Day 5 – Session: 1Day 5 – Session: 1

Session TitleSession Title::

Appropriation Accounts – Appropriation Accounts – Preparation of Summarised and Preparation of Summarised and Detailed Appropriation Accounts, Detailed Appropriation Accounts, Appendices. Reconciliation Appendices. Reconciliation between Finance Accounts and between Finance Accounts and Appropriation Accounts. Appropriation Accounts.

Session OverviewSession Overview

In this session we will quickly recap the topics In this session we will quickly recap the topics covered on day 1 – Session 4 and day 2 – covered on day 1 – Session 4 and day 2 – Session 1. We will also discuss about the Session 1. We will also discuss about the preparation of the summary of the preparation of the summary of the Appropriation Accounts and the detailed Appropriation Accounts and the detailed Appropriation Accounts, Appendices. Appropriation Accounts, Appendices. Reconciliation between Finance Accounts and Reconciliation between Finance Accounts and Appropriation Accounts will also be Appropriation Accounts will also be discussed. discussed.

Learning ObjectiveLearning Objective By the end of the session, we will be By the end of the session, we will be

understood the Summary of Appropriation understood the Summary of Appropriation Accounts and Detailed Appropriation Accounts and Detailed Appropriation Accounts and Appendices along with their Accounts and Appendices along with their preparation. Reconciliation between preparation. Reconciliation between Finance Accounts and Appropriation Finance Accounts and Appropriation Accounts will also be discussed. Accounts will also be discussed.

Responsibility for PreparationResponsibility for Preparation

The Appropriation Accounts relating to State Governments are The Appropriation Accounts relating to State Governments are prepared by the respective State Accountants General prepared by the respective State Accountants General (A&E) except in case of the State Government of Goa and (A&E) except in case of the State Government of Goa and Union Territory Government of Pondicherry. Union Territory Government of Pondicherry.

(Para 1.5 of the MSO(A&E) - Vol.II)(Para 1.5 of the MSO(A&E) - Vol.II)

PREPARATION OF APPROPRIATION ACCOUNTSPREPARATION OF APPROPRIATION ACCOUNTSForm and Content Form and Content

According to the nomenclature indicated in the According to the nomenclature indicated in the Demands for Grants, as approved by legislature.Demands for Grants, as approved by legislature.

1.1. Original Appropriations approved by legislature, Original Appropriations approved by legislature, supplementary appropriations, surrenders and supplementary appropriations, surrenders and re-appropriations distinctly; re-appropriations distinctly;

2.2. Actual expenditure against the sum total of Actual expenditure against the sum total of above; above;

3.3. Excess (+) or saving (-) under each head Excess (+) or saving (-) under each head

The Appropriation Accounts are in three partsThe Appropriation Accounts are in three parts

(Para 1.3 and Appendix I of the MSO (A&E) – Vol. II)(Para 1.3 and Appendix I of the MSO (A&E) – Vol. II)

Part-IPart-I-- Summary of Appropriation Accounts and audit Summary of Appropriation Accounts and audit certificate of the Comptroller and Auditor General of Indiacertificate of the Comptroller and Auditor General of India

Part-IIPart-II-- Detailed Appropriation Accounts; Detailed Appropriation Accounts;

Part-IIIPart-III-- Appendices, containing two appendices on Appendices, containing two appendices on expenditure met out of Advances from Contingency Fund expenditure met out of Advances from Contingency Fund and Grant-wise details of Estimates and Actuals adjusted in and Grant-wise details of Estimates and Actuals adjusted in the accounts in Reduction of Expenditure. the accounts in Reduction of Expenditure.

Part IPart I - - A summary of AppropriationA summary of Appropriation AccountsAccounts

It shows-It shows-(1) (1) the total amount of funds (original and the total amount of funds (original and

supplementary) provided by the Legislature under each supplementary) provided by the Legislature under each voted grant and charged appropriation,voted grant and charged appropriation,

(2) (2) the actual expenditure incurred against each, andthe actual expenditure incurred against each, and

(3) (3) the saving or excess under each grant or the saving or excess under each grant or appropriation.appropriation.

The summary is concluded with a reconciliation statement of The summary is concluded with a reconciliation statement of expenditure indicated in the Appropriation Accounts with expenditure indicated in the Appropriation Accounts with the expenditure indicated in the Finance Accounts. the expenditure indicated in the Finance Accounts.

The format of reconciliation statementThe format of reconciliation statement

ChargedCharged VotedVoted

RevenueRevenue CapitalCapital RevenueRevenue CapitalCapital

Total Total Expenditure Expenditure according to according to Appropriation Appropriation AccountsAccounts

AA BB CC DD

Deduct Deduct Recoveries Recoveries shown in shown in

Appendix IIAppendix II

MM NN OO PP

Net Total Net Total expenditure expenditure shown in shown in Statement No. Statement No. 10 of Finance 10 of Finance AccountsAccounts

(A-M)(A-M) (B-N)(B-N) (C-O)(C-O) (D-P)(D-P)

4.4. Expenditure on subsidies disbursed during the Expenditure on subsidies disbursed during the year.year.

This statement was also introduced from the year 2005-06 This statement was also introduced from the year 2005-06 in view of the recommendation made by the Twelfth in view of the recommendation made by the Twelfth Finance Commission. The data is arranged Major Headwise Finance Commission. The data is arranged Major Headwise under-under-

A. General Services,A. General Services, B. Social Services, andB. Social Services, and C. Economic Services.C. Economic Services. (Referred to Statement No. 12)(Referred to Statement No. 12) FormatFormat: Actuals of the current year : Actuals of the current year in thousands of rupeesin thousands of rupees..

Part IIPart II Detailed Appropriation Accounts Detailed Appropriation Accounts It showsIt shows – –

(1)(1) the original grant/ appropriation,the original grant/ appropriation, (2)(2) additional funds provided during the year byadditional funds provided during the year by

supplementary grant/ appropriation, supplementary grant/ appropriation, (3)(3) total grant/appropriation,total grant/appropriation, (4)(4) actual expenditure,actual expenditure, (5)(5) saving or excess in the grant/appropriation as a saving or excess in the grant/appropriation as a

whole, whole, and and

(6)(6) the amount surrendered during the year. the amount surrendered during the year.

Accounts are prepared strictly according to the nomenclature Accounts are prepared strictly according to the nomenclature used in the Demands for Grants as approved by the used in the Demands for Grants as approved by the Legislature. Grants/appropriations and actual expenditure are Legislature. Grants/appropriations and actual expenditure are included in these Accounts upto sub-head level. included in these Accounts upto sub-head level.

The Accounts contain following four columns:The Accounts contain following four columns: Column-1Column-1 :: Original (indicated by letter ‘O’)Original (indicated by letter ‘O’)

Supplementary (indicated by letter ‘S’)Supplementary (indicated by letter ‘S’)

Voted and ChargedVoted and Charged

Re-appropriations (indicated by ‘R’).Re-appropriations (indicated by ‘R’).

NoteNote: the executive is vested with powers for re-appropriation of funds : the executive is vested with powers for re-appropriation of funds from one head to another head within Revenue Section or within the from one head to another head within Revenue Section or within the Capital Section under the provisions of the delegation of Financial Capital Section under the provisions of the delegation of Financial Powers.Powers.

Column-2Column-2 :: Total grant or appropriation i.e. the sum total of Total grant or appropriation i.e. the sum total of

‘O’, ‘S’ and ‘R’ ‘O’, ‘S’ and ‘R’ ColumnColumn--33 :: actual expenditure incurred during the year.actual expenditure incurred during the year. Column-4Column-4 :: excess expenditure (as compared to total grant excess expenditure (as compared to total grant

or or appropriation as (+) and saving as (-) between appropriation as (+) and saving as (-) between the figures of column (2) and (3). the figures of column (2) and (3).

Part-III-AppendicesPart-III-Appendices Appendix-IAppendix-I : e: expenditure met out of advances from the xpenditure met out of advances from the

Contingency Fund, under each grant, not Contingency Fund, under each grant, not recouped to the Fund till the close of year is recouped to the Fund till the close of year is included. included.

Appendix-IIAppendix-II : : grant-wise details of estimates and actuals in grant-wise details of estimates and actuals in respect of ‘Recoveries Adjusted in the respect of ‘Recoveries Adjusted in the Accounts in Reduction of Expenditure’ are Accounts in Reduction of Expenditure’ are included. Actual recoveries under Revenue included. Actual recoveries under Revenue and Capital are compared in this statement and Capital are compared in this statement with the budget estimates to work out the with the budget estimates to work out the ‘more recoveries’ or ‘less recoveries’. ‘more recoveries’ or ‘less recoveries’.

General checks to be exercised while General checks to be exercised while compiling Appropriation Accountscompiling Appropriation Accounts

(1)(1) It is to be ensured that figures of ‘Provision/Expenditure/Excess/ It is to be ensured that figures of ‘Provision/Expenditure/Excess/ Saving’ as given under ‘Summary of Appropriation Accounts’ tally Saving’ as given under ‘Summary of Appropriation Accounts’ tally with those given under individual “Grant/ Appropriation-wise with those given under individual “Grant/ Appropriation-wise Accounts”.Accounts”.

(2)(2) The classification should follow the Budget and no unauthorised The classification should follow the Budget and no unauthorised head should be opened. head should be opened.

(3)(3) The amounts surrendered as shown in the “Summarised The amounts surrendered as shown in the “Summarised Appropriation Accounts” should agree with those worked out in Appropriation Accounts” should agree with those worked out in the “Detailed Appropriation Accounts”. the “Detailed Appropriation Accounts”.

(4)(4) The “plus/Minus” signs should be carefully checked. The “plus/Minus” signs should be carefully checked. (5)(5) Month of surrender should invariably be indicated. Month of surrender should invariably be indicated. (6)(6) The Comments about excess or saving incorporated in relevant The Comments about excess or saving incorporated in relevant

grants should not be ambiguous and that the comments should be grants should not be ambiguous and that the comments should be such as can be understood by a layman. such as can be understood by a layman.

(7)(7) It has to be ensured that variations under “Revenue Expenditure”, It has to be ensured that variations under “Revenue Expenditure”, Capital Expenditure”, “Loans” and “Charged” and “Voted” Capital Expenditure”, “Loans” and “Charged” and “Voted” categories have been separately worked out/ commented upon. categories have been separately worked out/ commented upon.

General checks to be exercised while compiling General checks to be exercised while compiling Appropriation Accounts (contd…)Appropriation Accounts (contd…)

(8)(8) Errors in totaling/spelling mistakes should be avoided. Errors in totaling/spelling mistakes should be avoided.

(9)(9) To ensure that the main thrust to focus and highlight To ensure that the main thrust to focus and highlight major excesses/savings is not diffused, only major major excesses/savings is not diffused, only major savings/ excesses should be included as per the savings/ excesses should be included as per the guidelines given by the Public Accounts Committee (PAC) guidelines given by the Public Accounts Committee (PAC) of the respective State. of the respective State.

(10)(10) Exhibition of expenditure in Appropriation Accounts Exhibition of expenditure in Appropriation Accounts should follow the provisions in the budget. Expenditure to should follow the provisions in the budget. Expenditure to be transferred to other heads as shown below the line in be transferred to other heads as shown below the line in the budget should be carefully noted and timely action the budget should be carefully noted and timely action taken for such transfer and an intelligent examination of taken for such transfer and an intelligent examination of these accounts is to be undertaken to find out whether these accounts is to be undertaken to find out whether any mistake has not apparently been made by the any mistake has not apparently been made by the Accountant General office in carrying out the annual Accountant General office in carrying out the annual adjustment and/or following the accounting mechanism adjustment and/or following the accounting mechanism as stipulated in the budget estimates etc. as stipulated in the budget estimates etc.

General checks to be exercised while compiling General checks to be exercised while compiling Appropriation Accounts (contd…)Appropriation Accounts (contd…)

(11)(11) Re-appropriation orders relating to the previous years Re-appropriation orders relating to the previous years after closure of Accounts should not be accepted and after closure of Accounts should not be accepted and acted upon. acted upon.

(12)(12) Comments on defective budgeting should be highlighted Comments on defective budgeting should be highlighted if the provision is not made under the correct head of if the provision is not made under the correct head of Accounts. Accounts.

(13)(13) When huge provision of funds are made through When huge provision of funds are made through reappropriation it should be examined to see whether reappropriation it should be examined to see whether they come under New Service and, if so, Public Accounts they come under New Service and, if so, Public Accounts Committee should be briefed and suitable guidelines Committee should be briefed and suitable guidelines issued in the matter.issued in the matter.

Reconciliation of the figures between Reconciliation of the figures between Finance Accounts and Appropriation Finance Accounts and Appropriation Accounts.Accounts.

The General rule is that a grant/appropriation is The General rule is that a grant/appropriation is voted/authorised for the gross expenditure required for voted/authorised for the gross expenditure required for each service.each service.

The expenditure shown against each grant/appropriation in The expenditure shown against each grant/appropriation in the Appropriation Accounts will thus exclude recoveries the Appropriation Accounts will thus exclude recoveries adjusted in the accounts as reduction of expenditure in the adjusted in the accounts as reduction of expenditure in the respective grants/appropriations. respective grants/appropriations.

The Finance Accounts, on the other hand, will show the net The Finance Accounts, on the other hand, will show the net expenditure after taking into account the recoveries. expenditure after taking into account the recoveries.