Reconciliation procedure

1. Accounts and Bank Reconciliation

2. Definition
Reconciliation means the determination of the
receipts and expenditure necessary to
bring the balances of two or more related
accounts or statements into one agreement

3. Parties of Reconciliation
 Three parties
– Executive Department
– Accounts Office
– Bank

4. Necessity of Reconciliation
 Accounts
– Reconciliation of accounts between Executive
Departments and Accounts Offices help
ensuring control of expenditure of each
department within budget allocation
– For keeping correct accounts

5. Necessity of Reconciliation
 Bank
– Effective Bank Reconciliation is the cornerstone
of any accounting system
– It is required to ensure successful guardianship
of public funds
– It provides a solid basis upon which the quality
of accounting information may be assessed

6. Rules concerning Reconciliation
 Para 96 to 99 of Chapter 5 of General
Financial Rules
 Articles 33 and 34 of Account Code Volume
4
 Chapter 6 of Public Expenditure
Management Manual

7. Objectives of Reconciliation
 To establish Parliamentary control and
accountability over taxpayers money
 To assist government machinery in
controlling budget and expenditure, thus
ensuring best utilization of public money
 To detect fraud and error and establish
good internal control

8. Objectives of Reconciliation
 To identify measures to be taken for
controlling expenditure and increase
revenue income
 To provide correct information for the
government and the donor agencies
 Monitor revenue receipts to keep track
between revenue and expenditure
 To have correct accounts and to create
reliability on National Accounts

9. Accounts Reconciliation
 Production of reliable monthly accounts
calls for regular reconciliation of accounts
between Accounts Office and the
Department
 Extent of Reconciliation
– Accounts Figure finally published will be those
of the Accounts Office
– Departmental Accounts are sufficiently accurate
to render possible efficient departmental control
over expenditure

10. Differences in Accounting Statements -
Reasons
 Due to error or omission of entry on the
part of Executive Department or by
Accounts Office
 Any direct payment of loan or loan interest
through Bangladesh Bank by ERD without
informing respective departments

11. Procedures of Accounts
Reconciliation
 Every month, within 3 days of
completion of accounts, letter from
accounts office to DDOs under its
jurisdiction to reconcile within 15 days;
 DDO accepts data transmitted by
accounts office if there is no variation

12. Procedures of Accounts
Reconciliation
 In case of variation, DDO will send his
officer to accounts office for reconciliation
 If no acceptance is received or no officer is
sent by the DDO within 15 days, a reminder
is to be issued from accounts office giving
additional 15 days
 The reminder letter should mention that the
data produced by accounts office will be
treated as final if reconciliation is not done

13. Procedures of Accounts
Reconciliation
 Monthly accounts transmitted by DAOs and
UAOs to DCAs must accompany a
reconciliation statement
 DCA to compile reconciliation statements
received from DAOs and UAOs with the
reconciliation statement of his office and
send the compiled reconciliation statement
to CAO within 5 days

14. Procedures of Accounts
Reconciliation
 CAO having reconciled the departmental accounts
within the respective ministry will finally send the
reconciliation statement within 5 weeks, after the
completion of accounts, to CGA
 The accounts section and CDPU will record
information received from CAO and DCA in the
respective registers and put up the file within 5 days
with necessary comments
 Prescribed Format is used for preparation of
statement on reconciliation

15. Bank Reconciliation
 Players of Bank Reconciliation
– Bangladesh Bank/ Sonali Bank
– Local Accounts Office
– Chief Accounts Officer
– National Board of Revenue
– Controller General of Accounts

16. Bangladesh Bank
 Bangladesh Bank is the Central Bank and
as such act as the custodian of government
money (not including those held in
commercial bank accounts)
 Legal Framework given by Bangladesh
Bank Order 1972

17. Bangladesh Bank
 Bangladesh Bank has 9 branches to deal
with government accounts as Treasury
Banks
 Bangladesh Bank has contracted out its
operations to Sonali Bank in areas where
there is no branch of Bangladesh Bank

18. Sonali Bank
 Sonali Bank has 1200 branches to carry out
transactions in relation to government
account
 Of which, 101 branches collect receipts
only and report directly to Bangladesh
Bank
 Remaining 460 branches act as Treasury
Banks transacting receipts and payments
on behalf of the government and report to
Sonali Bank Head Office

19. Accounts held by Bangladesh Bank
 109 GoB accounts are maintained
– General Account
– CAO offices
– Debt Management
– Railway
– T&T
– Postal
– Public Account – GPF
– Public Account – other
– Pension
– Foreign Aid, etc.

20. Reconciliation of Accounts with
Bangladesh Bank
 Summary statement against all 109 GoB accounts
is forwarded to CDPU in the CGA office by the
Accounts and Budgeting Department of
Bangladesh Bank daily
 Everyday Bangladesh Bank calculates the effects
of transactions in the accounts to workout one
single balance and adjusts overall cash deficits or
surplus by issue or purchase of Treasury Bills (in
excess of overdraft limit of Tk. 1000 crores) or by
ways and means advances

21. Reconciliation of Accounts with
Bangladesh Bank
 Closing Balances of each of 109
government accounts (in excess of
overdraft limit) are prepared by the
Accounts and Budgeting Department of
Bangladesh Bank and sent to Finance
Division
 Daily sales and retirement of Treasury Bills
and retired ways and means advances are
also prepared and noted underneath the
daily balance figure

22. Reconciliation of Accounts with
Bangladesh Bank
 In addition to daily cash balance statement
given to GoB, daily reporting of cash
transactions undertaken by Bangladesh
Bank for and on behalf of GoB is made to
the concerned DCA and DAO
 Sonali Bank, acting as agent of Bangladesh
Bank, also forwards a daily statement of
transactions to the respective DAO and UAO
through its local branches

23. Daily Reporting Requirement
 Statement of cash transactions together
with supporting vouchers are required to be
transmitted to respective accounts offices
by each office and branch of Bangladesh
Bank/ Sonali Bank

24. Monthly Reporting Requirement
 A statement of monthly closing balances of
all 109 GoB accounts having taken into
consideration cash movement in both
Bangladesh Bank branches and the
authorized Sonali Bank branches is
prepared and sent to the CGA by
Bangladesh Bank
 Account wise closing balances are sent to
Finance Division

25. Thank you
Any question?