Functions and Accounting Procedures

The various factions performed by the section are:

Contractor:

Work Orders/Contractors

Payments are made to contractors for laying distribution network, civil works, transmission lines,
haulage works and miscellaneous activities.

Distribution contractors for performing various activities are approved by the Company for each area
from time to time. Rates for each activity are also approved /revised by the Company after every two
years. Work orders are issued by the Area General Managers assigning work to each contractor. Copies
of work orders sent to Accounts.

In other Departments, like project, Transmission and Civil Contractors/Work Orders are awarded on the
basis of competitive and bidding according to the approved procedures and copies sent to Accounts.

Similarly contracts for haulage of goods and for hiring of equipment are awarded on annual basis by P&S
Department according to the purchase and Stores Procedure and copies sent to Accounts.

Check that Contract =/Work order has been approved by the competent authority.
Check computation and keep it in an Area-wise Contractors file.

Payment to Contract Employee

Due to ban on recruitment for regular appointment (Subordinate Staff) the Company has engaged,
purely on temporary basis, Personal in different categories to meet the shortage of staff. The period of
contract appointment ranges from six moth to one year. The person engaged on contractor are allowed
salary/remuneration on fixed per day/monthly basis, keeping in view the qualification, experience of the
contract employee of the contract employee.

Payment

At the end of the month the contractor employees claim payments on a Performaduly signed by him,
which is verified by his sectional head and approved by head of department.

Before payment against the contract employees claim forms check that:

The claim is duly supported with the appointment letter.

The rate claimed is as per terms and conditions.
The claim is checked with attendance sheet.
Tax where applicable is deducted and deposited into Government Treasury.
Payment Procedure

On receipt of PPCs/FPCs/Bills dulysupported by relevant documents in Accounts.

Check items quantities and rates in PPC/FPC with the Work Orders/Contract.
Check Daily Site Report (DSRS) and summary thereof with the quantities claimed in PPCs/FPCs.
Check that DSRs have been signed by the concerned supervisor/Engineer.
Check supporting documents e.g. delivery advices (Das)/Inward/Outward documents, etc in
case of haulage contracts.
Check that PPCs/FPCs have been signed by the Contractor and approved by the competent
authority.
Check computations for ascertaining the amount due.
Enter each PPC/FPC/Bills in the contractors Day book serial wise giving:
Name of the Contractor
PPC/Bills Numbers and date
Relevant Job Number and Account Head
Gross amount
Tax
Net amount due.
Initial of Section Incharge against each entry.
Prepare and authorize Cheque payment Voucher for the net amount payable to the
contractor.
Prepare and authorized Tax Voucher/Challan for deposit of Income Tax in the
Government Treasury.
The Area Accounts will send copy of the Contractors Day bookto the HO Accounts for
journalizing of transaction.

Accounting Treatment

On basis of Contractors Day Book maintained at HO and Contractor Day Book received from the
Area Accountant every month pass journal entry (permanent JV) debiting relevant job numbers
and crediting the Contractor Ledger Control Account in the General Ledger.

Posting in the subsidiary Ledger will made to each Contractor Account on the basis of Contractor
Day Book and from the copies of printout of payments provide by the Cash and Bank Section

Prepare monthly Trial balance of Subsidiary Contractors Ledger and reconcile with the
Contractor Ledger Control Account appearing in the General Ledger.
Scrutinize the Trail Balance to ensure correct postings in the Subsidiary Ledger accounts
and make adjustments, if any, so that each Contractors account show the correct
balance
File quarterly and annual Tax Returns with concerned authorities within due dates.
Issue annual tax certificates to each contractors.
Books and Record

The following books and records are maintained

Contract Day Book HO.

Print out cheque payment record from Cash and Banking Section
Area Contractor Day Book.
Subsidiary Contractors Ledger.
Paid Bills

The Section Incharge is responsible for keeping the Ledger Accounts duly reconciled. All Accounts and
records are subject to external/internal/commercial Audit.

Payment Services

Contracts/Agreements for Services

The company enters into agreement for provision of various services including medical, air passenger,
hotels, advertising, vehicle repair, workshop etc.

Doctors, Hospitals and Laboratories are approved by the company to provide medical facilities to its
employees in accordance with medical policy.

Traveling agencies and advertising agencies are also approved by the company to cater for the traveling
needs of the employees and publication of various notices in the newspaper.

Workshops for carrying out repairs and maintenance of the companys transport policy.

Copies of Contractors/Agreements are sent to Accounts Department.

Check that Contract/Agreement has been approved by the competent authority and keep it in a
separate file.

Payment Procedure

On receipt of bills for Services duly supported by the relevant documents, the following procedure is
adopted:

Bills from doctors/hospitals/laboratories.

Check particulars with agreement and approval of competent authority.
Check that the medical cards attached with the doctors bills are duly signed by concerned
employees.
Check rates charged with the agreed rate list
Check computations for ascertaining the amount due.
 Bills from Travel Agents/Advertising Agencies

Traveling Agents bills for booking of air travel are based on the actual cost of tickets for the journey
charged by the Airline and their commission on notified by the Government from time to time.

Check that the bill has been approved by the component authority.
Check particulars given in requisition for air travel booking and approval of the head of
department.
Check Booking Advice sent by Admin Department to the Travel Agent.
Check Utilization Advice signed by the user.
Check credit notes in case of partial utilization of tickets or cancelation thereof.
Check computations for ascertaining the amount due.

Bills from Advertising Agents

Advertising Agents Bills for publishing of notices in the newspapers are used on the actually charged by
the newspapers plus Agency Commission. Rates for advertisement are applied in accordance with the
rate list published by each newspaper while commission is payable as notified by the government.

Check Approval of competent authority.

Check bills with rate card of newspaper.
Check support documents including cutting of relevant advertisement.
Check measurement charged in the bill.
Check computation of ascertaining the amount due.

Hotel Bills

As per service rule, the executives on outstations tours in connection with performance of officials
duties are entitled to hotel stay. The Company has approved certain hotels in big cities and has
negotiated rates for their stay and provision of other services. Copies of such letters are sent to
Accounts.

Check that the bill has been approved by the competent authority.
Check letter Issued by the Company for Booking in the hotel.
Check bill with agreed rate.
Check support documents showing the various services provided and charged in the bill.
Check that bill has been signed by the touring executive.
Check computations for the amount due to hotel.
Work recoveries, if any from the concerned executives excluding his entitlement.

Workshops

Work Orders are issued by the Admin Department to approved workshops for carrying out
repairs/maintenance of Company vehicles at agreed rates.
 Check that bill has been approved by the competent authority.
Check requisition of concerned department for carrying out the work.
Check work order issued by the Admin with reference to the Departmental requisition.
Check that the bill match with work order.
Check that the bill is signed by the driver and verified by the user.
Check computations for the amount due to workshop

Hiring of Vehicle by various departments is received in Account.

On receipt bill:

Check that the bills have been approved by the competent authority.
Check period of hire
Check that the bill has been duly verified by the official concerned officials
Check consumption for the amount due.

Entry in Services Day Book and Payment Voucher

Enter each bill in the Service Day Book serial-wise giving:

Name of the Party

Bill # and date
Relevant Job # / Account Head
Gross amount
Tax Net Amount
Initial of the Section Incharge
Prepare and authorized cheque payment Voucher for the net amount payable to the
party.
Prepare and authorize tax voucher/challan for deposit of Income Tax in the
Government Treasury.

Accounting Treatment

On the Bases of Services Day Book:

Pass Journal Entry debiting Job Cost and crediting the Services Ledger Control Account in
the General Ledger.

Cash and Bank Section posts all cheque payment vouchers to each bank account and provide a copy of
the printouts of payments made the various parties through each bank. The Services Ledger Control
Account and Tax Control Account appearing in the General Ledger is debited accordingly.

Posting in the subsidiary ledger will made to each partys Account on the basis of Services Day Book and
from the copies of printouts of payment provided by the Cash and Bank.
 Prepare a monthly trail balance of the subsidiaryledger and reconcile it with the control
account appearing in the General Ledger.
Scrutinize the trail balance to ensure correct postings in the subsidiary ledger accounts
and make adjustments, if any, so that each partys account shows the balance correctly.
File quarterly and annual Tax returns with the concerned authorities within due dates.
Issue annual Tax Certificates to each party.

Books and Records

Services Day Book.

Subsidiary Ledger.
Paid Bills.
Printout the check payments received from Cash and Banks Section.

Rent Payments and Debit Notes

Agreement

Payments in advance sometimes to be made in respect of rent, insurance or some other expenses and
records for such prepayments and are maintained by this section.

Copies of lease agreements for rental of office and residential premises, duly signed by General Manager
(Admin) and the landlord are sent to Accounts. Similarly agreements exist with Sui Southern Gas
Company Limited (SSGC), Pakistan Petroleum Limited (PPL) and Pakistan Oilfields Limited (POL) for
sharing of services by sister organization.