CASH ESTIMATE EXERCISE
(ESTIMATE)
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CASH AUTHORISATION EXERCISE
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Monthly
letter from unit accounts office to executives
Format
from the executive offices
Format
from the unit accounts offices to HQ accounts office
Format
from the HQ accounts offices to Unit accounts office
Reviews
August
review
Revised
estimate
First
modification
Final
modification
Financial
reviews
Finance
code part 1
506 Revenue Expenditure-The revised and budget estimates of ordinary working expenses
submitted by the General Manager to the Railway Board are based on
detailed-estimates of revenue expenditure obtained by him from the various
heads of departments of the railway. On
receipt of the allotment from the Railway Board, these detailed estimates may
require modification consistent with the allotment sanctioned by the Railway
Board or as may be deemed necessary by the General Manager.
507 Within the amounts of the allotments fixed by General Manager under paragraphs 365
and 506
for the various spending authorities in charge of divisions and departments,
such authorities have full power to sanction expenditure on revenue account
during the year, subject to the condition that the specific sanction of the competent authority must be
obtained separately to all items of expenditure on establishment and
experimental or special temporary works where under rules or orders such
sanction is necessary; in a case in which the General Manager has prescribed
that detailed estimates should be prepared and administrative approval and
technical sanction obtained before the incurrence of expenditure, the procedure laid down by the
General Manager must be followed.
508 Proportionate Budget
allotment:- For the purpose of carrying out a meaningful comparison of the
actual working expenses for (and to end of) the month with the budget
allotment, it is necessary to distribute the sanctioned allotment for the year
over the twelve months after taking all known factors of disturbance or special
features into account. While the responsibility for the control of
expenditure against the budget allotment devolves upon the authority at whose
disposal the allotment has been placed, it is the duty of the Accounts Officer,
in his capacity as the financial adviser to the Administration, to render all
possible assistance to the controlling authorities in the exercise of such
control. Accordingly, he works out, at the beginning of each financial year, in
consultation with the officers responsible for the control of expenditure, the
estimated progressive expenditure under each sub head of a grant keeping in
view the following factors:
(i) Throw forward from the
previous year.
(ii) All
expenditure whether in cash or by transfer, the liability for which already
exists, but which is not likely to be distributed evenly during the year,
whether because it is of a periodical nature, or because it is contingent on
the receipt of supplies, or for any other reason.
(iii) Expenditure which is
practically fixed and evenly distributed throughout the year.
(iv) Other expenditure which
is likely to be incurred during the year but liabilities for which have yet to be incurred.
(v) The need to
keep some amount as a reserve for meeting fresh or unanticipated expenditure.
509 In respect of
sub-heads for which such detailed analysis is not practicable or necessary, may
be, inter alia, because the expenditure does not fluctuate from month to month,
i.e. establishment charges, past actuals as worked out for a number of years
may form the basis for this estimate.
510 From the details thus
worked out, the "Proportionate Budget Allotment" for each month is
worked out for each sub-head of the Grant, and the progress of expenditure
under each sub-head is then watched from month to month through Monthly
Financial Reviews (see
paras 511 & 513)
in order to see that the expenditure is according to anticipations and not at a
pace which is likely to lead to an
excess at the end of the year.
511 Monthly Statement of Approximate Receipts and Expenditure -- A statement of approximate receipts and expenditure under such
heads as may be prescribed should be
sent to the Railway Board so as to reach
them not later than the l5th of the month following that to which the figures
relate except for the months of July, October and January in which case the
statement may be sent not later than 20th
of the following month to which
the figures relate. The merit of this
statement lies in supply of information promptly to the Railway Board for the
purpose of watching the expenditure against the proportionate budget
allotment. The monthly statements will,
on receipt from the various railways, be consolidated in the Railway Board's
office An one single statement for all
the railways. A copy of the consolidated
statement should also be furnished to the Ministry of Finance of the Government
of India and the Accountant General, Central Revenues, in the first week of the
second month following that to which it pertains.
512 Revenue Allocation Registers
-- All revenue expenditure is to be recorded in
Registers, which are known as Revenue Allocation Registers, by the various
heads of accounts prescribed in the classification given in Appendix I (Volume
II). The object of these registers is to keep the heads of divisions, and
departments informed of the progress of expenditure against the allotments
placed at their disposal by the General Manager, which should be entered in red
ink in the appropriate columns provided for in these registers, so as to form a
ready means of comparison and check with the outlay.
513 Monthly Financial Reviews --The monthly
reviews show the expenditure to the end of the previous month, against the
allotment placed at the disposal of the
controlling authorities under each sub-head of the grant for which they are
responsible. The review should be
prepared in Form No. 513 and submitted to the controlling authorities every
month, by such date as may be fixed in consultation with them.
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sub-heads
of grant and heads of account.
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Budget
allotment for 1974-75
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Proportionate
budget
allotment
To
end of June, 1974
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Actual
expenditure to end of June, 1974
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Actual
expenditure to end of June, 1973
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Expenditure
upto June-1974 more (+) or less (-)
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as compared
with column-3
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as compared
with column-5
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1
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2
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3
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4
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5
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6
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7
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Note-the periods have been shown in the
proforma for the purpose of Illustration only.
514 The "Proportionate Budget Allotment" to the end of the
month (column 3) is worked out by the Accounts Officer in accordance with the
Instructions contained in paragraph 508
above. The figures of actual expenditure for and to end of the month (column
4), and for the corresponding period of the last year (col.5) will be available
from the Allocation Registers and the compiled accounts. The Accounts Officer should complete the
other columns of the review provided above and submit it to the controlling
authority, along With the comments of the executive officers responsible for
the expenditure and with such remarks of his own as may be necessary.
515 In compiling this review, the Accounts
Officer should see whether-
(a) the non-fluctuating expenditure is
in accordance with the monthly appropriation as worked out on the basis of
actuals in past years,
(b) the periodical expenditure
is in accordance with the proportionate budget allotment,
(c) the correlation assumed
between receipts and expenditure, in the preparation of the budget is
maintained. For the purposes of this comparison, items pertaining to the period, but remaining unadjusted for
any reason, should not be lost sight of.
516 The Monthly Financial Reviews, should be prepared by the Divisional
/ Workshop / Construction Accounts officers concerned for each
Division/Workshop/Construction Unit and the Financial Adviser and Chief
Accounts Officer should arrange for the consolidation of these reviews into the
Monthly Financial Review for the railway, the details of procedure and the due
dates being prescribed in consultation with the railway administration.
517 Re-appropriations --No liability, for which a provision does not exist or the provision
for which is inadequate in the allotment sanctioned by the General Manager,
should be incurred unless the necessary
funds can be obtained either by reappropriation or fresh allotment.
Such liabilities may, however, be liquidated provisionally, if otherwise
in order, on the spending authority undertaking to find the requisite
funds. All such expenditure should,
however, be held by the Account Officer under objection "for want of
appropriation " or as-" excess over appropriation."
518 The
Accounts Officer should advise the spending authorities about reappropriations
wherever needed, and how they are to be made.
He should ensure that reappropriations are carried out promptly and that
whenever a saving under some head is reasonably certain, steps are taken at
once to withdraw funds from the sub-head, and whenever it is clear that-the
progress of expenditure under some head is such as to require an additional
appropriation, steps are taken to arrange for it by reappropriation or
otherwise.
EXPENDITURE ON ACQUISITION, CONSTRUCTION AND
REPLACEMENT OF RAILWAY ASSETS
519 Separate allotments are
placed at the disposal of railway administrations under each Grant for
expenditure on works chargeable to Capital, Depreciation Reserve Fund,
Development Fund, Accident Compensation, Safety and Passenger Amenities fund
Open Line Works Revenue. These allotments are made in lump sums and their
distribution over the various sub-heads and over the works for which they are
intended are spelt out in the 'Works, Machinery and Rolling Stock Programmes'
which are furnished to the railways along with the Budget orders sanctioning
the allotments. These “Programmes” also show, in the case of work costing over
Rs 50,000 each, the total estimated cost of each work, and the Railway
administrations are required to exercise a control over expenditure, not only
against the allotment sanctioned for the
year for each work, but also against its total estimated cost as shown in the
'Programmes'. In regard to works
costing not more than Rs. 50,000 each, a lump sum is allotted to each railway
administration in the programmes before any expenditure is incurred against the
lump sum allotment, the estimates of such works should be sanctioned by the
General Manager or any lower authority empowered by him in this behalf.
Thus the control of expenditure on railway is exercised through--
(1)
the-preparation, in advance, of estimates of the expenditure to be incurred.
(2) the allotment of funds through budget Grants
for the year, on the basis of these
estimates ; and
(3) the continuous and
concurrent review of the expenditure as incurred against the
details of the estimates and against the sanctioned grants, so that
revisions of estimates or re-appropriation of funds are arranged for at the
earliest possible point of time.
The procedure to be followed in controlling expenditure against
estimates is detailed in Chapter XIV and XII of the Indian Railway Code for the
Engineering and Mechanical Departments, respectively.
520 Watch over Progress of
Expenditures --From the moment expenditure or
liability is incurred on works, a check at regular and frequent intervals
should be made on its progress, both against estimates and against funds. The check should originate in the lowest
executive unit, viz., a division.
Note.-Estimates are prepared for
New Minor Works costing over Rs. 5,000 each which are chargeable to "Open
Line Works--Revenue". The
provisions in paragraph
521 et seq apply equally to such works.
521 The Works Registers (Form
No. E. 1474) maintained in each division enable a running comparison to be made
between-
(a) the expenditure
incurred on each work and the detailed provision made in the estimate for the work, and
(b)
the budget allotment for the
work and the actual expenditure to the end of the month.
The
executive officer should examine the works registers monthly or at more
frequent intervals, and watch the progress of expenditure on each work, so that
any tendency towards excess over sanctioned estimates may be investigated and
curbed, or fresh administrative and technical sanctions obtained in time
to cover the anticipated, excess.
522 The Accounts Officer should also watch the progress of expenditure
on works on the lines laid down in paragraphs
523 to 533
and advise the executive officers as to the need of re-appropriations, whenever
such necessity arises (vide paragraph
518).
523 In watching the progress of expenditure on
works, the Accounts Officer should see whether-
(b) the anticipated credits have
actually been realized
(c) all adjustments are
made in time and
(d) expenditure on any new work is
not met by merely postponing or retarding the progress of sanctioned work.
524 Review of Expenditure --The Accounts Officer should prepare every month two reviews, one by
sub-heads/Plan Heads of the Grant and the other by individual works, and
present them to the authorities concerned by such dates as may be fixed in
consultation with them.
525 The review of expenditure
chargeable to Capital, Depreciation Reserve Fund, Development Fund, Accident
Compensation, Safety & Passenger Amenities Fund and Open Line
Works-Revenue, by sub-heads/Plan Heads of the Grant, should be prepared monthly
by the Accounts Officer in Form No. F. 525.
Form No. F. 525
Review
showing, Progress of Expenditure chargeable to Capital, Depreciation Reserve Fund,
Development Fund, Accident Compensation, Safety and Passenger Amenities Fund
and Open Line Works-Revenue to end of--------------------
Department --------------------
Office-----------------------
(Figures
in thousands of rupees)
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Sub-Head/ Plan
Head Grant No. 16
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Budget
Allotment for the year
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Total
Estimates Sanctioned during the Year
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Approximate
Expenditure to End of June 1979
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Capital
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D.R.F
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D.F.
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O.L.W. (R)
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ACS & PA
Fund
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Total
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1
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2
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3
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4
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5
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6
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7
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8
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9
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Percentage of Expenditure to allotment (Col.9/
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Percentage of Expenditure to allotment of the corresponding period of last year
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Reasons for
variations between Cols. 10 &
11 and brief remarks as to rate of
Progress of expenditure
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10
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11
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12
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Date. ------------------------- |
Signature ------------------------------------------
Designation -----------------------------------------
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The quarterly reviews
for period ending June, September and December may be sent to the Board by 25th
of the second following month to which the figures relate. The review for the period ending March, will be sent to the Board by 6th
August, each year.
Reasons for variations and brief
remarks as to the rate of progress of expenditure to be indicated in column 12
of the Form, should be meaningful and should he recorded in consultation with
the spending authorities.
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Description of
the work and sub-head / plan head.
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Amount of
sanctioned estimate
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Expenditure to
end of previous year
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Balance of
estimate.
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Budget
allotment for the Year
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1
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2
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3
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4
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5
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Expenditure
during the current year.
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Commitments
neither paid for nor included in the approximates for the month
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Total
expenditure and commitments to end of the month [ Col. 6(iii) + 7 ]
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Actuals to end
of previous month
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Approximate
for the month
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Total
expenditure to end of the month
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6 (i)
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6 (ii)
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6 (iii)
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7
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8
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Probable
further outlay to complete.
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Deduct
estimated throw forward to next year.
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Total
expenditure and commitments to be paid for in the year (cols. 8+9-10)
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Balance of
allotment available(5-11)
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Remarks.
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9
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10
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11
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12
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13
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Date. ------------------------- |
Signature
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Designation -----------------------------------------
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527 The above review of expenditure on individual works chargeable
to Capital or Capital and Depreciation Reserve Fund, or Development Fund, or
Accident Compensation, Safety and Passenger Amenities Fund, or Open Line
Works-Revenue, information should be classified under each sub-head/Plan head
of the grant, viz.-
11. New Lines (Construction).
12. Purchase of new
lines.
13. Restoration of
dismantled lines.
14. Gauge conversion.
15. Doubling.
16. Traffic
facilities-Yard remodelling and others.
21. Rolling stock.
31.
Track renewals.
32. Bridge work.
33. Signalling &
Tele-communication works.
34. Taking over of line
wires from P & T.
35. Electrification
Projects.
36. Other electrical
works.
41. Machinery &
Plant.
42. Workshops-including
Production Units.
51. Staff quarters.
52. Amenities for staff.
53. (i) Passenger Amenities.
(ii) Other Railway Users' amenities.
61. Investment in
Government Commercial undertakings-Road services.
62. Investment in
Government Commercial undertakings-Public undertakings.
64. Other specified
works.
71. Stores suspense.
72. Manufacturing suspense.
73. Misc. Advances.
81. Metropolitan
Transport Projects.
528 The
review of expenditure on new lines (construction) should show the Information
in regard to each construction shown in the "Works, Machinery and Rolling
Stock Programme" for the current year or for which, though not so shown,
there is a 'throwforward'.
529 In
the case of works, other than track renewals and rolling stock, the review
should be made in respect of-
(i)
(i)
each individual work estimated to cost over rupees one
lakh shown in the Works, Machinery
and Rolling Stock Programme for the current year, or for which though not so shown, there is a 'throwforward'.
(ii)
(ii) all works costing not more than rupees one lakh each, whether in
progress or new, not as individual
works but as one item for the total of such works, including the ‘throwforwards'. If the General Manager so directs, the review
should show in detail each item of work
for which an estimate has been sanctioned.
530 In regard to track renewals, the review
should show each item of work for which a separate estimate has been sanctioned
by the competent authority.
531 As regards Rolling Stock, each individual
item shown in the Works, Machinery and Rolling Stock Programme for the current
year or which, though not so shown, there is a 'throwforward' from the previous
year, should be included in the review under the following detailed heads.-
(i) Locomotives.
(ii) Boilers.
(iii) Carriages.
(iv) Wagons.
(v) Ferries.
532 With a view to complete the review, the
Information in regard to (a) the approximate expenditure for the month, (b)
commitments which have neither been paid for nor included in the accounts for
the month and (c) the amount of probable further outlay to complete the work
(columns 6 (ii), 7 and 9 of Form
No. F 526) should be obtained by the Accounts Officer from the controlling
authorities concerned.
533 The figures of 'actuals'
required for the review will be furnished to the concerned authorities by the
Accounts Officer immediately after such figures are available. The reviews should be completed by them in
accordance with the instructions contained in paragraphs 525 to 531
and submitted to the Financial Adviser and Chief Accounts Officer, so as to
reach him by the middle of the month following that, to which they relate.
534 Control
of Expenditure against the Capital Suspense Grant --The details of allotment
placed at the disposal of railway administrations under the sub-beads/ Plan
heads "Stores Suspense" and "Manufacture Suspense" under
Grant NO. 16 are shown on the debit side of the statements of "Stores'
Transactions" and "Manufacture Operations" included at the end
of the "Works, Machinery and Rolling Stock Programme" furnished to
the railway with the Budget Orders. The
details of anticipated credits under these suspense heads are shown on the
credit side of the said statements.
535 The detailed manner in which the control
over expenditure, against the funds allotted for purchases of stores under
"Stores Suspense" should be carried out, is prescribed in paragraphs
505 to 507 and 2862 of the Indian Railway Code for the Stores Department.
536 Monthly Reviews of
Suspense Grant --The progress of debits against the
allotments sanctioned by the Railway Board under 'Stores Suspense' and
'Manufacture Suspense' and the credits in respect of these suspense heads
anticipated to be adjusted in the accounts should be reviewed by the Accounts
Officer in the form given below.--
Review of Expenditure under
--------------------------------------Suspense to end of June-, 1975
Department------------------------------ |
Office---------------------------------------
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_____________________________________________________________________________________________________
Actuals Approximates to Balance of Grant Remarks as
To the
Sub/heads Grant for to end of Approximates end
of June, available rate of progress of
of
Grant. the year. May, 1975.
for June, 1975. 1975.
(col.
2-5)
expenditure.
____________________________________________________________________________________________
1 2 3
4
5
6
7
___________________________________________________________________________________________
537 The information in column 1 of the review
should be given under all the sub and detailed heads appearing in the
statements of 'Stores Transactions' and 'Manufacture Operations', referred to
in paragraph
534. In column 7, the Accounts Officer should furnish the comments on the
progress of actual debits as compared with the sanctioned allotment and credits
as anticipated.
538 The attention of the General Manager should
be drawn to the progress of debits and credits, if it shows any necessity for
the curtailment of the programme of purchases.
Debits and credits may be sub-divided by the more important items of
stores, if the railway administration so require, in order to regulate
purchases.
539 Financial Adviser and Chief
Accounts Officer's Review of monthly Receipts and Expenditure --The reviews in respect of Working Expenses, Capital, Depreciation
Reserve Fund, Development Fund, Accident Compensation, Safety and Passenger
Amenities Fund and Open Line Works Revenue Expenditure and Capital Suspense, as
well as similar reviews of the earnings of the railway, should be consolidated
by the Financial Adviser and Chief Accounts Officer in suitable form and
presented to the General Manager monthly in the shape of a "Financial
Review" for the whole railway before the conclusion of the second month
following that to which the review relates. The explanations given for the
variations between the expenditure of the year and the actuals for the
corresponding period of the previous year should be as meaningful as possible,
and the Financial Adviser and Chief Accounts Officer should indicate what in
his opinion are the conclusions to be drawn from the figures.
EXCHEQUER CONTROL
541 Importance and limitations
of Exchequer Control --Para. 539
requires the compilation of a 'Financial Review' wherein the earnings and
expenses of each Railway Administration up to the end of every month are
compared to the proportionate sanctioned budget and variances explained. However, as the figures of actual receipts
and expenses for a month are available only in the first or second week of the
second following month, there is a time lag of 6 to 8 weeks between incurrence
of expenditure or realization of earnings and their review with the
proportionate budget. The reason for the
time lag is that while cash disbursements and receipts are accounted for
immediately, book adjustments between one accounting unit/Railway
Administration and another take a great deal more time ; the books of account
for a month are, therefore, kept open for a longer period to accommodate such
'book adjustments'. As 'cash' forms, on
an average about 70% of the total expenditure of a Railway, Exchequer Control has the merit of providing
an effective means of monitoring a substantial part of the expenditure on a
day-to-day basis.
542 Since the budgetary allocations are
sanctioned only for expenditure, Exchequer Control mechanism is necessarily
limited in scope to the control of cash outgo.
Railway earnings are thus excluded from the purview of Exchequer Control
but are subject to usual examination through the monthly financial reviews as
well as the icurring scrutiny of cash remittances from stations and of Bank
advices.
543 Even though Exchequer Control was
originally envisaged as control of cash outgo by instituting drawing limits on
the banks, it has been considered neither necessary nor practicable to
introduce such a measure. Each Railway Administration operates a large number
of bank accounts (in some cases as many as 100 or more) for facilitating
payments. Further, these drawing
accounts are operated by a large number of disbursing officers. It would,
therefore, not be feasible to prescribe drawing limits for each bank account in
favour of each disbursing officer.
Exchequer Control, therefore, implies a self-imposed expenditure
discipline by means of a system of day-to-day monitoring to ensure that the
cash content of the budgetary allocations is not exceeded.
544 Railway budgetting is on 'gross' basis. i.
e., Parliamentary approval is obtained for gross' expenditure, ignoring the
credits/recoveries which are 'Outside the scope of the Demands for Grants. The actual cash against each budget Demand is
also gross', since credits/recoveries are usually effected through 'book
adjustments' or receipts of cash.
Further, the sanctioned budget grants involve a certain amount of
overlap, e. g., funds for purchase of stores are sanctioned under Demand 16,
but when the purchased stores are utilized for (say) maintenance and operation,
budget allocations are also provided under
Demands 4 to 10 etc. Cash outgo
is, however, involved only at the first point of activity, i. e., when stores
are purchased and paid for, and the 'overlap' is represented in railway
accounts through 'book adjustments'.
545 Implementation
of Exchequer Control.- Implementation of Exchequer Control involves the
following steps.-
(i) Correct assessment of the 'Cash' and 'adjustment' portions of the
sanctioned annual budget under each Demand by each Disbursing Officer, and also
the cash disbursement in respect of 'non-budget' items e. g. refund of fares
and freight.
(ii) As accurate an
assessment as possible of the quarterly requirement of cash,
(iii) Issue of quarterly/monthly cash authorization
to Disbursing Officers, and
(iv)
Concurrent control of cash outgo by each Disbursing Officer.
546 Assessment
of Cash Outgo-General Guidelines -- Broad
guidelines for making a realistic estimate of the 'cash' and 'adjustment'
portions of expenditure falling within the sanctioned budget as well as in
respect of 'non-budget items' are given in Annexure III. 'Adjustments' may involve
transactions between two or more accounting units within the same Railway
Administration or between one Railway Administration and another or between a
railway and a non-railway administration.
For example, as stated in para
544, issue of maintenance stores from stock will involve book adjustment by
transfer from 'Stores Suspense' under Demand No. 16 to the final head under
Demands No. 4 to 7. Likewise, in the case of contracts where one Railway
Administration is nominated as the paying authority for supplies to be
despatched to consignees on other railways, the disbursements by the former will
involve cash out go, but would appear as 'adjustments' in the books of the
consignee railways. The assessment of
cash and adjustment portions of the expenditure must, therefore, be made very
carefully by each Railway Administration strictly in accordance with the
guidelines given in Annexure
III. As a further check on the
reasonableness of the bifurcation between cash and adjustment, comparison with
the corresponding figures of the previous year (s) would also be useful.
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