Tuesday, October 20, 2009

INTERNALCHECK AND STATUTORY AUDIT


INTERNAL CHECK –PRE AND POST CHECK
1.1 INTERNAL CHECK
The check exercised By the Accounts office on the financial transactions of the Railways on half of Railway Administration is called internal check. This is called so to distinguish it from the audit conducted by the chief auditor of the railways receipts and expenditure on behalf of the controller and Auditor General of India. In fact the audit conducted by the Chief auditor should be rightly called “external audit” and the internal check carried out by the financial Adviser and his officers, on behalf of the Railway administration should be called “Internal audit” in modern parlance.

1. 1.1 The Scope and methods of internal check or internal audit have been brought out in detail in Chapter VIII of Accounts Code Volume I.

The Salient features of internal audit are as under.
(a) Check of Sanctions and orders,
(b) Check of delegation of financial authority,
(c) Check of all Establishment bills
(d) Pre-check and Post-check of expenditure
(e) Scrutiny of receipt - this includes inspection of original records at the stations as well as post audit of returns from the stations in the Traffic Accounts office;
(f) Internal check of debt and remittance transactions,
(g) Maintenance of Provident Fund Accounts,
(h) Check of pension payments,
(i) Prior check of all contractors bills etc., before passing the same for payment inspection of stations and other executive officers for checking the original records.

1.2 The Internal check is conducted with reference to -
(a) rules and orders issued by the President Railway Board, General Managers of Railways and various authorities,
(b) the instructions contained in the Codes and instruction issued from lime to time by the Railway Board,
(c) The recognized standards of financial propriety,

1. 3 While scrutinizing receipt. It should be seen
(i) That the amount due to the Railway for services rendered, supplies made, arc correctly and promptly assessed recovered as soon as they fall due,
(ii) that all receipt arc properly brought into account,
(iii» that all receipts are correctly classified, and if they represent an amount due to more than one railway, that they are correctly apportioned among the railways,

1.4 All claims against the railway are scrutinized with a view to see
(a) that the expenditure has been sanctioned by competent authority and that the expenditure is incurred by .an officer competent to incur it,
(b) that all prescribed preliminaries to expenditure are observed before disbursement of pay, etc.
(c) that it is covered by the grant at the disposal of the officer incurring it,
(d) that the expenditure does not contravene any rules and orders in force,
(e) that the expenditure does not involve a breach of the Standards of financial Propriety
(f) that the expenditure sanctioned for a limited period is not admitted beyond that period without further sanction,
(g) that in the case of recurring charges, which are, payable on the fulfillment of certain condition a certificate is forthcoming from the drawing office to the effect that necessary conditions have been fulfilled,
(h) that the charge is correctly classified,
As exceptions to this general rule the following payments may be; made before such check: - \
a} Payments from imprest
(h) Payment from station earnings when permitted under rules.
(e) Commission deducted by auctioneers from sale proceeds,
(d) Payment of certain classes of pay bills, muster sheets and labour pay sheets of open line staff specially permitted to be made by F.A. & C.A, 0.

1.5 INTERNAL CHECK OF SANCTIONS AND ORDERS
The Accounts Officer -should examine every rule. order or sanction whether issued by the president, the Railway Board, or any sub-ordinate authority in order to see
(a) that the authority framing the rule or according the sanction is competent to do so,
(b) that the sanction is definite.
(c) that the rule or order or sanction does not contravene any general or special orders of any higher authority and
(d) that the sanctions to expenditure of definite amounts, [he same arc always expressed both in words and figures.

1.6 TREATMENT OF ERRONEOUS PAYMENTS
When erroneous payments have been passed for considerable time. owing either to a wrong interpretation of financial rules or due lo oversight, the following procedure should he observed:
f) Wrong interpretation:
The new interpretation should be given effect from the date, which the competent authority may decide. If no date is specially fixed, the correct interpretation -should be given effect to from the date it is stated by the competent authority
Oversight
Payment made less than 12 months ago, should be recovered. Every overpayment of money to a railway servant is and must be regarded as a debt to public and all possible action should be taken for speedy recovery

1.7 POST CHECK OF PAID VOUCHERS
All bills, whether under the pre-check or the post check system in which payment has been made should be checked to see -
(a) that the acknowledgements of payments have been obtained (in English or Hindi).
(b) that the names of payees mentioned in the bills tally with the signatures obtained,
(c) that the payment has been witnessed, whereso required, by the official named in the bill and the acknowledgement is unqualified,
(d) that where a person other than payee himself has received the amount, the payment has been made under proper authority.
(c) that vouchers are stamped,
(f) that each voucher has been cancelled efficiently and promptly,

1.8 INTERNAL AUDIT AND INTERNAL CHECK :
Though Internal Check is part of Internal Audit as far as Railways are concerned yet there is a distinct difference between the two.
''International Audit is an independent appraisal function within an Organization for the review of activities as a service to all levels of Management. It is a review of the operations and accounts some-times continuously undertaken within a business by specially assigned staff".

The objectives of Internal Audit are
i) a Service to Management;
ii) ensures reliability and integrity of Accounts System.
iii) ensures compliances with rules and regulations;
Facilitate preventions and detection of frauds.
Internal Check is a part of the overall internal control system. The internal check is the check exercised on the day-to-day transactions which operate continuously as part of the routine system whereby the work of one person if proved independently of another.

SYSTEM OF INTERNAL AUDIT IN INDIAN RAILWAYS:
Internal Audit functions are performed in the form of Inspections of activity centres and offices by different agencies from Zonal and Divisional Railway offices:-
i) Inspection of Executive offices by Accounts Officers and Staffs as provided in Chapter-XVII of the Accounts Code Part-1,
ii) Inspection of stations by TIAs as per Chapter - XXXIII of Accounts Code - Part-II
Accounts Stores Verification of Stores as per Chapter-XXXIII of Stores Code
iv) Inspection of Subordinate Accounts offices by FA & CAO and his officers.
v) Inspection of Zonal Railway's Account Offices by the Board's Inspection Party,
All these Inspections are in the nature of Systems Audit ad Transaction Audit.
Further reading: Please refer Chapter-XVII of Accounts Code Part-1 to know more about the objectives of Inspections of executive offices and the records that are to be inspected.

STATUTORY AUDIT
2.1 Railways are part of the Government of India and not a corporation under any statute or Indian Companies Act. There is, therefore, no statutory audit of the type under Indian Companies Act. Statutory Audit is conducted by CAG which is much more comprehensive than company auditors and the audit report on performance is submitted lo the Par/lament by CAG, Public accountability is, therefore, maximum.

2.2 FUNCTIONS
The Comptroller and Audit General of India is the final audit authority in India and he is responsible for the audit of the accounts of the Indian Railways hut has no responsibility for the compilation of such accounts. The form in which account of the Indian Railway should he kept and changes in accounts classification affecting the recording of The expenditure in the Finance and Revenue Accounts are, however, subject to his approval (113-!).

2.3 OBJECT OF STATUTORY AUDIT (116 AI and 911 of Finance Code)
The Statutory audit has three fold purposes viz.
it is an accountancy audit - to check the accuracy and to see that all payments are supported by receipted vouchers,
it is an appropriate audit - to check to ensure that expenditure, receipts have been properly classified, and voted appropriations have not been exceeded
iii) it is also an administrative audit to check that expenditure has been incurred according to prescribed rules and regulations.
The main object of audit is to ensure -
a) that the system of accounts used by the internal check authority is correct,
b) that the method of check applied at every stage of the accounts is sufficient,
c) that the accounts are maintained and the checks applied with due accuracy and
d) that the arrangements exist in the accounts office to ensure attention to the financial interest of the railways on the part of all concerned.
2.4 RESPONSlBILITY
The responsibility of statutory audit is briefly as follows :-
a) it extends in respect of expenditure transactions lo all expenditure incurred in India.
(i) in respect of receipts, it includes receipt of Indian railways including receipts relating to accounts of manufacture,
c) it includes stores and stock accounts to do the extent prescribed by the Comptroller and Auditor General of India.
2.5 Audit is always conducted ex-post facto i.e. after the event-
Audit cannot prevent an overpayment through negligence or non-observance of rules and regulations. It is the duty of Audit to report results to the proper authority so that appropriate action is taken to rectify the irregularity wherever possible and atleast prevent its recurrence

COMMUNICATION FROM AUDIT -DRAFT PARAS AND AUDIT REPORTS (Chapter IX of Finance Code)
Ordinarily the results of statutory audit are communicated through -
a) Specific reports of the more important and serious irregularities discovered in the course of audit, of Accounts and departmental offices and station records,
b) Audit notes detailing minor irregularities discovered in the course of audit of accounts office records,
c) Inspection reports showing the results of audit of the initial records of executives offices (Para 916 of Financial Code).

An inspection report will consist of two parts, namely Part I dealing with the more important matters and Part II dealing with the rest, containing minor routine matters. Audit notes will also similarly consist of two parts. The final disposal of part II of audit notes and inspection reports rests with the Accounts officers and no formal reply to the Director of Audit is necessary. Replies to part I of inspection reports and audit notes and specific reports should be sent by the executive offices concerned to the accounts officer. In scrutinizing them, the Accounts officer should call for further information, if necessary, and consult the head of the division or department concerned, where desirable before giving a reply to the Director of Audit (918 and 919 of Financial Code). All audit objections and notes should be promptly attended to by the Accounts officer.

All important eases coming to the notice of Audit during inspections or regular audit which in the opinion of the Director of Audit merits inclusion in the Audit Report are brought to the notice of the Railway Administration through special letters, notes of objection etc., to the Heads of Departments/FA&CAOs by the Director of Audit. Since these special letters, factual statements form the basis of the material for the Audit Report, the Railway administration should deal with them at a sufficiently high level and bring out their point of view in a convincing manner before they proceed to prepare a draft paragraph for incorporation in the Audit report.

11.3 Draft paras
If it is decided by the Director of Audit that the statement of facts are required to be converted into a Draft Para for the Audit report, the draft Para prepared will be sent by the Director of Audit to the Personal address of the GM simultaneously sending advance copies of the draft Para with connected correspondence to the FA&CAO. HOD concerned, the additional Deputy, C&AG (Rlys) and the Director (Finance) Railway Board to facilitate prompt action and detailed examination. The railway administration is required to give a final reply lo the Director of Audit, after consultations with the Railway Board, within a period of eight weeks from the receipt of the draft Para. To allow some time for further enquiries and examination by the Railway Board, it will be necessary for the railway to forward the draft Para alone with a report from the Railway administration personally to the Director (Finance) Railway Board, as quickly as possible as but not later than five weeks of the receipt of the draft Para. The reply will be sent over the personal signature of the GM duly vetted by the FA&CAO.

Any modifications, which the Railway administration may desire to suggest, or any comments, which they wish Director of Audit to consider before giving their final reply should, as far as possible, be settled by personal discussions so that the final reply of the administration is sent within the overall time limit of 8 weeks. After the railway, administration has replied finally, any further enquiries by the Board or the Director of Audit will have to be dealt with based on highest priority,

11.4 Audit report of CAG
If the Audit is convinced of Railway administration replies that there are no irregularities, the draft paras will be dropped- If the audit considers the cases as irregular the draft paras will be included in the report of the CAG and the report is presented to the Parliament where it is taken up for consideration by the Public Accounts Committee. The Committee obtains personal evidence of senior officers of the Railway Board. The recommendations made by the Committee are considered by the Railway Board and notes on action taken by the Board are submitted to the Committee.

The Audit Report Covers Comments arising from audit of the Accounts of Railways and Appropriation Accounts on Railway Grants. Other points arising from the test audit of financial transactions of Railways are also included,

The Audit Report generally highlights :-
Financial Results of the year,
Leakage and Seepage of Railway Earnings,
Avoidable expenditure
Underutilization of assets:
Cost over runs due to Time overruns in the execution of projects
Inventory Control,

11.1 RECTIFICATION OF MISTAKES IN ACCOUNTS DISCLOSED BY AUDIT
(Para 922 of Finance Code)
if any mistake or inaccuracy is disclosed by Audit or detected in internal check, the following procedure should he adopted :
1) The mistakes should be rectified through the account of the month in hand if the accounts of the year have not been finally closed. (Any nature or mistakes)
2) Mistakes and misclassification noticed after, closing March Accounts but before the preparation _of Capital and Revenue and Finance Accounts should be rectified - The corrections should be intimated to the Railway Board by the first week of August either through a revised account or through corrections to accounts already submitted.
3) The following rules are lo he followed if the mistakes are noticed after the submission of Capital and Revenue and Finance Accounts :-
(a) If the item belongs to one revenue or service head but is wrongly classified under another - No correction need be made. A suitable note against the original entry is sufficient
The mistakes must, however, be corrected if the error affects (i) the revenue or expenditure of another Railway or a branch line company or another Government Department (ii) Capital Head (iii) Debt or remittance head.
(b) Capital - If the corrections affect capital major heads the same should be effected as without financial adjustment i.e. by altering the progressive figure of capital outlay.
(c)Debt or Remittance head : If the error affects a debt or remittance head the following procedure should be followed ;-
(i) Item taken to one debt or remittance head instead of another (either debit or credit) the correction should be made by transferring it from one to the other
(ii) Item credited or debited to a debt or remittance head instead of revenue or service head - same procedure as mentioned at (i) above,
(iii) Item credited or debited to a revenue head instead of to a debt or remittance head - correction should be made by minus crediting or minus debiting the revenue head and crediting or debiting the proper head,
4, If the rectification of mistake would lead to an excess over grant or grants voted by Parliament or to a considerable change in the dividend payable in General Revenue, the orders of Financial Commissioner (Railways) must be obtained.

GOVT. ACCOUNTING AND BOOKS

GOVERNMENT ACCOUNTS,
1. Governed by the requirements of the constitution and instructions of parliament through its committees,
2. Purpose is to determine as to how as little money as possible may be taken from the tax payer to maintain the activities,
3. There must be a systematic record of all receipts and expenditure classified appropriately,
4. Generally kept on a single entry system,
5. Maintained on cash basis,,
6. Statement of receipts and expenditure is only prepared,

COMMERCIAL ACCOUNTS
1. Governed by standard accounting practices and conventions and the law of the land such as company law, income tax law etc
2. Purpose is to show how as much can be earned as possible consistent with the requirement of the business
3. There should be a record of the usage of capital, profit/loss source of profit/loss and indication about the solvency of the company
4. Maintained on double entry basis
5. Maintained in accrual basis
6. Trading accounts, manufacturing account, profit and loss account and balance sheet are prepared

STRUCTURE OF GOVT. ACCOUNTING
PART I
CONSOLIDATED FUND OF INDIA
It is governed by Article 266 of constitution of India All receipts and expenditure both h on capital and revenue accounts are accounted for. In addition, loans and advances to Govt employees are accounted
REVENUE
Deals with the proceeds of taxation and other receipts classified as revenue and expenditure there form Rlys: The traffic receipts form the main source of revenue and working expenses are the main revenue expenditure
CAPITAL
Deals with expenditure met with the object of increasing the assets. Rlys: Capital, DRF, DF, OLW-R & Capital Fund according to nature of assets and rules of allocation Block account prepared for all assets irrespective of the source of funds. Loan account reflects expenses charged to loan from General revenue - Capital
DEBT – PUBLIC DEBT, LOANS & ADVANCES
Rlys: HBA, Scooter advance, cycle advance, natural calamity etc both advances and repayment of loans and recoveries of advances

PART II
CONTINGENCY FUND OF INDIA
It is governed by Article 267 of constitution of India. It is operated to meet unforeseen expenditure pending authorization of parliament. It is under the disposal of the F C of Railway.
PART III
PUBLIC ACCOUNTS OF INDIA
It is governed by Article 268 of constitution of India. All receipts and expenditure both h on capital and revenue accounts are accounted for. In addition, loans and advances to Govt employees are accounted
DEBT (OTHER THAN IN PART I)
It consists of receipts and payments other than those under Debt heads pertaining to Part I. eg. PF, Reserve Fund,Security Deposits, EMD, Departmental advances
REMITTANCES
It merely embraces adjusting heads which appear transfer among different circles.
GENERAL and SUBSIDIARY BOOKS

GENERAL
1. The General Cash Book or The Daily Abstract Of Cash Transactions (Form A 304)
2. The General Cash Abstract Book or The Monthly Classified Abstract Of Cash Transactions (Form A 306)
3. The Journal ( Form, A 307)
4. The Ledger (Form A 310)
SUBSIDIARY
1. Register of Works
2. Registers of Capital, DRF, DF, Capital Fund and OLWR
3. Revenue Allocation Register
4. Register of Earnings
5. Suspense Registers
a. Demands Payable Register
b. Misc. Advance Register
c. “F” Loans And Advances Register
d. Deposit Misc. Register
e. Deposit Unpaid Wages Register
f. Demands Recoverable Register
Capital Suspense Registers(Stores & Workshop Suspense

DIFFERENCE BETWEEN GENERAL AND SUBSIDIARY BOOKS
GENERAL BOOKS
Monthly accounts are prepared from the postings made in the general books,
Only the voucher no and amount are posted in the general book,
Maintained to collect and bring into account the transactions of an accounts circle,
Are mainly meant t prepare accounts suiting the principles of Govt. accounting,

SUBSIDIARY BOOKS
Schedules accompanying account current are prepared from the ;postings made in the subsidiary registers ( e.g. details of earnings and working expenses and works expenditure)
Details of transactions are recorded in the subsidiary registers
Maintained to exercise control over expenditure of an accounts circle
Serves to keep accounts to suit the commercial principles of accounting

Sunday, October 11, 2009

PRELIMINARY AND FINAL WORKS PROGRAMME FOR WORKS


Note.-Years have been shown in the form for the purpose of illustration.

PRELIMINARY & FINAL WORKS PROGRAMME FOR WORKS
Investment decisions relating to the creation, acquisition and replacement of assets on the Railways are processed through the annual "Works, Machinery and Rolling Stock Programme". Instructions regarding the preparation of the Machinery and Rolling Stock Programme are contained in Chapter XV of the Indian Railway Code of Mechanical Department (Workshops). On the basis of the estimate of the Plan funds requirement for the ensuing year, the Railway Board lay down the financial limits (see para 609) under various plan heads (refer to Appendix I) within which the Railway Administrations are required to make out their programme for the following years duly vetted by the Financial Advisor and Chief Accounts Officer for submission to the Railway Board by a specified date. The programmes are examined by the Railway Board and discussed. where necessary, with the General Managers and the works to be undertaken as well as the outlays during the Budget year are decided upon. 601 E.
The various stages of investment planning and preparation of the Final Works Programme arc given below:-
(i) Formulation of schemes as a part of advance planning;
(ii) Submission of major schemes for advance scrutiny and clearance by the Railway Board for selection of Projects to be taken up in the following year;
(iii) Preparation of the Preliminary Works Programme within the financial ceiling laid down by the Railway Board; and
(iv) Discussions with the Railway Board and submission of the Final Works Programme.
The investment planning process through the above stages is dealt with in the following paragraphs. 602. E
Advance Planning
The preparation of the annual Works Programme of a Railway is not an isolated exercise for the year, but is part of a continuous planning process from the level of the Divisional Officer upwards. Investment proposals emanating from the Division would be those which are intended to effect improvement in operation or remove bottlenecks etc., within the Division itself. Major investment proposals which benefit a Zonal Railway System or the Indian Railway as whole should be co-ordinated and planned at the level of the Railway Headquarters or the Railway Board, where necessary. 603.E
An important requirement for effective investment planning is the realistic estimation of project costs. Full details of the scheme must be worked out and no scheme should be included in the Railway's Works Programme unless detailed plans and estimates have been prepared and are ready. Detailed Traffic and Engineering surveys should be carried out for new lines, gauge conversions doublings and for other line capacity works costing more than Rupees Five Crores each. In the case of yard remodelling, line capacity works i.e., goods shed facilities and important buildings the estimates should be based on plans approved and signed by the concerned departments who should scrutinise the plans carefully to avoid the need for making any substantial modifications in the required facility it a subsequent stage. If major changes in the plans/scheme/specification of works nevertheless become necessary and arc likely to lead to substantial excesses over the sanctioned estimate the changes asked for by the concerned departments should not be agreed to unless reviewed and approved by the competent authority sanctioning the original estimate. In regard to proposals for new marshalling yards goods terminals and tranship yards etc. work study teams should go into the actual working before formulating schemes for the additional facilities required. 604.E
It is an essential feature of the railway system as a commercial undertaking that expenditure other than that wholly chargeable to ordinary Revenue, incurred on new assets or for improvement of existing assets should be financially justified before it is incurred. Detailed instructions regarding the financial Appraisal of Railway projects are contained in Chapter II of the Indian Railway Financial Code to which reference may be made. The cases where no financial justification need be given are contained in para 202 of the Indian Railway Financial Code. Detailed financial implications (including financial return) should be worked out in all cases including works financed from Development Fund, Accident Compensation. Safety anti Passenger Amenities Fund or Open Line Works Revenue (see para 626). If the prescribed return is found to be not obtainable on the anticipated level of traffic, the Railway Administration should examine whether the proposal cannot he reduced in scope, or given up in favour of some other alternative. or postponed until traffic prospects improve. 605. E
When a number of works have to be carried out to achieve a common objective, the financial implications or justification should be worked out for the entire scheme as a whole. In case where the wider schemes covers two railway a joint estimate of cost should be prepared for the Railway Board's consideration, The Railway in which the major portion of the work falls should obtain figures from the contiguous Railway for submitting joint figures of cost anti financial implication to the Railway Board. 606. E
Scrutiny of Schemes before preparation of Preliminary Works Programme
All schemes costing Rs. 20 lakhs or above should be worked out comprehensively and sent to the Board alone with full details of (i) the technical features. (ii) Cost break-up, (iii) benefit expected to accrue and (iv) financial implications. A sketch map of each proposal should also be sent. The Railway Administration must clearly bring out the purpose of each scheme and confirm that the proposal meets the objective fully and that the scope and cost of the project have been arrived at after the fullest possible investigation including assessment of the financial implications. After the schemes have been scrutinized by the Board, the Railway Administrations should be advised of the acceptance, with or without any modifications for inclusion in the Works Programme. 607.E
Track renewal proposals costing Rs. 20 lakhs and above are initially scrutinised by the Board, keeping in view the availability of permanent way materials. progress of the works already sanctioned and other technical factors. For this purpose the Railway Administrations should send all track renewal proposals costing Rs. 10 lakhs and above together with technical data like traffic density, age, conditions of track components etc., in the form prescribed by the Board to reach the Boards office by the stipulate date. After the proposals are screened by the Board, guidelines are issued to the Railway Administrations to reframe their proposals for inclusion in the Works Programme. 608. E
Preparation of the Preliminary Works Programme
The Chief Engineer of the Railway will be primarily responsible for ensuring that the proposals prepared by the various departments are complete in all respects and are correctly prepared. The overall priorities within the ceilings given by the Board will also be fixed by him in consultation with the General Manager and other Heads of Departments. He will be responsible for the preparation and timely submission of the Preliminary and the Final Works Programme. 609. E
In or about June/July each year the Railway Board should convey to each Railway, in respect of each Plan Head, the total outlay within which the Works Programme should be framed by the Railway. A list of the Plan Heads is given in Annexure I. On receipt of this financial ceiling the Railway Administration should take stock of the schemes already formulated and those under consideration and select for inclusion in the Works Programme within the financial ceiling such works as are expected to yield the maximum benefit to the Railway preference being given to works in progress. Further necessary changes in the investment schedule may be made in order to work within the financial ceiling for the year such modification., being taken note of in framing the Preliminary Works Programme and revising the financial implications. if necessary. 610. E
The Preliminary Works Programme for the following year should be submitted by the Railways to the Railway Board by 1st week of September or such earlier date as may be laid down by the Board. Proper financial appraisal of each work should be given in the Preliminary Works Programme together with the comments of the Financial Adviser and Chief Accounts Officer. 611.E
The project cost should be based on firm data both as to quantity and rates at current price levels. and should any increase occur in prices during the period intervening between the initial preparation of the project estimate and its inclusion in the Works Programme. the estimate should be updated taking into account any significant changes in the wages and material prices as well as increase in freights and fares. No other increase such as on account of change in scope of the project should be allowed without prior reasons being adduced for acceptance by the Railway Board. A sketch showing the proposal should accompany each proposal. 612.E
Each investment proposal should be accompanied by a detailed plan showing the scheduling of the project to match the traffic requirements and the financial outlay proposed for the year should be in accordance with this project schedule to enable the Railway Board to arrange for a realistic funds allocation for implementation of the programme. 613. E
In deciding the outlays for the various works Railway Administration must endeavour to progress all works in progress speedily and bring them into use at the earliest possible date. A work which has been sanctioned and for which funds have been allotted whether in the original or supplementary budget of a year should be treated as a "work in progress" for the next year and provided for as such in the programme. Such works should be grouped as indicated in para 619. 614. E
The Railway Administrations should make a realistic assessment of the amount required for each work in progress and necessary provision should be made for it in the Works Programme. In estimating the provision for works during the budget year a generous allowance should be made for those delays in execution which though unforeseen are known from experience to be so liable to arise particularly prior to inception anti during the initial stages of large projects. The provision made should take into account adjustment of charges on surveys connected with a project. 615. E
In exhibiting the outlay for the current year against individual works in the works programme, the outlay should be as per Pink Book, and in exceptional cases where the Railways propose any substantial increase in the outlay with corresponding reductions against other works, such revised outlay may be shown separately in brackets below the outlay as furnished in the Pink Book duly explaining the reasons for doing so in footnotes at the appropriate places. As far as possible only the last sanctioned costs should be exhibited. Wherever it is visualised that the cost would involve an excess over the last sanctioned cost, effective steps should be taken well in time to have the revised estimate prepared and sanctioned by the competent authority before the Works Programme is sent to the Board. In case where the revised estimates are sanctioned subsequent to the despatch of the filial Works Programme but before the end of January of the following years the same should be promptly advise to the Board to enable to the latest sanctioned cost being exhibited in the Pink Book to be circulated alongwith the Budget. In all cases of revised costs sanctioned by the Board, reference to the letter of sanction should invariably be indicated. 616. E
Works once introduced through a Works Programme (including Track Renewal Programme) and taken up after the estimates have been sanctioned by the competent authority should continue to be included every year till they are finally completed, except in cases where the works have reached the completion stage and where funds required if meagre could be found by re-appropriation. 617. E
The Works Programme is compiled in the following format:- 618. E
Form E. 618 Please see top of the page
WORKS PROGRAMME 1975-76
Demand No................. (Figures in thousands of rupees)
In respect of "Works in Progress" reference to item No. of the current year's Pink Book and also the authority under which the work was first started should be indicated. The works should be arranged as per the Plan Heads.
619. The items in the Works Programme should be grouped under the following categories while compiling the Works Programmes:-
(i) New Works.
(ii) Works in Progress.
(ii) Works approved in earlier years, which have not been actually commenced and on which no expenditure has been incurred till 30th June of the year previous to the Programme year.
(iv) Works approved in the earlier years but estimates for which have not been sanctioned by 30th June of the year previous to the Programme year.
620. The works are further made into sub-groups of (i) Works costing more than Rupees Five Lakhs each and (ii) Works costing upto Rupees Five lakhs each. Under (ii) works costing upto Rupees two lakhs each in the case of Track Renewal works and for works costing upto Rupees one lakh each in the case of other works only lumpsum provision should be shown without detailing individual works. Within each sub-group, the works are presented under each Plan Head.
621. A map showing the Railway System and indicating the new lines, doublings, major yard remodelling, important line capacity and signalling works which are in progress as well as proposed should be attached to the Works Programme. An alphabetical index of works and various managerial information regarding critical materials, expenditure position relating to passengers and railways users amenities etc. which will be prescribed by Railway Board should be included.
622. Integrated Budget.-The Annual Budget of Railways consists of assessment of earnings and expenditure forming part of Revenue Budget and that relating to the investment decisions taken through the Works Machinery and Rolling Stock Programmes. In order to co-relate the decisions relating to all these aspects, a consolidated budget called integrated Budget including Revenue Budget, Works Programme and the Machinery and Rolling Stock Programmes should be submitted by the Railways alongwith the preliminary Works Programme. The Integrated Budget will include the projections of traffic and earnings, working expenses, the estimated financial results for the ensuing year, and the operating ratio in the proforma specified by the Railway Board. The Railways should also furnish the details of Rolling Stock required on replacement account and addition account, duly co-relating it to the anticipated increase in traffic. In the covering note to the Integrated Budget the Railways should bring out the effect of the budget proposals on the efficiency of operations as indicated by the operating ratio and the financial viability of the system as revealed by the financial returns on capital investment. After discussion of the Preliminary Works Programme, a revised Integrated Budget should be submitted along with the Final Works Programme duly taking into account the changes that might have taken place in the meantime. The Integrated annual budget may be prepared under the personal guidance of the General Manager and with the assistance of Financial Adviser and Chief Accounts Officer.
Final Works Programme
623. After having examined the individual Railways Programme, and discussions with the General Managers, the Railway Board will decide the works which should be undertaken during the following year and which should be included in the Final Works Programme. The Railway Administration will then modify their Works Programmes as a result of the Board's decision and send their Final Works Programme to the Railway Board by the stipulated date.
Section II- Works Budget
624. Works Budget.-The revised and budget estimates for the construction, acquisition and replacement of assets are briefly known as Works Budget. The revised estimate gives an estimate of funds required for the current year and the budget estimate refers to the following year. For a detailed study of the Railway Budget, Chapter III of the Indian Railway Financial Code should be referred to. The budget estimate for the works are based on the Works Programme approved by the Board. The requirement of funds both for new investments and for works in progress are submitted in the form of "Demand for Grants" in the Works Machinery and Rolling Stock Programme which forms a part of the Budget papers presented to the Parliament. While compiling the Works Machinery and Rolling Stock Programme for presentation in the Parliament only works costing Rupees five lakhs and above are itemised.
Demand for Works Grants
625. The proposal of Government in respect of sums required to meet the expenditure from the Consolidated Fund of India are to be submitted in the form of Demands for Grants to the Parliament. The Demand shall be for gross expenditure, the credits or recoveries (refer to para 335 of Indian Railway Financial Code) being shown in the form of footnotes to Demands.
The Demand for Grants for the Works Budget is :-
Demand No. 16 :-Assets-Acquisitions, Construction and Replacements.
Financing of Works Budget
626. Works chargeable to Demand No 16.- Assets-Acquisitions Construction and Replacements are financed from railway revenue when it is charged to OLWR or financed from Capital. Depreciation Reserve Fund. Development Fund, Accident Compensation Safety and Passenger Amenities Fund. Expenditure budgeted under "Capital" involves increase in the Capital-at-charge of the Railways and hence is the liability for payment of dividend to General Revenue subject to the relief/exemptions granted by the Convention Committee. "Works Expenditure" of the Railway is thus financed from Revenue, Railway Funds and Capital provided by the General Revenues. The Railway Funds are Depreciation Reserve Fund, Development Fund and Accident Compensation Safety and Passenger Amenities Fund. For Details regarding the operation of the funds, reference may be made to Chapter III of the Indian Railway Financial Code. In the event of the railways revenue surplus not being adequate to fully meet the requirements of Development Fund Expenditure, the budgetary support from the General Revenues would also include temporary loans to finance expenditure from the Development Fund. The expenditure under works Budget of the Railways is, therefore. determined by the resource allocation under various Plan Heads.

REDESIGNED INCENTIVE SCHEME ON WORKSHOPS

REDESIGNED INCENTIVE SCHEME ON WORKSHOPS -TIRUPATHI PATTERN
-V. Rama Manohara Rao IRAS JAO/CRS/TPTY
INTRODUCTION:
An incentive scheme may be viewed as a ‘win–win solution’ between the administration and the staff of an organization. The advantages for the administration are: no requirement of additional man power, higher and efficient machine utilisation, more productivity, less pilferage of working hours, etc.
Whereas for workers: it gives the satisfaction of “earning more by working more” leading to more purchasing power. And as an end result the organization is benefited with better industrial relations and discipline.
In this write up, an attempt has been made to discuss the existing incentive schemes on Indian Railways without going into too much of technicalities but concentrating on the conceptual aspects of the schemes.

PRESENT SCHEMES:

Presently existing incentive schemes on Indian Railway workshops may be broadly
grouped into two categories: One is based on saving of time in each activity by the employee, there by performing the activity in lesser time than the prescribed time- giving scope for increased out turn. (Chittaranjan pattern)The other one is directly linked to outturn given by a group. This is Group based incentive scheme (Tirupathi scheme) which has been introduced on workshops during January 2002.

CHITTARANJAN PATTERN SCHEME

To appreciate better the newly introduced incentive scheme in CRS,(Carriage Repair Shop) Tirupathi, by bringing out the differences with the existing schemes, the chittaranjan pattern is also discussed briefly here under.


SALIENT FEATURES:
–Chittaranjan pattern incentive scheme was started in 1954 on Production shops and in 1958 on Indian Railway workshops.
–It is based on the time saved by the worker against the prescribed time for each activity set by the work-study group.
Ø It is so designed that a reasonably efficient worker should be able to earn 33%incentive. i.e; if the worker is able to complete a work in 3/4ths of the time prescribed, then he would be eligible to earn 33% incentive.

Ø However the maximum limit set is that the employee can not save time more than 50% of the allowed time for an activity. i.e. more than 50% saving in time will not be eligible for incentive benefit.

Under this scheme, the workers are divided into three categories: Direct workers, Essential indirect workers, and indirect workers. Different incentive rates are fixed for each category.
In this scheme the idle time can be booked on the following counts:
•Non availability of tools,
•Non availability of work
•Power cut
•Machine run down.
•The time office has to give every month the statements showing the number and details of workers in each category for calculating the incentive earned.

THE RETHINKING:
There has been a general view that the chittaranjan pattern of incentive scheme is not working up to the expectations because of the following reasons:
·Individual employee may earn the incentive leading to financial out flow for the administration but final out turn of the workshop is not increasing.
·There is no provision to take care of quality aspect of the work.
·As this is an individual based scheme, the expected synergy in gaining final output is not accruing.
·There is a perceived scope for manipulation of time saved by the employee.

The lacunae in the chittaranjan pattern forced the administration to rethink- and hence no incentive scheme has been introduced for workshops set up after
1980.
Hence the new scheme, which is group based and is directly linked to outturn given by the group.

TIRUPATHI PATTERN OF INCENTIVE SCHEME:

RITES Study group was constituted to propose a new incentive scheme for the workshops on Indian railways, Tirupathi workshop as a pilot project. The Railway
Board with some modifications accepted the RITES report. The similar scheme suggested by the RITES study group is being implemented in production shops DLW and ICF. However for the first time this scheme is introduced on workshops in Carriage Repair shop Tirupathi, during January 2002, which was inaugurated by the Honorable Railway Minister Shri Nitish Kumar.

ACTIVITIES OF CRS:

Before discussing the new scheme, the activities of CRS Tirupathi, are mentioned briefly:
The main activities of CRS are POH of coaches and turning of wheel sets.

Other works under taken are:
POH of MEMU, DMU, DHMU
RSP works like
•UIC vestibules.
•SS inlays
•Retro-fitment of Coaches.
•PVC flooring


SALIENT FEATURES OF THE SCHEME:

The salient features of the scheme are discussed as under:

A). The workshop categorization under the Scheme:

To facilitate the implementation of incentive scheme the workshop has been categorized into Production shops, Support Shops Support Departments & Non-incentive departments.

The Production shops:
•Wheel shop
•Paint shop
•CF shop
•CBR (carriage bogie repair shop)
•Train lighting shop

Support shops:

1.Mill Wright 2. Power maintenance 3.Machine shop and calibration shop
4.Smithy shop 5. Yard operating 6.Coach movement and scrap handling

Support departments:
• IED (Industrial Engg Department)(This department is newly designated by the
RITES clubbing PCO and other offices and made it primarily responsible for
incentive calculation related work)
• Computer Section
• Quality Systems Division (Dealing with ISO 9000 work)

Non Incentive Departments:

The Non Incentive Departments are:
–Accounts department including the Time Office
–All the Ministerial staff including those working in the shops
–Personnel Branch
–Stores Department
–Basic Training Center
–Out Side Power Maintenance

The Production shops, support shops, and support departments are given different incentive earning factors.


B). It is a group based incentive scheme:

The incentive earned is dependent on the collective performance of the group in terms of

(i) The total clocked in man-hours. This takes care of the absenteeism within the group i.e., the number of employees absent in the group will affect the entire group’s incentive earning capacity.
(ii) Total out turn in eGSCN given by the group.

(iii) Quality of work performed without giving scope for en-route detachments, or sick markings within 100.


C). Equalising factor for various kinds of Coach works-Conversion in to eGSCN:
All the units turned out by the group (say a shop) are converted in to SPUs,
(Standard Production Units) which are: equated GSCN with regard to coach related POH works, and ICF wheel set with regard to the turning of wheel sets for calculation of incentive on a equal footing.
RITES had provided with various conversion factors for various types of work( like RSP works, POH of MEMU etc) to convert in to eGSCN and authorized IED for any future requirements in fixing the conversion factors.

D) No Over Time:
•Overtime booking though allowed (under RITES study) acts adversely on group performance and also employee’s incentive earning. However the final scheme as approved by Railway Board does not provide for booking of over time.

E) Idle time:
Idle time can be booked only in the event of power failure for more than one hour (unlike the chittaranjan pattern).

•To assist in getting better attendance at work by group members a Group Attendance Factor is included in the scheme.

F) Indicators of quality performance:

This scheme takes in to consideration indicators of performance like
(i) Rectification man-hours (ii) time spent away from the work place (iii) quality factors (iv) En-route detachments (v) sick markings within 100 days after POH- while calculating the final incentive earned by the individual employee. These indicators will affect the incentive earning capacity of the employee.
Rectification man- hours: If a group is forced to spend more time than required to perform an activity because of the low quality work/ incomplete work of the earlier group, the additional time spent to rectify it, is called the rectification man hours and this factor acts negatively on the incentive earned by the earlier group and the individuals of that group.

G) QUALITY FACTORS:

These Quality factors are used in calculating the incentive earned by the supervisory staff, which makes them more responsible for the quality of work.

For Supervisory staff payment of incentive will be at a flat rate of 15% of their basic pay multiplied by quality factor Q as calculated below subjected to the condition that overall earning of the section supervised by them is 15% or more. In cases of sectional earning becoming less than 15% the actual average value of sectional incentive earning multiplied by quality factor Q shall be used for calculation of incentive earning for supervisory staff.
.
· Quality linkage factor Q=(Q1+Q2+ Q3)/3

· Q1 reflects the local passing in work shops (NTXR passing/rejections)
· Q2 reflects coaches marked within 100 days after the POH
· Q3 reflects en-route detachments.
· Q2, Q3 are 1 if the index is equal to /better than the global average/or previous year’s 095 (.9 for SE/SSE) if the index is equal to previous years’ or global average it is 0.9(0.85 for supervisors) if it is worse than previous years or than the global average.

(H)No fresh recruitment of staff is proposed under this scheme.

I) Railway Board had provided for review of the scheme within a year and termination after five years followed by review.


VARIOUS PARAMETERS -THEIR EFFECT ON THE INCENTIVE EARNINGS.

Various parameters of this scheme can be grouped into two:
1. That are directly proportional to the incentive earned by the employee.
2. Those are inversely proportional to the incentive earned by the mployee.
Parameters which keep a directly proportional relation to the incentive earned y the employee are:
–Total Clocked in man-hours of the group
–Total out turn achieved by the group in eGSCN,
–Number of working days in a month.

Inversely affecting parameters
i.e., if the value of these parameters increase the incentive earned by the employee will decrease.
• The rectification man-hours
• The coach holding factor. (should be > or = 1. If it is less than 1 it affects adversely on the incentive earned by the employee of that group).
•The time spent away from workshop by the employee.
•Number of men absent in the group in the month.
•Sick markings within 100 days of POH,
•En-route detachments

COMPARISON OF THE TWO SCHEMES:

THE CHITTARANJAN PATTERN & THE TIRUPATHI SCHEME


1.Introduced on workshops in 1958
2.It is individual based incentive scheme
3.The time saved by the worker in performing a work against the allowed
time forms the basis for the incentive earned. The maximum time that can be saved to be eligible for incentive is 50% to the prescribed time for an activity.
4. Idle time can be booked on more than one reason like non availability of tools, machine break down, power cut etc
5.Over time is allowed
6.Quality factors are not taken into consideration
7.There is no penalising factors for the worker in earning the incentive for the poor quality of work, absence from the workplace,
8.There are no equalizing factors for different types of work.



1.Introduced on workshops in January 2002

2.It is group based incentive scheme.

3. It is directly linked to out turn of the group in eGSCN units, and
the attendance factors. The maximum % of additional eGSCN coaches that can be turned out to be eligible for incentive earning is 50%

4.Idle time can booked only on account of power failure more than an
hour.( In CRS it seldom happens as power cut is managed by generators.

5. There is no provision for over time in Tirupathi scheme as approved by the Railway board.
(Even if Over Time is allowed as per RITES Study, it works against the incentive earning capacity of the worker)

6.Quality factors are taken into consideration and these if factors are adverse they act negative on the incentive earned by the worker.
7.The important feature of this scheme is that it takes into consideration of quality of work, the time spent away from the work place; the rectification man-hours etc and these can act against the amount of incentive earned by the worker.
8.All types of coachwork are converted into eGSCN in case of coach works and in case of the turning of wheels the common factor is ICF wheel sets.

THE WORKING OF THE SCHEME:

The theoretical aspects have been discussed regarding the scheme in the earlier paragraphs. The actual working details of the scheme will be discussed in the following paragraphs:
Prior to the introduction of the incentive scheme CRS had been turning out 40coaches (80 Four wheeler Units) per month on an average i.e., 480 coaches per year. This situation is termed as 100R condition in RITES Study.

The Rly Board approved incentive scheme is designed with an incentive earning of 20% i.e., 120R. With the existing staff strength of 1030 the number of eGSCN that are to be turned out to get 120R incentive is fixed at 50 equated GSCN coaches per month. If less than this target is achieved, it will not be eligible for incentive earning. However the upper ceiling limit of incentive as given in
Para 4.02 of Mechanical Code is applicable. i.e., more than 150R incentive is not allowed. As per this, the maximum additional out turn in eGSCN eligible for incentive would be restricted to 50%.

As per RITES study, the Industrial Engineering Department (IED) is made responsible for the calculation of incentive and preparing the bill. While preparing the bill the IED is supplied with inputs from Time office like the total clocked in man –hours of the various groups, and the absentee statements.
And IED collects details of various other data directly from the workshop like the rectification man – hours, the out turn. The bill prepared is sent to Accounts Department along with the relevant documents for vetting. The vetted bill is clubbed with the regular salary bill and payment is arranged after due internal check by the Accounts department.


CRS has performed to its optimum and the out turn has increased by 20 coaches er month on an average. Individual shops have achieved maximum out turn to the tune of around150R in terms of eGSCN. As a result the incentive payment was also t 150R.
The average incentive earned by workers of various scales :( In Rs, for Carriage Fitting shop for 3 months from Jan to March 2002 would give an idea of the amount of incentive payment to various grades of staff.
1560
2638
3213
2924
3250
Maximum earned
1406
2443
2728
2300
2805
Average Incentive earned
USK
2550-3200
TECH I
4500
Sr. Tech
5000-8000
JE II
5000-8000
JE I
5500-9000
Designation/
Scale


FINANCIAL OUTGO OF INCENTIVES FOR THE WORKSHOP-MONTH WISE (in Rs)

Month Production Shops Support Shops Support Department Supervisory Staff Total Outturn
In Four wheeler Units (Not in SPUs)
Jan-02 13, 18,8314,75,35216,30727,33118, 37,821114
Feb-02 15, 65,0302,81,35913,80829,54118, 89,738116
Mar-02 13, 35,2162,58,8229,83130, 34616, 34,215116
Apr-02 13, 09,8262,53,7279,82531, 96216, 05,340130
May-02 10, 67,7662,00,8618,03228 32713, 04,986124
Jun-02 12, 97,8172,59,7899,16130 15015, 96,917120
July-0214 12 7622 69 0771 19403 108816,93,779134
Aug-02 14 41 0872 83 51911 81929 85017, 66,275136
Total107483352282506907232087451,32,99,221



Month
Production
Shops
Support
Shops
Support
Department
Supervisory
Staff




























































Note:
The incentive calculated is based on the eGSCN units (SPUs) turned out be individual groups. However the out turn shown in the last column is the total number of Four-wheeler Units dispatched by the workshop to the Traffic after the
POH.

Prior to incentive scheme the average number of four-wheeler units turned out per month were 80. From January to March three months were trial period. During
April there has been a slight enhancement of target by the RITES and hence the
total incentive paid was reduced even the out turn was more compared to earlier
three months. And again during the months of May and June due to heavy summer the percentage of absenteeism has gone up. It was around 17% where as for other months it was around 12% explaining the lesser amount of incentive earned by the workshop employees though the out turn was matching compared to earlier months. Here we can clearly observe the role of negative factors determining the amount of incentive earned by the employee.


AN ANALYSIS AND CONCLUSION

This scheme will yield good results provided there is a strict monitoring form
the administration. Various sub groups in the workshop have to work in tandem to
achieve the additional out turn for the workshop. Other wise there is a
possibility of the situation where in some groups in the workshop achieve
additional outturn and hence additional incentive whereas some lag behind
leading to no net additional out turn for entire workshop taken together.

It is required to maintain the additional feed constantly and continuously at an
increased level. Form the point of view of the workers; they should not be
deprived of incentive for want of additional feed to avoid inviting any labour
problem.

There is a possibility of premature POH to keep up the additional feed to the
incentive shops.

On completion of one year the scheme has to be analysed for the financial
viability duly taking into consideration the following aspects:
The amount of additional out flow in terms of labour payment (incentive) and
material, and the financial benefit to the Railways in terms of the additional
out turn in return and at what cost.





The End







Annexure follows: Formulae.

Formulae
Equation 1
Group Std. Monthly Target =
Annual Target in SPU
(No. of Working Days in a month)*( No.of working Days in a Year)
Equation 2
Std Man-hours for the group in the month =
0.875 * Strength @ 120 R * Working Hours in the month
Equation 3
Group Attendance Factor =
( Actual Clocked In Hours)
0.875* On Roll Strength * Working Hours in month
Equation 4
Available Man Hours =
Clocked in Man Hours
Less idle time man hours
less rectification man hours actually clocked in the month by own group on
items for which other supplyin ggrouop agrees for rectification by own group
plus (3* rectification work man hours by other receiving group on items earlier
dispatched by own supplying group to any other receiving group.)
Equation 5
Group Production Norm for the group in SPU for the month

=(Group Std. Monthly Target * Available Man Hours)

Std. Man Hours for the group in the month
Equation 6
Group Base Output of the group in SPU=
0.833 * Group Production Norm
Equation 7
Group Production Index =

(Group incentive eligible Dispatches) *( Group Holding Factor )* (Group
Attendance Factor)/Group Base Output
Equation 8
Plant Production Index = P Xa/Xb+qYa/Yb+rZa+Zb+….
Xa Ya Za =
Group incentive eligible despattch in month for different incentive
production groups
Xb Yb Zb =
corresponding group base out put for the month for different incentive
production groups.
P q r = applicable weightage factors for individual production groups.

Applicable weightage factors =
(Allowed Time at 100 R per SPU) * ( Group standard monthly target in SPU)



Sum of( allowed Time* satandard monthly target)of All Shops

Equation 9
Gross Production Index =
(0.7 * Group production index) + (0.3 * Plant Production Index)
Equation 10
Individual Incentive Earned =
(GPI-1)
*( Incentive Earning Factor )
*( Actual Clocked in Hours of the Employee exluding time spent away from
work place)
/ ( Total Working Hours of the Month).

INCENTIVE CALCULATION FOR SUPPORT SHOPS

Equation 11
Standard Man Power Ratio for Support Shops:

Arithmetic Sum of Authorised Strength of all Production Shops



Authorized Strength of Support Shops
Equation 12
Actual Man power ratio=
Actual overall Strength of all Production Shops



Actual On roll Strength of Support Shops


Equation 13
Support Shops Incentive Group Performance Efficiency=
Actual Man Power Ratio
Standard Man Power Ratio
Equation 14
Support Shops Incentive Linkage Factor= 0.8 (Constant)
Equation 15
Individual Support Shops Attendance Factor=

Actual Clocked In Hours

0.875 * Over all Strength * working Days * Working Hours
Equation 16
Weighted Performance Index=
Sum of (G.P.I. * Over all Strength + G.P.I * Over all Strength + .…………)
Sum of (Actual Over all Strength of Production Shops)
Equation 17
Incentive Earning by an employee=
(Weighted Performance Index –1) * 0.8* Support Shops Incentive Group
Performance Effy * Individual support shop attendance Factor * Applicable
Incentive Earning Factor * Clocked-in Hours by a member / Scheduled Working
Hours.

Similar formulae are given for the calculation of incentive for the support
departments with incentive linkage factor of 0.5.

Tuesday, October 6, 2009

WORKSHOP MANUFACTURING SUSPENSE


NOTES ON WORKSHOP MANUFACTURE SUSPENSE ACCOUNT PREPARATION OF WMS BUDGET
What is Workshop- Manufacture Suspense Account?
1. It is a Suspense Head of Account under Capital (7200). It is operated upon to accommodate expenses incurred on labour, material and on-cost charges expended on various jobs. The labour pay sheets when. passed for payment are allocated to the head 'Labour' under Workshop Manufacture Suspense Account which is cleared to various jobs with reference to the Time/Tally Sheets. Debits on account of materials issued to various jobs are allocated to various work orders under the Workshop Manufacturing Suspense Account. Overheads charges i.e. shop-on-cost and general on-cost incurred are charged to on-cost work orders under W.M.S. Account and spread to various jobs on the basis of pre - determined rates, labour, material and on cost charges so booked are accumulated in Workshop General Register which is a detailed subsidiary register of W.M.S. Account. Charges appearing in Workshop General Register against various Work Orders are summarised in out-turn statements Part I and Part II which are also meant for raising debits and effecting recoveries. A Workshop Manufacturing Suspense account Current is compiled and journal entries prepared for incorporation of the transactions affecting Workshop Manufacturing Suspense Account in the Finance Accounts.
2.1. Need to maintain Manufacture Suspense Account:
Railways are a Commercial Concern. Costs incurred in Workshops affect maintenance costs of running the Railway. Any extravagance in Workshops is likely to tell upon operating costs resulting in erosion of profits. It is, therefore, necessary to have proper cost control over expenses incurred in a Workshop. For this purpose, a Suspense Head of Account is needed under which all expenses incurred in a Workshop are accumulated and analysed so as to pinpoint sources of waste and efficiency.
2.2. Expenditure incurred on jobs concerning manufacture and maintenance of Rolling Stock is debitable to Final Heads of Accounts while expenditure incurred on jobs undertaken on behalf of Stores Department, other Home Line Department, other Railways and other Government Departments is transferable to their accounts, Expenditure on jobs undertaken on behalf of Public Bodies, Private Bodies, individuals and Railway employees is recoverable from them. These transfers or recoveries take effect only after the jobs are undertaken or delivered. Till Manufacturing activities are completed, expenditure incurred on raw material, labour and overheads is to be temporarily held under a Suspense Head of Account and cleared therefrom as soon as the job is completed or stores delivered.
3. RECONCILIATION :
The reconciliation of balances appearing in W.M.S. Account Current and those appearing under Workshop Manufacturing Suspense Account in the General Books (Finance Accounts) is effected to prove accuracy of the two records. Occasions are there for the differences. There are certain vouchers which are journalised against W.M.S. Account, but are not taken in the out-turn statement due to the non-receipt of vouchers from the Executive duly accepted and allocated. Similarly, there are certain vouchers which are received from Executive duly accepted and allocate and are taken in the out-turn statement, but due. to non-receipt i debits, these are not accounted for in the General Books. These differences are detailed in form W-1624 to ensure proper action being taken for its accountal. The result of reconciliation is put u to the Workshop Accounts Officer Monthly.
4. What does the Balance under W.M.S. Account represent The balance under W.M.S. Account represents -
(i) The out-lay on works executed for other department ( the Home line pending acceptance of bills.
(ii) Out-lay on works executed for other Railways other that those in respect of repairs to their Rolling Stock pending acceptance of bills.
(Hi) Out-lay on works executed for other department pending acceptance of bill..
(iv) Outlay on store stock series credit for which is awaited from Stores Department.
(v) Under and Over charges : MANUFACTURE & REPAIRS: resulting from the differences between the actual cost of repair and maintenance and the estimated costs at which materials have I issued.
(vi) Under and over charges on cost
(a) arising out of the difference between the actual oncost expenditure booked to on-cost work orders and that distributed amongst the various work orders on a pre-determined rate,; II
(b) and difference between Time/Tally Sheets and labour paysheets on account of average hourly rates of labour.
(vii) Provisional adjustment of issue rate against wrong work order.
5. REVIEW OF BALANCES UNDER W.M.S. ACCOUNT:
The balance under W.M.S. Account is reviewed month) to see -
(i) That all items are current and have been undertaker after the issue of a proper work order under the sanction of i competent authority.
(ii)That the details consist of nothing else except labour material and work on-cost charges expended on unfinished jobs or completed jobs awaiting adjustment.
(iii) That there is no credit items in the details of balance) and if there are any such items, they are noted for immediate adjustment.
(iv) That in case of jobs undertaken for outsiders, a sufficient deposit has been made where such a deposit is required by the rules and on the first appearance of work, it is seen that an estimate is on record containing the extra percentage charges required under the rules and accepted by the party ordering the work
(v) That there are no inefficient balance and the periodical adjustments in respect of under/over charges under the manufacture and repair work orders are carried out regularly and outstanding are not allowed to accumulate
6. Compilation of WMS budget
6.1 The following is the proforma for preparing the WMS Budget
Debits Credits
balance at the debit of manufacture at commencement (i) To works Capital
of the year (ii) To Works DRF
(iii) To works DF
(ivi) To Works OLW {R}
Total (i) to (iv)
Debits during the year (v) To Capital Stores Suspense manufacture for stock
Labour manufactured stores
Stores returned stores
Direct purchase issues within demand
Miscellaneous revenue
Total debits foreign railway
Less issues within demand total credits
Less issues within demand
Net debits Net Credits
Closing balance
(i) Issues to stores suspense
(ii) Issues to works
Net debit or credit during the year.
Budget allotment required for total debits during the year.
Total debits during the year.
Grand total.
6,2 The provision against the various items on the debit and credit sides are estimated for the current year on the basis of the total expenditure under each head after taking into consideration the changes in the programme of works both relating to capital and revenue. The provision (or the existing year is based on the figures of revised estimates for the current year, after taking into account the programme of works for that year and also in the case of labour of all grades increases, appointments, retrenchments, etc. to be given effect to during that year. The detailed instructions as followed in respect of compiling this year are as follows:-
6.2.1.3. Material and Stores from Stores Suspense :-
The cost of stores anticipated to be drawn from stock is shown against this head. The figures provided against this item agree with the corresponding figure provided in the estimates of stores transactions under issues to Capital Manufacture Suspense. The information in this respect is supplied by Works Manager to the Controller of Stores for including figures in the budget (or Capital Stores Suspense.
6.2.1.4. Miscellaneous charges and Material by Direct purchases:
Against this item, the figures for cost of material required to be drawn for other Departments. Divisions, Workshops and on direct despatch orders issued by Controller of Stores are shown. The charges of miscellaneous nature are also included in these figures.


6.2.1 DEBIT SIDE : OPENING BALANCE : The closing balance under W.M.S including the balance under head 'Labour Suspense' at the close of the previous financial year is taken as the opening balance at the commencement of the year. This tallies with the balance in the General Book.
The provision under this head should be made on the basis of the actual expenditure after taking into consideration the change in the programme o< works both relating to Capital and Revenue.
6.2.1.5. Deduct (or issues within the Demand:
In order to avoid double provision of funds within the demand once under capital suspense and again under respective demand for capital works, the issues to capital works and issued to capital stores suspense are deducted from the total debits during the year for which budget provision is asked for.
6.2.2.1. Credit Side:-
(i) To Works, Capital DRF, DP, OLWR:- the figures of credits pertain to the works expenditure which is required to be passed through W.M.S. Account and which are programmed for execution during a year. The figures against each head tally with the corresponding figures under the respective demands of the works concerned.
6.2.2.2. To Capital Stores Suspense (Material sent to Stores):-
The figures represent the cost of manufactured material anticipated to be returned to Stores for stock purchases during a year. The provision is based on the information to be given by stores on account of cost of surplus and released material required to be returned to stores on Advice Notes are also indicated separately under this head. The figures under these heads also correspondingly agree with the figures adopted on debit side of stores suspense.
6.2.2.3. TO REVENUE CREDITS :
The figures relate to repairs and maintenance charges of Rolling Stock, Machinery and Plant, etc. The provision under this head should agree with the provision made in the estimates of Revenue Abstracts B & C against the head
(1) Workshop Repairs under -
(a) Rolling Stock ;
(b) Equipment; and
(2) New Minor Works.
6. 2.2.4. To work done for Foreign Railways & other Governments and other Public bodies
The figures under this head are estimated closely the basis of anticipated indents for works to be released ail workshops. Necessary information of necessary requirements is obtained from the concerned departments of the Railway.

6.2.2.5. Deduct for issues within the demand
The deduct figures for issues within, the demand pa contra figures as reduced from debits are also taken on credit side, Provision of funds is made for credits after deduction for issue within the demand.
6.2.2.6. BALANCE :
The anticipated balance at the close of the year represents' the difference between grand total of debits (including open balance) and credit during the year.
6.2.2.7. Net debit and credit :-
Net debit and credit during the year denote the difference between the total debits and credits during the year i.e. after exclude the deduct figures of issues within the demand for each side.
6.3. Grand Total is for total debits during the year. ;
6.4. Budget allotment required :-
Budget Allotment required is for total debits during year.
6.5. The gross budgeting of manufacturing suspense account signifies separate provision of funds to be made for debits art credits during the year instead of the net debits or credits. The expenditure being outlay on manufacturing operations is booked by debit to W.M.S. Account and clearance of the same represented} outturn is indicated separately by adjustment or credits. The credit) are treated beyond the scope of demand. The variations of actual in relation to budget for debits and credits separately are explained in financial reviews and in appropriation accounts. The gross budgeting system has therefore ensured effective budgetary control over the expenditure on manufacturing operations.
* * *

TOTAL QUALITY MANAGEMENT


What is TQM?
TQM stands for Total quality Management System.
Is the present system of collecting data is adequate?
Data and facts are fundamental to all improvement efforts. Data helps us make better decisions, gain new insights and measure our progress. All best-of-industry quality processes depend upon data collection.
Most measurement data were collected manually. For manufacturing processes, the data often come from measurement instruments used to collect spatial, environmental, electrical, mechanical or physical characteristics from the part being manufactured.
Present systems the collections of data by the following methods are not sufficient.
Surveys
Focus groups
Data sheets
Check sheets
Interviews and
Direct observation.

How warranty and quantity losses obtained?
By using various data collection tools this may be redefined.
v Basic Concepts: planning, stratification, bias, validity, reliability, sampling
v Exercise: concepts of stratification, sampling
v Data Collection Steps
v Review of various data collection methods: direct observation, data sheets, check sheets, surveys, interviews, focus groups, work flow diagrams, concentration diagrams
v Exercise: customer satisfaction surveys
v Exercise: flow diagram
v Data Presentation: the basic charts such as bar charts, line charts, run charts, scatter diagrams, pie charts; high tech charts such as radar charts, control charts
v As computers became smaller, more affordable and faster, this function was turned over to them, decreasing the time and increasing the accuracy of data collection.
v Setting up an automated shop floor data collection system involved straightforward decision making:
v Bring a dedicated data collection system, had one custom-designed for you, or you put one together yourself using a PC, a data collection box, a multiplex or and some sort of data collection software to communicate.
The software can be used to facilitate the following:
· The purposes of evaluation research (Exploring, Describing or Explaining)
· Deduction and Induction
· Cause and effect
· Hypothesis testing and grounded theory
· Types of evaluation designs such as Planning, Process, Outcome, Efficiency
· Action research
· Theories, goals and objectives
· Operationalization of concepts
· Sampling
· Units of analysis
· Measuring change
· Combining qualitative and quantitative data
· Ethical issues such as informed consent, anonymity and confidentiality
· Dissemination of results.

LDCE QUESTIONS 2008

LDCE QUESTION PAPERS YEAR WISE
SOUTHERN RAILWAY
11TH JUNE 2008
PAPER I

GENERAL KNOWLEDGE & ENGLISH, OFFICIAL LANGUAGE POLICY: GENERAL PRINCIPLES OF GOVERNMENT ACCOUNTING AND AUDITING WITH SPECIAL REFERENCE TO THE RAILWAYS. BOOKS AND BUDGET INCLUDING TRAFFIC BOOK

Important this paper contains two sections – A B & C both sections have to be answered section A carries 50 marks and section B carries 100 marks
SECTION A (MAX MARKS-50)
1. Write short notes on any two of the following (10 marks)
a) Narmada Bachao
b) VAT
c) Organ Transplant
d) Right to Information Act
2. Expand the following abbreviations ( 5 marks – ½ marks each)
a) LPG
b)CAT
c)PAC
d)SPV
e)ONGC
f) UPSC
g)SPCA
h) PERT
g) IMF
h) IRCTC
3. Explain the concept of Raj Bhasha how it is implemented in your office (Please restrict your note to 250 words) 5 marks
4. Name the authors of the following books ( 5 marks)
a) God of Small Things
b) Malgudi Days
c) As You Like It
D) My Experiments With Truth
E) Arthashastra
F) Who Moved My Cheese
G) Anand Math
H) The Monk Who Sold His Ferrari
I) Discovery of India
J) Harry Potter and Order Of Phoenix
5. Fill in the blanks (5 marks)
a) Veni ______ vicci
b) A Stitch in time _____________ ____________
c) Ignorance is _____________
d) Rise and Fall of _________ __________
e) Few and ________ between
f) I came, I saw and I __________
g) Jai Jawan Jai ____________
h) A thing of ________ is a joy forever
i) if they don’t have bread let them ear ____________
j) a ___________ measures earthquake

6. Briefly explain the difference between the following (10 marks)
a) Fundamental rights and directive principles
b) bonafide and malafide
c) BOLT & BOT
d) Limited tender an d open tender
e) Concurrence and sanction
7. The following personalities have been newsworthy. Briefly state the reason ( 10 marks)
a) E Sreedharan
b) INDIRA Nooyi
c) Barack Obama
d) J K Rowling
e) Sunita Williams
f) Kiran Mazumdar Shaw
g) Dalai Lama
h) Ratan Tata
i) Asif Ali Sardari
j) Hillary Clinton

SECTION B MAX MARKS 100
This section contains two parts A & B Attempt four questions taking any two from each
All questions carry equal marks of 25 each
1. What is the need for separate audit by representatives of comptroller and auditor general with effective internal auditing within the system, can c& AG Audit can be dispensed with discuss in detail giving pros and cons.
2. Write short notes on any five
a) Konkan Railway Corporation
b) Canons of Financial Propriety
c) Delegation of powers
d) reappropriations
e) Charged and voted expenditure
f) Railway Board
g) Dedicated freight corridor

3. In the present set up of Indian railways what are the different “FUNDS” In brief describe the nature of each fund and their operation. Briefly discuss “CAPITAL FUNDS”

4. How is the “operating ratio” calculated? What the limitations of this ratio in assessing the financial viability of the railway. What are your suggestions to bring down the operating ratio of Southern Railway?

5. “Railway finances were separated fro general finances primarily to secure stability for civil estimates by providing for an assured contribution from railway revenues and also to introduce flexibility in the administration of railway finances, is this concept still relevant today. Discuss relative advantages and disadvantages.

PART B

1. What is the purpose of “accounts office balance sheet. Briefly indicate the nature of debit and credit entries. What action would be taken for realisation of old outstanding?

2. Write short notes on any five
a) Zero based budgeting
b) Suspense heads
c) Apportionment of earnings
d) M & P Programme
e) Approximate account current
f) Railway Act
3. What is “appropriation accounts” annexure J is an index of the efficiency of the accounts department. Discuss how we can on southern railway minimise the number of instances brought under annexure J
4. In the existing systems, the closure of accounts take considerable time. Even then the booked expenditure do not reflect the actual and correct picture. Critically examine the procedure of monthly, quarterly and annual closing and give your suggestions for improving the existing system. Also indicates whether approximate account current should continue
5. “Traditional Budgeting is functionally oriented and accounting oriented but not result oriented. Zero based budgeting is an improvement over traditional budgeting” dicusss this statement in detail in the context Indian railways and also explain how zero based budget can be applied for revenue budget (i.e. working expenses).




















LDCE QUESTION PAPERS YEAR WISE
SOUTHERN RAILWAY
12TH JUNE 2008
PAPER II
TOTAL SIX QUESTIONS TO BE ANSWERED – TWO FROM PART I AND TWO FROM PART II AND TWO FROM EITHER PART III A OR III B ALL QUESTIONS CARRY EQUAL MARKS

PART I
FINANCIAL JUSTIFICATION FOR EXPENDITURE and TRAFFIC COSTING (MAX MARKS 50) ATTEMPT ANY TWO OUT OF QUESTIONS 1 TO 4

1 In the context of railway operations, explain the cost of joint costs. What is the basis on which such costs are apportioned among various services?
2. Write short notes on any five (maxi marks 5 each)
a.) Uneconomic Branch Lines
b.) Out of Turn Works
C) Special Limited Tenders
D) Throughput Enhanced Works
E) Terminal Charges
F) Orange Book and Pink Book
G) Specific Fuel Consumption

3. What is meant by productivity test and how it is applied to new projects? Do they serve the purpose as intended?
4. Highlight the importance of Sensitivity Analysis in evaluating investment proposals. How would you apply this to a proposal for a new line project?

PART II
MANAGEMENT ACCOUNTING (MAX MARKS 50) ANSWER ANY TWO QUESTIONS OUT OF QUESTIONS 5 TO 8

5. Define Break Even Analysis how it is calculated and what are the uses of Break-Even Analysis as a management tool
6. Write short notes on any five:
a) Management Audit
B) Profit Volume Ratio
C) Wagon Turn Around
D) Variance Analysis
E) Net Tonne Kilometres
F) Standard Costing
7. What is meant by financial ratios illustrate any two ratios can operating ratio be taken as a financial ratio give reasons
8. Discuss in detail the concept of performance of budgeting and its application in railway working

PART III MAX MARKS 50
Important answer any two out of questions 9 to 12 or any two out of questions 13 to 16

PART III A
9. What is meant by apportionment of earnings how is it done in respect of goods earnings of through traffic?
10. What is traffic suspense what are the items that constitute traffic suspense give your suggestions to reduce traffic suspense on Southern Railway?
11. Write short notes on any five
a) Leave Not Due
B) Staff Benefit Fund
C) Foreign Service Contribution
D) Supernumerary Post
E) Ex Gratia Payment
F) Special Casual Leave
12. (a) Briefly describe the organisational set up of the statistical department
And
(b) Define the following
i. Engine Hours
ii. Gross Tonne Kilometres
iii. Route Kilometres
iv. Occupation Ratio

PART III B
WORKSHOP STORES ACCOUNTS AND GENERAL EXPENDITURE
13. discuss how the POH of a Locomotive is worked out and explain how direct and indirect costs are taken into accounts
14. (a) what is stock adjustment accounts
(b) What are the various items adjusted through this account
C. Who is the competent authority to sanction the clearance of balance under this head
15. What are the essentials of a good inventory control system? Discuss ABC analysis and its advantages
16. Write short notes on any five
a) Completion Estimates and Completion Reports
B) Risk and Cost
C) Non-Schedule Items
D) Final Location Survey
E) Fall Clause
f) EFT and ECS

LDCE QUESTIONS 2007

LDCE QUESTION PAPERS YEAR WISE 2007
SOUTHERN RAILWAY
14TH FEBRUARY 2007
PAPER I
GENERAL KNOWLEDGE & ENGLISH, OFFICIAL LANGUAGE POLICY: GENERAL PRINCIPLES OF GOVERNMENT ACCOUNTING AND AUDITING WITH SPECIAL REFERENCE TO THE RAILWAYS. BOOKS AND BUDGET INCLUDING TRAFFIC BOOK

Important this paper contains two sections – A & B. Both sections have to be answered section A carries 50 marks and section B carries 100 marks
SECTION A (MAX MARKS-50)
1. write a short essay on any of the following (10 marks)
a. If there is poverty anywhere, it affects prosperity every where.
b. Effect of information technology on employment – is it positive or negative?
c. Raj Bhasha policy implementation on IR
2. Expand the following abbreviations ( 5 marks – 0.5 marks)
a. GDP b. CDROM c. RVNL d.GPS e. LIBOR f. PSLV g. GSLV h. SEBI i. BOLT j. ASEAN
3. Find the difference in meaning and usage of the following pairs of words( 5 marks)
a. effluent & affluent b. hallmark & bench mark c. jeans & genes d. affect & effect e. interpret & interrupt
4. why have these persons been in the news ( 5 marks)
a. Dr Raja J Cheeliah b. Nawjot Singh Siddhu c. Wangari Maathai d. Mohammed Ynus e. Shane Warne
5. give the name of the authors of these books (5 marks)
a. Search in Secret India b. Raja Tarangini c. The World is flat d. Ignited Minds e. Savitri
6. where are the following situated ( 3 marks 0.5 marks )
a. Buland Darwaza b. Hawa Mahal c. RDSO d. Petronas Towers e. Rolland Garros Ground f. Wax Museum of Madam Tussaud
7. Match the following ( 2 marks 0.5 marks)

Uber cup Cricket
China man Tennis
Check mate Badminton
Deuce chess
8. write a paragraph on any two of the following ( 4 marks each)
a. Dedicated Freight Corridor b. Ombudsman c. GM Crops d. Garib Rath
9. use the following in sentences of your own ( 6 marks 1 ½ marks each)
a. ultra wires b. de-novo c. suo-moto d. inter-alia
10. use the following idioms In your own sentences ( 5 marks)
a. bite the dust b. strike a balance c. in the same breath d. cast the first stone e. pay through the nose
SECTION B MAX MARKS 100
This section contains two parts A & B Attempt four questions taking any two from each
All questions carry equal marks
Part A
1. in a developing country like India on the threshold of the take-off, there is always competing demands between remunerative tariffs and societal needs. This calls of new ways of resource rising and innovative revenue measures. Describe the recent steps taken by IR in the regard. Do you have any suggestion?

2. the public accounts committee of parliament has repeatedly criticised the increasing trend of misclassifications ain accounts and mistakes in budgeting. Present an analysis of the causes for these problems. Suggest appropriate steps to eliminate their recurrence
3. railways are at once a Govt dept and commercial enterprise. Discuss how the twin-need of Govt and commercial accounting are satisfied in railway accounting process. Discuss the issue of dividend payment to the central revenue in this context.
4. write shot notes on any two of the following :
a. Integrated Budget b. Zero Based Budgeting c. Performance Budgeting d. Corporate Plans

Part B
5. Raiwlay Board (FC) have recently appointed a committee to explore the reasons for the delay in submission of monthly actual expenditure and also the variations between the approximates and the actuals. From your angle, analyze the causes for these delays and variations. Can the approximate be dispensed with the actuals submitted at an earlier date? Suggest steps for this.
6. There is a plethora of suspense heads in railway accounting. Discuss the need for continued operation of these suspense heads, specifically focussing on one suspense head each from Earnings, revenue expenditure and works expenditure
7. Write short notes on the following
a. demands payable b. exchequer control c. SRS F d. Annual Debt head Report
8. What is the accounting mechanism for recording the traffic earnings of a railway under various heads and their progressive realisation? Also describe the procedure for the apportionment of traffic earnings amongst railways

ANSWER ANY TWO out of questions 9 to 12 or ANY TWO out of questions 13 to 16 (25 each)
PART III A TRAFFIC ACCOUNTS STATISTICS AND ESTABLISHMENT ( 50 MARKS)
9. do you agree with the statement the magnitude of outstanding under traffic suspense reflects the efficiency of traffic accounts office? Discuss with your suggestions to bring it to the optimal levels.
10. a. what are the various types of statistical information generated from a goods invoice? Explain in detail how any three of them are calculated.
b. what is the reason for the continued difference between accounts office figures and statistical figures in monthly earnings?
11. Write short notes on
a. leave not due b. recent changes in the haulage charges of postal traffic c. scale check register d. combine train reports
12. Give significance of the following statistical results
a. wagon kilometres per wagon per day b. net tonne kilo meters c. occupation ratio d. net tonne kilo meters per engine hour
Part III B WORKSHOP AND STORES ACCOUNTS AND GENERAL EXPENDITURE
13. Elucidate
a. what are the constituent elements of workshop manufacturing suspense?
b. the objective and procedure for job costing in a railway workshop. How would you take make or buy decision based on cost data?
14. write short notes on
a. VED b.repeat order c. stores exception reports d. transfer pricing
15. a. describe the various techniques used for reducing the material cost through various stages in the purchase,storage, issue and disposal
b. how is inventory turn over ratio calculated? Can it be termed as a reliable index of inventory management

16. discuss the management information system with special reference to material management. Explain how the system helps the management in decision making.





LDCE QUESTION PAPERS YEAR WISE
SOUTHERN RAILWAY
15TH FEBRUARY 2007
PAPER II
TOTAL SIX QUESTIONS TO BE ANSWERED – TWO FROM PART I AND TWO FROM PART II AND TWO FROM EITHER PART III A OR III B ALL QUESTIONS CARRY EQUAL MARKS

PART I
FINANCIAL JUSTIFICATION FOR EXPENDITURE and TRAFFIC COSTING (MAX MARKS 50)

1. Describe the steps/stages involved in preparing a project report for new line project, predominantly for carrying iron ore. How is the project-appraisal and sensitivity analysis done for assessing the viability of the project? Assume your own data

2. Answer the following
a. there is a section of opinion which holds that cross-subsidisation in fares between passenger and goods in railways should be abandoned and the fare structure should align costs with tariff. Does the present traffic costing system provide adequate and reliable data to discuss the opinion?

b. discuss the methodologies of costing EMU services

3. Discuss any three of the following in brief
a. social cost benefit analysis b. specific fuel consumption c. apportionment of joint costs d. green book e. two packet system of tendering f. risk and cost tender

4. Railways need alternative sources for plan expenditure. Discuss the schemes like BOLT, BOT and projects under PPP in furthering this purpose.

PART II MANAGEMENT ACCOUNTING ( Max marks 50)
5. Explain the concept and utility of financial ratio analysis. Discuss the use of at least four ratios to assess the comparative performance of a railway in different periods as well as with other railways

6.
a. discuss cost volume-profit analysis . Describe the utility of break-even analysis for profit planning, continue or drop a product, make or buy decisions etc
b. zenith company manufactures a special cement which is sold in bags of 20 kgs its financial data is given below
Selling price per bag: Rs. 30.00
Variable cost per bag: Rs 16.00
Fixed cost : Rs 100000.00
Quantity : 3000 bags
Calculate the following
a. Break even quantity
b. Assume 10 % increase in fixed cost and calculate the new break even point
c. Assume 50 % increase in fixed cost and calculate the new break even point
d. Assume increase in variable cost to Rs 20 per bag and calculate the new break even point
7. write short notes on any three of the following
a. variance analysis b. fund flow analysis c. AFRES d. PERT
8. what is meant by Product Life Cycle Costing? Also explain the purpose of the same. What step you would recommend to reduce the life cycle cost in a railway production unit?