1. Session - 3 Internal Controls and Registers in Treasury Regional Training Institute, Ranchi Structured Training Courseware on Treasury Inspection

2. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/2 January 2005 Learning Objectives  At the end of the session, the participants will be able to –Define internal controls –List and explain different types of controls, in particular controls relevant to a Treasury –Describe the important registers and records maintained at the Treasury and their nature and purpose

3. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/3 January 2005 Internal Control – Institute of Internal Auditors’ Definition  Process within an organisation designed to provide reasonable assurance regarding achievement of the following primary objectives –Reliability and integrity of information –Compliance with policies, plans, procedures, laws and regulations –Safeguarding of assets –Economical and efficient use of resources –Accomplishment of established objectives and goals for operations or programs

4. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/4 January 2005 Types of Internal Controls  Preventive  Detective  Directive

5. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/5 January 2005 Types of Internal Controls – Another Categorisation  Organisational controls  Rules, Regulations and Policies  Procedures and Instructions  Personnel  Accounting and Budgeting  Monitoring and Reporting

6. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/6 January 2005 Main Internal and External Controls in Treasuries  Participants to suggest examples for each Category –Internal Controls  Organisational Controls  Rules and Regulations  Procedures and Instructions  Personnel  Reporting and Monitoring –External Controls

7. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/7 January 2005 Review of Internal Controls  Adequacy –Appropriately designed to provide reasonable assurance regarding achievement of organisational objectives  Effectiveness –Controls operating as intended

8. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/8 January 2005 Treasury Registers and Records - Categorisation  Cash Book and related Registers  Allotments and LOCs  Cheque-Drawing Officers  Settlement with other Governments  Deposits

9. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/9 January 2005 Treasury Records – Categorisation (Contd.)  AC Bills and Ad-interim payments  Valuables and sensitive payments  Pay and Pension Payments  Miscellaneous

10. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/10 January 2005 Cash Book and Related Registers  Complete account of cash transactions and book transfers –Receipts –Disbursements  Non-banking Treasuries –Immediate entries on authorisation  Banking Treasuries –Entered on the basis of bank’s daily accounts, after reconciliation with

11. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/11 January 2005 Cash Book (Contd.)  Register of Challans Issued  Register of Orders for Payment  Banking Treasuries –Subsidiary Registers  Register of Receipts  Register of Payments –Net Daily Receipt/ Payment posted into Register of Reserve Bank Deposits

12. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/12 January 2005 Cash Book – Control Issues  Erasures / Overwriting forbidden  Accountant –Personal responsibility for cash book –Examines totalling of cash book and carry forward to subsidiary registers/ schedules  Totalling verified by another officer, nominated by TO

13. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/13 January 2005 Other Registers Related to Cash Book  Register of Challans Issued  Register of Orders for Payment  Register of Receipts  Register of Payments  Register of Reserve Bank Deposits –Posted from Bank’s Daily Scrolls –Verified with Bank Passbook on daily basis  Register of Adjustments by Transfer –For items posted by TO through book transfer

14. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/14 January 2005 Register of Allotment Orders  DDO-wise allotment order file –Allotment from Original Grants –Allotment from Supplementary Grants –Re-appropriation Orders  Critical to preventing excess drawal of funds by DDOs

15. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/15 January 2005 Register of Letters of Credit  Counterpart of Allotment Register for Cheque-Drawing Officers –For preventing excess drawals –Introducing greater financial control and discipline  Introduced in Bihar in 1983 for DDOs with cheque drawing powers

16. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/16 January 2005 Register of LOC (Contd.)  Three Form Register –Form I  Allotments received from HOD –Form II  LOCs issued to Sub-treasury –Form III  Progressive expenditure against allotment –For Banking Treasury / Sub-Treasury  Withdrawal against LOC watched by Bank

17. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/17 January 2005 Register of Consolidated Receipts- cum-Schedules for Forest Cash Remittances  Remittances by Forest Officers in the Register –Also used for Consolidated Receipts sent to DFOs  Register of Forest Cheques Paid –For recording funds supplied to Forest Disbursing Officers

18. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/18 January 2005 Registers for Inter-Government Settlements  Register of Adjustments between Central and State Government –For transactions under “Adjusting Account between Central and State Government  Register of Adjustments with other State Transactions –For transactions under “Inter-State Settlement Suspense Account”  Separate Registers for Transactions with Railways, P&T and Defence

19. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/19 January 2005 Deposits  Revenue Deposits  Civil Court Deposits  Criminal Court Deposits  Personal Deposit Accounts / Personal Ledger Accounts –Under Consolidated Fund / Under Public Account –Special Permission of Government & AG –Should not be misused for transfer of money from Consolidated Fund to prevent lapse of funds

20. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/20 January 2005 Deposit Registers  Register of Deposit Receipts –Every item of receipt entered in this register –Daily Total carried to Cash Book  Register of Repayment of Deposits –Repayment of deposit recorded here, as also against original entry in Receipt Register –Daily Total carried to Cash Book –Verification of identity, before repayment

21. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/21 January 2005 Register of Personal Deposits  Banking Accounts at Treasury –Government Officials –Autonomous /Quasi-Government Bodies  Sanction of Govt. and AG’s Concurrence  To be closed on 31 st March, and balances transferred by –Debit to Expenditure Head –Except for Accounts of Non-Governmental Bodies

22. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/22 January 2005 Maintenance of PDA Register  Separate Ledger Page for each Account –Daily Totals from each account  Carried to Register of Personal Deposits –Daily Total carried to Cash Book  Account of Cash orders issued on Sub- treasuries maintained like a PDA –Personal Ledger for each Treasury –Payments at sub-treasury posted in PLA as repayment of deposits

23. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/23 January 2005 Registers of Civil and Criminal Court Deposits  Receipts and Repayments based upon orders of Competent authority  Details for each individual deposit to be recorded in the Deposit Registers

24. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/24 January 2005 Register of Deposit of Local Funds  Administrator-wise Deposit Register –Separate Column for each fund  Accounts of Local Funds (including Municipal Funds) to be kept distinct from Personal Deposit Accounts

25. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/25 January 2005 Plus-Minus Memoranda for Deposit Accounts  At the end of each month, plus-minus memoranda for –Revenue, Civil and Criminal Court Deposits –Each Personal Deposit Account  To be rendered to AG, along with monthly accounts

26. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/26 January 2005 AC Bill Register  Register of Abstract Contingent Bills maintained to –Prevent drawal of future AC bills, without settlement of earlier bills –Ensure submission of Detailed Contingent Bills within 2 months, and in any case, before the year-end

27. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/27 January 2005 Register of Ad-interim Payments  Separate register of ad-interim payments for bills presented and encashed at the Treasury  To be verified once a week by the Collector

28. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/28 January 2005 Register of Valuables  Receipt and return of chests, packets etc. –Received for safe custody from other Departments  Contents to be verified annually by the Department and the TO –Certificate of verification on the register

29. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/29 January 2005 Stamp Registers  Stamp Register for keeping account of receipts, issues, and balance of stamps  Sale Register, with names of Stamp Vendor  Register for receipt and disposal of unused/ damaged stamps  Monthly check of stamp balances at Sub- Treasuries by TO

30. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/30 January 2005 Other Registers of Sensitive Items  Register of Cheque Books  Register of Issue of Book of Drawals –Bill Transit Register, used by DDO for sending bills to Treasury  Register of Padlocks and Keys

31. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/31 January 2005 Gazetted Salary Register and Guard Files  Pay slips of gazetted officers entered in Salary Register –To prevent overpayment  Separate Guard Files for –Payslips issued by AG –LPCs of Gazetted Officers  To be cancelled, when they are transferred

32. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/32 January 2005 Register of Pension Payment Orders (PPOs)  Maintenance of PPOs –Guard Files for PPOs in loose sheets –In proper manner for book-form PPOs  PPO with full details to be entered in PPO Register

33. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/33 January 2005 PPOs - Control issues  Details of pension payment to be entered in Disburser Portion of PPOs  Proper identification of pensioner at the time of payment –Pensioners not drawing pension for 6 months

34. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/34 January 2005 PPOs – Control Issues (Contd.)  Closing of cases for dead pensioners –Return PPO to AG  Correct classification of pension payment –Up to Sub-Head Level

35. RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 3/35 January 2005 Miscellaneous Registers  Guard File of Specimen Signatures of DDOs –To be used for verification of signatures of DDOs on Bills  Register of Misclassification by the Bank  Token Register  Register of Treasury Voucher Slips  Register of Zamindari Compensation Bonds