CHAPTER 8
PROCEDURES FOR INTER-GOVERNMENTAL AND INTER-DEPARTMENTAL ADJUSTMENTS.

8.1    GENERAL

The inter-departmental/inter-governmental transactions will be settled by the following different procedures:-

  1. Direct booking of expenditure against the Demands for Grants of the functional Ministry.
  2. Issue of advices to RBI, CAS, Nagpur
  3. Cash settlement.

The system of issue of advices to Central Accounts Section, RBI, (CAS), Nagpur for inter-governmental adjustments will be applicable in respect of adjustments for which a system of settlement is specifically prescribed in paragraphs 8.8, 8.9,8.12.1, 8.13.1, 8.18.1and 8.21.3 below:

The detailed procedure of direct booking of expenditure by the agent Ministry against the Demand for Grants of the functional Ministry has been given in Para 8.5 below.

8.2    TRANSACTIONS ARISING IN THE ACCOUNTS OF THE PAY AND ACCOUNTS OFFICE WHICH ARE ADJUSTABLE BY THE ACCOUNTS OFFICER OF ANOTHER GOVERNMENT/DEPARTMENT ON CASH SETTLEMENT BASIS.

8.2.1    Such transactions should be initially adjusted by the Pay and Accounts Office in whose books the transactions originate under the suspense head "8658-Suspense Accounts - Pay and Accounts Office Suspense-Transactions adjustable by....." (name of Accounts Officer/Authority concerned)-such sub heads may be opened to record distinctly transactions adjustable by different Accounts Officers/Authorities. These transactions should be posted daily in the Outward Claims Register (Form CAM 53), separate folio being used for each Accounts Officer/Authority, by P.A.O. after daily compilation is completed . The closing should be done at the end of each month for the purpose of cash settlement except for transactions arising in March, in regard to which para 8.4.1 may be referred to. P.A.Os of the Department of Supply, are however, required to maintain separate subsidiary registers as hitherto on account of the heavy volume of such transactions, and enter weekly totals in the outward subsidiary claims register for effecting weekly settlement. If the account closes with some amount due to the other party, a bill should be prepared for the net amount due and sent to the cheque section for obtaining a cheque in favour of the Accounts Officer of the Government/Department concerned. (The classification on the bill will be shown as P.A.O. Suspense minus credit. The original credit balance under the suspense head will be automatically cleared when this voucher is compiled in the accounting section). The cheque will be sent to the other party concerned along with necessary schedules and vouchers in support of the transactions (Form CAM 54). The receipt of acknowledgement of the cheque by the other party should be watched and the acknowledgement when received should be noted in the register. In the converse case i.e., when payments on behalf of the other Government/Department are more than their receipts during the month, the schedules with supporting vouchers etc. should be sent to the other accounts officer and a cheque demanded from the latter. On receipt of the cheque from the other party, it will be sent to the bank for collection. The outstanding debit (original) under the suspense head will be cleared on receipt of the credit through the bank scroll by affording a minus debit (responding).

Note 1:-    The recoveries from salary bills on account of income tax, and surcharge and licence fee (rent) for government quarters will not be passed on to the Accounts Officers of the concerned Ministry/department. These recoveries will be credited to the appropriate final heads of accounts in the books of Pay and Accounts Office and included in the final compiled account rendered to the Principal Accounts Officer. The accounts rendered by the Principal Accounts Office of the Ministry/Department to the Controller General of Accounts, will also include the credits adjusted under these heads. A statement in the prescribed form will be sent every month by the Principal Accounts Officer to the Income-tax Officer, Salary Circle by the due dates prescribed. The schedule of recovery of licence fee will be sent to the Assistant Director of Estates concerned by the P.A.O. concerned in the form prescribed by the former.

Note 2:-    The following recoveries arising in salaries etc. bills in the books of Accounts Officers of the Central Civil, Defence, Railways, Posts, Telecommunications and U.T. Governments/Administrations will also be adjusted to the final head of account by their Accounts Officers so as to reduce inter-departmental adjustment:-

  1. Central Government Employees' Insurance Scheme , 1977.
  2. Central Government Employees' Group Insurance Scheme , 1980.
  3. U.T. Government Employees' Group Insurance Scheme, 1984.
  4. A.I.S. Officers borne on U.T. cadre and subscribing to the A.I.S. Officers (Group Insurance Rules,1981).
  5. Postal Life Insurance Premia recoveries.

The above transactions arising in the books of Railways (including their own employees) would be settled with the P.A.O. (Exp.) for the first two schemes, with the P.A.O.,U.T. Govt/Admn. from which the employee had come for the scheme under Sl. No. (C) and with the P.A.O. (Delhi Admn.) for the scheme at Sl. No. (D) above. The schedules of recovery of Postal Life Insurance Premia in the format supplied by the Director, P.L.I., Calcutta indicating therein the transfer-in and transfer-out cases along with a monthly statement of booked figures may be sent to the Director, PLI, Calcutta.

Relevant transactions relating to such deputationists will also be included in the statistics to be furnished under the schemes at Sl. No.(b) and (d) above by the Accounts Officers of Central Civil, Railways, Defence, Posts, Telecommunications, U.T. Government/Administration.

Subscriptions under the All India Service Officers (Group Insurance) Rules,1981, recovered from an All India Service Officers borne on a state cadre but serving on deputation with Government of India or U.T. government / administration shall be passed on to the accounts officer of the parent state government and will not be included in the statistics of borrowing ministry/department.

Note 3:-    Recoveries on account of Provident Fund (e.g. of officers belonging to All India Services) or loans and advances which are adjustable in the books of Accounts Officers of other Governments/Departments, will be initially booked under the suspense head (PAO Suspense) and cleared by remittance of cheque/draft as per the procedure prescribed in this paragraph.

Note 4:-    In respect of employees taken on foreign service from the public sector undertakings , autonomous bodies , institutions etc. recoveries on account of their contributions to the Contributory Provident Fund maintained by such bodies and other recoveries like installments of repayment of conveyance advance , house building advance, etc. drawn by them from their parent organisation, which are adjustable finally in the books of these bodies , shall not enter the accounts of government. These recoveries shall not be entered in the body of the bills. The drawing and disbursing officer concerned shall prepare and attach a separate schedule relating to such amounts required to be remitted to the parent body, by indicating such recoveries only on the outer cover of the bill as 'payable to ..... Organisation (name of the body to be indicated )' and seek a crossed cheque / bank draft, as the case may be, in favour of the organisation for being despatched to it. The P.A.O. shall pass the bill and issue one cheque for the net amount of the salary payable to the employee (or if cash is payable to the employee, include it in the amount of the cheque in favour of the D.D.O.) and another in favour of the parent organisation specified in the bill which shall be despatched by the D.D.O. to the organisation with a covering letter indicating the name of the employee and details of the recovery against which the cheque is forwarded.

Note 5:-    Payment on account of cost of stores supplied/ services rendered by D.G.S. & D. to various ministries/ departments other than those mentioned in para 8.8 below are made by the Department of Supply, classifying the payment under the head "P.A.O. -Suspense". All such payments are eventually to be accounted for against the grants controlled by the respective ministries/ departments receiving the stores. This is achieved when reimbursement is made to the P.A.O., Department of Supply on receipt of claims for the payment made initially. It is necessary that both parties take prompt action to adjust all such claims in order to avoid initial savings and subsequent excesses under the grants, and to avoid amounts, mounting under "P.A.O. -Suspense", thereby rendering clearance of outstandings under the head difficult.

8.3    TRANSACTIONS ARISING IN THE BOOKS OF ACCOUNTS OFFICERS OF OTHER GOVERNMENTS/DEPARTMENTS WHICH ARE ADJUSTABLE IN THE BOOKS OF THE PAY AND ACCOUNTS OFFICES ON CASH SETTLEMENT BASIS.

8.3.1    Such transactions may represent either recoveries and receipts initially accounted for by the Accounts Officer of the other department or Government or payments made by other Government/Department which are finally adjustable in the books of the Pay and Accounts Office. In the former case the other Accounts Officer will send to the Pay and Accounts Office a cheque for the amount of receipts/ recovery along with supporting schedules etc. (Form CAM 54). On receipt of the cheque or draft, the P.A.O. will send it to the bank for credit to Government account along with a challan showing the classification of the receipt or recovery and credit the final head of account at the time of compiling the account on receipt of the bank scrolls.

8.3.2    In the latter case i.e. when payment has been made by another department of Government, an account with supporting vouchers will be received from the other party along with a claim for reimbursement. On receipt of the claim the P.A.O. will examine the claim to see whether prima facie it pertains to the Department under his payment control and if necessary consult the Departmental officer. If it pertains to his department, he will have a bill prepared for the amounts duly classified to the under final head, pass it and send the bill to the cheque section just as in the case of a bill presented at the bill counter of the Pay and Accounts Office. The cheque section will issue the cheque and send the paid voucher to the accounting section alongwith other vouchers paid during the day. The debit will be classified under the final heads at the time of compiling vouchers received from the cheque section of the Pay and Accounts Offices as in the case of other payments. The cheque will be despatched by the cheque section to the Accounts officers of the Government or Department concerned alongwith a forwarding letter (Form CAM.56) giving reference to the number and date of the letter with which the claim was received.

8.3.3    Specimen entries of the accounts adjustments to be made in the books of the Pay and Accounts Office on account of Inter-departmental and Inter-Governmental transactions are given below;-

(a)    Recovery of Rs 500 made from pay bill towards Provident Fund subscription adjustable in the books of another Accounts Officer:-

First Stage:-    When the recovery is effected it will be classified under "8658-Suspense Accounts-PAO Suspense-Transactions" adjustable by 'X' P.A.O. Rs. 500/-(Credit)-Original.

Second Stage:-    When the cheque is issued in favour of other accounts officers:- (schedule of Dr./Cr. in Form CAM 54 received, serving the purpose of a bill).

"8658-Suspense Account-PAO Suspense-Transactions" adjustable by 'X' P.A.O.-Rs. 500/- (Minus credit)-responding, To "8670-Cheques and Bills-PAO Cheques" Rs.500/-(credit). The credit under PAO cheques will be cleared on receipt of the bank scroll indicating payment of the cheque.

(b)    Payment made by the Pay and Accounts Office on behalf of another Government/Department-Payment will be initially debited to "8658-Suspense Accounts-PAO Suspense etc". The account of the payment will be sent to the other Accounts Officers concerned for reimbursement. On receipt of the cheque from the other party, it will be sent to bank for credit to Government. On receipt of the bank scrolls with this credit the item will be classified as minus debit under the suspense head referred to above.

(c)    Recovery made by other Accounts Officer which is adjustable in the books of the Pay and Accounts Officer-On receipt of the cheque along with supporting schedule, it will be sent to bank for collection along with challan showing final classification of the receipt. On receipt of the bank scrolls the credit will be taken to final head. The head "PAO Suspense" is not operated.

(d)    Payment made or services rendered by another Government or Department adjustable in the books of Pay and Accounts Officer:-

  1. If the accounts received from the other Accounts Officers are found to be prima facie adjustable in the books of PAOs during the course of preliminary checks, the PAOs should reimburse the full amount claimed by the Accounts Officers within a period of 7 days of the receipt of the account without waiting for the detailed audit of the vouchers. The payment so made will be classified under the suspense head "Suspense Accounts (Civil)-unclassified suspense " in the first instance wherever the P.A.O. feels it necessary to consult the Departmental Officer; otherwise he could adjust it to the final head of account and intimate the Departmental Officer.
  2. In the former case the P.A.Os will communicate the details of the debits received by them to the concerned Departmental officers for acceptance. On receipt of their acceptance, the P.A.Os will relieve the suspense head by per contra debit to the final heads of account.
  3. If on receipt of the remarks of the Department it is found that the transactions are not to be adjusted in the books of the P.A.Os they may be redebited to the originating Accounts Officers in the accounts for the month on hand and all the supporting vouchers etc. received should also be returned.
  4. The PAO must keep a close watch over clearance of the transactions recorded under the suspense head and reasons for delays for over a month should be thoroughly investigated and appropriate action taken.

8.3.4    A Register of Inward Claims (Form CAM 55) should also be maintained for watching the settlement of accounts and claims from other accounts offices. Separate folios should be used for claims received from different Governments/Departments. As regards form of register of Outward claims and procedure relating thereto, refer to para 8.2.1. For watching clearance and settlement of inward/outward claims, P.A.O. Suspense broadsheet should be maintained (Form CAM 64).

8.3.5    Outward claims of Pay and Accounts Offices to be settled with State Accountants General may be raised directly against them by the Pay and Accounts Offices; but outward claims (other than those relating to expenditure etc. on National Highways) of State Accountants General to be settled with Pay and Accounts Offices may, as a special arrangement, be routed through concerned Principal Accounts Offices.

Outward claims in respect of G.P.F. pertaining to State Government/ U.T. employees on deputation with Central Government will be settled by Central PAOs directly with the authority nominated by the State/U.T. Government for the maintenance of G.P.F. accounts of its employees, without the intervention of the A.G., wherever a State Government/U.T. Government has taken over the work relating to maintenance of G.P.F. accounts from the I.A.& A.D.

8.4    PROCEDURE FOR SETTLEMENT OF TRANSACTIONS ARISING IN THE MONTH OF MARCH.

8.4.1    Normally, reimbursement of transactions arising during a month (last week of a month in the case of Pay and Accounts Officer of Supply Department) should be claimed by the first week of the following month. But, in order to bring to account all the transactions arising in the month of March during the same financial year in the books of the concerned Accounts Officers, all Pay and Accounts Officers/State Accountants General/ Railway/ Defence/ Posts/ Telecommunications Accounts Officers should endeavor to settle transactions arising during the first 3 weeks of March by raising debits (duly supported by vouchers/schedules etc.) at weekly intervals against the Accounts Officers concerned. The Accounts Officers, receiving the debits should ensure that such claims are responded to and settled immediately on receipt of the claims by issuing cheque. In respect of debit/Payment arising on or after 25th of March of a year on account of services rendered/supplies effected, telegraphic intimation should be sent by the Accounts Officer in whose circle it arose, to the concerned Accounts Officer indicating the net amount of claim to be reimbursed, and briefly indicating the nature of the transaction and the latter shall immediately arrange to send cheque to the former, by placing the amount thereof under the Suspense head ("Suspense Accounts (Civil)- Challans/Vouchers Suspense" in the case of departmentalised Pay and Accounts Officers) pending receipt of vouchers and documents in support of this debit. As payments against such telegraphic intimations are envisaged to be made even where details are not received by the responding Accounts Officers, the Accounts Officer who raises the telegraphic debit should take utmost care that the telegraphic advice is sent to the correct Accounts Officer for the correct net amount and he should invariably ensure the despatch of supporting vouchers/schedules etc by speed post on or before the 10th of April of the succeeding financial year. On receipt of vouchers etc, the responding Accounts Officer should adjust the debit to the final heads of accounts concerned before the accounts for March (Supplementary) are closed clearing the Suspense head.

8.4.2    Inspite of adhering to the procedure indicated in para 8.5.1 there might be cases where the debits may not reach the concerned Accounts Officer well in time to enable him to issue cheque/demand draft on or before 31st March of the same year . In such cases where the debits supported by the vouchers are received in the succeeding financial year but before March (Supplementary) accounts are closed , the Accounts Officer to whom the debits pertain shall accept and respond to the inward claim of debit by issuing a cheque and debiting the suspense head P.A.O. suspense in the accounts of the year in which the debit is received. Simultaneously a transfer entry shall be inserted in the March (supplementary) accounts of the preceding year to which it pertains by debiting the final head of expenditure concerned and minus debiting the head 'P.A.O. Suspense', so as to incorporate the expenditure in the accounts (including Appropriation Accounts) of the year in which the payment was made to the parties concerned by the outward claim originating Accounts Officer. This would avoid lapse of funds in the Demand for Grants of the consignee concerned.

8.4.3    The procedure as above would also be applicable for adjustment of miscellaneous receipts appearing in the books of an Accounts Officer but requiring final accountal in the books of another Accounts Officer.

8.5    SETTLEMENT OF INTER DEPARTMENTAL TRANSACTIONS THROUGH BOOK ADJUSTMENT i.e. WITHOUT RESORTING TO CASH SETTLEMENT

In respect of the programmes/ activities for which one Ministry /Department utilises the services of another Central Ministry /Department as its agent for executing the activity the Financial Adviser /Chief Controller of Accounts/Controller of Accounts of the functional Ministry / Department would issue annual budget allocation letter (indicating the amount approved in the Budget for the year for the programme / activity assigned to the agent / executing Department) after obtaining necessary financial sanctions. This would constitute authorisation for the executing Ministry /Department to incur expenditure upto the limits specified above. The amount so allocated will not be available for re-appropriation by the functional Ministry/ Department except with the concurrence of agent Ministry/ Department. A copy of such sanction would be endorsed to the Accounts Officer of the functional department to enable him to keep a note of this in the Expenditure Control Register maintained by him. The functional Ministry /Department would also communicate the Computer Code number relating to the heads to the Pay & Accounts Office of the agent Ministry.

The expenditure should be incurred by the executing Ministry /Department subject to observance of normal procedure of sanctions. The Pay & Accounts Office of the agent Ministry will book the expenditure under the relevant expenditure head against the Demands for Grants of the functional Ministry/Department. The Accounts Officer of the agent Department would furnish monthly and progressive figures of expenditure to the Accounts Officer of the functional Ministry / Department to enable the latter to monitor the flow of expenditure on the programme /activity. The Accounts Officer of the agent Ministry will in no case honour any claim which would result in excess over the amount authorised by functional Department. Annual reconciliation of expenditure will be conducted by the two Accounts Officers through the Statement of Central Transactions.

8.6    PROCEDURE FOR RECOVERY OF COST OF WORK DONE IN THE C.P.W.D./OTHER DEPARTMENTS FUNCTIONING ON THE PUBLIC WORKS PATTERN ON BEHALF OF OTHER GOVERNMENTS/ DEPARTMENTS

8.6.1.    The expenditure incurred by the Divisional Officers on behalf of other Civil Ministries/ Departments (provision for which has not been made under the Grants of C.PW.D. but under the Grant of the Ministry /Department) will be directly booked under the final head in terms of the procedure mentioned in para 8.5. The expenditure incurred on behalf of non-civil Ministries / other Governments will be booked under the Suspense head "8658-Suspense Accounts-107-Cash Settlement Suspense Account.

8.6.2.    The Divisional Officer will send the vouchers in support of the charge to the work concerned, in the normal manner as in respect of other works expenditure, to his Pay and Accounts Officer, and the vouchers will be subject to post check in the prescribed manner in the Pay and Accounts Office concerned.

8.6.3.    A claim for reimbursement of the monthly expenditure will be made simultaneously by the Division against the Accounts Officer of the non-civil ministry/department concerned or Accountant General of the state as the case may be, duly supported by an attested copy of the Schedule of Works Expenditure (without any supporting vouchers) in Form CPWA 64. The Accounts Officer /Accountant General concerned will settle the claim within one week of receipt of the claim on the basis of this in accordance with the instructions contained in Para 8.3.3 (d)(i) above.

8.6.4.    As the claims for March will be received by Accounts Officers of the non-civil Ministries only after the expiry of the financial year, the procedure of operating the Suspense head as detailed in para 8.4.2 ibid shall be followed for the accountal of the expenditure in the concerned year itself.

8.6.5.    In the month of March, the Divisional Officer will send an extra copy of the Schedule of Works Expenditure to his Pay and accounts Officer who will certify that the total expenditure for the year shown in column 7 against the work concerned is correct and forward this certified Schedule to the concerned Pay and Accounts Officer/Accountant General.

8.6.6    Any excess/short payments which come to light as a result of the post check of the Divisional Accounts will be communicated by the Pay and Accounts Officer to the division originating the debit for rectification of the resultant charge in the subsequent month's accounts.

8.6.7    It will be the responsibility of the Division originating the debits to watch the realisation of the payments from the concerned Pay and Accounts Office/State Accountants General and clear the suspense head in its books.

8.6.8    The Division would also watch that the expenditure incurred on the work does not exceed the administrative approval, technical sanctions and appropriation of funds, originally sanctioned or subsequently revised.

Note:    So far as works expenditure incurred by the C.P.W.D. in Nepal on behalf of the Ministry of External Affairs is concerned, the reimbursement of the expenditure will be claimed and received by the Pay and Accounts Office, C.P.W.D. Food Zone, New Delhi instead of by the C.P.W.D. Divisions direct.

8.7    The procedure explained above will also be followed for settlement of transactions arising on account of execution of civil works by the Departments of the Government (which function on the lines of C.P.W.D., but the Divisional Officers have no cheque drawing powers and all their claims are subject to precheck and payment by the P.A.Os.) on behalf of other Governments/Departments with the modification that instead of operating the minor head "Cash Settlement Suspense Account", the minor head "PAO Suspense" will be operated in their books.

8.8    SETTLEMENT OF DEBITS ON ACCOUNT OF SUPPLIES EFFECTED

SUPPLIES AND DISPOSAL ARRANGED BY THE DEPARTMENT OF SUPPLY.

8.8.1    The Chief Controller of Accounts, Department of Supply and his branch offices at Mumbai, Kolkata, Chennai, etc. have been authorised to recover the cost of stores for which they initially made payments and remit net payable proceeds of disposals by directly advising the Reserve Bank of India (C.A.S),Nagpur to effect transfer of funds to the account of that Department from that of State Governments, Defence, Railways, Posts and Telecommunications. The following heads of accounts are operated by the Organisation of Chief Controller of Accounts, Department of Supply:-

  1. 8786-Adjusting account between Central and State Governments-in respect of supplies to State Governments;
  2. 8787-Adjusting Account with Railways-in respect of supplies to Railways;
  3. 8788-Adjusting Account with Posts for supplies to Deptt. of Post;
  4. 8789-Adjusting Account with Defence-for supplies to Defence Department; and
  5. 8795-Adjusting Account with Telecommunications for supplies to Deptt. of Telecommunications.

Note:    As the banking business of Governments of Jammu and Kashmir and Sikkim is not conducted by the Reserve Bank of India , recoveries on account of supplies to these state governments will be effected by operating on the major etc. Head "8658 - Suspense Accounts - P.A.O. Suspense - Transactions adjustable by ....." and raising an outward claim against the Accounts Officer / authority concerned for reimbursement by cheque / bank draft.

8.8.2    The Pay and Accounts Officer (Supply) will send weekly advices to the Central Accounts Section, Reserve Bank of India, Nagpur and send a copy of this advice duly supported by vouchers and other necessary details to the Accounts Officers of the Departments of the consignee concerned. They shall ensure that such advices are sent telegraphically to the Central Accounts Section, Nagpur so as to reach them by the 25th of following April in respect of payments effected during the close of a financial year.

8.8.3    If any erroneous debit is passed on by the Pay and Accounts Officer (Supply) to any Accounts Officer, the latter may reverse adjustments through the Central Accounts Section of the Reserve Bank of India, Nagpur by operating on the head of account as indicated below:-

  1. the Accountants General shall operate on the relevant remittance head indicated in 8.8.1 (a) above;
  2. Railways/Defence/Posts/Telecommunications Accounts Officers shall operate on the Major etc. heads 8658-Suspense Accounts-Suspense Account (Railways/Defence/Posts /Telecommunications)-Reserve Bank Suspense.

The number and date of the relevant debit advice issued by the Reserve Bank of India (Central Accounts Section, Nagpur) shall be quoted in all such correspondence.

8.8.4    On receipt of the copy of the debit advice from the State Accountant General or Railway/Postal/Defence Accounts Officer, the Pay and Accounts Officer (Supply) will make the following adjustments in his books:-

(a)    If the advice is not accompanied with relevant vouchers:

The amount will be debited to the suspense minor head `Suspense Account (Civil)-Vouchers Suspense' by per contra credit to the minor head `Reserve Bank Suspense - Central Accounts Office'. Subsequently, on receipt of vouchers relating to the rejected claims, the amount will be debited to the concerned head viz.8786/8787/8788/8789/8795, in case the debit is found to be pertaining to other State Govts./Railways/Posts/Defence Accounts Officers or to 8658 Suspense Accounts-PAO Suspense, in case the debit is found to be adjustable in the books of other Central Pay and Accounts Officers by relieving the minor head `Suspense Account (Civil)-Vouchers Suspense'. On receipt of clearance Memo from Reserve Bank of India, the minor head "Reserve Bank Suspense - Central Accounts Office" will be cleared by minus credit to `R.B. Suspense-Central Accounts Office' by per contra credit to the Head `8675 - Deposits with Reserve Bank-101-Central (Civil)'.

(b)    If the advice is accompanied with relevant vouchers:

The amount will be debited to the adjusting heads or to `PAO Suspense' as above by per contra credit to the head `Reserve Bank Suspense-Central Accounts Office'. The latter head will be cleared on receipt of clearance memo from the Reserve Bank of India, Central Accounts Section by per contra credit to the head 8675 - Deposits with Reserve Bank - central-civil.

The debit will subsequently be raised against the concerned Accounts Officers afresh by advising the Central Accounts Section, R.B.I., Nagpur or by raising an outward claim as the case may be.

8.9    SETTLEMENT OF TRANSACTIONS ARISING IN MISSIONS/POSTS ABROAD

8.9.1    In respect of payments made abroad by Indian Missions, which require cash settlement with other accounts authorities, the Disbursing Officers should send to the Pay and Accounts Officer, Ministry of External Affairs, schedules and vouchers on a weekly basis, so that he could promptly claim reimbursement thereof.

8.9.2    Transactions of the State Government taking place at High Commission of India, London and Embassy of India, Washington shall be settled in cash by the Chief Controller of Accounts, Ministry of External Affairs with the Accountants General of the States concerned by operating on the head "8658-Suspense Accounts-PAO Suspense-transactions adjustable by........(name of the Accountant General concerned)".

8.10    SETTLEMENT OF DEBITS RELATING TO CUSTOMS DUTY ETC.

8.10.1    The procedure to be followed for realisation of customs duty on goods imported by the various Governments/ Departments has been laid down by the Department of Revenue and Banking.

8.10.2    Under the procedure, there will be no system of book transfers and the Department importing goods shall pay the customs duty by cheque drawn in favour of the Chief Accounts Officer of the Customs House concerned.

8.10.3    Customs duty on foreign post-parcels and mail would continue to be collected by the Postal Department in cash/by cheque after assessment of duty payable, by Customs Officers in Foreign Post Offices. A monthly statement of such duty assessed and collected will be prepared by the Foreign Post Office concerned and sent in duplicate to the Customs Officer in charge of the Foreign Post Office for verification who shall return one copy to the Post Office after checking and send the duplicate copy to the Pay and Accounts Office concerned. The Pay & Accounts Officer shall watch receipt of the amount from the Director of Accounts (Postal),Nagpur.

(Authority:-Para 22.1 and 22.2 of Scheme for collection of Revenue and payment of refunds etc. in the C.B.E.C.).

8.11    SUPPLIES MADE BY THE MEDICAL STORES DEPOTS OF MINISTRY OF HEALTH & FAMILY WELFARE TO STATE AND U.T. GOVERNMENTS.

8.11.1    The procedure to be followed for settlement of claims relating to supplies made by the Medical Stores Depots under the Ministry of Health and Family Welfare to various Governments has been prescribed separately by the Department of Health of that Ministry.

(Authority:-Pr.A.O. Min. of Health & F. W. OM No. 25021/1/78-79/CDN/M.S.Depot/1582 dated 25-2-81).

8.12    SETTLEMENT OF TRANSACTIONS BY RAILWAYS/ DEFENCE/POSTS/ TELECOMMUNICATIONS AMONG THEMSELVES ETC.

8.12.1    Transactions between Defence/Railways/Posts will be settled among themselves by sending advices to the Central Accounts Section, Reserve Bank of India, Nagpur.

8.13.1    The transactions specified below appearing in the books of Railways which require to be credited to Central Revenues under Ministry of Finance (Department of Economic Affairs etc.) will be settled by the Railway Board by sending necessary advice to the Central Accounts Section, Reserve Bank of India, Nagpur.

(a)    Dividend payable in lieu of Tax on Railways passenger fares, by Railways every month to Central Revenues and creditable to Ministry of Finance, Department of Economic Affairs.

(b)    Loans from General Revenues to Railways and recovery of interest on such loans including repayments of such loans and recovery of interest on loans and advances to employees of Railways-adjustable by Department of Economic Affairs.

8.14.1    The Controller General of Accounts may authorise on the merits of each case, proforma adjustments ( i.e. without effecting monetary settlement through the Central Accounts Section, Reserve Bank) to be effected through the Finance Accounts in the type of cases and circumstances indicated below:

(a)    Cases in which normal mode of settlement is through RBI, CAS, Nagpur i.e. (i) settlements between Railways, Posts, Telecommunications and Defence departments inter se; and (ii) Settlements between Railways, vis-a-vis C.C.A., Ministry of Finance, Department of Economic Affairs and Expenditure and C.C.A., C.B.D.T. as envisaged in para 8.13.1 but where the settlement could not be effected before 25th April;

(b)    Aggregate amount of the transactions to be adjusted between the accounting units under them is not less than Rs. 5 lakh gross credit or gross debit; and

(c)    The proposal reaches the Controller General of Accounts before the date prescribed for the purpose, in the time schedule for the closing of the annual accounts laid down by him.

8.14.2    Thus, payment of dividends by Railways to Central Revenues and interest on State Railway Provident Fund balances shall be settled on 'proforma' basis outside the books of the Reserve Bank of India, as it is not in practice possible to calculate the amount and effect monetary settlement of these transactions before 25th of April of each year.

8.15    SETTLEMENT OF TRANSACTIONS BETWEEN CENTRAL GOVERNMENT AND STATE GOVERNMENTS

8.15.1    In all cases of claims for an amount not exceeding Rs. 1000 in each case for transactions on account of supplies made or services rendered by one government to another, no monetary settlement will be resorted to. However, in respect of the claims relating to commercial departments/undertakings of a Government, which are required to work to a financial result, for services rendered or supplies made to or by them, the monetary settlement shall be carried out irrespective of the amount involved.

8.15.2    For transactions above the limit of Rs. 1000 and where the supplies/services are to be paid for irrespective of any monetary limit, the settlement will be made through cheques by the supplied Government. The procedure to be followed for making the monetary settlements in these cases, in respect of supplies/services to a Central Government Department (including Defence, Railways, Posts and Telecommunications besides Civil) will be as indicated below:-

8.15.3    The Department of the Central Government which received supplies/services will present a bill alongwith the accepted invoice to its own Accounts Officer concerned who will make the payment by cheques drawn in favour of the officer concerned of the supplying Government, in settlement of its claims.

8.15.4    In the reverse case of supplies/services rendered by a Central Government Department the settlement will be in cash. The cheques received by it from the supplied State Government will be presented by it to its Accounts Officer for encashment and credit to the proper head of account. In case the departmental officer is himself in account with a branch of the bank , the cheque will be remitted by him to the bank with a challan showing particulars of the head of account, for credit to Government account.

Note:-    Ministry of Finance, Department of Economic Affairs O.M. No. F.1(57)-B/74 dated 12.10.1976 lays down the procedure to be followed for settlement of inter-governmental transactions (i) between state Governments inter-se, (ii) between State Government on the one hand and Central Government-Railways, Defence, P&T., Civil Ministries/Departments on the other and (iii) between Central Civil on the one hand and Railways/Defence/P&T. on the other. The provisions of this O.M. would be an additional permissible method of settlement available for the purpose in cases where the debit does not originate in the books of the Accounts Officers concerned. In all cases where the debit for the supply made and services rendered by a Central Government Department vis-a-vis a State Government (referred to in (ii) above) and between a Central Civil Ministry/department versus Railways or P.&T. or Defence (referred to in (iii) above), originate in the books of an Accounts Officer, the Accounts Officer shall raise the debit against the Accounts Officer of the supplied department who shall effect necessary settlement by issue of cheque. In such cases the procedure of cash settlement only between the executive authorities concerned shall not be applicable.

8.16.1    The Union Territory Governments will also follow the procedure indicated in para 8.15 as may be applicable to them for settlement of their inter-governmental transactions arising out of services rendered or supplies made by/to them.

8.17.1    Even at present, some miscellaneous receipt and certain payment transactions (viz. payment of interest / repayment of principal on discharge of Central Government securities and pensions including pensions to freedom fighters etc.) take place at State treasuries. These transactions have to be accounted for by the treasuries in the State section of accounts under the head "8658-Suspense Accounts-PAO suspense -Transactions adjustable by the Pay & Accounts Officer, Department of ............." . The Accountants General of the State concerned is required to pass on the debits for these payments supported by schedules, vouches etc. to the Pay & Accounts Office of the Ministry/ Department concerned for cash settlement by issue of cheque in the usual manner.

Payments of Central Civil pension made at the treasury counters at the Principal Director of Audit (Central), Calcutta are booked under the final head of account in the Central section in their books and accounts are submitted to the Controller General of Accounts.

8.18.1    Ministries/Departments of Central Government will arrange payment of loans and grants-in-aid as well as payment of States' share of income-tax, Union excise duty, etc. through their Principal Accounts Officers. On receipt of sanction orders from the Ministry/Department, the Principal Accounts Officers will arrange to afford credit to the balance of State Government (except Jammu and Kashmir & Sikkim) by debit to their Ministries/departments accounts through the Reserve Bank of India (C.A.S), Nagpur. The Principal Accounts Officer will pass an entry in his books debiting the appropriate final heads of account, (e.g. major heads 3601, 3602, 7601 etc.) and crediting "8658-Suspense Accounts Reserve Bank Suspense-Central Accounts Office,". A copy of the advice will also be sent to the A.G. concerned or the Chief Accounting Authority of the State, in cases where the accounts have been departmentalised or separated from audit to enable him to make the necessary adjustment in the accounts of the State Government. On receipt of the clearance memo from the Central Accounts Section of the Reserve Bank of India, the suspense head mentioned above will be cleared by minus credit by per contra credit to "8675-Deposits with Reserve Bank-Central-Civil". The Principal Accounts Officer should ensure that the amount shown and debited in the monthly account sent by the Reserve Bank of India tallies with the amount of the advice sent by him. For detailed procedure in this connection refer to Annexure 1 to this Chapter.

8.18.2    Repayment of loans and payment of interest thereon by the State Governments (except Jammu and Kashmir and Sikkim) in respect of loans received from the Government of India will be arranged by the State Accountants General or the Chief Accounting Authority of the State irrespective of its designation, incases where the accounts have been departmentalised or separated from audit, by issuing suitable advice to the Reserve Bank of India (C.A.S.), Nagpur to credit the account of the Ministry/Department of the Central Government by debit to the State balance.

8.18.3    When State Governments (except Jammu and Kashmir and Sikkim) have to refund unspent amounts of old loans, the payment thereof will be arranged by the State Accountants General by issue of advice to Reserve Bank of India(C.A.S., Nagpur) to credit the balances of the Central Ministry/Department by debiting the State balances".

8.18.4    While State Accountants General are not authorised to debit the Central Government by sending advices to the R.B.I., as an exception, they have now been permitted, to withdraw amounts erroneously credited to Central Government towards repayment of loans or interest in an earlier advice by sending another advice to R.B.I. (C.A.S.), Nagpur to debit the Central Government provided that such advice contains the following certificate:-

"Certified that this advice represents the withdrawal of an earlier erroneous credit to the Central Government, by debit to State Government and does not represent withdrawal of payments already made which were due to the Central Government by State Government. Necessary details of earlier erroneous advice(s) now being withdrawn are being furnished to the CCAs/CAs concerned separately".

8.18.5    The Principal Accounts Offices of the Ministry/Department are responsible for maintenance of detailed accounts of the loans sanctioned by the Central Government to the State Governments and watching recovery of instalment of principal and interest.

8.18.6    As the banking business of the Government of Jammu and Kashmir is not conducted by the Reserve Bank of India, for payments of loans/grants to that Government the Principal Accounts Officer of the Ministry/Department concerned on the basis of sanction issued by the competent authority, will issue a crossed 'Account Payee' cheque drawn in favour of the Secretary to the Government of Jammu & Kashmir, Finance Department and send the same to the branch of the Jammu & Kashmir Bank Ltd., at Baba Kharag Singh Marg, New Delhi for credit to the account of the Jammu & Kashmir Government with Jammu & Kashmir Bank Ltd. An intimation of payment, along with necessary particulars will also be sent to the Secretary, Finance Department, Jammu & Kashmir and to the A.G., Jammu & Kashmir simultaneously. The Jammu & Kashmir Bank's branch at New Delhi will arrange for crediting the amount to Jammu and Kashmir Government's account and for clearing the cheque through usual banking channels.

8.18.7    A copy of each of the sanction order for payment of loan/grant issued by the Ministry/Department may be sent to the Accountant General, J & K, Srinagar/Sr. Dy. A.G., Jammu by name with full particulars of payments like cheque/bank draft No. and letter No. with date under which the payments were remitted. A check list of all sanctions issued and acted upon during each quarter ending June, September, December and March of every Financial year would also be sent by name to the authorities as above by the 15th of the following month.

8.18.8    As the banking business of the Government of Sikkim is also not conducted by the Reserve Bank of India, the payment of loans/grants to the Government of Sikkim will be regulated by the procedure prescribed hereunder:-

(a)    The Ministries/Departments of the Government of India will send to their Principal Accounts Officers, necessary sanctions for payments of grants and loans to the Government of Sikkim and endorse copies of these to the Finance Department of Government of Sikkim as well as to the Accountant General, (Central), Calcutta.

(b)    On the basis of the sanctions issued by the competent authorities, the Principal Accounts Officer will make the payment to the Government of Sikkim by a bank draft in favour of the Secretary, Finance Department, Government of Sikkim, Gangtok drawn on the State Bank of India. He will send intimation to A.G. (Central) Calcutta regarding the remittance and a quarterly list as laid down in para 8.18.6.

(c)    The Principal Accounts Officer should account for the transactions under the final heads.

(d)    While forwarding the draft to the Government of Sikkim, the Principal Accounts Officer should furnish to the Sikkim Government the full particulars relating to the payments in question with a copy to the Accountant General (Central) Calcutta.

8.18.9    For repayment of loans and payment of interest by Jammu and Kashmir and Sikkim Governments whose banking business is not conducted by the Reserve Bank of India, the system of direct payments by bank drafts in favour of the concerned Principal Accounts Officers (or specified P.A.O. where former does not operate a drawing account) will be followed.

8.19    ARRANGEMENTS FOR CREDIT TO CENTRAL GOVERNMENT OF INCOME TAX DEDUCTED AT SOURCE (TDS) FROM THE SALARY AND OTHER BILLS OF STATE GOVERNMENTS.

8.19.1    Consequent upon departmentalisation of receipts accounts of Union Govt. (Civil), the income tax recoveries effected from the bills paid by treasuries/State Government Pay and Accounts Officers/other State Government departmental offices rendering compiled accounts to the Accountants General shall be classified under the Minor head "TDS Suspense" below the Major head "8658 Suspense Accounts" in the State Section of accounts. The credit to this head will be afforded by transfer credit even at the time of recording pay order as per the provisions of Article 26 of Account Code Volume II. These offices should also maintain details of credit to the suspense head as above under the various major, minor and detailed heads of account relating to deductions of income tax at source like "0020" ,"0021",etc.

8.19.2    The Accountant General, will consolidate for the State Circle as a whole monthly, the amounts thus shown under TDS Suspense by these authorities. A cheque for the total amount booked under TDS Suspense shall be sent by him, after the monthly accounts are closed, to the Zonal Accounts Officer concerned duly supported by a statement in duplicate showing the figures pertaining to each treasury/ PAO/ Departmental officer rendering compiled accounts etc. On receipt of the cheque and realising the same through the accredited bank, the Zonal Accounts Officer of the CBDT will straightaway classify the credits to the relevant major, minor and sub-heads of accounts on the basis of the source at which the deduction has been made as indicated by the Accountant General in the statement referred to above by keeping in view the guidelines prescribed in CGA's O.M. No. S. 11024/1/80/TA/2457 dated 24th June, 1980.

8.19.3    Accountal of income tax deducted at source from interest on central government securities paid at state treasuries.

Payment of interest on Central Government securities can take place at State treasuries even after departmentalisation of Union Government Accounts (Civil). The claim for reimbursement on account of this payment shall be prepared by the Accountant General on net basis (i,e. after deduction of income tax deducted at source) and settlement of such claims shall be effected by the Principal Accounts Officer, Department of Economic Affairs. The Accountant General would furnish the following information to the Principal Accounts Officer, Department of Economic Affairs:-

  1. Gross amount of the interest paid.
  2. Amount of income tax etc. deducted from such payment and
  3. Net amount for which claim preferred.

8.19.4    On receipt of the above claim, the Principal Accounts Officer, Department of Economic Affairs shall reimburse to the Accountant General, the net amount and credit the income tax deducted at source to the concerned final head of account in his books after booking the gross amount of the interest payment on Central Government securities against the relevant interest head of account.

8.19.5    The income tax deducted at source from State Government securities either at the treasuries or at Public Debt Offices of the Reserve Bank of India, would be classified under suspense head TDS Suspense in the State Section of accounts. The procedure prescribed in para 8.19.1 and 8.19.2 above shall be applicable for the passing on of the credit to the Zonal Accounts Officer of CBDT and its final accountal in his books.

8.20    SPECIAL PROCEDURE FOR SETTLEMENT OF TRANSACTIONS RELATING TO NATIONAL HIGHWAYS.

8.20.1    The following procedure has been laid down in connection with the reimbursement of claims on behalf of State Govts./UT Govts. pertaining to constructions and maintenance of National Highways by them on agency basis:

(i)    The expenditure will be incurred by the Executive Engineers of the State P.W. Divisions from the State balances and exhibited in the monthly compiled accounts submitted by them to the State Accountant General.

(ii)    On receipt of monthly compiled account from the Divisions the Accountant General initially adjust the expenditure in the State section of his books under the head of account "8658-Suspense Accounts- P.A.O. Suspense-Items adjustable by Pay Accounts Office (NH), Ministry of Surface Transport". After consolidation, the Accountant General will send to the P.A.O. (NH), Ministry of Surface Transport the monthly statement of receipts (if any) expenditure on National Highways with all schedules, vouchers, supporting documents etc. for claiming reimbursement.

(iii)    on receipt of the monthly statement of receipts and expenditure on National Highways from the Accountant General as stated in (ii) above the P.A.O. (NH) in the Office of the Chief Controller of Accounts, Ministry of Surface Transport will reimburse the expenditure to the State A.G. concerned by cheque / demand draft after exercising the checks prescribed.

(iv)    The amounts outstanding in the Accountant General's books under the Suspense head mentioned in sub-para (ii) above will be cleared on receipt of cheque / demand draft from the Pay & Accounts Office, (NH).

(Authority:-CAG of India's letter no. 402-AC/192-71 dated 19-3-77.)

8.20.2    The procedure to be followed with regard to settlement / reimbursement of transactions relating to National Highways for the month of March will be as follows.:-

(i)    The Divisions incurring the expenditure on National Highways would intimate the weekly expenditure figures distinctly under the Major Heads " 3054" and "5054" to the Accountant General by telegram.

(ii)    These figures will be consolidated Major-Head wise and intimated by the A.G. to the Pay & Accounts Officer (National Highways) every week unaccompanied by vouchers.

(iii)    The Pay & Accounts Officer (National Highways) would settle the claim relating to the first three weeks of March by forwarding cheque as usual without insisting on the vouchers.

(iv)    In respect of the expenditure incurred during the fourth week of March a telegraphic advice would be sent by the Accountant General to the Pay & Accounts Officer (National Highways) by 29th or 30th March and the P.A.O. would settle this claim by a telegraphic transfer.

(v)    For the residual expenditure incurred during March and not covered by telegraphic advice as in preceding sub-para, claim for reimbursement of expenditure would be preferred (supported by vouchers etc.) by the A.G. by the 15th April which will be settled by the Pay & Accounts Officer by cheque as usual. At this stage all the vouchers, supporting documents etc. for the entire claim of March would be sent to the PAO (NH) after duly reconciling the claims already preferred with the expenditure booked in the accounts of March. Readjustments if any, found necessary, will be made by the PAO (NH) while making reimbursement, under advice to the A.G.

(vi)    The payments so made by the Pay & Accounts Officer (National Highways) would be adjusted initially under the suspense head " 8658- Suspense Accounts-P.A.O. Suspense" pending receipt of supporting vouchers /schedules from the A.G. This head would be cleared by P.A.O. (NH) on receipt of the requisite documents by debiting to final heads of account before he closes March (Sy) accounts.

(vii)    In the weekly / telegraphic advices, the As.G. would invariably indicate distinctly the reimbursement sought in connection with maintenance and construction works on National Highway under the Major heads "3054" and "5054" respectively.

8.20.3    While the accounting procedure prescribed in paras 8.20.1 and 8.20.2 may continue, in order to deal with the problem of late receipt of monthly compiled accounts in some states resulting in late reimbursement of expenditure incurred by the State Public Works Divisions, the procedure of reimbursement would be supplemented by "On-Account" payments to States /Union Territory Governments. Payments will be released in quarterly instalments for which formal sanction would be issued by the Ministry of Surface Transport. Payment for the first quarter would be released soon after the 'Vote -on account' is passed by the Parliament. Funds for the second and third quarters will be released on the basis of the actuals in the previous quarter, as reported by the State Governments, and the likely expenditure in the succeeding quarter. Such "On Account" release of funds would also take into accounts the recoveries (actual and likely) from the State Governments under the Major head'"3054-Roads & Bridges-Other receipt. Such recoveries relate to hire charges of the Central machinery and equipment which are to be recovered from contractors, etc. and classified under the Major head 3054-Roads and Bridges -Other receipts." The sanctions would indicate the head of account to which payments are to be debited as per budget provision. All "On-account" payments will be released to the State Governments and Union Territories through Accountant General concerned through cheque only and will be debited by the Pay & Accounts Officer, (National Highways), Ministry of Surface Transport, to the final head of accounts viz. 3054-Roads and Bridges and "5034-Roads and Bridges etc. as the case may be.

The State Accountants General will initially adjust on account advance as Receipt in the State books under the "8658-Suspense Account-P.A.O. Suspense" and will be cleared by minus credit to the suspense head to the extent claim is rendered to the respective Pay & Accounts Officer (NH). While for the first three quarters advance payments will be made upto 100% of anticipated expenditure projected by the State Governments less the unspent balance out of the advance paid in the previous quarter, the advance thus paid will be subject to adjustment by the R.P.A.O.s on receipt of monthly account from the State Accountant General under the normal procedure mentioned in para 8.20.1.

To ensure prompt and periodical adjustment of "On account" payments made above, the Regional Pay & Accounts Officers (NH) will maintain register in the form Annexure 1 to this Chapter. The columns may be opened in the register keeping in view the requirements of the Pay & Accounts Office. For example, the columns relating to adjustment maybe opened on the right side page of the register, whereas columns relating to "On account" on the left side page of the register. The registers should be closed every month indicating the total amount of advance paid during the year, the amount adjusted and the balance outstanding against the relevant heads of accounts.

[Authority:- CCA, Ministry of Transport, Dept. of Surface Transport's letter no. PAO/NH/2/ Revised Accounting Procedure /86-87/2600-17 dated 19-12-86.]

8.21    TRANSACTIONS RELATING TO PAYMENT OF LOANS/GRANTS BY CENTRAL GOVERNMENT TO UNION TERRITORY GOVERNMENTS (WITH LEGISLATURE)

8.21.1    Though the Union Territory Governments (with legislature) have separate Consolidated Funds of their own, they have no separate balances with the Reserve Bank of India and hence the procedure in para 8.18.1 above does not apply to them. The normal procedure of settlement in cash will be followed for the payment of loans and grants to U.T. Government (with legislature) and repayment of loans and payment of interest, as described below.

(i)    The Ministries/Departments of the Government of India will address to their Principal Accounts Officer the sanctions for payment of grants/loans to the Union Territory Governments (with Legislature) and endorse copies thereof to the Finance Secretaries and Accountants General/Accounts Officer/Director of Accounts of the Union Territory Governments.

(ii)    On the basis of the sanction issued by the Ministry/Department, the Principal Accounts Officer of the Ministry/Department will make the payment to the Union Territory Governments by a cheque drawn in favour of the Accountant General/Pay and Accounts Officer/Director of Accounts in the Union Territory concerned. While forwarding the cheque, the Principal Accounts Officer should furnish the full particulars relating to the payment and also endorse a copy of the forwarding letter to the Finance Secretary of the Union Territory Government concerned. The Principal Accounts Officers should account for the payments under the grants-in-aid/loan heads of account.

(iii)    The Accounts Officer of the Union Territory government will on receipt of the cheque take immediate action to credit it into the bank and account for the receipt under the concerned head in the account of the Union Territory maintained by him. The receipt of the cheque should be promptly acknowledged.

8.21.2    The Accounts Officers of the Union Territory Governments will be responsible for initiating action for repayment of loans and advances and payment of interest. The repayment of loans and payment of interest by the Union Territory Governments will be arranged by sending cheques in favour of the Principal Accounts Officer of the Ministry/Department concerned which sanctioned the loan. The Ministry/Department should communicate to the Accounts Officers of the U.T Governments the designation and address of the principal Accounts Officer in whose favour the cheque should be drawn. On receipt of the cheque the Principal Accounts Officer should send it immediately to the bank for credit to the account of the Ministry/Department alongwith a challan showing the details of classification, etc. and on receipt of the bank scroll, take the credit under loan/interest heads.

8.21.3    In case the amounts involved in the payment of loan or grant are substantial, i.e. over Rs. 1 crore, a slightly different procedure will be followed. Instead of sending a demand draft, the Reserve Bank of India, New Delhi will be advised by the Principal Accounts Officer of the Ministry/Department sanctioning the loan or grant to transfer the amount by telegraphic transfer to the bank at the headquarters of the Union Territory Government concerned, with a specific instruction to ensure that the debit to the account of the Ministry by the former bank and the credit to the government accounts by the latter takes place with the least possible time lag. A similar procedure will be followed in the case of repayments by the Union Territory Governments also where the amount involved is more than Rs. 1 crore. The underlying intention behind this arrangement is that as both the debits and credits are taken ultimately to the Central Government cash balance, the transfer should not result in heavy depletion of the cash balance, till the receiving bank affords credits to Government account.

8.21.4    The Principal Accounts Offices of the Ministry/Department are responsible for maintenance of detailed accounts of the loans sanctioned by the Central Government to the Union Territory Governments and watching recovery of instalment of principal and interest.

8.21.5    Procedure stated in paras 8.19.3 to 8.19.5 above would also be applicable to the Union Territory Governments and also to Union Territory Administrations whose accounts have not been separated except that the Minor head "TDS Suspense" below the major head "8658-Suspense Accounts" shall be operated in the Central Section of books of the Accountant General.

8.22    PROCEDURE FOR DRAWAL BY UNION TERRITORY ADMINISTRATIONS AGAINST DEMANDS FOR GRANTS OF CENTRAL MINISTRIES/DEPARTMENTS (OTHER THAN THE AREA DEMAND) FOR WHICH PROVISION DOES NOT EXIST IN THE UNION TERRITORY BUDGET, AND CASH SETTLEMENT THEREFOR.

8.22.1    In the case of Union Territory Administration (i.e. Union Territory Governments without Legislature) loans or grants are not given by Government of India under the major heads 7601,3601 etc., but budget provision is made by the Ministries/Departments under the relevant functional major heads in the Revenue and Capital sections of the Demands for Grants and relevant departmental officers are authorised to incur expenditure debitable to these Demands for Grants. In such cases, each withdrawal from the Union Territory by the departmental officer of the Union Territory Administration would be backed by the administrative approval and expenditure sanction accorded by the main Ministry/ Department concerned. Based on such sanction and administrative approval, the Union Territory Administration would also issue necessary expenditure sanction classifying the transactions as debitable to the head "8658-Suspense Accounts-PAO Suspense-Transactions adjustable by the ......" quoting reference to the sanctions accorded by the Central Ministry/Department for enabling the withdrawal. The Accountant General would claim reimbursement in the usual manner from the Pay and Accounts Officer of the Ministry/Department concerned of the Central Government and clear the suspense head on realisation of cheque.

8.22.2    In the case of Union Territory Administrations whose accounts have already been separated, the Pay & Accounts Officer of the Central Ministry / Department concerned will book the expenditure directly against the Demands for Grants of the Ministry/Department by adopting the procedure prescribed in para 8.5 above.

8.23    PROCEDURE FOR ADJUSTMENT OF ITEMS OF CENTRAL CIVIL RECEIPTS/EXPENDITURE ARISING IN THE BOOKS OF POSTS, TELECOMMUNICATIONS AND DEFENCE DEPARTMENTS.

8.23.1    In respect of transactions for which the relevant Civil Ministry/Department does not have to maintain detailed individual-wise account of the receipts and payments arising in connection with any scheme/subject etc. applicable to all the employees of the Government of India including Civilians paid out of Defence Estimates , Posts and Telecommunications (e.g.0020-Corporation Tax; 0021-Taxes on Income other than Corporation Tax; 0075-Other Administrative Services- Other Services-Passport and Visa fees; 2047-Other Fiscal Services; 2049-Interest payments and 7610-Loans to Government servants, etc.) such transactions would be finally accounted for under the concerned Major etc. (Civil) heads of account in the books of Posts, Telecommunications and Defence Departments.

Note-    Although individual-wise account is maintained in the cases of licence fee (Rent) for Government quarters forming part of General Pool accommodation (managed by the Director of Estates) no monetary settlement is to be effected. Such recoveries are required to be booked directly against the final head in the books of Posts/Telecommunications/ Railways.

[Authority: Principal Accounts Office, Min. of Urban Development, New Delhi's OM No. G-25011/1/91-92/ Pr.A.O./ T&C/293 -98 dated 9th April, 92.]

8.23.2    The receipts/payments relating to civil estimates under the Major Heads 0059 - Public Works, 0075 - Misc. General Services, 0210 - Medical and Public Health; 0216 - Housing, 2052 - Sectt. General Services, 2059 - Public Works, 2216 - Housing , 4059 - Capital Outlay on Public Works and 4216 - Capital Outlay on Housing shall be adjusted to the final head in the books of the Defence Department without carrying out any monetary settlement thereof with the concerned Civil accounting authority. The accounts consolidating authority of these departments shall render a monthly statement of receipts/payments including progressive figures for that financial year to the Controller of Accounts of the Ministry/Department concerned with that scheme/subject, and also furnish figures under the relevant minor head or budget sub-head to the Computer Cell of C.G.A's organisation while submitting the monthly accounts. For example, the statements in respect of Corporation Tax and Income Tax recoveries are to be rendered to the C.C.A., C.B.D.T; those in regard to receipts/payments under Government Employees' Insurance Scheme (under Major Heads 0235 and 2235) or Loans to Government servants (Major Head 7610 etc.) to C.A. Ministry of Finance, etc. Budget forecast for the receipt/expenditure based on actuals etc. have to be furnished by Postal Board, Telecom Board and F.A. Defence, to the respective Civil Ministry/Department in connection with the preparation of Budget Estimates/ Revised Estimates as well as for the administration/control of the relevant composite Demand for Grant. The accounts authority in the Central Civil Ministry/Department shall watch the receipt of such monthly/annual etc. statements and take the figures into account for computing the expenditure figures for the preparation/finalisation of Appropriation Accounts for the relevant Demands for Grants under his accounting control etc.

ANNEXURE 1
(Refer para 8.18.1)

DETAILED INSTRUCTIONS IN REGARD TO THE PROCEDURAL ASPECTS RELATING TO ACTION IN THE MINISTRY/DEPARTMENT AND THEIR PRINCIPAL ACCOUNTS OFFICES AND ACCOUNTANTS GENERAL OFFICES

A.- Payment of loans/grants to State Governments by the Central Government

(i)    The Ministries/Departments of the Government of India should endorse copies of the sanctions for payment of loans and grants to the state Governments, to the Principal Accounts Officer of the Ministry/Department. Finance Department of the State and the A.G. of the State Government concerned.

(ii)    On receipt of the sanction, the Principal Accounts Officer of the Ministry/Department concerned would directly advise the Central Accounts Section of the Reserve Bank of India, Nagpur immediately (in any case within two days at the most) for crediting the balance of the State Government by debit to the balance of the Central Government. Simultaneously the Principal Accounts Officer will pass an entry in his books debiting the appropriate final head of Account e.g. Major Heads 3601,3602,7610 etc. and crediting "8658-Suspense Accounts-Central Accounts Office R.B. Suspense". Such advices may be sent by Fax followed by post copies through Speed Post on the same or next day of advice.

(iii)    A copy of the advice at (ii) above alongwith a copy of the sanction should be sent by the Principal Accounts Officer of the Ministry/Department to the Deputy Accountant General by name and the Finance Departments of the State Government concerned. Full particulars, i.e. the no. and date of the sanction, the scheme for which loan/grant etc. has been sanctioned, amount etc. should be indicated clearly in the advice.

(iv)    On receipt of the advice from the Principal Accounts Officer of the Ministry/Department in Central Accounts Section, Nagpur, the Reserve Bank of India will credit the balance of the concerned State Government and pass on the debit through the Reserve Bank of India Central Account to the office of the RBI maintaining the accounts of the Ministry/Department, giving reference to the no. and date of the advice. Copies of the clearance memorandum after making the adjustments should be sent by the Central Accounts Section of the RBI, Nagpur to the concerned State Accountant General and to the Principal Accounts Officer of the Ministry/Department concerned, giving particulars of the advice on the basis of which the adjustments have been carried out.

(v)    On receipt of the clearance memorandum from the Central Accounts section of the Reserve Bank of India, Nagpur the Suspense Head mentioned at (ii) above will be cleared by the Principal accounts Officer of the Ministry/Department by minus credit by per contra credit to the head `8675 Deposits with Reserve Bank-Central-Civil-Reserve Bank-Central Accounts Office’.

(vi)    The office of the Reserve Bank of India maintaining the accounts of the Ministry/Department, will include the debit advised by the Central Accounts Section of the Reserve Bank of India, Nagpur as a distinct item in the monthly statement sent to the Principal Accounts Officer. The Principal Accounts Officer should ensure that the amount debited in the monthly account sent by the R.B.I. tallies with the account of the advice sent by him to the Central Accounts section of the R.B.I. at Nagpur. CCA/C.A. should also review the Register of Advices maintained by Pr. Accounts Office on 10th of each month.

(Authority:-Ministry of Finance (Deptt. of Exp.) O.M. NO. F2(45)/76-SC dated 22-2-1977 on file No. T-14013/1/78/MFCGA/Codes).

Note:-    "The procedure for release of ways and means advance by the Plan Finance Division of the Ministry of finance to the State Governments has been discontinued and from the financial year 1977-78 onwards the Ministries themselves will release funds to the State Governments directly for the centrally sponsored schemes and others administered by them and maintain all the necessary accounts. As the Ministries, themselves will be directly releasing the funds to the State Governments, their Principal Accounts Officers would arrange to make the payment of loans and grants on this account also in accordance with the procedure prescribed in the Ministry of Finance, Deptt. of expenditure Special cell O.M. No. F.2(45)/76-Special Cell dated 22-2-77 reproduced as Para A above).

(Authority:-MOF (DE) O.M. No. 10 (1)-PFI/76 dated 22.1.1977 and G-26035/1/77-MF-CGA dated 17.5.1977 on file No. T-14013/6/78/MF-CGA/Codes).

B.-    Repayment of Loans and payment of interest thereon by State Governments in respect of Loans from Central Government

(i)    The Accountant General of the concerned State Governments will as before arrange for such payments on the due dates by issuing advice to the Central Accounts Section of the R.B.I. at Nagpur for crediting the balance of the Central Government by debit to the balance of the State Governments concerned.

(ii)    The advices sent by the State Accountants General to the Reserve Bank of India should clearly indicate the name of the Ministry and Department and the principal Accounts Officer, in whose books the amounts are creditable. Copies of the advices sent by the Accountants General to the Central Accounts Section of the R.B.I. should invariably be endorsed to the Principal Accounts Officer of the Central Ministry/Department in whose accounts the amounts are adjustable, as indicated in the form given below together with a statement, giving the following information.

  1. No. and date of the sanction for the original Loan
  2. Amount of the Loan.
  3. Rate of interest applicable.
  4. Repayment of Principal.
  1. Date on which due;
  2. Amount of repayment;
  3. Reasons for delay, if any.
  1. Payment of interest. (a) Date on which due; (b) Account paid and rate at which calculated; (c) Reasons for delay, if any.

(iii)    On receipt of the advice from the Accountant General, the Central Accounts Section of the R.B.I. will debit the balance of the concerned State Government and pass on the credit to Central Government through the Reserve Bank of India Central Account to the Office of the Reserve Bank of India maintaining the account of the Ministry/Department concerned, supported by full particulars relating to the advice. A copy of the clearance memo after making the adjustment should also be sent to the Principal Accounts Officer of the Ministry/Department concerned supported by full particulars relating to the advice.

(iv)    On receipt of the copy of the advice from the AG referred to in para (ii) above, the Principal Accounts Officer will take credit under the appropriate loan/interest head by contra debit to Reserve Bank Suspense. On receipt of the clearance memo from the R.B.I. the Principal Accounts Officer should link it with the copy of the advice received from the Accountant General and clear the suspense head by per contra debit to the head 8675-Deposits with Reserve bank-Central-Civil-(CAS)."

(v)    The office of the Reserve Bank of India maintaining the accounts of the Ministries/Departments will include the credit passed on by the Central Accounts Section in the periodical statements of accounts rendered to the Principal Accounts Officer. It should be ensured by the Principal Accounts Officer that the relevant credits appear in these statements as early as possible after receipt of clearance memo form the central Accounts Section.

(vi)    Though the State Accountants General will be initiating action as above for repayment of loans and advances and payment of interest, the Principal Accounts Officer of respective lending Ministries/departments, will be responsible for maintaining necessary loan ledgers and ensuring that the central loans and advances to the states are repaid in the manner prescribed on due dates and payment of instalments of interest are also made correctly and on due dates. The detailed accounts of the loans will be kept by the Principal Accounts Officers as required in para 8.18.5 of this chapter. Cases of default or delay in repayment of loans or payment of interest should be promptly taken up with the Governments concerned. The position should also be reported to the Controller General of Accounts, Ministry of Finance in such form and at such intervals as may be prescribed by him.

[Authority:- MOF (Department of Expenditure) O.M. No. F. 2(45)/76-Special Cell dated 11-1-1979 on File No. T-14013/1/78-MF-CGA/Codes]

TABLE
(See Part 'B' above)

Nature of 
loan

Central Ministry/Department in whose accounts repayments 
of Principal and interest are to be adjusted.

A. In respect of loans as were outstanding at the end of 1978-79

(a) Consolidated Rehabilitation Scholarship loans

(i) Department of Rehabilitation in respect of loans for relief and rehabilitation of displaced persons, repatriates etc.

(ii) Ministry of Education and Social Welfare in respect of loans under National Loan Scholarship Scheme.

(iii) Department of Revenue and Banking (Revenue Wing) in respect of loans for relief of displaced gold smiths.

(b) Other Consolidated loans

Ministry of Finance, Department of Economic Affairs.

(c) Loans against net collection of Small Savings collections

Ministry of Finance, Department of Economic Affairs.

(d) Other Loans 
(i) Bhakra Nangal Project 
(ii)Hira Kund Stage-I (Orissa)

Ministry of Energy 
(Department of Power)

B. In respect of loans sanctioned in 1979-80 or thereafter

(e) Various categories of Plan/Non-Plan loans and Ways and Means Advance

Ministry/Department which sanctioned the loans and advances