DEFENCE ACCOUNTS CODE_2014 NOTES

DEFINITIONS
"Consolidated Fund " -Consolidated Fund of India - Article 266 (1)
"Public Account" - Public Account of India or the Public Account of a State- Article 266 (2)
"Contingency Fund"- Contingency Fund of India -Article 267 (1) ,the Contingency Fund of India Act,
1950
"CGDA" means the Controller General of Defence Accounts, the Head of the Defence Accounts
Department
"Cheque Drawing DDO" means a drawing and disbursing officer functioning under a Ministry or
Department, who is authorised to withdraw money for specified types of payments against an
assignment account opened in his favour.
"Chief Accounting Authority" means theSecretary of a Ministry or Department of the Government
of India/in the case of a Union Territory with separated accounts, its Chief Secretary/ Chief
Commissioner;
"Defence Accounting Circles" means the offices of the DAD including CGDA, who are nominated by
the RBI to accounts for and reconcile transactions in the Defence Proforma Account.
"Local Fund" means a local fund as defined in Rule 652 of the Treasury Rules;
"Appropriation" means the assignmentof funds included in a primary unit of appropriation, to meet
specified expenditure;
"Reappropriation" means the transfer of funds from one primary unit of appropriation to another
such unit;
"Debt Heads" In relation of MoD:The head of accounts under which transactions of Government
closing to balances are recorded and carried forward to the next financial year which includes heads
of Debts, Loans and Advances, Provident Funds, Reserve Funds, Deposits and Advances and Suspense
and Miscellaneous;
"Remittance Heads" Remittance Heads Refer to head of accounts to which transactions relating to
remittance business are taken.
Note :-In relation of MoD Cash Remittances and adjustments between officers rendering accounts to
the same Accounts Officer, (Major Head 8782) Adjusting Account with Railways and Department of
Post (Major Head 8787 and 8788) and Exchange Account (Major Head 8797);
"Revenue Heads" refer to the heads of account under which are recorded all proceeds of taxation
and other receipts classed as revenue and the expenditure met therefrom;
"SBI-CMP" means State Bank of India-Cash Management Product, a customized and secured
payment gateway.
 CHAPTER 1
AUTHORITY COMPETENT TO PRESCRIBE THE FORMS FOR MAINTAINING DEFENCE
SERVICES ACCOUNTS
1. The MoD (Finance) of the Govt. of India is to ensure that suitable accounts are maintained by the
Defence Services.
2. The forms in which the accounts should be kept in the offices of the DAD are prescribed by the
CGDA, with the approval of the Defence Secretary and Financial Adviser.
But if any change affects the form of the Finance and Revenue Accounts, it will not be made without
the previous sanction of the CGA and CAG.

DEPARTMENTALISATION OF ACCOUNTS
From 1st October, 1976 onwards, the responsibility for compiling the accounts of DS has been
entrusted to the CGDA.
Under the scheme of Departmentalisation of accounts in the MoD, the Defence Secretary will be the
Chief Accounting Authority.
This responsibility is discharged by him through and with the assistance of Secretary Defence
(Finance)/ Financial Adviser (Defence Services), who will function for and on behalf of the Chief
Accounting Authority.
The CGDA functions on behalf of FA(DS), as the Chief Authority in all matters affecting financial
advice, internal audit and the accounting of expenditure pertaining to the Defence Services.
The payments and accounting functionsi.r.o MoD are entrusted to the CGDA who will function as
the Principal Accounting Officer.
CGDA, on behalf of Chief Accounting Authority, is responsible for the compilation and consolidation
of the accounts of the MoD in the prescribed form and their timely rendition to the CGA.

COMPILATION OF DEPARTMENTALISED ACCOUNTS

5. The Defence Accounts Department classifies expenditure in respect of
(i) Defence Services paid from Defence Service Estimates and
(ii) Civil organisations under Ministry of Defence
Mentioned below, which are paid from the civil grant of Ministry of Defence :
(i) Armed Forces Tribunal (ii) Coast Guard Organisation (iii) Department of Defence (iv) Department of
Defence Production (v) Department of Defence Research and Development (vi) Department of Ex-
Servicemen Welfare (DESW) (vii) Defence Accounts Department (viii) Defence Estates Organisation
(ix) Jammu and Kashmir Light Infantry (x) Canteen Stores Department.

GENERAL DUTIES OF CGDA AS A CHIEF ACCOUNTING OFFICER

i. Consolidation of the accounts of the MoD in the manner prescribed by CGA;
ii. Arranging all payments of Defence Services through PCsDA/CsDA, DDO of the Services.
 iii. Submission of Statement of Central Transactions and material for the Finance Account of the
Defence and Defence (Civil) to the CGA;
iv. Preparation of Annual Statement of Central Transactions (SCT) of Defence Services Receipts
and Charges and rendition to the CGA.
v. Preparation of the portion of the Combined Finance and Revenue Accounts pertaining to
Defence Services and its submission to the CGA and Director General of Audit, Defence
Services for incorporation in the combined Finance and Revenue accounts of the Central and
State Government in India;
vi. Preparation of the Appropriation Accounts of the Civil Estimates of the MoD and sending the
same to the FADS and the Defence Secretary for onward transmission to the CGA and DGADS.
vii. Preparation of certain subsidiary statements in connection with the Appropriation Accounts
(Defence service Estimates) and submit them to the FADS.
viii. CGDA also renders annually an Audit Certificate on the accounts of the Defence Services; to
the FADS.

GENERAL DUTIES OF PCDA/CDA AS AN ACCOUNTING OFFICER

Pr Controller/Controller is the chief authority of Auditing & Accounting function in respect of
Formations/Units under their jurisdiction. Functions can be classified as below:-
(i) Receipts, Disbursements and Accounts:
(a) To collect accounts of all receipts and disbursements in the accounts area;
(d) To transfer to other Accounts Circle the items originating in their area pertaining to them and
adjusting in his accounts the items transferred to him by other Accounts Officers.
(ii) Financial Management Systems:
(a) To keep a watch over the progress of expenditure for the area under the locally controlled heads
against sanctioned allotments and to bring to the notice of the allottees and the immediate higher
authorities, cases in which the progress of expenditure is abnormally heavy or unusually low;
(c) Cash requirement Formulation; (i) They would formulate the budgetary requirements of the
DAD and render estimates to the CGDA. (ii) The Pr Controllers/Controllers will support the CGDA
towards formulation of cash requirements in respect of various heads (other than budgetary heads).
Pr. Controller/Controller is responsible for maintaining the details of the amount due to or by
Government working up to the balance on his own books.
*Responsible for reviewing these balances at the end of each year for submitting a copy of his
review of balances along with statement 5 & 13 to the CGDA.
*CGDA will prepare statement No. 5 &13 of Union Government Finance Account and send the same
to the CGA.
*Pr. Controllers/Controllers should not address the CAG, CGA, Services Headquarters or the MoD
(Finance) directly, except on routine matters.
*All communications on matters affecting the classification of Receipts and Charges and on form
and procedure relating to accounts should always be addressed to the CGDA.
 CHAPTER 2: GENERAL OUTLINES OF THE SYSTEM OF ACCOUNT
CONSOLIDATED FUND, CONTINGENCY FUNDAND PUBLIC ACCOUNT OF INDIA
The procedure to be followed for the payment into and the withdrawal, transfer or disbursement of
moneys from the "Consolidated Fund" and the "Public Account" for the custody of moneys standing
in that Fund and Account, is regulated by law made by the Parliament (by the President) under
Article 283 of the Constitution.
"The Contingency Fund of India" will be at the disposal of the President to enable advances to be
made for meeting unforeseen expenditure, pending authorisation of such expenditure by Parliament
under appropriations made by law.

ACCOUNTS OF THE CENTRAL AND STATE GOVERNMENTS WITH THE BANK

The Central Government and each of the State Governments have made separate arrangements with
the Reserve Bank of India.
Complete accounts of the Central Govt. and individual account of all Civil Ministries/Departments (as
well as accounts of Railways, Posts, Telecom and Defence) and Accountant General of States and of
AG accredited with Union Territory are maintained by the Central Accounts Section of the Reserve
Bank of India, Nagpur.
All transactions/adjustments between the accounts of Central Govt Ministries/Departments and
State Governments are settled on cash basis by issue of Cheque/Demand Draft.(Centre-State)
*The transactions between Defence, Department of Posts, Railways, Department of Supply in the
Ministry of Commerce (Store transactions) and Ministry of External Affairs (relating to High
Commission of India, London (ILAC), Washington and Embassy Accounts received through Principal
Accounts Officer of Ministry of External Affairs) are settled through "settlement accounts”.
The monetary settlement of such transactions through CAS,RBI Nagpur is effected by the
PCDA/CDA/Accounts Officer of the Ministry/Department concerned in whose books the transactions
originate.
*Loans to State Governments budgeted under the Civil Estimates of Ministry of Defence (Major Head
7610-Loan and Advances to State Government) are also advised through CAS, RBI, Nagpur by AO
(DAD), MoD for credit to the State Government.

TRANSACTIONS OF OTHER GOVERNMENTS IN STATE TREASURIES

The Treasury rules of each State Government issued under Article 283 of the Constitution.
*Cash balances held in a State Treasury form part of the Consolidated Fund, the Contingency Fund
and the Public Account of the State to which the Treasury belongs.
Money may be received and payments may be made on behalf of the Central Government and
other State Governments by a State treasury situated at a place where the treasury business is not
conducted by the Bank.
Such receipts and payments being taken in the first instance against the cash balance of the State
concerned. On receipt of intimation of such transactions through the monthly Treasury Account or
otherwise the Accountant General settles the transactions with the Central Government or State
Government as under:-
(a) In case of transactions pertaining to other State Governments, the Accountant General makes the
requisite adjustments through the CAS, Nagpur against the balances of the other State Governments
concerned.
*Settlement of transactions between the State Government of Jammu and Kashmir (also Sikkim) and
other States/ Centre is effected in cash or by demand drafts.
(b) In case of transactions of Central Government, including Railways/Postal/ Defence Departments
at State treasuries (both banking and non-banking), cash settlement is made by the State Accountant
General with the Pay and Accounts Office through suspense by exchange of Cheque/Demand Draft.

STATE TRANSACTIONS IN CENTRAL TREASURIES (CASH BASIS)

21. Cash balances held in the treasuries of the Central Government form part of the Consolidated
Fund, Contingency Fund and the Public Account of India.
Transactions on behalf of State Governments arising in central treasuries are settled in cash by issue
of Cheque/DD.

GENERAL OUTLINES OF THE SYSTEM OF DEFENCE SERVICES ACCOUNTS

(a) All receipts realised by the Defence Services are paid into a treasury or Bank. The initial detailed
accounts of such receipts are kept by the officers concerned of Defence Services.
(b) All payments on behalf of Defence Services are made either at a treasury or the Bank by means of
cheques or through e-mode /SBI-CMP by officers of the DAD and in certain cases by the Officers of
Defence Services.
(c) The Officers of DS render the accounts of their transactions to the PCDA/CDA concerned.
These accounts, the receipts and payments by the DAD itself, the transactions relating to Border
Roads, JAKLIi (Police ) and Coast Guard Organisations and the transactions passed on for adjustment
by other Accounts Officers are classified by the PCDA/CDA under the appropriate classification heads
of accounts.
*The lists of classification heads are given in the "Classification Hand Book of Defence Services
Receipts and Charges” and “Pamphlet of Revenue, Debt and Remittance Heads".
*The All-India Consolidated Compilations for Defence Services Receipts and Charges (under
Revenue, Debt and Remittance Heads as well as under Service Heads) are prepared by the EDP
Section of CGDA Delhi Cantt.

MODE OF SETTLEMENT OF DEFENCE TRANSACTIONS

23(a) All transactions arising in the Defence books which are eventually adjustable against the
balances of the Railways and Department of Posts, Department of Supply or vice versa, are passed
on to Accounts Officers concerned through "Settlement Accounts".
The monetary settlement between the balances concerned in respect of such transactions is effected
by the PCDA/CDA/Accounts Officer in whose books the transactions originate through the CAS, RBI
Nagpur.
(b) Transactions in the books of one Pr. Controller/Controller which are adjustable in the books of
another PCDA/CDA are passed on through the Defence Exchange Accounts.
(c) Transactions between Defence Services and other Ministries of the Central Government and
Union Territories are settled on cash basis by issue of cheques.
In certain cases, budget is placed by the Ministry of Defence to the Civil Ministry for direct booking of
transaction (e.g. DAVP).
(d) Transactions between Defence Services and non-government bodies and institutions or
individuals are settled by actual payment or by actual recovery as the case may be.
(e) The receipts and expenditure relating to Border Roads Organisation are finally accounted to the
heads of the Ministry of Road Transport & Highways by the DAD - Pr. CDA (Border Roads) although
the Budget provisions are made by the Ministry of Road Transport & Highways.
Monthly expenditure figures as well as final expenditure figures are intimated to the Principal Chief
Controller of Accounts, MORT&H by Pr. CDA (Border Roads) to enable them to monitor the
expenditure and to prepare Appropriation Accounts accordingly.
(g) Transactions of the Defence Services arising in the United Kingdom which are adjustable in India
are passed on to India through the Inward London Account (ILA) and dealt with centrally by PCDA
New Delhi.
Certain transactions on behalf of Government of India arising in England are finally audited in that
country. Such transactions are advised to India through an account known as "Account of
Receipts/Disbursements of the High Commissioner for India in the United Kingdom on account of
the Government of India."
All Embassies transactions are advised to India by Pr. CCE (MEA), through settlement Account. The
Defence transactions included therein are received and adjusted centrally by the PCDA, New Delhi.
The Remittance Transactions such as recovery of loans and advances, recovery of GPF subscription
etc relating to other PCDA/CDA, will however be passed on by PCDA, New Delhi to the respective
PCsDA/CsDA through the Defence Exchange Account.
(h) *The monthly account of each Pr. Controller/Controller, thus includes not only receipts and
disbursements arising in his accounts circle, but also receipts and charges in the United Kingdom,
Washington and other Embassies and all credits and debits received by them from the PCDA, New
Delhi through Exchange Accounts.

CENTRAL JOURNAL AND LEDGER

24. The CGA maintains a Journal and Ledger for central transactions which is posted from the
financial accounts of each year received from all Accounts Offices in India.

STATEMENT OF CENTRAL TRANSACTIONS (SCT) OF DEFENCE SERVICES RECEIPTS AND CHARGES

‘Statement of Central Transactions’ at the end of every financial year represents progressive effect of
all the transactions during the year.
The SCT is prepared from All India Consolidated Compilation of Service Heads, Revenue Debt and
Remittance Heads for March Supplementary.
The SCT is prepared only for minor head-wise details under different major heads concerned,
showing charged, voted, plan and non-plan expenditures distinctly.
*The CGDA prepares SCT of Defence Services & and MoD (Civil)- Receipts and Charges annually.
These SCTs are rendered to the CGA. A copy of the SCT is also endorsed to the DGADS, who after
check, endorses his audit certificate thereon and passes it on to the CGA.
A copy of the same will also be forwarded by the CGDA to the Ministry of Defence (Fin).
*A copy of the Consolidated annual accounts is also sent to the DGA (Central Revenues), New Delhi
by the DGA, DS after audit.
After closing of annual accounts, if an amendment to SCT is effected through Journal Entries with the
approval of CGA.
The effect of the Journal Entries will be intimated by the Accounts and Budget Section of the CGDA,
Delhi Cantt to the PCDA/CDA concerned to enable them to update their ledger balances and balances
reflected in the Annual Review of Balances, if any.

ANNUAL FINANCE ACCOUNTS OF THE CENTRAL GOVERNMENT

The Annual Finance Accounts of the Central Govt. (including Defence Services) are prepared by CGA
after the close of each financial year.
*The Appropriation Accounts of Defence Services are prepared by the FADS and signed by the
Defence Secretary.
*The Appropriation Accounts of the Defence (Civil) and Defence Pensions are prepared by the CGDA
Office and signed by the CGDA.
Finance Accounts contains various statements. Some of the important Statements are:- (i)
Statement No.1- Summary of Transactions (ii) Statement No.3-Loans and Advances by the Union
Government (iii) Statement No.4- Guarantees Given by the Union Governments (iv) Statement No. 5-
Summary of Balances (viii) Statement No.-13-Statement of Receipts, Disbursements and Balances
under heads of account relating to Debt, Deposits, Remittances and Contingency.

THE COMBINED FINANCE AND REVENUE ACCOUNTS OF THE CENTRAL AND STATE GOVERNMENTS
This account is in the nature of a General Financial Statement incorporating a summary of the
accounts of the Central Government and of all the State Governments for the last preceding financial
year.
It presents the transactions of all the Governments side by side, classified under the several major
and minor heads of accounts classification.
The CGDA prepares the portion of the Combined Finance end Revenue Accounts pertaining to the
Defence Services and submits it to the CGA for incorporation in the Combined Finance and Revenue
Accounts of the Central and State Governments in India.
 CHAPTER 3 :GENERAL PRINCIPLES AND METHODS OF ACCOUNTS
The annual accounts of the Central, State and Union Territory Governments (rendered by CGA) and
the Annual General Financial Statement (the Combined Finance and Revenue Accounts of the
Central and State Governments in India) which the CGA prepares, shall record the transactions of the
Central/State and Union Territories Governments which take place during a Financial Year running
from 1st April to 31st March.
Accounts so kept open after 31st March are known as March Supplementary/Supplementary-I and
March Supplementary Corrections/ Supplementary-II. These accounts are closed by the CGDA on
the dates intimated by CGA.
The accounts of the financial year in the books of the PCDA/CDA will be finally closed in March
Supplementary Corrections/ Supplementary-II.
After closing of annual accounts, if a rectification/readjustment is necessary, the same will be
carried out with the prior approval of CGA in exceptional cases.
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.
FORMS OF ACCOUNTS
32. The Accounts of Central Government shall be kept in the following three parts:
(i) Part I - Consolidated Fund of India
(ii) Part II - Contingency Fund of India
(iii) Part III - Public Account of India
(1) In Part I (Consolidated Fund of India) of the Account there shall be two main divisions namely: —
(i) Revenue consisting of sections for (First Division)
“Receipt Heads (Revenue Account)”
“Expenditure Heads (Revenue Account)”.
(ii) Capital, Public Debt, Loans etc. Consists Sections for (Second Division)
“Receipt Heads (Capital Account)”
“Expenditure Heads (Capital Account)”
“Public Debt (Loans and Advances etc.)”.
Section “Receipt Heads (Revenue Account)” shall deal with the proceeds of taxation and other
receipts classed as revenue
Section “Expenditure Heads (Revenue Account)” dealing with expenditure met therefrom.
The section “Receipt Heads (Capital Account)” shall deal with receipts of a Capital nature which
cannot be applied as a set off to Capital Expenditure.
The section “Expenditure Heads (Capital Account)” shall deal with
i. expenditure met usually from borrowed funds with the object either of increasing
concrete assets of a material and permanent character or of reducing recurring liabilities
 ii. It also includes receipts of a capital nature intended to be applied as set off to Capital
Expenditure.
The section “Public Debt” and “Loans and Advances” etc. shall comprise
i. Loans raised and their repayments by Government such as “Internal Debt”, “External
Debt” of the Central Govt.
ii. Loans and Advances made (and their recoveries) by Governments
iii. certain special types of heads for transactions relating to *'Transfers from Consolidated
Fund to the Contingency Fund' and inter-state settlement.
So far as the Defence Services and DAD are concerned, the following sections are covered in Part I of
Pamphlet of Revenue, Debt and Remittance Heads and Classification Hand Book of Defence Services
Receipts and Charges:- (i) Revenue Division-Sectors 'A' and 'B’ (ii) Capital Division—Sectors 'A', ‘B’
and 'C’ (iii) Loans and Advances-Sector ‘F’.
In Part II of the Account the transactions connected with the Contingency Fund shall be recorded.
In Part III (Public Account of India) of the Accounts, the transactions relating to
Debt {Small Saving Provident Funds (Sector-I)
Reserve Funds (Sector-J)
Deposits and Advances (Sector-K)}
Suspense and Miscellaneous (Sector-L) and
Remittances (Sector-M)} shall be recorded.
The transactions under Debt, Deposits and Advances - Government incurs a liability to repay the
moneys received or has a claim to recover the amounts paid(repayments of the Debt and Deposits,
and the recoveries of Advances).
The transactions relating to 'Remittances' shall embrace adjusting heads with Railways and
Department of Posts etc., except Exchange Accounts.
The initial debits or credits to these heads will be cleared eventually by corresponding receipts or
payments either within the same circle of account or in another account circle.
'Suspense' in this Part is also an adjusting head.
The Divisions/Sections shall be grouped into sectors under which specific functions or services are
grouped. The sectorsare sub-divided into Major Heads of Account. In some cases the sectors are sub-
divided into subsectors.
The sectors shall be distinguished by a series of letters of the Alphabet separately for the "Revenue
Receipt" section, the "Revenue Expenditure" section and for other sectors in other divisions.
A four-digit code allotted to Major Head, the first digit indicates whether the Major Head is a
Revenue Receipt Head or a Revenue Expenditure head or a Capital Expenditure head or Loan Head.
If the first digit is
'0' or '1' - Revenue Receipt
'2' or '3' -Revenue Expenditure,
'4' or '5' -Capital Expenditure,
'6' or 7' -Loan Head and
'8' will represent Contingency Fund and Public Account.
Revenue Receipt - 0001 to 1999
Revenue Expenditure - 2001 to 3999
Capital Receipt - 4000
Capital Expenditure - 4001 to 5999
'Public Debt' Loans and Advances, Inter-state Settlement and Transfer to Contingency Fund are
assigned code Nos. from - 6001 to 7999.
Contingency Fund - 8000.
Public Account - 8001 to 8999.
*The Major Head Capital Outlay on Defence Services (4076) is a common head which caters to all
Defence Services including Army, Navy, Air Force, Ordnance Factories, R & D and Inspection
Organisation.
The Sub Major Heads are denoted by two digits (e.g. 02, 03, etc.). The Minor Heads are given three
digits as in 101, 104, 110, 800 etc.
Major Heads, Sub Major Heads, Minor Heads, Sub-Heads, Detailed Heads and Object Heads together
constitute six tier arrangement of the classification structure of Government Account. Six tiers are
represented by a unique 15 digit numeric code.
The existing codification of accounting, receipts/expenditure heads represents:- (i) Major Head- 4
digits (Function) (ii) Sub-Major Head- 2 digits (Sub-function) (iii) Minor Head- 3 digits (Programme)
(iv) Sub-Head- 2 digits (Scheme) (v) Detailed Head- 2 digits (Sub-Scheme) (vi) Object Head- 2 digits
(primary unit of appropriation).
Classification in the books of Ministry of Defence
The grants of the Services are classified up to Detailed Head in which the Major Heads, Sub Major
Heads, Minor Heads, Sub-Heads and Detailed Heads constitute a five tier arrangement*.
In case of Defence Services, a Detailed Head constitutes the fifth and last tier of classification of
expenditure. The detailed head in CHB is termed as an Object of classification.
The detailed classification of account heads used in Government Accounts up to the stage of minor
heads is given in the List of Major and Minor Heads of Account of Union and States-Published by
the CGA.
The heads of classification operated upon in the Defence Services accounts are shown in
Classification Hand Book of Defence Services-Receipts and Charges and Pamphlet of Revenue, Debt
and Remittance Heads.
‘Classification Hand Book of Defence Services-Receipts and Charges’ is a compilation of code heads of
Revenue and Capital Heads pertaining to Defence Service Estimates only.
The Pamphlet of RD&R contains15 digits numeric classification heads of receipts and expenditure of
Revenue and Capital in respect of Civil departments paid out of Civil grant of MoD.
Both the books are published by the Controller General of Defence Accounts.
In addition, the Debt, Loans and Advances, State Provident Funds, Reserve Funds, Deposits and
Advances, Suspense and Remittance heads are opened only in the Pamphlet of RD&R which are
operated both for Defence Service transactions and Civil transactions.*
The Debt, Loans and Advances, State Provident Funds, Reserve Funds, Deposits and Advances,
Suspense and Remittance heads close to the balance to the Government after closing of
Government Account and balances thereof are carried forward in the Annual Review of Balances*.
*CGDA has been delegated powers to open the sub and detailed heads below the Minor Heads with
the concurrence of MoD (Finance) in consultation with the accredited Audit Officer (DGADS).
Voted Expenditure shall be shown separately from expenditure "charged", in the annual accounts

CLASSIFICATION OF TRANSACTIONS IN ACCOUNTS

Record of Capital Expenditure in Accounts.
In Defence, expenditure on procurements of items costing Rs. 10 Lakhs or more each and which have
a life of 7 years or more/which are required for modernization programme is debitable to Capital
Budget.
IMPORTANT GENERAL ORDERS GOVERNING CLASSIFICATIONS
Pay and Allowances:
In the Defence Services, the pay and allowances of Service Officers, PBORs, Civilians are accounted
for under separate Sub-Heads under various programmes of activity.
The pay and allowances of Government servants shall be classified in accounts as part of the scheme
activity or organisations (Sub-Head) under a programme (Minor Head) below a function
(Major/Sub-Major Head) to which the service of the Government servants closely relate.
Transit Pay and Allowances of Service Personnel :
*The transit pay and allowances of a Government servant proceeding to join an office on first
appointment or on transfer either permanently or as a temporary measure or on reversion from one
department to another should, in the absence of special orders to the contrary, be debited to the
office to which he is proceeding.
The transit Pay and Allowances both ways, of Officers of the Defence Services lent to Civil
Department (including Post and Railways) or, vice versa, are debitable to the borrowing Department.
The transit Pay and Allowances both ways, of a Government servant transferred from one
Government to another or to Foreign Service, will be adjusted in such manner as may be mutually
agreed upon by Governments concerned.
The transit pay and allowances both in respect of the forward and the return journeys of Government
servants transferred to or from Missions and Offices abroad will be borne by the Ministry which
plans the transfer of the official.
Transit Pay and Allowances of DAD Personnel
(c) Transit Pay and Allowances in respect of DAD personnel while proceeding on and reverting from
deputation to other Ministries of Central Government, the advance of pay paid will be finally adjusted
to the respective headsby the department which makes the payment.
The recoveries thereof will be finally adjusted to the respective headsby the office which effects
recoveries and there will be no passing of debits/credits to other departments, through settlement
Accounts.
Travelling Allowances.
The cost of travelling/Daily Allowances, etc. of officers of one Department in connection with
committee or other meetings, etc. of other Department is not debitable to same head as their pay
but should be debited to those Departments.
The Travelling Allowance of a Government servant transferred from one department to another is
debited to the department to which he is transferred.
The Travelling Allowance of a Government servant proceeding to join an appointment in any
department, should in the absence of special orders to the contrary, be charged to the department
to which he is proceeding.
The advance of TA/DA paid in respect of DAD personnel while proceeding on or reverting from
deputation to other Ministries of the Central Government will be finally adjusted to the respective
heads by the Department which makes the payments.
The Travelling Allowance of Military students under training with survey parties is debitable to the
civil department.
The Travelling Allowance of a Government servant both when proceeding on transfer to Foreign
Service and when reverting to duty shall be borne by the Foreign employer.
If a Government servant works for more than one Government, his Travelling Allowance may be
distributed between the different Governments as mutually agreed upon.
The conveyance charges of witnesses summoned or detailed to attend a criminal case, a civil suit or a
Court Martial, are compilable as follows:-
(i) Criminal case Estimates of the Ministry or Department to which the witnesses belong*
(ii) Civil Suit Estimates of the Ministry or Department which is a party to the case*
(iii) Court Martial Defence Service Estimates*
58. 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.

CLASSIFICATION OF TRANSACTIONS UNDER "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'.
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.
Classification of Transactions under Pay/TA on Transfer
Advances of pay and travelling allowances on transfer should be debited to the final head of account
and not to 'Civil Advances'.
In case of transfer of a Govt. servant from any department of Govt. of India to other department, the
advance of Pay/TAshall also bedebited to the final head of account and borne by the Dept. which
makes the advance.
The recovery of Pay and travelling allowances, advances on transfer, will irrespective of the year of
recovery, be treated as Minus Expenditure*.
The recoveries will be accounted for under the Head of Accountto which the expenditure of the
Department to which the GS is transferred is debited.
Advances for law suits shall be debited to the functional expenditure head concerned. Refunds of
amounts remaining unspent out of these advances shall be dealt with as cash recoveries and
adjusted.

CLASSIFICATION OF TRANSACTIONS UNDER SUSPENSE

61. Items of receipts and payments which cannot at once be taken to a final head of receipt or charge
owing to lack of information as to their nature or for any other reasons, may be held temporarily
under the Major head 8659-'Suspense Account(Defence)'in the Sector 'L-Suspense and
Miscellaneous' of the Accounts.
A service receipt for which full particulars are not given mustnot be taken to the head 'Suspense
Account' but should be credited to the Minor Head'Other Receipts' under the Revenue Head.
*No sum shall ordinarily be credited to Government by debit to a Suspense head; Credit must follow
and not precede actual realisation.

CLASSIFICATION OF CERTAIN INDIVIDUAL TRANSACTIONS (SPECIAL ORDERS)

62. The cost of land acquired for any specific work or a project shall be recorded as a part of the
cost of the works or of the projectunder the relevant functional Major/Minor Head.
The expenditure on acquisition of land for general purposes shall be recorded under the Major Head
"4076 – Defence Capital Outlay on Defence Services, Sub Major Head 01 Army/02 Navy/03 Air
Force-Minor Head 050-Land".
63. The sale proceeds of building/land should be credited as recoveries of expenditure*to the
Defence Services or the head of the civil departmentsconcernedto which the cost was originally
debited*.

GENERAL METHODS OF ACCOUNTING

Classification of refunds of bonafide receipts and recoveries of over-payments
(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 effected.

WRITE OFF FROM "BALANCE" HEADS TO "GOVERNMENT”

67. 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*.
The powers of the CAG of India, referred to above may be exercised by the CGDA, Addl. CGDA and
PCDA/CDA 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.
The DCGA and Addl. CDA /Jt. CDA may also write off the outstanding amount upto Rs. 100/- in each
case under the head 'Provident Fund Suspense'.
*These writes off are shown in a separate entry under the head "Government" in the annual Review
of Balances.
CORRECTION OF ACCOUNTS
68. 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.
*No formal transfer is necessary when the amount involved does not exceed Rs. 10/- or if accounts
of the year have been closed; it being sufficient to make a suitable note of the error against the
original entry.
However, an error no matter how old and small it may be, must be corrected if it affects a Debt,
Deposit or Remittance Head.
If the accounts of the year in which the error took place are open, the correction should be made by
removing the item from the head under which it was wrongly taken to that to which it properly
belongs.
If the accounts of the year in which the error took place are closed, then the following procedure
should be followed in the cases referred to:-
(i) 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;
(ii) An item credited to a debt, deposit or remittance head -instead of to a revenue head or 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 ;
(iii) 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;
(iv) 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 Expenditure head
TRANSFER ENTRIES AND CHECK OF CLASSIFICATION
69(a). Transfer entries are necessary in order: -
(i) 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;
(ii) to adjust, by debit or credit to its proper head an item outstanding under debt heads*;
(iii) to adjust inter-departmental and other transactions which do not involve the receipt or payment
of cash;
Annual transfers should as a rule be avoided, but in certain cases, such as adjustments of lapsed
deposits, interest on Provident Fund annual transfers are permissible.
*Powers of signing of Punching Medium.
72. The Punching Media in respect of transfer adjustments will be signed by the officers as mentioned
below:- (a) Normal Transfer Adjustments*
(i) SO(A) - upto Rs. 5,00,000
(ii) AAO - upto Rs. 25,00,000
(iii) AO/SAO - upto Rs. 1 Crore
(iv) ACDA/DCDA - upto Rs. 5 Crore
(v) Jt CDA/Addl CDA - upto Rs. 10 Crore
(vi) CDA/PCDA - exceeding Rs 10 Crore
(b) Rectification of incorrect adjustments*
(i) AO/SAO - upto Rs 25 Lakhs
(ii) ACDA/DCDA - upto Rs. 1 Crore
(iii) Jt CDA/Addl CDA - upto Rs 5 Crore
(iv) CDA/PCDA - exceeding 5 Crore
 CHAPTER 4: RULES REGULATING INTER-DEPARTMENTAL TRANSFERS
INTER-DEPARTMENTAL ADJUSTMENTS WITH OTHER DEPARTMENTS OF THE CENTRAL GOVERNMENT
*A service department shall not make charges against another department of the Central
Government for services which fall within the class of duties for which the department is
constituted.
*The Defence Services shall not be required to pay rent for building of the Central Civil
Departmentsother than Commercial Departments and undertakings, occupied by the Defence
Services for non-residential purposes.
Nor shall rent be charged for buildings of the Defence Services occupied for non-residential
purposes by the Civil Departments of the Central Government other than Commercial Departments
or Undertakings.
The Defence Services shall also not be required to pay for the use of the Government Civil
aerodromes and for other incidental services rendered by the Civil Aviation Deptt. to Indian Air
Force planes
Nor shall the Civil Aviation Department be charged, as a reciprocal arrangement, for the use of the
aerodromes of the Indian Air Force by Civil Aircrafts.
*No inter-departmental adjustment will be necessary on account of damages caused accidentally
by one Department to another e.g., no compensation is payable for damages caused accidentally to
Defence by the Railways and vice versa.
The Film Division of the Government of India may charge any other department for the cost of
production of films and other services.

ADJUSTMENTS WITH OUTSIDE BODIES

79. Payments shall be required in all cases where the Defence Services render service or make
supplies to a non-Government body or institution or to a separate fund constituted as such inside or
outside the Public Account.
*Relief in respect of payment for services or supplies given to anybody or fund should ordinarily be
given through a grant-in-aid rather than by remission of dues.
Military Farms work on a quasi-commercial basis, and they should, as far as practicable, settle all
transactions in cash instead of by book debit or credit; except in a few cases.
The cost of stationery and forms supplied to Military Farms is accounted for as cost accounting
transactions.

CHAPTER 5: RULES REGULATING THE ACCOUNTING OF RECOVERIES OF EXPENDITURE

IN GOVERNMENT ACCOUNTS
"Recovery" denote repayment of or payment by another department of the same Government or
by another Government or by a non-Government party *(including PSUs, autonomous bodies and
private persons and bodies to a Government Department) which initially incurred the charge and
classified it in the accounts as final expenditure by debit to revenue or capital heads of accounts.
RECOVERIES OF EXPENDITURE ONWORKS IN PROGRESS AND TRANSACTIONS OF STOCK AND OTHER
SUSPENSE ACCOUNT
86. Receipts from sale proceeds of material, plants, etc., received from the old structure and the
receipts under "Stock and Suspense" the recoveries falling under these two categories be treated as
reduction of gross expenditure*.

RECOVERIES FROM PRIVATE PERSONS OR BODIES AND GOVERNMENTS OUTSIDE INDIA

85. 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: (i) 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*.
(ii) In case of projects jointly executed by several Governments, where the expenditure is to be
shared by the participating Governments in agreed proportions, but the expenditure is ab initio
incurred by one Government and shares of another participating Governments recovered
subsequently, such recoveries from other Governmentsshould be exhibited as abatement of
charges* under the relevant expenditure head of account in the books of the Government incurring
the expenditure initially.

RECOVERIES BY ONE GOVERNMENT FROM ANOTHER (WITHIN INDIA)

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*.
Recoveries of above if not effected within the accounts of the year in which the expenditure was
incurred, should be treated as revenue*.
Exception: In cases where recovery is made on the basis of calendar year instead of financial year, the
entire amount of recovery may be treated as reduction of expenditure.

CLASSIFICATION OF RECOVERIES MADE BY ONE DEPARTMENT FROM ANOTHER DEPARTMENT OF

THE SAME GOVERNMENT
88. The recoveries should be treated as deduction from the gross expenditure*, except such
recoveries made by a commercial department e.g. Railways, Department of Posts and Department
of Telecommunications or a department of commercial undertaking (e.g. AIR), which should be
treated as receipts of that department.
Recovery actually effected, irrespective of the year to which it relates, shall be adjusted in accounts in
reduction of expenditure and exhibited in the schedule of recovery to be attached to the
Appropriation Accounts of the year in which the recovery is effected.
*Recoveries effected after the close of the accounts of the year in which the expenditure was
incurred, should be compiled in the Defence Services Accountsas revenue and not as deduction from
expenditure*, unless the latter course, is authorised by provision in the budget estimates.
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.

CHAPTER 6: GENERAL RULES AND PROCEDURE APPLICABLE TO DEFENCE PROFORMA

ACCOUNT
92. The balances of the Defence Services have been created Proforma in the books of the Reserve
Bank of India w.e.f. 1st April, 1962.
These balances form part of the balances of the Central Government for regulating the ways and
means arrangements.
Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its
credit policy under Section 17(5) of RBI Act, 1934 and are repayable in each case not later than three
months from the date of making that advance.
There is one Central Account in the books of the Reserve Bank of India for the Defence Service as a
whole but in the details working upto this single account, the total figures for each Controller will be
available separately in the books of the Reserve Bank.
*The transactions with or on behalf of the Defence Services arising in the accounts of Post, Railways,
Deptt of Supply, Ministry of Commerce (stores transactions) and HCI, London and Embassies accounts
including ISM Washington received through Principal Accounts Officer of MEA will be adjusted with
the RBI against the balance of the Defence Proforma Account and of the Government concerned.
These adjustments will centrally be effected by CAS, RBI at Nagpur.
DEFENCE TRANSANCTIONS AT BANK TREASURIES
Concept of Focal Point Branch (FPB):
It is based on the concept of "One PAO- One Focal Point Branch".
Focal Point Branches have been introduced in the Ministry of Defence with effect from 01.10.93.
In this procedure, the dealing branches of State Bank of India are linked for the purpose of reporting
Defence transactions where the Defence Accounting Circle is situated.
Defence Accounting Circle have been authorised by the RBI to transact in Defence Proforma Account.
The nominated Focal Point Branch acts as a dealing branch. It is responsible for prompt and accurate
accounting of the transactions reported to it daily by all the dealing branches linked to it.
Dealing Branches
The dealing branches maintain the account of the DDO/ PCsDA/CsDA and prepare daily Payment
and Receipt Scrolls in quadruplicate, separately for each account holder daily.
Each day's scroll is given a running serial number for the accounting year from 1st April to 31st
March.
The Payment and Receipt Scrolls are identified distinctly by prefix DEF (P) and DEF (R) for payment
and receipts separately.
The credit scrolls will show receipt number/MIN (MRO Identification Number) given by the Bank to
each MRO, the name of Depositor and its amount; the debit scrolls will show the cheque No., date
and amount of each cheque.
Each dealing branchwill furnish the daily scrolls duly supported by the Military Receivable Orders
and paid cheques in respect of the Defence transactions occurring in their books to the FPB.
*Focal Point Branches will prepare Main Scrolls and allot consecutive serial numbers to them.
*The Main Scrolls duly supported with the daily scrolls of branches and MROs / Paid cheques will be
sent to the PCDA/CDA daily for their verification and certification.
Two copies of the Main Scroll along with its original copy and the relative instruments received from
various dealing branches will be forwarded to the PCDA/CDA/Accounting Circle on day-to-day basis.
Simultaneously, the aggregate of receipts and payments in the Main Scrolls are incorporated in a
Daily memo* and the same is reported to SBI, GAD, SBI, Mumbai.
Main Scrolls supported with daily scrolls will be received in the Accounts Section of the PCDA/CDA
Office.
The Section will maintain a Register in manuscript (Main Scroll Register)for the date-wise recording
of the receipt of Bank scrolls and disposal of accompanying vouchers. Separate pageswill be allotted
for each FPB.

VERIFICATION OF DATE WISE MONTHLY STATEMENT (DMS)/ MONTHLY STATEMENT OF

SETTLEMENT (MSS)
*The FPB will prepare Date wise Monthly Statement (DMS), a summary of all the transactions
undertaken during the month and submit the same to the concerned Defence Accounting Circle.
DAC will verify and reconcile the transactions noted in the Main Scroll Register and return to the
FPB. The FPB will forward verified copy of DMS to SBI, Govt. Accounts Department, Mumbai.
The adjustments on account of discrepancieseither by the FPB /errors pointed out by the DAC will be
incorporated in a separate Error Scroll and reported to that office in the next day’s transactions.
*Error Scrolls will be prepared by the FPB at the time of certification of Main Scrolls or the Date Wise
Monthly Statements and included in the next day’s transactions.
*On receipt of daily memoranda/online data in respect of transactions from various FPB, the GAD,
SBI, Mumbai will consolidate the transaction from all FPB figures and report Receipts and Payments
separately to RBI, CAS, Nagpur for eventual settlement.
*A Monthly Statement of Settlement (MSS) will be generated and forwarded to the DAC and FPB.
The DAC will verify and return a copy of the same to FPB/SBI, GAD Mumbai duly pointed out
discrepancies, if any.
The RBI, CAS, will forwardmonthly statements of closing balances in the Defence Proforma Account,
for reconciliation with the Main Scrolls/DMS/MSS. A confirmation of the closing balances is sent to
the RBI CAS by the DAC concerned.
The SBI has implemented Government Business Software Solution (GBSS) for expeditious settlement
of transactions.
Electronic Payments through e-FPB
95. SBI Cash Management Product Branch, Mumbai is authorised to act as e-Focal Point Branch
from Government e-payment Gateway (GePG). It acts as a link and FPB for Ministry of Defence.
Downloadable e-Debit Scrolls/DMS and Settlement Reports are received from the CMP portal.
E-Payments through Private Sector Banks/Public Sector Banks
Four Private Sector Banks i.e ICICI Bank Ltd, AXIS Bank Ltd (formerly UTI), IDBI Bank Ltd and HDFC
Bank Ltd have been authorised by the RBI as their agents for conduct of all types of Govt
transactions.
MoD has not accredited these banks to act as treasury for defence transactions. However, e-
payments can be authorised from these banks by issue of cheques drawn on RBI/SBI.
The transactions routed through these banks will be adjusted in the Defence Proforma Account
through RBI/SBI.
RBI as FPB
98. The RBI PAD (Public Accounts Department) will function both as 'Dealing Branch’ and 'Focal Point
Branch’ in respect of Defence Accounting Circles.
Each RBI branch will act independently and render accounts through debit/credit scrolls.
The transactions effected by RBI Branches in respect of PCDA/CDA/DAC concerned will be accounted
for by them in their books and the balances in the accountsreported to CAS, Nagpur daily.

DEFENCE TRANSACTIONS AT NON-BANK TREASURIES

101(a) For Defence transactions at Non-bank Treasuries and payments made at Bank treasuries
through the intervention of the Treasury Officer (e.g. payment of pensions to Defence pensioners),
the paid vouchers and M.R.Os. etc. along with the Schedules of payments (in duplicate) and receipts
(in duplicate)will be sent by the Treasuries directly to the PCDA/CDA concerned bimonthly on the
11th and the last of the following month.
Copies of schedules being also sent to the respective Civil Accountants General.
These schedules will be received in the Accounts Sections and entered in a manuscript register
maintained for this purpose for each Treasury.
The total of this Register will be tallied with the total depicted in the inward monthly settlement
accounts of the Accountant General concerned.
PCDA/CDA will send a duly countersigned copy of the aforesaid schedules (without the vouchers,
etc.) to the Civil Accountant General.

ADVICE OF CLEARANCE
102. The total amount due to/from Department of Posts, Railways, Department of Supply should be
advised monthly to the CAS, RBI, Nagpur by the PCDA/CDA for adjustment against the balances of
the above Department/Ministry.
These advices should be sent to the CAS,RBI Nagpur at periodical intervals, viz. on the 10th, the 20th
and at the end of the month, the last one being always marked "Final".
Extracts of this advice to the Bank should be sent to Post/Railways/Dept. of Supply concerned along
with the supporting schedules or vouchers.
*Monetary settlement in respect of Defence transactions adjustable in the books of AG/P&AO
Ministries & Departments of Central Govt. will be in cash.
MEMO OF CLEARANCE BY THE RESERVE BANK
105. The Reserve Bank will, on receipt of each advice, make the necessary adjustment in the account
of the party concerned and issue intimation both to the debtor and to the creditor party in respect
of transactions.
MONTHLY SETTLEMENT ACCOUNT
106(a) As soon as the accounts of a month are closed, the *PCDA/CDA shall prepare a monthly
settlement account for the amounts booked in his account working upto the total net debit or credit
advised to the Reserve Bank during the month and send it to the Accounts Officer,
Post/Railways/Dept. of Supply.
*This account will cover only those items, the initiative for which rests with the Defence Department.
Similarly, a monthly settlement account from the Accounts Offices of Railways/Posts etc. with which
the Defence has an account, will be received every month in respect of items for which the initiative
rests with them.
ADJUSTMENTS OF TRANSACTIONS RELATING TO THE MONTHS OF FEBRUARY AND MARCH
The books of the Reserve Bank for the month of March will be closed by the 15thApril or on a date
as notified by them, after which no transaction involving inter-Government adjustments will be
cleared by the Bank in that March's account.
Proforma adjustments outside the Books of RBI
109. If any item of large magnitude affecting other department of the Central Government which is
not incorporated in the Defence Proforma Accounts of the same year comes to light after the
accounts of the financial year are closed by the Reserve Bank, the details of such will be furnished
by the PCDA/CDA to the CGDA.
*After obtaining the permission of the CGA for carrying out adjustment of those transactions, they
will be accounted 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.
Defence Transactions through e-Ticketing
97. E-ticketing system in lieu of Railway Warrant, to Service Personnel has been developed by the
CGDA via web services integration offered by IRCTC. Railway tickets can be booked over the internet
by any unit through a centralised portal of the CGDA.
In e-ticketing, a predefined amount is deposited by the PCDA (Travel) {Presently PCDA (R&D)} in the
Revolving Account at the central level with IRCTC by issue of Defence Cheques/e-payments through
SBI, CMP etc. Confirmation of Defence Cheques/CMP mandates are received through Scrolls and
adjusted in the Defence Proforma Account.
Tickets booked by any unit are debited against this revolving account. The money is recouped in the
Revolving account periodically. The relevant Service Heads are directly booked online.
WORKS/STORES EXPENDITURE AND SERVICES RENDERED
114(a) The receipts and expenditure pertaining to Air Force, Navy and Factory Works executed by
the Public Works Department will be passed on by the concerned Civil Accountant General to the
Regional CDA in whose area the work is carried out and not to PCDA (Air Force), (Navy) or
(Factories).
These figures will however, be intimated by the Regional Controllers to DFA (Air Force/Navy/Chief
Controller of Accounts (Factories) as the case may be along with the Statements of receipts and
expenditure relating to Air Force/Navy/ Factory works executed by the MES.

CHAPTER 7: DETAILED ACCOUNTING PROCEDURE REGARDING ADJUSTMENT OF

DEFENCE PROFORMA TRANSACTIONS
REMITTANCES INTO BANKS AND TREASURIES ON MILITARY RECEIVABLE ORDER
116 *Cash tendered by an officer of the Defence Services on Bank/non-bank treasury shall be
accompanied by a Military Receivable Order in triplicate.
*The original duly receipted will be delivered to the tenderer and the duplicate sent to the
PCDA/CDA concerned by the Bank/Treasury Officer through the Focal Point Branch.
The triplicate will also be returned to the depositor.
The duplicate copies of MROs along with the "Credit Scrolls"/"Schedule of Receipts" from
Banks/Treasuries will be received in Accounts Section in the Controller's Office.
Details of each MRO / MRO Identification Number (MIN) allotted by the Bank, in respect of
remittances into Banks will be recorded in the "Register of MROs".Totals in the registers will be
reconciled with the totals as reflected in the Credit Scrolls/DMS.
*Original copies of the MROs (sent by the depositors) will be received in Audit Sections /Accounts
Section / Sub-Offices and adjusted on a day to day basis by debiting the Suspense Head
"Remittances into Banks / Treasuries" and crediting the relevant Service Head / AG / PAO Suspense
Head etc.
The original copies of MROs will after adjustment be passed on to Accounts Section each month
along with a Statement of MROs adjusted separately in respect of each Bank / treasury.
Duplicate copies of MROs received from Banks/Treasuries will be adjusted in Accounts Section at the
end of each month by debiting the head "Reserve Bank Deposit-Defence" and crediting the
Suspense Head "Remittances into Banks and Treasuries" as minus charge.
Totals of the duplicate MROs adjusted will be reconciled at the end of the month with the credits
appearing under the head, "Remittances into Banks and Treasuries" in the Sectional Compilation as
Minus Charge.
The fact of the adjustment of the original copies of MROs will thereafter be recorded in MRO Register
and their totals agreed with printed compilation.

REMITTANCES TO DEFENCE SERVICES FROM BANKS AND TREASURIES i.e., CHEQUES DRAWN ON
BANKS & TREASURIES
*When a cheque is drawn/e-mandate issued, a Punching Medium will be prepared by the Audit
Section by crediting the Suspense Head "Cheques and Bills / Pay and Accounts Office Electronic
Advices (e-payment advices) and debiting the relevant expenditure / Service Head.
*The Daily Payment Sheets (DP sheets) and Schedule III/ e-payment mandates will be sent to
Accounts Section where the linking of the paid Cheques /e-Advice with the Schedule III / list of
credited and uncredited items will be done by manual process / OA module.
To facilitate linking of paid cheques with Schedule III in Accounts Section, a distinguishing mark of
the section issuing the cheque will be made on the chequeby the "Disbursement" Sectionat the
time of its issue.
Schedule III /e-mandates received in the Accounts Section from' D' Section etc. will be recorded
Section-wise / office-wise and date-wise and will form the basis for linking with the paid cheques / list
of credited and uncredited items.
Paid cheques/list of credited and uncredited items along with the debit scrolls/schedules of
payments will be received in Accounts Section daily/bi-monthly from the Bank/Treasuries.
With the help of the distinguishing mark, the paid cheques will be sorted out section-wise, office-
wise and date-wise and paired with the corresponding entry in Schedule III. Suitable Note of the
linking having been done will be made on Schedule III / list of credited and uncredited items itself.
*Accounts Section will prepare Punching Media once a month by debiting Suspense Head "Cheques
and Bills (020/81)/ Pay and Accounts Office Electronic Advices (020/91)” as minus Receipt by contra
credit to the head "Reserve Bank Deposits- Defence (021/00)".
On receipt of the printed RD&R Heads compilation from EDP Centre, the total amount credited /
debited to the Suspense Head “Cheques and Bills / Pay and Accounts Office Electronic Advices" will
be reconciled with those appearing in the Schedule III/e-mandates and the sum of total paid cheques
received and cancelled and e-items credited/uncredited and cancelled during the month,
respectively.
When a cheque / e-mandate" is cancelled, the Audit Section concerned will intimate the Accounts
Section, the details of the same including the month's account in which the adjustment is made.
The cheque shall be payable at any time within a period of three months from the date of issue;
TRANSACTIONS ORIGINATING IN THE BOOKS OF RAILWAYS, POSTS AND MEA DUE FOR FINAL
ADJUSTMENT IN DEFENCE ACCOUNTS(INWARD SETTLEMENT ACCOUNT)
Vouchers and accounts etc. will be received in Accounts Section periodically from the FA & CAO
Railways, Director of Accounts Post, Post Offices (in respect of Defence Pensions paid by Post Offices).
These will be entered in an "Inward Settlement Account Register" in respect of the Railway/Post
Accounts Officer concerned and PAO MEA.
The Accounts Sections will schedule the relevant items in duplicate to the Audit Sections concerned.
These schedules should be adjusted by the Audit Section within three days of their receipt.
*The Audit Sections after audit will prepare a Punching Mediumdebiting / crediting (i.e.by minus
credit or minus debit as the case may be) the "Reserve Bank Suspense Classified" Head by contra
adjustment to the relevant Service Head concerned.
The Punching Medium will be sent as usual by the Audit Sections to the EDP Centre and the duplicate
copy ofthe I.D. Schedules will be returned to the Accounts Section showing the particulars of
adjustment.
The duplicate copy of the schedule received from the Audit Section will be linked with the original on
record in the Accounts Section and the adjustment noted in "Inward Settlement Account Register".
On receipt of the clearance memo from the Central Accounts Section of Reserve Bank, Accounts
Section will link this with the advice received from the concerned Accounts Officer.
*Thereafter, the Accounts Section will prepare a Punching Medium clearing the "Reserve Bank
Suspense Classified" Head (by plus debit or plus credit, as the case may be) and finally compiling the
amount to the "Reserve Bank Deposit Defence".
As soon as the accounts of the month are closed, Accounts Officers of Railways and Posts will also
send to the PCDA/CDA concerned a monthly settlement account working upto the total net debit or
credit which has been advised to the Reserve Bank during the month for adjustment against the
balances of the latter.

TRANSACTIONS ORIGINATING IN THE DEFENCE BOOKS (OUTWARD SETTLEMENT ACCOUNT)

*On receipt of the relevant documents to support a debit/credit to be passed on to
Railway/Posts/Dept. of Supply, the Audit section concerned will adjust the transaction by
Debit/Credit to the relevant remittance heads viz. "Inter-Governmental Adjustment Accounts Major
Heads 8787- Adjusting Accounts with Railways, 8788-Adjusting Accounts with Posts”
And forward the vouchers etc. to Accounts Section along with the duplicate copy of Punching
Medium to raise the debit against them.
Accounts Section will prepareseparate Accounts-Officer-wise schedules showing the amounts
debited/credited to the inter-Governmental Adjusting Accounts. These schedules will be serially
numbered for each Accounts officerfor each month.
The serial number of the schedules will be noted in the "Outward Settlement Account Register" of
the Railways/Post Accounts Officer concerned.
At prescribed intervals, separate advices will be issued toCAS,RBI Nagpur, intimating the net amount
due to or from Accounts Officer, for effecting the necessary monetary settlement.
A copy of this will be sent at the same time to the Accounts Officer concerned along with the
necessary vouchers.
At the end of each month, a monthly settlement account showing the aggregate position of the
advices issuedduring the month, will be sent to Accounts Officer, after effecting an agreement of the
total account with the compiled actuals.
*On receipt of clearance memo, Accounts Section will carry out necessary adjustment by
transferring the amounts from inter-Governmental Adjusting Accounts (Remittance Head, clearance
effected by minus debit or minus credit.) to the Head "Reserve Bank Deposits-Defence".

ADJUSTMENT OF EXPENDITURE ON ACCOUNT CENTRAL PURCHASE OF STORES MADE THROUGH

DGS&D
Adjustment of transactions on account of stores relating to Central Purchase of Stores made through
DGS&D is carried out by the DAD Cells located at Delhi, Mumbai, Chennai and Kolkata.
The P & AO will hand over vouchers to the Cell.
It will also advise RBI CAS Nagpur for debiting the net amount against the balances of the PCDA/CDA
under whom the Cell is functioning. The copy of the advice will be handed over to the Cell instead of
sending to PCDA/CDA.
Cell scrutinise the vouchers received from the P & AO and sort them out CDA wise. Separate CDA
wise registers will be maintained.
The value of vouchers will be entered in the Register CDA wise and the segregated vouchers will be
scheduled to the LAOs of the Consignee PCDA/CDA immediately in batches under a top sheet.
At the end of the month, the total value of all vouchers scheduled to various Controllers will be
tallied with the copy of advice received from the PAO.
A PM will be put up by debiting the respective service heads with reference to the entries in the
Register per contra credit to RBI Suspense classified.
Copy of the advice along with the copy of the PM will be sent to the Accounts Section of the
PCDA/CDA under whom the cell is functioning.
The duplicate copy of the advice along with the copy of the PM when received in Accounts Section
will be entered in the Settlement Account Register. The amount compiled to RB Suspense (Classified)
head 00/020/82 will be relieved on receipt of clearance memos from RBI, CAS, Nagpur.

SETTLEMENT OF INTER DEPARTMENTAL/ INTER GOVERNMENT TRANSACTIONS

Outward Settlement (Cash basis)

Transactions arising in the books of PCsDA/CsDA which are adjustable in the books of AG State
Govt./PAO Ministries and Departments of Central Government, are settled on cash basis.
Transactions arising in the books of the PCsDA/CsDA will initially be compiled by the Audit Sections
to the relevant PAO Suspense Head, if they relate to PAO of the Ministry/Department of the Central
Government.
Transactions relating to AG will initially be compiled by the Audit Sections to the relevant suspense
heads shown in pamphlet of RD&R heads as Minus Charge.
The duplicate copies of the Punching Media will be sent to the Accounts Section along with
supporting details and vouchers.
Accounts Section prepare compilation schedules and handed over to the group in Accounts Section
maintaining the outward claims register.
Sufficient number of folios will be allotted for each PAO of the Ministry/AG indicating the Suspense
Code head/Remittance head at the top of the folio.
The Schedules received from the scheduling group/task will be segregated PAO wise/AG wise and
posted in the outward claims register.
Weekly totals of the folios pertaining to each party will be struck and if the resultant effect is a
credit, a payment order for the net amount on IAF CDA-13 and a Punching Medium will be prepared
and submitted to the AO/Senior AO, Accounts Section for approval.
The passed bill will be sent to the Disbursement Section along with IAFA-728 (Daily Payment Sheet)
for preparation of cheque.
The paid bill viz. IAF CDA-13 along with the cheque will be handed over by the Disbursement Section
to the AO/SAO, Accounts Section.
The cheque along with a forwarding memo will be dispatched on the same day on which it is received
from the Disbursement Section.
If the resultant effect of the totals of outwards claim register is a debit, a memo will be sent to the
party concerned requesting them to send a Bank Draft in favour of the PCDA/CDA preparing the
claim.
On receipt of Bank draft/cheque from the party, a MRO will be prepared in triplicate and the MRO
along with the draft will be presented in the Bank.
On receipt of the original copy of the MRO the outward claims group will adjust it by relieving the
PAO suspense head.

Inward Settlement (Cash basis)

124. Transactions arising in the Books of AG/PAO Ministries and Departments of Central
Government adjustable in the books of PCsDA/CsDA are settled on cash basis.
The Inward claims duly supported by schedules/vouchers along with Bank draft (in case the net effect
is a credit to the PCDA/CDA) or a memo requesting for a cheque (in case the net effect is a debit to
the PCDA/CDA) will be received in the Accounts Section in the group maintaining the Inward Claims
Register.
If the net effect is a debit to the PCDA/CDA for which a cheque is demanded by the party, a payment
order on IAF CDA 13 with punching medium compiling debits and credits to the respective Service
Heads, will be prepared and submitted to the AO/SAO, Accounts Section for approval.(Same
procedure as above)
If the net effect of the inward claims received is a credit to the PCDA/CDA for which a Bank
draft/cheque has been received, a MRO prepared in triplicate. (Same procedure as above)

ADJUSTMENT OF E-TICKETING TRANSACTIONS ON CASH BASIS

The cost of the Warrants and other charges are directly booked online to the relevant Service
Heads.
Concession is granted by the Indian Railways to Officers and PBORs on the concession
vouchers/Form ‘D’. The individual’s liability i.e 60% (Officers) and 50% (PBORs) is booked online as
advance by the Ministry of Defence to IRCTC.
After booking, ‘e-Concession Vouchers’ (e-CVs) are sent to the concerned PCDA/CDA/PAOs (ORs) for
effecting recovery from the IRLA of the concerned Officers/PBOR.
The e-CVs will be forwarded to the concerned PCDA/CDA/PAOs (ORs) by PCDA (Travel) on line for
recovery action.
In case, a Warrant is cancelled, the relevant Service Head and other charges already booked or liable
for refund will be reversed online.
The advance head for concession voucher/Form ‘D’ will be reversed or sent to the concerned PAO
(ORs) for refund action in the IRLA.
DRAWAL OF ADVANCES ON THE AUTHORITY OF EMERGENCY CASH REQUISITIONS(ECR)
(A) Bank Treasuries
Payments made by the bank treasuries on the authority of Emergency Cash Requisitions will be taken
directly against the Defence Proforma Account in their books.
The paid ECRs (both original and duplicate) together with the daily debit scrolls will be sent by the
banks through the Focal Point Branch to the concerned PCDA/CDA every day.
The Accounts Section of the PCDA/CDA office will record the receipt of the debit scroll along with
both the original and duplicate copies of ECRs in the register.
Account Section schedule the duplicate copies of E.C.Rs to the Audit Sections to which the
transactions pertain for noting in the demand register and for watching eventual recovery etc.
Accounts Section will adjust the amounts of the original copies of the ECRs to the head "Reserve Bank
Suspense Unclassified" by contra credit to the head "Reserve Bank Deposit-Defence" at the end of
each month.
The triplicate copies of the ECR will be received in the Audit Section concerned from the drawees
i.e., the units drawing the emergent advances.
They will pair the same with the duplicate copies received from the Accounts Sections and classify
and adjust the triplicate copies of the ECRs to the relevant heads of accounts by clearing the heads
"Reserve Bank Suspense Unclassified" by minus debit entry.
Thereafter the Audit Sections will forward the triplicate copies along with copies of the relevant
Punching Medium to the Accounts Section.
Accounts Section will pair the triplicate copies with their original copies. It will watch adjustment of
triplicate copies of the ECRs and eventual clearance of Suspense Head "Reserve Bank Suspense-
Unclassified".
(B) Non-Bank Treasuries
Payments made by non-Bank Treasuries on the authority of Emergency Cash Requisitions be
accounted for in the Treasury Accounts and cleared by the Civil Accountant General concerned.
Duplicate copies of the Emergency Cash Requisitions will be sent by the Treasury Officers directly to
the PCDA/CDA concerned on the very day on which the advances are made by them.
original copies will be sent to the PCDA/CDA concerned by the Treasury Officer in support of their bi-
monthly schedules of payment.
127. The Jammu and Kashmir State transactionsarising in Defence Books will be taken to “PAO
Suspense” head and settled monthly in cash by obtaining bank drafts from A.G. J&K.
Similarly, Pr. Controllers/Controllers will pay the amounts due to Jammu & Kashmir State by drawing
a cheque on State Bank of India, Jammu/Srinagar, in favour of A.G. Jammu & Kashmir.
Defence transactions taking place at the State Bank of India at Jammu or Srinagar will be taken
against the "Defence Proforma Account".

RECONCILIATION OF BALANCES IN THE BOOKS OF RESERVE BANK

After the accounts of the month are closed, the CAS, RBI Nagpur, will furnish the Statement of
Closing Balance to each of the PCDA/CDA by the 18th of the following month.
These figures should be reconciled with the total figures recorded in the Outward and Inward
Settlement Account Registers and in Register of Main scrolls received from Focal Point Branches
which will be abstracted monthly in a separate registertitled "Reserve Bank Deposits Accounts."
The Reserve Bank will also intimate the balances of each PCDA/CDA to the CGDA monthly. CGDA will
reconcile and confirm the monthly figures for the Department as a whole to the CGA for necessary
contra reconciliation with bookings under Reserve Bank Deposits.
The balances under head 'Reserve Bank Deposits— Defence' in the Defence books must agree with
the balances as worked out in the books of the Reserve Bank.
The unreconciled amount will be transferred to RB Suspense Unclassified (020/83)/PSB Suspense
(020/76) as the case may be.
Verification and Reconciliation
Ordinarily, at the end of the yearthere should be no balance under the heads and "Reserve Bank
Suspense Unclassified"/PSB Suspense.
The balance under the heads "Remittance into Banks and Treasuries" and "Cheques & Bills" will
represent the amount of unaccounted remittances (which will be rare) and the amount of uncashed
cheques respectively.These should be reconciled every month.

CHAPTER 8: EXCHANGE ACCOUNTS BETWEEN PCDA/CDA

The Defence Exchange Accounts will be operated for adjustment of transactions of the following
types only.
(a) Transactions pertaining to Debt, Small Savings Provident Funds, Loans and Advances, Deposits and
Advance, Suspense and Remittances head;*
(b) Transactions for the settlement or adjustment of which a particular PCDA/CDA is centrally
responsible.*
e.g. ILAC and Embassy transactions which cannot be booked to final heads by PCDA, New Delhi such
as GPF recoveries e-ticketing transactions booked by the PCDA (R&D) which are recoverable from the
IRLAs of the Service Personnel etc.;
(c) Imprest Advance Payments to Naval /Air Force personnel from Army sources and vice versa.
Payments made by Regional Controllers, PCDA (Navy), PCDA (Air Force) and PCDA (O) towards Army
Imprest are not to be passed on through Defence Exchange Accounts.*
Such amounts will be transferred to the books of the Regional CDA concerned by the EDP Centre,
CGDA Delhi Cantt annually.
Expenditure debitable to locally controlled headsincurred by one PCDA/CDA on behalf of another
(except the expenditure related to MES which will continue to be passed on through DEA) will be
finally brought to account against the relevant Service Heads concerned by the PCDA/CDA incurring
the expenditureinstead of debiting it through Defence Exchange Accounts against the PCDA/CDA on
whose behalf the expenditure is incurred.
Adjustment on account of bulk issue of stores and equipment from one service to another (i.e.
between Army, Air Force and Navy) together with the cost of incidental charges (viz. Rail, Freight, Sea
Freight etc.) incurred thereon by the supplying services will be made by the PCDA/CDA of the
receiving service in his books.

Exceptions:
a. All issues from Ordnance and Equipment Factories to Army, Navy and Air Force will be priced and
straightaway debited to Service heads of Army, Navy and Air Force by contra credit to deduct head
of O.F. Organisation by the Accounts Officer attached to each Factory.
b. Transfers of unserviceable and salvaged stores between Army, Navy and Air Force will be made
without any financial adjustment.
c. The provision does not apply to issue of stores and equipment to Institutions like the Joint
Services Wing of National Defence Academy for which no inter-department adjustment will be
made as such institutions though placed under the administrative control of any one of the Services,
are intended and used for the benefit of all the three Services.
Services' rendered by Army to the Air Force and the Navy and vice versa are treated as free.
Advances of Pay and Travelling Allowances to individuals transferred from the payment of one
PCDA/CDA to that of another will normally be finally adjusted in the accounts of the PCDA/CDA who
pays the advances.

WORKS UNDERTAKEN BY THE MES ON BEHALF OF AIR FORCE, ORDNANCE FACTORIES AND NAVY
Transactions relating to works undertaken by the M.E.S. on behalf of Air Force, Ordnance Factories
and Navy will be audited by the Army Controllers as sub auditors of the PCDA (Air Force), the PCDA
(Factories) and the PCDA (Navy) respectively and receipt and expenditure in connection therewith
will not be passed through Remittance Head.
All such receipts and expenditure will be adjusted by the Army Controllerdirectly to the relevant
detailed heads of account relating to Air Force, Factory and Navy Works.
The adjustment of departmental charges in respect of works executed by the MES on behalf of Navy
and Air Force will be carried out centrally by the CDA, (Army), Meerut.
These departmental charges will be debited to Navy and Air Force estimates under relevant heads of
accounts by per contra credit to Army Estimates.
No financial adjustment on account of departmental charges will be made in case of works
executed by the MES for Factories.
The PCDA/CDA in whose books the items are finally compiled will render periodical statementsof
revenue and expenditure relating to Air Force/Naval works direct to the respective DFAs.
This statement will be prepared by the AOs/AAOs GE attached to the GE's Offices in triplicate.
Two copies of statements will be sent by the AOs/AAOs GE to their PCDA/CDA within seven days of
the close of accounts of the last month of a quarter.
The PCDA/CDA will verify the figures with the printed sectional compilations and transmit one copy
of the statement to the DFA (AF)/DFA (Navy) so as to reach them by the end of the first month
following the quarter to which it relates.
In case of factory works, the detailed statement of revenue and expenditure will be prepared in
quadruplicate by the AOs/AAOs GE. Three copies will be sent by the AOs GE to their PCDA/CDA.
PCDA/CDA after verification of the figures with the printed compilation, will transmit two copies of
the statement to the Principal Controller of Accounts (Factories).
ID SCHEDULES-ACTION BY THE ORIGINATING PCDA/CDA OFFICE
A Defence ID Schedule in IAF (CDA)-338 A is prepared for each original item compiled to Defence
Exchange Account Head, with reference original vouchers, Punching Media etc.
It is prepared in a Controller's office in quintuplicate by the Audit/Accounts Section concerned at the
time of preparation of the PM by that section.
Out of 5 copies, three copies will be forwarded to the Originating Controller , one copy to Accounts
Section of the Originating Controller and one copy will be retained as office copy.
Accounts Section of the Originating PCDA/CDA office will ensure that all DID Schedules were correctly
originated and particulars of the originating DID Schedule will be noted in the Originating DID
Schedule Register.
Each entry made in the Originating DID Schedule Register, will be also be reconciled DID Schedule
number wise amount wise etc., with reference to the copy of the monthly report of Originating
Items generated by the EDP Centre, CGDA Delhi Cantt.
EDP Centre, CGDA, Delhi Cantt will generate originating DID Schedules Report and a soft copy will be
e-mailed to PCDA/CDA by 15th of the month following the month indicating 15 digits DID Schedule
Number allotted by the system with reference to the data compiled through PM.
The original, duplicate and another copy of schedules together with the supporting vouchers, will be
sent by Audit Section of the originating PCDA/CDA without waiting for the sectional compilation, to
the Accounts Section of the responding Controller who will enter them in a control register.
Preservation of original records till the finality of the case is the primary responsibility of the Audit
Section.
ACTION BY THE RESPONDING PCDA/CDA OFFICES (ADJUSTMENT OF DEFENCE ID SCHEDULES)
The Responding Controller is responsible for the prompt adjustment of all ID Schedules sent to him.
The adjustment is recorded on part B of the original, duplicate and the third copy of Defence ID
Schedule.
The original copy of the schedule thus completed will be treated as a Punching Medium and sent to
the EDP / DDP Centre concerned. The duplicate copy will be retained as an office copy.
The third copy will be sent to the EDP/DDP Centre for generating the responding schedule report.
The data base file of the Responding Items will be e-mailed to the EDP Centre, CGDA, Delhi Cantt,
who will consolidate the report and e-mail responding items report to EDP Centre, CDA (Army),
Meerut.
A print out of responding side report will also be sent by the EDP Centre, CDA(Army), Meerut to the
originating PCDA/CDA concerned to enable them to monitor the adjustment of DID Schedules floated
by them.
No monthly Defence Exchange Account, as such, is prepared and exchanged between parties to the
account. Only ID Schedules are prepared for original items, and the EDP Centre, CDA (Army), Meerut
centrally links the original and responding transactions by computerised process.
ANNUAL ABSTRACTS OF PROGRESS REGISTERS
An Annual Consolidated Abstract of Progress Registers in respect of Exchange Accounts between the
PCDA/CDA embodying all outstanding items on 31st March is prepared after the close of financial
year by the EDP Centre, CDA (Army), Meerut and sent to the CGDA Delhi Cantt by 20th Dec. each
year.

CHAPTER 9: ADJUSTMENT OF FOREIGN DEFENCE TRANSACTIONS ARISING IN

ENGLAND AND ADJUSTABLE IN INDIA
The Defence transactions in the United Kingdom requiring to be adjusted in the Indian Books will be
advised through RBI CAS, Nagpur to the PCDA, New Delhi by the Principal Chief Controller of
Accounts, MEA.
(a) Payments made in England on behalf of Defence Services and finally audited in that Country and
compilable to respective Minor Heads under Major Heads 2076, 2077, 2078, 2079 and 2080 of the
Defence Services Estimates.
(b) Other transactions such as the stores purchased for Defence Services, the cost of which is
compilable to Major Heads 2076, 2077, 2078, 2079 and 2080.
(c) Chancery Account relating to the payment made to Officers / staff serving in High Commission of
India, London and recoveries effected from them.
Defence transactions arising in England will be intimated by the Chief Accounting Officer to the High
Commissioner for India in the U.K. to the Pr CCA, MEA, New Delhi who will get the necessary
adjustments against the Defence Proforma Account made through the CAS, RBI Nagpur.
The Pr CCA, MEA, New Delhi after converting the sterling figures at the average rate will inform the
CAS, Nagpur for necessary adjustment against the Defence Balance of PCDA, New Delhi.
The PrCCA, MEA will furnish a copy of Advice along with concerned vouchers to the PCDA, New Delhi
and a statement giving the break-up of the net amount of receipt and charges relating to (i) the
Defence Remittances and (ii) the High Commissioner's Classified Account of Receipts and
Disbursements.
On receipt of Accounts from PCCA, MEA, New Delhi and clearance memo from RBI CAS, Nagpur,
PCDA, New Delhi will carry out the adjustment to final heads in his accounts.
The Remittance Transactions such as recovery of loans and advances, recovery of GPF subscription
etc relating to other PCDA/CDA, will however, be passed on by PCDA, New Delhi to the respective
PCDA/CDA through the Defence Exchange Accounts.
*Pension accounts and pensions transactions are directly raised and advised by Pr. CCA, MEA
against PCDA (P), Allahabad.

CHAPTER 10: COMPILATION OF ACCOUNTS

The receipts and expenditure accounts are electronically compiled by the EDP Section, HQrs Office
Delhi Cantt.
The necessary data available in the original vouchers etc. are codified in documents known as the
Punching Medium. The Punching Media are sent by different Controller’s Offices / Sub-Offices to the
concerned DDP/EDP Centre.
Code Numbers to the PCDA/CDA are allotted by the CGDA under intimation to the EDP Section, HQrs
Office, Delhi Cantt and those for the Sections of the Controller's Office by the DDP / EDP Centre,
concerned.
Separate Punching Media are prepared for each class of voucher.
(a) Cash Vouchers (Class of Voucher 1): This class of PM is prepared for cash payments by the DAD
Officers (except MES bills).
(b) Transfer Entries (Class of Voucher 2): Class 2 PM are prepared to transfer an item from one head
to another.
(c) I.D. Schedules (Civil) (Class of Voucher 3): This Class of PM is used for adjusting itemsoriginating
in the books of Civil Accounts for which inward claims are received from them and which are settled
on cash basis/ through advice to RBI CAS Nagpur.
(d) Abstract of Receipts and Charges (Class of Voucher 4)
(e) Cash Accounts (Class of Voucher 5): Formations drawing cheques against cash assignments, the
Punching Media is prepared in adjustment of their cash accounts.
(f) Railway Bills (Class of Voucher 6)
*(g) ID Schedules (Defence) (Class of Voucher 8): ID Schedules (Defence) are prepared on IAF (CDA)
338-A. The responding PCDA/CDA indicates adjustment of the ID Schedules in part 'B' provided for
this purpose, which itself constitutes the Punching Medium.
(h) MES Bills (Class of Voucher 9)
The original copies of all Punching Media or PM data on OA from Main Office / Sub-Offices are
dispatched to the DDP / EDP Centre concerned on day to day basis.

VARIOUS COMPILATIONS PREPARED BY EDP CENTRE AND THEIR DISPOSAL

various compilations printed by the DDP/EDP Centres:-
(a) Sectional compilations: A separate compilation for each section of a Controller's Office is
generated online to exhibit the amount compiled under each code head during the month.
Printed/soft copies of sectional compilations furnished by EDP Centre of the PCsDA/CsDA concerned
to their concerned Sections/Sub-Offices immediately on receipt after generating on line by the EDP
Section, CGDA, Delhi Cantt.
(b) Book compilation of RD &R Heads: A separate Book compilation of RD&R Heads is printed for
each PCDA/CDA office showing the current and progressive figures under each RD&R Head.
(c) Consolidated Compilation of All India Defence Services Receipts and Charges: A Consolidated
Compilation of All India Defence Service Receipts and Charges is generated online in the Compilation
System to show the current and progressive figures under each Major, Sub Major, Minor, Sub and
Detailed Head of account.
Ministry of Defence (Finance) Budget Section, PCDA(AF) (Navy), PCDA(R&D),PCOA (Fys), Accounts &
Budget Section of CGDA, DGADS, Services HQrs and Directorates concerned (E-in-C, MGO, QMG, EME
etc.) are users of this report.
(d) Consolidated Compilation of RD&R Heads: The monthly consolidated compilation of R D & R
Heads is generated online in the Compilation System by the EDP Centre of HQrs Office to show the
progressive figures in respect of each Controller and under each R D & R Head.
(e) Analysis of All India Defence Services Receipts and Charges: show the current and progressive
figures separately for each Controller and under each classification Code Head of Classification of
Hand Book.
(f) Compilations for March (Supplementary) and (Supplementary Corrections) Accounts: These
compilations are closed on the dates intimated each year by the Controller General of Defence
Accounts. They are printed and disposed of in the same manner as the monthly sectional
compilations.

CHAPTER 11: MAINTENANCE OF DEFENCE LEDGER AND VERIFICATION OF BALANCES

Defence Ledger is prepared in theform of statements showing receipts and charges and balances
under the Revenue, Debts, Provident Funds, Reserve Funds, Loans and Advances, Deposits and
Advances, Suspense and Remittances heads.
The statement of accountshowing heads and details of balances closed to "Government Account" is
prepared.
*Heads whose balances close to balances to the ‘Government Account’ have been grouped together
to facilitate the preparation of Annual Review of Balances.
POSTING OF DEFENCE LEDGER
173. The entries in the Defence Ledger will be posted annually.
As soon as the orders of the CGA are received through the CGDA for closing of annual account, the
closing balances of the heads of accounts closing to balances in the previous year will be brought
forward in thestatement of the current year.
After the close of the compilation for March Supplementary Corrections, if any, the final balances of
receipts and charges will be posted in statements and balances struckfor the preparation of the
Review of Balances.
The closing balances in the statement will be verified with the balances worked out independently in
the Debts, Provident Funds, Reserve Funds, Deposits, Advance, Suspense and Remittance Heads
Registers by the different Sections/Sub-Offices.
CLOSING OF BOOKS
The Revenue and Capital heads will be closed to 'Government Account'.
The Accounts under the Major Heads 0076, 0077, 0078, 0079, 0080 Defence Services Receipts, 2076-
Army, 2077-Navy, 2078- Air Force, 2079-Ordnance Factories and 2080- Research and Development,
Defence Services charges and 4076-Defence Capital Outlay and other revenue heads will be closed by
credit or debit to Government Account.
The heads pertaining to Sector E-Public Debt, F-Loans and Advances, I-Small Saving Provident Fund
etc, J-Reserve Funds, K-Deposits and Advances, L-Suspense and Miscellaneous and M-Remittance
Heads Closed to 'Balance Accounts' except that 'Reserve Bank Deposits-Defence'.
This head has been placed under Sector L-Suspense and Miscellaneousshall be closed to Government
Account.
PREPARATION OF ANNUAL REVIEW OF BALANCES
175. After the balances of the heads closing to balances to the Government are correctly transcribed
in receipts and charges in the statement (Annexure C9 to Appendix IX to this Code) the closing
balances of each code head will be correctly worked out.
The Statement 13 will also be prepared which is Minor Head wise statement of net balances closing
in Credit or Debit.
From the balances of Statement 13, Statement 5 will be prepared. Statement 5 is summary of
balances of Statement 13.
Statement 5 is intended to work out net consolidated cumulative balances in debit/credit to be
incorporated in the Government Account.
Verification of Balances
177. The amount booked under Revenue, Capital and other transactions of Government including RB
Deposits, the balances of which are not carried forward from year to year are closed to a single
head called ‘Government Account’.
The balances under this head represent the cumulative effect of Debt, Deposit and Remittance
Heads, Contingency Fund and closing cash balance.
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.
Verification of correctness of Statements of Finance Accounts
The following checks will be exercised to ensure that balances in the statements of the AROB have
been correctly worked out:-
i. The grand total of the balances of all heads closing to Government Account and closing to
balances to the Government Account in Receipts and Charges agree with the grand total of Book
Compilation under receipts and charges.
ii. The grand total of net difference of the Receipts and Charges under Closing Balance of the AROB
agree with that of the net DR/CR grand closing balances of Statement No 13, Closing Balances worked
out in the ‘Government Account’ and balances brought forward in Statement No 5.
REVIEW OF OUTSTANDING BALANCES
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.
Particulars of each sub head under the Head "Deposits," "Advances", "Suspense Accounts" and
"Loans and Advances by Central Government" should be given separately in the Review.
An unaudited copy of the report along with Statement No 5 & 13 and other information will be sent
to CGDA by due date, simultaneously supplying to the DADS a copy of the report for their scrutiny.
The Review, which will contain final figures of the year, will be subjected to test audit by the test
audit staff and will bear an audit certificate.
An audited copy of the report will be sent later as and when the report is received back from Pr
DADS/DADS, duly endorsed with an audit certificate.
Necessary correction to the above report, if required, will be issued, if necessary, when a
rectification / readjustment is carried out through a Journal Entry with the approval of CGA.
Review of Balances on Account of Loans and Advances
190. An annual statement of review of balances under the head "Loans and Advances" outstanding
under each sub-head on 31st March will be rendered by each PCDA/CDA on 1st September each year
to the Deputy Financial Adviser (Budget) Ministry of Defence (Finance).
The review will in particular, deal with writes off, delays in repayment, acknowledgement of balances,
doubtful assets in balances, etc.

CHAPTER 12: ESTIMATES

SECTION I-BUDGET ESTIMATES FOR SERVICE HEADS
The Defence Services Budget Estimates are presented in Two Demands for Grants; one Revenue
Account and another on Capital Account.
In addition to the above grants, two grants relating to civil i.e Defence (Pension) and MoD (Civil) are
also handled by the Ministry of Defence (Fin).
"Centrally Controlled Heads": Responsibility for implementing the decision and ensuring proper
control over expenditure is vested with various controlling authorities at Armed Forces
Headquarters etc., and no distribution of provision is made to subordinate authorities.
E.g Pay and allowances of regular personnel of the Armed Forces.
"Locally Controlled Heads": The accounting heads under which expenditure against budget
allotments made to local administrative authorities is compilable.
Some part of the total budget provision is placed at the disposal of local administrative authorities,
while the remaining part is controlled by the authorities at the Armed Forces Headquarters.
E.g. Payments to Industrial Establishment employed in store depots, factories, etc, Transportation
charges. Miscellaneous expenses, Payment for stores, Works expenditure and Pensions.

Periodical Review and Estimates

Preliminary Report for the current financial year 20th August
Preliminary Revised Estimates for the current financial year 10th November
and Forecast Estimates for the ensuing financial year
Revised Estimates for the current financial year 20th December
and Budget Estimates for the ensuing financial year
Modified Appropriation for the current financial year 10th March
Estimates for Centrally Controlled Heads
195. Estimates of receipts and charges in respect of all the centrally controlled heads are prepared by
the concerned Branches/Directorates etc. at the Armed Forces Headquarters/Departments.
They are submitted for consolidation to Financial Planning Directorates, who in turn submit the
consolidated requirements to the concerned Integrated Finance and Ministry of Defence
(Finance/Budget).

Estimates for Locally Controlled Heads

196. Estimates for locally controlled heads relating to Army are prepared by Headquarters of
Commands and Areas and Commanders of units and formations which are directly administered by
Army Headquarters and by similar authorities on the Air Force and Navy.
These estimates are rendered to the PCDA/CDA concerned for check and onward transmission to the
respective Branches/Directorates at Armed Forces Headquarters.
The estimates of receipts and charges in respect of Ordnance Factories organisation are prepared by
the General Managers etc. of the concerned factories.
After scrutiny by the local Accounts Office, are transmitted to the Director General of Ordnance
Factories(DGOF).
The DGOF consolidates the various estimates and submits the consolidated estimates, after vetting
by Controller of Finance, Ordnance Factory Board to Departments of Defence Production and
Supplies, Integrated Finance and Ministry of Defence (Finance/Budget).
Estimates in respect of Defence Research and Development Establishments are prepared by the
Directors of the concerned Laboratories/Establishments.
The estimates are checked by the local Accounts offices and transmitted to the DRDO Headquarters
for consolidation and submission to Integrated Finance and Ministry of Defence (Finance/Budget).
Copies of sanctioned Budget Estimates are distributed by Ministry of Defence (Finance/Budget) to
all concerned.
The authorities at Armed Forces Headquarters will communicate to subordinate formations the
amount allotted under the various locally controlled heads with which they are concerned.

SECTION II-BUDGET ESTIMATES PREPARED BY THE DEFENCE ACCOUNTS DEPARTMENT

Budget estimates in respect of only the Heads relating to DAD and Defence Services Pensions are
prepared by the DAD.
These estimates will be prepared by the Pr. Controller/Controller on forms prescribed by the CGDA
or the Financial Adviser, Ministry of Defence (Finance).
*Estimates for the Ministry of Defence (Civil) are prepared by the USD.(Est.ll/Genl.),CGDA (for
DAD),DFA (PSUs), DFA (Works) (in respect of Water Supply Schemes), US (Plg) for IDSA GM CSD,
Mumbai & Chief Directorate of Purchases and submitted to DFA/MO for vetting and processing.

BUDGET ESTIMATES FOR DEFENCE PENSIONS

205. The various estimates for Defence Pensions, Allahabad will be dispatched by the PCDA(P),
Allahabadthrough CGDA so as to reach the Deputy Financial Adviser (MO), Ministry of Defence
(Finance)
(1) Revised Estimates for the current year and 30th September
budget estimates for the ensuring year
(2) Modified Appropriation for current year 4th March
In case of expenditure under locally controlled heads pertaining to the DAD, the CGDA is the
ultimate authority responsible for watching the progress of expenditure against allotment.
This function is performed by CGDA by means of the monthly compiled actuals under the heads
concerned and the periodical reports submitted by the PCsDA/CsDA.

SECTION III-CASH REQUIREMENT ESTIMATES OF DEFENCE SERVICES

Cash Requirement Estimates for the ensuing Financial Year
210. The Cash Requirement Estimates of Defence Services for Revenue, Debt and Remittance Heads
are prepared by the CGDA, PCDA/CDA and other authorities.
PCDA/CDA, prepare Cash Requirement Estimates for the Revised Estimates for the current Financial
year and Budget Estimates for the ensuing year only in respect of certain Heads and submitted to
Deputy Financial Adviser (Budget), Ministry of Defence (Finance) through CGDA, Delhi Cantt.
They are generally based on the compiled actuals for the first six months of the current financial year
and the last six months of the previous financial year.
The estimates in respect of all other heads are prepared centrally by the Deputy Financial Adviser
(Budget), Ministry of Defence (Finance).

CHAPTER 13:BUDGETARY CONTROL OVER DEFENCE EXPENDITURE

The Demands for Grants for meeting expenditure on Defence Services are passed by Parliament each
year.
Soon after the presentation of the Demands for Grants in the Parliament, the authorities at Service
Headquarters and other central controlling authorities will notify the allotments under the locally
controlled heads to their lower formations.
These allotments will be treated as 'Provisional' and no expenditure against them can be incurred till
passing of the Demands for Grants.
VOTE ON ACCOUNT
After the Demands for Grants are passed, Parliament's approval to the withdrawal from the
Consolidated Fund is sought through an Appropriation Bill.
To enable the Government to carry on its normal activities from 1st April till such time as the
Appropriation Bill is enacted, a Vote on Account is obtained from Parliament through an
Appropriation (Vote on Account) Bill.
The provision included in the "Vote on Account" represents the sums required for meeting the
expenditure likely to be incurred during April and May, i.e., broadly one sixth of the estimated gross
expenditure included in the Demands for Grants.
Expenditure on 'new services' should not be incurred before the grants for the full year are passed
and the connected Appropriation Bill is enacted.
CONTROL OVER EXPENDITURE
Centrally Controlled Heads is monitored by controlling authorities at Armed Forces Headquarters.
"Locally Controlled Heads" DAD, jointly with the administrative and executive authorities monitors.
67 % of the budget allocation should be booked by the end of December. The expenditure ceiling of
33 % in the last quarter and 15 % of Budget Estimates in the last month viz. March should be strictly
adhered to.
EDP Centre, CGDA, New Delhi will furnish to them relevant extracts of compiled actuals from the
printed All India Compilations for Service Heads by 10th of the month following, to watch the
progress of expenditure against the grants.
The following provisions relate Locally Controlled heads, except that in case of MES heads, the MES
Regulations apply.
The three main stages of budgetary control against allotments are: (1) Initial distribution of budget
grants (2) Watching expenditure against allotments and (3) Re-appropriation.

INTIAL DISTRIBUTION OF BUDGET GRANTS

*The ultimate responsibility for ensuring that the expenditure does not exceed the corresponding
budget allotment rests on the Principal Staff Officer/Senior Officer at the Services
Headquarters/Departments within whose control the relative activities fall.
The amounts provided in the Defence Services Estimates for expenditure subject to local control are
allotted to commands and other formations by the aforesaid authorities.
These authorities keep back certain amounts as 'Reserve' to meet unforeseen requirements from the
formations. The quantum of this 'Reserve' is decided by the controlling officer at the Services
Headquarters, in consultation with the concerned Integrated Finance.
*All communications of allotment from the Services Headquarters/Departments issue with the
concurrence of the respective Integrated Finance and these are endorsed to the PCsDA/CsDA
concerned.
Sub-allotments by Commands or formation Headquarters are also notified to the PCsDA/CsDA
concerned.
WATCHING EXPENDITURE AGAINST ALLOTMENTS
228. It is the primary responsibility of the authorities, to whom allotments are made to watch the
progress of expenditure and to see that the expenditure does not exceed the allotment.
The PCDA/CDA will also simultaneously keep a watch on the progress of expenditure against
sanctioned allotments and bring to the notice of the allottees and the immediate higher authorities,
cases in which the trend of expenditure is, in the opinion of the PCsDA/CsDA abnormally heavy or
unusually low.PCDA/CDA will render monthly statements to the allottees.

RE-APPROPRIATION
232(a) Re-appropriation implies the transfer of funds from one primary unit of appropriation to
another such unit within a grant.
savings in the budget provision under one head can be utilised to meet excess expenditure under
another head, provided the heads are in the same Demand for Grantvoted by the Parliament.
*No re-appropriation between Revenue and Capital heads is permissible, since the Revenue
expenditure and Capital expenditure of Defence Services are provided in separate Demands for
Grants.
*The cardinal principle is that an authority can re-appropriate only in respect of savings arising out of
the allotments placed at his disposal.
*Powers of re-appropriation are exercised only by the Government of India and by officers of:-_1)
Central Controlling Authorities; 2) Command Headquarters; 3) Independent Area Headquarters; 4)
IAF Commands; and 5) Independent Stations.
Re-approptiation may broadly be authorised under the following conditions:-
(i) Any allotment or re-appropriation within a grant or appropriation may be authorised at any time
before but not after the expiry of the financial year to which such grant or appropriation relates.
(ii) Re-appropriation is permissible in respect of "savings arising out of allotments, placed at the
disposal.
(iii) a. In respect of direct controlling officers of Headquarters referred to at items 1) to 5), re-
appropriations are applicable only between control heads falling under the same sub-head.
b. In the case of Navy, powers of re-appropriation between different detailed heads of a Minor
Head and between Minor Heads falling under the same sub-head will be exercised by Naval
Headquarters.
c. In the case of Air Force, 1. Air Headquarters and in the case of Controlling Officers at Air
Headquarters; re-appropriation is permissible only between detailed minor heads falling under the
same sub-head
2. The controlling officers at Commands and Independent stations can re-appropriate between
detailed heads falling under the same Minor Head under Sub Head 'D'- upto a limit of Rs. 500- in
each case under intimation to PCDA (AF)/CDA (AF).
(iv) Powers to re-appropriate expenditure not exceeding 10% of the original budget provision
*between different Sub-heads falling within the same Minor head will be confined to the DSD, DMT,
DDSD (FP) AG, QMG, DOS and DGAFMS in respect of the Minor heads controlled by each, except in
the case of Military Engineer Services.
Navy these powers are vested in VCNS and Air Force- Directorate of Financial Planning Air HQr.
(v) Full powers of re-appropriation between the Sub Heads within the Minor Head under each
Demand -the Ministry of Defence.
(vi) Powers of re-appropriation between different minor heads under a major head are exercised by
the Government of India.
(vii) No formal re-appropriation should he carried out by controlling authorities at Armed Forces
Headquarters, in respect of, normal- excessesunder ordinary charges
(viii) Re-appropriations are permissible only between expenditure heads. Thus, excess receipts and
recoveries which are required to be accounted for as such cannot be utilised to meet expenditure in
excess of sanctioned grant.
(ix) No re-appropriation is permissible between funds allotted for 'Charged' and voted items of
expenditure.
(x) Sanction of Government of India is required for any re-appropriation which affects the following :
(a) Savings due to non-expenditure of provision for a specific measure
(b) An error in estimates
(c) Re-appropriations to meet expenditure one any new activity.
Re-appropriations are sanctioned by the Principal Staff Officers and the Ministry of Defence in
consultation with the Integrated Financial Advisers.
*No formal re-appropriation is necessary for transferring funds under the same control head
between Commands, Areas, Sub-Areas, Institutions, Depots, etc. Such transfers are affected by first
withdrawing savings surrendered by one Command etc., and then realloting as required.
LOANS AND ADVANCES
233. The expenditure under several heads of "Advances Repayable" e.g advance of TA/DA and "Loans
and Advances by the Central Government" will be watched by the PCDA/CDA against the sanctioned
allotments.
Loans sanctioned to Government Servants for the purchase of HBA, Car, Other Motor Conveyance,
Cycles, Warm Clothing etc., for which the sanctioning authorities themselves will ensure, before
sanctioning the advance that necessary funds are available to meet the expenditure.

CHAPTER 14:CASH ASSIGNMENTS

A 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 up to the limits specified therein.
Officers of the Defence Services intimate their requirements annually to their respective PCDA/CDA
who send requisitions to the Treasury Officers or the Bank concerned by the 15th March yearly.
Officers of the Defence Accounts Department are authorised to draw cheques on Reserve Bank of
India /State Bank of India or a Government treasury or sub-treasury at any place in India without
having placed funds to meet the cash requirements of the Defence Services within the limits of
budgetary provisions.
The officers of the DAD authorise to the DDO of the Defence Services to draw Cash from the Civil
treasuries or the Bank for certain specified purposes against Cash Assignments arranged in their
favour on a particular treasury or the Banks.
Drawings against these assignments by the officers concerned are made exclusively by cheques
supplied to them by PCDA/CDA.

CHAPTER 15:DEPOSITS
Sums which are clearly not due to Government but are held in trust, or as a security for a specific
purpose, e.g. for the fulfilment of a contract, will be credited to the appropriate "Deposit" head until
returned to the parties to whom they belong.
Undisbursed pay, pension or other allowances or receipts which can be credited to any specific head
of accounts, should not be held under the head "Deposits";
The head "Deposits" should not be used as a Suspense Head for showing receipts which owing to
their not being clearly described. In such cases, the receipts should be compiled to the heads to
which they appear to pertain, or to the Sub-Head "Miscellaneous Receipts" under the Minor Head
concerned.
*Erroneous Compilation made under any of the Deposit head should be readjusted by deduct entry
and not by a fresh debit or credit.

TRANSACTIONS COMPILABLE UNDER VARIOUS DEPOSIT HEADS

Donations/Contribution compilable towards National Defence Academy:All donations/contributions
towards the NDA are compiled to this deposit head, which will be relieved by per contra credit (by
deduction from expenditure) to Major Head 4076 on receipt of instructions issued by the Ministry of
Defence as and when the construction of particular building is completed.
Security Deposits: Security Deposits are tendered in form of Cash, Government securities, State or
Municipal Debentures, Port Trust Bonds, Bank Deposit Receipts or Savings Bank Pass Books.
Deposits other than those tendered in cash do not pass through the Government accounts and are
dealt with in the manner indicated in Financial Regulations.
Treasure Chest Deposits: Earnest Money Deposits, Civil Court Deposits and Personal Deposits paid
into Military Chest will be deposited into Public Fund Account/Government Treasury.
Field Deposits: The opening and closing balances in the IRLA of Officers are compiled to this head at
the time of compiling the ledger accounts.
Unclaimed Contributory Provident Fund Deposits: Accumulations in the Contributory Provident
Fund remaining unclaimed for more than six months are transferred to this head, which is relieved
as and when payment of the accumulated balances is actually made.
Miscellaneous Deposits: All deposits which do not pertain to any specified Deposit Head will be
compiled to the head "Miscellaneous Deposits."
LAPSED DEPOSITS
255. At the close of each financial year, all deposits remaining unclaimed for three years and all
balances of not more than twenty-five rupees in amount, will be transferred to the credit of the
Government under the head "Other Miscellaneous Receipts" by the PCDA/CDA in whose books the
amounts appear.
Except in the case of payment authorities issued in respect of Gorkha Personnel which will be valid
for 5 years, exclusive of the year in which the Deposits were made.
The period of limitation for recovery by Contractors of Security Deposits from the Government is 30
years from the date of deposit.

CHAPTER 16: ADVANCES AND SUSPENSE

SECTION I-LOANS AND ADVANCES
Disbursements of the following are treated as "Advances" :
(a) All payments made which are subject to recovery or adjustment
(other than advances of pay, pension or traveling allowances or any other advances which are
compilable to Service Heads of Accounts.)
(b) All payments made by Military Disbursing Officers into Military Treasure Chests, and vice versa.
(c) Permanent Advances sanctioned for current expenditure, such as the local purchase of petty
stores, contingent charges and payments for extra temporary labour.
Payments specially sanctioned by Government subject to recovery, with or without interest, are
treated as "Loans".
Necessary notes will be made in a Demand Register of all advances to watch their recovery.
If an advance or loan or any portion thereof is outstanding against any person or unit, transferred
from the audit circle to another, it will be communicated to the PCDA/CDA of the circle to which
transferred bydebit (minus credit) through the Defence Exchange Accounts to enable him to watch
recovery by a corresponding credit being taken to the Heads affected.
If a Government Servant is transferred to the Defence Services from the audit area of a State A.G.
and any loan sanctioned is outstanding against him, the amount of the loan is retained in the books
of the AG and the recoveries effected by the DAD are passed on to the AG through cheques.
The same procedure is to be followed in case of an individual transferred from the Defence Services
to the audit area of a State AG with outstanding balances of loan granted to him.
Particulars regarding the date when advances for the purchase of house, motor cars, motor cycles,
computer etc. were made and whether interest is chargeable or not, should be entered in the Last
Pay Certificate along with the outstanding demands, when an individual is transferred to the
payment of another Accounts Officer.
All recoveries effected in adjustment of advances will be credited in the compilations to the same
heads as the advances when originally made were debited.
DIFFERENT TYPES OF ADVANCES IN DEFENCE SERVICES
I. SECTOR L- Suspense & Miscellaneous
Sub-Sector (c) Other Accounts, Major Head 8672-Permanent Cash Imprest
All advances of a permanent nature for current contingent charges will be held in the names of
officers to whom they are made, and they will be personally responsible for these advances until
accounted for by them.
II. SECTOR -"K- Deposits and Advances"
Sub Sector (c)- Advances Major Head— 8551 -Defence Advances, Minor Head-101:-
Advances—Field Cashiers' Account: Funds provided to a Field Cashier are debited to this head by the
PCDA (O), Pune who makes the payments.
When the Field Cashier renders his account, the advances made to Imprest Holders on Requisitions
IAFF-1036 and to Officers on personal cheques IAFF-1034 are adjusted against the relevant heads
under Advances (viz. Advances-Pay Accounts Offices or Advances adjustable in PCDA/CDA Offices, as
the case may be) by contra credit to the head "Advances—Field Cashiers' Account".
Advances adjustable in PCDA/CDA Offices: Advances of pay etc. paid to Officers on personal
chequesby a Field Cashier or an Imprest holder are debited to the head "Advances adjustable in
Principal Controller/Controller of Defence Accounts Offices".
This head is relieved when the advances are recovered through the IRLAs by the concerned Principal
Controller /Controller.
Advances—Pay Accounts Offices:Cash required by an Imprest Holder for paying advances of pay, etc.
is obtained by him either from a Field Cashier or a Regional Controller.*
The amount paid is debited to the head "Advances—Pay Accounts Offices" by the PCDA (Officers)
Pune adjusting the Field Cashiers account or by the Principal Controller/Controller paying the
advance, as the case may be.
This head is relieved by the Pay Accounts Offices concerned when recoveries of advances of pay, etc.
paid to men are effected through the IRLAs of the personnel, or when other charges paid out of the
Imprest are charged against the relevant heads.
Advances—Imprest Holders' Accounts: Funds provided to Services and Supplies Imprest Holders of
the Army, Navy and Air Force will be debited to this head.
The advances will be cleared by per contra debit to the Service Heads, etc. on receipt of monthly
accounts from the Imprest Holders.
Miscellaneous Advances: Transactions which are of the nature of debts due to Government but
which do not come under any of the Heads of Advances specified above will be compiled to the head
"Miscellaneous Advances".
Other Advances: This is an advance redrawn against any of the above advances owing to losses
through misappropriation, de-falacation embezzlement etc.
INTEREST BEARING ADVANCES
III. SECTOR - "F- Loans and Advances”,
1. Major Head -7610-Loans to Government Servants etc
275. A register in IAF (CDA)-51 will be maintained to watch the recovery of advances for house
building, purchase of houses, motor cars, other motor conveyances, computer other conveyances
and the interest payable thereon.
The recovery of an advance will commence from first’s month pay drawn after its receipt.
The rate of interest to be charged on advances is fixed by the Government of India, Ministry of
Finance, separately for each financial year and communicated to all concerned.
2. Major Head 7615-Miscellaneous Loans. Minor Heads 215-Regimental and other Loans - Defence.
Payments and recoveries on account of loans specially sanctioned by Government will be compiled to
the head "Regimental and Other Loans-Defence" under Sector "F-Loans and Advances by the Central
Government".
RECONCILIATION OF POSTINGS IN REGISTERS AND VERIFICATION OF BALANCES
283. The payments made and the recoveries effected during a month on account of advances or
loans, as recorded in the several registers, will be totalled separately and the totals verified with the
amounts debited and credited respectively in the monthly RD&R Heads compilation.
284. The balances outstanding at the close of the accounts of each financial year in the various
registers prescribed for recording the transactions under Advances and Loans will be verified
annually with the balances shown in the Ledger.
SECTION II-SUSPENSE ACCOUNTS
286. Receipts and payments which cannot, in the absence of further information or orders, be
allocated to any head of account, and where the heads to which the transactions are likely to be
adjusted are not known, 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 clearance of the transactions taken to the Suspense Account (except MES transactions) will be
watched first by means of broad sheets(IAFA-195) for original debits and clearance through minus
debits and secondly in IAFA-525 for original credits and clearance through minus credits.
The clearance of MES transactions will be watched by means of a suspense register maintained by
Accounts Section of a Garrison Engineer's Office in IAF (CDA)-258 for each MES Division as required
by MES Regulations.
As in the case of advances, monthly agreement of the postings in the Suspense Register will be made
with the related figures appearing in the R.D.R. Heads compilation, and the balance at the end of
financial year will be reconciled with the ledger balance.
A monthly agreement between the compiled actuals and the postings in the Register of Suspense
Account, in respect of M.E.S. will be effected by the AO/AAO, GE concerned.
The total figures compiled during the year under this head will be furnished annually by the AO/AAO,
GE to the Accounts Section of the Principal Controller’s/Controller’s Office for incorporation in the
Review of Balances.
The balance in respect of the transactions under the head "Suspense Account" to be shown in the
Review of Balances will be the net balance worked out by taking into account the original and
adjusting entries of both debits and credits together.
No sums should ordinarily be credited to Government by debit to a suspense head ; credit must
follow and not precede actual realisation.

CHAPTER 17: ACCOUNTING OF EXPENDITURE MET OUT OF THE CONTINGENCY FUND

OF INDIA AND OF "CHARGED" EXPENDITURE
an advance from the Contingency Fund shall be obtained before incurring the expenditure.
i. to incur unforeseen expenditure in excess of the sanctioned grant or appropriation or
ii. on a "new service" not provided in the budget and there is no sufficient time for the voting of
Supplementary Demand and the passing of the connected appropriation bill.
The Contingency Fund of India is held on behalf of the President of India by the Secretary to the
Government of India, Ministry of Finance (Department of Economic Affairs). Advances from the
Fund shall be made by the Ministry of Finance (Department of Economic Affairs).
A copy of the order sanctioning the advance shall be forwarded by the MoF (DEA) to the PCsDA/CsDA
concerned directly.
Supplementary estimates for all expenditure so financed, shall be presented to Parliament at the first
session, meeting immediately after the advance is sanctioned.
As soon as Parliament has passed Supplementary Appropriation Act, the advances initially made from
the Contingency Fund shall be recouped to that Fund.

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.
Cost of stamp paper when required to be paid by the Government in terms of decree/arbitration
award, will be treated as "Charged" expenditure.
The under mentioned items of expenditure are also treated as "Charged" on the Consolidated Fund
of India.
(i) Interest charges on Fund balances
(ii) Loan for Water Supply Programmes to State Govts.
The payments made in satisfaction of the awards given by the competent authority under the
Payment of Wages Act, 1936 will be treated as "Charged".
Where a payment made to the Court is in the nature of a security for staying the execution of the
decree, the same would be treated as a "Deposit", and debited to the head Sector "L-Suspense and
Miscellaneous”, Major Head “8674-Security Deposit made by the Government” in the "Public
Account".
The payment made in satisfaction of the award of Central Administrative Tribunals should be
treated as expenditure "Charged", where the CAT grants some relief to a Government servant, such
arrears paid to satisfy the judgment will constitute expenditure "charged" on the Consolidated Fund
of India.

PROVISION OF FUNDS
299. Anticipatory provision in the Defence Services Estimates for meeting payments of "Charged"
expenditure would be made every year by the MoD in consultation with the MoD (Finance).
The provision made will be controlled centrally by the Ministry of Defence which will make specific
allotment of funds as and when a payment is to be made.
In cases where anticipatory provision has either not been made or proves inadequate and payments
cannot wait till the necessary supplementary appropriation is obtained from the Parliament,
advances from the Contingency Fund of India will be obtained.

ACCOUNTING PROCEDURE- EXPENDITURE MET FROM THE CONTINGENCY FUND OF INDIA

300. 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.
For this purpose, each Major Head of expenditure under the Consolidated Fund
(2076,2077,2078,2079,2080) is to be treated as a Minor Head subordinate to the Major Head
"Contingency Fund of India."

CHAPTER 18: MISCELLANEOUS

SANCTIONS BY THE CHIEFS OF STAFF FOR NON-RECURRING PAYMENTS
A sum of Rs. 2 Crore is placed every financial year at the disposal of the Ministry of Defence to enable
non-recurring payments to be made by Chief’s of staff.
(I) Chief of Army staff Rs. 100 lakhs per financial year
(ii) Chief of Naval staff Rs. 50 lakhs per financial year
(iii) Chief of Air Staff Rs. 50 lakhs per financial year
To make non-recurring payments on the following objects of expenditure:-
(a) Donations when visiting training establishments, Boys' Training Units etc.
(b) Provision of trophies, Flags etc. for presentation to Training Establishments;
(c) Provision of amenity articles when visiting hospitals, welfare centers etc.;
(d) Similar grants; and
(e) Miscellaneous expenditure incurred by a Chief of Staff while on tour for which no specific
provision exists in the Regulations, e.g. gratuities to servants, coolie hire etc.
This expenditure in a financial year should not exceed 15 % of the amount allocated to the Chief of
the Army Staff and 10 % of the amount allocated to the Chief of Naval Staff and Chief of the Air
Staff.
A sum not exceeding 1/6th of the annual ceiling of funds placed with the Service Chief may be drawn
as advance from PCDA, New Delhi at the beginning of the financial year viz. April by the MA/Dy. MA
to the COAS for making payment for given purposes. The amount will be kept in a current public fund
account with the State Bank of India, New Delhi and may be drawn upon as required.
Similarly, those payments sanctioned by Chief of Naval Staff will be paid by PCDA (Navy) Mumbai.
These officers are responsible for watching that the sanctions accorded do not exceed the prescribed
limits.
In the case of Air Force, the sum of Rs 15,000 be paid in the beginning of each financial year to the
Chief of Air Staff on a contingent bill received from him. A Public Fund Account will be opened by him
and he will incur expenditure as and when required.
A proper account of all expenditure incurred out of this grant will be maintained at Air Headquarters
supported by appropriate vouchers and the account will be subject to audit by the PCDA (Air Force).
For this purpose, a copy of the cash book will be received from the Chief of the Air Staff, by the first
week of April each year, together with the original receipts and vouchers.