AG Office Accounting

Compilation of State
Accounts by the
Accountant General
Reference : Account code
for AGs - earlier known as
Account Code Volume IV
And MSO(A&E) Vol I
What is the end product

of the accounting ?
State monthly accounts
Annual Finance Accounts
Annual Appropriation
Accounts
These are submitted to the Govt. / Legislature
Other Important outputs
Classified Abstracts
Consolidated Abstracts
Detail Books
Ledger
These are internal accounts kept by the AG
Other Important outputs
Journal
Broadsheets
Annual Detailed
Appropriation Accounts
These are internal accounts kept by the AG
Monthly
Accounts
Compilation
The Accounts are segregated and

compiled in two parts which are later
brought together :
The
Revenue receipt and

expenditure and Capital
expenditure Heads ( 0 to 5
Major Heads) referred to as service
heads
Debt Deposit and Remittance heads
(6 to 8999) referred to as DDR
heads.
SOURCES OF ACCOUNTS AND SECTIONS PROCESSING

Treasuries
Treasury
A/Cs
DC
sections
RBI
Other AGs
PAOs
PW Divisions
Works A/c sections
Forest Divisions
Forest A/c sections
Rly, P&T,
Defence
Deptt. Officers
operating through
Banks
Account Current
Section
Treasury
Accounts
Section
Could
be called by different names in
different offices like :

Central Treasury Section or
Book I section (HP)
Treasury Accounts
Received by the
Treasury
Accounts
section
Treasury Account
Receipts called
Cash Account
Payments Called
List of Payments
(First and Second)
Supported by schedule
Of receipts
Supported by schedule
Of payments
Supported
By challans
Supported
By vouchers
Treasury Account sections

Check LOP and Cash Accounts
For
Correctness of totals
Whether schedule of payments / receipts
tally with figures in LOP and CA
Whether voucher bundles have been
furnished for all the entries in the LOP
Any errors at this stage get posted in

8658
- 102 suspense(Civil)
Sub Head - Treasury Suspense
Treasury Accounts Sections

Cash Accounts and LOP are figures of
only DDR heads posted up to sub
head level. All the service heads are
shown by TO as sub heads under the
Suspense Head :
8658 111 Departmental Adjusting
Account Suspense
Commonly referred to as DAA

This initial booking in suspense is
done because
The
receipt and payment figures may

include items of reduction of expenditure
and refund of receipts / recoveries
respectively which are segregated and
accounted for by AG. Thus receipt /
payment booked initially under suspense
pending transfer to correct heads.

The Treasury attaches a summary of
balances with the LOP and Cash account. It
shows the :
OB and CB of Cash for non banking
treasuries
OB and CB of Reserve Bank Deposits for
banking treasuries
For banking treasuries having non banking
sub treasuries both Cash and RBD figures
would be shown.

(OB+Total Cash account-Total
LOP=CB)
The posting of the difference of LOP
and Cash account in Cash/ RBD is the
second part of double entries in
Treasury Accounts.
Both Cash and RBD are transferred to
8999 - Cash Balance at the closing of
the monthly accounts
Treasury Accounts sections

The treasury accounts section transfers
the figures of DDR heads upto sub head
level from Cash Accounts and LOP to a
register called Detail Book part I.
The schedules of payment and receipts
for all Service Major Heads along with
vouchers and challans are transferred to
Departmental compilation (DC) sections.

The supporting documents such as
vouchers, challans etc. for DDR heads are
also sent to different sections for subsidiary
accounting.
Loans, Reserve Funds, Deposits, Advances
are sent to Loan and Deposit Sections.
GPF sent to GPF sections.
Inter Government items sent to Account
Current sections.
PW and Forest cheques sent to Works A/c
and Forest A/c sections

All the DDR heads (including Try.
suspense) from all treasuries are
entered in DB I and totalled sub head
wise to get the total figures for the
whole state.
These sub head wise DDR figures for
the state for that month of account is
sent to the book section for
consolidation.
Treasury
Accounting in
Departmental
Compilation
Sections
D C Sections
DC sections are organised
Service Major Head wise i.e.
each section compiles one or
more major heads for all
treasuries. This segregation has
also been followed generally for
distribution of work after VLC
What the DC sections receive and

account for
Source
Payments
Receipts
Treasury
Sections
1. Vouchers (with or without

Recoveries)
2. Refunds of revenue
3. Vouchers of another Major
Head ( By mistake)
1. Receipts on Service Head

2. Reduction of Expenditure
3. Receipt of another Head
appearing by mistake
(rare)
Other
Sections
Of AG
office
Vouchers of the Major Head

with suspense slips from
1. Other DC sections
2. AC sections
Similar to Payments
Errors
1. Missing Vouchers
2. Totalling errors
3. Wrong Classification
8658 102 OB Suspense
Similar to Payments
D C Sections
The accountant tallies the vouchers
with the SOP.(1.4) Any missing
vouchers are classified under OB
suspense.
The accountant segregates the
vouchers sub/ detailed head wise
Vouchers / Schedules entered in
compilation sheets
Compilation
Sheet (1.5)
Vouchers with same classification of :

Detail Head ; P/ NP/CSS ; V/C
Gross entries
SOE wise
1CS : 1DS
Voucher wise
deductions (1.6)
Compilation Sheet gives the SOE
wise aggregate gross amounts for
all vouchers under a detailed head
Deduction Sheet
D C Sections : compilation
Remember Double Entries?
Effect of postings by Treasury
accounts section
Dr
- 8658 111 Service Major Head

Cr - Cash / RBD
Effect of postings by DC
Section
for vouchers without any recoveries
Dr
Service Major Head

(-) Dr 8658 111 Service Major Head
Effect of postings by DC
Section
for vouchers with recoveries
Dr
Service Major Head

Cr Recovery Heads
(-) Dr 8658 111 Service Major Head (Net
amount from the two entries above)
Vouchers with errors are not taken to
the final head and are posted in
compilation sheets as OB suspense.
Net effect
Dr
8658 102 OB suspense (Gross

amount of voucher)
Cr Recovery Heads
(-) Dr 8658 111 Major Head (Net amount)
- for vouchers with recoveries
Refunds of Revenue : These are not
entered in the compilation sheets. They
are accounted for in the classified
abstract
Net effect
(-)
Cr Revenue Head
(-) Dr 8658 111 Service Major Head
Vouchers of other Heads : Let us
presume a voucher of 2056 has come
in the Bundle of vouchers of 2055 which
is being compiled.
The voucher had been classified by
TO / TA section as
8658
111 DAA 2055 Dr.
in treasury a/cs
D C Sections : Compilation
Section prepares a suspense slip
classifying the amount of the voucher as
Dr 8658 111 DAA 2056

(Net effect: Dr 8658 111 DAA 2056
(-)Dr 8658 111 DAA 2055)

The voucher is sent along with the
suspense slip to the DC section which
compiles Major Head 2056
When vouchers are received with
suspense slips from other sections, they
are kept together to be posted in the
accounts like other regular treasury
vouchers.
The total of such incoming suspense
slips are also posted as a minus entry
against DAA suspense in the receiving
section to clear the suspense raised by
the sections which sent these slips.
A check is carried out at this stage (1.7) before posting figures in the classified abstract
1.
Total of compilation sheets (service head only )

2. (-) Total of deduction sheets
3. (+) Total under OB suspense (compilation
sheets)
4. (+)Total of suspense slips sent out
5. (+) Refunds of Revenue not yet accounted for
Should be equal to the LOP figure for the Major
Head ( Refer to table in second slide of DC sections)
DC Sections:Classified Abs
After this proving, figures are posted detail
head wise to the classified abstract :
Item
1. To Part 4
Item 2. To part 3
Item 3. To part 5
Item 4. ( Already entered in CT ledger)
Item 5.
To part 1 as (-) credit against the
concerned head
The LOP figure (minus) outward suspense
slips is entered in part 5 as a minus entry
under DAA suspense (1.8)
The schedules of receipts are scrutinised
for correct form and classification and
posted in part 1 of the abstract. The
responding minus entry is also made
under DAA suspense in part 2. Reductions
of expenditure are posted as (-) Dr in part
4 against appropriate heads (1.10)
After completing the postings for the
payment side, amounts from part 3 should
be transferred to part 1 and 2 (1.11)
(1.12) Check : the total of Part 1 and 2
for a treasury should be equal to
(Total recoveries from from payment
vouchers - Total refunds of Revenue)
This completes the posting of all
transactions in the classified abstract for
a particular treasury
Similiarly, the figures from all other
treasuries are also posted in the
Classified Abstract
After completing the posting of all
treasuries, Suspense slips received
from other sections are posted. (1.13)
Additions or deductions from the TE
ledger of the section are posted. (1.13)
The Proof sheet for the receipt and
payment sides are prepared.
This completes postings in the Abstract
Format of Classified Abstract
Manual
Classifications to
the lowest level
Try1
Try2
Try3
SSlip1
TEs
Computerised
Try1 Try2 Try3
Cl
as
si
fic
cat
ion
The figures for every head (lowest
level in the classification) in the
classified abstract are totalled for
all treasuries, suspense slips and
TEs and this gives the expenditure/
receipt on each head for the entire
state for that month.
D C Sections :
Consolidated Abstract
The totalled figures for the state from
Part 1 Revenue receipt head and
Part 4 Revenue / Capital
Expenditure head are transferred to
the consolidated abstract of the
DC section. (1.16)
In the consolidated abstract, figures
are summarised to Detail, sub, minor,
sub major and finally major head level.
D C Sections :
Consolidated Abstract
It has columns for :
Progressive
Expenditure to end of previous
month
Expenditure in current month (transferred
from classified abstract)
Progressive expenditure to the end of the
current month.
The Major Head figures of the service

heads are transferred to Book Section
for inclusion in the Abstract of Major
heads.
D C Sections : DDR Heads

The DDR figures from part 2 (receipts) and
part 5 (payments) are transferred to Book
section for inclusion in the abstract of DDR
heads (Detail Book 2). The DDR heads
operated are primarily DAA and OB
suspense and GPF, HBA etc. heads for
recoveries from salaries.
DC sections maintain broadsheets of DAA
suspense and OB suspense to monitor
clearance.
Works
Accounts
Works Account
Sections
Works Accounts :
Coverage
Study the different important
portions of the monthly
accounts
Study the accounting in AG
office after receipt of the
accounts
Works Accounts
Different Departments such as
Roads and Bridges
Housing
Irrigation
Public Health Engineering
Public Works Department
Operate through divisions and keep
works accounts.
Works Accounts
Hierarchy in Works Departments

Secretary of the Department
Engineer in Chief
Chief Engineers - Zone
Superintendent Engineers - Circle
Executive Engineer Divisions
Assistant Engineer / Junior Engineer.
Sub Divisions
Works Accounts
All PW Divisions send the
compiled monthly accounts to
AG for the expenditure
incurred on works.
Expenditure of regular
establishment in divisions is
incurred at treasuries like all
other departments.
Works Accounts
The salaries of the work
charged establishment is
paid in the divisions through
cheques and is included in
the divisional accounts
Works Accounts
Each division has sub ordinate sub
divisions
The Sub divisions submit accounts to
the division, which consolidates them
with its own accounts, computes Major
Head totals and prepares the Divisional
monthly accounts.
It is a fully compiled account. The AG
just consolidates the figures of all
divisions of the state.
Works Accounts
The important items in the Monthly
Divisional Accounts :
Form 80 : Monthly account : Major Heads
Form 74 : Classified Abstract of expenditure
Supported by vouchers
segregated works wise.
Form 46 : Revenues,Refunds and
recoveries on Capital Accounts
Form 64 : Works Abstract : Works wise
details
W A : Monthly A/c : F 80
Major Head Figures
Receipts equal to disbursements
as
all payments are through cheques

Dr Payment Head / Cr 8782 102 SH II Cheques
All receipts are remitted to treasury
Cr receipt head / Dr 8782 102 SH I Rem. to Try.
Other transfers and adjustment entries are also
made affecting two heads : they are only book
adjustments.
Cash transactions : Cash held in 8671 101
W A : Monthly A/c : F 80
Cash
Imprest
Temporary advances
Undisbursed cash
Monthly Account
Form-80
Division :- Shimla Divn. No2.Month : December 2000

Name of Major Heads
Schedule
Receipt
Form 46
13401
Disbursement
REVENUE
0059 Public Works
0216 Housing
769
0853- Mines & Minerals
26975
EXPENDITURE
2011 Parliament
-140598
Form 74
4210 COL Medical Bldg
-1087910
2059 PW Bldg (Plan)
764346
2059 PW Bldg (N -Plan)
1868760
5054 COL R&B ( Plan)
-312819
4216 COL Housing
158594
Monthly Account
Name of Major Heads
Schedule Receipt
Disbursement
2216- Housing (NP)
-30769
3054 R&B (N.P)
1056303
OTHER HEADS
769
Misc Heads of Account
Form 76
258597
145000
8443-Civil Deposits
Form 79
1797993
2157774
8658 Suspense Account CSSA

8658 Suspense AccountMPSSA
8782 Remittances
Cash Balance
Opening Balance
Closing Balance
Total
-1087910
1797993
886
1945
1059
1951643
886
6898961
6898961
W A : Classified(Exp) : F 74
For every Service Major Head
(Exp) in the Monthly account, there
will be a classified abstract
showing expenditure up to sub/
detailed heads.
The figures are the combined
expenditure figures of the division
and its sub divisions.
W A : Classified (Rct): F 46
Classified of service Head
receipts exactly similar to
Form 76
W A : Works Abs. : F 64
Shows the current and progressive
expenditure on the different works
undertaken by the division through
its sub divisions. All the works
undertaken a particular sub/
detailed head are shown together.
WA : DDR Heads
For the DDR Heads, supporting forms are
attached, showing Major Head wise breakup
and for each major Head, Div / Sub division
wise breakup.
Important Heads :
8782 Remittance
8658 CSSA
8658 MPSA
8443 PW deposits
8671 101 Cash balance
WA : Sectional A/cing
The Divisional Accounts are received in the
different Works A/c Sections
After receipt of accounts, the section
Scrutinises the account and tallies different forms as
all the forms are linked to Form 80
Classification checks are carried out on classified
abstracts
After scrutiny, the accounts are transferred to

the WM section for posting.
WM : Section A/cing
WM : Works Miscellaneous is the
controlling section for works accounts.
On receipt of verified accounts from
different WA sections, figures are
transferred from form 74 and 46A to
classified abstracts.
The classified abstract of WM section
are kept in the same form as DC
sections
WA : Sectional A/cing
The figures of all other divisions are posted in
the classified abstracts of respective Major
Heads.
Consolidated abstracts are prepared for
Service Major Heads.
Major Head figures for Service Heads and
detailed figures for DDR heads are sent to
Book Section.
Book :
SMH in Abstract of Major Head totals
DDR in Detail Book II
Subsidiary Accounts
Works Audit Register ( Divisionwise )
Expenditure
details of all the works

undertaken by the division.
BS of 8782
Remittances
to Try
Cheques
BS
of 8658 CSSA
BS of PAO suspense for National
Highways
Forest
Accounts
Forest Account
Sections
Forest Accounts :
Coverage
Study the different important
portions of the monthly
accounts
Study the accounting in AG
office after receipt of the
accounts
Forest Accounts
Structure
PCCF
CCF
DFO
Range officers
Forest Accounts
All Forest Divisions send the
compiled monthly accounts to
AG for the expenditure
incurred on works. In most
states, salaries are also paid
through cheques and included
in divisional accounts.
Forest Accounts
Each division has sub ordinate range
offices
The range offices submit accounts to
the division, which consolidates them
with its own accounts, computes Major
Head totals and prepares the Divisional
monthly accounts.
It is a fully compiled account. The AG
just consolidates the figures of all
divisions of the state.
Forest Accounts
The important items in the Monthly
Divisional Accounts :
Form 6 : Cash account
Form 14 : Classified Abstract
Revenue / Expenditure Supported by
vouchers.
Form 13 : Disbursers Ledger :
Amounts advanced to range officers
and their adjustment
F A : Cash A/c : Form 6

The cash account of a forest division is just
like the summarised extract of a cash book
but there is no OB and CB.
Major Head figures are shown for Service
Heads and sub/ detailed figures are shown for
DDR heads in the Cash Account
GPF, HBA, Income Tax and other recoveries
from salaries are also shown in the Cash
account as the salaries are also paid by
cheques and accounted for in the account
F A : Cash A/c : F 6
Receipts equal to disbursements
as
all payments are through cheques

Dr Payment Head / Cr 8782 103 SH II
Cheques
All receipts are remitted to treasury
Cr receipt head / Dr 8782 103 SH I Rem.
to Try.
Other transfers and adjustment entries
are also made affecting two heads : they
are only book adjustments.
No cash transactions
F A : Classified Abs : F 14
For the Service Major Heads (Exp.
and Revenue) in the Monthly
account, there will be classified
abstracts showing expenditure up
to sub/ detailed heads.
The figures are the combined
expenditure figures of the division
and its range offices
F A : Disburser Ledger : F 13
Gives a detailed account of total receipts and
disbursements under 8550 101 Forest
Advances appearing in the Cash Account.
Advances are given to Range officers to incur
expenditure.
Dr
8550 101 / Cr 8782 103 II cheques
After incurring expenditure from this advance,

the Range officer will submit an adjustment
account which clears the advance
Dr
Service Heads / Cr 8550 101
FA : DDR Heads
DDR Heads are shown in the cash account
and supporting schedules and statements are
attached.
Important Heads :
8782 Remittance
8658 112 TDS suspense
8009 GPF
8011 Insurance
7610 HBA, MCA etc.
FA : Sectional A/cing
The Divisional Accounts are received in the
Forest A/c Sections
After receipt of accounts, figures are
transferred from form 14 to classified abstracts.
The classified and all vouchers and supporting
documents are scrutinised by the Section
Officer to ensure the classifications of Receipt
and Payment are correct.
The classified abstract of Forest sections are
kept in the same form as DC sections
FA : Sectional A/cing
The figures of all other divisions are posted
in the classified abstracts.
Consolidated abstracts are prepared for
Service Major Heads.
Major Head figures for Service Heads and
detailed figures for DDR heads are sent to
Book Section.
Book :
SMH in Abstract of Major Head totals
DDR in Detail Book II
Subsidiary Accounts
BS
of 8782
Remittances
to Try
Cheques
BS
of 8550 Forest Advances
Departmental Accounts
Received from
(3.1)
Departmental commercial undertakings
PAO s of State Governments
functioning in State Capitals (No
Treasury)
PAOs of the State Govt. in another
State like Himachal Bhavan in Delhi.
Accounts ( Classified Abstracts)
prepared in concerned DC sections
They render monthly compiled accounts
showing detailed expenditure and a list
showing particulars of cheques drawn to
meet these expenditures.(3.2)
Classified and consolidated abstracts
are prepared from the compiled
accounts in the same manner as if they
were treasury accounts.
The Concerned Deptl. undertakings are placed
in funds directly with Banks and can draw
money through cheques for payment. The
PAOs also issue cheques on behalf of all the
offices under its control (3.2).
All payments would be Debited to concerned
expenditure heads with contra credit to 8670
102 PAO cheques or 103 Departmental
cheques.
Paid cheques of Departmental
undertakings are received by AG
through treasury Accounts
(appearing in LOP)
Try accounts show DR 8670 102 /
103. This clears the earlier credits.
Paid cheques of the PAOs are
received by AG through the compiled
accounts of the PAOs
For the PAOs, the amounts drawn are
reported by the designated bank to RBI.
The RBI debits the balance of the Govt.
and sends clearance memo to AG.
The compiled accounts show drawal of
cheques as credits under 8670 102 PAO
Himachal Bhavan etc.
On receipt of clearance memo, the AC
section passes TE : Dr 8670 102 and
Cr 8675 RBD
Account
Current
Sections
AC Sections
It prepares account of all Inter
Government transactions
There are two methods of IG settlement
RBI
advice
Cash
settlement
(5.1)
Account of transactions of another

Government occurring in a state are
classified as Outward Accounts and an
account is sent by the AG to the other
Government
AC Sections
Accounts of transactions of a state
occurring in the books of another Govt.
are inward accounts and an account is
received by the AG from the other Govt.
Different Suspense heads are used to
account for the different adjustments
with other Governments.
AC Sections
RBI Advice : examples (5.2)
Inter
state
Loans from Central Govt. and
repayments of principal and interest
State share of Central taxes/ duties
Grants in aid from Central Govt.
Remittances of RBI to Non Banking
Treasuries
AC Sections
The CAS RBI incorporates advices
received by it up to the 7th of the
following month for the purpose of
preparing monthly account and
computing closing monthly
balance (5.4)
AC Sections
Except March transactions
which are incorporated up to

25th April to include all advices
for the Financial Year. Inter
State adjustments received late
from treasuries etc. are
adjusted through advices in the
next year. (5.5)
AC Sections
Outward Accounts
The
transactions of other states arising

in different treasuries, divisions etc. are
consolidated in DBII (Showing state wise
breakup ) and passed on to AC section.
It prepares accounts for the different
states and sends them to the respective
AG s enclosing vouchers (Pension
vouchers not enclosed) and
simultaneously sends advices to RBI for
balance adjustments. (5.12)
AC Sections
Inward Accounts (5.13)
These
are received from other AG s. They are

usually preceded by the CM from RBI and on
receipt of these accounts, the AC section
clears CAORBI suspense and sends the
account and vouchers of service heads to
concerned DC sections through DAAA,
operates any DDR heads itself and sends docs
for subsidiary accounting whenever necessary.
Vouchers for which proper classification has
not been entered or cannot be posted due to
some reasons are kept as 8658 102
Unclassified suspense
AC Sections
Cash Settlement : Examples (5.16)
All
transactions adjustable with central

PAOs including Railway Defence and P&T
Expenditure on National Highways
Railway warrants
Income tax deducted at source
Recoveries to GPF, HBA fro Central Govt.
offficers on deputation to state govt.
All Central Pensions : Civil, Railways,
Defence etc. paid from state treasuries
AC Sections
Central Civil Pensions :
Were earlier adjusted through 8786
-adjusting account between Central and
State Governments by RBI advice
procedure.
From 1.10.1990 : Central Civil Pensions,
Freedom fighters pensions are to be
debited under 8658 101 PAO sub head
Central Pension Accounting office New
Delhi and cash settlement is to be done
AC Sections
5.17 Outward accounts to PAOs
All the central transactions occurring in treasuries,
divisions, etc. are booked by them in different
suspense heads.These are consolidated PAO wise
in the AC section.
If there is a net debit, AG raises a claim
If there is net credit, AG procures a draft through
Treasury/ Bank.
Account with vouchers etc. and claim / draft is sent
to PAO.
AC Sections
For claims, PAO sends draft which is deposited in
Bank/ Treasury
The procurement of draft by AG / Encashment of
draft deposited by AG is reflected in Treasury
accounts through bank scroll and clears the
suspense heads operated initially.
5.18
AG maintains broadsheets for different
suspense heads like PAO suspense,
Suspense Civil,TDS suspense.
AC Sections
5.19 Inward accounts received from PAOs
Transactions of state originate in PAO
PAO sends account with vouchers etc. and
draft for net receipt OR raise a claim for net
payment.
Final heads are operated in AG with contra
deduct entry in 8658 109 RB Suspense (HQrs)
and AC section deposits / purchases draft
Deposit / Purchase of draft is reflected in
treasury account through bank scrolls and
clears the suspense head 8658 109.
AC Sections
State AG normally not authorised to give advice
for reduction of Central Cash balance except
withdrawal of over payments made while
repaying loans/ interest through earlier advice
(5.22).
Income tax recovered from salaries of state
employees are classified under 8658 112 TDS
suspense and draft for total collection is
procured by AG and sent to the ZAO, CBDT.
(5.25)
Typical entries shown in annexure to chapter5.
(Pg 99)
Book
Section
Consolidation of Monthly
Account
Para 4.4 Preparation of Disburser Account
Paras 6.2 to 6.6 : Detail Books
Postings in DB I from Try a/cs
Transfer of totals of DBI to DBII
Collection of DDR figures from all other
sections / sources of accounts into DBII
Figures from DDR abstracts of DC sections
will clear DAAA suspense
Consolidation of
Monthly Account
Preparation of consolidated Abstract of
DDR Heads( 6.7)
There could be minus figures in DDR
heads. ( 6.8 )
Abstract of Major Head totals prepared
by taking major head figures from the
consolidated abstracts. (6.10)
Consolidation of
Monthly Account
Closing cash balance details to be prepared
giving breakup of OB and CB into three
components
Cash
in treasuries
Remittances in transit
Reserve Bank Deposits
The RBD closing balance is to be reconciled

with the Cash balance conveyed monthly by
RBI. (6.10)
Consolidation of
Monthly Account
Accounts of each month should be
completed on or before the 4th of the second
following month (15th May in case of
accounts for March). (6.11)
Preliminary Accounts are compiled for March
as the books remain open for adjustments.
By 30th June, after incorporating all
adjustments, the March supplementary
accounts are completed. (6.12 )
Consolidation of
Monthly Account
The central transactions appearing in the books
of the state AGs should be furnished to the CGA,
in the form of a statement called the Statement
of Central transactions by major,sub-major and
minor heads of account in the form and date
prescribed by the CGA. (6.13)
(by the last day of the following month 9.1(b))
Only nil accounts are sent now as central
transactions are not accounted for by AGs
6.15 Rectification of
errors
No alteration should be made in the DB,

classified abstract or consolidated abstract
of any month after they have been closed.
Corrections should be made only by a
formal transfer entry (TE).
If the amount <= Rs. 10 and of same Govt.
only a note of error.
Corrections between sub/detailed heads
under the same minor head should not be
made by TE, such corrections being made
by plus and minus entries against the head
affected.
Transfer Entries
one head of account to another
( 7.1) (up to minor heads- 6.15)
to
correct an error of classification
After
reconciliation by departments
to
adjust, by debit or credit to its

proper head, an item outstanding
under a DDR head
Clearance
of suspense by debit / credit

to service head
Transfer Entries
in
order to adjust inter-departmental and

other transactions which do not involve
receipt or payment of cash
TE
on Annual interest payment on GPF

accounts
when
it is found more convenient to

classify items pertaining to more than one
head of account under a single head
initially and then to take them to the proper
head of account.
IT
and surcharge
Transfer Entries
On one side of TE : only one major
head. Other side may have more than
one major head. All particulars
explaining the nature of the adjustment
and the reasons for correction must be
clearly stated. (7.2)
Transfer Entries
A list of adjustments which have to be
made periodically should be maintained
in order to ensure that they are regularly
made. These adjustments should be
made monthly, however if found
convenient they may be made quarterly.
(7.3)
Annual and half-yearly TEs should as a
rule be avoided, unless authorized by
CAG or Govt in consultation with AG.
(7.4)
Transfer Entries :
7.5(a)
Rev / Exp of one service head

wrongly classified in another
Before
closing of accounts : TE to rectify
error
After closing of accounts : Only note of
error against the original entry
If affecting another Govt. or a commercial
department, always rectified by TE even if
accounts are closed.
Transfer Entries :
7.5(b)
Errors affecting DDR heads must be
rectified regardless of amount. If
accounts are open they can be rectified
by transfer to the proper heads.
However when accounts have already
been closed, then the treatment would
be different in different cases, as
described in the next slide.
Transfer Entries :
7.5(b)
Nature of error
Adjustment to be
made
One DDR head instead TE from one to the

of another
other
Cr to DDR head instead Transferred to original
of Rev Head OR
Rev / Exp head
Dr to DDR head instead
of Exp. Head
Transfer Entries :
7.5(b)
Nature of error
Adjustment to be made
Cr to Rev Head
instead of to DDR
Head
Dr refunds (minor head

900 - refer 2.2 of list of
major and minor heads)
and Cr DDR head
Dr to Exp Head
instead of to DDR
Head
Cr relevant receipt head

and Dr DDR head
Transfer Entries :
7.5(b)
After accounts are closed,
corrections affecting Capital Major
Heads of same Govt., should
usually be effected by alteration of
progressive figures instead of
affecting the transactions of the
current year.
Note
below 7.5(b)
Proforma Accounts
(Rule 18) GAR
The operations of some departments include
undertakings of a commercial or quasicommercial nature (an industry factory or a
store). Their financial results need to be
expressed in commercial form so that cost of
service may be accurately known. This implies
the maintenance of manufacturing, trading and
P&L account. As this cannot be kept in the
Government system of accounts, they will be
kept on a proforma basis outside Government
Accounts.
Proforma Accounts
(contd) (Rule 18) GAR
These undertakings / offices have cash
transactions through treasuries / PAOs like all
other govt. offices and their cash transactions
are included in Govt. accounts
The proforma accounts are additional
accounts maintained by the Departmental
authorities themselves.
Journal and Ledger

(Rule 19) GAR
Journal and Ledger are technical accounts
prepared to bring out in a scientific method
the balances of accounts in regard to which
Government acts as a banker, remitter,
borrower or lender. Although the balances
can be worked out in the regular accounts,
there accuracy can be assured by the
preparation of journal and ledger.
Exam Answer from GAR
Journal and Ledger

State AGs should maintain separate
Journals and Ledgers for State and
Central transactions. (8.1)
Journal (8.2)
opening
entries (closing balances of the

preceding years accounts)
monthly entries
closing entries of the year.
For rectification of errors after closing of

Accounts monthly and annual - before
preparing Finance accounts
Journal and Ledger

Ledger maintained in two different forms (8.3)
(a)
accounts which close to balance

(b) accounts closing to Govt.
(a) Detailed monthly posting from

Consolidated Abstract of DDR heads.
(b) Gross posting from the Abstract of Major
head totals for transactions under revenue,
service and capital heads.
Journal and Ledger

The object of Ledger is to be bring out the
detailed balances under the heads other than
those which are closed to Govt. The heads
closing to Government are also included
without details, to ensure the balancing of
receipts and payments.
Para 8.11: Gives DDR heads closing to Govt.
Account 7810; 7999; 8680
The balance under 8675 is transferred to
8999 Cash balance and 8675 is always made
nil.
Monthly accounts of the

Central and State Govts
Each State AG should submit a monthly
account to the State Govt. A note explaining the
difference between the cash balance as per
accounts and as per the Bank should also form
part of the monthly accounts. (9.1 a)
An account of all central transactions and
transactions of UT brought to account by the
State AG, should be submitted by him to the
CGA by the last day of the following month.
(9.1 b)
Final
Accounts
Finance and
Detailed Appropriation
Accounts - AG
Expenditures out of the consolidated
fund { Service Heads + Loan Heads(of

DDR)} are made as per grants and
appropriations spelt out in the demands
for grants in the Budget
For each demand for grant /
appropriation, detailed budgetary
allocation is made up to the sub /
detailed / SOE level.
Accounts
Allocations can be made in three stages in
any/all of the grants/appropriations
Original
Supplementary
Reappropriations
/ Surrenders
The original demand is part of the budget

document. Supplementary figures are
conveyed to the AG around OctoberNovember.
Accounts
The reappropriations / surrenders take
place at the close of the financial year
and is received by the AG around the
time the accounts are being finalised.
On aggregating these three stages of
allocation, the total budgeted amount
against every sub / detailed/ SOE is
known. Grant wise Statements of final
allocation are prepared by AG.
Accounts
The monthly consolidated abstracts
prepared by AG have progressive
receipts and expenditures up to SOE /
detailed / sub head levels.
The following Abstracts are available
One
for each Service Major Head

A combined DDR abstract for all DDR
heads
Accounts
Thus the consolidated abstracts
prepared after closing March (S)
Accounts have the annual figures for all
sub/ detailed / SOE heads inclusive of
the expenditure figures for all the heads
in the different grants / appropriations.
Expenditure figures are transferred from
these consolidated abstracts to the
grant wise statements.
Accounts
Thus budgeted amounts and actual
expenditures are brought together and
excesses / savings on budget
provisions is computed for every head.
This statement is generally prepared by
summarising allocations and
expenditures up to sub head level.
Accounts
The completed grant wise statements are
then sent to the controlling officers for
each grant. They are expected to tally the
expenditures with their departmental
accounts and reconcile any differences
with AG.
This is the last chance of reconciling. The
Departments are supposed to reconcile
figures with AG every quarter.
Accounts
Some figures are required to be
changed consequent to reconciliation at
this stage.
After incorporating these changes, the
finalised grant statements taken
together form the Annual Detailed
Appropriation Accounts.
The Finance and Appropriation

accounts can be prepared only after
this is finalised.
Accounts
Each grant statement of the
detailed appropriation accounts and
the Appropriation accounts can
have four segments
Voted
Revenue
Voted Capital
Charged Revenue
Charged Capital
Sequence of coverage
Detailed appropriation accounts : preparatio
n by AG
Preparation of Appropriation accounts by AG
Headwise
appropriation accounts : Central Govt.
Procedure for Central Appropriation accounts
Structure of the Central Appropriation account
s
Appropriation Accounts - AG
For every grant in the detailed
appropriation accounts, audit
comments are framed on the
excesses, savings, excessive
surrenders / reappropriations, to
bring out the manner in which the
budget was administered by the
controlling officer.
Separate Monetary limits are fixed
for comments on savings and
excesses
HP :
The Appropriation accounts is
primarily an aggregation of all the
grants statements with comments.
Appropriation Accounts means the
accounts which indicate the
expenditure (both voted and
charged) of the Government for
each financial year compared with
the amounts of voted grants and
charged appropriations.
(Para 11.1 of CAM)
Headwise Central Gov.

The Principal AO of each Ministry prepares
head-wise Appropriation Accounts
(Para 11.3.1 of CAM)
Secretary as the Chief Accounting Authority is
responsible for finally approving and signing
the Head-wise Appropriation Accounts of
grants administered by his Ministry.

The Head-wise Appropriation
Accounts will be got approved by
the FA on the file and the Accounts
will be sent for audit scrutiny duly
signed by the Principal Accounts
Officer.

The Accredited Audit Officer for various
agencies is as follows:
Ministry
of Defence Director General of

Audit, Defence Services
Departments of Atomic Energy, Electronics
and Space Principal Director of Audit,
Scientific Departments
Andaman & Nicobar Islands AdministrationPD of Audit (Central), Calcultta
All Others DGCR, Delhi.
Central Govt.
The audited Head-wise Appropriation
Accounts of various grants will be
condensed by the CGA in the format of the
Appropriation accounts and furnished in
triplicate to Audit for clearance.
On receipt of clearance/further comments
from the DGCR, the condensed accounts
will be finalized under the signatures of the
CGA.
Central Govt.
The printed copies of the Appropriation
Accounts will then be sent to the DGCR
for obtaining the signature of the CAG
on the audit certificate before their
submission by the latter to the
President.
Structure of App. Acc.

Appropriation Account (Civil) covers
all grants except grants for Postal &
Telecommunication Services.
For P&T separate volume of
Appropriation Accounts are
Compiled.
Contents
Summary of Appropriation Accounts
Excess expenditure over Grants/
Appropriations
Statement of Gross expenditure and
recoveries as per Appropriation
Accounts and Net expenditure which
appears in Finance Accounts
Contents (contd..)
Grant-wise details with comments /
clarifications.
Annexure A: Statement of
Recoveries
Annexure B: Statement of Items
held under objection.
Annexure C: Extract of Capital and
Loan Investments in PSUs voted by
the Parliament in different grants and
actual expenditures.
Summary Appropriation
Accounts
Tabulation of all grants showing total
budget, actuals and excess / saving.
Each of these three figures is
segregated by revenue and capital
portions.
revenue and capital portions are
further sub divided into Voted and
Charged amounts
Grant-wise details
Gives the total grant (revenue/ Capital and
voted/charged) broken into original,
Supplementary and re-appropriations.
Against each group, actual expenditure,
excess/savings and amount surrendered is
given.
Notes and comments are given Major headwise giving reasons for excess/savings etc.
and referring to minor/ sub heads where the
primary excesses / savings had occurred.
Annexures
Annexure A
Grant
wise details of actual recoveries
Annexure B
Items
of expenditure not sanctioned by

competent authority and held under objection
Annexure C
Investments
in PSUs arranged Ministry wise.

Amounts segregated into Capital and Loan
portions. Grant through which investment was
voted is also indicated.
Finance Accounts
Finance Accounts of the Central
Government comprises the accounts of
the Central Governments as a whole
including transactions of Civil
Ministries, Defence Services, Posts and
Telegraph Departments and Railways.
Finance Accounts
It presents the accounts of receipts and
outgoings of the Central Government for
the year together with the financial results
disclosed by different accounts and other
data coming under examination, namely
revenue and capital account, public debt
and other liabilities and other assets as
worked out from the accounts.
(Para 13.1.1 of CAM))
Finance Accounts
Finance Accounts is divided into 2
parts:
Part
I: Summarised statements
Revenue
Capital
DDR and Contingency Fund
Finance Accounts
Part II: Detailed Statements
Section A
Receipts
and expenditure on revenue and

capital accounts
Section B
DDR
Contingency
Fund
Statement 1: Summary
of Transactions
Revenue receipts, revenue expenditure and
receipts and expenditure on Public debt by major
heads
Totals of capital receipts and capital expenditure
Receipts and Payment details relating to Loans
and Advances, Inter State Settlement,
Contingency Fund, Small Savings, PF, Reserve
Funds, Deposits and Advances, Suspense and
Miscellaneous and Remittances
of Transactions
Explanatory notes contains details of all
major heads, where there is a
significant difference compared to the
earlier year
Also contains summary of transactions
of Railways and Telecommunications
of Debt Position
Has 3 parts
Part
1: Statement of Borrowings on
internal and external debt
Part 2: Other Obligations such as reserve
funds and deposits
Part3 : Service of debt containing an
analysis of interest receipts and payments
and debt servicing ratio.
Statement 3: Loans and

Advances by the Union
Government
Summary of loans and advances made

to the State Governments, Union
Territories, Foreign Governments, NonGovernment Organisations and
Government servants.
Also contains details of loans and
advances on which repayment of
principal and interest are in arrears.
Statement 4:
Guarantees given by
Union Government
Details of guarantees given for:

Repayment
of principal and interest,

working capital, cash credit in respect of
companies, co-operatives
Repayment of share capital and minimum
dividend by statutory corporations and
financial institutions
Agreements entered by GOI with
international agencies
Statement 4:
Guarantees given by
Union Government
Details of guarantees given for:
Counter-guarantees to Banks
Guarantees to Railways/Electricity Boards for
prompt payment of dues/freight charges
Performance guarantees given for fulfillment of
contracts awarded to Indian companies in foreign
countries and
Performance guarantees given for fulfillment of
contracts awarded to foreign companies in foreign
countries
of Balances
Akin to Balance Sheet
Shows debit and credit balances up to
sub-sectors of all heads closing to
balance
Also contains Government Account
showing cumulative deficit/surplus of
the past taken together of all heads
closing to Government Account.
Statement 6: Statement showing

percentage distribution of
revenue receipts and expenditure
Receipts in various areas as a % of
total revenue receipts
Revenue expenditure in various
areas as a % of total revenue
expenditure
Statement 7: Statement
showing distribution between
Charged and Voted Expenditure
Break-up of total expenditure under
various sectors as voted and charged
expenditure.
Statement 8: Detailed
Accounts of Revenue Receipts
and Capital Receipts by Minor
Heads
Contains details of receipts by minor
heads for major heads starting from
0020-Corporation Tax to 4000Miscellaneous Capital Receipts
Statement 9: Detailed Accounts of

Revenue Expenditure by Minor
Heads and Capital Expenditure by
Major Heads
Revenue expenditure by minor heads
for heads from 2011 to 3606
Capital expenditure by major heads for
heads 4046 to 5475
Statement contains break-up of plan
and non-plan expenditure.
Statement 10: Statement of

Expenditure on Capital Account
during and to the end of the year
Capital expenditure by minor heads for
heads 4046 to 5475
Statement contains expenditure
incurred during the year and the
progressive expenditure to the end of
the year.

the Investments of the Union
Government
Contains 2 parts
Part I relates to investments in
enterprises under construction and Part
II relates to enterprises in operation.

the Investments of the Union
Government
Part II is further sub-divided as:
Statutory
Corporations
Joint Stock Companies
Government
Companies
Other Joint Stock Companies
International
Bodies
State Co-operative Banks and other Banks
Co-operative Societies

showing Capital expenditure
and the sources from which
funds were provided
Similar to Funds Flow Statement
Shows sources from which capital
expenditure and expenditure on loans
and advances is met.

relating to Debt, Deposits,
Remittances and Contingency
Fund
First part contains summary of opening
balance, receipts, disbursements and
closing balance for Consolidated Fund by
sector, Contingency Fund and I. Small
Savings, Provident Funds etc.,

relating to Debt, Deposits,
Remittances and Contingency
Fund
Second part contains opening balance,
receipts, disbursements and closing
balance for heads 8115-Depreciation
Reserve Renewal Fund to 8999- Cash
Balance by minor heads.

Debt and other Interest Bearing
Obligations of Government
Elaboration of Statement 2
Contains details of opening balance,
additions, debts discharged, closing
balance and interest paid for the heads
6001, 6002 and from 8001 to 8013.
Statement 14A: Details of

Market Loans raised in India
and Securities issued to
International Institutions
Details of market loans raised in India and
Securities issued to International
Financial Institutions.

Loans and Advances
Amplification of Statement 3.
Details of opening balance, additional
loans and advances disbursed during the
year, repayments made, closing balances
and interest received for heads 6202 to
7615 by minor heads is shown.

AG Office Accounting

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Compilation of State

What is the end product

Other Important outputs

Other Important outputs

The Accounts are segregated and

Revenue receipt and

SOURCES OF ACCOUNTS AND SECTIONS PROCESSING

different offices like :

Treasury Account sections

Any errors at this stage get posted in

Treasury Accounts Sections

Treasury Accounts Sections

receipt and payment figures may

Treasury Accounts Sections

Treasury Accounts Sections

Treasury Accounts sections

Treasury Accounts sections

Treasury Accounts sections

What the DC sections receive and

1. Vouchers (with or without

1. Receipts on Service Head

Vouchers of the Major Head

Vouchers with same classification of :

- 8658 111 Service Major Head

Service Major Head

Service Major Head

8658 102 OB suspense (Gross

111 DAA 2055 Dr.

Dr 8658 111 DAA 2056

(-)Dr 8658 111 DAA 2055)

Total of compilation sheets (service head only )

Expenditure to end of previous

The Major Head figures of the service

D C Sections : DDR Heads

Hierarchy in Works Departments

all payments are through cheques

Division :- Shimla Divn. No2.Month : December 2000

0853- Mines & Minerals

4210 COL Medical Bldg

2059 PW Bldg (Plan)

2059 PW Bldg (N -Plan)

5054 COL R&B ( Plan)

4216 COL Housing

2216- Housing (NP)

3054 R&B (N.P)

Misc Heads of Account

8658 Suspense Account CSSA

After scrutiny, the accounts are transferred to

details of all the works

F A : Cash A/c : Form 6

all payments are through cheques

8550 101 / Cr 8782 103 II cheques

After incurring expenditure from this advance,

Service Heads / Cr 8550 101

of 8550 Forest Advances

Account of transactions of another

which are incorporated up to

transactions of other states arising

are received from other AG s. They are

transactions adjustable with central

The RBD closing balance is to be reconciled

No alteration should be made in the DB,

correct an error of classification

adjust, by debit or credit to its