FINANCIAL MANAGEMENTFINANCIAL MANAGEMENT

BudgetingBudgeting

• The Department of Posts has been categorized The Department of Posts has been categorized as a as a commercial departmentcommercial department by the Ministry of by the Ministry of FinanceFinance

• The Government of India, too, needs to make The Government of India, too, needs to make profit on its investments in commercial profit on its investments in commercial departments. departments.

• The DoP at present is given budgetary support The DoP at present is given budgetary support in order to fulfill the USO to meet the social in order to fulfill the USO to meet the social commitment of the Government of India to commitment of the Government of India to connect and communicate with the remotest connect and communicate with the remotest corner of the country.corner of the country.

• For any commercial organization the For any commercial organization the financial health financial health is of prime concern. is of prime concern.

DOP as a Commercial DepartmentDOP as a Commercial Department

CONTDCONTD……

• The Department is, therefore, The Department is, therefore, required to earn returns (profits) on required to earn returns (profits) on investments made.investments made.

• Any capital invested must, therefore, Any capital invested must, therefore, show a rate of return for the investor. show a rate of return for the investor.

System of Accounts of System of Accounts of DOPDOP

• Accounts of DOP form part of general Accounts of DOP form part of general accounts of the Government of India; accounts of the Government of India;

• Accounts of DOP are built on the same Accounts of DOP are built on the same general plan of accounts of the general plan of accounts of the Government of India;Government of India;

• DOP Receipts & Expenditure are recorded DOP Receipts & Expenditure are recorded under various Major Heads-suitably under various Major Heads-suitably divided & sub divided as per nature of divided & sub divided as per nature of transactions.transactions.

Part Part II Part Part IIII Part Part IIIIII

Consolidated fundConsolidated fund Contingency fundContingency fund Public A/CPublic A/Css

RevenuRevenuee CapitalCapital Debt DebtDebt Dep. Remitt.Remitt.

[Pub. Debt/Loans & Adv.][Pub. Debt/Loans & Adv.]

ReceiptsReceipts ExpenditureExpenditure

ChargedCharged

PlanPlan Non PlanNon Plan

VotedVoted

New ActivityNew Activity// ExistingExisting

SchemeScheme EstablishmentEstablishment

General outlines of AccountsGeneral outlines of Accounts

Consolidated fund of India

• Consolidated fund of India-two divisions: Revenue consisting of receipt head &

expenditure head

• receipt head-deals with the proceeds of taxation and other receipts classed as revenue.

• expenditure head-deals with the expenditure met there from.

Consolidated fund of India Capital ,public debt and loans.• Capital comprises of receipt head and

expenditure head.• Receipt head deals with the receipts of a

capital nature which can not be applied as a set off to Capital expenditure.

• Expenditure head deals with the expenditure met from borrowed funds to increase assets.

What Is Budget?

Anticipated receipts and estimated expenditure within a given period of time, usually a year

Significance of Budget• Instrument of Policy

– Allocate scarce resources to competing claims

– Sets expenditure priorities of Government and hence reflects values

• Budget reflects the organizational structure– Establishes accountability and financial control

– Management tool

– Integration of Budget and Planning

• Issue of structural rigidities

Economic Relevance of Budget• Economic impact of government expenditure/

methods of raising resources

• Major fiscal policy document of the Government- as also industrial, monetary and financial sector policy

• Announces taxation measures or reforms which have far reaching economic impact

Constitutional Provisions- 1• Taxation only by legislation (Art 265)

• Expenditure only by specific appropriation (Arts 114 and 204)

• Annual Financial Statement (Art 112/202)– Estimates of receipts and expenditure out of the

Consolidated fund – Presented to the legislature for voting– By the President/Governor

Constitutional Provisions- 2• Article 266 defines “Consolidated Fund”

– All revenues– All loans (including treasury bills, W&M Advances)– All repayments of loans

• Any expenditure out of Consolidated fund only by specific appropriation

• Charged and Voted Items of Expenditure

Constitutional Provisions- 3• Contingency Fund (Art 267):

– Imprest amount with President/Governor– To make advances for unforeseen or new service

items of expenditure– Amount determined by law– Recouped by subsequent authorisation

• Public Account (Art 266(2))– All other public moneys not part of Consolidated

Fund– No authorisation by legislature needed

Divisions of Consolidated Fund

• REVENUE ACCOUNT– RECEIPTS- Current Income including Taxes, Fees,

Fines, Interest and Dividends– EXPENDITURE- which does not create assets

• CAPITAL ACCOUNT – RECEIPTS- Sale of Assets, Borrowed Funds and

Accumulated Cash Balances– EXPENDITURE- Creation of new assets– PUBLIC DEBT- Market Loans, Inter-Governmental

Loans etc.

Structure of Accounts Classification

• Six tier classification

– Sectors/ sub-sectors– Functions- Major heads– Programmes- Minor Heads– Schemes/ Organizations- Subheads– Sub-schemes- Detailed heads – Objects

• Sub-classification of objects

Why a six-tier classification?

• Enables budget to function as a management tool:– Enables a review of Government operations– Review of sectoral allocations– Linkage between outlays and functions, programmes

and schemes– Item-wise control of expenditure

Issue of Budget Circular

Preparation of revenue and expenditure estimates by agencies

Review and consolidation of agency requests by competent ministries

Transmission of ministry requests to central agency

Negotiations between competent ministries and central agencyPREPARATION OF DRAFT BUDGET

Cabinet approval of draft budget

Final budget submitted to Legislature for approval

Budget Formulation: Organizational Steps

Preparation of Budget• Responsibility of the executive wing of the

Government

• Issue of the Budget Circular- by the Finance Ministry– Contains instructions on how to prepare estimates

for different items– Outlines Expenditure policy– Formats are circulated

• Strict adherence to time limits laid down

Preparation of Budget - 2

• Government Accounts are in simple cash book format - merely record the transactions in the year in which they occur

• Receipts Estimates– Based on trends– State of the economy– Inflation

Preparation of Budget - 3

• Expenditure Budgeting

– Estimates to be prepared by respective Government Departments

– Incremental Budgeting– First Charge to on-going schemes and committed

items– Justifications for increased outlays

Back

Preparation of Budget - Role of Finance Ministry

• Aggregation of the Receipts & Expenditure

• Inclusion of New Schemes

• New taxation measures

• Final iterative exercise– Ensure prioritization amongst sectors– Accommodate “sensitive” items– Keep overall deficit under check– Window dressing- deliberate under-funding or over-estimation

Presentation of Budget• By the Minister in charge of Finance to the

lower house of the legislature

– Annual Financial Statement– Demands for Grants– Other explanatory memoranda– Finance Bill– Appropriation Bill– Vote on Account- when needed

Execution of Budget

• Expenditure can be incurred only with:– Valid sanction by the competent authority– Adequate appropriation

• Appropriations are communicated to concerned after Appropriation Act is passed

• Competent officers issue sanctions within appropriation

• Expenditure on items not included in the budget - New Service Procedure or Supplementary Appropriation

Shortcomings of Existing Budgetary Practices• Inefficiencies and wastes of earlier years carried

over into subsequent years

– Alternative methods or the option of not continuing the activity is not evaluated

– Funds available for new initiatives- very limited

• Paucity of resources forces arbitrary cuts leading to inflated budget requests

• Lack of sense of ownership in concerned departments

Shortcomings (contd)• More focus on current RE than BE

• Classification quirks deprive crucial sectors/ activities of funds

• Cash based accounting gives misleading picture of financial status

• Budget is input driven and does not measure outcomes

– Obsession with financial accounting at the cost of proper utilisation

Establishment of goals, objectives

and policies

Developmentof programmes

Allocation ofresources

Executionof the budget

Appraisal andevaluation

BUDGETARY PROCESS

COMPONENTS OF ACCOUNTS IN DOP BUDGET• Revenue Receipts & Recoveries• 1 Postal Operations• 2 SB & CC• 3 Recoveries • Total (A)• Revenue Expenditure• 1 Salaries & Wages• 2 Pension• 3 Others • Total (B)• Revenue Deficit (B-A)• Capital Expenditure (C)• Total (Budgetary Support ) Deficit = (B-A+C)

Financial Performance of the Financial Performance of the Department of Posts Department of Posts

over last few Yearsover last few Years

INDIAPOST’s deficit

YEAR DEFICIT (in crore)02-03 136403-04 137504-05 1382 05-06 121006-07 125007-08 151108-09 359309-10 664110-11 6346

The reality!

REVENUE IN MILLION %

EXPENDITURE IN MILLION %

Sale of stamps 6143.07 08.82 Gen Admin 7337.29 05.51

PRC 23149.5 33.25 Operations 88789.81 66.72

Commission on MO & IPO

4005.45 05.75 Agency services

4005.57 03.01

Remuneration on SB/SC Work

35627.67 51.17 Others 37804.02 28.41

Other receipts 697.63 01.03 Recoveries (-)4857.21 (-) 3.65

69623.32 133079.48

NET DEFECIT

63456.16

Other receipts includes charges on sale of PP form, pp fee stamps, CRF etc.Other expenditure includes Audit & Accounts, Pension charges, Stationery & printing

Revenue & Expenditure 2010-11

21/04/23

Material Required

Process Instructions to cut the cake

Two round cakes one small on big ( double the size of small cake)

Knife to cut the cake

Paper plates to eat the cake after the exercise.

•Book eight trainees whose birthdays are closest to the training day/ month to come forward.

•Ask four of them to select one of the cake & other four the another cake which they will cut when you instruct them to do so.

Small cake shows how much we earn – Revenue.

Big cake shows how much we spend – Expenditure.

•Ask the first group of participants who selected the big cake to cut it as instructed in Step I and the second group of participants to cut the small cake as per step II explaining each part they are going to cut

•Discuss points given below.

•Close session by cutting the cake into small slices and sharing with all participants

• Step I – Big Cake Explain67% of expenditure of the department goes towards salary and pension.

Cut 5% of the cake first.

Step II. Small Cake Explain that- 51% of the revenue comes from Financial Services – SB, Insurance, Money Remittance.Rest of the revenue from Mails

32

EXERCISE- CAKE CUTTING

discussion led by trainer : • expenditure is larger than revenue – Ask them what do they make out of this? Action what do we need to do to increase our revenue, what are the options to make the small cake bigger?, making the big cake smaller? Ask them what are the implications of both options

•What are the biggest source of expenditure – point out to the large portion of the bigger cake. Ask what can we do about that? How about doubling our productivity? ? How will computerisation help ( reduce back office work more persons can serve customers)

•What are the biggest sources of revenue? How can we increase our income? Out of 1,55,000 post offices more than 80% of our post offices are in rural areas and more than 1,25,000 are BOs. How can we make a contribution to increase revenue.

Note : Recommended for trainers who have participated in this exercise earlier.

REVENUE

Unit 1.3 34

Revenue & Expenditure 2010-11

EXPENDITURE

35

NON-PLAN REVENUE EXPENDITURE

• Salary , Wages & Pension Salary , Wages & Pension

Largest component

Objectives of Financial Objectives of Financial Management ?Management ?

Financial Management - ObjectivesFinancial Management - Objectives

• To achieve the ideal operating ratio/ To achieve the ideal operating ratio/ Expense Coverage Ratio:- Expense Coverage Ratio:-

– By controlling/minimizing the revenue expenditure,By controlling/minimizing the revenue expenditure,

– By achieving revenue targets and preventing the By achieving revenue targets and preventing the Revenue pilferages,Revenue pilferages,

– By maximizing the revenue collections/ recoveries By maximizing the revenue collections/ recoveries

from other organizations for the services rendered from other organizations for the services rendered to them,to them,

– By properly implementing the opportunities of new By properly implementing the opportunities of new schemes/services introduced from time to time.schemes/services introduced from time to time.

Expense Coverage RatioExpense Coverage Ratio

• Expense Coverage Ratio helps to arrive at a conclusion as to whether there is a commercial gain or loss;

• Expense Coverage Ratio is worked out with ‘Net Working Expenditure’ and ‘Net Revenue’.

Sale of postage stamps/stationery 100%

Postage in cash, unpaid article amount, franking machine amount

100%

Money order commission 100%

IPO commission 100%

Telephone bill Total no of bills collected x Rs 10/-

SB account( including WFA/NREGS account),RD account, TD account etc.

Rs.151.76 per live account yearly

Silent Account Rs. 20.93

KVP/NSC certificate I/D Total No of certificate(issue/Discharge) x 51.64

IVP certificate Discharge Total No of certificate (Discharge) x 13.67

PLI 7% of premium collected

RPLI 10% of premium collected

Railway/telecom pensioners Rs. 80/- per payment

EPF pensioners Rs. 58.55 per payment

How to calculate ECR?

IMTS Rs. 364 per transaction

Post box/post bag rent 100 %

Advertisement income 100%

Exam fee income 100%

MO/VPMO form 100%

Issue of identity card 100%

Sale of old records 100%

Speed post revenue 100%

Sale of gold coin 4.6 % of Total amount Sold

Retail Post As per MOU

Cont….44Unit 1.3

Expense Coverage RatioExpense Coverage Ratio

• ECRECR = Net Revenue receipt x 100Net Revenue receipt x 100

Net Working ExpensesNet Working ExpensesWhere :

• Net Revenue receipts = Gross Revenue receipts (-) Refunds; and

• Net working expenditure = Gross working expenditure less depreciation and recoveries.

• Figure of more than 100(ECRECR )means a profitable state of business

Operating RatioOperating Ratio• Operating RatioOperating Ratio = Net ExpenditureNet Expenditure

Net RevenueNet RevenueWhere :

• Net Revenue receipts = Gross Revenue receipts (-) Refunds; and

• Net working expenditure = Gross working expenditure less depreciation and recoveries.

• Operating RatioOperating Ratio of less than 1 indicates profitable state of business.

Exercise 2.4B.1

• Trainees to do the questions given in the exercise

BUDGETTING BUDGETTING

HEAD OF ACCOUNTSHEAD OF ACCOUNTS- Postal Receipts, &- Postal Receipts, &- Expenditure- Expenditure

Primary Units of AppropriationPrimary Units of Appropriation Six tier classifications have been Six tier classifications have been

introduced in the Detailed Demands introduced in the Detailed Demands for Grants:for Grants:

Major HeadMajor Head - 4 digits (Function) - 4 digits (Function)

Sub Major Head - 2 digits (Sub Function)Sub Major Head - 2 digits (Sub Function)

Minor HeadMinor Head - 3 digits (Programme) - 3 digits (Programme)

Sub Head - 2 digits (Scheme)Sub Head - 2 digits (Scheme)

Detailed Head - 2 digits (Sub Scheme)Detailed Head - 2 digits (Sub Scheme)

Object Head -2 digits (Primary unit of Object Head -2 digits (Primary unit of Appropriation)Appropriation)

Major Head – 3201 – Postal ServicesMajor Head – 3201 – Postal ServicesSub Major Head – 02 – OperationSub Major Head – 02 – Operation

Minor Head– 003 – TrainingMinor Head– 003 – TrainingSub Head – 01 – Operational TrainingSub Head – 01 – Operational Training

Detailed/Object headsDetailed/Object heads(01) Salaries(01) Salaries(02) Wages (02) Wages (03) Overtime Allowances(03) Overtime Allowances(04) Pensionery Charges(04) Pensionery Charges(06) Medical Treatment(06) Medical Treatment(11) Travelling Expenses(11) Travelling Expenses(13) Office Expenses(13) Office Expenses(14) Rent, Rates & Taxes(14) Rent, Rates & Taxes(21) Supplies & Materials(21) Supplies & Materials(26) Adv. Sales & Publicity.(26) Adv. Sales & Publicity.(28) Payments for prof. Service(28) Payments for prof. Service(50) Other Charges(50) Other Charges(64) Write off / losses(64) Write off / losses

EXAMPLEEXAMPLE

Budget

- Information regarding anticipated Information regarding anticipated expenditure.expenditure.

  - Current YearCurrent Year - Next Year (Ensuing year)- Next Year (Ensuing year)

- Standing expenditure- Standing expenditure- New items of expenditure- New items of expenditure

(1)(1) Budget Estimates BE Budget Estimates BE (2)(2) Revised Estimates RERevised Estimates RE(3)(3) Anticipated Final Grant AFG Anticipated Final Grant AFG (4)(4) Variation Statement.Variation Statement.

 

Non Plan Expenditure EstimatesNon Plan Expenditure Estimates• The framing of the Revised Estimates (RE) for current year The framing of the Revised Estimates (RE) for current year

should always precede Budget Estimation for the ensuing should always precede Budget Estimation for the ensuing year (BE).year (BE).

• The RE should include:The RE should include:• Only those items which are likely to materialize for Only those items which are likely to materialize for

payment during current yearpayment during current year• Actual so far recorded during current yearActual so far recorded during current year• Sanctions for expenditure already issued or Sanctions for expenditure already issued or

contemplated, andcontemplated, and• Other expenditure of seasonal character or otherwise Other expenditure of seasonal character or otherwise

Name of the Unit : ---------------

RE FOR 2011-12 & BE FOR 2012-13

UNDER POSTAL WORKING EXPENSES. Head of Original Expenditure Actual TOTAL SUB MAJOR HEAD

Account Allotment First Five months

(Rs.) Cash Book Debit Liabilities (3+4+5) Estimated for Revised Budget

already accepted upto last seven Estimates for Estimates for

adjusted Aug'2011 but months of 2011-12 2012-13

upto not adjusted current year

Aug-11

3201-02-101-01 Existing POs

Salaries Wages T.E O.E P P S S OTA M & E O.C

Total

Name of the Unit : --------G.P.O.RE FOR 2011-12 & BE FOR 2012-13

UNDER POSTAL WORKING EXPENSES. Head of Original Expenditure Actual TOTAL SUB MAJOR HEAD DIFFERENCE

Account Allotment First Five months BETWEEN

(Rs.) Cash Book Debit Liabilities (3+4+5) Estimated for Revised Budget COL.2 & 8

already accepted upto last seven Estimates for Estimates for

adjusted Aug'2011 but months of 2011-12 2013-14

upto not adjusted current year

Aug-11

3201-02-101-04 Speed Post Salaries 1600000 1447233 1447233 2228767 3676000 4044000 (+) 2076000 Wages 575000 257268 257268 442732 700000 735000 (-) 125000 T.E. -- - -- O.E 80000 28635 28635 513657 80000 84000 P P S S 350000 785160 785160 1099840 1885000 1979000 (-) 1535000 OTA - 111373 32087 143460 200844 344304 385000 (-) 344304 O.C 30000 33612 33612 47388 81000 85000 (-) 51000In house Comp. 0 -- -- 2250000 2250000 2250000 --

Total 2635000 2663281 0 32087 2695368 6783228 9016304 9562000

Name of the Unit : ……………………..

FINAL GRANT AS IT WILL STAND ON 31.3.2012Standard object Revised allotment Actual Actual Probable Anticipated Total Additional

of expenditure issued by Circle Expenditure Expenditure Expenditure Expenditure in requirement Demand

office in Jan-12 upto the end during during Mar-12 for 2011-12

of Dec-2011 Jan-12 Feb-12

3201-02-101-01 Existing POs Salaries Wages T.E O.E P P S S OTA M & E O.CTotal3201-02-101-04 Salaries Wages O.E P P S S OTATotal

Name of the Unit : ……………………..

SHOWING ANTICIPATED GRANT AS IT WILL STAND ON 31.3.2012Actual Actual Probable Anticipated Total Additional

Expenditure Expenditure Expenditure Expenditure in requirement Demand

upto the end during during Mar-12 for 2011-12

of Dec-2011 Jan-12 Feb-12

114302979.00 12057750.00 11430298.00 11448973.00 149240000.00 1240000.00891162.00 92309.00 200265.00 216264.00 1400000.00 ----------297299.00 41807.00 33910.00 33984.00 407000.00 ----------

4929374.00 769665.00 1172000.00 830961.00 7702000.00 1202000.00197464.00 28646.00 127000.00 152890.00 506000.00 306000.00

4376274.00 505905.00 456944.00 470877.00 5810000.00 ----------394638.00 ------- ------- 100362.00 495000.00 495000.00

7228270.00 743472.00 850000.00 900258.00 9722000.00 1022000.0032544.00 ------- 10000.00 87456.00 130000.00 ----------

3115944.50 448733.00 309603.00 315719.50 4190000.00 1190000.00517701.00 73597.00 71702.00 74000.00 737000.00 217000.0057620.00 1150.00 10230.00 11000.00 80000.00 ----------

1633224.00 473458.00 200318.00 200000.00 2507000.00 1607000.00130631.00 4883.00 27016.00 37470.00 200000.00 ----------

5455120.50 1001821.00 618869.00 638189.50 7714000.00 3014000.00

STATEMENT SHOWING THE PROGRESSIVE EXPENDITURE OF CEILING ITEMS FOR THE MONTH OF ……………………………………… Ceiling Items Allotment of Actual exp. Exp. Incurred Total exp.

funds upto previous in the month ofmonth (Current Month)

1 3201-02-101-01-03 B2(i) Wages 14,00,000 6,96,464 1,04,927 8,01,3912 3201-02-101-01-05 B2(i) OE 56,25,000 37,42,812.85 4,05,347.42 41,48,160.273 3201-02-101-01-1 B2(i) OC 70,00,000 61,90,918 8,74,084 70,65,0024 3201-02-101-01-12 M & E - 3,94,638 - 3,94,6385 3201-02-101-01-08 GPO RRT 1,30,000 32,543.80 - 32,543.806 3201-02-101-01-06 B2(i) PPSS 1,47,000 1,59,359 15,620 1,74,9797 3201-02-101-01-01-13 GPO OE Plan 75,000 31,388 11,346 42,7348 3201-02-101-04-03 B2(4) Wages 5,75,000 3,90,957 56,270 4,47,2279 3201-02-101-04-05 B2(4) OE 80,000 33,020 590 33,610

10 3201-02-101-04-08 B2(4) OC 30,000 62,825 7,643 70,46811 3201-02-101-04-06 SP PPSS 3,50,000 11,17,975 4,53,959 15,71,93412 3201-02-101-01-09 MMS Wages 9,00,000 5,28,541 61,947 5,90,48813 3201-02-101-(09) MMS OE 1,50,000 42,535 - 42,53514 3201-02-101-01-09 MMS M&S 25,000 - - -15 MH-3209-03-101-III SB SBCO wages 50,000 - - -16 3201-03-101-(I) SBCO OE 10,000 1,256 - 125617 SBCO OC SBCO OC 10,000 4,301 - 4,30118 3201-03-101-03-05 (1(3)) SBOE 30,000 47,159 30,540 77,69919 SBOC SBOC 10,000 2,874 - 2,87420 3201-03-101-06-02 Cleg. House 7,30,000 2,80,680.74 - 2,80,680.7421 B2(i) OE -355 Dak Seva - 800 - 80022 3201-01-001-00-26 Phil. Pub. - 45,815 11,400 57,21523 3201-01-001-01-00-26 ASP Plan - 3,092 - 3,092

Total 1,38,09,954.39 20,33,673.42 1,58,43,627.81

"A" STATEMENT OF ……..…….. GPO FOR THE MONTH OF …………………………..Sl. No.Heads PO SB SBCO Speed MMS Canteen EPP Total1 Pay of Officers 92276 - Post 922762 Pay of Staff 6071849 614243 86300 136590 6270 134772 6880 70569043 DA 2772473 276420 38836 61161 2822 60657 3097 32154664 HRA 1757902 180064 22666 39866 1881 40868 2064 20453115 CCA 234317 24660 3500 4880 215 5150 250 2729726 TA 150652 13200 2200 4000 200 4400 200 1748527 PP 27055 2420 375 745 55 457 311078 T.F. 2580 1170 37509 Pay 2560 256010 Special Pay 1590 159011 Medical Treatment 48821 5244 167 5423212 OTA 535615 135364 8796 9030 3600 2696 69510113 TA bill / Adv. 10869 20551 3142014 Honararium 235 23515 PL Bonus 70614 4438 11135 8618716 FA 219000 13500 23250017 HBA 246268 24626818 CGEGIS 68215 6821519 Split duty allowance 20 2020 Machine allowance 366 36621 Leave encashment 75548 7554822 Washing allowance 24421 690 1170 60 1110 60 2751123 Incentive 980 98024 LTC 19568 1956825 Rent 248752.2 248752.2

Total 12682546.2 1287826 162840 261880 15103 261245 12551 14683991.2

Exercise 2.4B.2Exercise 2.4B.2

• Trainees to answer the questions given in the Trainees to answer the questions given in the exerciseexercise

• Expenditure should not be incurred under any Expenditure should not be incurred under any head in excess of the sanctioned allotments. head in excess of the sanctioned allotments.

• If the existing allotment is inadequate, the If the existing allotment is inadequate, the next higher authority must be approached well next higher authority must be approached well in advance for placing additional funds.in advance for placing additional funds.

• Until additional funds are received or at least a Until additional funds are received or at least a clear and written commitment to this extent is clear and written commitment to this extent is received, expenditure should not be incurred received, expenditure should not be incurred in excess of the allotment.in excess of the allotment.

• If at any stage, funds are surplus to the If at any stage, funds are surplus to the requirements under any head, the amount of requirements under any head, the amount of the probable excess should be promptly the probable excess should be promptly surrendered. surrendered.

Expenditure Control tipsExpenditure Control tips

• Such an action will ensure that there is no Such an action will ensure that there is no lapse at the end of the year. lapse at the end of the year.

• A systematic watch be kept over the expenditure, andA systematic watch be kept over the expenditure, and

• Progressive expenditure be compared every month Progressive expenditure be compared every month with the proportionate allotments under each head. with the proportionate allotments under each head.

Proper monitoring absolutely necessary :Proper monitoring absolutely necessary :(1) Expenditure does not exceed fund allotted under any head.(1) Expenditure does not exceed fund allotted under any head.(2) Excess funds is surrendered timely.(2) Excess funds is surrendered timely.

- To keep watch over progress of expenditure and compare with proportionate To keep watch over progress of expenditure and compare with proportionate grant every month.grant every month.- Obtain Monthly statement from subordinate offices Obtain Monthly statement from subordinate offices for whom the allotment is sub divided. eg. Gazetted HOs.for whom the allotment is sub divided. eg. Gazetted HOs.

- To ensure to incur proportionate expenditure every month.- To ensure to incur proportionate expenditure every month.-Avoid incurring or committing expenditure in a particular year Avoid incurring or committing expenditure in a particular year and postponing payment of bills to the subsequent final year. and postponing payment of bills to the subsequent final year.

- Ensure that the expenditure is charged under correct head of A/Cs.- Ensure that the expenditure is charged under correct head of A/Cs. eg. SB, SBCO, Speed Post expenses should not be under PO.eg. SB, SBCO, Speed Post expenses should not be under PO.

OC – OEOC – OE and and M&E – OE etc.M&E – OE etc.

FINANCIAL MANAGEMENT TIPSFINANCIAL MANAGEMENT TIPS

(1) Salary - Periodical establishment review (1) Salary - Periodical establishment review - Computer norms- Computer norms - Verification of figures- Verification of figures - Redeployment of posts / staff - Redeployment of posts / staff (2) Review/streamlining of work procedure. (2) Review/streamlining of work procedure. - simplifying operations.- simplifying operations.(3) Full utilisation of manpower (3) Full utilisation of manpower - desired output - desired output - even distribution of work. - even distribution of work. - adjustment of duty hours w.r.t. workload.- adjustment of duty hours w.r.t. workload. - management of peak hour traffic. - management of peak hour traffic. - manage counter rush during lunch hours of other offices.- manage counter rush during lunch hours of other offices.(4) Productivity and Efficiency(4) Productivity and Efficiency

(5) Office Expenses (i) (i) PurchasesPurchases - excess, unwanted, costly items. excess, unwanted, costly items. - indents to PSDs - excess indents.- indents to PSDs - excess indents. - misuse of forms, stationary, bags, etc.- misuse of forms, stationary, bags, etc.   - Quotations, Limited tenders, Open tenders- Quotations, Limited tenders, Open tenders

- DGS&D Rate Contracts- DGS&D Rate Contracts- Schedule of Financial Powers - Schedule of Financial Powers

(ii) (ii) Telephone bills, electricity billsTelephone bills, electricity bills (iii) Inspection vehicle, MMS vehicles(iii) Inspection vehicle, MMS vehicles

fuel consumption – litre / km.fuel consumption – litre / km.(6) Wages -Coolie charges for extra dispatch of mailsCoolie charges for extra dispatch of mails-Delivery of heavy mails – Postmen coolie chargesDelivery of heavy mails – Postmen coolie charges-Conveyance of cash w.r.t. traffic, revenue of PO.Conveyance of cash w.r.t. traffic, revenue of PO.

- engagement of mazdoors / outsiders.- engagement of mazdoors / outsiders.

(7) (7) PPSSPPSS - Legal charges - Legal charges (8) (8) Travelling ExpensesTravelling Expenses - Disciplinary cases, - Disciplinary cases, - Transfers and postings,- Transfers and postings, - Temporary deputation. - Temporary deputation. (9) (9) OTAOTA: : - Only barest minimum absolutely - Only barest minimum absolutely necessary necessary to be allowed to be allowed (10) (10) Medical Reimbursement billsMedical Reimbursement bills(11) (11) Building maintenanceBuilding maintenance - Optimum utilization of space.  - Optimum utilization of space.   - Civil / Electrical works- Civil / Electrical works

TRAINER TO GIVE 20 MINUTES TO TRAINEES TO TRAINER TO GIVE 20 MINUTES TO TRAINEES TO LIST ATLEAST 20 TIPS FOR INCREASING LIST ATLEAST 20 TIPS FOR INCREASING REVENUE & EXPENDITURE CONTROL IN A REVENUE & EXPENDITURE CONTROL IN A DIVISION. THEREAFTER ONE OF THE GROUP TO DIVISION. THEREAFTER ONE OF THE GROUP TO PRESENT IN 15 MINUTES BEFORE THE CLASS.PRESENT IN 15 MINUTES BEFORE THE CLASS.

EXERCISE 2.4B.3EXERCISE 2.4B.3

Thank youThank you