Centre for Good Governance

Public Financial Management Projects In Government of Bihar

Our vision
To be a world class institution to guide governance reform To be a think tank to foster growthoriented and people-centric governance To leverage e-Governance for improving service delivery to the citizens

Positions & Profiles

Resource Group Director Dr Rajiv Sharma, IAS DG, CGG Qualification Ph.D. (Engineering & Public Policy), Carnegie Mellon University, USA; Areas of Expertise Urban Administration Urban Development, Infrastructure Development Project Management, Governance Management Development. Strategic Planning Financial Management Service Management Public Financial Management and Accountability. Change Management, Leadership, Organization Behaviour

M. Sivaramakrishna Dy. ED, CGG

B.Tech, IIT, Mumbai MBA, IIM, Ahmedabad M.A. (Economics)

A. Srinivas Kumar, IA&AS Dy. ED, CGG

Dr. S. Ramnarayan Ph.D. Organizational Director, Change Behaviour, Case Western Management Resource Group, Reserve University CGG M. Brahmaiah M.Com., Director, Financial Kakatiya University Management Resource Group, CGG

Budget, Accounting & Auditing Reform, State Financial Accountability Assessment, Local Bodies Financial Accountability Assessment. 3

Working Relationships : National

National Dept of Personnel Training Model Code for Good Governance Good Governance Toolkit IAS Training Restructuring Study Review of Foreign Training Programme for Civil Servants National Agenda for Judicial and Legal Reforms Development of National Public Service Law Handbook on Citizens Charters Capacity Building for Citizens Charters in States Strategic Review of District Administration in India National Implementing Agency for Access to Information

Dept of Administrative Reforms & Personnel Grievances

Ministry of Housing & Urban Poverty Alleviation National Institute of Urban Affairs (NIUA) Ministry of Urban Development Ministry for Home Affairs

Process Reengineering for Service Delivery Improvement Machinery of State Government Study
Researchers Colloquium on Urban Poverty Alleviation Integrated Poverty Monitoring System Indo-USAID Fire (D) Training Programmes e-Municipality (In association with National Institute of Smart Government) INSTAXX: e-Governance application for Country-wide Instant Alert Network (CIAN) 4

Working Relationships : State Governments

State Governments (Relevant to Southern region only) Andhra Pradesh Strategic & Performance Innovation Unit (SPIU), MA&UD Dept, GoAP APPMSDIP in 12 Key Departments Kerala MGP, Government of Kerala MGP, Government of Kerala DSP, Government of Kerala Centre for Management Development, Trivandrum IMG, Trivandrum Karnataka Development, Training & Implementation of Comprehensive Citizens Charter in Pilot LSGIs Developing Systems for Social Audit Development of Grievance Redressal Mechanism Strategic Alliance RTI Implementation (As part of the UNDP-DoPT project on NIA) Governance Reform Programme I-2002-06- Establishment of strategy, performance and innovation units in key departments Governance Reform Programme II-2006-09- Institutional reforms for sustained poverty reduction

Indian Institute of Management, Bangalore

State ATI, Mysore Tamilnadu Anna Institute of Management, Chennai (State ATI)

Strategic Alliance
RTI Implementation (As part of the UNDP-DoPT project on NIA) RTI Implementation (As part of the UNDP-DoPT project on NIA) 5

International Linkages Strategic Alliances

Maxwell School, Syracuse University Civil Services College, Singapore

Donor Agencies
The World Bank Department For International Development (DFID),UK United Nations Development Programme (UNDP), India Asian Development Bank (ADB) United Nations Online Network in Public Administration and Finance (UNPAN)

International Linkages Projects

e-Justice: UNDP funded project for bringing legal awareness among the
rural women Machinery of Government Study An inter-state and inter-country study funded by DFID Local Bodies Accountability Assessment An inter-state and intercountry study funded by DFID ADB-sponsored Training Programme on e-Governance China, Mynamar,

Cambodia, Thailand, Laos and Vietnam

South Asia Resource Centre on Social Accountability in partnership with the World Bank (SASANet) Training on Community Score Card Sri Lanka Key Issues of Sub-National Governments Expenditure Study
7

e-Projects
Accrual based Accounting through ERP system at MCH Online Grievance Redressal Tracking System Urban Water Supply Information System Model Towns Information System (INDIRAMMA) Water Quality & GE cases Monitoring System Project Monitoring System Web-enabled GIS system for Qutubullapur Municipality: APUSP
8

Training Programmes
Client Programme Areas Knowledge Areas City Development Strategy Social & Environmental Impact Assessment Urban Financial Management Accrual based Accounting & budgeting e-Governance Applications GIS Applications Change Management Project development & Implementation Land use & Development Planning Using Land as a resource Digitisation Mapping Land records Land use & Development Planning Using Land as a Resource

Financial Management

Indo-USAID FIRE (D)

GIS Applications

Reforms and Human Resource Development

Process Re-engineering Change Management Leadership Development

Training Programmes
Client Programme Areas
Induction Training programme for Elected representatives of Andhra Pradesh

Knowledge Areas
Urban Governance Urban Poverty Municipal Finance Leaderships development Town Planning e-Governance Applications for ADB Project Managers from Mekong Region Right to Information Monitoring & Evaluation Social Audit

GoAP

ADB

e-Governance

UNDP / DoPT-GoI DFID

Transparency Participatory planning

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Mapping of Local Network Institutions: Public Sector

Dr Marri Channa Reddy Human Urban Governance, Municipal Accounts & Resource Development Institute of AP Budgeting, Revenue Management, Public Health (State ATI) and Sanitation Administrative Staff College of India Service Delivery, (ASCI) Programmes Engineering (ESCI) Staff College of Urban Management Development

India Design & Infrastructure, Urban Services & Urban Poverty, Accounts Management of Finances &

Regional Centre for Environmental Studies

Environment Protection Training Environmental Planning, Techniques in SWM Research Institute (EPTRI), Hyderabad ICRA Management Consulting Services Financial Management Limited (IMacs) Institute of Public Enterprise, Hyderabad Centre for Good Governance National Remote Hyderabad Sensing Service Delivery e-Governance, GIS, Accrual based Accounting Agency, GIS Applications

11

Mapping of Local Network Institutions - Private Sector

Lok Satta PRIYA
Local Government Legislation Local Government Legislation

CRISIL
Institute of Chartered Financial Analysts of India (ICFAI), Hyderabad CII Indian School of Business, Hyderabad Dr. Reddys Laboratories

Credit Enhancement
Costing of Services

Private Public Partnerships Change Management, Public Sector Management Livelihoods

12

Mapping of other Network Institutions

Kerala (i) Centre for Management Development, Trivandrum

(ii) (iii)

Kerala Institute of Local Administration (KILA), Trivandrum IMG, Trivandrum

Karnataka
(i) (ii) Indian Institute of Management, Bangalore ATI, Mysore

(iii)
(i)

Janagrahaa, Bangalore
Anna Institute of Management, Chennai

Tamil Nadu

13

GoB Studies
Treasury Rules Financial Rules

Pension Code

IT System Audit

Budget Manual

GPF Study

Internal Audit

Public Financial Management

14

Modernization of Treasury Code of Government of Bihar

15

Objective of the workshop

To refine the Bihar Treasury Rules
with active participation of the participants

16

Treasury Code-Genesis

During British rule, treasuries were set up with well laid down rules. The first treasury was established as early as 1794
Treasuries doubled as banks, held custody of valuables such as stamp paper, opium, etc.

Today, a Treasury functions as a common service provider for receiving and making payments on behalf of government

17

Purpose of Treasury
Treasury Code serves as a primary source of reference for the Treasury Officers. It deals with: internal controls in withdrawal, payment, custody of monies, etc. responsibilities of officers who receive and disburse money on behalf of government provides specimen forms in which bills have to be presented and returns to be furnished to various authorities

18

Comparison of the codes of Different States

As a first step towards revision, Consultants have reviewed Treasury Codes of: West Bengal, Andhra Pradesh, Tamil Nadu,

Karnataka,
Maharashtra, Central Treasury Rules of GOI and Bihar Treasury Code. Contd

19

CGG Team visited Karnataka and Maharashtra to study the

working of treasuries in those States.

Bihar, Maharashtra and W.B. are similar while Tamil Nadu, Andhra Pradesh and Karnataka codes are largely similar BTC has been commonalities with those of Maharashtra & WB

20

Need for the revision

The Treasury Codes revised in Karnataka NA Maharashtra 1968 Bihar 1970 AP 1983 TN 1992 WB 2005

Outdated due to many changes that have taken place, particularly, a treasury does not carry out banking function anymore and due to computerization of its operations, it has also become an accounting unit

21

Obsolescence of Rules

Many provisions in the treasury rules have become outdated due

to changes that have taken place in the last four to five decades;
As the rules have not been revised keeping with the changes they are today accompanied by a large number of instructions /

decisions
Sometimes the practices are at variance with rules

22

The Current Task

The revision is done not only to update the existing rules but also to arrive at an ideal format for the code, the structure of which would enable easy reference to the rules

23

Administration, Accounts and Computerization

Status of Control Treasuries over Bihar FD Primary Computerized Software is developed and maintained by NIC Maharashtra DAT Primary Computerized NIC has developed software in DB.II Web based software W.B. DTA Primary Computerized Included in TR (Appendix-10). T.N. DTA Secondary Compilation of accounts. Automated Treasury Bill passing system (ATBS) has been implemented in 2 districts AP DTA Secondary Computerized & connected with DTA and Finance Kar DoT Secondary Computerized computerized & connected with the DoT.

Compilation of Accounts by AG Computerization of Treasury Functions

Uses Oracle data base

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Methodology for Withdrawal of Moneys from the Government Accounts

Treasury/PAO PAOs Bihar No PAO Maharashtra Cheque Drawing System Cheque Drawing West Bengal Cheque Drawing Cheque Drawing TN Cheque Drawing Bill Drawing (Switched over to cheque drawing in 2 districts) Bill Drawing Andhra Pradesh Cheque Drawing Bill Drawing (Switched over to cheque drawing in 2 districts) Bill Drawing Karnataka Cheque drawing Cheque drawing

District Treasuries

Bill Drawing

Sub-Treasuries

Bill Drawing

Bill Drawing

No Sub Treasury

Cheque Drawing

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Changes made
the criterion whether a rule is laying down a lasting and stable principle or practice is adopted Notes, instructions including government decisions form an integral part of the Rules and are incorporated into sub-rules Lengthy rules divided as main rules and sub rules

Rules modified and abridged in simple language

Where repetition or similar rules they are integrated

Contd

26

 Where a footnote or executive instruction or government decision only reiterates the already established rule, such references are dropped. Where any of them modifies the prevailing rule, it is incorporated into the rule. Executive instructions are given in the end of the Volume I relate to the period from 1998 onwards. The entire letter/note is reproduced instead of its gist. The gist of these instructions is incorporated in the relevant rules wherever necessary. Some instructions actually are in the nature of rules and naming them executive instructions is a misnomer. Such instructions are incorporated as rules.

27

Suggested Methodology
To avoid duplication between treasury rules, financial rules and account code, it is proposed that where a BTR does not deal with either working of the treasury or about receipt or withdrawal of government money, but is more in the nature of instructions to government officers, such rules are deleted & provided in FR if they

are already not included in it

It is suggested that the Bihar Treasury Code be called Bihar Treasury Rules 2008 Revised BTC be only one book so that referring to Rules, forms and appendices is convenient

28

Rule Referencing Methodology

Adopted 5 tiers as below.

1. Chapter
2. Section 3.Sub-section

4. Rule
5. Sub-rule or Note or Instructions

29

Organization of Chapters
Existing Chapters 1 Introduction 1 Revised Chapters Introduction (Remove general principles and take them to relevant chapters) General Organization and Working of Treasuries Receipt and deposit of money into government account Deleted as it deals with non-banking treasuries which are not there anymore

2 3 4

General Organization Receipt of Monies Custody of Monies

2 3

5
6 7 8 9 10 11 12 13

Withdrawal of monies from government account

Special Rules for banking treasury Special Rules for PWD, etc. Public Debt Deposits Loans and Advances Transfer of money Other remittances Executive Instructions

Withdrawal of monies from government account

Incorporated in relevant chapters Incorporated in relevant chapters Deleted (Taken it to chapter4)

5 6

Deposits Loans and Advances Deleted Deleted Deleted

Add - Inter governmental transactions

30

Sub Treasury to mean Treasury

Expecting that GOB would continue the present practice of independent sub treasuries, Treasury is defined as including sub treasury.

31

Deletion of Obsolete Provisions

All the Non Banking Sub Treasuries were converted into banking treasuries as a matter of policy by GoB rendering related rules in BTC obsolete
West Bengal brought out new Treasury Rules in 2005 in which the said rules have been removed Changes made to Rules, Appendices, Forms of old BTC Chapter wise are in the coming slides.

32

Chapter I
Name Topics dealt : : Introduction Short title and commencement, definitions, Main rules relating to various chapters

No. of rules
No of forms No. of appendices

:
: :

40 (1 to 40)

(Note below Rule3) (5,6,8,11,30,36 to 40

No. of SG decisions
No. of rules deleted Reasons for deletion

:
: :

20
10 Conversion of non-banking treasuries into banking treasuries, Upgradation of sub-treasury into treasury and out-dated provisions

No. of forms deleted

New rules added

:
:

Nil
Nil

Best practices

33

Chapter II
Name of Chapter Topics dealt with No.of rules No.of forms No.of Appendices

: : : : :

General Organisation and working of treasuries General organization, Treasury accounts, inspection and Miscellaneous provisions 46 7 5 Treasury

No.of SG decisions
No.of rules deleted Reasons for deletion

:
: :

1
17 ( 54 to 59,61,62,65,66,72,74,81,81A,82,82A,84)

Conversion of non-banking treasuries into banking treasuries, Upgradation of sub-treasury into treasury and out-dated provisions

No.of forms deleted

New rules addes Best adopted practices

:
: :

6
Nil

( BTC form 2 to 5,5A and 5B)

Monthly accounts to be signed by TO as in other States. Formation of Director Treasuries and Accounts prevalent in most of the States suggested
34

Chapter III
Name of Chapter Topics dealt with No.of rules No.of forms No.of Appendices No.of SG decisions No.of rules deleted Reasons for deletion No.of forms deleted New rules added Best practices adopted

: Receipt of Government Moneys and payment of such moneys

into the Public Account of the Province

: General rules, Procedure for paying & receiving moneys into

Govt. Account and granting receipt

: : : : : : : :

32 4 Nil 5 21 ( 85 to87, 92 to 94,100,103,105 to 116)

: non-banking treasury .&sub-treasury provisions

3 Nil ( BTC forms 6,7 and 9)

35

Chapter IV
Name of Chapter Topics dealt with No.of rules No.of forms No.of Appendices No.of SG decisions No.of rules deleted Reasons for deletion No.of forms deleted New rules added Best practices adopted

: : : : : : : : : : :

Custody of moneys relating to or standing in the Public Account Cash in Departmental chests, Cash balance in treasuries and verification of cash balance 19 4 Nil Nil 19 ( 117 to 135)

Conversion of non-banking treasuries into banking treasuries. 4 Nil Nil ( BTC forms 10 to 13)

36

Chapter V
Name of Chapter
Topics dealt with

:
:

Withdrawal from the Public Account

General rules, Personal claims of Government servants, Bills of Gazetted Government servants, Bills of non-gazetted Government servants, Contingent servants, Pension payments, Payments of purchase of stores, Miscellaneous payment

No.of rules No.of forms No.of Appendices No.of SG decisions No.of rules deleted

: : : : :

301 (136 to446A) 54 12 Nil 87 (out of which 8 deleted)

Reasons for deletion

No.of forms deleted New rules added Best practices adopted

:
: : :

Non-banking treasury provisions, provisions and out-dated rules

22 Nil

sub-tresury

rules,

BFR

Lapsed deposits refund-.Authorisation from AG not required-rule modified. System generated Cheque payments instead of sending bills to Bank suggested, Personal deposits period of closure reduced to items dormant for 2 consecutive years-rule modified 37

Chapter VI
Name of Chapter
Topics dealt with No.of rules No.of forms No.of Appendices No.of SG decisions No.of rules deleted

: Special rules for Bank treasuries

: Payment into Bank, Withdrawal from Bank, Daily accounts
and returns, Miscellaneous

: : : :

35 1 Nil 7 15 deleted (447, 448, 450, 451, 453, 467 to 471, 477 to 481 Integrated into other chapters : Ch2- 6 rules, Ch3-2 rules and Ch4- 12 rules

: Entire chapter removed-

Reasons for deletion No.of forms deleted New rules added Best practices adopted

: No need for separate chapter as all are banking treasuries : : :

Nil Nil New appendix 8 on letter of credit added
38

Chapter VII
Name of Chapter Topics dealt with No.of rules No.of forms No.of Appendices

: Special rules applicable to particular departments : Public Works Dept, Forest Dept and Military Secretary to
the Governor

: : :

31 7 1 (Appendix 13)

No.of SG decisions
No.of rules deleted Reasons for deletion No.of forms deleted New rules added Best practices adopted

Nil
Integrated in to new Ch3-8 rules; new Ch4-19 rules

: Entire chapter removed- deleted 4 (484, 488, 493 and 507) : Separate Chapter considered superfluous : : :
7 Nil Nil

39

Chapter VIII
Name of Chapter Topics dealt with No.of rules No.of forms No.of Appendices

: Public Debt : Permanent and temporary loans, Floating debt and other
obligations

: : :

19 5 Nil

No.of SG decisions
No.of rules deleted Reasons for deletion No.of forms deleted New rules added Best practices adopted

Nil
Government account

: 19 integrated into new Chapter 4-Withdrawal from : Separate chapter not considered necessary : : :
2 Nil Nil ( BTC forms 70A and 72)

40

Chapter IX
Name of Chapter Topics dealt with

: :

Deposit Introductory, General rules, Revenue Deposits, Civil and Criminal Court deposits, Personal deposits, Deposits for work done public bodies or individuals, Deposit under workmens compensation Act, Deposits of local funds, Special rules for particular local funds or classes of local fund 70

No.of rules

No.of forms
No.of Appendices No.of SG decisions No.of rules deleted

:
: : :

2
1 3 9 ( 534, 542, 551, 553, 556, 567, 571,5 81 and 587)

Reasons for deletion

No.of forms deleted New rules added Best practices adopted

:
: : :

Non-banking treasury provision and out-dated rules.

Nil Nil Nil
41

Chapter X
Name of Chapter Topics dealt with No.of rules No.of forms No.of Appendices

: : : : :

Loans and advances General, Special rules applicable to different classes of loans and advances 12 1 (Form 48) Nil

No.of SG decisions
No.of rules deleted Reasons for deletion No.of forms deleted

:
: : :

Nil
Nil Nil Nil

New rules added

Best practices adopted

:
:

Nil
Nil

42

Chapter XI
Name of Chapter Topics dealt with No.of rules No.of forms No.of Appendices

: : : : :

Transfer of moneys standing in the Public Account Introduction, Transfer through currency, Remittances of coin and notes 57 5 Nil

No.of SG decisions
No.of rules deleted Reasons for deletion No.of forms deleted New rules added Best practices adopted

:
: : : : :

Nil
57 ( 614 to 670)

Conversion of non-banking treasuries into banking treasuries. 5 Nil Nil ( BTC forms 77 to 81)

43

Chapter XII
Name of Chapter Topics dealt with

: :

Other remittances through Government Reserve Bank of India remittances, Record of drawing and encashment, other rules and special rules for remittances of sepoys and policemen 42 1 1 2 42 ( 671 to 712) Conversion of non-banking treasuries into banking treasuries. 1 Nil Nil ( BTC forms 82)

No.of rules No.of forms No.of Appendices No.of SG decisions No.of rules deleted Reasons for deletion No.of forms deleted New rules added Best practices adopted

: : : : : : : : :

44

Chapter XIII
Name of Chapter Topics dealt with

: :

Executive instructions Introduction, Provision of funds at treasuries, currency chests, Coin, Currency and bank notes, cipher code and treasury agencies 97 13 6 Nil 97 (717 to 813)

No.of rules No.of forms No.of Appendices No.of SG decisions No.of rules deleted Reasons for deletion No.of forms deleted New rules added Best practices adopted

: : : : : : : : :

Conversion of non-banking treasuries into banking treasuries. 6 Nil Nil ( BTC forms 22 to 27)

45

Appendices
There are 27 Appendices in Bihar Treasury Code

Five appendices viz. 23 to 27 are not printed relating to Coinage Rules of Reserve Bank of India as no NBSTs exist
These appendices are no more required and hence deleted Deleted11 appendices from the remaining and added 3 appendices In the New BTR there are 14 Appendices

46

Appendices Deleted
Sl. NO 1 2 6 7 Old No. Title of appendix. Questions for Sub inspections.( Rule75 ) divisional Treasury Remarks Since all sub treasuries are given the status of independent Treasuries, It is enough if it is mentioned in the Rule Drawing and Disbursing Officer. Hence it is appropriate if the list is appended to financial rules as this is nothing to do with the functions of treasury officer.. This also does not exist in WB Code -do-

List of Government servants authorized to draw bills except in the education and industries department. (Rule 137)

List of authorized the officers who can sign and countersign bills in the education and industries department. (Rule 137). Contingent charges that required countersignature by superior officer. (Rule 137). List of controlling officers for the purpose of the traveling allowance rules of the department or officers. (Rule 137). List of Proper Authorities for drawing and countersigning certain charges payable at sub-treasuries.{Rule139 (b) }

This has nothing to do with the functions of treasury officer and it will be appropriate if taken to Financial Rules. Further this does not find place in WB Code also. -do-.

10

11

-do-

47

Appendices Deleted
Sl. NO 7 Old No 14 Title of appendix. Memorandum of instructions for deduction of Income tax and Super tax from salaries, etc.( Note 2 below Rule228 ) Remarks This has nothing to do with the functions of treasury officer and it is the responsibility of DDO to affect statutory recoveries, therefore it will be appropriate if taken to Financial Rules. Further this does not find place in WB Code also. -do-

15

Rules made by Auditor-General for regulating the preparation of last pay certificates in cases of transfers on duty, of or return from leave. (Note 2 below Rule 236 )

16

List of departments and undertakings Deleted recognized as commercial and cases for authorized inter-departmental adjustments. Reserve Bank Of India remittances- See Note 3 under Rule 672.Deleted as the rule itself deleted. remittances on government account. Instructions to Treasury officers and Managers See Note2 below Rules 735 &739. Deleted as the rule itself of the State Bank of in charge of currency deleted. chests.

10 11

21 22

48

Appendices Added
Sl. No 1 New No. Gist of Appendix Letter of Credit System. Reasons for inclusion.

2.

3.

Letter of credit system provisions available in Rule 461 are taken to Withdrawal of Moneys Chapter on revised Code. The instructions there under are kept in the Appendix. Receipts Exempted from Stamp Rule152 provides for exemption of Duty. certain receipts from stamp duty. The list there under is worth to be an appendix as in W B Code. Advise list/Register of Payment Government decision 3 under Rule Orders. 313. It is found necessary to include decision as appendix.

49
Contd.,

Forms
There are109 Forms in BTC 52 Forms retained 57 Forms deleted

3 Forms required in Rules 80, 250 & 603 added

In new BTRS 2008 there are 55 Forms

50

Points for consideration of GOB

Signing of monthly accounts by the Treasury officer himself for sending them to AG Bihar Keeping the control of Treasury functions under separate HOD i.e. Director of Treasuries and Accounts As the cheques in respect of PWD & Forest departments are received in Treasury for enfacement the very bill payment functions be entrusted to Treasury Officer and should be made responsible for preparation of accounts and sending them to AG Bihar

51

Thank You
Dr. Rajiv Sharma, IAS Director General Centre for Good Governance Dr. MCR HRD IAP Campus, Road No. 25, Jubilee Hills, Hyderabad, Andhra Pradesh (India) Tel. No.: (+91- 40- 23541952), Fax No. (+91- 40- 23541953) E-mail: dg@cgg.gov.in www.cgg.gov.in

52