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8/13/2019 Pfm in Bihar

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Centre for Good Governance

Public Financial Management Projects

In Government of Bihar


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Our vision

To be a world class institution to guide

governance reform

To be a think tank to foster growth-oriented and people-centric governance

To leverage e-Governance for improving

service delivery to the citizens


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Positions & ProfilesResource Group Director Qualification Areas of Expertise

Dr Rajiv Sharma, IAS

DG, CGG

Ph.D.

(Engineering & Public Policy),

Carnegie Mellon University,

USA;

Urban Administration

Urban Development,

Infrastructure Development

Project Management, Governance

Management Development.

M. Sivaramakrishna

Dy. ED, CGG

B.Tech, IIT, Mumbai

MBA, IIM, Ahmedabad

Strategic Planning

Financial Management

Service Management

A. Srinivas Kumar, IA&ASDy. ED, CGG

M.A. (Economics) Public Financial Management andAccountability.

Dr. S. Ramnarayan

Director, Change

Management Resource Group,

CGG

Ph.D. Organizational

Behaviour, Case Western

Reserve University

Change Management, Leadership,

Organization Behaviour

M. BrahmaiahDirector, Financial

Management Resource Group,

CGG

M.Com.,Kakatiya University Budget, Accounting & Auditing Reform,

State Financial Accountability

Assessment,

Local Bodies Financial

Accountability Assessment.


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Working Relationships : NationalNational

Dept of Personnel Training Model Code for Good Governance

Good Governance ToolkitIAS Training Restructuring Study

Review of Foreign Training Programme for Civil Servants

National Agenda for Judicial and Legal Reforms

Development of National Public Service Law

Handbook on Citizens Charters

Capacity Building for Citizens Charters in States

Strategic Review of District Administration in IndiaNational Implementing Agency for Access to Information

Dept of Administrative Reforms &

Personnel Grievances

Process Reengineering for Service Delivery Improvement

Machinery of State Government Study

Ministry of Housing & Urban

Poverty Alleviation

Researchers Colloquium on Urban Poverty Alleviation

Integrated Poverty Monitoring System

National Institute of Urban Affairs

(NIUA)

Indo-USAID Fire (D) Training Programmes

Ministry of Urban Development e-Municipality (In association with National Institute of Smart

Government)

Ministry for Home Affairs INSTAXX: e-Governance application for Country-wide Instant

Alert Network (CIAN)


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State Governments (Relevant to Southern region only)

Andhra Pradesh

Strategic & Performance Innovation

Unit (SPIU), MA&UD Dept, GoAP

APPMSDIP in 12 Key Departments

Governance Reform Programme I-2002-06- Establishment of

strategy, performance and innovation units in key departments

Governance Reform Programme II-2006-09- Institutional reforms

for sustained poverty reduction

Kerala

MGP, Government of Kerala Development, Training & Implementation of Comprehensive

CitizensCharter in Pilot LSGIs

MGP, Government of Kerala Developing Systems for Social Audit

DSP, Government of Kerala Development of Grievance Redressal Mechanism

Centre for Management Development,

Trivandrum

Strategic Alliance

IMG, Trivandrum RTI Implementation (As part of the UNDP-DoPT project on NIA)

Karnataka

Indian Institute of Management,

Bangalore

Strategic Alliance

State ATI, Mysore RTI Implementation (As part of the UNDP-DoPT project on NIA)

Tamilnadu

Anna Institute of Management, Chennai

(State ATI)

RTI Implementation (As part of the UNDP-DoPT project on NIA)

Working Relationships : State Governments


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International Linkages

Maxwell School, Syracuse University

Civil Services College, Singapore

Strategic Alliances

Donor Agencies The World Bank

Department For International Development (DFID),UK

United Nations Development Programme (UNDP), India

Asian Development Bank (ADB)

United Nations Online Network in Public Administration

and Finance (UNPAN)


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e-Justice: UNDP funded project for bringing legal awareness among the

rural women Machinery of Government Study An inter-state and inter-country study

funded by DFID

Local Bodies Accountability Assessment An inter-state and inter-

country study funded by DFID

ADB-sponsored Training Programme on e-Governance China, Mynamar,

Cambodia, Thailand, Laos and Vietnam

South Asia Resource Centre on Social Accountability in partnership with

the World Bank (SASANet)

Training on Community Score Card Sri Lanka

Key Issues of Sub-National GovernmentsExpenditure Study

International Linkages Projects


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e-Projects

Accrual based Accounting through ERP system

at MCH

Online Grievance Redressal Tracking System

Urban Water Supply Information System

Model Towns Information System (INDIRAMMA)

Water Quality & GE cases Monitoring System

Project Monitoring System

Web-enabled GIS system for QutubullapurMunicipality: APUSP


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Training Programmes

Client Programme Areas Knowledge Areas

Indo-USAID FIRE (D)


City Development Strategy

Social & Environmental Impact

Assessment Urban Financial Management

Accrual based Accounting &

budgeting

e-Governance Applications

GIS Applications

Change Management

Project development &

Implementation Land use & Development Planning

Using Land as a resource

GIS Applications

Digitisation

Mapping Land records

Land use & Development Planning

Using Land as a Resource

Reforms and Human

Resource

Development

Process Re-engineering

Change Management

Leadership Development


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Mapping of Local Network Institutions: Public Sector

Dr Marri Channa Reddy Human

Resource Development Institute of AP

(State ATI)

Urban Governance, Municipal Accounts &

Budgeting, Revenue Management, Public Health

and SanitationAdministrative Staff College of India

(ASCI)

Service Delivery, Management Development

Programmes

Engineering Staff College of India

(ESCI)

Design & Infrastructure, Urban Services

Regional Centre for Urban &

Environmental Studies

Urban Poverty, Management of Finances &

Accounts

Environment Protection Training

Research Institute (EPTRI), Hyderabad

Environmental Planning, Techniques in SWM

ICRA Management Consulting Services

Limited (IMacs)


Institute of Public Enterprise, Hyderabad Service Delivery

Centre for Good Governance e-Governance, GIS, Accrual based Accounting

National Remote Sensing Agency,

Hyderabad

GIS Applications


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Mapping of Local Network Institutions - Private Sector

Lok Satta Local Government Legislation

PRIYA Local Government Legislation

CRISIL Credit Enhancement

Institute of CharteredFinancial Analysts of India

(ICFAI), Hyderabad

Costing of Services

CII Private Public Partnerships

Indian School of Business,Hyderabad

Change Management, PublicSector Management

Dr. Reddys Laboratories Livelihoods


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Mapping of other Network Institutions

Kerala

(i) Centre for Management Development, Trivandrum

(ii) Kerala Institute of Local Administration (KILA), Trivandrum

(iii) IMG, Trivandrum

Karnataka

(i) Indian Institute of Management, Bangalore

(ii) ATI, Mysore

(iii) Janagrahaa, Bangalore

Tamil Nadu

(i) Anna Institute of Management, Chennai


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GoB Studies

Treasury Rules FinancialRules

Pension CodeBudget ManualIT System Audit

Internal AuditGPF Study

Public Financial Management


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Modernization of

Treasury Code of Government of Bihar


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Objective of the workshop

To refine the Bihar Treasury Rules

with active participation of the

participants


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Treasury Code-Genesis

During British rule, treasuries were set up with well laid down

rules. The first treasury was established as early as 1794

Treasuries doubled as banks, held custody of valuables such as

stamp paper, opium, etc.

Today, a Treasury functions as a common service provider for

receiving and making payments on behalf of government


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Purpose of Treasury

Treasury Code serves as a primary source of reference for the

Treasury Officers. It deals with:

internal controls in withdrawal, payment, custody of monies, etc.

responsibilities of officers who receive and disburse money onbehalf of government

provides specimen forms in which bills have to be presented and

returns to be furnished to various authorities


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Comparison of the codes of Different States

As a first step towards revision, Consultants have reviewed Treasury

Codes of:

West Bengal,

Andhra Pradesh,

Tamil Nadu,

Karnataka,

Maharashtra,

Central Treasury Rules of GOI and

Bihar Treasury Code.

Contd


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CGG Team visited Karnataka and Maharashtra to study the

working of treasuries in those States.

Bihar, Maharashtra and W.B. are similar while Tamil Nadu, Andhra

Pradesh and Karnataka codes are largely similar

BTC has been commonalities with those of Maharashtra & WB


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Need for the revision

The Treasury Codes revised in

Outdated due to many changes that have taken place, particularly, a

treasury does not carry out banking function anymore and due to

computerization of its operations, it has also become an accounting unit

Karnataka Maharashtra Bihar AP T N WB

NA 1968 1970 1983 1992 2005


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Obsolescence of Rules

Many provisions in the treasury rules have become outdated due

to changes that have taken place in the last four to five decades;

As the rules have not been revised keeping with the changes they

are today accompanied by a large number of instructions /

decisions

Sometimes the practices are at variance with rules


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The Current Task

The revision is done not only to update the existing rules but also

to arrive at an ideal format for the code, the structure of which

would enable easy reference to the rules


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Administration, Accounts and Computerization

Status of Bihar Maharashtra W.B. T.N. AP Kar

Control over

Treasuries

FD DAT DTA DTA DTA DoT

Compilation of

Accounts by AG

Primary Primary Primary Secondary Secondary Secondary

Computerization of

Treasury Functions

Computerized

Software is

developed andmaintained by

NIC

Computerized

NIC has

developedsoftware in

DB.II

Web based

software

Computerized

Included in TR

(Appendix-10).

Compilation

of accounts.

Automated

Treasury Billpassing

system

(ATBS) has

been

implemented

in 2 districts

Computerized &

connected with

DTA and

Finance

Computerized

computerized

& connected

with the DoT.

Uses Oracle

data base


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Methodology for Withdrawal of Moneys from the

Government Accounts

Treasury/PAO Bihar Maharashtra WestBengal

TN AndhraPradesh

Karnataka

PAOs No PAO Cheque

Drawing

System

Cheque

Drawing

Cheque

Drawing

Cheque

Drawing

Cheque

drawing

District

Treasuries

Bill

Drawing

Cheque

Drawing

Cheque

Drawing

Bill

Drawing

(Switched

over to

cheque

drawing in

2 districts)

Bill

Drawing

(Switched

over to

cheque

drawing in

2 districts)

Cheque

drawing

Sub-Treasuries BillDrawing

Bill Drawing No SubTreasury

BillDrawing

BillDrawing

ChequeDrawing


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Changes made

the criterion whether a rule is laying down a lasting and stableprinciple or practice is adopted

Notes, instructions including government decisions form an integral

part of the Rules and are incorporated into sub-rules

Lengthy rules divided as main rules and sub rules

Rules modified and abridged in simple language

Where repetition or similar rules they are integrated

Contd


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Where a footnote or executive instruction or government decision

only reiterates the already established rule, such references aredropped.

Where any of them modifies the prevailing rule, it is incorporated

into the rule.

Executive instructions are given in the end of the Volume I relate to

the period from 1998 onwards. The entire letter/note is reproduced

instead of its gist. The gist of these instructions is incorporated in the

relevant rules wherever necessary.

Some instructions actually are in the nature of rules and naming

them executive instructions is a misnomer. Such instructions areincorporated as rules.


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To avoid duplication between treasury rules, financial rules and

account code, it is proposed that where a BTR does not deal with

either working of the treasury or about receipt or withdrawal of

government money, but is more in the nature of instructions to

government officers, such rules are deleted & provided in FR if they

are already not included in it

It is suggested that the Bihar Treasury Code be called Bihar

Treasury Rules 2008

Revised BTC be only one book so that referring to Rules, forms and

appendices is convenient

Suggested Methodology


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Rule Referencing Methodology

Adopted 5 tiers as below.

1. Chapter

2. Section

3.Sub-section

4. Rule

5. Sub-rule or Note or Instructions


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Organization of Chapters

Existing Chapters Revised Chapters

1 Introduction 1 Introduction

(Remove general principles and take them to

relevant chapters)

2 General Organization 2 General Organization and Working of Treasuries

3 Receipt of Monies 3 Receipt and deposit of money into government

account

4 Custody of Monies Deleted as it deals with non-banking treasuries which

are not there anymore

5 Withdrawal of monies from

government account

4 Withdrawal of monies from government account

6 Special Rules for banking treasury Incorporated in relevant chapters

7 Special Rules for PWD, etc. Incorporated in relevant chapters

8 Public Debt Deleted (Taken it to chapter4)

9 Deposits 5 Deposits

10 Loans and Advances 6 Loans and Advances

11 Transfer of money Deleted

12 Other remittances Deleted

13 Executive Instructions Deleted

7 Add - Inter governmental transactions


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Sub Treasury to mean Treasury

Expecting that GOB would continue the present practice

of independent sub treasuries, Treasury is defined as

including sub treasury.


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Deletion of Obsolete Provisions

All the Non Banking Sub Treasuries were converted into

banking treasuries as a matter of policy by GoB rendering

related rules in BTC obsolete

West Bengal brought out new Treasury Rules in 2005 in which

the said rules have been removed

Changes made to Rules, Appendices, Forms of old BTC

Chapter wise are in the coming slides.


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Chapter I

Name : Introduction

Topics dealt : Short title and commencement, definitions, Main rules

relating to various chapters

No. of rules : 40 (1 to 40)

No of forms :

No. of appendices : 1 (Note below Rule3)

No. of SG decisions : 20

No. of rules deleted : 10 (5,6,8,11,30,36 to 40

Reasons for deletion : Conversion of non-banking treasuries into banking

treasuries, Upgradation of sub-treasury into treasury and

out-dated provisions

No. of forms deleted : NilNew rules added : Nil

Best practices :


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Chapter II

Name of Chapter : General Organisation and working of treasuries

Topics dealt with : General organization, Treasury accounts, Treasuryinspection and Miscellaneous provisions

No.of rules : 46

No.of forms : 7

No.of Appendices : 5

No.of SG decisions : 1

No.of rules deleted : 17 ( 54 to 59,61,62,65,66,72,74,81,81A,82,82A,84)

Reasons for deletion : Conversion of non-banking treasuries into bankingtreasuries, Upgradation of sub-treasury into treasury and

out-dated provisions

No.of forms deleted : 6 ( BTC form 2 to 5,5A and 5B)

New rules addes : Nil

Best practices

adopted: Monthly accounts to be signed by TO as in other States.

Formation of Director Treasuries and Accounts prevalent

in most of the States suggested


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Chapter III

Name of Chapter : Receipt of Government Moneys and payment of such moneysinto the Public Account of the Province

Topics dealt with : General rules, Procedure for paying & receiving moneys intoGovt. Account and granting receipt

No.of rules : 32

No.of forms : 4

No.of Appendices : NilNo.of SG decisions : 5

No.of rules deleted : 21 ( 85 to87, 92 to 94,100,103,105 to 116)

Reasons for deletion : non-banking treasury .&sub-treasury provisions

No.of forms deleted : 3 ( BTC forms 6,7 and 9)

New rules added : Nil

Best practices adopted :


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Chapter IV

Name of Chapter : Custody of moneys relating to or standing in thePublic Account

Topics dealt with : Cash in Departmental chests, Cash balance intreasuries and verification of cash balance

No.of rules : 19

No.of forms : 4

No.of Appendices : NilNo.of SG decisions : Nil

No.of rules deleted : 19 ( 117 to 135)

Reasons for deletion : Conversion of non-banking treasuries into bankingtreasuries.

No.of forms deleted : 4 ( BTC forms 10 to 13)


Best practices adopted : Nil


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Chapter V

Name of Chapter : Withdrawal from the Public Account

Topics dealt with : General rules, Personal claims of Government servants, Bills of GazettedGovernment servants, Bills of non-gazetted Government servants,

Contingent servants, Pension payments, Payments of purchase of stores,

Miscellaneous payment

No.of rules : 301 (136 to446A)

No.of forms : 54

No.of Appendices : 12 (out of which 8 deleted)

No.of SG decisions : Nil

No.of rules deleted : 87

Reasons for deletion : Non-banking treasury provisions, sub-tresury rules, BFR

provisions and out-dated rules

No.of forms deleted : 22


Best practices adopted : Lapsed deposits refund-.Authorisation from AG not required-rule modified.System generated Cheque payments instead of sending bills to Bank

suggested, Personal deposits period of closure reduced to items dormant

for 2 consecutive years-rule modified


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Chapter VI

Name of Chapter : Special rules for Bank treasuries

Topics dealt with : Payment into Bank, Withdrawal from Bank, Daily accounts

and returns, Miscellaneous

No.of rules : 35

No.of forms : 1

No.of Appendices : Nil

No.of SG decisions : 7

No.of rules deleted : Entire chapter removed-15 deleted (447, 448, 450, 451, 453, 467 to 471, 477 to 481

Integrated into other chapters : Ch2- 6 rules, Ch3-2 rules and

Ch4- 12 rules

Reasons for deletion : No need for separate chapter as all are banking treasuries

No.of forms deleted : Nil


Best practices adopted : New appendix 8 on letter of credit added


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Chapter VII

Name of Chapter : Special rules applicable to particular departments

Topics dealt with : Public Works Dept, Forest Dept and Military Secretary tothe Governor

No.of rules : 31

No.of forms : 7

No.of Appendices : 1 (Appendix 13)


No.of rules deleted : Entire chapter removed- deleted 4 (484, 488, 493 and 507)Integrated in to new Ch3-8 rules; new Ch4-19 rules

Reasons for deletion : Separate Chapter considered superfluous

No.of forms deleted : 7




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Chapter VIII

Name of Chapter : Public Debt

Topics dealt with : Permanent and temporary loans, Floating debt and otherobligations

No.of rules : 19

No.of forms : 5



No.of rules deleted : 19 integrated into new Chapter 4-Withdrawal fromGovernment account

Reasons for deletion : Separate chapter not considered necessary

No.of forms deleted : 2 ( BTC forms 70A and 72)




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Chapter X

Name of Chapter : Loans and advances

Topics dealt with : General, Special rules applicable to differentclasses of loans and advances

No.of rules : 12

No.of forms : 1 (Form 48)



No.of rules deleted : Nil

Reasons for deletion : Nil

No.of forms deleted : Nil

New rules added : NilBest practices adopted : Nil


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Chapter XI

Name of Chapter : Transfer of moneys standing in the Public Account

Topics dealt with : Introduction, Transfer through currency, Remittancesof coin and notes

No.of rules : 57

No.of forms : 5

No.of Appendices : NilNo.of SG decisions : Nil



No.of forms deleted : 5 ( BTC forms 77 to 81)New rules added : Nil



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Chapter XII

Name of Chapter : Other remittances through Government

Topics dealt with : Reserve Bank of India remittances, Record of drawingand encashment, other rules and special rules for

remittances of sepoys and policemen

No.of rules : 42

No.of forms : 1

No.of Appendices : 1No.of SG decisions : 2



No.of forms deleted : 1 ( BTC forms 82)




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Chapter XIII

Name of Chapter : Executive instructions

Topics dealt with : Introduction, Provision of funds at treasuries, currencychests, Coin, Currency and bank notes, cipher code and

treasury agencies

No.of rules : 97

No.of forms : 13

No.of Appendices : 6No.of SG decisions : Nil

No.of rules deleted : 97 (717 to 813)


No.of forms deleted : 6 ( BTC forms 22 to 27)




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There are 27 Appendices in Bihar Treasury Code

Five appendices viz. 23 to 27 are not printed relating to

Coinage Rules of Reserve Bank of India as no NBSTs exist

These appendices are no more required and hence deleted

Deleted11 appendices from the remaining and added 3

appendices

In the New BTR there are 14 Appendices

Appendices


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Appendices Deleted

Sl.

NO

Old

No.

Title of appendix. Remarks

1 6 Questions for Sub divisional Treasury

inspections.( Rule75 )

Since all sub treasuries are given the status of

independent Treasuries,

2 7 List of Government servants authorized to

draw bills except in the education and

industries department. (Rule 137)

It is enough if it is mentioned in the Rule Drawing

and Disbursing Officer. Hence it is appropriate if

the list is appended to financial rules as this is

nothing to do with the functions of treasury officer..

This also does not exist in WB Code

3 8 List of authorized the officers who can sign

and countersign bills in the education andindustries department. (Rule 137).

-do-

4 9 Contingent charges that required

countersignature by superior officer. (Rule

137).

This has nothing to do with the functions of treasury

officer and it will be appropriate if taken to

Financial Rules. Further this does not find place in

WB Code also.

5 10 List of controlling officers for the purpose of

the traveling allowance rules of the

department or officers. (Rule 137).

-do-.

6 11 List of Proper Authorities for drawing

and countersigning certain charges payable

at sub-treasuries.{Rule139 (b) }

-do-


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A di Add d


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Appendices Added

Sl.

No

New

No.

Gist of Appendix Reasons for inclusion.

1 Letter of Credit System. Letter of credit system provisions

available in Rule 461 are taken to

Withdrawal of Moneys Chapter on

revised Code. The instructions there

under are kept in the Appendix.

2. Receipts Exempted from Stamp

Duty.

Rule152 provides for exemption of

certain receipts from stamp duty.

The list there under is worth to be an

appendix as in W B Code.

3. Advise list/Register of Payment

Orders.

Government decision 3 under Rule

313. It is found necessary to includedecision as appendix.

Contd.,


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Forms

There are109 Forms in BTC

52 Forms retained

57 Forms deleted

3 Forms required in Rules 80, 250 & 603 added

In new BTRS 2008 there are 55 Forms


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Points for consideration of GOB

Signing of monthly accounts by the Treasury officer

himself for sending them to AG Bihar

Keeping the control of Treasury functions under

separate HOD i.e. Director of Treasuries and Accounts

As the cheques in respect of PWD & Forest

departments are received in Treasury for enfacement

the very bill payment functions be entrusted to

Treasury Officer and should be made responsible for

preparation of accounts and sending them to AG Bihar


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Thank You

Dr. Rajiv Sharma, IAS

Director General

Centre for Good Governance

Dr. MCR HRD IAP Campus, Road No. 25, Jubilee Hills,

Hyderabad, Andhra Pradesh (India)

Tel. No.: (+91- 40- 23541952), Fax No. (+91- 40- 23541953)E-mail: [email protected]

www.cgg.gov.in