FINANCIAL MANAGEMENT IN NEERANCHAL PROJECTVIGYAN BHAWAN,DT 11.01.14
Department of Land Resources, MoRD
CONTENTS Introduction Objectives Financing Plan Funding Pattern Component wise cost Break-up IUFR Budget & Fund Flow system Accounting Procedures Audit Internal Control System Books of Accounts & Records Staffing & Capacity Building Implementation of CPSMS
INTRODUCTION
Neeranchal National Watershed project is assisted by World Bank(IDA) and implemented by Department of Land Resources, Ministry of Rural Development, Government of India.
Project Duration -6 years starting from 2014-15.
Expected effective date- June 2014 Project will be implemetned in 8 selected
states i.e, Andhra Pradesh, Odisha, Jharkhand,Chhatisgarh, Madhya Pradesh, Maharastra, Gujrat & Rajasthan.
OBJECTIVES
Strengthen fiscal and financial management at all levels.
Ensure uniformity in accounting across all locations of the Project
To provide timely and reliable financial information to different stake holders.
To ensure the project funds are utilized for the purpose for which it was intended for.
FINANCING PLAN
SOURCE FUND (US$m) FUND(INR cr)
World Bank(IDA) 178.50 (50%) 1071.00
Government of India(DoLR) & State Government
178.50(50%) 1071.00
TOTAL 357.00 2142.00
FUNDING PATTERN
World bank will not provide any advance towards project expenditure.
Eligible Expenditures of project are to be reimbursed on quarterly basis based on the IUFR.
WHAT IS ELIGIBLE EXPENDITURE?
Eligible expenditures are those expenditures for which Government and WB have agreed upon in the legal documents and are mentioned in the Cost table and these are spent as per the Project Implementation Plan(PIP)
COMPONENT WISE COST BREAK-UP
Heads US($)m INR(Cr) % Central Institutional and Capacity Building
11.3 67.80 3.16
National Innovation support 32.0 192.00 8.96
IWMP implementation support in States
301.9 1811.40 84.57
Project Management & Coordination 11.8 70.80 3.31
Total 357.0 2142.00 100
INTERIM UNAUDITED FINANCIAL REPORT(IUFR)
IUFR is a very important financial reporting format in which each state has to report their financial progress.
The report has to be submitted within 30 days of the completion of quarter to DoLR ,Project implementation Unit(PIU).
The IUFR format for states are :
BUDGET & FUND FLOW SYSTEM
Approved % of the total approved work plan(AWP) of the project for any financial year will be budgeted in the budget line of DoLR , MoRD.
Similarly approved % of the total AWP will be budgeted in the state budgets of 8 states as a separate budget line for Neeranchal Project.
The Fund flow pattern of the project will be like:
ACCOUNTING PROCEDURE AT SLNA
The following general principles for accounting will be applicable for all SLNAs:
Cash Basis Double entry Method Accounts may be maintained preferably in Tally. Only Actual expenditure will be reported in IUFR.
No advance will be shown as expenditure
CONTD. Separate Bank accounts are to be opened for
Neeranchal Project at state & district level.(preferably in same bank).
Delegation of Financial Powers and Financial Rules will be as per the SLNA administrative/financial rules.
SLNA,WCDC,(WDT,WC if required) will be treated as different accounting centers and separate accounting records are to be maintained.
CONTD.
All funds released by the state to the district and block level units will be treated as inter unit transfers until expenditures are incurred at these levels.
Interest earned from the project fund will be treated as grant and will be spent for the purpose of Project purposes.
No depreciation on Assets.
AUDIT
External Audit : Annually Auditor Selection: Practicing CA firms
empanelled by C&AG as per the WB procurement procedure.
Audit ToR & Report: As per the ToR & format agreed with the WB.
Audit Report to be submitted by 15th September for each F.Y by SLNA.
INTERNAL AUDIT
Half yearly. Auditor Selection: Practising CA firms
empanelled by C&AG as per the WB procurement procedure.
Audit ToR : As per the ToR agreed with the WB.
Audit Report to be submitted to management & PIU, DoLR.
INTERNAL CONTROL SYSTEM Preparation of BRS on Monthly Basis Preparation of Monthly Receipts & Payments
Statements Submission of Requisition Form for
seeking funds Monthly reconciliation of payments with
expenditures Monthly Review of Financial Progress
against Annual Budget Monthly Analysis of Advances Monthly analysis of Statutory payments Numbering of assets and physical
verification
BOOKS OF ACCOUNTS & RECORDS Cash Book General Ledger Journal Book Cheque Issue Register Fixed Asset Register Audit objections register Advance Register/Ledger Budget Control Register Payment Vouchers(Cash & Bank) Receipt Vouchers(Cash & Bank) Journal Vouchers File opening register Dak (Letters Issue/receipt) Registers
STAFFING & CAPACITY BUILDING
Dedicated FM cell with staff of requisite qualifications and experience will be created at SLNA and WCDC level to strengthen the FM arrangement of on going IWMP.
Adequate hand hold training & capacity building will be imparted to the FM staffs.
IMPLEMENTATION OF CPSMS
CPSMS can be implemented instantly at 8 Neeranchal states as chart of accounts is prepared. Hence registration and expenditure filing is possible in these states for neeranchal transactions
For IWMP states: Only Registration at present.