UPJN Accounting Manual

UTTAR PRADESH JAL NIGAM
Accounting Manual
(Including Stores Procedures)
April 2010
A.F. Ferguson & Co.

New Delhi
Uttar Pradesh Jal Nigam Accounting Manual
Table of Contents
Chapters
Section / Section / Subject Page No.

Subject
Code
Preface to Accounting Manual 9 – 12
1.00 Section: Chart of Accounts 13 – 28
1.01 An Overview of Chart of Accounts and Related Aspects 15
1.02 Codification Structure for Chart of Accounts 16
1.03 Codification Structure for Subsidiary Ledger Accounts 19
1.04 Codification Structure for Works Projects 21
1.05 Codification Structure for Functional Budget 25
1.06 Codification Structure for Profit/ Cost Centres 26
1.07 Codification Structure for Analysis Parameters 27
1.08 Codification Structure for Locations/ Offices 28
2.00 Section: Stores 29 – 59
2.01 Receipt of Purchased Materials 32
2.02 Supplier‟s Bill Passing 36
2.03 Transfer of Materials – Intra-unit 40
2.04 Transfer of Materials – Inter-unit 43
2.05 Consumption of Materials 47
2.06 Sale of Materials / Scrap Materials 51
2.07 Physical Verification of Materials 54
2.08 Inventory Management 57
3.00 Section: Works Expenditure 60 – 73
3.01 Works expenditure incurred through engaging the contractors 63
3.02 Transfer and Closure of Projects 66
3.03 Maintenance of existing projects 70
4.00 Section: Loan, Deposits, Grant and Investment 74 – 93
4.01 Loans taken for UPJN 77
4.02 Loans and advances given by UPJN 80
4.03 Loans received by UPJN for works purpose on behalf of local 83
bodies, others, etc.
4.04 Deposit (Grants) from Government for works purpose 87
4.05 Deposit from local bodies / others for works purpose 89
4.06 Investments 91
5.00 Section: Fixed Assets 94 – 122
5.01 Acquisition / Self constructed / Development of Fixed Assets / 100
Intangible Assets / Project Asset
5.02 Revaluation of Fixed Assets / Intangible Assets 105
5.03 Inter-unit transfer of Fixed Assets and Project Asset 107
5.04 Transfer of Project Asset between Works Project / Recovery of 110
Project Asset as Fixed Assets
5.05 Fixed Assets and Project Asset issued to contractors – lent and 113
returned
5.06 Depreciation on Fixed Assets / Amortisation on Intangible Assets 115
5.07 Sale of Fixed Assets and Project Asset 117
5.08 Physical Verification of Fixed Assets and Project Asset 120
6.00 Section: Revenue and Collection 123 – 133
6.01 Centage on Works Projects 125
6.02 Survey, Investigation and Project Preparation Fees 128
6.03 Sale of tender forms 131
6.04 Revenue Adjustments 132
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Section / Section / Subject Page No.

Subject
Code
7.00 Section: Revenue Expenses 134 – 146
7.01 Accounting for Revenue Expenses 136
7.02 Expenses incurred by one Unit on behalf of other Unit 143
7.03 Provision for doubtful debts and writing off bad debts 145
8.00 Section: Personnel 147 – 180
8.01 Salaries 148
8.02 General Provident Fund (GPF) Transactions 153
8.03 Group Insurance Scheme (GIS) Transactions 157
8.04 Employee Loans and Advances 161
8.05 Reimbursement of Expenses to Employees 165
8.06 Full and Final Settlement 167
8.07 Permanent/ Temporary Imprest 170
8.08 Accounting on Transfer of Employees 174
8.09 Recoveries/ Reimbursement - Staff on Deputation 177
8.10 Allocation of Personal Expenses to Works/ Fixed Assets 180
9.00 Section: Cash and Bank 181 – 211
9.01 Fund Remittance – HO to Units 183
9.02 Fund Remittance – Units to HO 186
9.03 Transactions through Personal Ledger Account 188
9.04 Transactions through Bank 190
9.05 Transactions in Cash 201
9.06 Physical Verification of Cash 204
9.07 Bank Reconciliation Statement 208
9.08 Deposit of Statutory Dues 210
10.00 Section: Inter Unit Transactions (IUTs) 212 – 222
10.01 Raising Advice of Transfer - Debit/ Credit (ATD/ ATC) 214
10.02 Accepting Advice of Transfer - Debit/ Credit (ATD/ ATC) 218
10.03 Reconciliation of Inter Unit Transaction (IUT) accounts 221
11.00 Section: Preparation of Accounts 223 – 245
11.01 Maintenance of Books of account and Documents Control 224
11.02 Preparation of Monthly Accounts and consolidation thereof 226
11.03 Preparation of Final Accounts and consolidation thereof 233
11.04 Merger and Demerger of Accounting Unit 238
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Appendices
Format Format Name Page No.

Reference No.
Appendix I: Chart of Accounts 245 – 282
Appendix IIA: Books of Account 283 – 299
BA/01 Journal Voucher 284
BA/02 Bank Payment Voucher 285
BA/03 Bank Receipt Voucher 286
BA/04 Cash Payment Voucher 287
BA/05 Cash Receipt Voucher 288
BA/06 Contra Voucher 289
BA/07 Journal Book 290
BA/08 Bank Book 291
BA/09 Cash Book 292
BA/10 General Ledger 293
BA/11 Subsidiary Ledger 294
BA/12 Analyses Level – I / Analyses Level – II / Function Level – I / 295
Function Level – II / Profit/Cost Centre Level – I / Profit/Cost
Centre Level – II
BA/13 Trial Balance (General Ledger) 296
BA/14 Trial Balance (Subsidiary Ledger) 297
BA/15 Trial Balance (Group Head) 298
BA/16 Trial Balance (Schedule) 299
Appendix IIB: Subsidiary Records/ Register 300 – 338
Section 2.00: Stores
MT/R01 Stores Entry Register 302
MT/R02 Daily Transaction Register 303
MT/R03 Stores Ledger 304
MT/R04 Supplier Bill Register 305
Section 3.00: Works Expenditure
WE/R01 Contractor Bill Register 306
WE/R02 Works Register 307
WE/R03 Works Register Summary 308
WE/R04 Demand and Collection Register 309
Section 4.00: Loan, Deposit, Grant and Investment
LD/R01 Loan Register (for loans taken by UPJN for its purpose) 310
LD/R02 Loan Disbursed Register 311
LD/R03 Loan Register (for Loan received from Government, etc. on 312
behalf of local body, others, etc. for execution of Works project on
its behalf)
LD/R04 Deposits (Grant) Register 314
LD/R05 Deposits Register 315
LD/R06 Investment Register 316
Section 5.00: Fixed Assets
FA/R01 Fixed Assets Register / Intangible Assets Register 318
FA/R02 Project Asset Register 319
FA/R03 Junior Engineer Asset Register 320
Section 7.00: Revenue Expenses
RE/R01 Prepaid Expense Register 321
Section 8.00: Personnel
PA/R01 Unpaid Salary Register 322
PA/R02 Unpaid Bonus/ Ex-Gratia Register 323
PA/R03 General Provident Fund Register 324
PA/R04 General Provident Fund Broad Sheet 325
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Reference No.
PA/R05 Group Insurance Scheme Register 326
PA/R06 Group Insurance Scheme (Summary) Register 327
PA/R07 Group Insurance Scheme Claim Register 328
PA/R08 Employee Advance/ Loan Register 329
PA/R09 Reimbursement Register 330
PA/R10 Permanent/ Temporary Imprest Register 331
PA/R11 Demand Register (Staff Deputed Outside UPJN) 332
PA/R12 Demand Register (Staff Deputed At UPJN) 333
Section 9.00: Cash and Bank
CB/R01 Cheque Dishonour Register 334
CB/R02 Stale Cheque Register 335
CB/R03 Physical Cash Verification Register 336
CB/R04 Statutory Dues Register 337
Section 10.00: Inter Unit Transactions
IUT/R01 Advice of Transfer Debit/ Credit (ATD/ATC)/ Acceptance Register 338
(ATDCAR)
Appendix IIC: Forms 339 – 373
Section 2.00: Stores
MT/F01 Goods Receipt Note 340
MT/F02 Materials Transfer Note 341
MT/F03 Self Consumption Note 342
MT/F04 Materials Consumption Note 343
MT/F05 Materials Sale Note 344
MT/F06 Materials Adjustment Note 345
MT/F07 Physical Verification Report – Materials 346
Section 3.00: Works Expenditure
WE/F01 Receipt Challan 347
Section 5.00: Fixed Assets
FA/F01 Asset Receipt Note 348
FA/F02 Asset Transfer Note 349
FA/F03 Indent 350
Section 8.00: Personnel
PA/F01 Expenses Statement 351
PA/F02 Permanent/ Temporary Imprest Application 353
Section 9.00: Cash and Bank
CB/F01 Money Receipt 355
CB/F02 Cash Certificate 356
CB/F03 Bank Reconciliation Statement 357
Section 10.00: Inter Unit Transactions
IUT/F01 Advice of Transfer - Debit/ Credit (ATD/ ATC) 358
IUT/F02 Inter Unit Transaction Balance Confirmation Certificate (IUTBCC) 360
IUT/F03 Schedule of Inter Unit Transactions (IUTs) 361
IUT/F04 Inter Unit Reconciliation Statement 362
IUT/F05 Joint Inter Unit Reconciliation Statement 364
IUT/F06 List of Transactions for Which ATDs/ ATCs not Raised 365
IUT/F07 List of ATDs/ ATCs Raised for which 'Acceptance' not Received 366
from the Responding Unit(s)
IUT/F08 List of ATDs/ ATCs for which 'Acceptance' not Sent to the 367
Originating Unit(s)
IUT/F09 Units with which IUT Accounts not Reconciled 368
IUT/F10 List of Disputed IUTs 369
Section 11.00: Preparation of Accounts
POA/F01 Check-List for Preparation of Monthly / Final Accounts 370
POA/F02 Balance Confirmation 373
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Reference No.
Appendix III: Monthly / Final Accounts 374 – 399
POA/01 Balance Sheet 375
POA/02 Income and Expenditure Account 376
POA/03 Schedules to Balance Sheet and Income and Expenditure 377
Account
POA/04 Cash Flow Statement 398
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Abbreviations
Acronym Full Form
AE Assistant Engineer
ARN Asset Receipt Note
ATC Advice of Transfer Credit
ATD Advice of Transfer Debit
ATN Asset Transfer Note
BPV Bank Payment Voucher
BRS Bank Reconciliation Statement
BRV Bank Receipt Voucher
CB Contract Bond
CO Circle Office
COA Chart of Accounts
CPV Cash Payment Voucher
CRV Cash Receipt Voucher
CV Contra Voucher
DCR Demand and Collection Register
DO Division Office
DTR Daily Transaction Register
EE Executive Engineer
GO Government Order
GRN Goods Receipt Note
HO Head Office
I/O Input / Output
IA Intangible Assets
IUT Inter Unit Transaction
JE Junior Engineer
JE (T) Junior Engineer (Technical)
JV Journal Voucher
MAN Materials Adjustment Note
MB Measurement Book
MCN Materials Consumption Note
MR Money Receipt
MSN Materials Sale Note
MTN Materials Transfer Note
NRV Net Realisable Value
O&M Operation and Maintenance
PLA Personal Ledger Account
PI Permanent Imprest
PV Physical Verification
PVR Physical Verification Report
SCN Self Consumption Note
SWM Solid Waste Management
TDS Tax Deducted at Source
TI Temporary Imprest
ULB Urban Local Body
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Acronym Full Form

UPJN Uttar Pradesh Jal Nigam
WIP Works in Progress
ZO Zonal Office
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PREFACE TO ACCOUNTING MANUAL

Background
1. A. F. Ferguson & Co. (AFF) has been retained by Uttar Pradesh Jal Nigam (UPJN) for
revision of Accounting Manual including Stores Procedures, development of computerised application
for Accounting and Store Functions and providing Implementation Support to UPJN with respect to
revised accounting manual and computerised systems.
2. As part of this assignment, AFF is required to revise the Accounting Manual (including Stores
Procedures) for UPJN.
3. This document contains the Revised Accounting Manual (including Stores Procedures) for
UPJN.
Key objectives of the revisions in Accounting Manual
4. The Accounting Manual for UPJN is intended to:

 Comply with the Generally Accepted Accounting Principles
 Strengthen the internal controls
 Eliminate the redundant and duplicate activities
 Strengthen the financial reporting
 Provide standardised procedures, formats and registers relating to accounting and stores
systems
 Facilitate computerisation of accounting and stores systems
 Facilitate capacity building of the finance and accounts staff. to make them familiar with
the accounting and stores procedures of UPJN
Coverage of the Accounting Manual
5. The Accounting Manual covers the accounting and stores procedures. The coverage of
Accounting Manual has been provided in the table below:
Section Code Section Name

1.00 Chart of Accounts
2.00 Stores
3.00 Works Expenditure
4.00 Loan, Deposit, Grant and Investment
5.00 Fixed Assets
6.00 Revenue and Collection
7.00 Revenue Expenses
8.00 Personnel
9.00 Cash and Bank
10.00 Inter Unit Transactions
11.00 Preparation of Accounts
Appendix Ref. No. Appendix Name
Appendix I Chart of Accounts
Appendix IIA Books of Account
Appendix IIB Subsidiary Records / Register
Appendix IIC Forms
Appendix III Monthly / Final Accounts
6. The above Sections have been further divided into Subjects.
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AFF’s Approach to the Accounting Manual
7. AFF commenced the study of existing system on October 6, 2009. For this purpose, the
consultants visited various sections/ departments of Head Office and the select unique field offices/
units of UPJN.
8. After completion of the field visits, AFF‟s key observations, implications and brief
recommendations in the areas of Accounting and Store systems were documented and discussed
with the key concerned officials of UPJN.
9. The existing Accounting Manual and above field visits, meetings/ discussions formed the
basis for development of this Accounting manual.
10. To prepare the revised Accounting Manual, AFF undertook the following activities:
 Need gap analysis to identify the area of improvements in the accounting procedures
 Identified non-compliances with the Generally Accepted Accounting Principles
 Regrouping of the accounting procedures required in the existing manual to make it more
user friendly
 Prepared simplified formats
 Define accounting policies with respect to accounting of various nature of transactions
being undertaken by UPJN
 Defined frequency / timing for every activity / action to be undertaken in a process
 Provided at the end of each subject, formats to be used including details like document
type, title, frequency, responsibility of preparation, distribution to concerned person /
section.
 Internal controls embedded in the process
 Step by step detailed Accounting Entries to be passed at various stages of transactions
 Comprehensive Chart of Accounts
 Brief background about the subject provided in every Section wherever required to
understand the procedure in the right context
 Practicality of implementation of accounting manual in computerised scenario
 Improved grouping of various subjects e.g. separate chapter on IUT transactions.
 Cross-linking and cross-referencing of various section and subjects to make it more
understanding
Structure of the Accounting Manual
11. Accounting Manual for UPJN has been divided into various Sections. Each Section of the
Accounting Manual has been structured as under:
 Section Background
 Accounting Policies
 Coverage of Section
 Subject
12. Each Section has been further divided into subjects. Each Subject of the Accounting Manual
has been Structured as under:
 Subject Background
 Step by step procedure covering:
 Activities / Action
 Person / Section responsible for the activity
 Frequency / Timing of the activity
 Documents / Records covering:
 Format reference
 Document title
 Document type
 Frequency
 Person responsible
 Distribution to Office / Section
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 Accounting entries
 Additional internal controls / checks, if any
Users of the Accounting Manual
13. The users of this Accounting Manual shall be the Finance and Accounts Department and
various Sections at Head Office, Zonal Office, Circle Office, Division Office, GM Unit and other field
offices (hereinafter referred to as Unit or Units unless otherwise specifically referred to). Also, this
Accounting Manual shall be referred by concerned Engineers and other Authorities at various stages.
The overall users of the Accounting Manual has been provided below:
14. The above structure gives an overview of the accounting set up – in terms of accounting units
at Head Office, Zonal Office, Circle Office, Divisional Office, GM Unit Office, etc. The Cash Cell,
Banking Section, Loan Section, HRD Unit, Purchase unit, Community Participation Unit, Employee
LIC Group Insurance Unit are the accounting units at Head Office where as the Balance Sheet Unit
and Compilation Unit are the support functions at HO.
15. Divisions / Unit / Sub-divisions are all accounting units. Zonal Offices act as accounting as
well as compilation unit. The ZO consolidates the trial balance of Division / Unit / sub-division under it.
ZOs submit their trial balance to the Compilation unit at HO for consolidation of accounts for UPJN as
a whole. The Circle offices are non-accounting units and are attached to one of the zone/ division for
their salary and administrative expenses
Administration of the Accounting Manual
16. This Accounting Manual shall be maintained by all the concerned sections/ departments of
the Divisions/ Units for a ready reference purpose.
17. Any amendment to this Accounting Manual shall be effective only after it has been authorised
by the Designated Committee/ Authority as constituted f by UPJN for this purpose at HO level.
18. Amendments to the Accounting Manual shall be based either on a specific request from any
Unit or periodic reviews undertaken by the Designated Committee/ Authority. A request for change in
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this Accounting Manual shall be forwarded to the Chief Account Officer at HO level, who shall present
it to the Designated Committee/ Authority for discussion and consideration for amendment.
19. Based on the order passed by the Designated Committee/ Authority (as constituted by UPJN
for this purpose at HO level), changes shall be incorporated in this Accounting Manual. The
proceedings/ discussions relating for any decision (whether to amend this Accounting Manual or not)
shall be recorded as minutes of the meetings and all the relevant documents shall be filed in a
separate file.
20. All the Units shall be intimated about the amendments in this Accounting Manual through a
circular stating the paragraph(s) and line(s) to be replaced and date from which the change would be
effective. Every circular stating any amendment in this Accounting Manual shall be attached with this
Accounting Manual. After making amendment in the Accounting Manual every amendment would be
incorporated with a footnote stating the effective date of amendment.
Circulars/ notification issued by UPJN
21. This Accounting Manual shall have the overriding effect on all the earlier circulars/
notifications/ office orders/ memorandum/ rules and regulations/ guidelines relating to accounting
procedures as prescribed by UPJN from time to time.
22. However Circulars/ notifications/ office orders/ memorandum/ rules and regulations/
guidelines (hereinafter referred collectively / individually as “Policies”) relating to accounting policies
as prescribed by UPJN from time to time shall be referred (to the extent of policies aspects) to carry
out the accounting.
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1.00 Section: Chart of Accounts

Section Background:
1.01 This Section provides the structuring and codification of COA and related parameters which
shall be used in recording and analysing the accounting data by UPJN.
1.02 The proposed codification structure discussed in this Section has been developed taking into
consideration the long-term needs of the organisation and the requirement of the Information
Technology (IT) enabled environment. Further the codification structure has been designed in a
manner that flexibility can be maintained in terms of including new heads within the given structure as
and when needed.
Creation/ Deletion of codes
1.03 Based on the order passed by the Designated Committee / Authority, the codes shall be
created by the respective users/ section/ department of UPJN. The proposed guidelines in respect of
creation/ deletion of code (based on the codification structure as provided in this Section of the
Accounting Manual) has been provided in a table below:
Particulars Codes to be created/ deleted by

Chart of Accounts
 Schedule Balance Sheet Section at Head Office
 Accounts Category Head Balance Sheet Section at Head Office
 Accounts Group Head Balance Sheet Section at Head Office
 General Ledger Compilation Section/ Accounts Section at Head Office
 Subsidiary Ledger Compilation Section/ Accounts Section at Head Office
However Subsidiary Ledger Accounts relating to following can be

created by Unit which is required to pass the accounting
transactions:
 Party Name
 Employees name
Analysis & Reporting
Parameters
Works Projects MIS/ Project Monitoring Section at Head Office
 Works Group
 Works Class
 Works Type
 Scheme
 Project
 Project Components
Funding Agency
Funding Components
Project Cost Components
Functional Budget Budget Section at Head Office
Analyses Parameters MIS Section, Monitoring Section, Accounts Section, Balance Sheet
Section, as the case may be, at Head Office
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Coverage of this Section
1.04 This Section covers the following Subjects:
Sl. Subject Subject code

No.
1. An Overview of Chart of Accounts and Related Aspects 1.01
2. Codification Structure for Chart of Accounts 1.02
3. Codification Structure for Subsidiary Ledger Accounts 1.03
4. Codification Structure for Works Projects 1.04
5. Codification Structure for Functional Budget 1.05
6. Codification Structure for Profit/ Cost Centres 1.06
7. Codification Structure for Analysis Parameters 1.07
8. Codification Structure for Locations/ Offices 1.08
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Section: Chart of Accounts Section Code: 1.00

Subject: An Overview of Chart of Accounts Subject Code: 1.01
and Related Aspects
This subject provides an overview of COA and related aspects discussed in this Section.
1. The proposed COA and related aspects discussed in this Section are as under:
 Chart of Accounts
 Subsidiary Ledger Account
 Works Project
 Functional Budget
 Profit/ Cost Centre
 Analysis Parameters
 Locations/ Offices
2. An overall structure of the COA and its linkage with above related aspects has been
presented below:
3. A detailed note on designing of the COA, related parameters and their codification structure
has been provided in the subsequent Subjects of this Section. The detailed COA has been provided as
Appendix I of this Accounting Manual.
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Subject: Codification Structure for Chart of Subject Code: 1.02
Accounts
This Subject provides the codification structure of the COA.
1. The COA has been structured in such a manner that it shall have in-built linking with grouping
of accounts and schedule of the Balance Sheet and Income and Expenditure Account.
2. The proposed structuring of COA is provided in a table below:
Components of COA Intended Use

Schedules Schedules and sub-schedules shall be in line with the proposed format of
Balance Sheet and Income and Expenditure Account of UPJN
Accounts Category Accounts Identification Heads shall be “Liability”, “Asset”, “Income” and
Head “Expenditure” which would facilitate categorisation of detailed General
Ledger Accounts included under each of these Account Group Heads
Accounts Group Head Accounts Group Heads shall represent the broad Group of Accounts under
the above Accounts Category Heads
General Ledger This shall be the Accounts Head which would be used for passing the
Account accounting entries (i.e. natural head of accounts)
3. Proposed codification structure of COA has been discussed under the subsequent
paragraphs.
Schedule Code
4. The codes for Schedules of the Balance Sheet and Income and Expenditure Account shall be
allotted with a running serial number starting from 01. These schedule codes shall be reflected as the
first two digits in the codification structure of the Accounts Category Head Code, Accounts Group
Head Code and the General Ledger Account Code.
5. In line with the above, codes for the schedules shall be allotted as illustrated below:
Schedule Name Schedule Code

Capital Grant, Subsidy, Contribution 01
Secured Loans 04
Unsecured Loans 05
Current Assets, Loans and Advances 09
Current Liabilities and Provisions 10
Centage Income 12
Personnel Expenses 18
Accounts Category Head Code
6. For Accounts Category Head code, a single digit numeric code shall be used. The Accounts
Category Heads shall be “Liability”, “Asset”, “Income” and “Expenditure” which would facilitate
categorisation of detailed General Ledger Accounts included under each of these Accounts Category
Heads.
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7. Codes for the Accounts Category Head shall be allotted as illustrated below:
Accounts Category Head Name Accounts Category Head Code

Liability 01
Asset 02
Income 03
Expenditure 04
Accounts Group Head Code
8. A 2 digits numeric code shall be suffixed to the Schedule Code and the Accounts Category
Head for identifying Accounts Group Heads. This will ensure that flexibility is maintained in terms of
including new account group heads as and when needed. These 2 digits code along with the
Schedule Code and the Accounts Category Head code shall give the 6 digits “Accounts Group Head
Code” as illustrated below:
Schedule Name Schedule Accounts Accounts Accounts Two Accounts

Code Category Category Group Head Digit Group Head
Head Head Code Code
Code
Capital Grant, 01 Liability 1 Capital Grant 01 01.101
Subsidy, from GoI
Contribution Capital Subsidy 10 01.110
from GoI
Current Assets, 09 Asset 2 Cash Balance 30 09.230
Loans and in Hand
Advances Imprest with 50 09.250
Employees
Current Liabilities 10 Liability 1 Creditors 05 10.105
and Provisions Staff related 09 10.109
liabilities
Centage Income 12 Income 3 Centage 01 12.301
Income -
Construction
Works Project
Centage 02 12.302
Income -
Maintenance
Works Project
Personnel 18 Expenditure 4 Salaries, 01 18.401
Expenses Allowances and
Bonus
Pension 04 18.404
General Ledger Account Code
9. General Ledger Account code shall be a combination of the Accounts Group Head code and
a further 4 digits code for identifying General Ledger Accounts.
10. A 4 digits code shall be suffixed to the “Accounts Group Head code” and the combination of
the Accounts Group Head code and these 4 digits shall constitute the 10 digits “General Ledger
Account Code” as illustrated below:
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Accounts Group Accounts General Ledger Account Four digits General Ledger
Head Group Head code Account code
Code
Capital Grant 01.101 Capital Grant from GoI 0010 01.1010010
from GoI
Cash Balance in 09.230 Cash 0010 09.2300010
Hand
Imprest with 09.250 Permanent Imprest 0010 09.2500010
Employees Temporary Imprest 0020 09.2500020
Creditors 10.105 Account Payable – 0010 10.1050010
Contractor
Account Payable – Supplier 0020 10.1050020
Staff related 10.109 Salary Payable 0010 10.1090010
liabilities Pension Payable 0130 10.1090130
Centage Income - 12.301 Centage Income - 0010 12.3010010
Construction Construction Works Project
Works Project
Centage Income - 12.302 Centage Income - 0010 12.3020010
Maintenance Maintenance Works Project
Works Project
Fines and 16.301 Fines & Penalties Levied – 0010 16.3010010
Penalties Levied Contractors
Fines and Penalties Levied 0020 16.3010020
– Suppliers
Salaries, 18.401 Basic Pay 0010 18.4010010
Allowances and Dearness Allowance 0020 18.4010020
Bonus
Pension 18.404 Pension Expense 0010 18.4040010
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Subject: Codification Structure for Subsidiary Subject Code: 1.03
Ledger Accounts
This Subject provides the codification structure of the Subsidiary Ledger Accounts.
1. In case where any General Ledger Accounts would be operated as a 'Control Accounts',
Subsidiary Ledger Accounts shall be used to facilitate further analyse separate accounts under these
Control Accounts.
2. All those General Ledger Accounts which shall be operated as Control Accounts shall be
grouped for the purpose of identifying the „Types of Subsidiary Ledger Accounts‟ as illustrated below:
General Ledger Accounts (Control Accounts) Type of Subsidiary Ledger

Accounts
Accounts Payable – Suppliers Party Name
Accounts Payable – Contractors
Advance to Suppliers
Advance to Contractors
Deposit from Suppliers
Deposit from Contractors
Temporary Imprest with Employees Employee Name
Permanent Imprest with Employees
House Building Advances
WIP Materials Name of Works Projects
WIP Cost
Centage Income – Construction Works Project
Centage Income – Maintenance Works Project
Capital Grant from GoI Scheme Name
Capital Grant from GoUP
Inter Unit Transaction – Funds Transfer Unit Name
3. The above linkage would facilitate use of a Type of Subsidiary Ledger Accounts with multiple
General Ledger Accounts (Control Accounts).
4. Subsidiary Ledger Accounts shall be created as per the above Types of Subsidiary Ledger
Accounts. These independent Subsidiary Ledger Accounts shall be linked with the respective General
Ledger Accounts (Control Accounts) to be operated as General Ledger specific Subsidiary Ledger
Accounts.
5. After identifying the type of Subsidiary Ledger Accounts, codification for Subsidiary Ledger
Accounts shall be independent of codification of General Ledger Accounts (Control Accounts).
6. The codification structure for Subsidiary Ledger Accounts has been discussed under the
following heads:
 Codification for Type of Subsidiary Ledger Accounts
 Codification for Subsidiary Ledger Accounts
Codification for Type of Subsidiary Ledger Accounts
7. A 3 digits alpha code shall be used for each Type of Subsidiary Ledger Accounts as
illustrated below:
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Type of Subsidiary Ledger Accounts Code for Type of Subsidiary Ledger

Accounts
Party Name PTY
Employee Name EMP
Name of Works Projects WRP
Scheme Name SCH
Unit Name UNT
Codification for Subsidiary Ledger Accounts
8. Subsidiary Ledger Accounts shall be defined under each of the above types of Subsidiary
Ledger Accounts.
9. A 3 digits alphabetic numeric code for type of Subsidiary Ledger Accounts shall be suffixed
with 7 digits code for that particular Subsidiary Ledger Account which shall constitute a 10 digits alpha-
numeric code to be used for defining the General Specific Subsidiary Ledger Account code as
illustrated below:
General Ledger Account Type of Subsidiary Subsidiary Ledger Account

(Control Accounts) Ledger Accounts
Accounts Payable – Suppliers PTY PTY0000001
PTY0000002
PTY0000003
Advance to Suppliers PTY PTY0000001
PTY0000002
PTY0000003
Deposit from Suppliers PTY PTY0000001
PTY0000002
PTY0000003
Temporary Imprest with EMP EMP0000001/ Employees Code
Employees EMP0000002/ Employees Code
EMP0000003/ Employees Code
Permanent Imprest with EMP EMP0000003/ Employees Code
Employees EMP0000006/ Employees Code
House Building Advance EMP0000003/ Employees Code
WIP Cost Materials WRP RNW0010101
RNW0010102
UOW0010101
Inter Unit Transaction – Funds UNT 10 Digit Unit Code
Transfer
Page | 20
Section: Chart Of Accounts Section Code: 1.00

Subject: Codification Structure for Works Subject Code: 1.04
Projects
This Subject provides the Codification Structure for Works Projects
The combination of Works Project and General Ledger Account would be used for recording and
monitoring the Works project expenditure.
Works Projects
1. Works Project code shall be a 10 digit alpha-numeric code as illustrative below:

 1 alpha digit for Works Group Code
 1 alpha digit for Works Class Code
 1 alpha digit for Works Type Code
 Numeric digits for Scheme Code
 Numeric digits for Project Code
 Numeric digits for Project Component Code
2. The proposed structuring of Works Project is provided in a table below:
Levels of Works Projects Categories

Works Group  Rural Development Department
 Urban Development Department
 Public Works Department
 Others
Works Class  Construction
 Operation & Maintenance (O & M)
 Project and Consultancy
 Others
Works Type  Water Supply
 Sewerage
 Drainage
 Solid Waste Management (SWM)
 Sustainability
 Others
Scheme  Scheme (as sanctioned by Government)
Project  Projects (as sanctioned under the above schemes)
Project Component  Project Components (as defined under above projects)
3. The proposed codification structure for Works projects is discussed in the subsequent
paragraphs.
Works Group
4. A single digit alphabetic code shall be allotted to the Work Group e.g. for Rural Development
Department „R‟, for Urban Development Department „U‟, for Public Works Department „P‟, for Others
„O‟. This would facilitate categorisation of detailed work expenditure under each of these groups.
Works Class
5. A single digit alphabetic code shall be allotted to the Work Classes for any works project e.g.
for Construction „C‟, for Operation & Maintenance (O&M) „M‟, for Project and Consultancy „P‟, for
Others „O‟.
Page | 21
6. A single digit alphabetic code shall be suffixed to the relevant Work Group for identifying Work
Class. This 1 digit alphabetic code along with Work Group code shall constitute the 2 digits alphabetic
code for “Works Class” as illustrated below:
Works Work Group Works Class One Digit Works Class

Group Code Code Code
Rural R Construction C RC
Development Operation & Maintenance (O&M) M RM
Department Project and Consultancy P RP
Others O RO
Urban U Construction C UC
Development Operation & Maintenance (O&M) M UM
Department Project and Consultancy P UP
Others O UO
Works Type
7. A single digit alphabetic code shall be suffixed to the relevant Work Class for identifying Work
Type e.g. for Water Supply „W‟, for Sewerage „S‟, for Drainage „D‟, for Solid Waste Management
(SWM) „M‟, for Sustainability „T‟, for Others „O‟.
8. This 1 digit alphabetic code along with 2 digits alphabetic Work Class code shall constitute
the 3 digits alphabetic code for “Works Type” as illustrated below:
Works Class Work Class Works Type One Digit Works Type
Code Code Code
Rural Development RC Water Supply W RCW
Department – Sewerage S RCS
Construction Drainage D RCD
Solid Waste Management M RCM
(SWM)
Sustainability T RCT
Others O RCO
Urban UM Water Supply W UMW
Development Sewerage S UMS
Department – O&M Drainage D UMD
Solid Waste Management M UMM
(SWM)
Sustainability T UMT
Others O UMO
Scheme
9. Scheme code shall be a combination of the relevant Alphabetic Work Class Code and a
further 3 digits numeric code for identifying Schemes.
10. A 3 digits numeric code shall be suffixed to the relevant Work Class Code and the
combination of the 3 digits alphabetic Work Class Code and these three digits numeric code shall
constitute the six digits alphanumeric “Scheme Code” as illustrated below:
Work Class Work Class Scheme Three Digits Scheme Code

Code Code
Rural – Construction RCW Scheme A 001 RCW001
– Water Supply Scheme B 002 RCW002
Urban – O&M - Water UMW Scheme A 001 UMW001
Supply Scheme B 002 UMW002
Page | 22
Project
11. Project code shall be a combination of the relevant Alphabetic Scheme Code and a further
two digits numeric code for identifying Project.
12. A two digits numeric code shall be suffixed to the relevant Scheme Code and the combination
of the six digits alphanumeric Scheme Code and these two digits numeric code shall constitute the
eight digits alphanumeric Project Code as illustrated below:
Scheme Scheme Project Two Digits Project

Code Code Code
Rural – Construction – Water Supply RCW001 Project A 01 RCW00101
– Scheme A Project B 02 RCW00102
Urban – O&M - Water Supply – UMW001 Project A 01 UMW00101
Scheme A Project B 02 UMW00102
Project Component
13. Project Component code shall be a combination of the relevant Alphabetic „Project Code‟ and
a further 2 digits numeric code for identifying Project Component.
14. A 2 digits numeric code shall be suffixed to the relevant “Project Code” and the combination
of the 8 digits alphanumeric Project Code and these 2 digits numeric code shall constitute the 10
digits alphanumeric “Project Component Code” as illustrated below:
Project Project Code Project Two Project

Component Digits Component Code
Code
Rural – Construction – Water RCW00101 Project 01 RCW0010101
Supply – Scheme A – Component A
Project A Project 02 RCW0010102
Component B
Urban – O&M - Water UMW00101 Project 01 UMW0010101
Supply – Scheme A – Component A
Project A Project 02 UMW0010102
Component B
15. For the purpose of analysing the works project expenditure - funding agency, funding
components and cost components wise, a composite codification structure which shall be linked with
works project has been structured as below:
Cost monitoring factors Categories

Funding Agency  GoI,
 GoUP
 MLA
 MP
 Community participation
 External funding agency
Funding Components  Grant
 Contribution
 Loan
 Deposit
Project Cost Components  Labour
 Materials
 Other
Note: The above shall be provided while defining the project code as discussed earlier.
Page | 23
Funding Agency
16. UPJN receives funds either from the respective outside parties (e.g. Urban Local Bodies, etc.)
or from Central and/ or State Government or directly from the funding agencies (e.g. ADB, World
Bank, etc. on behalf of outside parties/ Government) for execution of the construction projects. All
these agencies shall be termed as funding agencies.
17. Every funding agency shall be allotted with a running serial number starting from 01 as
illustrated below:
Name of Funding Agency Funding Agency Code

Central Government i.e. GOI 01
State Government – Uttar Pradesh 02
Urban Local Bodies – Name of Urban Local Body 03
Jal Sansthan – Name of Jal Sansthan 04
Asian Development bank (ADB) 05
World bank (WB) 06
MLA - Area 07
MP – Area 08
Community Participation 09
Funding Components
18. Funds provided by the funding agencies to execute the works projects can be in form of loan,
grant, subsidy, deposits, etc.
19. Each funding component shall be allotted with a running serial number starting for 01 as
illustrated below:
Name of Funding Component Funding Component Code

Loan 01
Grant 02
Subsidy 03
Deposit 04
Project Cost Components
20. Cost components of any project to be executed by UPJN shall broadly be categorised in to
Labour, Materials, Project Asset, Centage, Others, etc.
21. Each cost component shall be linked with the respective General Ledger Account as
illustrated below:
Cost Components of Project Cost components Code

Labour Cost Respective General Ledger Account Head
Materials Cost Respective General Ledger Account Head
Project Asset Cost Respective General Ledger Account Head
Centage Cost Respective General Ledger Account Head
Others Cost Respective General Ledger Account Head
Page | 24

Subject: Codification Structure for Functional Subject Code: 1.05
Budget
This Subject provides the Codification Structure for Functional Budget.
1. Budget can be defined/ allocated at the following levels:

 General Ledger Account
 Project Component
2. Budget at General Ledger Account level shall be defined for the year. However budget for
Project Component shall be defined for the project life.
3. Budget codes for General Ledger Account and Project Component shall be the codes of
General Ledger Account and Works Project, respectively.
4. Budget at General Ledger Account level can be defined for various functions at two levels as
illustrated below:
Functional Budget Level I Functional Budget Level II

Works Construction
Operation & Maintenance (O&M)
Capital Furniture and Fixtures
Plant and Machinery
Data Processing Equipment
Revenue Centage Income
Other Income
Expenditure Personnel
Administration
Interest and Financial Charges
Accounts and Audit
Supervision
5. The codes for the each level of Functional budgets shall be allotted as illustrated below:
Functional Functional Budget Functional Budget Level II Functional Budget

Budget Level I Level I Code Level II Code
Works F1001 Construction F2WRC00001
Operation & Maintenance F2WRM00001
(O&M)
Capital F1002 Furniture and Fixtures F2CAP00001
Plant and Machinery F2CAP00002
Data Processing Equipment F2CAP00003
Revenue F1003 Centage Income F2REV00001
Revenue Grant F2REV00002
Interest Income F2REV00003
Other Income F2REV00004
Expenditure F1004 Personnel F2EXP00001
Administration F2EXP00002
Interest and Financial Charges F2EXP00003
6. Budget at Project Component shall be defined at the time of creating a Project Component
Code.
Page | 25

Subject: Codification Structure for Profit/ Cost Subject Code: 1.06
Centres
This Subject provides the Codification Structure for Profit/ Cost Centres.
1. Profit centres and cost centres shall be identified by Head office and informed to different
Accounting Units which can be any department, activity, office, machine, group, etc.
2. Based on the allocation of revenue and expenses, accounting shall be done under the
respective profit/ cost centres. Accounting under profit centres and cost centres concept shall facilitate
in analysing and improving the profitability and/ or efficiency of that profit centres and cost centres.
3. Profit centre and cost centre can be identified at any level in the UPJN‟s hierarchy.
Accordingly there may be either more than one profit centre and cost centre under any office or more
than one office under a particular profit centre and cost centre.
Profit centre
4. Profit centre is an accounting term that refers to a department or function in the organisation
to which the revenue and the cost are separately identified to determine the result of such activity or
function.
5. A ten digit code starting shall be used for various profit centres. These profit centres may
include areas of business (e.g. urban, rural, etc.), business categories (construction of Construction
schemes, maintenance of existing schemes, etc.)
Cost centre
6. Cost centre is an accounting term that refers to a department or function in the organisation to
which the costs are separately identified to determine the cost efficiency and variance from the
budgeted cost of that department or function.
7. A ten digit code shall be used for various cost centres. These cost centres may include cost of
activities or group of activities/ functions, e.g. Supervision Charges, Accounting & Audit Expenses,
Secretariat Expenses, etc.
Page | 26

Subject: Codification Structure for Analysis Subject Code: 1.07
Parameters
This Subject provides the Codification Structure for Analysis Parameters.
1. The analysis parameters shall be tagged on to the General Ledger Account(s). It shall be
used to group a particular type of transactions under related General Ledger Accounts.
2. Analysis of transactions can be done at two levels of analysis parameters as illustrated below:
Analysis Parameter Level I Analysis Parameter Level II

Works - Construction Works Project 1
Works Project 2
Works - Operation & Maintenance (O&M) Works Project 3
Works Project 4
Capital Furniture and Fixtures
Plant and Machinery
Data Processing Equipment
Non-Works Personnel
Administration
Interest and Financial
Amount Provided Towards Losses
Income Tax
3. The codes for the each level of Functional budgets shall be allotted as illustrated below:
Analysis Parameter Analysis Analysis Parameter Analysis Parameter

Level I Parameter Level I Level II Code Level II Code
Code
Works - Construction A1001 Works Project 1 10 Digit Works Project
Code
Works Project 2 10 Digit Works Project
Code
Works - Operation & A1002 Works Project 3 10 Digit Works Project
Maintenance (O&M) Code
Works Project 4 10 Digit Works Project
Code
Capital A1003 Furniture and Fixtures A2CAP00001
Plant and Machinery A2CAP00002
Data Processing A2CAP00003
Equipment
Non-Works A1004 Personnel A2NWR00001
Administration A2NWR00002
Interest and Financial A2NWR00003
Page | 27

Subject: Codification Structure for Locations/ Subject Code: 1.08
Offices
This Subject provides the Codification Structure for Locations/ Offices.
1. Location code represents the office to which the transactions relate. These codes shall
provide the linkage of hierarchical reporting and help in consolidation of accounts.
2. Each location code shall have 4 levels in line with the existing organisation hierarchy in UPJN
as illustrated below:
1 digit Head offices

code
2 digits Zonal office 1 Zonal office 2 Zonal office 3

code
2 digits Circle office 1 Circle office 2 Circle office 3

code
Divisional office 1 Divisional office 2 Divisional office 3

5 digits
code
3. For the purpose of defining the location code, Accounting Units at head office shall be kept at
the level of Division level.
4. Based on the above a ten digits numerical code shall be used for the different level offices of
UPJN as illustrated below:
Offices HO ZO CO DO Office Code

Head office 1 00 00 00000 1000000000
Zonal office (ZO)1 1 01 00 00000 1010000000
Zonal office 2 1 02 00 00000 1020000000
Circle office (CO) 1 of Zonal Office 2 1 02 01 00000 1020100000
Divisional office (DO) 3 of circle office 1of Zonal Office 2 1 02 01 03000 1020103000
Page | 28
2.00 Section: Stores

Section Background:
2.01 This Section covers the Stores accounting and related procedures .
2.02 Stores and Materials have been interchangeably used in this Section.
Accounting Policies
2.03 The main accounting policies that shall be followed relating to Stores accounting are provided
in the subsequent paragraphs:
Purchase of Materials
a.) All the materials purchased shall be identified to a particular Works project and shall be
accounted for under the WIP Materials Account of the corresponding Works project. In case of
materials purchases made are not identified to a particular Works project, it shall be booked to
Central Stores Account.
b.) The materials shall be valued at the landed cost i.e. basic price, excise duty, sale tax, freight and
other incidental & directly attributable expenses (e.g. loading / unloading expenses).
c.) In case of imports, the cost of materials shall include the following:
 Cost Insurance Freight (C.I.F.) value of materials
 Custom duty.
 Port charges, landing charges and clearing agent's commission
 Local transport charges
 Other incidental expenses and local taxes, if any.
 Gain / loss on account of foreign exchange fluctuation
d.) In case of any price variation, retrospectively, to any materials (subsequent to the receipt of
materials at store and passing of bill), which results in amount payable to/ recoverable from
supplier, the same shall be identified and accounted for as and when and shall be charged to the
WIP Materials Account or Central Stores Account as the case may be. In case the corresponding
materials have already been consumed, the same shall be charged off to the relevant WIP
Materials Consumed Account of the Works project.
Inter unit transfer of materials
e.) All materials transfers (between Junior Engineer, Project, Unit, location) shall be made against
MTN duly approved by the respective Designated Authority. Materials transfer shall be accounted
for as and when the materials has been issued or received. Materials transfer shall be valued at
weighted average rate.
f.) All materials receipts from other Units shall be valued at the same rate at which there have been
transferred by other Units. Accounting for these receipts shall be done as and when the materials
are received.
g.) The materials received from other Units shall be valued at the same rate as intimated by the
Transferor Unit in the respective Advice of Transfer Debit (ATD).
h.) The cost of transport of materials transferred from the Transferor location/ store to the Transferee
location/ store shall be charged to the WIP Materials Account of the transferee Works project or
Central Store Account, as the case may be.
Consumption of materials
Page | 29
i.) Materials consumption shall be accounted for as and when the materials have been consumed
and valued at weighted average rate.
Valuation of closing stock of Materials
j.) Closing stock of materials shall be valued at the lower of the cost or net realisable value. Net
realisable value (NRV) of the inventory should be estimated on the basis of most reliable
evidence at the time of valuation.
Allocation of stores expense
k.) UPJN incurs stores expenses for the maintenance of Stores. These expenses shall be first
accounted for under the relevant expense heads and shall be apportioned / allocated
subsequently.
l.) Stores expenses shall include the following items:

 Godown rent
 Stores maintenance expenses
 Other expenses relating to stores.
m.) At every month end, the above stores expenses, on an appropriate basis, shall be allocated to
the:
 Cost of respective materials items lying with the store; or
 In case where the respective materials items have already been consumed, then to the
respective Works projects under the account head WIP Materials Consumed Account
 However in case of store expenses which are directly identifiable to any Works project, the
store expenses shall be allocated to the WIP Materials Account of the concerned Works
project.
Sale of materials / scrap
n.) The sale of materials / scrap shall be accounted for on dispatch of materials to the selected buyer.
o.) In general, any income or loss on sale of materials shall be credited / debited to Income / Loss
from Sale / Disposal / Surplus / Write Off of Material Account. The scrap sale can be on account
of sale of unused materials identified as scrap or sale of used materials identified as scrap. In
general, the sale of scrap (used materials identified as scrap) shall be credited to Income from
Sale of Scrap Account. However, for sale of materials / scrap pertaining to Works project, the
treatment shall be as per the Policies prescribed by UPJN.
Materials in transit
p.) At the period end, if the ownership of materials has been passed to UPJN then based on the
information available and respective Purchase Order (PO) / Contract Bond (CB), a provision for
the cost of materials in transit shall be created. Subsequently, at the time of actual receipt of the
materials, this provision shall be adjusted with the amount of actual liability of the materials
purchased.
Other accounting policies
q.) In case of unused materials items which are identified as scrap or obsolete materials, the
valuation of these materials items shall be done at cost or Net Realisable Value (NRV) whichever
is lower and the difference shall be charged off to the Income and Expenditure Account (in case
where materials items are not identified to any Works project) or WIP Cost Others Account (in
case where materials items are identifiable to any Works project).
Page | 30

No.
1. Receipt of Purchased Materials 2.01
2. Supplier‟s Bill Passing 2.02
3. Transfer of Materials – Intra-unit 2.03
4. Transfer of Materials – Inter-unit 2.04
5. Consumption of Materials 2.05
6. Sale of Materials / Scrap Materials 2.06
7. Physical Verification of Materials 2.07
8. Inventory Management 2.08
Page | 31
Section: Stores Section Code: 2.00

Subject: Receipt of Purchased Materials Subject Code: 2.01
Subject Background:
This subject covers the accounting procedure to be followed in relation to receipt of purchased
materials.
Materials are purchased by UPJN directly through supplier or through Permanent Imprest (PI)
provided to concerned officials (e.g. Junior Engineer/ Assistant Engineer). In case of materials
purchased directly from supplier, Dispatch Instruction is issued to the supplier providing details of the
materials item required, its quantity, location of receipt, etc. Based on the Dispatch Instruction,
supplier supplies the materials.
The materials supplied to UPJN shall be inspected by third party agency before supply to UPJN.
Based on the Inspection Report, it shall be decided whether the materials shall be accepted or
rejected for supply to UPJN. After receipt of materials at UPJN, entry shall be made in Stores Entry
Register of the concerned store. Subsequent to receipt, UPJN may decide to have testing of the
materials supply and accordingly decide whether to accept or reject the materials. In case the
materials received are damaged, Materials Outward Gate Pass shall be prepared for return of
damaged materials to the supplier. Subsequent to acceptance of materials, Goods Receipt Note
(GRN) shall be prepared by Junior Engineer and shall be valued at Accounts Section.
In all cases, materials shall be first provisionally valued and accounted for in GRN based on the rates
provided in respective Purchase Order (PO) / Supply Order / Contract Bond (CB). Thereafter,
materials shall be actually valued based on the supplier bill received. Procedure for bill passing and
accounting of bill has been covered under Subject Code: 2.02
In context of the above, this subject is covered under the following heads:
 Receipt of materials
 Preparation of GRN
 Valuation of GRN
 Purchase of materials through Permanent Imprest
 Freights and incidentals on purchases
Procedure:
Sl. Person / Activity / Action Frequency /

No. Section Timing
Responsible
Receipt of materials at UPJN location
1. Storekeeper /  When materials are received at stores / site, make stores At the time of
Security entry in Stores Entry Register, immediately providing entry of
Personnel details of materials received, Delivery Challan / Bill ref. materials at
etc. Essentially the purpose of making the stores entry is stores/ site
to record the actual time and date of the materials
receipt for any future reference purpose.
 Put the stores entry no., date and time of receipt of
materials, on the Delivery Challan / Bill.
2. Junior  When materials are unloaded, ensure the following key At the time of
Engineer (JE) aspects: unloading the
/ Storekeeper o Stores entry has been made by Storekeeper in the materials
Stores Entry Register for the concerned materials.
o Stores entry no., date and time of receipt of
materials, on the Delivery Challan / Bill.
Page | 32

No. Section Timing
Responsible
o Check Inspection Report – for inspection undertaken
at supplier‟s site‟ (if any), shall available with the
Store Section (to be checked by JE)
o Check that the materials are received as per the
details provided in Dispatch Instruction.
o The materials quantity is not in excess of the quantity
for which Dispatch Instructions has been issued.
o The materials are in normal conditions and are not
damaged. Reject the materials quantity that is
apparently damaged.
 Calculate the quantity of materials received, materials
damaged vis-à-vis mentioned in Delivery Challan/ Bill.
 Update Measurement Book (MB)
 Acknowledge the copy of Delivery Challan/ Bill of the
supplier by putting a receipt stamp and mention the
quantity of materials accepted as well as materials
damaged and rejected.
o In case the quantity actually received is lower than
the quantity mentioned in Delivery Challan/ Bill then
mention the quantity short received on Delivery
Challan/ Bill.
o In case the quantity actually received is more than
the quantity mentioned in Delivery Challan/ Bill then
excess quantity shall be returned to the supplier.
 Prepare Materials Outward Gate Pass for damaged
materials/ excess materials returned and take receipt
signature of the transporter / supplier representative on
it.
Preparation of GRN
3. Junior  In case materials‟ testing is required to be done, send Within one day
Engineer the materials for testing purpose of receipt of
materials
4. Junior  Receive Inspection Report As and when
Engineer  In case where Inspection Report indicates rejection of
materials, reject materials, prepare Materials Outward
Gate Pass and take receipt signature of the transporter/
supplier representative on it.
 Prepare GRN with complete details for materials Same day
accepted (in case of rejection of entire lot of materials,
GRN shall not be prepared )
o In case of inspected materials, GRN date shall be
the date of receipt of Inspection Report otherwise
GRN shall be prepared on the same day on which
stores entry is made.
 Update Daily Transaction Register (DTR) based on GRN
for the materials quantity accepted.
 Forward GRN, MB along with Delivery Challan/ Bill and /
or Materials Outward Gate Pass (in case of materials
rejected) to Assistant Engineer (AE).
5. Assistant  Scrutinise, approve and forward the GRN, MB and Same day on
Engineer Delivery Challan/ Bill to Accounts Section. receipt of GRN
Valuation of GRN
6. Accounts  On receipt of GRN, verify GRN with the MB, Delivery Within one day
Section Challan/ Bill, PO / Dispatch Instruction, CB, etc. of receipt of
Page | 33

No. Section Timing
Responsible
 Value GRN based on the rates agreed with the supplier GRN
and finalise it.
7. Accounts  Prepare Journal Voucher (JV), for the GRN Value, and Same day on
Section obtain approval from Designated Authority. valuation of
 Based on JV, update Journal Book, Stores Ledger, GRN
Supplier‟s Bill Register, General Ledger, Subsidiary
Ledger and Works Register. The Supplier Bill Register
shall be maintained Stores Entry No. wise.
Purchase of materials through Permanent Imprest
8. Junior  Adopt the same procedure for purchase of materials As and when
Engineer / undertaken through PI as provided in Subject Code: 8.07 indicated
Assistant  Adopt the same procedure of Receipt of Materials at
Engineer / UPJN location, and preparation, valuation and
Accounts accounting of GRN, as provided above.
Section  Policies prescribed by UPJN, if any, shall be applicable
for testing of the materials purchased through PI.
Freights and incidentals on purchases
9. Junior  If freight and incidentals charges are paid on materials Within one day
Engineer / through PI, then adopt the same procedure for of receipt of PI
Assistant transactions undertaken through PI as provided in / TI vouchers
Engineer / Subject Code: 8.07
Accounts  Mention the GRN reference on the freight bill / vouchers
Section pertaining to the freight.
 Provide details of freight and incidentals on GRN in
remarks column.
10. Accounts  In case of freights and incidentals expenses incurred for Within one day
Section which payment shall be made by Unit, receive and pass of receipt of
the freight bill. freight bill
 Prepare JV and obtain approval from Designated
Authority. In case where materials have been consumed,
WIP Materials Consumed Account shall be debited
(Accordingly update Stores Ledger after preparation of
JV), otherwise, WIP Materials Account / Central Stores
Account shall be debited.
 Based on JV, update Journal Book, Stores Ledger (in
case materials not consumed), General Ledger,
Subsidiary Ledger and Works Register.
 Provide details of freight and incidental on GRN in
remarks column.
Formats
Format Document Document Frequency Responsibility Distribution to

Ref. Title Type
MT/R01 Stores Entry I/O At the time of entry Storekeeper / ---
Register of materials at Security
stores/ site Personnel
MT/F01 GRN I/O As and when Junior Engineer  Own Copy
materials are  Assistant
received and Engineer
accepted  Accounts Section
MT/R02 Daily O Same day on Junior Engineer ---
Transaction finalisation of GRN
Register
Page | 34

Ref. Title Type
MT/R03 Stores O Same day on Accounts ---
Ledger valuation of GRN Section
MT/R04 Supplier‟s O Same day on Accounts ---

Bill Register valuation of GRN Section
WE/R02 Works I/O Same day on Accounts ---
Register valuation of GRN Section
Accounting Entries
Sl. Event Voucher Source Accounting Entries Person /

No. type documents Section
Responsible
1. Receipt of JV GRN Debit Accounts
Materials Section
from Relevant WIP Materials Account /
Supplier Central Stores Account
Credit
Bills Awaited Account

2. Receipt of JV GRN Debit Accounts
Materials Section
from Relevant WIP Materials Account /
Supplier Central Stores Account
through PI
Credit
Permanent Imprest Account

3. Freight and JV Supporting Debit Accounts
incidental Vouchers / Section
expenses Bills Relevant WIP Materials Account /
through PI Central Stores Account /
WIP Materials Consumed Account
Credit
Permanent Imprest Account

4. Freight and JV Transporter Debit Accounts
incidental Bill Section
expenses Relevant WIP Materials Account /
through Central Stores Account /
Transporter Relevant WIP Materials Consumed
bill (supplier Account
or outside
party) Credit
Account Payable – Contractor /
Account Payable - Supplier Account
Page | 35

Subject: Supplier’s Bill Passing Subject Code: 2.02
Subject Background:
This subject covers the accounting procedure to be followed in relation to passing supplier‟s bill and
payment thereon.
Any difference between supplier‟s bills passed and the provisional values as per GRN shall be
accounted for under relevant WIP Materials Account / Central Stores Account. However, at the time of
such adjustment, in case, the respective materials items have already been consumed and the
relevant WIP Materials Account shows nil balance, the difference amount shall be charged off directly
to the relevant WIP Materials Consumed Account of the Project.
 Supplier‟s bill passing
 Advance payment to supplier
 Payment to supplier against supplier‟s bill
Procedure:

No. Section Timing
Responsible
Supplier’s bill passing
1. Junior  Receive supplier‟s bill from the supplier and put a date As and when
Engineer stamp on it for the date of receipt. supplier bill is
(Technical)  Refer GRN, MB, Delivery Challan, etc. and scrutinise received
supplier bill and check that the bill details has the Delivery
Challan duly acknowledged by the Junior Engineer.
 Ensure the following key aspects while passing the bill: Within one
o The quantity mentioned in supplier bill is same as that day of receipt
mentioned in the respective GRN. of bill
o The rate is as per the respective Purchase Order / CB
/ revised price variation statement, etc., as applicable,
through which the rates were agreed with the supplier.
o Undertake casting, cross casting of the bill and ensure
that the bill is as per the terms and conditions agreed.
o Pass the bill for the amount payable accordingly.
 Forward the supplier bill along with the MB and Delivery
Challan, to Accounts Section.
2. Accounts  Receive supplier‟s bill along with the MB and Delivery As and when
Section Challan and put a date stamp on it for the date of receipt. supplier bill is
 Ensure that every supplier bill must have a corresponding received
GRN. Supplier bill without GRN shall not be passed.
 Update Supplier‟s Bill Register for the details of supplier Within one
bill received. The Supplier Bill Register shall be day of receipt
maintained Stores Entry No. wise of bill
 Ensure the following key aspects while passing the bill:
o Stores entry reference details are provided (by JE /
Storekeeper of UPJN) on the Delivery Challan.
o The quantity mentioned in supplier bill is same as that
mentioned in GRN.
o The rate is as per the PO / CB / revised price variation
statement, etc., as applicable, through which the rates
Page | 36

No. Section Timing
Responsible
were agreed with the supplier.
o Undertake casting, cross casting of the bill and ensure
that the bill is as per the terms and conditions agreed.
o Pass the bill for the amount payable on quantity
accepted.
3. Executive  Undertake an overall check on the supplier‟s bill and As and when
Engineer approve the bill for payment. supplier bill is
(EE) received for
approval
4. Accounts  Prepare JV and obtain approval from the Designated Within one
Section Authority, for the amount payable to the supplier based on day of receipt
the bill passed. of approval
 Based on JV, update Journal Book, General Ledger, from
Subsidiary Ledger, Supplier‟s Bill Register and Works Executive
Register. Engineer
 Update Stores Ledger for the difference between GRN
Value and the bill passed value, in any. Such difference
might arise on price variations, etc.
Advance payment to supplier
5. Accounts  Advance payment shall be made to the supplier only as As and when
Section per the agreed terms and conditions.
 Receive Performa Invoice from supplier for the advance.
 In case advance is to be paid to retire dispatch documents
from the bank, verify particulars of Bank Advice with
Dispatch Instruction / PO / CB through which materials
were instructed to be supplied and percentage of payment
was agreed to be paid (e.g. this is an usual case in case
of imported materials).
 Take necessary approvals from Designated Authority and
forward supporting documents to Cashier for payment.
6. Cashier  Receive supporting documents. As and when
 To process payment, adopt the procedure for bank Same day
payments as provided in Subject Code: 9.04
 Prepare BPV.
 Based on BPV, update Bank Book, General Ledger,
Subsidiary Ledger, MB and Works Register.
Payment to supplier against supplier’s bill
7. Accounts  The payment to supplier shall be made on or after the due On the day of
Section date of payment for the amount passed against the bill making
and net of advance paid, if any, earlier. payment
 Forward JV with supporting documents to Cashier for
payment.
8. Cashier  Receive JV with supporting documents As and when
 Prepare BPV.
 Based on BPV, update Bank book, Supplier‟s Bill
Register, General Ledger, Subsidiary Ledger and Works
Register.
 Update MB for the supplier‟s bill passed and payment
made.
Page | 37
Formats

Ref. Title Type
materials are  Assistant Engineer
received  Accounts Section
 Junior Engineer
(Technical)
MT/R04 Supplier‟s I/O Same day of Accounts ---
Bill Register Receipt of GRN/ Section
Receipt of Bill/
Passing of Bill/
Advance
Payment/
Payment to
Supplier against
Bill
WE/R02 Works O Same day of Accounts ---
Register updation of Section
Supplier‟s Bill
Register
MT/R03 Stores O As and when Accounts --
Ledger Section
Accounting Entries
Sl. No. Event Voucher Source Accounting Entries Person /

type documents Section
Responsible
1. On passing JV GRN and Debit Accounts
supplier bill Supplier‟s Bill Section
Bills Awaited Account
(for the GRN amount)
Credit
Account Payable -Supplier

Account
Relevant WIP Advance Account

(for advances given earlier, if
any)
2. In case GRN JV Supplier‟s Bill Debit Accounts
value is Register – Section
higher than difference Account Payable -Supplier
bill passed between GRN Account
amount and bill
passed Credit
amount
Relevant WIP Materials Account
/ Central Stores Account
3. In case GRN JV Supplier‟s Bill Debit Accounts

value is Register – Section
lower than difference Relevant WIP Materials Account
bill passed between GRN / Central Stores Account
Page | 38
Sl. No. Event Voucher Source Accounting Entries Person /

type documents Section
Responsible
amount and bill
passed Credit
amount
Account
4. Advance BPV Performa Debit Cashier
Payment to invoice / bank
Supplier advice Relevant WIP Advance
Account/ Advances - Supplier
Account
Credit
Bank Account
5. Payment to BPV Supplier‟s Bill Debit Cashier
Supplier
against Account Payable -Supplier
supplier‟s bill Account
Credit
Bank Account
Page | 39

Subject: Transfer of Materials – Intra-Unit Subject Code: 2.03
Subject Background:
This subject covers the accounting procedure to be followed in relation to the transfer of materials
within Unit.
The materials may be transferred within Unit between Works projects, JE and Locations. It may
happen that the materials are transferred for use in one Works project from another Works project or
within Works project having different components based at the same location or at another location
managed by same JE or different JE. Materials may also be transferred in case of transfer of JE.
For transfer of materials, the JE requiring materials shall prepare Materials Transfer Note (MTN)
which shall be for requisition of materials as well as transfer of materials. However in case where the
materials have been sent voluntarily, the MTN shall be prepared and sent by the Transferor JE and
signature of Transferee JE shall be taken (Transferee JE need not prepare MTN in such cases).
 Requisition of materials for transfer
 Transfer of materials
 Receipt of transferred materials
 Valuation of MTN, GRN and MAN
Procedure:

No. Section Timing
Responsible
Requisition of materials for transfer
1. Transferee -  Prepare MTN, providing the details of Works project, As and when
Junior materials required, quantity required, etc. materials are
Engineer  Obtain approval of AE and EE required to be
 Authorise a Person to receive materials on its behalf in transferred
case JE does not go to receive the materials from
Transferor and authenticate the signature of receiver
 Subsequently, send the MTN to Transferor JE for transfer
of materials.
2. Executive  Identify the location/Junior Engineer, from where Same day on
Engineer materials can be optimally transferred. receipt of
 Approve and forward the MTN to Transferor – JE. MTN
Transfer of materials
3. Transferor –  Receive MTN from EE/ JE and check it to ensure that all On dispatch of
Junior the necessary information (materials item, quantity materials
Engineer required, approval of EE, etc.) has been provided to make
a transfer of materials.
 Issue materials against the MTN received.
 Obtain signature of the Transferee JE or its authorised
representative on MTN on dispatch of materials.
 Provide details in the MTN for the materials dispatch vis.
actual quantity dispatched, etc.
 Prepare Materials Outward Gate Pass for transfer of
materials.
 Update the DTR with MTN details and also the details of
the Works project, if any, out which materials have been
Page | 40

No. Section Timing
Responsible
dispatched.
 Forward MTN to AE.
4. Transferor –  Scrutinise, approve and forward the MTN to Accounts Same day of
Assistant Section. receipt of
Engineer MTN
Receipt of transferred materials
5. Transferee –  On receipt of materials along with MTN, make stores As and when
Storekeeper / entry in Stores Entry Register immediately by providing materials are
Security details of materials received, etc. received
Personnel
6. Transferee –  When materials are received, ensure the following: Same day of
Junior o Check that the materials are received as per the receipt of
Engineer / details provided in copy of MTN. materials
Storekeeper o The materials are in normal conditions and are not
damaged.
 Measure the quantity of materials received, materials
damaged vis-à-vis quantity dispatched as mentioned in
MTN.
 Prepare GRN with complete details for materials
dispatched by Transferor JE.
 For any difference between quantity dispatched as per
MTN and actual quantity received / damaged, prepare
Materials Adjustment Note (MAN) to adjust the quantity
short received / damaged
 Update DTR based on GRN and MAN for the materials
quantity.
 In case of shortage of quantity received, mention the
actual quantity short received in the MAN and person
responsible for shortage, if any.
 Update the DTR with the Works project details for which
materials have been received. This Works project shall
be the same Works project that was mentioned in the
MTN initiated by the Transferee Junior Engineer.
 Forward GRN, MAN and MTN to AE.
7. Transferee –  Scrutinise, approve and forward GRN, MAN and MTN Same day of
Assistant receipt of
Engineer MTN, GRN
and MAN
Valuation of MTN, GRN and MAN
8. Accounts  On receipt of MTN from Transferor AE, verify MTN and Within one
Section value MTN based on the weighted average rate derived. day of receipt
 On receipt of GRN and MAN from Transferee AE, value of MTN, GRN
the GRN and MAN based on the weighted average rate. and MAN
 The balance quantity short received (as per MAN) shall
be debited to the account of person responsible and
accordingly recovery shall be made from that person.
9. Accounts  Prepare JV for the MTN, GRN and MAN Value and obtain Same day
Section approval from Designated Authority
 Based on JV, update Journal Book, General Ledger,
Subsidiary Ledger, Stores Ledger and Works Register.
Page | 41
Formats

Ref. Title Type
MT/R01 Stores Entry I/O At the time of Storekeeper / ---
Register receipt of Security
materials at Personnel
stores
MT/F02 MTN I/O As and when Junior Engineer  Own Copy
Materials – Transferee  Assistant Engineer
required  Accounts Section
 Transferor Junior
As and when Junior Engineer Engineer
materials – Transferor  Transferor
dispatched Assistant Engineer

materials are - Transferee  Assistant Engineer
MT/F06 MAN I/O As and when Junior Engineer  Own Copy

materials – Transferee  Assistant Engineer
shortage  Accounts Section
identified /
damaged
MT/R02 DTR O Same day on Junior Engineer ---
transfer of – Transferor
materials / on
receipt of Junior Engineer
materials – Transferee
Ledger valuation of MTN, Section
GRN and MAN
WE/R02 Works O Same day on Accounts ---
Register valuation of MTN, Section
GRN and MAN
Accounting Entries

Responsible
1. On JV MTN Debit Accounts
transfer of Section
materials Relevant WIP Materials Account
(Transferee Works project) / Central
Stores Account
Account Recoverable - Others Account
(for recovery against materials short
received)
Credit

(Transferor Works project) / Central
Stores Account
Page | 42

Subject: Transfer of materials – Inter-Unit Subject Code: 2.04
Subject Background:
This subject covers the accounting procedure to be followed in relation to the transfer of materials
between two Units.
Inter-unit transfers are transfers between Works projects / JE / Locations between two Units. The
process of inter-unit materials transfer is similar to that of intra-unit transfers, except to the fact that
the accounting Units shall be separate for the Transferor and Transferee of materials.
 Requisition of materials for transfer
 Transfer of materials
 Receipt of transferred materials
 Valuation of MTN by Transferor Unit
 Valuation of GRN and MAN by Transferee Unit
Procedure:

No. Section Timing
Responsible
Requisition of materials for transfer
1. Transferee -  Prepare MTN, providing the details of Works project, As and when
Junior materials required, quantity required, etc. materials are
Engineer  Obtain approval of AE and EE required to
 Authorise a Person to receive materials on its behalf in be
case JE does not go to receive the materials from transferred
Transferor and authenticate the signature of receiver
 Subsequently, send the MTN to Transferor JE for transfer
of materials.
2. Transferee -  Identify the Unit in case from where materials can be Same day on
Executive optimally transferred. receipt of
Engineer  Approve and forward the MTN to Transferor Unit. MTN
Transfer of materials
3. Transferor  Receive MTN from Transferee Unit. Same day on
Unit –  Identify the location/JE of Transferor Unit, from where receipt of
Executive materials can be transferred optimally. MTN
Engineer  Forward MTN to Transferor – JE.
4. Transferor –  Receive MTN from EE and check it to ensure that all the On dispatch
Junior necessary information (materials item, quantity required, of materials
Engineer approval of EE, etc.) has been provided to make a
transfer of materials.
 Issue materials against the MTN received.
 Obtain signature of the Transferee JE or its authorised
representative on MTN on dispatch of materials.
 Provide details in the MTN for the materials dispatch vis.
actual quantity dispatched, etc.
 Prepare Materials Outward Gate Pass for transfer of
materials.
 Update the DTR with MTN details and also the details of
Page | 43

No. Section Timing
Responsible
the Works project, if any, out which materials have been
dispatched.
5. Transferor –  Scrutinise, approve and forward the MTN to Accounts Same day of
Assistant Section. receipt of
Engineer MTN
Receipt of transferred materials
6. Transferee –  On receipt of materials along with MTN, make stores As and when
Storekeeper / entry in Stores Entry Register immediately by providing materials are
Security details of materials received, etc. received
Personnel
7. Transferee –  When materials are received, ensure the following: Same day of
Junior o Check that the materials are received as per the receipt of
Engineer / details provided in copy of MTN. materials
Store Keeper o The materials are in normal conditions and are not
damaged.
 Measure the quantity of materials received, materials
damaged vis-à-vis quantity dispatched as mentioned in
MTN.
 Prepare GRN with complete details for materials
dispatched by transferor JE.
 For any difference between quantity dispatched as per
MTN and actual quantity received / damaged, prepare
MAN (to adjust the quantity short received / damaged)
 Update DTR based on GRN and MAN for the materials
quantity.
 In case of shortage of quantity received, mention the
actual quantity short received in the MAN and person
responsible for shortage, if any.
 Update the DTR with the Works project details for which
materials have been received. This Works project shall
be the same Works project that was mentioned in the
MTN initiated by the Transferee Junior Engineer.
 Forward GRN, MAN and MTN to AE.
8. Transferee –  Scrutinise, approve and forward GRN, MAN and MTN. Same day of
Assistant receipt of
Engineer MTN, GRN
and MAN
Valuation of MTN by Transferor Unit
9. Accounts  On receipt of MTN from Transferor AE, verify MTN and Within one
Section – value MTN based on the weighted average rate derived. day of receipt
Transferor  Raise an Advice of Transfer Debit (ATD) to intimate the of MTN, GRN
Unit materials item wise value of materials transferred to and MAN
Transferee Unit – Accounts Section. Refer Subject Code:
10.01 for procedure relating to raising ATD
10. Accounts  Prepare JV and obtain approval from Designated Same day of
Section – Authority. valuation of
Transferor  Based on JV update Journal Book, General Ledger, MTN
Unit Subsidiary Ledger, Stores Ledger and Works Register.
Valuation of GRN and MAN by Transferee Unit
Page | 44

No. Section Timing
Responsible
11. Accounts  Receive and review ATD and supporting documents and Within one
Section – forward the perforated copy to the Transferor Unit. Refer day of receipt
Transferee Subject Code: 10.02 for procedure relating to accepting of MTN and
Unit ATD ATD
 On receipt of GRN, MAN and MTN from Transferee AE
and ATD from Transferee Accounts Section, value the
GRN and MAN, based on MTN and ATD received from
Transferor Unit.
 The balance quantity short received (as per MAN) shall
be debited to the account of person responsible and
accordingly recovery shall be made from that person.
12. Accounts  Prepare JV for the GRN and MAN Value and obtain Same day of
Section – approval from Designated Authority valuation of
Transferee  Based on JV, update Journal Book, General Ledger, MTN
Unit Subsidiary Ledger, Stores Ledger and Works Register.
Formats

Ref. Title Type
MT/R01 Stores I/O At the time of Store keeper / ---
Entry receipt of Security Officer –
Register materials at Transferee JE
stores
MT/F02 MTN I/O As and when Transferee JE /  Own Copy
Materials Transferor JE  Transferee
requisition / Assistant Engineer
transferred  Transferor Junior
Engineer
 Transferor Assistant
Engineer
 Accounts Section
(both the units)
MT/F01 GRN I/O As and when Transferee -  Own Copy
materials are Junior Engineer  Assistant Engineer
MT/F06 MAN I/O As and when Transferee -  Own Copy
materials Junior Engineer  Assistant Engineer
shortage  Accounts Section
identified /
damaged
MT/R02 DTR O Same day on Transferor JE / ---
transfer of Transferee JE
materials / on
receipt of
materials
IUT/F01 ATD I/O Same day on Accounts section  Own Copy
valuation of  Transferee Unit
MTN
MT/R03 Stores O Same day on Accounts Section ---
Ledger valuation of
MTN, GRN
and MAN
Page | 45
WE/R02 Works O Same day on Accounts Section ---

Register valuation of
MTN, GRN
and MAN
Accounting Entries

Responsible
1. On transfer JV MTN & ATD Debit Accounts
of materials Section -
to other Unit IUT – Materials Account Transferor
Credit

(Transferor Works project) /
Central Stores Account
2. On receipt of JV MTN & ATD Debit Accounts
materials Section –
from other Relevant WIP Materials Account Transferee
Unit (Transferee Works project) /
Account Recoverable - Others

Account
Credit
IUT – Materials Account
Page | 46

Subject: Consumption of Materials Subject Code: 2.05
Subject Background:
This subject covers the accounting procedure to be followed in relation to the consumption of
materials including departmental consumption or consumption through contractors for Works projects.
The consumption of materials shall be accounted for based on the measurement undertaken for the
materials consumed and at weighted average rate. Based on materials consumed, a Consumption
Statement shall be prepared and details shall be provided in Measurement Book maintained by
concerned JE.
The consumption can be through departmental consumption or consumption out of materials

advanced to contractors. In case of departmental consumption, Self Consumption Note (SCN) shall
be prepared whereas in case of consumption through contractors Materials Consumption Note (MCN)
shall be prepared.
The materials may be advanced to contractor for consumption either on „free of cost‟ or „chargeable
basis‟. Materials advanced to Contractor free of cost means the materials which are to be used by the
contractor for works purpose and do not form part of the materials to be supplied by the contractor for
works as per the respective CB. The materials advanced to contractor „free of cost‟ shall be treated as
if under the custody of concerned Junior Engineer.
MTN shall be prepared for materials advanced to contractor. On consumption of these materials,
MCN shall be prepared. MTN and MCN shall be prepared by JE and valued by Accounts Section.
Materials advanced to contractor on chargeable basis shall be treated as if it is sale of materials.

Materials Sale Note (MSN) shall be prepared for materials advanced to contractor on chargeable
basis. The same has been covered in the Subject Code: 2.06
 Departmental consumption
 Materials advanced to contractor
 Consumption of materials advanced to contractor
 Penalty for materials not returned by contractor
Procedure:

No. Section Timing
Responsible
Departmental consumption
1. Junior  Undertake measurements for the works undertaken and As and when
Engineer materials consumed measurement
 Prepare Consumption Statement for the materials is undertaken
consumed.
 Prepare SCN for the materials consumed.
 Update DTR based on SCN
 Forward SCN and Consumption Statement along with
MB to AE
2. Assistant  Scrutinise, approve and forward SCN, Consumption Same day on
Engineer Statement and MB to Accounts Section and receipt of SCN
JE(Technical) and related
documents
Page | 47

No. Section Timing
Responsible
3. Junior  Receive the SCN, Consumption Statement and MB. Within one day
Engineer  Check the Consumption Statement and approve it. of receipt of
(Technical) SCN and
related
documents
4. Accounts  Receive SCN and check it with respect to Consumption Within one day
Section Statement and MB, undertake casting and cross-casting. of receipt SCN
Ensure that all the required details are available in the and related
above documents. documents
 Undertake valuation of SCN based on the weighted
average rate.
Authority, to account for materials consumption.
 Based on JV, update Journal Book, Stores Ledger,
General Ledger, Subsidiary Ledger and Works Register
Materials advanced to contractor
5. Junior  Estimate the quantity to be advanced as Free of Cost As and when
Engineer  Prepare MTN for the quantity of materials advanced to
the contractor.
 Obtain the signature of the contractor / its authorised
representative on MTN and dispatch materials to
contractor.
 Update DTR based on MTN.
 Prepare Materials Outward Gate Pass for dispatch of
materials
 Dispatch materials to Contractor.
6. Assistant  Scrutinise, approve and forward MTN to Accounts Same day of
Engineer Section. receipt of MTN
7. Accounts  On receipt of MTN from AE, value MTN based on the Within one day
Section weighted average rate derived. of receipt of
 Prepare JV, for the MTN value in case of materials MTN
advanced Free of Cost to Contractor, and obtain
approval from Designated Authority
General Ledger, Subsidiary Ledger and Works Register.
Consumption of materials advanced to contractor
8. Junior  Update MB based on the measurements undertaken of As and when
Engineer the work done and prepare a Consumption Statement for
the materials consumed on the work.
 Prepare MCN for the materials item consumed / returned
by contractor.
 Update DTR based on MCN for materials consumed as
well as returned, if any by the contractor.
 Forward MCN and Consumption Statement along with
MB to JE (Technical)
9. Assistant  Scrutinise, approve and forward MCN, Consumption Same day of
Engineer Statement and MB, approve it and forward it to Accounts receipt of MCN
Section and JE(T).
10. Junior  Receive the SCN, Consumption Statement and MB. Same day of
Engineer  Check the Consumption Statement and approve it. receipt of MCN
(Technical)
11. Accounts  Check MCN with respect to Consumption Statement and Within one day
Section of receipt of
Page | 48

No. Section Timing
Responsible
MB, undertake casting and cross-casting. MCN
 Ensure that all the required details are available in the
above documents.
 Undertake valuation of MCN based on the weighted
average rate applied to its corresponding MTN.
Authority, for the MCN in case of materials were earlier
advanced as free of cost to contractor.
Penalty for materials not returned by contractor
12. Junior  In case excess materials issued free of cost has not As and when
Engineer been returned by the Contractor, inform Accounts
Section through a letter about recovery of the same from
contractor‟s bill.
 Prepare MAN for the materials not returned by the
Contractor and forward it to AE.
 Update DTR based on MAN.
13. Assistant  Scrutinise, approve and forward MAN to Accounts Same day of
Engineer Section. receipt of MAN
14. Accounts  Receive MAN from AE. Within one day
Section  Undertake valuation of MAN based on the weighted of receipt of
average rate applied for the corresponding MTN. MAN
 In such case, penalty shall be charged to contractor
against unreturned materials and the cost of unreturned
materials shall also be recovered. The penalty shall be
affected as per the relevant clause of the CB.
 Prepare JV based on MAN.
Formats

Ref. Title Type
MT/F03 SCN I/O As and when Junior  Own Copy
Consumption Engineer  Assistant Engineer
Statement is  Accounts Section
prepared
MT/F02 MTN I/O As and when Junior  Own Copy
Materials is Engineer  Assistant Engineer
advanced  Accounts Section
 Contractor‟s Copy
MT/F04 MCN I/O As and when Junior  Own Copy
Consumption Engineer  Assistant Engineer
Statement is  Accounts Section
prepared
MT/F06 MAN I/O On adjustment Junior  Own Copy
of stock quantity Engineer  Assistant Engineer
for reasons  Accounts Section
MT/R02 DTR O Same day on Junior ---
finalisation of Engineer
SCN / MCN /
MTN
Page | 49

Ref. Title Type
Ledger valuation of Section
SCN / MCN /
MTN
Register valuation of Section
SCN / MCN /
MTN
Accounting Entries

Responsible
1. On JV SCN Debit Accounts
Departmental Section
Consumption Relevant WIP Materials Consumed
Account
Credit

2. On materials JV MTN Debit Accounts
advance to Section
contractor Relevant WIP Materials Account
free of cost
to contractor Credit

3. On materials JV MCN Debit Accounts
consumption Section
by contractor Relevant WIP Materials Consumed
Account
Credit

4. In case of JV MAN Debit Accounts
materials not Section
returned by Account Payable – Contractor
contractor Account
Credit

Fines & Penalties Levied –
Contractors Account (for materials
unreturned)
Page | 50

Subject: Sale of Materials / Scrap Materials Subject Code: 2.06
Subject Background:
This subject covers the accounting procedure to be followed in relation to the sale of materials / scrap.
Sale of materials shall be on account of obsolete/ scrap / excess materials sold through selection of
outside buyers or materials issued to contractor on chargeable basis on a particular Works project.
In case of materials sale other than to contractor, UPJN selects the buyer through open tenders or
other suitable method. Materials issued to contractor on chargeable basis has some margin over and
above the cost of materials. After selection of buyer, the materials shall be dispatched to the buyer
and MSN shall be prepared. MSN shall be prepared by JE and valued by Accounts Section
In case of materials sold to selected buyer, the payment shall be received before dispatch of materials
based on the Policies prescribed by UPJN. In case of materials advanced to contractor on chargeable
basis, the value of materials shall be recovered from the contractor‟s bill or against advance payment.
 Identification of materials / scrap for Sale

 Receipt of payment
 Preparation of MSN and dispatch of materials
 Valuation of MSN
Procedure:

No. Section Timing
Responsible
Identification of materials / scrap for Sale
1. Junior  JE shall identify materials / scrap to be sold (usually at As and when/
Engineer / the time of physical verification of materials items) during physical
Executive  Based on the Policies prescribed by UPJN, the buyer verification of
Engineer / shall be selected. materials items
Accounts
Section
Receipt of payment and its Accounting
2. Cashier  Receive payment for materials / scrap sold. Adopt the As and when
procedure for bank receipts as provided in Subject
Code: 9.04 Same day of
 Prepare BRV. receipt of
 Based on BRV, update Bank Book, General Ledger payment
and Subsidiary Ledger.
Preparation of MSN and dispatch of materials
3. Executive  Instruct JE to dispatch quantity of prescribed materials As and when
Engineer to the selected buyer.
4. Junior  Based on instruction from EE, prepare MSN, providing As and when
Engineer details of Works project from which materials shall be instructions
dispatched, quantity to be dispatched, nature of received from
materials whether normal, unused materials - scrap, Executive
used materials – scrap, etc. and mention the fact that Engineer
the MSN is prepared for materials sold.
 Attach approval note along with MSN On dispatch of
Page | 51

No. Section Timing
Responsible
 Prepare Materials Outward Gate Pass for dispatch of materials to
materials. buyer
 Take the signature of the buyer or its authorised
representative on Materials Outward Gate Pass and
provide them copy of it.
 Update DTR under a particular Works project from
which materials have been dispatched / sold.
 Forward MSN to AE for materials sold
5. Assistant  Srutinise, approve and forward the MSN to Accounts Same day of
Engineer Section. receipt of MSN
Valuation of MSN
6. Accounts  On receipt of MSN from AE, value the MSN based on As and when
Section the weighted average rate derived and also enter the
sale value in MSN.
 Identify income or loss on sale of materials, as the
case may be.
7. Accounts  Prepare JV, for sale of materials and income or loss on Within one day
Section sale of materials, and obtain approval from Designated of receipt of
Authority. MSN
General Ledger, Subsidiary Ledger, and Works
Register.
Formats

Ref. Title Type
MT/F05 MSN I/O As and when the Junior Engineer  Own copy
materials are  Assistant Engineer
dispatched.  Accounts Section
MT/R02 DTR O Same day on Junior Engineer ---
receipt of GRN
Ledger receipt of GRN Section
Register receipt of GRN Section
Accounting Entries

Responsible
1. On receipt of BRV Tender Debit Cashier
money from document
buyer of Bank Account
materials
Credit
Account Payable – Others

Account
2. On dispatch of JV MSN Debit Accounts
Materials Section
including unused Account Payable – Others
materials Account
Page | 52

Responsible
identified as
scrap (in case WIP Cost Others Account (in
income / loss is case of loss)
to be borne by
Works project) Credit
WIP Cost Others Account (in

case of income)
Materials Section
including unused Account Payable – Others
materials Account
identified as
scrap (in case Income / Loss from Sale /
income / loss is Disposal / Surplus / Write Off of
to be borne by Material Account
UPJN)
Credit
Relevant WIP - Materials

Account / Central Stores
Account
Income / Loss from Sale /

Disposal / Surplus / Write Off of
Material Account
used materials Section
identified as Account Payable – Others
scrap Account
(in case sale
proceeds is to be Credit
borne by Works
project) WIP Cost Others Account
used materials Section
identified as Account Payable – Others
scrap Account
(in case sale
proceeds is to be Credit
borne by UPJN)
Income from Sale of Scrap
Account
Page | 53

Subject: Physical Verification of Materials Subject Code: 2.07
Subject Background:
This subject covers the accounting procedure to be followed in relation to stock adjustments on
shortage / surplus identified on physical verifications.
The Physical verification committee shall be formed consisting person other than the persons who are
responsible for maintaining materials location. This committee shall undertake physical verification
and submit a physical verification report to identify the shortage / surplus of materials available at site
vis-à-vis recorded in books.
 Physical verification
 Preparation of Physical Verification Report
 Reconciliation with Stores Ledger and adjustments for shortage / surplus
Procedure:

No. Section Timing
Responsible
Physical verification
1. Physical  Carry out the physical verification of the materials as At least once
Verification per the Policies, if any, prescribed by UPJN during the year
Committee  Physically verify materials store covering all the
storage locations including Central / Divisional stores,
Junior Engineer site, other locations, etc. In case there
is nil stock at a particular location, it shall be clearly
specified.
2. Physical  Adjust the stock movements in terms of receipt / issue After physical
Verification in / from the store location during physical verification verification
Committee based on the measurements undertaken and
documented through GRN, MTN, SCN, MCN, and
MSN for recording receipt / issue of materials at the
storage location.
Preparation of Physical Verification Report
3. Physical  Prepare Physical Verification Report (PVR) – Materials After physical
Verification and record the actual measurement and quantity of verification
Committee materials as per verification for each item of materials,
time and date of physical verification. The PVR shall be
signed by all the Committee members
 Mention any assumptions made for physical
verification, if any
 Identify materials shortage / surplus by comparing PVR
and DTR.
 Mention the physically verified quantity in DTR to
represent the actual available quantity in stock.
 Forward PVR to Accounts Section
Reconciliation with Stores Ledger and adjustments for shortage / surplus
4. Accounts  Receive PVR from Physical Verification Committee Within seven
Section  Reconcile PVR with Stores Ledger, to identify shortage days of receipt of
/ surplus quantity of materials, if any to keep the DTR PVR
and Stores Ledger tallied in respect of quantities of
Page | 54

No. Section Timing
Responsible
materials.
 Calculate the value of the identified shortage / surplus
quantity of materials based on Weighted Average
Method
5. Accounts  Based on PVR, prepare Materials Adjustment Note to As and when
Section make entries for the materials quantity discrepancy in
the Stores Ledger on the last date of month on which
physical verification has been undertaken.
 In case of shortage, reduce materials quantity and
value in Stores Ledger, through MAN. Transfer the
value to the stores shortage / surplus - pending
investigation Account.
o On the decision taken by appropriate authority for
shortage, account for debit corresponding JE /
person responsible (in case of recovery) or debit
WIP Cost Other Account (in case of write off
approval) and credit stores shortage / surplus -
pending investigation Account
 In case of surplus, increase the materials quantity and
value in Stores Ledger, through MAN. Transfer the
value to WIP Materials Account of the corresponding
Works project at the available weighted average rate
and credit WIP Cost Others Account / Income from
Stores Surplus Account.
 Prepare JV, for the shortage / surplus, and obtain
approval from Designated Authority.
 Based on JV, update Journal Book, General Ledger
and Works Register.
Formats

Ref. Title Type
MT/F07 Physical I/O On physical Physical  Own Copy
Verification verification Verification  Accounts Section
Report - Committee  Head of Office
Materials
MT/F06 MAN I/O As and when the Junior  Own copy
materials are Engineer  Assistant
adjusted. Engineer
MT/R02 DTR O As and when Junior ---
physical verified Engineer
quantity is finalised
MT/R03 Stores O As and when the Accounts ---
Ledger valuation of physical Section
verification shortage
/ surplus is done
WE/R02 Works I/O As and when the Accounts ---
Register valuation of physical Section
verification shortage
/ surplus is done
Page | 55
Accounting Entries

Responsible
1. On JV PVR Debit Accounts
identification Section
of shortage Stores shortage / surplus -
Credit

(concerned Works project) /
2. On JV PVR Debit Accounts
identification Section
of surplus Relevant WIP Materials Account
(concerned Works project) /
Credit
Stores shortage / surplus -

3. On decision JV Decision Debit Accounts
taken on taken by Section
shortage by Designated Relevant WIP Cost Others
Designated Authority Account
Authority – (concerned Works project) /
approval of Central Stores Account
shortage
Credit
Stores shortage / surplus -

shortage by Designated Stores shortage / surplus -
Designated Authority pending investigation Account
Authority –
approval of Credit
surplus
WIP Cost Others Account /
Income / Loss from Sale / Disposal

/ Surplus / Write Off of Material
shortage by Designated Account Recoverable – Others
Designated Authority Account
Authority –
recovery Credit
from person
responsible Stores shortage / surplus -
Page | 56

Subject: Inventory Management Subject Code: 2.08
Subject Background:
This subject covers the procedure of inventory management including criteria for identification and
categorisation of inventory items based on their physical/ usability status, procedure for disposing off
the scrap, obsolete and non-moving inventory items, aging of inventory items, inventory management
techniques, etc.
Criteria for identification and categorisation of inventory items based on their status
 All inventory items lying in store shall be identified and categorised based on their use and
physical condition as under:
Identification Identification criteria Abbreviation

categories Used
Regularly Items which are used on a regular basis (subject to items R
Usable which are specifically identified as non obsolete/ scrap)
Obsolete Items which are identified as obsolete due to outdated O
technology or otherwise (Subject to items which are
specifically identified as scrap)
Scrap Fresh items declared as scrap S
Old & Used Items which are re-used/ re-issued and/ or lying in store for O/U
(Repairable) repair (being repairable items) including scrap generated
 All scrap and obsolete items shall be identified and disposed off on a regular basis to ensure that
the funds are not being blocked unnecessarily
 This shall be ensured by carrying out physical verification (at least once during the year) and an
ageing analysis of the inventory with the objective of identifying such materials. Such items shall
ideally be segregated and kept separately from other materials.
 UPJN shall lay down Policies for determining / declaring any item as obsolete or scrap and the
manner of their disposal. All the items identified for disposal shall be collected at the respective
Store of Units (immediately after identification) and disposed off immediately.
Procedure for disposing off the obsolete, non-moving and scrap items
 The steps to be followed for disposing off the obsolete and scrap items are as under:
o Identify and prepare a list of obsolete, non-moving and scrap items.
o Circulate the list to other locations to ensure that the materials is not required at any location.
o Forward a copy of the final list to the Competent Authority for approval to pass necessary
order for declaration of obsolete, non-moving and scrap items.
o Get the inspection of items done by competent authority to obtain approval for disposal
(wherever appropriate)
o Dispose-off slow moving items which are lying for a considerable period with no scope of
utilisation in immediate future (to minimise losses caused due to depreciation in value of the
materials).
o Call quotations from various parties for the sale of materials identified for disposal.
Ageing of inventory items
 During the physical verification exercise, ageing (in years) of inventory items shall be done under
the following categories:
Page | 57
Categories Criteria
<1 year Items which are lying for less than a year
1 to 3 years Items which are lying for one year or more but less than three years
3 to 5 years Items which are lying for three years or more but less than five years
5 to 10 years Items which are lying for five years or more but less than ten years
10 to 20 years Items which are lying for ten years or more but less than twenty years
>20 years Items which are lying for twenty years or more
Inventory Management Techniques
 UPJN shall adopt the following inventory management techniques:

o ABC Analysis
o VED Analysis
o Perpetual Inventory System
o Economic Order Quantity
o Safety stock Level
ABC analysis
 Efficient store keeping requires sufficient control over all inventory items of stores. However,
comparatively greater care is necessary in case of costlier items. ABC analysis is used for
identifying these items. The method requires classification of the inventory into categories,
proportional to the inventory total cost, designated as A, B and C category items as under:
o Category A comprises of items which represent the most significant amount of investment in
inventory.
o Category B comprises of the items of secondary importance.
o Items in category C are higher in quantity, but of less value in relation to the total inventory
amount.
 While exercising control over stores, items of category A shall be given the maximum attention.
Their levels of stock shall be strictly controlled. In case of items of category B, ordinary stores
routine shall be observed but policies regarding levels of stock may not be so strictly adhered to
as for the items in category A. Items of category C do not require continuous monitoring.
VED analysis
 Under VED technique, items are classified into Vital, Essential and Desirable on the basis of
criticality of the item as perceived by the user department.
Perpetual Inventory System

 Perpetual inventory system requires recording of stores balances after every receipt and issue, to
facilitate regular checking and to obviate closing down for stock taking. The basic objective of this
system is to make available the details relating to the quantity and value of each item at all times.
The system thus provides a rigid control over stock of materials as physical stock can regularly be
verified with the stock records kept in the stores. Perpetual inventory system requires:
o Maintenance of both bin cards as well as Stores Ledger on perpetual inventory system
o Adoption of continuous stock taking i.e. continuous checking of the physical quantity with the
quantities shown in the bin card and the Stores Ledger by an independent personnel covering
different sections of the stores in rotation.
Economic Order Quantity (EOQ)

 EOQ is essentially an accounting formula that determines the point at which the combination of
order costs and inventory carrying costs are the least. The result is the most cost effective
quantity to order.
o Annual Usage - Expressed in units, this is the forecasted annual/periodical usage.
o Order Cost - This is the sum of the fixed costs that are incurred each time an item is ordered.
These costs are not associated with the quantity ordered but primarily with physical activities
required to process the order. These would include the costs relating to:
 Processing of the purchase order and/or requisition,
 Any approval steps,
Page | 58
 Processing of the receipt,

 Incoming inspection,
 Invoice processing and vendor payment.
(It shall be noted that these are costs associated with the frequency of the orders and not
the quantities ordered)
o Carrying cost -Carrying cost is the cost associated with having inventory on hand. It is
primarily made up of the costs associated with the inventory investment and storage costs.
For the purpose of the EOQ calculation, if the cost does not change based the quantity of
inventory on hand, it shall not be included in carrying cost. In the EOQ formula, carrying cost
per unit is used. The primary components of carrying costs are as under:
 Interest. If money is borrowed to pay for the inventory, the interest rate would be part of
the carrying cost.
 Insurance. Since insurance costs are directly related to the total value of the inventory, it
would be included as part of carrying cost.
 Taxes. If any tax is required to be paid on the value of the inventory it would be included.
 Storage Costs.
 Formula - Q = [2UP/S]^1/2
Where, Q = Economic order quantity
U = Quantity (units) purchased or used in a year/period
P = Ordering cost of an order
S = Carrying cost of one unit
 Maintaining EOQ - The values for Order cost and Carrying cost shall be evaluated at least once in
a year taking into account any changes in interest rates, storage costs and operational costs.
Safety Stock
 Safety stock is the lowest quantitative balance of materials, which must be maintained in hand at
all times so that the work is not stopped on account of non-availability of materials. The following
parameters shall be taken into consideration for monitoring and fixing the level of safety stock:
o Consumption value (ABC classification)
o Criticality (VED classification and also availability of substitutes)
o Reliability of suppliers. This is measured on:
 Quality (Number of rejections)
 Variability in lead time of delivery
 Responsiveness (ability to dispatch materials quickly in case of emergency orders)
 Distance from plant (low lead times reduce variance)
 The above techniques shall be used to manage inventory in a scientific and efficient manner as
under:
o Materials shall be classified as per ABC and VED techniques for better physical control as
well as monitoring of stock level.
o Ordering quantity shall be decided on the basis of EOQ technique. Since the materials is to
be ordered quarterly, EOQ shall be calculated for a quarter. To apply this technique Carrying
cost and Ordering cost shall be calculated as has been detailed above. For Annual usage,
quantity required for the respective quarter can be used in place of the annual requirement.
Also a provision for safety stock shall be added to the materials required in a quarter. EOQ
shall be calculated for each quarter at the beginning of the year itself. (EOQ for a quarter may
undergo a change in case a revised requirement is received from the field units).
o Perpetual inventory system shall be followed for regular and effective control over the stock
lying at the stores. This would facilitate timely and correct reporting of the stock level to the
Planning/MM Cell thus ensuring proper planning and monitoring of stock.
Page | 59
3.00 Section: Works Expenditure

Section Background:
3.01 This Section covers the Works expenditure accounting and related procedures.
Classification of Works
3.02 UPJN carries out the following class of works:

 Construction projects
 Maintenance of existing projects
Construction projects
3.03 UPJN carries out water supply related construction projects on behalf of other outside parties
(local bodies, Jal Sansthan, etc.). After completion, these projects are handed over to the respective
parties.
Maintenance of existing projects
3.04 At present there are certain cases where the projects executed by UPJN were not transferred
to the respective parties due to certain valid reasons. In view of this, these projects are also being
maintained by UPJN and the prescribed „user charges‟ (e.g. water supply charges) from the users (i.e.
general public) are being recovered by UPJN.
Funding of Works Expenditure
Funding for Construction projects
3.05 To execute the construction projects, funds are received by UPJN either from the respective
outside parties (e.g. Urban Local Bodies, etc.) or from Central and/ or State Government or directly
from the funding agencies (e.g. Asian Development Bank (ADB), World Bank, etc. on behalf of
outside parties/ Government). Funds received from outside parties may be in the nature of Loan or
Subsidy/ Grant to those parties. However for accounting purpose these funds shall be treated as
„Deposits‟ by UPJN.
3.06 However there are cases where funds disbursed by Central and/ or State Government or by
funding agencies are in the nature of Loan to UPJN and UPJN is required to repay these loans and to
pay interest thereon. In these cases these funds shall be treated as loan received by UPJN for
accounting purpose.
Funding for Maintenance of existing projects
3.07 For the purpose of maintenance of the existing projects, UPJN receives grants from Central/
State Government. However for accounting purpose these funds shall be treated by UPJN as
„deposits‟.
Works Cost
3.08 A total of the following shall constitute as Works Cost for any particular project:
 Expenditures incurred but not paid (i.e. labour, materials consumed and other directly
attributable expenditures)
 Expenditures incurred and paid
 Expenditure not yet incurred but payment made in advance against those expenditure
 Unconsumed Materials (being shown as stock) lying at site/ Store
 Centage on all the above
Page | 60
Works Cash Outlay
3.09 A total of the following shall constitute as Cash Outlay on Works for any particular project:
 Expenditures incurred and paid (i.e. labour, materials consumed and other directly
attributable expenditures
 Expenditures not yet incurred but payment paid in advance against those expenditure
 Centage on all the above
Categorisation of Works Project
3.10 The categorisation of above works projects shall be under:
Works Categorisation
Projects
Work Group  Rural Development Department
 Urban Development Department
 Public Works Department
 Others
Works Class  Construction
 Operation & Maintenance (O & M)
 Project and Consultancy
 Others
Works Type  Water Supply
 Sewerage
 Drainage
 Solid Waste Management (SWM)
 Sustainability
 Others
Scheme  Schemes (as sanctioned by Government)
Project  Projects (as sanctioned under the above schemes)
Project  Project Components (as defined under above projects)
Components
This shall be the lowest level of project categorisation under which the works
expenditure shall be recorded. For every project components there shall be parallel
General Ledger account head with the necessary Subsidiary Ledger.
For details Refer Section Code: 1.00 Chart of Accounts.
Accounting Policies
3.11 The main accounting policies that shall be followed relating to Works Expenditure accounting
are provided in the subsequent paragraphs.
a.) Accounting for all works expenditure related transactions shall be done on an accrual basis.
b.) Water supply charges collected / to be collected from maintenance projects shall not be treated
as income of UPJN. At the period end, any unutilised deposit (in the form of water supply charges
or receipts of grant from Government for maintenance projects) or excess expenditure, if any on
the maintenance projects shall be treated as payable or recoverable, respectively, amount from
the Government. This amount shall be treated as per the terms and conditions associated with
the respective deposits received by UJPN from the Government.
3.12 This section covers the following Subjects:
Page | 61

No.
1. Works expenditure incurred through engaging the contractors 3.01
2. Transfer and Closure of Projects 3.02
3. Maintenance of existing projects 3.03
3.13 Accounting aspects and related procedures relating to the following have been covered under
the following sections/ subjects:
 Deposits / Loan / Grants - Refer Section Code: 4.00 - Loan, Deposits, Grant and
Investment
 Stores – Refer Section Code: 2.00 - Stores
 Centage – Refer Section Code: 6.00 - Revenue and Collection
 Works Expenditure incurred through PI / TI – Refer Section Code: 8.00 - Personnel
Page | 62
Section: Works Expenditure Section Code: 3.00

Subject: Works expenditure incurred through Subject Code: 3.01
engaging the contractors
Subject Background:
This subject covers the accounting procedure to be followed in relation to the works expenditure
incurred through engaging the contractors.
Accounting of work expenditure on both classes of projects (Construction projects and maintenance of
existing projects) shall be the same.
Every Works project shall be allotted a separate Project Code and Account Heads and all the works
expenditure shall be identified to a particular project.
 Preparation/ Receipt of contractor‟s bill
 Passing of contractor‟s bill
 Advance payment to contractor
 Payment to contractor against contractor‟s bill / amount retained earlier
The above procedure shall be applicable to the account for the expenditure on both the classes of
projects i.e. construction projects and maintenance of existing projects.
Procedure:

No. Section Timing
Responsible
Preparation/ Receipt of contractor’s bill
1. Junior  Update Measurement Book (MB) for the details of works As and when
Engineer undertaken.
(JE)
2. Junior  Prepare running / final bill as per the MB and Contract As and when/
Engineer Bond (CB) and jointly agree with the contractor; or on achieving
 Receive the running / final bill from the Contractor, pass it the respective
as per the MB and CB. Put a date stamp for the date of milestone as
receipt on contractor‟s bill. agreed in the
 In case of materials supplied by UPJN as part of the CB, CB
prepare Materials Consumption Note (MCN) – Refer
Subject Code. 2.05 for procedure related to consumption.
 Forward running / final bill to the concerned Assistant
Engineer (AE) along with MB and MCN, if any, for review
and approval purpose
3. Assistant  Receive the running / final bill from concerned JE along As and when
Engineer with MB and MCN, if any. Put a date stamp for the date of running / final
receipt on contractor‟s bill. bill is received
 Scrutinise the running / final bill & MCN and verify it with
MB and CB.
 Approve and forward it to concerned JE (Technical)
Passing of contractor’s bill
4. Junior  Receive contractor‟s running / final bill along with MB and As and when
Engineer MCN, if any, from the AE. running / final
(Technical)  Put a date stamp for the date of receipt of contractor‟s bill. bill is received
 Scrutinise the running / final bill and verify it with MB and
Page | 63

No. Section Timing
Responsible
CB.
 Pass the bill for the amount payable to the contractor.
 Forward the contractor‟s running / final bill along with MB
and MCN, if any, to concerned Accounts Section
5. Accounts  Receive contractor‟s bill along with MB and MCN, if any. As and when
Section  Put a date stamp for the date of receipt on contractor‟s bill.
Scrutinise and verify the contractor‟s bill with MB and CB
 Pass the bill for the amount payable to the contractor.
 In case of water testing fees, security deposit for defect
liability period, etc. are to be retained, deduct the same
from the amount payable to the contractor.
 Forward contractor‟s bill along with MB, CB and MCN, if
any, to the concerned Executive Engineer (EE).
6. Executive  Receive contractors bill and undertake an overall check of As and when
Engineer the contractor‟s running / final bill and approve the bill for contractor bill
payment. is received for
approval
7. Accounts  Prepare Journal Voucher (JV). As and when
Section  Based on JV, update Journal Book, Contractor‟s Bill approved by
Register, General Ledger, Subsidiary Ledger and Works Executive
Register. Engineer
Advance payment to contractor
8. Accounts  Advance payment shall be made to the contractor only as As and when
 Ensure that there are no previous unsettled advances
recoverable from the contractor.
 Receive Performa Invoice from contractor for the advance.
forward supporting documents to Cashier for payment.
9. Cashier  Receive supporting documents As and when
 Prepare Bank Payment Voucher (BPV).
Subsidiary Ledger, Contractor‟s Bill Register and Works
Register.
 Update MB with the advance payment details.
Payment to contractor against contractor’s bill / amount retained earlier
10. Accounts  Forward the JV with supporting documents to Cashier for As and when
Section payment.
 The payment to contractor shall be made on or after the
due date of payment for the amount passed against the bill
and net of advance, if any, paid earlier and water testing
fees, security, etc. to be deducted.
 The payment to contractor for any amount retained earlier
as deposit shall be paid on or after the due date/ milestone
achieved/ maintenance period expired, etc. and amount
passed for payment by the designated authority.
payments as provided in Subject Code: 9.04.
 Prepare BPV.
Page | 64

No. Section Timing
Responsible
Subsidiary Ledger, Contractor‟s Bill Register, and Works
Register.
 Update MB with the payment details.
Formats
Format Document Document Frequency Responsibility Distribution

Ref. Title Type to
WE/R01 Contractor‟s O As and when Accounts ---
Bill Register contractor bill is Section
passed / paid
WE/R02 Works Register I On contractor‟s Accounts ---
running / final bill Section
passing / payment
Accounting Entries

Responsible
1. Bill Passing JV Contractor‟s Debit Accounts
Running/ Section
Final Bill Relevant WIP Labour Account
Credit
Account Payable - Contractor

Account
/ Relevant WIP Advance
Account (for advances paid
earlier, if any)
Tax deducted at source –

Contractors a /c
Relevant Deposits from

contractors Account (E.g.
testing fees) / Security deposit
Account / Other relevant
accounts, if any
Payment to Invoice / CB
Contractor Relevant WIP Advance Account
Credit
Bank Account
3. Payment to BPV Contractor‟s Debit Cashier
Contractor Running Bill
against Account Payable -Contractor
contractor‟s bill Account / Relevant Deposit
/ amount from Contractors Account
retained earlier
(e.g. deposit) Credit
Bank Account
Page | 65

Subject: Transfer and Closure of Projects Subject Code: 3.02
Subject Background:
This subject covers the accounting procedure to be followed in relation to the transfer and closure of
Construction projects.
This subject is covered under the following heads:

 Preparation of Project Completion Certificate
 Transfer of completed Works project and accounting thereof
 Transfer of WIP and accounting thereof
Procedure:

No. Section Timing
Responsible
Preparation of Project Completion Certificate
1. Junior  On completion of the projects component, JE shall On
Engineer prepare “Project Completion Certificate” providing details completion of
regarding completion of component. The Project projects
Completion Certificate shall also include the following components
details:
o The scheme has been completed in all respects
o All the source documents vis. GRN, MCN, SCN, MTN,
MSN, etc. have been submitted to Accounts Section
pertaining to the projects component.
o There is no unreported liability on the projects
component or any advance pending adjustment.
o There is no materials balance lying with respect to
Works projects component. (In case, any materials
are lying with JE, then the same shall first be cleared
by transfer of the same to another scheme, central /
divisional stores or sale).
 Forward the Project Completion Certificate to AE
2. Assistant  Receive the Project Completion Certificate for the projects As and when
Engineer component completed and verify the details.
 Approve and forward the Project Completion Certificate,
on projects component completion, to Accounts Section
requesting closure of the projects components.
Transfer of completed Works project and accounting thereof
3. Transferor -  Receive the Project Completion Certificate from AE. As and when
Accounts  Ensure that the all the source documents vis. GRN, MCN
Section SCN, MTN, MSN, contractor‟s bill, supplier‟s bill have
been duly accounted for.
 Ensure that the Works Register has been prepared up to
date and tallies with the books of account.
 For closure and transfer the completed Works projects the
following accounting procedure shall be adhered:
o In case where Unit which is responsible to execute the
project and is also maintaining the corresponding
deposit account, prepare JV, for completion and
closure of project, and obtain approval from
Designated Authority
Page | 66

No. Section Timing
Responsible
o In case where Unit which is responsible to execute the
project but the corresponding deposit account is being
maintained at Head Office (HO) / other Unit, prepare
JV for completion of project and raise Advice of
Transfer Debit (ATD) on HO / other Unit. Refer Subject
Code: 10.01 for procedure relating to raising ATD.
4. Transferee –  Receive and review ATD and supporting documents and As and when
Accounts forward the perforated copy to the Transferor Unit. Refer
Section (HO / Subject Code: 10.02 for procedure relating to accepting
Unit) ATD
 Prepare JV, for closure of the project, and obtain approval
from Designated Authority. Any outstanding balance under
Deposits Account shall be reflected as recoverable /
payable amount from / to the concerned party.
Transfer of WIP and accounting thereof
5. Transferor -  In case where responsibility for execution of works is As and when
Accounts transferred from one Unit to another Unit, prepare JV, and
Section obtain approval from Designated Authority, for transferring
the entire outstanding balances under all the related WIP
accounts and under deposit account to the concerned
transferee and raise ATD on that Unit. Refer Subject
Code: 10.01 for procedure relating to raising ATD
6. Transferee –  Receive and review ATD and supporting documents and As and when
Accounts forward the perforated copy to the Transferor Unit. Refer
Section (HO / Subject Code: 10.02 for procedure relating to accepting
Unit) ATD
 Prepare JV, for transfer of relevant WIP, and obtain
 Based on JV, update Journal Book, General Ledger and
Formats

Ref. Title Type
IUT/F01 ATD I/O On transfer of Transferor –  Own copy
completed Works Accounts  Transferee
projects component / Section Accounts
Works in Progress Section
 Head Office
WE/R02 Works O Same day on Accounts ---
Register valuation of GRN Section
Page | 67
Accounting Entries

Responsible
1. On JV JE‟s Project Debit Transferor –
completion of Completion Accounts
projects Certificate Relevant Completed Works Section
component Projects Account
Credit
Relevant WIP Labour Account
Relevant WIP Materials Consumed

Account
Relevant WIP Cost Others Account
Relevant WIP Centage Account
Other relevant Account, if any

2. On JV JV for Debit Transferor –
preparation of completion Accounts
originating of projects IUT – Completed Works Projects Section
ATD for component Account
transfer of
completed Credit
Works
projects Relevant Completed Works
component to Projects Account
Unit / HO
3. On receipt of JV ATD Debit Transferee –
ATD from Accounts
transferor for Relevant Completed Works Section
transfer of Projects Account
completed
Works Credit
projects
component IUT – Completed Works Projects
Account
4. On closure of JV ATD Debit Transferee –
projects Accounts
Relevant Deposits Account Section
(Works related)
Credit
Relevant Completed Works

Projects Account
5. On JV JE‟s Project Debit Transferor –
preparation of Completion Accounts
originating Certificate IUT – Works in Progress Account Section
ATD for
transfer of Credit
Works in
progress for Relevant WIP Labour Account
continuation
Page | 68

Responsible
Relevant WIP Cost Others
Account

Account
Relevant WIP Project Asset

Account
Other Relevant Account

6. On receipt of JV ATD Debit Transferee –
ATD from Accounts
transferor for Relevant WIP Labour Account Section
transfer of
WIP Relevant WIP Cost Others
Account

Account

Account
Credit
IUT – Works in Progress Account
Page | 69

Subject: Maintenance of existing projects Subject Code: 3.03
Subject Background:
This subject covers the accounting procedure to be followed in relation to demand and collection of
water supply charges on the Works project maintained by UPJN.
UPJN collects water supply charges from the consumers of water supply through the projects
maintained by it. Maintenance of the project is on a continuous basis. These charges as collected by
UPJN are utilised in maintaining the existing projects.
In view of the above, the works expenditure incurred on maintenance projects shall be adjusted
against Deposits (in the form of grant) received from Government as well as water supply charges
collected from consumers at the period end. The balance of deposits lying or unadjusted works
expenditure shall be carried forward for adjustment next period.
 Raising of demand for water supply charges
 Receipt of water supply charges
 Provisioning for doubtful demand
 Write off of doubtful demand
 Period end procedure
Procedure:

No. Section Timing
Responsible
Raising of demand for water supply charges
1. Junior  Maintain Demand and Collection Register (DCR), As and when
Engineer maintenance scheme wise the bills is
 Raise the bill against consumers for the collections to raised.
be made on or before the due date.
 Enter the bill details for each consumer in the respective
DCR.
2. Accounts  At the end of current billing period, cast the total of At the end of
Section demand raised for all the consumers. current billing
 Prepare JV, for the bills raised, and obtain approval period
from Designated Authority.
Subsidiary Ledger
Receipt of water supply charges
3. Junior  On receipt of water supply charges, issue money As and when
Engineer receipt to the consumer.
 Adjust the money received with the outstanding arrears
in the preference of overdue water supply charges and
current demand
 Update DCR for respective consumer
 Prepare, Receipt Challan providing consumer wise
collection made and bifurcating into overdue water
supply charges, previous demand and current demand.
 Submit Receipt Challan along with money receipts and
Cash / Cheque to Cashier
4. Cashier  On receipt of Receipt Challan along with money As and when
Page | 70

No. Section Timing
Responsible
receipts and cash / cheque, cross check and cast the
totals against cash well as cheque received. Put a
stamp of actual cash / cheque received on Receipt
Challan.
5. Cashier  Based on Receipt Challan, prepare Bank Receipt As and when
voucher (BRV) / Cash Receipt Voucher (CRV).
 To process receipts, adopt the procedure for bank /
cash receipts as provided in Subject Code: 9.04 / 9.05
 Based on BRV / CRV, update Bank Book / Cash Book,
General Ledger and Subsidiary Ledger.
Provisioning for doubtful demand
6. Junior  Carry out a scrutiny and analysis of the water supply At the end of
Engineer charges recoverable from consumers. reporting
 At the end of reporting period calculate the closing period
arrears and estimate the doubtful demand, if any, for
every consumer.
 Intimate the Accounts Section regarding provision to be
made for doubtful demand.
7. Accounts  Prepare JV, for the doubtful water supply charges On receipt of
Section recoverable, and obtain approval from Designated intimation from
Authority. JE
Subsidiary Ledger and DCR.
Write off of doubtful demand
8. Junior  Carry out a scrutiny and analysis of the water supply As and when
Engineer charges recoverable from consumers.
 Identify those water supply charges which are non-
recoverable.
 Intimate the Accounts Section regarding doubtful
demand to be written off.
9. Accounts  Prepare JV, for the write off of non-recoverable water On receipt of
Section supply charges, and obtain approval from Designated intimation from
Authority JE
Subsidiary Ledger & DCR.
Period end procedure
10. Junior  Submit all the DCR to Accounts Section for At the reporting
Engineer / reconciliation with the balance as per books of account. period end.
Accounts  Closing Arrears as per DCR should tally with balance in
Section Water Supply Charges Recoverable Account.
 In case of difference, identify the reconciliation
difference and pass the necessary accounting entry, if
any.
11. Accounts  At the period end the WIP Cost, WIP Materials At the reporting
Section Consumed, WIP Cost Others and WIP Centage of the period end.
maintenance schemes shall be adjusted against the
Deposits Account (including Water Supply Charges
Deposits Account).
 Prepare JV, and obtain approval from Designated
Authority
Subsidiary Ledger.
Page | 71
Formats
Format Document Title Document Frequency Responsibility Distribution to

Ref. Type
WE/R04 Demand and I/O As and when Junior ---
Collection Engineer
Register
WE/F01 Receipt Challan I/O As and when Junior  Own Copy
collections are Engineer  Accounts
made Section
Accounting Entries

Responsible
1. On billing for JV Bills/ DCR Debit Accounts
water supply Section
charges Water Supply Charges
Recoverable Account
Credit
Water Supply Charges

Deposits Account
2. On collection BRV / CRV MR Debit Cashier
of water
supply Bank Account / Cash Account
charges
Credit

Recoverable Account
3. On JV Intimation Debit Accounts
provisioning from JE Section
for doubtful Doubtful Water Supply Charges
demand Account
Credit
Provision for Water Supply

Charges Account
4. On write off JV Approval Debit Accounts
of doubtful from Section
water supply designated Provision for Water Supply
charges authority Charges Account (if provision
made earlier)
Credit
Doubtful Water Supply Charges

Account (if provision made
earlier)
Debit Accounts
Section
Deposits Account
Page | 72

Responsible
Credit

Recoverable Account
5. On closure of JV __ Debit Accounts
the WIP Section
Accounts Relevant Deposits Account
(Cost, (maintenance project)
Materials
consumed, Water Supply Charges Deposit
Centage, Account
others, etc.)
of the Credit
maintenance
schemes WIP Labour Account
WIP Materials Consumed

Account
WIP Cost Others Account
WIP Centage Account
Page | 73
4.00 Section: Loan, Deposits, Grant and Investment

Section Background:
4.01 This Section covers the Loan, Deposits, Grant and Investment accounting and related
procedures. .
4.02 As per the Uttar Pradesh Water Supply & Sewerage Act, 1975 and the current business of
UPJN, inter alia, the main business activities that UPJN carries out are as under:
 Financing the schemes for the supply of water and for sewerage and sewage disposal
 Execution of work projects on behalf of urban local bodies, etc.
 To operate, run and maintain any water work and Sewerage system, if and when directed
by the State Government
Loan
4.03 For carrying out the above activities, UPJN takes loan for financing the Works projects
relating to supply of water and for sewerage and sewage disposal. Generally these Works projects
are executed by UPJN on behalf of the urban local bodies, etc. Disbursement of loan to these
agencies may be in the form of funds or in the nature of value of Works projects executed and handed
over to them. For this, UPJN is responsible to recover the loan and interest amount from urban local
bodies, etc. and repay the loan and pay the interest to the loan providers.
4.04 Further UPJN may also avail loans for its normal operation or for procuring capital items.
4.05 In this Section, for accounting purpose, these funds have been treated as loans (both as
received by UPJN for financing of Works projects and for its own purpose) received and disbursed by
UPJN. Accounting for receipt of both types of loans shall be same.
Deposits
4.06 To execute the construction projects, funds are received by UPJN either from the respective
outside parties (e.g. Urban Local Bodies, etc.) or from Central and/ or State Government or directly
from the funding agencies (e.g. ADB, World Bank, etc. on behalf of outside parties/ Government).
Funds received by those outside parties may be in the nature of Loan or Subsidy/ Grant for them but
in case those funds are disbursed by those parties to UPJN then accounting purpose these funds
shall be treated as „Deposits‟ by UPJN.
Investment
4.07 In addition to loans, this Section also covers the accounting procedure relating to
investments, in general, made by UPJN.
4.08 Based on the above, the coverage of this Section has been provided below.
Accounting Policies
4.09 The main accounting policies that shall be followed relating to loan, deposits, grant and
investment accounting are provided in the subsequent paragraphs:
Loans taken by UPJN
a.) Interest paid / payable on any loans shall be accounted for on an accrual basis..
Loans given by UPJN
b.) Interest receivable on any loans shall be accounted for on an accrual basis..
Page | 74
c.) When the management is of the opinion that recovery of any loan is doubtful, an adequate
provision shall be created for it. When the management is of the opinion that the loan will not be
recovered, then the respective loan/advance amount shall be written off.
Grant received
d.) If the Company receives any Grant in the nature of revenue, the same shall be treated in
accordance with terms and conditions attached with the grant.
e.) Accounting policy for Capital Grants has been covered in Section: 5.00 Fixed Assets of this
Accounting Manual.
Investment
f.) A current investment is an investment that is by its nature readily realisable and is intended to be
held for not more than one year from the date on which such investment is made. A long term
investment is an investment other than a current investment even though it may be readily
marketable.
g.) Long-term investments shall be carried in the financial statements at cost. It is necessary to
create a provision for diminution to recognise a permanent decline in the value of investments.
Such provision shall be deducted from the carrying amount of the investments. The reduction in
value shall be charged to the Income and Expenditure Account. Any subsequent increase shall be
credited to the Income and Expenditure Account to the extent of the amount debited earlier, i.e.
the carrying value shall not exceed the original acquisition cost.
h.) Current investments are carried in the financial statements at the lower of cost or fair value. Any
reduction in the carrying amount of the investments (not temporary reduction) shall be debited to
the Income and Expenditure Account.
i.) Fixed deposits for earmarked funds shall be treated as investments e.g. fixed deposits against
General Provident Fund.
j.) Income on investments, etc. shall be accounted for on an accrual basis i.e. income receivable
whether due or not shall be taken in the books of account as on the closing date of the period
end.
k.) Income / loss on sale of investments shall be accounted for on transfer of ownership. e.g.
transfer of ownership in case of securities shall be the date of delivery. Income / loss on
redemption of investments shall be accounted for on the due date of redemption.
l.) When an investment is disposed of, the difference between the carrying amount and the net sale
proceeds (gross sale proceeds minus expenses directly attributable to sale) is to be charged to
the Income and Expenditure Account.
m.) In case an investment is made at different points of time at different acquisition costs and a
portion of such investment is sold, then weighted average method shall be applied to arrive at the
cost of the investments disposed.
n.) Interest, dividends, etc. in connection with the investments shall be treated as income and
credited to Income and Expenditure Account, if they are earned after acquisition of the
investments. Sometimes, such incomes may accrue in the pre-acquisition period but are paid
after the acquisition, so any such pre-acquisition incomes in connection with the investments shall
be treated as capital profit and they shall be adjusted against the acquisition cost.
o.) In the case of dividend income, final dividend shall be recognised in the period when the dividend
is declared in the annual general meeting of the investee company. Interim dividend shall be
accounted for in the period of approval by the board of the investee company.
Page | 75

No.
1. Loans taken for UPJN 4.01
2. Loans and advances given by UPJN 4.02
3. Loans received by UPJN for works purpose on behalf of local bodies, others, 4.03
etc.
4. Deposit (Grants) from Government for works purpose 4.04
5. Deposit from local bodies / others for works purpose 4.05
6. Investments 4.06
Page | 76
Section: Loan, Deposits, Grant and Section Code: 4.00

Investment
Subject: Loans taken for UPJN Subject Code: 4.01
Subject Background:
UPJN may take loans to finance the schemes for the supply of water and for sewerage and sewage
disposal as well as for its own use. These loans shall be dealt with at Head Office (HO) only and
details of these loans (relating to receipts, repayment, interest payment, etc.) shall be entered in the
Loan Register which shall be maintained at HO. The accounting procedures for receipt of loans (both
as received by UPJN for financing of Works projects and for its operations) shall remain the same.
Loans may be taken from Government, financial institution, etc. which may be short term or long term
in nature. Short-term loans are those loans which are due for not more than one year as on the date
of the balance sheet.
Interest on loans are accounted for as and when it is accrued and due. At the period end, interest
accrued but not due shall also be accounted for. However, this interest accrued but not due shall be
adjusted in the next period by passing the JV.
 Receipt of Loan
 Interest accrued and due on loan
 Repayment of installment of principal loan and interest thereon
 Interest accrued but not due on loan
Procedure:
Sl. Person / Activity / Action Frequency

No. Section / Timing
Responsible
Receipt of Loan
1. Cashier To process receipt of loan and adopt the procedure for bank As and
receipts as provided in Subject Code: 9.04 when Same
 Prepare Bank Receipt Voucher (BRV). day on
 Based on BRV, update Bank Book, General Ledger and receipt of
Subsidiary Ledger. loan
 Update the loan details in Loan Register and prepare
schedule of repayments including principal & interest in
Loan Register
Interest accrued and due on loan
2. Accounts  Calculate interest accrued and due payable on outstanding Week
Section loans on due date. Interest accrued and due is the interest before the
which is liable to be paid on due date. due date
3. Accounts  Prepare Journal Voucher (JV), for the interest accrued and On due
Section due, and obtain approval from Designated Authority date
Subsidiary Ledger and Loan Register.
Repayment of installment of principal loan and interest thereon
4. Accounts  Prepare loan repayment schedule providing details of loan Week
Section wise principal and interest amount to be paid for each loan before the
on a due date. due date
5. Cashier  To process payment, adopt the procedure for bank As and
payments as provided in Subject Code: 9.04 when
 Prepare Bank Payment Voucher (BPV) Same day
Page | 77

Responsible

Based on BPV, update Bank Book, General Ledger, of receipt of
Subsidiary Ledger and Loan Register. intimation
Interest payable accrued but not due on loan
6. Accounts  At the period end, calculate interest accrued but not due on At the
Section loans, for the no. of days / month from the last due date. period end
Interest accrued but not due is the interest which is yet to be
due for payment.
 Prepare JV, for the interest accrued but not due, and obtain
Subsidiary Ledger.
 Adjust the above JV in the next period by passing the JV.
7. Accounts  Adjust the JV passed for interest accrued but not due on At the start
Section loans in the next period by passing the JV. of next
period
Formats

Ref. Title Type to
LD/R01 Loan I/O On receipt / payment of Accounts ---
Register loan and interest related Section
transactions
Accounting Entries

Responsible
1. Receipt of Loan BRV Loan Debit Cashier
agreement /
loan Bank Account
sanction
order Credit
Relevant Loan Account

(works / non works
purpose)
2. Interest accrued and JV Loan Debit Accounts
due on Loan agreement / Section
loan Relevant Interest expense
sanction Account (works / non works
order / loan purpose)
register
Credit
Relevant Interest Accrued

and Due on relevant Loan
Account (works / non works
purpose)
3. Repayment of loan BPV Loan Debit Cashier
and interest thereon agreement /
loan Relevant Loan Account
sanction (works / non works
Page | 78

Responsible
order / loan purpose)
register
Relevant Interest Accrued
and Due on relevant Loan
purpose)
Credit
Bank Account
4. Interest accrued but JV Loan Debit Accounts
not due on Loan register Section
(period end) Relevant Interest expense
purpose)
Credit
Relevant Interest accrued

but not due on loan taken
purpose)
5. JV for interest accrued JV JV for Debit Accounts
but not due on Loan interest Section
accounted for in accrued but Relevant Interest accrued
previous period (to be not due but not due on loan taken
accounted for in next passed in Account (works / non works
period) the previous purpose)
period
Credit
Relevant Interest expense

purpose)
Page | 79

Investment
Subject: Loans and advances given by UPJN Subject Code: 4.02
Subject Background:
UPJN may disburse loans to local bodies for their water supply and sewerage schemes. For this,
UPJN is responsible to recover the loan and interest amount from urban local bodies, etc. and repay
the loan and pay the interest to the loan providers.
This subject covers the accounting procedures relating to the loan and advances given to these
agencies in the form of funds.
 Disbursement of loan and advances

 Interest accrued and due on loan and advances
 Receipt of installment principal loan and advances & interest thereon
 Interest accrued but not due on loan and advances
Procedure:

No. Section Timing
Responsible
Disbursement of loan and advances
1. Accounts  At the time of disbursement of loan to local body, others, On
Section etc., ensure that all the documentation has been completed disbursement
pertaining to loan and loan has been approved internally by of loan
Designated Authority.
2. Cashier  To process payment, adopt the procedure for bank Same day
Subsidiary Ledger and Loan Disbursed Register.
Interest accrued and due on loan and advances
3. Accounts  Calculate interest accrued and due. Interest accrued and Fifteen days
Section due is the interest which is liable to be received on due before due
date. date
 Prepare intimation for interest accrued and due and send it
to the borrower.
4. Accounts  Prepare Journal Voucher (JV), for the interest accrued and On due date
Section due, and obtain approval from Designated Authority.
Receipt of installment of principal loan and advances & interest thereon
5. Cashier  To process receipt, adopt the procedure for bank receipts Same day on
as provided in Subject Code: 9.04 receipt of
 Prepare BRV. installment
 Based on BRV, update Bank Book, General Ledger and
Interest accrued but not due on Loan and Advances
6. Loan -  At the period end, calculate interest on loans accrued but At the period
Accounts not due, for the no. of days / month from the last due date. end
Section Interest accrued but not due is the interest which is yet to
Page | 80

No. Section Timing
Responsible
be due for receipt.
 At the period end prepare JV, for the interest accrued but
not due, and obtain approval from Designated Authority.
Subsidiary Ledger.
Formats

Ref. Title Type to
LD/R02 Loan I/O On receipt / payment of Loan - Accounts ---
Disbursed loan and interest Section
Register related transactions
Accounting Entries
Sl. Event Vouche Source Accounting Entries Person /

No. r type documents Section
Responsible
1. Disbursement of BPV Loan Debit Cashier
Loan agreement /
loan sanction Relevant Loan and
order Advances to Outside
Agencies Account
Credit
Bank Account
2. Interest accrued JV Loan Debit Accounts
and due on Loan agreement / Section
loan sanction Relevant Interest Income
order / loan Accrued and Due - Loan and
disbursed Advances to Outside
register Agencies Account
Credit
Interest Income on Loans &

Advances to Outside
Agencies Account
3. Interest accrued JV Loan Disbursed Debit Accounts
but not due on Register Section
Loan (period end) Relevant Interest Income
Accrued But Not Due - On
Loan and Advances to
Outside Agencies Account
Credit
Relevant Interest income

Account
4. JV for interest JV JV for interest Debit Accounts
accrued but not accrued but not Section
due on loan due passed in Relevant Interest income
Page | 81
Sl. Event Vouche Source Accounting Entries Person /

No. r type documents Section
Responsible
accounted for in the previous Account
previous period (to period
be accounted for Credit
in next period)
Relevant Interest Income
Accrued But Not Due - On
Loan and Advances to
5. Receipt of BRV Loan Debit Cashier
installment of loan agreement /
and interest loan sanction Bank Account
thereon order / Loan
Disbursed Credit
Register
Relevant Loan and
Advances to Outside
Agencies Account
Relevant Interest Income

Accrued and Due on Loan
and Advances to Outside
Agencies Account
Page | 82

Investment
Subject: Loans received by UPJN for works Subject Code: 4.03
purpose on behalf of local bodies, others, etc.
Subject Background:
This subject deals with accounting aspects relating loan received from Government, etc. on behalf of
local body, others, etc., for woks projects to be executed for it.
Loans are received by UPJN from Government, etc. for Works project (vis. Water supply, sewerage,
etc.) on behalf of urban local bodies, others, etc. Against these Loans, Works project are required to
be executed by UPJN.
In context of the above, at the time of receipt, the loan shall be credited to Loan Account.
Subsequently, these loans shall be debited as Loans and advances to urban local bodies / others and
credited to Deposits (Loan) Account. On closure of project, the Deposits (Loan) Account shall be
adjusted against completed Works project. These loans shall be maintained and accounted for at
Head Office level only.
Interest on loans and advances recoverable are accounted for as and when it is accrued and due. At
the period end, interest accrued but not due shall also be accounted for. However, this shall be
adjusted in the next period by passing the JV.
Interest on loan payable to Government, etc. are accounted for as and when it is accrued and due.
 Receipt of loan from Government, etc.
 Interest accrued and due for payment against Loan taken from Government, etc. on behalf of
local body, others, etc.
 Interest accrued and due for receipt from local body, others, etc. against Loan taken from
Government, etc. on its behalf
 Receipt of installment of principal loan and interest thereon from local body, others, etc.
 Repayment of installment of principal loan and interest thereon to Government, etc.
Procedure:

No. Section Timing
Responsible
Receipt of Loan from Government, etc.
1. Cashier  To process receipt, adopt the procedure for bank receipts Same day
as provided in Subject Code: 9.04 on receipt of
 Prepare BRV. loan
 Based on BRV, update Bank Book, General Ledger,
Subsidiary Ledger and Loan Register (for Loan received
from Government, etc. on behalf of local body, others, etc.
for execution of Works project on its behalf).
2. Accounts  On receipt of the above loan, prepare JV, for Deposits Same day of
Section received in the form of loan and loan & advances given to receipt of
local bodies / others (based on the Government order loan
through which loan is disbursed), and obtain approval from
 Based on JV, update Journal Book, Subsidiary Ledger and
General Ledger and Loan Register (for Loan received from
Page | 83

No. Section Timing
Responsible
Government, etc. on behalf of local body, others, etc. for
execution of Works project on its behalf)
Interest accrued and due for payment against loan taken from Government, etc. on behalf of
local body, others, etc.
3. Accounts  Calculate interest accrued and due for payment against Fifteen days
Section loan taken from Government, etc. before due
date
4. Accounts  Prepare JV, for the interest accrued and due, and obtain On due date
Section approval from Designated Authority.
Subsidiary Ledger, Loan Register (for Loan received from
execution of Works project on its behalf) .
Interest accrued and due for receipt from local body, others, etc. against loan taken from
Government, etc. on its behalf
5. Accounts  Calculate interest accrued and due for receipt from local Fifteen days
Section body, others, etc. against Loan taken from Government, before due
etc. on its behalf. date
6. Accounts  Prepare JV, for the interest accrued and due, and obtain On due date
Section approval from Designated Authority.
Subsidiary Ledger, Loan Register (for Loan received from
execution of Works project on its behalf).
Receipt of installment of principal loan and interest thereon from local body, others, etc.
7. Accounts  Before due date, prepare loan and interest recovery Fifteen
Section intimation and send it to local bodies for intimating payment before due
of loan to local bodies. date of loan
installment
8. Cashier  To process receipt, adopt the procedure for bank receipts Same day
 On receipt of payment from local bodies, prepare BRV. installment
 Based on BRV, update Bank Book, Subsidiary Ledger and
General Ledger and Loan Register (for Loan received from
execution of Works project on its behalf).
Repayment of installment of principal loan and interest thereon to Government, etc.
9. Accounts  Prepare loan repayment schedule providing details of loan Week
Section wise principal and interest amount to be paid for each loan before due
on a due date. Forward this schedule to the Cashier. date
10. Cashier  To process payment, adopt the procedure for bank On or before
payments as provided in Subject Code: 9.04 due date
 Prepare BPV.
 Based on BPV, update Bank Book, Subsidiary Ledger and
General Ledger
 Update Loan Register (for Loan received from Government,
etc. on behalf of local body, others, etc. for execution of
Works project on its behalf) with the details of repayment
made for principal loan and interest thereon.
Page | 84
Formats

Ref. Type
LD/R03 Loan Register I/O On Receipt / Accounts ---
(for Loan Disbursement Section
received from / Closure of
Government, Loan
etc. on behalf of
local body,
others, etc. for
execution of
Works project on
its behalf)
Accounting Entries

Responsible
1. On receipt BRV Government Debit Cashier
of Loan Order for
loan Bank Account
Credit
Relevant Loan Account (works / non

works)
JV Government Debit Accounts
Order for Section
loan Relevant Loan and Advances to
Credit
Relevant Deposits (Loan) Account

2. Accounting JV Loan Debit Accounts
for interest Register Section
accrued Relevant Interest Income Accrued and
and due Due - Loan and Advances to Outside
payable & Agencies Account
recoverable
Credit
Relevant Interest Accrued and Due on

relevant Loan Account (works / non
works)
3. Receipt of BRV Government Debit Cashier
Loan and Order for
interest loan Bank Account
installment
from local Credit
bodies.
Relevant Loan and Advances to
Relevant Interest Income Accrued and

Due - Loan and Advances to Outside
Page | 85

Responsible
Agencies Account
4. Repayment JV Government Debit Accounts
of loan and Order for Section
interest loan Relevant Loan Account (works / non
thereon works)
Relevant Interest Accrued and Due on

relevant Loan Account (works / non
works)
Credit
Bank Account
Page | 86

Investment
Subject: Deposits (Grants) from Government Subject Code: 4.04
for works purpose
Subject Background:
Grant received by UPJN from Government department, local body, etc. for executing the works
projects shall be treated as Deposits (Grant). These deposits shall be adjusted with the expenditure
incurred on the works projects on completion of works. These deposits shall be adjusted by the same
Unit which maintains the respective deposits account.
 Receipt of Deposits (Grant)
 Disbursement of Deposits (Grant) to Units
Procedure:

Responsible
Receipt of Deposits (Grant)
1. Accounts  Update the grant details, based on Government Order, in As and
Section Deposits (Grant) Register when
2. Cashier  To process receipt, adopt the procedure for bank receipts as Same day
provided in Subject Code: 9.04 on receipt
 Prepare BRV of Grant
Subsidiary Ledger and Deposits (Grant) Register.
Disbursement of Deposits (Grant) to Units
3. Cashier  To process payment, adopt the procedure for bank As and
payments as provided in Subject Code: 9.04 when
 Prepare BPV and raise ATD. Refer Subject Code: 10.01 for
procedure relating to raising ATD
Subsidiary Ledger and Deposits (Grant) Register
Formats

Ref. Title Type to
LD/R04 Deposits I/O On receipt / disbursement Accounts ---
(Grant) / closure of Deposits Section
Register (grant)
Page | 87
Accounting Entries

Responsible
1. On receipt of BRV Government Debit Cashier
Deposits (Grant) Order and
receipt of money Bank Account
Credit
Relevant Deposits (Grant)

Account
2. On disbursement BPV Head Office Debit Cashier
of Deposits Order
(Grant) to Unit Funds Remittance
between Units - Grant
Account
Credit
Bank Account
Page | 88

Investment
Subject: Deposits from local bodies / others Subject Code: 4.05
for works purpose
Subject Background:
Deposits are received by UPJN from Government department, local body, etc. for executing the works
projects. These deposits shall be adjusted with the expenditure incurred on the works projects on
completion of works. These deposits shall be adjusted by the same Unit which maintains the
respective deposits account.
 Receipt of Deposit from local bodies / others for works purpose
 Disbursement of Deposits to Units for works purpose
Procedure:

No. Section Timing
Responsible
Receipt of Deposit from local bodies / others for works purpose
1. Accounts  Update the deposit details, based on Disbursement Order of As and
Section local bodies, in Deposits Register when
2. Cashier 
Based on the above, adopt the procedure for bank receipts Same day
 Prepare BRV deposits
Subsidiary Ledger and Deposits Register
Disbursement of Deposits to Units for works purpose
3. Cashier  For disbursement of deposits from HO / Unit to Unit, adopt As and
the procedure bank payments as provided in Subject Code: when
9.04 and raise ATD. Refer Subject Code: 10.01 for
procedure relating to raising ATD.
 Prepare BPV
Subsidiary Ledger and Deposits Register
Formats

Ref. Title Type to
LD/R05 Deposits I/O On receipt / Accounts ---
Register disbursement / closure Section
of Deposits
Page | 89
Accounting Entries

Responsible
1. On receipt of BRV Disbursement Debit Cashier
Deposits Order
Bank Account
Credit
Relevant Deposits for

works Account (from local
bodies / others)
2. On disbursement by BPV Head Office Debit Cashier
HO of Deposits to Order
Unit Funds Remittance
between Units - Deposits
Account
Credit
Bank Account
Page | 90

Investment
Subject: Investments Subject Code: 4.06
Subject Background:
UPJN‟s investments may be against any earmarked funds (e.g. GPF) or in general. These
investments may be in the form on shares, debentures, bonds, fixed deposits, etc. The investment
can be broadly classified into current investment and long term investment.
A current investment is an investment that is by its nature readily realisable and is intended to be held
for not more than one year from the date on which such investment is made. A long term investment
is an investment other than a current investment even though it may be readily marketable.
Income on investments are accounted for as and when it is accrued and due. At the period end,
income accrued but not due shall also be accounted for. However, this shall be adjusted in the next
period by passing the JV.
 Making Investment
 Income on Investment
 Income accrued but not due on Investment
 Investment Realisation
Procedure:

Responsible
Making Investment
1. Cashier  After taking approval from respective Designated Authority, As and
adopt the procedure for bank payments as provided in when
Subject Code: 9.04
 Investment shall be paid by cheque / direct transfer from the
account of UPJN.
 Prepare BPV
 Based on BPV, update Bank Book, Subsidiary Ledger and
General Ledger and Investment Register
Income on Investment
2. Accounts  On availability of information regarding income accrued and On due
Section due, prepare JV, for the income accrued and due, and obtain date
Subsidiary Ledger and Investment Register.
Income accrued but not due on Investment
3. Accounts  In case income is fixed and guaranteed, then calculate At the
Section income on investments accrued but not due, for the no. of period end
days / month from the last due date. Income accrued but not
due is the income which is yet to be due for receipt.
 At the period end prepare JV, for the income accrued but not
due, and obtain approval from Designated Authority.
 Based on JV, update Journal Book, Subsidiary Ledger and
General Ledger.
Page | 91

Responsible
provided in Subject Code: 9.04 on receipt
 On receipt of income, prepare BRV. of income
Subsidiary Ledger and Investment Register.
Investment Realisation
provided in Subject Code: 9.04
 Prepare BRV.
 Based on BRV, update Bank Book, Subsidiary Ledger and
General Ledger.
 Update Investment Register with the details of repayment
made for principal loan and interest thereon.
Formats

Ref. Title Type to
LD/R06 Investment I/O On receipt / payment of Accounts ---
Register Investment and income Section
related transactions
Accounting Entries

Responsible
1. Making BPV Investment Debit Cashier
Investment related
document Relevant Investment Account
Credit
Bank Account
2. Income JV Investment Debit Accounts
accrued and related Section
due on document Relevant Income Accrued
Investment and Due on Investment
Account
Tax Deducted At Source

Recoverable - Income on
Investment Account
Credit
Relevant Income on
Investment Account
3. Receipt of BRV Investment Debit Cashier
income on related
investment document Bank Account
Credit
Relevant Income Accrued
Page | 92

Responsible
and Due on Investment
Account
4. Interest JV Investment Debit Accounts
accrued but related Section
not due on document Relevant Income Accrued but
Investment not Due on Investment
(period end) Account
Credit
Relevant Income on
Investment Account
5. JV for income JV JV for Income Debit Accounts
accrued but accrued but Section
not due on not due on Relevant Income on
Investment investment Investment Account
accounted for passed in the
in the previous previous Credit
period (to be period
accounted for Relevant Income Accrued but
in next period) not Due on Investment
Account
6. Realisation on BRV Investment Debit Accounts
Investment Register Section
Bank Account
Credit
Relevant Investment Account
Page | 93
5.00 Section: Fixed Assets

Section Background:
5.01 This Section covers the Fixed Assets accounting and related procedures.
Accounting Policies
5.02 The main accounting policies that shall be followed relating to fixed assets accounting are
provided in the subsequent paragraphs:
Fixed Assets
a.) As a general policy, the cost of fixed assets shall comprise its purchase price / construction price
and any directly attributable cost of bringing the assets to its working condition for its intended
use. Any expense (if it does not increase the capacity / efficiency of the corresponding fixed
assets) incurred subsequent to the period when fixed assets was ready to use, shall not be
capitalised and shall be treated as revenue expenditure.
Bought out Fixed Assets
b.) In addition to the cost of bought out fixed assets, the following components of cost (only
illustrative) incurred for putting the fixed assets in „ready to use‟ condition shall be considered for
capitalisation of fixed assets:
 Basic cost of the fixed assets including non recoverable/ non reimbursable billed taxes and
duties such as import duty, excise duty (MODVAT), sales tax, value added tax and similar
other taxes and duties.
 Freight up to the place of installation
 Octroi
 Brokerage
 Stamp duty for transfer of assets in UPJN‟s name
 Registration fee charged by statutory authorities for registration of assets
 Delivery and handling cost for bringing the fixed assets in the current location and condition
 Cost of installation
 Cost of spare part to make the assets ready to use
 Transit Insurance (also in case of imports)
Self constructed Fixed Assets
c.) In addition to the above mentioned costs, the cost (incurred up to the date of assets ready to use)
of self constructed fixed assets shall also include the below mentioned costs:
 Project Insurance,
 Site preparation expenses for installation of fixed assets
 Contractor‟s cost
 Hiring charges for hiring construction equipments
 Borrowing and financing cost (i.e. interest during construction, processing fee for loan, etc.)
on the fixed assets
 Repairs and maintenance expenses, if any, before the assets is ready to use
 Expenditure incurred during trial run
 Installation cost
 Up gradation cost if any to increase the efficiency of the fixed assets
d.) Abnormal loss during construction period shall not be capitalised, but charged to the Income and
Expenditure Account.
Other Specific Fixed Assets
Page | 94
e.) Other specific fixed assets and their associated costs for capitalisation are provided below:
 Land
o Compensation for acquisition of land and legal charges thereon
o Compensation for trees on acquired land
o Payment to tenants for withdrawal of tenancy rights / compensation paid for vacating the
land.
 Building
o Bought out building
 Basic cost of building
 Statutory Registration fee
 Cost of obtaining permits, sanctioned plans, occupation certificates from municipal or
other bodies with respect to building
o Self constructed building
 Labour, material, equipment hiring charges and overheads cost for construction
 Site preparation expenses
 Cost of demolition of unwanted structure in the place where building is constructed
 Cost of financing up to the date of obtaining completion certificate from architect
 Repairs and maintenance expenses incurred up to the date of obtaining completion
certificate from architect
When a building is purchased along with the land, the purchase cost shall be allocated between
the land and building based on technical and commercial valuation by expert valuers.
 Plant and Machinery (including installed / erected / assembled)
o Contractors cost in case of outsourcing of the entire erection / construction of plant and
machinery
o Foundation cost
o Hiring of construction equipment e.g. in case of building, assembling, etc.
 Vehicles
o Road tax registration charges
o Registration fee
o Cost of spare parts (if purchased at the time of purchase of vehicle) to make the assets
ready to use
 Furniture and Fixtures, Electrical Fittings, Office Equipments
o Contractors cost
o Fees of interior designer, architect, etc.
Capitalisation of amount recovered / payable to contractor / supplier as per contract
f.) All liquidated damages recoverable/ deducted from the contractor shall be reduced from the cost
of the assets being constructed / procured. All bonus payable to the contractors as per the CB
shall be added to the cost of the assets being constructed/ manufactured/ procured.
Accounting for wholesome / partial loss of Fixed Assets
g.) In case the fixed assets is damaged/ destructed/ lost etc. to the full extent which makes the fixed
assets non-usable then the fixed assets shall be decapitalised 100% and written off as abnormal
loss of fixed assets. The scrap of such fixed assets shall be transferred to scrap stock and
accounted for accordingly.
h.) In case the fixed assets is partially damaged/ destructed etc. then the cost of restoring /
reconstructing / rebuilding the fixed assets to its condition before damage / destruction shall be
capitalised and the proportionate value of the assets damaged / destructed based on technical
evaluation shall be decapitalised and written off as abnormal loss of fixed assets e.g. water
transmission pipeline of 20 kms. installed for transmission of water from the treatment plant to
reservoir is damaged to the extent of 2 kms., then in such case the cost of restoring 2 kms. shall
be capitalised and the carrying value of 2 kms. damaged pipeline shall be written off as abnormal
loss of fixed assets.
Government grant received against specific Assets

Page | 95
i.) Government grant received in cash against purchase of fixed assets shall be treated as Capital
Grant (Balance Sheet item). Government Grant against which fixed assets has been purchased /
acquired / constructed shall be credited to Income and Expenditure Account on a periodical basis
to the extent of depreciation / amortisation charged to assets.
j.) In case where any fixed assets is received as grant, these assets would be capitalised and
accounted for in the books of account at a nominal value i.e. Re. 1.
Capitalisation of cost of Improvement / repairs
k.) If any Fixed Asset is required to be maintained subsequent to its usage in order to receive the
desired output, the cost of maintenance of the assets shall be treated as revenue expenditure.
However, if the expenditure incurred subsequent to its capitalisation for improvisation in the
capacity and utilisation of assets then such expenditure shall be capitalised. However, major
expenditure incurred for overhaul/ repair and maintenance of an assets shall not be treated as
capital expenditure, if the overhaul/ repair of an assets (e.g. overhauling of plant and machinery
and whitewash of building), is required to be done on a regular basis for upkeep of the assets and
working of the assets in its normal conditions and the existing capacity.
Capitalisation of Fixed Assets value less than Rs. 5000/-
l.) Any individual Fixed Asset, which costs below Rs.5,000/- shall be capitalised and accounted for
under the respective block of fixed assets. However for such fixed assets, 100% depreciation
shall be charged in the first year itself. After charging depreciation at 100%, there shall be no
further depreciation charged in subsequent periods. However, if the total value of such individual
fixed assets (which cost below Rs.5,000/- individually) is more than 10% of the block of fixed
assets under which they fall, then the entire value of fixed assets shall be capitalised and
depreciated at the applicable depreciation rate to that particular block of fixed assets.
Date of capitalisation of Fixed Assets
m.) The date of capitalisation shall be taken as the date on which the Fixed Asset is first ready to use.
This shall be known from the following:
 In case of plant and machinery - ready to use certificate given by the Engineering department
 In case of assets bought out fixed assets - purchase date
 In case of assets constructed from own sources - ready to use certificate given by the
architect/ Engineer
 Other memorandum records pertaining to the assets.
Revaluation of Fixed Assets
n.) An increase in net book value arising on revaluation shall be credited to a reserve account under
„Revaluation Reserve Account‟. A decrease in net book value arising on revaluation of fixed
assets is charged to Income and Expenditure account. Revaluation reserve shall be reduced on a
periodical basis by transferring the equivalent amount of depreciation charged on the revalued
portion of the cost of the respective fixed assets. Revaluation of a class of fixed assets shall not
result in the net book value of that class of asset being greater than the realisable value of the
asset.
Disposal / Sale of Assets
o.) In case of sale of fixed assets where the consideration value is higher than the original cost of
fixed assets then the difference between the consideration received and the original cost shall be
taken to Capital Reserve as it is capital profit and the balance profit (i.e. difference between
original cost and book value) shall be credited to Income and Expenditure Account.
Page | 96
p.) The book value of the scrap of fixed assets (i.e. Gross block net of Accumulated Depreciation)
shall be written off and charged to the Income and Expenditure Account. The amount realised on
disposal of scrap shall be accounted as “Income from Sale of Scrap Account”.
q.) Any loss (equal to the difference between the revalued book value and sale proceeds) on the sale
of revalued fixed assets shall be reduced from the revaluation reserve and the balance loss shall
be debited to the “Income / Loss from Sale / Disposal / Surplus / Write Off of Fixed Assets
Account”. In case, after adjustment of loss any balance is lying in revaluation reserve pertaining
to fixed assets sold, it shall be credited to the Income and Expenditure Account.
r.) Any profit (equal to difference between the sale proceeds and revalued book value) on sale of
revalued assets shall be credited to the Income and Expenditure Account. Further, the amount
lying, if any, in revaluation reserve pertaining to that Asset shall be credited to the Income and
Expenditure Account.
s.) Fixed assets that have been retired from active use and held for sale shall be stated at lower of
net book value or net realisable value.
Shortage of Fixed Assets on physical verification
t.) Fixed assets accounted for in books of account and recorded in the Fixed Assets Register but
physically missing (based on the Physical Verification Report) shall be treated based on the
decision taken by UPJN. In case where the value of such fixed assets is to be recovered from
person responsible then that shall be accordingly recovered, otherwise it shall be written off.
Assets under dispute
u.) All the fixed assets accounted for in the books of account of UPJN which are under dispute or
litigation shall be disclosed in the financial statements along with notes/remarks that these are
under dispute and also the status of the legal case as at the reporting date of the Financial
Statements.
Transfer of Fixed Asset between Units
v.) In case of transfer of fixed assets from one Unit to other, the related amount of Gross Block and
Accumulated Depreciation (i.e. up to the end of the immediately preceding financial period) as
appearing in the books of the Transferor Unit as on the date of transfer shall be transferred to the
Transferee Unit. The depreciation for the entire financial period in which the assets have been
transferred shall be allocated to both the Units on proportionate period of use basis. The
transportation cost in case of inter-unit transfer of fixed assets shall not be capitalised and shall
be accounted for as revenue expenditure
Intangible Assets
w.) An Intangible Asset is an asset having no physical substance but is identifiable and held for use
for the purpose of providing goods or services or for rentals or administrative purpose. An
intangible assets shall be recognised only if it is identifiable, controlled by the organisation, has
measurable cost and measurable future economic benefits is expected to flow to UPJN (future
economic benefits may be in the form of cost control, revenue generation, etc. which can be
measured). Generally, the following may be identified as intangible assets:
 Trademarks, trade names
 Internet domain names
 Technology-based intangible assets
 Patented Technology
 Computer Software e.g. Acquisition / development of computer software for UPJN
x.) The following cost components shall be considered for capitalisation of Intangible Asset in general
(including bought out or internally generated):
Page | 97
 Basic cost of the assets

 Non-recoverable taxes and duties
 Project Insurance, especially for self generated intangible assets up to the date of assets
ready to use
 Statutory duties payable if any on intangible assets acquisition.
 Registration fee charged by statutory authorities for registration of intangible assets, if any
 Cost incurred to make the intangible assets ready to use e.g. Installation fee paid to the
software supplier for successful loading of the software.
 Cost of financing till the intangible assets is ready to use
 Expenditure incurred during trial run e.g. expenditure incurred during software implementation
till its final approval.
 Cost of up gradation, which increases the efficiency of the intangible assets
 Any expenditure that is directly attributable in generating the intangible assets such as legal
and professional charges directly attributable to intangible assets
 Salary, wages and other employment cost of the personnel directly involved in the generation
of intangible assets
 Expenditure on material and services used or consumed in generating the intangible assets
 Overheads which are necessary to generate the assets and can be allocated on consistent
and reasonable basis to the intangible assets.
Project Asset
y.) Project asset is similar to fixed assets, except to the fact that they are acquired, purchased,
constructed for execution of an identified Works Project and out of the funds of Works Project. In
case where project asset are purchased for a particular Works project, the cost of those project
asset shall be debited to WIP Project Asset Account.
z.) However in case where Fixed Asset purchased are not directly relating to any Works project but
are used for Works Project, then the amount of deprecation for use of these Asset on the Works
project shall be charged to that Works Project.
Depreciation on Fixed Assets / amortisation of Intangible Assets
Method of depreciation
aa.) Depreciation shall be provided consistently as per the method of depreciation and at the rates as
prescribed by UPJN. In case there is any change in the method of depreciation, then the
depreciation shall be calculated retrospectively and the difference thereon shall be charged to
Income and Expenditure Account. This fact shall be disclosed separately in the Financial
Statement.
Depreciation Reserve
bb.) Depreciation Reserve shall be created for replacement of fixed assets in accordance with the
Policies prescribed by UPJN. Depreciation reserve is created / credited every financial period
through appropriation of surplus of income over expenditure.
cc.) No depreciation shall be charged on land.
Depreciation on revalued Assets
dd.) In case of revaluation of assets, depreciation shall be charged on the revalued Gross Block.
Apportionment of depreciation amount on works
ee.) In case where any fixed assets is identified as being used on any Works project then the
proportionate amount of depreciation of that fixed assets shall be debited to WIP Cost Others
Account of respective Works project.
Page | 98
ff.) In case where any fixed assets is returned by contractor (which was lent earlier to contractor),
then the net book value of that Fixed Asset shall be assessed by the concerned Junior Engineer
(which shall be the fair value). The net book value so assessed shall be deducted from the net
book value before use of that Fixed Asset by contractor and the balance shall be the depreciation
to be charged on the Works Project on which the fixed assets has been used by debit to WIP
Cost Others Account.
Amortisation of Intangible Assets
gg.) Intangible assets shall be amortised over the period of its licence/permits/tenure or the period as
prescribed by UPJN.
Apportionment of amortised amount on works
hh.) In case where any intangible assets is identified as being used on any Works project then the
proportionate amount of amortisation of that intangible assets shall be debited to WIP Cost Others
Account of respective Works project
5.03 This Section covers the following Subjects on:

No.
1. Acquisition / Self constructed / Development of Fixed Assets / Intangible 5.01
Assets / Project Asset
2. Revaluation of Fixed Assets / Intangible Assets 5.02
3. Inter-unit transfer of Fixed Assets and Project Asset 5.03
4. Transfer of Project Asset between Works Project / Recovery of Project Asset 5.04
as Fixed Assets
5. Fixed Assets and Project Asset issued to contractors – lent and returned 5.05
6. Depreciation on Fixed Assets / Amortisation on Intangible Assets 5.06
7. Sale of Fixed Assets and Project Asset 5.07
8. Physical Verification of Fixed Assets and Project Asset 5.08
Page | 99
Section: Fixed Assets Section Code: 5.00

Subject: Acquisition / Self constructed / Subject Code: 5.01
Development of Fixed Assets / Intangible
Assets / Project Asset
Subject Background:
This subject covers the accounting procedure to be followed in relation to Acquisition/ Self-
constructed / Development of fixed assets / intangible assets / project asset.
Overall the procedure pertaining to the above shall be similar to that provided in Section 2.00 - Stores
and Section 3.00 - Works Expenditure.
Fixed assets are held with the intention of being used for the purpose of producing or providing goods
or services and are not held for sale in the normal course of business. Accordingly, any expenditure
which results in creation of a new fixed assets or substantially increases the capacity or the benefit
that can be derived from an existing asset and such benefit is of enduring nature shall be treated as
fixed assets.
Fixed assets / intangible assets can be acquired, purchased or constructed out of the UPJN funds or
from grant from Government. It may also be received from Government in the form of Grant to UPJN.
Project asset is acquired, purchased or constructed out of the UPJN funds or deposits received for
Works project purpose from Government, local body, others, etc.
Fixed assets / intangible assets / project asset may be movable or immovable in nature. In case of
immovable asset, it may have been constructed or assembled at the site itself.
Capital Works in Progress (WIP) refers to the construction / development of fixed assets / intangible
assets e.g. construction of office buildings or staff quarters for employees or development of software
for UPJN.
 Acquisition / self-constructed / development of fixed assets / intangible assets / project asset
 Advance payment to supplier
 Payment to supplier against supplier‟s bill
 Freight and incidentals on fixed assets / intangible assets / project asset
Procedure:

No. Section Timing
Responsible
Acquisition / self constructed / development of fixed assets / intangible assets / project asset
1. Storekeeper  When assets are entered in UPJN location, make stores On receipt of
/ Security entry in Stores Entry Register, immediately providing fixed assets
Personnel details of fixed assets received, Delivery Challan
reference, etc.
2. Designated  When assets purchased for UPJN is received, ensure the At the time of
Authority following: receipt of fixed
o Stores entry has been done by Storekeeper in the assets /
Stores Entry Register. intangible
o Check that the assets are received as per the details assets
provided in Purchase Order (PO) / Supply order
o The assets are in normal conditions and are not
damaged
Page | 100

No. Section Timing
Responsible
In case of any intangible assets or immovable fixed
assets, there shall be no stores entry.
 Update MB based on measurement undertaken, if any.
 Prepare Asset Receipt Note (ARN) and forward ARN to
Designated Authority for approval. In case of constructed
/ developed Asset ARN shall be prepared on completion
of asset.
 Update Junior Asset (JE) Asset Register (to maintained
by the person in whose custody the fixed assets /
intangible assets / project asset is available)
3. Designated  Scrutinise, approve and forward the ARN and supporting Same day on
Authority documents to Accounts Section. receipt of ARN
4. Accounts  Receive and review ARN. As and when
Section  In case of constructed / developed Asset, identify the
expenditure incurred pertaining to the Capital WIP. It
shall be ensured that all the expenditure incurred has
been duly accounted for in Capital WIP.
 Ensure that the Completion certificate, if assets
constructed, by Designated Authority is received.
 The Measurement Book (MB) is updated for the various
measurements undertaken pertaining to the works.
 The above process would be similar even for project
asset constructed / developed.
 In case of Capital work in progress for project asset, the
expenditure shall be debited to WIP Project Asset
Account.
 Value ARN based on the rates agreed with the supplier /
contractor, other directly attributable cost incurred, etc.
and finalise it. In case of fixed assets constructed or
intangible assets developed, the ARN shall be valued
based on the balance lying in Capital WIP account for the
identified fixed assets
5. Accounts  Receive and pass supplier's / contractor‟s bill based on On receipt of
Section the rates agreed in Contract Bond (CB) and quantity the supplier‟s
received as per ARN. For passing the bills of supplier bill/ grant
follow the process as provided in Subject Code: 2.02. For sanction order
passing the bills of contractor follow the process as
 In case of fixed assets / intangible assets / project asset
acquired out of grant (cash or kind), verify with sanction
order.
 Overall scrutinise all the documents pertaining to the
fixed assets / intangible assets whether moveable or
immovable, to ensure that the fixed assets / intangible
assets are owned by UPJN and its value is identifiable.
 Prepare Journal Voucher (JV) and obtain approval from
Designated Authority. Same day of
 Based on JV, update Journal Book, General Ledger, passing of bill
Subsidiary Ledger, Supplier Bill Register / Contractor Bill
Register and Fixed Assets / Intangible Assets / Project
Asset Register.
 In case of project asset, update Works Register.
 Forward JV with supporting to Cashier for payment.
Advance payment to supplier
Page | 101

No. Section Timing
Responsible
6. Accounts  Advance payment shall be made to the supplier only as As and when
 Receive Performa Invoice from supplier for the advance.
 In case the advance is to be paid to retire dispatch
documents from the bank, verify particulars of Bank
Advice with Dispatch Instruction / PO / CB through which
fixed assets / intangible assets / project asset were
instructed to be supplied and percentage of payment was
agreed to be paid (e.g. this is an usual case in case of
imported items).
forward supporting documents to Cashier for payment
7. Cashier  Receive supporting documents. As and when
 Based on BPV, update Bank Book, General Ledger and
Subsidiary Ledger.
Payment to supplier against supplier’s bill
 The payment to supplier shall be made on or after the
due date of payment for the amount passed against the
bill and net of advance paid, if any, earlier.
 Prepare BPV.
Subsidiary Ledger, Supplier Bill Register
 Update MB for the supplier‟s bill passed and payment
made
Freight and incidentals on fixed assets / intangible assets / project asset
9. Junior  Mention the ARN reference on the freight bill / freight As and when
Engineer / vouchers pertaining to the freight. vouchers are
Assistant  Provide details of freight and incidentals on ARN in received.
Engineer remarks column.
Accounts  Check and pass the freight bill / voucher.
Section  In case the freight pertains to the Asset, the same shall
be debited to the cost of corresponding asset. However,
in case freight pertains to the materials for construction of
asset, then the same shall be added to the cost of Capital
WIP.
Authority.
Subsidiary Ledger, and Works Register (In case of
project asset).
Page | 102
Formats

Ref. Title Type
MT/R01 Stores Entry O At the time of receipt Storekeeper / ---
Register of fixed assets / Security
project asset at Personnel
stores
FA/F01 ARN I/O On receipt / Designated  Own Copy
capitalisation of Authority  Accounts
fixed assets / Section
intangible assets /  Designated
project asset authority
FA/R03 JE Asset O On preparation of Designated --
Register ARN Authority
FA/R02 Project Asset O On finalisation of Accounts --
Register ARN Section
FA/R01 Fixed Assets / O On finalisation of Accounts --
Intangible ARN Section
Assets
Register
MT/R04 / Supplier Bill O On receipt of bills Accounts --
WE/R01 Register / and payment against Section
Contractor Bill it
Register
WE/R02 Works O As and when project Accounts --

Register asset related Section
expenses are
incurred / paid
Accounting Entries

Responsible
1. Receipt of JV ARN Debit Accounts
fixed assets / Section
intangible Relevant Fixed Assets Account /
assets (other Intangible Assets Account /
than grant) / WIP Project Asset Account
project asset
Credit

Account
Relevant Advances for capital

items Account /
Relevant WIP Advances Account
(for adjustment of advances, if
any)
2. Receipt of JV ARN Debit Accounts
Assets Section
(by way of Relevant Fixed Assets Account /
grant) Intangible Assets Account
Page | 103

Responsible
Credit
Relevant Grant Account

3. On JV ARN Debit Accounts
Capitalisation Section
of Assets Relevant Fixed Assets Account /
constructed / Intangible Assets Account
developed
Credit
Relevant Capital WIP Account

4. Payment to BPV Supplier‟s Debit Cashier
supplier Bill
against Account Payable - Supplier
supplier‟s bill Account
Credit
Bank Account
payment to Invoice /
supplier Bank Advice Relevant WIP Advances Account
(in case of Project Asset) /
Relevant Advances to supplier for
capital items Account
(in case of Fixed Assets /
Intangible Assets)
Credit
Bank Account
6. Incidental JV Bill / Debit Accounts
expenses on Voucher Section
fixed assets / Relevant Fixed Assets Account /
intangible Intangible Assets Account /
assets / WIP Project Asset Account
project asset
Credit
Relevant Account
Page | 104

Subject: Revaluation of Fixed Assets / Subject Code: 5.02
Intangible Assets
Subject Background:
This subject covers the accounting procedure to be followed in relation to revaluation of fixed assets /
intangible assets.
The revaluation of fixed assets / intangible assets shall be done, when it is assessed by the
management that the net book value of the fixed assets / intangible assets does not depict the true
fair value of the assets. However, it is important to note that the revaluation of assets is not done
frequently but is done over a longer period of the life of asset. The revaluation of fixed assets /
intangible assets shall be done by expert valuer appointed by UPJN. Based on the expert‟s Valuation
Report, the fair value of the assets shall be identified and accordingly considered for accounting.
Procedure:

No. Section Timing
Responsible
Revaluation of Fixed Assets / Intangible Assets and accounting thereon
1. Designated  Forward the Valuation Report of the expert valuer to As and when
Authority Designated Authority for approval.
2. Designated  Approve / disapprove the Valuation Report. As and when
Authority  In case of approval, pass the order for revaluation and
forward it to Accounts Section.
3. Accounts  Receive the approval on Valuation Report. As and when
Section  Based on the Valuation Report, prepare JV and obtain for the period
approval from Designated Authority. during which
 Based on JV, update Journal Book, General Ledger, valuation is
Subsidiary Ledger and Fixed Assets Register. undertaken
Accounting Entries

Responsible
1. On the JV Valuation Debit Accounts
revaluation Report Section
(in case Relevant Fixed Assets Account /
valuation is Intangible Assets Account
higher than
book value) Credit
Revaluation reserve Account

2. On the JV Valuation Debit Accounts
revaluation Report Section
(in case Loss on Revaluation of Assets
valuation is Account
lower than
book value) Revaluation reserve Account
(in case earlier revaluation was on
higher side) – to the extent of lower
of balance lying in it or decrease in
Page | 105

Responsible
value of Assets.
Credit
Relevant Fixed Assets Account /

Intangible Assets Account
Page | 106

Subject: Inter-unit transfer of Fixed Assets Subject Code: 5.03
and Project Asset
Subject Background:
This subject covers the accounting procedure to be followed in relation to transfer of fixed assets /
project asset from one Unit to another Unit within UPJN.
The inter-unit transfer may occur on need basis. In this case the Gross Block and Accumulated
Depreciation of the fixed assets shall be transferred from one Unit to another. Project asset shall be
transferred to another Unit at the lower of fair value of the project asset or the original cost.
 Requisition for transfer of Fixed Assets / Project Asset
 Transfer of Fixed Assets / Project Asset
 Receipt of transferred Fixed Assets / Project Asset
Procedure:

No. Section Timing
Responsible
Requisition for Transfer of Fixed Assets / Project Asset
1. Junior  Prepare Indent providing the details of fixed assets / As and when
Engineer/ project asset required. fixed assets /
Assistant  It may be happen that the JE may not go to receive project asset are
Engineer the Asset from Transferor JE. In such a case, JE required to be
(Transferee) shall authorise a Person to receive Asset on its transferred
behalf.
 Obtain approval of AE and forward it to Executive
Engineer (EE).
2. Executive  Approve the Indent and send it to EE (Transferor) As and when
Engineer Unit.
(Transferee)
3. Executive  Receive Indent from Transferee Unit. Within next day of
Engineer  Identify the location/JE, from where fixed assets / receipt of Indent
(Transferor) project asset are to be transferred.
 Forward Indent to Transferor AE.
4. Assistant  Scrutinise, approve and forward the Indent to Same day of
Engineer concerned JE. approval
(Transferor)
Transfer of Fixed Assets / Project Asset
5. Junior  Check the Indent to ensure that all the necessary On transfer of
Engineer information has been provided to make a transfer of Assets
(Transferor) fixed assets / project asset.
 Prepare Asset Transfer Note (ATN).
 Take the signature of the Transferee JE or its
authorised representative on ATN.
 Provide copy of ATN to the recipient of fixed assets /
project asset.
 Update JE Asset Register.
 Forward ATN to AE.
6. Assistant  Scrutinise, approve and forward the ATN to Accounts Within next day of
Engineer Section. receipt of ATN
Page | 107

No. Section Timing
Responsible
(Transferor)
7. Accounts  On receipt of ATN from Transferor AE, verify ATN As and when
Section – and value ATN.
Transferor  Raise an Advice of Transfer Debit (ATD) on Within one day of
Unit Transferee Unit. Refer Subject Code: 10.01 for receipt of ATN
procedure relating to raising ATD
 Prepare JV, for the ATD raised, and obtain approval
from Designated Authority.
Subsidiary Ledger and Fixed Assets Register /
Project Asset Register.
 In case of project asset update Works Register based
on the value of project asset for which ATD is raised.
Receipt of Transferred Fixed Assets / Project Asset
8. Storekeeper /  When fixed assets / project asset is received at UPJN On receipt of
Security location, make store entry in Stores Entry Register, fixed assets /
Personnel immediately providing details of fixed assets / project project asset
asset received, Delivery Challan reference etc.
9. Junior  When assets are received, ensure the following: On receipt of
Engineer o Check that the assets are received as per the fixed assets /
(Transferee) details provided in ATN project asset
damaged.
o Prepare ARN.
o Update JE Asset Register
o Forward ARN to AE.
10. Assistant  Scrutinise, approve and forward the ARN to Accounts Same day
Engineer Section.
(Transferee)
11. Accounts  Receive ARN As and when
Section –  Receive and review ATD and supporting documents
Transferee and forward the perforated copy to the Transferor Within one day of
Unit Unit. Refer Subject Code: 10.02 for procedure receipt of ATD
relating to accepting ATD and ARN
Authority
Subsidiary Ledger and Fixed Assets Register /
 In case of project asset update Works Register based
on the value of project asset for which ATD is raised.
Formats

Ref. Title Type
FA/F03 Indent I/O On requisition Junior Engineer  Own Copy
of fixed assets / (Transferee)  Executive Engineer
project asset (Transferor)
 Transferor Junior
Engineer
FA/F02 ATN I/O On transfer of Junior Engineer  Own Copy
fixed assets / (Transferor)  Assistant Engineer
project asset  Accounts Section
Page | 108

Ref. Title Type
 Receiver‟s copy
FA/F01 ARN I/O On receipt of Junior Engineer  Own Copy
fixed assets / (Transferee)  Assistant Engineer
project asset  Accounts Section
IUT/F01 ATD I/O On transfer of Accounts  Own Copy
assets to Section  Transferee Unit
another Unit
FA/R03 JE Asset O Same day on Junior Engineer --
Register finalisation of (Transferor/
ATN / ARN Transferee)
FA/R01 Fixed O Same day on Accounts --
/ Assets valuation of Section
FA/R02 Register / ATN / ARN (Transferor/
Project Transferee)
Asset
Register
Accounting Entries

Responsible
1. Transfer of JV ATN & ATD Debit Transferor
fixed assets Accounts
between IUT – Fixed Assets/ Project Asset Section
Unit Account
(Transferor)
Relevant Accumulated
Depreciation Account
Credit
Relevant Fixed Assets Account
2. Transfer of JV ATN Debit Transferor
project asset Accounts
between IUT – Fixed Assets/ Project Asset Section
Unit
(Transferor) Credit
WIP Project Asset Account

3. Transfer of JV ARN Debit Transferee
fixed assets Accounts
between Relevant Fixed Assets Account Section
Unit
(Transferee) Credit
IUT – Fixed Assets/ Project Asset

4. Transfer of JV ARN Debit Transferee
project asset Accounts
between Relevant WIP Project Asset Section
Unit Account
(Transferee)
Credit
IUT – Fixed Assets/ Project Asset
Page | 109

Subject: Transfer of Project Asset between Subject Code: 5.04
Works Project / Recovery of Project Asset as
Fixed Assets
Subject Background:
This subject covers the accounting procedure to be followed in relation to transfer of project asset
between Works Project and recovery of project asset as fixed assets.
Project asset of one Works project may be of use in executing another Works project. In such cases
project asset shall be transferred from one Works project to another. In case project asset is
transferred between Works projects or recovered as fixed assets, project asset shall be transferred at
the lower of fair value of the project asset or the original cost.
 Transfer of Project Asset between Works Project
 Recovery of Project Asset as Fixed Assets
Procedure:

No. Section Timing
Responsible
Transfer of Project Asset between Works Project
1. Junior  Prepare Indent providing the details of project asset As and when
Engineer/ required. project asset are
Assistant  It may be happen that the JE may not go to receive required to be
Engineer the project asset from Transferor JE. In such a case, transferred
(Transferee) JE shall authorise a person to receive project asset
on its behalf.
 Obtain approval of AE and forward it to EE.
2. Executive  Approve the Indent and send it to Transferor JE. As and when
Engineer
(Transferee)
3. Junior  Check the Indent to ensure that all the necessary As and when
Engineer / information has been provided to make a transfer of On transfer of
(Transferor) project asset project asset
 Prepare ATN
 Take the signature of the Transferee JE or its
authorised representative on ATN
 Provide copy of ATN to the recipient of project asset
 Update JE Asset Register
4. Junior  When assets are received, ensure the following: Same day of
Engineer o Check that the assets are received as per the receipt of ATN
(Transferee) details provided in ATN and project asset
damaged.
o Prepare ARN.
o Update JE Asset Register
o Forward ARN to AE.
5. Assistant  Scrutinise, approve and forward ATN to Accounts As and when
Engineers Section.
(of Transferor
Page | 110

No. Section Timing
Responsible
and
Transferee
Works
Project)
6. Accounts  Receive ATN and value it. Within one day of
Section  Based on ATN, prepare JV and obtain approval from receipt of ATN
Subsidiary Ledger, Project Asset Register and Works
Register.
Recovery of Project Asset as Fixed Assets
7. Executive  Prepare Indent authorising the transfer of the assets Receiving of
Engineer  Forward to AE of Works Project concerned. project asset from
Works Project to
divisional fixed
assets
8. Assistant  Sign on Indent and forward to JE in charge of Works On receipt of
Engineer Project. Indent from EE
9. Junior  Prepare ATN On receipt of
Engineer  Obtain signature of the recipient of project asset. approved Indent
10. Assistant  Scrutinise ATN, sign on ATN and forward to On receipt the
Engineer Accounts Section ATN copy from JE
11. Accounts  Receive and value ATN As and when
Section  Based on the value derived prepare JV and obtain
Subsidiary Ledger, Project Asset Register, Fixed
Assets Register and Works Register
Formats

Ref. Title Type
FA/F03 Indent I On requisition Executive  Own Copy
of project asset Engineer  Transferor of assets
 AE
FA/F02 ATN I/O On transfer of Junior  Own Copy
project asset Engineer  Receiver of assets
 AE
FA/R03 JE Asset O On receipt/ Junior --
Register transfer of the Engineer
assets as
required
WE/R02 Works O As and when Accounts --
Register Section
FA/R02 Project O As and when Accounts --
Asset Section
Register
FA/R01 Fixed Assets O As and when Accounts --
Register Section
Page | 111
Accounting Entries

Responsible
1. Transfer of JV ATN Debit Accounts
project asset Section
between Relevant WIP Project Asset
Works Project Account (Transferee Works
(Transferor) Project)
Credit

Account (Transferor Works
Project)
2. Recovery of JV ATN Debit Accounts
project asset Section
and entered in Relevant Fixed Assets Account
fixed assets
Credit

Account (Transferor Works
Project)
Page | 112

Subject: Fixed Assets and Project Asset to Subject Code: 5.05
contractors – lent and returned
Subject Background:
This subject covers the accounting procedure to be followed in relation to fixed assets / project asset
lent to contractor / returned by contractor.
Fixed assets and project asset are lent to contractors for use in the Works projects. In such case,
there shall be no accounting entries of project asset in books of account for fixed assets and project
asset. Only the corresponding registers shall be updated.
 Lend Fixed Assets / Project Asset to contractors
 Return of Fixed Assets / Project Asset by contractor
Procedure:

No. Section Timing
Responsible
Lend Fixed Assets / Project Asset to contractors
1. Junior  Prepare ATN and obtain signature of contractor or its On transfer of
Engineer authorised representative on it. project asset /
 Update JE Asset Register. fixed assets
2. Assistant  Scrutinise ATN, approve and forward it to Accounts On receipt of
Engineer Section. ATN
3. Accounts  Receive ATN. As and when
Section  Update Fixed Assets / Project Asset Register
 Mention the ATN details in the Contract Bond (CB) File.
Return of Fixed Assets / Project Asset by contractor
4. Junior  Receive fixed assets / project asset from Contractor. On transfer of
Engineer  Prepare ARN and obtain signature of contractor or its project asset /
authorised representative on it fixed assets
 Update JE Asset Register
 Forward ARN to AE
5. Assistant  Scrutinise ARN, approve and forward it to Accounts On receipt of
Engineer Section. ARN
6. Accounts  Receive ARN and update Fixed Assets / Project Asset As and when
Section Register
 Mention the ATN details in the CB File.
Page | 113
Formats

Ref. Type
FA/F02 ATN I/O On lending of Junior Engineer  Own Copy
assets to  Contractor
Contractor  AE
FA/F01 ARN I/O On receipt of Junior Engineer  Own Copy
assets from  Contractor
Contractor  AE
FA/R03 JE Asset O On Junior Engineer --
Register finalisation of
ARN / ATN
FA/R01 / Fixed Assets O On receipt of Accounts --
FA/R03 Register / Project ARN / ATN Section
Asset Register
Page | 114

Subject: Depreciation on Fixed Assets / Subject Code: 5.06
Amortisation on Intangible Assets
Subject Background:
This subject covers the accounting procedure to be followed in relation to depreciation / amortisation
on fixed assets / intangible assets.
All depreciable / amortisable fixed assets / intangible assets shall be depreciated / amortised over a
period of its useful life. The depreciable assets are assets having limited useful life held by UPJN for
use in the production / provision of goods / services, for external rental purpose or for administrative
purpose and are expected to be used during more than one accounting period. Such assets are not
held for the purpose of sale in the ordinary course of business.
If assets have been purchased during the period, then depreciation / amortisation shall be charged for
the proportionate period.
 Depreciation / Amortisation
Procedure:

No. Section Timing
Responsible
Depreciation / Amortisation
1. Accounts  At the end of period compute depreciation on fixed At the end of
Section assets / amortisation on intangible assets within each the financial
assets group at the prescribed rates period
 Ensure that assets has not been fully depreciated
before the beginning of the financial period
 In case of revalued assets, calculate the corresponding
proportion of depreciation to be charged to revaluation
reserve.
 In case of assets acquired from grants (other than free
of cost), calculate the amount of amortisation from
grant.
 Prepare schedule of Depreciation / Amortisation of
assets group wise.
Authority.
and Subsidiary Ledger
 Update the depreciation value into Fixed Assets
Register / Amortisation value into Intangible Assets
Register
Page | 115
Formats
Format Document Title Document Frequency Responsibility Distribution

Ref. Type to
FA/R01 Fixed Assets Register O At the end of Accounts ---
/ Intangible Assets financial period Section
Register
Accounting Entries

Responsible
1. Depreciation JV Intangible Assets Debit Accounts
on fixed Register Section
assets Relevant Depreciation
Account
Credit
2. Portion of JV Fixed Assets / Debit Accounts
depreciation Intangible Assets Section
on revalued Register Revaluation Reserve Account
assets
Credit
3. Charging JV ARN Debit Accounts
depreciation Section
on WIP Cost Relevant WIP Cost Others
of the Works Account
projects
Credit
Relevant Depreciation
Account
4. Amortisation JV Intangible Assets Debit Accounts
of intangible Register Section
assets Relevant Amortisation
Account
Credit
Amortisation Assets Account
5. Amortisation JV --- Debit Accounts
of Grant (for Section
assets other Relevant Grant Account
than free of
cost) Credit
Relevant Account
Page | 116

Subject: Sales of Fixed Assets and Project Subject Code: 5.07
Asset
Subject Background:
This subject covers the accounting procedure to be followed in relation to sale of fixed assets and
project asset.
Fixed assets and project asset are normally identified for sale keeping in view the aspects like its
utility to UPJN, repair and maintenance cost incurred on it, it becoming obsolete, damaged etc. After
it has been identified for sale, the procedure as per the Policies of UPJN shall be adopted for sale.
 Identification of Assets to be sold / disposed
 Receipts against Assets sold
 Dispatch of Assets to buyer
Procedure:

No. Section Timing
Responsible
Identification of Assets to be sold
1. Designated  Prepare a Survey Report on the condition of the assets As and when
Authority (including project asset) at least once in a year and
identify assets to be sold.
 Forward report to the Designated Authority.
2. Designated  Based on Survey Report, adopt the procedure prescribed On approval
Authority for sale of assets. of Survey
 Pass written order for sale of assets (including project Report
asset) and send it to JE / AE.
Receipts against Assets sold
3. Cashier  Receive payment for assets (including project asset) sold. Same day of
 To process receipt, adopt the procedure for receipt as receipt
 Prepare BRV
 Based on BRV, update Bank Book General Ledger,
Subsidiary Ledger and Fixed Assets / Intangible Assets /
Dispatch of Assets to buyer
4. Junior  Prepare ATN for assets (including project asset) to be On receipt of
Engineer sold. order for sale
 Prepare Gate Pass and obtain receiver's signature on it.
5. Assistant  Scrutinise, approve and forward ATN to Accounts Section. On receipt of
Engineer ATN
6. Accounts  From Fixed Assets / Intangible Assets / Project Asset On approval
Section Register extract cost of Assets and depreciation thereon of ATN
to end of last financial period.
 Value ATN based on the above.
 Prepare JV, for sale and identification of Income / Loss
from sale, and obtain approval from Designated Authority
Page | 117

No. Section Timing
Responsible
Subsidiary Ledger and Fixed Assets / Intangible Assets /
Project Asset Register
Formats

Ref. Title Type
FA/F02 ATN I/O On dispatch of Junior Engineer  Own Copy
asset  Buyer
 AE
FA/R01 Fixed Assets O On finalisation Accounts Section --
/ Intangible of ATN
Assets /
Project Asset
Register
FA/R03 JE Asset O On finalisation Accounts Section --
Register of ATN
Accounting Entries

Responsible
1. On BRV Money Debit Cashier
receipt of Receipt
payment Bank Account
from
buyer of Credit
assets
Account Payable – Others Account
2. Sale of JV ATN Debit Accounts
assets Section
Account payable - Others Account /
Relevant Accumulated Depreciation /

Amortisation Account
Revaluation Reserve Account (if any

balance lying corresponding to the
asset)
Income / Loss from Sale / Disposal /

Surplus / Write Off of Fixed Assets
Account (in case of loss)
Credit
Relevant Fixed Assets Account /

Intangible Asset Account
Page | 118

Responsible
Income / Loss from Sale / Disposal /
Surplus / Write Off of Fixed Assets
Account (in case of profit)
3. Sale of JV ATN Debit Accounts
project Section
asset Accounts Payable – Others Account /
Credit
WIP Project Asset Account
Page | 119

Subject: Physical Verification of Fixed Assets Subject Code: 5.08
and Project Asset
Subject Background:
This subject covers the accounting procedure to be followed in relation to physical verification of fixed
assets and project asset.
Physical verification of fixed assets and project asset shall be done to identify its existence, its present
condition, etc. The shortages identified needs to be either recovered from the person responsible or
shall be written off, as the case may be.
 Physical Verification of Fixed Assets and Project Asset
 Adjustment for shortage
 Write off of shortage
Procedure:

No. Section Timing
Responsible
Physical Verification of Fixed Assets and Project Asset
1. Accounts  Prepare list of fixed assets and project asset as per Fixed As and when
Section Assets Register and Project Asset Register and provide physical
this list to Physical Verification Committee verification is
to be
undertaken.
2. Physical  Carry out the physical verification of the fixed assets and As and when
Verification project asset at any time during the year as per the
Committee Policies of UPJN
 Physically verify fixed assets covering all the locations
including HO, Unit office, other sites (if any), etc.
3. Physical  Prepare Physical Verification Report (PVR) and record After physical
Verification the actual measurement and quantity of fixed assets and verification
Committee project asset as per verification as against list of fixed
assets and project asset provided by Accounts Section.
Mention any assumptions made for physical verification,
if any. The PVR shall be signed by all the members of
Committee undertaken the physical verification at the
concerned location.
 Identify shortage, if any, of fixed assets and project asset.
 Forward PVR to Accounts Section and Designated
Authority.
Adjustment for shortage
4. Accounts  Receive PVR from Physical Verification Committee On receipt of
Section  Identify value of the fixed assets and project asset which PVR
are found short. Based on PVR and valuation made
prepare proposal for adjustment of shortage and submit it
to Designated Authority for approval.
 Prepare JV, for adjustment of shortage of assets, and
obtain approval from Designated Authority
Subsidiary Ledger and Fixed Asset / Project Asset
Page | 120

No. Section Timing
Responsible
Register
Write off of shortage
5. Designated  Review the proposal of shortage of fixed assets and After receipt of
Authority project asset and take decision accordingly, PVR
o Writing off the shortage for assets / project asset
o Assigning the responsibility for recovery from person
responsible, if any.
 Intimate the decision taken to Accounts Section.
6. Accounts  Based on the decision taken by Designated Authority, On receipt of
Section prepare JV for either following, as the case may be: order from
o Writing off shortage of assets (In case of project Designated
asset there shall be no JV) Authority
o Recovery of shortage form person responsible
and obtain approval from Designated Authority
Subsidiary Ledger, Fixed / Intangible Assets / Project
Asset Register
 In case of project asset update Works Register.
Formats

Ref. Title Type
FA/R01 Fixed Assets O At the time of Accounts --
Register booking shortage Section
FA/R03 JE Asset O At the time of cross Physical --
Register verifying the Verification
physical quantity Committee
Accounting Entries

Responsible
1. For JV PVR Debit Accounts
booking Section
the Relevant Accumulated Depreciation
shortage Account
of assets
Fixed Assets Shortage Pending
Investigation Account
Credit
Relevant Fixed Assets Account

2. For writing JV Order for Debit Accounts
off the write off by Section
assets Designated Income / Loss from Sale / Disposal /
Authority Surplus / Write Off of Fixed Assets
Account
Credit
Page | 121

Responsible
Investigation Account
3. For JV Order for Debit Accounts
assigning recovery by Section
responsibi Designated Relevant Claim receivable Account
lity to JE Authority
for Credit
recovery
Investigation Account /
Relevant WIP Project Asset Account
Page | 122
6.00 Section: Revenue and Collection

Section Background:
6.01 This Section covers the Revenue and Collection accounting and related procedures.
6.02 Accounting aspects and related procedures relating to the following have been covered under
separate Sections of this Accounting Manual:
 Income from investments - Refer Section No. 4.00
 Income / loss on sale of scrap / materials - Refer Section No. 2.00
 Income / loss on sale of assets - Refer Section No. 5.00
 Grants received from Governments for maintaining the existing projects and revenue
realised from those projects - Refer Section No. 4.00 and Section No. 3.00 respectively.
Accounting Policies
6.03 The main accounting policies that shall be followed relating to revenue and collection
accounting are provided in the subsequent paragraphs:
a.) Revenue shall be recognised and accounted for only in case where there is a reasonable
certainty about its ultimate collection. Recognition of revenue, for the items for which the ultimate
collection is not reasonably certain, shall be deferred till their actual collection for the accounting
purpose. Subject to the above, the accounting for all the revenue items shall be done on an
accrual basis.
Centage Revenue
b.) Centage revenue shall be accounted for as and when expenses on Works projects are incurred.
The accounting of Centage income on materials purchased and advances given shall be deferred
and accounted for under Centage Suspense. In case of materials consumption/ adjustment of
WIP advance, Centage Suspense account shall be debited and Centage income shall be credited
based on the value/ amount of materials consumed/ advances adjusted.
Survey investigation and project report preparation fee
c.) Survey investigation and project report preparation fees for projects (proposed to be executed by
UPJN) shall be accounted for as and when the project report is approved. In case these project
reports are prepared on behalf of third parties where UPJN is not executing the project, then
these fees shall be accounted for on submission of project deliverables.
Income from sale of scrap
d.) Income from sale of scrap shall be accounted for on dispatch of scrap.
Excess provision / unclaimed credits written back
e.) The liabilities and expenses provided for in previous periods, which (on a prudent assessment)
are no longer required shall be written back, under a separate head “Excess provision / unclaimed
credits written back Account”.
f.) Unclaimed credit balances which are lying unadjusted in an account for a longer period and there
are valid ground to write them off, shall be taken to the Income and Expenditure Account under
“Excess Provision / Unclaimed Credits Written Back”, provide there shall not be pending litigations
with respect to these Unclaimed credit balances.
Page | 123
Extra-ordinary items
g.) Extraordinary items are income or expenses that arise from events or transaction that are clearly
distinct from the ordinary activities of the entity and therefore not expected to recur frequently or
regularly. Extraordinary items nature and amount shall be disclosed separately in the Income and
Expenditure Account for the period in order to measure its impact on current period‟s excess of
income over expense or vice versa. The disclosure can be made either in the Income and
Expenditure Account itself or in the Notes to Accounts. e.g. Major loss on account of destruction
of plant and machinery, building, etc. due to earthquake, flood, fire and other natural calamities or
due to man-made actions like riots, civil commutation, war, etc.
Prior Period items
h.) Prior period items are income or expenses which arise in the current period as a result of errors or
omissions in the preparation of the financial statements of one or more periods. The nature and
amount of prior period items shall be separately disclosed in the Income and Expenditure Account
in a manner that their impact on the current period‟s profit or loss can be perceived.
i.) Prior period items do not include other adjustments necessitated by circumstances, which though
related to prior periods, are determined in the current period, e.g., arrears payable to workers as a
result of revision of wages with retrospective effect during the current period.
j.) Any revenue pertaining to the previous period(s) which could not be recognised and accounted
for in those period(s) due to any error and/ or omission and is realised in the current period shall
be shown separately as “Prior Period Revenue Account”.

No.
1. Centage on Works Projects 6.01
2. Survey, investigation and project preparation fees 6.02
3. Sale of tender forms 6.03
4. Revenue Adjustments 6.04
Page | 124
Section: Revenue and Collection Section Code: 6.00

Subject: Centage on Works Projects Subject Code: 6.01
Subject Background:
This subject covers the accounting procedure to be followed in relation to centage on Works projects.

 Centage Suspense
 Centage Income
The procedural and accounting aspects as described in this Subject shall be applicable to the account
for the centage on both the classes of projects i.e. construction projects and maintenance of existing
projects.
Further the above procedural and accounting aspects shall also be applicable in case of any other
similar income (supervision charges, accounts and audit charges, establishment charges, etc.) in
place of or in addition to Centage which may be charged as income on the Works projects.
Rate (%)/ basis of charging centage and its applicability on Works projects shall be as per the terms
and conditions associated with the relevant schemes, notification/ circular issued by the Government
and Policies prescribed by UPJN in this regard.
Procedure:

Responsible
Centage Suspense
1. Accounts  For calculation of Centage Suspense, refer Works Register, As and
Section Store Ledger and WIP – Materials Account when
 Calculate Centage Suspense amount for the materials
purchased/ transferred on projects and WIP advances given
to contractors/ suppliers on which centage is earned.
 Centage suspense amount shall be calculated project wise
and based on the rate and method as prescribed for that
purpose.
2. Accounts  Prepare Journal Voucher (JV), for Centage Suspense, and Same day
Section obtain approval from Designated Authority
 At any point of time the outstanding Centage Suspense
Amount in Centage Suspense Account shall be equal to the
amount which would come by applying the centage
percentage on the value of outstanding balance in WIP
Materials Account / WIP Advance Account.
Centage Income
3. Accounts  For calculation of Centage Income, refer Works Register As and
Section  Calculate Centage Income on the project expense actually when
incurred (e.g. materials consumed, labour and other cost
incurred, etc.) on which centage is earned.
 Centage income amount shall be calculated project wise and
based on the rate and method as prescribed for that
purpose.
4. Accounts  Prepare JV, for Centage Income, and obtain approval from Same day
Page | 125

Responsible
Section Designated Authority
 At any point of time the centage income amount in Centage
Income Account shall be equal to the amount which would
come by applying the centage percentage on the value of
total WIP Cost actually incurred during the period (e.g.
materials consumed, labour and other cost incurred, etc.)
Formats

Ref. Title Type to
WE/R02 Works Register O At month Accounts ---
end Section
Accounting Entries

Responsible
1. On purchase of JV Bill / Debit Accounts
project material Voucher Section
Credit
Relevant Centage Suspense

Account
2. On WIP advance JV Advance bill Debit Accounts
relating to / voucher Section
projects to Relevant WIP Centage Account
contractors and
suppliers Credit

Account
3. On receipt of JV MTN Debit Accounts
project material Section
from other Unit/ Relevant WIP Centage Account
project
Credit

Account
4. On transfer of JV MTN Debit Accounts
project material to Section
other Unit/ project Relevant Centage Suspense
Account
Credit
Page | 126

Responsible
5. On consumption JV MCN / SCN Debit Accounts
of project material Section
on project Relevant Centage Suspense
Account (to the extent of
materials consumed)
Credit
Relevant Centage Income

Account
6. On accounting for JV Expense bill Debit Accounts
centage income / voucher Section
on incurring the Relevant WIP Centage Account
project (expenditure other than
expenditure materials consumption)
Credit
Relevant Centage Income

Account
Page | 127

Subject: Survey Investigation and Project Subject Code: 6.02
Preparation Fees
Subject Background:
This subject covers the accounting procedure to be followed in relation to Survey, Investigation and
Project Preparation fees for the surveys / projects prepared by UPJN.
UPJN carries out survey / investigation and prepares project report for implementation of any project.
These projects may be implemented by UPJN or by third party. Based on the project report prepared,
the approving authority reviews and approves the project as well as the cost of the project to be
incurred. UPJN charges fees for carrying out survey / investigation and project preparation.
 Identification and valuation of survey investigation and project preparation fee
 Transfer of WIP Cost on account of fees to implementing Unit.
Procedure:

No. Section Timing
Responsible
Identification and Valuation of Survey Investigation and Project Preparation Fee
1. Designated  Identify whether any survey investigation and project On approval
Authority preparation fee is recoverable. Further identify whether the of project or
fee pertains to: submission
o the project to be executed by UPJN (in this case the fee of project
is payable if the project is approved) or deliverable,
o the project prepared on behalf of third party, where as the case
UPJN is not executing the Project (in this case fee is may be
payable as and when the project deliverable is
submitted and agreed).
 Intimate Accounts Section about the quantum of fees and Same day
its recoverability.
2. Accounts  In case fee is for the project to be executed by UPJN, As and when
Section account for the fees on approval for the project.
 In case fee is for the project not to be executed by UPJN,
raise the claim on third party for the fee recoverable and
account for the fees on submission of project deliverable.
 Prepare JV and obtain approval from Designated Authority Same day
Subsidiary Ledger
 Update Works Register for the project to be executed by
UPJN
Transfer of WIP Cost on account of fees to implementing Unit
3. Accounts  In case, fee is accounted for in one Unit but the As and when
Section implementation is carried out at other Unit. In that case
(Transferor transfer the relevant WIP Cost and WIP Centage on
Unit) account of fees to the other implementing Unit.
 Prepare Advice of Transfer Debit (ATD) and forward it to Same day
Transferee Unit. Refer Subject Code: 10.01 for procedure
relating to raising ATD
 Based on ATD, prepare JV and obtain approval from
Page | 128

No. Section Timing
Responsible
Subsidiary Ledger and Works Register
4. Accounts  Receive and review ATD and supporting documents and As and when
Section forward the perforated copy to the Transferor Unit. Refer
(Transferee Subject Code: 10.02 for procedure relating to accepting
Unit) ATD Same day
 Based on ATD, Prepare JV and obtain approval from
Subsidiary Ledger and Works Register, etc.
Formats

Ref. Title Type
IUT/F01 ATD I/O On transfer of Transferor –  Own copy
WIP Cost and Accounts  Transferee Accounts
Centage thereon Section Section
 Head Office
WE/R02 Works O At month end Accounts ---
Register Section
Accounting Entries

Responsible
1. On fees receivable JV On Debit Accounts
against project approval of section
approval (project to the project Relevant WIP Cost
be executed by Others Account
UPJN)
Credit
Survey Investigation and

Project Preparation Fee
Account
2. On fees receivable JV On Debit Accounts
against submission of submission section
project deliverable of Project Survey Investigation and
(project not to be deliverable Project Preparation Fee
executed by UPJN) Receivable Account
Credit
Survey Investigation and

Project Preparation Fee
Account
3. On transfer of WIP JV ATD Debit Transferor –
Cost against fees to Accounts
implementing Unit IUT – Works in Progress section
Account
Page | 129

Responsible
Credit
Relevant WIP Cost

Others Account
4. On transfer of WIP JV ATD Debit Transferee –
Cost against fees to Accounts
implementing Unit Relevant WIP Cost section
Others Account
Credit
IUT – Works in Progress

Account
Page | 130

Subject: Sale of tender forms Subject Code: 6.03
Subject Background:
This subject covers the accounting procedure to be followed in relation to sale of tender forms.
Tenders may be sold and cash/ cheques/ DDs may be collected by any of the departments/ sections
of UPJN. Every departments/ sections shall maintain a record showing sale of tenders and amount
collected.
Cash/ cheques/ DDs collected on account of sale of tenders shall be remitted by that departments/
sections on the same day to the respective Cashier.
In case where cash on of sale of tender is directly received by the cashier, the Designated Authority
shall intimate the cashier about the amount (including tax, etc., if any,) and the nature of income so
that cashier can account for the income under the correct account head.
Procedure:

No. Section Timing
Responsible
1. Cashier  Receive cash / cheque/ DD for tender forms sale. On receipt of
 Adopt the procedure for bank / cash receipts as provided in cash / cheque
Subject Code: 9.04 and 9.05 respectively
 Prepare Bank Receipt Voucher (BRV) / Cash Receipt
Voucher (CRV)
Accounting Entries

Responsible
1. On receipt BRV / Money Debit Cashier
of Cash / CRV Receipt
cheque Bank Account / Cash Account
Credit
Income from sale of tender forms

Account
Page | 131

Subject: Revenue Adjustments Subject Code: 6.04
Subject Background:
This subject covers the accounting procedure to be followed in relation to income related adjustments.
This subject covers the following related sub-process:

 Pre-received income
 Income receivable
 Write back of the deposits / claims, etc.
 Prior period income
Procedure:

No. Section Timing
Responsible
Pre-received income
1. Accounts  Identify pre-received income based on the revenue As and when
Section received for a period beyond the current financial period
e.g. Advance rent received in which partial is for the next
financial period.
 Prepare JV and obtain approval from Designated Authority
Subsidiary Ledger.
Income receivable
2. Accounts  Identify income receivable based on the revenue not At the period
Section received up to the current financial period e.g. interest end
income.
Subsidiary Ledger.
Write back of the deposits / claims, etc.
3. Accounts  Identify excess / unclaimed deposits, payables, etc. or As and when
Section excess provisions made, if any.
Subsidiary Ledger.
Prior period income
4. Accounts  Identify Prior period income, if any. As and when
Section  Prepare JV and obtain approval from Designated Authority
Subsidiary Ledger.
Page | 132
Accounting Entries

Responsible
1. Pre-received JV Bill / Debit Accounts
income Voucher Section
Relevant Income Account
Credit
Pre-received Income Account

2. Income JV -- Debit Accounts
Receivable Section
Relevant Income Receivable
Account
Credit

3. Write back of JV Approval Debit Accounts
the excess / from Section
unclaimed Designated Relevant Deposits / Claims /
deposits, Authority Provisions Account
payables, etc. or
excess Credit
provisions made
Excess Provision / Unclaimed
Credits Written Back Account
4. Prior Period JV -- Debit Accounts
Income Section
Relevant Account
Credit
Prior Period Income Account
Page | 133
7.00 Section: Revenue Expenses

Section Background:
7.01 This section covers the Revenue expenses accounting and related procedures.
7.02 Revenue expense is treated as an expense to be matched against revenue and incurred for
the purpose of running normal business operations.
7.03 In context of UPJN, revenue expense are generally categorised under the following groups:
 Personnel Expense
 Administrative Expense
 Interest and Finance Expense
 Depreciation and Amortisation
7.04 Above revenue expense form part of the Income and Expenditure Account of UPJN.
7.05 However the accounting aspects and related procedures relating to the following type of
expense have been covered under separate Sections of this Accounting Manual:
 Employee related expense and benefits – Refer Section Code: 8.00 – Personnel
 Depreciation / Amortisation – Refer Section Code: 5.00 – Fixed Assets
 Stores expense – Refer Section Code: 2.00 – Stores
 Interest expense – Refer Section Code: 4.00 – Loan, Grant, Deposits and Investment
7.06 Further the accounting aspects and related procedures relating to the following type of
expenditure (other than revenue expenditure) have been covered under separate Sections of this
Accounting Manual
 Capital Expenditure – Refer Section Code: 5.00 – Fixed Assets

 Works projects Expenditure – Refer Section Code: 3.00 – Works Expenditure
Accounting Policies
7.07 The main accounting policies that shall be followed relating to revenue expenses accounting
are provided in the subsequent paragraphs:
a.) Revenue expense shall be accounted for on an accrual basis. Revenue expenses paid during the
period which pertains to the next financial period shall be treated as prepaid expenses.
b.) All items of revenue expense recognised in a period shall be included in the determination of net
profit or loss for the period including extraordinary items of revenue expense, prior period items of
revenue expense and the effects of changes in the accounting estimates.
c.) Provision shall be made for all debts which are doubtful of recovery. Further, the debts which are
not recoverable shall be written off as bad debts and recognised as such in the Income and
Expenditure Account. However, if any provision for doubtful debts has been created, then bad
debts shall first be adjusted against the same and balance, if any, shall be written off as bad
debts. In case a debt which was written off earlier is recovered or excess provision is created
against a debt, then the same shall be accounted for as Bad Debts Recovered in the same period
in which the respective debt is recovered or provision against any debt remain excess.
Page | 134
Sl. Subject Subject Code

No.
1. Accounting for Revenue Expenses 7.01
2. Expenses incurred by one Unit on behalf of other Unit 7.02
3. Provision for doubtful debts and writing off bad debts 7.03
Page | 135
Section: Revenue Expenses Section Code: 7.00

Subject: Accounting for Revenue Expenses Subject Code: 7.01
Subject Background:
This subject covers the accounting procedure to be followed in relation to revenue expenses incurred
by UPJN.
Every revenue expense incurred shall have a supporting or contractor bill/ voucher. These expenses
may be directly incurred by any department/ section but shall be paid by Accounts Section or by the
employees of UPJN through PI / TI.
Expense bill/ voucher shall be authorised, first by the respective authority which is primarily
responsible for incurring the expense and then by Head of Accounts Section and by the concerned
authority for accounting and payment purpose.
Supporting documents for expense shall be attached with the voucher through which expense shall
be accounted for and the payment voucher shall have the reference of the voucher through which
expense shall be accounted for.
There would be certain revenue expense which would be incurred for any Works Project or may
pertain to any fixed asset. These expenses shall be accounted under respective Works Project or
capitalised with that particular fixed asset. Bill/ supporting documents for such revenue expense shall
be marked accordingly by the respective authority (which is primarily responsible for incurring the
expense) at the time of approving the expenses. This would facilitate proper accounting of the
expense.
Prepaid expenses
Prepaid expenses shall be accounted for as expenses in the financial period in which the benefit
these expenses shall accrue the benefit e.g. Insurance premium on vehicles paid for the period which
partially falls in the current financial period and partially in the next financial period.
Extra-ordinary items
Extraordinary items are income or expenses that arise from events or transaction that are clearly
distinct from the ordinary activities of the entity and therefore not expected to recur frequently or
regularly. Extraordinary items nature and amount shall be disclosed separately in the Income and
Expenditure Account for the period in order to measure its impact on current period‟s excess of
income over expense or vice versa. The disclosure can be made either in the Income and
Expenditure Account itself or in the Notes to Accounts. e.g. Major loss on account of destruction of
plant and machinery, building, etc. due to earthquake, flood, fire and other natural calamities or due to
man-made actions like riots, civil commutation, war, etc.
Prior Period items
Prior period items are income or expenses which arise in the current period as a result of errors or
omissions in the preparation of the financial statements of one or more periods. The nature and
amount of prior period items shall be separately disclosed in the Income and Expenditure Account in a
manner that their impact on the current period‟s profit or loss can be perceived. The following are the
select examples of prior period items:
 Effect on account of mathematical mistake in calculation of depreciation in earlier periods.
 Under valuation of closing stock on account of non-consideration of stock
 Non-provisioning of certain expenses last period against which actual expenses are incurred in
the current period e.g. Electricity bill, telephone bill, etc.
 Identification of theft of stock in the subsequent period which happened in earlier period and was
not considered for stock valuation in that period.
Page | 136
 Salary arrears approved and not provided in the earlier period but not paid earlier
Prior period items do not include other adjustments necessitated by circumstances, which though
related to prior periods, are determined in the current period, e.g., arrears payable to workers as a
result of revision of wages with retrospective effect during the current period.
Miscellaneous expenditure to the extent not written off
Miscellaneous expenditure comprises items of expenditure which are not entirely charged to income
in the period in which they are incurred, but are carried forward in the Balance Sheet to be amortised
in subsequent periods.
No expense shall be carried forward as miscellaneous expenditure, unless some benefit from the
expenditure can reasonably be expected to be received in future and the amount of such benefit is
reasonably determinable. The amount to be carried forward shall not exceed the expected future
revenue/ other benefits related to the expenditure. In any case period shall not exceed five years.
The accounting procedure of the extraordinary items, prior period items and miscellaneous
expenditure to the extent not written off shall be similar to that of any other revenue expenses being
incurred.
 Bill / voucher passing
 Payment against expenses incurred
 Advance payment against expenses
 Miscellaneous expenditure to the extent not written off
Procedure:

Responsible
Bill / voucher passing
1. Accounts  Receive from the Designated Authority, the bill / voucher of On
Section various suppliers/ contractor/ service provider/ employees receiving of
towards expense. the bill /
 Put a date stamp for the date of receipt at Accounts Section voucher of
and update Supplier Bill / Contractor Bill Register. Supplier expense
Bill / Contractor Bill Register shall facilitate the tracking of
bill details since its receipt till payment.
 While passing the bills, ensure the following key aspects:
o Approval of the Designated Authority
o Bill is supported by the relevant supporting Within one
documents/worksheets day of
o Recovery of advance paid, if any, is being made receipt of
o Deduction on account of any other recoveries to be bill
made from the bill has been made
o Amount of bill is as per the Purchase Order (PO) /
Contract Bond (CB), if any and other terms and
conditions etc. have been complied with
o In case any expense verification requires measurement
of works undertaken against expense, then the
Measurement Book (MB) must be updated.
 Undertake casting, cross casting of the bill and verify the bill
in all respect.
 In addition to the above, comply with the relevant Policies
Page | 137

Responsible
prescribed by UPJN for verifying and approving the
expenses and their accounting. These expenses would
include vehicle running expense, repair & maintenance,
rent & hire charges, security expense, professional charges,
telephone/electricity bills, advertisement & publicity bills,
etc. Additional internal controls in relation to such expense
have been provided later in this subject.
 Pass the bill / voucher by putting a „passed for payment
stamp‟ and specify the amount by which bill passed.
 Calculate the prepaid expenses (expenses which pertain to
next financial period(s)) so that these can be accounted for
accordingly e.g. rates and taxes, insurance premium of
vehicle, etc. paid in advance
2. Executive  Undertake an overall check on the bill / voucher and On receipt
Engineer approve the bill for payment on or after the due date. of bill /
voucher for
approval
3. Accounts 
Prepare Journal Voucher (JV), for the amount payable and After
Section deductions on account of TDS, other taxes, deposits, etc. to approval of
be made, and obtain approval from Designated Authority. bill by EE
Subsidiary Ledger and Supplier Bill / Contractor Bill
Register.
 In case of prepaid expenses if any, update Prepaid
Expense Register.
4. Accounts  Prepaid expenses accounted for during the period shall be On the
Section required to be accounted for as expenses during the next beginning of
period. the new
 Based on the details available in Prepaid Expense Register financial
regarding prepaid expenses to be adjusted, prepare JV, for period
the prepaid expenses (to the extent for which the expense
pertain to that financial period) in the next financial period,
and obtain approval from Designated Authority.
Subsidiary Ledger and Prepaid Expense Register.
Payment against expenses incurred
5. Cashier  On or after the due date, the payment shall be made for the As and
amount passed against the bill and net of advance paid, if when
any, earlier.
 Adopt the procedure for bank / cash payments as provided Same day
in Subject Code: 9.04 and 9.05 respectively
 Prepare Bank Payment Voucher (BPV) / Cash Payment
Voucher (CPV)
 Based on BPV / CPV, update Bank Book / Cash Book,
General Ledger, Subsidiary Ledger and Supplier Bill /
Contractor Bill Register.
 Update MB, if any, for the details of payment made e.g.
building repairs and maintenance.
Advance payment against expenses
6. Accounts  Receive approval for advance to supplier/ contractor against On
Section expenses to be incurred. receiving
 Ensure the following key aspects: the
o Advance payment is to be made as per the agreed approved
terms and conditions. advance
Page | 138

Responsible
o In case of normal advance, receive Performa Invoice request
from for the advance.
o The terms & conditions of the CB / work order have
been fulfilled which are required for providing advance
o Requisite bank guarantees, if any, have been received
and are confirmed from the issuing bank.
7. Cashier  To process payment, adopt the procedure for bank Same day
 Prepare BPV.
Register.
Formats

Ref. Type to
MT/R04 / Supplier Bill / I/O As and when bill Accounts --
WE/R01 Contractor Bill received, passed & Section
Register payment made
RE/R01 Prepaid I/O As and when Accounts --
Expense prepaid expense Section
Register identified and
adjusted
Accounting Entries

Responsible
1. Booking of JV Bill / Debit Accounts
expenses in Voucher Section
case of credit Relevant Expense Account
period is allowed
Prepaid Expense Account
Credit
Relevant Liability Account

2. Cash expense CPV Bill / Debit Accounts
Voucher Section
Relevant Expense Account
Credit
Cash Account
3. Accounting of JV Bill / Debit
prepaid Voucher
expenses as Relevant Expense Account
expense
Credit

Page | 139

Responsible
4. Payment of CPV/ Bill / Debit Cashier
expenses BPV Voucher
Account Payable- Supplier
Account/
Account Payable - Contractor
Account /
Permanent Imprest Account /
Temporary Imprest Account
Credit
Cash Account / Bank Account

5. Advance BPV Bill / Debit Cashier
Payment Voucher
Advances – Supplier Account /
Advances – Contractor Account
Credit
Bank Account
6. At the time of JV Bill / Debit Accounts
settlement of Voucher Section
expense against Relevant Expense Account
advance
Credit
Relevant Advance Account

7. Booking of prior JV Voucher Debit Accounts
period expense Section
Relevant Prior Period Expense
Account
Credit
Relevant Account
8. Booking of extra JV Voucher Debit Accounts
ordinary Section
expense Extra ordinary expense Account
Credit
Relevant Account
9. Booking of JV Bill / Debit Accounts
miscellaneous Voucher Section
expenditure to Miscellaneous expenditure to the
the extent not extent not written off Account
written off
Credit
Relevant Liability Account

10. Amortisation of JV -- Debit Accounts
misc. expenses Section
Page | 140

Responsible
Credit
Miscellaneous expenditure to the

extent not written off Account
Additional Internal Controls:
Sl. Nature of Key Additional Internal Controls

No. Expense
1. Printing &  A Stationery Stock Register shall be maintained to record details of
Stationery opening balance, receipt, issue and closing balance of stationery
items. For each stationery items there would be separate folio in
Stationery Stock Register.
 Every transaction entered in the Stationery Stock Register shall be
initialled by the person who shall enter the transaction in it.
 Periodic physical verification of stationery items shall be carried out
and any difference in the stock as per register and actual stock shall
be enquired and accounted for.
2. Repair &  In case repairs and maintenance work is carried out against work
maintenance on order / CB issued to contractor then Certificate shall be provided by
any fixed asset the Designated Authority that the work has been completed up to
satisfaction and has been carried out in accordance with specification
provided, if any.
 If any deduction is to be made from contractor‟s bill on account of
delay in execution of work, unsatisfactory performance of work etc., an
office note shall be prepared to this effect providing the detail of
penalty/deduction to be imposed.
 In case UPJN has taken an insurance cover on the asset, a claim shall
be raised on the insurance company and the insurance survey is
conducted before and after the repair has been carried out.
 Insurance claim recognised in the books of account shall be adjusted
from the expenses incurred on restoring the asset in its previous
condition and the excess expense shall be charged to respective
Repairs and Maintenance Account.
3. Vehicle running  Vehicle running expenses shall be accounted for and paid based on
expense the Policies prescribed by UPJN.
 It shall also be ensured that:
o Average fuel consumption does not vary significantly for one
vehicle.
o Average fuel consumption of same make and type of vehicle does
not differ significantly from each other.
o Fuel is procured on the basis of duly authorised petrol requisition
slip.
o In case of fuel expense on credit basis, the bill is received from
petrol pump on a monthly basis providing details of vehicle no.
wise date wise fuel filled in the vehicle.
4. Rent and hire  Rent is paid in respect of all premises within the due date as per the
charges rent agreement.
 In respect of vacated premises, security deposit is received back from
the owner or adjusted against the rent liability.
 Tax at source has been deducted, wherever applicable.
5. Security expense  For passing the bill daily attendance of security guards has been
provided
Page | 141
Sl. Nature of Key Additional Internal Controls

No. Expense
 In the contractor bill, the rate charged by the contractor shall be in
accordance with the contract entered with the security service agency
and the no. of days claimed per security guard shall be in accordance
with the attendance record maintained.
 Statutory deductions, contribution and deposit in respect of provident
fund, ESI, other contribution, etc. shall be in accordance with relevant
statutory obligations.
 Other deductions/adjustments to be made from the bill of security
service agency have been made in accordance with terms of contract.
6. Rates and Taxes  Payment is made before due date to avoid any penal action.
 In case payment is not made, adequate provision shall be created for
the same.
7. Legal and  Fee charged is in accordance with the terms and condition of the work
Professional fees order or any other agreement.
 Services has been rendered in accordance with the terms of work
order and accepted by the concerned Unit
 Advance paid to the consultant, if any is adjusted.
 Any other deduction/adjustment, required to be made in accordance
with the terms of agreement, has been made.
8. Advertisement &  All advertisements charged for in the bill shall be supported by proof of
publicity expense advertising media/publisher/agency, etc.
 Rates and other charges charged in the bill are as per the rate
agreement with the advertising agency.
 Media-wise number of advertisements actually appeared tally with the
number of advertisement charged for. Proof of advertisements in the
form of newspapers, magazines, etc. has been provided with the bill.
Page | 142

Subject: Expense incurred by one Unit on Subject Code: 7.02
behalf of other Unit
Subject Background:
This subject covers the accounting procedure to be followed in relation to expenses incurred by one
Unit of UPJN on behalf of another Unit.
Any Unit of UPJN may incur certain expenses on behalf of another Unit. Similarly certain expense
already accounted for by any Unit might be required to be transferred to other Unit later. These
expenses include traveling expense of any employee of other Unit, vehicle expenses, etc.
In case where at the time of incurring the expenses, it is known that these expense are being incurred
on behalf of other Unit then instead of Relevant Expense Account, relevant Inter Unit Transaction
(IUT) Account shall be debited. In case after incurring expenses, it is identified that it pertains to
another Unit, then the IUT Account shall be debited and Relevant Expense Account shall be credited
on identification. These expenses shall be accounted for in the Unit for which expenses has been
incurred.
 Expenses incurred on behalf of another Unit
 Expenses incurred for Unit by another Unit
Procedure:

Responsible
Expenses incurred on behalf of another Unit
1. Accounts  When expense is incurred on behalf of As and
Section another Unit, follow the process for accounting for expense when
(Transferor as provided in Subject Code. 7.01 above.
Unit)  Raise an Advice of Transfer Debit (ATD) for the expenses
for which other Unit is to be debited. Refer Subject Code:
10.01 for procedure relating to raising ATD.
 Prepare JV and obtain approval from Designated Authority.
Register
Expenses incurred for Unit by another Unit
2. Accounts  Receive and review ATD and supporting documents and On receipt
Section forward the perforated copy to the Transferor Unit. Refer of ATD from
(Transferee Subject Code: 10.02 for procedure relating to accepting Transferor
Unit) ATD Unit
 Prepare JV and obtain approval from Designated Authority. – Accounts
 Based on JV, update Journal Book, General Ledger and Section
Subsidiary Ledger.
Page | 143
Formats

Ref. Title Type
IUT/F01 ATD I/O As and Accounts Section  To the other
when (Transferor Unit) Unit
Accounting Entries

Responsible
1. On incurring an JV Bill / Debit Accounts
expense on Voucher Section –
behalf of other and ATD IUT - Others Account Transferor
Unit Unit
Credit
Account Payable - Supplier

Account / Account Payable -
Contractor Account / Permanent
Imprest Account / Temporary
Imprest Account
2. For transferring JV Bill / Debit Accounts
expense to Voucher Section –
other Unit and ATD IUT - Others Account Transferor
Unit
Credit

3. On responding JV ATD Debit Accounts
to ATD Section –
Relevant Expense Account Transferee
Unit
Credit
IUT - Others Account
Page | 144

Subject: Provision for doubtful debts and Subject Code: 7.03
writing off bad debts
Subject Background:
This subject covers the accounting procedure to be followed in relation to provisioning against
doubtful debts and writing off bad debts.
There may be accounts receivables, advances, etc. (including pertaining to works projects) which
might not be recovered for a long time or are doubtful of recovery. In case it is doubtful of recovery,
provision for doubtful debts shall be made whereas in case of ascertainment that debt shall not be
recovered, the same shall be written off and charged to Income and Expenditure Account.
 Provision for doubtful debts
 Recovery against doubtful debts
 Writing off bad debts
 Receipt against written off bad debts
Procedure:

No. Section Timing
Responsible
Provision for doubtful debts
1. Accounts  Review and identify the accounts receivables or At the beginning
Section advances given to employees or to contractors, etc. of month of
 Prepare a list of doubtful debts, if any and send to March of the
Designated Authority for approval reporting period
2. Designated  Scrutinise the doubtful debts. On receiving
Authority  Based on the facts, if debt is found to be doubtful of the list form
recovery, then approve for provision for doubtful debts. accounts
3. Accounts  Prepare JV and obtain approval from Designated On receiving of
Section Authority. approval from
 Based on JV, update Journal Book, General Ledger Designated
and Subsidiary Ledger Authority for
provision for
doubtful debts
Recovery against doubtful debts
4. Accounts  In case of recovery against doubtful debts, the On recovery
Section provision needs to be assessed and shall be against doubtful
accordingly reduced / increased. debt
Writing off bad debts
5. Accounts  In case it is assessed that the debt is not recoverable As and when
Section at all, then put up the proposal for write off to the
6. Designated  Review the proposal and if it is assessed that debt is As and when
Authority not recoverable, then approve for write off of debt.
7. Accounts  Prepare JV and obtain approval from Designated On receipt of
Section Authority approval from
 Based on JV, update Journal Book, General Ledger Designated
and Subsidiary Ledger Authority for
write off of debt.
Receipt against written off bad debts
Page | 145

No. Section Timing
Responsible
8. Cashier  In case any recovery arises against the bad debt On recovery of
written off in the last periods, the same shall be treated bad debts
as Bad Debts Recovered.
 To process receipt, adopt the procedure for cash / bank
receipts as provided in Subject Code: 9.04 and 9.05
respectively.
 Prepare Bank Receipt Voucher (BRV) / Cash Receipt
Voucher (CRV)
General Ledger and Subsidiary Ledger
Accounting Entries

Responsible
1. At the time of JV Assessment Debit Accounts
making of doubtful Section
provision for debt Bad Debt Account
doubtful debts
Credit
Provision for doubtful debt

Account
2. At the time of JV Approval Debit Accounts
writing off the from Section
bad debts Designated Provision for doubtful debt
Authority Account / Bad Debt Account (to the
extent not provided for)
Credit
Relevant Accounts Receivable

Account /
Relevant Advances Accounts /
Other Relevant receivable Account
3. In case of CRV/ Receipt Debit Cashier
recovery BRV against bad
against bad debt Cash/ Bank Account and / or
debt written off Provision for doubtful debt Account
(in case recovery made against
provision for doubtful debt account)
Credit
Bad Debt Recovered Account (to

the extent written off / provided for
earlier)
Relevant Accounts Receivable

Account / Relevant Advances
Accounts / Other Relevant
receivable Account (to the extent
not written off earlier)
Page | 146
8.00 Section: Personnel

Section Background:
8.01 This Section covers the Personnel accounting and related procedures.
Accounting Policies
8.02 The main accounting policies that shall be followed relating to personnel accounting are
provided in the subsequent paragraphs:
Salaries
a.) Expenses on salaries and related allowances (including pensions, bonus and ex-gratia, etc.) shall
be accounted on accrual basis in the same period in which these expenses are accrued. Pay
arrears shall be accounted for in the same period in which the pay revisions are declared.
Reimbursement of Expenses to employees on claim basis
b.) Transactions relating to employees‟ claim shall be accounted for in the same accounting period in
which they are claimed. These employees‟ claims include leave travel allowance, reimbursement
of medical expenses, etc.
Employees‟ terminal/ retirement benefits
c.) Employees‟ terminal benefits shall include Gratuity, Pension, and Leave Encashment etc. These
expenses shall be accounted for based on actuarial valuation. The disclosure of the same shall
be made accordingly in the Notes to Accounts.
Employees cost eligible for Capitalisation/ chargeable to works
d.) The employees‟ cost shall initially be accounted for under the expense account heads. The
reclassification (between capital expenditure and revenue expenses) of these costs to the 'capital
works' or „works expenditure‟ shall be done subsequently by credit to the relevant expense heads.
Loans and advances to employees
e.) Guarantees given by UPJN on behalf of its employees to financial institution/ bankers for
repayment of loans/ advances (in case of any default in repayment of loans/ advances taken by
employees of UPJN e.g. house building advance) shall be disclosed as contingent liabilities in the
Notes to Accounts with the quantum of outstanding of loan amount or for the amount for which
guarantees have been given by UPJN.
Sl. No. Subject Subject code

1. Salaries 8.01
2. General Provident Fund (GPF) Transactions 8.02
3. Group Insurance Scheme (GIS) Transactions 8.03
4. Employee Loans and Advances 8.04
5. Reimbursement of Expenses to Employees 8.05
6. Full and Final Settlement 8.06
7. Permanent/ Temporary Imprest 8.07
8. Accounting on Transfer of Employees 8.08
9. Recoveries/ reimbursement - Staff on Deputation 8.09
10. Allocation of Personal Expenses to Works/ Fixed Assets 8.10
Page | 147
Section: Personnel Section Code: 8.00

Subject: Salaries Subject Code: 8.01
Subject Background:
This subject covers the accounting procedure to be followed in relation to:

 Salaries including allowances such as dearness allowance, special pay, house rent allowance,
etc.
 Pensions for retired employees
 Pay arrears (salaries and pensions)
 Bonus and ex-gratia
 Deductions from salaries/ pensions such as GPF deductions, GIS deductions, recovery of
advances, TDS etc.
 Unpaid salaries, bonus and ex-gratia, pay arrears, etc.
Though the pay bills for salaries, pay arrears, pensions, bonus and ex-gratia (hereinafter referred to
as salaries) shall be prepared by the Establishment Section, separately, the accounting procedures
for them shall be similar. Thus the process of accounting for pay arrears, pensions, bonus, ex-gratia
and related deductions has been described as „salaries‟ in this subject.
Based on the relevant data/ information/ received from the Accounts Section and Policies prescribed
by UPJN, the Establishment Section shall prepare the pay bills.
All the components of salaries and deductions shall be shown in pay bill under separate columns in
such a manner so that the accounting for the same can be done for each items of pay bill separately.
e.g. Recoveries against loans and advances shall be segregated, between recoveries against the
loans and advances made by UPJN and the loans and advances disbursed through financial
institution/ bankers. Further the recoveries against loans and advances made by UPJN shall be
segregated into the principal and interest amount recovered separately.
The aspects relating to accounting and payment of unpaid salaries (including bonus and ex-gratia,
etc.) have also been covered in this subject. To record the unpaid salaries and payment thereof, a
separate Unpaid Salary Register/ Unpaid Bonus/Ex-Gratia Register shall be maintained.
At the end of each year, provisions for employees‟ terminal benefits (pensions, gratuity and leave
encashment) shall be done based on actuarial valuation at the Accounts Section – Head Office (HO).
 Bill passing for salaries
 Payment of salaries
 Unpaid salaries/ bonus / ex-gratia
 Payment of unpaid salaries/ bonus / ex-gratia
Procedure:

No. Section Timing
Responsible
Bill passing for salaries
1. Accounts  Receive the pay bill duly approved by the Designated As and when
Section Authority from the Establishment Section
2. Accounts  Scrutinise and verify the pay bill for the following key On the same
Section aspects: day of receipt
o The arithmetic correctness of the pay bill of pay bill
o Inclusion of all components of allowances and
Page | 148

No. Section Timing
Responsible
deductions based on the data/ information sent to
Establishment Section, relevant records maintained by
the Accounts Section and the pay bills of previous
months/ periods
o Deduction of statutory dues/ taxes in accordance with
the respective Statute
o Recoveries e.g. against advance/ loans, Group
Insurance Scheme (GIS) deductions, etc. based on the As and when
records maintained by the Accounts Section
 Obtain clarifications from the Establishment Section if any,
and receive revised pay bill duly approved by the
3. Accounts  Prepare Journal Voucher (JV) to account for salaries and On the same
Section obtain approval from Designated Authority day of
 Affix the stamp „passed for payment‟ and specify the receiving the
amount to be paid approved pay
 Based on JV, update Journal Book, General Ledger, bill
Subsidiary Ledger, relevant Register(s)
 Forward the JV along with the supporting documents to the
Cashier for Payment
Payment of salaries
4. Cashier  Receive the JV along with the supporting documents. As and When
 Process payment for the salary payable in accordance with Same Day
the pay bill passed for payment.
 To process payment, adopt the procedure for cash / bank
payments as provided in Subject Code: 9.04 / 9.05
 Prepare Bank Payment Voucher (BPV) / Cash Payment
Voucher (CPV) - in case of payments made in cash
 Obtain the signature of employees receiving salary in Cash
on the pay bill
 Based on BPV/ CPV, update Bank Book / Cash Book,
General Ledger and Subsidiary Ledger
Unpaid salaries/ bonus / ex-gratia
5. Accounts  Scrutinise Salary Payable Account, Bonus Payable After 6
Section Account and the Ex-gratia Payable Account and indentify months from
the salaries, bonus and ex-gratia which remain unpaid for a the end of the
period of more than 6 months/ as per Policies prescribed month in
by UPJN which the
 Prepare JV to account for the Unpaid Salary/ Bonus/ Ex- pay/ bonus/
Gratia and obtain approval from Designated Authority ex-gratia
 Based on JV, update Journal Book, General Ledger, becomes
Subsidiary Ledger and Unpaid Salary Register/ Unpaid payable/ as
Bonus/Ex-Gratia Register per Policies
 Inform the Establishment Section for the Unpaid Salaries/ prescribed by
Bonus/ Ex-Gratia so that the Establishment Section can UPJN
consider the same in preparation of pay bill for the future
periods
Payment of unpaid salaries/ bonus / ex-gratia
6. Accounts  Receive the application (duly checked and approved by the As and when
Section Establishment Section) from the employee for claim of the
unpaid salaries/ bonus/ ex-gratia and check the relevant
account for the amount of unpaid salaries/ bonus/ ex-gratia
payable
 Obtain authorisation for payment of the unpaid salary/ Same day
Page | 149

No. Section Timing
Responsible
bonus/ ex-gratia from Designated Authority on the
application received
 After receiving the approval, affix the „passed for payment
stamp‟ on application and specify the amount to be paid
 Forward the application to the Cashier for payment
7. Cashier  Receive the application As and when
 Prepare BPV
Subsidiary Ledger and Unpaid Salary Register/ Unpaid
Bonus/Ex-Gratia Register
Formats

Ref. Type to
PA/R08 Employee O As and Accounts Section/ ---
Advance/ Loan when Establishment Section
Register
PA/R03 General Provident I/O As and Accounts Section/ ---
Fund Register when Establishment Section
PA/R04 General Provident O As and Accounts Section/ ---
Fund Broad Sheet when Establishment Section
PA/R06 Group Insurance O As and Accounts Section/ ---
Scheme Register when Establishment Section
PA/R01 Unpaid Salary I/O As and Accounts Section ---
Register when
PA/R02 Unpaid Bonus/ Ex- I/O As and Accounts Section ---
Gratia Register when
Accounting Entries
Sl. Event Voucher Source Accounting Entries Person/

Responsible
1. Accounting for JV Pay Bill Debit Accounts
Salaries/ Section
Pension Relevant Salaries Account
Payable
Credit
Relevant Deductions from

Salaries Account
Relevant Recoveries Account
Payable to Financial
Institutions towards
Employee‟s HBA Account
Relevant Interest Income on

Advance to Employees
Account
Page | 150

Responsible
Tax Deducted at Source

(TDS) – Salary Account
Relevant Salaries Payable

Account
2. Payment of BPV/ Pay Bill Debit Cashier
Salaries CPV
Relevant Salaries Payable
Account
Credit
Bank Account / Cash

Account
3. Accounting for JV Pay Bill/ Bonus/ Debit Accounts
Unpaid Salary/ Ex-Gratia Bill Section
Bonus/ Ex- Salary Payable Account/
Gratia Bonus Payable Account/
Ex-Gratia Payable Account
Credit
Unpaid Salary Payable

Account/
Unpaid Bonus Payable
Account/
Unpaid Ex-Gratia Payable
Account
4. Payment of BPV Employee‟s Debit Cashier
Unpaid Salary/ approved
Bonus/ Ex- application Unpaid Salary Payable
Gratia Account/
Unpaid Bonus Payable
Account/
Unpaid Ex-Gratia Payable
Account
Credit
Bank Account / Cash

Account
5. Provision for JV Actuarial Debit Accounts
Retirement Valuation Section
Benefits Report (if any) Leave encashment Account/
(Additional Gratuity Expenses Account/
Provision) Pension Expense Account
Credit
Provision for Leave

Encashment Account/
Provision for Gratuity
Account/
Provision for Pension
Page | 151

Responsible
Account
6. Provision for JV Actuarial Debit Accounts
Retirement Valuation Section
Benefits Report (if any) Provision for Leave
(Reduction in Encashment Account/
Provision) Provision for Gratuity
Account/
Provision for Pension
Account
Credit
Leave encashment Account/

Gratuity Expenses Account/
Pension Expense Account
Page | 152

Subject: General Provident Fund (GPF) Subject Code: 8.02
Transactions
Subject Background:
This subject covers the accounting procedure to be followed in relation to GPF transactions.
Accounting for GPF deduction, interest provision, GPF advance, deduction against GPF advances
shall be as per the Policies prescribed by UPJN and relevant laws.
Accounting for GPF deduction and recoveries against GPF advances from Salaries have been
covered in the Subject Code: 8.01. The withdrawal of GPF balance by the employee on full and final
settlement is covered in the Subject Code: 8.06
However the accounting procedures relating to deduction and deposition (including employers‟
contribution) of provident funds for the employees who come under the purview of the Employees
Provident Fund And Miscellaneous Provisions Act, 1952, shall be based on the relevant provisions
and rules & regulations as laid down under this Act.
Similarly the accounting procedures relating to deduction and deposition (including employers‟
contribution) of insurance for the employees who come under the purview of the Employees' State
Insurance Act, 1948, shall be based on the relevant provisions and rules & regulations as laid down
under this Act
 GPF advance – approval for advance
 GPF advance – payment of advance
 Interest on GPF
 Reconciliation of GPF balances
Procedure:

No. Section Timing
Responsible
GPF advance – approval for advance
1. Establishment  Receive application from the employee for advance As and when
Section against GPF Balance, check eligibility, decide amount of
installment, number of installments and get it approved
from the Designated Authority
2. Accounts  Receive the approved application for advance against Same day of
Section GPF Balance receipt of
 Pass the application for payment, affix the „passed for application
payment stamp‟ on application and specify the amount to
be paid
 Forward the application to cashier for payment
GPF advance – payment of advance
3. Cashier  Receive the approved application for the amount of As and when
advance to be given.
 Prepare BPV
Subsidiary Ledger, General Provident Fund Broad Sheet,
Page | 153

No. Section Timing
Responsible
General Provident Fund Register
 After making the payment forward the copy of the
application marked „paid‟ to Establishment Section for
updation of GPF records
4. Establishment  Receive copy of approved application marked as „Paid‟. As and when
Section  Record the recovery schedule in the General Provident Same day
Fund Broad Sheet and General Provident Fund Register
for the payment made
Interest on GPF
5. Establishment As per the Policies prescribed by UPJN, calculate interest At the year
Section on outstanding amount of GPF as per General Provident end/ As per
Fund Register UPJN‟s
 Prepare a list of interest credited to employees‟ GPF Policies
Account, get it approved from the Designated Authority
and forward the list to Account Section for accounting
purpose
6. Accounts  Receive the approved list of GPF interest and compare it As and when
Section with General Provident Fund Broad Sheet
 Prepare JV to account for the GPF Interest and obtain
Subsidiary Ledger, General Provident Fund Broad Sheet
and General Provident Fund Register
Reconciliation of GPF balance
7. Accounts  At month end, compare the balance in GPF account in the At month end
Section books of account with that of the General Provident Fund
Broad Sheet
 Identify discrepancies if any
 Prepare JV to account for differences, if any, and obtain
Subsidiary Ledger, General Provident Fund Broad Sheet
and General Provident Fund Register
Formats

Ref. Type to
PA/R04 General Provident O As and when Accounts Section/ ---
Fund Broad Sheet Establishment
Section
PA/R03 General Provident I/O As and when Accounts Section/ ---
Fund Register Establishment
Section
Accounting Entries
Sl. Event Voucher Source Accounting Entries Person / Section

No. type documents Responsible
1. Payment for BPV Applicatio Debit Cashier
GPF advance n for GPF General Provident Fund (GPF)
advance Account
Credit
Page | 154

Bank Account
2. Interest on JV General Debit Accounts
GPF Provident Interest on General Provident Fund Section
Fund (GPF) Account
Register
Credit
General Provident Fund (GPF)
Account
3. Deduction of JV Paybill Debit Accounts
Employees‟ Section
Contribution to Relevant Salaries Account
Provident
Fund and Credit
Employees
State Employees‟ Contribution to
Insurance Provident Fund Payable Account
Corporation
from Employees‟ Contribution to ESIC
Employees‟ Payable Account
Salary
4. Employer‟s JV Paybill Debit Accounts
contribution to Section
Provident fund Employer‟s Contribution to
Provident Fund Account
Employer‟s Contribution to Pension
Fund Account
Employer‟s Contribution to Deposit
Linked Insurance Scheme Account
Provident Fund Administration
Charges Account
Deposit linked Insurance Scheme
Administration Charges Account
Credit
Employer‟s Contribution to
Provident Fund Payable Account
Fund Payable Account
Linked Insurance Scheme Payable
Account
Charges Payable Account
Administration Charges Payable
Account
5. Employer‟s JV Pay bill Debit Accounts

Contribution to Section
ESIC Employer‟s contribution to ESIC
Account
Credit
Employer‟s contribution to ESIC

Page | 155

Payable Account
6. Payment of BPV Pay bill Debit Accounts
Provident Section
Fund dues Employees‟ Contribution to
Employer‟s Contribution to
Fund Account Payable Account
Linked Insurance Scheme Payable
Account
Charges Payable Account
Administration Charges Payable
Account
Credit
Bank Account
7. Payment of BPV Pay bill Debit Accounts
ESIC dues Section
Employees‟ Contribution to ESIC
Payable Account
Employer‟s Contribution to ESIC
Payable Account
Credit
Bank Account
Page | 156

Subject: Group Insurance Scheme (GIS) Subject Code: 8.03
Transactions
Subject Background:
This subject covers the accounting procedure to be followed in relation to GIS transactions.
Deduction of Insurance premium (hereinafter referred as „GIS‟) is made from employees‟ monthly
salary. As per the current practice, amount deducted from the employees‟ salaries are deposited with
the Insurance Company (currently - Life Insurance Corporation of India) and claims are raised on
Insurance Company as and when required. The GIS deductions are decentralised at UPJN‟s Units;
however the payment to Insurance Company and processing for employees‟ claim is centralised at
Head Office (HO).
Accounting for GIS deduction from Salaries has been covered in the Subject Code: 8.01
 Transfer of GIS deduction to GIS Section-HO
 Payment of GIS deductions to Insurance Company
 Receipt of GIS claim from Insurance Company
 Transfer of GIS claim to respective Unit
 Receipt of GIS claim at Unit from GIS Section, HO
Procedure:

No. Section Timing
Responsible
Transfer of GIS deduction to GIS Section-HO
1. Accounts  Determine and transfer the deduction of GIS amount to At the end of
Section - Unit GIS Section HO. every month
Authority and raise ATD on the GIS Section - HO to
transfer the deduction of GIS amount (Refer Subject
Code: 8.03) Refer Subject Code: 10.01 for procedure
relating to raising ATD.
Subsidiary Ledger
2. GIS Section -  Receive and review the ATD. Forward the perforated copy As and when
HO to the Accounts Section – Unit. Refer Subject Code: 10.02
for procedure relating to accepting ATD.
Authority
Subsidiary Ledger and Group Insurance Scheme Register
and Group Insurance Scheme (Summary) Register
Payment of GIS deductions to Insurance Company

3. GIS Section -  Determine the amount to be deposited with Insurance At the end of
HO Company towards GIS deducted during the month based every month/
on the number of employees, designation and date of as per the
retirement and Group Insurance Scheme Register and Policies
Group Insurance Scheme (Summary) Register prescribed
 Prepare a note for payment to be made to Insurance by UPJN
Company. Affix the stamp „passed for payment‟ for the
Page | 157

No. Section Timing
Responsible
payment to be made
 Forward the note to Cashier to make payment
4. GIS Section -  Receive the note for making the payment of GIS As and when
HO (Cashier)  To process payment, adopt the procedure for bank Same day
payment as provided in Subject Code: 9.04
 Prepare BPV
Subsidiary Ledger and Group Insurance Scheme Register
Receipt of GIS claim from Insurance Company
5. GIS Section –  Receive the request (approved by the Head of the Unit) As and when
HO (Cashier) for processing claim for the employee/ nominee of the
employee from the respective Unit
 Prepare the request for the claim to be raised on Same day
Insurance Company and undertake the process to submit
claim as required
 Receive claim from Insurance Company As and when
 To process receipt, adopt the procedure for bank receipts Same day
as provided in Subject Code: 9.04
 Prepare Bank Receipt Voucher (BRV)
Subsidiary Ledger and Group Insurance Scheme Claim
Register
Transfer of GIS claim to respective Unit
6. GIS Section –  Prepare the cheque for the claim amount (as received Same day of
HO (Cashier) from Insurance Company) and forward to the concerned receipt of
Unit where the employee is located. claim
 Adopt the procedure for bank payments as provided in
Subject Code: 9.04
 Prepare BPV
Subsidiary Ledger and Group Insurance Scheme Claim
Register
Receipt of GIS Claim at Unit from GIS Section, HO
7. Establishment  On receipt of cheque for the claim amount from HO, Same day of
Section handover the cheque to the employee/ nominee of the receipt
employee. Obtain acknowledgement from employee/
nominee of the employee.
 Mark about the same in Group Insurance Scheme
Register.
Page | 158
Formats

Ref. Type
IUT/F01 ATD I On transfer of Accounts  Own Copy
GIS deduction to Section  GIS Section - HO
GIS Section –
HO
PA/R05 Group O As and when Establishment ---
Insurance Section and
Scheme Accounts
Register Section
(maintained at
Units and GIS
Section - HO)
PA/R06 Group O As and when GIS Section - __
Insurance HO
Scheme
(Summary)
Register
(maintained at
GIS Section -
HO)
PA/R07 Group O As and when GIS Section - --
Insurance claims are HO
Scheme Claim made, receipt
Register against claim
and payment
against claim
Accounting Entries

Responsible
1. Transfer of GIS JV Pay bill Debit Accounts
deduction to GIS Section –
Section-HO Group Insurance Scheme (GIS) Unit
Deduction Account
Credit
IUT – Others Account

2. Accounting of JV ATD Debit GIS Section –
GIS deduction HO
on transfer from IUT – Others Account
Units
Credit
Group Insurance Scheme (GIS)

Deduction Account
3. GIS Payment to BPV Group Debit GIS Section –
Insurance Insurance HO (Cashier)
Company Scheme Group Insurance Scheme (GIS)
against Register Deposit Account
deduction from
Salaries Credit
Page | 159

Responsible
Bank Account
4. Receipt of GIS BRV Claim Debit GIS Section –
claim at HO Receipt HO (Cashier)
Bank Account
Credit
Group Insurance Scheme (GIS)

Claim Account
5. Transfer of claim BPV GIS claim Debit GIS Section –
to respective received HO (Cashier)
Unit Group Insurance Scheme (GIS)
Claim Account
Credit
Bank Account
Page | 160

Subject: Employee Loans and Advances Subject Code: 8.04
Subject Background:
This subject covers the accounting procedure to be followed in relation to loans and advances to
employees
The loans and advances provided to the employees are generally in the nature of House Building
Advance, Vehicle Advance for cycle, two wheeler and four wheeler vehicles.
The process of approving the loan shall be centralised at the Advance Section – HO. However to
ensure controls on timely recovery and limit the number of records handled by one Unit, the process
of disbursing and recovery of loan shall be decentralised at the Unit where the employee is located.
The Units shall maintain all the records for each employee relating to the loans disbursed.
The loans and advances to employees are provided:

 By UPJN or
 Through Financial Institutions/ Banks
In case where loans are provided by UPJN, directly, recoveries made against the loans and advances
are adjusted against the loans provided.
In case where loans and advances are provided to employees through financial institutions/ banks,
the recoveries made against the loans and advances are deposited with the financial institutions/
banks.
In both the above cases, recovery of loans and advances are done from the employees‟ salaries by
way of deduction from the monthly salary. The installment amounts to be deducted from the monthly
salary include both principal and the interest amount.
Loans and advances are provided by financial institutions/ banks to the employees at a lower interest
rate. The difference of interest amount based on the interest rate provided to the employee and the
interest rate charged by the financial institution is borne and accounted for as interest subsidy by
UPJN.
Guarantee given by UPJN on behalf of its employees to financial institution/ bankers for repayment of
loans/ advances (in case of any default in repayment of loans/ advances taken by employees of UPJN
e.g. house building advance) shall be disclosed as contingent liabilities in the financial statement for
outstanding loan amount or for the amount for which guarantee has been given by UPJN.
Sanction, disbursement, recovery, etc. in relation to the employees loans and advances shall be done
based on Policies prescribed by UPJN and/ or terms and conditions of the respective financial
institutions/ banks.
 Receipt of loans and advances application from employee
 Disbursement of employee loans and advances
 Recovery of loans and advances – through salary
 Repayment of loans and advances to Financial Institution / Bankers
Page | 161
Procedure:

No. Section Timing
Responsible
Receipt of loans and advances application from employee
1. Establishment  Receive the loans and advance application form from As and when
Section - Unit employee.
 Check the eligibility and other criteria and get the
approval from the Designated Authority.
 Forward the loans and advance application to
Advance Section – HO.
Disbursement of employee loans and advances
2. Advance  Receive and process the loans and advance As and when
Section - HO application.
 Obtain approval/ Disbursement Order for loan and
advances from the Designated Authority for loan
amount, interest rate, recovery mechanism, number of Same day
installments, etc.
 Forward Disbursement Order for loan and advances
to the respective Units where the employee is located
3. Accounts  Receive Disbursement Order for loan and advances. As and when
Section - Unit  In cases where disbursement of loan and advances is Same day
to be made by UPJN, forward it to the cashier for
making payment.
 In cases where disbursement of loan and advances is
to be made through financial institution/ bankers, write
a letter to the respective banker with a copy of the
order for disbursement to the employee for loan
disbursement directly.
 Obtain the disbursement letter from the respective As and when
financial institution/ bankers.
 Forward a copy of disbursement letter as received Same day
from the respective financial institution/ bankers to the
Establishment Section for recovery thereof from
employee‟s salaries.
4. Cashier  Receive the Disbursement Order for loan and As and when
advances
 To process the payment, adopt the procedure for bank Same day
 Prepare BPV
Subsidiary Ledger
 Forward copy of the Disbursement Order for loan and
advances marked as „paid‟ to the Establishment
Section.
5. Establishment  Receive Disbursement Order for loan and advances / As and when
Section disbursement letter as received from the respective
financial institution/ bankers / Receive the
Disbursement Order for loan and advances marked as Same day
„paid‟ from the Cashier
 Post the loan details and schedule of recovery
including principal and interest in the Employee
Advance/ Loan Register.
Recovery of loans and advances – through salary
6. Establishment  Update Employee Advance/ Loan Register based on After finalising
Section the recoveries made against loans and advances from the pay bill
Page | 162

No. Section Timing
Responsible
the monthly salaries.
Repayment of loans and advances to Financial Institution / Bankers
7. Accounts  Based on pay bill received from the Establishment At the month
Section Section, prepare a list of employee wise amount to be end/ As per the
repaid (including the interest subsidy component) to terms with the
the respective financial institution/ bankers. Financial
 Obtain the approval for payment of the same to the Institutions
respective financial institution/ bankers and forward
the same to cashier for payment.
 Prepare JV for the amount of interest subsidy payable
by UPJN and obtain approval from Designated
Authority
and Subsidiary Ledger
8. Cashier  Receive the list for the amount to be repaid to the As and when
respective financial institution/ bankers.
 To process the payment, adopt the procedure for bank Same day/ On
payments as provided in Subject Code: 9.04 or before the
 Prepare BPV due date of
 Based on BPV, update Bank Book, Subsidiary Ledger, making the
General Ledger payment
9. Accounts  Obtain balance confirmation from the respective After making
Section financial institution/ bankers for the payment made the repayment
 In case of any difference, follow up with the respective of loans and
financial institution/ bankers and take the necessary advances
action
Formats

Ref. Type to
PA/R08 Employee Advance/ O As and Establishment ---
Loan Register when Section
Accounting Entries

Responsible
1. Disbursement BPV Disbursement Debit Cashier
of loan and Order
advance to Relevant Advance Account
employee
Credit
Bank Account
2. Interest JV Pay bill Debit Accounts
Subsidy Section
Payable Interest Subsidy Account
Credit
Interest Subsidy Payable Account
Page | 163

Responsible
3. Repayment BPV Employee Debit Cashier
to Financial Advance/
Institutions Loan Payable to Financial Institutions
Register towards Employee‟s HBA Account
Interest Subsidy Payable Account
Credit
Bank Account
Page | 164

Subject: Reimbursement of Expenses to Subject Code: 8.05
Employees
Subject Background:
This subject covers the accounting procedure to be followed in relation to reimbursement of expenses
(Leave Travel Allowance, Medical, Conveyance, Travel Allowance, Telephone Expenses, etc.) to
employees.
Reimbursements of the above expenses shall be made as per the Policies prescribed by UPJN.
Though the Policies for the reimbursement of above expenses would be, separate, the accounting
procedures for them shall be similar. Thus the process of accounting for all type of reimbursement of
expenses has been described as „reimbursement of expenses‟ in this subject.
 Passing of claim for reimbursement of expenses
 Payment of claim for reimbursement of expenses
Procedure:

No. Section Timing
Responsible
Passing of claim for reimbursement of expenses
1. Establishment  Receive expenses reimbursement claim along with the As and when
Section bills/ voucher/ supporting from the employee along with
the requisition for payment Same day
 Pass the expenses reimbursement claim in accordance
with the Policies prescribed by UPJN
 Obtain approval for payment of above by the Designated
Authority
 Affix the stamp „passed for payment‟ and specify the
amount to be paid on expenses reimbursement claim
documents
 Forward the approved claim along with bills/ voucher/
supporting to Accounts Section.
2. Accounts  Receive approved claim along with bills/ voucher/ As and when
Section supporting for reimbursement of expenses.
 Prepare JV for the amount payable and obtain approval Same day
from Designated Authority
Subsidiary Ledger and Reimbursement Register
 Forward the approved claim along with bills/ voucher/
supporting to cashier for payment
Payment of claim for reimbursement of expenses
3. Cashier  Receive the approved claim along with bills/ voucher/ As and when
supporting
 Prepare BPV
Subsidiary Ledger and Reimbursement Register
Page | 165
Formats

Ref. Type to
PA/R09 Reimbursement O As and Establishment Section/ ___
Register When Accounts Section
Accounting Entries

Responsible
1. Bill Passing of JV Bills and Debit Accounts
Expenses supporting Section
Reimbursable to Relevant Expense
employees Reimbursement Account
Credit
Relevant Expense
Reimbursement payable
Account
2. Reimbursement BPV JV Debit Cashier
of Expenses to
employees Relevant Expense
Reimbursement payable
Account
Credit
Bank Account
Page | 166

Subject: Full and Final Settlement Subject Code: 8.06
Subject Background:
This subject covers the accounting procedure to be followed in relation to full and final settlement of
employees by way of resignation, termination, expiration or retirement.
The Establishment Section and the Accounts Section shall be jointly responsible for processing the
full and final settlement of the employee including processing of the terminal/retirement benefits (such
as gratuity, pension), adjustments and recoveries, payment of the balances of GPF, processing and
payment of claim of GIS etc.
Intimation regarding the resignation, termination, expiration or retirement of the employee (hereinafter
referred to as cessation of services) shall be received by the employee and Accounts Section where
the employee is located from the Establishment Section. In case of retirement, the intimation shall be
sent by the Establishment Section 6 months prior to the date of retirement. In cases of termination or
resignation, the intimation shall be sent immediately on receiving the approved resignation or
termination letter.
 Intimation to employee and Accounts Section
 Preparation of full and final settlement
 Processing and payment of full and final settlement
Procedure:

No. Section Timing
Responsible
Intimation to employee and Accounts Section
1. Establishment  Send intimation to employee and Accounts Section at Six months
Section the cessation of services of employee giving details of before date of
the process to be initiated by both the employee and retirement/ at
Accounts Section the earliest in
other cases
Preparation of full and final settlement
2. Employee*  Obtain No Objection Certificates from all offices where As per the
served Policies
 Fill the forms as required for the retirement/terminal prescribed by
benefits (such as forms for pension, gratuity, leave UPJN
encashment, withdrawal of GPF, and claim for GIS
etc.)
 Obtain approvals on forms as required from the
Designated Authority(ies)
 Forward the No Objection Certificates and forms duly
filled to the Establishment Section
3. Establishment  Receive the No Objection Certificates and forms from Before
Section the employee cessation of
 Scrutinise the records maintained for the dues payable services/ as
to/ amounts recoverable from the employee per the
 Obtain information from the Accounts Section for the Policies
amounts payable to/ amounts recoverable from the prescribed by
employee UPJN
 Take necessary action to pay/recover the amounts
Page | 167

No. Section Timing
Responsible
determined as above, from the employees‟ salaries/
directly.
 In case of direct payments/recoveries to be made from
the employee forward the details to Accounts Section
settlement of the same
4. Accounts  Receive the details of the amount payable/recoverable Before
Section from the employee directly cessation of
 Scrutinise the related accounts of the employee for the services/ as
records maintained at Accounts Section for recoveries per the
to be made from the employee directly (for e.g. Policies
settlement of PI/TI, miscellaneous recoverable from the prescribed by
employee, etc.) UPJN
 Inform the employee of the amount
payable/recoverable
 Prepare BPV/CPV on payment of the amount payable
/BRV/ CRV on receipt of the amount recoverable as
the case may be
 To process payment, adopt the process of bank/cash
 To process receipt, adopt the process of bank/cash
receipts as provided in Subject Code: 9.04 / 9.05
 Prepare BPV/CPV/BRV/CRV
 Based on BPV/BRV, update Bank Book, CPV/CRV in
Cash Book, General Ledger, Subsidiary Ledger and
relevant Register(s)
 Forward the details of settlement to the Establishment
Section
5. Establishment  Scrutinise and complete the forms received from the Before
Section employee in all respects cessation of
 Determine the amount of retirement/terminal benefits to services/ as
be paid on full and final settlement to the employee per the
(including the amounts payable towards Gratuity, Policies
Pension, Leave Encashment, GPF, GIS etc.) prescribed by
 Prepare the Forms as required (Gratuity Payment UPJN
Order, Pension Payment Order, Last Pay Certificate,
etc.) and obtain approvals for settlement of the same
from the Designated Authority
 Forward the copy of forms/details, LPC, Service book
etc. to the Accounts Section to account for the amounts
payable and process the payment
Processing and payment of full and final settlement
6. Accounts  Receive the copy of forms/details, LPC, Service book As per the
Section etc. Policies
 Ensure taking over of all the physical assets of UPJN in prescribed by
custody with the employee and the documents, UPJN
records, registers being maintained by the employee.
The employee taking over the physical assets and the
document, records, registers shall certify the receipt of
the same.
 Based on the documents received from the
Establishment Section, prepare JV, to account for
amounts payable, and obtain approval from
Page | 168

No. Section Timing
Responsible
 Forward the JV along with the supporting documents to
the Cashier for Payment
7. Cashier  Receive the JV along with the supporting documents As and when
 Prepare BPV
Subsidiary Ledger and relevant Register(s)
 Inform the Establishment Section of the payments
made
*In case of expiration, nominee of the employee shall complete the required processes to the extent
possible and the remaining processes shall be completed by the Establishment Section
Accounting Entries:

Responsible
1. Accounting for JV LPC and Debit Accounts
the Leave Relevant Section
Encashment, Forms/documents Leave Encashment
Pension and Account
Gratuity Payable
on Full and Final Pension Expense Account
Settlement
Gratuity Expense Account
Credit
Leave Encashment
payable Account
Pension Payable Account
Gratuity Payable Account

2. Payment of BPV JV as above Debit Cashier
Leave
encashment, Leave Encashment
Pension and payable Account
Gratuity
Pension Payable Account
Gratuity Payable Account
Credit
Bank Account
3. GPF Withdrawal BPV General Debit Cashier
on Full and Final Provident Fund General Provident Fund
Settlement Register and (GPF) Account
Form for
withdrawal Credit
Bank Account
Page | 169

Subject: Permanent/ Temporary Imprest Subject Code: 8.07
Subject Background:
This subject covers the accounting procedure to be followed in relation to Permanent and Temporary
Imprest given to employees and its settlement.
Transactions relating to Permanent Imprest (PI) and Temporary Imprest (TI) shall be carried out as
per the Policies prescribed by UPJN in this regard.
Permanent Imprest (PI) is a fixed sum of amount given as advance to the employee to meet out the
official expenses (as per the Policies prescribed by UPJN). PI amount is paid once during the year
and recouped as and when it is utilised to keep the PI amount at the defined level. At the end of the
reporting period, the PI Account shall be made nil and the balance amount shall be recovered/ paid,
subject to the Policies prescribed by UPJN.
Temporary Imprest (TI) is sanctioned on “need basis” to the employee to meet out the official
expenses (as per the Policies prescribed by UPJN). TI may be availed in cases where the PI amount
is expected to fall short. TI is required to be sanctioned before the expenses are incurred.
The accounting procedure for both i.e. PI and TI shall be similar.
This subject is covered under the following heads

 Imprest advance
 Settlement of imprest
 Period end process
Procedure:

No. Section Timing
Responsible
Imprest advance
1. Accounts  Receive the approved Permanent / Temporary Imprest Same day of
Section Application receipt of
 Scrutinise the application for PI in accordance with the application
entitlement for the year and affix the stamp „passed for
payment‟ specifying the amount to be paid
 In case of TI, verify the supporting documents submitted
with the TI request and affix the stamp „passed for
payment‟ specifying the amount to be paid
 Forward the Permanent/ Temporary Imprest Application
along with supporting documents to Cashier for Payment
2. Cashier  Receive the Permanent/ Temporary Imprest Application As and when
along with supporting documents Same day
 Process the payment, adopt the procedure for bank/ cash
 Prepare BPV/ CPV
 Based on BPV/CPV, update Bank Book/ Cash Book,
General Ledger, Subsidiary Ledger and Permanent/
Temporary Imprest Register
Settlement of imprest
3. Accounts  Receive Expenses Statement against imprest (duly Same day of
Section approved by Designated Authority) along with vouchers/ receiving the
Page | 170

No. Section Timing
Responsible
supporting documents and money receipt, if any, for the Expenses
cash deposited by the employee with cashier. Statement
 Check the following key aspects to determine the amount
of expenses and amount recoverable/ payable to the
employee:
o The vouchers/ supporting shall be in original and for
the period for which Expenses Statement is submitted.
(Previous period expenses shall have specific
approvals of the Designated Authority)
o Totals of vouchers/ supporting submitted should tally
to the Expenses Statement
o The expenses incurred against PI shall be in
accordance with the eligibility of nature of expenses
as per the Policies prescribed by UPJN
o The expenses incurred against TI shall be in
accordance with the approvals taken while availing TI
advance and as per the Policies prescribed by UPJN.
o The employee shall clearly mention the expenses/
Works project to which the expenses shall be debited.
The same shall be approved by the Designated
Authority
 In case of discrepancy if any, forward the Expenses
Statement to the Designated Authority with details about
the discrepancies (The revised / re-authorised Expenses
Statement along with amount payable to UPJN if any, is to
be submitted by the employee following the same process
as mentioned above)
 Account for the expenses incurred by debit to the account
heads as per the expense details mentioned in the
Expenses Statement.
Authority
 Based on JV, update JV Book, General Ledger,
Subsidiary Ledger and Permanent/ Temporary Imprest
Register
 Forward the Expenses Statement to Cashier to settle the
PI/TI balance
4. Cashier  Receive the approved Expenses Statement. As and when
 Settle the PI/TI balance by making further payment/ Same day
recovering the amount from employee as the case may be
*
 Verify the outstanding balance of PI/ TI of the employee
from the Permanent/ Temporary Imprest Register to the
Expenses Statement
 Process the payment/ receipt
 To process payment, adopt the procedure for bank/ cash
payments as provided in Subject Code: 9.04 / 9.05.
 To process receipt adopt the procedure for bank/ cash
receipts as provided in Subject Code: 9.04 / 9.05
 Prepare BPV/ CPV/ BRV/ CRV
 Based on BPV/BRV, update Bank Book/ CPV/ CRV in
Cash Book, General Ledger, Subsidiary Ledger and
Permanent/ Temporary Imprest Register
Period end process
Page | 171

No. Section Timing
Responsible
5. Accounts  At the end of the year, scrutinise the Permanent/ At year end
Section Temporary Imprest Register of each employee.
 Settle the account to ensure that the employee balances
for PI/TI at the end of the year are Nil
 Ensure that the balance as per Permanent/ Temporary
Imprest Register and the balance in books of account is
same
Formats

Ref. Type to
PA/F02 Permanent/ Temporary I/O As and employee Accounts
Imprest Application When Section
PA/F01 Expenses Statement I As and employee Accounts
When Section
PA/R10 Permanent Imprest/ I/O As and Accounts ___
Temporary Imprest Register When Section
Accounting Entries:
Sl. Event Voucher Source Accounting entries Person/

Responsible
1. Imprest BPV Permanent/ Debit Cashier
advance Temporary
Imprest Permanent Imprest Account/
Application Temporary Imprest Account
Credit
Bank Account/ Cash Account

2. Receipt on BRV / Expenses Debit Cashier
submission CRV Statement
of Expenses Bank Account/ Cash Account
Statement by Credit
employee
Permanent Imprest Account/
3. Accounting of JV Expenses Debit Accounts
Expenses Statement Section
through PI/ TI Expense Account/ Relevant WIP
Account
Credit

4. Payment of BPV / Expenses Debit Cashier
shortfall of CPV Statement
PI/ TI Permanent Imprest Account/
Credit
Page | 172

Responsible
Bank Account/ Cash Account
5. Recovery of BRV / Expenses Debit Accounts
excess of CRV Statement Section
PI/TI Bank Account/ Cash Account
Credit

Page | 173

Subject: Accounting on Transfer of Subject Code: 8.08
Employees
Subject Background:
This subject covers the accounting procedure to be followed in relation to transfer of an employee
from one Unit to another within UPJN.
An employee shall be transferred only through an Office Order approved by the Designated Authority
for transfer. The order for transfer of employee shall be received at the Unit from which employee is
being transferred (hereinafter referred to as Transferor Unit), Unit where the employee is being
transferred to (hereinafter referred to as Transferee Unit) and the Accounts Section HO.
Before transfer of an employee, all the related outstanding balances (recoverable/ payable),
appearing in the books of accounts of the Transferor Unit shall first be adjusted to the extent possible.
Remaining outstanding balances, if any, shall be transferred to the Transferee Unit by way of Advice
of Transfer Debit (ATD) / Advice of Transfer Credit (ATC). The Accounts Section of the Transferee
Unit shall ensure accounting of balances as transferred by the Transferor Unit immediately on transfer
of employee. The detailed process for both Transferor Unit and Transferee Unit is provided below.
 Identification of balances of employee
 Preparation of Last Pay Certificate
 Transfer of balances of employee
Procedure:

No. Section Timing
Responsible
Identification of balances of employee
1. Accounts  Receive orders for transfer of employee from the As and When
Section of the Designated Authority
Transferor Unit
2. Accounts  Scrutinise all the related accounts of the employee to Before
Section of the determine the amount recoverable from the employee, processing
Transferor Unit including : the last
o Permanent / Temporary Imprest with employee Salary of the
o Rent Receivable from employee for use of UPJN‟s employee at
assets the Unit
o Recoverable against loans/ advances given to
employee
o Claims receivables from employee
o Any other amount recoverable from employee
 Scrutinise all the related accounts of the employee to
determine the amount payable to the employee,
including:
o Salary Payable
o Leave Salary Payable
o Bonus/ Ex-Gratia Payable
o Unpaid Salary Payable/ Unpaid Bonus-Ex-Gratia
Payable
o Reimbursement Payable
o Balances of GPF
o Any other amount payable to the employee
Page | 174

No. Section Timing
Responsible
o In case an employee who has control/ looks after
materials (e.g. JE/ AE/ Store Keeper) is transferred
ensure the following additional controls:
 Physical verification of the material lying in the
custody of the employee and reconcile with the
employee‟s Daily Transaction Register (DTR)
and Store Ledger maintained by Accounts
Section.
 The shortage in material, if any, is recovered
from the employee
 Obtain a certificate from the employee who is
taking over charge in place of transferred
employee regarding the material items lying with
transferring employee.
3. Accounts  List out all the balance recoverable/ payables of the On
Section of the employee being transferred processing
Transferor Unit  Ensure adjustments/ settlement of the amount the last salary
recoverable/ payable to the employee as determined of the
above, in the last salary of the employee at the employee
Transferor Unit or pay to/ recover from the employee,
directly.
 Forward the list of the balance recoverable/ payables to
the Establishment Section for confirmation/ checking/
additions in respect of the outstanding balances for
which the records are being maintained by it.
Preparation of Last Pay Certificate
4. Establishment  Receive the list of the recoverable/ payables, for As and when
Section of the confirmation/ checking/ additions in respect of the
Transferor Unit outstanding balances for which the records are being
maintained by the Establishment Section.
 Prepare the Last Pay Certificate of the employee in
accordance with the Policies prescribed by UPJN and
mention all the recoverable/ payables in it. Obtain
approval on the Last Pay Certificate from the
 Forward the Last Pay Certificate to Accounts Section
Transfer of balances of employee
5. Accounts  Receive the Last Pay Certificate along with the list of all On the last
Section of the recoverable/ payables date of
Transferor Unit  Transfer all recoverable/ payables from/ to the service of the
employee to the Transferee Unit employee at
 Prepare JV and obtain approval from Designated the Unit
Authority for the transfer and raise ATD/ATC as the
case may be on the Transferee Unit. Refer Subject
Code: 10.01 for procedure relating to raising ATD.
 Forward the ATD / ATC, LPC and Service Book to the
Accounts Section of the Transferee Unit
6. Accounts  Receive orders for transfer of employee from the As and when
Section of the Designated Authority
Transferee Unit  Receive and review the ATD/ ATC, Last Pay Certificate, On the same
Service Book, etc. Forward the perforated copy of the day of receipt
ATD/ ATC to the Transferor Unit. Refer Subject Code: of document
Page | 175

No. Section Timing
Responsible
10.02 for procedure relating to accepting ATD
 Scrutinise the ATD/ ATC to determine the recoverables/
payables transferred to the Unit
 Prepare JV to account for the transfer of balances of the
employee and obtain approval from Designated
Authority
 Open required folios/accounts in the books of accounts
and registers such as General Provident Fund Broad
Sheet, General Provident Fund Register, Employee
Advance/ Loan Register, etc. for the employee
 Forward Last Pay Certificate, Service Book, etc. and
copy of ATD/ ATC to the Establishment Section for
necessary actions in this regards.
Formats

Ref. Title Type
IUT/F01 ATD/ ATC I/O On transfer Accounts Section  Own Copy
of employee – Transferor Unit  Accounts Section –
balances Transferee Unit
Accounting Entries:

Responsible
1. Transfer of JV LPC Debit Accounts
recoverable Section –
from / payable IUT – Personnel Account / Transferor
to employee Relevant Employee Payable Unit
Account
Credit
Relevant Employee Recoverable
Account /
IUT – Personnel Account
2. Accounting of JV ATD/ATC Debit Accounts
recoverable Section –
from / payable Relevant Employee Recoverable Transferee
to employee – Accounts/ Unit
Entry at the IUT – Personnel Account
Transferee Unit
Credit
IUT – Personnel Account /

Relevant Employee Payable
Account
Page | 176

Subject: Recoveries/ Reimbursement - Staff Subject Code: 8.09
on Deputation
Subject Background:
This subject covers the accounting procedure to be followed in relation to recoveries and
reimbursement of expenses relating to staff on deputation from/ to UPJN.
As per the current policies, only contribution towards leave encashment and pensions are recovered
and reimbursed. Salaries relating to deputed staff are borne by the respective organisation where the
employees are deputed.
The above reimbursements shall be subject to the statutory deductions/ other recoveries, if any.
The periodicity of raising the demand by UPJN and the periodicity of payment of demand raised by
outside agency/ body shall be as per the Policies prescribed by UPJN and the terms agreed with the
outside agency/ body.
The detailed process of transactions for recoveries/ reimbursement of expenses on deputation of staff
is provided below. The same process is to be followed for other such reimbursable expenses.
 Demand on outside Agencies/ Bodies
 Demand from outside Agencies/ Bodies
Procedure:
Sl. Person / Activity / action Frequency /

No. Section Timing
Responsible
Demand on outside Agencies/ Bodies
1. Establishment  Determine the amount to be recovered from the Periodically
Section agency/body as per terms
 Prepare the Demand for amount to be recovered and with outside
obtain approvals agency/
 Forward approved Demand to Accounts Section for body
accounting
2. Accounts  Receive approved Demand As and when
Section  Prepare JV to account for the receivable and obtain
Demand Register (Staff deputed outside UPJN)
 Forward the approved Demand to the concerned agency/
body and cashier
3. Cashier  Receive approved Demand from Accounts Section As and when
 Receive amount from outside agency/body against
demand raised
 To process receipt, adopt the procedure for bank Same day
receipts as provided in Subject Code:9.04
 Prepare BRV
the Demand Register (Staff deputed outside UPJN)
Demand from outside Agencies/ Bodies
4. Establishment  Receive Demand from the Outside Agency/ Body for As and when
Page | 177
Sl. Person / Activity / action Frequency /

No. Section Timing
Responsible
Section their staff deputed at UPJN
 Verify the Demand for correctness in accordance with Same day
terms of deputation and the period of deputation
 Obtain approvals for payment of the same
 Forward approved Demand to Accounts Section
5. Accounts  Receive approved Demand As and when
Section  Prepare JV to account for the amount payable and obtain
 Based on JV, update JV Book, General Ledger and
Demand Register (Staff deputed at UPJN)
 Forward the Demand to the Cashier for payment
6. Cashier  Receive the Demand from Accounts Section As and when
 To process the payment, adopt the procedure for bank Same day
 Prepare BPV
Demand Register (Staff deputed at UPJN)
Formats

Ref. Type to
PA/R11 Demand I/O On receiving the Accounts ___
Register (Staff Demand making Section
deputed outside the payment
UPJN)
PA/R12 Demand I/O On raising the Accounts ___
Register (Staff Demand and Section
deputed at receiving the
UPJN) amount
Accounting Entries:

Responsible
1. Raising the JV Demand Debit Accounts
Demand on raised by Section
Outside UPJN Leave encashment of Staff Deputed
Agencies/ Outside UPJN Recoverable
Bodies for Account
staff deputed
outside UPJN Pension Contribution of Staff
Deputed Outside UPJN
Recoverable Account
Credit
Leave Encashment Account
Pension Expense Account

2. On receipt of BRV Demand Debit Cashier
amount raised by
against the UPJN Bank Account
Page | 178

Responsible
Demand
raised on Credit
Outside
Agencies/ Leave Encashment of Staff
Bodies Deputed Outside UPJN
Recoverable Account
Pension contribution of Staff

Deputed Outside UPJN
Recoverable Account
3. Demand JV Demand Debit Accounts
raised by Raised on Section
Outside UPJN by Leave Encashment Account
Agencies outside
/Bodies Agencies / Pension Expense Account
Bodies
Credit
Leave Encashment of Outside Staff

Deputed at UPJN Payable Account
Pension Contribution of Outside

Staff Deputed at UPJN Payable
Account
4. On payment of BPV Demand Debit Cashier
amount Raised on
against the UPJN Leave Encashment of Outside Staff
Demand outside Deputed at UPJN Payable Account
raised by Agencies /
Outside Bodies Pension Contribution of Outside
Agencies Staff Deputed at UPJN Payable
/Bodies Account
Credit
Bank Account
Page | 179

Subject: Allocation of Personnel Expenses to Subject Code: 8.10
Works/ Fixed Assets
Subject Background:
This subject covers the accounting procedure to be followed in relation to allocating the expenses
incurred on employees to works expenditure/ fixed assets.
The employees‟ cost shall initially be accounted for under the expense account heads. The
reclassification (between capital expenditure and revenue expenses) of these costs to the 'capital
works' or „works expenditure‟ shall be done subsequently by credit to the relevant expense heads.
Procedure:
Responsible
th
1. Executive  Identify the employees whose costs can be directly By the 5
Engineer attributable to Works Expenditure/ Capital Work in Progress – of each
Fixed Assets month
 Determine the period for which the employee‟s costs are to
be loaded to the WIP Cost of the Works project / Capital
WIP– Fixed Assets
 Identify the works project / Asset under Construction (Capital
Work in Progress) to which the employees‟ costs are to be
loaded
 Provide instructions along with the above details to the
Accounts Section to determine the cost to be loaded to the
WIP cost of Works project / Capital WIP – Fixed Assets
2. Accounts  Receive the instructions and details duly approved by EE. On the
Section  Identify the Salary costs (the Salary costs will include basic same day
pay and related allowances) of these employees for a month of receipt
from the Pay bill of
 Determine the proportionate cost based on the period instructions
specified in the details received
 Prepare JV to load the costs and obtain approval from
Designated Authority. Attach the detailed working to the JV
Subsidiary Ledger
(The detailed process of works expenditure and capital work
in progress – fixed assets have been covered in Section 3.00
Works Expenditure and Section 5.00 Fixed Assets
respectively)
Accounting Entries:

Responsible
1. Loading of employee JV Pay Bill Debit Accounts
costs to Works Relevant Capital WIP Section
Expenditure/ Capital Account / Relevant WIP
Work in Progress – Cost Others Account
Fixed Assets
Credit
Relevant Salaries Account
Page | 180
9.00 Section: Cash and Bank

Section Background:
9.01 This Section covers the Cash and Bank transactions accounting and related procedures.
9.02 In UPJN, cash / bank receipts and payments are decentralised. Hence, each Unit of UPJN is
required to maintain its independent bank accounts.
Maintenance of Bank Accounts
9.03 To ensure monitoring and control of funds and for effective financial management and
discipline, each Accounting Unit shall maintain their bank accounts, independently. The type of bank
accounts to be maintained and transactions to be made with those bank accounts shall depend on the
Policies prescribed by UPJN from time to time.
9.04 The relevant details in respect of every new bank account (e.g. purpose, name of the bank,
branch, address and account code, etc.) opened at the Unit level shall be intimated to the Chief
Accounts Officer at Head Office (HO).
Custody of Financial Instruments, Cheques, etc.
9.05 The financial instruments shall be kept with the Accounts Section for safekeeping. The
Cashier shall be the custodian of all the relevant financial instruments. These financial instruments
would include bank guarantees received as security deposit, fixed deposit receipts, earnest money in
the form of fixed deposit received from suppliers / bidders, post dated cheques, cheque books, pass
books, balance confirmations certificates, bank statements, revenue stamps, etc.
9.06 Detailed records for the receipt and issue of the above mentioned financial instruments shall
be maintained by the concerned Cashier.
9.07 The Head of the Accounts Section and/ or the Designated Authority shall conduct surprise
checks (at least once in a quarter) to ensure that the above mentioned financial instruments are
recorded and held as required. Any discrepancies found during the surprise checks shall be
addressed on an immediate basis.
Accounting Policies
9.08 The main accounting policies that shall be followed relating to cash and bank transactions
accounting are provided in the subsequent paragraphs:
a.) Bank charges / interest income shall be accounted for in the same period in which debited /
credited by the bank.
b.) The accounting of cash and bank transactions shall be done on the same day of making the
payment/ getting the receipt.
Page | 181

No.
1. Fund Remittance – HO to Units 9.01
2. Fund Remittance – Units to HO 9.02
3. Transactions through Personal Ledger Account 9.03
4. Transactions through Bank 9.04
5. Transactions in Cash 9.05
6. Physical Verification of Cash 9.06
7. Bank Reconciliation Statement 9.07
8. Deposit of Statutory Dues 9.08
Page | 182
Section: Cash and Bank Section Code: 9.00

Subject: Fund Remittance – HO to Units Subject Code: 9.01
Subject Background:
This subject covers the accounting procedure to be followed in relation to transfer of funds from HO to
Units for meeting out various type of expenditure including expenditure for works, revenue and
establishment costs, acquisition of fixed assets, etc.
Fund Requisition Statement
A Fund Requisition Statement shall be prepared by the Units to request for funds from HO and sent to
the respective Zonal Office (ZO). The Fund Requisition Statements of all Units shall be scrutinised for
appropriateness and compared with the budgeted estimates for various type of expenditure for the
Unit. Thereafter these Fund Requisition Statements shall be consolidated (including that of ZO) and
forwarded to HO.
Similarly at HO level, the Fund Requisition Statements shall be scrutinised for appropriateness and
compared with the budgeted estimates for various type of expenditure for the Units. The funds as
considered appropriate, shall be transferred to the ZO which in-turn shall transfer the funds to the
Units.
The process of transfer of funds, its frequency, time lines, mode of transfer of funds (i.e. through bank
transfers, cheques, etc) and the channel of flow of funds (e.g. directly from HO to Unit or through ZO)
shall be as per the Policies prescribed by UPJN.
 Transfer of funds from HO
 Receipt of funds at ZO
 Transfer of funds from ZO
 Receipt of funds at Units
Procedure:

No. Section Timing
Responsible
Transfer of funds from HO
1. Cashier – HO  Receive the approved intimation from the Chief Accounts As and when
Officer for amount of funds to be transferred to the Units
via ZO
 To process payment, adopt the procedure for bank
payments as provided in Subject Code: 9.04.
 Prepare Bank Payment Voucher (BPV) and raise Advice Same day
of Transfer Debit (ATD) on the ZO for fund transfer.
Refer Subject Code: 10.01 for procedure relating to
raising ATD
 Based on Bank Payment Voucher (BPV), update Bank
Book, General Ledger, Subsidiary Ledger and relevant
Register(s)
 Transfer the funds to the ZOs as per approval
 Forward the statement of funds approved for each Unit to
the respective ZO with intimation of transfer of funds
Receipt of funds at ZO
2. Cashier – ZO  Receive and review ATD and the statement for the funds As and when
Page | 183

No. Section Timing
Responsible
transferred. Forward the perforated copy to the Accounts
Section – HO. Refer Subject Code: 10.02 for procedure
relating to accepting ATD
 On receipt of funds, adopt the procedure for bank Same day
receipts as provided in Subject Code: 9.04
 Prepare Bank Receipt Voucher (BRV)
Transfer of funds from ZO
3. Cashier – ZO  Receive from HO the statement of funds approved for Within 1 day
each Unit with intimation of transfer of funds of receipt of
 Obtain approvals for transfer of funds to the Units funds
 Prepare BPV and raise ATD on the Unit for fund transfer. Same day
Refer Subject Code: 10.01 for procedure relating to
raising ATD
Subsidiary Ledger and Funds Requisition Register
 Transfer the funds to the Units as per approval
 Forward the statement of funds approved to the
respective Unit with intimation of transfer of funds
Receipt of funds at Units
4. Cashier – Unit  Receive and review ATD and the statement for funds As and when
transferred. Forward the perforated copy to the Accounts
Section – ZO. Refer Subject Code: 10.02 for procedure
 Prepare BRV
Formats

Ref. Title Type
IUT/F01 ATD I/O As and Accounts Section –  Own Copy
when HO, ZO  To the other
Unit
Accounting Entries:

Responsible
1. Fund BPV Approved Debit Cashier –
remitted from Fund HO
HO to ZO Requisition Relevant Funds Remittance
Statement between Units Account
Credit
Bank Account
Page | 184

Responsible
2. Funds BRV ATD & Debit Cashier – ZO
Received at Statement of
ZO from HO Funds Bank Account
received
from HO Credit
Relevant Funds Remittance

between Units Account
3. Funds BPV Statement of Debit Cashier – ZO
remitted from Funds from
ZO to Units HO Relevant Funds Remittance
Credit
Bank Account
4. Funds BRV ATD & Debit Cashier –
Received at Statement of Unit
Units from Funds from Bank Account
ZO ZO
Credit
Relevant Funds Remittance

Page | 185

Subject: Fund Remittance – Units to HO Subject Code: 9.02
Subject Background:
This subject covers the accounting procedure to be followed in relation to fund remittance from Units
and receipt of funds at HO. In accordance with the Policies prescribed by UPJN, funds received
(revenue in nature) or income earned at the Units, may be required to be transferred to HO.
The process of transfer of funds, its frequency, timelines, mode of transfer of funds (i.e. through bank
transfers, cheques, etc) and the channel of flow of funds (e.g. directly from Unit to HO or through ZO)
shall be as per the Policies prescribed by UPJN.
 Transfer of funds from Units
 Receipt of funds at HO
Procedure:

No. Section Timing
Responsible
Transfer of funds from Units
1. Cashier –  Scrutinise books of account for the remittances to be As per the
Unit made (as per the Policies prescribed by UPJN), and Policies
prepare details of the same prescribed by
 Obtain approvals from Designated Authority for transfer UPJN
of funds as per the details prepared
 Prepare BPV and raise ATD on the HO for fund transfer
Refer Subject Code: 10.01 for procedure relating to Same day
raising ATD
 Forward the cheque, details of receipt at the Unit and the
remittance being made including mention of the account
head under which the receipts are accounted for, to the
HO.
(As per the current Policies, the cheque issued by the
Unit shall be drawn on the HO)
Receipt of funds at HO
2. Cashier –  Receive and review ATD and the details of funds As and when
HO transferred. Forward the perforated copy to the Accounts
Section – Unit. Refer Subject Code: 10.02 for procedure
 Prepare BRV
Page | 186
Formats

Ref. Title Type
IUT/F01 ATD I/O As and Accounts Section -  Own copy
when Unit  To the other
Unit
Accounting Entries:

Responsible
1. Fund BPV --- Debit Cashier –
remitted from Unit
Unit to HO Relevant Funds Remittance between
Units Account
Credit
Bank Account
2. Funds BRV ATD Debit Cashier –
Received at HO
HO from Unit Bank Account
Credit
Relevant Funds Remittance between

Units Account
Page | 187

Subject: Transactions through Personal Subject Code: 9.03
Ledger Account
Subject Background:
This subject covers the accounting procedure to be followed in relation to transactions through
Personal Ledger Account (PLA).
UPJN maintains a PLA with Government Treasury in which Government releases funds for deposits /
grant for Works project, etc. The funds released in PLA are transferred in the Bank Account for
utilisation. PLA shall be reconciled with treasury at least on a quarterly basis. This PLA shall be
maintained and accounted for at Head Office level only.
 Deposit of Fund in PLA
 Withdrawal of Fund from PLA
 Reconciliation of PLA
Procedure:

No. Section Timing
Responsible
Deposit of Fund in PLA
1. Accounts  Receive the Government Order (GO) for transfer of As and when
Section funds to the PLA
 Check the PLA with the Treasury to confirm transfer of
funds
 On receipt of funds, adopt the procedure for bank
 Prepare JV, for the funds transferred to the PLA, and
obtain approval from Designated Authority
Withdrawal of Fund from PLA
2. Cashier  The funds from PLA to Bank Account of UPJN shall be As per the
transferred based on approval of Designated Authority. terms of
 For transfer of funds, adopt the procedure for bank Government
receipts as provided in Subject Code: 9.04 Order
 Prepare BRV for withdrawal of funds from PLA and
transfer to Bank Account
Subsidiary Ledger and relevant Register(s).
3. Accounts  Prepare JV, to account for Loan, Grant, Deposit, etc. On the same
Section against which funds were transferred from PLA to day of transfer
Bank Account, and obtain approval from Designated of funds
Authority.
 Obtain approvals on JV as required
Page | 188
Accounting Entries:

Responsible
1. Deposit of Fund in JV Government Debit Accounts
PLA Order Credit Section
PLA
Account PLA
Government
Account
2. Transfer of funds BRV Government Debit Cashier
to Bank Account Order Credit
Bank
Account PLA Account
3. Accounting for JV BRV Debit Accounts

Loan/ Grant/ Credit Section
Deposit PLA
Government Relevant
Account Deposit (Loan/
Grant/ Deposit)
Account
Page | 189

Subject: Transactions through Bank Subject Code: 9.04
Subject Background:
This subject covers the accounting procedure to be followed in relation to transactions through bank.
The detailed process of transactions through Bank is provided below.
Bank Payments
The process of bank payments covers all payments to various outside parties/ agencies/ bodies,
employees etc. by way of a bank instrument.
Procedural and accounting aspects relating to the passing and accounting the following types of
expenditure/ expenses for payment have been covered under relevant Sections of this Accounting
Manual:
 Capital expenditure – Refer Section Code: 5.00 - Fixed Assets

 Works project expenditure – Refer Section Code: 3.00 - Works Expenditure
 Revenue expenses other than employee related expenses – Refer Section Code: 7.00 -
Revenue Expenses
 Employee related expenses and benefits – Refer Section Code: 8.00 - Personnel
 Purchase of Materials and material related expenditure – Refer Section Code: 2.00 - Stores
 Interest expenses – Refer Section Code: 4.00 - Loan, Deposits, Grant and Investment
 Payment on account of transfers between Units (Covered in this Section)
(the above list is illustrative)
Every payment to be made shall have bills / vouchers and other supporting documents based on
which payment shall be passed, expense/ account payable shall be accounted for and subsequently
paid. Bills / vouchers and other supporting documents for expense/ account payable shall be attached
with the voucher through which expense/ account payable shall be accounted for. The payment
voucher shall have the reference of the voucher through which expense/ account payable are
accounted.
Bank Receipts
This process covers the procedure for accounting of receipts by way of cheque/ demand draft/direct
transfers to Bank.
The receipt may be on account of various transactions. Procedural and accounting aspects relating to
the accounting of accrual of income/ accounts receivables/ transfer of funds for the following receipts
have been covered under separate Sections of this Accounting Manual:
 Sale of materials – Refer Section Code: 2.00 - Stores

 Receipt of water supply charges – Refer Section Code: 3.00 - Works Expenditure
 Receipt of loan, deposits, grants, income on investments, receipt on sale of investments, recovery
of loans advanced – Refer Section Code: 4.00 - Loans, Deposits, Grant and Investment
 Sale of fixed assets and project asset – Refer Section Code: 5.00 - Fixed Assets
 Sale of tenders – Refer Section Code: 6.00 - Revenue and Collection
 Receipt for/ from employees – Refer Section Code: 8.00 - Personnel
 Receipt on account of transfers between Units (Covered in this Section)
(the above list is illustrative)
Most receipts shall have bills / vouchers and other supporting documents based on which income/
account receivable shall be accounted for, and subsequently received. Bills / vouchers and other
Page | 190
supporting documents for income/ account receivable shall be attached with the voucher through
which income/ account receivable shall be accounted for. The receipt voucher shall have the
reference of the voucher through which income/ account receivable is accounted.
Withdrawal of Cash from Bank
This process covers the procedure for withdrawal of cash from bank.
Approvals of Designated Authority shall be taken prior to withdrawal of cash from bank. Though to the
extent possible cash payments shall be avoided, however, it may be required for certain payments to
be made in cash.
The Designated Authority shall fix the cash drawing limit and the maximum cash balance that can be
maintained at any point of time. These limits shall be reviewed periodically. Amount of cash to be
withdrawn from bank shall be in accordance with these limits.
Deposit of Cash with Bank
This process covers the procedure for deposit of cash with bank.
Approvals of Designated Authority shall be taken prior to deposit of cash with bank. Though to the
extent possible cash receipts shall be avoided, however, certain receipts may be in cash; whole or
part of which may be deposited with bank
The Designated Authority shall fix the maximum cash balance that can be maintained at any point of
time. These limits shall be reviewed periodically. Amount of excess cash balance shall be deposited
in the Bank Account in accordance with these limits.
Inter-bank transfer
This process covers the procedure to be followed for inter-bank transfer of funds.
Though inter-bank transfers shall be restricted to maintain track of funds, transfers of funds may
however be required for optimum utilisation of funds. However, in cases where the bank balances
reflect funds specific to a purpose (e.g. specific Works project/ funds for revenue or establishment
expenses / acquisition of fixed assets), transfer of such funds shall be restricted.
The inter-bank transfer shall take place only on authorisation of the Designated Authority.
Cancellation of cheques issued by UPJN
Cheques issued by UPJN to outside parties/ employees shall be required to be cancelled in the
following cases :
 There is a mistake in filling the details of the cheque such as the amount in words and figures do
not tally or any other mistake
 The cheque has been dishonoured by the Bank due to any reason
 (the process for the cheques that have become time barred i.e. stale cheques has been covered
below under the sub-subject treatment of stale cheques)
The cheque shall be returned by the party giving the advice received from the bank stating the reason
or along with an application in case the cheque has a mistake.
Treatment of Dishonour of cheque received by UPJN
Dishonour of cheque takes place when a cheque deposited in bank, received by UPJN is not credited
by the bank to the Bank Account. On receipt of intimation from bank about dishonour of a cheque, the
concerned employee/party account shall be debited immediately for the amount of cheque (except in
case where cheque has been dishonoured with the remarks „present again‟) and the employee/ party
Page | 191
shall be immediately informed about the same.
The charges levied by bank on UPJN for dishonor of cheque may also be debited to the concerned
employee/party account
Treatment of Stale Cheque issued by UPJN
The cheque issued/ received are valid for encashment up to a particular period from the date of
cheque in accordance with the relevant Statute. Therefore any cheque issued by UPJN and not
presented for payment for any reason within that period from the date of its issue shall become time
barred/ stale.
A track of the stale cheque shall be kept through the monthly Bank Reconciliation Statement
prepared. The stale cheque shall be accounted for by debiting the Bank Account and crediting to a
separate account head named „Stale Cheque Account‟.
Treatment of Lost Cheques issued by UPJN
This process covers the procedure for accounting of lost cheques. i.e. cheques issued to parties/
employees and lost by them.
In context of the above, This subject is covered under the following heads:
 Bank payments
 Bank receipts
 Withdrawal of cash from bank
 Deposit of cash with bank
 Interbank transfer
 Cancellation of cheques issued by UJPN
 Treatment of dishonor of cheques received by UPJN
 Treatment of lost cheques issued by UPJN
 Treatment of stale cheques issued by UPJN
 Bank charges
Procedure:

No. Section Timing
Responsible
Bank Payments
1. Cashier  Receive the approved JV from the approving Authority As and when
based on which payment is required to be made
 In case where the amount payable has not been
accounted for in the books of account by way of JV and
the payment is required to be made based on the bills /
vouchers and other supporting documents, receive the
duly approved bills / vouchers and other supporting
documents from the concerned Sections/ officials
passed for payment.
 Ensure that stamp for “passed for payment” is affixed
and the amount to be paid is specified on the JV/ bills /
vouchers and other supporting documents
2. Cashier  Prepare Bank Payment Voucher (BPV) and Account As and when for
Payee Cheque for the net amount payable the approved
 Enter the JV number on BPV/ attach the approved bills JV/ bills /
/ vouchers and other supporting documents to BPV (as vouchers
the case may be).
Page | 192

No. Section Timing
Responsible
 Ensure that amount payable and the payee are as per
the JV/ bills / vouchers and other supporting documents
attached.
 Ensure correctness and completeness of all details
recorded in BPV
 Forward BPV and cheque to the Designated Authority
3. Designated  Verify and authorise BPV and sign the cheque (in case Within 1 day of
Authority two authorised signatories are required, then the receipt of
cheque shall be signed by both the signatories) cheque
4. Cashier  Based on BPV, update Bank Book, General Ledger On the same
and Subsidiary Ledger day of signing
 Affix the stamp „Paid‟ on JV / bills / vouchers and other of cheque
supporting documents by writing cheque no., date and
amount.
 File the vouchers in serial order in the Bank Payment
Voucher file
 Hand over the cheque along with details of payment
(such as party‟s Invoice no. and Invoice date etc.) to the
party and obtain acknowledgement on BPV.
 In case the cheque is to be sent by post, hand over the
sealed envelope to the Dispatch Section and obtain an
acknowledgement of the Dispatch official for the receipt
of cheque.
5. Dispatch  Dispatch the cheques to the parties On the day of
Section  Update Dispatch Register with the document reference receipt of
and date of dispatch cheque
6. Cashier  Review the Dispatch Register to ensure timely dispatch Weekly
of cheques. In case of delays, follow-up with the
Dispatch Section.
Bank Receipts
7. Cashier  Receive the cheque/ demand drafts from the As and when
party/employee. Ensure the following:
o Cheques are complete, current and valid
o Amount in words and figures tally
o Cheques are crossed, signed and are drawn in
favor of UPJN - Cross the cheques if not already
crossed
o Cheques/drafts from parties are accompanied by
authorisation of the concerned Section / Department
 In case of receipt by way of direct transfer to the Bank
Account, obtain the intimation from the party paying
and/or obtain details from the credits made in the Bank
Statement
8. Cashier  Prepare Money Receipt for the cheque/ demand draft in Immediately on
duplicate and issue original Money Receipt to the receipt
party/employee
 Identify and specify the details, on the Money Receipt,
of the JV / bills / vouchers and other supporting
documents against which cheque/ demand draft is
received
9. Cashier  Prepare a Bank Receipt Voucher (BRV) for each money Same day of
receipt raised during the day issuing money
 Enter the JV number on the BRV/ attach the approved receipt
bills / vouchers and other supporting documents to the
Page | 193

No. Section Timing
Responsible
BRV (as the case may be)
Ensure that all the cheques/ demand drafts are
deposited with the bank either on the same day of its
receipt or at the beginning of the next day.
 Send the BRV along with the Money Receipt to the
Designated Authority for authorisation. As and when
 On receipt of the authorised BRV, update Bank Book,
 File the vouchers in serial order in the Bank Receipt
Voucher file
Withdrawal of Cash from Bank
10. Cashier  Determine the amount of cash to be withdrawn from As and when
bank and obtain approvals of Designated Authority
 Prepare cheque and forward it to the authorised Immediately on
Designated Authority receipt of
approval
11. Designated  Verify and sign the cheque (in case two authorised Same day of
Authority signatories are required, then the cheque shall be receipt of
signed by the both signatories) cheque
12. Cashier  Withdraw cash from bank on the same day of receipt of Same day
signed cheque Immediately on
 Upon withdrawal of cash from bank, prepare Contra withdrawal of
Voucher (CV) and obtain approvals cash
 Based on Contra Voucher update Bank Book and Cash
Book
 File the vouchers in serial order in the Contra Voucher
file
Deposit of Cash with Bank
13. Cashier  Ascertain the amount of cash to be deposited with the As and when
bank and obtain approvals of Designated Authority
 Deposit the cash with bank Immediately on
 Prepare CV for amount of cash deposited with bank and receipt of
obtain approvals approval
 Based on CV update Bank Book and Cash Book
file
Inter-bank transfer
14. Cashier  Determine the amount and bank accounts between As and when
which funds are to be transferred
 Obtain approvals of Designated Authority for inter-bank
transfer of funds Immediately on
 Upon approval for inter-bank transfer of funds, prepare receipt of
CV and cheque for the amount of funds to be approval
transferred
 Attach the approval to the CV
 Forward the CV and cheque to the authorised
15. Designated  Verify and authorise the CV and sign the cheque (in Same day of
Authority case two authorised signatories are required, then the receipt of
cheque shall be signed by the both signatories) cheque
16. Cashier  Ensure that all the cheques are deposited with the bank Immediately on
either on the same day of its receipt or at the beginning authorisation of
of the next day CV and signing
Page | 194

No. Section Timing
Responsible
 Based on CV, update Bank Book of both the bank of cheque.
accounts
file
Cancellation of cheques issued by UPJN
17. Cashier  Receive the cheque from the bank / party/ employee As and when
along with the advice from the bank/ application from
the party Immediately on
 Obtain approval of Designated Authority to accept the Receipt
cheque for cancellation.
18. Cashier  On receipt of approval, accept the cheque and put a Same day
stamp of „Cheque Cancelled‟ on it.
 To process receipt, adopt the procedure for bank
receipts as provided in this subject
 Prepare a BRV to record the receipt of cancelled
cheque
19. Cashier  When making payment against cancelled cheque, As and when
prepare BPV and cheque.
payments as provided in this subject
 Mention the following details on the BPV:
o Details of cheque cancelled
o Details of new cheque being issued in lieu of the
above mentioned cancelled cheque
Treatment of Dishonour of cheque received by UPJN
20. Cashier  Receive advice stating reasons of dishonour of cheque As and when
from the bank along with the cheque.
21. Cashier  In case cheque has been dishonoured with the remarks Within 1 day of
„present again‟, re-deposit the cheque into the bank with receipt of
the necessary correction sought by bank. cheque
 In case dishonour is for any other reason, prepare a
Bank Payment Voucher to adjust the account of the
employee/ party from whom cheque was earlier
received.
 Adopt the procedure for bank payments as provided in
this subject
 Enter the dishonoured cheque particulars in the Cheque
Dishonour Register.
Head of  In cases where the original cheque (dishonoured
Accounts cheque) was received by any Section other than
Section Accounts Section, intimate the concerned Section to
take action for recovery against the dishonoured
cheque.
 In case where the original cheque (dishonoured
cheque) was received directly by the Accounts Section,
intimate the employee/ party that the cheque has been
dishonored and that a payment for the amount payable
Page | 195

No. Section Timing
Responsible
plus bank charges and surcharges, if any, for late
payment shall be sent immediately.
22. Cashier  Receive the cheque/ demand draft/ cash from the As and when
employee/ party
 Prepare BRV/ CRV to account for the cheque/ demand
draft/ cash received.
 Adopt the procedure for bank receipts as provided in
this subject and cash receipts as provided in Subject
Code: 9.05
 Based on BRV/ CRV, update Bank Book/ Cash Book,
General Ledger, Subsidiary Ledger and relevant
Register(s).
 Dispatch the dishonored cheque to the employee/ party
only after receipt of the payment in lieu of cheque
 Update the Cheque Dishonour Register
Treatment of Lost Cheques issued by UPJN
23. Head of  Receive the intimation of loss of cheque from the As and when
Accounts employee/ party
Section  Ensure the following: Immediately on
o Instruct the party to give an affidavit for the lost receipt of
cheque intimation
o Instruct the bank to stop payment against the lost
cheque
 On receipt of affidavit from the employee/ party, forward As and when
the intimation and affidavit to Designated Authority and
obtain approvals to initiate the process of accounting for
the lost cheque in the books of account
 On receipt of approval from Designated Authority, Immediately on
forward the intimation, approval and affidavit with approval
instructions to account for the lost cheque to the
Cashier
24. Cashier  On receipt of intimation, approval and affidavit, process As and when
receipt.
this subject
 Prepare a BRV to record the lost cheque.
25. Cashier  When making payment in lieu of the lost cheque, Within 1-2 days
prepare BPV and cheque. of receipt of
 Process payment, adopt the procedure for bank intimation
o Details of lost cheque
o New cheque being issued in lieu of the above
mentioned lost cheque
Treatment of Stale Cheque issued by UPJN
26. Cashier  Refer Bank Reconciliation Statements. Monthly
 Identify and prepare a list of cheques issued by UPJN
and has become stale.
 Obtain approvals from Designated Authority for transfer
Page | 196

No. Section Timing
Responsible
of stale cheques to the Stale Cheque Account. Immediately on
 On receipt of approval, prepare a BRV to record the receipt of
stale cheque and for transfer of all such cheques to approval
„Stale Cheque‟ Account.
this subject
 Enter the stale cheque details in the Stale Cheque
Register
27. Head of  Receive the application from the employee/ party for the As and when
Accounts revalidation/ issuance of new cheque along with the
Section stale cheque.
 Ensure that the concerned employee‟s/ party‟s cheque Within 1 day of
is lying in the Stale Cheque Account. receipt of
 Get the approval (on the application) from the application
Designated Authority to revalidate the cheque / issue a
new cheque.
payments as provided in this subject.
 Prepare BPV. In case of revalidation of stale cheque,
forward the stale cheque to Designated Authority for
revalidation.
o Details of stale cheque
o Details of new cheque, if any, being issued in lieu of
the above mentioned stale cheque
 Based on BPV, update Bank Book and General Ledger
 Cancel the stale cheque, in case new cheque being
issued and file it in a separate file.
 Update the Stale Cheque Register for the cheque
issued.
Bank Charges
28. Cashier  Upon receipt of advice from bank mentioning As and when
amount, account for the same in books of account.
 Prepare BPV for the amount of bank charges
29. Cashier  If bank does not send advices, scrutinise bank pass Once a month
book/ statements to see if such charges have been
made.
 Check for the correctness of the charges levied.
 Enquire with the bank in case the bank charges levied Immediately on
by the bank are found to be incorrect. Apply for identifying
rectification of charges levied, if required.
 In cases, where bank charges are levied correctly,
prepare BPV for amount of bank charges
 Process payment, adopt the procedure for bank
 In case where the bank charges are to be recovered
from/ loaded to a Works project/ party/ fixed asset etc.,
forward a copy of BPV to the Accounts Section
30. Accounts  Receive the BPV As and when
Section Same day
Page | 197

No. Section Timing
Responsible
 Prepare JV, by debiting the relevant account head in
case where the bank charges are to be recovered from/
loaded to a Works project/ party/ fixed asset etc, and
obtain approval from Designated Authority.
 Based on JV, update General Ledger and Subsidiary
Ledger
Formats
Format Ref. Document Document Frequency Responsibility Distribution

Title Type to
CB/F01 Money I/O On receipt of Cashier  Payer
Receipt cheque /  Own Copy
demand draft
CB/R01 Cheque O As and when Cashier ___
Dishonour
Register
CB/R02 Stale Cheque O As and when Cashier ___
Register
Accounting Entries:

Responsible
1. Payment BPV JV/ bills / Debit Cashier
from Bank vouchers and
other Relevant Account (Payable
supporting Account/ Expense Account)
documents
Credit
Bank Account
2. Bank BRV Money Debit Cashier
Receipt Receipt and
bills/ Bank Account
vouchers /
supporting Credit
Relevant Account
3. Withdrawal Contra ___ Debit Cashier
of Cash from Voucher
Bank Cash Account
Credit
Bank Account
4. Deposit of Contra ___ Debit Cashier
Cash in Voucher
Bank Bank Account
Credit
Cash Account
Page | 198

Responsible
5. Inter Bank Contra ___ Debit Cashier
Transfer Voucher
Respective Bank Account
Credit

6. Cancellation BRV Cheque Debit Cashier
of cheque cancelled
issued Respective Bank Account
Credit
Relevant Account head (As

debited on issue of cheque)
7. Issue of BPV BRV and Debit Cashier
cheque in cheque
lieu of cancelled Relevant Account Head (As
cancellation Credited on cancellation of
of cheque cheque)
Credit

8. Dishonour of BPV Bank advice Debit Cashier
Cheque along with
deposited in dishonoured Relevant Party/ Employee
Bank by cheque Account (As credited on receipt of
UPJN relevant cheque)
Credit
Bank Account
9. Receipt in BRV/ Money Debit Cashier
lieu of CRV Receipt
dishonor of Bank Account/ Cash Account
cheque
Credit
Relevant Account (As debited on

dishonour of cheque)
10. Cancellation BRV Intimation Debit Cashier
of lost and Affidavit
cheque from Bank Account
(issued by employee/
UPJN) party Credit
Relevant Account (As debited on

issue of relevant cheque)
11. Cheque BPV Intimation Debit Cashier
issued in lieu and Affidavit
of lost from Relevant Account (As credited on
cheque employee/ cancellation of lost cheque)
cancelled party and
BRV Credit
Page | 199

Responsible
Bank Account
12. Accounting BRV Bank Debit Cashier
of Stale Reconciliation
Cheque Statement Bank Account
Credit
Stale Cheque Account

13. Issue of BPV Stale Cheque Debit Cashier
Cheque in Register
lieu of stale Stale Cheque Account
cheque
Credit
Bank Account
14. Bank BPV Bank Advice/ Debit Cashier
Charges Bank Pass
Book/ Bank Bank Charges Account
Statement
Credit
Bank Account
15. Bank JV Bank Debit Cashier
charges Statement
recovered and BPV for Relevant Account Head (Bank
from/ loaded Bank charges recovered from/ loaded
to a Works Charges to)
project/
party/ fixed Credit
asset, etc.
Bank Charges Account
Page | 200

Subject: Transactions in Cash Subject Code: 9.05
Subject Background:
This subject covers the accounting procedure to be followed in relation to transactions through cash.
Cash payments and receipts shall be given as per the Policies prescribed by UPJN. Advances in cash
shall be limited to the purposes as stated in the Policies prescribed by UPJN and in case if the cash
payment is not as per the Policies prescribed by UPJN, a prior approval shall be obtained from the
Cash Payment
The process of cash payments covers all payments to various outside parties/ agencies/ bodies,
employees etc. by way of cash.
Policies shall be prescribed laying down the limit for cash payments and the type of expenses for
which payments can be made in cash by the Units
As in case of Bank Payments, procedural and accounting aspects relating to the passing and
accounting the following types of expenses for payment have been covered under relevant Sections
of this Accounting Manual. For e.g.
 Revenue expenses – Refer Section Code: 7.00 - Revenue Expenses
 Employee related expenses and benefits – Refer Section Code: 8.00 - Personnel
Every payment to be made shall have bills / vouchers and other supporting documents based on
which payment shall be passed, expense/ account payable shall be accounted for and subsequently
paid. Bills / vouchers and other supporting documents for expense/ account payable shall be attached
with the voucher through which expense/ account payable shall be accounted for. The payment
voucher shall have the reference of the voucher through which expense/ account payable are
accounted.
Cash Receipt
All cash receipts shall be received by Cashier against the issue of Money receipt; however the
concerned Section shall indicate the amount of cash to be received.
The receipt may be on account of various transactions. Procedural and accounting aspects relating to
the accounting of accrual of income/ accounts receivables for the following receipts have been
covered under separate Sections of this Accounting Manual. For e.g.:
 Receipt of water supply charges – Refer Section Code: 3.00 - Works Expenditure
 Sale of tenders – Refer Section Code: 6.00 - Revenue and Collection
 Receipt for/ from employees – Refer Section Code: 8.00 - Personnel
Most receipts shall have bills / vouchers and other supporting documents based on which income/
account receivable shall be accounted for, and subsequently received. Bills / vouchers and other
supporting documents for income/ account receivable shall be attached with the voucher through
which income/ account receivable shall be accounted for. The receipt voucher shall have the
reference of the voucher through which income/ account receivable is accounted.
 Cash Payment
 Cash Receipt
Page | 201
Procedure:

No. Section Timing
Responsible
Cash Payment
1. Cashier  Receive the approved JV from the approving Authority As and when
based on which payment is required to be made
 In case where the amount payable has not been
accounted for in the books of account by way of JV and
the payment is required to be made based on the bills /
vouchers and other supporting documents, receive the
duly approved bills / vouchers and other supporting
documents from the concerned Sections/ officials passed
for payment.
 Ensure that stamp for “passed for payment” is affixed
and the amount to be paid is specified on the JV/ bills /
vouchers and other supporting documents
2. Cashier  Prepare Cash Payment Voucher (CPV) for amount of Within one day
cash to be paid of receipt of
 Enter the JV number on the CPV/ attach the approved the approved
bills / vouchers and other supporting documents to the JV/ bills
CPV (as the case may be).
 Obtain approval of the Designated Authority on the CPV
3. Cashier  Disburse cash and obtain the signature of the payee on As and when
the CPV as acknowledgement of the cash received.
 In case the payment is made to the person other than the
payee mentioned on CPV the payment shall be released
only on the receipt of letter of authorisation from the
payee and approval from the Designated Authority.
 Attach the letter of authorisation along with CPV and
obtain the signature of the payee
4. Cashier  Based on CPV, update Cash Book, General Ledger and As and when
Subsidiary Ledger.
 Affix the stamp „Paid‟ on JV / bills / vouchers and other
supporting documents after entry in Cash Book
 File the CPV in serial order in the Cash Payment
Voucher file
Cash Receipt
5. Cashier  Receive the duly authorised documents from the As and When
concerned Section specifying the amount to be collected
(e.g. tender form for sale of tender)
 Receive the cash and prepare Money Receipt in
duplicate. Issue original of Money Receipt to the
employee/party.
 Identify and specify the details of the JV / bills / vouchers
and other supporting documents against which cash is
received on the Money receipt
6. Cashier  Prepare Cash Receipt Voucher (CRV) for each money Same day
receipt issued during the day.
 Enter the JV number on the CRV/ attach the approved
bills / vouchers and other supporting documents to the
CRV (as the case may be).
 Send the CRV along with the Money receipt to the
Designated Authority for authorisation.
 On receipt of the authorised CRV, update Cash book,
Page | 202

No. Section Timing
Responsible
 File the CRV in serial order in the Cash Receipt Voucher
file
Formats

Ref. Title Type to
CB/F01 Money Receipt I/O On receipt of Cashier
cash
Accounting Entries:

Responsible
1. Cash CPV JV/ bills / Debit Cashier
Payment vouchers and
other Relevant Account
supporting
documents Credit
Cash Account
2. Cash CRV Money Debit Cashier
Receipt Receipt
Cash Account
Credit
Relevant Account
Page | 203

Subject: Physical Verification of Cash Subject Code: 9.06
Subject Background:
This subject covers the accounting procedure to be followed in relation to physical verification of cash
and adjustment for cash shortage and its write off.
The custodian of cash shall be the Cashier at the Unit. The cash shall be physically verified and tallied
with the books of account by the Accounts Section on a daily basis.
The Head of the Accounts Section and/ or the Designated Authority shall conduct random checks
periodically (at least once in a month) of the physical cash balance to ensure that the physical cash
balance and the balance as per books of account reconcile. Any discrepancies found during the
surprise checks shall be addressed on an immediate basis.
 Physical Verification of Cash in Hand
 Identification and Adjustment for Cash Shortage/ Surplus
Procedure:

No. Section Timing
Responsible
Physical Verification of Cash in Hand
1. Cashier  Check and ensure that all CPV, CRV and CV have been At the end of
entered in the Cash Book each day
 Enter the balance as per the cash book in the Physical
Cash Verification Register
 Count the physical cash balance available and write down
the balances denomination wise in the aforesaid Register
 Sign the Physical Cash Verification Register and Cash
Book.
2. Head of the  Undertake surprise cash count and verify the same with Once a month
Accounts „Cash Book‟ and initial the Cash Book after verification and
Section and/ Physical Cash Verification Register
or the
Designated
Authority
Identification and Adjustment for Cash Shortage/ Surplus
3. Cashier  Compare the physical cash balance recorded in the Immediately
Physical Cash Verification Register with the cash balance on physical
recorded from the cash book and check for discrepancy verification of
 In case of discrepancy between physical cash balance and cash in hand
cash balance as per books of account, mention the reason
for differences and take necessary action.
 In cases, where the discrepancy is not traceable, intimate
the same to the Head of the Accounts Section and/ or the
4. Head of the  On receipt of intimation of cash shortage/ surplus, Immediately
Accounts scrutinise the discrepancy and give instructions for on receipt of
Section and/ accounting of the same intimation
or the
Page | 204
Designated
Authority
5. Cashier  In case of non-traceable shortage / surplus of cash, as Immediately
long as the cause of shortage/ surplus is not known, on receipt of
prepare a CPV / CRV for the shortage/ surplus amount by instructions
debiting/ crediting the Account head „Cash shortage/
surplus pending investigation‟
 Adopt the procedure for cash payments/ cash receipts as
 Based on CPV / CRV, update Cash Book, General Ledger
and Physical Cash Verification Register
6. Accounts  On ascertaining the cause of shortage/ surplus of cash, As and when
Section prepare JV, to adjust the „Cash shortage/ surplus pending cause of
investigation account‟ and obtain approval from shortage is
Designated Authority. established
 In case of shortage debit the following:
o relevant account head in case there is some mistake in
any voucher
o recoverable from employee - relevant employee
account (i.e. cashier) in case found to be responsible
o cash losses written off in case decision taken to write
off the loss
 In case of surplus credit the following:
o relevant account head in case there is some mistake in
any voucher
o payable to employee - relevant employee account (i.e.
cashier) in case found payable to the employee
o miscellaneous income in case decision taken to
account for as income
 Obtain approvals on JV as required. Based on JV, update
JV Book, General Ledger, Subsidiary Ledger and Physical
Cash Verification Register
7. Cashier  Prepare the Cash Certificate, certifying that the cash At the month
balance as appearing in books of account has been end
physically verified by the cashier and/ or the Designated
Authority.
Formats
Format Document Title Document Type Frequency Responsibility Distribution

Ref. to
CB/R03 Physical Cash O Daily Cashier ___
Verification Register
CB/F02 Cash Certificate O Monthly Cashier  Own

Copy
 HO
 ZO
Page | 205
Accounting Entries:

Responsible
1. Accounting of cash CPV Physical Debit Cashier
shortage on physical Cash
verification Verification Cash shortage/ surplus
Register pending investigation
account
Credit
Cash Account
2. Accounting of cash CRV Physical Debit Cashier
surplus on physical Cash
verification Verification Cash Account
Register
Credit
Cash shortage/ surplus

pending investigation
account
3. On decision taken on JV Physical Debit Accounts
shortage by Cash Section
Designated Authority – Verification Relevant Account
rectification of voucher Register
Credit

account
Designated Authority – Verification Relevant Recoverable
recovery from person Register Account
responsible
Credit

account
Designated Authority – Verification Cash losses written off
write off of cash losses Register Account
Credit

account
surplus by Designated Cash Section
Authority – rectification Verification Cash shortage/ surplus
of voucher Register pending investigation
account
Page | 206

Responsible
Credit
Relevant Account
Authority – payable to Verification Cash shortage/ surplus
person Register pending investigation
account
Credit
Relevant Payable Account

Authority – account as Verification Cash shortage/ surplus
miscellaneous income Register pending investigation
account
Credit
Miscellaneous Income
Account
Page | 207

Subject: Bank Reconciliation Statement Subject Code: 9.07
Subject Background:
This subject covers the accounting procedure to be followed in relation to Bank Reconciliation
Statement (BRS).
BRS shall be prepared on a monthly basis for each bank account. The BRS shall be reviewed by the
7th of the following month by the Designated Authority. The BRS shall be constantly reviewed for the
old/ outstanding items, bank charges levied not recorded, cheques deposited not cleared, stale
cheques etc. and regular follow up shall be taken with the respective employees/ parties/ bank/
concerned Sections of UPJN as required, to ensure that the items as outstanding in the BRS settled
in due course.
The process of scrutiny of BRS with regards to identifying and accounting for stale cheques has been
covered under Subject Code: 9.04
Procedure:

No. Section Timing
Responsible
Preparation of Bank Reconciliation Statement
rd
1. Cashier  Ensure that all bank payment vouchers, bank receipt By the 3 of the
vouchers and contra vouchers are Posted in the Bank next month
Book
 Obtain bank statement from the bank for the month
 Prepare the BRS
 Submit the Bank Reconciliation Statement for each
bank to the Designated Authority for verification and
approval.
2. Designated  Review and verify the BRS. Instruct the Cashier to Within 1 day of
Authority pass the necessary accounting entries/ initiate the receipt of BRS
follow up action for the reconciliation items which are
outstanding for the long time and can be adjusted.
Accounting based on Bank Reconciliation Statement
3. Cashier  Take appropriate action to clear the outstanding On the same day
transactions in the BRS. of receipt of the
 Follow the respective process as mentioned in this approved BRS
Accounting Manual for the following:
o Items directly debited by Bank, refer to the process
of bank payment as provided in Subject Code:
9.04
o Items directly credited by Bank, refer to the
process of bank receipts as provided in Subject
Code: 9.04
o Stale cheques, refer to the process of stale
cheques as provided in Subject Code: 9.04
o Bank charges levied not accounted for, refer to the
process of bank charges as provided in Subject
Code: 9.04
Page | 208
Formats

Ref. to
CB/F03 Bank Reconciliation I/O Monthly Cashier ___
Statement
Accounting Entries:

Responsible
1. Items BPV Bank Debit Cashier
directly Statement,
debited by Bank Advice Relevant Account (e.g. bank
Bank charges)
Credit
Bank Account
2. Items BRV Bank Debit Cashier
directly Statement,
credited by Bank Advice Bank Account
Bank
Credit
Relevant Account (e.g. interest

income, party account)
Page | 209

Subject: Deposit of Statutory Dues Subject Code: 9.08
Subject Background:
This subject covers the accounting procedure to be followed in relation to deposit of Statutory Dues.
The statutory taxes/ duties/ deductions/ contributions shall be deducted as per the provisions of the
relevant Statute and accounted for accordingly. These statutory dues shall be deposited with the
relevant authorities on or before the due dates.
A Statutory Dues Register shall be maintained to record details in respect of the following:
 Relevant Statute and Section as per the provisions of which deductions made
 Details of deduction
 Details of deposit with the relevant authorities
The register shall be updated at the time of deduction of taxes and deposit thereof with the relevant
authorities.
In context of the above, the detailed process to be followed by the Accounts Section for deposit of
Statutory Dues is provided below.
Procedure:

No. Section Timing
Responsible
Deposit of Statutory Dues
1. Accounts  Enter the following key details of tax deducted in the At the time of
Section Statutory Dues Register maintained for the purpose. the statutory
Separate folio shall be maintained for deductions under taxes/ duties/
different Statute. deductions/
o Date of deduction of tax contributions
o Name of Assessee as per
o Particulars of payment/credit. provisions of
o Amount on which tax is deducted the relevant
o Rate at which tax is deducted Statute
o Reference of certificate, if no tax is deducted or
deducted at lower rate than the applicable tax rate.
o Amount of tax
 The relevant General Ledger shall be updated on
accounting for the statutory taxes/ duties/ deductions/
contributions as mentioned in the respective Sections of
this Accounting Manual
2. Head of the  Scrutinise the General Ledgers and the register As per the
Accounts maintained for the taxes deducted to determine the time lines
Section liability of statutory dues payable mentioned in
 In cases of requirement of the relevant Statute, compile the relevant
payee wise summary of taxes deducted under each head/ Statute to
Section as per the relevant Statute. deposit the
 Calculate total tax to be deposited under each Section to statutory
the relevant Authority. taxes/ duties/
 Prepare challan as required by relevant acts and obtain deductions/
authorisation as required. Forward it to Cashier for contributions
payment.
Page | 210

No. Section Timing
Responsible
3. Cashier  Receive challan As and when
payments as provided Subject Code: 9.04
 Prepare BPV for the amount of the challan.
 Deposit the challan and the cheque with the bank within
the time lines as per the relevant Statute.
 Obtain the receipted copy of the challan deposited from
the bank
 Enter reference of payment detail in Register maintained.
4. Head of the  Prepare the monthly/ quarterly/ annual returns based on As per the
Accounts the books of account and the register maintained. time lines
Section  Obtain approvals from Designated Authority on the mentioned in
monthly/ quarterly/ annual returns the relevant
 Submit the monthly/ quarterly/ annual returns as per the Statute to
time lines mentioned in the relevant Acts. deposit the
statutory
taxes/ duties/
deductions/
contributions
Formats

Ref. to
CB/R04 Statutory Dues I/O As and Accounts ___
Register when Section
Accounting Entries:

Responsible
1. Payment BPV Challan Debit Cashier
of
Statutory Relevant statutory taxes/ duties/
Dues deductions/ contributions account (
e.g. Tax Deducted at Source
Account)
Credit
Bank Account
Page | 211
10.00 Section: Inter Unit Transaction (IUTs)

Section Background:
10.01 This Section covers the Inter Unit Transactions - IUT (occurred between two Units including
HO) accounting and related procedures.
Inter Unit Transactions (IUTs)
10.02 For the purpose of carrying out the IUTs, categories of Inter Unit Transactions (IUTs), nature
of IUTs and corresponding account heads to be used are as under:
Categories of Inter Unit Nature of Transactions Account Heads to be

Transactions used
Inter Unit Transaction (IUT) Remittance/ Receipt of Revenue Funds Funds Remittance
– Funds Remittance among Units between Units –
between Units Revenue
Remittance/ receipt of funds among Units to Funds Remittance
meet out capital expenditure (building, between Units – Capital
furniture & Fixture, vehicle, etc) of the Units Expenditure
Remittance/ Receipt of Grant Funds among Funds Remittance
Units between Units - Grant
Remittance/ Receipt of Deposit Funds Funds Remittance
among Units between Units -
Deposit
Remittance/ Receipt of Loan Funds among Funds Remittance
Units between Units - Loan
Inter Unit Transaction (IUT) Transfer/ Receipt of Works in Progress to IUT – Works in
– Works in Progress Units Progress
Inter Unit Transaction (IUT) Transfer/ Receipt of Completed Works IUT – Completed
– Completed Works projects to HO/ Units Works Projects
Projects
Inter Unit Transaction (IUT) Receipt/ Issue of Materials among Units IUT – Materials
– Materials
Inter Unit Transaction (IUT) Receipt/ Issue of Fixed Assets/ Project Asset IUT – Fixed Assets/
– Fixed Assets/ Project among Units Project Asset
Asset
Inter Unit Transaction (IUT) IUTs pertaining to Salaries, GPF balance, IUT - Personnel
– Personnel employees advance balance, etc.
Inter Unit Transaction (IUT) Remaining IUTs – other expenses, etc. IUT – Others
– Others
Subsidiary Ledger (SL)
10.03 For the purpose of maintaining the Unit wise and transaction category wise inter-unit account
and also to facilitate reconciliation, each of the above Inter-unit Account head shall have the
Subsidiary Ledger (SL).
10.04 SL for IUTs shall be the name/ code of the Unit. For this purpose, every Unit shall be allotted
a unique code.
Accounting Units
10.05 By virtue of the origin of the IUTs, accounting Units have been classified as under:
Page | 212
 Originating Unit - means the accounting Unit, in which the IUT occurs and which raises
the document for IUTs, called Advice of Transfer - Debit/ Credit (ATD/ ATC) to the
Responding Unit.
 Responding Unit - means the accounting Unit, on which the Originating Unit raises the
ATD/ ATC.
10.06 A uniform system to account for IUTs is laid down in this Section.
Accounting Policies
10.07 The main accounting policies that shall be followed relating to IUT accounting are provided in
the subsequent paragraphs:
a.) Inter-unit transactions shall be made on cost/ book value basis (or the rate/ value decided by the
Designated Authority) and no mark-up shall be included in inter-unit transfers.
b.) No IUT shall be recorded in books of account until the ATD/ ATC has been raised on the
concerned Unit.
c.) Respective Zonal Office (ZO) shall be responsible for the reconciliation for IUTs closing balance
between respective Units and between Head Office (HO) and respective Unit.

No.
1. Raising Advice of Transfer - Debit/ Credit (ATD/ ATC) 10.01
2. Accepting Advice of Transfer - Debit/ Credit (ATD/ ATC) 10.02
3. Reconciliation of Inter Unit Transaction (IUT) accounts 10.03
Page | 213
Section: Inter Unit Transactions (IUTs) Section Code: 10.00

Subject: Raising Advice of Transfer - Debit/ Subject Code: 10.01
Credit (ATD/ ATC)
Subject Background:
This subject covers the accounting procedure to be followed, by originating Unit, in relation to raising
Advice of Transfer- Debit/ Credit (ATD/ ATC).
For each IUT a separate document titled Advice of Transfer - Debit/ Credit (ATD/ ATC) shall be
prepared by the originating Unit to raise inter-unit debit / credit advices (as the case may be) on the
Responding Unit.
 Preparation of ATD/ ATC
 Entry of ATD/ ATC in Advice of Transfer Debit/ Credit (ATD/ATC)/ Acceptance Register
(ATDCAR)
 Dispatch of ATD/ ATC
 Receipt of the acceptance against ATD/ ATC.
 Modification/Cancellation of ATD/ ATC after its non-acceptance
 Schedule of Inter Unit Transactions (IUTs)
Procedure:

No. Section Timing
Responsible
Preparation of ATD/ ATC
1. Accounts  Identify whether the transaction occurred with the other As and when
Section - Unit is IUT.
Originating  Prepare 2 copies of the ATD/ ATC along with the relevant
Unit voucher for the inter-unit transaction.
2. Accounts  Get the ATD/ ATC and the voucher along with the Same day
Section - supporting documents verified/ authorised by the
Originating Designated Authority.
Unit
Entry of ATD/ ATC in Advice of Transfer Debit/ Credit (ATD/ATC)/ Acceptance Register
(ATDCAR)
3. Head of  Maintain an Advice of Transfer Debit/ Credit (ATD/ATC)/
Accounts Acceptance Register (ATDCAR) to record the ATD/ ATC
Section - raised.
Originating  Keep separate folio for each Unit.
Unit
4. Accounts  Enter the details of every ATD/ ATC raised, in the Same day
Section - ATDCAR and inter-alia, derive the closing balance (after
Originating entry of each ATD/ ATC) with responding Unit.
Unit  Enter the closing balance in the ATD/ ATC, after taking
into account that particular ATD/ ATC (which is being sent
to responding Unit).
5. Head of  Check and approve the ATD/ ATC and copy of all Same day
Accounts supporting documents
Section -
Originating
Unit
6. Accounts  Pass the accounting entry of ATD/ ATC in Journal Book. Same day
Page | 214

No. Section Timing
Responsible
Section -  File the copy of the ATD/ ATC serially, Unit wise in a
Originating separate file. (Files shall be maintained separately for
Unit each accounting Unit for each period).
Despatch of ATD/ ATC
7. Accounts  Forward ATD/ ATC and copies of supporting documents Same day
Section - along with a covering letter to the Responding Unit.
Originating
Unit
8. Head of  Review the ATDCAR every week to check that all the At the week
Accounts ATD/ ATC have been entered in it and despatched timely. end
Section -  Follow up with the Responding Unit for the acceptance of
Originating the ATD/ ATC.
Unit
9. Head of  Ensure that acceptances have been received from other At the month
Accounts Units for all the ATD/ ATC raised during the previous end
Section - month.
Originating
Unit
Receipt of the 'acceptance' against ATD/ ATC
10. Accounts  Receive the acceptance (Part - II of ATD/ ATC) from As and when
Section - responding Unit.
Originating  After the receipt of acceptance put the date of receipt of
Unit the acceptance on it and enter the detail in ATDCAR. Same time
 In case of any difference between the closing balance as
reported by the responding Unit and closing balance as
appearing in the ATDCAR, follow up with the originating
Unit to reconcile the difference as per procedure
prescribed in Subject Code 10.03: Reconciliation of Inter
Unit Transaction (IUT) accounts
Modification/Cancellation of ATD/ ATC after its non-acceptance
11. Head of  In case of non-unacceptance of ATD/ ATC from the As and when
Accounts responding Unit, analyse the reasons mentioned in the
Section - ATD/ ATC by the responding Unit and supporting
Originating attached (if any, as justified by the responding Unit for the
Unit non-acceptance). Same day
 Forward unaccepted ATD/ ATC to head of Accounts
Section.
12. Head of  If the reasons mentioned and supporting attached with the Same day
Accounts ATD/ ATC are justifiable and results in cancellation of
Section - ATD/ ATC then mark that particular ATD/ ATC as
Originating 'cancelled' (on both the i.e. original and copy) and instruct
Unit accordingly to the concerned dealing assistant.
 In case the unaccepted ATD/ ATC results in a
modification, instruct the concerned dealing assistant to
cancel the ATD/ATC issued and raise a fresh ATD/ATC.
 On analysis of unaccepted ATD/ ATC, if it appears that
IUT has been credited/ debited under the wrong account
head or ATD/ ATC has been raised to the Unit other than
the Unit to which it was supposed to be raised, instruct to
the concerned dealing assistant to cancel the same and
issue fresh ATD/ATC correctly.
13. Accounts  In case of cancellation of ATD/ ATC, prepare the relevant Same day
Section - JV for cancellation of ATD/ ATC, attach the cancelled
Originating ATD/ ATC (only original, received from responding Unit)
Page | 215

No. Section Timing
Responsible
Unit. with it and get the voucher verified/ authorised by the
 In case of non-acceptance, no accounting entry is to be
passed by responding Unit.
14. Accounts Pass the entry in ATDCAR, for the cancelled ATD/ ATC with Same time
Section - proper narration.
Originating
Unit
15. Accounts In case where the unaccepted ATD/ ATC results in the Same day
Section - modification:
Originating  Cancel the unaccepted ATD/ ATC by following the steps
Unit enumerated above.
 Issue a fresh ATD/ATC by following the procedures
mentioned above for Preparation of ATD/ ATC and
Despatch of ATD/ ATC.
Schedule of Inter Unit Transactions (IUTs)
16. Accounts  Prepare 3 copies of Schedule of Inter Unit Transactions At the month-
Section - (IUTs) at the month end and get it verified / authorised by end
Originating the Designated Authority.
Unit  Send original of the Schedule of Inter Unit Transactions
(IUTs) along with first copy to the concerned dealing
assistant, involved in preparation of final accounts and file
second copy in a separate file.
 However the Schedule of Inter Unit Transactions (IUTs)
for last month of accounting period, shall be prepared
based on the Joint inter-unit reconciliation statement
received from the Zonal Office (ZO)/ Head Office (HO).
Refer Subject Code 10.03 for reconciliation of Inter Unit
Transaction (IUT) accounts.
Formats

Ref. Type
IUT/F01 Advice of Transfer - I As and Accounts  Own copy
Debit/ Credit (ATD/ when Section  Responding
ATC) Unit
IUT/R01 Advice of Transfer O/I As and Accounts -
Debit/ Credit when Section
(ATD/ATC)/
Acceptance Register
(ATDCAR)
IUT/F03 Schedule of Inter O As and Accounts  To be
Unit Transactions when Section attached with
(IUTs) the set of
Monthly Final
Accounts
Page | 216
Accounting Entries

Responsible
1. Accounting JV ATD/ ATC and Debit Accounts
for IUT Supporting Section
documents Relevant IUT Account /
Relevant Account head
Credit
Relevant Account head /

Relevant IUT Account
2. Receipt of the -- Part - II of ATD/ No accounting entry Accounts
'acceptance' ATC Section
against ATD/
ATC
3. Cancellation JV ATD/ ATC returned Debit Accounts
of IUT after its back from Section
non- responding Unit Relevant IUT Account /
acceptance and supporting Relevant Account head
document
explaining the Credit
reason for non -
acceptance Relevant Account head /
Additional internal controls:
 ATDs/ ATCs shall be raised by the originating Unit on responding Unit in a manner that
responding Unit can account for it in totality. In other words a single ATD/ ATC shall be raised for
a single transaction or a group of/ related transactions.
 ATD/ ATC shall have the running pre-printed serial number.
Page | 217

Subject: Accepting Advice of Transfer - Debit/ Subject Code: 10.02
Credit (ATD/ ATC)
Subject Background:
This subject covers the accounting procedure to be followed, by the responding Unit, in relation to
accepting Advice of Transfer - Debit/ Credit (ATD/ ATC) sent by the originating Unit. This subject has
been described under the following heads:
 Acceptance of ATD/ ATC

 Entry of acceptance of ATD/ ATC in Advice of Transfer Debit/ Credit (ATD/ATC)/ Acceptance
Register (ATDCAR)
 Non-acceptance of ATD/ ATC
 Dispatch of acceptance/ non-acceptance
 Schedule of Inter Unit Transactions (IUTs)
Procedure:

Responsible
Acceptance of ATD/ ATC
1. Accounts Receive the ATD/ ATC raised by the originating Unit. As and when
Section of
responding
Unit
2. Accounts Check and forward the ATD/ ATC received from originating Same day
Section of Unit to the Designated Authority.
responding
Unit
3. Head of the Verify the ATD/ATC and mark the ATD/ATC as accepted/ not Same day
Accounts accepted. Forward the same to the concerned dealing
Section of assistant.
responding
Unit.
4. Accounts Get the ATD/ ATC along with the supporting documents Same day
Section of verified / authorised by the Designated Authority.
responding
Unit In case of Acceptance of ATD/ATC
 Prepare relevant voucher and attach part - I of ATD/ ATC
and supporting with voucher.
 Get the voucher verified / authorised by the Designated
Authority.
Entry of acceptance of ATD/ ATC in Advice of Transfer Debit/ Credit (ATD/ATC)/ Acceptance
Register (ATDCAR)
5. Head of Maintain an 'Advice of Transfer Debit/ Credit (ATD/ATC)/
Accounts Acceptance Register (ATDCAR) to record the ATD/ ATC
Section of raised. Keep separate folio for each Unit.
responding
Unit
6. Accounts Enter the details of every 'acceptance' of ATD/ ATC, in the Same day
Section of ATDCAR and inter alia, derive the closing balance (after entry
responding of acceptance of ATD/ ATC) with originating Unit.
Page | 218

Responsible
Unit
7. Accounts  Check the closing balance mentioned in ATD/ ATC with Same time
Section of the books of account and ATDCAR. It should tally with the
responding balance mentioned in the ATD/ ATC raised by originating
Unit Unit. (after combining all the IUT account heads for
originating Unit)
 In case of any difference, mention it in the column of

'comment' of the part - II of ATD/ ATC ('acceptance') and
reconcile it with the originating Unit.
 Other comment (if any) related to ATD/ ATC shall be
mentioned in the column of 'comments' only.
 Adopt the procedure for Reconciliation of Inter Unit
Transaction (IUT) accounts as provided in Subject Code:
10.03
Non-acceptance of ATD/ ATC
8. Accounts  In case of non-acceptance of ATD/ ATC, mention reasons Same day
Section of and attach supporting for the non-acceptance of ATD/
responding ATC.
Unit  Ensure that in case of non-acceptance of ATD/ ATC, both
the part of ATD/ ATC shall be returned back to the
originating Unit.
Despatch of 'Acceptance/ Non-acceptance'
9. Accounts  Forward acceptance/ non-acceptance of ATD/ ATC to the Same day
Section of Originating Unit along with a covering letter.
responding
Unit
10. Head of  Review the ATDCAR every week to check that all the Weekly
Accounts acceptance of ATD/ ATC have been despatched timely.
Section of
responding
Unit
11. Head of  Ensure that acceptances have been issued to other Units At the month
Accounts for all the ATD/ ATC received during the previous month. end
Section of
originating
Unit.
Schedule of Inter Unit Transactions (IUTs)
12. Accounts  Prepare 3 copies of Schedule of Inter Unit Transactions At the
section - (IUTs) at the month end and get it verified / authorised by month-end
Responding the Designated Authority.
Unit  Send original of the Schedule of Inter Unit Transactions
(IUTs) along with first copy to the concerned dealing
assistant, involved in preparation of final accounts and file
second copy in a separate file.
 However the Schedule of Inter Unit Transactions (IUTs),
for last month of accounting period, shall be prepared
based on the Joint inter-unit reconciliation statement
received from the Zonal Office (ZO)/ Head Office (HO).
Refer Subject Code 10.03 for reconciliation of Inter Unit
Transaction (IUT) accounts.
Page | 219
Formats

Ref. Type
IUT/F01 Advice of Transfer - I As and Accounts Responding Unit
Debit/ Credit (ATD/ when Section
ATC)
IUT/F01 Perforated copy of I As and Accounts Originating Unit
ATD/ ATC when Section
IUT/R01 Advice of Transfer O/I As and Accounts -
Debit/ Credit when Section
(ATD/ATC)/
Acceptance Register
(ATDCAR)
IUT/F03 Schedule of Inter Unit O As and Accounts To be attached
Transactions (IUTs) when Section with the set of
Monthly Final
Accounts
Accounting Entries

Responsible
1 Accounting for JV ATD/ ATC Debit Accounts
IUT after raised by Section
Acceptance of originating Unit Relevant IUT Account /
ATD/ ATC and Supporting Relevant Account head
documents
Credit
Relevant Account head /

2 Non- --- Part - II of ATD/ No accounting entry Accounts
acceptance of ATC Section
ATD/ ATC
Additional internal controls:
Acceptance' of ATD/ATC
 Responding Unit shall confirm its acceptance /non-acceptance on the ATDs/ATCs received
from the originating Unit at the earliest to facilitate the reconciliation of the IUT accounts.
 No ATD/ ATC shall remain pending for response (i.e. for acceptance or non-acceptance) by
responding Unit in any circumstance.
 ATDs/ ATCs shall be accepted in totality. ATD/ ATC shall not be accepted in part. If any ATD/
ATC is not acceptable in its totality, it shall be sent back to the originating Unit along with the
reasons (to be stated on the ATD/ ATC) and the supporting documents for the non-
acceptance of ATD/ ATC.
 In case the ATD/ATC is acceptable to the responding Unit, Part II of ATD/ ATC shall be sent
by the responding Unit to the originating Unit as Acceptance of ATD/ ATC. For that purpose
no separate ATD/ ATC shall be prepared by the responding Unit.
Page | 220

Subject: Reconciliation of Inter Unit Subject Code: 10.03
Transaction (IUT) accounts
Subject Background:
This subject covers the accounting procedure to be followed, by both originating and responding Unit,
in relation to for carrying out the reconciliation of Inter Unit Transaction (IUTs) accounts. This subject
is covered under the following heads
 Inter-unit reconciliation (Monthly)

 Settlement of disputed IUTs at Zonal Office (ZO)
 Preparation of Joint Inter-unit Reconciliation Statement (Quarterly)
 Inter Unit Transaction Balance Confirmation Certificate (IUTBCC)
To carry out the inter-unit reconciliation, balance under different IUT account heads for each Unit shall
be combined by every Unit to arrive at the net balance with that Unit.
Reconciliation of the inter-unit accounts is to be carried out on a monthly basis with all the Units to
facilitate a smooth and timely updation and closing of the books of account.
After reconciliation, at the period-end, there shall be a nil balance in the inter-unit account heads in
the consolidated accounts for the UPJN as a whole.
Procedure:

No. Section Timing
Responsible
Inter-unit reconciliation (Monthly)
1. Accounts  Ensure that combined closing balance under all the IUT Within 1 weeks
Section account heads in books of account is tallied with the of the end of
balance appearing in the ATDCAR. the month
 Make a copy of the ATDCAR for all the Units for the
respective periods, get it verified / authorised by the
 Forward the above statements to the other Units for
carrying out the reconciliation
2. Accounts  Receive a copy of the ATDCAR from the other Units. As and when
Section  Compare the above with the ATDCAR maintained in the
Unit and prepare an Inter-unit Reconciliation Statement Next week
in 3 copies for all the Units. If there is any difference,
find out the reason for the same and take necessary
action.
 In case of unreconciled balances, follow up with the
concerned Unit to pass necessary accounting entries.
 Forward original of the Inter-unit reconciliation statement
to the respective Units and copy to the Zonal Office
(ZO)/ Head Office (HO), as the case may be. Retain
copy of the Inter-unit Reconciliation Statement in a
separate file.
 In case of any disputed IUTs, refer the matter to the ZO/
HO (as the case may be) to resolve the matter.
3. Accounts  Receive copy of the Inter-unit reconciliation Statements As and when
Section from the Units and file in separate files (Unit wise).
Page | 221

No. Section Timing
Responsible
Settlement of disputed IUTs at Zonal Office (ZO)/ Head Office (HO)
4. Accounts  Receive copy of the Inter-unit Reconciliation Statements As and when
Section of the from the Units and file in separate files (Unit wise).
ZO/ HO  In case of any disputed IUTs, follow up with the Units to
settle the transaction.
5. Designated  If required, organise a joint meeting of the Units to Quarterly
authority of resolve the matters pertaining with the disputed IUTs
ZO/ HO and instruct accordingly to pass the accounting entries.
Preparation of Joint inter-unit reconciliation statement
6. ZO/ HO  Prepare Joint inter-unit Reconciliation Statement (for all Quarterly
the concerned Units) in 4 copies; get it signed from the
designated authorities of both the Units and Designated
Authority of ZO/ HO.
 Forward copies of Joint Inter-unit Reconciliation
Statement to both the Units
 Retain original in file of Unit wise IUT reconciliation.
7. Accounts  Pass the adjustment accounting entries (if any) based Immediately
Section of on the Joint Inter-unit Reconciliation Statement. after receiving
concerned the Joint inter-
Unit unit
reconciliation
statement
8. Accounts  Issue/ obtain Inter Unit Transaction Balance Immediately
Section of Confirmation Certificate (IUTBCC). after receiving
concerned the Joint inter-
Unit unit
reconciliation
statement
Formats

Ref. Type to
IUT/F04 Inter-unit Reconciliation I/O Monthly Every Unit Other Unit
Statement
IUT/F05 Joint Inter-unit I/O Quarterly Every Unit Other Unit

Reconciliation Statement
IUT/F02 Inter Unit Transaction O Quarterly Every Unit Other Unit

Balance Confirmation
Certificate (IUTBCC)
Page | 222
11.00 Section: Preparation of Accounts

Section Background:
11.01 This Section covers the Preparation of Accounts and related procedures.
11.02 Transactions in the books of account shall be made in accordance with the respective
Accounting Policies as laid down in this Accounting Manual.

No.
1. Maintenance of Books of account and Documents Control 11.01
2. Preparation of Monthly Accounts and consolidation thereof 11.02
3. Preparation of Final Accounts and consolidation thereof 11.03
4. Merger and Demerger of Accounting Unit 11.04
Page | 223
Section: Preparation of Accounts Section Code: 11.00

Subject: Maintenance of Books of Account Subject Code: 11.01
and Documents Control
Subject Background:

 Maintenance of Books of Account
 Maintenance of Subsidiary Records/ Registers
 Maintenance of Forms
 Monthly / Final Accounts
 Documents Control
 Custody and Disposal of Records
Maintenance of Books of Account
Every Accounting Unit of UPJN shall compulsorily maintain all the Books of Account as provided as
Appendix IIA to this Accounting Manual.
Maintenance of Subsidiary Records/ Registers
In addition to the above books of account, every Accounting Unit shall also maintain certain subsidiary
records. Maintenance of subsidiary records shall facilitate:
 Additional checks/ controls
 Tracking of related transactions/ group of transactions at one place
 Analysis of certain related transactions/ group of transactions for a desired purpose
A list of Subsidiary Records / Registers that shall be maintained by each of the Accounting Unit of
UPJN is provided as Appendix IB to this Accounting Manual
Maintenance of Forms
To record/account for the various transactions, in books of account/ subsidiary records/ registers,
various forms shall be used by different users. A list of forms as referred to in this Accounting Manual
is provided as Appendix IIC to this Accounting Manual
Monthly / Final Accounts
Every accounting unit of UPJN shall prepare the following statements as part of their Monthly / Final
Accounts. A list of statements as referred to in this Accounting Manual is provided as Appendix III to
this Accounting Manual.
Documents Control
The documents (books/ registers/ forms, etc.), while in use shall be in custody of the person/ section
responsible for its maintenance and updation. The used documents shall be submitted to the Head of
the Office. The Head of the Office shall in accordance with the Policies prescribed by UPJN instruct
on the storage and maintenance of the documents.
New/ blank documents shall be kept at the respective office (Division, Circle, Zone, Head Office, etc.).
As per the requirements of the concerned users, a written request shall be submitted to the Head of
the respective office and Head of the respective Accounts Section. The Head of the respective
Accounts Section shall ensure that all the used documents have been submitted to the Accounts
Section and the relevant transactions recorded therein have been accounted for in the books of
account. Based on the approval, the documents shall be issued to the concerned user.
Page | 224
All the used forms shall be filed separately to know their status e.g. whether all the forms of a
particular forms‟ book have duly been received back by the Accounts Section or not after their use.
Before issuing any new forms‟ book, this status shall also be taken into consideration. At any point of
time, two parallel forms book shall not be used by any single user.
For the above purpose, Accounts Section of every Unit shall maintain a Document Control Register
(having separate folio for each type of document) to record receipt of new documents, issue of new
documents to users and receipt of used documents from the user. Before issuing any new forms‟
book, it shall be ensured that every form of that book is serially numbered. In addition, every forms‟
book shall be allotted a unique serial number to have a track on it.
Custody and Disposal of Records
All the records (i.e. books of account, subsidiary records/ registers, used forms) for the current
financial year shall be kept under the safe custody of respective officials of the Accounts Section for
any future reference purpose. These records shall be inspected from time to time by the Head of the
Accounts Section.
However the above records for the previous financial years shall be kept under the safe custody of
Head of the Accounts Section for any future reference purpose. These records shall not be disposed
off until a period of 16 years relevant to the financial year to which they pertain or until the period as
prescribed by UPJN in this regard.
Page | 225

Subject: Preparation of Monthly Accounts and Subject Code: 11.02
consolidation thereof
Subject Background:
This subject covers the accounting procedure to be followed in relation to preparation of monthly
accounts at Units and consolidation thereof at Zonal Office (ZO) level for the Zone and subsequently
at Head Office (HO) level for UPJN as a whole. Each Unit shall prepare its monthly accounts,
individually, and submit to ZO and Head Office for their consolidation.
A checklist shall be filled by each Unit preparing the monthly accounts to ensure that all the
procedures relating to preparation of monthly accounts have been complied with and attached along
with the monthly accounts.
The Accounts Section of the respective Office (ZO or HO, as the case may be) shall supervise the
monthly closing of books of account of its respective Units or ZO, as the case may be, to ensure
timely closure of accounts as per the procedure laid down in this Section. Before consolidation,
monthly accounts/ consolidated monthly accounts shall be compared (with that of previous months)
and scrutinised for accuracy and completeness.
Before preparation of monthly accounts, each Unit shall ensure the updation/ completion of books of
account and other relevant subsidiary records.
Relevant accounting entries shall be passed in accordance with the accounting procedures as
mentioned in the respective sections of this Accounting Manual.
 Completion of Books of Account and Subsidiary Records
 Preparation of Month End Closing Entries
 Ledger Scrutiny
 Reconciliations and Balance Confirmation
 Preparation of Trial Balance, Income and Expenditure Account and Balance Sheet
 Consolidation of Monthly Accounts at Zone for Units
 Consolidation of Monthly Accounts at HO
Procedure:

No. Section Timing*
Responsible
Completion of Books of Account and Subsidiary Records
1. Accounts  For preparation of monthly accounts, the aspects including By the
Section - Unit the following shall be ensured: month end
o Vouchers: Posting of all the vouchers in their
respective books
o Source Documents: Receipt, recording and
accounting of all the source documents for materials
such as Goods Receipt Note (GRN), Materials Transfer
Note (MTN), Self Consumption Note (SCN), Materials
Consumption Note (MCN), Materials Adjustment Note
(MAN), etc.
o Expense/ bills: Passing and accounting of all the bills
(suppliers, contractors)/ supporting documents for other
expenditure received during the month
Page | 226

No. Section Timing*
Responsible
o Revenue Items: Accounting of all revenue items e.g.
interest, centage, etc.
o Capitalisation: Capitalisation of fixed assets (including
out of respective Capital Work in Progress Accounts)
based on the completion certificates, etc.
o Inter Unit Transactions: Responding of all ATDs/
ATCs received during the period from the originating
Unit(s)
o Books of account: Updation of all books of account
such as Bank Book, Cash Book, Journal Book, General
ledgers and Subsidiary ledgers based on the vouchers /
source documents
o Records & Registers: Recording and updation of all
records and registers maintained
Preparation of Month End Closing Entries
2. Accounts  Identify the journal entries required to be passed specific to By the
Section - month closing to reflect the correct position of liabilities, month end
Unit assets, income and expense up to the month closing.
These would include:
o Depreciation on fixed assets
o Provision for expenses bills received but not passed for
payment
o Provisions for expenses incurred but bill not received
o Any other provisional entry keeping in view the
materiality concept
o Interest expense accrued till the end of accounting
period but not accounted for in the books of account
o Income accrued from investments in respect of all
interest bearing investments but not accounted for in
the books of account
 Prepare Journal Voucher (JV) and and obtain approval from
Designated Authority. The amount of the JV shall be the
difference between the amount to be accounted up to the
period and the amount already accounted for up to the
previous month
 Based on JV, update Journal Book, General Ledgers,
Subsidiary Ledgers, relevant Record(s) and register(s)
Ledger Scrutiny
st
3. Head of the  Scrutinise the Books of Account, General Ledgers, By the 1 of
Accounts Subsidiary Ledgers and other relevant records and registers the next
Section - Unit and ensure the following key aspects: month
Scrutiny of Income Accounts:
o Centage income on Works project for the period has
been recognised as required
o Debit entries have not been accounted for in the income
accounts; if accounted for, verify such transactions
Scrutiny of Expense Accounts:
o All expenses for the period have been accounted for in
the books of account
o Extra ordinary expenses have been identified
separately
o Capital expenses have not been recorded in expenses
accounts.
Scrutiny of Asset Accounts:
o Expenditure booked to WIP Cost, Materials, Centage,
Page | 227

No. Section Timing*
Responsible
Others, etc. are under the correct Works project
oWorks projects on which work has been completed
have been transferred to Completed Works projects
o Payments made to contractors, suppliers have been
adjusted for the balances in the respective advance
accounts
o Inter Unit transactions are accounted for in the correct
account heads
o Investments made/ redeemed/ sold have been
accounted accurately and the interest accrued and due
on the same are accounted for
o Fixed Assets / Intangible Assets capitalised during the
period have been updated in the Fixed Asset /
Intangible Assets Register
Scrutiny of Liability Accounts:
o Works project related funds (deposits/ grants/ loans)
and other funds received by UPJN in nature of liability
are accounted for in the correct account heads and
appropriate registers
o Interest payable on loans is calculated and correctly
accounted for
Clearance of Unclaimed/ Non-Recoverable/ Old Balances
o Identify balances in party ledgers, employees ledger
and receivable/payable accounts for very old, small
balances, etc. for the purpose of writing them off/ writing
them back based on the following key aspects:
 Where there is no transaction for a long period in
the relevant account and no transaction is expected
to take place in future.
 If the debtor has become insolvent and there is no
possibility of recovery from it.
 If there is credit balance in a receivable/debtor‟s
account, however no value is payable by UPJN.
 If there is debit balance in a payable/creditor‟s
account, however no value is recoverable by UPJN.
 Where any recovery has become time barred under
the relevant law.
o Review the balances as identified above for justification
and reasonableness of provision/ write off/write back.
o Obtain approvals from Designated Authority for
provisions against the above balances / write off/ write
back.
o Above cases shall be reported to the respective ZO /
HO, as the case may be as a separate annexure
st
4. Accounts  Based on the Ledger Scrutiny, prepare JV to account for By the 1 of
Section – the provision/ write off/ write back/ rectifications, as the case the next
Unit may be, and obtain approval from Designated Authority. JV month
to be passed in the month for which accounts are being
prepared.
Reconciliations and Balance Confirmation
nd
5. Head of  Reconciliations between Books of Account and Subsidiary By the 2 of
Accounts Records/ Registers the next
Section - o Verify the balances of the Subsidiary ledgers with the month
Page | 228

No. Section Timing*
Responsible
Unit balance in the respective General Ledger and ensure
that they are reconciled
o Verify the balances of Subsidiary Records/Registers
(for e.g. Loan Register, Deposit Register, GPF Register,
Work Register, Unpaid Salary Register, Employee
Advance Register, Temporary / Permanent Imprest
Register, Fixed Assets Register, Centage Register, etc)
with the respective General Ledger & Subsidiary
Ledgers and ensure that they reconcile
Accounts  Balance Confirmations
Section - o Write to the respective Units and parties (based on the
Unit criteria as decided by UPJN, such as age and value of
receivables/ payables) for sending the corresponding
Account Statement and/ or the Balance Confirmation
Certificate. (These would include UPJN‟s other Units,
banks, financial institutions, contractors, suppliers,
service providers, etc.)
o Obtain the Account Statement and/ or the Balance
Confirmation Certificate; identify discrepancies, if any
and the reason for the same.
o File the Balance Confirmations Statements in a
separate file and attach copies with monthly accounts
 Based on the reconciliations, identify the accounting entries
to be passed for the discrepancies.
 Prepare JV to account for the rectifications/ adjustments,
and obtain approval from Designated Authority. JV to be
passed on the last day of the month for which accounts are
being prepared
Preparation of Trial Balance, Income and Expenditure Account and Balance Sheet
th
6. Head of the  On completion of all the above processes, prepare the Trial By the 5 of
Accounts Balances (classifying into Schedules, Group Heads, the next
Section – General Ledgers and Subsidiary Ledgers), in the prescribed month
Unit formats, showing opening balances (as on date), net debit/
credit for the year and closing balances (as on date).
 Prepare Income and Expenditure Account and Balance
Sheet in the prescribed formats, obtain approvals of
Designated Authority and forward the approved Trial
Balances, Income and Expenditure Account, Balance Sheet
along with the following annexure to the ZO / HO:
o Checklist showing compliances
o Copies of Account Statement and/or balance
confirmations for the period
o Confirmation for compliance of Accounting Policies and
in case of any deviation, details thereof with financial
impact
o Notes to Accounts relating to the accounting
transactions passed during the period
o Cash certificate & Bank Reconciliation Statement
o MIRs
 Summary of Works Register
 Works project completed but not closed for
accounting
 File a copy of the above set of monthly accounts in a
Page | 229

No. Section Timing*
Responsible
separate file
7. Head of the  In case of any comments from ZO / HO which require any Within a day
Accounts change in the monthly accounts already submitted, revise of receiving
Section – the monthly accounts and forward to ZO / HO. the
Unit comments
Consolidation of Monthly Accounts at Zone for Units

th
8. Head of the  Receive the set of monthly accounts from each Unit By the 7 of
Accounts (includes Divisions, ZO, etc.), reconcile the opening balance the next
Section - of the Trial Balance of the Unit with the closing balance of month
Zone the previous Trial Balance
 Review and scrutinise the monthly accounts for unusual
balances
 Obtain clarifications/ rectified accounts in case of
discrepancies
th
9. Head of the  Prepare comparisons with the previous monthly Income and By the 10
Accounts Expenditure Account and Balance Sheet to determine the of the next
Section - major discrepancies. Obtain clarifications from Units as month
Zone required and prepare reasons/ notes for the same.
 Consolidate the monthly accounts received to prepare the
consolidated monthly accounts for the ZO and attach the
following annexure:
confirmations for the period (those received from Units
and obtained at Zones for parties at ZO level)
impact
transactions passed during the period (including that of
every Unit)
o MIRs
accounting
 Forward the consolidated monthly accounts for the Zone to
the HO. In case of any change in the monthly accounts of
any Unit (subsequent to their submission to ZO / HO), the
revised monthly accounts shall also be attached with the
above consolidated monthly accounts.
 File a copy of the consolidated monthly accounts in a
separate file
Consolidation of Monthly Accounts at HO
th
10. Accounts  Receive monthly accounts from all the Units, scrutinise the By the 7 of
Section – HO same and suggest respective Unit and ZO for necessary the next
correction/ rectification, if any. month
th
11. Accounts  On receipt of consolidated monthly accounts from all ZOs By the 15
Section – HO (consolidated for Zones and independent for Units) and of the next
Accounting Units of HO, scrutinise the same and obtain month
clarifications required if any, and ensure that:
o All annexure required for monthly accounts have been
Page | 230

No. Section Timing*
Responsible
submitted by each ZO and are tallied and reconciled.
 No balances appear in Account Codes retained for use
exclusively at HO, in the Trial Balance of the Units/ ZOs
st
12. Accounts  Consolidate the monthly accounts received to prepare the By the 21
Section – HO monthly accounts for UPJN and attach the following of the next
annexures: month
confirmations for the period (those received from ZOs
and obtained at HO for parties at HO level)
impact
transactions passed during the period (including that of
every Unit)
o MIRs
accounting
 Ensure that the inter Unit balances are reconciled post
consolidation.
 Obtain approvals as required on the monthly accounts
prepared
 File a copy of the monthly accounts in a separate file
* Note: The frequency/ timings as mentioned are applicable in cases where accounts are being
prepared under manual environment. In computerised environment, the monthly financial statements
can be generated at any level for all the transactions authorised at any given point of time after
completion of the month. Hence the timelines mentioned above shall vary accordingly.
Formats

Ref. Title Type
POA/F01 Check-list for O Monthly Accounts  Own Copy
Preparation of Section – Unit  Accounts Section –
Monthly / Final ZO/ HO
Accounts
CB/F02 Cash O Monthly Accounts  Own Copy
Certificate Section – Unit  Accounts Section –
ZO/ HO
CB/F03 Bank O Monthly Accounts  Own Copy
Reconciliation Section – Unit  Accounts Section –
Statement ZO/ HO
POA/F02 Balance O Monthly Accounts  Own Copy
Confirmation Section – Unit  Accounts Section –
ZO/ HO
BA/13 Trial Balance I/O Monthly Accounts  Own Copy
TO Section - Unit  Accounts Section –
BA/16 ZO/ HO
Accounts  Own Copy
Section – ZO  Accounts Section –
HO
Page | 231

Ref. Title Type
POA/02 Income and I/O Monthly Accounts  Own Copy
Expenditure Section – Unit  Accounts Section –
Account ZO/ HO
HO
POA/01 Balance Sheet O Monthly Accounts  Own Copy
Section – Unit  Accounts Section –
ZO/ HO
HO
Page | 232

Subject: Preparation of Final Accounts and Subject Code: 11.03
consolidation thereof
Subject Background:
This subject covers the accounting procedure to be followed in relation to preparation of final accounts
at Units and consolidation thereof at ZO level for the Zone and subsequently at the Head Office level
for UPJN as a whole.
The process of preparation of Final Accounts shall require compliance to all procedures of the
monthly accounts as mentioned in Subject Code: 11.02. The additional controls, processes and
accounting aspects are covered in this subject.
The Accounts Section of the respective Office (ZO or HO , as the case may be) shall supervise the
yearly closing of books of account of its respective Units or ZOs, as the case may be, to ensure
correctness and completeness of accounts along with meeting the time lines as per the procedure laid
down in this Section.
This subject covers the process up to preparation of Final Accounts at the Unit level and its
consolidation at the ZO and HO to generate the Financial Statements of UPJN.
For the purposes of providing time lines, financial year has been considered as April to March.
 Identification of Expenses/ Revenue for Allocation/ Apportionment to Units

 Issuance of Accounts Closure Guidelines by Head Office and Zone Office
 Year End Procedures at Units – Obtaining information from concerned sections/ employees
 Year End Procedures at Units – Year end accounting entries
 Preparation of Final Accounts at Units
 Consolidation of Final Accounts at Zone
 Consolidation & Preparation of Final Accounts at HO
Procedure:

No. Section Timing*
Responsible
Identification of Expenses/ Revenue for Allocation/ Apportionment to Units
1. Accounts  Identify the accounting entries/ items which have been Before the
Section - HO accounted for at Head Office but are required to be year end/ as
allocated/ apportioned (based on certain pre-determined and when
basis/ norms/ estimation) to Units. This would include:
o Accounting for Provision for Retirement benefits of
employees such as Gratuity, Pension, Leave
encashment
o Accounting for Interest expenses
o Any other expenses incurred/ revenue earned and
accounted for at Head Office
 Prepare a statement for the above with the name of Unit
and amount to allocated/ apportioned.
Prepare JV and obtain approval from Designated
Authority. Raise ATD/ATC on the Units. Refer Subject
Code: 10.01 for procedure relating to raising ATD/ATC
Based on JV, update Journal Book, General Ledger,
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No. Section Timing*
Responsible
2. Accounts  Receive and review the ATD/ATC raised by Accounts As and when
Section – Section – HO and forward the perforated copy to the
Unit Accounts Section HO. Refer Subject Code: 10.02 for
procedure relating to accepting ATD/ATC
 Scrutinise the ATD/ATC to determine the balances Same day
transferred
 Prepare JV, to account for the balances transferred and
obtain approvals, and obtain approval from Designated
Authority
Issuance of Accounts Closure Guidelines by Head Office and Zone Office
3. Accounts  Prepare guidelines/ instructions specific to the closing of By the end of
Section - HO account to inform the Units to prepare accounts in February
certain manner, if any.
 The guidelines would include:
o Timelines – task/ activity wise
o Year end closing transactions to be accounted for at
Unit / ZO
o Revised format for final accounts, in case of any
change
o Specific information that may be required at Head
Office for analyses
o Contingent liabilities with their nature – based on
particular transactions
o Any other matter/ clarification which may be required
to be reported
 Obtain approvals of Designated Authority for the
guidelines and issue them to the respective Units
(specifying separate guidelines/ instructions for ZO).
4. Accounts  In addition to the Guidelines issued by Head Office, By first week of
Section – ZO prepare guidelines/ instructions specific to the closing of March
account to inform the Units to prepare accounts in
certain manner, if any.
 The guidelines would include:
o Accounting for Centage
o Closure of Works Projects
o Specific information that may be required at ZO / HO
for analyses
o Any other matter/ clarification which may be required
to be reported
 Obtain approvals of Designated Authority for the
guidelines and issue them to the respective Units.
Year End Procedures at Units – Obtaining information from concerned sections/ employees
5. Head of  Obtain information on all pending transactions which By 1st week of
Accounts impact the financial positions of the Unit from the April
Section – concerned sections/ employees of the Unit
Unit  An indicative list of such transactions is:
o Pending contractors bills for works done
o Pending submission of source documents for
materials to the Accounts Section
o Services availed and bills received/ not received (not
sent to Accounts Section)
Page | 234

No. Section Timing*
Responsible
o Details of contingent liabilities, if any
o Works project physically closed during the year, but
not reflected in books of account
o Details of any extraordinary items, though not
impacting the current financial statements, but
bearing materiality with regards to reporting
 Obtain the report on Physical verification of materials
and adopt the process as referred to in Subject Code:
2.07.
Year End Procedures at Units – Year end accounting entries
6. Accounts  Receive the details received from other sections/ By 2nd week
Section – employees and guidelines issued from HO / ZO. of April
Unit  Identify the year end accounting entries including:
o Accounting for materials in transit
o Accounting for materials received in store but
pending finalisation of GRN
o Accounting for completed Works projects
o Accounting for provision for expenses for bills
received but not passed
o Accounting for provision for expenses of bills not
received, however services/ goods received
o Accounting for provision in diminution in value of
investments, revaluation of fixed assets, employee
related liabilities
o Accounting for prepaid expenses
 Prepare JV, for the above, and obtain approval from
Subsidiary Ledgers, relevant register(s)
Preparation of Final Accounts at Units
rd
7. Head of  Prepare the Final Accounts for the year as per the By the 3
Accounts following procedures of preparation on monthly accounts week of April
Section – as provided in the Subject Code: 11.02:
Unit o Completion of Books of Account and Subsidiary
Records
o Preparation of Month End Closing Entries
o Ledger Scrutiny
o Reconciliations and Balance Confirmation
o Preparation of Trial Balance, Income and
Expenditure Account and Balance Sheet
Consolidation of Final Accounts at Zone
th
8. Accounts On receipt of Final accounts of each Unit, adopt the By the 4
Section – procedure of „consolidation of Monthly Accounts at Zone for week of April
Zone Unit‟ as provided in the Subject Code:11.02
Consolidation & Preparation of Final Accounts at HO
9. Head of  Determine the amount for the transactions, including the By the end of
Accounts following, if required: April
Section – HO o Transfer to Reserves
o Transfer to Depreciation Reserve
o Provisions for Expenses
o Provisions for Losses
o Tax Liability
 Prepare JV, to account for the above, and obtain
Page | 235

No. Section Timing*
Responsible
st
10. Accounts  On receipt of Consolidated Final Accounts of the Zone By the 1 week
Section – HO and each Unit, adopt the procedure of „consolidation of of May
Monthly Accounts at HO‟ as provided in the Subject
Code: 11.02
nd
11. Accounts  Prepare the Final Trial Balances, Income and By the 2
Section – HO Expenditure Account and Balance Sheet (including week of May
Schedules) and attach the following:
o A complete set of Accounting Policies (including after
considering the deviation reported by Units)
o Notes to Accounts (as reported by Units)
o Cash Flow Statement
 Obtain approvals as required on the final accounts
prepared
* Note: The frequency/ timings as mentioned are applicable in cases where accounts are being
prepared under manual environment. In computerised environment, the financial statements for the
year (final accounts) can be generated at any level for all the transactions authorised at any given
point of time. Hence the timelines mentioned above shall vary accordingly.
Formats

Ref. Title Type
IUT/F01 ATD/ ATC I/O As and Accounts  Own Copy
when Section – HO  Accounts Section – Unit
BA/13 Trial Balance I/O Yearly Accounts  Own Copy

TO Section –Unit  Accounts Section – ZO/
BA/16 HO
POA/02 Income and I/O Yearly Accounts  Own Copy
Expenditure Section – Unit  Accounts Section – ZO/
Account HO
Section – ZO  Accounts Section –HO
POA/01 Balance O Yearly Accounts  Own Copy
Sheet Section – Unit  Accounts Section – ZO/
HO
POA/04 Cash Flow O Yearly Accounts  Own Copy
Statement Section – Unit  Accounts Section – ZO/
HO
Page | 236
Accounting Entries

Responsible
1. Allocation/ JV --- Debit Accounts
Apportionment of Section – HO
Expenses/Revenue Relevant Income Account
Credit

2. Accounting of JV ATD/ ATC Debit Accounts
Expense/ Revenue Section –
Allocated/ IUT – Others Account Unit
Apportioned from
HO Relevant Expense Account
Credit

3. Appropriation of JV Income and Debit Head of
excess of income Expenditure Accounts
over expenditure Account Income and Expenditure Section – HO
(Transfer to Account
Reserves)
Credit
Transfer to Depreciation
Reserve /
Transfer to Other capital
reserves Account /
Transfer to General reserves
Account / Transfer to Other
Reserve Funds Account
4. Provision for Tax JV Computation Debit Head of
Liability of Income Accounts
Income and Expenditure Section – HO
Account
Credit
Amount Provided for Income
Tax Account
Page | 237

Subject: Merger and Demerger of Accounting Subject Code: 11.04
Unit
Subject Background:
This subject covers the accounting procedure to be followed in relation to merger and demerger of
accounting.
Merger refers to the transfer of an entire Accounting Unit to another existing Accounting Unit.
Demerger refers to separating a part of an existing Accounting Unit to form a new Accounting Unit or
merging with another existing Accounting Unit. Thus retaining the identity of the existing Accounting
Unit from which the portion is getting de-merged.
The procedure does not provide criteria for evaluation of this decision, but only provides the
procedure to be followed on merger and demerger of an Accounting Unit.
This subject covers the following related sub-process:

 Merger of Accounting Unit
 Demerger of Accounting Unit
The Designated Authority at UPJN shall issue an office order for the merger/ demerger of the
Accounting Unit. The order shall specify the following:
 Name and code of the Accounting Unit with which the Unit is being merged in case of merger/
new Accounting Unit in case of demerger.
 Name and location codes of all the Units which will report to the new Accounting Unit in case of
merger/ demerger of a Zone
 Name and location code of the Zone under which the Unit will fall in case of demerger of a Unit
 Date on which it would commence its operations
 Details of functions which would be carried out by the new Accounting Unit
 The organisational structure of the new Accounting Unit (including the designations and functions
of the employees of Unit being merged/ demerged)
 In case of demerger, the office order shall specify the basis of transferring the assets (including
the schemes), liabilities, expenses and income to the Unit in which the demerged Unit shall be
merged / new Accounting Unit being formed
For ease of merger and demerger process, to the extent possible, the effective date for merger/
demerger shall be last date of the month.
The Head of the Accounts Section at the Zone and the Head of the Zonal Office of both the merging
Units and the demerging Units shall in concurrence, prepare a work plan in accordance with the office
order along with time lines and closely monitor the process of merger/ demerger to ensure all the
required procedures and accounting are effectively accomplished. The work plan shall include the cut
off dates of recording of transactions for the Unit being merged/ demerged and shall be circulated to
the respective Units. Accounting of entries post the cutoff date shall be made in the Units formed post
merger/ demerger
Page | 238
Procedure:

No. Section Timing
Responsible
Merger of Accounting Unit
1. Designated  Forward the office order for merger of the Accounting Unit As and When
Authority to the following: order is
st
o Accounting Unit which is getting merged (1 Unit) passed
st
o Accounting Unit in which the 1 Unit is getting merged
nd
(2 Unit)
st nd
o Respective Zones of the 1 and 2 Unit in case
different
o Accounts Section at HO
 Forward the copy of the office order to all Accounting
Units to ensure that all further communications are made
accordingly
2. Accounts  Receive the office order for the merger into another Unit As and When
st
Section (1  Receive the work plan from the respective Zonal Office
Unit)
3. Accounts  Transfer of Bank Balances: The bank balances of the As per the cut-
st st nd
Section (1 1 Unit shall be required to be transferred to the 2 Unit off date for
st
Unit) as the 1 Unit may lose its identity post merger. accounting in
st
 Obtain requisite approvals for transfer of bank balances to 1 Unit as
nd
the 2 Unit. mentioned in
 Adopt the procedure for bank payments as provided in the office
Subject Code:9.04 order/ work
nd
 Prepare BPV and raise ATD on the 2 Unit Refer Subject plan
Code: 10.01 for procedure relating to raising ATD
Subsidiary Ledger
st
4. Accounts  Receive and review the ATD raised by the 1 Unit and As and when
nd nd
Section (2 forward the perforated copy to the 2 Unit. Refer Subject
Unit) Code: 10.02 for procedure relating to accepting ATD
 Scrutinise the ATD/ATC to determine the balances
transferred
 On receipt of funds, prepare BRV to account for the Same day
balances transferred and obtain approvals as required
Subject Code: 9.04
Subsidiary Ledger
5. Accounts  Physical Verification: To close the books of account at As per the cut-
st nd
Section (1 the Unit and transfer of physical balances to 2 Unit, off date for
Unit) carry out physical verification of the following as on the accounting in
st
day end of cut-off date for accounting: 1 Unit as
o Cash Balance: Follow the procedure on physical mentioned in
verification of Cash balance. Refer Subject Code:9.06 the office
o Materials: Follow the procedure on physical order/ work
verification of Materials. Refer Subject Code: 2.07 plan
o Fixed Assets: Follow the procedure on physical
verification of Fixed Assets and Project Asset. Refer
Subject Code: 5.08.
6. Accounts  Closure of Books of Account: Based on the office order As per the cut-
st
Section (1 and work plan, prepare the complete set of accounts for off date for
Unit) the Unit. accounting in
Page | 239

No. Section Timing
Responsible
st
 Adopt the procedure of „preparation of final accounts at 1 Unit as
Unit‟ as provided in the Subject Code:11.03 mentioned in
the office
order/ work
plan
nd
7. Accounts  Transfer of Account Balances to the 2 Unit: Based As per the cut-
st
Section (1 on the Trial Balance, prepare JV, to transfer all the off date for
nd
Unit) account balances to the 2 Unit, and obtain approval accounting in
st
from Designated Authority. Debit all liability and income 1 Unit as
account head and credit all assets and expense account mentioned in
heads with the balances as per Trial Balance the office
 Obtain approvals of Designated Authority on the JV order/ work
 Based on JV, update Journal Book, General Ledger, plan
Subsidiary Ledger, relevant Register(s). Ensure that the
balances in all the books of account, General Ledger,
Subsidiary Ledger are „NIL‟ after accounting for the JV
 (No further accounting entries shall be made in the Books
st
of Account of the 1 Unit)
 Forward the copy of the Trial Balance and JV prepared to
nd
the 2 Unit
8. Accounts  Handing over assets (cash, materials, fixed assets, As per the cut-
st
Section (1 etc.)/ records/ documents, etc., on handing over, off date for
Unit) ensure the following key aspects: accounting in
st
o Concerned officials along (from the concerned 1 Unit as
section, (e.g. cashier for cash, JE for materials/ fixed mentioned in
assets, Accounts Section for books of account, JE/ the office
Accounts Section for MTN, GRN, etc.) with the order/ work
Designated Authorities of both Units shall conduct plan
physical verification of the items handed over by the
st
1 Unit and both shall sign on the Physical Verification
Report for the items received and retain a copy each.
o Based on the Physical Verification Reports (as per
above), document the balances to be handed over
o Document the serial numbers of the records/
documents e.g. vouchers, books, records and
registers; currently in use, not in use (blank) and,
used up (past records) and being handed over to the
2nd Unit. The last used page/folio of each of these
shall be signed by the Designated Authority
mentioning the cut-off date until which accounting
transactions have been updated
o Hand over the physical assets and documents to the
2nd Unit
9. Accounts  Receive the physical assets (cash, materials & fixed As and when
nd
Section (2 assets), documents, records, registers etc. and verify
Unit) them with the statement giving details as submitted by the
st
1 Unit.
10. Accounts  Receive the Trial Balance and JV prepared as above from As and when
nd st
Section (2 the 1 Unit
Unit)
11. Accounts  Prepare JV, and obtain approval from Designated Same day
nd st
Section (2 Authority, to incorporate the balances of 1 Unit by
st
Unit) passing a reverse JV of the JV passed at the 1 Unit. i.e.
Page | 240

No. Section Timing
Responsible
credit all liabilities and income and debit all assets and
expenditure account heads with the balances as per JV.
 Obtain approvals
st
 JV shall be prepared on the 1 day of merger as per the
office order
Subsidiary Ledger
 Update the relevant Register(s) based on the JV and
documents transferred
st nd
12. Accounts  Identify the Inter Unit Balances of the 1 Unit and 2 Unit Same day
nd
Section (2 that can be set off/ adjusted
Unit)  Prepare JV, and obtain approval from Designated
Authority, to set off the Inter Unit Balances and obtain
approvals
Subsidiary Ledger
13. Head of Unit  Inform the following by way of a letter/ statement about Within 2-3
nd
(2 Unit) the completion of process of merger: days of
o Issuing authority of the office order for merger completion of
o Head of the Accounts Section at the Zone merger
o Head of the Zonal Office
 Inform the Accounts Section of all Units, Zones and the
outside parties (suppliers/ contractors/ bankers/ financial
institutions etc.) associated with the 1st Unit regarding
details of further correspondence
De-Merger of Accounting Unit
14. Designated  Forward the office order for de-merger of the Accounting As and When
Authority Unit to the following: order is
o Accounting Unit which is getting de-merged (1st Unit) passed
o In case the 1st Unit is getting merged to another
existing Unit, the Accounting Unit in which it is getting
merged (2nd Unit).
o Respective Zones of the 1st and 2nd Unit in case
different
 Forward the copy of the office order to all Accounting
Units to ensure that all further communications are made
accordingly
15. Accounts  Receive the office order for the de-merger into another As and When
st
Section (1 Unit
Unit)  Receive the work plan from the respective Zonal Office
16. Accounts  Identify the balances of liabilities, assets, incomes and As per the cut-
st
Section (1 expenses required to be transferred on the demerger as off date for
Unit) per the office order accounting in
st
 In case the office order is silent about the same, the 1 Unit as
liabilities, assets, incomes and expenses required to be mentioned in
transferred on demerger shall be identified. An illustrative the office
way of identifying is provided below: order/ work
o Identify the Works project that are to be transferred. plan
The account heads relating directly to those identified
schemes shall be transferred
o Identify the employees which are getting transferred.
All amounts pertaining to those employees shall be
Page | 241

No. Section Timing
Responsible
transferred
o Identify the fixed assets being transferred to the new
Unit. All amounts pertaining to those fixed assets shall
be transferred
 Prepare the list of the liabilities, assets, incomes and
expenses identified for transfer
 Obtain approval on the list prepared
17. Accounts  Prepare JV, and obtain approval from Designated Same day
st
Section (1 Authority, for transfer of amounts for the account heads
Unit) identified as per the approved list to the new Accounting
Unit/ existing Unit as the case may be and raise ATD/
nd
ATC as case may be on the 2 Unit and obtain approvals
as required. Refer Subject Code: 10.01 for procedure
relating to raising ATD
Subsidiary Ledgers, relevant Register(s)
18. Accounts  Receive the office order from the Designated Authority As and when
nd
Section (2 order is
Unit) passed
st
19. Accounts  Receive and review the ATD/ ATC raised by the 1 Unit On the date of
nd st
Section (2 and forward the perforated copy to the 1 Unit. Refer de-merger/
Unit) Subject Code: 10.02 for procedure relating to accepting setting up of
ATD new Unit as
 Scrutinise the ATD/ATC to determine the balances per order
transferred
 Prepare JV, to account for the balances transferred and
obtain approvals as required
Subsidiary Ledgers, relevant Register(s)
20. Accounts  Identify the account heads of Inter Unit Transactions On the date of
nd st nd
Section (2 between the 1 Unit and 2 Unit which can be set off de-merger/
Unit) against each other (not applicable in case of new Unit setting up of
being formed) new Unit as
 Obtain approvals to set off the balances of inter Unit per order
transaction between the 2 Units
 On receiving the approvals, prepare JV to set off the Inter
Unit Balances
st nd
 JV shall be prepared on the 1 date of merging into 2
Unit/ establishing the new Unit
 Obtain approvals of Designated Authority on the JV
 Based on JV, update Journal Book, General Ledgers and
Subsidiary Ledgers
21. Accounts  Inform the following by way of a letter/ statement about Within 2-3
nd
Section (2 the completion of process of de-merger: days of de-
Unit) o Issuing authority of the office order for de-merger merger/ setting
o Head of the Accounts Section at the ZO up of new Unit
o Head of the Zonal Office as per order
o Accounts Section of all Units and ZOs
 Inform Accounts Section of all Units, ZOs and the outside
parties (suppliers/ contractors/ bankers/ financial
institutions etc.) associated with the 1st Unit regarding
details of further correspondence
Page | 242
Formats

Ref. Title Type
IUT/F01 ATD I/O On transfer of Bank Accounts  Own copy
st
Balances on merger and Section (1  Accounts
nd
transfer of balances as Unit) Section (2
per books on de-merger Unit)
Accounting Entries

Responsible
1. Transfer of BPV --- Debit Accounting
Bank Unit getting
st
Balances on Relevant Fund Remittance merged (1
Merger between Units Account Unit)
Credit
Bank Account
2. Receipt of BRV ATD Debit Accounting
Bank Unit in which
st
Balances on Bank Account the 1 Unit is
Merger getting
nd
Credit merged (2
Unit)
Relevant Fund Remittance
3. Transfer of all JV Trial Debit Accounting
account heads Balance of Unit getting
st st
on Merger of 1 Unit All Liability Accounts* merged (1
Accounting Unit)
Unit All Income Accounts*
Credit
All Asset Accounts*
All Expense Accounts*
(* Relevant Account Heads)

4. Transfer of all JV Trial Debit Accounting
account heads Balance Unit in which
st
on Merger of and JV All Asset Accounts* the 1 Unit is
st
Accounting from 1 getting
nd
Unit Unit All Expense Accounts* merged (2
Unit)
Credit
All Liability Accounts*
All Income Accounts*
Page | 243

Responsible
5. Setting off of JV Trial Debit* Accounting
Inter Unit Balance Unit in which
st
Transactions and JV Relevant Fund Remittance the 1 Unit is
st
on Merger from 1 between Units Account getting
nd
Unit merged (2
Relevant IUT Accounts Unit)
Credit*
Relevant Fund Remittance

Relevant IUT Accounts
* (The accounts to be debited and

credited shall depend on the
balances as shown in Trial Balance
post merger, however the
st
Subsidiary ledgers will be that of 1
nd
and 2 Unit)
6. Transfer of JV Office Debit * Accounting
accounts on Order & Unit getting
De-merger of Books of Liability Accounts de-merged
st
Unit Account (1 Unit)
Income Accounts
Credit*
Asset Accounts
Expense Accounts

7. Accounting for JV ATD/ ATC Debit* Accounting
merging of Received Unit in which
accounts of Asset Accounts de-merged
de-merged Unit is
Unit Expense Accounts merged/ new
Accounting
nd
Relevant IUT Accounts Unit (2 Unit)
Credit*
Liability Accounts
Income Accounts
Page | 244

Responsible
8. Setting off of JV ATD/ATC Debit* Accounting
st
Inter Unit from 1 Unit in which
st
Transactions Unit Funds Transfer between Units the 1 Unit is
on Merger (not (relevant Accounts) getting
nd
applicable in merged (2
case of new Relevant IUT Accounts Unit)
Unit being
formed) Credit*
Funds Transfer between Units

(relevant Accounts)
* (The accounts to be debited and

credited shall depend on the
balances as shown in Trial Balance
post merger, however the
st
Subsidiary ledgers will be that of 1
nd
and 2 Unit)
Page | 245

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UTTAR PRADESH JAL NIGAM

A.F. Ferguson & Co.

Section / Section / Subject Page No.

Section / Section / Subject Page No.

Format Format Name Page No.

Format Format Name Page No.

Format Format Name Page No.

Acronym Full Form

PREFACE TO ACCOUNTING MANUAL

Key objectives of the revisions in Accounting Manual

4. The Accounting Manual for UPJN is intended to:

Coverage of the Accounting Manual

Section Code Section Name

6. The above Sections have been further divided into Subjects.

AFF’s Approach to the Accounting Manual

Structure of the Accounting Manual

Users of the Accounting Manual

Administration of the Accounting Manual

Circulars/ notification issued by UPJN

1.00 Section: Chart of Accounts

Creation/ Deletion of codes

Particulars Codes to be created/ deleted by

However Subsidiary Ledger Accounts relating to following can be

Coverage of this Section

1.04 This Section covers the following Subjects:

Sl. Subject Subject code

Section: Chart of Accounts Section Code: 1.00

Section: Chart of Accounts Section Code: 1.00

This Subject provides the codification structure of the COA.

2. The proposed structuring of COA is provided in a table below:

Components of COA Intended Use

Schedule Name Schedule Code

Accounts Category Head Code

Accounts Category Head Name Accounts Category Head Code

Accounts Group Head Code

Schedule Name Schedule Accounts Accounts Accounts Two Accounts

General Ledger Account Code

Section: Chart of Accounts Section Code: 1.00

General Ledger Accounts (Control Accounts) Type of Subsidiary Ledger

Codification for Type of Subsidiary Ledger Accounts

Type of Subsidiary Ledger Accounts Code for Type of Subsidiary Ledger

Codification for Subsidiary Ledger Accounts

General Ledger Account Type of Subsidiary Subsidiary Ledger Account

Section: Chart Of Accounts Section Code: 1.00

This Subject provides the Codification Structure for Works Projects

1. Works Project code shall be a 10 digit alpha-numeric code as illustrative below:

2. The proposed structuring of Works Project is provided in a table below:

Levels of Works Projects Categories

Works Work Group Works Class One Digit Works Class

Work Class Work Class Scheme Three Digits Scheme Code

Scheme Scheme Project Two Digits Project

Project Project Code Project Two Project

Cost monitoring factors Categories

Name of Funding Agency Funding Agency Code

Name of Funding Component Funding Component Code

Project Cost Components

Cost Components of Project Cost components Code

Section: Chart Of Accounts Section Code: 1.00

This Subject provides the Codification Structure for Functional Budget.

1. Budget can be defined/ allocated at the following levels:

Functional Budget Level I Functional Budget Level II

Functional Functional Budget Functional Budget Level II Functional Budget

Section: Chart Of Accounts Section Code: 1.00