Sh. aseem sir (workshop of financial managment held on 20 27.03.2013)
1. Preparing the FinancialPreparing the Financial
Records/Statements/Details-Records/Statements/Details-
ECR/Valuable Register/CashECR/Valuable Register/Cash
Book/Ledger/BRS/Receipt &Book/Ledger/BRS/Receipt &
Payment Account &Payment Account &
Additional InformationAdditional Information
11
2. 22
Accounting basically means :
The process of identifying, measuring, recording,
classifying, summarising, analysing, interpreting and
communicating the financial transactions and events
in monetary terms.
OBJECTIVES OF ACCOUNTING
To keep systematic records
To ascertain the net effect of financial operation e.g.
surplus or deficit
To know the financial position of the institution for the
Internal control
To provide information to DGCA, MHRD and
Parliament
3. Accounts broadly means reflection of
Receipts and Payments under the
relevant & prescribed heads i.e.
entering the classified Receipts &
Payments and drawing Receipt &
Payment Account , Income &
Expenditure Account and Balance
Sheet therefrom.
5. As and when a receipt is occurred or
payment is made Voucher is to be
created for each such transaction.
All these vouchers are to be entered in
their respective control registers
(valuable register in respect of receipts
and expenditure control/advance
register in respect of payments) before
its required deposits and payments.
6. 66
CLASSIFICATION OF EXPENDITURE
The account will be classified under the broad
classification heads indicating the expenditure
programme-wise/activity-wise as per the heads
precribed in the Budget estimates.
The correct classification of expenditure as well
as receipt therefore, is of paramount importance
and a pre-requisite for evaluation of the financial
performance.
7. 77
Suitable instructions for ensuring proper
classification may have to be issued to the
subordinate offices for maintaining programme-
wise expenditure details.
The bills submitted by the respective departments
will be subjected to cent per cent scrutiny at the
finance & accounts with reference to the
transaction appearing in the supporting sub-
voucher attached therewith so that correctness of
the classification recorded is ensured and the
results based thereon are reliable.
8. 88
Capital Expenditure and Revenue Expenditure
Capital Expenditure : All Non-recurring
expenditure made for purchase of Capital (basically
movable & immovable assets) items are called
Capital Expenditure
For Example: Purchase of Land, Xerox Machine, UPS
etc.
Revenue Expenditure : All Recurring expenditure
for day to day maintenance of the Office are Revenue
Expenditure
For example : Salary, Repair of equipment, Rent,
Electricity charges, remuneration to staff etc.
9.
10. IGNOU Regional CentreIGNOU Regional Centre
Bill Passing cum ExpenditureBill Passing cum Expenditure
Control RegisterControl Register
S.
No.
Diary No. &
Date of
Receipt of
bill in
IGNOU, RC
Learner
Support
Centre
where
from bill
is
received
Name of
Party/details of
bill NO. & Date
Bill
Amount
TDS
SD Net Amount Head of
Account
Signature of
AR/DR with
date
Cheque/
DD No.
with
date
Remar
ks
11. Valuable Register for AdmissionValuable Register for Admission
Section/Finance & AccountsSection/Finance & Accounts
Section at the Regional CentreSection at the Regional Centre
S. No. DD No. Date Amount
Bank
Name
Name of
Student
Progra
mme
Date of
Deposit
12. 1212
CASH BOOK – FEES ACCOUNT/SALE OF FORM/OTHER
RECEIPTS FROM STUDENTS
Month &
Date
Vr. Particulars of receipts
& from whom received
Receipt No.
Chq/DD No.
Amt. Cash Bank Ledger
folio.no
1-04-131-04-13 2R2R FeesFees 562134562134 10,00,0010,00,00
00
-- IDBIIDBI 11
2-04-132-04-13 3R3R Sale of FormSale of Form 2645326453 5,0005,000 -- PNBPNB 22
3-04-133-04-13 4R4R Dup.I-CardDup.I-Card 8454184541 200200 -- SBISBI 33
13. 1313
CASH BOOK REMITTANCE SIDECASH BOOK REMITTANCE SIDE
Month &Month &
DateDate
Vchr.No.Vchr.No. ParticulaParticula
rs ofrs of
PaymentPayment
Chq.No/Chq.No/
AdviceAdvice
No.No.
Amt.Amt. CashCash BankBank LedgerLedger
Folio/PaFolio/Pa
ge No.ge No.
30-04-1330-04-13 9 P9 P Trnsfr.Trnsfr.
To Hqtr.To Hqtr.
001001 10052001005200 -- IBIB 2424
14. 1414
CASH BOOK – GRANT ACCOUNTCASH BOOK – GRANT ACCOUNT
RECEIPTS SIDERECEIPTS SIDE
MonthMonth
& Date& Date
Vchr.No.Vchr.No. ParticularsParticulars
of receiptsof receipts
& from& from
whomwhom
receivedreceived
ReceiptReceipt
No.No.
Chq.No./Chq.No./
CreditCredit
Adv.No.Adv.No.
AmtAmt CashCash BankBank LedgerLedger
Folio/PaFolio/Pa
ge No.ge No.
1-4-131-4-13 1-R1-R 11stst
Qtrly.Qtrly.
GrantGrant
112112 10000001000000 -- PNBPNB 55
30-4-1330-4-13 7-R7-R Int. fromInt. from
BankBank
120120 20002000 -- PNBPNB 66
16. All accounting units shall maintain the
cash books, in the prescribed form i.e.
One for fee, Sale of Forms, other receipts
and another separately for applicable
Plan & Non-Plan Grant Accounts.
17. As and when any receipt is occurred
based on the deposit slips/credit advice
by the Bank, a receipt voucher should
be created and entered in the respective
Cash Book.
18. Similarly if payment made by
cheque/DD should be recorded in
appropriate column on payment side
after having created a voucher.
Any cash withdrawn by drawing self-
cheques should be entered in the cash
column on receipt side and appropriate
bank column on payment side.
19. The Cash Book should be closed
regularly at the end of the day on which
a transaction occurs after having it
completely checked.
20. 2020
Bank Reconciliation StatementBank Reconciliation Statement
A statement which reconciles theA statement which reconciles the
balance as per cash book and thebalance as per cash book and the
balance as per pass book showing allbalance as per pass book showing all
causes of difference between the twocauses of difference between the two
Causes of differenceCauses of difference
1.1. Transaction that usually appear in theTransaction that usually appear in the
cash book, but not in the pass bookcash book, but not in the pass book
2.2. Transactions that usually appear in theTransactions that usually appear in the
pass book, but not in the cash bookpass book, but not in the cash book
21. 2121
Transactions that usually appear inTransactions that usually appear in
the Cash Book but not in Passthe Cash Book but not in Pass
BookBook
Cheques/DDs deposited into bank but notCheques/DDs deposited into bank but not
yet collectedyet collected
Cheques/DDs issued but not yetCheques/DDs issued but not yet
presented for paymentpresented for payment
Cheques/DDs dishonored but no entryCheques/DDs dishonored but no entry
made in the cash bookmade in the cash book
Errors in the cash bookErrors in the cash book
22. 2222
Causes of ErrorsCauses of Errors
Dr or Cr entry made twiceDr or Cr entry made twice
Transaction of Dr side entered on the CrTransaction of Dr side entered on the Cr
side or vice versaside or vice versa
In the case of more than one Bank A/c theIn the case of more than one Bank A/c the
cheque/deposit is entered in thecheque/deposit is entered in the
unconnected A/csunconnected A/cs
Error in BalancingError in Balancing
23. 2323
Transactions that usually appear inTransactions that usually appear in
the Pass Book but not in the Cashthe Pass Book but not in the Cash
BookBook
Interest allowed by the BankInterest allowed by the Bank
Amounts collected/paid as per theAmounts collected/paid as per the
standing instructionsstanding instructions
Bank ChargesBank Charges
Errors in the Pass bookErrors in the Pass book
24. 2424
Causes of Errors in Pass BookCauses of Errors in Pass Book
Ommission of EntryOmmission of Entry
Recording of receipt & payment in theRecording of receipt & payment in the
wrong side of A/cwrong side of A/c
Recording of receipt & payment whichRecording of receipt & payment which
belongs to some other A/cbelongs to some other A/c
25. 2525
Format of Bank ReconciliationFormat of Bank Reconciliation
Dr. Cr.Dr. Cr.
Balance as per cash bookBalance as per cash book AmtAmt --
Cheques issued but not paid by theCheques issued but not paid by the
bankbank
AmtAmt --
Interest given by the BankInterest given by the Bank AmtAmt --
Interest collected but not recorded in theInterest collected but not recorded in the
Cash bookCash book
AmtAmt --
Cheque deposited but not collected byCheque deposited but not collected by
the Bankthe Bank
-- AmtAmt
Bank ChargesBank Charges -- AmtAmt
Errors in Cash Book/Pass BookErrors in Cash Book/Pass Book AmtAmt AmtAmt
26. 2626
Amount received as per standingAmount received as per standing
instructionsinstructions
AmtAmt --
Amount paid as per standingAmount paid as per standing
instructionsinstructions
-- AmtAmt
Balance as per Pass bookBalance as per Pass book -- AmtAmt
27. 2727
LedgerLedger
Ledger is a book containing all accountsLedger is a book containing all accounts
affected by various transactions in theaffected by various transactions in the
institution it could be termed as a classifiedinstitution it could be termed as a classified
and summarized record of transactionsand summarized record of transactions
relating to all the head of Accounts.relating to all the head of Accounts.
28. LEDGERLEDGER
RECEIPTS SIDERECEIPTS SIDE
Month &Month &
DateDate
Vr. NoVr. No ParticularParticular
s ofs of
receiptreceipt
GrantGrant FeesFees SOFSOF InterestInterest OtherOther
FromFrom
StudentStudent
1-4-131-4-13 1-R1-R 11stst
Qtrly.Qtrly.
GrantGrant
10000001000000 55
1-4-131-4-13 2-R2-R FeesFees 10000001000000 99
2-4-132-4-13 3-R3-R Sale ofSale of
formform
50005000 99
3-4-133-4-13 4-R4-R Dup.I.Dup.I.
CardCard
200 10200 10
7-4-137-4-13 7-R7-R Int.Int.
BankBank
20002000 1111
Cash
book
folio
no.
30. LEDGER MAINTENANCE
Head-wise Ledgers (for example T.A,
Remuneration, etc.,) are to be maintained for
all expenditure and for receipts (fees, sale of
forms etc,) and thus each and every
transaction are to be recorded in the ledgers
mentioning the page no. in which the
corresponding entry is made in the cash book.
With the page no. of ledger.
31. 3131
Monthly/Quarterly/Yearly Receipt &Monthly/Quarterly/Yearly Receipt &
Payment AccountPayment Account
Basically subordinate unit’s accounts endsBasically subordinate unit’s accounts ends
at the periodic preparation of Receipt &at the periodic preparation of Receipt &
Payment Account which they are to send toPayment Account which they are to send to
Headquarters Monthly/Quarterly/Yearly.Headquarters Monthly/Quarterly/Yearly.
Only at the end of Financial year they areOnly at the end of Financial year they are
supposed to send the Additional informationsupposed to send the Additional information
which are detailed aheadwhich are detailed ahead
32. 3232
Accounting Systems
1.Cash Accounting- The cash basis accounting
measures the flow of cash resources. It recognises
transactions and events only when cash is received
or paid.
Financial statements produced under the cash basis
of accounting cover cash receipts, cash
disbursements, and opening and closing cash
balances. A cash accounting system has the
advantage of simplicity.
Presently Regional centres are submitting Receipt
and payment Account on cash basis and after
additional information obtained from RC’s are
merged at Hqrs, it is converted into Accrual
Accounting.
33. 3333
Accrual Accounting -
1.The accrual basis accounting recognises transactions
and events when they occur irrespective of when cash is
paid or received.
2. Revenues reflect the amounts that came due during
the year, whether collected or not.
3. Expenses reflect the amount of goods and services
consumed during the year, whether they are paid or not
in that period.
4. The costs of assets are deferred and recognised when
the assets are used to provide service.
Expenses are the costs of goods and services consumed
as well as any increase in liabilities or decrease in
assets over the accounting period( e.g. depreciation and
losses which can occur in the absence of any
transactions also.
34. What & how the accounts are prepared at
Headquarters
In this context, let us see the process as to what and
how the accounts are prepared at headquarters.
Creation of vouchers in respect of receipt, occurs
through cash/DD/IPO deposit, credit advice or receipt
book and in respect of expenditure, occurs through
cash/cheque/DD payment or debit advice. All these
vouchers are to be routed through their respective
control registers (valuable register in respect of
receipts and expenditure control/advance register in
respect of payments) before its respective deposit and
payment.
35. Arranging the vouchers date/serial
number-wise on a given date and
checking them from the ODL generated
Cash Book.
As the entries are automatically
transferred to Ledgers. Hence the Trial
Balance gets drawn there after.
Entering separately the quarterly
accounts received from Regional
Centers in MS-Excel after having the
following check points :-
36. a) Opening Balances as on 1st April is as per the closing
balance as on 31st
March of the previous financial year
b) All Grants remitted by Hqrs are shown
c) Expenditure have been booked under proper heads
d) Recoveries made during the period have been duly
remitted.
e) Head-wise/Sub-headwise totals are correct
f) Overall totalling is correct
g) The unspent balances tally with the Closing balances
shown at the end of the respective period.
37. After carrying out, the checking of the
subordinate office’s account /
corrections (after the receipts of
clarifications) the merger of
accounting heads take place.
Preparation of quarterly Trial Balance,
Income & Expenditure & Balance
Sheet.
38. 3838
All the above steps are for
Monthly/Quarterly/Periodical Statements and
at the end of respective financial year the
cash accounts are converted to Accrual
Accounts by adding the following additional
information sought from the Schools,
Divisions, Units.
1.Outstanding liabilities 2.prepaid expenses
3. Prior period expenses 4.Outstanding
Income, if any 5.Closing stock held
(Stationery, Study material ,Stamps,
consumables and non-consumables stores
etc.
39. 3939
For this the following AdditionalFor this the following Additional
information is collected frominformation is collected from
Schools/Divisions/UnitsSchools/Divisions/Units
Prior Period Expenditure :: Expenditure made
during the current year but pertains to previous
financial year. For example salary for the
month of March is paid in the month of April of
next financial year
Prepaid income –– Any Income received in
advance which pertain to next financial year ;
for example – Fees /Rent received in advance
Prepaid Expenditure:: Any expenditure paid
during the year the benefit of the same
extends to next financial year-For Example-
Insurance /Rent/AMC paid in advance
40. 4040
Outstanding Expenditure/PendingOutstanding Expenditure/Pending
ExpenditureExpenditure:: Any expenditureAny expenditure
pertaining to the current year but notpertaining to the current year but not
paid in the current financial year due topaid in the current financial year due to
various reasons like scarcity of fund/billsvarious reasons like scarcity of fund/bills
received late.received late.
Closing StockClosing Stock:: At the end of theAt the end of the
financial year (as on 31st March) somefinancial year (as on 31st March) some
portion of the stationery / study materialportion of the stationery / study material
may be lying unused out of the stockmay be lying unused out of the stock
purchased during the year.purchased during the year.
41. Once the feeding of connected cash and
accrual details is complete Receipt & Payment
Account, Income and Expenditure Account ,
and Balance sheet are drawn.
The Annual Accounts so compiled is placed
before Finance Committee ,BOM for its
Approval.
After approval by the Finance Committee and
BOM the Annual Accounts are sent to DGACR
for Audit who in turn conducts Statutory
Audit, points deficiencies, issues draft audit
report, get clarifications and issues audit
certificate.
42. The Finance & Accounts Division then gets
the approval of Annual Accounts alongwith
Audit Report from FC & BOM.
Once the approval is obtained the Annual
Accounts of the particular year is printed
and forwarded to MHRD for laying it in both
the houses of Parliament.
