Overview of Model Accounting System for Panchayats

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Simplified Accounting Structure for PRIs

• Overview of Model Accounting System for
  Panchayats
• http//accountingonline.gov.in

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Why Model Accounting System ?

• One of the item of e-PRI (Mission Mode Project
  MMP under National e-Governance Plan NeGP).
• Recommendations of C AG and MoPR.
• TFC incentives Grant
• Performance based Grant Conditions for getting
  Rs.897 crores

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Wherewithal

• IT Infrastructure
• All Block Panchayats computerised 11th FCA
• All Gram Panchayats computerised 12th FCA
• Manpower
• Qualified I T professionals 11th FCA/ 12th FCA
• e-Connection
• All Block Panchayats connected GRAMSAT
• Additional Connectivity BSNL VPN

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Precursor

• PAMIS Accounting Software
• Implemented as a trial version in ZP/BP for
  maintenance of Accounts
• Advantages of the application
• Follows double-entry accounting system
• Daily transactions can be captured
• Can be customised as per accounting requirements
• Shortcoming in the application
• No Standard Budget Head concept
• Standalone version
• Lack of security in the data-storage
• Not in the public domain.
• Cant be integrated with NREGSoft, PlanPlus,
  AwasSoft at National Level.

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Rational for PRIASoft

• Based on Standard Head of Accounts Concept
• Complies to C AG formats
• Standard formats(8) prescribed by CAG for al
  level of PRIs
• Web based software application developed by NIC
  at National Level.

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Need of Standardised Formats

• Preparation of Budget.
• Analysis of Expenditure.
• Maintenance of Accounts.
• Self disclosure of financial transactions.
• Reporting for Auditing.

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What is New?

• 3-Tier Classification Simple, robust, and easy
  to use.
• Generation of Financial Reports through computers
• 2-Part Accounts
• Part-I Receipts Expenditure
• Part-II PFs, Loans, Deposits, Advances, etc.

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3-Tier classification
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Part-I Panchayat Fund

Receipts Payments
Revenue Receipts (0-1) Revenue Expenditure (2-3)
- Tax Receipts Taxes on Profession, Land revenue, etc -2049 Interest payment -2059 Maintenance of Community Assets, etc
-Non-Tax Receipts Interest eared, etc -2049 Interest payment -2059 Maintenance of Community Assets, etc
Capital Receipts (4000) -Other Receipts (800) Capital Expenditure (4-5)
Part-II -Loan Section - Provident fund Pension -Insurance -Civil Deposits Advances - Suspenses Accounts
9/26/2013
CAG of India
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Part-II Provident fund etc

Receipts (7000-8999) Payments (7000-8999)
Loan Section -Loan Section-7610 Pension Provident Section - Provident fund Pension (8009) Insurance Pension Section -Insurance (8011) Deposits Advance Section -Civil Deposits (8443) -Civil Advances (8550) Suspense Account - Suspense Accounts (8658) Loan Section -Loan Section-7610 Pension Provident Section - Provident fund Pension (8009) Insurance Pension Section -Insurance (8011) Deposits Advance Section -Civil Deposits (8443) -Civil Advances (8550) Suspense Account - Suspense Accounts (8658)
9/26/2013
CAG of India
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Exception to 3-Tier

• Central Schemes assigned 2-digit sub-heads
  State Scheme Alpha-numeric 2-digit subhead

Receipts Payments
1601- Grants in aid 2210-Health and Sanitation
101-Grants from GOI 101-Primary Health Centre
15- NRHM 15-NRHM
796-Tribal Sub-plan 789-SC Sub-plan 700-Normal Plan 02-wages (object head)
9/26/2013
CAG of India
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Structure of Budget Head

• Three layer Budget Head for receipt of
  Grants-in-Aid
• First 4-digit classification - major head
  represent function
• Second 3-digit classification - minor head
  represent the programme of expenditure.
• Third 2-digit subhead only for schemes when it
  exits.

Contd..
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Structure of Budget Head

• Four layer Budget Head for expenditure
• First 4-digit classification - major head
  represent function
• Second 3-digit classification - minor head
  represent the programme of expenditure.
• Third 2-digit subhead only for schemes
• Fourth 2-digit (00 to 99) - object head
  -represent the object item of expenditure
  (activity).

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Major Heads

• Agriculture
• Soil and Water Conservation
• Minor Irrigation
• Animal Husbandry, Dairying, Poultry and Fuel and
  Fodder
• Fisheries
• Forestry and Minor Forest Produce
• Village and Small Scale Industries

• Rural Housing
• Water Supply and Sanitation
• Animal Husbandry, Dairying, Poultry and Fuel and
  Fodder
• Transportation
• Rural Electrification
• Non-conventional Sources of Energy
• Poverty Alleviation Programme

Contd..
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Major Heads

• Education
• Technical Training and Vocational Education
• Art, Culture and Libraries
• Market and Fairs
• Health and Family Welfare
• Water Supply and Sanitation
• Women and Child Welfare

• Social Security and Welfare
• Welfare of Scheduled Castes, Scheduled Tribes and
  Other Weaker Sections
• Public Distribution System
• Maintenance of Community Assets
• Interest Receipts/Payment
• Pension and Other retirement benefits
• Panchayati Raj Programmes

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3-Tier Classification

• Major Heads
• 23 Major Heads to cover 29 functions
• New Major Head 2206 Market and Fairs
• Schemes
• Major GoI Schemes Standardised 2-digit
  subheads.
• State Schemes 2-digit alpha-numeric subhead
• Object Heads
• Standardized object heads for common types of
  expenditure (27)
• Additional object heads can be opened by
  Panchayats

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Standardised Sub-Heads for Some Central Schemes
Scheme Code (Sub Head) Scheme Description
11 Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)
12 Sampoorna Gramin Rozgar Yojana (SGRY)
13 Swaranjayanti Gram Swarozgar Yojana(SGSY)
14 Indira Awas Yojana (IAY)
15 National Rural Health (NRHM)
16 Accelerated Rural Water Supply Programme (ARWSP)
17 Total Sanitation Campaign
18 Mid Day Meal Scheme
19 Sarva Shiksha Abhiyan
20 Pradhan Mantri Gram Sadak Yojana (PMGSY)
21 Integrated Watershed Management Programme
22 Integrated Child Development Services (ICDS)
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Standardised Object Head

• 01 Salaries (1)
• 02 Wages
• 03 Overtime Allowance
• 04 Pensionary charges
• 05 Honoraria
• 06 Medical treatment
• 07 Travel Expenses
• 08 Office Expenses (2)
• 09 Rent, Rates and Taxes
• 10 Audit Fee

• 11 Printing
• Other Administrative Expenses
• 13 Supplies and Materials
• 14 Petrol/Diesel
• 15 Advertising and Publicity
• 16 Other Contractual Services
• 17 Grants in aid
• 18 Contributions

Contd..
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Standardised Object Head
19 Subsidies 20 Share of taxes / duties 21 Motor
Vehicles/hiring charges 22 Machinery and
Equipment 23 Major Works 24 Write off /
losses 25 Deduct recoveries 26
Maintenance 80 Other Expenditure
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Items included in Salary OE
Salaries includes in these object head (i) Pay
of officers, (ii) Dearness pay of officers,
(iii) Dearness Allowance of Officers, (iv)Pay of
establishment, (v) Dearness pay of
establishment, (vi) Dearness Allowance of
establishment, (vii) Bonus , (viii) Interim
relief, (ix) Other allowances (CCA, HRA other
fixed allowances), (x) Children education
allowances, (xi) LTC, (xii) Transport allowance.
Other Expenses (2) includes in these object head
(i) Local purchase of stationery, (ii)
Liveries, (iii) Telephone trunk calls, (iv)
Furniture, (v) Service postage stamps, (vi)
Purchase of books publications, (vii) Office
expenses and miscellaneous , (viii) Staff
car, (ix) Water cooler, (x) Typewriter, (xi)
Purchase of accounting machine, (xii) Charges
paid to the State Government for Police
Guards, (xiii) Hot and cold weather
charges, (xiv) Electricity water charges, (xv)
Purchase of photo copier, (xvi) Purchase of
computer laser printer.
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PART II - Other Heads
7610 Loans to Panchayat Employees 8009
Provident Fund 8011 Insurance 8443 Civil
Deposit 8550 Civil Advances 8658 Suspense
Accounts 4000 Capital Receipts Capital Heads
relate to Revenue Heads
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Preparation of Accounts

• Budget in prescribed (new 3-tier) classification.
• Accounts Initially accounts are to be prepared
  on cash basis.
• Built in features Subsequent switching over to
  accrual system.
• Period of accounts Financial year. (1st April
  ending 31st March)
• Provision for all prescribed (8) Report formats.
• ICT has the key role in adopting these formats.
• Data/ Reports through IT Applications, PRIASoft
  developed by NIC

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Simplified Accounting Procedure

• The accounts are prepared on cash basis i.e. a
  transaction is only recorded when cash is
  received or paid.
• Period of accounts is a financial year as a
  period of 12 months ending 31st March in any
  year.
• Daily transactions shall be recorded in Cash
  Book.
• The receipts be recorded on receipts side and
  payments on payments side.
• Every day the cash book shall be closed and
  Closing Balance worked out would then form the
  Opening Balance for next day.
• Classification / head of account for each
  transaction shall be clearly mentioned.
• Every day the details of transactions as recorded
  in the cash book.
• Transferred to Register of Receipts if the
  transaction is receipts
• Transferred to Register of Payments if it is
  payment.

Contd..
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Simplified Accounting Procedure

• Bank Reconciliation
• At the end of the month the bank and treasury
  reconciliation should be completed.
• Differences between cash book, bank and treasury
  balances are to be rectified.
• Corrections should be made then there in the
  Register of Receipts and Register of Payments.
• Totals in Register of Receipts and Payments can
  be struck which would give the total expenditure
  under each head of account for the month.
• Where PRIs and Bank / Treasury are computerized,
  online reconciliation with Bank/Treasury may be
  followed.

Contd..
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Data Maintenance/ 8 - Formats

• Format I Monthly/Annual Receipts Payment
  Accounts
• Format II Consolidated abstract register
• Format III Reconciliation Statement with Bank
  and Treasury
• Format IV Statement of Receivable and Payable
• Format V Register of Immovable of Property
• Format VI Register of Movable property
• Format VII Inventory Register
• Format VIII Register of Demand, Collection and
  Balance
• Above formats designed to facilitate
• Switch Over to Accrual System

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Thanks .
Simplified Accounting Structure for PRIs