CGDA

Accounting System

SYSTEM OF ACCOUNTING OF EXPENDITURE IN DEFENCE

Defence Accounts Department( DAD) is responsible for audit, payment and accounting of all Receipts and charges pertaining to Defence Services and Defence Organizations.

Compilation Work in DAD offices

The accounting information in DAD are classified into various accounting heads as given in the List of Major and Minor Head of Account (LMMH) published by Controller General of Accounts.

The last element of accounting classification in DAD is in the form of code heads. The code-heads are unique identification for accounting transaction which are given by DAD.

The accounting code-heads operated by DAD in respect of Defence Organisations are contained in Classification Hand Book- Defence Services Receipts and Charges (CHB) and code heads other than Defence budget relating to DAD, CGO, BRO, CSD, MOD(Sectt) and Public Account and Contingency Fund of India are contained in Pamphlet of Revenue, Debt and Remittance Heads (RD & R Pamphlet).

Five tier classification of Defence expenditure.

Compared to six tier classification followed in Civil departments, where the object head is the sixth tier of classification, DAD follows 5 tier classification with last tier classification- detailed head- treated as object head.

Sectors

Major Heads (Sub-Major Head in case of Capital Outlay)

Minor Heads

Sub-Heads

Detailed Heads

The codification pattern for detailed code heads under each Minor Head of CHB and R D & R Pamphlet. consists of 7 digits. The first two digits denote category prefix, the next three digits denote the main part of the code head and the last two digit denote suffix to the main code head. There are about 1800 code heads in use in CHB and 900 code heads in R D & R Pamphlet.

Punching Medium and its elements

The basic document that goes into the compilation of accounts is called the Punching Medium(PM). It is the most elementary document prepared in the DAD offices that goes into the preparation of the accounts for the Defence Services. It contains information relating to Month, CDA(code) booking the transaction, classification code head, class of voucher, serial number of the voucher, whether a Receipt or a charge and the amount.

The various class of vouchers and the respective code numbers assigned to them are as under:

Class 1 Cash vouchers.

Class 2 Transfer entries

Class 3 Civil inter-departmental schedules

Class 4 Abstract of receipts and charges

Class 5 Cash accounts

Class 6 Railway bills

Class 8 Defence inter-departmental schedules

Class 9 MES bills paid by main office

Financial Transactions in MoD

1. All the monetary/ financial transactions of the MoD can be grouped under two categories:

(a) Receipts of MoD (inflow of funds into MoD)

(b) Expenditure of MoD (payments from MoD/outflow of funds)

Modes of Settlement of Defence Transactions are as under:

2. The Transactions within, into and out of MoD can happen through following modes:

(a) e-Receipts [e-MRO] and e-Payments: also called transactions on ´cash basis´. Transactions with Non-Governmental bodies/Institutions/ Vendors/ State Govts are dealt with on cash basis.

(b) Letter of Authorization (LoA): LOA refers to the settlement of inter departmental transactions through book adjustment without resorting to cash settlement. It is issued when one Ministry/Department (called Functional Ministry/ Department) utilizes the services of another Central Ministry /Department as its Agent for executing some activity or program.

(c) Settlement Account: Claimant Ministry renders advice on monthly basis, based on vouchers/bills duly accepted by the Paying Ministry, to RBI CAS Nagpur for crediting their proforma accounts and debiting the proforma accounts of Paying Ministry.

(d) Payment Book Debit: Settlement within MOD i.e.[Army/AF/Navy] will be done through PBD Vouchers.

SL NO.	TRANSACTION WITH	MODE
1	Individuals Non-Govt. Bodies and Institutions	Cash Basis
2	MEA (Indigenous Transactions)	Cash Basis/LoA
3	MEA (Foreign Deputation etc.	Settlement Account/LoA
4	Railways, Posts	Settlement Account/LoA
5	Other Ministries/Departments	Cash Basis/LoA
6	State Govt. and Vice Versa	Cash Basis
7	Within MoD (Army/AF/Navy)	Settlement through PBD Vrs.

3. As per an agreement with SBI, all cash payments and receipts of MoD, for which DAD is responsible, will be routed through e-Payment Gateway and "e-MRO portal" of SBI CMP Fast Plus respectively.

( 4. Flow of documents involved in the reconciliation process of receipts, the payment authorisation by PAO, payment by SBI CMP, Settlement/Accounting by RBI, CAS Nagpur:

a. Transaction done through SBI CMP:

MEDIUM	DESCRIPTIONS	PURPOSE
DEBIT SCROLL	All Payments	Confirmation of payments to the beneficiaries
CREDIT SCROLL	All Receipts	Confirmation of receipts to Govt.
DAILY MEMORANDA	All Receipts & Payments.	For settlement with RBI
DMS	Date Wise Monthly Statement	To reconcile the total Receipts & Payments
VERIFIED DMS	Duly verified by the PAO	PAO confirms the correctness of Receipts& Payments
MSS	Monthly Statement of Settlement	To reconcile the DMS with amount settled by RBI
Balance Statement [Summary of Transaction]	Put through Statement with SBI	To reconcile with DMS and MSS

a. Transaction done through SBI CMP:

MEDIUM	DESCRIPTIONS	PURPOSE
ADVICE OF CLEARANC	Advices to RBI for Credit/Debit	To raise Debit/Credit
MEMO OF CLEARANC	Confirmation regarding Credit/Debit	For clearance in the book of PAO
Balance Statement [Summary of Transaction]	Statement Inter Govt. Adjustment [IGA]	To reconcile with Advice of Clearance raised/received

Receipts to MoD [e-MRO]

1. Any receipt into the MoD is accepted on e-MRO through e MRO Portal.

2. The e- Credit Scroll is an electronic intimation of the said transaction having been credited The SBI generates an e-Credit Scroll for each e-MRO transaction carried out through e MRO Portal as receipt of MoD.

Reconciliation of SBI CMP Payments

At the end of the financial year, the amount outstanding in the code head 93/020/91 for SBI CMP will be zero. At any time in a financial year, the SBI CMP transactions is the sum total of following items

(i) The booking under Deposits with RB (93/020/91) made during that financial year

(ii) The bills processed and payments pending either with PAO or SBI CMP Fast Plus

(iii) The rejected payments yet to be processed

The check is always required to be made from April 1st as the payments, credit to beneficiary, rejections and repayments are not necessarily in same month. It´s a continuous process throughout a year.

भारत सरकार | रक्षा मंत्रालय | GOVERNMENT OF INDIA | MINISTRY OF DEFENCE