Para 4.1 — MSO

CLASSIFICATION OF TRANSACTIONS IN GOVERNMENTS ACCOUNTS 4.1 A distinet feature of the system of Government Accounts is the minute elaboration with which the financial transactions of Government under both receipts and payments are differentiated and classified. The object of this elaborate system of classification is to secure the utmost possible uniformity of accounting amid the immense volume and variety of the financial transactions of the Government and thereby to render possible, not only reliable comparisons between the accounts of different Governments and periods, but especially the preparation of budget estimates on forecasts of receipts and payments. Such a system of classification would also compel each disbursing officer to a minute periodical review of the public receipts and payments in his charge and so makes for effective financial control and economy. A proper system of classification of accounts would also provide the management with more purposeful accounting information to monitor programmes and serve the legislature in a meaningful appreciation of allocation of resources and purposes of Government expenditure.

The structure of classification was revised with effect from 1-4-1987 in the context of the change in emphasis and growth of developmental activities of Government with the twin objectives of reflecting Government transactions in terms of functions, programmes and schemes and securing a direct correlation between accounting classification and plan head of development.