CHAPTER 5
COMPILATION, CONSOLIDATION OF ACCOUNTS, PREPARATION OF 'LEDGER' AND SUMMARY OF BALANCES.

5.1    COMPILATION OF VOUCHERS IN THE ACCOUNTING SECTION

5.1.1    On receipt of the daily memorandum of pre-check payments (i.e. carbon copies of the relevant page of the register of cheques delivered) along with the vouchers from the cheque Section, the Accounts Section should verify whether all the vouchers mentioned in the daily memorandum have been received and whether the amount and total are correctly entered. (When a cheque is issued in lieu of a time-barred cheque, the latter duly cancelled should be treated as the voucher bearing classification minus credit 8670-Cheques and Bills etc. thereon, for issuing a fresh cheque in lieu of the cancelled one.) After this verification, one copy of the daily memorandum shall be returned to the Cheque Section as acknowledgement for the vouchers received. Similar action should be taken when a copy of the list of payments along with paid vouchers is received from the Cheque Section, as per the procedure mentioned in para 3.4 of Chapter 3 of this Manual. If any voucher is found to be missing, the fact should be entered in the relevant memo/list of payments and efforts should be made to trace it/obtain it. If it is not traced/obtained before the month's posting is completed, the amount of the voucher should be posted against the sub head "Challans/Vouchers Suspense" under the major/minor heads "8658-Suspense Accounts-Suspense Account (Civil)".

5.1.2    The grand total of the amounts of cheques delivered during the entire month as derived from the said memos/lists of payments for that month should be posted on the credit(receipt) side against the inner column 'Original' under the minor heads 'PAO Cheques' and 'Departmental Cheques' respectively under the major head '8670-Cheques and Bills' in the classified abstract.

5.1.3    The vouchers should be compiled on the same day on which they are received from the Cheque Section. They should be posted in the Compilation Book or Compilation Sheet (Form CAM 33).Separate sheets should be used for the vouchers passed by the P.A.O. and for those passed by Cheque Drawing D.D.Os. The gross amounts indicated in the voucher against various units of appropriation or public account etc. should be posted against the concerned heads; deductions/ recoveries shown in payment vouchers will be compiled under each relevant head such as income-tax, surcharge, licence fee, recovery of house building advance, motor car advance, G.P. Fund contribution etc. or 'PAO Suspense' head etc. where a credit is adjustable finally in the books of another accounts authority. The recoveries of overpayments whether made in cash or by short drawal from a bill, shall be taken in reduction of expenditure under various detailed heads, if they are refunded in the same account year. Such recoveries pertaining to previous year(s) shall be recorded under a distinct minor head, “Deduct Recoveries of Overpayments” below the concerned major/sub-major head. The P.A.O. should also ensure each day that the total amount of cheques delivered during the day and the amounts appearing under the head 'PAO Cheques' in the compilation sheet agree and similarly that the total amount of cheques issued by Cheque Drawing DDOs each week tallies with the amounts appearing under the head 'Departmental Cheques' for that week. Correctness of posting of each voucher in the compilation sheet should be checked by tallying the total of the debits under various detailed heads with the total of the credits which represents the deductions/recoveries plus the net amount of the voucher.

5.1.4    At the end of each month, it should also be ensured that the grand total of the debits for all the vouchers together in the compilation sheet(s) set apart for the PAO's vouchers (and separately for each Cheque Drawing DDO's vouchers) agree with the grand total of the credits therein.

Note:    The effect of payments of outstation pay bills by bank drafts is that the bank would account for the payment of salary for March in its daily scroll for March itself on the day on which it issues the bank drafts. The P.A.O. would debit the net amount for which the bank draft has been issued to the suspense head 'Outstation Pay Bills for March' under the minor head 'Suspense Accounts (civil) below the major head '8658 Suspense Accounts' per contra credit to the minor head 'PAO cheques' below the major head '8670 Cheques and Bills'. While the minor head 'PAO - Cheques' would be cleared by minus credit per contra credit to the minor head 'P.S.B. suspense' below the major head '8658- Suspense Accounts' or to the head '8675 - Deposits with Reserve Bank Central (civil)' as the case may be, on receipt of the payment scroll from the bank ,in March itself and the debit under the suspense head would be cleared by the PAO in April by debiting the head salaries for the gross amount and minus debiting the head 'Outstation pay bills for March' and crediting the relevant receipt/recovery heads of accounts, by proposing transfer entries in the first week of April to ensure prompt clearance of the suspense head.

5.2    COMPILATION OF RECEIPTS

5.2.1    On receipt of the receipt scrolls from the bank(s) alongwith challans, the entries should be tallied with the individual challans and totals should be checked. If any challans are found to be wanting, the absence thereof should be specifically noted in the register in form CAM.17 (i) for being obtained from the bank and (ii) for being exhibited in the accounts against the sub head "Challans/Vouchers Suspense" under the major/minor head '8658-Suspense Accounts' etc at the end of the month, if still awaited. This suspense head would be cleared by minus credit on receipt of the challan by classifying the same under the relevant receipt/refund head of account.

5.2.2    The receipts should be compiled in Compilation Sheet(s) (separate sheet or portion being utilised for booking credit against each bank account) under the relevant major, minor and sub/detailed heads of accounts. At the end of each month, it should be ensured that the grand total of the credit in the compilation sheet tallies with the grand total of the amount of all the receipt scrolls together as posted in the register (Form CAM 17) referred to in para 1.9.4 of Chapter 1 of this Manual.

5.2.3    Notwithstanding the above instructions, separate procedure for compilation if any, prescribed by CBDT/CBEC in regard to compilation of accounts for revenue collected under the provisions of their schemes would continue to be followed by them.

5.3    TRANSFER ENTRIES

5.3.1    Transfer Entries, which are entries intended to transfer an item from one head of account to another, are necessary:-

(a)    in order to correct an error of classification in the original accounts;

(b)    in order to adjust by debit or credit to its proper head, an item outstanding under a Debt, Deposit or Remittance head;

(c)    to effect periodical adjustments such as :

(i)    annual adjustment of interest payable on the accumulations/accretions of G.P.Fund/C.P.Fund etc. by debiting the major head '2049 - Interest payments' and crediting the heads '8009-State Provident Fund-G.P.Fund/C.P.Fund etc.

(ii)    adjustment by Pr.A.O. to transfer/clear the amount from the minor head 'Public Sector Bank Suspense' below the major head '8658- Suspense Accounts' to major/minor heads '8675-Deposits with Reserve Bank-Central (civil)' etc.

(d)    to arrange payments of grants in aid/loans to state governments/union territory governments etc.

Transfer entries should be prepared in the Form CAM-34. On one side of every transfer entry, there should be only one major head but there may be a debit or credit to various other heads or vice-versa. In a transfer entry all particulars explaining both the nature of the adjustment and the grounds for the correction must be clearly stated.

5.3.2     A list of adjustments which have to be made periodically should be maintained in order to ensure that they are regularly made.

5.3.3.    If an item which properly belongs to a revenue or expenditure head is wrongly classified under another revenue or expenditure head in the accounts, the error may be corrected at any time before the accounts of the year are closed by proposing a transfer entry; but after the accounts are closed, no correction is admissible, it being sufficient to make a suitable note of error against the original entry. If, however, the error affects the receipts and disbursements of another Government or the transactions of a commercial department, it should be corrected by transfer in all cases as soon as the error is discovered. Corrections or transfers affecting capital major heads which do not affect the accounts of other governments, should be effected by merely altering the progressive figures and on 'proforma' basis for purposes of Statement No.12 of Finance Accounts, that is , without passing debit and credit entries through the accounts of the year’s financial transactions. This would avoid unnecessary inflation of the actual expenditure appearing in the accounts of the year in which the misclassification etc. was detected.

5.3.4    An error which affects a debt, deposit, suspense or remittance head must be corrected by transfers, however, old and small it may be. If the accounts of the year in which the error takes place are not closed, the correction should be made by the removal (through minus entry) of the item from the head under which it was wrongly taken to that to which it properly belongs.

For example a debit amounting to Rs. One lakh representing house-building advance has wrongly been booked under 'Motor Car Advance' below the major head '7610-Loans to government servants etc.'. As the accounts of the year are yet open, the correction may be made by debiting the head 'House Building Advance' and withdrawing the same by minus debit to the head 'Motor Car Advance' below the major head '7610-Loans to government servants etc.' in the same year in which the error has crept in.

If the accounts of the year in which the error takes place are closed, then the following procedure may be adopted:

(i)    an item taken to one debt, deposit, suspense or remittance head instead of another the correction should be made by transfer from the one to the other.

(ii)    an item credited to a debt, deposit, suspense or remittance head instead of to a revenue head; or debited to a debt, deposit, suspense or remittance head instead of to an expenditure head-the correction should be made by transfer to the head under which it should originally have appeared;

(iii)    an item credited to a revenue head instead of to a debt, deposit, suspense or remittance head-correction should be made by debiting refunds and crediting the proper head; e.g. Transactions relating to 'Central Government Employees Group Insurance Scheme' below the major head '8011-Insurance and Pension Funds' have wrongly been credited to the minor head 'Government Employees Insurance Schemes below the major head '0235-Social Security and Welfare', the corrections after the close of the year would be as under:

Dr

Major Head 0235 - Social Security and Welfare
Sub-major Head 60 - Other Social Security and Welfare Programmes

Minor Head 105- Government Employees Insurance Schemes
Deduct - refunds

To

Major Head 8011 - Insurance and Pension Funds
Minor Head 103 - Central Government Employees Group Insurance Scheme 

Cr.

(iv)    an item debited to an expenditure head instead of to a debt, deposit, suspense or remittance head-correction should be made by debiting the appropriate head and crediting the relevant receipt head; in the case of department not having a corresponding receipt head, to the M.H.0075-Misc. General Services.

However, when the correction affects a head for which budget provision is obtained, the correction/transfer may be effected by affording plus credit or minus credit under the head concerned, without affecting the actual expenditure (i.e., debit side of the head) for the year.

(Errors in the accounts of works in the Central Public Works Deptt. are governed by the provisions of article 200 of Account Code Vol. III)

5.3.5    All transfer entries prepared during a month should be entered in the Transfer Entry Number Book (Form CAM 35). The effect thereof should be reflected in the monthly accounts of that month after preparing a 'Summary of Transfer Entries' (Form CAM 36) as described in the next sub para.

5.3.6    As and when approved, transfer entries should be posted individually into columns 1 and 2 of Form CAM-35 against the respective heads of account affected. After all the T.Es. for the month are, thus entered, the total effect against each head of account separately under debit and credit columns should be worked out and posted into money columns 5 and 6 respectively of that form. Thereafter the grand total under columns 5 and 6 should be worked out and agreed with the grand total under columns 1 and 2 respectively to serve as a cross check. The figures appearing in columns 5 and 6 against each head of account should be posted against the corresponding head of account in the departmental classified abstract in the appropriate column. In case a bound book is not used for entering each year's monthly Summary of T.Es, then at the end of the year the monthly sheets of the document should be arranged in the order of the months and bound into a convenient volume.

5.4    PREPARATION OF DEPARTMENTAL CLASSIFIED ABSTRACT

5.4.1    The Departmental Classified Abstract (Forms CAM 37 and CAM 38) will be maintained separately for each month in two parts-Part I for receipt (credit) entries and Part II for booking disbursement (debit) entries, pertaining to revenue, capital accounts, debt, deposits, suspense and remittance transactions. Some heads are shown therein so as to serve as specimen. Various major heads along with their minor heads and sub/detailed heads will be typed or printed one below the other in the classified abstract indicating distinctly therein the parts "Consolidated Fund","Contingency Fund" and "Public Account". Separate columns will be opened in the abstract, one for recording the transactions of the P.A.O. and one for each Cheque Drawing DDO (including Public Works Divisional Offices, Forest Offices, if any) and one for reflecting the effect of transfer entries. (If need be, a separate classified abstract may be maintained for incorporating accounts of Divisional Officers wherever they are large in number.) Entries will be made therein against each head of account by posting the figure of total for the month as compiled in the separate compilation sheet(s).

5.4.2    Before Divisional accounts are incorporated, they have to be checked with the supporting schedules etc. The particular item in the Divisional accounts reading 'Cash Balance diminished/increased' and appearing respectively on the receipt/payment side of the account will be posted in the classified abstract against the head "8671-Departmental Balances Civil-P.W. Cash Balance" on the corresponding side.

5.4.3    Posting against the minor head "Public Sector Bank Suspense" (under the major head 8658-Suspense Accounts) and Head 8675-Deposits with Reserve Bank-Central-Civil-R.B. H. Qrs. should be made for the gross amount on the appropriate side, i.e. credit and debit respectively; as per the totals of receipt & payment scrolls as worked out in the Register in Form CAM 17 mentioned in paras 1.9.4 and 1.9.8 of this manual. The effect of transfer entries, if any, should also be posted in this abstract under the relevant column.

5.4.4    Figures against the inner column "Original" under the minor heads 'PAO Cheques' and 'Departmental Cheques' (under the major head 8670-Cheques and Bills) in Part I of the abstract should be entered by the following the procedure laid down in para 5.1.2 ante. Clearance under these minor heads should be indicated against responding minus from the monthly total of the amounts in the payment scrolls separately relating to the bank account held by the PAO and by each cheque Drawing DDO as extracted from the register in form (CAM-17) in the manner referred to in paras 1.9.4 and 1.9.8 of Chapter 1 of this Manual.

5.4.5    The grand total in Part I of the abstract should tally with the grand total in Part II thereof if postings are made correctly.

5.4.6    After the postings in the compilation sheets and the classified abstract are completed, they should be submitted to the Assistant/Junior Accounts Officer who will carefully test check the postings. The Assistant/ Junior Accounts Officer and Accounts Officer shall personally check the correctness of postings in respect of items over Rs. 25,000 and Rs. 1,00,000 respectively under any detailed head of account and trace the entry in the classified abstract. however, in respect of postings of challans (Receipts) relating to the Central Board of Excise and Customs, the extent of checking of correctness of postings by concerned AAO/JAOs and Sr.AO/AOs are relaxed so as to excise checks to the following extent:-

AAO/JAO-- All items over Rs. 20,000 and 50% of the items above Rs.10,000 but below 20.000.
Sr.AO/AO-- All items above Rs.50,000

5.5    CHECKS TO BE EXERCISED BY THE PAOs

Each PAO shall satisfy himself that no voucher/challan has been omitted to be posted during compilation by scrutiny of :-

(i)    Compilation sheets to see that (a) the checks prescribed in para 5.1.4 ante are exercised, and (b) the total number of vouchers/challans posted in them each month is equal to the number of vouchers/challans accompanying the daily memos/lists of payments and receipt scrolls for that month, and

(ii)    the figures posted in the classified abstract under the following heads-which are drawn from source other than the compilation sheets to see that:-

  1. postings under the major head 8670-Cheques and Bills (both original and responding) are correct figures by counter-checking them with the monthly totals of columns 2 and 3 of the PAO's check register (in FORM CAM-15) required to be maintained by the PAO personally.
  2. the postings against the minor head "Public Sector Bank Suspense" and/or under the head "Deposits with Reserve Bank-Central Civil-Reserve Bank Headquarters" against the major head "8675 Deposits with Reserve Bank" are correct and drawn from the total in the register in from CAM-17.
  3. the posting against the sub-head "Challans/Vouchers Suspense" under the major head '8658 Suspense Accounts' etc, is correct and supported by necessary details as required to be maintained vide paras 5.1.1. and 5.2.1. ante.
  4. the grand total of Part I of the abstract tallies with the grand total of Part II thereof for each month.

5.6    CONSOLIDATED ABSTRACT

5.6.1    The Consolidated Abstract should also be maintained in two parts, Part I for recording the receipt (credit) transactions and Part II for recording disbursement (debit) transactions for each year as in the form CAM-39. Separate columns for each month's transactions and progressive total upto the end of each month should be opened therein by placing inner sheet(s). Major/Sub-major/minor/ sub/detailed heads shall be entered therein in the same sequence as in the classified abstract and monthly total from the latter shall be posted against each of the head of account under the appropriate monthly column and progressive total upto end of the month will be struck.

Note:    A combined register representing the classified abstract as well as consolidated abstract may be maintained by any PAO if this is found convenient when the number of Cheque Drawing DDOs functioning under him is small by opening necessary inner sheets.

5.7    RENDITION OF MONTHLY ACCOUNTS BY PAY AND ACCOUNTS OFFICES

5.7.1    Each Pay and Accounts Office shall send by the 7th of the following month to its Principal Accounts Office, a monthly account in computer format prescribed by the Controller General of Accounts separately for each ministry/department. The account shall show the monthly as well as progressive figures of receipts and payments against the final level of classification. The expenditure shall further be exhibited grant-wise against each primary unit of appropriation showing Plan and Non Plan, Voted and Charged expenditure separately. At the end of the account, a proof sheet shall be attached showing Grant-wise/Major head-wise totals (separately for Plan and Non-Plan, Voted and Charged Expenditure) with grand totals to ensure that the total of receipts agree with the total of payments i.e. the account is balanced.

5.7.2    On receipt of Pay & Accounts Office monthly accounts in the Principal Accounts Office, they will be checked especially to detect prima-facie errors in classification. The Principal Accounts Office will consolidate the Pay and Accounts Office Accounts on computer through the software package 'Contact' and print on the computer an abstract group minor head-wise totals for the purposes of appropriation control. Certain checks are to be exercised to ensure that all the transactions of each P.A.O. are compiled on the Computer and the amounts of each transaction properly classified and taken on the computer. These checks are listed in Annexure-A-Part I.

After the proof sheet has been reconciled (as detailed in Annexure-A-Part I), a floppy containing the Consolidated accounts for the Controller is to be created using the "clear files" option of 'Contact' and sent to C.G.A. 's office by the 20th of the following month. The format of the forwarding letter should be as given in the Annexure-A-Part III.

5.7.3    The Chief Accounting Authority of the Ministry/ Department may require Principal Accounts Office/Pay and Accounts Offices functioning under him, to render accounts showing expenditure against grants/units of appropriations in such form as may be required.

5.8    SUBMISSION OF MONTHLY ACCOUNTS BY THE PRINCIPAL ACCOUNTS OFFICE OF THE MINISTRIES/ DEPARTMENTS TO THE CONTROLLER GENERAL OF ACCOUNTS.

(i)    For Civil Ministries

Consolidated Monthly accounts from Principal Accounts Office to Controller General of Accounts - 15th of the following month.

(ii)    For Non-Civil Ministries and U.T. Administrations :

17th of the following month.

5.9    STATEMENT OF CENTRAL TRANSACTIONS AND JOURNAL ENTRIES

5.9.1    A Statement of Central Transactions will be prepared by each Principal Accounts Office at the end of every financial year representing the progressive effect of all the transactions during the year upto and including March (supplementary) transactions and prepared only with minor head-wise details under different major heads concerned and showing charged, voted, Plan and Non-Plan expenditure distinctly. No alterations should be made in the classified abstract or consolidated abstract of any month after they have been closed. When errors are discovered in the same year involving a correction by transfer of amount from one minor head to another under the same major head or from one major head to another after the Statement of Central Transactions is prepared and submitted, necessary corrections termed Journal Entries (in short J.Es) should be proposed by using the same form as for transfer entry and supported by a "statement of effect of the corrections " wherein the amount of each correction and amount, after the correction, are to be indicated against the concerned heads. Corrections between detailed heads under the same minor head may be carried out by P.A.Os by making plus and minus entries against the affected heads keeping a note of error in such cases in the relevant ledger.

5.9.2    All Journal Entries should be serially numbered for easy identification and signed by the head of the Accounting Organisation viz., CCA/CA/Dy.CA/AG as the case may be. Approval of the C.G.A. should be obtained therefor for incorporation in the accounts. The Principal Accounts Office should also apprise concerned P.A.O. of the details of J.Es accepted by the C.G.A. for incorporation in the accounts, in so far as they affect the figures held in the books of each such P.A.O. to enable the latter to prepare his ledger etc. on the basis of the updated data.

5.10    LEDGER OF BALANCES UNDER DEBT, DEPOSIT, SUSPENSE & REMITTANCE HEADS.

5.10.1    (a)    The monthly figures posted in the various broadsheets pertaining to debt, deposit, suspense and remittance heads will have to be compared with the figures of that month's transactions under relevant heads in the monthly account for verifying that the two sets of figures tally; discrepancy if any, between the two should be analysed forthwith to set right any unposted item or misclassification.

(b)    The two heads of account '7810-Inter-State Settlement' (Sector G) and '7999-Appropriation to Contingency Fund' (Sector H) are not of the nature of debt, deposit, suspense or remittance heads and are also to be closed to Government Account annually vide para 5.11. Balances under debt, deposit, suspense and remittance heads are to be individually closed to balance(as per para 5.9.2),except that balances under the head '8680-Miscellaneous Govt. Account' are to be closed to Govt. Account annually and those under '8675-Deposits with Reserve Bank' held in the books of Principal Accounts Offices should be closed annually to Govt. Account, but those in the books of the Controller General of Accounts are to be transferred to the head '8999-Cash Balance', every month.

5.10.2    The `Ledger' for Debt Deposit Suspense and Remittance heads closing to balance viz. those under Sectors E,F,I,J,K,L, (excluding major heads `8675 -Deposits with Reserve Bank and "8680-Miscellaneous Government Account and "M" of the List of Major and Minor Heads of Account may be prepared half-yearly for the first six months from April to September after the accounts of September are closed and thereafter quarterly from October to December and from January to March including March Supplementary by using proforma-Form CAM-40. It will be prepared by P.A.O.s upto sub/detailed heads, as may be necessary, based on the figures of first six months and subsequently for the two quarters, and sent to Principal Accounts Office so as to reach by 5th November, 5th February and 5th July of each year respectively. Amounts of balances adopted/transferred, if any, on "Proforma" basis in terms of provisions of para 16.4 of Chapter 16 will be clearly indicated in the relevant columns of Forms CAM-40 & 41. Amounts adopted on transfer consequent on the Departmentalisation of Accounts from Accountants General would have to be exhibited similarly in the Ledger of the respective year in which the 'Proforma' transfer was effected. Principal Accounts Office will prepare a 'Ledger' comprising the transactions of all "P.A.Os" under his jurisdiction put together, with minor head-wise details only on the basis of figures furnished by the PAOs periodically. The Ledger will be submitted to the respective CCA/CA for review by 10th November, 10th February and 10th July of each year. A copy of the Periodical Statement together with the comments of the respective CCA/CA with action initiated to liquidate huge outstanding balances and to wipe out adverse balances under various Debt, Deposit Suspense and Remittance Heads should be sent to the Finance Accounts Section of the Controller General of Accounts by 15th November, 15th February and by 15th July respectively each year for regular monitoring. It may be ensured that the progressive figures appearing during the course of the year tally with those appearing in the Statement of Central Transactions including the effect of all Journal Entries incorporated therein. Balances under the head "Public Sector Bank Suspense" need not be included in the 'Ledger' to be maintained by P.A.Os, since clearance against this head for adjustment against the head "Reserve Bank Deposits" is carried out only in the Principal Accounts Office. A sector-wise abstract of balances figuring in the 'Ledger' will be prepared thereafter by the Principal Accounts Office in form CAM-40.

5.11    COMPUTATION OF GOVERNMENT ACCOUNT

5.11.1    Progressive figures as at the end of each year under the heads falling under sectors A, B, C, D, G & H appearing under the Consolidated Fund as well as under the major heads 8675-R.B.D. and 8680-Miscellaneous Government Account under Sector 'L' under the Public Account are to be closed to Government and not carried over to the following year. The total of the progressive figures to the end of each year under them is to be worked out to arrive at the balance under "Government Account" in the manner shown in Annexure "C". The closing balance under "Government Account" will have to be carried over to the statement "Summary of Balances" described in the next paragraph and as shown in the illustrative example.

5.12    SUMMARY OF BALANCES

5.12.1    A statement called "Summary of Balances" is to be prepared comprising sector-wise balances etc. in the proforma indicated in Annexure "B". The closing balances under "Government Account" and the closing balance under various debt, deposit, suspense and remittance heads which close to balance are to be entered therein. The total under each of the two sides (Debit and Credit sides) of the statement should be equal.

5.12.2    The statement prepared for the transactions of Government of India as a whole by the C.G.A. will form Statement No 5 of the Finance Accounts.

5.13    ILLUSTRATIVE EXAMPLE

5.13.1    An illustration for the preparation of Sector-wise 'Ledger', Sector -wise "Government Account" and Sector-wise "Summary of Balances" is appended at Annexure B. Though amounts are shown therein to the nearest crore of rupees, in actual accounts they have to be shown upto a unit of rupee.

5.14    SUBMISSION OF MATERIAL FOR STATEMENT No.5 OF FINANCE ACCOUNTS TO C.G.A.

5.14.1    PAOs should submit to the Principal Accounts Office (say by the 10th October every year), a copy of the 'Ledger' with only minor head-wise figures. The Principal Accounts Office will tally the figures in the 'Ledger' (except under P.S.B. Suspense) as prepared by it from its S.C.T. with the total for all its PAOs and prepare a statement of " Summary of Balances". A copy each of the Sector-wise 'Ledger', 'Government Account' and 'Summary of Balances' will be sent by each Principal Accounts Office to the CGA's Office every year by the date prescribed by the latter.

5.15    PROFORMA CORRECTIONS

5.15.1    "Proforma" corrections to balances of earlier years (in cases where provisions of Rule 38 of Government Accounting Rules,1990 are not attracted), wherein either (a) a head closing to balance vis-a-vis a head closing to Government Account are involved or (b) correction of a balance under a head (closing to balance) purely as an accounting device is involved, are to be effected by affording relevant contra effect to "Government Account" referred to above . Approval of the C.G.A. is required to be obtained in each case for the incorporation of any such 'Proforma' correction(s) or of any other type, indicating full background/justification therefor.

5.15.2.    Expenditure incurred under the Consolidated Fund of India and booked to the correct heads is also accounted for in the Appropriation Accounts and forms part of the balances under "Government Account" or under Loan, debt, etc. heads in the Finance Accounts.

Certain types of decisions taken by Government occasionally, affect such balances (which represent progressive effect of bookings during earlier years),and necessitate alteration in the figures of balances exhibited in the "Ledger of Balances", Finance Accounts, etc. For this purpose, the device of "Proforma Correction" is adopted so as not to have to pass the old transactions of expenditure, etc. once again through the monthly accounts/S.C.T. of the year whose accounts are open at the time the relevant Government decision is taken.

The following are some main types of situations in which "Proforma corrections" are required to be MADE :-

(i)    Whenever a decision is taken by Govt. (i.e. Ministry/Department concerned in consultation with the Budget Division of the Department of Economic Affairs, C.G.A. and on the advice of the C. & A.G.) to change classification of a specific type of transaction from a head closing to "Government Account" or to balance under a Loan, Debt, etc. head to another Loan, Debt, etc. head which closes to balance. The decision would imply that the aggregate effect of transactions booked during earlier years under the relevant affected head would have to be transferred to the new head selected for the purpose. An example of this type is of consolidation of loans given to States, as a result of recommendation of the Finance Commission, which involves transfer of aggregate balances from Minor Heads under relevant sub-Major heads to various Minor Heads under the new Sub-Major Head e.g. "F-Pre 1984-85 Loans" below the Major Head "7601-Loans and Advances to State Governments."

(ii)    Based on decisions of Government, Controller of Aid Accounts and Audit as well as Railway Board effect certain increases or decreases in the opening balances of heads of accounts operated upon exclusively by them, without routing adjustments through the monthly accounts or Statement of Central Transactions of the year for which the Finance Accounts are under preparation.

(iii)    If and when under special orders of Government, a Government aided institution is taken over without any cash outgo for being run as a Departmental Undertaking, balances pertaining to its liabilities, namely, loans and advances borrowed by it and assets and investments owned by it, are taken under the relevant head of account with a contra entry against "Government Account" and or loan head under which loans may have been given to it earlier. Similarly, where a Departmental Undertaking is converted into a Company or Corporation, etc. the balance (or progressive capital expenditure under various capital expenditure heads) pertaining to the Undertaking, would need re-classification under the appropriate heads in the light of the change in status of the Undertaking. In such cases also, "Proforma corrections" of the balances under relevant heads would be necessary.

(iv)    Whenever a decision is taken by Central Govt. for conversion of a Grant-in-aid given during any earlier financial year to a State Govt. or U.T. Govt. into a loan; or a loan given into a Grant-in-aid with retrospective effect, after issuing necessary sanction therefor and including necessary explanation in the notes on Demands for Grant concerned. In the former type of cases, the progressive figure under the Major Head "7601" ( see Para 10.8.7 as well) -Loans and Advances to State Governments" will be increased through a "Proforma correction" after affording contra credit for a corresponding amount under "Government Account". This will have to be reflected in the ledger of balances "Form CAM-41", "Government Account" (Form CAM-42) and in the material for Finance Accounts to be submitted to CGA. A note should also be kept in the loan register indicating briefly the terms and conditions of the repayment of loan. In the case of retrospective conversion of a loan given earlier into a Grant-in-aid, the relevant sanction order should indicate the treatment to be given to the portion of loan which had already been repaid and also to the interest paid to Central Govt. by the recipient of the loan. "Proforma correction" would similarly be required so as to decrease the progressive figure under the relevant Minor Head under the Major Head "7601-Loans and Advances to State Governments" by affording contra debit to "Government Account" in the documents referred to above.

(v)    Paras 10.8.5 and 10.8.6 envisage the raising of or lowering down of balance under the two Minor Heads "Advances for purchase of other conveyances" and "Other advances", by Principal Accounts Offices, wherever necessary, with the approval of the C.G.A. To give effect to this, they would have to effect proforma corrections to the closing balance(s) against the affected head(s) in their ledger of balances in form CAM-41 reflecting contra effect in their "Government Account" in form CAM-42 and in the material for Finance Accounts to be submitted to C.G.A.

5.15.3    Adjustments relating to "Proforma Corrections" in respect of the type of transactions referred to in para 5.15.2 should not be passed through the regular monthly accounts or appear in the Statement of Central Transactions, nor should the opening balances be corrected with a foot note. But a full account of such adjustments under an account named "Prior Period Adjustment Account" should be submitted with the material for the Union Govt. Finance Accounts. [Annexure C to this Chapter provides illustration with Part I containing three different examples falling under this account. Part II indicates the manner in which the first example is to be reflected in the material for the affected statements for Finance Accounts, and part III indicates entries generated by the said first example in the computation of closing balance of "Government Account" entering material for the Summary of Balances (Statement No. 5) of the Finance Accounts.

The effects of these adjustments should be incorporated in the material for relevant statements of Finance Accounts distinctly in a separate line under the opening balance of the concerned minor head below the relevant major head, with the nomenclature "Prior Period Adjustment Account". The net effect of these adjustments on "Government Account" would have to be worked out for arriving at the balance as on 31st March, thereunder, for purposes of insertion against this head in the material for Statement No. 5 Finance Accounts.

Annexure - A
(Refer Para 5.7.2)

Procedure for consolidation of Controller accounts on Computer.

PART-I :    Checks to be exercised to ensure reconciliation between the figures of the Pr. AO and PAOs.

1.    The proof sheet (summary of Grant-wise, Category-wise, Major-Headwise totals) appearing at the end of the PAO accounts is to be compared with the proof sheet (Control Totals) as printed through the computer.

This check is exercised to ensure that the grant-wise, category-wise, major head-wise figures are exactly the same as indicated by the PAO in the proof sheet- besides the totals tallying there should not be an interchange between Plan and Non-Plan, voted and charged between figures appearing in the PAOs proof sheet and the computer generated control totals.

Two copies of this verified control totals should be prepared. One copy is to be retained in the Pr. AO for record and the other duly signed by the Pr.A.O. should be sent to the CGA's office alongwith the floppy containing the consolidated accounts.

(2)    To ensure accurate classification below major head level - every quarter a progressive PAO-wise account should be generated through the computer and despatched to the PAOs for confirmation. Corrections, if any, will be incorporated as per procedure indicated in Annexure-A-Part II.

At the close of the March accounts, only the last quarter's reconciliation remain. Corrections, if any, for this quarter can be incorporated in one of the supplementary accounts and communicated to the office of the CGA on floppies as in the case of normal monthly accounts.

A certificate signed by the Pr. AO indicating that the figures for the quarter have been tallied with the PAOs, is to be sent to the CGA's office along with the accounts for the month following the end of the quarter. (The certificate for the quarter ending June will be sent in August along with the July accounts).

PART-II :    Procedure for carrying out corrections in the Controller's Monthly accounts.

Corrections to the transactions of the previous months will be incorporated in the current monthly accounts by the PAOs concerned. These corrections will be entered through 'CONTACT' like normal transactions at the end of PAO's accounts. A list of these PAO-wise/ month-wise corrections carried out will be forwarded along with the accounts. No manually prepared correction cards will be sent to the office of the CGA.

PAOs accounts which have been excluded from the preceding month's accounts will be entered in the following month. Details of such accounts should be forwarded along with the floppy.

PART-III :    Contents of the forwarding letter of the Monthly accounts.

The forwarding letter accompanying the floppy containing the monthly accounts should invariably contain: -

1.    A certificate to the effect that the grant-wise , category-wise and major head-wise figures of each PAO have been compared with the proof sheet attached by the PAOs at the end of the booklet;

2.    A list of PAOs which have been excluded from the monthly accounts; otherwise a 'NIL' statement;

3.    PAO-wise, month-wise details of accounts pertaining to previous months included in the present month or a 'NIL' statement.

4.    PAO-wise, month-wise details or corrections to the accounts of preceding months which have been carried out in the present month.

ANNEXURE `B'
(Para 5.12.1)

ILLUSTRATIVE EXAMPLE LEADING TO PREPARATION OF "SUMMARY OF BALANCES"

1.    DATA FOR THE ILLUSTRATION

Supposing transactions arising during 1990-91 are as at (a) to (f) below, receipt of balances on `proforma' basis as per Para 16.4 of Chapter 16 of this Manual as at (g), and opening balances as on 1.4.90 as at (h) below:

(a) Receipts (Revenue) received during the year :

April, 1990  3460
May,1990 3461
Feberuary,1991 3459
March,1991 (including supplementary)  3463
Progressive Total (including JEs)  13843

 Total of Sectors A+B in the S.C.T. to be carried to Government Account[Form CAM-42]

(b) Expenditure (Revenue) incurred during the year

April,1990 3353
May,1990 3352
February,1991 3354
March,1991 (including Supplementary & JEs)  3355
(Progressive Total (including JEs) 13414

Total of sectors A+B+C+D in the S.C.T. carried to a Government Account [Form CAM-42]    

(c) Expenditure (Capital) incurred during the year

April,1990   560
May,1990   561
February,1991   559
March,1991 (including Supplementary)   563
Progressive Total (including JEs) 2243 

Total of Sectors A+B+C+D in the S.C.T. carried to Government Account [Form CAM-42]

(d) DDR Transactions (Receipts) during the year :

Sector

April,90

May,90

February, 91

March,91 (including JEs etc.)

Progressive total (including JEs) 
as per SCT under respective sector carried to Sector-wise Ledger Form CAM -41

E 4602 4601 4603 4602 18408
F 572 573 571 572 2288
I I 816 817 816 818 3267
J 151 151 153  151 606
K 583  584 585 583 2335
L 105 106 105 107 423
M 16 16 16 16 64
TOTAL 6845 6848 6849 6849 27391

 

(e) DDR Transactions (Payments) during the year :

Sector

April,90

May,90

February, 91

March,91 (including JEs etc.)

Progressive total (including JEs) 
as per SCT under respective sector carried to Sector-wise Ledger Form CAM -41

E 3374  3373 3375 3374 13496
F 1038 1040 1038 1039 4155
I 459 458 459 461 1837
J 126 127 126 126 505
K 555 556 555 556 2222
L 173 172 175 174 694
M 40 40 41 41 162
TOTAL 5765 5766 5769 5771 23071

 

(f) DDR heads closed to Government (RBD in this case) appearing on debt side :

April,90

May,90

February,91

March,91

Progressive total (including JEs) figure appearing 
in SCT against the head 8675-RBD carried to Government Account [Form CAM-42]

627

630

626

623

2503

(g)    During the year balances were received by the Pr.A.O. on `proforma' basis from another such office as follows :-

Debit balance of Rs.80 crores under Sector F(Loans & Advances), and of Rs.5 crores under Sector L (Suspense & Misc., other than Major Heads 8675 and 8680) and Credit balance of Rs.21 crores under Sector I(Small Savings, P.F. etc). and of Rs.7 crores under Sector K (Deposits & Advances).

(h)    Closing balances under various DDR heads of the preceding year (i.e. as on 31.3.1990) which would be opening balances as on 1.4.1991 are as follows :-

In Pr.A.O. books

   

In CGA's books

   
 

Dr.

Cr.

 

Dr.

Cr.

Govt. Account

15184

--

     

E. Public Debt

--

23068

E. Public Debt

--

23068

F. Loans & Advances

17920

--

F. Loans & Advances

17920

--

     

Contingency Fund

--

50

I. Small Savings & P.F. etc.

--

7699

I. Small Savings & P.F. etc.

--

7699

J. Reserve Funds

--

1027

J. Reserve Funds

--

1027

K. Deposits & Advances

--

1743

K. Deposits & Advances

--

1743

L. Suspense & Misc. (except 8675 & 8680)

405

--

L. Suspense & Misc. (except 8675 & 8680)

405

--

M. Remittances

28

--

M. Remittances

28

--

     

N. Cash Balance

15234

--

 

33537

33537

 

33587

33587

Notes : (1)    For purposes of simplicity of the illustration, break up of figures has not been indicated under the sectors F,J,K & L into categories as follows as normally required in the summary of balances (Statement No.5 of Finance Accounts).

Sector

Categories

F. Loans & Advances (i) Loans & Advances to State & U.T. Governments
(ii) Other Loans

J. Reserve Funds

(a) Reserve Funds bearing interest
Gross balance
Investment 

(b) Reserve Funds bearing interest
K. Deposits & Advances (a) Deposits bearing interest
Gross balance
Investment

(b) Deposits not bearing interest

(c) Advances

L. Suspense & Miscellaneous

(a) Coinage Accounts

(b) Suspense Gross balance Investment

(c) Other Accounts
Gross balance
Investment
Accounts with Govts. of Foreign countries

Note : (2)     In the illustration, for the sake of simplicity, all figures are shown in crores of rupees only, though these documents are to be prepared up to unit of rupee and transactions under (a) to (f) of the data are shown as though they occurred during 4 months only.

Note : (3)    For the sake of simplicity in the illustration, the transactions/balances in only one Pr.A.O. and its effect reflected in the CGA's office are indicated though the portion of the data showing receipt of balances on `proforma' basis during the year from a different Pr. Accounts Office presupposes the existence of another Pr. Accounts Office whose balances should have also formed part of the balances held in the books of the CGA but not specifically indicated in the illustration.

Note : (4)    For the sake of simplicity, it has been assumed that the entire balance under `PSB Suspense' has been cleared and transferred to the head `8675-Deposits with Reserve Bank' by the Pr.A.O., before close of the accounts.

II.    SECTORWISE ABSTRACT (LEDGER) OF DDR HEADS CLOSING TO BALANCE COMPUTATION OF "GOVERNMENT ACCOUNT" AND STATEMENT OF "SUMMARY OF BALANCES".

The above documents as in the books of Pr.A.O. and the last one as in the books of CGA adopting the assumed data are as shown in CAM-41,42 & 43 and Summary of Balances. The figures adopted by the Pr.A.O. on `proforma' basis are shown distinctly in italics in these forms for early tracing.

ANNEXURE`C'
(Referred to in para 5.15.3)

Illustrative Example

PART I.    Prior Period Adjustment Account

 

Sl. No.      

1.

Dr.
0.10 crore

7601-Loans and Advances to State Government
-Loans for Central Plan Schemes
-Fisheries-Inland Fisheries

To
Government Account Reasons for the `P.P.A.A.':-
Decision of Govt. vide sanction No. ........dated to treat a grant-in-aid of Rs.0.10 Crore (booked to head `3601' which is closed to Govt. Account) given to State `A' during 1981-82, as a loan with retrospective effect. (This will affect material for Statements No.13, 15 &5).

 

 

Cr. 0.10 Crore

2.

Dr.
33 Crores

7053-Loans for Civil Aviation
-Aerodromes and Air Route Services
To
Government Account Reason for the `P.P.A.A.' :-
Decision of Government to book expenditure on debentures to a loan head instead of to the investment head (viz. Major Head 5053 which is closed to Govt. Account) as was the earlier practice. (This will affect material for Statements No.10, 13 & 5).

 

Cr. 33 Crores

3.

Dr.
12 Crores

4858-Capital outlay on Engineering Industries and Ship building Industries.
04-Ship building Industries
To
4858-Capital outlay on Engineering Industries
05-Aircraft Industries
Reasons for `P.P.A.A.'. :-
Decision of Govt. to book outlay on investment in Garden Reach Ship builders and Engineers Ltd. to the former head instead of to the latter head as was the earlier practice. Both the heads affected close to Govt. Account.
(This will affect material for Statement No.10 only but will not affect `Government Account').

 

Cr. 12 Crores (minus debit)

Part II -    Entries relating to Serial No.1 of Part I

 

 

Amount On 1-4-00

Receipts

Disbursements

Account as on 31-3-01

(a) Entries under material for Statement No.15 of Finance Accounts, 1986-87

7601-Loans and Advances to State Governments Prior Period Adjustment Account

Dr. O1 

R1

D1

O1+P1+D1-R1 
=0.10 crore

Dr. P1 
0.10 crore

(b) Entries under material for Statement No.17 of the Finance Accounts

7601-Loans and Advances to State Governments -State of 'A'  

 

 

 

 

-C Loans for Central Plan Schemes        
-Fisheries-Inland Fisheries O2 P2 R2 D2 O2+P2+D2+R2+Rs.0.10 crores
Prior Period Adjustment Account 0.10 crore      

Part III -    Entries for Computation of closing balance of GOVERNMENT ACCOUNT as on 31.3.01 on account of Serial No.1 of Part I.

FORM CAM 42

Sector

 

Dr.

Cr.

 

Opening balance as on 1.4.00 (excluding the Prior Period Adjustment Account)

0  
 

Net effect of Prior Period Adjustment Account 

  33.10
 

Adjusted Opening balance as on 1.4.00

0-33.10   

A + B 

Receipts(Revenue)

   

A+B+C+D

Expenditure(Revenue)    

A+B+C 

Expenditure(Capital) 

   
G(M.H.7999) L(M.H.8675 & 8680)

D.D.R. Heads(closed to Govt. Account). 

   
 

Net effect of balances adopted/ transferred proforma reversing its side

   
 

Total

 O+T1

T2+33.10
 

Closing balance transferred to Summary of balances

O+P+T1+T2
-33.10

 

O = Opening Balance
P = Prior Period Adjustment Account
T1 = Total under Col. Dr. excluding (a) Opening balance and (b) Prior Period Adjustment Account.
T2 = Total under Col. Cr. excluding figures relating to net effect of balances adopted/transferred proforma and also excluding Prior Period Adjustment Account.

[Authority : 1(14)/83/TA and 1(14)/86/TA]