defence account code - Controller of Defence Accounts(R&D), New

315 Pages·2014·3.01 MB·English

DEFENCE ACCOUNT CODE
I. HISTORY
• The DEFENCE ACCOUNT CODE has its origin in the CIVIL
ACCOUNT CODE (VOLUME - I to VOLUME-IV).
• The first edition of Account Code Volume –I was approved on
rd
23 December, 1938 and released in 1940 by the Accountant
General of India with the approval of Lord Linlithgow, the
Governor General of India.
• The first edition of Defence Account Code was released in 1952
followed by an edition in 1967, a reprint in 1977 and another
edition in 1994.
• The current edition of 2014 has been revised and updated after a
hiatus of twenty years. It has eighteen chapters.

II. SALIENT FEATURES
This edition includes Paras /Chapters dealing with:
• Clarification and Accounting of Capital Expenditure;
• e-payment including e- FPB (SBI, CMP Branch);
• Reconciliation of RBI,SBI transactions;
• e-ticketing;
• Accounting of foreign procurements, and
• Recording and Review of outstanding balances.
DEFENCE ACCOUNTS DEPARTMENT

DEFENCE ACCOUNT CODE

2014

For use of Defence Accounts Department only
Issued by the authority of

CONTROLLER GENERAL OF DEFENCE ACCOU NTS

PREFACE

The Defence Accounts Code encompasses the entire gamut of the accounting function
discharged by the Defence Accounts Department. It contains detailed instructions and
procedures relating to accounting, compilation, consolidation of annual accounts and inter-
departmental/inter-governmental adjustments.

Over the course of the last twenty years, significant changes have been introduced in the
transaction of government business and accounting starting from the restructuring of the
Demands for Grants pertaining to MoD. Within the Department, significant changes have
been made in automation of systems of payment and accounting of expenditure. There was
thus a need to reflect these in the Code, replacing those provisions that have been rendered
redundant in view of these changes. Thus, while the basic principles and broad structure of
accounts remain the same, certain newly introduced areas such as e-payment, e-ticketing
have been incorporated. New Appendices have been incorporated on the Review of Balances
and Reconciliation of Defence transactions. In addition, some of the existing provisions have
been simplified for the ease of understanding e.g the Focal Point Branch Scheme.

Any additions or alterations which may be necessary to the Code will be notified periodically
by PCDA (SC), Pune, with the prior approval of the CGDA. All issues arising out of the
interpretation of any of the provisions listed herein or any proposals for amendments shall
be referred to the CGDA through PCDA (SC) Pune.

This Edition of the Defence Account Code supercedes the 1994 Edition.

Delhi Cantt. (Vandana Srivastava)
Dated 01-07-2014 Controller General of Defence Accounts

INDEX

S. No. Para Page
Definitions
CHAPTER-1
GENERAL
1. Authority competent to prescribe the forms for 1 6
maintaining Defence Services Accounts
2. Departmentalisation of accounts 4 6
3. Compilation of departmentalised accounts 5 7
4. General duties of Controller General of Defence 6 7
Accounts as a Chief Accounting Officer
5. General duties of PCDA/CDA as an Accounting Officer 7 8
6. Miscellaneous 11 9
CHAPTER-2
GENERAL OUTLINES OF THE SYSTEM OF ACCOUNTS
7. Consolidated Fund, Contingency Fund and Public 15 10
Account of India
8. Accounts of the Central and State Governments with 18 10
Banks
9. Transactions of other Government in State Treasuries 20 11
10. State transactions in Central Treasuries 21 12
11. General outlines of the system of Defence Services 22 12
Accounts
12. Mode of settlement of Defence transactions 23 13
13. Central Journal and Ledger 24 14
14. Statement of Central Transactions of Defence Services 25 14
Receipts and Charges
15. Annual Finance Accounts of the Central Government 26 15
16. The Combined Finance and Revenue Accounts of the 27 15
Central and State Governments in India
CHAPTER-3
GENERAL PRINCIPLES AND METHOD OF ACCOUNTS
17. General
Period of Account 29 16
Cash Basis of Accounts 30 17
Currency in which Accounts are kept 31 17
18. Forms of Accounts
Main Divisions of Accounts 32 17
Major, Minor, Detailed and Object Heads 34 20
Classification in the books of Ministry of Defence 35 20
Objectives of Classification 36 21
Guidelines for opening a new code 37 21
Pamphlet of RD&R/Classification Hand Book of 38 22
Defence Services Receipts and Charges
Classification of Expenditure as “Charged” or “Voted” 39 22
19. Classification of Transactions in Accounts
General Limitations 40 23
20. General Principles of Classification 41 23
21. Classification of Capital and Revenue Expenditure 42 23
Criteria for determining whether expenditure should be 43 24
classified under heads of Capital section or Revenue
section of the Consolidated Fund of India
Allocation between Capital and Revenue expenditure 44 24
on a Capital Scheme
Capital receipts during construction mainly to be 45 25
utilised in reduction of Capital expenditure
Receipts and recoveries representing recoveries of 46 25
expenditure previously debited to Capital Major Head
Capital cost of non-productive work to be met from 47 25
ordinary revenues
Conversion of outstanding loans into equity 48 26
investments or Grants-in-Aid
Charging of interest on Capital outlay met out of 49 26
specific loans raised by Government
Record of Capital Expenditure in Accounts 50 26
22. Important General Orders Governing Classification 51 27
Pay and Allowances 51 (a) 27
Transit Pay and Allowances of Service Personnel 51 (b) 27
Transit Pay and Allowances of DAD Personnel 51 (c) 28
Travelling Allowances 52 28
Contribution made by Government 58 29
Refunds of Revenue 59 29
Classification of transactions under "Civil Advances" 60 (a) 29
Classification of Transactions under Pay/TA on transfer 60 (b) 30
Classification of Advances for Law Suits 60 (c) 30
23. Classification of transactions under Suspense 61 30
24. Important special orders governing classification of 62 30
certain individual transactions- Cost of Acquisition of
Land
Sale proceeds of Government land and buildings 63 30
Cost of Survey of India and other Scientific Parties 65 31
accompanying a Military Expedition
25. General methods of accounting
Classification of refunds of bonafide receipts and 66 32
recoveries of overpayments
Write off from "balance" heads to "Government 67 32
Account”
Correction of Accounts 68 33
26. Transfer entries and check of classification 69 34
Periodic Transfers/Adjustments 70 34
Checks of Classification of Receipts and Charges 71 34
Powers of signing Punching Medium 72 35
Examination of Compiled Actuals 73 36
CHAPTER-4
RULES REGULATING INTER-DEPARTMENTAL TRANSFERS
27. Introductory 75 37
28. Inter-departmental adjustments with other 76 37
departments of the Central Government
29. Adjustments with State Governments 78 38
30. Adjustments with outside bodies 79 38
31. General 80 38
CHAPTER-5
RULES REGULATING ACCOUNTING OF RECOVERIES OF
EXPENDITURE IN GOVERNMENT ACCOUNTS
32. Introductory 84 40
33. Recoveries from private persons or bodies and 85 40
Governments outside India
34. Recoveries of expenditure on works in progress and 86 40
transactions of stock and other suspense account
35. Recoveries by one Government from another (within 87 40
India)
36. Classification of recoveries made by one department 88 41
from another department of the same government
37. Receipts and recoveries on Capital account 89 41
38. Settlement of doubts or disputes 90 42
CHAPTER-6
GENERAL RULES AND PROCEDURE APPLICABLE TO DEFENCE PROFORMA ACCOUNT
39. Introductory 92 43
40. Defence transactions at bank treasuries 94 (a) 43
Concept of Focal Point Branch 94 (b) 44
Dealing Branches 94 (c) 44
Verification of DMS/MSS 94 (j) 45
Electronic Payments through e-FPB 95 45
Electronic payments through Private Sector 96 46
Banks/PSBs
41. Defence Transactions through e- Ticketing 97 46
RBI as FPB 98 46
Compilation to be made under Suspense Head under 99 47
Defence Proforma Account on introduction of FPB
Scheme with effect from 01-10-1993
42. Defence transactions at non-bank treasuries 101 47
43. Advice of clearance 102 47
44. Memo of Clearance by the Reserve Bank 105 48
45. Monthly Settlement Account 106 48
46. Accounting heads 107 48
47. Adjustments of transactions relating to the months of 108 49
February and March
Proforma adjustments outside the Books of RBI 109 49
48. Inter-Government and inter-departmental adjustments 110 49
49. Works/stores expenditure and services rendered 114 53
CHAPTER-7
DETAILED ACCOUNTING PROCEDURE REGARDING ADJUSTMENT OF DEFENCE
PROFORMA TRANSACTIONS
50. Remittances into Banks and Treasuries on Military 116 56
Receivable Order
51. Remittances to Defence Services from banks and 117 57
treasuries i.e., cheques drawn on Banks & Treasuries
Adjustment of electronic advice-payments through 118 59
RBI/SBI
Adjustment of e-payments- Private Sector Banks / 119 59
Public Sector Banks
52. Transactions originating in the books of Railways, Posts 120 59
and MEA (in respect of ILAC, Washington and other
embassies a/c) due for final adjustment in Defence
accounts
53. Transactions originating in the Defence books which 121 61
are adjustable against the balances of
Railways/Posts/Department of Supply in the Ministry of
Commerce (stores transaction)
Adjustment of expenditure on account of stores 122 (a) 62
relating to central purchase made through DGS&D
Action by PAO, DGS&D 122 (b) 62
Action by the DAD Cell 122 (c) 62
Action by Accounts Section of the PCDA/CDA under 122 (d) 63
whom the Cell is functioning
Action by the consignee PCDA/CDA 122 (e) 63
Adjustment of Central Purchase Voucher 122 (g) 63
54. Accounting instructions for settlement of inter
departmental/inter Government transactions
Settlement of Outward Transactions (Cash basis) 123 63
Settlement of Inward Transactions (Cash basis) 124 65
55. Adjustment of e-Ticketing transactions on Cash basis 125 66
56. Drawal of advances on the authority of Emergency 126 66
Cash Requisitions
Bank Treasuries 126 (a) 66
Non-Bank Treasuries 126 (b) 67
57. Defence transactions arising in Jammu and Kashmir 127 67
State and vice versa
58. Reconciliation of balances in the books of Reserve 128 68
Bank
59. Treatment of incorrect and incomplete debits/credits 129 68
Verification and Reconciliation 130 71
CHAPTER-8
EXCHANGE ACCOUNTS BETWEEN PR. CONTROLLERS/ CONTROLLERS OF
DEFENCE ACCOUNTS
60. General 134 91
61. Works undertaken by the MES on behalf of Air Force, 135 94
Ordnance Factories and Navy
62. Action by the Originating PCDA/CDA office 137 95
Action by the Responding PCsDA/CsDA office 141 97
Clearance of outstanding items 145 97
List for Manual Linking 147 98
63. Accounts for March Supplementary and March 149 98
Supplementary Corrections
64. Defence Exchange Accounts 150 98
65. Annual Abstracts of Progress Registers 151 98
CHAPTER-9
ADJUSTMENT OF FOREIGN TRANSACTIONS
66. Defence transactions arising in England and adjustable 154 104
in India
67. Transactions finally audited in England 157 105
68. Embassy accounts other than ILAC 160 106
69. Transactions relating to Defence Pension payments 161 107
made by embassy of India at Nepal
70. Settlement of transactions other than ILAC/embassy 162 107
and pension
71. Accounting of pay and allowances of DAD staff and 163 107
officers posted abroad
72. Accounting of foreign procurements 164 108
CHAPTER-10
COMPILATION OF ACCOUNTS
73. General 167 110
Class of Vouchers 168 110
74. Various compilations prepared by EDP Centre and 170 111
their disposal