DEFENCE ACCOUNTS DEPARTMENT

DEFENCE ACCOUNT CODE 2022

For use of Defence Accounts Department only

Issued by the authority of

DEFENCE ACCOUNT DEPARTMENT(DAD)

HEAD QUARTERS

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 PREFACE

“Well done is better than well said”- what we do is often more important than we may say.
Our actions never lie. They speak for themselves. The New Defence Account Code 2022 is
culmination of massive exercise done on Business Process re-engineering for the last year or so.
As we had embarked on laying foundation for IT automation projects covering every possible facet
of DAD, it was a natural corollary for us to do simultaneous review of our existing policies,
procedures and processes. New Defence Account Code reflects our new look at the important
vertical related to Accounting Functions.
Simplicity has been the key in rewriting new Account Code. Not only flow of chapters has
been made smoother, redundant and archaic material has been removed and the entire material is
written in plain and simple English. We have been guided by the maxim that many problems of
focusing are best resolved by defining what to ignore. I can say with certainty that Defence
Account Code is in a form of new Avatar.
We in DAD HQrs had a big vision, and we had fire in our belly to do something new. But
we would never have gotten anywhere without the active cooperation and stupendous efforts of
our Field Offices across the country. I am honoured, humbled and grateful to be a part of this
landmark re-engineering exercise and eager to see the change we can enact together in coming
years with fresh outlook on our core areas.

(Rajnish Kumar)
th
20 June 2022 Controller General of Defence Accounts

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 INDEX
SL.NO. TOPICS PARA [S] PAGE [S]

CHAPTER - I

Over view of Accounting in Defence Accounts

Department
Major Roles/Functions of the Defence Accounts
1 1 to 3 7
Department

2 Single Accounting Circle [SAC] 4 7

PRABAL [PFMS for Raksha Budget Aaharan aur

3 5 7
Lekhankan]

4 Accounting in DAD 8 to 13 7&8

5 Accounting Classification 14 to 16 8&9

6 Classification of Hand Book (CHB) 17 9

Pamphlet of Revenue, Debt and Remittance Heads

7 18 9
[RDR]:

8 Amendment of CHB and RDR Note below 18 9

9 Understanding code heads used in DAD: 19 9 & 10

10 Punching Medium (PM) 20 to 22 10

11 Important features of PM 23 10 & 11

12 Class of Vouchers 24 11

The Delegated Powers of PM in r/o transfer

13 25 12
adjustments and rectifications

14 Dispute or Doubt regarding Accounting procedure 26 12

CHAPTER – 2

Budgetary Control over Defence Expenditure

15 Budget Estimate [BE] 28 13

16 Demand of Grants 29 13

17 Vote on Account 31 13

18 Watching Expenditure against Allotments 32 13

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19 Revised Estimate 33 13

Re-Appropriation, Supplementary Demand of

20 34 14
Grants, Modified Appropriation

21 Appropriation Accounts 36, 37 14

CHAPTER – 3

Financial Transactions in MOD

22 Mode of Settlement of Defence Transactions 39 15

23 e-Receipt [e-MRO] and e-payments 40 15

Flow of documents for reconciliation with SBI CMP

24 41 15 & 16
& RBI,CAS, Nagpur
Process involved in e-payments and CMP
25 42 17 & 18
Rejections

26 Deposits with Reserve Bank [Payments] 43 18

27 Reconciliation of SBI CMP Payments 45 19

28 Receipts to MOD –[ e-MRO] 46 20

29 Process involved in e-Receipts 48 20 & 21

30 Letter of Authorisation [LoA] 50 22

31 Suspense Account 53 25 to 27

CHAPTER – 4

Correction of Accounts

32 Rectification of misclassification – procedure 55 28 & 29

33 Transfer Entries and Check of Classification 56 29

34 Periodic Transfer/Adjustment 57,58 29 & 30

35 Checks of Classification of Receipts and Charges 59 30

36 Closure of Accounts - Due Dates 60 30

CHAPTER – 5

Annual Closure of Accounts

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37 Defence Ledger 61 31

38 Annual Review of Balances [AROB] 62 31

39 Government Account 63 31

40 Balance Account 64 31

41 MIS reports at the end of the Financial Year 66 32

CHAPTER – 6

Miscellaneous

42 Cash basis of Accounts 67 34

43 Currency in which Accounts are kept 68 34

44 Form of Accounts 69 34

Special expenditure on account of Field

45 70 34
Operations and Special Services
Write off from 'Balance" head to "Government"
46 71 34
head

47 Classifications of refund, recoveries & losses 72 35 & 36

48 Compilation Reports in DAD 73 36 & 37

49 Embassy Accounts 74 37

Accounting of Pay & Allowances of DAD Officers

50 75 37
and Staff posted abroad

51 Accounting of Foreign Procurements 76 37

Capital Receipts during construction mainly to be

52 77 37
utilised in reduction of Capital expenditure

53 Sale proceeds of Govt. Land and Buildings 78 37

54 Charged Expenditure 79 37

55 Contingency Fund of India 80 38

56 Object Heads 81 38

57 Contributions made by Govt 82 38

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 GLOSSARY

1 Proforma Account 01 39

2 e MRO 02 39

3 e Credit Scroll 03 39

4 e Debit Scroll 04 39

5 SBI CMP Rejection 05 39

6 Accounting Circle 06 39

7 e Focal Point Branch 07 39

8 Deduct Head 08 39

9 Capital Expenditure 09 39

10 Revenue Expenditure 10 39

11 Deposits 11 39

12 Advances 12 40

13 Loans 13 40

14 Recovery 14 40

15 Centrally Controlled Heads [CCH] 15 40

16 Locally Controlled Heads [LCH] 16 40

17 Grants-in- Aid 17 40

18 Cash Assignment 18 41

19 Charged Expenditure 19 41

20 Bonafide Receipts 20 41

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 Chapter: 1

Over view of Defence Accounts Department

Major Roles, Functions and Accounting in Defence Accounts Department

1. Defence Accounts Department (DAD) functions under the administrative control of Ministry of
Defence and is headed by Controller General of Defence Accounts (CGDA).

2. The mandate given to the DAD is audit, payment and accounting of all charges and receipts
pertaining to Armed Forces/ Services and Organizations under MoD. These include transactions of the MoD
with other Central Ministries/Departments/States/UTs etc. Rendering of advice on accounting and financial
matters to MoD and its sub-ordinate Services / Organisation is also a task mandated to the DAD.

3. The CGDA functions on behalf of Secretary Defence (Finance)/ Financial Adviser (Defence Services),
in all matters affecting financial advice, internal audit and the accounting in respect of receipts &expenditure
pertaining to the Defence Services. CGDA is the Principal Accounting Officer of the MoD. In this role, the CGDA
furnishes necessary information for the Appropriation Accounts to the Ministry of Defence. CGDA prepares (i)
the Annual Consolidated Accounts of Receipts & Charges of Defence Services, and of Civil Estimates of the
Ministry of Defence, and (ii) Appropriation Accounts in respect of two Civil Grants of Ministry of Defence i.e.
MoD(Civil) and Defence Pension Grant. In addition, the CGDA renders Annual Audit Certificate for the Defence
Services, to the C&AG through Ministry of Defence, for tabling in the Parliament.
4. Accounting of all receipts and charges of the MoD is an important function of DAD. DAD follows the
concept of Single Accounting Circle [SAC]. The one Accounting circle for the DAD is DAD Hqrs, which is the
single point destination for all real time accounting activities and information in the Department. The DAD Hqrs
performs a dual role:
(i) that of the Principal Accounting Officer (Pr.AO) for the MoD.
(ii) that of a Pay and Accounts Office, along with the sub-ordinate offices of DAD, like the PCsDA/CsDA

5. In DAD, under the SAC, the audit process is decentralized, i.e. auditing of bills happens at different
CDA/PCDA offices. However, the processes of accounting and payment are centralized at DAD HQrs, through a
centralised system/platform called PRABAL (PFMS for Raksha Budget Aaharan aur Lekhankan), hereinafter
referred as system.

6. All bills of procurement from GeM or Non-GeM are received through GeM portal centrally. These are
distributed amongst various Principal Controllers and Controllers of Defence Accounts Department (PCDA/
CDA offices) for audit and authorization of payment through system. Payment advice is sent to SBI centrally
through system and compilation happens simultaneously.

7. The PCDA/CDA acts as representative of the CGDA in the field and carry out activities of audit and
authorization of payment in respect of units/organizations under MoD within their jurisdiction. Accounts
sections of PCDA/CDA offices undertake accounting functions related to their area of jurisdiction on behalf of SAC.

Accounting in DAD

8. The process of accounting in DAD starts with the allocation of Budget to the MoD, by the Parliament.
The allotted budget under various Grants of MoD is further sub-allotted by Services/ Departments/
Organizations to their lower formations.

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9. For each financial activity [like Pay and Allowances, Procurement of goods and services etc], a unique
identification code [known as Code Head] has been provided which helps in easy identification of the activity
and its purpose.

10. The Organization wise and code head wise details of Allotment of Funds are uploaded on the system
by the HQrs of Services/ Organizations under MoD. It Includes sub allotments by Command HQrs and Lower
Formations.

11. Once the details of allotments are uploaded on system, expenditure from the same can proceed.

12. All payments to individual officers/personnel, units and vendors are centrally made through
electronic mode i.e. e-Payment by SBI CMP Fast Plus. All Remittances/payments to the Government by
individuals serving under MoD, units, vendors are made on e-MRO via SBI CMP Fast Plus. In addition, Inter-
government transactions are done through Letter of Authorization (LoA) or Settlement through RBI CAS
Nagpur.

13. Accounting information relating to all receipts and payments is captured by the System under
relevant Code Heads in real-time and maintained centrally. MIS reports in desired formats can be generated
through the system by the Stake Holders at any given point of time.

Accounting Classification

14. The Budget of Government is linked to the accounting classification. Government transactions are
accounted for under the specific accounting classification falling under the Consolidated Fund, Contingency
Fund and the Public Account of India.

15. The Consolidated Fund and the Public Accounts are divided into Divisions. These divisions are again

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divided into sections. Within Divisions/Sections, specific functions or services are grouped are called Sectors.
The Sectors are sub-divided into Major Heads of Account. However, in some cases, the Sectors are sub-divided
into sub- Sectors before been divided into Major Heads of Accounts. The Six tiers of classification of accounts
are indicated as under-

The 15 digits code head in the CGA’s Account is 405960051230053

Note: In case of Defence Services, a Detailed Head constitutes the fifth and last tier of classification of
expenditure as Defence Services have been granted exemption from use of object head of classification
vide delegation of financial power rules.
16. The accounting information in DAD is classified into various accounting heads at the level of Major
and Minor Heads as given in the List of Major and Minor Head of Account (LMMHA) published by Controller
General of Accounts [CGA]. The details of heads below the Minor heads are available in Pamphlet of RDR
Heads and CHB.

17. Classification of Hand Book (CHB): It is a compilation of code heads of Revenue and Capital Heads
pertaining to Defence Service Estimates and Classification codes are in alpha-numeric. The classification at the
Sub-Head level is given in alphabets.

18. Pamphlet of Revenue, Debt and Remittance Heads [RDR]: It contains 15 digits numeric classification
heads of receipts and expenditure (Revenue and Capital ) in respect of Civil Departments paid out of Civil
Grant of the Ministry of Defence. In addition, the Debt, Loans and Advances, State Provident Funds, Reserve
Funds, Deposits and Advances, Suspense and Remittance heads are opened in the Pamphlet of RD&R Heads
which are operated for both Defence Service transactions and Civil transactions. Classification heads in respect
of Civil Ministries are also opened therein.

Note:
i) All amendments below Minor Heads [includes Opening of New Sub heads, detailed heads and Code
Heads]to Pamphlet of RDR Heads and CHB are carried out by CGDA with the concurrence of the Ministry of
Defence (Finance) and in consultation with Director General of Audit, Defence Services [DGADS] .
ii) The prior approval of Comptroller and Auditor General [C&AG] will also be obtained (through
CGA/DGADS) in cases where an amendment affects Major or Minor Heads.
iii) Both CHB and Pamphlet of RDR heads are published by the Controller General of Defence Accounts.
iv) The detailed guidelines for opening of the heads issued by MoD (Fin)/CGA [as contained in LMMHA]
from time to time are required to be followed.

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19. Understanding code heads used in DAD:
Defence Accounts Department uses Seven [7] digits coding system for classification of accounts exclusively
operable below 15 digit classification heads. The 7 digit Code Head consists of three divisions , XX/YYY/ZZ , as
mentioned hereunder:

Division FORM RDR CHB REMARKS

To generate reports/information as
per user requirement intended to
know distinctively the source of
Prefix XX 00 to 99 01 to 99 expenditure and /or the category of a
particular expenditure/receipt
wherever required. Default prefix for
RDR is 00 and CHB is 01
Main Head YYY 001 to 099 101 to 950 Unique number
Suffix ZZ 00 to 99 00 to 99 Sub classification of Main Head

Note:-Seven [7] digit code head gives more flexibility to Defence Services in classification of varied nature of
expenditure which is not feasible within 15 digit classification of heads.

20. Punching Medium (PM)

Punching Medium (PM) is the basic accounting instrument in DAD, generated by the system, for
accounting and compilation of any type of transaction as it occurs
21. A PM contains information relating to month, CDA (code), classification code head, class of voucher,
voucher No., Section code, whether receipt or charge and the amount etc
22. Taking into account the different types of monetary transactions in the MoD, PM contains 4 types of
accounting information: (+) Charge, (-) Charge, (+) Receipt, (-) Receipt.

23. Important features of PM are as follows:

When used Impact on accounts

(+)Charge
Consolidated Fund:
Generally used to release payment from budget head. Results in reduction in budget.

Public Account: 1. Creates debit balance under the

Represents payments on accounts of Loans, advances or relevant head which is to be
withdrawals of funds by subscribers. monitored for recovery.
2. Decrease in balances under Fund
Heads.
3. Utilizations of deposits received.

(+)Receipt
Consolidated Fund:
1. Generally used for accounting of bonafide receipts to Deposited into CFI, results in increase in
Government deposited through e MRO Govt. Revenue.
2. Sale proceeds of Government land and buildings will be
credited to Major Head ‘4000 – Miscellaneous Capital
Receipts’
Public Account:
1. Used for accounting of receipts under Deposit heads 1. Reduction of debit balances
2. Identifies recovery of loan/advance, or Fund created under Loans and Advances
subscription etc. Heads.

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 3. Clearance of booking under Advances- PAOs Advances 2. Increase in balances under
head on charge side is cleared as + Receipt. Provident Funds and Deposits
Heads.
(-)Charge
Consolidated Fund
1. On account of inter-service adjustments in the accounts 1. Utilization of budget under deduct
of issuing Service/organization (Deduct Heads). heads (Stores Heads).
2. Receipts and recoveries on capital account (other than 2. Restoration of budget under capital
sale of Land &Building) are taken as reduction of heads.
expenditure.
3. Recoveries of over-payments shall be credited as 3. Restoration of Budget.
reduction in expenditure irrespective of the year.
4. Recovery of Pay and travelling allowances, advances on 4. Restoration of Budget.
transfer, will irrespective of the year of recovery, be
treated as Minus Expenditure.
5. Misclassifications also rectified as minus charge.

Public Account Denotes completion of accounting

Used in release of suspense on charge side. transaction cycle so far as Suspense
Misclassifications also rectified as minus charge. Heads (+Charge) are concerned.
(-)Receipt
Consolidated Fund
1.Refunds of Revenue taken for reduction of the Revenue Reduces the booking under Receipt
Receipts. Heads.
2.Misclassifications also rectified as minus Receipt.
Public Account Denotes completion of accounting
Release of booking under suspense heads initially transaction cycle so far as Suspense
accounted for as (+) Receipt Heads are concerned.

24. As per the nature of transactions, PM can be classified into 4 classes

(a) Cash Vouchers Class of Voucher- 1 Prepared for payments by the DAD
Prepared to adjust or transfer an item from one
head to another, where necessary. This class of
(b) Transfer Entries Class of Voucher- 2 voucher is also used to account for a receipt
transaction [e-MRO] or to rectify a
misclassification of an earlier transaction.
This Class of Punching Media is used for Inter-
Governmental transaction like

(i) Items originating in the books of Ministries

(c) I.D. Schedules [Civil] Class of Voucher -3
settled through advice to RBI CAS Nagpur

(ii) The transactions compiled on the basis of LoA

of Civil Ministries (as PBD Vouchers).
to account for transactions on the basis of
Vouchers/Bills received for Post Audit and
(d) Post Audit Vouchers/Bills Class of Voucher 4
Compilation of Cash Accounts from Imprest
Holders/Cash Assignment holders

Note 1- Vouchers get serially numbered for a month, class wise.

Note 2- The powers of authorities to approve Class 1 PM will be as per delegation of financial
powers to pass claims/bills.

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 Note 3- Class 3 PM and Class 4 PM powers will be as per Class 2 PM

25. Different levels of officers in the DAD have been authorized/ delegated powers to approve the PM
generated in the day to day activities of the DAD. The Punching Media in r/o transfer adjustments and
rectifications will be signed by the Officers as mentioned below:-

Rectification of Incorrect
Normal Transfer Adjustments
Designation Adjustments [Amt in Rs. and
[Amt in Rs. and upto]
upto]
AAO 25,00,000 NIL
AO/SAO 1,00,00,000 25,00,000
ACDA/DCDA 5,00,00,000 1,00,00,000
JT.CDA/ADDL.CDA 10,00,00,000 5,00,00,000
CDA/PCDA Above 10 Crores Above 5 Crores

26. In case of any doubt or dispute regarding the accounting procedure, the matter should be referred to
the CGDA for decision in consultation with the CGA and Director General of Audit Defence Services (DGADS).

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 Chapter: 2

Budgetary Control over Defence Expenditure

27. The process of payment and accounting in DAD starts with the allocation of Budget to the MoD, by the
Parliament. The allocation of budget is based on the requirements projected by the MoD, after ascertaining
the same from the subordinate Services/ Organizations.

28. The fund requirement, called Budget Estimates (BEs) is consolidated under the different heads of
expenditure called Grants of the MoD and submitted to the Ministry of Finance which tables them in the
Parliament, under the Budget of the GoI.

29. The Demands for Grants for meeting expenditure on Defence Services are passed by Parliament each year.
Within the amounts of these Demands for Grants, Ministry of Defence arranges for financing of services for
which that Ministry is responsible. The provisions made in these Demands for Grants are based on estimate
of requirements, within the constraints of total resources available and the demands on these resources.
There are 4 Grants for the MoD as follows:

(a) Ministry of Defence (Civil)

(b) Defence Services (Revenue)
(c) Capital Outlay on Defence Services
(a) Defence Pension

Defence Service Estimates [DSE]: Detailed Head wise budgetary provision in respect of two defence
grants i.e. Defence Services Revenue and Capital Outlay on Defence Services are provided through Defence
Services Estimates (DSE).
Detailed Demand for Grant [DDG]: Object Head wise budgetary provision in respect of MoD (Civil)
and Defence Pension Grants are provided through Detailed Demand for Grant (DDG).

30. Once the Parliament approves the Demands for Grants, the allotments can be utilized for incurring
expenditure, in the new Financial Year, starting on 1st April each year.

31. To tide over the period prior to approval of Budget by the Parliament, ‘Vote on Account’, a grant is made in
advance by the Parliament to ensure the functioning of the Government/ Ministries. This permits
expenditure of some amount, usually 1/6th of the BE, by the concerned Ministry/ Department.

Watching Expenditure against Allotments:

32. The responsibility for ensuring that expenditure incurred is within the allocated budget against the
grant/appropriation rests with the executive authority. To assist them in performing this function, System
provides real-time data relating to expenditure and allotments. Further, System does not permit incurring
expenditure in excess of allotments. In order to ensure mid course correction, the PCDA/CDA specifically
informs the Executives about the anomalous trends in expenditure for necessary correction at their end.

33. Revised Estimates [RE]: Towards mid of the financial year, Revised Estimates (RE) are prepared by the
Services/ Organizations taking into account actual expenditure upto a cut-off date, and additional
requirement of funds felt at that point of time, due to some unforeseen or new event/ expenditure/
requirement. Similarly, surrender of funds is proposed in cases where expenditure is not proceeding on
anticipated lines and there is a likelihood of having unspent allotment at the end of the year.

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34. During the course of the year, there may be felt a requirement for additional funds under some activities
which can be obtained through:

(a) Re-Appropriation: Transfer of funds from one primary unit of appropriation to another such
unit within a grant or appropriation. It may be sanctioned by a competent authority at any
time before the close of the financial year. No re-appropriation between Revenue and Capital
heads is permissible. Further, re-appropriation is not permissible between “Voted” and
“Charged” expenditure. [For details see Rule 116 to 118 of FR – I VOL – I].
(b) Supplementary Demand for Grants: These demands are consolidated by the MoD, after
ascertaining from different Services/ Organizations under it and are submitted to the
Parliament as Supplementary Demands for Grants. The Supplementary Demands for Grants
are presented to and passed by the Parliament before the end of the financial year.
(c) Modified Appropriation: This is a final estimate for the year and will be based on the latest
known actual and the likely expenditure during the remaining period of the year. On the basis
of this estimate, necessary re-appropriations and/or surrenders are formally sanctioned by the
Ministry of Defence (Finance)/Ministry of Finance

35. Austerity measures and guidance for expenditure issued by MoD/MoF should be adhered to through
system.

36. Appropriation Accounts: - After the financial year comes to an end, Appropriation Accounts are prepared for
the MoD. The object of the Appropriation Accounts is to present the audited accounts of expenditure from
the appropriations for the year with full explanations of all important variations between the final
appropriations and the actual expenditure. Financial Advisor (Defence Services) is responsible for the
preparation and submission of the Appropriation Accounts of the Defence Services to the Comptroller and
Auditor General (C&AG) of India and the Director General of Audit, Defence Services (DGADS). CGDA is
responsible for preparation and submission of Appropriation Accounts of MoD (Civil) and Defence Pension
Grants

37. The Appropriation Accounts are put up before the Parliament for approval. If any money has been spent on
any service during a financial year in excess of the amount granted for the service for that year, the President
causes to be presented to Lok Sabha a demand for such excess. All cases involving such excesses are brought
to the notice of Parliament by the Comptroller and Auditor General through a report on the Appropriation
Accounts. The excesses are then examined by the Public Accounts Committee which makes
recommendations regarding their regularization in its report to the House. The demands for excess grants
are made after the expenditure has actually been incurred and after the financial year to which it relates has
expired.

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 Chapter: 3

Financial Transactions in MoD

38. 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:

39. 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.

Note: - 1. Cash basis means e-MRO and e-Payments

Transactions through e-Receipts and e-Payments

40. 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.

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 41. 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 FROM THROUGH TO

DEBIT SCROLL All Payments Confirmation of payments to e-FPB Online PAO
the beneficiaries
CREDIT SCROLL All Receipts Confirmation of receipts to e-FPB Online PAO
Govt.
DAILY MEMORANDA All Receipts & Payments For settlement with RBI e-FPB GAD RBI
DMS Date Wise Monthly To reconcile the total Receipts e-FPB Online PAO
Statement & Payments
VERIFIED DMS Duly verified by the PAO PAO confirms the correctness PAO e-FPB GAD
of Receipts& Payments

Monthly Statement of To reconcile the DMS with GAD Direct PAO

MSS
Settlement amount settled by RBI GAD Direct e-FPB
Wise Balance
Put through Statement with
Statement [Summary To reconcile with DMS and MSS RBI Direct PAO
SBI
of Transaction]

b. Transaction done through Settlement Account:

MEDIUM DESCRIPTIONS PURPOSE FROM THROUGH TO

ADVICE OF Advices to RBI for To raise Debit/Credit PAO1 Direct RBI &
CLEARANCE Credit/Debit PAO2

MEMO OF Confirmation regarding For clearance in the book of PAO1&

RBI Direct
CLEARANCE Credit/Debit PAO PAO2

Wise Balance Statement Inter Govt. To reconcile with Advice of RBI Direct PAO1&
Statement [Summary Adjustment [IGA] Clearance raised/received PAO2
of Transaction]

Note: PAO1 = Claimant PAO, PAO2 = Paying PAO

Page 16 of 41
The flow of documents involved in the reconciliation of payments made by DAD

Step 2
e-Payment to
Vendors
e-FPB

Daily
memoranda
Step 8A
St VDMS
St Step ep
ep 3 Ste
3A p8
1
D
Veri
SBI GAD
Paym e
bi D fied
ent t M DM
S Put through
autho Sc S (VD
rizati ro
Deposits with MS) Ste Step 5
on ll p6
Reserve Bank MSS
93/21/00 Step 4 RBI CAS
PRABAL NAGPUR
Pr.AO (CGDA) Step 7
Step 9 Summary of
Transaction

PCDA/CDA
reconciles
MSS, DMS &
Debit Scroll

Page 17 of 41
42. Process involved in e-Payments and CMP Rejections:

(a) Payment through SBI CMP:

b. Failed Transaction [CMP Rejections], Suspense Booking & its Clearance:

Steps ACTIVITY Section Code Head R+ R- Code Head C+ C-

In case of failed 93/020/96
Accounts
1 transaction (Minus Debt 93/021/00 100 (CMP REJ 100
(Systems)
Scroll Uploaded) SUSPENSE
93/020/96
At time of re-issue of
2 Audit 93/020/91 100 (CMP REJ 100
payments
SUSPENSE
Budget Head 100
If, transaction is required 93/020/96 100
3 Audit
to be cancelled (CMP REJ
SUSPENSE

Deposits with Reserve Bank (Payments)

43. The compilation under Deposits with Reserve Bank head will be done by system on receipt of scroll’s data
from SBI CMP. The system makes adjustments through T.E on the following occasions.

(a) For Debit Scrolls

(b) For Minus Debit Scrolls (failed transactions)

44. In case of difference in DMS amount with RBI figures [by System]
[Actual transaction may be Rs.100/-]

Page 18 of 41
 Steps Activity Code (+) (-) Code Head (+) Ch (-)CH
Head RT RT
1 When RBI Deposits 50 PSB 50
Figures more with Suspense
than the DMS Reserve (93/020/76)
(Rs.150) Bank
(93/021/00)
2 When RBI Deposits 50 PSB 50
rectifies with Suspense
the above Reserve (93/020/76
difference Bank
(93/021/00)
3 When RBI Deposits 40 PSB 40
Figures less with Suspense
than the DMS Reserve (93/020/76
(Rs.60) Bank
(93/021/00
4 When RBI Deposits 40 PSB 40
rectifies with Suspense
the above Reserve (93/020/76
difference Bank
(93/021/00

45. Reconciliation of SBI CMP Payments.

(a) At the end of the financial year, the amount outstanding in the code head 93/020/91 for SBI CMP will be
Zero.
(b) In order to ensure that the balances outstanding on account of SBI CMP transactions are correct, a
system check is available.
(c) 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.

(d) 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.

(e) System tallies SBI CMP transactions with compilation under Deposit with Reserve Bank Head as
follows and alerts CGDA/PCDA/CDA if the accounts are not tallied as under: -

Page 19 of 41
 Receipts to MoD [e-MRO]

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

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

48. Process involved in e-Receipts:

(a) Receipt to MOD:

Page 20 of 41
 (b) Action by Audit Section on various types of receipts/recoveries via e-MRO

(c) At the end of every month, the Monthly Statement received from RBI is cross checked with
the system generated DMS report and with booking on charge side of Deposit with RB head (93/021/00). In
case of difference in DMS with RBI Figures [by system], the discrepancy will be adjusted as under:

[Actual transaction may be Rs.100/-]

Page 21 of 41
49. An example describing e-receipt in MoD:

50. Letter of Authorisation: To enable MoD perform some activity for any other Ministry/ Department of GoI,
the said Ministry provides allocation of funds under their appropriate head through a document called LoA

On the basis of the said LoA the Unit provides necessary services/goods to the Ministry/Department
concerned. The bill raised for such expenditure incurred by Unit is paid by the PCDA/CDA debiting the 15 digit
head of account mentioned in the LoA. The PCDA renders an MIS to the Ministry/Department concerned.
The accounting information is also shared with the Ministry through e-Lekha.

These are the transactions originating in the Defence Books which are Adjustable against the
Balances of Civil Ministries. There are cases wherein MoD seeks services/goods from other Ministry, in such
case LOA is issued by CGDA as Pr.A.O. in favour of the Pr.A.O. of the concerned Ministry/Department.

Page 22 of 41
 Direct Booking under MEA Heads through Digital LoA

LOA contains the following details

1. Works to be undertaken
2. Budget
3. Executing Agency
4. Grants- No and 15-digit Code Head
5. SER CODE /SCCED CODE on e-LEKHA portal/relating to the Heads
Action by CGDA on receipt of LOA
a. Opening of Code head under 15-digit accounting head if not available.
Action by PCDA
1. Accept the LoA.
2. Make payments on such bills received from the unit.
3. Will render MIS report to the Ministry
4. Process with CGDA cases of surrender or requirement of additional funds.
Action by Unit: -
1. Will access the LoA on PRABAL.
2. Initiate procurement process.
3. Generate Sanction/Bill
4. Forward the same to PCDA for audit and payment.
5. Initiate the case for the surrender of funds, if required,

Direct Booking under MEA Heads through Digital LoA

Agent Ministry
(MoD)

Functional Digital LoA (Step 1)

PRABAL
Ministry (MEA)
Monthly Exp/Progressive Pr.AO (CGDA)
PFMS Exp/Surrender of LoA
(Step 5)
(Step 2) Digital LoA

PAO
(PCDA/CDA
)
Audit
Submission and
of Claim Paym
ent
Defence Services Training (Step 3)
Page 23 of 41
Establishments (Step 4)
(Units/DDO)
51. Illustration describing e-payments out of MoD:

52. Payment to Railways for the usage of railway sidings by the Defence Services through RBI CAS Nagpur is
elaborated through diagram as under:

Page 24 of 41
 1st Step
Bills/Vr for
Copy of
acceptance
Central Railway advice to
GE office where
transaction in books of PCDA/CDA
railway siding Account Section of
platform exist railway adjustable in PCDA/CDA
Defence 3rd Step (b)
2ndStep
Accepted
bills sent to Will prepare CIDS &
Central forward the Vrs to GE
Advice 3rdStep 6thStep
Railway office for adjustment/
raised (a)
Clearance of RBI
Suspense Classified
Head

00/020/82----- (-) CH
RBI CAS Nagpur - Service Head—(+)
adjustments in DPA CH
Here suspense is
cleared
4thStep
Clearance
memo issued to

(1) CM received
(2) CM received
from RBI in
from RBI in Central
A/c Section
Railway
of PCDA/CDA

Will adjust the

5thStep Clearance Memo
for Debit
Transaction

00/021/00---(+) RT

00/020/82---(+) CH

53. Suspense Account: -Payments which cannot, in the absence of orders or information, be adjusted in the
relevant Code Head, will be taken to the Head "Suspense Account". When information is received
subsequently, the correct head of account will be credited or debited by clearing the amounts compiled
under the head "Suspense Account". The Details in respect of Suspense Heads are available in Pamphlet of
RDR under various Minor Heads below Major Head 8659.

Page 25 of 41
 Note 1: No sum shall ordinarily be credited to Government by debit to Suspense head. Credit must follow
and not precede actual realisation.
Note 2: A service receipt for which full particulars are not given must not be taken to the head 'Suspense
Account' but should be credited to the Minor Head 'Other Receipts' under the Revenue Head to which it
appears to belong, pending eventual transfer to the proper head on receipt of detailed particulars.
Note 3: The charges under the head 'Suspense Account’ will consist of items for which full particulars, which
will enable the audit office properly to classify them, have not been given.

TYPES OF SUSPENSE OPERATED IN DEFENCE SERVICES

Minor Nature of
Code Heads Rt/Ch Significance
Head transactions
8659 –Suspense Accounts (Defence)

Outstanding Receipt/Credit balance represents

recoveries like GPF or loans and advances etc, in
respect of the officials of the Central
Receipt Ministries/Departments on deputation under the
establishment of MoD, have been recovered but
Representing
00/020/01 not passed on to the Concerned
101 - PAO transactions with
to Ministry/Department in absence of details.
Suspense PAOs of various
00/020/50
Civil Ministries.
Outstanding Charge/Debit balance represents
that Supply and Services rendered to Civil
Charge Ministries /Departments but reimbursement
awaited from PAO of the concerned
Ministry/Department.

Outstanding Receipt/Credit balance represents

recoveries like GPF or loans and advances etc, in
respect of the officials of the State Government
Receipt on deputation under the establishment of MoD,
Representing have been recovered but not passed on to the
transactions with concerned State Government in absence of
00/019/01
102 - AG Accountant details.
to
Suspense General of States
00/019/29
and Union
Territories Outstanding Charge/Debit balance represents
that services and supplies rendered to State
Charge Government and given aid to civil power etc but
subsequent reimbursement from AG Concerned
are not received.

Receipt/ Suspense on debit/credit is operated to book the

Representing
108 - PSB difference between the figures of debit/credit
00/020/76 transactions with
Suspense scrolls/DMS of SBI Transactions and monthly
Public Sector Banks
Charge Statement of advice of RBI CAS Nagpur.

109 - RB RB The transactions Receipt Minus Credit/Debit balances under this head
Page 26 of 41
 Suspense Suspense originating in the shows that Audit Sections have adjusted the
(Classified)- books of Railway, claims but Clearance Memos’ are either awaited
020/82 Post and from RBI CAS, Nagpur or if received, the same
Telegraphs and have not been compiled by the Accounts Section.
MEA due for final Charge Position will be just reverse when the balance
adjustments in under the above head closes as Plus Credit/Debit.
Defence Account
are booked under
this suspense head.
RB
Representing Receipt Suspense on debit/credit is operated to book the
Suspense
transactions with difference between the figures of debit/credit
(Unclassifie
RBI. Charge scrolls and DMS of RBI Branches.
d) – 020/83

Representing Receipt
113 - PF transactions Outstanding Debit/credit balance represents the
00/020/55
Suspense relating to various balances details of which are awaited.
fund accounts Charge

Receipts and payments which cannot in the

00/020/61- Miscellaneous Receipt
absence of further information or order, be
63,65,66,72 transactions not
140- Misc. allotted to any head of account, and head to
,74, 87- covered under
Suspense which transactions are likely to be adjusted are
90,93,94 Minor Heads 101
Charge not known, are to be booked to Miscellaneous
etc. to 138 above
Suspense.
8670 – Cheques and Bills
Negative balances under these heads represent
payment made to the beneficiary and scroll
received from e-FPB and adjusted but initial
111 – Payment through compilation of payment authorisation is still
Electronic 93/020/91 online mode (SBI Receipt under process.
Advice CMP)
Positive balances under these heads represent
debit scrolls awaited from e-FPB.

8677 – Remittance into Banks/Treasuries

Negative balances under these heads represents

104 - E-receipts through
93/020/80 Charge receipts realized and scroll received from e-FPB
Defence e-MRO
but not adjusted by Audit Section.

Page 27 of 41
 Chapter:4
Correction of Accounts

54. If an item, which properly belongs to a Revenue or Expenditure Head, is wrongly classified under another
Revenue or Expenditure Head, the error may be corrected any time before the accounts of the year are
closed. However, an error no matter how old and small it may be, must be corrected if it affects a head
closing to Balances (viz. Debt, Deposit or Remittance Head). If the accounts of the year in which the error
took place are open, the correction should be made immediately.

55. If the accounts of the year in which the error took place are closed, then the following procedure should be
followed: -
(a) An item taken to one debt, deposit or remittance head instead of another, the correction
should be made by transfer from one to the other;

eg:- Advance paid to MSEDL as security deposit for HT connection, has been compiled to 00/018/64 (Defence
advances – Miscellaneous)instead of 00/020/85 (security deposit by Central Government offices with the
state). This can be rectified by a transfer entry as under:
Code (+) (-) Code (+) (-)
Head Receipt Receipt Head Charge Charge
00/020/85 100
00/018/64 100

(b) An item credited to a debt, deposit or remittance head instead of a revenue head – the
correction should be made by transfer to the head under which it should originally have appeared.

eg:- When an amount erroneously compiled to 00/012/15 (Computer Advance) head instead of 00/004/19
(Interest on Computer Adv) code head. This can be rectified by a transfer entry as under:

Code (+) (-) Code (+) (-)

Head Receipt Receipt Head Charge Charge
00/004/19 100
00/012/15 100

(c) An item debited to a debt, deposit or remittance head instead of to an expenditure head-the
correction should be made by transfer to the head under which it should originally have appeared;

eg:- When an amount erroneously compiled to 0/017/05 (Misc Deposit) instead of service head then
rectification transfer entry will be as under :

Code (+) (-) Code (+) (-)

Head Receipt Receipt Head Charge Charge
00/017/05 100
Service 100
Head

(d) An item credited to a Revenue head instead of to a Debt, Deposit or Remittance Head-
correction should be made by debiting refunds and crediting the proper head;

eg:- When an amount erroneously compiled to revenue head i.e Gratuity (014/56) instead of 00/012/07 (HBA)
,then rectification transfer entry will be as under :

Page 28 of 41
 Code Head (+) (-) Code (+) (-)
Receipt Receipt Head Charge Charge
00/012/07 100
00/014/56 100
or
Deduct –Refunds
Head wherever
available

(e) An item debited to an expenditure head instead of to a Debt, Deposit or Remittance

Head-the correction should be made by debiting the proper head and crediting the relevant receipt
head.

eg:-When an amount erroneously compiled to 94/30 ( office expense) as plus charge instead of 00/020/98
(Permanent Advance), then rectification transfer entry will be as under:

Code Head (+) (-) Code (+) (-)

Receipt Receipt Head Charge Charge
*00/094/15 XXXX 00/020/98 XXXX
(other Misc
Receipt)

• Minus charge of 00/094/30 instead of Plus receipt to 00/094/15 (Other Misc Receipt) will
Increase allocation in that financial year.

Note 1: After the accounts of the year are closed, corrections or transfers affecting Capital Major Heads, unless
they affect the accounts of different Governments, should usually be effected without financial adjustment by
alteration of progressive figures, without passing the debit or credit entries through the account of the year's
financial transactions. This would prevent unnecessary inflation of the current year's accounts and the voting
of grants of doubtful propriety which the inclusion of the correcting entries in the current accounts would
otherwise involve.

Note 2: Should an error or omission in the recorded expenditure of a work come to light after its accounts
have been closed, the accounts may be reopened in order to rectify the error or omission unless the amount
involved is not more than ten rupees in which case a note of the error or omission, should be made in the
relevant documents concerned.

Transfer Entries and Check of Classification

56. Transfer entries, that is, entries intended to transfer an item from one head of account to another are
necessary in order: -

(a) to correct an error of classification in the original accounts or to revise classification

provisionally made as a matter of convenience in the first instance;
(b) to adjust, by debit or credit to its proper head an item outstanding under debt heads;

In a transfer entry all particulars explaining both the nature of the adjustment and (if a correcting
transfer) the grounds of the correction must be clearly stated.

Periodic Transfer/Adjustment

57. Adjustments/readjustments subject to the general rules governing rectification of misclassifications should
always be made as soon as the necessity for them is discovered.

Page 29 of 41
58. Annual transfers should be avoided as a rule, but in certain cases, such as adjustments of lapsed deposits
and interest on Provident Fund, Annual/Quarterly transfers are permissible. In those cases, the adjustments
shall invariably be made before the closure of the accounts of the year to which the transactions relate.

A list of adjustments required to be made periodically should be maintained in order to ensure that they are
done regularly.

Checks of Classification of Receipts and Charges

59. The following general checks will be exercised by the concerned payment section in the Sectional
Compilations and monitored by Accounts Section of the Controllers before rendering monthly review of
compilation certificate to the HQrs Office: -

AAO AO/SAO G.O.(ACCOUNTS)

PM Prepared are correctly Action has been initiated to Necessary checks prescribed for
compiled in the sectional ascertain reasons for all minus the AAO/AO/SAO have been
compilations transactions in receipts and exercised.
charges and dealt with promptly
No PM operated has been left Reasons for progressive Minus Debit and credit scroll correctly
over in the sectional compilation figures in the heads are examined compiled and reconciled with the
and prefix category correctly and remedial actions taken to Deposits with RB Head.
operated wherever required. clear the minus compilations

60. Closure of Accounts-due dates:

AUTHORITY FOR
DESCRIPTIONS NATURE OF TRANSACTIONS APPROVING DATES PRESCRIBED
TRANSACTION
All Original Cash out flow As per Delegation of 31st March
Payments Powers
through SBI CMP
March (Pre) Compilation of payments authorized upto 31st As per Delegation of Upto 15th April or as per the
Accounts March as Class I voucher [including Powers dates prescribed by RBI/CGA
corrections]
March Adjustments through (i) Class II Vouchers to As per Delegation of Upto 15th May or as per the
Supplementary adjust accounts or carry out rectifications. (ii) Powers dates prescribed by CGA
Accounts (March Class III Vouchers on account of CID
Final) Schedules & (iii) Class IV Vouchers to adjust
Cash Accounts of Imprest holders/ Cash
Assignment holders.
Journal Entries Adjustment of Misclassification etc noticed CGA through CGDA 1st Week of June or as per
after closure of accounts the dates prescribed by CGA
Proforma Adjustment of those transactions which are CGA through CGDA Prior to finalization to
adjustments not incorporated in the Defence Proforma appropriation accounts
outside the Accounts of the same year and come to light
Books of RBI after the accounts of the financial year are
closed by the Reserve Bank, will be accounted
for in the accounts of the same financial year,
outside the books of Reserve Bank by
correction to the “Reserve Bank Deposits-
Defence” on a proforma basis.

Page 30 of 41
 Chapter 5

Annual Closure of Accounts

61. Defence Ledger is generated online in the form of statement showing receipts and charges and balances
under the heads of accounts consisting of Revenue, Debts, Deposits, Loans and Advances, Suspense and
Remittances head.

Annual Review of Balances [AROB]

62. The accounts of the year are not complete until the balances upon the Ledger under the Debt and other
Balanced heads have been verified. Accordingly, after the books of the year have been closed, an
explanatory statement of closing balances, called the Review of Balances, will be prepared in the form of a
general report which will take up each of the heads in succession. The report should contain: -

(a) A statement of each ledger balance which is to be explained, (with year-wise break- up);

(b) An explanation of the nature and condition of the liability involved in it;

63. The amount booked under Revenue, Capital and other transactions of Government including Deposits with
RB, the balances of which are not carried forward from year to year are closed to a single head called
‘Government Account’.

64. The balances under the head represent the cumulative effect of Debt, Deposit and Remittance Heads,
Contingency Fund and closing cash balance.

65. The correctness of net credit /debit balances worked out in Statement 13/AROB is verified and proved by
adding the same to Government Account under book keeping system.

The balances under relevant code heads under following Major Heads are mentioned in AROB:

Sl. Major Head Identification of Adverse/Outstanding Balance

No.
1 7610- Loans to Govt. Credit balance under this head represents adverse balance. It
Servants should always be closed as net debit balance.
2 8014- Insurance and Credit balance under this head represents that confirmation is
Pension Funds awaited from PLI Directorates, though PLI premium is recovered
from the Pay & Allowances of Officers/PBORs.
3 8433- Civil Deposits Unclaimed fund balance for more than three years should be
transferred to the credit of the Government as Miscellaneous
Receipt.
4 8444- Deposits-Defence Unclaimed balance for more than three years should be
transferred to the credit of the Government as Miscellaneous
Receipt.
5 8550- Civil Advances Outstanding debit balances under this head should be adjusted
within six months against the arrears of Pay & Allowances, leave
salary, death gratuity, balance in the Contributory / GPF etc due
in respect of deceased official.
6 8551 – Defence Advances Outstanding debit balance under these heads represents imprest
account/cash account are outstanding from units and yet to be
compiled.
7 8659- Suspense Accounts Refer table under Para 53
Page 31 of 41
 – Defence
8 8670- Cheques and Bills Refer table under Para 53
9 8677- Remittance into Refer table under Para 53
Bank/Treasuries
10 8787- Adjusting account Outstanding balances under this head represents that
with railways reimbursement from Railway is awaited.
11 8788- Adjusting account Outstanding balances under this head represents that
with Post reimbursement from Department of Posts is awaited.

66. Following MIS reports are prepared at the end of the Financial Year for the authorities at MoD& CGA

(a) Statement of Central Transactions (SCT): SCT of Defence Services Receipts and Charges:
After rendering March Supplementary – I (March Final) Accounts to CGA, DAD HQrs prepares an
Annual Statement of Central Transactions (SCT) of Ministry of Defence indicating progressive
Receipts and Charges each year and sends it to the CGA, DGADS and MoD (Fin) on the dates
prescribed by them. SCTs for Controller Nos 097 & 073 (i.e. Defence & Civil) are prepared
separately.
(b) Annual Finance Accounts of the Central Govt. (including Defence Services), prepared by the
Controller General of Accounts after the close of each financial year.
(c) Combined Finance and Revenue Accounts pertaining to the Defence Services: The
Controller General of Defence Accounts (CGDA) prepares the portion of the same and submits it to
the Controller General of Accounts (CGA) for incorporation in the Combined Finance and Revenue
Accounts of the Central and State Governments in India.

Note:-Finance Accounts contain various statements. Some of the important Statements rendered by
CGDA to CGA are as under:-

Page 32 of 41
PREPARATION OF AROB (ANNUAL REVIEW OF BALANCES)

DEFENCE LEDGER

CLOSING OF ACCOUNTS

CLOSE TO GOVT ACCOUNTS CLOSED TO BALANCES

(Revenue, Capital & Deposits Deposits, Advances, Suspense,

with Reserve Bank) Loans & Advances by Central
Govt.
Not carried forward to the
Next financial year

Verification of Balances

Review of Outstanding
Balances
[Statement 5 & 13)

Note: A real-time AROB is available online showing the balances of Debt and other balanced heads.

Page 33 of 41
 Chapter 6
Miscellaneous

67. Cash basis of Accounts: The transactions in Government Accounts shall represent the actual cash
receipts and disbursements during a financial year as distinguished from amounts due to or by the
Government during the same period.

Exception: Book adjustments may be authorized by any rules included in this Code or Account Codes or by any
general or special orders issued by Government, after consultation with the Comptroller and Auditor General
[C&AG]

68. Currency in which Accounts are kept: The Accounts of Government kept in India are maintained in
Indian Currency.

69. Form of Accounts- Government Accounts are to be kept in the following three parts as per the
Constitution of India:

(a) Consolidated Fund of India (Refer Para 266 (1) of the Constitution of India)
(b) Public Account of India (Refer Para 266 (2) of the Constitution of India)
(c) Contingency Fund of India (Refer Para 267 (I) of Constitution of India).

70. Special expenditure on account of field operations and special services: Special instructions are
issued, as and when necessary, by the Controller General of Defence Accounts, with the concurrence of the
Ministry of Defence (Finance) for the preparation, submission and adjustment of accounts connected with
field operations and special services.

71. Write off from "balance" heads to "Government: Ordinarily all amounts due to Government which
are found to be irrecoverable shall be written off from the Debt Head of Accounts concerned to an
expenditure head as a loss to Government. Similarly, any amount due by Government remaining unclaimed for
such time as may be prescribed by Government may be credited as Revenue of the Government concerned by
Debit to the Debt or Deposit Head concerned. Amounts outstanding due to book-keeping errors under heads
which close to balance may be written off to Major Head '8680 Miscellaneous Government Account' , Minor
head-102 "Write off from Heads of Accounts closing to balance" with the specific approval of the Comptroller
and Auditor General.
Note 1- (A) The powers of the Comptroller and Auditor General of India, referred to above may be exercised
by the Controller General of Defence Accounts, Additional Controller General of Defence Accounts and Pr.
Controller/Controller of Defence Accounts in cases where the amounts to be written off do not exceed Rs.
1000/- provided that:—
(i) The amounts written off have thoroughly been examined by the Internal Audit Sections;
(ii) The CGDA/Addl. CGDA/PCDA/CDA is personally satisfied that the items have been outstanding for
over 5 years, and that a dead end has been reached in all cases and that a write off is unavoidable;
and
(iii) The CGDA/Addl. CGDA/PCDA/CDA has also satisfied himself that the outstanding is the result of a
book keeping error only.

(B) The Deputy Controller General of Defence Accounts and Additional Controller of Defence Accounts /Joint
Controller of Defence Accounts may also write off the outstanding amount upto Rs. 100/- in each case under
the head 'Provident Fund Suspense' subject to his having satisfied himself about the conditions (i) to (iii) in
'A' above. Items written off by the Dy. CGDA/Addl CDA/Jt. CDA shall be submitted to the next higher
authority for review.
Page 34 of 41
 Note 2- Where it is not possible to establish that un-reconciled balances/differences under the heads of
account which close to balance are either due to book-keeping errors or involve loss/receipts, the
balances/differences may be written off to 'Government Account' with the approval of the Comptroller and
Auditor General after obtaining the concurrence of the Government concerned.

Note 3- The amounts written off by the authorities under powers delegated to them in respect of
"Provident Fund Suspense" should be reported Half Yearly to the Accounts Section of the CGDA's office by
1st May and 1st November covering the period of accounts upto 31st March and 30th September
respectively. The report regarding the write off from suspense heads other than Provident Fund Suspense
covering the period from 1st October to 30th September should be rendered annually so as to reach the
CGDA's office by 1st of November. Nil reports will also be required in respect of write off from all suspense
heads.

72. Classifications of refund, recoveries and losses:

A Refunds of bonafide receipts and recoveries of over-payments: The charges due to refunds
of bonafide receipts, and receipts on account of recoveries of over-payments are compilable as
under, irrespective of the monetary value of the items involved;

(i) Refunds of bonafide receipts: The amounts refunded will be compiled by deduction
from the head which was over credited in the first instance, whether such refunds are made
in the same year or in subsequent years.

(ii) Recoveries of overpayments: Recoveries of over-payments shall be credited as

reduction in expenditure irrespective of the year in which such recoveries are affected.

B Refunds of Revenue shall as a General rule be taken in reduction of the Revenue Receipts. In
so far as the Sector' A- Tax Revenue' is concerned the refunds authorised by the income tax
authorities shall be accounted for under a distinct Sub- Head (deduct refunds) below the relevant
Minor Heads under the Major / Sub-Major Heads in that Sector, so that the net collection of each tax
/ duty (accounted for under the Minor Heads) can be readily ascertained from the accounts.

The refunds of Revenue relating to the Sector 'B-Non-Tax Revenue', and 'C-Grants-in-Aid'
and Contributions may be accounted for under separate Minor Heads 'Deduct Refunds' under the
Major/Sub-Major Heads falling in these Sectors, in case it is not practicable to exhibit such refunds as
Sub-Heads below the programme Minor Heads.

C Recoveries by one government from another (within India)

(i) If the recoveries represent debits to another Government of expenditure which was so
debitable from the moment it was sanctioned, they should not be treated as revenue of the
Government affecting the recoveries but as deduction from expenditure.

(ii) In case of joint establishment, where the expenditure is not shared by two or more
Governments ab initio, but is incurred by one of the Governments and partially repaid by the
others, the repayment, if made while the accounts of the year are still open, should be treated
as deduction from expenditure.

(iii) Recoveries of the classes falling under (i) and (ii), if not effected within the accounts
of the year in which the expenditure was incurred, should be treated as revenue.

Page 35 of 41
 D Recoveries from Private Persons or Bodies and Governments outside India

Recoveries of expenditure for services or supplies made to non-Government parties or other

Governments (including local funds and Governments outside India) shall in all cases be classified as
receipts of the Government rendering such services or supplies.

Exceptions: When a Government undertakes a service merely as an agent of a private body, so that
the entire cost of the service is recovered from that body, the net cost of Government being nil, the
recoveries may be taken as reduction of expenditure.

E Losses

(i) Classification of buildings, lands, stores and equipment Losses or deficiencies of

such assets shall not be classified under a separate head, in the accounts, though they should
be written off from any value or commercial account that may be maintained. If any
transactions under these categories are recorded under a Suspense head in the Government
accounts, losses or deficiencies relating thereto shall be written off the Suspense heads also.

(ii) Classification of losses or deficiencies of cash in hand, whether in treasuries or in

departmental charge, all losses or deficiencies of this type shall be recorded under relevant
separate heads in the accounts.

Note 1:- The acceptance of counterfeit coin or notes shall be regarded as a loss of cash.

Note 2 :- Any recovery made in the course of the year in which the losses are brought to
account shall be shown by deduction from the head under which the loss is recorded. Any
recovery made after the accounts of the year are closed shall be as an item of receipts.

a. Irregular and unusual payments: It shall be recorded in the accounts with general reference to
the ordinary rules of classification according to the nature of the expenditure; for example an
overpayment of salary shall be debited to the head "Salaries".
b. Classification of inevitable losses: Where losses are an inevitable feature of the working i.e CSD,
Naval Dockyard, the major head of accounts under which the expenditure of that department is
classified shall contain separate descriptive heads under which such losses shall be recorded

73. Compilation Reports in DAD are generated online:

(a) Sectional compilations: Section wise compilation generated to exhibit the amount compiled
under each code head during the month.
(b) Consolidated Compilation of All India Defence Services Receipts and Charges: Shows the
current and progressive figures under Major, Sub Major, Minor, Sub Head, Detailed Head and code
head.
(c) Consolidated Compilation of RD&R Heads: Shows the progressive figures in respect of each
Controller under each R D & R Head. The total receipts and expenditure under Service Heads
(Revenue/Capital Expenditure and Receipts) are transferred to the respective RD&R conversion
heads (006/00 for Army, 006/01 for Navy, 006/02 for Air Force, 007/00 for Dte of Ordnance, 007/01
for R&D and 011/00 for Capital Outlay both on receipts and charges). This enables to ensure receipt
and charge figures are balanced at the end of the monthly closing of account.
(d) Analysis of All India Defence Services Receipts and Charges: Shows the current and
progressive figures separately for each Controller and under each Code Head of Classification of
Hand Book.
Note: Query Module is also available for generation of reports as per the requirement of users.

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 74. Embassy Accounts

All Embassy accounts are centrally received in PCDA, New Delhi from Pr CCA, MEA. Accounts are
received together with a copy of Advice on RBI, CAS Nagpur and entered in Inward Claim Register.
The same will be adjusted by Audit Section after scrutiny by preparing Class III PM by prefixing
category ’74’ to RB Suspense Classified (74/020/82) as Minus Receipt/Charge per contra adjustment
to Service Heads as Plus Receipt/Charge. This head will be cleared on receipt of clearance memo
from RBI, CAS Nagpur.

75. Accounting of pay and allowances of DAD staff and officers posted abroad:

With effect from 18-03-2009 PCDA, New Delhi has been nominated as Proforma Controller for DAD
officers and staff posted abroad in Mission/Embassies. The Controllers will forward the Last Pay
Certificate of the DAD personnel to the PCDA New Delhi who are proceeding on deputation to
foreign Embassies/Missions abroad.

76. Accounting of Foreign Procurements:

Procurements through foreign vendors are paid through Letter of Credit. Foreign transactions are
presently handled by PCDA New Delhi, PCDA (Navy) Mumbai, PCDA (R&D) Bangaluru, PCDA (R&D)
Hyderabad and CDA (R&D) Bangaluru.

77. Capital Receipts during construction mainly to be utilized in reduction of Capital expenditure:
Receipts and recoveries on Capital Account in so far as they represent recoveries of expenditure
previously debited to a Capital Major Head shall be taken in reduction of expenditure under the Major Head
concerned except where, under the rules of allocation applicable to a particular department, such receipts
have to be taken to Revenue.

78. The sale proceeds of Government land and buildings will be credited to Major Head ‘4000 –
Miscellaneous Capital Receipts’ in all cases.

Note: The progressive capital expenditure under the specific Major Head, from which the original
expenditure/investment was made, will be reduced through Prior Period Adjustment Account (PPAA)
corresponding to the expenditure incurred initially.

79. Charged Expenditure: Payment in respect of "Charged" expenditure will not be made without the
specific allotment of funds. In the absence of specific allotment of funds and in urgent cases, PCsDA/CsDA
may use their personal discretion to authorize provisional payments in the absence of allotment under
‘Charged Expenditure’ in order to avoid ‘contempt’ of court. PCsDA/CsDA at the same time should show
utmost promptitude in obtaining sanction for implementation of court judgments and allotment of funds
under charged expenditure, under intimation to the concerned authorities at HQrs of the Commands.

However, in case where an allotment letter issued for a particular year lapses due to non-payment
during that year, a fresh allotment letter has to be issued for the year in which payment is actually made

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80. Contingency Fund of India: Expenditure met out of advances from the Contingency Fund of India
should be recorded under the Major Head "Contingency Fund" with the same details as it would have been
recorded if it had been met out of the Consolidated Fund India."

Payments made out of the advances drawn from the Contingency Fund will be debited to the Heads
of Accounts specified under Part II-Contingency Fund of India in the Pamphlet of RDR Heads.

When an expenditure initially met out of an advance drawn from the Contingency Fund is recouped
to the Fund on passing the necessary Appropriation Act, the relevant Minor Head under the Major Head
'Contingency Fund' (which was initially debited at the time of the drawal of advance) will be credited per
contra debiting relevant Service Head, as Minus Debit or Plus Credit depending on whether the readjustment
is made in the account of the same financial year or next financial year respectively.

81 Object Heads: Object heads are in use in case of Civil Organisations only covered under DDG for
budgetary allocations. The list of object heads is given in Delegation of Financial Power Rules.

82 Contribution made by government: Article 282 of the Constitution provides that the Union may
make any grants for any public purpose, notwithstanding that the purpose is not one with respect to which
Parliament may make laws. The word "Grant" used here should be taken to mean not merely "Grant-in-Aid"
but also other direct expenditure.

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 Glossary

01. Proforma Account: There is one Central Account in the books of RBI for Defence Services. This is
maintained by Central Accounting Section (CAS) of RBI, Nagpur. The balances of the Defence Services have
been created Proforma in the books of RBI. Any payment or receipt by Defence Services affects the Proforma
Account. The Payments/Receipts made through SBI CMP Fast Plus/SBI e-MRO Portal or by any branch of SBI
will be consolidated daily by SBI Government Accounts Department (GAD) and settled (put through) with RBI
CAS, Nagpur.

02. e-MRO [e-Receipt]: e MRO contains the details of payee, amount, purpose, in favour of which
Controller etc. in respect of payments made [e-Receipt] to MoD through e-MRO portal by any individual or
unit.

03. e-Credit Scroll: A list containing all details of individual receipts to MoD. This is generated at SBI CMP
Centre (e-focal point branch) and pushed to PRABAL portal.

04. e-Debit Scroll: A list containing all details of individual payments made by MoD. This is generated at
SBI CMP Centre (e-focal point branch) and pushed to PRABAL portal.

05. SBI CMP Rejection: Certain transactions fail due to incorrect Account Number, IFSC, and Closed
Accounts etc. SBI CMP e-focal point branch provides Minus Debit Scroll [Flag 9] for Accounting of such failed
transactions in the System.

06. Accounting Circle: Accounting Circle means Accounting Centre responsible for the Accounting
Functions of payments/receipt transactions carried out in that area. The accounting of all payments/receipts
by DAD is carried out centrally through PRABAL, under Single Accounting Circle [SAC].

07. e-Focal Point Branch: SBI CMP Centre will act as link as well as e-Focal Point Branch [one point of
contact]. SBI CMP is responsible to provide the details of e-Payments/e-Receipts to Pr. AO (CGDA)/PAO
(PCDA/CDA).
08. Deduct Head: These are separate code heads under which the receipts and recoveries are to be
booked as per provisions of Defence Accounts Code
09. Capital Expenditure: Significant expenditure incurred with the object of acquiring tangible assets of a
permanent nature (for use in the organisation and not for sale in the ordinary course of business) or enhancing
the utility of existing assets, shall broadly be defined as Capital expenditure. Expenditure on a temporary
asset, cannot, ordinarily be considered as expenditure of a Capital nature.

10. Revenue expenditure: Charges on maintenance, repair, upkeep and working expenses, which are
required to maintain the assets in a running order as also all other expenses incurred for the day to day
running of the organisation, including establishment and administrative expenses, shall be classified as
Revenue expenditure.
(Please refer Rules 29 to 31 of Government Accounting Rules, 1990 for details in r/o Revenue and Capital
Expenditure).

11. Deposits : Sums which are clearly not due to Government but are held in trust, or as a security for a
specific purpose. These are of following types:

(a) Security Deposit ( Please refer Rule 200 to 216 of FR Pt 1 VOL -1)

(b) Lapsed Deposit(Please refer Rule 189, Central Government Account Receipts and Payment
Rules, 1983)
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Note: The period of limitation for recovery by Contractors of Security Deposits from the Government is 30 years
from the date of deposit.

12. Advances: Advances include all payments made in advance, which are subject to recovery or
adjustment. It will not include pay, pension or travelling allowances or any other advance which is compilable
to Service Heads of Accounts. These are of following types:

(a) Permanent Advances: advances of a permanent nature for current contingent charges will be
held in the names of officers to whom they are made. They will be personally responsible for these
advances until accounted for by them in the manner indicated in Pay and Allowances Regulations for
the Army, Navy or Air Force as the case may be. If an advance has been allowed as a temporary
arrangement, the fact will be prominently indicated against the entry in the above register and its
adjustment will be carefully watched.

(b) Civil Advances: Money advanced for miscellaneous purposes under special authority and
recoverable in cash and sums overpaid on vouchers other than those for service payments shall be
adjusted under the Major Head '8550-Civil Advances'. Payments made on account of Government
expenditure should not be held under 'Civil Advances' on the ground that further proceedings in audit
are necessary for their final admission. This head shall cover items, which are from their inception,
debts due to Government, recoverable either in cash or by deduction from Pay and Allowances. Pay
and Allowances of any kind in respect of an assignable period paid before they are due, shall be
debited to the same head as and when paid after they are due.

13. Loans: Loans refer to Payments specially sanctioned by Government subject to recovery, with or
without interest. [For more details please refer to Pamphlet of RDR Heads].

14. Recovery: It means repayment by one Department/Government/Non-Government

Party/Autonomous Body/Private Person/Private Body to another Department.

15. Centrally Controlled Heads (CCH): Expenditure in respect of Pay and Allowances and Pension of
regular personnel of the Armed Forces, which are obligatory commitments dependent on the strength and
composition of Armed Forces, and various other factors governed by the policy decisions of the Government
of India, are controlled centrally by the Armed Forces Headquarters. The accounting heads, under which the
expenditure of this nature is compilable, are called "centrally controlled heads".(See Rule 82 of FR Part 1 Vol
1, for details).

16. Locally Controlled heads (LCH): Other expenditure susceptible to local control handled by lower
formations, are covered under “locally controlled heads”.(See Rule 82 of FR Part 1 Vol 1, for details)

17. Grants-in-Aid: As a general principle Grants-in-Aid can be given to a person or a public body or an
institution having a distinct legal entity and detailed guidelines in this regard are prescribed in General
Financial Rule (GFR). Ministry of Defence gives grants-in-aid of recurring and non-recurring nature to the non-
Governmental bodies like Jawahar Institute of Mountaineering, Pahalgam, Calicut University, Cochin
University of Science and Technology(CUSAT), Kochi Centre for Techno Strategic Studies (CTESS), CARE, IIT
Delhi, Vijayanta, Senior Secondary School (Eng Med), HVF Managing Committee, Avadi, Life Science Research
Board (LSRB), Naval Research Board [NRB], Armament Research Board (ARMREB), CSD, Directorate of
Defence Labour Procurement etc.

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18. Cash Assignment: Cash Assignment is a letter of credit in favour of a Disbursing Officer authorising a
particular Treasury Officer or the Bank to make payments demanded by him upto the limits specified therein.

19. Charged Expenditure: In accordance with Article 112(3) (f) of the Constitution of India, payments
made in satisfaction of a judgment decree or award of any court or arbitral tribunal will be treated as
expenditure “Charged” on the Consolidated Fund of India and will not be subject to vote by the legislature. All
other expenditure met out of Consolidated Fund of India will be treated as Voted Expenditure. Charged or
Voted expenditure shall be shown separately in the accounts as well as in the Budget Documents.

20. Bonafide Receipts: These are mandatory recoveries and no consent from individual/unit is required.

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