Compilation of Government Accounts

Indian Audit and Accounts Department

Structured Courseware on Government Accounting

Compilation of Government Accounts

(Chapter-5 CAG’s Manual of Standing orders (A&E) vol .I)

Session Overview

Accounts are “Statements of facts relating to money or things having money value”. The ‘facts’ that are incorporated in accounting records are transactions.

A mere chronological listing of monetary transactions in the form of cash account does not bring out the significance of the transactions and their aggregate effects. From such cash account a person cannot tell, without going through every item, how he stands in relation to his various customers, and whether his business is profitable or not. It becomes necessary that the transactions are classified under various heads, as for example the name of various customers dealt with or of various articles dealt in; and that the results of the transactions under these heads should be arranged in such a form as to show clearly not merely the significance of each separate transactions but also the combined effect of any desired series of transactions.

The sources from which accounts along with the supporting documents flow to the Office of the Accountant General are many. In his office, The Accountant General examines these transactions and also the documents supporting them, posts them in appropriate manner to produce intelligible, readable and usable monthly accounts and annual accounts.

The accounts of the Union Government were departmentalized (i.e. maintained by the departments concerned) in stages from 1st April 1976 to 1st April 1977, relieving the Comptroller and Auditor General from the responsibility for compiling the accounts. The compilation of accounts of the Union Government has now been entrusted to the Comptroller General of Accounts.

As of now the Comptroller and Auditor General is responsible for maintaining the accounts of the State Governments and of Union Territories, (except that of the States of Goa and Sikim and the Union Territory of Pondichery).

In this session we will discuss the various prescribed steps in the compilation of accounts in the Indian Audit and Accounts Department.

Learning objective

At the end of the session, the learner will be able to state the sources from which accounts are received in Accountants General office, procedure for receipt of accounts from the treasuries and its distribution, maintenance of Detail Book, opening of new heads of accounts, and compilation of accounts.

Initial Accounts

The initial accounts of receipts and payments on behalf of the State Governments are maintained in the State Treasuries in the respective States who compile and render them monthly to the Accountant General concerned. In the case of certain large departments of the Governments, like Public Works and Forest, where Divisions working under them have been vested with cheque drawing powers, the account of the moneys drawn are maintained by the Divisions themselves, who remit their receipts and surplus periodically in lump sum into the treasuries. The divisions render monthly accounts to the respective Accountant General. These compiled accounts of the transactions include in them, inter alia, the total amount of cheques drawn and money remitted into the treasuries during the month under the relevant Remittance Heads prescribed for the purpose. The contra debits/credits relating to the cheques paid/moneys received by treasuries are included by the Treasuries in their initial accounts for the month rendered to the Accountant General. The Accountant General concerned, through the appropriate subsidiary registers, watches the pairing off of credits/debits relating to cheques drawn and encashed and moneys remitted and brought to account by the treasuries.

Screenshot: Treasury Interface

Sources of initial accounts

The sources from which accounts along with supporting documents flow to the Accountant General are:

(a)  District Treasuries;

(b)  Pay and Accounts Offices of the State Government;

(c)  Public Works Divisions, Forest Divisions and other departmental accounts offices which are authorized to make payments through cheques and receive moneys and which render compiled accounts;

(d)  Inter-State Suspense Account from other Accountants General;

(e)  Clearance memos advising Inter-Government Adjustments in the books of the Reserve Bank and the statement of monthly balances from the Reserve Bank;

(f)  Adjustments carried out in the office of the Accountants General, which include Inter-Government transactions, book transfers for inter-departmental supplies and services, periodical adjustments and rectification of misclassification.

Public Works divisions, Forest Divisions and departmental accounts officers render to the Accountant General monthly fully compiled accounts classifying the receipt and payment transactions of the month under appropriate heads of account duly supported by vouchers and other documents. In Tamil Nadu and Andhra Pradesh, the treasuries render the fully compiled accounts to the concerned Accountants General. In other States the treasuries render accounts to the Accountants General twice in a month covering the period from 1st to 10th (first list) and 11th to the last day of the month (second list).

The initial accounts of State Government transactions are prepared by the authorities through whom the transactions occur, such as Treasuries, Public Works Divisions, Forest Divisions and other Departmental Accounts Offices, Pay and Accounts Office of State Government, Inter-State Suspense accounts received from other Accountant General etc. From these initial accounts the Indian Audit and Accounts Department compile, under different heads prescribed for Government Accounts, and bring out monthly civil accounts and annually the Appropriation Accounts and the Finance Accounts, showing the result of all the transactions, which occur during that period.

Receipt of Initial Accounts from Treasuries in the Offices of the Accountants General

A Section called Central Treasury Section receives the Initial Accounts from the Treasuries in the Accountant General’s Office. In some offices the Book Section also performs this function. Compilation of Accounts and preparation of classified and consolidated abstracts are dealt with in DAE Sections which are constituted on departmental basis so that transactions relating to a particular department may, as far as possible, be dealt with in one section.

(MSO (A&E) Vol-I Para 5.2)

Screen Shot Due Date Register

Screen Shot Covering Memo

Checking of Initial Accounts and their treatment

The Central Treasury Section (or Book Section in some offices), which received the accounts from the treasuries, is responsible for checking the entries in the Cash Account and List of Payments with the various schedules of receipts and payments relating to the several heads of account.

(MSO (A&E) Vol-I Para 5.3)

The first schedule of payments, which comprises of payments made at the Treasury from the 1st to 10th of a month, along with the connected vouchers, are dispatched by each Treasury by or before 15th of the same month. In the second schedule of payments transactions made from the 11th to the end of the month are due to be despatched by the treasury by 5th to 8th of the next month. The total of the 1st schedule of payments should be brought below and added to the total of the 2nd Schedule of payments so that the grand total in the latter may agree with the entry in the List of Payments.

The Cash Accounts and the List of Payments which show the receipts and payments respectively for the whole month's with supporting schedules and the connected vouchers together with the memorandum in Form T.A 48 showing the number of various schedules, vouchers, cheques, etc., should be sent along with the 2nd Schedule of Payments. The accounts sent by the Treasury Officer, Accounts Compiling Officer etc. through their representatives will be received in the Central Treasury Section (Book Section in some offices) against proper receipt and those Treasury / Compiled Bank Accounts sent by post will be received in the Receipt Section and these will be passed on unopened to the Assistant concerned in the Book Section on the date of receipt in the office or the next morning if received in the evening.

On receipts, the Monthly Account and the List of Payments are examined to see that the account and the supporting schedules and other documents which should invariably accompany the account, have been received in complete state. If any documents are missing they should at once be called for. The several schedules, lists, etc. received in support of the Monthly Account should be examined in the section for verification so that they are in all respects properly prepared in accordance with rules applicable to each case, and that totals of the schedules agree with the entries in the Cash Account and List of Payments. A certificate of agreement will be recorded in the List of Payments and Cash Account by the Accountant concerned in the Central Treasury Section.

(MSO (A&E) Vol-I Para 5.4)

Screenshot Capturing List Of Payments

Screenshot Capturing Cash Account

Screenshot Reconciliation of LOP/CA with Covering Memo

Screenshot Reconciliation of LOP/CA

A list of vouchers, which should have accompanied the List of Payments but are not received upto the time of completion of the monthly account, should be prepared for inclusion in the Objection Memorandum.

(MSO (A&E) Vol-I Para 5.5)

Vouchers and other documents, which are not received with the monthly accounts, should, on receipt subsequently, be examined in detail in the same manner as they should have been examined, if received at the proper time. The AAO/SO in charge section should see that necessary scrutiny has been exercised before reference to such documents is removed from the Objection Book or the Objection Memoranda as the case may be.

If it is found that the monthly account or a substantial percentage of vouchers are habitually received late, a special enquiry should be made to ascertain the reasons for the delay and the cooperation of the Director of Treasuries or the Divisional Officer should be sought in applying the remedies which the Accounts Office may consider desirable.

A comprehensive check to find out whether all the required documents or vouchers as per the Treasury Schedules have been received will be conducted by the Accountants dealing with the work of compilation in the DAE Section concerned.

Amounts representing differences noticed between the figures incorporated in the treasury lists of payments/cash accounts and those appearing in the corresponding schedules of payments/ receipts as also amounts for which schedules themselves are wanting along with supporting vouchers etc will be classified under the suspense Head ‘Treasury Suspense’ under the Minor Head ‘Suspense Account’ below the Major Head ‘8658-Suspense Account’. The amounts under the ‘Treasury Suspense’ will be cleared on receipt of missing accounts or vouchers or other documents from the treasury.

Thereafter, the schedules of payments and receipts relating to Revenue and Capital Heads along with all the vouchers and challans, etc. will be transferred to the DAE Section concerned with their acknowledgement obtained on the List of Payments/ Cash Account.

(MSO (A&E) Vol-I Para 5.6)

The treasury schedules in respect of Debt, Deposit and Remittance Heads will be similarly checked by the Central Treasury Section (Book Section in some offices) with the Cash Account and List of Payments and the Schedules and supporting vouchers/challans made over to the concerned sections (Deposit, Loans, Account Current, etc.). In all these cases the availability of vouchers, challans, etc. will be checked by the sections concerned and they will call for the wanting documents, if any, from the treasury.

(MSO (A&E) Vol-I Para 5.7)

The Central Treasury Section in addition to checking that all schedules etc. as per the List of Payments/Cash Account have been received will also examine the List of Payments/ Cash Account as to the correctness of form, method of entry and verification of Cash Balances. The necessary notes of classification should be entered in the remarks column of these documents. The List of Payments/ Cash Account will then be put up to the AAO/SO of the section who will carefully check the classification of receipts and expenditure before submitting it to the Branch Officer in charge. After the latter passes it, the Cash Account and the List of Payments are made over to the poster of Detail Book in Book section.

(MSO (A&E) Vol-I Para 5.8.1)

Diagram: Flow of Accounts

The steps for receipt of accounts from the treasuries and their treatment may be summarized as under:

(i) The Accountant in Central Treasury Section (or Book Section) will check the contents of account received from the treasury with the printed covering list (form T.A 48) accompanying them and put his dated initials. If any documents is wanting it should be called for at once.

(ii) The Accountant will check each entry in the Cash Account and the Lists of Payments with the schedules supporting it and write the word "Agreed" with dated initials in the beginning and end of the Cash Accounts, Lists of Payments and Schedules against each entry. In case there is a discrepancy it should be pointed out to the Treasury Officer and got reconciled without delay. The comparison of the amounts of vouchers with the entries in the schedules and the checking of the totals in the latter case will be done in the Compilation Sections concerned which will be responsible for calling for any missing documents in respect of the Schedules, and for watching through their own Objection Books and Objections raised by them in the course of compilation of accounts. Similarly, missing documents in respect of other Accounts Offices will be called for by the Accounts Current Sections concerned and watch their receipts through the Error Book, the form of which has been prescribed by the Comptroller and Auditor General.

(iii) Missing Vouchers / Schedules With a view to test checking the contents of the bundles of vouchers received from the Treasury with monthly accounts through departmental representatives for detecting cases of missing vouchers, supporting schedules and other documents the following procedure will be observed by Book Section.