Government Accounting

Government Accounting

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Government
• Agency of the state carrying out its deals
and objectives through positive functions.
• To promote welfare/ better quality of life.
• Raise and spend money.
• Financial administration, the role of
government accounting.

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2

Government Accounting
• Process of recording, analysing,
classifying, summarising,
communicating, and interpreting the
financial transactions and events
about government in aggregate and
in detail reflecting transactions and
other economic events involving the
receipt, spending, transfer, usability
and disposition of assets and
liabilities.
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3

Objectives
• Provide information about expenditure
• Provide information about Revenues
• Provide information about loans and
deposits
• Provide information about cash availability

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4

Features
• Accounting system comply with the constitutional;
statutory and other legal requirements of the country.
• Related to budgetary classification.
• Accounts are maintained in a manner that will clearly
identify the objects and purposes for which funds have
been received.
• It will facilitate the audit by external review authorities
and readily furnish the information needed for an
effective audit.
• It will permit effective administrative control of funds
and operations.
• Disclose economic and financial results.
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5

Difference between Commercial Accounting
and Government Accounting
Commercial Accounting
• Profit motive
• Profit and Loss Account
and Balance sheet
• Double entry System
• Chartered Accountants
• Trade or manufacture
• Accrual basis

Govt. Accounting
• Welfare motive
• Budget
• Single entry system
• Comptroller and Auditor
General of India
• Financial Administration
• Cash basis

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General Principles of
Government Accounting

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Pin pointing Responsibility (IAAD)
Accounting Systems
Public sector Commercial enterprises
Recording and consolidation of
transactions
• Incomes and expenditure
classifications
• Maintaining internal Accounts
• Combined Accounts
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7

Classification of
Government Accounting in India
• By constitution of India
– Consolidated fund of India
– Public Account
– Contingency Fund

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Consolidated Fund of India
• For centre and each of
states
• All incomes received by
the government are
credited
– Tax or non tax
– Loans such as Treasury
Bills..
– Money received in
repayment of loans.
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9

• The expenditures charged on consolidated fund
– The salary and allowances of the President.
– Debt charges and cost of raising Loans
– Salary, allowances and pension payable to CAG of
India
– Salaries, allowances and pensions payable to Judges
of Supreme court.
– Salaries and allowances of the chairman and Deputy
chairman of Rajya Sabha and speaker and deputy
speaker of Lok Sabha
– Sums required for arbitration tribunal
– Any other expenditure charged by constitution/ union
Act.
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10

Public Account
• Any money, which is not to go to the
Consolidated Fund is credited to the Public
Account.
• Article 266(2) of constitution
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Savings Deposits and Certificates;
Reserve Funds;
Deposits;
Advances

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Contingency Fund
• This fund is in the nature of an imprest.
• Advances can be made by the
President/Governor of a State for meeting
unforeseen urgent expenditure pending
authorization of such expenditure by Parliament
or State Legislature.
• It is recouped from the Consolidated Fund.
• Article 267(1)

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12

IAAD
• Includes the officers and establishments employed
for accounting and audits
• Headed by C&AG
• Works in co-operation with Finance Ministries and
Departments of Union & States.
• Helps in framing budget and its utilisation.
• Audit of Postal and Telegraph, Railways, Defence
• Government commercial audit conducted by
Accountant General
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CAGI
• Appointed by President of India (Article
148(1))
• Removed by president by recommend of
Parliament.
• Status is of Judge of Supreme Court.
• Oath before president (148(2))
• Salary determined by Parliament
• Six years, retirement at age 65 (148(3))
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Duties and Powers
• Advice president on the form of keeping account
of centre and state.
• Ensure that amount authorised by legislature have
been properly spent.
• Submit audit reports to President/ Governor.
• Submit Finance Accounts and Appropriation
Accounts annually.
• Provide assistance and advices to Union and state
governments.
• Empowered to inspect any offices of accounts and
treasuries under the control of govt.
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15

PAC
• Standing Committee of Parliament to
exercise vigilance over governmental
spending and performance.
• 22 members- 15 from Lok Sabha, 7 frm
Rajya Sabha
• Annually elected, convention is two year
term.
• Chairman nominated by Speaker of Lok
sabha.
• Scrutinises Appropriation Accounts of GoI
and report of CAGI.
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Estimate Committee
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To examine the estimates
Suggest alternatives
30 members form Lok Sabha
One year service. But 2/3 members re-elected.
Chairman nominated by speaker

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Thank You

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