appropriation accountsrti jammu1 appropriation accounts

Appropriation Accounts RTI Jammu 1

Appropriation Accounts


Session Overview

• Under the Constitution of India read with Section 11 of the CAGs (DPC) Act, 1971, the CAG is required to prepare, for the Central Government, for each State Government and for the Government of each of the Union Territories with separate Legislative Assemblies, Accounts, that is accounts of the expenditure (both voted and charged) of the Government for each financial year.


Session Overview

• These accounts include in the case of accounts compiled by the Comptroller and Auditor General of India, Appropriation Accounts


Session Overview

• Appropriation Accounts indicate the appropriations sanctioned for each grant by concerned legislature (Parliament/State Legislature) and actual expenditure booked against that appropriation along with reasons for any excess and savings, if any.


Session Overview

• Appropriations are sanctioned by the legislature for gross amounts (i.e. excluding deductions and recoveries) and consequently gross expenditure against each grant is indicated in the Appropriation Accounts. Finance Accounts, on the other hand, show net expenditure under different heads after taking into account deductions and recoveries.


Session Overview

• During this session we will discuss:

• Objective and concepts underlying Appropriation Accounts;

• Form and Content of Appropriation Accounts;

• Reconciliation of figures appearing in the Finance Accounts with those appearing in the Appropriation Accounts.


Learning objectives

• By the end of the session, the learner will be able to define the objective and concept of Appropriation Accounts of the Government. The learner will also be able to state scope, form and arrangement of material in Appropriation Accounts and reconcile the expenditure indicated in the Appropriation Accounts with the expenditure indicated in the Finance Accounts.


Objective and concept

• Constitution of India has well defined provisions relating to financial matters of the Union Government and of State Governments.

• Article 266 (1) defines the ‘Consolidated Fund of India or of the State concerned’ and what can be credited to the fund.



• Article 266 (3) provides that ‘no moneys out of the Consolidated Fund of India or the Consolidated Fund of a States hall be appropriated except in accordance with law and for the purpose and in the manner provided in this Constitution’.



• The procedure for appropriation of moneys out of the Consolidated Fund of India for meeting out expenditure of the Government of India is laid down in Articles 112, 113, 114, 115 and 116 of the Constitution.

• Similarly, procedure for appropriation of moneys out of the Consolidated Fund of a State for meeting the expenditure of that State is prescribed in Articles 202, 203, 204, 205 and 206 of the Constitution of India.



• Under Article 112 (1), the President is required to lay before Parliament each year an ‘Annual Financial Statement’ containing the estimated receipts and expenditure of the Government of India for that year.

• Under Article 112 (2) the ‘Annual Financial Statement’ shall show the sums required to meet expenditure described by the Constitution as charged on the Consolidated Fund of India and other expenditure and distinguish expenditure on revenue account from other expenditure.



• Under Article 113(2) so much of the estimates of expenditure, included in the ‘Annual Financial Statement’ to meet expenditure other than charged expenditure shall be submitted in the form of demand for grants to the House of People for approval.

• Under Article 114(1) after the demands for grants have been approved, a bill shall be introduced to provide for appropriation out of the Consolidated Fund of India moneys required to meet the charged expenditure and grants approved in the Demand for Grants.



• Article 114(3) forbids that no money shall be drawn from the Consolidated Fund of India except after appropriations made by law (read with the approval of Parliament) in accordance with the provisions of Article 114.



• From these Constitutional provisions it is clear that the Government can draw money from the Consolidated Fund of India only after appropriations have been approved by Parliament as per procedure prescribed in the Constitution. Drawal of any money out of Consolidated Fund of India without the approval of Parliament is, thus, a violation of the Constitution.



• Parliament needs an assurance or a report that its mandate exercised through the Appropriation Act has been followed and that there has been no infringement of the Parliamentary control over drawals from the Consolidated Fund of India.



• Appropriation Accounts is a mechanism through which appropriations approved by Parliament and expenditure incurred by the Government out of the Consolidated Fund of India is submitted to the Parliament indicating therein any expenditure in excess of appropriation, expenditure on schemes without parliamentary approval, major savings in appropriations indicating unnecessary appropriations submitted to Parliament, etc.



• Where the Comptroller and Auditor General of India maintain the accounts, he is also responsible for preparation and submission of the Appropriation Accounts (as per Section 11 of the CAG’s (DPC) Act, 1971.



• (a) that the moneys shown in the accounts as having been disbursed were legally available for, and applicable to, the service or purpose to which they have been applied or charged;

• (b) that the expenditure conforms to the authority which governs it; and

• (c) that every appropriation has been made in accordance with the provisions made in this behalf under rules framed by competent authority.



• The Finance Accounts which present the general accounts of the Government are intended to supplement the accounts separately presented in the form of Appropriation Accounts for each grant and charged appropriation included in the Appropriation Acts passed by the Legislature.


Form and Content

• The Appropriation Accounts are prepared according to the nomenclature indicated in the Demands for Grants, as approved by legislature, showing the:


Form and Content

• Original Appropriations approved by legislature, supplementary appropriations, surrenders and re-appropriations distinctly;

• Actual expenditure against the sum total of above;

• Excess (+) or saving (-) under each head.


Form and Content

• Since Appropriation Act and Demands for Grants are also prepared according to the constitutional provisions, the Appropriation Accounts have to show separately charged and other expenditure and revenue and capital expenditure.


Form and Content

• The Appropriation Accounts are in three parts:

• Part-I- Summary of Appropriation Accounts and audit certificate of the Comptroller and Auditor General of India;

• Part-II-Detailed Appropriation Accounts;


Form and Content

• Part-III-Appendices, containing two appendices on expenditure met out of Advances from Contingency Fund and Grant-wise details of Estimates and Actuals adjusted in the accounts in Reduction of Expenditure.


Part-I-Summary of Appropriation Accounts

• A summary of Appropriation Accounts showing the total amount of funds (original and supplementary) provided by the Legislature under each voted grant and charged appropriation separately for revenue and capital, actual expenditure incurred against each grant. The summary is followed by the grand total of the amount of Grant/ Appropriation (under Revenue and under Capital) and against Voted Grant and Charged Appropriation.



• The summary is concluded with a reconciliation statement of expenditure indicated in the Appropriation Accounts with the expenditure indicated in the Finance Accounts.



• The summary concludes with the certificate of the Comptroller and Auditor General of India. The format of certificate (as per appropriation Accounts of Government of Jammu and Kashmir for the year 2003-04) is as under:


CAG’s Certificate

• ‘The Appropriation Accounts have been prepared and examined under my direction in accordance with the requirements of the Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act, 1971. On the basis of the information and examination that my officers required and have obtained, I certify that these accounts are correct, subject to the observations in my Report(s) on the Accounts of the Government of Jammu and Kashmir being presented separately for the year ended 31st March 2004’.


Part-II-Detailed Appropriation Accounts

• The Appropriation Accounts are prepared strictly according to the nomenclature used in the Demands for Grants as approved by the Legislature. Grants/appropriations and actual expenditure are included in these Accounts upto sub-head level. The Accounts contain following four columns:


Column 1-• deals with the Original (indicated by letter ‘O’),

Supplementary (letter ‘S’), Demand for Grants as Voted and Charged on the Consolidated Fund. The provision and actual expenditure on Plan and Non-Plan are totaled up under each sub-head and reflected as a single figure. Re-appropriation of funds from one head to another head within Revenue Section or within the Capital Section is indicated by letter ‘R’ or ‘-R’. The ‘O’, ‘S’ and ‘R’ are indicated separately in Column–I.


Coulumn-2

• Coulumn-2-indicates the total grant or appropriation i.e. the sum total of ‘O’, ‘S’ and ‘R’.


Column-3

• Column-3- indicated the actual expenditure incurred during the year as obtained from the annual accounts.


Coulmn-4

• Coulmn-4- indicates the excess expenditure (as compared to total grant or appropriation as (+) and saving as (-) between the figures of column (2) and (3).


Part-II-Detailed Appropriation Accounts

• The re-appropriation orders incorporated in column (1) are to be explained giving reasons. Similarly, reasons for excess and savings in column (4) are to be explained with reference to the total grant.

• The Accounts are prepared separately for Revenue and Capital Sections and exhibit charged appropriations and voted expenditure separately.


Part-III-Appendices

• Appendix-I

• In this appendix, expenditure met out of advances from the Contingency Fund, under each grant, not recouped to the Fund till the close of year is included.


Part-III-Appendices

• Contingency Fund is placed at the disposal of the President/Governor to meet any unforeseen and urgent expenditure. The Fund is recouped from Consolidated Fund, as and when occasion arises. Legislative control over expenditure from the Contingency Fund is exercised appropriation to recoup the fund are presented to legislature. This appendix brings to the notice of Legislature expenditure met out of the Contingency Fund, which has not been recouped during the year and has, thus, escaped the scrutiny of Legislature.


Appendix-II

In this appendix grant-wise details of estimates and actuals in respect of ‘Recoveries Adjusted in the Accounts in Reduction of Expenditure’ are included. Actual recoveries under Revenue and Capital are compared in this statement with the budget estimates to work out the ‘more recoveries’ or ‘less recoveries’.


Responsibility for preparation

• The Appropriation Accounts relating to State Governments are prepared by the respective Accountants General (A&E) except in case of the State Government of Goa and Union Territory Government of Pondicherry.


Check of Accounts

• Checked by ITA section of A&E office;

• Audited by Accountant General (Audit), who also gives clearance for printing of the Accounts.


Time schedule for preparation and submission of Accounts

• (i) Transmission of Appropriation Accounts by the AG (A&E) duly checked by Internal Test Audit to the AG (Audit): 25th July each year

• (ii) Return of Appropriation Accounts duly checked by the AG (Audit) 8th August each year

• (iii) Final submission to headquarters 14th September.


Certificate of the Accountant General (A&E)

• The Accounts of Government of…..for the year……forwarded herewith have been prepared by me in accordance with the requirement of Article 149 of the Constitution of India read with the provisions of CAG’s (DPC) Act, 1971, I have obtained all the information and explanations wherever necessary. Subject to the observations in this compilation, I certify to the best of my knowledge and belief that these accounts are correct statement of the receipt and disbursements of the Government of……………………….for………

•• Accountant General (A&E)


Certificate of the Accountant General (Audit)

• The Appropriation Accounts of…….for the year………..have been examined by me. On the basis of the information and explanations that my officers required and have obtained, and according to the best of my information as a result of test audit of the accounts, I certify, in pursuance of provisions of Article 149 and 151 of the Constitution of India and the CAG’s (DPC) Act, 1971, that these accounts are correct subject to observations in the Report of the Comptroller and Auditor General of India on the Accounts of the Government of………(Civil) for…..

• Accountant General (Audit)


Correction of Errors

• Utmost care to be taken to avoid errors;• Any error noticed in the printed copies should be

neatly corrected in manuscript in the copies sent to the CAG.

• Where the number of errors is large, the errata should be printed after an intimation of the documents having been signed by the CAG is received.

• This will enable the AG (A&E) to incorporate in the errata any errors, which may be pointed out by the CAG.


Correction of Errors

• No correction slip should be issued after the Accounts and Reports have been forwarded to Government.

• If a serious error or misprint comes to notice after the documents have been forwarded to Government, it should be immediately brought to the notice of the CAG. If it is decided to issue a correction, the correction slip will be issued in the name of the AG who is responsible for the preparation of the Accounts, but it should not bear any date. The Accountant General should ensure that any such correction slip issued is pasted in the copies signed by the CAG which are to be laid on the table of the legislature.

• No correction slips can be issued after the documents are laid before the legislature; if any errors are noticed they should be reported to the Comptroller and Auditor General with an explanation for the delay in noticing them.


Confidential Accounts

• Since Appropriation Accounts and Finance Accounts are to be presented to the State Legislature along with the Audit Report, they cannot become ‘Public’ until they have been laid on the table of the House. It is, therefore, necessary to guard against the disclosure to the public and press till their presentation to the Legislature. The Accounts and all correspondence relating to them should therefore be classified as confidential till that time.


General checks

• It is to be ensured that figures of 'Provision/ Expenditure/ Excess/Saving' as given under 'Summary of Appropriation Accounts' tally with those given under individual "Grant/ Appropriation-wise Accounts".

• The classification should follow the budget and no unauthorized head should be opened.

• The amounts surrendered as shown in the "Summarized Appropriation Accounts" should agree with those worked out in the "Detailed Appropriation Accounts".


General checks

• The "Plus/Minus" signs should be carefully checked.

• Month of surrender should invariably be indicated.

• The comments about excess or saving incorporated in relevant grants should not be ambiguous and that the comments should be such as can be understood by a layman.


General checks

• It has to be ensured that variations under "Revenue Expenditure", "Capital Expenditure", "Loans" and "Charged" and "Voted" categories have been separately worked out/commented upon.

• Errors in totaling/spelling mistakes should be avoided.

• In order that the main thrust to focus and highlight major excesses/savings is not diffused, only major savings/excesses should be included as per the guidelines given by the Headquarters Office or by the Public Accounts Committee of the respective State.


General checks• Exhibition of expenditure in Appropriation

Accounts should follow the provisions in the budget. Expenditure to be transferred to other heads as shown below the line in the budget should be carefully noted and timely action taken for such transfer and an intelligent examination of these accounts is to be under-taken to find out whether any mistake has not apparently been made by the Accounts General’s office in carrying out the annual adjustment and/or following the accounting mechanism as stipulated in the budget estimates etc.


General checks

• Re-appropriation orders relating to the previous years after closure of Accounts should not be accepted and acted upon.

• Comments on defective budgeting should be highlighted if the provision is not made under the correct head of Accounts.

• When huge provision of funds are made through re-appropriation it should be examined to see whether they come under ‘New Service’ and, if so, Public Accounts Committed should be briefed and suitable guidelines issued in the matter.


Checks by ITA

• The working sheets received from several sections for preparation of draft Appropriation Accounts in Book/Finance Accounts Section and Journal entries etc., as well as Ledger in Book Section from which the bulk of the statement for Finance Accounts and Appropriation Account are compiled should be checked to inter alia ensure that: -

• no unauthorized heads of accounts have been opened.

• there are no anomalies and obvious mistakes of classification do not exist;


Checks by ITA

• wide variations, if any, between Revised Estimates and Actuals have been properly examined to ensure that no serious misclassifications have occurred;

• per contra adjustments on account of transactions affecting different Accounts Officers or appearing in the books of two different branches or sections of one and the same Accountant General have been correctly carried out in the books of both the branches/sections.


Checks by ITA

• there are no abnormal transactions of receipts/disbursements requiring investigation, rectification or insertion of suitable footnotes.

• Reconciliation of figures between the draft Finance Accounts and the draft Appropriation Accounts should be effected completely for all the heads of accounts.


Role of Public Accounts Committee

• (i) examine report of the Comptroller & Auditor General.

• (ii) ascertain that money granted by Parliament has been spent by the Government with the scope of demand.

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