CHAPTER XIII—SUSPENSE ACCOUNTS
A.—INTRODUCTORY
343. The account head 'Suspense", sub-divided into as many of the five heads
named as:
(1) Purchases, (2) Stock, (3) Miscellaneous P. W. advances, (4) London Stores,
and (5) Workshop Suspense.
These heads are of a temporary character and all transactions recorded under
them, are ultimately removed either by payment, or recovery, in cash, or. by
adjustment.
The transactions, therefore, consist of both debits and credits, the latter being
treated as reduction of expenditure when making up the account of the major
head.
B.—PURCHASES
344. When materials are received from a supplier or from another division or
department, their value should be credited to Purchases—
immediately on their receipt, if they have been received for a specific work,
the cost may be included at once in the accounts of the work as well as the
connected subsidiary accounts.
345. When the actual value of the materials is not known, an estimated figure
should be adopted,
any difference being adjusted by a plus or a minus credit to Purchases.
346. When the price of the materials is paid or adjusted by transfer, the payment
should be debited to Purchases, and the outstanding credit thus cleared.
347. Unclaimed balances in the Purchases account should be dealt with in
accordance with the procedure prescribed for Deposit balances regarding the
repayment of lapsed deposits applies mutatis mutandis to repayments of
lapsed balances of Purchases.
The account of this head should be kept in Form 67, Suspense Register, the
details being recorded in a separate set of folios for each of the two headings
(1) Purchases for stocks, and (2) Purchases for specific works.
SUSPENSE ACCOUNTS
C—STOCK
349. The head "Stock" is opened in all divisions in which stocks of materials are
maintained for general purposes.
In divisions in which no stocks are maintained, this account should be
opened only when any manufacture operations are undertaken.
350. The money limit for the stock reserve of the division, is meant to be
applied to the value of materials acquired or manufactured for stock purposes
only.
Excesses over this limit are permissible only when caused by unadjusted
expenditure on manufacture operations connected with specific sanctioned
works.
351. The account head "stock" is debited with:
all expenditure connected with the acquisition of stock materials and with:
all manufacture operations, and with:
the expenditure incurred on storage.
It is credited with the value of materials issued to works or sold, transferred
or disposed of, and:
The balance of the account will represent:
the book value of the materials in Stock plus
unadjusted charges, etc. connected with manufacture and
the unadjusted expenditure on storage.
352. The sub-heads of the Stock account are:—(1) Small Stores, (2) Building
Materials, (3)Timber, (4) Metals, (5) Fuel, (6) Painters stores, (7) House fittings,
(8) Miscellaneous Stores, (9) Land, Kilns, etc., (10) Manufacture, and (11)
Storage. Nos. (1) to (8) may be replaced locally by other suitable heads, if
necessary.
353.
a) The general account of the receipts, issues and balances of the suspense head
"Stock" should be, maintained in the Suspense Register, Form 67.
A separate account should be kept in respect of each sub-head the
transactions of the several sub-divisions being detailed therein as separate items
and the totals of all sub-divisions as another.
Transfers within the division should be accounted for against a single item
"Deduct—Transfers within Division", before the total for the entire head "Stock"
is struck.
354. The balance under the sub-head "storage" at the end of a year should be
adjusted finally on closing the accounts of that year as a "surplus" or "deficit", i.e.,
as profit or loss on stock, according as it is a minus or plus balance, and should not
be carried forward to the following year.
D.-MISCELLANEOUS P.W. ADVANCES
355. Transactions recorded under the head 'Miscellaneous P. W. Advances" are
divided into four classes:—
1. Sales on credit. 2. Expenditure incurred on Deposit Works in excess of
deposit received. 3. Losses, retrenchments, errors etc.
4. Other items.
356. When stores of any kind are sold on credit, their value should be debited to
Miscellaneous P. W. Advances under the sub-head "Sales on credit", so that:
(1) the accounts of Stock or works from which the materials are issued may be
kept correctly, and
(2) the recovery of the value from the local body or individual concerned may
be watched through the regular accounts
357. Outlay on Deposit Works is required to be limited to the amounts of
deposits received.
Any expenditure on deposit works incurred in excess of the amount deposited
is chargeable to Miscellaneous P. W. Advances pending recovery.
358. Under the heading Losses, retrenchments, errors, etc.", appear the following:
—
a) Deficiencies in cash of stock. b) Actual losses of cash or stock.
c) Errors in accounts awaiting adjustment. d)Retrenchments and losses of
other kinds recoverable from Government servants.
359. The head 'Other items' is meant for all debits, the allocation of which is not
known or which cannot be adjusted until recovery or settlement is effected or
write-off ordered.
The following are cited as examples:—(1) debits, the classifications of which
cannot be determined at once, (2) recoverable debits not pertaining to the
accounts of a work, and (3) recoverable outstanding appertaining to works, the
accounts of which are closed 360. Items in the" "Miscellaneous P. W. Advances"
accounts are cleared either by actual recovery or by transfer, under proper
sanction or authority, to some other head of account, items or balances which
may become irrecoverable should not be so transferred until ordered to be written
off.
361. The detailed accounts of this head should be kept in Form 67, "Suspense
Register”.
For items falling under the class "Expenditure incurred on Deposit Works in
excess of deposits received" details are not necessary, as these are recorded in
the Schedule of Deposit Works, Form 65.
For each of the other three classes of items, a separate set of folios should be
reserved, and all the items under each class should be detailed so that their
clearance may be watched individually.
E.—LONDON STORES
362. The head "London Stores" is the suspense head through which are passed all
transactions connected with stores obtained through the High Commissioner for
Pakistan in the U. K. The objects of this account are (i) that the stores received
from England are brought on the accounts of Stock or works immediately on
their receipt, without waiting for the debit for the payments made in England by
the High Commissioner, (ii) that when the debit precedes the stores the receipt of
the latter is watched, and (iii) that in all cases agreement is secured between the
debit to Stock or works, and the payments made in England.
363. When the stores arrive, this head should be credited, and the accounts of the
works concerned or Stock should be debited, with the cost of the quantities actually
received, the amount being determined by converting the invoiced sterling value
into rupees at the official rate of exchange, for the month in which the payment
was made in England.
364. When the debit for the payments for stores made in England, which will be
calculated in rupees at the official rate of exchange for the month of payments, is
received from the Accountant General, the head London Stores should be debited
and the head Public Works Remittances credited.
365. Charges in Pakistan (e.g., balance of sea-freight and carriage and incidental
charges) should be debited direct to Stock or works concerned unless incurred
prior to the arrival of the stores in- the division, in which case they should be
debited to London Stores, and on receipt of the stores the debit should be
transferred to the relevant accounts of works or Stock, when making the
adjustment of cost as laid down in paragraph 363
366. A surcharge at the rate fixed by Government from time to time, to cover
departmental expenses and marine insurance is added by the High Commissioner
for Pakistan in the U. K. to the invoiced price (including freight) of all European
Stores obtained through him by Provincial Governments, Commercial
Departments, including Irrigation Works, Government commercial undertaking,
Local Funds. States, private individuals,, etc., in calculating the debit-able to or
recoverable from these various sources.
367. The balances at credit of this head represent the value of stores received for
which no debits for payments in England have come to hand and debit balances
indicate payments for stores which have not yet been received.
368. Balances due to short deliveries, etc., which cannot be cleared by recovery
of cost are not adjustable until their write-off has been sanctioned by competent
authority.
369 The transactions under this head should be recorded in detail in a monthly
schedule, Form 71, Schedule of London Stores.
370. Indents on the High Commissioner for Pakistan in the U. K., should
indicate the detailed classification of the charge which in the case of the Public
Works Department, is always the head "Charges in England—Stores-for Pakistan"
subordinate to the major head under which the suspense head "London Stores" of
the division is classified: see paragraph 343. In each case the following particulars
should be added:—
1. whether the charges are debit-able to Central—Civil,
2. whether the expenditure is "charged" (non-voted) or "voted" Thus, in a division,
in which the London Stores account is kept under the major head "50—Civil
Works", an indent for stores required partly for works of Government and party for
Deposit Works, will be classified as shown below:—
50 - Civil Works—Charges in England—Stores for Pakistan. Central—Civil.
Voted.
F.—WORKSHOP SUSPENSE
371. When a workshop has been established, all direct outlay on the jobs
executed and on other operations of the workshop is passed through the suspense
head "Workshop Suspense"
a separate account is kept under it of each job or operation, so that:
all charges relating to each, may be collected and
charges of a general nature may be suitably distributed over all the jobs or
operations affected, before the total cost recoverable is determined.
372. The recorded expenditure on a job is removed from the suspense head only:
when an adjustment is affected against the deposit received or against the
service or other head concerned.
This removal is effected by a credit to the account of the job. But:
when any charges are transferred from one job or operation to another, the
transfer should be made by plus and minus debit entries.
373. On the completion of a job, all outstanding charges on it must be debited to
the head concerned, but
in cases where this cannot be done, as in the case of expenditure incurred in
excess of the deposit received, the unadjusted amount should be transferred to the
head "Miscellaneous P. W. Advances" pending settlement.
374. The detailed account of the transactions under this head should be kept in a
suitable form showing the cost of each job-or operation and its adjustment from
time to time.
CHAPTER XIV.—WORKSHOP ACCOUNTS
A.—INTRODUCTORY
375. The accounts to be kept in a workshop depend on the extent of the operations
and the size of the shops.
376. When there is a small shop in a division for the execution of repairs to
tools and plant or of small manufacture jobs, the accounts of works executed in
such shops should be kept in the forms prescribed for repair works or
manufacture operations.
377. Larger workshops, with special plant or machinery are treated as separate
sub- divisions, or divisions, for account purposes.
When such workshops are of the character of quasi-commercial
undertakings, the system of accounts will be that prescribed locally for similar
undertakings.
When they are run mainly for departmental purposes, the accounts should be
kept in accordance with the instructions laid down in this chapter.
In either case, the exact forms to be used and the procedure to be observed
will be settled by the local Administration in respect of each workshop in
consultation with the Accountant General.
378. For every job there must be an estimate of cost (providing for all charges,
including the prescribed percentages for indirect charges), sanctioned by
competent authority and accepted by the indenting officer.
The amount to be realised from the indenting party will be based on the
actual cost including indirect charges.
379. No work should be undertaken for municipalities or private parties before the
whole estimated cost, including all charges for supervision, profit, etc., has been
paid to the Divisional Officer, or into a treasury to the credit of the Public Works
Department.
This rule may be relaxed at the discretion of the Divisional Officer, or
Superintendent of the workshop, in the case of Government officers where full
recovery is not open to doubt.
In such cases a rough estimate of the probable cost must be prepared in
advance and the officer concerned required to give an undertaking that he agrees
to pay the actual charges in full on completion of the work.
The full expenditure incurred must be deducted from the officers pay for the
following month.
In all cases an undertaking should be procured from the party concerned that
it will not hold the Department responsible for loss by fire or theft or any other
factor which could not be foreseen, when the estimate was prepared.
In cases where it is found that the original estimate is likely to be appreciably
exceeded, a revised estimate should be prepared.
The cost of the operations should be charged monthly to the head
"Miscellaneous P. W. Advances", pending recovery.
B.—DIRECT AND INDIRECT CHARGES
380. Receipt and expenditure transactions in connection with the workshops are
brought to account as follows:—
a) Where capital accounts are kept of a workshop intended mainly for the needs
of the Irrigation Branch, the capital expenditure should be recorded under the
relevant division.
Receipts representing recoveries of capital expenditure will be taken in
reduction of such expenditure.
b) Where capital accounts are kept of a workshop intended mainly for the needs
of the Civil Works Branch, all expenditure incurred upon it should be recorded
under the major head 50.
Recoveries of capital expenditure will be taken in reduction of such
expenditure.
381. All Capital charges on buildings, plant and machinery and stock materials,
and all charges incurred on their maintenance should be accounted for as ordinary
Public Works transactions.
These are charges which neither pertain to any individual job executed in the
shops, nor are capable of direct apportionment amongst all the jobs, and are,
therefore, met out of the grants of the Department.
382. All other expenses connected with the operations of a workshop are debit-
able to the jobs concerned, and should therefore, be accounted for under the
suspense head "Workshop Suspense".
The charges pertaining exclusively to any job should be debited to it at once,
and those of a general nature should be treated, in the first instance, as general
charges, under one or more suitable headings, and apportioned subsequently
amongst the jobs concerned.
383. In the case of jobs of all classes, the cost of operations should be cleared or
adjusted in transfer month by month but in the following cases the accounts of a job
may be settled once a year.
a) When the total cost during the year is not larger than Rs. 500.
b) When the monthly settlement of account is inconvenient to the indenting
division, department or Government.
384. In addition to the direct charges, the account of each job should be debited
with suitable percentages determined by the local Administration, in consultation
with the Accountant General, to cover the indirect charges enumerated below:
—
a) Supervision charges.
b) Interest on the capital cost of buildings, plant and machinery.
c) Maintenance charges of buildings, plant and machinery.
d) Depreciation of buildings, plant and machinery.
e) Establishment charges.
The percentage for Supervision charges should be calculated on the value of
materials issued to each job.
The other charges are ordinarily calculated on the total cost of labour and
stores pertaining to the job.
It is usual to charge a further percentage on account of profit except in the-
case of jobs executed for other divisions of Government.
385. The indirect charges should be brought to account whenever the settlement
of the account of direct charges, is effected.
C.—ANNUAL ACCOUNT AND REVIEW
386. Annually Pro forma accounts of each workshop should be prepared,
consisting of—.
i. the Capital Account, showing the values of the buildings, machinery and plant,
and stock, and the outstanding balance of the Workshop Suspense Account.
ii. the Outturn Account, showing charges on labour and stores, and the general
and indirect charges, and
iii. the Profit and Loss Account, showing on the one side the actual working
liabilities of the year e.g.,
(a) interest calculated on the mean capital of the year under all the heads
named in (i) above,
(b) the actual maintenance charges of buildings and machinery and plant,
(c) depreciation of buildings, machinery and plant calculated on the capital
value thereof and
(d) general establishment charges plus (1) a suitable addition thereto on
account of leave and pensionary charges and (2) one percent, for audit and
accounts establishment, only on such jobs in respect of which this percentage is
not credited to the major head in the regular accounts.
387. Subject to such directions as may be given by the Auditor General in this
behalf, the Accountant General will review the annual accounts of a workshop, in
consultation with the officer in charge of it, and report to the local
Administration on its financial wording, specially bringing out the necessity, or
otherwise, of revising the percentages fixed for the several charges.
Pro-forma Accounts
(Pro forma refers to a set of financial statements that incorporate assumptions
or hypothetical conditions regarding past or future events. Pro forma statements are
useful for presenting possible financial results)
CHAPTER XV.—DEPOSITS
A—INTRODUCTORY
388. Deposits transactions of the Public Works Department are of two kinds:-
I.—Public Works Deposits, which pass through the regular accounts of the
division,
II.—Interest-bearing Securities.
Deposits of the first kind comprise transactions of the following classes,
which are passed through the head Public Works Deposits:—
a) Cash deposits of subordinates as security,
b) Cash deposits of contractors as security,
c) Deposits for work (other than Takavi Works) to be done,
d) Sums due to contractors on closed accounts,
e) Miscellaneous deposits.
The interest-bearing securities referred to in class II are deposited by
subordinates and contractors.
These do not pass through the regular-accounts of the division.
B.—SECURITY DEPOSITS
389. Security deposits of subordinates and contractors, whether made in cash or
in one of the forms of security are-covered by a bond or agreement setting forth
the conditions under which the security is held and may be ultimately refunded or
appropriated.
390. The recognized forms of Interest-bearing Securities, and the rules to which
they are subject, are indicated below:—
a) Government Securities other than Post Office the Government Securities,
Manual 5-Year Cash Certificates issued by the authority of the by
b) Municipal Debentures and Port Trust Bonds Central Government. Under the
rules for Post for 5 years
c) Post Office 5-Years Cash certificates. Office 5-Year Cash Certificates and for
depositors
d) Post Office Savings Bank Pass Books.in Post Office Savings Banks issued
under the authority of the Central Government.
Such receipts will be accepted on the understanding that Government is not
held responsible for any loss that may result from the failure of the bank or to
any other cause and that if the security is lost; the loss will fall on the depositor,
who will be required to furnish fresh security.
The deposit receipt should be made out in the name of the pledgee and held in
custody by such officer as the local Administration may prescribe.
The depositor should receive the interest, when due, direct from the bank,:
on a letter from the pledgee authorizing the bank to pay it.
391. Government paper tendered as security shall be taken at its market value at
the time of deposit and not at its face value.
In the event of such security appreciating or depreciating, no re-adjustment of
the value of the Government paper should be made unless the fall or rise in the
market value is such as to render it necessary to call upon the depositor to
produce further Government paper to the extent of at least Rs. 100, or to
involve the return to the depositor of Government paper to the same extent.
Even then no such adjustment should be made, unless after such adjustment
there is still a reasonable margin between the market value of the Government
paper tendered and the amount of the security necessary.
392. Security Deposits lodged in the post Office Savings Bank should be
hypothetical to the Divisional Officer, or to the. Sub-divisional Officer if this has
been specially authorized by the local Administration. The Bank Pass Books should
remain in the custody of the officer to whom the deposits are pledged.
393. Cash deposits of subordinates and contractors may be converted, at the
cost of the depositor, into one or more of the forms of interest- bearing
securities provided—
i. that, the depositor has expressly desired this in writing, and
ii. that the acceptance of the new form and security is permissible under the
rules as well as under the terms of the agreement or bond.
394. Percentage deductions for security deposit made from contractors, bills
should be credited to the head "Public Works Deposits-Cash deposits of
contractors".
As an exception to this rule, the security may be exacted by withholding from
payment the required percentage of the value of work actually measured and
passed,
if the total amount recoverable on this account is so small that its exclusion
from the works outlay of the year is not likely to affect the grants appreciably.
The limit fixed for the purpose is Rs. 500 for each work. Amounts thus
withheld appear in the suspense account, "Contractors—Other Transactions",
of the work concerned.
395. Without the special orders of competent authority, no security deposit
should be repaid or re-transferred to the depositor, or otherwise disposed of, except
in accordance with the terms of his agreement or bond.
