1. BUDGET

3. Public Fund in Government Treasury Taxes Duties etc. Developmental Welfare activities

4. Legislative Control on Public Funds Legislature has the Authority over Public Funds. The Government is only the executive agency to give effect to the decisions of the Legislature on all money matters. As it is not possible for the legislature to scrutinize and approve the day-to-day monetary transactions of the government, a system has been evolved by which the government prepares a Financial Statement showing all the anticipated Receipts and Expenditure classified under certain broad Heads of Accounts for the ensuing year. It is a mandate under Article 202 of the Constitution.

5. SOURCES OF INCOME TO THE STATE GOVERNMENT Revenue Receipts Share of Central Taxes Taxes on Commodities and Services Taxes on Property and Capital Transaction Non Tax Revenue Interest Receipts Receipts on departmental services Grants in Aid from Government of India Public Debt Internal Debt State Development Loan Loans and Advances from Government of India

6. EXPENDITURE OF THE STATE GOVT Salary expenditure Pay and allowances of the Govt. Employees Non Salary expenditure Office and other expenditure which includes Printing charges, Stationery, Rents, rates and taxes, Water and Electricity charges. Hire on vehicles. Publicity Interest Payments Subsidies Vehicle Maintenance including Oil and Petrol charges Capital Expenditure Expenditure on works Debt Repayments Repayment of Loans and Advances

7. Budget consists of 1.Consolidated Fund of the State 2.Contingency Fund of the State 3.Public Account of the State

8. Consolidated Fund of the State As per Article 266(1) of the Constitution of India ‘Consolidated’ Fund is formed of all Revenues received by the State Government, all Loans borrowed from Government of India, from other Autonomous Institutions and the Public and the Loans raised through the issue of Treasury Bills, or Ways and Means Advances and all money received by the Government in recovery of Loans and Advances.

9. Contingency Fund The Contingency Fund is intended to provide advances for meeting unforeseen expenditure arising in the course of a year, pending authorization of such expenditure by Law to be passed by the State Legislature under Article 205 or 206 of the Constitution. The present corpus is Rs. 50 crores.

10. Public Account The Public Account of the State pertains to all public moneys received by or on behalf of the State Government which are not creditable to the Consolidated Fund of the State. All such money do not actually belong to the Government but they have to be accounted for in the same way as Government money and they have to be repaid to parties concerned on the due dates. The repayment of these amounts do not require the vote of the Legislature, as they are in the nature of ordinary banking transactions.

11. Voted expenditure means expenditure which is subject to the vote of the Legislative Assembly. Charged expenditure means as is not to be submitted to the Vote of the Legislative Assembly under the provisions Article 202 of the Constitution. Voted and charged

12. Expenditure in respect of the Salaries and allowances of judges of any High Court, Governor of the State, Debt repayment including Interest Payments and other Expenditure relating to the raising of loans any other expenditure declared by the Legislature of the State by Law, to be so charged Charged

13. Any scheme to accomplish a purpose constitutes a Plan. While firms and industries plan future production, advertising, etc., Government plan, in varying degrees, the future development or performance of their economics. This is usually on an Annual Plan basis and Five-Year Plan basis. Plan schemes are mainly divided into two categories, viz., State Schemes (State Development Plan) and Central Assistance to State Plan. There is yet another category of schemes viz., Schemes assisted by Autonomous Bodies, in respect of which the financial assistance is rendered by the agencies like LIC, GIC, National Co-operative Development Corporation, NABARD, etc. Plan

14. Budget and Accounting Classification Classification is the structural key to planned and rational Government Budgeting. With a view to bring closer relation among Budget heads, account heads and Plan Heads Sectorial classification was introduced: Sector Major Heads Minor Heads Group Sub Head Sub Heads Detailed Heads

15. Head of Account Sector indicate the grouping of the various functions of the Government corresponding to the sectors plan classification. They may comprise sub sectors where necessary. A.General Services B. Social Services C. Economic Services D. Grants in Aid and Contributions Major head indicates the functions of the Government such as agriculture, education, health etc and to correspond to the heads of development in plan classification. They may comprise sub major heads where necessary.

16. Head of Account Sub-Major head are opened where necessary under a major head to record those transactions which are of a distinct nature and are of sufficient importance to be recorded exclusively, but at the same time allied to the function of the major head. The head of account relating to each such sub division is termed as “sub major head” and the budget code is two digit code e.g. under the major head “2202.Education” the sub major head :- 01.Elementary Education 02.Secondary Education 03.University and Higher Education etc.

17. Minor Head and Sub Head Minor head means a head subordinate to a Major head or Sub-Major head representing a specific programme. Group Sub head suggested in between the Programme Minor head and Sub head representing a similar group of schemes which are implemented under a separate funding pattern. Eg. EAP, Sub-head means a head subordinate to a minor head. It indicates schemes for Plan Programmes or administrative set-up in the case of non-plan expenditure.

18. Detailed Head  Detailed head is the primary unit of appropriation. It exhibits expenditure under basic items like salaries, Travel Expenses, Office Expenses etc.  Sub-detailed heads denote break-up of detailed heads or object classification, wherever necessary, and possible. e.g. 010 Salaries / 011 Pay / 012 Allowances / 013 DA etc.

19. ‘ Demands for Grants The estimates of Expenditure from the Consolidated Fund, which are required to be voted by the Legislature are presented to the Legislative Assembly in the form of Demands for Grants. The demands for grants have been formulated Secretariat Department wise and HOD wise. At present there are 40 Demands For Grants in the State Budget. No HOD will cross more than one demand for grant.

20. Grant No. XVI. Health, Medical and Family Welfare Departments Volume NO. III/8 HOD : Director of Medical Education Sl. No. Non-PlanPlan 1Major Head2210Medical and Public Health 2210Medical and Public Health 2Sub-Major Head01Urban Health Services - Allopathy 01Urban Health Services - Allopathy 3Minor Head001Direction and Administration 110Hospitals and Dispensaries 4Group Sub Head11State Development Plan 5Sub Head(01)Headquarter’s Office (40)RIMS General Hospital 6Detailed Head010Salaries010Salaries 7Sub detailed head 011Pay011Pay 012Allowance012Allowance 013DA013DA

21. Budget Documents 1.Budget Speech 2.Volume I/1 – Annual Financial Statement and Explanatory Memorandum on Budget. 3.Volume I/2- Statement of Demand for Grants. 4.Volume II – Detailed Estimates of Revenue and Receipts. 5.Volume III- Details of Demands for Grants for Non-Pan and Plan. There are 17 parts in Volume III, each part contains Demands for Grants or Departments coming under each Department of Secretariat. 6.Volume IV – Public Account 7.Volume V – Annexure to the Budget.

22. Budget Documents (contd..) 6.Volume VI – Budget in Brief 7.Volume VII/1 – Annual Plan 8. Volume VII/2 – Tribal Sub Plan 9. Volume VII/3 - SC Sub Plan 10.Volume VIII – Appendices to the Budget Estimates. 11.Volume IX – Analysis of the Demands for Grants by Ministers. 12.Notice of Demands for Grants. 13.Volume X – Government Commercial Undertakings Supplement to the Detailed Budget Estimates.

23. Approval of the Budget After the demands are voted by the Assembly a Bill called ‘The Appropriation Bill’ shall be introduced in the Legislative assembly for authorization and then it has to be approved by the Governor. The Appropriation bill then becomes the Appropriation Act which empowers the Government to draw money and spend from the Consolidated Fund of the State in accordance with the vote of the Legislature.

24. ‘ Quarterly release of budget Budget Release Order system was issued from 1st April, 2001 vide G. O. Ms. No. 59 Finance & Planning (FW: BG) Department dt.30-3-2001. After passing of Appropriation Act in the State Legislature, Budget used to be released funds quarterly through BROs under Plan and Non-Plan and LOCs for works. BROs used to be issued for Plan items of expenditure and Non Plan items of Works, Grants in Aid and Non BRO items are subject to quarterly regulations.

25. ‘ Budget Release Order Based on the BROs issued by the Finance Department, Administrative Department of Secretariat used to issue Administrative Sanction Orders duly following the Business Rules and Codal provisions..After passing of Appropriation Act in the State Legislature, Budget used to be released funds quarterly through BROs under Plan and Non-Plan and LOCs for works. Based on the BROs issued by the Finance Department, Administrative Department of Secretariat used to issue Administrative Sanction Orders duly following the Business Rules and Codal provisions.

26. ‘ Reforms subsequent to BRO Government introduced Green Channel system releasing entire Budget on items like Diet charges, Drugs and Medicines, subsidies, Scholarships and stipends, Arogyasree etc. Issue of LOC was removed for works

27. ‘ Comprehensive Budget Release Order Comprehensive Budget Release Order (CBRO) system was introduced to facilitate timely availability of funds to the implementing agencies. It enables the departments to distribute the budget allotted to them in accordance with the annual work plan, programme priorities, and specific monthly requirement of the department rather than distribution in equal quarterly instalments. Secretariat Departments and Chief Controlling Officers prepare the budget distribution statement online for the entire approved 2016-17 Budget in accordance with their annual work plan, programme priorities, monthly / quarterly fund requirement, etc., and submit to the Finance Department.

28. ‘ Comprehensive Budget Release Order Finance Department in turn issues Comprehensive Budget Release Order. In respect of the Centrally Assisted State Development Plan under Group Sub Head 12 and corresponding Matching State Share provided under Group Head 11- State Development Plan, the BROs will be issued after receipt of the funds from Government of India and the concerned funding agency.

29. ‘ Comprehensive Budget Distribution Order Based on the CBRO, the Chief Controlling Officers prepare Comprehensive Budget Distribution Orders (CBDO) duly distributing the approved budget amongst the Sub-ordinate Controlling Officers (SCOs) as well as the Drawing and Disbursing Officers (DDOs) for all four quarters of the 2016-17 financial year with immediate effect and release the same to the SCOs and DDOs - duly making changes, if any.

30. Re-appropriations As per para 17.4 of A.P. Budget Manual, the HODs are authorized to re-appropriate funds from one unit of appropriation to another unit of appropriation under their control subject to following restrictions : From one Grant to another Grant, between Revenue, Capital and Loans Sections even in the same Expenditure constituting New Service / Project / Scheme for which there was no budget provision previously. From Charged provision to Voted provision or vice-versa. From Plan to Non-Plan. Re-appropriations for accommodating recoveries. Re-appropriations shall be with in the R.E fixed by the Finance Department.

31. Re-appropriations Conditions:- The expenditure shall be under general control of HOD or authority sanctioning Re-appropriation. Re-appropriation should invariably be rounded to the multiple of thousands only Reappropriation should not involve the undertaking of recurring liability i.e. liability which extends beyond the financial year in question. Reappropriations should not be rushed through at the fag end of the financial year, to prevent the lapse of an appropriation.

32. Accounts, RE and BE 1.Accounts or actuals of a year are the amounts of receipts and disbursements for the financial year beginning on April 1st and ending on March 31st following, as finally recorded in the Accountant- General’s books. 2.Revised Estimates is an estimate of the probable receipts or expenditure for a financial year, framed in the course of that year with reference to the transactions already recorded and anticipations for the remainder of the year in the light of the orders already issued or contemplated to be issued or any other relevant facts. Revised Estimate is not an Appropriation. 3.Budget Estimates are the detailed estimates of the receipts and disbursements of a financial year.

33. Reconciliation All the DDOs are requested to prepare an Expenditure Statement and also the Statement of Receipts every month and reconcile the figures with Treasury before 4th of the month succeeding month to which they relate. Chief Controlling Officer / Head of the Department (HOD) is required to reconcile his department’s accounts with AG’s figures and issue monthly Reconciliation Certificates to AG every quarter. An officer has to be nominated in the department and make responsible for such a reconciliation process.

34. Thanks