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Employees' Provident Fund Organisation

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(Ministry ofLabour & Empl(~vment, Govt. OfIndia)

( ~ ~) / Corporate Headquarters

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Bhavishya Nidhi Bhawan, 14-Bhikaiji Caroa Place, New Delhi-l 10066

No. BkgJl(2)2006/NFMSNoI.II Date:

To IMPORTANT
PRIORITY
All a..ional P.F. Commissioner/Officer in-charge,
Regional Office/Sub- Regional Office,

Sub:- Discrepancies noticed in the implementation of NFMS- regarding.

Sir,
Instructions have been issued from time to time on implementation of NFMS through
various circulars from Head Office.

It is regretted to note that even after two years of implementation of NFMS, certain offices
are not complying with the instructions/guidelines issued on the subject & the NFMS is not being
implemented at their offices in its true spirit.

While going through the report received from field offices, the following kind of
irregularities/ deficiencies/ deviations have been noticed in operation of NFMS for Alc No. I &
10:­

l- On implementation ofNFMS, the field offices were asked to convert the Bank Alc No.1 &
10 from Saving to Current Account. The erstwhile saving account was to be closed
immediately after such conversion. It is noticed that some of the offices have not yet closed
the saving accounts and the saving accounts are also in operation. The transactions made
from saving account to current account are also being reflected in NFMS report. These
transactions being internal transactions should not be reported in fortnightly returns. This
practice should be stopped and the Saving Accounts wherever in operation should be closed
immediately and furnish a confirrnation_QX 2l)~Q2.0~.

2- Some of the offices are erroneously drawing a certain amount daily in the moming from
Central Alc No. 5 & II arld in the evening the debit or credit balance of the day is
transferred to the Central Accounts. This practice is not as per instructions issued from Head
Office and hence not in order.
According to NFMS whatever would be the closing balance in Alc No. 1 & 10 at the
end of day (whether debit or credit) that should be transferred by link branch to the
Centralized Bank Account 5 & 11 at Mumbai leaving 'Nil' balance in Alc No. 1 & 10. The
link branch need not bother for the non-availability of fund or debit balance in Alc No. 1 &
10 because all the debit transactions at field office are honoured from Central Investment
Account at the end of the day, by way of transfer of debit balance to Central Account, by
the respective Link Branches. Link branches are not supposed to withdraw fund in advance
in the morning from the Central Accounts for the transaction of the day. This should be
stopped immediately.

3- It is observed that some of the link branches of file.d oUkes are directly debiting Qr ~itin.z.-~~1
to Central Accounts 5 & 11 for each and everv transactions which resulted ";iuln"'ber'or --­
entries from Central Alc for a day. According to NFMS instructions, there shouldbe only

Mv Documen,tf'uetten2006/Bank :&C'm04-lQ..07 do~

 one entry for each day as ''Transfer from" or 'Transfer to" Central Accounts. Only the debit
or credit balance at the end of the daY should be transferred to respective Central Accounts.
In view of the above irregularities noticed by Head Office, all fIled offices are requested to
make sure that no such kind of deviations mentioned above are in practice at their office or at their
respective link branch. The officers/officials concerned may be advised again to go through all the
earlier circulars issued by Head Office in this regard.
All field offices have earlier been advised vide circular dated 28-03-07 that the fortnightly
NFMS returns shall first be forwarded through email to Head Office and the hard copy of the same
shall also be sent to Banking Section through post. But it is observed that only a few offices are
sending said returns through email. TIle offices which have not started sending these returns
through email are again requested to use email for quick submission NFMS Fortnightly returns.
Due to wTong reporting of transactions from Alc No. I to 5 & 10 to II and vice versa, there
have been a large number of un-reconciled entries in both the accounts. Due to non-reconciliation
of these transfer entries, a huge amount was shown as missing in the balance sheet for the year
2006·07 which attracted severe criticism/objection from C & AG. Similar situation is continuing in
the current financial year also. To avoid such situation in the current year balance sheet 2007-08,
the persons concerned on the job at your office may be directed suitably to verify each and every
transactions carefully with the bank stat~:ment and ensure that no wrong reporting is made to Head
Office.
It may be noted that proper implementation of NFMS in letter & spirit is the sole
responsibility ofthe Officer In-charge of the concerned field office as well as RC-I1RC-II(F&A) of
the concerned regional office in respect of all the offices falling under their jurisdiction. They must
ensure that daily closing balance in the bank accounts is transferred to Central Accounts without
fail and the same are reported in Fortnightly Returns regularly in time..
The above contents may be accorded TOP PRIORITY by all concerned and submit
acknowledgement having noted and being implemented properly in all your offices.

Vi
.; urs faithfully,

~----
(v':"P. RaQMlia'lij
Regional P.F. Commissioner, Gr-I
Finance & Accounts
Copy to:,
1. Additional CPFC (NZJSZ/EZIWZ).
:trJ. :l,O~
1. Deputy Director (Audit Hqrs)
3. All Zonal Audit Officers with a request to verify Fortnightly Returns of Ale No.1 & 10 during the

course of Intemal Audit of the respective offices.

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