PERSONAL LEDGER ACCOUNTSDAY – 1 SESSION – I General: Personal Ledger Accounts (also known as Personal Deposit Accounts) broadly fall into two categories, viz., those operated within the consolidated fund of the State and those in the Public Account. The opening of a Personal Ledger Account under the consolidated fund of the State requires the approval of the State Government in consultation with the Accountant General. According to the guidelines issued by the Comptroller & Auditor General of India in his letter No. 443-10/65-61, dt 21.4.61 circulated vide 00A-3961, dt.2.8.61, P.L. Accounts under the consolidated fund can be opened in special circumstances when normal procedure of drawal from the Treasury by presentation of bills proves unworkable in respect of any special scheme under taken by the Government. Further, such scheme should have gross working expenses of an amount exceeding Rs. 5 lakhs in an year and should have considerable receipts. The Personal Ledger Accounts under the Public Account are opened after the sanction of the Government is issued in consultation with the Accountant General. Preamble: Personal Deposit Accounts have been in vogue since the inception of Government accounts or it can be said to be synonymous with accounting system. The origin of Personal Deposit Accounts can be traced in various accounting systems but for discussion purposes in this article we will restrict it to our accounting system, which has been laid down by the British but almost adopted in toto after independence. So, historically it can be said that our accounting system definitely provides for P D Accounts and the Office of the Comptroller & Auditor General of India especially dealt with the provisions of Personal Ledger Account. Truly, PLA is one of the types of PDA. The creation of this facility was aimed at giving more flexibility to Drawing & Disbursing Officers basically to ensure implementation of government policies in a time bound manner. It was actually intended to give support to the Head of Departments for speedier implementation of policies/projects. But of late it has been seen that the purpose of extending this facility is being vitiated so much so that it amounts to misuse. Though it may be said for the benefit of DDO’s that an intention of misusing this facility may be inadvertent, having said so this manner of funding requires a relook. The aim of this is therefore, to deal in totality and present the reader with all the options to make a judgement. Procedure and processes involved in operations of PLA are as below: Definition: The provision for Personal Deposit Accounts is made with the intention to facilitate the administration thereof to credit receipts into and to effect withdrawals directly from the account. This was coupled with pre condition that no withdrawal will result into minus balances therein. PLA essentially refers to those deposit accounts, which are operated by DDO as a banking account in a government treasury. Para 7.6 & 7.7 of Manual of Standing Orders, Accounts & Entitlement of Comptroller and Auditor General of India has defined PLA in the following manner. 7.6 Ordinarily the opening of a banking deposit account or of a Personal Ledger Account is sanctioned by Govt. after consultation with the Accountant General. It is generally recognized that the Govt. should not agree to the opening of such an account unless it is satisfied that the initial accounts of moneys in the Personal Ledger Accounts are properly maintained and are subjected to audit. 7.7 Except where, by law or rules having the force of law, Personal Deposit Accounts are created by transferring funds from consolidated fund for discharging liabilities of the Govt. arising out of special enactments, Personal Deposit Accounts, created by debit to consolidated Fund. This should be closed at the end of the financial year by minus debit of the balances to the relevant service heads in the consolidated Fund, the Personal deposit Account being opened next year again, if necessary, in the usual manner. Looking to the definition, the restraints put for opening of such Personal Deposit Accounts are quite clear and it also tends to discourage any deviation from the codal provisions. 1) What is Personal Ledger Account? Personal Ledger Account is an account, which is opened in the name of a personal/Institution fund with prior permission of government and concurrence from Accountant General, Pr. PAO. There should be an Administrator to operate the Personal General belief that PLA’s have something to do with operation of Government money by any official in his personal capacity is not true at all. Types of PLAs i) There are different categories of the Personal Ledger Account intended to meet other requirements of the Govt’s functions. Public undertakings & Local bodies etc which are directly transferred/created to them by debiting Major heads 3604 Compensation and assignments to Local bodies etc and others likewise. It’s the government money and to be operated in accordance with Government . prior permission from government is necessary. account and will be placed in the Public Account portion thereof. No lump sum amount should be kept under this as per para 192 of Receipt and Payment rules 1983. Management. viz: A. As per law or rules having the force of law for discharge of liabilities of Govt. a. The balances under PLAs falling under latter category must be surrendered to the Govt. account to avoid the lapsing of it is absolutely contrary to the principle of Legislative financial control in letter and spirit. This prior permission cannot be given by government unless concurrence from AG/Pr.Ledger Account. For administering moneys tendered by or on behalf of warrants and attached estates under Govt. Civil & criminal court Deposits in respect of Chief Judicial Authority concerned. (ii) The Personal Ledger Accounts being allowed to be opened broadly under ‘D’ category as mentioned above.PAO/CCA is obtained. out of the special enactments. (iii) Every PLA so authorized to be opened will form part of Govt. For officers commanding units and others concerned in the administration of Public fund or regimental fund. D. PLAs of non Govt. on one pretext or the other are classified under two further sub categories. bodies. In regulatory activities of Govt. E. Such Personal Ledger Account can be opened in the name of a private personal/Institution. But the idea of drawing money out of Govt. C. account or allowed to be lapsed to it in the end of the financial year. B. the receipts are realized and credited to fund or account to be utilized towards expenditure. b. However. Expenses which are classified to other service heads. G is not required. The Treasury Officer/PAO may ask the PLA holder to surrender the cheque book and close the Account. office. the balances in PLA/s do not lapse. Interpretation is that PLAs be allowed to be opened/operated only with the annual approval of Accountant General What are the types of Personal Ledger Accounts? Personal Ledger Accounts are of two types:(i) (ii) (iii) Normal PLA/cs where Treasury Officer/PAO in banking account with Administrator. However. receipt by sending a correction memo to A. such amount can be allowed to be carried forward as specified in the account.and after one complete accounting year if it is less than Rs 25/-(vide rule 189 of R&P rules 1983 as Rule 506 of MTR 1968) However. by (ii) above. PLA/cs opened by operation of Account passed by parliament/legislature. it is required to be closed. the permission from A. . For this purpose. if the PLA/c is opened and a lump sum amount is deposited to discharge the liability of government. this rule is not applicable to the deposits concerned by (i) above viz. In respect of the PLA concerned. This can be either done by putting condition while giving concurrence for opening PLA or by means of transfer entry by asking Treasury Officer/PLA holder to send the proposal in the suitable form before the account of the year are finally closed.G. Such accounts are required to be closed at Nil balance by debit to PLA an debit to concern major head. the drawing and disbursing officers are allowed to draw bills for –nil-amount as a special case/types of cases by special order of government. If the PLA holder do not turn upto Treasury the Treasury Officer can give stop payment order to Bank with respect the cheques available in the cheque book and credit the balance to government Accounts misc. The major head in consolidated funds stands debited and contra credit is official to PLA/c. Where the consolidated fund is debited and amount is transferred to PLA/c by means of drawal of a bill or by means of transfer entry. But if the PLA/c is not operated for more than three years.rules and with due care. These balances in general deposit account lapse to government after three full accounting years if balance is more than Rs 25/. L. by the parties/officials nominated for operation of the same. moneys directly to the Treasuries. Volume-II. account is operated. account as debit to the sub-head “Advances” by per contra credit to the sub-head “Suspense” under the relevant minor head of account.L. P. balances carried forward proforma only. Returns due to Accountant General’s office:From the Treasury:1) Plus and Minus Memoranda with the accounts received from the Treasuries as required under Art. Money is drawn by the administrator by presentation of cheques on the treasury in which P.L. account are debited to “Suspense debit” under the account and all receipts credited to “suspense credit”.L. Account under the Public Account is opened by credit to the accounts concerned. Accounts under the Public Account:P. Accounts under the Consolidated Fund: A separate Personal Ledger Account is opened under the service head for each scheme. Amount advanced by the Government for operation of the scheme. 3) All the Treasury officers are required to obtain from each Administrator an annual certificate of balances and forward the same to the Accountant General explaining the reasons in detail for difference if any between the balances as per their books and that of the Administrators. . 120 of Account code.L.L. They draw money by presenting cheques on the Treasury Officer. As the service heads under which the P. All drawals by the Administrator from the P.L. 2) An extract of the Register of receipts and payments maintained in Form TA-45 in the Treasury/Sub Treasury should also be received monthly supported by the original paid cheques.SESSION – II Accounting Procedure:P. Amount advanced by the Government for operation of the scheme is drawn and credited to P. account is operated is closed to Government account. G. Different state governments may have different documents and monetary limits may also change. circulated in 00A-5048. giving details of A.R. giving details of A.2. 25.From the Administrators Except those which are operated for private bodies. and date.and below have been retained by him (total amount to tally with the figure shown against item (1) of the Expenditure side). Finance Department Memo dt. every Administrator should send a detailed account monthly to the A.) a) Statements showing details of sale proceeds of stores and stock and other receipts separately indicating the challan number and date (cash memo number and date also in respect of cash collection) from whom received. dt. Volume I (For March accounts only)..65. b) Statement showing detail of disbursements indicating the cheque number and date.G. 100/ and a certificate signed by the administrator to the effect that sub-vouchers for Rs100/.’s advice No.C. brief particulars and amount (total amounts to tally with the figures shown against 2 (a) and 2 (b) above of the receipt side). brief particulars and amount paid duly supported with all sub-vouchers above Rs. particulars and amount adjusted against each (Total of statement to tally with the amount shown against item 2 of the expenditure side of the account). The documents to accompany the monthly accounts are enumerated below. office showing the receipts and withdrawals supported by vouchers by 10th of the following month as per instructions contained in Government of Orissa.G. bill No. e) Treasury reconciliation statement closing balance as shown against item 3 of the Expenditure side to be reconciled with the closing balance shown in the plus and minus memo of the Treasury officer (Differences to be detailed under cheques drawn not encashed. d) Statement of debit adjustments by A.’s Advice No. 2) Annual certificate as required under S. 8. particulars and amount against each (Total to tally with the amount drawn against item 3 of the receipt side of the account). 461 of O. (Different State governments may have different documents and monetary limits may also change. .1. c) Statement of credit adjustment by Accountant General.65. to whom paid. cash credited not accounted for by Treasury etc. G. and date.T. and date. The Treasury officer sends to the AG office the plus minus memo as prescribed in Act 1109 Account code Vol. ii) Once the budget has been allocated to some service unspent balances thereof can be transferred to a Personal Deposit Account/PLAs for ensuring its uninterrupted progress. The repetition of such practice will result in accumulation under deposit accounts depriving the consolidated fund and creating scarcity of fund for even the regular and routine functions of the Govt. From this . But the idea of allocation of money with a view to transferring the same to a Personal Deposit Account/PLAs without even conceiving a project does not conform to the intention and spirit of the rules. Budget provisions need not be made for making the payments since government acts as a banker as far as the PLA transactions are concerned.viz budget i) It is evident that the amounts of money transferred to deposit accounts under PLA system go out of the purview of the consolidated fund and to obviate any misuse. 1) How is accounting done? These PLAs form a part of Public Account of Government Accounts.PLA viz .II/Rule 98 of Accounting Rules for trgs 1992. As such no sanction from legislature/parliament is necessary for making payment form PLA viz. If it shows debit balance it is treated as adverse balance and it is necessary to investigate the reasons for overdrawal. It is indeed an extra budgetary reform but for speedier implementation but not a parking facility of funds to the discretion of DDO. And in the statement no 16 of the Finance Account these are shown as follows Opening 8443-CD 106-PD PLA Balance Cr X Receipts Cr Y Payments Dr Z Closing Balance Cr (X+Y-Z) Every Personal Ledger Account must show credit balance. The payment appear under the same head but on debit side. The receipts are accommodated under the Major Head 8443 – Civil Deposits – 106-PD-PLA on credit side. provision for lapsing the unspent balance was made compulsory. This leads to misuse of this facility.a . This will be an essential condition for transparency in Accounts. At the end of the month say by 10 th of next month.the 1st memo Broad sheet of PLA is posting and the Broad sheet figure is worked out which is further compared to the Ledger figure which is derive from Account document is Detail book. it is necessary for the Treasury officer to approach the AG (A&E) and reconcile the balances appearing in their books with that of A Gs office. At the end of the year. these balances must be in agreement with those derived in Treasury Accounts. The plus minus memo is the replica of the Register in form to be prescribed by each State Government. 2) How is reconciliation conducted? The Administrator is allowed to deposit authorised amounts in the Personal Ledger Account during the course of the month. As such. there is no room for disagreement of the balances. Generally the PLA holders are keeping the PLA in simple cash book form or in the forms prescribed in the Departmental Registration. This is an important part in maintaining the Personal Ledger Accounts. The PLA holder will send the balance certificate to AG only when the Treasury Reconciliation is completed. This is an important record and can be said to be a bridge between AG office and Treasury office. If this reconciliation is scientifically conducted. General reason is misclassification. If some difference occurs steps should be taken to reconcile. The reconciliation ensures the correctness in balances in both Initial Accounts and Final Accounts. This reconciliation is necessary as the Treasury rules provide that the balances of the government are the balances which are appearing in the book of AG. closing balance of PLA is worked out. At the end of the year. . Generally the figures must be in agreement. it is necessary to reconcile the receipts which are appearing in the Treasury/PAO Account with those appearing in the records of the Administrator. Travel expenses. office expenses etc).75 Proper watch should be kept over submission of the various returns due from the Treasury Officer and the monthly accounts from the Administrators. The audit sections should maintain the following registers for the purpose:1) Register to watch the receipt of Plus and Minus Memoranda from the Treasuries. Viz. the expenditure which pertains to Revenue/Capital of section of government account cannot be incurred from PLA.1538. The Administrator is required to issue a cheque from the cheque Book provided to him by Treasury Officer. 2) Register to watch the receipt of monthly accounts from the Administrators. the Treasury Officer/PAO gives the Personal Ledger Account holder a PLA code No & Cheque Book.Session – III PLA audit. The specific conditions about this while giving concurrence. No refunds/pay &allowance/pension/promissory notes can be credited to Personal Ledger Account. Scrutiny in Central Audit:The procedure laid down below may also be followed in addition to the instructions laid down in 0. AG/Pr.PAO/CCA can also lay down certain conditions about type of receipts which can be credited to PLA.11. (Pay salaries. Such receipts cannot be deposited in PLA While giving permission.g. 2) How the withdrawals can be made? Generally. government has to lay down. Generally. Laboratory Deposits for students hostel deposits from students staying in hostel. The revenue realized should be credited to Revenue Receipt Account.0. Scope 1) What amounts can be deposited in Personal Ledger Account? All receipts cannot be deposited in Personal Ledger Account. For this purpose. If some tax is imposed by Law persons by legislature/parliament. there should not be any objection to credit non government money to PLA e. the specimen signature of the authority empowered to sign cheque should be sent to Treasury Officer/PAO. the entire tax proceeding should go to Revenue Receipts in revenue session of account. dated 4. . The withdrawals should be for bonafied use as specified in general order. It is a limit that the withdrawal should not exceed the receipts.B. when the Personal Ledger Account is opened. 26. The Treasury Officers have been directed to stop payments on P. that monthly accounts are not received.L.TRA-41/70-39915(28).3961.1961. These registers should be submitted on 15th every month to the Branch officer.2 section on 25 th January and July for submission to the Accountant General.L. Non-submission of monthly accounts has become chronic.G.70. Action to enforce these orders should be taken at once (vi) As per 0. (ii) The vouchers received should be subjected to audit in the TAD sections like the contingent vouchers and a separate half-margin should be issued to communicate the audit observations to the Administrators. the receipt of the same should be watched through wanting voucher register under a separate heading.0A. dated 2. The results of such review are to be communicated to TM. dt.’s office with the monthly P. Accounts on receipt of information from the A. (iii) Discrepancies between the balances as shown in the monthly accounts sent by the Administrator and the plus and minus memoranda sent by the Treasury Officer should be got reconciled by a reference to the officers concerned. It has been noticed that proper watch on the receipt of monthly accounts is not kept and the delay in receipt or non.8. the observations made during the previous six months both in local as well as Central audit. they are not properly registered in the objection book to ensure proper watch is kept. accounts within the service heads once every six months based on . Some pages may be set apart for each P. (iv) Serious irregularities noticed in the returns submitted by these offices should be specially brought to the notice of the controlling officers and the government. accounts from the Administrator.L. But such a review is .receipt is not properly pursued with the Administrator. each TAD section is required to review all the P. Account in the Registers mentioned above. The following instructions should be followed strictly in Central Audit:(i) If vouchers and supporting documents are not received in the A.L.G.8. (v) In their letter No.3) Register to watch the Annual Certificate of balances from the Treasuries. Further if with the accounts receipts vouchers and other supporting documents are not received. The registers should be submitted for review quarterly to the Group officer. It should be borne in mind that non-submission of supporting documents might hide a fraud or defalcation and if the receipt of the documents is not ensured such irregularities might go undetected. addressed to all departments (copy attached) the Finance Department has stressed the necessity of timely submission of monthly compiled accounts. D Hd. references to the Group Officer for taking up with appropriate authorities and pursuing them up to their closure before the Appropriation Accounts for 1978-79 are furnished. OAD Hd. Qrs should give copies of all the relevant paras to the Audit section concerned for further action.rarely conducted. in respect of the months selected for detailed check and the stores accounts. A copy of the “Proforma Accounts” should be sent along with the Inspection Report. These dates should be noted in the calendar of returns and submitted regularly. During local audit a thorough examination of all the expenditure and receipts under the scheme. accounts. Proforma accounts prepared by the Administrators on the scheme during the previous financial year should be conducted and results incorporated in the inspection report.L. The Branch Officers should review all such accounts and put up. Any special points requiring closer scrutiny during local audit should also be sent to the party. P. stringent audit scrutiny is necessary to ensure proper control. Types of Audit observation: Since Personal Ledger Account operations are done by authorized authorities without having much of the scrutiny at the Treasury Officers/Pay & Accounts officer level. D.A. if any maintained by the Administrators.G and action taken against it will be reported in the monthly report. As Personal Ledger Account is operated by executives who are otherwise busy in the execution. there is likely delay in accounting of the transactions. They also require adequate checks just like regular transactions. In respect of inoperative accounts. This will result in lot of unreconciled areas in the PLA . Qrs on receipt of intimation of local audit. Therefore. it should be seen during local audit as to how the store and stock balance if any have been disposed off Sections should pursue with the State Government and the Administrators concerned for closure of the inoperative. A time bound programme for their clearance will be drawn up by the Branch Officer of the section concerned for approval of Sr. Local Audit:The audit sections should give details of the balances of the P. accounts operated by the head of the office to O.L. timely accounting poses difficulties. D.O.A. Opening of Personal Ledger Accounts without specific concurrence of AG. Opening of unauthorized accounts. Non utilization of central funds for the purpose for which they are granted. . Non transfer of funds to urban local bodies. Opening of Personal Ledger Accounts without the approval of competent authority. Normal Audit Observations: Following are some illustrative cases of audit observations normally found in PLA: • • • • • • • • • • • • Non-closing of Personal Ledger Accounts. Funds remaining unutilized in PLAs without transfer to consolidated fund. Non reconciliation of balances.operations. Opening of Personal Ledger Accounts to avoid lapse of budget grants. which should be subjected to proper scrutiny to avoid likely hood of misappropriation/fraud. Balances lying in bank accounts for more time. Opening of Personal Ledger Accounts under wrong Account heads. Temporary withdrawal and crediting of the same fund into PLA after some time. 28 crore) conducted (August/September 2003) further revealed the following irregularities. Non-utilisation of funds by keeping in PDAs not only delayed the implementation of schemes for which funds were released but also defeated the purpose for which budget were provided in financial year. Audit Report – Civil 2002-2003 (Government of Madhya Pradesh) Transfer of funds to Personal Deposit Account: Five hundred and thirty one Personal Deposit Accounts (PDAs) of Government and semi Government institutions as on 31 March 2003 were found opened in the treasuries. 0.D. Following irregularities were noticed in maintenance of PDAs: a) Non-closing of PDAs As per provisions of Rule 543 of Madhya Pradesh Treasury code 531 PDAs with balance of Rs. Accounts are generally opened by debit to the consolidated fund and the amount debited is shown as expenditure in the respective heads. noticed that 115 new P. Accounts with balances of Rs.D. Records of Land Acquisition offices shahdol and Joint Director Panchayat and Social Welfare Rewa revealed that an amount Rs 0. This was obviously done with a view to avoid lapse of grants.56 crore and Rewa: Rs. Of these 128 PDAs with balances of Rs. It was. c) A test check of 59 PDAs (Rs 650. b) Funds remaining unutilized in PDAs P.29 crore) was lying in bank accounts in contravention of aforesaid instructions issued by the Finance Department. Financial rules provide that no money shall be drawn from Treasury unless it is required for immediate disbursement.66 crore as on 31 March 2003 were opened during 2002-2003. and none of the above accounts were found closed. (i) According to instructions issued by Finance Department (January 1998) all amounts pertaining to land acquisition and development schemes excluding funds received from Government of India deposited in Commercial bank accounts were required to be withdrawn and deposited in PDA. 1142. 94.SESSION – IV Following case studies are extracted from published Audit Reports of CAG. .38 crore were required to be closed at the end of financial year by minus debit to the relevant service head.85 core (Shahdol: Rs. The expenditure to this extent was inflated and did not depict the factual position of accounts of the State.419. 0. however.64 crore remained un-operative during 2002-03. The concerned officers (August 2003) confirmed the position. 1.54 crore) conducted (October 2001)/ supplemented by the information furnished by Accountant General (A&E) M. The closing in these accounts indicates that rules regarding closing of PDAs at the end of the financial year were not observed. reply had not been received (December 2003). Test check of records of Labour Commissioner Mahdya Pradesh. The matter was referred to Government in November in November 2003. 18. As per instructions of Government of India. (a) Non closing of PDAs All the 320 PDAs having balance of Rs. houses were to be constructed within the period of two years (including extended period of six months). Out of these 70 PDAs having balance of Rs. 10.85 crore remained un-operative during 2000-01. 0. (ii) In another case LAO sehore had credited receipt of Rs. 1.92 crore as shown I Appendix L. A test check of 22 PDAs (Rs. Resultantly. Report on further action taken by them was awaited in audit (November 2003). 72.08 crore to the Madhya Pradesh . 240. Audit Report 2000-2001 – Government of Madhya Pradesh Transfer of funds to Personal Deposit Account: There were 320 Personal Deposit Accounts (PDAs) having balance of Rs. (iii) It was noticed that departments did not reconcile the balances in PDAs with treasuries. Gwalior revelaed the following irregularities. 0. 240.30 crore as Central Assistance for the construction of 1300 houses under housing scheme for Hamals @ Rs.13 crore meant for land acquisition inpost office Sehore instead in PDA to achieve the targets under small saving scheme.48 crore while in other 9 cases it was more by Rs 20. Indore (October 2001) revealed that rs. (b) Funds remaining unutilized in PDAs: (i) Government of India released Rs. 180.13 crore were required to be closed at the end of the financial year by minus debit to the relevant service head as per provisions of Rule 543 of Madhya Pradesh Treasury Code.000 per beneficiary.P.13 crore in respect of Government and semi Government Institutions as on 31 March 2001.22 crore was deposited (March 1998) in PDA after advancing Rs. in 19 PDAs the balance shown by department was less by Rs. On being pointed out Director stated (October 2001) that balance amount would be released to Urban Local Bodies during 2001-02. Centre for Rehabilitation Studies (CRS) Bhopal in August 1995. Another amount of Rs 1.27 crore was transferred to the newly created Chattisgarh State (November 2000). The amount of Rs. No action was taken by the Department/Treasury for closure of PDA as provided under the rules. . Out of this an amount of Rs 9. The action of the Government was not in order as PDA being non-interest bearing account. but deposited the same in PDA (March 2000).33 crore were still awaited (October 2001). form whom utilization certificates for Rs.89 crore was transferred to newly created Chattisgarh State (November 2000).76 crore on account of Octroi Compensation Grant for the months of February and March 2000 which was to be paid to Urban Local Bodies. The PDA (Rs.Housing Board. The balance amount of Rs. 21.5 crore) remained uncooperative for last five years. During 2000-01 Rs.22 crore was still lying in the PDA in contravention of rules. (iv) An amount of Rs 3. On being pointed out Director. (ii) Commissioner.34 crore in the PDA (March 2000) provided on the recommendation of 10 th Finance Commission for construction works. 77. Panchayat and Social Welfare Department credited Rs.29 crore was released to District Panchayats. The balance amount of Rs.25 crore (State share) was sanctioned by Government of Madhya Pradesh for the said purpose which was also credited in the PDA (Feburary 1996). the commissioner stated (October 2001) that balance amount could not be released to District Panchayats as the utilization certificates of earlier amounts were awaited. An amount of Rs. 1. On being pointed out.75 crore pertaining to ICMR Project (Central Share) for gas affected persons was credited in the PDA of the Director. 55. no interest was payable on such account. On being pointed out Department stated that funds could not be utilized as Hamals had not shown any interest in the housing scheme. Out of the 1300 houses only 58 houses could be constructed (October 2001).49 crore remained untilised for the year 2000-01. CRS state (October 2001) that in lieu of interest on the amount kept in PDA Government released grants to the centre from which research work was being conducted. 46. (iii) Director Urban Administration Bhopal withdrew Rs. 19.16 crore was still lying in the PDA (October 2001). 47. 144. The reply of Department was not tenable as money should not have been drawn in anticipation of demand. 0. 1. 1. the expenditure to this extent was inflated and did not depict the factual position of accounts of the State. 60. Khargone and Badwani revealed that in contravention of above instructions of Finance Department LARO Khargone withdrew Rs. the matter regarding review of said notification was taken up (October 1997) by Principal Accountant General (A&E).of the project who did not present themselves for the collection of relief payment. non-utilisation of funds not only delayed the implementation of schemes for which funds were released and also defeated the purpose of providing budget in the respective financial years.(v) According to instructions issued by Finance Department (January 1998) all amounts lying in the bank accounts were to be withdrawn and kept in PDA.16 crore and Mandla Rs. The closing balance under PDA as on 31 March 2001 indicate that money was drawn to avoid the lapse of budget grants.51 crore) and deposited it in the bank account. c) PDAs opened to avoid lapse of budget grants/surrender of funds Financial rules provide that no money shall be drawn from treasury unless it is required for immediate disbursement.10 crore from PDA (Rs. Tribal Welfare Khargone Rs. In addition. Sardar Sarowar Project (LARO). 1. The reply of the State Government was however awaited. During 2000-01 an amount of Rs. 0. d) Opening of PDAs without specific concurrence of Accountant General Rule 623 of the Central Treasury Rules provide that PDA should not be opened without the specific authority of Accountant General. but these instructions were superseded by Government notification dated 22 November 1994 according to which all administrative departments were authorised to open PDA without specific sanction of Accountant General. (vi)Scrutiny of records of Land Acquisition and Rehabilitation Officers.20 crore (Assistant Commissioner. On this being pointed out LARO stated (October 2001) that amount was drawn for distribution among ----------.04 crore) pertaining to centrally sponsored/assisted schemes to avoid the lapse of funds. .73 crore was transferred to 17 PDAs which includes Rs. With a view to ensure better financial discipline. Since the amount shown under PDA had already been shown as expenditure in the respective heads. Similar instructions were also issued by Finance Department in February 1962. U. Further. U.Uttar Pradesh Experience: Under Chapter 16 of Financial Hand book of UP Government Volume V Part I there is a provision for government servants. IV. P that the head 8229 was meant .5. PLA operations . This booklet has been issued in consultation with the AG. III. U. Further. Funds were not used in a financial year and not deposited back resulting in unnecessary strain to consolidated fund.During 2000-01. 0. These types of banking accounts have been treated as PLAs in the Government of UP. Govt. It should be used within the same financial year and if not. But on examination it was seen that it should be opened under Minor Head 8443-106. civil deposits – personal deposits.98) to open PLA A/c as per provisions of FHB Vol.P. II.27 crore (October 2000) were opened in the treasuries during the period April 2000 to October 2000 which now come under Chattisgarh State. P. 49 PDAs having balance of Rs. DDOs are operating banking account in treasuries without the approval of competent authority.22 crore (March 2001) were opened without specific authority of Principal Accountant General (A&E) Madhya Pradesh. In addition 4 PDAs having balance of Rs. This has not been incorporated in the said Manual. in UP there is a handbook of instructions called ‘niyamavali’ on deposits. Under the G. It was pointed out by the AG. of UP Govt DRDA/Vidhayak Nidhi has been classified under the Head “8448-Deposit of local funds 120-other funds”. State Government is yet to respond. Despite lapse of 5 years the same has not been done though Government had refused once. on scrutiny of PLAs of different departments by O/o AG it was revealed that: I. in their official capacity to obtain a special sanction of government accorded in consultation with Accountant General for opening of a banking account with treasury. intimated their opinion that 8229-Development and Welfare fund and 8223Famine Relief Fund are Deposit heads but as per List of Major and Minor heads these are classified in (J) Reserve funds and sub classification thereof (b) Non-bearing interest category. UP Government has been making promises for inserting the same. 8. Arrangement has been made under PLA Manual or ‘niyamavali’– 1998 (come in force wef 4. V Part I but original provision of 340-B regarding closing of the PLA A/c and lapsing the balances to the consolidated fund is not there.O. it should be back with consolidated fund of UP by a minus debit. vii) Yet another discrepancy revealed in some cases was that sanctions for utilization for the next year were being issued by the Govt without adopting the said procedure. The following unauthorized PLAs were operated by UP Government. as stated earlier. said that Reserves and Reserve funds might be constituted under the provision 4.G. Amounts are being kept for spending next year by debiting expenditure heads and crediting to the PLA/Deposit heads. it is considered to be utilized.135 crores were out standing at the end of the year 2003-2004 making it clear that provision of lapsing these funds to the consolidated fund at the end of the financial year was not being adhered to by most of the treasuries. V. The request of the state government for operation of PLAs for agriculture development fund under the head 8229 is not tenable and the Govt was not willing to change AG U. heavy amounts are kept out of budget cycle. Details of PLA a/cs during 2003-2004 Heads As per list of Director of Statistics U.S. The response of State Government was awaited. for operating (Opening) of PLA a/cs (Banking a/c) are not being taken in most of the cases by State Treasuries. With such a situation there will be heavy strain on budget as the funds kept in PLAs will not be fruitfully utilized for productive purposes.O. x) The people being deprived of their rights as their genuine basic needs being ignored due to delays in execution of works due to idling of scarce fund/finance in PLA. (A&E)-Vol.P. ix) The huge accumulations in the PLAs may lead a parallel economy being run within the Govt. while these money (amounts) is neither spent nor any financial or physical target achieved. In spite of established provisions under F H B Vol. it revealed that more than Rs. As per AG office Unauthorized A/cs . P.15. viii) Generally after drawing money as per financial sanction. By doing so.1 with the approval of State Legislature. 8443-106 378 30 348 8443-123 42 05 37 8443-800 56 06 50 8448 1822 255 1567 vi) Further.1 of M.otherwise.V Part I and PLA ‘niyamavali’ consent of A. Due to irregular transfer to this method of funding the unproductive use or depiction there of is glaring as : the appropriation accounts gave a misleading picture of the actual expenditure during the year. The intention of achieving the physical aims quickly through PLA route by the Govt. was not achieved. Other special orders issued by Government –for specific purposes.G. . The picture thus emerged would be 5-6 times more grace if other major heads are taken besides 8443-106. The facility of carrying the balance over to next year gives liberty to the executing agencies to delay the implementation of schemes which lead to cost over-run. The amounts kept under the PLAs were deemed to have been spent without the approval of the Accountant General. Rule 50 to Rule 63 of Accounting Rules for Treasuries 1992. xiii) Over the years it has been observed that more and more money is being channelised through PLA/deposits route. xii) For the period ending March 2004 AG further reviewed the situation and found it alarming. although this (PLA deposits) envisaged on the contrary.P were not authorized by A.xi) The statutory provision of opening of such PLAs with the proper authorization of the Accountant General was also overlooked and quite a sizeable number of such deposit accounts are performing with out any authorization by the States A. inefficiency and chances of misutilisation. As many as 255 out of total of 1822 PLAs opened under Major Head 8448 of U. The total accumulation under PLAs during 2003-04 amounted to Rs 2165 Crores which is alarming.G by the end of March 2004. Money lying in the PLA/deposits for long outside the budgetary cycle defeats the purpose of planning being the efficient tool of legislative control. Civil works were delayed through non-payment of bills of contractors. Infact the plan schemes are being ignored. Position of Law/Rules/Codes: The following guidelines principles about PLA are required to be considered:i) ii) iii) iv) Case – I: Article 284of Constitution of India Rules 180 to 196 of Receipt & Payment Rules. 2007 and similar such rules in State Treasury Rules. the transfer credit system is not applicable for such credits unless AG’s concurrence is obtained. There is no proper check at Treasury level. Since this is the breach of the conditions stipulated in concurrence UOR. The Administrator put fourth the plan that alongwith all other sums which would go to PLA are included in this PLA and therefore they are unable to segregate such sums. This practice shows that the grant made by legislature in the previous year are utilized in the next year. Secondly.G Office? . What can be solution on this problem? Case-II: While regrestering the documents a charge of Rs 20/. The expenditure is deposited to concerned major head in appropriate books grant and credit is shown in the bill itself to PLA/c some department officers are drawing bill for full gross amount and credit the amount by means of challan. can this permission be withdrawn by AG? Case-III: A proposal was received from government to credit Rs 100/ to PLA in Transport commissioner’s name and Rs 100/. This amount was not at all credited to government. These accounts are not closed for –nil-balance. What should be the action in A. After five years an amount of Rs 19 crores was given to private company as grant-in-aid for building the bridges. This work was given to a company on contract basis with no cost to government. Previously.The Education Department has been provided with the facility of PLA. The previous balance is allowed to be carried forward to the next year.to be charged for smart card to be issued to vehicle driver. this was taking 4-5 years to receive the original documents. The government sanctions grants for payment of salaries to non government secondary school teaching and non-teaching staff. As soon as the Administrative Department communicate grants to concerned DDO he drawn the bill for – nil—amount.per page was allowed to be made to Registration Department as the registered documents were to be given immediately to the concerned person. While giving concurrence it was stipulated that the excess amount should be credited to government on quarterly basis.to Motor vehicle Taxes when law passed by parliament provides a fee Rs 200/. electricity bills. It was proposed by Forest Deptt that the money so received may be deposited in P L Account to be opened in the name of Divisional Forest Officer and utilize these sums for welfare of Labour engaged in extracting the Tendu leaves.Case-IV Tendu leaves are extracted from Forest area and then are sold to the contractors on auction basis. Further. Should the proposal made by Govt. telephone bills should be paid from the P L Account. The P L Account was allowed to be opened where in only such amounts were allowed to be credited & this money was to be utilized for carrying out minor repairs in the hospital with proper sanction. What are the effects of this order? What action is required to be taken in A G office? . X Ray fees and Blood examination charges to above P L Account. Public Health Department issued an order allowing the hospitals to credit 50% of the O P D charges. many patients put some donation in Donation Box at their discretion. Contractor credits the requisite amount in Govt. be agreed to by A G? Case-V While leaving the hospital. Treasury. it was ordered that all water supply bills. are required to be closed for – nil – balance by affording minus debit to the Major Head/grant in the consolidated Fund.Solution Case – I ♦ The Personal Ledger Accounts which are credited by debit to consolidated Fund. The Treasury Rules/CGA (R&P) 1983 provide this type of adjustment. Alternatively a proposal may be sent PAO/AG to make necessary adjustment in accounts by means of Transfer Entry. . rules/subsidiary instructions should provide that the first cheque in the next year will be returned through Treasury/PAO who will not pass that cheque unless the above requirements are fulfilled on the evidence produced by PLA holder. If the detailed accounts are kept by the administrator. he should be asked to work out the unspent balance and asked to issue a cheque for the unspent balance to be credited to the Receipt head of Account of the Department and to be accounted as reduction in expenditure/grant which was initially debited. ♦ In order to keep watch on this. the concurrence may be withdrawn at any time if there is breach of the conditions imposed. ♦ Secondly. ♦ The expenditure which is in the nature of Revenue expenditure is incurred without the knowledge of Legislature/Parliament and remains unbudgeted. ♦ This can be reported through the Audit Report and discussed in PAC meeting.Solution Case – II ♦ If Accountant General has got power to withdraw the concurrence once given to Administrative department of government. . the Treasury Officers can be asked not to pass the first cheque in the quarter for payment unless the excess receipts are credited to government account. ♦ Any payment to be made to the party can be made after making Budget provision in the Consolidated Fund of the State/Central. ♦ As such. Accountant General may not give concurrence to open the Personal Ledger Account. the entire amount of Rs 200/-is required to be credited to government account as Revenue Receipts since the Act is passed by parliament.to Personal Ledger Account cannot be accepted. As per Art 284 of the Constitution. ♦ This proposal violates the provisions of Constitution. ♦ No Personal Ledger Account should be allowed to be opened for such transactions.Solution Case – III ♦ This is the Tax Revenue of Government. the proposal to credit Rs 100/. . . as it is Revenue Expenditure of Govt. This can not be made from the P L Account for the very reason that this is not brought to the notice of legislature. P L Account may be disagreed.Solution Case-IV The amount received from auction of Tendu leaves form part of Revenue Receipt of Govt. 1992. it should be credited as Revenue Receipt under the head 0406 – Forest & wild life vide Rule 50 of A R T. As such. For welfare of the labourers the Budget provision may be made & expenditure incurred. water charges bills are revenue expenditure and this expenditure can be incurred by making budget provisions only. Crediting these receipts to PLA violates the provisions of Treasury Rules & it is in contravention of Rule 50 of A R T. money Revenue Receipts are to be credited to Revenue Receipt head in full under the head 0210 Medical & Public Health. Revenue receipts are shown to the extent of 50% in accounts and the entire expenditure on such items will be excluded from Revenue expenditure. Electricity bills. . Telephone bills. Further more. Incurring it from P L Account violates the provisions of Constitution in the sense that the expenditure which pertains to Consolidated Fund is incurred without the sanction and knowledge of legislature.Solution Case-V P L Account was allowed to be opened for money in Donation Boxes which is not Govt. due to implementation of such orders.