Pk-Afp Functions of Accounts Department

8/3/2019 Pk-Afp Functions of Accounts Department

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Indian Railways

Accounts Department

An Overview

Parimal Kasliwal

Professor Accounts Management


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No Taxation without

Representation


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265. No tax shall be levied or

collected except by authority oflaw.


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112. (1) The President shall in respect of every financial year

cause to be laid before both the Houses of Parliament a statementof the estimated receipts and expenditure of the Government of

India for that year, in this Part referred to as the annual financial

statement.

(2) The estimates of expenditure embodied in the annual financial

statement shall show separately(a) the sums required to meet expenditure described by this

Constitution as expenditure charged upon the Consolidated Fund

of India; and

(b) the sums required to meet other expenditure proposed to be

made from the Consolidated Fund of India,

and shall distinguish expenditure on revenue account from other

expenditure.


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283. (1) The custody of the Consolidated Fund of India and

the Contingency Fund of India, the payment of moneys into

such Funds, the withdrawal of moneys therefrom, the

custody of public moneys other than those credited to such

Funds received by or on behalf of the Government of India,their payment into the public account of India and the

withdrawal of moneys from such account and all other

matters connected with or ancillary to matters aforesaid shall

be regulated by law made by Parliament, and, untill provision

on that behalf is so made, shall be regulated by the rules

made by the President


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Indian Railways and the

Constitution of India


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Constitutional Provisions

Seventh Schedule

Rules of Allocation of BusinessRailways & MoF


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Seventh Schedule(Article 246)

(List I- Union List)

22. Railways

30. Carriage of passengers and

goods by railway, sea or air, or bynational waterways in

mechanically propelled vessels.


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Allocation of Business Rules

RAILWAYBOARD (RAIL BOARD)1. Government Railways-All matters, including those relating to

Railway revenues and expenditure, but excluding Railway Inspectorate

and RailwayAudit.

2. Non-Government Railways Matters in so far as provision for

control by the Ministry ofRailways, Railway Board as provided in the

RailwaysAct, 1989 (24 of 1989) or in the contracts between the

Government and Railways, or in any other statutory enactments, namely,

regulations in respect of safety, maximum and minimum rates and fares,

etc. excluding the item of work allocated to the Department of Urban

Development.

3. Parliament Questions regarding offences relating to pilferage of

railway property other than offences relating to crime on Government

Railways and Non-Government Railways.

4. Administration of pension rules applicable to Railway employees.


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HISTORICAL BACKGROUND

33 separate Railway administrations (4 by Govt., 5 byIndian Princely states & 24 by pvt. Companies)

Headed by an officer of the ICS

Assisted by 1 Secretary, 3 Deputy Secretaries, 4Under Secretaries, 4 Assistant Secretaries

7 circles- Consulting Engineer, Govt. Examiner ofAccounts

Accounting and auditing by Accuontant General(Public Works Department)


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Oct 1901 Sir Thomas Robertson appointed as

Special Commissioner of IR

Report in 1903 Setting up of Railway Board Chairman & 2

Members

March 1905-Control given to Railway Board Examiner of Accounts


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1908, Railway Finance Committee

Independent of Department of Commerce and

industry: Post of Accountant General Railwayscreated

Based on recommendations of Acworth

Committee (1921), appointment of Financial

Commissioner (Railways) in April 1923


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Objective-Economy in expenditure of public

money; coordination of Railway policy with

general financial policy.

Separation convention of1924

Evolution in five stages


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Stage I: Railway finance part of Finance

Department; accounting by AG

Stage II: Appointment of Financial

Commissioner (Railways) in 1923

Stage III: Separation process complete in1929, AG replaced by Controller of Railway

Accounts (under FC(Rlys.)) and Director ofRailway Audit under Auditor General

Beginning of IRAS


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Stage IV: Railway Accounts Department placed

under General Manager (Wedgewood

Committee (1937))

Change of designation to FA&CAO

Stage V: distinct Finance Branch under

Financial Adviser & Chief Accounts Officer

(FA&CAO)


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Railway Board

Chairman, Railway Board

Financial Commissioner (Railways)

Members of the Railway Board Member Engineering (ME)

Member Electrical (ML)

Member Mechanical(MM

)

Member Staff(MS)

Member Traffic (MT)


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Financial Commissioner (Railways)

Separation Convention

Railway Budget separate from General Budget

Railway to manage its own finances

Sanctioning of Expenditure for Railways


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FINANCIAL COMMISSIONER (Railways)

Professional head; ex-officio Secretary to

Govt. of India

In event of disagreement with Chairman,Railway Board (and the Minister of Railways)

in matters concerning Railway Finance, can

directly refer to Finance Minister

Can issue instructions to all FA&CAOs on

accounting and financial matters.


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Accounts Department of IR

3 Levels

Apex Railway Board

Zonal Railway

Field Units

Audit Offices are attached at all 3 levels; viz.

Dy. CAG (Railways) at Railway Board

PDA at Zonal Railways

Senior Divisional Audit Officer at field level


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FinancialCommissioner

Accounts

Accounting

Reforms

FinanceBudget

Finance

Commercial

Establishment

Pay

Commission

Statistics &

Economics

Finance


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JAO

SAO

DY.FA&CAO

JAO

SAO

DY.FA&CAO/G

FA&CAO/G

JAO

SAO

DY.FA&CAO/TFC

JAO

SAO

DY.FA&CAO/Stores

JAO

SAO

Chief Cashier

FA&CAO/WST

JAO

SAO

Dy FA&CAO/Const

FA&CAO/CONSTN

FINANCIAL ADVISER &CHIEF ACCOUNTS OFFICER


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DIVISIONALACCOUNTS

ORGANISATION

ADFM DFM ADFM

Sr DFM


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FUNCTIONSOFACCOUNTSDEPARTMENT

Keeping the accounts of the Railways in

accordance with prescribed rules

Internal check of transactions affecting the

receipts of expenditure of the railways.

Tendering financial advice

Compilation of budgetOther management accounting functions

Ensuring financial propriety


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MAINDIVISIONSOF WORK

Administration

Booking and Compilation

Budget

Cash and Pay

Compensation Claims

Engineering Accounts Establishment accounts


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MAINDIVISIONSOF WORK

Finance and planning

Fuel Accounts

Inspection(Executive and Accounts Officers)

Expenditure accounts

PF and Pension

Traffic Accounts Stores Accounts

Traffic costing

Workshop accounts


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INTERNALCHECKOFEXPENDITURE

Precheck and postcheck

All claimsagainsttheRailwaysshould beprechecked.

Payments fromimprest,stationearning,paymentsof certain classesof pay

bills,master sheets, paymentsmadein

advance for purchaseofstoresmay bepostchecked.


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INTERNAL CHECK

Check of sanctions and orders

Check of delegation of financial authority

Check of all establishment bills

Pre check and post check of expenditure

Maintenance of PF accounts

Check of pension payments

Prior check of all contractors bills, stores bills

before passing the same for payment


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INTERNAL CHECK

Conducted with reference to rules and ordersissued

Codal provisions Cannons of financial propriety

For example while scrutinizing receipts

Amount due to railways are correctly and

promptly assessed and recovered

All receipts are properly brought into account

Correctly clarified/correctly apportioned

Sanctioned by competent authority.


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RAILWAYACCOUNTSASA

COMMERCIALENTERPRISE

Capital and revenue transactions

Capital and revenue accounts

Profit and loss accounts, balance sheet

Prepared at close of financial year


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RAILWAYSACCOUNTSASAGOVT.

ENTERPRISE

Govt accounts are maintained in 3 parts

Consolidated Fund of India(Part I)Article 266

Contingency Fund of India(Part II)Article 267

Public Accounts of India(Part III)Article 268


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RESULTSOFINTERNALCHECK

Irregular payments and objections

Disallowance list,objections statement, objections

book, register of serious irregularity

Classification of objects

Want of sanctioned estimate, excess over estimate,

irregular personal claims, absence of vouchers

Regularisation of objections Requiring GMs sanction, Railway Boards sanction,

action taken by the Accounts Officer


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FINANCIALAPPRAISALOFRAILWAY

PROJECTS

General principles of investment decisions

Scrutiny by Accounts Officer

Test of remunerativeness-14% New lines, line capacity works, yard re-

modelling, change of traction,introduction of

new services

50 lakhs and above-detailed traffic survey


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Structure of Railway Accounts

Revenue- Traffic earning main source, workingexpenses main revenue expenditure.

Capital- Expenditure to increase concrete

assets, block account.

Debt- Loan and advances.

Remittances- Adjusting heads, transfer

between different accounting circles.


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Performance Budgeting

Demands for grants- Spell out the function, activities

and objects.

Each demand has three subdivisions- Subhead,

detailed head which answers why, primary unit,which answers what.

13 demands for grants.

This classification provides direct integration,flexibility, management information.

Pk-Afp Functions of Accounts Department

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