5/5/2024 INTERNSHIP

REPORT
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“Internship Report”

Accounts Department Sahiwal

Submitted By: Ch. Umar Mushtaq

Roll No F20BACFN1M01014

Program: BS Accounting and Finance

Session: Morning

Supervisor Name: Dr. Ghulam Murtaza

The Islamia University of Bahawalpur

Department Of Accounting and Finance
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Acknowledgements

I am highly Grateful to Almighty ALLAH for giving me the life and energy to conceive and
actualize the internship and this report.
Our learned and erudite Supervisor Ghulam Mustafa the Islamia University of Bahawalpur
for his inspiring guidance, keen interest, and continuous encouragement throughout my
internship report making efforts.
All Staff of IUB Bahawalpur who implicitly or explicitly helped me in my Internship Report.
Last but not the least I am highly indebted to staff of District Account Office Sahiwal for
providing me the opportunity and support to accomplish my internship.
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Dedication
I dedicate all my efforts and struggles of the educational life to my dear parents; without them
I’m meaningless. Also, I devote the work of this internship report to respectable and
honorable teachers who taught and supported me in developing my personality as a
competent professional.
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Table of Contents
Accounts Department Sahiwal ............................................................................................... I
Acknowledgements ................................................................................................................. V
Dedication ............................................................................................................................VI
Table of Abbreviations .......................................................................................................... IX
Executive Summary .............................................................................................................. X
Chapter 1 ................................................................................................................................ 1
Introduction ............................................................................................................................ 2
1.1 Background of Study ............................................................................................... 2
1.2 Purpose of Study...................................................................................................... 2
1.3 Scope of Study ......................................................................................................... 2
1.4 Research methodology ................................................................................................. 2
1.5 Limitation of Study ...................................................................................................... 3
Chapter 2 ................................................................................................................................ 4
INTRODUCTION TO DISTRICT ACCOUNTS OFFICE SAHIWAL ................................ 4
2.1 Introduction .................................................................................................................. 5
2.2 History .......................................................................................................................... 8
2.3 Separation of Audit and Accounts ................................................................................ 8
2.4 District Account Office Sahiwal .................................................................................. 8
2.5 Function of the Office .................................................................................................. 9
2.6 Organizational chart ................................................................................................... 10
2.7 Over View of Administrative Arrangements .............................................................. 10
2.8 PIFRA .................................................................................................................... 12
2.9 Pakistan Audit and Accounts Department ............................................................. 12
2.10 Who is accountable to whom and for what ........................................................ 13
2.11 Reasons for keeping huge record ....................................................................... 13
2.12 Purpose of audit & accounts department ........................................................... 14
2.13 Function and Power of Auditor General of Pakistan ............................................... 15
2.14 Accounting ............................................................................................................... 17
2.15 Commercial Accounting V/S Government Accounting ........................................... 17
2.16 Legislative Requirement .......................................................................................... 19
2.17 Main Functions ...................................................................................................... 21
2.18 Basic function of GP fund ........................................................................................ 21
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CHAPTER 3 ........................................................................................................................ 24
SWOT ANALYSIS .............................................................................................................. 24
3. SWOT ANALYSIS ....................................................................................................... 25
STRENGTHS WEAKNESS OPPORTUNITIES THREATS ............................... 25
3.1 STRENGTHS ........................................................................................................ 25
3.2 WEAKNESS ......................................................................................................... 25
3.3 OPPORTUNITIES................................................................................................. 26
3.4 THREATS .............................................................................................................. 26
CHAPTER 4 ........................................................................................................................ 27
4. MY LEARNING EXPERIENCE .............................................................................. 28
4.1 CHALLENGES FACED ....................................................................................... 29
CHAPTER 5 ........................................................................................................................ 30
5.1 CONCLUSION .......................................................................................................... 31
5.2 RECOMMENDATIONS ....................................................................................... 32
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Table of Abbreviations

AG ACCOUNTANT GENERAL
AAG ADDITIONAL ACCOUNTANT GENERAL
CGA CONTROLLER GENERAL OF ACCOUNTS
DAO DISTRICT ACCOUNTS OFFICERS
DAG DEPUTY ACCOUNTANT GENERAL
DA BILL DAILY ALLOWANCE BILL
GP FUND GENERAL PROVIDENT FUND
PIFRA PROJECT FOR IMPROVEMENT IN FINANCIAL REPORTING
AND AUDITING.
SAP SYSTEM APPLICANTS’ PRODUCT
SWOT STRENGTH, WEAKNESS, OPPORTUNITIES, THREATS.
TA BILL TRAVELLING ALLOWANCE BILL
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Executive Summary
I have done my internship report in District Account Office situated in Sahiwal city. It is the
place where accounts of government employees, government receipts and payments or
expenditures are maintained. District Accounts offices from all over the country collect and
compile the data about government employees, government receipts and payments. These
offices are controlled by the District Accounts Officer which is the head of these offices.
Assistant Accounts officer (AAO) assists him. Assistant Accounts Officer is assisted by the
Senior Auditors and Junior Auditors. District accounts offices makes closings of accounts on
yearly, half yearly and on monthly basis. Financial year starts from 30 June and ends on 1
July. I saw the yearly closings during my Internship. This was very busy period for both
accounts office staff and the other government employees of various government departments
who are concerned with it.
First Chapter includes the Introduction to the report. The second chapter identifies the
introduction to district account office sahiwal. The third chapter is about SWOT Analysis.
Fourth chapter includes My key learnings. Fifth chapter includes conclusion and
recommendations.
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Chapter 1

Introduction to the Report

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Introduction

1.1 Background of Study

For getting the Bachelor degree, each student is required to spend at least 6-8 weeks as an
internee in a recognized organization. The students are required to work in their specialized
fields.
The main purpose of this program is to make students familiar with the practical work, as
there is great difference between the theory they have learnt during their Bachelor and how
the job is practically done.
Another important aspect of the internship program is that the internee is placed in most of
the departments of the organization through job rotation. It provides them with a glance of
each department, as the working period is too short for learning in detail.

1.2 Purpose of Study

Fulfillment of the degree requirement of the Bachelor, from IUB
• To analyze Functions at District Account Office Sahiwal
• To gain practical knowledge.
• To make relevant recommendations in the light of the analysis made.

1.3 Scope of Study

1. It is a compulsory requirement for the award of a bachelor Degree
2. It will help present and prospective students of the department in making
assignments and writing reports on the organization.
3. It can also provide help to the organizations management in identifying their
Strengths, Weaknesses, Opportunities and Threats.
4. It can also provide assistance to students seeking financial data for analysis.

1.4 Research methodology

The methodology that is adopted for this report is based on both the primary as well as
secondary data. The sources of primary data were:
1. Formally arranged interview/ discussions with Management, Staff of the DAO
2. Personal observations

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The sources of secondary data were;

1. Annual reports
2. Over view of the DAO
3. Official Website of DAO
A lot of time was spent in DAO at each department and the information was collected from
discussions and interviews with Managers Officers.

1.5 Limitation of Study

The span of operation is too large to be covered completely in short time of 8 weeks. Which
does not permit to fully analyze and understand the function, and the privacy policy of DAO
also limits access to the organizational data and information that is termed as confidential.
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Chapter 2

Introduction To District
Accounts Office Sahiwal
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2.1 Introduction
The social and economic growth of any development country depends mainly on the health of
its financial institutions. Similarly, the non-trading organization and government institution or
other charitable institutions like Government school, Colleges, Universities, Hospitals,
Agriculture, Police, Social welfare, etc. which work for only human being not for earning
profit. The main aim of these institutions is to provide good education, health facility, safety
of the people life etc. So these departments work under the District Accounts Office in the
district.
District Accounts Office records all the employees’ records up to the date of appointment to
the date of retirement. All record of the employees of (Government employees) which work
in the district are kept in the ledger accounts, District Accounts Office controls all activities
of the employees and control the incomes and expenditures of the district.
It plays very important role in the District. The salaries of the employees are done through
District Accounts Office and other benefits, like traveling allowances, daily allowances etc.
are given by the District Accounts Office. District Accounts Office also gives the General
Provident Advances Facility to the employees at the time of needs and also the other facilities
to the employees. District Accounts Office plays a very important role in the district and also
in the province for the development of the country. It kept the detailed records of the income
and expenditure of the district. The entire districts work under the Accountant General
Punjab.
The office of the Accountant General Punjab, functions under the Controller General of
Accounts Ordinance, 2001. It is the apex accounting agency at the provincial level. It
prepares and maintains the accounts of the province; lays down the principles governing the
internal financial control for Government departments in consultation with the Provincial
Finance Department; and authorizes payments and withdrawals from the Consolidated Fund
and Public Accounts of the Provincial Government, after due exercise of expenditure controls
(pre-audit). Monthly and annual appropriation accounts, civil accounts and financial
statements are produced by the AG Office under cash-basis International Public Sector
Accounting Standards (IPSAS).
In addition to accounts the AG office has also started producing dashboard based financial
reports for decision-makers in the provincial government.
Payments pre-audited and processed by AG office at Lahore and respective District Accounts
Offices working under its purview in 36 districts include salaries of more than 1.1 million
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government employees, general provident fund payments and pension payments to more than
0.55 million pensioners of the Government of Punjab.

Both accounting and payment processing functions are done through SAP-ERP based
Financial Accounting & Budgeting System. At district level there are respective District
Accounts Offices operating under purview of main AG Office at Lahore. The DAOs are
connected through Wide Area Network to main server at AG Office, Lahore, which in turn is
linked to the central server of CGA at Islamabad.
Essentially, FABS comprises of the New Accounting Model (NAM), and an SAP-ER phased
Information Technology platform. The New Accounting Model (NAM) was introduced in
year 2000, through approval by the Auditor General of Pakistan, to improve the traditional
government accounting system by bringing-in a shift towards modified cash-basis of
accounting, double-entry book-keeping, commitment accounting, fixed asset accounting and
a new multi-dimensional Chart of Accounts. A key objective of FABS (i.e. NAM, along with
the SAP-based IT platform) was to help produce timely, relevant, accurate, reliable and
comprehensive financial reports for the decision makers to enable effective accountability
and better financial governance. Objectives of FABS include effective budgetary
management, financial control, cash forecasting, trend analyses, fiscal administration and
debt management.

The strategic direction of AG Punjab office comprises following components:

• Re-defining itself as a data organization by turning SAP-ERP system/FMIS at AG

Office into a hub of real-time, authenticated financial data of the provincial
government through development of IT linkages with entities generating financial
data on receipts, expenditures, financing, and liabilities and assets of the government
• Enhancing portfolio of cash-basis financial reports produced by AG Office, based on
user requirements and international good practice, inclusive of:
o reporting aligned with SDGs and Environmental, Social and Governance
concerns of the government
o Dashboard based financial reports for decision-makers
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• Integrating analytical reporting on autonomous entities and local governments in

financial reports of the province for ultimate transition to Whole of Government
Accounting (WGA)
• Phased transition to accrual accounting
• Use of IT based solutions, business process re-engineering, and facilitation and
grievance redress services to improve processing of payments related to supplier
claims, payroll, pension and General Provident Fund (GPF) inclusive of measures
like:
o Online submission of claims to AG Office/DAOs
o Monitoring of payment processing through dashboard to reduce rejection-rate
and processing time of claims
o Establishment of facilitation services for customers
• Institutionalization of knowledge management and effective record management
processes
• SAP-ERP based system is being run at more than 500 sites across the country at
federal, provincial and district level. They include self-accounting entities like Pak
PWD, Pakistan Mint, Geological Survey of Pakistan and Directorate of Postal
Accounts. The District Accounts Offices (DAOs) and other district level offices, and
provincial line departments are linked through Wide Area Network (WAN) to servers
at Accountant General office and the Finance Department of the respective province.
All provincial servers are linked through WAN to the federal server lying at the office
of the Accountant General Pakistan Revenues (AGPR) in Islamabad, thereby creating
a seam-less and integrated system capable of providing real-time information on
financial transactions taking place on the system across the country at national and
sub-national level. Among other things, the FABS is being used to process (a)
monthly pay of more than 2.5 million government employees at federal, provincial
and district levels (b) monthly pension of more than 0.5 million government
employees (c) General Provident Fund payments of government employees (d)
thousands of payment claims of government departments across the country on a daily
basis (e) monthly and annual accounts of federal, provincial and district governments
(f) budgets of federal and provincial governments.
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2.2 History
The office of the Accountant General was created according to the provisions of Govt. of
India Act, 1935. The first Accountant General Punjab was appointed on 15.08.1947. Under
Article 168 and 171 of the Constitution of the Islamic Republic of Pakistan 1973, Audit and
Accounts of the Federation and Provinces is Federal subjects with the inception of CGA
Ordinance (No. XXIV of 2001), the CGA has been made responsible for preparation and
maintaining the accounts of the Federation, the Provinces and District Government w.e.f 01-
07-2001.The CGA performs accounting, expenditure authorization and allied functions at
provincial level through respective Accountants General in each of the provinces. Under
provincial AG at district level, there are District Accounts Offices.

2.3 Separation of Audit and Accounts

Office of the Accountant General, NWFP, till 30th June, 1989 was responsible for the local
audit of accounts of the Provincial Government departments and its autonomous bodies and
corporations and performance of audit of projects etc. The audit reports too thereon were
being prepared by this office.
The function of local audit of accounts was however withdrawn from it and assigned to
newly established office of the Director General, Audit NWFP in July 1989. All the
accounting transactions both for the Federal as well as Provincial Government were under the
administrative and functional control of the Auditor General of Pakistan.
The separation of Audit & Accounts departments were promulgated vide Auditor General's
ordinance 2001 and Controller Generals Ordinance 2001, since then the Accounts
Departments were independently kept under the newly created office of the Controller
General of Accounts (CGA)

2.4 District Account Office Sahiwal

It is situated near district courts Sahiwal city where I did my Internship. It is the place where
accounts of government employees, government receipts and payments or expenditures are
maintained. District Accounts offices from all over the country collect and compile the data
about government employees, government receipts and payments. These offices are
controlled by the District Accounts Officer which is the head of these offices. Assistant
Accounts officer (AAO) assists him. Assistant Accounts Officer is assisted by the Senior
Auditors and Junior Auditors. District accounts offices makes closings of accounts on yearly,
half yearly and on monthly basis. Financial year starts from 1 July and ends on 30 June. This
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was very busy period for both accounts office staff and the other government employees of
various government departments who are concerned with it.

2.5 Function of the Office

Main codified functions of Controller General of Accounts as envisaged in CGA Ordinance
2001 are:
• To prepare and maintain the accounts of federation and provinces and district
governments.
• To authorize payments and withdrawals from the Consolidated Fund and Public
• Accounts of the Federal and Provincial governments

Others functions contributing to sound financial management

• Formulating the principles governing the internal financial control for government
departments.
• Rendering advice on accounting procedure for new schemes, programs or activities
undertaken by the Government concerned.
• Providing the information required by the Federal, Provincial or District Governments
(in so far as accounts compiled permit).
• Developing and maintaining an efficient system of pension, provident funds and other
recruitment benefits
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2.6 Organizational chart

2.7 Over View of Administrative Arrangements

This section provides an overview of how the Government of Pakistan is organized
administratively to record, compile and reporting financial information.

2.7.1 Auditor General

The Auditor General’s role and powers are established in the constitution of Pakistan
1973 (Articles 168 to 171) and defined further in Pakistan (Audit and Accounts) Order
1973. While retaining overall responsibility for the accounts of the Federation and
Provinces, this responsibility is delegated to the Comptroller or Controller General, in
order to maintain independence between the audit function and the accounting function.

2.7.2 Controller-general or comptroller-general

The Controller-General is responsible for matters of accounting policy and procedure in
relation to the accounts of the Federation and Provinces, as delegated by the Auditor-General.
The Controller-General is responsible for the overall operations of the accounting offices
within Pakistan Audit department and for the production of timely financial reports of the
Government and its accounting entities. Controller General is now called Comptroller-
General due to the computerized accounting system.
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2.7.3 Accountant generals

The Accountant Generals are established in each Province and the Federal government, and
each report to the Controller-General. These officers are responsible for the overall
operations of accounting offices within their jurisdiction (e.g., a Province), and deal with
matters of accounting policy and procedure in those areas. In case of Federal Government,
the AGPR (Accountant General Pakistan Revenues) is located in Islamabad with Sub-Office
in each of the Provincial capitals and other designated areas. All AGPR Sub-Offices (Now
referred to as Deputy General Pakistan Revenues), report monthly accounting information, in
respect of Federal transactions to AGPR Islamabad. As well as performing a consolidation
function, each AG Office and the AGPR have their own accounting offices for processing
accounting transactions arising within the locality of their office.

2.7.4 District accounts officer

Each Province is further divided into districts. Each district contains its own District
Accounts Office. The DAO’s are responsible for processing all accounting transactions from
the various departments in that district. The DAO’s maintains records of payment and
receipts for Federal and Provincial transactions (In separate ledgers) and submit consolidated
monthly accounts to the respective AGPR sub-office or AG office. In Sahiwal DAO’s branch
Asim Ghani is District Accounts Officer.

2.7.5 Assistant accounts officer

Accounts officer works under the District Accounts Officer. Senior and Junior auditors work
under his command. Or he deals with them. Assistant Accounts Officer and Assistant
Treasury Officer both are the subordinates of District Accounts Officer. AAO is the federal
employer and his head is the Auditor General. Whereas Assistant
Treasury Officer is the Provincial Government employer. His head is Accountant General of
Province. There are five Accountant Generals in Pakistan. These all are responsible to
transfer complete reports to Auditor General of Pakistan. And Auditor General is answerable
and responsible to President of Pakistan. He also deals with trainees. For instance, NIP
trainees and as I went there for my 6 to 8 weeks Bs internship program.

.
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2.8 PIFRA
The World Bank and developed countries provides financial aid to developing countries. But
they were not ready to provide more aid. They said that the system of preparation of accounts
and audit is not proper in Pakistan. They said that there is misuse of financial aids and
chances of manipulation are high. Now World Bank gave a project named as PIFRA which
stands for Project Improvement for Financial Reporting and Auditing. So, they prepare
software for this purpose. The Govt. of Pakistan took an initiative to address the
shortcomings of the financial reporting system and to ensure good governance.
The IMF carried out a survey in Government Accounting in early 1990s, followed by a
diagnostic study sponsored by the World Bank. As a result, the Project to Improve Financial
Reporting and Auditing (PIFRA) was introduced by the Auditor General of Pakistan in 1994.
The main objective of this project is to computerize the whole accounting and auditing
system of the country. The idea behind computerizing the whole system is to generate timely,
accurate and reliable financial statements; to monitor fiscal deficit; to forecast flow of cash;
to manage public debt and to achieve effective financial controls. The accounting system of
Pakistan was inherited from the century old accounting system of the Indian Government

2.9 Pakistan Audit and Accounts Department

In many cases the origin of many troubles in private life as well as the “Public Administration
can be traced back to the fact that money was not spent discreetly so it is not difficult to earn
money as to spend it well”. It is a fundamental principle that every public officer should
exercise same vigilance in respect of expenditure incurred from public fund as a person of
ordinary prudence would exercise in respect of expenditure out of his own purse.
Management of public funds and its control are a task of magnitude and delicacy.
A secretary to the government who is the principal accounting officer in respect of his
Ministry/Department and his subordinate small offices are responsible to ensure that the
funds controlled by him are spent in accordance with the Financial Rules and Regulations.
Financial powers are delegated to the head of department, head of the offices and drawing &
disbursing officers for the purpose.
If these powers are not exercised correctly due to non-observance of rules of financial
propriety, then there is a danger for misappropriation and embezzlement or undue delays in
payment causing misery to the persons concerned. Even the money has been sanctioned by
the parliament, it has to see that the government does not misuse the money or does not go
beyond the sanctioned Limits. For this purpose, there is appointed an Auditor General who
exercises external control over expenditure and audits the government accounts.
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2.10 Who is accountable to whom and for what

In matters of financial accountability both for money and property, such accountability not
only to the officers of high ranks but also to subordinates. This problem of accountability
pervades all activities where funds and property involved whether the institution is a small
shop, a big store, a corporation or a government department. A store manager must see that
his store inventory conforms to the record of income and sale, a cashier must balance his
cash, and a pharmacist must all times account for his supply of medicines. Accountability of
such type is accomplished by a system of internal checks based upon record keeping. Thus,
when a store keeper receives an order to issue a particular item of store, he makes an entry to
that effect in the Issue register and obtains acknowledgement of the person concerned.
Similarly, if a cashier has to pay some money, he has to get acknowledgement for it and to
make necessary entry in cash book.
These entries are checked and rechecked by the supervisors. This procedure may seem quite
elaborate to call for shortening the redtop. But it should be remembered that unless there is a
system of internal check the correct amount cannot be vouch saved. For these reasons in
matter of financial transactions, there is a tremendous amount of record keeping whether in a
private business house or in government offices. Government environment, however,
required and to tolerate more record keeping than private businesses. This is because
government departments are accountable to the public for the details of their operations and
do not have the degree of internal freedom as it is enjoyed in private firms. The public
business is every body’s business, whereas the private business is concerned to an individual
or a group of individuals.

2.11 Reasons for keeping huge record

The main reasons for the government to keep a large number of records are explained below.
i Many government records are required by law rather than the needs of management.
ii There may be more record keeping for its own sake in government because of their
satisfaction.
iii There may be more record keeping for its own sake in government record keeping a
holy rite, because the rite has the sanction of time and was approved by the
forefathers, only the profane would suggest abolition or alterations and
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iv A vested interest record keeping may be easier to defend in government what is the
primary purpose of fiscal accountability namely democratic responsibility to the
public at large.
v A public official has two types of such accountability:
• FIDUCIARY,
• ACCOUNTABILITY FOR THE EXERCISES OF WISDOM AND JUDGMENT
IN MAKING FISCAL DECISION.

The concept of fiduciary responsibility encompasses faith, trust, and confidence, particularly
in the realms of banking, trusteeship, and treasury management. This responsibility involves
both custodianships, where traditional safeguards like bonding, auditing, and regulations
mitigate risks, and managerial discretion, assessing the effectiveness of fiscal officers.
Accountability extends to disbursing officers who handle funds for current services, as well
as collectors of public revenue, scattered across various locations. Every official handling
public fund must demonstrate lawful authorization, accuracy, proper documentation, and
adherence to statutory requirements. Independent audits serve as a final check, ensuring
compliance and detecting errors or misappropriation. Financial transactions must be
supported by thorough documentation, with auditors verifying authority, fund availability,
correctness of calculations, absence of duplicates, and adherence to procedural requirements.
Ultimately, all individuals are accountable not only to their employing agency and
independent auditors but also to a higher moral authority.

2.12 Purpose of audit & accounts department

Now we discuss the purpose of accounts and audit departments

2.12.1 Audit Department

The term “Pakistan Audit department” means the officers and establishment, subordinate to
the Auditor General of Pakistan, that are employed upon the audit or upon the keeping of
accounts of the federal government and of provincial governments. It is very essential that a
watch should be maintained over the financial transactions of government and that the
agency employed for the purpose should be independent of the servants of government who
are entrusted with the realization and utilization of public money or properties. The task is
entrusted in Pakistan to “Pakistan Audit and Accounts department”
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2.12.2 Accounts Department

So far as its audit duties are concerned, the position of the Pakistan Audit department in
relation to government transactions is exactly the same as that of an “Auditor”. It must ensure
that the accounts maintained truly represent facts that the rules and order framed by
competent authority in regard to financial matters have been followed and that the
expenditure has been incurred with due regularity and propriety, and must bring to the notice
of competent authority and irregularity in connection therewith In order to achieve the object
stated above, it is laid down in article 168 of the constitution of “Islamic Republic of
Pakistan”, 1973 that
i There shall be an Auditor General of Pakistan who shall be appointed by the
president.
ii Before entering upon office, the Auditor General shall make before the chief justice of
Pakistan oath in the form as set out in the constitution.
iii The terms and conditions of service including the term of office of the Auditor
General shall be determined by an Act of parliament and until so determined by the
order of the president.
iv A person who has held office as Auditor General shall not be eligible for further
appointment in the service of Pakistan before the expiration of two years, after he has
ceased to hold that office.
v The Auditor General shall not be removed from office except in the like manner and
on the like grounds as a judge of the Supreme Court.
vi At any time, when the office of the Auditor General is vacant or the Auditor General
is absent or unable to perform functions of his office due to any reason, such other
person as the president may direct shall act as Auditor General and perform the
functions of that office.

2.13 Function and Power of Auditor General of Pakistan

The auditor General of Pakistan performs two-fold responsibilities with regard to Accounts
and Audit. He performs his duties through his subordinate Audit and Accounts offices.

2.13.1 Accounts
i The auditor general shall be responsible for keeping of the accounts of the federation
and of each province other than accounts relating to defense and railway.
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ii The auditor general shall prepare annual accounts showing the annual receipts and
iii Disbursement for the purpose of federation and of each province and these annual
reports are submitted to the president and the governor of each province respectively.

2.13.2 Audit
The Auditor General is empowered:
1. He audits all expenditure incurred from the revenues of federal government and of
provinces to ascertain whether moneys shown in the accounts as disbursed were legally
available for and applicable to the service or purpose to which they have been applied or
charged and whether the expenditure conforms to the authority which govern it.
2. The audit all transactions of federal government and of the provinces relating to debts,
deposits, sinking funds, advances and remittance business.
3. To audit all training, manufacturing and profit and loss account and balance sheet in any
department of central or provincial governments.
4. The receipts of any department of federal or provincial governments.
5. The Auditor General of Pakistan oversees the audit of federal and provincial government
accounts, including stores and stock records. They have the authority to establish audit
rules and inspect government offices, including treasuries, to ensure compliance. The
Auditor General can request access to relevant books and documents for auditing
purposes. Audit reports on federal government accounts are submitted to the president
and provincial government accounts to the respective governors, who then present them
to the National Assembly and provincial assemblies, respectively, for discussion and
action through Public Accounts Committees. The Director General Audit conducts audits
according to a schedule, and audit reports highlighting serious irregularities are prepared
annually. These reports are scrutinized and submitted to the respective governments for
further action by the Public Accounts Committees in the legislative bodies. The function
of the Pakistan Audit department is strictly based on the Fundamental principle of audit,
that its primary function is to verify the accuracy and completeness of accounts to secure
that all revenues and receipts collected are bought to accounts under proper heads of
accounts and that all expenditure and disbursements are authorized, vouched and
correctly clarified.
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2.14 Accounting
Accounting in a general sense, may be considered as a process in which the transaction of an
operating entity is documented, classified and recorded, for the purpose of accumulating and
providing financial information essential to the conduct of designated activities. This
definition may be expanded to include such features as system design, which involves the
development of recording methods and necessary internal central; the documentation and
verification of financial transactions; the maintenance of records and books of accounts (book
keeping); the continuous testing of accuracy and propriety of the records, and of the
effectiveness of internal control (internal auditing), the periodic summary review of
transactions practices and procedures (external auditing).

Another definition in some-what different words is also there. Accounting may be defined as
the composite activity of analyzing, recording, summarizing and interpreting the financial
transactions of any economic enterprise.
Government accounting may be said to comprise these same activities for a
government entity that organized legislative, executive and judicial machinery of the state,
which by law governs and provides certain public services for citizens in established
geographical areas.

2.15 Commercial Accounting V/S Government Accounting

The principles of commercial and government accounting differ in certain vital points. The
main aspects of contrast are those of functions, principles, methods and purposes. The main
function of a commercial concern is to trade i.e. to take part in production, manufacturing or
inter change of goods or commodities between different groups or individual and thereby to
make profit. On the other hand, the function of government is to govern a country and for the
discharge of that function to administer the several departments of its activities in the best
possible way.
As far as the principles are concerned, a non-government commercial concern deals
preliminary with the utilization of capital for the purpose of making profit and it is interested
to see at intervals how it stands in relation to its debtors and creditors whether it is gaining or
losing, what are the sources of its gain a loss, and whether it is solvent or insolvent. In order
to obtain ready answer to these questions, the concern has to keep a system of detailed
 18

account. In respect of each person dealt with, each class of asset held, each article dealt in, it
maintains a separate account so that the result of the transactions in each case may be
ascertained.
On the other hand, the activities of a good Government in any country are determined by the
needs of the country. The main branches of its activities being known, it is a matter for
decision what expenditure will be necessary during any year in carrying out, these activities.
After a decision has been reached on these points, it becomes necessary to determine how to
raise sufficient money to meet that expenditure.

The classification in the accounts of the transactions of the Federal and Provincial
Governments is determined firstly by the administrative classification of the activities and
secondly by the classification of the nature of the transactions. The accounting is, therefore,
more elaborate than that followed in commercial accounts. But the immediate objective of
Government Accounts is not to ascertain the gain or loss on the transactions of the
Government as a whole in carrying out these activities.

In the two cases the methods utilized for preparing accounts also differs. It is the Generally
Accepted Accounting Practices (GAAP) in the commercial world to maintain account books
by the “Double Entry” system, which in based on the fact that is every transaction or
financial change two parties or accounts are involved, one giving and the other receiving.
Under that system every transaction requires two entries in the books, one against the party or
account giving and the other against the party or account receiving.
The mass of the Government Accounts is kept by single entry. Single entry system means a
system under which single effect of financial transaction is recorded in book of accounts. For
example, when revenue3 is realized only receipt entry is recorded and its corresponding
effect is not exhibited. Similarly, when a payment is made only the entry concerning the
payment is recorded.
Non-Government commercial accounts are designed to show how much money the concern
can put in to the pockets of the proprietors consistently with the maintenance of a profit
earning standards of the concern. In contrast to this,
Government Accounts are designed to enable government to determine how little money it
need take out of the pockets of the tax payers in order to maintain its necessary activities at
the proper standard of efficiency.
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2.16 Legislative Requirement

Overall control and release of funds is exercised by the legislature. All financial matters in
government are subject to consideration, approval and review by the legislature. The extent
and nature of this control by the legislature may vary among countries for a number of
reasons and may also differ according to the kind of activities involved. The fact, however,
the executives propose remains that plan of expenditure while these are reviewed, sometimes
modified, and approved by the legislature.
The approved proposals are executed as an executive responsibility, and operation are in the
last process, subjected to a past review by the legislature. Executive authorities carry out the
responsibility assigned to them with the funds made available to them by the legislature.
These authorities possess no intrinsic power for raising revenue or incurring expenditure. In
financial matters, they exercise only the delegated authority, which comes from the
legislature, basic law or the construction of the country.

Features of accounting system of Pakistan

Accounting system of Pakistan has several features discussed as under.

Cash Book
Accounting system of Pakistan is based on actual receipts and payments of cash and not on
the basis of accruals of right and obligations. This book is maintained at District Accounts
Office.

Single Entry System

Accounting transactions are recorded on single entry system. Now government has developed
its system to New Accounting Model and doing double entry system with help of computer
software SAP. Now accounting transactions are recording on double entry system.

Basic Accounting Unit

DAO’s of civil Government are the basic accounting units in Pakistan.
These offices perform the dual function of maintaining the accounts and auditing. Therefore,
DAO’s are consisting of Audit staff under the AGP (Auditor General of Pakistan) and
Account staff under the Control of Finance Department of provincial Government.
 20

Closing the Accounts

Formally accounts of the Government of Pakistan are closed annually or at the end of each
financial year. But DAO’s closed its accounts on half yearly and monthly basis which helps
the DAO’s to constitute annually closing. Government financial year starts from 1st July and
ends on 30th June every year.

Compilation and Consolidation of Accounts

After the basic accounting units have put together the figures of Expenditures and receipts
etc. In different heads of accounts these are sent to the accounts and audit department for
compilation. After compilation of accounts these are sent to executive government.

Centralization of Accounts
The government accounts of Pakistan are centralized in the sense that while the receipts are
made by the administrative departments. The need to remove this anomaly has been felt and
duty of maintaining the initial and intermediate accounts is being entrusted to the department
concerned. So far this process has been completed in respect of Defense, Foreign affairs,
Railways, Forest, National savings, Post office, Telephones and Telegraphs etc. Same process
prevails in other departments and is under review and study.

New Accounting Model

NAM has been adopted as the accounting model for Pakistan.
Recording of commitments, fixed assets and certain Assets and Liabilities are the aspects and
features of NAM.

Commitments
Recording of commitments did not have an immediate impact on the cash position but do
have effect on the budget availability.

Fixed Assets
NAM introduces recording of Fixed Assets which would help in effective maintenance and
monitoring. The availability of a list of Fixed Assets and their value would greatly help in
assigning responsibility for the care and maintenance of accounts.
 21

Certain Assets and Liabilities

The recording of certain Assets and Liabilities as part of modified cash basis of accounting
will help in providing useful information for decision making and for disclosure in the
financial statements. The difference should be noted that using the cash basis of accounting or
previous system of accounting helps in controlling the cash against budget amounts and
allows only the statement of receipts & payments to be generated. The Modified Cash Basis
of accounting or NAM on the other hand helps in controlling not only cash but also
commitments against budget allowing the production of statement of Assets and Liabilities
and a cash flow statement.

2.17 Main Functions

Following are the main function performed by the district account office Sahiwal.
• Pension
• Maintenance of G.P. Fund Accounts.
• Pre-Audit of personal claims of all gazetted/non gazetted staff.
• Payment of various loans and advances, civil advances and permanent advances of
non-developed departments in ATD on behalf of Federal government and issuance of
cheques after processing claims on this account at National Bank of Pakistan at ATD.
• Compilation of monthly accounts
Following are areas discussed where I have work during my internship; I have discussed
these areas along with complete work procedures along with document and forms in annexes.
.
2.17.1 GP Fund Section and Its Function
• Maintenance of GP fund accounts of the subscribers.
• Preparing balance sheet.
• Advance and Transfer of GP Fund
• Final Payment.

2.18 Basic function of GP fund

The district accounts officer is responsible to maintain Government Provident Fund accounts
of civil employees of his district like a banker. G.P Fund is a compulsory saving scheme for
 22

the benefit of civil employees. A monthly deduction at fixed rate, pay scale wise is made on
this account form on the basis of salaries of employees. These monthly deductions are
maintained in the individual ledger account in district account office. The total accumulation
along with interest accrued thereon is paid to employee on his retirement from service.

2.18.1 G. P Fund Advance

During the service an employee can take advance from his G.P Fund account for some
immediate reason. These advances are refundable by the civil employee and accounted for in
his ledger account. A civil employee can take three times 80% non-refundable advances
during his entire service on reaching the age of 45years, 50 years and 55 years. These
advances are treated part of final payment of his G.P Fund account. Deductions made from
pay bills are regularly posted in ledger account by the concerned auditor posted in G.P Fund
section under the supervision of assistant account officer.

2.18.2 Procedure to approve advance

A Subscriber is a person who desires an advance out of his G.P Fund. Accounts officer, the
head of accounts office is a person who sanctions such advancer in his favor if admissible to
him.
✓ On the basis of balance sheet of subscriber bill are form by DDO of employee
department proper form is prepared by the department called source -5
✓ The bill along with sanction letter is deposed at pre audit counter of district
accounts office i.e. counter sanction The counter section issues a token/dairy no
✓ Sends claim in G.P Fund section. This sanction passes bill in ledger account of the
subscriber and record a payment order on it. Pre audit claim on claim verification
Performa.
✓ The D.A.O signs this payment order. D.A.O and special seal is embossed on it.
✓ This passed bill is sent to the HR for processing OFF-CYCLE Entry on SAP R/3.
✓ After processing claim on system credit advice are prepare and sent to subscriber
bank.
✓ After that deduction are made from subscriber in case of refundable GP fund
amount return in minimum 12 and maximum 36 installments.
 23

2.18.3 Other Document requirement

The following documents are essentially be furnished to DAO for Temporary Advance
The important information given below
• Pay Bill (for BPS 16 and above).
• Source-5 duly completed in all respects.
• Sanction from the competent authority mentioning therein Number & date
• Copy of last Balance Sheet
• Copy of Computerized NIC
• Number & date of Credit Memo balance thereby transferred from other DAO/AAO.

2.18.4 G. P Fund Transfer Case

• Name & designation.
• G.P Fund Account Number.
• Personal Number.
• Copy of Computerized NIC.
• Copy of last Payroll.
• Application duly signed by subscriber
• Number & date of the balance transferred from any other DAO/AAO.
• Copy of Last Pay Certificate (LPC).
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CHAPTER 3

SWOT ANALYSIS
 25

3. SWOT ANALYSIS

To carry out the SWOT and financial analysis of the Account Office through the help of
calculating the horizontal analysis is a situational which includes
STRENGTHS WEAKNESS OPPORTUNITIES THREATS
That affects the organization performance.” The overall evaluation of a company Strengths,
Weakness, Opportunities and Threats is called SWOT analysis.
SWOT is a very important analysis for better implementation of over mission. Its goal is
maximized over strength and opportunities. And minimize weakness and threads

3.1 STRENGTHS
• AG is one of the old offices in the province. Work for the longer period of time in the
province.
• DAO Perform alternative duties at the time needed.
• The employee of the AG. Are offered reasonable monetary benefits are given i.e.
EID-UL-FITAR AND EID-UL–AZAH .This serves as additional benefits and
competency for the source of motivation for the employee.
• It has broad bases network of branches throughout the province, also one office in
every district. The subscribers are provided services at their nearest possible place to
confirm subscriber’s satisfaction.
• The employee of the AG office is strict followers’ rules and regulation imposed by the
AG. The discipline environment at office bolster is image and also enhances the
overall output of the organization.
• The working condition in AG office branch here is very conductive and favorable for
batter output.
• The office enjoys a good plus point when it come to the employee officer relationship,
the hearing as removing of discrepancies if any, between the employees and between
the officer and employee.

3.2 WEAKNESS
• The strong political hold of some parties and Government and their dominance is
affecting the Account office in negative way they have to provide loan under the
pressure, which leads to uneven and adjusted feeling in the office employee.
 26

• The promotion and allowances etc. in office are often powered by senior’s favoritism
or depends upon their wills and decisions. This adds to negative factors, which
dominate the employees thus resulting in affecting their performance negatively.
• The Accounts office lack the strength of being powered by the network of computers,
which have saved time, energy and would have lessened the mental stress, the
employees have currently, this would add to the strength if it were powered by
network of computers.
• The Accounts office lacks the modern equipment’s. Even if there is any equipment,
they lack to fall in the criteria of being rearmed as update and upgraded.
• The work load in the Accounts office is not evenly distribute and the work load tends
to be more on some employees while other abscond away from their responsibilities,
which serve as a demodulation factor for employees’ performance above average
works.

3.3 OPPORTUNITIES
• In the organization where the weakness and also there some opportunities are existed.
How the organization can achieve the opportunities? The opportunities are necessary
for the betterment of the organization.
• The world today has become a global village because of advancement in the
technologies, especially in communication sectors. More emphasis is now given to
avail the modern technologies to work batter and improve their performances.

3.4 THREATS
• In the organization where the opportunities are available and there also threats. The
threats can disturb the overall performance of the organization so that is the quality of
the organization how he can handle the threats of the organization and save the
goodwill of the organization. In all organization threats are exist, the organization
faces the threats all the time.
• My learning experience as an intern in a district account office likely provided you
with valuable insights into financial management, record-keeping, and administrative
processes within a government organization. I may have gained practical skills in
budgeting, auditing, and financial analysis, as well as an understanding of compliance
with regulatory requirements and procedures.
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CHAPTER 4

KEY LEARNING
 28

4. MY LEARNING EXPERIENCE

My learning experience as an intern in a district account office likely provided me with

valuable insights into financial management, record-keeping, and administrative processes
within a government organization. I may have gained practical skills in budgeting, auditing,
and financial analysis, as well as an understanding of compliance with regulatory
requirements and procedures.

Weeks 1-2: Orientation and Introduction

During the first two weeks of my internship, I underwent orientation and familiarization with
the district account office's operations. I received an overview of the organizational structure,
met with key staff members, and became acquainted with the office environment.
I continued my internship at the district account office, focusing on various tasks and projects
assigned to me. I had the opportunity to learn and contribute to different aspects of financial
management and administrative processes within the office.

Key Learning:
• Introduction to financial management practices in government organizations.
• Understanding the role of the district account office in budgeting, auditing, and
financial reporting.

Weeks 3-4: Hands-on Training in Financial Procedures

In weeks three and four, I began hands-on training in various financial procedures and tasks
within the office. I shadowed senior accountants and participated in day-to-day activities
related to budget preparation, record-keeping, and financial analysis.

Key Accomplishments:
• Assisted in preparing budget reports for the upcoming fiscal year.
• Updated financial records and documentation for auditing purposes.
• Conducted basic financial analysis under supervision.
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Weeks 5-6: Project Involvement and Skill Development

During weeks five and six, I took on more responsibilities and actively contributed to
ongoing projects within the district account office. I applied the skills and knowledge gained
in the earlier weeks to tackle real-world financial challenges.
Key Activities:
• Conducted independent research on government financial regulations and policies.
• Participated in project meetings and provided input on financial decision-making.
• Developed proficiency in using accounting software for data analysis and reporting.

Weeks 7-8: Final Projects and Reflection

In the final two weeks of my internship, I focused on completing final projects and reflecting
on my overall learning experience. I consolidated my learning, identified areas for further
improvement, and prepared for the conclusion of my internship.

Key Reflections:
• Enhanced understanding of government accounting principles and practices.
• Improved skills in financial analysis, record-keeping, and documentation.
• Appreciation for the importance of teamwork and collaboration in achieving
organizational goals.

4.1 CHALLENGES FACED

Complexity of Financial Systems: Encountered challenges in navigating the
accounting software and understanding complex financial procedures .Overcame
these challenges through guidance from colleagues and self-directed learning.

Some specific aspects of your learning experience may include:

i. Familiarity with accounting software and systems used in government offices.
ii. Exposure to financial reporting and documentation procedures.
iii. Understanding of government financial regulations and policies.
iv. Collaboration with colleagues on financial projects and tasks.
v. Development of communication and teamwork skills in a professional
environment.
vi. Observing the day-to-day operations of an account office and how financial
decisions are made.
vii. Problem-solving and critical thinking in addressing financial challenges or
discrepancies.
viii. Reflecting on my internship experience. It can help me to identify areas of
growth, skills acquired, and insights gained, which can be valuable for my
personal and professional development.
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CHAPTER 5
CONCLUSION AND
RECOMMENDATIONS
 31

5.1 CONCLUSION
"In conclusion, my internship experience at the district account office has been immensely
rewarding and insightful. Over the course of eight weeks, I've had the privilege of delving
into the intricacies of financial management, record-keeping, and administrative processes
within a government organization. From orientation and hands-on training to project
involvement and final reflections, each phase has contributed significantly to my professional
growth and development.

Through guided mentorship and practical application, I've acquired practical skills in
budgeting, auditing, and financial analysis, alongside a deep understanding of compliance
with regulatory requirements and procedures. The complexity of financial systems posed
challenges, but with perseverance and support from colleagues, I've successfully navigated
through them, emerging with a heightened proficiency in using accounting software and
addressing financial discrepancies.

Moreover, active involvement in projects and collaborative efforts with team members have
not only honed my technical skills but also emphasized the importance of teamwork and
communication in achieving organizational goals. Reflecting on my journey, I've gained a
newfound appreciation for the role of government accounting principles and practices, and
I'm equipped with improved skills in financial analysis, record-keeping, and documentation.

As I move forward in my career, I carry with me not only the tangible outcomes of this
internship but also the invaluable insights and experiences that will continue to guide my
professional endeavors. I'm grateful for the opportunity to contribute to the district account
office and am eager to apply the knowledge and skills gained to future challenges and
opportunities in the field of financial management."

This conclusion encapsulates your internship journey, highlighting your growth, skills
acquired, and readiness to apply your learning’s in future endeavors.
 32

5.2 RECOMMENDATIONS
There should not be any abrupt policies by the upper management, as this practice hurts the
subscriber’s confidence in the Accounts Office.
• Required qualified staff should be provided to the accounts office in order to improve
the functioning of the office.
• It should like to be suggested that at least all the Districts of the Accounts offices
should be fully computerized in order to expedite the dealing process among the all ADO and
their subscribers.
• Daily records should be interred directly into these computers, it will not only reduced
transaction time, will increase the accuracy but also be efficient as well, not only it will be
economical but will also reduce the extra burden of work of the office.
• It will also help in reducing the use of excessive paper work.
• Good relationship among staff member leads to the peak performance of the any
organization. I observed that the staff relationship was normal otherwise but some time it is
noticed that there existed a little consistency among the staff member.