Section 2 in The M.P. Housing Board Accounts Rules, 1991
2. Definitions.
- In these rules unless the context otherwise requires :-(a)"Adhiniyam" means the Madhya Pradesh Griha Nirman Mandal Adhiniyam, 1972 (No 3 of 1973);(b)"Composite Project" means a set of projects grouped for purposes other than maintenance of General Accounts of the Board (e.g. obtaining loans from financial institutions or rendering returns to lending agencies);(c)"Chart of account" means a collective record of account heads under which the financial transactions are grouped for management information, making up monthly accounts and to facilitate preparation of final accounts;(d)"Contingency fund" means the Contingency Fund established under Section 73 of the Adhiniyam;(e)"Divisional Officer" means the Executive Engineer or any other officer in charge of a Construction Division;(f)"Detailed Chart of Account" means the Chart of Account containing minor heads, sub-heads, and detailed heads of account;(g)"Detailed Instructions" means the instructions referred to in rules;(h)"Deposit Works" means works of Government or Semi-Government Bodies or private organisations undertaken by the Board on payment of deposit to cover the cost of work;(i)"General Account" means the account in which financial transactions are classified under the account heads as per Chart of Accounts;(j)"Grant" means in relation to the Budget, the amount noted by the Board or expenditure on a project or service;(k)"Input Document" means a record containing "Primary Data";(l)"Maintenance Works Code" means the code assigned to maintenance works in a separate series for each Division;(m)"Main Chart of Accounts" means the Chart of Accounts containing the major heads of Accounts;(n)"Memorandum Account" means an account incorporating the balances under more than one account extracted from the Trial Balance for the purpose of generating additional management information (e.g. overheads account in which expenses recorded under separate major heads and amount defrayed by charge to project account are incorporated);(o)"Nodal Agency (Word Bank Funds)" means the (Housing) Board acting on behalf of Director of Urban Development in performance of the function of channelling the funds provided by World Bank under Madhya Pradesh Urban Development Programme to various Implementing Agencies;(p)"Nominal Muster Roll" means a record of attendance of the labour directly employed by the Housing Board and also wages earned and paid;(q)"Project" means a work sanctioned as a separate unit for the purpose of accounting. In relation to building projects, the unit shall be the category of building (i.e., H1G, MIG, LIG, etc.);(r)"Primary Data" means the data containing the full description of financial transactions necessary for grouping several transactions under the account heads appearing in Chart of Accounts;(s)"Project Code" means the code assigned to each constructions project in a single series for the Board covering Land Development Projects and Building Projects for identification in accounts;(t)"Revised Accounting System" means the system introduced under new rules;(u)"Running Salary Ledger Account" means employee-wise account of salaries paid and deductions made therein;(v)"Subsidiary Account" means an account containing details in support of the entries in the General account;(w)"Secured advances" means advances to contractors for their financial accommodation on the strength of materials purchased by them and brought to the site for consumption on work; and(x)words and expressions used in these rules, and not defined, but defined in Adhiniyam, shall have the meanings assigned to them in the Adhiniyam.Section 2Features of the Accounting System2.0Principles of Accounting. - The following principles and procedures shall govern the accounting system of the Board.2.1Double Entry. - Accounts shall be maintained under Double Entry System.2.2Accrual Accounting. - Accounts shall be maintained on accrual basis involving recognition of liabilities and receivable amounts. However, for convenience, the Housing Commissioner shall be empowered to permit' accounting on cash basis in monthly accounts in specified categories of transactions on an exception basis subject to the condition that this relaxation shall not apply to the final accounts of the Board. At the beginning of introduction of these rules, these exceptions shall be listed in Part-I of Annexure 'A' to these rules.Except as otherwise provided in these rules the accounts of the Board shall be maintained on generally accepted commercial principles and practices of accounting.2.3Budget. - 2.3.1 The Budget of the Board shall be framed adopting the following procedure subject to the provisions of the Adhiniyam.2.3.2Annual Budget shall be related to long term plans.2.3.3Budget allocations shall be made separately, for each service or function represented by the head(s) of account on the prescribed Chart of Accounts.2.3.4Budget allocations referred to in Rule 2.3.3 shall distinguish cash flows from book adjustment for the purpose of cash management. Monthwise projections of cash flows separately for each project shall be related to realistic time schedules of execution of projects, contractual obligations for payment, availability of project inputs and time schedules for sale as well as approved pattern of recovery of sale proceeds.Also budget proposals shall distinguish between the following categories of allocations :-(i)Liabilities in respect of completed projects.(ii)Work-in-progress.(iii)New Projects.2.3.5In order to minimise variations between budget estimates and actuals the following procedure shall be adopted :-(a)As far as possible budget allocations for new projects should be restricted to projects which have received administrative approval.(b)In respect of project which received administrative approval but there is a long interval between such approval and first allocation in budget. It is likely that costs might have escalated during such interval. In such cases, projects estimates may be updated on the basis of revised cost norms before incorporation in the budget.(c)Financial Rules governing payment procedures shall be framed by the Board to prescribe that necessary checks should be exercised at the stage of award of contracts or commencement of work and also at the stage of payment of safeguard against excess of budget.(d)Unutilised budget allocations shall be surrendered by the Circle Officer at the earliest date to facilitate re-allocations among other projects. A cut-off date in this regard may be prescribed by the Board.2.3.6The Board shall frame delegation of financial powers rules to regulate re-allocations of budget provisions to meet unforeseen emergencies. Also a contingency fund may be prescribed in the Griha Nirman Mandal Adhiniyam and rules framed for operating the same.2.3.7Each Circle shall function as a budget centre. Accordingly a separate budget shall be framed and incorporated in the Board's Budget.Monitoring of actuals against estimates (i.e. expenditure and receipts) separately for cash component and total allocations including adjustments shall be done separately for each Circle. Reasons for variations exceeding prescribed limits shall be placed before the Board together with audit comments thereon.2.4Process of Accounting. - Accounting in the Board shall be organised as laid down in the following rules.2.5Format of Accounts. - 2.5.1 Primary Data regarding the financial transaction of the Board shall be recorded in the account format prescribed by the Housing Commissioner. Each set of transactions comprised in such data having common characteristic relevant to the functioning of the Board shall be grouped in the account formats and recorded as distinct entries. Each such group shall be assigned a descriptive name and code number by the Housing Commissioner denoted by account heads. At the beginning of the introduction of these rules the Board shall adopt the Chart of Account annexed hereto containing these account heads. These account heads (major heads) may be further sub-divided into sub-groups denoted by minor, sub and detailed head as set out in detailed chart of accounts.2.5.2Account Formats shall be categorised as :--Input documents (i.e. Vouchers, Money Receipts, Remittance Slips, Stock Indents, Bank Advices/scrolls).-Basic Accounts Records (i.e. cash book, journal etc.).-Ledgers.-Monthly accounts.2.6Processing of Data. - 2.6.1 Account heads prescribed under Rule 2.5.1 shall invariably be recorded in all input documents and checked by a nominated officer of the Board before a payment is made or remittance accepted by the Bank or the Board or a transaction is journalised. Opening of unauthorised account heads shall be prohibited. Account heads shall be transcribed from input documents into Basic Account Records.2.6.2Ledgers shall be organised by grouping them into Main Ledgers and Subsidiary Ledgers. Main Ledger shall contain accounts each corresponding to a major head of account. Subsidiary ledgers shall contain accounts each corresponding to a minor, sub or detailed head as set out in the Detailed Chart of Accounts. Main Ledgers shall be posted from the Cash Book(s) or journal whereas subsidiary ledgers shall be posted from the input documents. Main and Subsidiary Ledgers shall be agreed with each other and balanced. Project accounts which collect expenditure and receipts project-wise (without details of cost heads) shall be placed in Main Ledger notwithstanding the fact that each project account corresponds to a minor head. This exception covers project revenue also. Accordingly project-wise recoveries of hire-purchase debts, sales etc., shall be placed in main ledger.2.6.3The ledger balances shall be collected in a Trial Balance and accounts proved.2.6.4Monthly Accounts shall be prepared from the Trial Balance. Although Trial Balance records closing balances in the various accounts, transactions during the month shall be distinguished for purposes of internal control and management information.2.6.5Before balances in various accounts are worked out, inter-account transfers shall be effected in accordance with the instructions and explanatory notes contained in the Chart of Accounts. (Also see Sections 3 to 8 for more details regarding operation of the accounting system.)2.7Final Accounts. - Final accounts of the Board comprising the following shall be prepared for each financial year (1st April to 31st March) in the formats annexed hereto.(i)Sale Account (Annexure 'B')(ii)Income and Expenditure Account or Profit and Loss Account (Annexure 'C')(iii)Balance Sheet (Annexure 'D')These accounts shall be supplemented by such schedule and explanatory notes as may be prescribed by the Board. These accounts and schedules shall be got certified by the Internal Audit Officer who shall submit his report in two parts as detailed below to the Housing Commissioner :-
