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State of Madhya Pradesh - Section

Section 4 in The M.P. Housing Board Accounts Rules, 1991

4. Elements of Functional Environment.

- The Board shall approve procedural instructions subject to the provisions of this section to regulate the functional environment to the accounting system so as to facilitate its harmony with the latter. Detailed financial rules may be framed for this purpose. The functional environment comprises :--organisational responsibility centres-banking arrangements and cash management procedures-procedure for collection of receipts-payment procedures.
4.1Responsibility Centres. - The Divisions and Estate Management Officers shall function as Responsibility Sub-Centres in regard to project management under the overall charge of the Main Responsibility Centre i.e. Circle. In addition, the Circle shall function as a Budget Centre. The Board shall delegate to the officers in charge of these Responsibility Centres the financial powers necessary to discharge their responsibilities.
4.2Banking Arrangements. - 4.2.1 The Board shall reserve to itself powers to nominate the banker(s).
4.2.2Opening of an account in a bank shall be subject to execution of a formal agreement with it regarding the procedures for transactions of banking business of the Board and rendering accounts returns to the latter.
4.2.3The agree referred to in Rule 4.2.2 shall be designed to secure the timely flow of the input data into the accounting system smoothly. In pursuance of this objective, banker(s) to the Board shall be required to render the following services :-
(i)Daily rendition of detailed statements of account {i.e. Bank Scroll) to the nominated officer of the Board.
(ii)Usage of special forms approved by the Board for remittance slips, cheques, transfer advances and Bank Scrolls.
(iii)Check of remittance slips by the Bank to ensure that it is signed or countersigned by nominated officers of the Board and the account head is noted thereon. (The Bank may not be required to check the correctness of the account head).
4.2.4The Board shall have the following accounts in the Bank. The scope of each account shall be as set out below The officers noted against them shall be authorised to operate on them. The detailed instructions shall provide for arrangements for operating on these accounts in the absence of the nominated officers :-
Sl. No. Designation of the Officer Name of the Account Scope of the Account and related aspects
(1) (2) (3) (4)
1. Accounts Officer (Payments) in the Head Office (a) General Account (Head Office) Excluding transactions relating to projectsaided by World Bank, all other receipts shall credited to thisaccount and payments made therefrom.
(b) World Bank Project (Implementing Agency) Account. The purpose of maintenance of this account is toensure that funds earmarked for projects receiving assistancefrom World Bank are not diverted for other purposes. Loansreceived from World Bank, HUDCO and Government as well as theImplementing Agency's {i.e. Housing Board's) share of investmentshall be credited to this account and project payment madetherefrom. The sub-system for payments provides for transferringthese funds to the Circle Band Account for incurring expenditureon project. Therefore debit to the account operated in the HeadOffice do not entirely represent final expenditure on projectsbut only transfers to a similar account at a lower tier. The MISshall provide for aggregating the accounts at the two tiers andpresenting a full view of the utilisation of loan funds.
2. Accounts Officer (Circle Office) (a) General Expenditure (Circle Account) Funds placed at the disposal of the CircleOfficer by the F.A. and C.A.O. by means of cheques or demanddrafts or mail transfers shall be credited to this account.Payments from this account comprise expenditure directly incurredby Circle Office on administration, imprests opened withDivisional Officers and Estate Managers and reimbursement ofexpenditure incurred by them out of such imprests.
(b) World Bank Project (Circle Account) Funds received by the Circle from World BankProjects (Implementing Agency) Account referred to at 1 (b) aboveshall be credited to this account. No direct expenditure shall beincurred from this account by the Circle. Entire expenditureshall be incurred only by opening imprests with DivisionalOfficers and making payment towards recoupments of such imprests.
3. Divisional Officers (a) General Expenditure (Accounts Division) Imprests received from the Circle Officer otherthan those relating to World Bank aided projects shall becredited to this account and payments made therefrom.
(b) World Bank Project (Division) Account. Imprests received from Circle Officer forfinancing expenditure on World Bank aided projects shall beplaced to the credit of this account and expenditure on theseprojects met therefrom.
(c) Revenue Account (Division) All receipts collected in the Division includingthe deposits received in respect of Deposit Construction Worksand contractors deposits shall be credited to this account. TheDivisional Officers shall not utilise this account for making anypayment and advise the Bank to transfer the entire balance on aday-to-day basis to their branch at Bhopal for credit to theGeneral Account (Head Office) referred to at 1 (a) above. TheScope of the revenue account covers World Bank aided projectalso. Recoveries under sites and services projects are monitoredthrough monthly accounts.
4. Estate Manager (a) General Expenditure Account (Estate Management) The scope of this account and the manner ofoperating it shall be as in respect of General ExpenditureAccount (Division) referred to at 3 (a) above.
(b) Revenue Account (Estate Management) This account comprises all receipts collected inEstate Management. It is not available for expenditure whetherfor refunds of revenue deposits or for other purposes. Entirebalance shall be advised by the Estate Manager for transfer tothe General Account (Head Office) at Bhopal referred to at 1 (a)above by means of inter-bank transfers.
The Board may at its discretion open any other account for the purpose of securing separate identify of a specified category of transactions in the account of bank or to safeguard against diversion of funds earmarked for certain services or investments.
4.3Cash Management. - 4.3.1 Cash management shall be performed by the F.A. and C.A.O. All receipts collected in all the accounting centres shall be transferred to his account at Bhopal. He shall place funds at the disposal of the Circle Officer and the latter shall be empowered to distribute the provision among the various disbursing units in his Circle subject to the budget provision and guidelines issued by the Board or Chairman or Housing Commissioner.
4.3.2A cash budget shall be framed to supplement the General Budget, projecting the month-wise cash flows under the various account heads prescribed in Chart of Accounts. The cash outflows shall be estimated separately for each project based on realistic time schedules for execution of projects. Release of funds shall be on the basis of updated time schedules for completion of project. All variations between cash budget estimates, release of funds and actual expenditure shall be monitored to document the variations and analysis conducted. Results of such analysis highlighting the salient features shall be periodically submitted to the Housing Commissioner. Similarly cash inflow shall be estimated separately for each project and compared with the actual inflows. Results of such variance analysis duly approved by the Circle Officer shall be formally recorded in the Circle Office for evaluation of performance of the Circle. An advance copy shall be communicated to the Housing Commissioner through the F.A. and C.A.O.
4.4Procedure for collection of receipts. - 4.4.1 Collection of receipts through bank shall be the rule and acceptance in cash by officer of the Board shall be by way of exception. The Board may by resolution authorise such exceptions.
4.4.2In respect of remittances by private parties into the Bank, it shall be ensured that the full particulars of the transaction necessary for correct accounting are furnished in the remittance-slips. For this purpose either challan-cum-demand notices with pre-printed account heads shall be issued or the Registration Application may be similarly pre-printed. Where the accounting system does not, however, provide for the above internal control private parties shall be required to submit the remittance-slips to nominated officer of the Board for counter-signature before remittance into Banks.
4.4.3In respect of challan-cum-demand notice the amount required to be remitted shall be filled in by an officer of the Board. The Bank shall be required to decline the remittance for an amount which varies from the demand. The Chairman may, however, issue guidelines for entertaining applications for part payment and also nominate officers to grant such permission. On grant of the same, the challan-cum-demand notice shall be revised.
4.4.4Cash receipts referred to in Rule 4.4.1 shall be collected by the cashier or any nominated officers who may issue receipts after making entries in the Cash Book or Cash Scroll as the case may be. Cash Scrolls shall be subject to the same procedures as applicable to cash books in regard to all aspects including machine numbering of pages, custody, centralised control of stock, record of completed books and norms for preservation of records. Wherever feasible, totals of such cash scrolls may be incorporated in the Main Cash Book or the Cash Book of the concerned sector without repeating the details.
Where such a practice hampers the posting of ledger, the Cash Book shall be posted separately from the Input Documents and agreed with the Cash Scrolls. Detailed instructions shall contain the necessary provisions in this regard.
4.4.5In respect of remittances by private parties, cheques may be accepted by the Bank but credit to the account of the Board shall be afforded only on realisation. For the purpose of settlement of dues to the Board payment shall be deemed to have been made on the date cheque is realised by the Bank.
Private parties located at outstation may be permitted to remit dues to the Board by means of demand drafts (not cheques). Such remittances shall be accounted for by the Board on the day of receipt in the designated office pending depositing the demand draft into the Bank. Payment to the Board in such cases shall be deemed to have been made on the day of receipt in the designated office.
4.5Payment Procedure. - 4.5.1 Payment shall be made by means of crossed cheques in favour of the payee(s). The Housing Commissioner may make regulations prescribing exceptions to the above rule providing for payments in cash or for issuing open cheques subject to the following provisions :-
(a)Except in the case of salaries to non-gazetted staff, exceptions shall be clearly identified by a monetary limits.
(b)Issue of open cheque should be on written request of the party concerned and permission should be granted by an officer immediately superior to the cheque drawing officer where the prescribed monetary limit is exceeded.
(c)It should be ensured that no statutory provisions (e.g. Income Tax Act) are violated by issue of open cheques. In rendering returns to Income Tax authorities it should be ensured that adequate internal controls exist in the Board to ensure that the income through open cheques is reported as such.
4.5.2Cheques in favour of officers of the Board for placing funds for opening or recoupment of Imprests shall be drawn by designation only and not by name. In the event of a change in the incumbency of the office, the successor officer shall be responsible for taking over the cash balance in the Imprest account.
4.5.3The Housing Commissioner may prescribe that specified categories of payment be advised to the nominated bank for credit to the account of the payee. The payee shall, on issue of such orders, be required to open an account in the Bank and intimate the account number to the designated officer of the Board.
Section 5Project Accounting