Para 5.15 — CAM

5.15 PROFORMA CORRECTIONS

5.15.1 "Proforma Corrections” to balances of earlier years in cases where provisions of Rule 38 of Government Accounting Rules, 1990 are not attracted, are to be carried out by affording relevant contra effect to "Government Account" referred to above. Approval of the CGA is required to be obtained in each case for the incorporation of any such 'Proforma Correction’, by providing full background and justification. This includes cases wherein either-

closing to balance vis-a-vis a head closing to Government Account are involved; or

(b) correction of a balance under a head closing to balance purely as an accounting device is involved.

5.15.2 Expenditure incurred under the CFI and booked under concerned heads is accounted for in the Appropriation and Finance Accounts. However, the balances under the heads of loan, debt etc will also be included in the Finance Accounts.

Certain Government decisions occasionally affect such balances representing progressive effect of bookings made in earlier years, and necessitate alteration in the figures of balances exhibited in the "Ledger of Balances", Finance Accounts, etc. In such cases, the provision of "Proforma Correction" will be used and not by passing (the old transactions of expenditure etc) through the monthly accounts/S.C.T. of the year in which the relevant Government decision is taken.

The following are some of the main types of situations in which "Proforma Corrections" are required to be made:

(i) Change of Classification: Decision may be taken by Government in consultation with the Budget Division,DEA,Ministry of Finance and CGA on the advice of the C. & A.G. for change in classification of any specific type of transaction of a head closing to "Government Account" or for transfer of balance from one to another head under Loan or Debt etc. which closes to balance. The decision would imply that the aggregate effect of transactions booked during earlier years under a relevant head will have to be transferred to a new head selected for the purpose. An example of this type is the consolidation of loans given to State Governments that involves transfer of aggregate balances from one Minor Head/Sub-Major head to another Minor Head/ Sub-Major Head. Specific example for this is the "Loans consolidated on the recommendations of the various Finance Commissions" under the Major Head "7601-Loans and Advances to State Governments."

(ii) Increase or Decrease in the Opening Balances: Based on decisions of Government, the Controller of Aid Accounts and Audit as well as Railway Board effect certain increases or decreases in the opening balances of heads of accounts exclusively operated by them. This is

What This Means

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Key Points

• 1Proforma Corrections adjust balances of earlier years where Rule 38 of GAR 1990 does not apply
• 2Each proforma correction requires prior approval of the CGA with full background and justification
• 3Corrections are made through contra effect to 'Government Account'
• 4Two scenarios: (a) corrections between heads closing to balance vs. Government Account, (b) pure balance corrections as accounting devices
• 5These adjustments affect the Finance Accounts and the ledger of balances

Practical Example

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.