Compilation process of Government accounting Part 2.pptx
1. Compilation process of Government
accounting
Md. Ruhul Quddus , CAFO(Primary and Mass
Education)
2. What We Will Discuss…
• Legal framework for the generation of Government
accounts
• Compilation process of Government accounts
• Concept of Appropriation Accounts and Finance Accounts
• Important Contents of Appropriation Accounts and Finance
Accounts
• Preparation, Audit, and Certification of Finance Accounts
• Major Audit Observations on Appropriation Accounts and
Finance Accounts
• Public Accounts committee deliberation on Appropriation
Accounts and Finance Accounts
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4. Govt. Accounts Mandate.
Constitution CAG (Additional Functions) Act,
1974
Article 131:
Form and Manner of
Keeping Public Accounts
The public accounts of the
Republic shall be kept in such
form and in such manner as
the Auditor General may, with
the approval of the President,
prescribe.
Section 4: Preparation of
Appropriation and Finance
Accounts
Section 5: Audit of accounts
of statutory public
authorities, etc.
Section 6: Preparation of
Commercial Accounts
Section 7: Preparation of
General Financial statement
Public Moneys & Budget
Management ACT, 2009
Section 17(2):
PAO will prepare
Appropriation Accounts
and send it to CAG for
audit.
Section 17 (4):
CGA will prepare Finance
Accounts of the
Government and send it to
CAG for audit.
5. Structure of government accounts: Legal Framework
Article#80-92: Chapter II- Legislative and Financial Procedures
Primary Structure of Government Accounting is derived from
these articles (Partially dictates what to be prepared):
Article#84: Consolidated Fund and the Public Account of the
Republic
Article#87: Annual financial statement
Article#88: Charges on Consolidated Fund
Article#90: Appropriation Act
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6. • CGDF: For Defence Services
• FA&CAO : For Railways Accounts
• CGA: For rest of the Government
• Account Code: (Volume-1, Para-1)
• Compilation is the responsibility of CGA
• Account Code: (Volume-1, Para-11)
Structure of government accounts: Who?
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8. Structure of Government Accounts: Summing up
Who:
•Appropriation
Account:
•PAO
•Finance
Accounts
•CGA
•Monthly
Accounts:
•CGA:
•CGDF
•FA&CAO
What:
• Monthly
Account.
• Appropriation
Accounts
• Finance
Accounts
When:
• Monthly,
• Annually
How:
• Following
Procedure,
forms &
manner laid
in the
Constitution,
Additional
Functions
Act, 1974
and Account
Code
Whom:
• President
/Parliament
• Finance
Division
• PAOs
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9. Components of Consolidated Fund
and Public Accounts
Consolidated Fund: Receipts
Consolidated Fund: expenditure – non development -Charged
Consolidated Fund: expenditure – non development – Others
Consolidated Fund: expenditure – development
Public Accounts : Receipts
Public Accounts : Payments
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10. Classification Structure of Government Accounts and
Budget
• Accounts "Classification Chart " with 13 digit numeric code
was introduced from 1st July, 1998.
• BACS with 56 digits introduced 1st July, 2018.
• The introduction of any new code requires the approval of
the Comptroller and Auditor General.
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11. Compilation of Accounts -
Receipts of Government
• All receipts in Bangladesh on behalf of the Government are
paid into the Bank;
• Methods of collection : Manual challan
: Automated Challan
: Deduction from Bill
• The initial accounts of such receipts are maintained by
officers subordinate to the Controller General of Accounts
(CGA), normally by the Divisional Controllers of Accounts
(DCAs) / District Accounts & Finance Officers (DAFOs) /
Upazilla Accounts Officers (UAOs);
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12. Compilation of Accounts –
Receipts of Government (contd.)
• Receipts realized in the Post Offices, Public Works, Roads and
Highways, Public Health Engineering, Forest, and any other
Department which may be authorized on this behalf are paid into
the Bank in a lump sum and are accounted for at the DCAs
/DAFOs/UAOs;
• All Receipts realized in the Defence Services for which accounts
are kept by the Controller General of Defence Finance (CGDF) are
shown by DCAs /DAOs/UAOs as receipts of the Controller General
of Defence Finance who accounts for the receipts;
• Receipts of the Railways do not pass through DCAs
/DAFOs/UAOs. Railways deal directly with Bangladesh Bank.
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13. Compilation of Accounts – (contd.)
Payments of Government
• Payments in Bangladesh on behalf of the Government are
ordinarily made at the Bank. The initial accounts of payments
are kept at the CAFOs/DCAs/DAFOs/UAOs except for Defence
Services.
• Departmental Officers are required to maintain initial accounts
for the amount drawn in a lump by them. Certain
Departmental Officers are authorized to make payments by
cheque. Initial accounts of such payments are kept by the
Officers concerned.
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14. Compilation of Accounts (contd.)
Transactions are captured, classified and reported
• Transactions originating in the DCAs or DAFOs or UAOs are to
be recorded as per COA.
• Transactions, made by officers of certain Departments, are not
accounted for by DCAs or DAFOs, or UAOs in detail in the
classified form, but are shown in their accounts under the
remittance head as a consolidated entry;
• All the transactions are recorded on a real-time basis. All the
subordinate offices, however, need to close the monthly
accounts as per the pre-determined date.
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15. Compilation of Accounts (contd.)
Transactions captured, classified and reported
• In the case of Dhaka Presidency, CAFOs are responsible for the
settlement of payments claimed by different Government
Departments and their accounting;
• Some CAOs receive from certain departmental officers, an
account of transactions made by them. These transactions are
included by CAFOs in their monthly statement of classified
accounts of receipts and payments and furnished to CGA;
• The receipt transactions operated through treasury challans
within the Presidency are, however, captured by DCA, Dhaka.
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16. Accounts between CGA, CGDF
and FA&CAO, Railways
• Transactions under the CGA and transactions under the CGDF,
which are adjustable in the accounts of each other, are passed
on month by month to each other for adjustment through
Exchange Accounts. Such adjusting exchange accounts are
operated by the officers of the CGA and the CGDF;
• Transactions involving Railways taking place between the CGA
and the FA&CAO, Railways or between the FA&CAO, Railways
and the CGDF are adjusted through settlement Accounts.
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17. Account of the Government with the Bank
• Government has an agreement with Bangladesh Bank by virtue
of which the general banking business of the Government is
carried on and transacted by the Bank in accordance with and
subject to the provisions of the Agreement and of the
Bangladesh Bank Order 1972.
• Statement of cash transactions undertaken by Bangladesh
Bank on behalf of the Government together with all supporting
vouchers etc. is transmitted by each office and branch of
Bangladesh Bank daily to the DAFO, DCA, CAFO, and the CGA
office, as the case may be.
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18. Account of the Government with the Bank (contd.)
• Each branch of Sonali Bank transacting Government business as
an agent of Bangladesh Bank forwards daily a statement of
transactions to the local UAO/DAFO/DCA along with all
supporting vouchers.
• All transactions regarding Public Accounts taking place in the
offices and branches of Bangladesh Bank and designated
branches of Sonali Bank are consolidated in the Government
Accounts Department of Bangladesh Bank.
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19. Account of the Government with the Bank (contd.)
At the close of the accounts of each month, a statement of
closing balance of the Government on the books of the Bank
after taking into account all cash transactions in all the offices,
branches and agencies of the Bank and the adjusting
transactions in its own books is forwarded by the Head Office of
Bangladesh Bank to the Controller General of Accounts.
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20. June (Pre) and June (Final)
• June (Final) is an additional month where additional
adjustments are required, especially for GPF interest
calculation. Correction of error, Misclassification, etc is
adjusted before the finalization of yearly accounts.
• Before preparation of Yearly Accounts June (Final) needs to
be closed
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21. Yearly Accounts
• At the end of each year CGA compiles two sets of accounts
–
1) Appropriation Accounts, and
2) Finance Accounts.
• These accounts are audited and certified by the
Comptroller and Auditor General of Bangladesh.
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22. Flow of Accounting Data
UPAZILA ACCOUNTS OFFICES
DISTRICT ACCOUNTS &
FINANCE OFFICES
DCAs
CONTROLLER GENERAL OF ACCOUNTS
(CGA)
CGDF
ADG
Railway
CAFOs
Works, Roads,
T&T, Postal,
Forest, Public
Health etc.
Ministries/
Divisions
Bangladesh
Bank Finance
Division
Monthly
Accounts
C&AG
Appropriation & Finance Accounts
Parliament
23. Concept of Appropriation Accounts and
Finance Accounts
Appropriation Accounts means accounts relating to
expenditure brought to account during a financial year
to the several items specified in the Appropriation
Act. It provides comparison between final grant and
expenditure of different ministries and their
subordinate officers together with explanation of
variance, if any.
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24. Concept of Appropriation Accounts and
Finance Accounts (2)
Finance Accounts means the accounts of receipts and
disbursements for the purpose of the Government,
the accounts of public debt, and the assets and
liabilities of the Government as deduced from the
balances recorded in its books. This covers all
accounting aspects of the Consolidated Fund and
Public Accounts of the republic.
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25. Concept of Appropriation Accounts and
Finance Accounts (3)
• The Appropriation Accounts is technically an expenditure
variance report that compares actual against budget. On the
other hand, the Finance Accounts is a hybrid document that
includes balance sheet items (assets and liabilities) and also cash
flow from Revenue, Investment, Borrowing etc.
• The Finance Accounts is a description of the financial standing of
the government at a particular point of time whereas an
Appropriation Accounts tells how efficiently the executive
government has conducted its expenditure programme vis-à-vis
budget during a period. Finance Accounts covers both
Consolidated Fund and public Accounts.
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26. Concept of Appropriation Accounts and
Finance Accounts (4)
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Finance Accounts Appropriation Accounts
Includes the total receipts and
payments of the Government of a
financial year, the financial assets
and liabilities including the local
and foreign debt, the cash balance
position at the end of the year.
Normally balances related to
assets and liabilities are carried
forward to next year.
Relates expenditure brought into
account to the budget and
includes explanation of spending
authority for any overspending or
surplus.
27. Contents of Appropriation Accounts
Appropriation Accounts (new format)
• Preface
• Introduction
• Audit Certification of Comptroller and Auditor General of
Bangladesh
• Summary of Appropriation Accounts
• Appropriation Accounts (Detail)
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30. Contents of Finance Accounts (New)
Finance Accounts (new format)
• Certificate of the Comptroller & Auditor General
• Statement of the Controller General of Accounts
• Introduction to Finance Accounts
• Financial Statements
o Statement – 1: Cash Receipts and Payments
o Statement – 2: Comparison of Budget and Actual Amount
o Statement – 3: Comprehensive Receipts and Disbursements under Public
Accounts
o Statement – 4: Summary of Financing Activities
o Statement – 5: Summary of Balances
• Notes to the Accounts
• Glossary and Acronyms
• Annexures (available in website)
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36. Preparation, Audit and Certification of
Appropriation Accounts (1)
• Currently CAOs generate Appropriation Accounts
through iBAS and submit to the Principal Accounting
Officers for his signature.
• Appropriation Accounts is signed by the secretary of
the respective ministry/division as proof of his
ownership as Principal Accounting Officer.
• Signed Appropriation Accounts is submitted to the Civil
Audit Directorate for audit. Thereafter, it is sent to the
C&AG for his final approval and audit certification.
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37. Preparation, Audit and Certification of
Appropriation Accounts (2)
Appropriation Accounts (Postal Department): CAO
(Postal) compiles the Appropriation Accounts and the
Director General of the Postal Department signs it.
After being audited by PTST Audit Directorate, the
appropriation accounts are furnished to the
Comptroller and Auditor General (C&AG) for
certification.
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38. Preparation, Audit and Certification of
Appropriation Accounts (3)
• CGDF compiles the Appropriation Accounts on the
basis of actual expenditure vis-à-vis budget allocation
received from different SFC, FC and AFC offices with
comments on excess expenditure/surplus fund given
by the Defense Ministry.
• The script of the Appropriation Accounts is then sent
to the DG, Defense Audit, for audit comments.
Thereafter, it is sent to the C&AG for his final
approval and audit certification.
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39. Preparation, Audit and Certification of
Appropriation Accounts (4)
• Bangladesh Railway prepares appropriation accounts to
show its actual expenditure vis-à-vis the budget grant
attested for it. The FA&CAO/East compiles the
appropriation accounts, which are signed by the
Director General of Bangladesh Railway after adding his
comments on variances from the original grant.
• The accounts are then sent to the Director General of
Railway for audit and thereafter, to the C&AG for
certification.
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40. Appropriation Accounts 2017-18
Audit Observations
Issues Operating Activity Development Activity
Excess
Expenditure
3 Ministries incurred excess
expenditures of Tk. 5282.76 crore.
11 Ministries overspent Tk.
1,48,330.05 crore against different
code range, resulting in over
expenditure of Tk. 19,048.83 crore
from final grants.
3 Ministries incurred excess expenditures
of Tk.4228.22 crore, representing 16.24%
excess of final grants.
From review of code ranges with more
than Tk.10 core allocation showed 15
Ministries over spent Tk.11,959.85 crore
than final grants.
Budget Surplus 18 Ministries had budget surplus
of Tk.11,706.90 crore
representing 9.4% of the
allocation. Cause identified as
inefficient budget planning and
failure to surrender the amount
on time.
18 Ministries had budget surplus of
Tk.17,870.75 crore representing 9.4% of
the allocation.
41. Appropriation Accounts 2017-18
Audit Observations
Issues Operating Activity Development Activity
Supplementary
Grants without
requirements
Supplementary grant provided
without actual requirements
to 8 ministries when they
failed to spend the original
budget. Total surplus is
17.35%.
Unnecessary supplementary grant
provided to 12 ministries when they
failed to spend the original budget.
Total surplus is 9.02% of final grant.
Cause inefficient budget estimate
preparation.
From review of code range
with more than Tk.10 core
allocation shows that 11
Ministries failed to spend 98%
of the budget, but still
supplementary grants were
provided.
42. Finance Accounts 2017-18
Audit Observations
Changes observed in different balances of CF and PAR, but
explanations not provided.
Proper narrative disclosure not provided for 14 statements and 25
schedules.
Complete source of information not available with Central Data
Processing Unit (CDPU) of CGA.
Discrepancies observed in figures of Statements and Schedules of
Finance Accounts.
Negetive balances shown against financial assets and liability.
43. Finance Accounts 2017-18
Audit Observations
Discrepancies with NBR against revenue receipts.
Disagreement on external loan balances with ERD.
Total liability against Treasury Bills does match with BB data. Several
TB are showing negative balances.
There is no disclosure about Government Guarantees/contingent
liabilities.
