MINISTRY OF RURAL DEVELOPMENT

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MINISTRY OF RURAL DEVELOPMENT

• FINANCE ACCOUNTS

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FUNCTIONS OF I.F.D

• PREPARATION OF BUDGET AND PERFORMANCE BUDGET OF
  THE MINISTRY
• SCRUTINY AND APPROVAL OF EXPENDITURE PROPOSALS
• MATTERS RELATING TO STANDING COMMITTEE
• VETTING OF FINANCIAL SANCTIONS
• ACCOUNTS AND PAYMENTS

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BUDGET ALLOCATION 2004-05 (Interim)
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MINISTRY OF RURAL DEVELOPMENTALLOCATION AND
EXPENDITURE IN LAST THREE YEARS
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Procedure for release of funds

• Each Schemes of the Ministry of Rural Development
  has well defined guidelines specifying the
  procedure for release, distribution and
  utilisation of funds.
• The funds in case of allocation based schemes are
  released to the DRDAs in two installments.
• The first installment of Central Share of funds
  are released at the beginning of the financial
  year automatically to all those implementing
  agencies which had drawn the second installment
  of funds during the preceding year without any
  condition.
• In other cases first installment is released
  after scrutiny of proposals supported by
  utilisation certificates and audit reports and
  minimum utilisation of available funds as
  prescribed in the guidelines.

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Procedure for release of funds

• Second installment is released on fulfillment of
  the following conditions
• Utilisation of 60 of available funds
• Production of UC And AR for previous year.
• Release of matching state share.
• To enforce financial discipline following
  deductions are made -
• If the Opening Balance is more than 15,
  proportionate deductions are made from the
  central share.
• In case of short release of state share , three
  times of the shortage is deducted from the next
  installment.
• Cuts are also imposed for diversion of funds .
• Late receipt of proposals.

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Procedure for release of funds

• In case of late receipt of proposals following
  cuts are imposed
• Graded cut of 10 if the second installment
  proposals are received in January.
• Graded cut of 20 if the second installment
  proposals are received in February.
• Graded cut of 30 if the second installment
  proposals are received in March.

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FLOW OF SANCTIONS

Program Division
Copy of Sanction
2
4
1
3
5
Implementing Agency
Accounts Wing
Deptt. of the State
A.G.s
State Finance Secretary

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FUNCTIONING OF SPECIAL CELL
SPECIAL CELL
SANCTIONS
REQUISITION (1)
BANK SBBJ
PRG. DIVISION
FOR TTS/DDS
CONFIRMATION
EXP.DATA
OF TTS SENT/DDS
ADVICE (3)
TTS
AUTHORISATION (4)

DRDAs etc.
DEMAND DRAFTS(2)

U.TS WITHOUT LEGISLATURE
RBI,NAGPUR
THRO AGs
BIHAR, JK, ARUNACHAL PR
STATE GOVT.
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CONFIRMATION OF FUNDS RECEIVED BY THE PAYEE BANKS
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Advantages gained by the current system

• Direct Flow of funds to the DRDA.
• Elimination of postal delays and loss of
  drafts.
• Effective control of Expenditure - daily
  closing.
• Eliminating the risk of double releases
• Reconciliation with Banks/Program Divisions
• Funds reaching to Payee Bank with 4 days
• Confirmation received from Payee Bank in 7 days

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Accounting Procedure for DRDAs

• DRDAs are required to observe the following
  accounting procedure w.e.f 1-4-2002
•      Multiplicity of bank accounts is not
  permissible. Scheme wise separate Bank accounts
  shall be operative.
•    Funds are not allowed to be diverted from one
  scheme to another or from central scheme to state
  scheme .
• Transfer of funds to BDOs/other implementing
  agencies will be reflected as advance to
  implementing agencies and would be adjusted by
  the receipt of UCs/Adjustment Bill.
•   DRDAs are required to keep funds only in saving
  bank account.
• DRDAs have been asked to maintain assets
  register.
•  

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Accounting Procedure for DRDAs

• Interest earned on funds of each scheme should be
  added in the scheme funds.
• State share received against a particular scheme
  should also be kept in the scheme account
  maintained in the Bank.
• DRDAs are required to maintain scheme wise cash
  book.
• No inter-banking transactions to facilitate
  Bankers to achieve their targets are allowed.
• Minus cash book balances are not allowed to
  appear.
• Release of advance subsidy is not allowed.

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DRDA ACCOUNTING STUDIES
THE DRDA ACCOUNTING STUDIES WERE STARTED IN THE
YEAR 1998-1999. UP TO THE YEAR 2002-03, 193 DRDAs
HAVE BEEN COVERED FOR ACCOUNTING STUDY.FOR THE
YEAR 2003-04, 37 DISTRICTS WERE SELECTED OUT OF
WHICH STUDIES FOR 27 DISTRICTS HAVE BEEN
COMPLETED.
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Computerisation of Release of Grants

• Complete process of release of grants is
  computerised and is online.
• Programme Divisions send their proposals on line
  which get concurred through computer and sanction
  orders are generated through computer only.
• Process of Pay And Accounts office are fully
  automatised.
• Advantages
• Timely Reconciliation of accounts.
• No Over sanctioning.
• Expenditure of the ministry can be seen at any
  time.
• Less delays .

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Thank You.