Para 8.4.1 — CAM
Original Rule Text
8.4.2 Despite adhering to the procedure indicated in para 8.4.1 there might be cases where debits do not reach the concerned PAO in time to enable him to issue cheque/demand draft on or before 31st March of the same year. In such cases, where the debits supported by the vouchers are received in the succeeding financial year, but before March (Supplementary) accounts are closed, the PAO to whom the debits pertain shall accept and respond to the inward debit claim by issuing a cheque. He should in such cases, debit the suspense head PAO suspense, in the accounts of the year in which the debit is received. A Transfer Entry shall simultaneously be inserted in the March (supplementary) accounts of the preceding year, by debiting the final head of expenditure and minus debiting the head 'PAO Suspense'. This will serve to incorporate the expenditure in the accounts (including Appropriation Accounts) of the year, in which the payment was made by the outward claim originating PAO, and avoid lapse of funds in the Demand for Grants of the consignee concerned.
8.4.3 The above procedure will also be applicable for adjustment of miscellaneous receipts appearing in the books of an PAO that require final accounting in the books of another PAO.
8.5 PROCEDURE FOR DIRECT BOOKING OF EXPENDITURE BY AGENT MINISTRY/DEPARTMENT BASED ON LETTER OF AUTHORISATION (LOA) ISSUED BY THE FUNCTIONAL MINISTRY
8.5.1 This relates to the programmes or activities for which one Ministry /Department utilizes the services of another Central Ministry /Department as its agent for executing the activity. In such cases, the FA /Pr. CCA/CCA/CA of the functional Ministry / Department will issue annual budget allocation letter, indicating the amount approved in the Budget for the year for the programme or activity assigned to the agent or executing Department, after obtaining necessary financial sanctions. The executing Ministry/Department are authorized to incur expenditure up to the limits specified in the authorization letter. The allocated amount in such cases will not be available for re-appropriation by the concerned functional Ministry/Department, without the concurrence of agent Ministry/ Department. A copy of such sanction has to be endorsed to the Pay and Accounts Officer of the functional department so as to keep a note of this in the Expenditure Control Register. The functional Ministry/Department would also communicate the 15-digit code relating to the heads, to the PAO of the agent Ministry in the authorization letter.
8.5.2 The executing/agent Ministry or Department, on the condition of observance of normal procedures of sanction will incur the expenditure. The PAO of the executing Ministry will book the expenditure under the relevant expenditure head against the Demands for Grants of the functional Ministry/Department and furnish the monthly and progressive figures of expenditure to the Principal Accounts Office of the functional Ministry/Department. This is to enable the latter to monitor the flow of expenditure on the programme/activity and prepare Appropriation Accounts related to the Grant. The Pay and Accounts Officer of the executing/agent Ministry will not honour any claim that would result in excess over the amount authorised by functional Department, in any case. The Principal Accounts Office of both agent and functional Ministries/Departments will conduct annual reconciliation of expenditure, before preparing their SCT and Appropriation Accounts respectively.
What This Means
This paragraph addresses what happens when March transaction debits arrive at a PAO after 31st March but before the March Supplementary accounts are closed. In such cases, the receiving PAO accepts the inward debit claim by issuing a cheque, even though it falls in the new financial year. To ensure the expenditure is recorded in the correct year, the PAO books the charge under the final head and simultaneously passes a contra entry through a suspense head. This suspense head is then cleared when the PAO formally compiles the March accounts. If the debits arrive after the Supplementary closing but the amount is significant, further special procedures apply.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Covers March debits arriving after 31st March but before Supplementary closing
- 2Receiving PAO must accept and issue cheque despite it being the new financial year
- 3Expenditure booked under final head with contra entry through suspense head
- 4Suspense cleared when March Supplementary accounts are compiled
- 5Ensures expenditure is correctly attributed to the financial year in which it arose
Practical Example
A debit claim for Rs. 8 lakh relating to a March transaction reaches the PAO of the Ministry of Education on 10th April. Since the March Supplementary accounts are not yet closed, the PAO accepts the claim, issues a cheque, and books the expenditure under the correct head for the previous financial year. A contra entry is passed through the suspense head, which is cleared when the PAO finalizes the March Supplementary compilation.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What is the 'March Supplementary' closing?▼
What if the debit arrives after the Supplementary closing?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.