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Regional Workshop On

Model Accounting System for Panchayats

(Himachal Pradesh, Jammu & Kashmir, Punjab, Haryana, Uttrakhand, Chandigarh and Lakshadweep)

Ministry of Panchayati Raj &

C & AG of India2nd December, 2009

AtHIPA-SIRD, Shimla

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Agenda for the dayTime Topic/Presentation

10.00-10.30

Registration

10.30-10.35

Welcome Pr Secy (PR), HP & Dir / HIPA

10.35-10.40

Inauguration DG (LB)

10.40-11.00

Model Accounting System for Panchayats JS , MoPR

11.15-11.30

Model Accounts Formats Dir (LB)

11.30-12.00

PRIASoft NIC, New Delhi

12.00-14.00

Presentations by Himachal Pradesh, Haryana, Punjab and Chandigarh

14.00-14.45

LUNCH

14.45-15.15

Presentations by Jammu & Kashmir, Uttrakhand and Lakshadweep

15.15-15.45

Discussion

15.45-15.55

Summing up & way forward Jt. Secy., MoPR, GoI

15.55-16.00

Vote of thanks

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To deliberate on a Roadmap for…

• Adoption of Model Accounting Formats• Deployment of PRIAsoft• Action Plan for clearance of arrears in Accounts finalisation & Audit• Action plan to fill up vacancies in accounts departments in PRIs• Training needs of accounts staff in PRIs• Outsourcing experiences & options• State regulations – modifications required?

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Presentation Outline•Need for a sound Accounts & Audit system in PRIs

•Observations & recommendations of 11th & 12th Finance Commissions

•Model Formats- Salient features

•PRIAsoft- Salient features

•Flow Chart for Deployment of Model formats

•Options for Training

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Need for a sound Accounts & Audit system in PRIs

Large amounts flowing and to flow to PRIs (CSS’s , ACA’s, CFC grants, state budget etc)Sound accounting & audit system will

•ensure transparency•induce accountability•enhance credibility of PRIs leading to devolution of 3Fs•enable aggregation of data for better decision making at higher levels•enable track flow & usage of funds•help decide subsequent releases•help devise strategies to make PRIs financially viable.

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11th Finance CommissionCommented about:• Unsatisfactory system of accounts & audit in PRIs &- CAG’s supervision ( TGS) • Lack of trained staff in PRIs

Set aside Rs 10,000 cr. for LBs including-• 98 cr p.a.for maintenance of VP & IP accounts

(Rs 4000 /VP / year & accounts preparation to be outsourced)

• 200 cr for databases relating to finances•Accounts & databases – 1st Charge•Additional Requirement to be met from FC grants

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12th Finance CommissionObserved:

• States donot have credible information on the finances of LBs• LBs continue to need support for building data bases & maintenance of accounts• States to assess the requirement & earmark funds out of total allocation for LBs

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Technical Committee on Budgeting & Accounting for PRIs

•Based on 11th FC recommendations- formats for accounts & databases prescribed by CAG in 2002, simplified in 2007•A committee of C&AG, MoPR, Planning Comm., Finance Ministry, CGA , NIC , Pr. Secretaries WB, UP, AP & Gujarat constituted for further simplification.•Simplified formats suggested.•Details to be presented by Director (LB)

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Model Formats- Salient features

• Three tier classification• A sub-head incorporated for schemes• Major heads devised in equivalence with 29

subjects• Flexibility to States to open object head• Simplified procedure for rectification of errors

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• Initially accounts to be prepared on cash basis• Features built in to enable transition to

Accrual basis.• These include:– Bank/ Treasury reconciliation statements– Register of receivables & payables– Register of inventories– Register of Demand, Collection & balance

Model Formats- Salient features

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Model formats- introduction

• Intended to switchover wef 1/4/2010

• Opening balances on 1/4/2010 will be required

• If accounts in arrears- Statement of Affairs to be prepared & necessary corrective entries to be made subsequently

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PRIAsoft• A software that will make the process of accounting simple & easy• An integral part of e-pri.• Software- web enabled & also off line version• Mapping of state specific classification to the model classification (one time activity)• States that have their own applications- PRIAsoft will provide an interface between existing software & new system• Details to be presented by NIC

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Deployment strategy

1.Preparation of Manuals

2.Capacity Building

3.Application Development & Deployment

4. BPR

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Preparation of Manuals

Identifying Agency for preparing

Prepare Accounts Manual

Translate in Local Languages

Distribution

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Capacity Building

Identify Institutes/Organizations

Assess Training Needs

Prepare Training Manuals

Train Master Trainers Conduct Training

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Application Development

Application to integrate with e-lekha and Run on e-PRI

platform

PRIA soft to be modified

Testing in a few States

Modify if required

InternalizeDeploy (through outsourcing ?)

Deployment thru Panchayat’s Own staff

Integrated with State/Central Govt.

Accounts

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BPR

Circulation to States/UTs/Ministries

Obtain Feedback

Modify Rules/Regulations/Administrative Guidelines

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Options for TrainingFor Formats etc-SIRDs along with Regional Training Institutes of C & AG

For PRIA soft- NIC will partners with Training Instts.Request for options

Funds-RGSY, BRGF & Others (FC grants etc.)

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Outsourcing

• MoPR would circulate to States– draft bid documents – draft Service level agreements– Outline of Monitoring mechanism

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Categories of States & proposed Strategy

Category 1 Category 2 Category 3

Willing to adopt the model codes

along with PRIASoft

Have their own format of accounts

but no software

Have their own format of accounts

and also own software

Proposed Strategy

Use Model Account formats and PRIASoft

Map the accounts to model accounts and use PRIASoft

Map the accounts to model accounts and build interface between their software and PRIASoft

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Thank you