GOVERNMENT ACCOUNTS AND BUDGET- AN OUTLINE

GOVERNMENT ACCOUNTS
1.Accounts of Union Government showing receipts and disbursements, surplus or deficit generated and changes in Govt. liabilities and assets shownevery year 2.Comptroller and Auditor General of India certifies and submits to President of India 3.Laid in each House of Parliament.

Government Accounts(contd)
4.Principles of Accounting prescribed in Government Accounting Rules, 1990

5.Subsidiary accounts by Department of Posts separate Accounts Manuals 6.Cash Based Accounting actual cash receipts and disbursements 7.Switching over to Accrual Based Accounting [ income/expenditure recognized ] under process

Main Divisions and structure of Government Accounts Consolidated Fund of India ( Part-I )

Contingency Fund of India ( Part-II )

[Transactions relating to Contingency fund]

Public Account ( Part III )

[Transactions relating to Debt, Reserve Funds,
Deposits, balances] Suspense, Remittances and cash

Divisions and Structure of Accounts

Consolidated Fund

Revenue

Capital

Receipt Heads (Revenue A/c)

Expenditure Heads (Revenue A/c)

Receipt Heads (Capital A/c)

Expenditure Heads (Capital A/c) Public Debt, Loans And Advances etc

Divisions and Structure of Accounts

Classification of transactions Major Head [ Correspond to functions of Govt ]

Sub Major Head

Minor Head [ Identify the programs ]

Subordinate Head or Sub Head [ Represent Schemes ]

Detailed Head [ Denotes sub Scheme ]

Object Head [ represents the primary unit of appropriation ]

ACCOUNT CODE
1. 15 Digit code is introduced to classify the account code heads properly which comprises the following fields. 2. Major head 4 digits Sub Major head 2 digits Minor head 3 digits Sub Minor head 2 digits Detailed head 2 digits Object head 2 digits

ACCOUNT CODE
Major Head 3201-Postal services 01-General Administration 02-Operation 03-Agency services 04-Audit &Accounts 05-Engineering 06-Amenities to staff 07-Pension 08-Stationery and printing 09-Other Expenses

ACCOUNT CODE
1201-Revenue Receipt Head 3201-Revenue Expenditure Head 5201-Capital Head Expenditure relating to CO is booked as follows
3201-01-101-01-00-01
3201-01-101-01-00-02 3201-01-101-01-00-03 3201-01-101-01-00-06 3201-01-101-01-00-11

SALARIES
WAGES OVERTIME ALLOWANCES MEDICAL ALLOWANCES DOMESTIC TRAVEL EXPENSES

BUDGET
1.It is an estimate of the income and expenses needed to carry out programmes for a financial year in respect of a particular organisation. 2.It can provide guidelines for managing the future investments and expenses. 3.Financial year starts from April and ends in March. The current financial year is 2011-12. 4.Normally, budget allotment is received during the month of June in a financial year

Preparation of Budget Statement

1.The following statements are used to prepare the budget in respect of a financial year. 2.Head Office will prepare A Statement monthly and submit to Divisional Office. 3.Divisional Office will prepare B Statement monthly after consolidating the A Statement of the HOs in their jurisdiction and submit to Regional Office. 4.Regional Office will consolidate the B Statements received from the divisions under their jurisdiction and submit to Circle Budget. 5.With the help of the above statements, the budget statements i.e. RE-BE statements, AFG statements and Variation statements are prepared at all levels. 6.Whenever budget statements are prepared, the amount should be shown in thousands only. 7.All the budget statements should be prepared separately for plan and non-plan

What is RE-BE?
1.RE means Revised Estimate and BE means Budget Estimate. 2.The RE-BE statements are prepared during the month of September and submitted to RO by DO on or before 12 th September. 3.The revised estimates are prepared by the Divisional Office for the current financial year based on the expenditure for the months from April to August. 4.The budget estimate is for the next financial year and it will be prepared anticipating the expenditure by analysing the expenditure of the previous years.

What is AFG?
AFG means Anticipated Final Grant. The AFG statements are prepared during the month of January and submitted to RO by DO on or before 06 th February The AFG statements are prepared by the Divisional Office based on the expenditure for the months from April to January While preparing the AFG statements, the Divisional Office Accountant should be more cautious to ensure accuracy. The revised allotments are normally received during the middle of January. The final grants are normally received during the end of February or in the first week of March.

Basic guidelines for incurring expenditure 1.The expenditure should always be proportionate to the total allotment. 2. By the end of December, 67% of the allotment should be spent. 3. Divisions are not allowed to spend more than 33% during the last quarter unless they receive any fresh allotment in the final grant.

Basic guidelines for incurring expenditure

1.When excess funds are available, all the funds should be surrendered to RO before 10th of March. The surrendered funds can be utilised by the needy divisions/regions. 2.Rush of expenditure during the final stage of financial year should be avoided. 3.Whenever expenditure exceeds the allotment, the divisional head should proper action to get additional funds from RO. 4.In case of emergency, the DO has to address RO/Budget and get the clearance for spending any expenditure above the allotment. 5.Otherwise, the divisional head will be held responsible for such excess expenditure.

What is variation statement?

1.The statement compares the final expenditure of a financial year with reference to original allotment as well as final allotment. 2.For example, in a financial year, in respect of 02-101-01 Wages the original allotment is Rs.3 lakhs and final grant is Rs.4 lakhs. If the expenditure is Rs.4,00,500, the divisional head has to explain the reason for variation as follows: Expenditure 4,00,500 Original allotment 3,00,000 Variation 1,00,500 (1) Expenditure 4,00,500 Final Grant 4,00,000 Variation 500 (2) The reason for variation in respect of (1) and (2) has to be explained by the divisional head.

 1.The powers to appropriate funds within the object head rest with Chief PMG. 2.The appropriation at Circle level is done at the time of preparation of AFG statements. 3.Hence, the Divisional Heads should be more careful at the time of preparation of AFG and they have to surrender the unwanted funds. Such funds can be properly appropriated and allotted to divisions/regions by the Chief PMG. 4.Even after appropriation, if excess funds are available, that will be surrendered directly to Directorate by the Circle Budget. 5.Chief PMG is not competent to appropriate funds under OTA, Railway Haulage Charges, Pensionery funds, funds under printing heads.

Appropriation of Accounts