 CA:A letter of credit in favour of DDO

authorising a bank or a treasury officer to

make payments upto specified limits
 Meant only for payments that are not subject
to pre-audit
 Placed in favour of the nearest RBI/SBI
branch. If no such branch nearby, can be
placed on a treasury
 GOI sanction required for placement in favour
of other banks
 Only Establishments are issued with Cash
Assignments. Exceptions are aircraft carriers
& cruisers which can hold CA as well as
Money warrant
 Issue of Defence cheque books by PCDA
 Payment to be made directly out of CA,
MONEY SHOULD NOT BE TRANSFERRED TO
PUBLIC FUND A/C
 Basis of CA:Past actuals and anticipated
requirement
 CA to a newly commissioned ship:Provision of
Govt sanction to IA Cell of PCDA for release
of CA and nomination of LAO-notification by
IA cell to all concerned
 CA can be sanctioned by C-in-C in
consultation with PCDA and with prior
concurrence of IFA as per Sl no 42 of
Annexure II to NI 1/S of 2006
 Prerequisites for New CA:Unit to be sanctioned by Govt.
officer holding the charge not below Cdr rank and unit has
sufficient infrastructure and exposure for operation of CA
 SOC for new CA submitted by Command Hqrs to
PCDA(Imprest) through local Accounts office
 After PCDA’s approval, CA sanctioned by C-in-C with the
concurrence of IFA
 Original sanction should be sent by Command Hqrs to
PCDA (Imprest)
 Finally D section places the CA and issues cheque books
 COs of ships/Estts to intimate annual
requirement on every Jan 1 for the ensuing FY
 Placement of CAs without reference to PCDA
by sub offices
 Undrawn balance at the end of FY and unutilised Cash with
the Units will lapse
 Any cheques drawn before the close of FY but paid in the
next FY will be debited to the Cash Assignment of FY in
which cheques were drawn
 Anticipated excess amount of CA be surrendered by units
through respective Audit Offices in the March beginning.
Unless amount is surrendered, banks will carry forward the
undrawn balance till June 30
 CA not linked to budget availability because
payments also made for various types of
advances i.e.TA/DA or MLR,CEA etc
 Steps taken to make majority of payments
through NPO only
 Supplementary CAs to meet Addl expenditure
 Monthly review of CA balances and their
surrender
 COs are responsible for proper utilisation and
safe custody of cash and maintenance of cash
books on daily basis
 Entries be made BY Accounts officer of both
receipt & payment daily in the cash book in their
actual order of occurrence
 All entries to be serially numbered
 Payments made to ships against money warrants
be intimated concurrently to Audit office
 Maintenance of a bank pass book which should
be got completed by the bank periodically
 At least monthly Bank Reconciliation
 All cash to be kept in a treasure chest/safe with two
locks of different description or combination locks
 Keys to be kept with the Logistic officer/officer
detailed to carry out logistic duties
 Duplicate key to be handed over to the CO in a sealed
cover indicating the contents and a receipt obtained
 Cover to bear signatures of both Logistic &
commanding officer
 In case of BLO,duplicate key handed over to admin
authorities
 Account to be kept distinct from any other account
 Ships/Estts of Navy may receive in their cash
A/Cs receipts on Account of payment issues
of items of clothing/victualling stores and
other small misc items of refunds/recoveries
and also to appropriate the same towards
departmental expenditure
 A statement of drawings made against cash
assignment required to be submitted in
duplicate to PCDA/sub offices by units four
times a month:
 1st to 7th of the month
 8th to 14th of the month
 15th to 21st of the month
 22nd to the last day of the month
 Submission of true extract of Cash Book
along with supporting documents to PCDA
 In case of Estts,Cash Account to be submitted
in two parts i.e. Part-I with all receipts &
payments from 1st to 20th of the month by
25th of month and Part-II for remainder
month by 7th of next month
 Ship’s Cash A/Cs to be submitted in a single
part for the whole month by 7th of the next
month
 CA holder will furnish a certificate with Cash
A/C regarding the agreement of drawings
from the bank as shown on the receipt side of
Cash Book with the amount shown in the
bank pass book maintained by him.
Discrepancy to be explained through BRS
 Ships/estts should not hold cash in excess of their
actual and immediate reqts
 Amount of Cash should be kept to the barest
minimum
 Estts should not hold cash beyond one week’s reqt
 Ships may draw money required for one month
anticipated reqt
 Cash should not be drawn more than 2 days before
actual date of disbursement
 Drawl of money in excess of above limit can be
sanctioned only by admin authorities in
consultation with PCDA and special sanction
thereof to be submitted alongwith cash accounts
 Certificates to be endorsed of handing/taking
over as well as surprise check
 Surprise check at least once a quarter by CO
 Counting of cash by two officers deputed by
CO
 Certificates to be countersigned by the
logistic officer and CO in ink
 For ocean going ships
 It is an authority to the CO of a self accounting
ship indicating the monetary limit upto which he
can draw amount from BLO/CA holder in a month
 Air Craft carriers issued both CA and money
warrants. However, total drawal made on both in
a month should not exceed Cash Assignment
limit for the month plus accumulated undrawn
balance brought forward from previous months.
Aircraft carriers will utilise CA at base port and
Money warrant away from base port
 Paying authority will note on the warrant the
amount paid.It will forward the original
requisition with the cash account retaining
duplicate copy for its records
 At ports where no naval authority exists, ship
may obtain funds from Govt treasury; an
endorsement of payment will be made by the
Treasury on money warrant
 Ship can also draw anticipated reqts from last
port of call if proceeding to a place where no
naval/coast guard authority or treasury exists
 Such advances to be normally limited to the
reqt of an additional month
 In case of money warrant, undrawn balance not
carried forward to next month
 Procedure for Addl money warrant and surrender
of money warrant is the same as of Cash
Assignment
 All money warrants lapse on 31st March when
they should be returned to the Audit office
 Monthly cash account of money warrant sent to
PCDA by 7th of the next month
 Delay in compilation of expenditure
 Irregularities in operation of cash accounts
 Diversion of funds to Public Fund Account
 Non reconciliation with bank statements
 Huge drawl of cash and subsequent deposit
 Non surrender of assignments on 31st March
 Drawl of balance amount on 31st March and
its deposit into Treasury
 Use of FIS for compilation of expenditure on
daily basis