Indian Audit and Accounts Department

Structured Courseware on Government Accounting

Session: 11& 12 – Appropriation Accounts

Appropriation Accounts 2. Form and Content of Appropriation

Accounts;
3. Reconciliation of figures appearing in
Session Overview the Finance Accounts with those
appearing in the Appropriation
Under the provisions of Article 149 of the Accounts.
Constitution of India read with Section 11 of
the Comptroller and Auditor General’s Learning objectives
(Duties, Powers and Conditions of Service)
Act, 1971, the Comptroller and Auditor By the end of the session, the learner will be
General is required to prepare, for the Central able to define the objective and concept of
Government, for each State Government and Appropriation Accounts of the Government.
for the Government of each of the Union The learner will also be able to state scope,
Territories with separate Legislative form and arrangement of material in
Assemblies, Accounts, that is accounts of the Appropriation Accounts and reconcile the
expenditure (both voted and charged) of the expenditure indicated in the Appropriation
Government for each financial year. These Accounts with the expenditure indicated in
accounts include in the case of accounts the Finance Accounts.
compiled by the Comptroller and Auditor
General of India, Appropriation Accounts
Objective and concept
Appropriation Accounts indicate the
Constitution of India has well defined
appropriations sanctioned for each grant by
provisions relating to financial matters of the
concerned legislature (Parliament in the case
Union Government and of State
of Union Government and State Legislature
Governments.
in the case of State Governments) and actual
expenditure booked against that
Article 266 (1) provides that all revenues
appropriation along with reasons for any
received by the Government, all loans raised
excess and savings, if any.
by that Government by the issue of treasury
bills, loans or ways and means advances and
Appropriations are sanctioned by the
all moneys received by that Government in
legislature for gross amounts (i.e. excluding
repayment of loans shall form one
deductions and recoveries) and consequently
consolidated fund to be entitled the
gross expenditure against each grant is
‘Consolidated Fund of India or of the State
indicated in the Appropriation Accounts.
concerned’. Article 266 (3) provides that ‘no
Finance Accounts, on the other hand, show
moneys out of the Consolidated Fund of
net expenditure under different heads after
India or the Consolidated Fund of a States
taking into account deductions and
hall be appropriated except in accordance
recoveries. There is, thus, variation between
with law and for the purpose and in the
the figures in the Finance Accounts and in
manner provided in this Constitution’.
the Appropriation Accounts.
The procedure for appropriation of moneys
During this session we will discuss:
out of the Consolidated Fund of India for
1. Objective and concepts underlying
meeting out expenditure of the Government
Appropriation Accounts;
of India is laid down in Articles 112, 113,

Participant Note No. 11 & 12– Appropriation Accounts 1

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Indian Audit and Accounts Department
Structured Courseware on Government Accounting
Session: 11& 12 – Appropriation Accounts
114, 115 and 116 of the Constitution.
Similarly, procedure for appropriation of
moneys out of the Consolidated Fund of a
State for meeting the expenditure of that
State is prescribed in Articles 202, 203, 204,
205 and 206 of the Constitution of India.
In this session we will discuss the
constitutional provisions on appropriations
out of Consolidated Fund of India only.
Under Article 112 (1), the President is
required to lay before Parliament each year
an ‘Annual Financial Statement’ containing
the estimated receipts and expenditure of the
Government of India for that year.
Under Article 112 (2) ibid, the ‘Annual
Financial Statement’ shall show the sums
required to meet expenditure described by
the Constitution as charged on the
Consolidated Fund of India and other
expenditure and distinguish expenditure on
revenue account from other expenditure.
Under Article 113(2) so much of the
estimates of expenditure, included in the
‘Annual Financial Statement’ to meet
expenditure other than charged expenditure
shall be submitted in the form of demand for
grants to the House of People for approval.
Under Article 114(1) after the demands for
grants have been approved, a bill shall be
introduced to provide for appropriation out of
the Consolidated Fund of India moneys
required to meet the charged expenditure and
grants approved in the Demand for Grants.
Article 114(3) forbids that no money shall be
drawn from the Consolidated Fund of India
except after appropriations made by law
(read with the approval of Parliament) in
accordance with the provisions of Article
114.
Participant Note No. 11 & 12– Appropriation Accounts
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Article 115 and 116 of the Constitution deal
with the procedure for obtaining
supplementary, additional or excess grants
and for vote on account, votes of credit and
exceptional grants.
From these Constitutional provisions it is
clear that the Government can draw money
from the Consolidated Fund of India only
after appropriations have been approved by
Parliament as per procedure prescribed in the
Constitution. Drawal of any money out of
Consolidated Fund of India without the
approval of Parliament is, thus, a violation of
the Constitution.
Parliament needs an assurance or a report
that its mandate exercised through the
Appropriation Act has been followed and that
there has been no infringement of the
Parliamentary control over drawals from the
Consolidated Fund of India.
Appropriation Accounts is a mechanism
through which appropriations approved by
Parliament and expenditure incurred by the
Government out of the Consolidated Fund of
India is submitted to the Parliament
indicating therein any expenditure in excess
of appropriation, expenditure on schemes
without parliamentary approval, major
savings in appropriations indicating
unnecessary appropriations submitted to
Parliament, etc.
Where the Comptroller and Auditor General
of India maintain the accounts, he is also
responsible for preparation and submission
of the Appropriation Accounts (as per
Section 11 of the CAG’s (DPC) Act, 1971.
The object of preparing Appropriation
Accounts in a distinct compilation is to
report:
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Indian Audit and Accounts Department
Structured Courseware on Government Accounting
Session: 11& 12 – Appropriation Accounts
(a) that the moneys shown in the accounts
as having been disbursed were legally
available for, and applicable to, the
service or purpose to which they have
been applied or charged;
(b) that the expenditure conforms to the
authority which governs it; and
(c) that every appropriation has been made
in accordance with the provisions made
in this behalf under rules framed by
competent authority.
A grant/appropriation is voted/ authorized for
the gross expenditure required for each
service. The expenditure shown against each
grant/appropriation in the Appropriation
Account thus excludes recoveries of
expenditure relating to respective
grants/appropriations.
The Finance Accounts which present the
general accounts of the Government are
intended to supplement the accounts
separately presented in the form of
Appropriation Accounts for each grant and
charged appropriation included in the
Appropriation Acts passed by the
Legislature.
Form and Content
The Appropriation Accounts are prepared
according to the nomenclature indicated in
the Demands for Grants, as approved by
legislature, showing the:
1. Original Appropriations approved by
legislature, supplementary
appropriations, surrenders and re-
appropriations distinctly;
2. Actual expenditure against the sum
total of above;
3. Excess (+) or saving (-) under each
head.
Participant Note No. 11 & 12– Appropriation Accounts
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As provided in the Constitution for
preparation of ‘Annual Financial Statement’,
expenditure out of Consolidated Fund has to
be shown separately in respect of charged
expenditure and other expenditure and has to
distinguish expenditure on revenue account
from other (capital) expenditure. Since
Appropriation Act and Demands for Grants
are also prepared according to these
constitutional provisions, the Appropriation
Accounts have also to show separately
charged and other expenditure and revenue
and capital expenditure.
For discussion the form and content of
Appropriation Accounts during this session
the Appropriation Accounts of Government
of Uttar Pradesh will be discussed.
The Appropriation Accounts are in three
parts:
Part-I- Summary of Appropriation Accounts
and audit certificate of the Comptroller and
Auditor General of India;
Part-II-Detailed Appropriation Accounts;
Part-III-Appendices, containing two
appendices on expenditure met out of
Advances from Contingency Fund and
Grant-wise details of Estimates and Actuals
adjusted in the accounts in Reduction of
Expenditure.
Part-I-Summary of Appropriation
Accounts
A summary of Appropriation Accounts
showing the total amount of funds (original
and supplementary) provided by the
Legislature under each voted grant and
charged appropriation separately for revenue
and capital, actual expenditure incurred
against each grant. The summary is followed
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Indian Audit and Accounts Department
Structured Courseware on Government Accounting
Session: 11& 12 – Appropriation Accounts

by the grand total of the amount of Grant/ Part-II-Detailed Appropriation Accounts

Appropriation (under Revenue and under
Capital) and against Voted Grant and The Appropriation Accounts are prepared
Charged Appropriation. strictly according to the nomenclature used in
the Demands for Grants as approved by the
The summary is concluded with a Legislature. Grants/appropriations and actual
reconciliation statement of expenditure expenditure are included in these Accounts
indicated in the Appropriation Accounts with upto sub-head level. The Accounts contain
the expenditure indicated in the Finance following four columns:
Accounts. The format of reconciliation
statement used is as under: Column 1- deals with the Original (indicated
by letter ‘O’), Supplementary
Charged Voted (indicated by letter ‘S’), Demand
Revenue Capital Revenue Capital
Total A B C D for Grants as Voted and Charged
Expenditure on the Consolidated Fund. As
in
Appropriation break up of expenditure between
Accounts Plan and Non-Plan does not flow
Deduct M N O P
Recoveries out of the Constitutional
shown in provisions and has been
Appendix II
Net Total (A-M) (B-N) (C-O) (D-P) necessitated only by the executive
expenditure orders issued, Appropriation
shown in
Statement No. Accounts do not indicate this
10 of Finance breakup. The provision and actual
Accounts
expenditure on Plan and Non-Plan
are totaled up under each sub-
The summary concludes with the certificate
head and reflected in the
of the Comptroller and Auditor General of
Appropriation Accounts as a
India. The format of certificate (as per
single figure of expenditure. In
appropriation Accounts of Government of
addition, the executive is vested
Jammu and Kashmir for the year 2003-04) is
with powers for re-appropriation
as under:
of funds from one head to another
head within Revenue Section or
‘The Appropriation Accounts have been
within the Capital Section under
prepared and examined under my direction in
the provisions of the delegation of
accordance with the requirements of the
Financial Powers. The letter ‘R’
Comptroller and Auditor General’s (Duties,
or ‘-R’ indicates these re-
Powers and Conditions of Service) Act,
appropriations. The ‘O’, ‘S’ and
1971. On the basis of the information and
‘R’ are indicated separately in
examination that my officers required and
Column–I.
have obtained, I certify that these accounts
are correct, subject to the observations in my
Coulumn-2-indicates the total grant or
Report(s) on the Accounts of the Government
appropriation i.e. the sum total of
of Jammu and Kashmir being presented
‘O’, ‘S’ and ‘R’.
separately for the year ended 31st March
2004’.

Participant Note No. 11 & 12– Appropriation Accounts 4

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Indian Audit and Accounts Department
Structured Courseware on Government Accounting
Session: 11& 12 – Appropriation Accounts
Column-3- indicated the actual expenditure
incurred during the year as
obtained from the annual
accounts.
Coulmn-4- indicates the excess expenditure
(as compared to total grant or
appropriation as (+) and saving as
(-) between the figures of column
(2) and (3).
The re-appropriation orders incorporated in
column (1) are to be explained giving
reasons. Similarly, reasons for excess and
savings in column (4) are to be explained
with reference to the total grant.
The Accounts are prepared separately for
Revenue and Capital Sections and exhibit
charged appropriations and voted
expenditure separately.
The Appropriation Account of each
grant/appropriation will contain ‘Notes and
Comments’, wherever necessary; which will
bring to the notice of the Legislature (giving
relevant particulars of the group heads)
excess over grant/appropriations requiring
regularization, expenditure booked against
the grant/appropriation but not really
debitable to it, expenditure incurred on a
‘New Service’ without specific authority of
the Legislature, unjustified or excessive
provision of funds leading to large savings
and lapses and also cases of defective control
over expenditure e.g., excessive, irregular or
unjustified re-appropriations or surrenders
within the grant/ appropriation.
Part-III-Appendices
Appendix-I
In this appendix, expenditure met out of
advances from the Contingency Fund, under
Participant Note No. 11 & 12– Appropriation Accounts
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each grant, not recouped to the Fund till the
close of year is included.
Contingency Fund is placed at the disposal of
the President/Governor to meet any
unforeseen and urgent expenditure. The
Fund is recouped from Consolidated Fund, as
and when occasion arises. Legislative
control over expenditure met from the
Contingency Fund is exercised when the
Government approaches the legislature for
appropriation to recoup the fund. The
intention of this appendix is to bring to the
notice of Legislature expenditure met out of
the Contingency Fund, which has not been
recouped during the year and has, thus,
escaped the scrutiny of Legislature during the
year when expenditure was met out of the
Fund.
Appendix-II
In this appendix grant-wise details of
estimates and actuals in respect of
‘Recoveries Adjusted in the Accounts in
Reduction of Expenditure’ are included.
Actual recoveries under Revenue and Capital
are compared in this statement with the
budget estimates to work out the ‘more
recoveries’ or ‘less recoveries’.
Responsibility for preparation
The Appropriation Accounts relating to State
Governments are prepared by the respective
Accountants General (A&E) except in case
of the State Government of Goa and Union
Territory Government of Pondicherry.
Check of Accounts
Submission of draft Accounts to
Accountant General (Audit)
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Indian Audit and Accounts Department
Structured Courseware on Government Accounting
Session: 11& 12 – Appropriation Accounts

The draft Appropriation Accounts along with The compiling officer should send to each
Finance Accounts after compilation by the authority responsible for controlling
Accountant General (A&E) and, check by expenditure against a grant/appropriation, an
ITA wing are sent to Accountant General advance copy of the draft of the
(Audit), where an independent check will be Appropriation Accounts of the
exercised on these Accounts with reference grant/appropriation and the draft notes and
to initial records and the accounts will be comments proposed to be included. The
finally cleared for printing by the Accountant explanations furnished by the Controlling
General (Audit). Authorities should be given due
consideration in finalizing the Notes and
A suitable modus operandi should be evolved Comments.
by mutual consultation between Accountant
General (A&E) and Accountant General Time schedule for preparation and
(Audit) to ensure that the work of submission of Accounts
scrutinizing the accounts by the latter goes on
smoothly and is completed within the time The following time schedule for the
frame. It is also essential that the Accountant preparation of Appropriation Accounts by the
General (A&E) and Accountant General concerned Accountants General (A&E) and
Audit should co-ordinate the work of the completion of their checks by the
preparation of the annual accounts and the respective Accountants General (Audit) is
Audit Report and checking of the accounts prescribed for the year 2014-15:-
by Accountant General (Audit) in such
manner that the printed copies of all the three
documents are forwarded simultaneously to Sl Stage Appropriation
the Comptroller and Auditor General for No. Accounts
countersignature/ signature. This is quite 1. Flow of 15 July-17
necessary as all the three documents are to be Statements/Grants August
submitted to the State Legislature from A&E to Audit (#)
simultaneously. The full responsibility for 2. Return by Audit 24 July-21
finally submitting both the draft accounts and August
printed copies of the Accounts rest with the 3. Vetting of ‘Notes to ----
Accountant General (A&E). The Accounts’ by GA Wing
responsibility for translation of the Accounts 4. Attending to Audit 21 August-31
into Hindi will also be that of the Accountant observations August
General (A&E). 5. Return of vetted ‘Notes ----
to Accounts’ by Audit
Instruction for Preparation 6. Draft certification by 01 September-
AG (Audit) 07 September
Adequate care is to be taken while drafting of 7. Vetting of Audit 04 September-
material for comments in the Appropriation Certificate by Report 10 September
Accounts, obtaining explanations from the State Wing- Approval
Controlling Authorities and subsidiary of Headquarters (with
information to be included in the Accounts. modification/correction
etc) (*)
8. Modify accounts based 10 September-

Participant Note No. 11 & 12– Appropriation Accounts 6

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Indian Audit and Accounts Department
Structured Courseware on Government Accounting
Session: 11& 12 – Appropriation Accounts
on RS Wing 15 September
observations and
making available ‘print
ready’ version (in pdf
format) to Audit ($)
9. Signing of Audit 21 September-
certificate by the CAG 30 September
of India (**)
(#) Immediately on completion of
preparation of Statements/Appendices and
Grants, draft version (as furnished to Audit)
is to be made available to the Finance Dept,
at least 10 days prior to the day, fixed for the
Exit Conference.
(*) A spiral bound ‘bond copy’ version is to
be prepared by AG (A&E) and accompany
with the draft audit certificate sent to the
concerned Reports States Wing.
($) No correction is permissible consequent
to the preparation of the ‘Print Ready’
Version. Major alterations, therefore are, if
required to be carried out only with the
concurrence of GA Wing and Audit Wing of
the respective offices.
(**) Signatory copies of printed accounts
should reach Headquarters by September 25,
2014 positively.
The observations/comments of the
Accountant General (Audit) will be attended
to and settled by the concerned Accountant
General (A&E) within one week of the return
of the checked copies of the Finance
Accounts and Appropriation Accounts.
Note: the Comptroller and Auditor
General of India fix these dates each year.
The Accountant General (A&E) shall furnish
full information to the Comptroller and
Auditor General of India after the close of
Participant Note No. 11 & 12– Appropriation Accounts
Courseware designed and prepared by: Regional Training Institute, Allahabad
the accounts of the financial year to enable
the latter to keep a watch over the Progress in
the preparation, finalizing and printing of the
Accounts.
Accountant General (A&E) will furnish five
Printed copies of the Appropriation Accounts
and Finance Accounts of their respective
States to the Comptroller and Auditor
General for signature so as these could be
available for presentation to the Legislature
during the Budget Session. The number of
copies of these documents required by the
Comptroller and Auditor General is 19
(including one for transmission to the Press
Information Bureau of the Government of
India) after the documents are placed before
the Legislature.
Forwarding of printed copies
While forwarding the printed copies of
Appropriation Accounts to the Comptroller
and Auditor General, the following
certificates should be furnished by the
Accountant General (A&E) and Accountant
General (Audit):
Certificate of the Accountant General
(A&E):
The Accounts of Government of…..for the
year……forwarded herewith have been
prepared by me in accordance with the
requirement of Article 149 of the
Constitution of India read with the provisions
of Comptroller and Auditor General’s
(Duties, Powers and Conditions of Service)
Act, 1971, I have obtained all the information
and explanations wherever necessary. Subject
to the observations in this compilation, I
certify to the best of my knowledge and
belief that these accounts are correct
statement of the receipt and disbursements of
the Government
of……………………….for………
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Indian Audit and Accounts Department
Structured Courseware on Government Accounting
Session: 11& 12 – Appropriation Accounts
Accountant General (A&E)
Certificate of the Accountant General
(Audit)
The Appropriation Accounts of…….for the
year………..have been examined by me. On
the basis of the information and explanations
that my officers required and have obtained,
and according to the best of my information
as a result of test audit of the accounts, I
certify, in pursuance of provisions of Article
149 and 151 of the Constitution of India and
the Comptroller and Auditor General’s
(Duties, Powers and Conditions of Service)
Act, 1971, that these accounts are correct
subject to observations in the Report of the
Comptroller and Auditor General of India on
the Accounts of the Government of………
(Civil) for…..
Accountant General (Audit)
CERTIFICATE OF THE
COMPTROLLER AND AUDITOR
GENERAL OF INDIA
This compilation containing the
Appropriation Accounts of the Government
of Uttar Pradesh for the year ending 31st
March 2014 presents the accounts of the
sums expended in the year compared with the
sums specified in the schedules appended to
the Appropriation Acts passed under Articles
204 and 205 of the Constitution of India. The
Finance Accounts of the Government for the
year showing the financial position along
with the accounts of the receipts and
disbursements of the Government for the
year are presented in a separate compilation.
The Appropriation Accounts have
been prepared under my supervision in
accordance with the requirements of the
Comptroller and Auditor General’s (Duties,
Powers and Conditions of Service) Act, 1971
and have been compiled from the vouchers,
challans and initial and subsidiary accounts
Participant Note No. 11 & 12– Appropriation Accounts
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rendered by the treasuries, offices, and
departments responsible for the keeping of
such accounts functioning under the control
of the Government of Uttar Pradesh and the
statements received from the Reserve Bank
of India.
The treasuries, offices and/or
departments functioning under the control of
the Government of Uttar Pradesh are
primarily responsible for preparation and
correctness of the initial and subsidiary
accounts as well as ensuring the regularity of
transactions in accordance with the
applicable laws, standards, rules and
regulations relating to such accounts and
transactions. I am responsible for preparation
and submission of Annual Accounts to the
State Legislature. My responsibility for the
preparation of accounts is discharged through
the office of the Accountant General (A&E).
The audit of these accounts is independently
conducted through the office of the Principal
Accountant General (General & Social
Sector Audit) in accordance with the
requirements of Articles 149 and 151 of the
Constitution of India and the Comptroller
and Auditor General’s (Duties, Powers and
Conditions of Service) Act, 1971, for
expressing an opinion on these Accounts
based on the results of such audit. These
offices are independent organizations with
distinct cadres, separate reporting lines and
management structure.
The audit was conducted in
accordance with the Auditing Standards
generally accepted in India. These Standards
require that we plan and perform the audit to
obtain reasonable assurance that the accounts
are free from material misstatement. An audit
includes examination, on a test basis, of
evidence relevant to the amounts and
disclosures in the financial statements.
On the basis of the information and
explanations that my officers required and
have obtained, and according to the best of
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Indian Audit and Accounts Department
Structured Courseware on Government Accounting
Session: 11& 12 – Appropriation Accounts
my information as a result of test audit of the
accounts and on consideration of
explanations given, I certify that, to the best
of my knowledge and belief, the
Appropriation Accounts read with
observations in this compilation give a true
and fair view of the accounts of the sums
expended in the year ended 31st March 2014
compared with the sums specified in the
schedules appended to the Appropriation Act
passed by the State Legislature under Articles
204 and 205 of the Constitution of India.
Points of interest arising from study
of these accounts as well as test audit
conducted during the year or earlier years are
contained in my Reports on the Government
of Uttar Pradesh being presented separately
for the year ended 31st March 2013.
(SHASHI KANT SHARMA)
Comptroller and Auditor General of India
Date:
New Delhi
Correction of Errors
Utmost care shall be taken in reading the
proofs at the various stages so that only the
mistakes as a result of printer’s devil, which
sometimes becomes unavoidable, are left for
inclusion in the errata. Any error noticed in
the printed copies should be neatly corrected
in manuscript in the copies sent to the
Comptroller and Auditor General. Where the
number of errors is such as will require the
printing of errata, the errata should be printed
after an intimation of the documents having
been signed by the Comptroller and Auditor
General of India is received. This will enable
the Accountant General (A&E) to incorporate
in the errata any errors, which may be
pointed out by the Comptroller and Auditor
General of India.
Participant Note No. 11 & 12– Appropriation Accounts
Courseware designed and prepared by: Regional Training Institute, Allahabad
No correction slip should be issued after the
Accounts and Reports have been forwarded
to Government. If a serious error or misprint
comes to notice after the documents have
been forwarded to Government, it should be
immediately brought to the notice of the
Comptroller and Auditor General with an
explanation of the circumstances in which
the mistake could not be noticed and rectified
earlier. If it is decided to issue a correction,
the correction slip will be issued in the name
of the Accountant General who is responsible
for the preparation of the Accounts, but it
should not bear any date. The Accountant
General should ensure that any such
correction slip issued is pasted in the copies
signed by the Comptroller and Auditor
General which are to be laid on the table of
the legislature.
No correction slips can be issued after the
documents are laid before the legislature; if
any errors are noticed they should be
reported to the Comptroller and Auditor
General with an explanation for the delay in
noticing them.
Confidential Accounts
Since Appropriation Accounts and Finance
Accounts are to be presented to the State
Legislature along with the Audit Report, they
cannot become ‘Public’ until they have been
laid on the table of the House. It is, therefore,
necessary to guard against the disclosure to
the public and press till their presentation to
the Legislature. The Accounts and all
correspondence relating to them should
therefore be classified as confidential till that
time.
General checks to be exercised while
compiling Appropriation Accounts
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Indian Audit and Accounts Department
Structured Courseware on Government Accounting
Session: 11& 12 – Appropriation Accounts
1. It is to be ensured that figures of
'Provision/Expenditure/Excess/Saving'
as given under 'Summary of
Appropriation Accounts' tally with
those given under individual
"Grant/Appropriation-wise Accounts".
2. The classification should follow the
budget and no unauthorized head
should be opened.
3. The amounts surrendered as shown in
the "Summarized Appropriation
Accounts" should agree with those
worked out in the "Detailed
Appropriation Accounts".
4. The "Plus/Minus" signs should be
carefully checked.
5. Month of surrender should invariably
be indicated.
6. The comments about excess or saving
incorporated in relevant grants should
not be ambiguous and that the
comments should be such as can be
understood by a layman.
7. It has to be ensured that variations
under "Revenue Expenditure", "Capital
Expenditure", "Loans" and "Charged"
and "Voted" categories have been
separately worked out/commented
upon.
8. Errors in totaling/spelling mistakes
should be avoided.
9. In order that the main thrust to focus
and highlight major excesses/savings is
not diffused, only major
savings/excesses should be included as
per the guidelines given by the Office
of the Comptroller and Auditor General
Participant Note No. 11 & 12– Appropriation Accounts
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of India or by the Public Accounts
Committee of the respective State.
10. Exhibition of expenditure in
Appropriation Accounts should follow
the provisions in the budget.
Expenditure to be transferred to other
heads as shown below the line in the
budget should be carefully noted and
timely action taken for such transfer
and an intelligent examination of these
accounts is to be under-taken to find
out whether any mistake has not
apparently been made by the Accounts
General’s office in carrying out the
annual adjustment and/or following the
accounting mechanism as stipulated in
the budget estimates etc.
11. Re-appropriation orders relating to the
previous years after closure of
Accounts should not be accepted and
acted upon.
12. Comments on defective budgeting
should be highlighted if the provision is
not made under the correct head of
Accounts.
13. When huge provision of funds are
made through re-appropriation it should
be examined to see whether they come
under ‘New Service’ and, if so, Public
Accounts Committed should be briefed
and suitable guidelines issued in the
matter.
Checks by ITA
Checks that may be exercised by ITA Section
during local scrutiny of the draft
Appropriation Accounts are:
(i) The working sheets received from
several sections for preparation of draft
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Indian Audit and Accounts Department
Structured Courseware on Government Accounting
Session: 11& 12 – Appropriation Accounts
Appropriation Accounts in
Book/Finance Accounts Section and
Journal entries etc., as well as Ledger in
Book Section from which the bulk of
the statement for Finance Accounts and
Appropriation Account are compiled
should be checked to inter alia ensure
that: -
(a) no unauthorized heads of accounts have
been opened.
(b) there are no anomalies and obvious
mistakes of classification do not exist;
(c) wide variations, if any, between
Revised Estimates and Actuals have
been properly examined to ensure that
no serious misclassifications have
occurred;
(d) per contra adjustments on account of
transactions affecting different
Accounts Officers or appearing in the
books of two different branches or
sections of one and the same
Accountant General have been
correctly carried out in the books of
both the branches/sections.
(e) there are no abnormal transactions of
receipts/disbursements requiring
investigation, rectification or insertion
of suitable footnotes.
(ii) Reconciliation of figures between
the draft Finance Accounts and
the draft Appropriation Accounts
should be effected completely for
all the heads of accounts.
Public Accounts Committee
Constitution: At present ,it has 15 members
from Lok Sabha and 7 members from Rajya
Sabha. The members are elected every year
Participant Note No. 11 & 12– Appropriation Accounts
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from amongst the members of the respective
Houses according to the Principles of
proportional representation by means of a
single transferable vote. Some of the national
political parties renominate their members
for a second year term on the Committee.
Ministers are debarred from becoming
members of the Committee. If a member
elected to the PACis subsequently appointed
as Minister, he ceases to be a member of the
committee. It is thus ensured that the PAC
functions absolutely independent of the
influence of the Government and brings to
bear an objective, judicious and non party
approach to the matter under its scrutiny and
arrive at its findings and recommendations.
Since 1967, a leading member of the
opposition party or group is being appointed
as Chairman of the Committee by the
Speaker, Lok Sabha under rule 258(1) of
Rules of Procedure and the Conduct of
Business for Lok Sabha.
Scope and Functions
According to Rule 308 of the Rules of
Procedure of the Lok Sabha, the main
function of the PAC is to examine the
Appropriation Accounts, Annual Finance
Accounts of the Government and such other
accounts laid before the House as it may
think fit. The committee has to satisfy it self
that
(a) that the money shown in accounts as
having been disbursed were legally
available for and applicable to the
service or purpose to which they have
been applied or charged;
(b) that the expenditure conforms to the
authority which governs it; and
(c) that every reappropriation has been
made in accordance with the
provisions made in this behalf under
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Indian Audit and Accounts Department
Structured Courseware on Government Accounting
Session: 11& 12 – Appropriation Accounts
rules framed by the competent
authority.
It shall also be the duty of the Public
Accounts Committee
(a) to examine in the light of the report of
the report of the comptroller and
Auditor General, the statement of
accounts showing income and
expenditure of State corporations,
trading and manufacturing schemes,
concerns and projects, together with
the balance sheets and statements of
profit and loss accounts which the
President may have required to be
prepared or are prepared under the
provisions of the statutory rules
regulating the financing of a particular
corporation, trading concern or
project;
(b) to examine the statement of accounts
showing the income and expenditure
of autonomous and semi-autonomous
bodies, the audit of which may be
conducted by the Comptroller and
Auditor General of India, either under
the direction of the President or under
the provisions in the CAG(DPC) Act
1971. and
(c) to consider the report of the
Comptroller and Auditor General in
cases where the President may have
required him to conduct an audit of
any receipts or to examine the
accounts of stores and stocks.
An important function of the committee is to
ascertain that money granted by Parliament
has been spent by Government with the
scope of the Demand. The implications of
this phrase are that
Participant Note No. 11 & 12– Appropriation Accounts
Courseware designed and prepared by: Regional Training Institute, Allahabad
(i) money recorded as spent against
Grant must not be more than the
amount granted.
(ii) The expenditure brought to
account against a particular grant
must be of such a nature as to
warrant its record against that
grant and no other and
(iii) The grants should be spent on
purpose which are set out in the
detailed Demand for grants and
they cannot be spent on any New
service not contemplated in the
Demand
Another important function of the
committee is the discussion of points of
financial discipline and principle.
Since one of the functions of the
Committee is to act as a check on unwise
methods of expenditure, it is undoubtedly
possesses the power, if necessary, to
intervene in matters of administration and
to examine the systems under which the
Ministries work. Such intervention is,
however, rare. The Committee usually
concentrates on the general control to
secure economy and leaves questions of
internal administration to the Minstry
concerned. It can nevertheless call
attention to weak points in the
administration itself, leaving it the
Ministry ;to remedy them.
It is not concerned with questions of
policy in the broader sense; it is only
concerned in a limited degree with the
policy or the method of
expenditure.While no opinion is
expressed on points of general policy, any
extravagance or waste in carrying out that
policy is within its field of investigation.
The Committee is concerned with any
lacunae in the system or process of
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Indian Audit and Accounts Department
Structured Courseware on Government Accounting
Session: 11& 12 – Appropriation Accounts

control which had occasioned loss to the

Exchequer, rather than with the
individuals involved. But it has to be
assured that adequate action has been
taken to prevent recurrence oif such cases
including disciplinary action against the
officials concerned.

In short, the examination of the Accounts

and Audit Reports by the PAC extends
“beyond the formality of the expenditure,
to its wisdom, faithfulness and
economy”.

Participant Note No. 11 & 12– Appropriation Accounts 13

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