Para 3.13.22 — MSO (Audit)
Original Rule Text
3.13.22 All transactions as are ultimately removed either by payment or recovery in cash or by book adjustments are recorded under suspense heads. Unless otherwise permitted by the rules, the use of suspense heads for provisional adjustment of transactions that are ultimately adjustable under ordinary revenue and service heads should be avoided as far as possible.
What This Means
Suspense heads are temporary accounting entries used for transactions that will eventually be cleared by actual cash payment, recovery, or book adjustment. Unless specifically allowed by rules, departments should avoid parking transactions under suspense heads when they should be booked directly under the proper revenue or service heads of account.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Suspense heads are temporary holding accounts for transactions awaiting final classification
- 2Transactions are cleared from suspense by cash payment, recovery, or book adjustment
- 3Use of suspense heads should be avoided for items that can be directly classified under regular heads
- 4Suspense heads should only be used when rules specifically permit provisional adjustment
Practical Example
A PWD division receives payment for a work but cannot immediately determine which specific project to credit it to. The amount is temporarily booked under a suspense head. However, audit flags that this has been sitting in suspense for six months when the department should have identified the correct head and cleared it within a month. The auditor recommends prompt book adjustment to the proper account head.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why are suspense heads problematic if items remain too long?▼
Who is responsible for clearing suspense head entries?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.