FINANCE AND ACCOUNTING MANUAL

ROYAL GOVERNMENT OF BHUTAN

MINISTRY OF FINANCE
 CONTENTS
CHAPTER – I ................................................................................................................1
1. GENERAL PRINCIPLES AND RULES ..........................................................1
1.1 Introduction .........................................................................................................1
1.2 Objective and Supersession ...............................................................................1
1.3 Currency, Fiscal Year and Mode of Accounting ...............................................2
1.4 Abbreviations .....................................................................................................2
1.5 Definitions..........................................................................................................4
1.6 Bank Accounts of the Government ....................................................................9
1.6.1 General Principles ..............................................................................................9
1.6.2 Bank Accounts for Budgetary Operations .......................................................10
1.6.3 Operation of Government Bank Accounts .......................................................10
1.6.4 Government Revenue Accounts (RGR)...........................................................11
1.6.5 Government Budget Fund Account (BFA) ......................................................12
1.6.6 Government Non-Revenue Receipts & Deposits Accounts ............................12
1.6.7 Letter of Credit Accounts (LC & PLC) ...........................................................13
1.6.8 Bank Accounts Abroad ....................................................................................14
1.6.9 Government Consolidated Fund Account ........................................................15
1.6.10 Refundable Deposits Accounts ..................................................................15
1.6.11 Revolving Fund Account............................................................................17
1.6.12 Trust Fund Account& Other Government Funds .......................................17
1.6.13 Audit Recoveries Account..........................................................................18
1.6.14 Current Deposit (CD) Accounts .................................................................19
1.6.15 Use of Deposit Invoices .............................................................................20
1.6.16 Statement of Accounts from Banks ............................................................21
1.6.17 Reconciliation of Bank Accounts ...............................................................22
1.7 Money in Government Accounts .....................................................................22
1.7.1 Location of Government Moneys ....................................................................22
1.8 Custody of Government Moneys .....................................................................23
1.9 Deposit of Receipts in Government Accounts .................................................23
1.10 Withdrawal of Money from Government Accounts ........................................24
1.11 Responsibility for Government funds withdrawn ............................................24
1.12 Handling of Government funds .......................................................................25
1.12.1 Use and maintenance of cash chest ............................................................25
1.13 Use of Cheques ................................................................................................27
1.13.1 Issue of Chequebooks .................................................................................27

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 1.13.2 Care and custody of Chequebooks .............................................................27
1.13.3 Procedure for preparation of cheques .........................................................28
1.13.4 Period of validity, stale or time-barred cheques .........................................30
1.13.5 Stop payment of cheque .............................................................................31
1.13.6 Replacement of lost cheques ......................................................................31
1.14 Loss and Defalcations ......................................................................................32
1.14.1 Responsibility for losses .............................................................................32
1.14.2 Report on losses..........................................................................................33
1.14.3 Administrative follow-up ...........................................................................33
1.14.4 Exceptions ..................................................................................................34
CHAPTER – II .............................................................................................................35
2 TRANSFER OF CHARGES ...........................................................................35
2.1 General .............................................................................................................35
2.2 Transfer pursuant to Administrative Orders ....................................................35
2.3 Taking Over of Charges in Absence of an Officer ..........................................38
CHAPTER - III ............................................................................................................39
3 RELEASE OF FUNDS ....................................................................................39
3.1 General .............................................................................................................39
3.2 Procedure for Release of Funds .......................................................................39
3.3 Types of Releases ............................................................................................40
3.3 Budgetary Releases ..........................................................................................40
3.4.2 Current Regular Releases .................................................................................40
3.4.3 Capital Releases ...............................................................................................40
3.5 Minimum Conditions for Budgetary Releases .................................................40
3.6 Non-Budgetary Releases ..................................................................................41
3.6.2 Non-Revenue Releases ....................................................................................41
3.6.3 Refundable Deposit Releases ...........................................................................41
3.6.4 Uncashed cheque Releases ..............................................................................41
3.7 Timeline for Release of Funds .........................................................................42
3.8 Unauthorised diversion of Funds .....................................................................43
3.9 Release of funds is not Sanction for Payment .................................................43
3.10 Right to Withhold Release or Freeze Operation of Bank Accounts .................43
3.11 Monitoring and Reporting of Releases ............................................................43
CHAPTER – IV............................................................................................................45
4 RECEIPTS ........................................................................................................45
4.1 General .............................................................................................................45
4.2 Receipt and Deposit of Government Money ...................................................45
4.3 Acceptable Form of Receipts ...........................................................................46
4.4 Money Receipts ...............................................................................................47

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 4.4.1 Money Receipts, Money Receipts Books ........................................................47
4.4.2 Custody and use of Revenue Money Receipts .................................................47
4.4.3 Custody and use of Non-revenue Money Receipts ..........................................47
4.5 Accounting of Receipts ....................................................................................48
4.5.1 Responsibilities for Accounting for Receipts ..................................................48
4.5.2 Receipts Accounting Principles .......................................................................49
4.5.3 Receipts Accounting Procedures .....................................................................50
4.5.4 Accounting of Recovery of Expenditure .........................................................51
CHAPTER – V .............................................................................................................53
5 EXPENDITURE PROCESSING- GENERAL RULES ...............................53
5.1 General Principles ............................................................................................53
5.2 Claims in Arrears - Exceptions ........................................................................54
5.3 Permanent Advances ........................................................................................54
5.4 Temporary Advances .......................................................................................55
5.5 Permanent & Temporary Advances - Accounting ...........................................55
5.6 General Procedure for Processing of Claims ...................................................56
5.7 Sanction of Expenditure – Sanctioning Officer ...............................................57
5.8 Certificate of Verification – Verifying Officer ................................................58
5.9 Preparation of Vouchers ..................................................................................59
5.9.1 Disbursement Voucher (Form FAM – 4.5) ................................................59
5.9.2 Journal Voucher (Form FAM – 4.6) ................................................................60
5.9.3 Other Voucher (as prescribed in Form FAM – 4.6) ...................................60
5.10 Approval of Expenditures – Approving Officer ..............................................61
5.11 Payment............................................................................................................62
5.12 Drawing and Disbursing Officer (DDO) .........................................................63
5.13 Return of Claim................................................................................................64
5.14 Claims of Civil Servants ..................................................................................64
5.14.1 Personnel and Other Personnel Emoluments .............................................64
5.14.3 Medical Benefits.........................................................................................67
5.14.4 Expenditure on Travel ................................................................................68
5.14.5 Expenditure against Work Charge .............................................................70
5.15 Other Objects of Expenditure ..........................................................................71
5.15.1 General .......................................................................................................71
5.15.2 Particular Objects of Expenditure ...............................................................71
CHAPTER – VI............................................................................................................80
6 ACCOUNTING OF EXPENDITURE ...........................................................80
6.1 Recognition of Expenditure .............................................................................80
6.2 Books of Accounts - Maintenance ...................................................................80
6.3 Recording of Expenditure ................................................................................81

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 6.4 Supporting Books at the Accounting Units .....................................................88
CHAPTER – VII ..........................................................................................................90
7 WORKS PROCEDURES AND ACCOUNTING .........................................90
7.1 General Principles ............................................................................................90
7.2 Responsibilities ................................................................................................91
7.3 Execution of Works – Pre-requisites ...............................................................92
7.3.1 Approvals and Sanctions..................................................................................92
7.3.2 Mode of Execution ...........................................................................................93
7.3.3 Terms of Payment on Award of Contract ........................................................94
7.4 Execution of Works – Record Keeping ...........................................................95
7.4.1 Maintenance of Records ..................................................................................95
7.4.2 Muster Roll (MR). ...........................................................................................96
7.4.3 Measurement Book (MB). ...............................................................................97
7.4.4 Materials at site Account Register (MAS A/C) .............................................101
7.4.5 Tools and Plants Account Register ................................................................102
7.4.6 Empty Container Register ..............................................................................103
7.4.7 Site Order Book .............................................................................................103
7.4.8 Hindrance Register.........................................................................................104
7.4.9 Dismantled/Extracted Materials Account Register ........................................104
7.4.10 Contractor’s Ledger ..................................................................................104
7.4.11 Works Cost Sheet .....................................................................................105
7.5 Payment and Accounting of Works Expenditure...........................................105
7.5.1 General ...........................................................................................................105
7.5.2 Payments to Works-Persons and Accounting thereof ....................................106
7.5.3 Payments to Suppliers/Contractors and Accounting thereof ..........................109
7.5.4 Payment and Accounting of Advances ..........................................................113
7.6 Completion of Works.....................................................................................116
7.6.1 Closing of Works Account.............................................................................116
7.6.2 Reports on completion of Works ...................................................................118
CHAPTER – VIII ......................................................................................................119
8 TRANSACTIONS UNDER OTHER BROAD HEADS .............................119
8.1 Other Broad Heads – Receipts and Expenditure............................................119
8.1.1 Releases (Group Head Code – 2). ..................................................................119
8.1.2 Grants in Kind (Broad Head Code – 3) .........................................................121
8.1.3 Borrowings in Kind (Broad Head Code – 4) .................................................122
8.1.4 Revenue Receipts/Remittances (Broad Head Code – 5)................................122
8.1.5 Other Recoveries/Remittances (Group Head Code – 6) ................................123
8.1.6 Personal Advances (Broad Head Code – 7) ...................................................124
8.1.7 Miscellaneous Receipts/Payments (Group Head Code – 8) ..........................125

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 8.1.8 Suspense items (Group Head Code – 9) ........................................................127
8.1.9 Budgetary Expenditure (Group Head Code – 10)..........................................127
CHAPTER – IX..........................................................................................................128
9 SUSPENSE ACCOUNTS ..............................................................................128
9.1 General ...........................................................................................................128
9.2 Suspense – Stock and Purchases Account .....................................................128
9.2.1 Operation of Stock and Purchases Accounts .................................................128
9.2.2 Receipts of stock ............................................................................................130
9.2.3 Accounting of stock received.........................................................................131
9.2.4 Issue of Stock .................................................................................................133
9.2.5 Pricing of stock issued and billing .................................................................134
9.2.6 Accounting of stock issued ............................................................................134
9.2.7 Other internal and accounting checks ............................................................136
9.2.8 Physical stock taking......................................................................................137
9.3 Suspense – Public Works Advances ..............................................................138
9.3.1 Transactions under PW Advances .................................................................138
9.3.2 Accounting of PW Advances .........................................................................142
9.5 Suspense – Deposit Works.............................................................................142
9.5.1 Transactions on Suspense – Deposit Works ..................................................142
9.5.2 Responsibilities of each party ........................................................................143
9.5.3 Transfer of funds and accounting ..................................................................145
9.5.4 Accounting of Deposit Works .......................................................................145
9.6 Suspense – Other Deposits.............................................................................148
9.6.1 Transactions under Suspense – Other Deposits .............................................148
9.6.2 Accounting of “Suspense – Other Deposits” .................................................149
CHAPTER – X ...........................................................................................................152
10 MONTHLY ACCOUNTS .............................................................................152
10.1 General ...........................................................................................................152
10.2 Preparation of Monthly Accounts ..................................................................153
CHAPTER – XI..........................................................................................................156
11 PRESERVATION OF FINANCIAL RECORDS .......................................156
11.1 Maintenance of Records ................................................................................156
11.2 Preservation period of Financial Records ......................................................156
11.3 Destruction of Records ..................................................................................157
CHAPTER – XII ........................................................................................................159
12 ANNUAL FINANCIAL STATEMENTS .....................................................159
12.1 General ...........................................................................................................159
12.2 Sources of Information and Methods .............................................................160
12.3 Statement of Outstanding Loans ....................................................................163

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 12.4 Statement of Equity Portfolio ........................................................................163
12.5 Statement on other Bank Accounts ................................................................164
12.6 Reconciliation of Govt. Consolidated Account ..............................................165
12.7 Other Schedules .............................................................................................166
APPENDIX – I ...........................................................................................................167
MINIMUM REQUIREMENTS TO SUPPORT EXPENDITURE .......................167
APPENDIX – II ..........................................................................................................173
LIST OF ACCOUNTING OBJECTS ......................................................................173
LIST OF FAM FORMS ............................................................................................180

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Royal Government of Bhutan Finance and Accounting Manual

CHAPTER – I

1. GENERAL PRINCIPLES AND RULES

1.1 Introduction

1.1.1 This chapter introduces the broad principals of accounting and the
overall mechanism for management of Government funds including
the banking arrangements and other important elements of accounting.
This chapter thus forms an important basis for all the other chapters of
the Finance and Accounting Manual.

1.1.2 Unless the context indicates otherwise, the singular shall include plural
and the masculine shall include feminine in these rules.

1.2 Objective and Supersession

1.2.1 The overall purpose of the FAM shall be to achieve efficiency,

economy, effectiveness, equity, sustainability, transparency, and
accountability as stipulated in the PFA for having a sound system of
public finance.

1.2.2 In order to achieve the above, the FAM aims to fulfil the following
objectives:
i. Strengthen public sector financial management and accounting
through judicious use of public resources,
ii. Ensure timely and efficient release of public funds,
iii. Incorporate an effective and efficient system of treasury
operations,
iv. Monitor financial compliance and discipline in the utilization of
funds,
v. Ensure timely submission/receipts of accounts and periodic
financial statements from the budgetary bodies,
vi. Maintain central accounts of the Government and prepare a
consolidated report on financial status of the Government,
vii. Develop and pursue public sector accounting standards for
enhancing professionalism in public sector accounting,
viii. Establish harmony between FAM and other components of the
FRR.

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1.2.3 FAM shall supersede all circulars, notifications that are inconsistent
with the provisions of this manual. All future notifications and circulars
shall conform to the provisions of this manual.

1.2.4 Notwithstanding anything contained in the FAM, the provisions as

stipulated in the PFA shall prevail.

1.2.5 The FAM 2016 shall come into force with effect from the date of
notification by the MoF.

1.3 Currency, Fiscal Year and Mode of Accounting

1.3.1 All receipts and payments transactions of the Government shall be

accounted for in Ngultrums. Parallel records in other currencies may be
maintained separately in required cases.

1.3.2 The fiscal year for accounting of financial transactions of the

Government shall begin on 1st July every year and close on 30th June
next year.

1.3.3 Government accounting shall be maintained on cash basis.

1.3.4 The transactions executed in a currency other than Ngultrum shall be

accounted applying the exchange rate on the date of transaction.
Similarly June closing bank balances in foreign currency accounts of
budgetary bodies abroad shall be converted to Ngultrum applying the
exchange rate of the transaction date.

1.4 Abbreviations

1.4.1 The following abbreviations have been used in this Manual:

AA&FS Administrative Approval and Financial Sanction
AFD Administration & Finance Division
AFS Administration & Finance Section
AG Annual Grant
BM Budget Manual
BSR Bhutan Schedule of Rates
BST Bhutan Sales Tax
BUP Budget Utilisation Plan
CD Current Deposit
CPE Common Public Expenditure

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CS-DRMS Commonwealth Secretariat-Debt Recording &

Management System
CSO Civil Society Organisation
DDO Drawing & Disbursing Officer
DLG Department of Local Government
DMD Debt Management Division
DNB Department of National Budget
DNP Department of National Properties
DPA Department of Public Accounts
DRC Department of Revenue & Customs
FAM Finance & Accounting Manual
FMM Financial Management Manual
GIN Goods Issue Note
GNHC Gross National Happiness Commission
GPF Government Provident Fund
GRN Goods Received Note
HRMD Human Resource Management Division
LC Letter of Credits Account
LG Local Government
LPC Last Pay Certificate
MAS A/c Materials at Site Account
MB Measurement Book
MoF Ministry of Finance
MRP Miscellaneous Receipts and Payments
NGOs Non-Government Organisations
PAH Permanent Advance Holder
PED Public Enterprise Division
PEMS Public Expenditure Management System
PFA Public Finance Act
PLC Project Letter of Credit Account
PMM Property Management manual
POL Petrol, Oil and Lubricant
PPD Policy and Planning Division
PRR Procurement Rules and Regulations
PWA Public Works Advance
RAA Royal Audit Authority
RGoB Royal Government of Bhutan
RM Revenue Manual
RMA Royal Monetary Authority
RMD Release and Monitoring Division
RMO Running and Maintenance Operation

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SBD Standard Bidding Document

TA Travelling Allowances
TAH Temporary Advance Holder
TS Technical Sanction
T&P Tools and Plant

1.5 Definitions

1.5.1 Unless the context otherwise requires, the use of the following terms in
these rules shall mean:

(1) Accounts Officer:

An officer who shall be responsible for maintaining the books
of account with respect to public money and also to ensure that
public funds are expended in compliance to the Financial Rules
and Regulations.

(2) Accounting Standards:

Authoritative statement of how particular types of transactions
and other events should be reflected in the financial statements.

(3) Administrative approval and Financial Sanction:

The formal approval accorded by the competent authority to
start the works or services proposed by the implementing
agency based on the budget appropriations.

(4) Agent Bank:

A bank acting on behalf of the central bank (RMA) for
handling of day to day monetary transactions of the Subsidiary
bank accounts and budgetary LC system accounts of the
Government.

(5) Annual Grant:

The sum of all financial resources, allocated annually from the
Government to Local Governments, for implementing new
development programmes/projects and activities, and managing
and maintaining existing service structures and delivery of
services. It includes both current and capital grants and various
forms of earmarked grants.

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(6) Annual Report:

A yearly report of financial and non-financial performance
together with the financial statements.

(7) Appropriation:
An authorization for expenditure of a designated amount of
public funds for a specific purpose and under specified
conditions.

(8) Appropriate/Competent Authority:

An authority or the government body who/which has the power
to exercise or to discharge any duty or function under the
Acts/Rules or the mandate made there under.

(9) Authorised Bank:

A bank authorised to be used by a Budget Bodies for
facilitating budgetary operations outside the budgetary LC
system.

(10) Bhutan Schedule of Rates (BSR):

Item rates for works prepared and published by a designated
authority.

(11) Budgetary Bodies:

All organisations and institutions of the three branches of
Government including constitutional bodies, and local authority
entities, but not state enterprises.

(12) Cashier:
An employee who is authorized to handle hard cash in
Budgetary Body.

(13) Chief Executive:

The person who has the responsibility for managing the affairs
of a budgetary body or a state enterprise, unless otherwise
specified in the Public Finance Act.

(14) Consolidated Fund:

A Government Consolidated Fund into which shall be
deposited all public monies not allocated to specific purposes
by law and from which expenditure of the State shall be met.

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(15) Controlling officer:

An officer entrusted with the responsibility to deploy
employees sub-ordinate to him in order to get particular
functions of the Government performed.

(16) Deposit Work:

Any work or service, execution of which has been entrusted by
a Budgetary body or a non-Budgetary Body to another such
Budgetary Body. Non Budgetary Body in this case refers to an
agency that is executing some works under the auspices of
direct funding either through loan or grants or both. (Examples:
Hydropower and other Projects under construction)

(17) Detailed Estimate:

Estimate prepared for the purpose of obtaining technical
sanction based on the site survey, drawings and technical
specifications including structural drawing of a work to be
executed.

(18) Disbursing Unit:

An office authorized to disburse the funds on behalf of the
Government.

(19) Donor:
A provider of external resources by way of concessionary
loans, grants, materials, technical assistance or other forms of
support to the Government.

(20) Double entry accounting:

Double entry bookkeeping is a system of accounting in which
every transaction has a corresponding debit and credit entries.

(21) Drawing and Disbursing Officer (DDO):

An officer authorised to draw Government funds from a bank
account and/or make payments there from on behalf of the
Government.

(22) Financial Rules and Regulations (FRR):

Rules and Regulations made by the Ministry of Finance
pursuant to the Public Finance Act.

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(23) Financial Statements:

The statement of sources and application of funds showing the
revenues and expenditures and financing of a fiscal year.

(24) Fruitless and Wasteful Expenditure:

Expenditure which was made in vain and would have been
avoided had reasonable care been exercised.

(25) Government:
The Royal Government of Bhutan.

(26) Head of the Department/Agency:

An officer exercising the over-all administrative, financial and
technical control of a Government Department/Organisation
and/or declared as such by the Government.

(27) Head of Office:

An officer exercising the administrative, financial and technical
control of a unit and declared as such by the Head of the
Department/Organisation.

(28) Irregular Expenditure:

Expenditure, other than authorised expenditure, incurred in
contravention of a requirement of any applicable rules,
regulations or legislation.

(29) Local Authority:

Refers to Dzongkhags, Gewogs and municipal bodies
established under legal authority.

(30) Local Governments (LG):

Refers to Dzongkhag Tshogdu (DT), Gewog Tshogde (GT) and
Thromde Tshogde.

(31) Mobilisation Advance:

Advance payment made free of interest in respect of work
contract on submission of the required performance security
and an unconditional bank guarantee for an equivalent amount
by the contractor.

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(32) Preliminary Estimates:

Estimate prepared for the purpose of obtaining budget
appropriations.

(33) Property Officer:

An officer delegated with the authority and responsibility for
safe custody and utilisation of Government properties.

(34) Public Money:

All money received by the Government and by Budgetary
Bodies, including the proceeds of all loans raised, grants
received, money collected for specific purposes and retained in
separate accounts by law, and any other money that the
Minister of Finance determines as public money, but not money
held in trust or custody on behalf of non-government parties, or
money received by State Enterprises.

(35) Secured Advance:

Advance payment made to a contractor against construction
materials brought to the site by the contractor for incorporating
in the work.

(36) Storage charge:

A rate worked out on the basis of expenditure incurred on
handling and custody of stock and maintenance of store
warehouse or stockyard.

(37) Supervision charges:

A charge intended to recover proportionate amount of direct
overheads involved on the procurement of the articles supplied
to or works carried out for another agency.

(38) Technical Sanction:

The formal acceptance of technical soundness of a work to be
executed either departmentally or as deposit work or on
contract by an appropriate technical authority based on
submission of drawings, designs and specifications including
detailed estimates.

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(39) Unauthorised Expenditure:

Over spending from an approved budget limit, and expenditure
not in accordance with the purpose of an approved expenditure
budget.

1.6 Bank Accounts of the Government

1.6.1 General Principles

1.6.1.1 Ownership and the right of stewardship of all moneys in all the bank
accounts of the budgetary bodies shall rest with the Ministry of Finance
(MoF). The MoF shall reserve the right to:

a. Freeze operation of any such account,

b. Open, re-style and close any such account,
c. Transfer proceeds from and to any such account,
d. Withdraw, change the operating authority of any such account.

1.6.1.2 The Royal Monetary Authority (RMA) shall be the Government

Depository for the purposes of budgetary operations of the
Government.

1.6.1.3 A principal account of the Government for the budgetary operations,

styled as the “Government Consolidated Fund”, representing the total
fund available, shall be maintained with the RMA.

1.6.1.4 The MoF may authorise opening and operation of bank accounts
abroad for the budgetary bodies maintained outside the country, such
as, embassies, missions, consulates and other agencies for specific
purposes.

1.6.1.5 The MoF and the RMA shall appoint Agent Banks and make such
arrangements with them as are required for management of budgetary
operations.

1.6.1.6 The MoF may be required to hold foreign currency accounts in the
country by virtue of specific provisions in the project agreements and
authorise one of its agencies to operate such accounts outside the
Government Consolidated Fund.

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1.6.2 Bank Accounts for Budgetary Operations

1.6.2.1 The MoF or its authorised agencies shall maintain and operate the
following Subsidiary Bank Accounts with the Agent Banks for
facilitating receipt of Government Funds in the Government
Consolidated Fund and the management thereof:

a. Government Revenue Account

b. Government Budget Fund Account
c. Government Non-Revenue Receipts & Deposits Account.

The Agent Banks shall pass on the net proceeds of these accounts to
the Government Consolidated Fund on a daily basis.

1.6.2.2 The DPA shall open the following types of Lines of Credit (referred to
as Letter of Credit Accounts) at the Agent Bank for facilitating
withdrawal of Government funds by the Budgetary Bodies:

a. Letter of Credit Account (LC)

b. Project Letter of Credit Account (PLC)

The Agent Bank shall pass on the total of withdrawals made by the
Budgetary Bodies from these accounts to the Government Consolidated
Fund on a daily basis.

1.6.2.3 The DPA shall maintain a “Refundable Deposits Account” with the
Agent Bank and the RMA to hold those specific purpose receipts
against which the Government incurs an obligation to repay or
otherwise account for, but which are not available for appropriation
against the general operation of the Government.

1.6.2.4 Some Budgetary Bodies may be allowed to maintain current accounts

with banks for operation of Revolving funds for manufacture,
procurement, maintenance and delivery of articles or services of
routine nature.

1.6.3 Operation of Government Bank Accounts

The following flow chart depicts the scheme of operation of the

Government Bank accounts:

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Government
Revenue Account

Government
Budget Fund Government
Account Consolidated Fund

Government Non-
Revenue Receipt
and Deposit
Account

LC Withdrawals

1.6.4 Government Revenue Accounts (RGR)

.6.4.1 The Department of Revenue & Customs – (DRC) shall operate the
Government Revenue Account with the Agent Bank for accounting of
all revenues earned by the Government.

1.6.4.2 The detailed procedure for collection and deposit of revenues through
the sub-accounts (RGR accounts) of this subsidiary bank account shall
be guided by the rules prescribed in the Revenue Manual (RM).

1.6.4.3 Refunds of revenue shall be charged to this account.

1.6.4.4 All revenues collected and deposited in the assigned Revenue sub-
accounts, as well as the refunds of revenues made by the authorised
Agency, shall be passed on to this account by the Agent Bank at
regular intervals as prescribed in the RM.

1.6.4.5 The net proceeds of this account shall be passed on to the Government
Consolidated Fund by the Agent Bank on a daily basis.

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1.6.5 Government Budget Fund Account (BFA)

1.6.5.1 The Department of Public Accounts (DPA) shall operate the

Government Budget Fund Account with the Head Office of the Agent

Bank for facilitating account keeping in respect of the following:

a. Receipts of external assistance and refund of balances, if any;

b. Receipt of borrowings;
c. Other receipts such as advances and expenses of previous years,
year-end closing cash balances etc.
d. Receipt of sale proceeds that are attached to budgetary
operations by virtue of specific agreements;
e. Recovery of principals on loans extended by the Government;
f. Recoupment/transfers from Refundable Deposits Account.

1.6.5.2 The receipt and deposit of moneys in the Government Budget Fund
Account and the accounting of such receipts shall be guided by the
provisions under rules 4.2.2 and 4.4.1.2 in Chapter IV.

1.6.5.3 The Agent Banks shall pass on the net proceeds of this account to the
Consolidated Fund on a daily basis.

1.6.6 Government Non-Revenue Receipts & Deposits Accounts

1.6.6.1 The DPA shall maintain the Government Non-revenue Receipts and
Deposit Account with the Agent Bank for making the pertinent non-
budgetary receipts of the Budgetary Bodies available in their LC/PLC
accounts. Non-Revenue receipts and deposits shall be the non-revenue
moneys received other than refundable deposits.

1.6.6.2 This account shall be utilised by the Budgetary Bodies to deposit any
amount received by them in reimbursement of expenditure already
incurred or as an advance towards expenditure to be incurred on behalf
of the payer or for deposits of refunds of GIS, GPF, BST, funds for
deposit works, etc.

1.6.6.3 Non-Revenue deposit cheques shall be “A/C Payee only” drawn in

favour of Non-Revenue Receipts and Deposits Account. In case of
cheque/cash warrants/demand draft received from Budgetary & Non-
Budgetary Agencies on account of Non-Revenue Receipts and
Deposits Account, the DDO shall ensure that such instruments are

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endorsed as deposits as Non-Revenue Receipts and Deposit Account.

1.6.6.4 The budgetary bodies shall deposit the cheques/cash warrant/Demand

draft into Non-Revenue Receipts and Deposits Account on the same
day/next working day where there is banking facilities. In rural places
without banking facilities, such instruments shall be deposited within
ten (10) working days.

1.6.6.5 The request for release of Non-Revenue releases shall be submitted to

the DPA only when payments are due.

1.6.6.6 The DPA shall make equivalent non-revenue releases in the desired
LC/PLC account on receipt of requisitions from the budgetary bodies
quoting reference to the deposit of the amount.

1.6.6.7 Any unspent non-revenue release balances towards the end of the fiscal
year shall have to be re-deposited into non-revenue receipts and
deposits account to facilitate releases in the subsequent fiscal years.

1.6.6.8 Operation of this account for withdrawals will not be required

normally. The DPA may operate this account only for transfer of
wrong deposits from this account to the pertinent subsidiary bank
account or the reverse thereof.

1.6.6.9 The Agent Bank shall pass on the proceeds of this account to the
Government Consolidated Fund on a daily basis.

1.6.7 Letter of Credit Accounts (LC & PLC)

1.6.7.1 The DPA shall open the LC and PLC accounts on a case-by-case basis,
at the request of the Budgetary Bodies, after taking into consideration
their organisational, structural, location and regional requirements for
the execution of their budgets provided that the operation of such
accounts will be done by the responsible accounts personnel posted in
such organization.

1.6.7.2 A PLC account shall be opened only when the quantum of external
grant to a project is a substantial amount and the project is expected to
run over more than one fiscal year. The capability of the project
executing unit in the maintenance of a separate set of accounts records
and submit regular monthly accounts shall also be taken into account.

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1.6.7.3 LC/PLC account shall be jointly operated by any two signatories, one
of which shall be the Head of Finance and the other, one of the
following:

i. The Head of Office; or

ii. The Officers designated by the Act

1.6.7.4 Drawing and Disbursing Officer, Budget Line and Bank Branch shall
be specified in the request letter.

1.6.7.5 These accounts shall be used as the drawing sub-accounts of the

Consolidated Fund.

1.6.7.6 In order to facilitate the withdrawal of funds through the LC and PLC
accounts, the DPA shall issue release orders from time to time to the
Agent Banks in respect of the individual accounts. These release orders
shall specify the limits up to which the drawing authorities of the
Budgetary Bodies may withdraw funds for their respective
expenditures.

1.6.7.7 All releases shall be valid until the end of the relevant fiscal year, after
which any unutilised balance shall lapse.

1.6.7.8 The authorised Drawing and Disbursing Officers of the Budgetary

Bodies shall issue cheques for approved expenditures within the limit
of the releases.

1.6.7.9 The different forms of LC accounts, in view of their drawing sub-

account status, shall not be used for deposit of funds.

1.6.8 Bank Accounts Abroad

1.6.8.1 The Budgetary Bodies abroad shall hold, with approval of the DPA,
bank accounts with reputable banks in respective countries, for the
funds remitted to them.

1.6.8.2 The parent or controlling authorities of the budgetary bodies abroad

shall designate Drawing and Disbursing Officers of such accounts and
intimate their names and designations to the DPA.

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1.6.8.3 Releases for the use of the Budgetary Bodies abroad shall be made by
the DPA into the appropriate LC accounts, which shall be held with the
Agent Bank in Bhutan.

1.6.8.4 Funds shall be remitted from the LC accounts by the agent bank to the
budgetary bodies abroad in their appropriate overseas accounts.

1.6.8.5 The expenditure incurred from these overseas accounts shall be

governed by the provisions of the Financial Rules and Regulations.

1.6.9 Government Consolidated Fund Account

1.6.9.1 The Government shall hold Government Consolidated Fund Account

at the RMA as the Principal account for the budgetary operations of the
Government. The daily cash position of the budgetary operations of the
Government shall be ascertained from this account.

1.6.10 Refundable Deposits Accounts

1.6.10.1 The DPA shall maintain the Refundable Deposits Account with the
Agent Bank and the RMA as a principal bank account.

1.6.10.2 This account shall be used for those specific purpose moneys, which
are not available for appropriation against the general operation of
Government.

1.6.10.3 All money received by the Budgetary Bodies as refundable security

deposits, earnest money or performance security or any other type of
refundable receipts, which are not revenue, grants or borrowings, shall
be deposited into this account.

1.6.10.4 Refundable deposit cheques shall be “A/C Payee only” drawn in

favour of Refundable Deposits Account. In case of cash
warrants/demand drafts received from suppliers on account of
Refundable Deposits Account, the DDO shall ensure that the
instrument is duly endorsed as “Deposit into Refundable Deposits
Account”

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1.6.10.5 The budgetary bodies shall deposit the cheques/cash warrant/Demand

draft into Refundable Deposits Accounts on the same day/next working
day where there is banking facilities. In rural places without banking
facilities, such instruments shall be deposited within ten (10) working
days.

1.6.10.6 The request for Refundable deposits release either in full or in part
shall be submitted to the DPA only when payments are due.

1.6.10.7 Expenditure on meeting liabilities relating to deposits made in the

Refundable Deposits account shall be met through Refundable
Deposits Account releases from the DPA. Such a release shall be made
only upon receipt of a specific request from the Budgetary Bodies
concerned. The DPA shall arrange recoupment of equivalent amounts
from the Refundable Deposits account to the Government Budget Fund
account.

1.6.10.8 If the concerned Budgetary Body does not pay full amount of
refundable deposits released by DPA to the contractors/suppliers, the
remaining balance amount shall have to be re-deposited into the
refundable deposit account before the end of the fiscal year.

1.6.10.9 Trust Funds created for specific purposes, and operated by or under
supervision of Budgetary or Non-Budgetary Bodies or Board of
Directors appointed by the Government, through separate bank
accounts, shall not form a part of the Refundable Deposits account.

1.6.10.10 The Agent Bank shall pass on the net proceeds of the Refundable
Deposits account to the MoF Refundable Deposits Account maintained
with the RMA.

1.6.10.11 The Ministry of Finance shall transfer funds from the Refundable
Deposits Account to Government Budget Fund Account from time to
time to facilitate smooth release of refundable deposits and for cash
management purposes. Unreleased balances, if any, at the close of the
financial year shall be transferred to Refundable Deposit Account by
debit to Budget Fund Account.

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1.6.11 Revolving Fund Account

1.6.11.1 The DPA may authorise operation of current bank accounts to some
Budgetary Bodies for some specific operations of routine nature. The
proceeds in these accounts shall form a part of the Government money
in banks but shall not form a part of the budgetary accounts. The
services generated from these funds are generally purchased by the
Budgetary Bodies and hence those are already accounted for.

1.6.11.2 Revolving funds shall not be used for meeting budgetary expenses
under any circumstances.

1.6.11.3 The expenditure incurred from these accounts shall be governed by the
provisions under the Financial Rules & Regulations.

1.6.11.4 By issue of separate orders, the Government may, at any time,

prescribe financial rules and establish mechanisms to capture relevant
financial and other information in respect of these accounts and
assimilate those with the overall budgetary operations of the
Government. Till such time, the account-keeping and other aspects of
these operations shall be governed by the arrangements made by the
parent organisations.

1.6.11.5 An account of these operations shall be submitted to the DPA at such

intervals and formats as may be prescribed by the DPA.

1.6.11.6 A statement of operations of the Revolving Funds shall be appended as

a memorandum item in the Annual Financial Statements of the
Government.

1.6.12 Trust Fund Account& Other Government Funds

1.6.12.1 The Government may order establishment of Trust Funds outside the
Government Consolidated Account for specific purposes.

1.6.12.2 Such funds shall generally be operated by a Board of Directors or such

other persons or bodies as may be nominated by the Government or by
its constitution.

1.6.12.3 Moneys generated by the Trust Funds shall be utilised for the specific
purposes only through the budgetary process.

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1.6.12.4 A Statement of Trust Funds showing receipts and payments for the
fiscal year shall be appended as a memorandum item in the Annual
Financial Statements of the Government.

1.6.13 Audit Recoveries Account

1.6.13.1 The Royal Audit Authority (RAA) shall operate a current account
styled “Audit Recoveries Account” outside the Government
Consolidated Fund for the deposit and management of audit recoveries
remitted to it on its instance.

1.6.13.2 The amounts recovered at the instance of the RAA shall be remitted by
the Heads of Offices within the prescribed dateline to the RAA. Such
remittances shall be supported by a statement indicating the Audit
report No. & date, relevant audit paragraph/memo number and date,
name of the party, amount recovered and the balance amount
recoverable, if any. In case, the amounts are directly received by the
RAA from the party concerned, it shall provide all the above
information to the Head of Finance Section of the relevant office
among others.

1.6.13.3 The RAA shall remit the proceeds of the Audit Recoveries Account on
a quarterly basis as follows:
a. Revenue portion of the proceeds to the Government Revenue
Account.
b. The balance to the DPA for deposit in to the Government Budget
Fund Account.

1.6.13.4 The operation, maintenance and discharge of accountability in respect

of this account shall be governed by the rules framed by the RAA.

1.6.13.5 The proceeds in this account shall form a part of the Government
money in banks but shall not form a part of the budgetary accounts
save for the amounts remitted to the Government Revenue Account
and the Government Budget Fund Account.

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1.6.14 Current Deposit (CD) Accounts

1.6.14.1 The DPA may authorise operation of current accounts to the budgetary
bodies, NGOs, CSOs etc. for management of activities outside the
budgetary system. However budgetary bodies shall not be permitted to
open and operate the CD Accounts with any of the Financial Institutes
without the explicit written authorization from the Department of
Public Accounts.

1.6.14.2 These accounts shall be maintained to deposit moneys received or

collected in addition to the budgetary releases from the Government for
the specific purposes. The proceeds shall be a part of the Government
money but shall not form part of the budgetary accounts.

1.6.14.3 Funds earmarked for such activities shall be passed on to these current
accounts as “Current or Capital Grants” through the budget
mechanism.

1.6.14.4 The management of these accounts and the account keeping shall be
guided by the relevant fund management rules or funding agreements
duly approved by the Ministry of Finance in individual cases.

1.6.14.5 The expenditure from these accounts shall be generally governed by

the provisions under the Financial Rules and Regulations subject to
conditions as may be additionally provided for in the approved fund
management rules or funding agreements.

1.6.14.6 The responsibility for proper utilization of such funds and the
accountability thereof shall rest upon the officials nominated for
operation of these accounts.

1.6.14.7 An account of these operations shall be submitted to the DPA at such

intervals and in such formats as may be prescribed by the DPA. A
statement of operations of these accounts shall be appended as a
memorandum item in the Annual Financial Statements of the
Government.

1.6.14.8 Supplementary funds raised by Budgetary Bodies through the fees and
charges made with the approval of the MoF, for services provided to
the public shall be deposited into the Current Deposit Accounts.

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1.6.14.9 The audit of CD Accounts shall be conducted by the RAA.

1.6.15 Use of Deposit Invoices

1.6.15.1 Save for the credits transferred by the RMA, the Agent Bank and all its
branches shall accept deposits in any of the subsidiary bank accounts
only if such deposits are made by the use of Government supplied and
account specific Deposit invoices.

1.6.15.2 Four different types of deposit invoices shall be used meant for each
kind of the subsidiary bank accounts, namely:
a. Revenue Deposit invoices for Government Revenue Account
(Form prescribed in the RM);
b. Budget Fund Deposit invoices for Government Budget Fund
Account (Form FAM – 1.1A);
c. Non-Revenue Deposit invoices for Government Non-Revenue
Receipts & Deposits Account (Form FAM – 1.1B);
d. Refundable Deposit invoices for Refundable Deposit Account
(Form FAM– 1.1C).

All deposits shall be made using deposit invoices that are generated
from the accounting system.

1.6.15.3 Maintenance of central stock and distribution of the Revenue Deposit

invoices to the user agencies shall be undertaken by the DRC. Where
deposit invoices are generated through the accounting system,
maintenance of central stock and distribution thereof will not be
necessary.

1.6.15.4 The respective deposit invoices, filled in three copies shall be produced
to the Agent Bank whenever any deposit is made in any of the above
subsidiary bank accounts of the Government.

1.6.15.5 The Agent Bank shall retain two copies of the invoices and
acknowledge receipt of the amount specified in the 3rd copy of the
invoices.

1.6.15.6 A reference of the deposit invoice shall be kept in the Cashbook of the
depositor against the relevant payment item.

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1.6.15.7 While sending the bank statements in respect of the subsidiary bank
accounts, the Agent Bank branches shall send one copy of the deposit
invoices to the DRC (in respect of the Revenue Account) or to the
DPA(in respect of the other subsidiary bank accounts).

1.6.16 Statement of Accounts from Banks

1.6.16.1 Each branch of the Agent Bank shall send the following statements at
the end of every month:

a. Bank statements for each LC and PLC account to each of the

agencies operating those accounts. A copy of such statements
shall be sent to the DPA.

b. Separate bank statements for deposits received in the Non-

Revenue Receipts & Deposits Account and the Refundable
Deposits Account duly supported by one copy of the individual
deposit invoices to the DPA.

1.6.16.2 The Head Office of the Agent Bank shall submit the following reports
to the agencies mentioned against each:

a. A daily report giving the balance of the Government’s

Budgetary fund position at the end of the day’s business,
indicating the totals of receipts and withdrawals shall be sent to
the DPA on the next working day.

b. A consolidated statement in respect of the Government

Revenue Account shall be sent to the DRC and the DPA on a
monthly basis.

c. A fortnightly bank statement in respect of the Government

Budget Fund Account supported by a copy of the deposit
invoices and credit advice shall be sent to the DPA.

d. Separate consolidated statements of the deposits received

through the Government Non-Revenue Receipts & Deposits
Account and the Refundable Deposits Account, by bank
branches, shall be sent to the DPA on a monthly basis.

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e. A consolidated statement giving totals of all transactions in the

subsidiary principal and LC/PLC accounts, transfer of proceeds
to the Government Consolidated Account and the resulting
balances at the beginning and end of the period shall be sent to
the DPA at such intervals as may be decided by the MoF.

1.6.16.3 The RMA shall submit separate bank statements in respect of the
Consolidated Fund and the MoF Refundable Deposits Account on a
monthly basis to the DPA.

1.6.17 Reconciliation of Bank Accounts

1.6.17.1 Reconciliation of the Principal and Subsidiary bank accounts shall be

undertaken by DPA. Agencies collecting revenues shall follow
instructions in the Revenue Manual for reconciliation of Revenue sub
accounts (RGR accounts).

1.6.17.2 Accounting units in all budgetary bodies shall reconcile each of the
LC, PLC or any other bank accounts operated by the office on a
monthly basis.

1.6.17.3 The DPA shall withhold releases if the bank reconciliation statements
are not submitted on a monthly basis.

1.7 Money in Government Accounts

1.7.1 Location of Government Moneys

1.7.1.1 Government funds shall be held in the following places:

a. Moneys credited in Government Consolidated Fund Account shall
be held in the RMA.

b. Such moneys in transit to the RMA shall be held in the Agent

Banks.

c. In the case of Budgetary Bodies abroad, such moneys shall be held

in authorised banks.

d. Part of such moneys may also be held in the departmental chests

provided that:

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i. The departmental chest shall mean to include the cash boxes

provided at the collection windows, and
ii. The amount of money held in a departmental chest shall not
exceed the amount of collections made after the banking
hours or the amount of cash disbursements expected to be
made during the business hours of a working day.

1.7.1.2 The Heads of Departments shall prescribe suitable cash

collection/transaction hours so that the above rule can be adhered to.

1.7.1.3 The Heads of Departments shall prescribe the maximum amount of

cash that can be held in a departmental chest, in case banking facilities
are not available in a station.

1.8 Custody of Government Moneys

1.8.1 The RMA, the Agent Banks and the authorised banks shall be
responsible for the safe custody of Government moneys held in the
banks.

1.8.2 The procedure for the safe custody of Government moneys held in the
departmental chests referred to in rule 1.7.1.1(d), shall be governed by
the provisions under Section 1.12.1 of this chapter.

1.9 Deposit of Receipts in Government Accounts

1.9.1 All moneys received for the Government shall be deposited in full on
the same day or following working day to the concerned bank by use
of deposit invoices for inclusion in the Government account failing
which a penalty of twenty-four (24%) per annum on the total amount
not deposited shall be imposed on the person responsible unless
authorized by a competent authority.

1.9.2 In places where there are no banking facilities available, such monies
should be deposited within ten (10) days from the date of receipt
failing which the a penalty of twenty-four (24%) per annum on the
total amount not deposited shall be imposed on the person responsible
unless authorized by a competent authority.

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1.9.3 By the end of each working day, the receiving branches of banks shall
cause all such receipts to be included in Government Consolidated
Fund Account held at the RMA.

1.9.4 Receipts of moneys for the Government and accounting of such

receipts shall be governed by the rules prescribed under Chapter IV.

1.10 Withdrawal of Money from Government Accounts

1.10.1 Moneys shall not be withdrawn from Government account other than
against cheques/authorisations issued by an authorised Drawing and
Disbursing Officer (DDO)1 on an account opened in favour of an
agency at a specified branch of the Agent Bank/s.

1.10.2 Unless otherwise authorised specifically, no moneys shall be

withdrawn from Government accounts for holding them in separate
accounts.

1.10.3 By the end of each day, the paying branches of banks shall cause all
withdrawals of Government money to be passed on to the Government
Consolidated Fund Account held at the RMA.

1.10.4 Withdrawal of moneys from Government accounts for meeting

expenditure shall be governed by the rules prescribed under Chapter V.

1.11 Responsibility for Government funds withdrawn

1.11.1 A Chief Executive of a Budgetary Body or a Head of Office

withdrawing funds or authorising other officials to withdraw funds
from Government accounts shall be primarily accountable to the
Government for such funds withdrawn. All withdrawals from a
Government account and all payments from the office shall be made on
his authority or on his behalf.

1.11.2 The responsibility shall not cease until an account of the legitimate
expenditure is rendered and accepted to the satisfaction of the
Government on completion of audit of the accounts.

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1.11.3 The officer authorised for withdrawal of funds or making

disbursements shall be accountable to the Chief Executive or Head of
Office for funds withdrawn or disbursements made.

1.11.4 A Government employee provided with temporary or permanent

advances to meet legitimate expenditure shall be accountable to the
Chief Executive or Head of Office. The responsibility shall not cease
until an account of them is rendered and accepted to the satisfaction of
the Chief Executive or Head of Office/Finance Officer in charge.

1.12 Handling of Government funds

1.12.1 Use and maintenance of cash chest

1.12.1.1 As far as possible the agencies should refrain from holding cash in the
office. They are not permitted to draw self-cheques and hold cash.

However, for the cash received against recovery of advances pertaining

to the same financial year and other valuables such as Bank
Guarantees, the Agency shall maintain a cash chest for the safe custody
of Government cash and/or other valuables. The use of a cash chest
shall be conducted in accordance with the following procedures:

a. Cash, Chequebook or fanfold cheque forms in use, receipt book in

use and other valuables held in custody on behalf of the
Government shall be kept in an adequately strong cash chest
(where necessary, firmly embedded in cement concrete or walls).

Note – 1.The type of cash chest shall depend upon the amount of cash
and other valuables generally kept therein and other relevant
circumstances like the general state of security of the premises or the
area in which the office is located.

Note – 2. The cash chest shall be secured by two locks of different

patterns so that the keys of one do not fit into the other.

Note –3. The keys of such locks shall be kept preferably under the
custody of two different officers. If this is not practicable, the key of
one lock shall be kept apart from that of the other lock.

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b. The chest shall not be opened unless the custodian/s of the two
keys are present for the purpose.

c. A loss of the key/keys of the chest shall at once be reported by the

custodian/s of the key/s to the Head of Office who shall take such
necessary action as will prevent the risk of loss of Government
money or other valuables in the chest. Such action may include,
but not limited to, sending information to the Head of the
Department or Ministry, as the case may be, and the police
authorities.

d. Duplicate keys of the locks shall be placed in separate sealed

covers, super-scribing the identity of the chest, the office to which
it belongs and the numbers of the keys. The sealed covers shall be
lodged with another Head of Office functioning in the area or
preferably with the branch of the bank conducting business of the
office concerned.

e. A Duplicate Keys Register shall be maintained indicating the

authorities with which those are lodged. The covers shall be called
for once a year (in July), the keys examined, put under fresh
sealed covers and lodged once again. A note shall be kept in the
register to signify that the duplicate keys have been examined,
found correct and genuine and that those have been sent back for
safe-keeping.

f. Entries shall be made in the Duplicate Keys Register indicating

the date and the reasons, if on any occasion, the duplicate keys are
obtained for opening the chest. The date of re-sealing the duplicate
keys and lodging them afresh with the desired officer shall be
noted in the register.

g. The amount of cash or other valuables available in the chest shall

match with the balance of cash/valuables in the
Cashbook/valuables register at any point of time. A physical
verification of the balance available in the chest shall be carried
out at the end of each working day.

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1.13 Use of Cheques

1.13.1 Issue of Chequebooks

1.13.1.1 First issue of chequebooks or cheque forms shall be made by the Agent
Bank to the authorised DDO on the opening of a bank account and on
receipt of a request from the DDO.

1.13.1.2 For subsequent issue, the DDO shall fill in the special requisition slip
inserted in the chequebook or cheque forms and submit the same to the
bank.

1.13.1.3 Bank accounts allotted to the Budgetary Bodies shall generally be

jointly by two signatories, one of which shall be the Head of Finance
and the other, one of the following:
a. The Head of the Agency; or
b. The Officer designated by the Act.

1.13.1.4 When an authorised cheque signing officer vacates his/her position, the
Head of Office or in his own case his controlling officer, shall
withdraw the cheque signing authority of the officer and shall authorise
a new officer under intimation to the bank branch and the DPA.

1.13.2 Care and custody of Chequebooks

1.13.2.1 In the performance of their functions as the drawing officers of

Government money, the DDOs shall act with utmost integrity, care and
caution. They shall take particular care in discharging the
responsibilities and adherence to procedures prescribed hereunder:

a Chequebooks shall be kept under lock and key in the chest.

b. Before bringing a Chequebook into use, the DDO shall

examine the Chequebook by counting the number of cheque
forms contained in the book and the series of the cheque
numbers printed in the forms. He shall then record a certificate
of count on the inside of one of the cover pages of the
Chequebook under his signature and seal.

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c. The DDO shall alert the relevant bank branch promptly in

writing, in case a loss of a Chequebook or a blank cheque form
is noticed at any point of time.

d. The DDO shall maintain a Chequebook Register and a Cheques

Issued Register in forms FAM – 1.2 and FAM – 1.3
respectively. The Cheques Issued Register shall be reviewed
from time to time to ensure that every cheque form has been
accounted for.

e. When a bank account is closed or issue of cheques on a bank

account is no longer necessary, a cheque drawing officer shall
notify the bank branch of the fact. The unused blank cheque
forms or a totally unused Chequebook shall be returned to the
bank. A note to this effect shall be kept in the Chequebook and
the Cheques Issued registers.

f. Counterfoils of the used Chequebooks shall be maintained as

per provisions under Chapter XI.

1.13.3 Procedure for preparation of cheques

1.13.3.1 The Head of Office and the DDOs shall ensure that the procedure for
preparation of cheques as prescribed under this rule are followed:

a) All cheques shall be drawn only on the basis of disbursement

vouchers duly signed by the Head of Finance and approved by
the Drawing and Disbursing Officer and valid supporting
documents.

b) Cheques shall be drawn on a bank account in cheque forms

provided specifically for that account by the Agent Bank
branch.

c) Amount shall be mentioned clearly and legibly both in numbers

and words in every cheque, leaving no blank space on the left-
hand side of both.

Note – 1. Abbreviations in the use of words, like “Fifteen hundred

only” in place of “One thousand five hundred only”, shall not
be permitted.

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Note – 2. A sum in whole Ngultrums just above the amount, for which
the cheque is drawn, shall be written in words across the
cheque in right angle to the print. Thus, “Under Ngultrums one
hundred ten only” shall mean that the amount of the cheque is
equivalent to or slightly more than Ngultrums one hundred nine
but not more than Ngultrums one hundred ten.

This cross entry shall not be necessary, if the amount in words is type
perforated by special cheque writing machines.

d) Cheques written by hand shall be written and signed in

indelible ink only. Type perforated cheques shall be signed in
indelible ink only.

e) An official seal indicating the designation of the cheque

drawing officer shall be put below the signature on every
cheque issued.

f) The bank account number on which the cheques are drawn

shall be inscribed on every cheque issued.

g) Corrections and alterations in a cheque shall be made only by

striking through the incorrect entries and rewriting the correct
entries above or below the incorrect entries. The cheque
drawing officer shall attest such corrections and alterations over
his full signature.

h) Cheques drawn in favour of suppliers, contractors etc. shall be

crossed “A/C. Payee only”. Those drawn in favour of
Government offices shall be crossed “& CO.”.

i) Cheques drawn for the purchase of Demand drafts or Cash

Warrants shall be drawn on “Yourselves” and endorsed at the
back with the following words: “Please issue Demand
Draft/Cash Warrant as per application”.

j) Cheques drawn in favour of temporary or permanent advance

holders for their making cash payments on behalf of the
Government shall be issued in favour of the concerned officer
by name.

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1.13.4 Period of validity, stale or time-barred cheques

1.13.4.1 A cheque issued against a LC account shall remain valid for six
months from the date of issue or till the closure of the financial year,
whichever is earlier. Cheques shall become “stale” or “time barred” on
expiry of this period and shall not be negotiated.

1.13.4.2 A stale or time barred cheque shall not be revalidated under any
circumstances. Such a cheque may be replaced by issue of a fresh
cheque in accordance with the following procedure:

a. A stale cheque pertaining to the same fiscal year.

After obtaining satisfactory explanations from the payee on the

reasons of not presenting it in time, a stale cheque pertaining to
the same fiscal year, shall be marked “CANCELLED”
diagonally and prominently across, and a fresh cheque may be
issued in its place.

Note – 1. A note of cancellation of the stale cheque shall

be recorded in the “Cheques Issued” register and a cross
reference shall be recorded on counterfoils of both the
cancelled and new cheques.

b. Uncashed cheque pertaining to previous years.

An uncashed cheque pertaining to previous years presented for

revalidation shall be sent to the DPA along with the explanation
from the payee, for issue of equivalent release. A fresh cheque
shall be issued only on receipt of the equivalent release. The
following shall be the accounting transactions:

i. On receipt of a uncashed cheque from the payee.

Cash A/c (BH 12.a, OBC 80.01) Dr.
MRP: Others (BH 8.d, OBC 89.26) Cr.

ii. While forwarding the uncashed cheque to DPA.

MRP: Payments to DPA (BH 8.c, OBC 89.17) Dr.
Cash A/c (BH 12.a, OBC 80.01) Cr.

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iii. On receipt of Uncashed cheque release from DPA.

Bank A/c (BH 12.b, OBC 80.02) Dr.
Release–Uncashed Cheque (BH 2.d, OBC 81.04) Cr.

iv. On payment to the payee.

MRP: Others (BH 8.d, OBC 89.26) Dr.
Cash/Bank A/c (BH 12.a/b, OBC 80.01/02) Cr.

1.13.5 Stop payment of cheque

1.13.5.1 When the payment needs to be stopped against a cheque already issued
the DDO shall promptly send a stop payment order to the bank. A
written confirmation on having noted the stop payment order against
the cheque shall be obtained from the bank.

a. When the payment of a cheque is stopped, a note of stopping

the cheque shall be maintained.

b. If a cheque payment is stopped, the DDO shall reverse the

original entry in the Cashbook and other accounting records.

1.13.6 Replacement of lost cheques

1.13.6.1 A Head of Office may decide to consider a request for issue of a fresh
cheque in lieu of a cheque alleged to have been lost or not received by
the payee. Such cases may be processed in the following manner:

a. The bank statements and bank reconciliation statements shall

be referred in order to ascertain that the cheque has not been
paid for.

b. If the cheque pertains to the current fiscal year:

i. The alleged loss of the cheque shall be intimated to the

bank with the advice to stop payment of the cheque.

ii. A certificate of non-payment and a written confirmation of

noting the stop payment order on the cheque shall be
obtained from the bank and recorded in the Cheques Issued
Register.

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iii. The party requesting for the issue of a fresh cheque shall
execute an indemnity bond (Form FAM – 1.4) exonerating
the Government from any risk or loss that may arise in
future, as a result of use of the cheque alleged to have been
lost.

Exception – 1. In the case of a Government office,

undertaking or a bank, such an indemnity shall not be
required. A certificate to the effect that the cheque was not
received or was lost after having received and that it will be
returned to the drawer if found afterwards, shall be
obtained.

iv. A fresh cheque may be issued in lieu of the lost cheque only
on completion of the requirements mentioned at (a) and (b)
above.

c. If the cheque pertains to a previous fiscal year:

Actions as per rule 1.13.6.1 (b) (i) to (iii) shall be completed. A

case requesting for an equivalent release shall be sent to the
DPA giving the details of meeting the requirements mentioned
at rules ibid. A fresh cheque may be issued only on receipt of
the equivalent release. The accounting treatments shall be as
specified under 1.13.4.2 (b).

d. A cross-reference of the cheque getting lost and issue of the

fresh cheque shall be recorded in the Cheques Issued Register,
the counterfoils of both the cheques and the relevant paid
voucher.

1.14 Loss and Defalcations

1.14.1 Responsibility for losses

1.14.1.1 Every official of the Government shall understand clearly that he will
be held personally responsible for any loss sustained by the
Government because of:

a. Act/s of fraud or negligence on his part;

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b. Act/s of fraud or negligence on the part of any other officer, if

it is found that he contributed to the loss by his own action,
negligence or omission.

c. Proper internal control system in their respective organization;

or

d. Timely action or direction to check such losses.

1.14.2 Report on losses

1.14.2.1 An officer shall submit a report to the next higher authority, the Head
of Office and the Head of the Department as soon as circumstances
lead to believe that a loss or shortage of Government moneys, stores,
equipment or other properties has taken place. A loss for the purposes
of this rule shall include all loss or destruction of Government property
as a result of accidents, suspected theft, fraud, fire, sabotage or any
other natural causes.

1.14.2.2 The Head of Office/Department shall arrange a full investigation and

subsequently submit a complete report to the next higher authority. The
report shall be submitted even when the responsible party makes good
such loss. It shall describe the nature and extent of the loss indicating
the flaw or neglect of the rules by which the loss was possible to be
perpetrated and the prospects of recovery.

1.14.2.3 All cases of losses due to accidents or suspected acts of sabotage or

burglary shall be reported at once to the Police irrespective of the value
of the loss.

1.14.2.4 A formal Police investigation report shall be obtained from the Police
Authorities in respect of all cases referred to them.

1.14.3 Administrative follow-up

1.14.3.1 All investigations on losses and shortages shall try to fix the
responsibilities for losses. Apart from ascertaining the nature, extent
and circumstances leading to the loss, the investigations shall go into
such details as are necessary for fixing of responsibility for the loss.
Copies of investigation reports shall be sent to all the authorities
mentioned under rule 1.14.2.2.

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1.14.3.2 If it transpires in the investigations that an act of fraud, negligence or

financial irregularity could be perpetrated because of some defect in
the rules and procedures, the MoF and/or the administrative
Ministry/Organisation shall take effective remedial action to rectify the
shortcomings.

1.14.3.3 Departmental proceedings for taking disciplinary actions shall be

undertaken in all cases of loss caused by fraud, negligence or financial
irregularity. Apart from these proceedings, every effort shall be made
to recover the whole amount of loss from the persons found guilty,
especially when cause of the loss was commitment of fraud or wilful
financial irregularity. If it is found that laxity of supervision facilitated
the fraud, the supervising officer at fault shall also be penalised.

1.14.3.4 On completion of investigations in a reported case of loss, a competent

authority shall issue a sanction order for effecting the write off and/or
consequent recovery of cost, if any. If the amount of loss in cash or
stock is replenished immediately on reporting or on completion of
investigations within the same fiscal year in which the loss was
reported, only the recovery shall be ordered and no write off shall be
effected.

Note – 1. Accounting procedure for writing off the losses shall be

guided by the provisions under rule 5.15.2.(vii) in Chapter – V.

1.14.4 Exceptions

1.14.4.1 The Chief Executives/Heads of Departments shall prescribe the

percentage of permissible losses in handling, processing, storage or
transit wherever some losses in quality or quantity are perceived in the
routine handling of perishable or non-perishable goods.

1.14.4.2 The rules under Sections 1.14.2 and 1.14.3 shall not apply in the cases
of such normal handling, processing, storage or transit losses up to the
limit prescribed by the Chief Executives/Head of the concerned
Department.

1.14.4.3 Except for provisions under rule 1.14.2.1, all the other rules under
Sections 1.14.2 and 1.14.3 shall not apply in the cases of losses due to
natural calamities. The Chief Executive/Head of Department shall
make an assessment of the extent of loss or damage caused by a natural
calamity and take up the issue with appropriate authorities for write off
or restoration.

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CHAPTER – II

2 TRANSFER OF CHARGES

2.1 General

2.1.1 A register of “Incumbents of Heads of Office” shall be kept in every

office showing the period of incumbency of each officer who held
charges of the Head of Office at different points of time.

2.1.2 Every change in the incumbency of the Head of Office shall be

conducted by preparation of a proper Charges Handing/Taking Over
Note bearing signature of both the relieved and relieving officers. A
copy of these notes shall be sent on every occasion to the controlling
officer and such other officers as may be necessary.

2.1.3 Handing/Taking Over Notes, bearing signatures of both the relieved

and relieving officers, shall preferably be prepared in all cases of
transfer of charges. Such notes shall invariably be prepared in case of
every change in the incumbency to any position, which heads a section
under the Head of Office or require handling of any or several of the
following:
a. Construction/maintenance works,
b. Stores,
c. Stock of inventory or equipment,
d. Cash including Permanent/Temporary Advances,
e. Cashbook,
f. Signing of cheque and/or receipt.

2.2 Transfer pursuant to Administrative Orders

2.2.1 In the case of transfer of charges of the Head of Office, the relieving
officer shall, on assumption of charges, send a report on “Transfer of
charges” to his controlling officer. Unless specific extension of time for
submission of such report is obtained from the controlling officer, the
report on Transfer of charges shall be sent within a period of two weeks
of assumption of charges.

Note – 1. The relieving officer shall inspect the records, stores, works
including materials at site, examine the accounts and count the cash.
The relieved officer may accompany the relieving officer in the
inspection of outstations.

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Note – 2. In his “Transfer of charges” report, the relieving officer shall

bring to notice any deficiencies, departure from rules and generally any
irregular practices in the conduct of business, which may have come to
his notice during such inspection. He shall also mention what
outstations he has to inspect yet and when he proposes to inspect those.

Note – 3. The relieving officer, after taking over of charges, shall take
such actions as may be necessary and within the powers delegated to
him, to set right the deficiencies, departures and irregularities. The
controlling officer shall pass such orders in respect of deficient items
as may be necessary.

2.2.2 In order to complete the process of transfer of charges, the following

procedures shall be followed:

a. The Cashbook or the advance account (in the case of permanent or

temporary advance holders) shall be closed, totalled and balanced.
The permanent or temporary advance holder shall settle the
advances before being relieved.

b. The relieved officer, under his dated full signature, shall render the
following:

i. A certificate of verification of cash in chest and handing over

of the same to the relieving officer.

ii. A certificate of handing over of the original keys of the chest

indicating the key numbers.

iii. A certificate of handing over of the unused cheque forms

available in the Chequebook under use.

iv. A certificate of handing over of the unused receipt forms

available in the receipt book under use.

c. The relieving officer shall satisfy himself of the physical

availability of the stated cash and other items mentioned under rule
2.2.2 (b) and take over the items by writing the words “Taken
over” below the certificates and putting his dated full signature.

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d. The relieved officer shall get the duplicate set of the keys of the
chest brought in. Those shall be examined and tested by the
relieving officer. The keys shall be sealed in a fresh cover under the
signature of the relieving officer and lodged once again. A note of
the examination, taking over, putting under a fresh seal and lodging
of the keys back shall be kept in the Duplicate Keys Register under
the signature of the relieving officer.

e. The relieved officer shall get separate lists prepared in respect of

stores balances and inventories maintained under his charges,
countersign those and hand those over to the relieving officer. The
relieving officer shall take over such charges and sign a receipt on
the list. The relieving officer shall note any inaccuracies noticed
therein by him. The receipts of stores, inventory shall form a part
of the Handing/Taking over note.

f. The relieved officer shall hand over a note to the relieving officer,
which shall contain at least the following information.
i. Status of all the works in hand.
ii. The orders remaining to be complied with.
iii. Details of such matters, which, in his opinion, may require the
attention of the relieving officer.
iv. Explanation of extra-ordinary circumstances, if any.
v. Existing or apprehended difficulties.
vi. Status of audit that is, the period up to which audit has been
completed and outstanding observations remaining to be
attended, if any.
vii. A list of all claims awaiting settlement/adjustment as on the
day of transfer of charges indicating the reasons for cases
remaining pending for more than 3 weeks.

g. A copy of the complete set of handing/taking over document

including the receipts for cash, stores and inventory, the note from
the relieved officer and the list of outstanding cases shall be sent
to the Controlling officer, Chief Executive/Head of the
Department, Organisation or Ministry as the case may be. The
relieved officer may keep a copy of the complete set of
handing/taking over document.

h. In the case of any disagreement between the relieved and relieving

officers, a reference shall be made to the controlling officer.

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Note – 1. All of the requirements prescribed under rule 2.2.2 may not
be applicable in the cases of transfer of charges of officers working
under the overall supervision of the Head of Office as specified under
rule 2.1.3. Only the pertinent items of requirements shall be adopted in
such cases.

2.2.3 If the relieving officer fails to bring to notice any deficiency,

discrepancy or insufficiency in the charges taken over from his
predecessor, he shall be held responsible for the same, both to the
quantity and quality, so far as he was in a position to ascertain it.

2.3 Taking Over of Charges in Absence of an Officer

2.3.1 The following course of action shall be taken when an officer handling
Government funds, stores, stock of equipment and inventory etc.,
absconds, dies or become incapacitated in the performance of duties:

a. The Head of the Department, Organisation or Ministry shall

immediately designate a custodian to safeguard the funds, stores
equipment and inventory etc. The nearest civil authority shall
safeguard these if such an incidence takes place in a remote
locality.

b. The Head of the Department, Organisation or Ministry shall

thereafter appoint a committee to prepare an inventory of the cash
and other accountable items physically available and to determine
the extent of responsibility or liability of the officer for any
shortage that may be found.

c. If the absconding, deceased or incapacitated officer happens to be

responsible to another accountable officer like the Head of Office
under an order on delegation of authority, procedures mentioned at
(a) and (b) above shall be followed. The extent of responsibility or
liability of the former for any shortage shall be determined by the
committee appointed by the Head of the Department, Organisation
or Ministry.

d. Charges of the absconded, deceased or incapacitated officer shall

be taken over by another officer designated by the appropriate
authority [or the Head of Office himself in the case of (c)] on the
basis of the inventory prepared by the committee.

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CHAPTER - III

3 RELEASE OF FUNDS

3.1 General

3.1.1 Once the budget has been approved by the Parliament, the DNB shall
issue a Budget Notification to provide the Budgetary Bodies with their
approved budget details. The Ministry of Finance shall release funds to
budgetary bodies after the budget has been approved by Parliament in
accordance with the provisions of PFA.

3.1.2 The Ministry of Finance shall set and meet reasonable time frames for
the release of funds.

3.1.3 The Ministry of Finance may withhold releases of funds based on the
conditions provided in this Manual.

3.2 Procedure for Release of Funds

3.2.1 The budget execution phase shall start with the release of funds
through the Letter of Credit (LC) system in the respective bank
accounts maintained at the agent banks. Subject to fulfilment of the
necessary formalities, the DPA shall ensure timeliness of release of
funds to the concerned Budgetary Bodies in order to facilitate
execution of programmes and activities, which are included in the
approved budget.

3.2.2 The Budgetary Bodies shall plan their works in such a way as to avoid
lapse of released funds at the close of a fiscal year and submit their
Budget Utilization Plan (BUP) accordingly. In order to minimise the
chances of idle funds getting lapsed at the year-end, the DPA shall be
empowered to fix time periods in the last quarter of the year, after
which release of funds shall generally not be permitted.

3.2.3 The system of releases described in this chapter shall be subject to

change depending upon the Government’s cash flow situation and fund
management policies.

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3.3 Types of Releases

3.3.1 There are two (2) types of releases namely (i) Budgetary releases and
(ii) Non-Budgetary releases.

3.3 Budgetary Releases

3.4.1 The budgetary releases shall consist of the following two types:
i. Current regular
ii. Capital

3.4.2 Current Regular Releases

3.4.2.1 Such releases are for meeting the current expenditures of regular
nature, and shall be made quarterly for Central Agencies and
Dzongkhags and half yearly for Gewogs. However, Agencies shall be
required to submit BUP and release request for activity based current
releases, which shall not be included in the Current Regular Releases.

3.4.2.2 The only condition to be fulfilled for the release of such funds shall be
the timely closure and reconciliation of monthly accounts of the last
month of the previous quarter within ten (10) days after closure of the
month and the submission of BUP.

3.4.3 Capital Releases

3.4.3.1 For the release of funds under this category, the minimum documents
to be submitted and procedures to be followed, unless otherwise
prescribed, shall be as follows:

3.5 Minimum Conditions for Budgetary Releases

3.5.1 To facilitate timely budgetary releases, the following minimum

conditions shall be fulfilled by the budgetary bodies:

a. Sufficient Budget provision:

There should be sufficient budget provision against the activity for
which fund release is requested. If the activity is new, budget
incorporation process has to be completed before requesting for
fund release.

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b. Monthly Accounts and Bank Reconciliation:

Timely closure of monthly accounts and BRS by the budgetary
bodies within ten (10) days after completion of a month.

c. Donor Fund Balance:

If the activity is funded by the donor, there should be sufficient
fund balance against that particular FIC

d. Closing Cash Balance:

To facilitate the first quarterly release the closing cash balance of
previous fiscal year should be surrendered and received by DPA

e. Budget Utilisation Plan (BUP):

Submission of Budget Utilisation Plan (BUP) is mandatory for all
RGoB funded and RGoB co-financed activities. All subsequent
releases shall be based on utilization of previous fund releases
made.

3.6 Non-Budgetary Releases

3.6.1 It refers to release of fund that is not tagged to the budgeted activities.
The following shall be construed as non-budgetary releases:

3.6.2 Non-Revenue Releases

3.6.2.1 It refers to releases made against deposits made by Budgetary Bodies

into Government Non-Revenue Receipts and Deposit Account on
account of the fund received from another budgetary body or other
agencies for carrying out deposit works etc.

3.6.3 Refundable Deposit Releases

3.6.3.1 It refers to releases made against the funds deposited by budgetary

bodies into the Government Refundable Deposit Account as bid
security, performance security and retention money etc.

3.6.4 Uncashed cheque Releases

3.6.4.1 It refers to releases made against cheques pertaining to the previous

fiscal year which could not be presented to the bank before the closure
of the fiscal year. Such releases shall be made taking into consideration
the availability of lapsed fund against that particular LC/PLC account.

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3.6.4.2 Budgetary bodies should exercise due diligence to avoid incidence of

un-cashed cheques by constantly referring to bank reconciliation
statements and other measures as deemed appropriate.

3.7 Timeline for Release of Funds

3.7.1 As required by the PFA, 2007 under Section 114, a timeframe for
release of funds may be set by the DPA.

Sl. Type of Fund Timeframe for Release of

Documents Required
No. Releases Funds by DPA
I Budgetary Releases:
1. Current Regular No documents. Release on Current Release completed by
Release quarterly basis without having 15th of the first month of every
to request quarter.
2. Capital Releases No documents. Release based One (1) working day
on BUP (Release completed within one
(1) working day from the
receipt of online release
request)
II Non-Budgetary Releases:
1. Non-Revenue and No documents. Online fund Two (2) working days
Refundable request (Release completed within two
Releases (2) working days from the
receipt of online fund request.
After validation of deposits
with BoB statements of
deposits in NR and RD
accounts)
2. Un-cashed Online fund release request Two (2) working days
Cheques with scanned copy of the (Release completed within two
original un-cashed Cheques (2) working days from the
and explanations. Original receipt of online fund release
cheque to be forwarded to request)
DPA.

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3.8 Unauthorised diversion of Funds

3.8.1 Activities for which there is no provision in the budget shall not be
carried out. Incurring of unbudgeted expenditures and diversion of
funds towards unauthorised activities shall constitute a budget offence,
for which the Head of the office and the AFD shall be liable and
accountable.

3.9 Release of funds is not Sanction for Payment

3.9.1 The release of funds by the DPA does not in any way exempt the
budgetary bodies from the need to ensure that expenditures out of
released funds are in accordance with the budget and prescribed
financial rules and regulations and therefore the release of funds shall
not be taken as sanction for payment under any circumstances.

3.10 Right to Withhold Release or Freeze Operation of

Bank Accounts

3.10.1 Notwithstanding any of the provisions contained in this chapter, the

DPA shall reserve the right to withhold releases of funds or freeze
operation of any bank account under the following circumstances:
a. Non-closure of completed monthly accounts over extended
periods of time;
b. Non-submission of quarterly Budget Utilisation Plan (BUP)
through PEMS;
c. Failure to attend to the defects/irregularities noticed in the
reports/accounts or any general queries raised by the DPA.

3.11 Monitoring and Reporting of Releases

3.11.1 Towards the end of each quarter, the DPA shall closely monitor the
releases made to the budgetary bodies

3.11.2 Any instances of underutilization of funds released shall be reviewed

from Monthly Accounts and adjusted against the subsequent fund
releases.

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3.11.3 For facilitating proper closure of books of accounts, all budgetary fund
releases shall be completed by the 15th of June of every Fiscal Year.

3.11.4 A quarterly fund release status report shall be prepared by the DPA on
a regular basis.

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CHAPTER – IV

4 RECEIPTS

4.1 General

4.1.1 Amounts collected by Budgetary Bodies pertain to either the

Government Consolidated Fund or the Refundable Deposits Account.

4.1.2 The receipts in the Government Consolidated Fund Account shall

consist of the following:
a. Proceeds of the Government Revenue Account.
b. Proceeds of the Government Budget Fund Account.
c. Proceeds of the Government Non-Revenue Receipts and
Deposits Account.

4.1.3 The receipts in the Refundable Deposits Account may include:

a. Security deposits;
b. Earnest moneys;
c. Other refundable receipts.

4.2 Receipt and Deposit of Government Money

4.2.1 All moneys received as revenue of the Government shall be deposited

without delay in the designated revenue sub-account through the use of
Revenue Deposit invoices as provided for in the RM.

4.2.2 Moneys received as grants, borrowings, recoveries of loan principals,

specific sale proceeds, other recoveries etc. at the DPA shall be
deposited in the Government Budget Fund Account by the use of
Budget Fund Deposit invoices (FAM – 1.1A).

4.2.3 Money received by any Budgetary Bodies as advance or

reimbursement from other agencies for expenses to be incurred or
already incurred on their behalf shall be deposited in the Government
Non-revenue Receipts and Deposits account by use of Non-revenue
deposit invoices (FAM – 1.1B).

4.2.4 Receipts of all refundable moneys like security deposits, earnest

money, performance security and other refundable deposits etc. shall
be deposited promptly in the Refundable Deposits account by use of
deposit invoices for Refundable Deposits Account (FAM – 1.1C).
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4.2.5 Officers receiving money for the Government shall be accountable for
all such monies received by them. They shall maintain a proper record
of the receipts and deposits. The accountability shall not cease until
proper accounts of the receipts and the deposits of such receipts in the
Government account are submitted and the same are accepted to the
satisfaction of the Government.

4.2.6 Any person making a payment to the Government is entitled to receive

a proof of payment in the form of an official receipt. The receiving
officer shall issue such a receipt against the payments received by him.
In the case of a recovery made from a payment, a signed statement
showing the dues, recoveries made and the net amount paid shall be
issued by the DDO if so desired by the payee.

4.2.7 Collection of Government monies shall not be mixed with private

monies.

4.2.8 Government monies shall not normally be collected except at the

designated offices unless otherwise specifically authorized by the
Government.

4.3 Acceptable Form of Receipts

4.3.1 Payments to the Government may be received in cash, cheque, bank

draft, cash warrants, transfer of credit and such other forms as may be
authorised by the Government from time to time.

a. Cheques, drafts or cash warrants used for payment of

Government revenue or other dues shall be drawn on a local
bank.

Note – 1. Local bank, for the purposes of this rule shall mean that
the paying bank shall be situated in the same station as the office of the
collection agency.

4.3.2 If the cheque or instrument is dishonoured by the bank, the payer’s

indebtedness to the Government continues and the collection agency
shall take appropriate action, including notification to the payer and
levying of penalties or interests as may be applicable under the relevant
rules. The Government shall not accept any responsibility for any delay
in the receipt of such communication by the payer.

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4.4 Money Receipts

4.4.1 Money Receipts, Money Receipts Books

4.4.1.1 Money receipts shall bear a clause to indicate that those issued against
receipt of payment by cheques, drafts, cash warrants or means other
than by cash shall be valid only when the proceeds against such
instruments are realised and credited in the Government account.

4.4.1.2 In order to maintain a separate and distinct identity of the Government

revenue receipts accounting, two separate types of money receipts shall
be used for Government revenues and other items of receipts. These
shall be referred to as:

a. Revenue money receipts – Used for receipts of Government

Revenue as defined by the DRC. The DRC shall maintain the
central stock of Revenue money receipts.

b. Non-Revenue money receipts (Form FAM – 3.1) – Used for all

other kinds of receipts. All the Budgetary Bodies shall use the
system generated Non-Revenue money receipts for accounts
operated in the government accounting system.

4.4.2 Custody and use of Revenue Money Receipts

4.4.2.1 The use, distribution, custody and preservation of Revenue money

receipts shall be governed by rules under the RM.

4.4.3 Custody and use of Non-revenue Money Receipts

4.4.3.1 All budgetary agencies shall use system generated Non Revenue
Money Receipts and not the printed receipts. The Ministry of Finance
shall not be responsible for printing and supply of the printed Non
Revenue Receipt Books to any agencies.
a. Non-Revenue Money Receipt in form FAM – 3.2 has been
designed and incorporated in the accounting system.
b. As soon as the transactions for non-revenue receipt is passed
and approved in the system, the system will auto generate the
Non-Revenue Money Receipts which are pre-numbered.
c. The print out of such receipts may be handed over to the payer
and a copy may also be attached with the voucher.

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d. A copy of such receipts shall also be filed in chronological

order for reference and record.
e. In case, a receipt is required to be cancelled, all copies of the
receipt form shall be prominently defaced by putting two
diagonal lines across the form and writing “CANCELLED”
inside the lines. All copies of the cancelled receipt shall be
retained in the book.

4.4.3.2 Duplicate money receipts or Hand Receipts shall not be issued under
any circumstances. A certificate to the effect that a particular money
receipt was issued for the money received from the payer on a certain
date may be given if necessity arises.

4.5 Accounting of Receipts

4.5.1 Responsibilities for Accounting for Receipts

4.5.1.1 The responsibility for collecting, depositing and accounting of revenue

receipts and refunds there from shall rest with the DRC. The
designated officers of the DRC and other agencies administering
revenue collections shall be responsible to ensure that all sums due to
the Government are promptly collected, deposited, accounted for and
credited to the designated bank account.

4.5.1.2 The DPA shall be responsible for detailed accounting of receipts in the
Government Budget Fund Account including the payments and/or
transfers there from. The total receipts in Refundable Deposits Account
and the Non-Revenue Receipts and Deposits Account shall be
reconciled with reference to the copies of respective deposit invoices,
bank statements and the monthly accounts received at the DPA. It shall
also be responsible for the accounting of the total receipts in the
Government Consolidated Fund Account.

4.5.1.3 A payer shall be responsible to ensure that the payments of

Government dues are rendered within the due date. In cases of default,
the DRC or the concerned Budgetary Bodies shall be responsible to
take appropriate actions to realize such dues.

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4.5.1.4 A penalty of twenty-four percent (24%) per annum shall be imposed on

all financial dues to the Government relating to outstanding advances,
excess payments, inadmissible payments, embezzlements, misuse of
funds and such other irregularities after three (3) months from the date
of issue of audit reports. The agencies concerned shall take legal action
in case of non-recovery within twelve (12) months from the date of
issue of audit report.

4.5.2 Receipts Accounting Principles

4.5.2.1 All receipts of the Government shall be recognised at the DPA and the
DRC (HQ) after the bank has received the money or cleared the
cheque, draft or credit advice.

4.5.2.2 Receipts at the collecting agencies shall be recognised on receipt of

money or instrument of payment in an acceptable form and on
recoveries from payments made.

4.5.2.3 Receipts in the form of cheques at the collecting agencies shall be

subject to de-recognition through a reverse entry in cases of cheques
being dishonoured.

4.5.2.4 Receipts of fund releases at the Budgetary Bodies shall be recognised

on the basis of receipt of release orders from the DPA. The Budgetary
Bodies shall compare their records of receipts of releases with those
recorded by the bank and discrepancies if any found between the two
shall be settled by referring such matters to the DPA.

4.5.2.5 Other receipts and deposits shall be recognised at the Budgetary

Bodies on the date of receipt of such payments.

4.5.2.6 Receipt of recoveries made from the disbursements at the Budgetary

Bodies shall be recognised on the date of disbursement.

4.5.2.7 Receipts shall be recorded on gross basis, that is, at the full amount
received from the payer. Receipts shall not be recorded net of any
related costs such as refunds, commissions or fees.

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4.5.3 Receipts Accounting Procedures

4.5.3.1 Accounting of Government Revenue Account

The provisions under the RM shall govern the account keeping and
rendering of accounts returns in respect of the revenue collected at
various levels. The following directions are added to supplement those
provisions:
a. All receipts shall be credited in gross amount. The Agent Banks
shall be instructed to pass on the debits on account of collection
charges, commissions, fees etc. if any, to a specific withdrawal
account (LC/PLC).

b. The consolidation of revenue receipts shall take place at the

DRC level on the basis of information received from all the
RRCO’s, budget and other collecting agencies.

c. Monthly collection statements shall be received at the DRC

according to the formats prescribed in the RM.

d. All refunds shall be processed and accounted for at the DRC.

e. The collection and refund data shall be reconciled with the

bank statements.

f. A monthly report on total receipts and refunds (with relevant

breakdowns) shall be prepared by the DRC and submitted to
the DPA among others.

4.5.3.2 Accounting of Government Budget Fund Account

Receipts and deposits in the Government Budget Fund account shall be

undertaken and accounted for by the DPA as follows:

a. The receipts shall be recorded on gross amount basis. The

RMA and the Agent Banks shall be advised to pass on the
collection charges, commissions or fees etc., involved in the
process of collection of the proceeds to a designated withdrawal
(LC) account.

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b. The refund of unutilised grants to the respective donors shall be

made by the DPA from the Government Budget Fund Account

c. The deposit of receipts and the refunds of unspent grants shall

be recorded in a Cashbook.

d. Subsidiary records in respect of grants and borrowings in

particular shall be maintained to ensure maintenance of updated
accounts of receipts and refunds for each project, implementing
agencies and donors to which such receipts and refunds pertain.

e. A statement of receipts and payments in Government Budget

Fund Account shall be prepared. This statement shall be
reconciled with the bank statements.

4.5.3.3 Accounting of Non-Revenue Receipts & Deposits Account

This being a decentralized account, the exercises at the DPA shall be

limited to the reconciliation of the receipts through this account and
ensuring that equivalent deposits are exhibited in the monthly accounts
of Budgetary Bodies. The procedures for reconciliation of this account
are prescribed in Chapter XII.

4.5.3.4 Accounting of Government Consolidated Account

a. The Annual Financial Statements of the Government start with

the opening balance in this account and arrive at the resulting
closing balance, which match with the balance in this account.
There shall be no separate accounting of the Consolidated Fund
Account as such.

b. An exercise shall however be undertaken by the DPA for

reconciliation of the balance available in this account. The
procedures for the reconciliation of this account are prescribed
in Chapter XII.

4.5.4 Accounting of Recovery of Expenditure

4.5.4.1 Recoveries in respect of overpayments previously made out of

Government funds shall not be treated as revenue.

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4.5.4.2 Recoveries pertaining to the overpayments made in the same fiscal

year shall be credited to those account heads in which the original
expenditure was debited.

4.5.4.3 Recoveries pertaining to overpayments made in a previous fiscal year

shall be credited to those account heads in which the original
expenditure was debited after obtaining necessary budget line with
zero budget appropriation from DNB by debiting Cash and crediting
the zero budget line. The amount recovered shall be remitted to the
DPA by debit to the Head “Misc.Rct/Pmt: DPA– Prev.Yr. Exp”.

4.5.4.4 Under both the circumstances covered under rules 4.5.4.2 and 4.5.4.3,
if the recoveries cannot be made immediately on detection of the
overpayment or if the recoveries are effected in instalments, the first
journal entry shall be to debit the head “PWA – Employees or PWA –
Suppliers -Others” as the case may be and credit the original
expenditure account head. Subsequently when the recovery is effected,
the Cash account shall be debited and PWA account shall be credited.
At the time of remittance of the recovered amount, “Misc. Rct/Pmt:
DPA– Prev. Yr.Exp” A/C. shall be debited and Cash or Bank Account
shall be credited.

4.5.4.5 If the recoveries pertaining to the previous fiscal year’s expenses are
effected at the instance of the RAA, and if there are instructions to
deposit the recoveries in favour of the RAA, the remittance of
recoveries shall be made accordingly. The accounting head “Other
Recov./Remit.: Others – Audit Recoveries for RAA” shall be used for
recording such remittances.

4.5.4.6 There could be instances when an employee pays the recoverable

amount directly to the RAA. This shall be discouraged as the accounts
records of the office shall continue to show the amount as outstanding
against the employee under such circumstances. However, in case of
an emergency, if the RAA agrees to accept the recovery directly from
an employee, an intimation of the recovery giving proper references
and indicating the receipt number shall be sent by the RAA to the head
of finance of the concerned agency. The head of finance shall, on the
strength of the advice from the RAA, make the necessary covering
Journal entry by debiting the “Other Recov./Remit.: Others – Audit
Recoveries for RAA” and crediting the PWA account to clear the
outstanding item from the books of accounts.

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CHAPTER – V

5 EXPENDITURE PROCESSING- GENERAL RULES

5.1 General Principles

5.1.1 Moneys appropriated for specific purposes or activities and made

available from time to time shall be utilised solely for those specific
purposes.

5.1.2 No money shall be withdrawn from Government accounts except for

settlement of legitimate claims against the Government or for payment
of advances in pursuance of an approved appropriation.

5.1.3 Claims against the Government shall become due for submission
immediately on completion of the required services or on fulfilment of
conditions as specified in individual contracts.

5.1.4 Claims shall be submitted immediately but not later than by 12 months
of their becoming due. Personal claims of the Government employees
shall be submitted within the times prescribed for each in the rules for
processing of such claims.

5.1.5 A Claim against the Government shall be presented by submission of a

bill indicating the nature and amount of the claim.

5.1.6 A bill may be drawn by the office itself or a Government employee in

an appropriate bill form prescribed for the particular nature of the
claim and signed by the officer-in-charge or the employee as the case
may be, or,

A bill may be presented by a supplier, contractor, firm or corporate

body in respect of supplies, works or services delivered or to be
delivered to the Government in accordance with a valid agreement. All
such bills raised against the Government must be signed by the
claimant.

5.1.7 Every claim against the Government shall be established as legitimate

prior to making payments out of Government funds.

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5.2 Claims in Arrears - Exceptions

5.2.1 Claims in arrears refer to the claims not presented within a period of 12
months of their becoming due for payment. Such claims shall be
considered as time barred.

5.2.2 Time barred claims can be revitalised within a period of two years of
their becoming time barred only by obtaining a formal “Approval for
Review” from an appropriate authority, delegated with such powers.
The process of verification and settlement of the claim shall begin only
after receipt of the Approval for Review of the claim.

5.2.3 No claim shall be accepted after a period of two years from the date up
to which the presentation is permissible under rule 5.1.4, except for
those that may become due on the strength of a court order or an order
of the Government.

5.3 Permanent Advances

5.3.1 The Head of Office may designate “Permanent Advance Holders” to

handle generally - recurring expenses in the field units or branch
offices. The Permanent Advance Holder (PAH) shall be a person other
than the DDO of the HQ. The advances paid to the PAH for such
purposes shall be called “Permanent Advances”.

5.3.2 The following procedures shall apply in respect of payment and

replenishment of Permanent Advances to a PAH:
a. The amount of such advance shall be limited to one month’s
estimated expenditure of the unit, office or section concerned;

b. The amount of Permanent Advance shall be determined and

sanctioned on a case by case basis by the Head of Office.

c. A PAH shall submit an account of the utilisation of the

Permanent Advance from time to time to the Head of Office for
obtaining replenishment. Replenishment of the advance shall be
made normally once a month; but it can be more frequent if the
occasion demands.

d. A PAH shall refund any unspent amount of the advance at the

close of a fiscal year.

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5.4 Temporary Advances

5.4.1 The Head of Office may designate Temporary Advance Holders

(TAH) for making disbursements against specific purposes within a
specific time. The advance paid for such specific purposes shall be
called “Temporary Advance”.

5.4.2 The following procedures shall apply for payment and liquidation of
Temporary Advance to a TAH:
a. Temporary Advance shall be approved and authorised for
payment on the basis of an identified and imminent
expenditure.

b. The TAH shall submit an account of utilisation of the

Temporary Advance to the Head of Office immediately on
completion of the assignment. Unspent balance of the advance
shall be refunded along with the submission of accounts.

c. The TAH shall refund the advance immediately if the specific

purpose no longer needs to be fulfilled and if it transpires that
the advance shall not be used during a period of fifteen (15)
days.

d. On the close of a fiscal year, a complete liquidation of all

temporary advances in the hands of the individual TAHs shall
be made.

e. A TAH shall cease to act immediately upon the completion of

the assignment.

5.5 Permanent & Temporary Advances - Accounting

5.5.1 The PAH/TAH shall operate on advances received from the Head of
Office/DDO and be accountable to him.

5.5.2 The PAH/TAH shall observe the relevant rules for incurring
expenditure.

5.5.3 Any other money received by the PAH/TAH on behalf of the

Government shall not be mixed up with the advance but shall be
deposited in the relevant account of the Government in accordance
with the provisions under Chapter IV.

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5.5.4 Permanent and Temporary Advances shall be classified as “Suspense –

PW Advances – Employees” against the respective officers by name.

5.5.5 The PAH/TAH shall maintain an account in duplicate in Form FAM –

4.1. The duplicate shall be retained by the PAH or the TAH and the
detachable original shall be submitted to the Head of Office together
with the original paid bills, cash memorandums etc. for adjustment and
liquidation of the advances.

5.5.6 The account submitted by a PAH or TAH shall be treated as a claim

for the purposes of replenishment or liquidation of the advance.

5.5.7 All Ledgers, Sub-ledgers and Memorandum records in respect of the

expenses incurred out of the Permanent and Temporary advances shall
be maintained at the accounting unit of the Head of Office

5.5.8 The non-expended balance of the Permanent or Temporary Advances

at the end of a Fiscal Year shall be surrendered by the respective
officers before the books are closed.

5.6 General Procedure for Processing of Claims

5.6.1 A Head of Office or an officer authorised by him with powers to draw

and disburse Government money shall maintain a Bills Inward Register
in Form FAM – 4.2.

5.6.2 All claims received or prepared in an office shall be registered in the

Bills Inward Register. The register shall be reviewed once a month by
the Head of Office and the result of the review shall be recorded in the
register.

5.6.3 Action on settlement or return of any claim received in an office shall

be completed within thirty (30) days of receipt of the claim.

5.6.4 The following requirements shall be fulfilled for establishment of

legitimacy of claims against the Government and making payments out
of Government funds:
a. Existence of a Sanction of expenditure;
b. Recording of verification of claims;
c. Preparation of disbursement voucher;
d. Approval of expenditure;
e. Payment;

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5.7 Sanction of Expenditure – Sanctioning Officer

5.7.1 A Sanction of Expenditure shall include the terms Administrative

Approvals or Financial Sanctions or Administrative Approval &
Financial Sanction approved by competent authority.

5.7.2 The purpose of such an order shall be to indicate the acceptance by the
administrative Department or organisation of a proposal to start
incurring of expenditure or making commitments against an
appropriation available.

5.7.3 An officer to whom adequate financial powers have been delegated

under the relevant rules shall issue a Sanction of Expenditure in Form
FAM – 4.3 wherever practicable, on the basis of a proposal submitted
by the head of an unit or section and verified by the head of the finance
section. Such officers have been referred to as Sanctioning Officers in
these rules.

5.7.4 The sanctioning officer shall exercise due care and diligence, and shall
not sanction expenditure exceeding the lawful and available
appropriations and the financial powers delegated to him/her.

5.7.5 The sanctioning officer shall not sanction any personal advances of any
kind unless a previous advance of such kind is liquidated in full.

5.7.6 The accounting unit shall maintain an Appropriation Control Register

in Form FAM – 4.4 wherever practicable, to keep the commitments of
expenditure within the approved budget limits. Appropriation
available at any time shall be the allocated budget less commitments.

5.7.7 If a Sanction of Expenditure is issued with the concurrence of a higher

authority, the fact shall be mentioned in the sanction or order.

Exceptions:

Issue of Sanction of expenditure shall not be necessary in the following

cases:
a. Payments or withdrawal of moneys for personnel emoluments
and other personnel emoluments;

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b. Office expenses on utilities, small and urgent purchases of

consumables or services and POL for office vehicles;
c. Remittances of recoveries and Government contributions to GPF;
d. Deposits in the Government Non-Revenue Receipts and Deposits
Account and Refundable Deposits Account;
e. Refund of security deposits and earnest moneys;
f. Payment of taxes and royalties;
g. Replenishment of advances up to the amount accepted for
adjustment.
h. Payment of subsequent rents.
i. Settlement and/or payment of Travelling Expenses bills of
employees;
j. Sanction and payment of Transfer TA (including advances) and
LTC.
k. Payment of subsequent running account bills in respect of Works
Contracts. However specific approvals will have to be obtained
for payments beyond the permissible limits of the contracts in
terms of deviations/extra works/substitute items etc.
l. In case of supply contracts, the supply order/purchase order and
the amendments thereof may be treated as the sanction of
expenditure.

5.8 Certificate of Verification – Verifying Officer

5.8.1 This process involves the function of verification of any claim against
the Government in order to establish that the goods or services have
been received for the specific purposes and have been recorded in the
relevant records.

5.8.2 An officer delegated with the responsibilities for supervision and/or

maintenance of records pertaining to particular activities or functions,
shall verify any claims pertaining to those supplies or services
delivered, utilities provided or works executed. Such an officer has
been referred to as Verifying Officer in these rules.

5.8.3 In order to prevent the chances of making a double payment, the

verifying officer shall record the fact of verification of a claim on the
relevant supply orders, registers, measurement books etc., mentioning
the bill/claim number so verified.

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5.8.4 He shall append a certificate of verification on the claim under his full
signature and seal. The certificate shall state that:
a. The articles and the quantities mentioned in the claim have
been received and recorded in page numbers of the relevant
registers/measurement books;
b. The quality of goods are as per specifications;
c. The rates are correct;
d. Suitable notes of the verification of the claim have been made
in the relevant contracts, supply orders, registers etc.

5.8.5 If the certificate of verification is recorded on more than one copy of

the claim, all the copies except the original shall be marked “COPY”
prominently. The verifying officer shall sign the certificate of
verification in full only on the original claim and initial on the other
copies.

5.9 Preparation of Vouchers

5.9.1 Disbursement Voucher (Form FAM – 4.5)

a. The accounting unit shall prepare a disbursement voucher (DV)
in the computerized accounting system, which has been
implemented by the MoF. The DV has been designed as per
Form FAM – 4.5 for settlement of a claim by payment.

b. All relevant sections of the disbursement voucher shall be filled

in properly and due diligence may be exercised in selecting the
Broad Heads and the object codes.

c. The accounting unit shall refrain from preparing manual

vouchers.

d. Corrections of disbursement vouchers, if required, shall be

made by passing either journal voucher or reversal voucher
through the computerized accounting systems.

e. For all adjustment vouchers where no payment has to be made,

the accounting unit shall prepare a Journal Voucher through the
system by selecting the required parameters.

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f. The disbursement voucher along with the verified claim and

supporting documents shall be submitted to the designated
authority for according approval.

g. After obtaining the approval from the designated authority on

the body of the voucher generated by the system, the
accounting unit shall approve the voucher from the system. If
the voucher entails a cheque, cheque number shall be selected
and this particular cheque number and the voucher number
generated by the system shall be noted down on the copy of the
voucher. The accounting unit shall ensure that the approved
copy of the voucher in the system and the printed copy of the
voucher shall have exactly the same details including the
voucher number and the cheque number.

5.9.2 Journal Voucher (Form FAM – 4.6)

a. Journal vouchers shall be prepared and approved for

incorporation of values of non-cash transactions in the accounts
and transfer of debits and credits from one head of account to
another.

b. The preparation and approval of a journal voucher shall be

undertaken in the same process as have been prescribed for the
disbursement vouchers.

c. If a transaction is meant for adjustment of an earlier advance

and no payment is required to be made, normally a Journal
voucher in Form FAM – 4.6 shall be prepared.

5.9.3 Other Voucher (as prescribed in Form FAM – 4.6)

a. All cash and release receipts are recorded through preparation

of Other Vouchers. While the release vouchers are auto
generated by the system by debiting bank and crediting the
appropriate BH and OBC for releases, the cash receipt vouchers
will have to be prepared by the accounting unit by selecting
voucher type as “Others” and debiting Cash and crediting
relevant BH and OBC.

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b. The transactions under Other Vouchers will appear in the

Receipt side of the Cash Book.

c. The other vouchers shall be approved immediately to capture

total cash and fund release receipts. Print out of the Other
Vouchers shall be filed properly for future
records/reconciliation.

5.9.4 Reversal Voucher (as prescribed in Form FAM - 4.6)

a. Reversal vouchers shall be prepared and approved for

correction of disbursement transactions, journal entries and
other vouchers to nullify the earlier entries. A correct
disbursement/journal/other vouchers will have to be prepared
and approved simultaneously.

b. The preparation and approval of a reversal voucher shall be

undertaken in the same process as have been prescribed for
disbursement vouchers.

5.10 Approval of Expenditures – Approving Officer

5.10.1 A disbursement/journal/reversal/other vouchers shall be approved for

payment, adjustment or receipts by the Head of Office or an officer
designated as the DDO. Such an officer has been referred to as
Approving Officer in these rules.

5.10.2 The Approving Officer shall be responsible for seeing that:

a) A sanction of expenditure has been issued by an appropriate
authority;
b) A certificate of verification has been accorded by the relevant
Verifying Officer in appropriate cases;
c) The intended payments/adjustments are within the lawful and
available appropriations;
d) Claims have been preferred by the rightful party and the payee
has been identified correctly in the voucher.
e) All supporting documents like verified bills, GR Notes,
sanctions, approvals are attached with the voucher;

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f) Statutory deductions and recoveries have been made at correct

rates and amounts;
g) Remittances against recoveries/receipts are made to proper
authorities;
h) The expenses and recoveries (if any) have been classified
correctly.
i) Adequate funds are available for making the disbursement;
j) The money is either required for immediate disbursement or
has already been paid from a permanent or temporary advance;
k) The amount of payment required has been mentioned correctly
in the disbursement voucher.

5.10.3 The Approving Officer shall sign in full only in indelible ink on the
voucher to accord approval for payment/adjustment/receipts. A seal
indicating the official position of the Approving Officer shall be used
below the signature.

5.10.4 Approval in excess of available appropriations shall not be accorded.

5.11 Payment

5.11.1 The following general rules shall be followed for making payment
against an approved claim:

a. All payments shall be made by cheque. Agencies are not permitted to

draw self-cheques for drawing cash to make cash payments.
Exceptions to the applicability of this rule may be allowed by a Head
of Office in the following cases:
i. Advances recovered in cash pertaining to the current fiscal year
only can be utilized for making cash payments not exceeding to
the amount recovered in cash.
ii. As far as possible cash balances may be maintained at zero.
The unutilized cash balance at the end of the fiscal year shall be
automatically carried forward by the system to the first month
of the next fiscal year.

b. Payments against approved and authorised claims shall be made only

to the claimant as identified in the disbursement voucher usually
through Account Payee Cheques.

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c. Payments in cash, where permissible, shall be made to the payee or

his authorised agent only.

d. Rules on use, custody and preparation of cheques as prescribed under

Part 1.6 of Chapter I shall be followed for payments by cheques.

e. Cheques for payment shall generally be sent by registered post.

These may also be handed over to the payee or his authorised
representative who may come personally to collect the same.

f. Cheque payments made by the registered post shall have cheque

envelopes bearing a direction to return the unclaimed cheque (i.e.
unclaimed post) to the issuing office.

g. All disbursements shall be supported by proper evidence of the payee

having received the payment in accordance with the applicable laws.

5.12 Drawing and Disbursing Officer (DDO)

5.12.1 The Head of Office shall generally designate a suitable Drawing and
Disbursing Officer (DDO) preferably the Head of Finance unless he
himself acts as such.

5.12.2 The DDO shall exercise the same vigilance in respect of expenses out
of Government funds as a person of ordinary prudence may be
expected to exercise in spending his own money. In particular, the
DDO shall see to it that:
a. Proper entries of the disbursement and recoveries are made for
the correct amounts in the Voucher;

b. A cheque for the correct payable amount to the correct payee is

prepared in accordance with the rules if the payment is made by
cheque, and the cheque number and date is entered in the
disbursement voucher correctly;

c. The disbursement voucher has been duly numbered;

d. The supporting documents are prominently defaced with the

word “PAID VIDE VR.NO…”

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e. The instructions under Section 5.1.10 for approval of

expenditure and Section 5.1.11 for making payments are
strictly observed;

5.13 Return of Claim

5.13.1 Notwithstanding anything incorporated in the rules earlier, a claim may

be returned to the claimant at any stage of its processing or just after
the receipt of it, explaining the reasons for not entertaining the same or
giving instructions to attend to some material defects noticed in the
claim.

5.14 Claims of Civil Servants

5.14.1 Personnel and Other Personnel Emoluments

5.14.1.1 Attendance register as prescribed in the Civil Service Rules shall be the
basis for drawing of Personnel and Other Personnel Emoluments in
respect of both civil service employees and elementary service
personnel. However, the personnel and other personnel emoluments
shall be processed and paid using the payroll system. Any deductions
arising out of unauthorized leave should be based on the strength of the
administrative orders issued by a competent authority.

5.14.1.2 In cases where separate attendance registers are maintained in different

field units and sections located outside the office, the Officer-in-charge
of personnel of those sections shall send an Attendance Report in form
FAM – 4.7, to the accounting unit by 20th of each month through the
Human Resource Division (HRD).

5.14.2 Pay Bills

5.14.2.1 Preparation of monthly pay bills:

a. Save for provisions in (b) below, separate pay bills in Form
FAM – 4.8 shall be generated and approved from the Payroll
System.

b. Separate pay bills shall be prepared for establishments, which

are chargeable to different budget lines (Activities or Projects).

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c. All modifications in the establishment including leave, absence,

new appointment etc. communicated to the accounting units up
th
to the 20 of the month shall be incorporated in the payroll for
th
the same month; modifications communicated after the 20 of
the month shall be incorporated in the succeeding month’s
payroll.

d. When pay is drawn for a portion of a month only, the actual

period of the month for which the pay is drawn shall be
mentioned against the concerned employee below his name.

e. Every change in the amounts drawn in respect of each

employee over those drawn in the previous month’s payroll
shall be supported by a copy of the relevant order. (Periodical
Increment Certificate, Order of Pay fixation etc.) This order
shall be attached with the monthly payroll in which the changed
emolument is drawn for the first time. A brief explanation on
the cause of change in the amount/s shall be recorded on the
body of the pay bill below the name of the employee.

f. When the name of an employee appears for the first time in a

monthly pay bill, a copy of the Last Pay Certificate or the
Appointment letter, as the case may be, and the joining order
shall be attached with the bill. A short explanation like “Joined
on transfer or new appointment” shall be recorded on the body
of the bill below the name of the employee.

g. A pay slip giving the details of the amounts drawn and

deductions made shall be given to each of the employees for
whom the pay is drawn and disbursed.

5.14.2.2 Pay bills for dues in arrears or part of a month:

a. As far as possible, arrears of pay or leave salary fallen due
under any circumstances, shall be drawn in the monthly pay
bill.

b. The reason of drawing the bill, like “Arrears due to pay fixation
on promotion/sanction of increment or sanction of Earned
leave” etc., as the case may be, shall be recorded below the
name of the employee. The order under which such arrears
have fallen due or sanctioned shall also be quoted in the note
and a copy of the same shall be attached with it.
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c. The amounts of entitlement and those drawn for each month for
which the arrears is drawn shall be entered in separate lines, the
first line being the due and deductible amounts and the second
line quoting the drawn and deducted amounts. A reference to
the voucher number of the pay bill in which the amount was
omitted, drawn for the lesser amount or was drawn but
subsequently refunded shall be mentioned against the amount
drawn.

d. The drawing officer shall record the following certificates

under his dated signature on the body of the arrears payroll:
i. No part of the amount claimed in this bill has been
drawn and paid to the incumbent in any shape
previously.
ii. A note of the claim prepared in this pay bill has been
kept in the paid payrolls for the period to which this
claim pertains.

5.14.2.3 In respect of arrears pertaining to a post previously held in another

office (Viz. After the transfer of an employee to a new office), the
arrears payroll shall be prepared by the present employer and sent to
the previous employer for verification and noting in the relevant earlier
payrolls and recording the certificate of noting mentioned at rule
5.14.2.2 (d). The present employer shall pay the amount drawn in such
bills. If a settlement in cash or reimbursement is required for making
the payment, the previous employer shall promptly accept the debit and
pay the gross amount of the bill to the present employer.

Exception – 1. In the case of employees coming back to the civil

service or joining it on reversion/transfer from secondment services in
Government undertakings or organisations outside the scope of
budgetary operations of the Government, the application of rule
5.14.2.3 shall be waived. Under such circumstances, the organisations
to which the person was seconded shall draw the arrears by themselves
on receipt of orders from appropriate authorities and remit the payment
to the concerned employee.

5.14.2.4 Deductions on account of Taxes, Health contribution, House rent,

Provident Fund, GIS etc. shall be made from the pay bills at rates
prescribed under rules and orders issued from time to time. These
deductions shall be shown under separate columns.

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5.14.2.5 Pay shall be disbursed fully on the last working day except for the last
month of the RGoB and Agent Bank’s fiscal year. In the last month of
the fiscal year, the Head of Office and the DDO shall decide on a day
not more than ten (10) days in advance of the close of the month for
disbursement of salaries.

5.14.2.6 The amount of payment for payrolls and remittance of recoveries shall
be drawn and disbursed through the process of authorisation of
disbursement vouchers.
a. Employees shall normally be paid by direct credit into their
bank accounts.
b. No self cheques shall be drawn to draw cash from the Bank for
disbursements of salaries and wages.

5.14.2.7 Recoveries made in the payrolls on behalf of other agencies shall be

remitted within the same month.
a. Schedules or such other details as may be prescribed under the
relevant rules or orders of recoveries shall be sent with the
remittances.

5.14.2.8 Government contributions to the employees’ provident funds shall be

remitted along with the P.F. recoveries.

5.14.2.9 When an employee in Government service gets relieved from an office

on transfer, secondment, superannuation or retirement, the Head of
Office shall issue a Last Pay Certificate (LPC) in form FAM – 4.9.

The following treatment shall be given to the advances lying outstanding

against an employee relieved on transfer or secondment:
a. The nature, amount of the advance and the mode of its
recovery/adjustment shall be mentioned in the LPC.
b. The office receiving the employee shall make the recoveries from
pay in applicable cases and remit the same to the office issuing the
LPC.

5.14.3 Medical Benefits

5.14.3.1 Claims for medical expenses from the employees in civil service shall
be processed in accordance with the rules of entitlements issued from
time to time.

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5.14.4 Expenditure on Travel

5.14.4.1 The Head of Budgetary Bodies may generally delegate his power for
approving Travel Authorisations and Travel claims to the designated
controlling officers.

5.14.4.2 As prescribed under the Bhutan Civil Service Rules and Regulations,
an employee shall obtain an approved Travel Authorisation in form
FAM – 4.10, in duplicate from his Controlling Officer by submitting a
travel plan before the commencement of the tour.

a. An advance of travelling allowance shall not exceed ninety

percent (90%) of the total estimated travel cost.
Sanction/payment of advance shall be withheld in case an
earlier advance so sanctioned remains unsettled. Sanction of
advance of Travelling Allowance shall be accorded in the
Travel Authorisation itself.

b. Original copy of the approved Travel Authorisation shall be

submitted to the Accounting unit for payment of advance.

c. The duplicate copy shall be submitted with the Travelling

Allowance bill on completion of the travel.

5.14.4.3 A claim for payment of Travelling Allowance shall be processed by an

employee in a Travelling Allowance Bill in form FAM – 4.11. The bill
shall be submitted with the necessary supporting documents; especially
the following:
a. The travel authorisation approved by a competent authority;

b. Original boarding pass for reimbursement/adjustment of

airfares, DSA etc. for travel outside the country. In case the
boarding passes are lost, a copy of relevant pages of the
Passport showing entry and exit from the various airports may
be submitted as the proof of travel.

c. A civil servant shall be eligible to claim mileage as per position

level without having to produce vehicle registration documents

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d. Receipted bills and/or cash memoranda in support of actual

expenses, if such items are included in the claim;

e. A tour report when desired by the controlling officer.

Note – 1. Bills and Cash memoranda in support of expenses

incurred on official purchases or other official purposes during the
course of the travel shall not form a part of the Travelling Allowance
claim.

5.14.4.4 T.A. bills shall generally be submitted to the Controlling Officer

immediately but not later than by 30 days on completion of the tour.

Exception – 1. When the travels are undertaken in routine discharge of

normal duties and are frequent, the T.A. bills shall be submitted at the
end of a month.

5.14.4.5 A controlling officer shall examine the tour report in applicable cases
and on acceptance of the same, forward the T.A bills to the accounting
unit duly certified and recommended for payment.

5.14.4.6 The accounting units shall examine each item of a travelling allowance
bill with reference to the relevant rules or orders governing the
entitlement of such items and admit, restrict or disallow them
accordingly.

Exception –1. The application of the above rule may be waived when
a competent authority has accorded a special sanction in respect of a
T.A. claim or any item thereof.

5.14.4.7 No supplementary claims shall be admitted in respect of Travelling

Allowance bills except for the following cases:

Exception – 1. Transportation of personal effects in journeys

undertaken on transfers, or, in applicable cases for fares etc., where the
journeys on transfer are undertaken at separate points of time by the
Government servant and the members of his/her family.

Exception – 2. Increases in the rates of entitlements with retrospective

effect, caused by orders of the Government.

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5.14.4.8 When both husband and wife are civil servants and both are transferred
together to the same place of posting at the same time, the transport
charge shall be admissible only for one person.

5.14.4.9 Transfer grant as admissible shall be paid by the relieving agency and
Transport charge of personal effects and other allowances at the rates
prescribed from time to time shall be paid by agency where the civil
servant is transferred to.

5.14.4.10 Payment/settlement of a T.A. bill shall be made through the process of

authorisation of a disbursement/journal voucher.

5.14.4.11 A Travel register in form FAM – 4.12 shall be automatically

maintained by the computerized accounting system.
a. Relevant details of Travel bills settled in respect of employees shall
be recorded in this register.
b. The accounting unit shall use this register to ensure that travel bill
for the same period has not been paid earlier to the employee.

5.14.5 Expenditure against Work Charge

Agencies involved in the execution of a particular project are required
to propose separate budget for meeting the personnel emoluments,
travels, utilities and other overhead costs for all the manpower
involved in the execution of that particular
activity/project/constructions. All such expenditures shall be charged
to that particular activity and not under the direction services. Further,
the agencies should also charge the overhead costs such as travels,
hiring of vehicles etc of the monitoring staff involved in the monitoring
and supervision of specific activities against such activities or works.
This is called Expenditure against work charge. Agencies shall be
required to follow the guidelines issued by the Department of National
Budget while preparing the budget so that expenditures against work
charges could be streamlined and monitored.

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5.15 Other Objects of Expenditure

5.15.1 General

The Approving officers shall ensure that all required formalities and
procedures prescribed under various rules and orders have been
followed and adequate documents have been attached to the claim
before approving a claim. Adequate records in respect of all
disbursements and adjustments shall be maintained at the accounting
unit.

An illustrative list of records to be maintained and internal checks to be

followed are given below; a more exhaustive list giving the minimum
requirements for accepting expenditure under different objects of
expenditure is given in Appendix – I.

5.15.2 Particular Objects of Expenditure

i) Utilities.
Subsidiary registers shall be maintained in each office to enable
recording of services obtained for office like, telephone trunk calls,
Fax, electricity, water & sewerage charges, postal expenses, etc.
Claims shall be verified from these records.

ii) Supplies and Material.

A stock register for all consumables received in an office and issued
there from shall be maintained in each office. All bills for supplies
made to an office shall be verified from and recorded in this register.
Rules under PRR shall be followed in all procurements. Rules under
Chapter IX of this manual for Stock accounts shall be followed where
procurement and distribution are undertaken through a central stores
facility of the Budgetary Body.

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iii) Rental of Property.

Government orders issued from time to time for rental of properties
shall be followed for hiring of any property. Generally, lease
agreements, duly approved by the Department of National Properties
or Dzongkhag Administrations shall be executed for hiring of any
building or land for official purposes. The provisions under such lease
agreements shall form the authority for payment of rental charges of
buildings or land. In respect of claims for hiring of vehicles, specific
approvals of a competent authority together with a log sheet showing
the utilisation duly verified by a designated officer shall form the
authorities for the expenses on hiring of vehicles.

iii) Maintenance of Property – Vehicles, Equipment.

Expenses on running, minor and routine maintenance expenses on the
following items only shall be booked under these objects of
expenditure:
i. Vehicles attached to Direction offices;
ii. Equipment in offices, laboratories;
iii. Small farming equipment.

a. Officers in charge of vehicles shall log the use, POL purchases

and repair/maintenance works for such vehicles in Vehicle
Logbooks (PMM – 6)/History sheets (PMM – 5) maintained for
each of the items. The Heads of Departments/Offices shall
prescribe suitable Logbooks for other fuel run
equipment/machinery. Officers in charge of the equipment
machinery shall log the use, POL purchases in the Logbooks
and repair maintenance works in the History sheets.

b. Bills for supply of POL or repair/maintenance works shall be

verified from these Logbooks/History sheets and recorded
therein.

Note – 1. The vehicle or equipment In-charge shall append a

performance summary of the vehicle or equipment at the
end of each month in the Logbook. Any substantial
deviation from the rated fuel consumption rate shall be
brought to the notice of the Head of Office.

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c. When there are no budget provisions for running and

maintenance of heavy vehicles or equipment, the expenses
thereon shall be booked under temporary Running &
Maintenance account heads of the particular vehicles or
equipment. For this, an Object head styled as “Others: RMO –
Heavy Vehicles and Equipment” under Miscellaneous Receipts
& Payments account shall be used. The costs such incurred
shall be recouped from time to time by transferring them to the
works concerned through journal entries on the basis of the
entries in the Logbooks. The year ending result of these
temporary accounts shall be turned to zero.

d. In case, budget provisions are provided for running and

maintenance of the heavy vehicles and equipment, the running
costs or transportation charges in the estimates shall be
recovered from the works on which those are utilised. Under
these circumstances, the expenses on the running and
maintenance shall be charged against the budget lines. The
recoveries shall be effected through journal entries by debiting
the works concerned on the basis of Logbook entries and
crediting “Others: RMO – Heavy Vehicles and Equipment”
under the head Miscellaneous Receipts & Payments. These
amounts shall be remitted to the DPA by debit to the same
account head.

iv) Maintenance of Property – Buildings, Roads,

Plantations.
Except for minor and routine works on maintenance which are possible
to be efficiently and economically executed under the supervision of a
non-technical person, all works of maintenance of buildings, roads,
plantations or other installations shall be entrusted to the appropriate
engineering departments or sections.
a. In respect of such minor or routine maintenance works, the
officer in charge of the property or supervising the works shall
record the details of works undertaken in the asset register
(PMM-2) against the item. He shall verify the bills for the
maintenance works on the basis of the entries in this register
and enter the bill verification therein.

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b. The engineering departments or sections shall follow the rules

under Chapter VII, for works procedure and accounts in respect
of all maintenance works undertaken by them.

v) Maintenance of Property – Furniture, Computer,

Others.
The officer in charge of the property shall record the details of works
undertaken in the Inventory register against the item. He shall verify
the bills for the maintenance works on the basis of the entries in this
register and enter the bill verification therein.

vi) Operating Expenses – Advertising.

Expenses on advertisement of matters of public education or interest,
policy notifications, suspension or introduction of particular service
facilities etc. shall be booked under this object. Records of such
advertisements shall be maintained in the office. These will be
consulted for monitoring of performances or other purposes.
a. A copy of the publication in which the advertisement was
inserted shall be attached with every bill on advertising
expenses. These copies, the rate chart and the order for
insertion of such advertisement shall be the basis for
verification of the bills on advertising expenses.

b. Expenses on advertisement of tender notices for procurement of

materials or works shall be charged on the works or materials
cost.

vii) Write off – Stock, Loss of Cash/Goods.

Amounts shall be written off only after receipt of a sanction order
issued by a competent authority. Generally, write-off sanctions are
issued after completion of investigations etc. It thus becomes necessary
to hold the amount of estimated loss under a suspense head of account
like PW Advances until the investigations are complete and a proper
order is issued.

The initial entry for holding the amount under suspense will be:

Suspense – PW Advances A/C. Dr.

To Cash or Stock A/C. etc. Cr.

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Note – 1. In case of loss of cash, the above entry shall be made

through a disbursement voucher as the Cashbook balance
has to be brought down by the lost amount. Entries for loss
of Stock etc. shall be carried out through a journal voucher.

The amount held under suspense shall be cleared on receipt of a “Write

off” sanction order. The journal entry for clearing the suspense account
shall be:

Exp.Current/Activity/Write Off A/C. Dr.

Suspense/PW Advances A/C. Cr.

a. A sanction for writing off an item of fixed asset or equipment like

building, vehicle, installation etc., shall not require any accounting
entries in the cash based budgetary accounts of the Government.

The following actions shall be taken in these cases:

i. Entries quoting the sanction order and the disposal/handing
over of the written off items shall be made in the relevant
Asset or Inventory register by the Property Officer.

ii. Unutilised balance of appropriations for maintenance of the

written off item shall be withdrawn on issue of a write off
sanction.

iii. If the sanction order prescribes recovery of cost or part

thereof, the amount involved shall be booked as suspense
PW item against the party through a journal voucher
crediting the original expenditure head and the recovery of
it shall be watched through a memorandum record. The
actual recovery shall clear the suspense item against the
party by debit to cash and credit to the suspense item. The
remittance of the recovered amount to the revenue or other
designated authorities shall also be brought into account.

b. If the write off sanction pertains to an item of irrecoverable

advance, the entries shall be made through a journal voucher
debiting the Expenditure Current, Activity, write off A/C. and
crediting the relevant Advances A/C. Such budget lines should be
sought from Department of National Budget by submitting all the
relevant documents.

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viii) Acquisition of land, buildings.

Procedure to be observed for acquisition, assessment of value and
payment of compensation against such properties shall be regulated by
special orders issued by the Government from time to time.
a. The Officer in-charge/Property Officer shall make a preliminary
entry in the asset register and prepare or verify a bill in a suitable
form, giving the area, dimension and other pertinent details of the
property. Copies of assessment details/order and sale deed shall be
attached with the bill.

b. The Officer in-charge shall be responsible to obtain a title deed of

the property and enter the same in the asset register.

c. Registration or court fee, stamp duty etc. if required, shall form a

part of the cost of the property.

ix) Capital Expenditure on Structure, Plants &

Equipment.
Procedure shall be governed by the rules under the PRR and Chapter
VII on Works Accounts.

x) Current and Capital Grants.

These are unrequited transfers for specific purposes, in cash or kind to
other levels of the Government, corporations, NGOs, communities etc.
outside the budgetary operations of the central Government. Payments
shall be made on the basis of a sanction order issued by a competent
authority and booked against the budget lines directly.

xi) Loan servicing by the Government – Repayment of

loans
The Department of Macroeconomic Affairs (DMEA) under Ministry of
Finance shall maintain memorandum accounts of the loans availed by
the Government and arrange timely repayment. Apart from the
schedule and terms of repayment, the Memorandum account shall keep
track of the committed amount of the loan, amounts drawn, interest and
service charges accrued, principals and interests etc. paid and the
balance outstanding through Commonwealth Secretariat. Debt
Recording and Management System (CS-DRMS). The following
actions shall be taken to record the transactions under this category:

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a. The principals and the interests shall be paid through the

normal budgetary and accounting process of preparation of
disbursement vouchers.

b. The interest portion shall be debited against the relevant current

expenditure item.

c. The capital repayment portion shall be debited against the

relevant Repayment expenditure item.

d. Sometimes, an amount of interest or service charges is directly

debited to the loan account of the Government and is treated as
disbursement made to the Government by the lending agency.

On receipt of such intimation:

(i). In the memorandum account an equivalent amount shall be
accounted for as Interest or Service charges accrued, Principals
drawn from the loan account and Repayment of Interest or
Service charges;

(ii). A journal entry shall be made for recording the in-kind

transactions of “Borrowings in kind” received and
“Interest/Service charges” paid. The intimation from the
lending agency shall be the basis for this transaction. Copy of
this intimation shall be attached with the journal voucher.

xii) Lending by the Government – Recovery of Loans

1. Extending loans out of Government funds shall be governed by
the rules prescribed and the disbursement of loans shall be
made upon signing of an agreement between the Government
and the borrower. The loan agreement shall, among other
things, include suitable clauses covering the following aspects:
a. The name and address of the borrower;
b. The purpose and amount of the loan;
c. The chargeable rate of interest;
d. Mode and timing of repayment (both principal and
interest);
e. The equivalent currency and the rate of exchange to be
applied in repayments;
f. Period of moratorium, if any on repayment of principal;
g. Consequences of default in payment of interest or
repayment of principal.

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2. Apart from the Sub-ledger account for the payment item, the
accounting section of the lending unit shall maintain a
memorandum account of the loan in a Loan Accounts Register
from which it shall keep watch over the recovery of loans and
interest.

3. A reference of the loan agreement and the MoF approval shall

be quoted in the disbursement voucher.

4. The borrower shall remit the repayments of principals and

interests in separate cheques as these shall be remitted to
different agencies.

Note – 1. Since the payment of loan is an expenditure item against

approved budget lines, the recoveries of principals and interests shall
not be credited to the expenditure item in the accounts. Instead, such
recoveries shall be credited under “Miscellaneous Receipts/Payments –
DPA: Loan principals A/C.” and “Revenue Recoveries/Remittances –
Loan interests A/C” respectively.

5. The repayments received as Principals shall be remitted to the

DPA after endorsing the cheque in favour of the DPA. “MRP–
DPA: Loan principals A/C.” shall be debited while remitting
the repayment.

6. The receipts of interest on loans shall be remitted to the

respective RGR A/C. or RRCO after endorsing the cheque in
favour of the RGR A/C. or RRCO as the case may be.
“Revenue Recoveries/Remittances – Loan interests A/C” shall
be debited while remitting the receipt.

7. The entries in the Cashbook shall be as follows:

i. On receipt of the repayments:
Cash A/C. Dr.
MRP – DPA: Loan principal A/C. Cr.
Rev.Rec./Remit – Loan interest A/C. Cr.
(Being receipt of repayment of loan principal and interest
from……….. vide cheque Nos………DPA)

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ii. On remittance of the recoveries:

MRP – DPA: Loan principal A/C. Dr.
Rev.Rec./Remit – Loan interest A/C. Dr.
Cash A/C. Cr.
(Being remittance of the loan principal and interest to DPA and
DRC, vide ….)

8. The central accounting units at the DPA and the DRC shall
accord credits for such receipts under the heads “Recoveries of
Principals” and “Interest on Loan” respectively.

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CHAPTER – VI

6 ACCOUNTING OF EXPENDITURE

6.1 Recognition of Expenditure

6.1.1 An expenditure shall be recognised immediately upon making payment

in cash or signing a cheque in case of a Disbursement Voucher and on
authorisation of a Journal Voucher subject to the following:
a. In the case of payments made from Permanent or Temporary
Advances, the expenditure shall be recognised when an account
together with the relevant supporting documents are approved
and authorised for adjustment.

b. Direct disbursements from a loan account shall be recognised

on the dates of such disbursements irrespective of the actual
date of receipt of the goods or services in the project.

c. Direct disbursements from grant accounts shall be recognised

only after the receipt of goods or services in the project.

6.1.2 Fiscal Year of a payment shall be determined by the issue date of the
cheque or the date of payment in cash.

6.2 Books of Accounts - Maintenance

6.2.1 Every unit incurring expenditure shall maintain proper books of

accounts as follows:
a. Apart from other supporting books, one set of books of accounts
shall include those registers and other records, which are primarily
required for recording of receipts, payments and adjustment
transactions, compilation of accounts statements and check or
verification of correctness of those statements. These books of
accounts shall be maintained in the accounting units which are all
generated from the accounting system. Such a set shall include:
i. Cashbook (Form FAM – 5.1)
ii. Journal Book (Form FAM – 5.2)
iii. Ledger (Form FAM – 5.3)
iv. Sub Ledger (Form FAM – 5.4)

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v. Other Memorandum records as follows:

(1) Non-Revenue Deposits and Releases Register;
(2) Refundable Deposits and Releases Register;
(3) Employees’ Personal Advances Register;
(4) Employees’ Loans Register;
(5) Stock Ledger (Form 8.1), where applicable;
(6) PW Advances Register;
(7) Government Loan Account Register.

b. The other set of books of accounts shall generally comprise of

records maintained for the purposes of monitoring, controlling and
keeping details of relevant background information like
measurement, stock, movement of vehicles, use of equipment etc.
pertaining to expenditure transactions. These books of accounts
shall be maintained generally outside the accounting units; i.e, in
the field units, stores etc. and according to the rules in which such
requirements are prescribed. These shall be called for in the
accounting units from time to time in connection with settlement
of claims, distribution of costs or other verifications.

6.2.2 All books of accounts which are maintained manually shall be bound
in convenient volumes and shall have pre-numbered pages.

6.2.3 Entries in books of accounts shall be made neatly and legibly in

indelible ink.

6.2.4 Pasting of pages or pieces of papers, use of erasures, correcting fluids

or other materials for correction of entries shall not be made.

6.2.5 Corrections in the books of accounts shall be made through journal or

reversal entries giving cross-references in each affected entry.

6.2.6 The officer-in-charge shall attest all corrections by putting his dated
full signature.

6.3 Recording of Expenditure

6.3.1 All financial transactions including the value of items of In-Kind

assistance shall be incorporated in the accounts through entries in the
prescribed books of accounts.

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6.3.2 Incorporation of expenditure in the accounts of the Government shall

be undertaken by the accounting units by keeping of books under the
principles of double entry accounting. The essential books to be
maintained by the accounting units and the process of recording
transactions in those shall be guided by the following procedures:

1. Cashbook (Form FAM – 5.1)

Except for the officers holding permanent or temporary advances, all
Government officers, who are authorised to receive and/or draw and
disburse Government moneys, (referred to as Drawing & Disbursing
Officers in these rules) shall maintain Cashbooks in form FAM–5.1..

1a. Maintenance of Cashbook:

Under the present computerized accounting system, Cashbooks are
automatically updated by the system without any manual interventions.

a. All monetary transactions get entered in the Cashbook as soon

as they are punched in the computerized accounting system and
transactions approved.

When the monthly closing is done for the transactions in the

system, the system cashbook gets closed for the month and the
cash and bank balances get carried forward to the next month.
However, when the transactions are closed for the year, all
books of accounts will get closed and the system will bring
forward only the cash balances as the opening balance in the
cashbook of the new fiscal year. Thus the accounting units will
ensure the compliance of the following:
i. The closing bank balance at the end of a fiscal year shall
not be brought forward in the next fiscal year.

ii. For externally funded projects, any fund release balance

at the end of the fiscal year need not be surrendered to
the DPA and the same should be allowed to lapse.
However the Agencies are advised not to seek releases
more than the required amount so as to avoid release
lapses.

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th
b. The Cash balance at the end of a fiscal year (as on 30 June or
Last working day of the Fiscal Year) shall be brought forward
in the next fiscal year and the same shall be remitted to the
DPA within July (1st month of the next fiscal year) itself in the
form of cash warrant/demand draft and bank transfer in cases of
missions, embassies and consulate offices abroad. While
surrendering the closing cash balance, the budgetary bodies
should provide LC/PLC account number and FIC (FIC-wise
breakdown, if more than one FIC is involved) in the forwarding
letter.

Note-1: Bank charges for preparing Cash Warrant/Demand

Draft of the closing cash balance shall be met from the closing
cash balance amount and charged to relevant Object Code in
the month of June itself.

Exception – 1. The closing cash balances of the Embassies,

Missions and Consulates abroad at the end of a fiscal year shall
be brought forward in the next year. Budgetary releases for the
next fiscal year to such agencies shall be made in full without
adjusting the closing cash balances but the Missions, Embassies
and Consulates abroad shall surrender the closing cash balances
to DPA through a Direct Transaction (DT) from their LC
accounts held in BoBL, Thimphu within July upon receipt of
first quarter fund release as follows:
i. To treat the surrender of prior year closing cash balance in
July
MRP: Payments to DPA (OBC 89.13) Dr.
Cash Cr.

ii. Upon authorizing BoBL to transfer from LC to BFA (to re-

instate cash balance in PEMS)

Cash A/c Dr.

Bank Cr.

d. The total of the Cashbook which shall be automatically

calculated by the system shall be confirmed on a daily basis.

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e. At the end of each month, the cash balance in the Cashbook

shall be physically verified and a signed and dated certificate to
that effect shall be recorded as:
“Certified that the cash and cheques available in chest has been
actually physically verified by me and the total amount of cash
and cheques in the chest was found to be Nu.xxxx.xx (amount
in words), which agrees with the balance shown in the
Cashbook.”

f. In the verification of cash in chest, if any discrepancy is noticed

between the balance arrived at in the Cashbook and the actual
cash found in the chest, the instructions contained under
Section 1.7 under Chapter I shall be followed.

g. Correction of entries in the Cashbook, if required, shall be

made by reversing the entry and making a fresh correct entry
giving cross-references in the original entry, the reverse entry
and the new entry. The DDO shall attest every such correction
and invariably date his initials in the vouchers. The accounting
unit shall not be able to use erasures, correcting fluids or
overwriting an existing entry in the Cashbook as it is system
generated.

h. Unless otherwise sanctioned specially by the Head of Office, a

Government officer who handles Government money shall not
handle in his official capacity, money which does not belong to
the Government.

Note – 1. Where, under any special sanction, a

Government officer is allowed to handle, both Government and
non-Government moneys, separate cash boxes and sets of
accounts records shall be maintained for each. The Government
money and the accounts records thereof shall be kept entirely
separated from the non-Government money and the accounts
records thereof.

i. The system will maintain separate Cashbooks and sets of

accounts records in respect of each of the bank accounts.

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j. The Cashbook shall be treated as a book of prime entry for

recording of all transactions in cash and through bank. The
Cash and Bank columns of the Cashbook shall be treated as
equivalent to Cash A/C and Bank A/C respectively.

k. The entries in this register will be made as and when

transactions occur, strictly by date and order in which the
transactions are carried out.

l. A suitable narration shall be recorded under each entry. The

entries shall appear as follows:

Transaction: Receipt of a Budgetary Release order:

Entry in the Debit (Receipt) side of the Cashbook:
“To Budgetary Releases A/C. (Bank Column)
Rct.code…/…./…./.
(To record the receipt of release order No…….. dated…….)”

Underlying principle of double accounting:

Bank A/C. Dr.
Budgetary Releases A/C. Cr.

Transaction: Payment of a bill for supply of office stationary:

Entry in the Credit (Payment) side of the Cashbook:

“By Current Exp. A/C.

Exp.code …./…./…./14.01
(To record payment to M/s…… against bill No….. dated….)”

Underlying principle of double accounting:

Current Exp. A/C. Dr.

Cash or Bank A/C. Cr.

m. Other than the situation described in paragraph (n – i) below

and except for Releases received from the DPA, all receipts of
cash and cheques shall get recorded in the Cash column on the
Debit side of the Cashbook against the proper Head of account.
Deposits of such cheques or cash in the Non-Revenue Receipts
& Deposits Account or Refundable Deposits Account shall get
recorded in the Cash column on the Credit side of the
Cashbook.

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n. An authorised and recorded expenditure can be cancelled only

before the actual disbursement of the amount or on receiving
back the disbursed cash, the original non-cashed cheque or a
cheque equivalent to the payment made.

i. In such circumstances, the original entry of the

transaction shall be reversed by making a new entry in the
Cashbook. The amount shall be entered in the Bank
column only if the original non-cashed cheque is received
back. The original non-cashed cheque shall be the basis
for making this reverse entry.

If the amount is received back in cash, or a cheque of

equivalent amount, the entry shall be made in the Cash
column by issuing a non-revenue receipt.

ii. A note of the cancellation shall be recorded in the

disbursement voucher giving a reference to the new entry.

iii. The original non-cashed cheque shall be cancelled and

defaced. An entry of the cancellation of this cheque shall
get updated in the Cheques Issued Register.

2. Journal book (Form FAM – 5.2)

Journal books shall be automatically maintained by the system
to record the transactions undertaken through the journal
vouchers.
a Separate Journal books shall be maintained in respect of
each of the bank accounts operated by an office.
b. Entries in the Journal book shall get updated
simultaneously with the passing of Journal vouchers.
c. Each entry in the Journal book shall be followed by a
proper narration explaining the reason and background
of the entry.
d. Each entry in the Journal book shall be attested by the
Approving officer if maintained manually also.

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3. Ledger (Form FAM – 5.3)

The accounting system will automate the Ledger as per FAM-
5.3. The Ledger shall be maintained for segregating or grouping
of receipts and/or expenses transactions under broad heads of
accounts.

The accounting system will pick up the ledger balances for the
preparation of monthly Receipts & Payments Statements.
a. Separate Ledgers shall be maintained in the system for
each of the bank accounts operated by an office.

b. Each of the approved cash, bank and journal

transactions recorded in the cashbook or the journal
book shall be entered in the Ledger under the respective
broad head of account mentioned in the cashbook and
journal book respectively.

c. The posting of transactions in the Ledger shall be

automatic by the system and the balance under each
account head shall be arrived at simultaneously with
each entry.

d. The year ending closing balances under Advances,

Recovery – Remittances and all Suspense broad heads
shall be carried forward to the next year in the Balance
column to maintain continuity of the unsettled accounts.
The balances shown in the column “Cumulative
balances” against these heads in the Receipts &
Payments Statements shall thus agree with the Ledger
balances.

4. Sub-ledger (Form FAM – 5.4.)

Depending on the number of transactions under a bank account,
separate Sub-ledgers or separate sections of Sub-ledgers shall
be assigned to each of the broad heads of accounts except for
opening of sub-ledger accounts by object codes under
individual broad heads of accounts, budget activities or
suspense items in accordance with the rules under Chapter VIII
and IX.

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The Sub-ledgers shall be the basis for the monthly Expenditure

Statements and other schedules. These shall be automatically
maintained by the computerized accounting system as follows:
a. Separate sets of Sub-ledgers shall be maintained in
respect of each of the bank accounts operated by an
office.

b. Each of the approved disbursement and journal

vouchers shall be entered in the appropriate Sub-ledger
account wherever maintenance of Sub-ledger accounts
has been prescribed in the rules.

c. The Sub-ledger accounts shall be opened for each

applicable object (separately for cash and kind) that
may be defined under each broad head.

d. No control balance shall appear in the Sub-ledger in

respect of Bank or other Loans obtained by individual
employees from the Financial Institutions or other
offices. Only recoveries and remittance of such
recoveries shall be recorded in the Sub-ledgers.

e. Entries in the Sub-ledgers shall be automatic and the

balances arrived at simultaneously with every entry.

f. The totals of balances of each Sub-ledger or section of

the Sub-ledger shall be reconciled monthly with the
balances under the corresponding broad head in the
Ledger.

g. The year ending balances in the Sub-ledger accounts

falling under the broad heads mentioned under
paragraph 3(e) of these rules shall be carried forward to
the next fiscal year.

6.4 Supporting Books at the Accounting Units

6.4.1 Apart from the memorandum records mentioned in relevant sections,

the accounting units shall maintain the supporting books of accounts as
mentioned below. However if such supporting books are not
automatically maintained by the system, the agencies will have to
maintain them manually.

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1. Bills Inward Register (Form FAM – 4.2)

Maintenance of this register shall be conducted in accordance
with the provisions under rules 5.6.1 and 5.6.2.

2. Chequebook Register (Form FAM – 1.2)

Every time a new Chequebook is brought into use in respect of
a particular bank account, the beginning and ending serial
numbers of the cheque forms contained in the book shall be
entered in the system.

3. Cheques Issued Register (Form FAM – 1.3)

Every time a cheque is issued, the details of the cheque shall be
reflected in this register in the system. Details like its
subsequent cancellation, stop payment orders, substitution etc.
shall also be reflected in system.

4. Receipt Book Register (Form FAM – 3.2)

Separate registers shall be maintained for keeping record of
receipt and issue of Revenue Receipt books and the serial
number of receipt forms contained in the books. Issue of receipt
books to the using unit shall be acknowledged by the user.

5. Bills Outward Register (Form FAM – 5.5)

Record of bills, Debit notes, invoices or claims raised by an
office for supplies made, products sold or services rendered
shall be maintained in this register. Each of such bills raised
shall be identified with the serial number and date of the entry
in this register.

Particulars of the office/party against whom the bill is raised

and details of settlement of the bills shall also be noted against
each entry. The Head of Office shall review this register at least
once a month and take proper actions against the defaulters for
realisation of the dues.

6. Other Memorandum Records.

Memorandum records as prescribed under different sections
shall be maintained in appropriate forms and registers.

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CHAPTER – VII

7 WORKS PROCEDURES AND ACCOUNTING

7.1 General Principles

7.1.1 All works shall be primarily divided in two categories, “original works
and “maintenance works”.

a. Original works shall comprise of:

i. All new constructions;
ii. Additions, alterations, renovations, remodelling of an
existing property forming a part of a new project/work
or resulting in an increase in the value of the existing
properties;
iii. Experimental application of new, alternative or
improved construction materials or techniques on
existing properties;
iv. Initial repairs to newly acquired properties;
v. Restoration of previously abandoned or destroyed
properties for bringing them into use;
vi. Repairs and maintenance of properties during their
construction.

b. Maintenance works shall comprise of:

i. Routine repairs and maintenance works;
ii. Remodelling, improvements, replacements or re-
constructions which do not result in an increase in the
value of existing properties, provided that the particular
work is not a component of an original project or work
and the work does not involve any acquisition of land.

7.1.2 Original and maintenance works shall be classified as Capital and

Current Appropriations respectively.

7.1.3 All works, whether original or maintenance shall be initiated only

against an approved budget appropriation.

7.1.4 Unless otherwise specifically mentioned, all works shall be initiated in

accordance with the PRR, only after obtaining Administrative
Approval & Financial Sanctions and proper Technical Sanctions.

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7.1.5 All Budgetary Bodies shall ensure that the works are executed and
completed within the stipulated time and within the approved
appropriations in accordance with the PRR and other prevailing laws,
rules and procedures.

7.1.6 For works to be financed from external grants or borrowing, the rules
and procedures prescribed by the RGoB shall be followed, unless
otherwise agreed.

7.1.7 Qualified Engineers working in the respective organisations may issue

Technical Sanctions for works within the power delegated to them.

7.1.8 Preparation of estimates and execution of a work shall be carried out

by a Budgetary Bodies having necessary technical competence or with
the assistance of another Budgetary Body by entrusting it as a Deposit
work.

7.2 Responsibilities

7.2.1 The Head of Office shall, among others, be responsible for ensuring
that:
a. All works are executed in accordance with the prescribed rules
and procedures;

b. The works are carried out in the best possible interest of the
Government;

c. The progress of the works are commensurate with the time and
expenditure incurred;

d. As an Entrusted Agency, the Deposit works are executed in

accordance with the prescribed rules and procedures, and
according to the requirements of the Client Agency and that the
statement of accounts are submitted in time to the Client
Agency.

e. The prescribed books of accounts are maintained;

7.2.2 The Head of Office shall be responsible to take all such reasonable
actions, to which he is competent to, for timely completion of the work
as well as to avoid cost overruns.

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7.3 Execution of Works – Pre-requisites

7.3.1 Approvals and Sanctions

7.3.1.1 An appropriate competent authority of the administrative

Ministry/Department requisitioning a work shall issue an
Administrative Approval and Financial Sanction (AA&FS). Such an
approval shall be based on detailed estimate along with architectural
and engineering drawings, where applicable.

7.3.1.2 A competent technical authority shall issue Technical Sanctions (TS)

for all works.

7.3.1.3 The TS shall be based on the following conditions:

a. Drawings, designs and specifications including detailed
estimates.

b. The drawings, designs and detailed estimates shall be site

specific and based on site conditions.

c. Estimates of all works shall be in accordance with the current

Bhutan Schedule of Rates (BSR). In the absence of any
specific item of work in the BSR, a fresh analysis of rates shall
be prepared based on the prevailing market rates and submitted
for the approval of the competent authority.

d. Before according TS, the sanctioning authority shall be

satisfied that no material deviations from the whole project as
prepared for the purposes of the AA&FS are anticipated.

e. TSs may be accorded to components of a whole work provided

that a specific amount corresponding to the component is
mentioned clearly in the AA&FS.

f. The amount of TS shall be within the amount specified in the

AA&FS.

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g. Provided that the conditions at (i) under this rule are fulfilled, a
fresh estimate shall be prepared and a Revised Technical
Sanction issued when, during the course of executing a work, it
transpires that the actual expenditure on a work is likely to be
in excess of 10% over the amount in the previous TS. The
Revised TS shall exhibit the quantities of items or work and
amounts sanctioned in the original estimate and those estimated
to be required.

h. While executing a sanctioned work, if some extra or additional

work beyond the scope of the sanctioned work is considered
necessary, and if the technical quality of the sanctioned work is
not contingent upon undertaking such additional work, a
Supplementary Technical Sanction shall be issued provided that
the conditions at (i) are fulfilled.

i. The issue of a Revised or Supplementary TS shall be subject to

the availability of Budget appropriation and issue of a Revised
AA&FS.

7.3.1.4 In all cases, the Head of Office shall issue an order for commencement
of work on receipt of which, a contractor, Supervising and Site
Engineers shall start actual execution of a work.

7.3.1.5 Unless otherwise specified, the AA&FS for a work shall be deemed to
have lapsed in case the work is not commenced within twelve (12)
months from its issue.

7.3.2 Mode of Execution

7.3.2.1 All public works shall be carried out through an open and fair
competitive bidding based on the PRR and the categorisation and
classification of the contractors by the Construction Development
Board (CDB) or such other authorities as may be established by the
Government.

7.3.2.2 The concerned Budgetary Body shall take up the execution of a work
departmentally or entrust it to another specialised Budgetary Body as
deposit work where:

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a. The work to be executed is of specialized nature and the

required level of skills and/or technical know-how is not
available with the contractors, or;

b. The works are to be carried out through community

participation.

7.3.2.3 The selection of contractors/suppliers and award of supply or work

contracts shall be undertaken in accordance with the procedures
prescribed in the PRR.

7.3.3 Terms of Payment on Award of Contract

7.3.3.1 In the case of a work estimated to cost up to Nu. 0.10 (point one)
million, the contract shall specify that no amounts shall be payable to
the contractor till the whole work has been completed and a certificate
of completion is issued to the contractor.

7.3.3.2 In case of works costing more than Nu.0.10 (point one) million, the
contracts shall generally specify that amounts shall be payable at such
times as agreed between the parties or at prescribed intervals
coinciding with the physical progress of the work.

7.3.3.3 Generally, all materials required for the construction shall be supplied
by the contractor and the cost included in the respective item rates.
When some of the materials for construction are supplied by the
Budgetary Body for the sake of ensuring quality, the following
procedures shall be followed:
a. When the work is tendered out, the tender document shall
specify the items that will be supplied by the Government and
the bidders should be instructed to exclude the cost of those
materials from the rates to be quoted.

b. The value of materials issued by the Government shall be

booked to the work, and the contractor shall not include the
cost of such materials in his bills.

7.3.3.4 The price adjustment resulting from rise and fall in the cost of labour
and/or materials shall be as per clause 6.3.2 of PRR.

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7.3.3.5 Should price variations occur during the period of time extension, it
shall be applicable only under force majeure conditions or where such
time extension has been granted in the interest of the Government.

7.3.3.6 Except for cases of advances, contractors/suppliers shall be advised to

show quantities and amounts distinctly against each item of
work/supply in the bills in a cumulative form.

7.4 Execution of Works – Record Keeping

7.4.1 Maintenance of Records

7.4.1.1 In addition to the financial and accounting records to be maintained for

recording the financial and accounting transactions prescribed under
various chapters/sections, the following records/books on work
accounts shall be maintained, depending on the mode of execution.

a. If the work is executed departmentally, the following books/records

shall be maintained:
i. Muster Roll Register (FAM – 6.1)
ii. Muster Roll (FAM – 6.2)
iii. Measurement Book (FAM – 6.3)
iv. Measurement Book Register (FAM – 6.4)
v. Material at Site Account Register (FAM – 8.1)
vi. Tools and Plants Account Register (FAM – 8.1)
vii. Empty Container Account Register (FAM – 8.1)
viii. Site Order Book (FAM – 6.5)
ix. Hindrance Register (FAM – 6.6)
x. Dismantled/Extracted Materials Account Register (FAM – 8.1)
xi. Works Cost Sheet (FAM – 6.7)

b. If the work is executed through contract, maintenance of the

Muster Roll Register and the Muster Roll shall not be required.
Instead, a system generated memorandum Ledger in FAM – 6.8
shall be maintained. The Materials at Site Account Register shall
be maintained for the materials supplied by the Government, if any.
A Materials Control Register shall be maintained for the items
supplied by the contractor.

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7.4.2 Muster Roll (MR).

a. MR in Form FAM – 6.2 shall be maintained to record daily

attendance of work-persons engaged for works executed
departmentally.

b. The following shall be guidelines on the preparation and

maintenance of MR:
i. On receipt of an order for the commencement of a work, the
Site Engineer shall submit to the Head of office through the
Supervising Engineer, a requisition for issue of MR specifying
therein the number of each category of work-persons (like
mason Gr., carpenter, labour etc.) required and the period for
which they are required.

ii. On examination of the budget provision, existence of AA&FS,

TS etc., the Head of Office shall issue the required MR to the
Supervising Engineer approving therein the strength of each
category of work-persons, period of their engagement and the
rates for each category. The MR shall be registered in the
Muster Roll Register (Form FAM – 6.1) and assigned a number
and date before issue. The issue of the MR shall take place
before the commencement of the work or beginning of the
working period whichever is earlier.

iii. The rates of payment to different categories of work-persons

shall be fixed in accordance with the wage rates prescribed by
the Government from time to time.

iv. The Supervising Engineer shall further re-issue the MR to the

Site Engineer.

v. Separate MRs shall be issued for each work. The Head of

Office and the Supervising Engineer may however allow the
use of a single MR for several small works of short duration.

vi. All columns of the MR, including those for the Citizenship
Identity/Immigration Card No. shall be filled in by the Site
Engineer.

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vii. Attendance of the work-persons engaged in a work shall be

marked daily in the MR before the start of work by the Site
Engineer and signed by him.

viii. MRs shall not be prepared in duplicate.

ix. No over writing shall be permitted in the MR.

x. Surprise checks on the attendance of the MR shall be conducted

by the Supervising Engineer/the Head of Office or his
nominated officer. The checking officer shall initial the day
column in the MR in token of the attendance having been
checked.

xi. MR shall be closed on the last day of the period for which it
was sanctioned or on completion of the work, whichever is
earlier.

xii. Generally, all the three parts of the MR shall be filled in before
submission to the Supervising Engineer.

xiii. Agencies executing works through community participation

shall maintain an attendance register instead of the MR to
record such contributions.

7.4.3 Measurement Book (MB).

a. MB in Form FAM – 6.3 shall be maintained by the Site

Engineer to record detailed actual measurement of quantities of
works done as well as supplies received. MBs shall be the
basis of all accounts of quantities of works done by contractors
or work-persons engaged departmentally or supplies received.

b. MBs shall be considered as very important accounts records

and maintained very carefully and accurately, as these may
have to be produced as evidence in a court of law, if and when
required.

c. MB shall be printed, securely bound and page numbered.

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d. All MBs belonging to a disbursing unit shall be serially

numbered with a prefix to identify these with the office.

e. The Head of Office shall maintain a MB Register in Form FAM

– 6.4 in which the details of MBs issued to a sub-unit or
Supervising Engineer, their return, review and maintaining on
record shall be entered. A similar register shall be maintained in
the office of the Supervising Engineer in which the details of
their issue to specific Site Engineers and their ultimate return to
the Head of Office shall be recorded.

f. MBs no longer in use by Supervising Engineers or Site

Engineers shall be withdrawn promptly even though they are
not completely written up. These may be re-issued later.

g. A Site or Supervising Officer getting transferred or relieved on

any account shall hand over all the MBs issued to him to his
successor. The transfer shall be recorded in the respective MBs
after the last entries under the dated signatures of both the
relieved and relieving officials. Such MBs shall be recorded in
the MB Register as received back and re-issued to the new
official.

h. Any corrections in MBs made by the accounting units in the

offices of the Supervising Engineer or the Head of Office shall
be entered in red ink, and shall be initialled and dated.

i. In case of lump sum contract, MB need not be maintained since

the payment of running bills shall be based on the activity
schedule.

j. The following shall be the guidelines on the maintenance of

MB:
i. MBs shall generally be written by the Site Engineer.

ii. Recording of Measurements shall be done neatly and

directly in the MB in indelible ink at the work site only.
The MB shall be so written that the transactions
pertaining to a work are traceable easily;

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iii. No entry in a MB shall be erased. Corrections shall be

made by crossing out the incorrect entries neatly and
inserting the correct details. Each such correction shall be
initialled and dated by the official making the corrections.
Cancellations of measurements shall be supported by
dated initials of the officer ordering the cancellation,
stating the reasons for cancellation or by the number, date
and name of the issuing authority of the order for
cancellation.

iv. Each set of measurements shall commence with the

following entries as may be applicable in each case:
In the case of works:
(a) Full name of the work,
(b) Location of the work,
(c) Name of the contractor,
(d) Number and date of contract agreement,
(e) Number and Date of written order to commence
the work,
(f) Intended date of completion,
(g) Date of measurement
(h) Page and MB No. Reference of previous
measurement.

In the case of Supplies:

(a) Name of supplier,
(b) Number and date of supply order,
(c) Name of work,
(d) Date of measurement,
(e) Page and MB No. Reference of previous
measurement, if any.

v. Entries in the MB shall be continuous from one page to

another. Pages in a MB shall never be left blank, pasted or
torn out. Blank page left inadvertently, if any, shall be
cancelled under attestation;

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vi. In the cases of works or supplies awarded on contract,

the measurements shall be taken jointly with the
contractors/suppliers or their authorised representatives.
The measurements recorded shall be signed with date at
the end by the official taking the measurement and the
other party in token of the latter’s acceptance of the
measurements. If the contractor/supplier or their
authorised representatives do not present themselves
during the measurements despite being notified, the
measurements taken by the Government officials shall be
considered as final and binding on the
contractor/supplier.

vii. In the cases of works executed departmentally, if the

works are susceptible to measurement, detailed
measurement of the works under execution shall be taken
and recorded in the MB on the closure of each MR.

viii. An abstract of measurements giving the totals of

measurements by individual items of work as indicated
in the sanctioned detailed estimate shall be appended
below the detailed measurements.

ix. In the case of departmentally executed works that are

susceptible to measurement; an additional record entry
on cost efficiency of the work shall be appended below
the abstract in the MB in the following format:

Estimated value of works done up to this MR.

Less Estimated value of works done up to the previous
MR
Estimated value of works done in this MR = (A)
Cost of materials used during this MR period
Add amount of this MR
Actual cost of work done in this MR = (B)
Cost efficiency on work done in this MR =
(A ~ B)/A*100.

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k. The Supervising Engineer shall be responsible for

conducting 100% check of the measurements of all such
works, which cannot be subsequently measured, such as
works relating to foundations. For other items, the
Supervising Engineer shall test check a minimum of 40%
of the total value of the works. The Supervising Engineer
shall record the results of test checks in the MB under his
signature and shall also sign below the abstract of
measurements.

l. The Head of Engineering Cell of the Agency/disbursing

unit shall be responsible to test check a minimum of 20%
of the total value of the works.

7.4.4 Materials at site Account Register (MAS A/C)

a. Material at Site Account Register in Form FAM – 8.1 (Stock

Ledger) shall be maintained for all works for the materials issued
to the works/contractors by the agencies. The MAS A/C shall
cover day to day receipt and consumption of materials, and hence
shall be maintained according to the following rules:

i. The Site engineer shall maintain a separate MAS A/C for

each work under his charge;

ii. The account shall be cleared as and when the work is

completed. Surplus materials, if any, shall be transferred to
other works through Property Transfer Note, (Form PMM –
4) with the approval of the next higher authority. The value
of such transferred materials shall be booked against the
new work and equivalent amount shall be deducted from
the cost of the completed work.

b. The materials for issue to the contractor shall be held in the MAS
A/C under the custody of the Department and shall be issued to
the contractor from time to time strictly in accordance with the
requirements. Care shall be taken to prevent diversion of
materials issued to the contractor.

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c. All materials at site shall be physically verified from time to time

and positively at the end of each fiscal year in respect of all
works in progress and/or on completion of work. Shortages, if
any, shall be investigated and responsibility fixed. If the loss is
due to natural calamity or it is not possible to fix responsibility,
the value thereof shall be considered for accounting as a charge
to the same work.

Note – 1.Where the work contract includes supply of materials by the

contractor, the Site Engineer shall maintain a suitably designed
Materials Control Register and record therein the details of important
materials like cement, steel, CGI sheets etc. that are brought by the
contractor. Such details shall include name of the item, date brought in,
quantities, purchased from, Cash Memo/Bill No. and rates. These items
of information shall be utilised for exercising quality control and
paying secured advances.

Note – 2. Diversion of materials brought by the contractor in the

work-sites shall not be permitted if secured advances have been paid
against such materials.

7.4.5 Tools and Plants Account Register

Tools and Plant Account Register shall be maintained in Form FAM –

8.1 (Stock Ledger) for all general and special tools and plants of
consumable nature. The cost of small Tools and Plants shall generally
be charged directly to the work concerned as and when acquired.

When tools and plants are loaned for a specific work or purpose, the
record of the loan shall be entered in the register for ensuring the return
thereof. Losses of tools and plants shall be reported to the Supervising
engineer/Head of Office for investigation. Tools and plant shall be
physically verified annually and the annual report thereof prepared
indicating the opening balance, receipt, transfers and losses during the
years as well as the balance at the end of the year. Unserviceable tools
and plant shall be dealt with in accordance with the provisions in
PMM. On completion of the work, the balance stock of tools and plant
shall be kept in the Stores.

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7.4.6 Empty Container Register

Empty Container Register in Form FAM – 8.1 (Stock Ledger) shall be

maintained by the Site engineer for empty bitumen drums etc. Disposal
of empty containers shall be conducted in accordance with the
provisions in PMM, when sufficient quantity is available. Utilisation of
such items shall be noted in this register under attestation of the officer
concerned.

7.4.7 Site Order Book

Site Order Book shall be maintained by the Site Engineer for all works
in Form FAM – 6.5 for the purpose of recording instructions issued at
site pertaining to work. The site order book shall be maintained as
follows:

a. The Supervising/Senior most Engineer or Authorised

Representative of the Head of Office shall record in the Site Order
Book any defects/instructions for the compliance of the Contractor
and Site Engineer;

Note – 1. In case the Site Engineer feels the necessity of any

modification or correction in the design, specification or scope of
work during the construction, he shall immediately bring the issue
to the notice of the Supervising Engineer for obtaining written
authorisation.

Note – 2. Instructions involving additional or extra works shall be

processed in accordance with the scope of work, budget
appropriation, and terms of contract in applicable cases and
ordered in writing separately. Before making any extra financial
commitment, Agencies shall take into consideration the provisions
under rule 7.1.5, which require them to remain within the
approved appropriations for the works.

b. The signature of the official giving the instruction and the

signatures of the Contractor’s representative and the Site Engineer
shall be recorded in the Site Order Book;

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c. The Site Order Book shall be reviewed regularly and

compliance with the instruction recorded therein by the Contractor
and Site Engineer shall be ensured;

d. The Site Order Book shall invariably be referred to at the time of

preparation and submission of statements for deviation items,
substitution items, extra items, additional items, time extension and
making final payments;

7.4.8 Hindrance Register

Hindrance Register in Form FAM – 6.6 for each work shall be

maintained by the Site Engineer for all works. Whenever any
hindrance affects the progress of work, the Site and/or Supervising
Engineer shall make a note of such hindrance in the Hindrance
Register. Signatures of the Site Engineer, Supervising Engineer and the
contractor’s representative at site shall be recorded clearly in the
Hindrance Register. Any request for extension of time for the
completion of the work shall be based, among others, on the facts
recorded in the Hindrance Register.

7.4.9 Dismantled/Extracted Materials Account Register

Materials obtained through dismantling or which are retrieved or

extracted during the course of execution of the works, such as trees
felled or stones, rocks extracted shall be considered as properties of the
Government. Such materials shall be accounted for in the
Dismantled/Extracted Materials Account Register in Form FAM – 8.1
(Stock Ledger), which shall be maintained by the Site Engineer for all
works. The modalities of the usage, stacking and the disposal of
dismantled materials shall be conducted in accordance with the
provisions of Standard Bidding Documents (SBD).

7.4.10 Contractor’s Ledger

Every Budget Agency executing works through contract shall maintain

a Contractor’s ledger in Form FAM – 6.8 for individual contractors
reflecting the transactions undertaken in connection with execution of
works or materials supplied.

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7.4.11 Works Cost Sheet

a. All Agencies executing works shall maintain a ledger of Works

Cost Sheets in Form FAM – 6.7 to:
i. Record transactions pertaining to each work;

ii. Have accurate up to date data on status of any work in progress

or completed.

iii. Enable the Head of Office or other senior officers of the Budget
Agency to review, appraise, and to exercise control over the
works.

b. The Works Cost Sheet shall be prepared and maintained for all
original works costing more than Ngultrums one million. The
information in the ledger of Works Cost Sheets shall be based on
financial transactions and maintained by the accounting unit of the
Head of Office. Upon completion of a work, the expenditure
recorded in the Work Cost Sheet shall be totalled and balance of
appropriation, if any, shall be indicated under the total column of
the expenditure section.

7.5 Payment and Accounting of Works Expenditure

7.5.1 General

7.5.1.1 Expenditure on works shall generally be made through the following

three channels:
a. Payments to Work-persons;
b. Payments to Suppliers and Contractors;
c. Advances to Officials, Agencies, Suppliers and Contractors and
their adjustments.

7.5.1.2 The procedures for processing payments as mentioned under Chapter

V shall be followed in general for processing of payments in
connection with execution of works also. Since most of the payments
against works are made through the MRs and MBs and Abstract of
bills, some additional and specific procedures are involved. Such
additional procedures are laid down in the following sections.

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7.5.2 Payments to Works-Persons and Accounting thereof

7.5.2.1 Wages for all work-persons engaged for the execution of works on a
daily rate basis shall be drawn on MR, Form FAM– 6.2.

7.5.2.2 The Site Engineer shall total all the columns of daily attendance, fill in
the rates against each work-persons, work out the total number of
payable days, indicate the fines and deductions if any, put the net
payable amounts in respect of each and total payable amount. The
amount of unpaid wages up to the previous MR shall be brought
forward in Part II.

7.5.2.3 The progress of works done by the work-persons shall be recorded in

part III of the MR as per the abstract of measurements. If the work is
not susceptible to measurements, a remark shall accordingly be given
in part III.

7.5.2.4 An entry of the closed MR shall be made in the MB indicating the

name of the work, MR number, period covered in the MR and the total
amount of the payment. The closed MR along with the MB shall be
submitted to the Supervising Engineer. In the case of variations in the
cost efficiency exceeding 5% as recorded in the MB, a proper
justification of the cause and the proposed measures to be adopted to
bring down the variation shall be explained in a separate paper.

7.5.2.5 On receipt of a completed MR, all the calculations, entries and totals
shall be thoroughly checked in the office of the Supervising Engineer.
The Supervising Engineer shall also conduct appropriate amount of
check of the measurements, ensure correctness of the entries in the MR
and MB, the amount of unpaid wages in Part II, and countersign it. He
shall verify the stated causes of variation in the cost efficiency factor,
examine the merit of the proposed remedial measures, recommend or
give his own suggestions and submit the MR and MB to the Head of
Office for advice and payment.

7.5.2.6 The following checks shall be conducted by the accounting unit in the
Head of Office to ensure that:

a. The MR has been filled in correctly in all respects;

b. The wage rates of different categories of work-persons are
correctly applied;

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c. Daily totals of different categories of work-persons have not

exceeded the sanctioned strength on any day;
d. Paid holidays have been marked in accordance with the Labour
Act and rules in force;
e. Total payable days of each work-person, amount payable to
each and the total amount of payment have been calculated
correctly;
f. Unpaid wages of previous MRs have been claimed correctly;
g. The Supervising Engineer or other designated officers have
checked the MR attendance from time to time or for the
prescribed minimum number of days, in case there is a
departmental order to the effect;
h. The calculations in the MB, both in the detailed measurements
and the abstract are correct.
i. In the case of a last MR of a work, the prescribed amounts of
test checks on works have been carried out.

Note – 1. Deficiencies if any noticed under steps (g), (h) and (i)
shall not cause withholding the payment. Those shall be brought to the
notice of the Head of Office for adoption of corrective measures.

7.5.2.7 While passing the MR for payment, the Head of Office shall issue
suitable instructions to the Supervising Engineer and the Site Engineer
to adopt specific measures for correction of deficiencies mentioned
under rules 7.5.2.6 (g), (h) and (i) as well as to control variations in the
cost efficiency mentioned under rules 7.5.2.4 and 7.5.2.5.

7.5.2.8 Calculation checks and required corrections in a closed MR shall be

completed within one week of its receipt by the Head of Office.

7.5.2.9 The payable amount of the closed MR shall be paid to the Supervising
Engineer as Temporary Advance or charged against the work against
the officer for making disbursements. When the payments are charged
to the work, it should be ensured by the site engineers/ accounting units
that the paid muster rolls are attached with the voucher for future
reference and records.

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7.5.2.10 A pass order indicating the MR Number, disbursement voucher

number and the amount of MR shall be recorded in the MB in red ink
and signed by the Disbursing Officer. A red ink line shall be drawn
diagonally across the pages of the MB where the related measurements
have been recorded to indicate that the measurements have been
accounted for.

7.5.2.11 On receipt of the Temporary Advance, the Supervising Engineer shall

arrange disbursement of wages, preferably on the same day
immediately after the working hours of the work-persons if the work is
carried out in the same station. In the cases of works at outstations,
disbursements shall be made at the earliest taking the reasonable
journey time into consideration.

7.5.2.12 While making disbursements, stamped acknowledgement of the

payment shall be obtained from each payee on the MR. The
disbursements shall be witnessed by another official who shall record a
certificate of having witnessed the payments at the foot of the MR. The
details of unpaid items shall be recorded in Part II of the MR.
Similarly, if any of the unpaid items of previous MRs are paid out of
the advance against the present MR, entries of the same shall also be
made in Part II of the MR.

7.5.2.13 The completed MR and the unpaid wages, if any, shall be submitted
back, without delay to the Head of Office for adjustment of the
advance and booking of expenditure against the work.

7.5.2.14 The total amount of Part I of the MR shall be charged to the work
against the budget line. The unpaid wages relating to Part I shall be
credited in “Suspense – Other Deposits - Others” under the work. The
disbursement of previously unpaid wages recorded in part II of the MR
shall be debited against “Suspense – Other Deposits - Others” under
the work.

7.5.2.15 A Register of Unpaid Wages in Form FAM – 6.9 shall be maintained

in the office of the Supervising Engineer to keep a record of the unpaid
items of the MRs and their subsequent payments. This register shall be
produced to the accounting unit on every occasion of MR transactions.

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7.5.2.16 Subsequent payment of unpaid wages shall be made through a payment

voucher on the strength of a note of request from the Site Engineer
recommended by the Supervising Engineer. A note of such payment
shall be kept in the Register of Unpaid Wages and in the relevant MR.
These payments shall be charged to “Suspense – Other Deposits -
Others” under the work

7.5.2.17 Wages remaining unpaid for three (3) months or more shall be reported
to the Head of Office who will decide whether the amounts should
continue to be held in office or should be remitted to the Refundable
Deposits Account.

7.5.2.18 On the closing of the works accounts or by the end of the fiscal year,
whichever is earlier, the unpaid wages lying at the credit of “Suspense:
Other Deposits – Others” shall be remitted to the Refundable Deposits
Account by debit to the head “Misc. Rct/Pmt: Deposits – Refundable
Deposit” keeping a note on the Registers of Unpaid Wages and
Refundable Deposits.

7.5.2.19 Wages remaining unpaid for more than three (3) years shall be cleared
through a journal entry debiting the suspense head and crediting the
work concerned by obtaining a budget line for the work from DNB.
While approving the budget line, the DPA shall transfer the equivalent
amount from the RD Account to Govt. Budget Fund Account under
intimation to the Budgetary Body. A note of the clearance shall be kept
in the Register of Unpaid Wages against the relevant items. The note of
deposit in the Refundable Deposit Register shall be cleared by putting
a remark “Cleared by transfer to Budget Fund vide DPA No.”.

7.5.3 Payments to Suppliers/Contractors and Accounting

thereof

7.5.3.1 Payments for works or supplies required for specific works shall be
based on the quantities recorded in the MB.

7.5.3.2 Subject to the terms of agreements, the payments against works shall
generally be made against running account bills and the payments
against supplies shall be made in proportion with the actual supplies
within 30 days from the date of receipt of claims.

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Note – 1. Successive claims against a work or supply contract for

payments against progress of work or supply are referred to as
“Running Account Bills”.

7.5.3.3 Payments against running account bills shall be subject to adjustment

in the subsequent bills.

7.5.3.4 The following documents shall be required to make payments for the
bills submitted by the contractor:

a. Joint measurement sheet, measurement book, bills duly verified

by Site Engineer and signed by the Contractor and Engineers or
Head of Department/Division for the payment of running bills,

b. Joint measurement sheet, measurement book, bills duly verified

by Site Engineer and signed by the Contractor and Engineers or
Head of Department/Division, work completion certificate,
approval for deviations, extra works, time extensions, price
escalations and substitute items for the payment of final bills.

7.5.3.5 The Site Engineer shall verify all bills of contractors and suppliers with
reference to the entries in the MB and, in applicable cases with entries
in the MAS A/C or the T&P register. The following shall be ensured
while verifying the claim:
a. If the contractor is required to obtain certain construction
materials from the Government, it shall be ensured that:
i. The cost of such items are not included in the claim;
ii. Recoveries of the cost of materials so supplied are
effected in case the item rates of contract are inclusive
of the cost of materials.

b. If any secured and/or Mobilisation Advance was paid to the

contractor for the materials brought in by him, recoveries of the
advance in accordance with the terms of agreement are
effected.

c. Security deposits are deducted in accordance with the terms of

agreement.

7.5.3.6 The verified and certified bills shall then be submitted to the
Supervising Engineer with the relevant MB/s.

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7.5.3.7 Besides examining the bills verified by the Site Engineer, the
Supervising Engineer shall conduct such checks as deemed necessary
in order to ensure the admissibility of the claim.

7.5.3.8 Among such checks, the Supervising Engineer shall carry out checks
on theoretical consumption of important items like, cement, steel, road
metal etc. in accordance with technical norms. Such checks are
intended to ensure that the issue or consumption of materials is in
accordance with the progress achieved. Calculation sheets for such
checks shall be attached with the bill. Any notable under or over
consumption of materials shall be investigated and explained in those
notes for approval or suitable instructions from the Head of Office.

7.5.3.9 The bills and the MBs, duly endorsed by the Supervising Engineer
shall be submitted to the Head of Office.

7.5.3.10 In the accounting unit of the Head of Office, the following specific
checks shall be carried out in cases of bills for works or supplies to
works.
a. The MB entries shall be verified to ensure that:
i. Measurements have been test checked to the extent
required;
ii. Calculations on quantities, volumes etc. are
arithmetically correct;
iii. Rates have been recorded correctly and are in
accordance with the contract;

b. If the bill is the first of a running account, it shall be verified

whether the performance guarantee, if specified in the contract,
has been provided by the contractor/supplier.

c. If the bill is on a running account, it shall be compared with the

previous running account bill and a cross-reference of the two
successive bills shall be noted in both the bills.

d. In the cases of bills for supplies, the relevant MAS A/C. or the
T&P Register shall be checked to see whether the receipt of
items have been correctly noted therein and the verification of
the current bill has been marked there.

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e. Cases of notable under or over consumption as brought out by

the Supervising Engineer shall be brought to the notice of the
Head of Office for his approval or suitable instructions.

f. Deductions in rates of items of works, effected if any, shall be

verified in accordance with the terms of agreement and got
approved by the Head of Office.

g. Statutory deductions and recoveries of cost of materials issued

by the Government, secured and/or Mobilisation Advances, if
any, shall be effected and noted in the relevant registers.

h. Deduction of security deposit, as per terms of agreement, shall

be made and noted in the relevant register.

i. In the MB, an entry of pass and payment of the bill shall be

made in red ink below the abstract of measurement giving
reference to the voucher number and date. The relevant pages
in the MB containing the measurements shall be crossed
diagonally in red ink. The entry shall be attested by the DDO
over his full dated signature and seal.

j. The number and page of the MB in which the detailed

measurements and abstracts are recorded shall be noted in the
payment voucher.

7.5.3.11 The gross amount of the passed bill shall be charged against the work.
The recoveries of secured and Mobilisation Advances shall be credited
in “Suspense – PW Advances – Secured Advances and “Suspense –
PW Advances – Mobilisation Advances” under the work and noted in
the relevant register against the particular contractor.

7.5.3.12 The recovery of security deposit shall be credited in “Suspense – Other

Deposits - Security & Earnest Money” under the work and noted in the
relevant register against the contractor. The amount of security deposit
recovered from the bill shall be remitted to the Refundable Deposits
Account by debiting “Misc. Rct/Pmt – Deposits: Refundable Deposits”.

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7.5.4 Payment and Accounting of Advances

7.5.4.1 Advances for works shall mainly be of the following types:

a) Mobilisation advance;
b) Secured advance;
c) Temporary advance;
d) Deposit works advance.

The payment of these advances shall be processed and made in

accordance with the general procedures of payments under Chapter –
V. The special aspects of these advances and their recoveries are
outlined in the following paragraphs:

7.5.4.2 Payment and Accounting of Mobilisation Advance

a. Interest free Mobilisation Advances may be provided, as

provided in the contract document, in respect of a works
contract on submission of an unconditional bank guarantee
issued by a reputed Financial Institution and acceptable to the
Procuring Agency for an amount equal to the required advance
payment.

b. Unless otherwise mentioned in the contract agreement, the

amount of mobilisation advance shall be limited to ten percent
(10%) of the initial Contract Price.

c. When sanctioned, the claims of Mobilisation Advance shall be

routed through the Site and Supervising Engineers to the Head
of Office with the relevant entries in the MB.

d. The grant of Mobilisation Advance shall be covered by a bank

guarantee to be furnished by the contractor. It shall be seen that
the guarantee remains valid till the recoveries are complete.

e. An order sanctioning the Advance, verified and approved claim

for grant of Mobilisation Advance and existence of the
unconditional bank guarantee, work order, tender documents
and measurement book shall be the supporting documents for
making payment of the Mobilisation Advance.

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f. A red ink entry of the payment of Mobilisation Advance giving

reference to the disbursement voucher shall be made in the MB
under the full name and dated signature of the Disbursing
Officer. A note of the page and number of the MB shall be
recorded in the disbursement voucher.

g. The payment shall be charged under “Suspense: PWA:

Suppliers – Mobilisation Advance” under the work and noted in
the relevant register against the particular contractor as well as
in the contractor’s ledger.

h. The recovery shall be made in specified instalments starting

from the first running account bill. Instalments shall be fixed in
a way so that the entire amount is recovered latest by the time
80% of the works are completed. A contractor’s offer to effect
the recovery earlier or at a faster rate shall be acceptable.

7.5.4.3 Payment and Accounting of Secured Advance

a. Secured Advance shall be provided to the contractor as per the

terms of contract against the construction materials brought in
the site by the contractor for incorporating in the works. In case
of fabrication works off site, secured advance may be paid to
the contractor after the site inspection is carried out by the
client at the cost of the contractor, submission of proof of
payment (work material) and submission of supply order.

b. Claims of secured advance shall be routed through the Site and

Supervising Engineers to the Head of Office with an entry in
the MB.

c. Advance against construction materials shall be limited to

seventy-five percent (75%) of the value of the required items
brought to site as verified and assessed by the Supervising
Engineer, which shall be supported by the original
invoices/bills from the suppliers. All materials imported from
other countries shall be supported by Bhutan Sales Tax
Receipts or customs clearance.

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d. While verifying and giving an assessment of the value, the

Supervising Engineer shall be responsible for certifying on the
claim that:
i. The materials against which advance has been sought
have been brought to site;
ii. The contractor has not been previously paid any
advance on the security of these materials;
iii. The materials are as per the tendered specifications and
are not in excess of the quantity required for use in
construction of the work under contract.

e. The Government/Department shall secure a lien on the materials

against which secured advance has been sought through a
declaration from the contractor and safeguard those against losses
due to misuse or diversion by the contractor.

f. Verified and approved claim of the contractor together with the

declaration on lien including measurement books, original
invoices/bills certified by the Site and Supervising Engineer and
work order shall be the supporting documents for payment of
secured advance.

g. A red ink entry of the payment of secured advance giving

reference to the disbursement voucher shall be made in the MB
under the full name and dated signature of the Disbursing
Officer. A note of the page and MB number shall be recorded in
the disbursement voucher.

h. Payment of secured advance shall be charged against “Suspense

– PWA: Suppliers – Secured Advances” under the work and
noted in the relevant register against the contractor as well as in
the contractor’s ledger.

i. Recoveries of secured advance against construction materials

shall be effected from the running account bills as and when the
materials are used in the work as evidenced from the MAS
account. A contractor’s offer to effect the recovery at a faster rate
shall be acceptable.

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7.5.4.4 Payment and Accounting of Temporary Advance

a. Advances paid to Site or Supervising Engineers for specific

purposes in connection with execution of works like Muster
Roll payment, petty miscellaneous expenses, release of
consignments from railway/transport authorities, loading and
unloading away from work sites etc. fall under this category.

b. Payment and accounting of these advances shall be governed

by the rules under sections 5.1.4 and 5.1.5 in Chapter V read
with Part 9.3 under Chapter IX.

7.5.4.6 Payment and Accounting of Deposit Works Advance

a. Advances for execution of works paid to another Budgetary

Body outside the administrative control of the client Budgetary
Body shall be classified under this category.

b. An approval of the Head of Office based on the AA&FS and

the TS submitted by the entrusted Budgetary Body shall be the
authority for payment of these advances.

c. The payment and accounting of these advances shall be

governed by the rules under Sections 9.5.3 and 9.5.4 in Chapter
IX.

7.6 Completion of Works

7.6.1 Closing of Works Account

7.6.1.1 The accounts of a work shall be closed on its completion by attending

to the following requirements:

a. All liabilities in the form of outstanding bills, unpaid wages etc.

shall be settled.

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Note – 1. In case some of the liabilities to contractors/suppliers are

required to be kept unsettled due to disputes or other reasons beyond
the reasonable control of the Budgetary Body, the amounts considered
to be admissible shall be charged to the work as follows:
Budget line of the work Dr.
To Suspense: Other Deposits – Closed Works Cr.

Note – 2. The accounts of the work under Note – 1 shall be closed

keeping the suspense heads open for later adjustment. The above
transaction shall be allowed only for those works, which have been
completed in all respects before the closure of the fiscal year and all
formalities like handing/taking over has been done. It cannot be
applied to those works which have not been completed or which would
spill over to the next fiscal years.

Note – 3. The amounts such charged to the works shall be

remitted to the Refundable Deposit Account by debiting the Head
“Misc.Rct/ Pmt: Deposits – Refundable Deposits”

Note – 4.The budgetary body shall adjust the closed works account
within one month after the close of the fiscal year except for cases
under legal disputes.

b. Subject to the conditions mentioned in Notes 1 – 3 under

7.6.1.1(a), all advances and balances under suspense heads
under the work shall be liquidated.

c. Amounts due or recoverable from other Agencies,

Organisations, local bodies etc., in connection with the works
shall be recovered.

d. In applicable cases, the expenditure recorded in the Works Cost

Sheet shall be totalled and the balance of appropriation, if any
shall be indicated under the total column.

7.6.1.2 The Supervising Engineer or in his absence, the Site Engineer shall be
responsible for the following on completion of a work:

a. Surplus materials, if any in the MAS A/C. shall be transferred

to another work or to stock by credit to the work. The cleared
MAS A/C Register shall be surrendered to the Head of Office.

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b. Tools & plant, issued to the work, Empty containers,

Dismantled/Extracted materials shall be transferred to
respective numerical accounts by keeping a note of such
transfers in the relevant registers, which shall thereafter be
surrendered to the Head of Office.

c. The Site Order Book and the Hindrance Register shall be

surrendered to the Head of Office.

d. Proper handing/taking over note of all works executed and

completed shall be carried out between the construction
unit/contractor and the user unit/Client Agency on the basis of
an order from the Head of Office. In case of works executed on
contract, the handing/taking over shall be subject to the
warranty conditions as specified in the contract.

7.6.2 Reports on completion of Works

7.6.2.1 Works Completion report in Form FAM – 6.10 shall be submitted by

the Site Engineer to the Head of Office through the Supervising
Engineer, indicating the final expenditure, and the date of handing over
of the work.

7.6.2.2 In the case of an original work, an “As Built Plan and Drawing” shall
form a part of the completion report.

7.6.2.3 In case of a deposit work, a copy of the completion report shall be

submitted by the Head of Office/Department to the Client Agency on
whose behalf the work is executed.

7.6.2.4 Copies of completion reports in respect of original works shall be sent

to the DNP and the Property Officer who shall record the total cost of
the asset in their Fixed Assets Registers.

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CHAPTER – VIII

8 TRANSACTIONS UNDER OTHER BROAD HEADS

8.1 Other Broad Heads – Receipts and Expenditure

8.1.1 Releases (Group Head Code – 2).

Releases of funds as well as withdrawals of releases made by the DPA

shall get booked under any of the four broad heads under this item.

a. All releases will get recorded on the receipt (Debit) side of the
Cashbook in the Bank column. Withdrawal of releases will get
entered on the payment side of the Cashbook in the Bank column.

The underlying principle of double entry for recording of releases and

withdrawal of releases in the Cashbook shall be as follows:

Releases:
Bank A/C. Dr.
To Releases (Budgetary etc.) A/C. Cr.

Withdrawal of releases:
Releases (Budgetary etc) A/C. Dr.
To Bank A/C. Cr.

b. Depending on the nature, the releases shall be of four types. (four

broad heads under this item). A Ledger account for each of the
four types of releases shall be opened automatically. Opening of
Sub-ledger accounts for the releases shall not be required except
for the cases mentioned against each type. The four broad heads
and their codes shall be:

i. Budgetary (2a)
ii. Non-Revenue (2b)
iii. Refundable Deposits (2c)
iv. Uncashed Cheques (2d)

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c. Releases: Budgetary (2a).

All releases against the current year’s budget appropriations,

whether those are out of borrowed funds or external grant funds or
internal receipts of the Government, shall be classified under this
head.

Note – 1. If a disbursing unit is required to operate a single bank

account for projects funded by different financing items or donors,
it will be necessary to maintain separate Sub-ledger accounts to
keep track of releases received against each of the different
financing items.

d. Releases: Non-Revenue (2b).

These are non-budgetary releases generally against prior deposits

made into the Government Non-Revenue Receipts and Deposits
Account. It is not mandatory for the Agencies to seek Non-
Revenue release for the full amount if the same cannot be utilized
with in the same financial year. Non-Revenue releases can be
sought as and when they can be utilized but within a reasonable
period of time.

i. Accounting units shall maintain a memorandum record of

the individual deposits made in the Non-Revenue Account
and the releases received against such deposits in a
register. (Receipt amount & ref., Deposit amount & ref.,
Release amount & ref., Assignment ref.)

e. Releases: Refundable Deposits (2c).

The non-budgetary releases for refund of earlier deposits made

in the Refundable Deposits Account shall be termed as
Refundable Deposits Account releases and classified as such by
the disbursing units in their accounts.

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i. Accounting units shall maintain a memorandum record of

the individual deposits made in the Refundable Deposits
Account and the releases received against such deposits in
a register. (Received from, Receipt Head, Work/Activity,
Receipt amount & ref., Deposit amount & ref., Release
amount & ref., Disbursement ref.)

f. Releases: Uncashed cheques (2d).

Releases against the uncashed cheques of previous fiscal years

shall be booked under this head.

8.1.2 Grants in Kind (Broad Head Code – 3)

This Broad Head of accounts shall be used to record the value of “In-
Kind” goods or services received generally in projects. As the name
implies, the value of goods or services received through only
Assistance or Grants from the donors shall be booked under this head.

a. A journal voucher shall be prepared for recording of both the

receipts and utilisation or deployment of such assistance with
the following entries:
Expenditure – Current/Capital A/C. Dr.
(Exp.Code…./…/…/)
To Grants in Kind (Donor A) A/C. Cr.
(Rct.Code…/…/…/)

b. Separate Ledger accounts shall be maintained for individual

donors.

c. Separate Sub-ledger accounts in respect of individual projects

financed by the same donor shall be maintained.

d. The journal voucher shall be prepared on the basis of either of

the following records:
i. A statement of expenses on a project sent by the donor
or information received from the GNHC or
DMEA/DPA, duly verified by the project manager;
ii. A copy of a paid invoice received from the donor, duly
verified by the project manager;
iii. Assessed value of the goods or services received.

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e. The project manager shall take the initiative to obtain a

statement of expenses or copies of invoices from the donor in
time.

f. If no statement of expenses or copies of invoices are received

from the donor despite efforts to this effect, the project manager
shall assess the value of the goods or services on market value
and provide the information to the accounting unit for
necessary incorporation in the expenditure account.

g. The procedure for verification and approval as per rules under

sections 5.8 and 5.10 of Chapter V shall be followed for
authorisation of the journal voucher.

8.1.3 Borrowings in Kind (Broad Head Code – 4)

The disbursements made directly by a lender to a supplier, contractor,

service provider or to itself from a loan account of the Government
shall be accounted for under this broad head.
a. A Journal voucher debiting the expenditure line item and crediting
the “Borrowing in kind – Donor Acronym” account shall be
authorised immediately on receipt of information on a direct
disbursement from a loan account.

i. If the arrival of the paid for goods or services are likely to be

received after sometime, “Suspense – PW advances -
Others” of the relevant activity shall be debited instead of
the expenditure line item.
b. Separate Ledger accounts shall be maintained in respect of each
lender.
c. Separate Sub-ledger accounts in respect of different projects
financed by the same lender shall be maintained.

8.1.4 Revenue Receipts/Remittances (Broad Head Code – 5)

Receipts or recoveries pertaining to different revenue items and the

remittance of such receipts to the relevant RRCOs or RGR accounts
shall be recorded under this broad head of account.

a. Recoveries shall be made in accordance with the Government

rules or orders issued from time to time.

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b. Subject to other provisions in the RM, the recoveries effected

or receipts made during the course of a month shall be remitted
in full within the same month.

c. A Ledger account for the broad head “5 – Revenue

Receipts/Remittances” shall be maintained.

d. Separate Sub-ledger accounts for individual items of revenue as

may be defined from time to time at the object level shall be
maintained.

e. Instructions in the RM shall be followed for the recoveries,

remittances and maintenance of records and for the submission
of accounts to the DRC.

8.1.5 Other Recoveries/Remittances (Group Head Code – 6)

The recoveries made from Government employees for GPF, GIS etc.
based on Government orders, and other deductions based on
arrangements made by the employees with the financial institutions
and the remittance of such amounts shall be recorded against the
relevant broad heads under this item.

a. The broad heads and their codes under this item shall be as
follows:
i. GPF: Employees Contribution (6a)
ii. GIS (6b)
iii. Other Insurance Premia (6c)
iv. Loans from Financial Institutions. (6d)
v. Others (6e)

b. A Ledger account for each of the broad heads shall be

maintained.

c. Separate Sub-ledger accounts for individual object heads as

may be prescribed by the DPA from time to time under these
broad heads shall be maintained. No separate Sub-ledger
accounts need be maintained where a broad head does not have
more than one object head under it.

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d. The recoveries effected or the amounts received during the

course of a month shall be remitted in full within the same
month.

e. Memorandum control registers shall be maintained in respect of

loans and advances obtained by Government employees from
Financial Institutions or other organisations outside the
budgetary operations of the Government. These registers shall
be used to keep watch over the progress of liquidation of the
loans etc. by the recoveries and remittances. Records shall be
maintained in respect of each individual for each kind of loan
or advance obtained from these sources.

8.1.6 Personal Advances (Broad Head Code – 7)

Advances to Government employees on personal accounts like

advances of TA, Leave Salary etc., which are paid in accordance with
service rules or other orders shall only be booked under this head.

Note – 1.Temporary and Permanent advances, which are issued for

Government works shall be treated under appropriate Suspense heads.
These transactions shall not be booked under this broad head.

a. A personal advance of any kind shall not be sanctioned or paid

in case a pervious personal advance remains unsettled.

b. Payment of any personal advance to a Government employee

shall be processed on the basis of a sanction order issued by the
competent authority. The sanction order shall specify the
purpose of the advance, the time for and manner of recovery or
adjustment of the advance. A copy of the sanction order shall
be attached with the disbursement voucher.

c. A Ledger account shall get maintained for this broad head of

account.

d. Sub-ledger accounts shall get opened for this object head under
the activities in which the personal emoluments of the
employees concerned are provided.

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e. The balance of advances at the end of a fiscal year shall get

carried forward to the next year, both in the Ledger and
relevant Sub-ledger accounts.

f. Individual accounts shall get maintained in a memorandum

register of Personal Advances to watch over the payments and
progress of adjustment/recovery of personal advances from
individual employees.

g. Recoveries in respect of advances pertaining to a prior fiscal

year which are not reflected in the audit report shall be remitted
to the DPA after making necessary adjustments in the books of
account. However, recoveries which are reflected in the audit
reports, other than donor funded, shall be remitted to the Audit
Recoveries account after making necessary adjustments in the
books of account. While the recovery of these advances shall be
credited to “Personal Advances Account”, their remittances
shall be booked under the Head “Misc. Receipts/Payments –
DPA: Prior Year Advances” or “Other Recov/Remitt – Others:
Audit recoveries for RAA.

h. A penalty of 24% per annum shall be imposed on all financial

dues to the Government relating to outstanding advances,
excess payments, inadmissible payments, embezzlements,
misuse of funds and such other irregularities after three (3)
months from the date of issue of audit reports. The agencies
concerned shall take legal action in case of non-recovery within
twelve (12) months from the date of issue of audit report.

8.1.7 Miscellaneous Receipts/Payments (Group Head Code – 8)

The following broad heads shall be operated under this group:

a. Deposits: Non-Revenue (8a):

Deposits in the Government Non-Revenue Account shall be booked
under this broad head. One Ledger account shall be maintained for this
account. No Sub-ledger account shall be required. A memorandum
record of the individual deposits and releases obtained shall be
maintained as mentioned under rule 8.1.1(d)

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b. Deposits: Refundable Deposits (8b):

Deposits in the Refundable Deposit Account shall be booked under this
broad head. One Ledger account shall be maintained for this account.
No Sub-ledger account shall be required. A memorandum record of
these deposits and releases obtained shall be maintained as mentioned
under rule 8.1.1(e)

c. Payments to DPA (8c):

Closing cash balances, recoveries pertaining to previous fiscal years
expenses/advances, refundable external grants and recoveries of loan
principals and original uncashed cheques shall be remitted to the DPA.
Such remittances to the DPA shall be booked under this broad head,
suitably classified as per object heads prescribed under this head. One
Ledger account for the broad head and separate Sub-ledger accounts
for each of the objects under it shall be maintained. This object code
shall not be allowed to use for journal and reversal transactions.

Note – 1. The remittance letter to DPA should clearly mention the

FICs for surrender of closing cash balances.

d. Others (8d):
Transactions pertaining to expenses on Store handling, Running
&Maintenance of heavy vehicles and equipment in absence of budget
provisions and recovery or adjustment of these charges (whether or not
budget provisions exist) shall be booked under this broad head.
Some differences between the receipts and payments amounts may
result in the process of conversion of the accounts statements
submitted in foreign currency by the agencies abroad. These
differences occur due to fluctuations in the exchange rates. Such
differences shall be accounted for under this broad head. One Ledger
account for this broad head and separate Sub-ledger accounts for each
of the objects prescribed under this head shall be maintained.

Transactions pertaining to the receipts and expenditures of funds

received from other organizations or agencies which are not deposit
works in nature should also be booked against this head of account.
Usually for such receipts, the budgetary bodies shall not have to submit
the statement of accounts as these receipts shall not be in the form of
advances unlike deposit works receipts although it is mandatory that
such receipts and expenditures should be accounted for in the books of
accounts of the agencies.

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The following types of transactions shall have to be charged to this

head of account:
i. Payment against uncashed Cheques Transactions;
ii. Refund of PF, GIS, SSS or any other receipts received on behalf
of the employees;
iii. Refund of BST and custom duties to the suppliers or contractors
received from Department of Revenue and Customs;
iv. Any other receipts for which accounts need not be submitted to
the agencies from where such funds have been received although
it shall be mandatory to acknowledge such receipts through Non-
Revenue Receipts.

e. The broad head (8d) – Misc.Receipts/Payments – Others”

shall also be used for recording any other transactions, which
cannot be logically classified under any of the other Broad
Heads of Accounts.

8.1.8 Suspense items (Group Head Code – 9)

See rules under Chapter IX.

8.1.9 Budgetary Expenditure (Group Head Code – 10)

As the name implies, all budgetary expenditure and reductions there
from shall be classified under the appropriate broad heads of this item.
This item shall comprise of the following broad heads:
a. Current (10a).
b. Capital (10b).
c. Lending (10c).
d. Repayments (10d).

The provisions under Chapter V shall be applicable in total for

transactions under these broad heads. One Ledger account for each of
the four broad heads and separate Sub-ledger accounts for individual
budget lines (separately for cash and kind) and pertinent suspense or
advance items at the object level shall be maintained.

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CHAPTER – IX

9 SUSPENSE ACCOUNTS

9.1 General

9.1.1 The suspense accounts shall be used for temporarily accommodating

some expenditure of or amounts payable by the Government until
those can be transferred to the rightful activities or paid to the
creditors.

9.1.2 Charging any expenditure under the suspense heads shall automatically
create a responsibility upon the Head of Office, accounting unit and
other concerned authorities to clear the suspense item at the earliest by
transferring the charges to their rightful places.

9.1.3 Accounting units, Heads of Offices, Departments and Organisations

shall frequently review the balances and items placed under suspense
to ensure that timely actions take place to clear them.

9.2 Suspense – Stock and Purchases Account

9.2.1 Operation of Stock and Purchases Accounts

9.2.1.1 Stock Account shall be maintained wherever procurement/receipt and

issue of materials pertaining to several works or activities are handled
from a Central Procurement unit of a department or organisation.
Another suspense head styled as “Purchases Account” shall be
maintained.

9.2.1.2 The basic principle of maintaining Stock Account shall be to distribute

the cost of items procured or received to the relevant works or
activities to which those were issued. Depending upon the policy in
place, the cost shall include the cost of acquiring, handling and
delivery of the procured items to the place of work or activity.

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9.2.1.3 The procurement unit shall maintain a Stock Ledger in Form FAM –
8.1. Maintenance of several stock ledgers may be necessary if the stock
is sub-divided in several groups of stock items. Different pages or sets
of pages shall be allocated for each item of stock. A few pages shall be
reserved at the end of the ledger for preparation of monthly abstracts of
stock transactions.

9.2.1.4 Normally, a Ledger account for the Stock A/C. and one for the
Purchases A/C. shall serve the purposes of accounting. If however, the
Head of Office considers it necessary to maintain the stock accounts
separately for several groups of stock items, opening of Sub-ledger
accounts for each such group shall be necessary.

9.2.1.5 The Head of Office operating the Stock Account shall authorise a
Store-keeper or a Stores Officer (both of them referred as Property
Officer in these rules) as a custodian of stock and responsible for
maintenance of the quantity account of stock.

9.2.1.6 The Property Officer shall be provided with a set of Bin Cards (Form
FAM – 8.2), Goods Received Notes (Form FAM – 8.3) and Goods
Issue Notes (Form FAM – 8.4).
a. The Bin Cards (FAM – 8.2)
i. The Bin Cards shall be serially numbered and a register of
them shall be maintained in Form FAM – 8.5.
ii. Posting in the Bin Cards shall be made from the Goods
Received Notes (GRN) and Goods Issue Notes (GIN).
iii. When completed, a Bin Card shall be replaced by a new card
after bringing forward the balance in the new card. The
completed Bin Card shall be returned to the Head of Office
where the entries will be checked with the Stock Ledger.
Any discrepancy between the two shall be further
investigated and corrective actions taken by the Head of
Office. Receipt of the used Bin Cards shall be kept on record
by the Head of Office.
b. Goods Received Notes (FAM – 8.3):
i. GRN shall be bound in convenient booklets containing two
copies of each sheet. The sheets shall be machine-numbered.
The first copy shall be perforated and the second copy shall
be bound in the book. Filling of information in both the
copies shall be done simultaneously by carbon process in
indelible ink.

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ii. A register of GRN books shall be maintained by the

Head of Office in Form FAM – 3.2 (Stock Register for
Receipt books etc).

c. Goods Issue Notes (FAM – 8.4):

i. Goods Issue Notes shall be in five copies marked as
“Original”, “Duplicate” etc. printed on them.
ii. The GINs shall be machine numbered and bound in
convenient volumes. A register of GIN books shall be
maintained by the Head of Office in Form FAM – 3.2
iii. Used GIN books shall be returned to the Head of Office
for checking with the entries in Stock Ledger and for
retaining in his office.

9.2.2 Receipts of stock

9.2.2.1 The Property Officer shall count, weigh and measure as the case may
be, all materials received in the stores. He shall examine all materials
received to ensure that they conform to the quality and specifications
prescribed. Any item not conforming to the prescribed quality and
specifications shall be rejected forthwith and the supplier shall take
those out of the stock yard immediately.
a. If the inspection on quality and specification is undertaken
subsequent to the delivery or at a separate place, and the items or
part of the supply are found to be deficient in quality and
specification, the Property Officer shall issue a Rejection
Memorandum in form FAM – 8.6 endorsing copies to the supplier
and the Head of Office.

9.2.2.2 The details of the count or measurement or weight of materials shall be

recorded in the Goods Received Note (GRN), prepared in two copies
through the carbon process. Separate GRN shall be prepared for
individual suppliers and consignments. Remarks shall be given
prominently on the GRN in case any deduction is effected on the rates
or value due to quality or other reasons in accordance with the terms of
the supply contract. Transport inwards, insurance or taxes etc., if
payable extra in accordance with the supply contract shall be taken into
account in the preparation of the GRN.

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Note – 1. In the cases of stores of an Engineering Department, the

details of measurements, weight, count and verification etc. shall first
be recorded in the Measurement Book in accordance with the
provisions under the chapter on Works Account.

9.2.2.3 The number or quantity of the accepted materials shall be entered in

the respective Bin Card/s.

9.2.2.4 The original GRNs prepared during the day, the verified bills and other
documents supporting the claim shall be sent to the accounting unit
with a Daily Summary of GRNs (Form FAM – 8.7). The duplicate
copy of the GRN shall remain bound in the GRN book under the
custody of the Property Officer till the book is under use.

9.2.3 Accounting of stock received

9.2.3.1 While the Bin Cards with the Property Officer shall indicate the
quantity account of stock, the accounting unit shall maintain the value
as well as quantity accounts of the stock.

9.2.3.2 On receipt of the Daily Summary of GR Notes together with the GRNs
and other documents, the rates and/or value quoted in the GRNs shall
be checked thoroughly at the procurement unit.

a. The rates in the GRNs shall be the rates quoted in the bills or other
forms of claims subject to verification/modification in accordance
with the terms of the supply contract and deductions effected by
the Property Officer. Corrections, if necessary, shall be got done
by the Property Officer in both the copies of the GRNs.

b. A journal voucher shall be prepared for incorporating the total

value of the materials in the Stock A/C as follows:
Suspense – Stock A/C. Dr.
To Suspense – Purchases A/C. Cr.

The Summary of GR Notes shall be the supporting document for this

voucher.

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9.2.3.3 The GRN and the relevant supplier’s claim shall then be processed for
payment.
a. The rules and procedure prescribed under chapter V shall be
followed for making payments against claims for supply of stock
items. The verification of the bills as certified by the Property
Officer, shall be cross-checked at the accounting unit with the
entries in the GRN and the entries in the Measurement Books in
relevant cases.

b. Claims for supplies made by other offices, if any, shall be treated

at par with the claims from the suppliers.

c. The Cashbook accounting entry for payments shall be:

Suspense – Purchases A/C. Dr.
To Bank or Cash A/C. Cr.
Or, To Suspense – PWA – Suppliers A/C. (In case, adjustment
of earlier advance is required).

The GRN and the verified supplier’s claim shall be the minimum
supporting documents.

Note – 1. In order to avoid accounting and other complications,

the claims for transport inwards, insurance, taxes etc., shall be settled
together with the materials cost. If this is not possible due to any
reason, the accounting unit shall debit the payment for cost of materials
under “Suspense – PW Advances A/C.” instead of “Purchases A/C”.
At the time of finally settling all the associated extra costs, the balance
under PW Advances shall be transferred to the Purchases A/C through
the following journal entry:
Suspense – Purchases A/C. Dr.
To Suspense PW Advances A/C. Cr.
(amount of earlier payment)

The following Cashbook entry shall be made for making the residual
payment:
Suspense – Stock A/C. Dr.
(residual payment)
To Bank or Cash A/C. Cr.
(residual payment)

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9.2.3.4 In addition to posting of the financial transactions in the respective

Ledger and Sub-ledger accounts, the accounting units shall enter the
receipt details directly from the GRNs against respective items of stock
in the “Stock Ledger” (Form FAM – 8.1).

9.2.4 Issue of Stock

9.2.4.1 Materials shall be issued from stock on receipt of an approved

requisition and allowed to be taken out of the stockyard only through
the use of a GIN or a Rejection Memorandum.

a. Materials procured for other offices shall be issued from stock to

the requesting offices only on receipt of an approval recorded on
the Material Requisition (PMM – 1) by the Head of Office or an
officer authorised by him. A letter issued by the other Heads of
Offices requesting for procurement/supply of items of stock shall
be considered as a requisition for this purpose.

b. On issue of the materials requested for, the Property Officer

shall make out a GIN in 5 copies. (Form FAM – 8.4).

c. The issue of the materials shall at once be posted in the Bin

Cards.

d. The signature of the consignee or the carrier shall be obtained

on the GIN as acknowledgement of receipt of the materials.

e. The original and the duplicate copy of the GINs shall be sent to
the consignee and the carrier respectively. The triplicate copy
of the acknowledged GINs shall be sent to the Head of Office
at the end of the day through a Daily Summary of GINs in
Form FAM – 8.7. The fourth copy shall be retained by the
Property Officer together with the requisition as a voucher
against the entries of issue in the Bin Cards. The fifth copy
shall remain bound in the book to be returned to the Head of
Office after completion of its use.

f. The issue of stock items as per the GINs shall be posted in the
Stock Ledger for the quantity and value at Weighted Average
Rate by the accounting unit and simultaneously a bill shall be
raised for the materials issued.

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9.2.5 Pricing of stock issued and billing

9.2.5.1 The issue of stock shall be priced at the Weighted Average Rate. A bill
shall be raised in form FAM – 8.9 for the supplies made. The bill shall
be registered in the Bills Outward Register and assigned with the
registration number before sending it to the debtor.

Note – 1. The total recorded value of an item of stock divided by

its quantity shall give the Weighted Average Rate per unit of the item.
It may change with the receipt of fresh supply of the item and hence
shall be worked out on every such occasion.

9.2.5.2 In addition to this Weighted Average Rate for the items supplied, the
following items shall be added in the bills:

a. Where a separate establishment, including casual labour and

material handling facility is maintained for physical handling,
safe-keeping, collection etc. of stock, a Storage charges
percentage rate shall be fixed annually on the basis of the total
estimates of expenditure and issue of stock. This Storage
charges shall be added in the bill on the total basic value of the
stock supplied as a distinct item of cost.

b. If heavy vehicles are maintained for delivery of indented

materials to work sites or other offices, a mileage rate for usage
of such vehicle shall be worked out on the basis of estimates for
expenditure on running and maintenance and the usage of such
vehicles. A Transportation charge at this rate shall be added in
the bill as a distinct item of cost, if the indented materials are
delivered to the consignee by use of such vehicles.

c. Delivery of goods by hired vehicles shall be charged extra on

actual.

9.2.6 Accounting of stock issued

9.2.6.1 Accounting of the value of stock issued shall start with the raising of
bills as per provisions under section 9.2.5

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a. In respect of the stock issued to works or activities under the

financial control of the Head of Office, the bill shall be adjusted
through the normal procedure of works or activities accounts.
Total value including the storage charges of such stock shall be
charged to the works or to the activities concerned. The journal
entry shall be:
Budget line Expenditure A/C. Dr.
To Stock A/C. Cr.
To Misc. Rcts. - Storage charges A/C. Cr.

b. In respect of the bills raised for stock supplied to other offices

of the same department or organisation but beyond the financial
control of the Head of Office who maintains the stock account,
the journal entry for raising the bill by the Stores shall be:

Suspense – Deposit Works A/C. Dr.

To Stock A/C. Cr.
To Misc.Rcts.- Storage charges A/C. Cr.
To Misc.Rcts.– RMO Vehicle A/C. Cr.
(if applicable)

c. Cashbook entry for recording receipt of payments by the Stores

against bills raised for supply of stock:

Cash A/C. Dr.

To Suspense – Deposit Works A/C. Cr.

d. If budget appropriations are available for covering the direct

expenses on maintenance and physical handling of stores or
heavy vehicles, the expenditure incurred on these heads shall be
booked against the specific budget lines. The credit balances
under Storage charges and RMO Vehicles accounts recorded at
the time of raising of bills shall be set off by remitting to the
DPA, the equivalent amounts in respect of the settled bills by
debit to the account head “Misc.Rct/Pmts – Storage Charges or
RMO - Vehicles”.

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e. If budget appropriations are not available for covering the

direct expenses on maintenance and physical handling of stores
or heavy vehicles, the expenditure incurred on these shall be
debited to the Misc.Rct./Pmts.- Storage charges or RMO
Vehicles A/C. These debit balances shall be set off by credits in
these accounts at the time of raising of bills.

9.2.7 Other internal and accounting checks

9.2.7.1 The following monthly exercises shall be undertaken to ensure

correctness of both the value and quantity accounts of stock:

a. At the end of a month, the Property Officer shall submit a

monthly abstract of quantity account of stock items in Form
FAM – 8.10 from the individual Bin Cards. The abstract shall
indicate the total quantities received, issued and month ending
balance in respect of each item of stock by Bin Cards.

b. The accounting unit shall prepare two abstracts of GRN and

GINs (FAM – 8.11 and FAM – 8.12) respectively. Posting in
these abstracts may be done daily or at the end of a month by
individual GRNs or GINs. The abstracts shall indicate the total
value of goods received and issued during the month by GRN
or GIN. These totals should match with the respective totals in
the Stock A/C as well as the abstract of Stock Ledger.

c. The accounting unit shall close the Stock Ledger at the end of
each month. The monthly totals of quantities and values of
receipts and issues as well as the month ending balances in
respect of each item of stock shall be worked out and posted in
the monthly abstract of stock transactions at the end of the
ledger. The totals of value obtained in this process should agree
with the monthly totals in the Stock A/C. in the main ledger and
the monthly abstracts of GRNs and GINs. The totals of
quantities in respect of each item should agree with the totals
per Bin Cards submitted by the Property Officer.

d. The GRNs and GINs issued by the Property Officer but not
accounted for during the month shall be taken into account for
these exercises on reconciliation.

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9.2.7.2 Review of Storage and Transportation charges:

The percentage rates prescribed for the storage charges and the mileage
adopted for the transportation charges shall be reviewed at the end of
each year on the basis of total of debits (payments made) and credits
under these heads. Adjustments shall be made in the rates for the next
year to operate these on no loss – no profit basis.

9.2.8 Physical stock taking

9.2.8.1 The Head of the Department shall arrange a physical stock taking of
the Stores at regular intervals as prescribed under PMM.

9.2.8.2 Discrepancies if any noticed in the physical verification of stock shall

be investigated fully. Pending the result of the investigation, the
discrepancies shall at once be taken into both quantity and value
accounts of stock. This shall be done by correcting the respective Bin
Card quantities with a receipt or issue entry and the remarks “Stock
found surplus/short in physical verification”. Simultaneously, journal
entries as follows shall be passed to correct the value accounts as well:

a. Stock item found surplus:

No adjustment in value accounts. Only the quantity accounts in
the Bin Cards and Stock ledger shall be modified with a
suitable remark on receipt of a “Take back” order. The
Weighted Average Rate shall get modified also.

b. Stock item found short:

Direction activity – PW Advances – Others Dr.
To Stock A/C. Cr.

The Physical verification report shall be the basis for this journal entry.
Entries of correction shall be made in all relevant documents like Bin
Cards, Stock Ledger etc. The final entry for writing off the loss on
stock shall be made only on receipt of a write-off sanction issued by an
appropriate authority. Since this will involve investigation and
reporting etc., it may be necessary to hold the amount under PW
advances pending recovery or writing off as the case may be. If there is
a recovery, Cash A/C. shall be debited instead of Write off A/C.

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9.3 Suspense – Public Works Advances

9.3.1 Transactions under PW Advances

9.3.1.1 Except for the advances paid for Deposit works and Personal Advance
Accounts, all advances issued for procurements or works including
sale on credit of stock items, losses or errors under investigation, shall
be classified under PW Advances.

9.3.1.2 All PW Advances shall be pertaining to a budget activity or another

suspense item.

9.3.1.3 PW Advances shall be divided into the following categories:

a. PWA: Employees
Transactions pertaining to the payment and recovery or
adjustment of temporary and permanent advances made to
officials in the interest of Government works shall be booked
under this category.
i. Payment entry (Cashbook):
PWA – Employees Dr.
(of relevant activity, Dep.Works item)
To Cash or Bank A/C. Cr.

ii. Recovery (Cashbook)/Adjustment (Journal) entry:

Cash or Budget line A/C Dr.
To PWA – Employees Cr.
(of relevant activity, Deposit Works item)

Note-1. While paying advances from budgeted activity,

selection of budget line is mandatory.

Note- 2. For advances to be paid from deposit works money

corresponding LC/PLC account shall be selected.

b. PWA: Suppliers - Others

Transactions pertaining to the payment and adjustment of
advances payable to suppliers, contractors, service providers
etc., on the basis of specific clauses in the contracts or orders
from appropriate authorities shall be booked under this
category.

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i. Payment entry (Cashbook):

PWA – Suppliers Dr.
(of relevant activity or Dep.Work)
To Cash or Bank A/C. Cr.

ii. Adjustment entry (Journal):

Bud. Activity or Purchases A/C Dr.
To PWA – Supplier Cr.
(of relevant activity or Dep.Work)

c. PWA: Sales on Credit

When items of stock are sold on credit, the recoverable value of

such items including handling, supervision or any other
incidental charges shall be booked under this category. A sale
on credit shall be undertaken only on the basis of an order
issued by an appropriate authority.

i. Sale (Journal):
PWA-Sales on Credit Dr.
(of stock)
To Stock A/C. Cr.

ii. Receipt of payment (Cashbook):

Cash A/C. Dr.
To PWA – Sales on Credit Cr.
(of stock)

Note – 1. Credit sale of properties or assets shall not be

recorded in the above manner. Recovery of sale proceeds in
respect of assets or properties charged off on acquirement shall
be watched through memorandum records.

d. PWA: Losses under investigation

Fixation of responsibility for losses or deficiencies in cash,

stock or other properties may take some time. The value of
such losses or deficiencies may be held under this category
until the investigations are completed and the amount gets
recouped or written off under proper orders. Errors in accounts
in justified cases can be placed under this category until the
investigation is completed and rectified by an adjustment entry.
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i. An amount can be booked under this head only on the

basis of an order issued by an appropriate authority.

ii. The amounts involved under this category shall

preferably be held against a party who is prima-facie
accountable for the loss or deficiency. In cases of losses
due to natural calamities or other circumstances beyond
the reasonable control of a Government official, an
appropriate authority may order the amount to be held
against the office itself. The journal entry shall be as
follows:

PWA – Losses etc.A/C. Dr.

(of the activity or stock)
To Cash or Stock A/C. Cr.

e. PWA: Others

Debits in respect of recoverable items, which cannot be

allocated under any head until the recovery is completed or
which cannot be adjusted until recovery is completed or write
off ordered, shall be booked under this category under orders
from an appropriate authority. Examples in this category:

i. Debits for which classification cannot be determined

immediately;
ii. Recoverable amounts against a completed and closed
activity of previous years. A budget line shall be
obtained first for the activity being reopened.
iii. Recoverable amounts against a replacement cheque
where the original cheque was also cashed.

Note – 1. Expenses incurred over and above a sanctioned

amount or in absence of appropriations shall not be booked
under this head except under a proper sanction from the
Ministry of Finance.

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f. PWA: Suppliers – Mobilisation Advance

Transactions pertaining to the payment and adjustment of

mobilisation advances payable to suppliers, contractors, service
providers etc., on the basis of specific clauses in the contracts
or orders from appropriate authorities shall be booked under
this category.

i. Payment entry (Cashbook):

PWA: Suppliers – Mobilisation Advance Dr.
(of relevant budget line/activity)
To Cash or Bank A/C. Cr.

ii. Adjustment entry (Journal):

Budget line/Activity A/C Dr.
To PWA: Supplier – Mobilisation Advance
Cr.
(of relevant budget line/activity)

g. PWA: Suppliers – Secured Advance

Transactions pertaining to the payment and adjustment of

secured advances payable to suppliers, contractors, service
providers etc., on the basis of specific clauses in the contracts
or orders from appropriate authorities shall be booked under
this category.

i. Payment entry (Cashbook):

PWA: Suppliers – Secured Advance Dr.
(of relevant budget line/activity)
To Cash or Bank A/C. Cr.

ii. Adjustment entry (Journal):

Budget line/Activity A/C Dr.
To PWA: Supplier – Secured Advance Cr.
(of relevant budget line/activity)

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9.3.2 Accounting of PW Advances

9.3.2.1 Separate Ledger accounts for each of the categories under the PW
Advances shall be opened.

9.3.2.2 Separate Sub-ledger accounts shall be opened for each of the

individual recoverable or adjustable items under relevant budget
activities or suspense items.

9.3.2.3 Memorandum records of PW Advances paid to individual employees,

suppliers etc. shall be maintained in the PW Advances Register to
watch over the outstanding balances against each of the parties
concerned and their adjustments or recoveries.

9.3.2.4 On payment of advances or for holding of losses, sales on credit etc.,

the relevant PWA account is debited and the cash, bank, stock or work
account etc. is credited.

9.3.2.5 The Public Works advances shall be cleared either by transfer of

charges to the relevant heads (adjustment entries) or by recovery of
cash.

9.3.2.6 The closing balances under Public Works Advances (except PWA:
Employees) account at the end of a fiscal year shall be brought forward
in the Ledger and Sub-ledger accounts of the next fiscal year.

9.5 Suspense – Deposit Works

9.5.1 Transactions on Suspense – Deposit Works

9.5.1.1 Any assignments undertaken by a Head of Office for any other

Budgetary Body outside the administrative control of his own Head of
Agency, in consideration of funds received from such agencies shall be
termed as Deposit Works. The financial transactions pertaining to such
assignments shall be classified under the broad head “Suspense –
Deposit works”.

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9.5.1.2 The agency entrusting the deposit work shall be termed as “Client
Agency” and the agency undertaking the deposit works shall be termed
as “Entrusted Agency”.

9.5.1.3 No interest shall be payable to the Client Agency on the advances

received against deposit works.

9.5.2 Responsibilities of each party

9.5.2.1 The Client Agency shall indicate the necessary details of the
assignment desired to be entrusted to the Entrusted Agency.

9.5.2.2 The Entrusted Agency shall send to the Client Agency, an estimate of
cost of the deposit work desired to be entrusted to it. The estimate shall
include a reasonable supervision charge over and above the cost of
execution. If the assignment is for only rendering professional services
like providing drawing, design or estimates only and not the execution
or procurement, a service charge not exceeding 5% of the estimated
value of the work shall form the cost of the assignment. Such charges
shall be deposited to RGR account unless otherwise specified in the
operation guidelines of their CD account.

Note -1. No supervision and professional service fees shall be

charged in the case of Government to Government assignments.

9.5.2.3 The Client Agency shall accept the estimate at the indicated cost and
remit the full amount of the estimated cost to the Entrusted Agency in
advance.

9.5.2.4 The Entrusted Agency shall remit the full amount of supervision or
service charges to the Government Revenue account in proportion with
the progress of expenditure.

9.5.2.5 Save for the exceptions listed below, the Head of Office in the
Entrusted Agency shall realize the entire amount of the estimated cost
of the assignment before incurring any expenditure or liability for the
assignment.

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Exception – 1. A Head of Department/Agency may authorise a Head of

Office under him to start the execution on receipt of an advance
amounting to not less than 40% of the estimated cost if he is satisfied
that the Client Agency has not defaulted earlier and the funds for the
deposit work will be coming in time. The Head of Department/Agency,
in such cases may authorise receipt of the balance of the estimated cost
in suitable instalments on fixed dates.

Exception – 2. When the deposit work from another Budgetary Body is

of such nature that it cannot be fulfilled within the same fiscal year, the
Head of Department/Agency may authorise the Head of Office under
him to accept the advances in accordance with the budget provisions of
the Client Agency for the work.

Exception – 3. When the deposit work from another Budgetary Body is

financed by a loan or grant agreement executed by the Government,
specifying the release pattern, the Head of Department/Agency may
authorise the Head of Office to accept the advances in suitable
instalments in accordance with the terms of the loan or grant
agreement. In all such cases of exceptions, the instalments shall be
received in advance of the expenses being incurred.

Note – 1.No exceptions on receipt of the full amount of the estimated

cost including the supervision charges shall be applicable if the deposit
work involves mainly procurement and supply of equipment.

9.5.2.6 The Entrusted Agency shall not incur any expenditure on a deposit
work out of the budgetary releases made to it, nor shall it incur any
expenditure on budget or other purposes out of the funds received for a
deposit work.

9.5.2.7 If escalation of costs is perceived during any stage of execution of a

deposit work, the Entrusted Agency shall submit revised estimates of
the deposit work at appropriate stages to the Client Agency to enable
the latter to provide the additional funds.

9.5.2.8 The Client Agency shall specify the volume, quality, standard etc. of
the goods, works, or services required by it.

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9.5.2.9 The Entrusted Agency shall be responsible for the efficiency,

economy, effectiveness, waste and deficiency in meeting the
requirements of the Client Agency.

9.5.2.10 The Entrusted Agency shall be accountable for the expenditure

incurred on the deposit works executed by it and hence shall maintain
the relevant accounting records.

9.5.2.11 The Entrusted Agency shall send monthly financial reports in respect
of the individual deposit works to the Client Agency and retain all
original vouchers and financial records and facilitate the same for audit
and other purposes.

9.5.3 Transfer of funds and accounting

9.5.3.1 The clients outside the Government shall follow their own accounting
rules and practices for accounting of the payments for works entrusted
to a Government Budgetary Body.

9.5.3.2 The procedures for transfer and accounting of funds in the Client and
Entrusted Agencies in the Government shall be with the following
qualification:

a. The broad head code and name in the case of a Deposit work
shall be “9e, Suspense – Deposit Works”

9.5.3.3 Accounting of receipts of funds by the entrusted agencies from Non-

budgetary agencies or agencies outside the Government for deposit
works shall be the same as in the case of receipts of funds from
Budgetary Agencies.

9.5.4 Accounting of Deposit Works

9.5.4.1 Depending on the nature of the assignment, expenditure on the Deposit

works shall be governed by the provisions under the PRR, Chapter V –
Expenditure – Payments, Chapter VII – Works Accounting and Part
9.2 – Stock Account of this Chapter simultaneously and/or individually
as the case may be.

9.5.4.2 A Ledger account for the “Suspense – Deposit works” shall be opened
by the Entrusted Agency.

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9.5.4.3 Separate Sub-ledger accounts shall be maintained in respect of

individual deposit works. A separate Sub-ledger account for the
relevant “PW advances” object shall be opened for each of the deposit
work account, as and when necessary.

9.5.4.4 Receipt of advance payment for deposit works shall be credited under
“Suspense – Deposit works” in the Ledger. The account of the DW
assignment shall be credited in the Sub-ledger. The cheque/draft shall
be deposited in the Government Non-revenue Account and equivalent
amount of Non-revenue release shall be obtained from the DPA.

The Cashbook entries shall be as follows:

a. Receipt of advance payment:
Cash A/C. Dr.
Dep.Works A/C. Cr.

b. Deposit of the advance to Government Non-revenue account:

Government Non-Revenue Deposits A/C. Dr.
Cash A/C. Cr.

c. Receipt of Non-revenue release:

Bank A/C Dr.
Non-revenue release A/C. Cr.

9.5.4.5 Expenditure incurred on deposit works shall be debited under the

“Suspense – Deposit works A/C” in the Ledger and against the
particular deposit works item in the Sub-ledger. The Cashbook entry
for the expenditure shall be:

Dep.Works A/C. Dr.

Cash or Bank A/C. Cr.

9.5.4.6 Advances paid by the Entrusted Agency out of receipts against deposit
works shall be debited under the relevant PW advances account in the
Ledger and under the PWA object code of the particular deposit work
item in the Sub-ledger. The Cashbook entry for the advance payment
shall be:

PW Advances A/C. Dr.

Cash or Bank A/C. Cr.

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9.5.4.7 At the end of each month, the supervision charge at the stated rate shall
be charged on the total of the expenditure booked against each of the
deposit work item during that month. The journal entry shall be:

Dep. Works A/C. Dr.

Rev.Rct./Remit. Others – Dept Cr.

9.5.4.8 In case, the portion of supervision charges was not remitted to the
Government Revenue Account earlier on receipt of the advance from
the Client Agency, the amount charged on the Deposit Works account
as supervision charges shall be remitted promptly to the Government
Revenue Account by debit to the same head as follows (Cashbook):

Rev.Rct./Remit –Others Deptl. A/C. Dr.

Cash or Bank A/C. Cr.

9.5.4.9 For the deposit works which would be completed within the fiscal
year, the balances should be surrendered to the client along with the
statement of accounts for liquidation of advances. On receipt of the
final statement of accounts and the balance fund if any from the
Entrusted Agency, The Client Agency will book the expenditures by
debiting the budgetary head and crediting the PWA advances. The
balance fund received in the form of cash or cheque shall be taken into
the account by debiting cash and crediting PWA advances.

9.5.4.10 If the deposit works cannot be completed within the fiscal year, the
Entrusted Agency shall deposit the balance of funds against deposit
works into the Non-Revenue Account. The balances shall be calculated
based on the funds received from the client against such deposit works
minus the expenditures incurred for those particular deposit works and
the outstanding advances against such deposit works. The balances
under the Deposit works Account at the end of the fiscal year shall get
brought forward in the Ledger and Sub-ledger accounts of the next
fiscal year.

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9.6 Suspense – Other Deposits

9.6.1 Transactions under Suspense – Other Deposits

9.6.1.1 Amounts received or recovered as Security deposits, Earnest moneys

etc., which are required to be held for some time and are likely to be
refunded or confiscated at a later date shall be classified under
Suspense – Other Deposits:

Note – 1.Security Deposits can be received either in the form of cash,

bank drafts, cash warrants, bank guarantee, or in such other forms as
may be provided for in the agreement or rules requiring such deposits.

Note – 2.Securities obtained in forms other than cash, bank draft or

cash warrants shall not form a part of the accounts. These shall be
entered in a Register of securities and held under the custody of the
Head of Office or the officer authorised by him. Care shall be taken to
ensure that the securities received in these forms remain valid until the
end of the required period. The custodian of such instruments shall be
held responsible and accountable for safe keeping and validity of such
instruments.

9.6.1.2 The deposits received in form of cash, bank drafts or cash warrants
(referred to as cash deposits) shall be passed through the accounting
records and shall be deposited in the relevant accounts of the
Government.

9.6.1.3 No interest shall be payable on the cash deposits received by the

Government.

9.6.1.4 No deposit shall be repaid or re-transferred to the depositor except in

accordance with the terms of agreement governing the deposit.

9.6.1.5 Cash deposits shall comprise of the following categories, each of

which is classified as an object class as follows:

a. Cash deposits from Government employees, contractors,

suppliers etc. as security or earnest money – “Susp. – Other
Dep. – Security and Earnest Money”.

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b. Cash deposits or amounts payable later for miscellaneous

purposes – “Susp. – Other Dep. – Others”.

9.6.1.6 The amounts received and/or classified under the head “Suspense –
Other Deposits” represent liabilities of the Government and hence,
shall not be utilised for any purposes other than for making refund,
confiscation or payment to the party concerned.

9.6.1.7 The receipts under Suspense – Other Deposits shall be deposited in the
Refundable Deposits Account of the Government immediately. On no
account shall these receipts be allowed to get lapsed along with the
closing bank balances of the LC account; nor shall such amounts form
a part of the closing cash balance at the end of a fiscal year.

9.6.2 Accounting of “Suspense – Other Deposits”

9.6.2.1 A Ledger account shall be opened for this broad head.

9.6.2.2 Separate Sub-ledger accounts shall be opened for each of the three
object classes under Suspense – Other Deposits.

9.6.2.3 A Memorandum record of the individual items of other deposits

received and deposited in the Refundable Deposits Account shall be
maintained as specified under rule 8.1.1(e)

9.6.2.4 Amounts of security deposits recovered from bills shall be credited

under “Suspense – Other Deposits A/C” as follows:

a. Payment of the bill:

Expenditure line A/C. Dr. (Gross Amount)
Other Dep. – object class A/c Cr.
Bank A/C. Cr. (Cheque Amt)

The amounts so recovered shall be deposited in the Refundable

Deposits Account and the Cashbook entries shall be:

b. Deposit in Refundable Deposits Account:

Misc.Rct/Pmt – Dep.in RD Account Dr.
Cash or Bank A/C. Cr.

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9.6.2.5 Refund of deposits remitted to the Refundable Deposits Accounts shall

be made upon receipt of a RD Account release to be obtained from
DPA on submission of a request along with the acknowledged copy of
the RD invoice from the bank. The Cashbook entries shall be:

a. Receipt of RD Account Release:

Bank A/C. Dr.
Release – RD Account Cr.

b. Refund of Deposit:
Susp. Other Dep. – object class A/C. Dr.
Bank or Cash A/C. Cr.

9.6.2.6 If a work or activity account is required to be closed with a final

payment but the actual payment cannot be made due to any reason, the
amount of the closing payment may be held in credit under “Suspense –
Other deposits – closed works A/C.” for closing the account. The
amount shall be remitted to the Refundable Deposits Account. The
suspense account shall be cleared when the payment is finally made.

a. Closing the work account by holding the un-disbursed amount

under other deposits (Journal entry):
Expenditure line A/C. Dr.
Susp.Other Dep. – closed work A/C. Cr

b. Remitting the amount to the RD Account (Cashbook):

Misc.RCT/Pmt. – Dep.in RD Account Dr.

Cash or Bank A/C Cr.

c. Making payment of the amount to the claimant after getting an

equivalent release:
Susp.Other Dep. – closed work A/C. Dr.
Cash or Bank A/C. Cr.

9.6.2.7 If the Government confiscates an item of deposit by issue of an

appropriate order to the effect, the amount so confiscated shall be
remitted to the Revenue account. If the amount was already remitted to
the Refundable Deposits Account, a RD release shall be obtained first
for remitting the amount to the Revenue account.

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a. Clearing the credit balance under Other Deposits by a Journal

entry (after making necessary entries for the RD release and
before making remittance to Revenue account):

Susp.Other Dep. – Object Class A/C. Dr.

Rev.Rct/Remit – Others – Other Rev. Cr.

b. Remitting the amount to the Revenue account:

Rev.Rct./Remit – Others – Other Rev. Dr.
Cash or Bank A/C. Cr.

Note – 1.A direct transfer of the amount from the RD Account to the
Government Revenue Account by the DPA or MoF shall not be
undertaken. The reason being that the previous credit under the deposit
account has to be cleared by a debit entry as illustrated above and the
debit under the Government Revenue Account shall have to be
supported by a deposit invoice.

9.6.2.8 The yearend closing balances under this account shall be brought
forward in the Ledger and Sub-ledger accounts of the next fiscal year.

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CHAPTER – X

10 MONTHLY ACCOUNTS
10.1 General

10.1.1 Although the monthly accounts for all the budgetary bodies will be
system generated, the Heads of offices/Accounting units shall ensure
correctness of monthly accounts on receipt, utilisation and disposition
of funds separately in respect of each of the bank accounts allotted to
them.

10.1.2 In the case of Dzongkhags/Gewogs, a copy of the expenditure

statements pertaining to individual sectors shall be sent to the
corresponding Sectors as and when requested.

10.1.3 The DDO/AFD/AFS shall thoroughly examine the monthly accounts

for correctness, authenticity, completeness of presentation, adherence
to the rules on classification of charges and budgetary appropriations.

10.1.4 Any correction of irregularities or alterations to be incorporated in the

monthly accounts and other financial records shall be done jointly by
the concerned DDO/AFD/AFS of the Agency and the DPA.

10.1.5 The month end processes in respect of each of the LC or PLC accounts
shall be completed within ten (10) days from the close of a month.

10.1.6 The monthly accounts in respect of each of the LC or PLC accounts

shall comprise of the following statements and schedules:

a. Receipts and Payments Statement (Form FAM – 9.1);

b. Schedule of Fund Releases (Form FAM – 9.2);
c. Schedule of Grants & Borrowings in Kind (Form FAM – 9.3);
d. Schedule of Revenue Receipts and Remittances (Form FAM–9.4);
e. Schedule of Other Recoveries and Remittances (Form FAM–9.5);
f. Schedule of Personal Advances Account (Form FAM – 9.6);
g. Schedule of Miscellaneous Receipts and Payments (Form FAM–
9.7);

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h. Schedule of Suspense – PW Advances (Form FAM – 9.8);

i. Schedule of Suspense – Deposit Works (Form FAM – 9.10);
j. Schedule of Suspense – Other Deposits (Form FAM – 9.11).
k. Expenditure Statement (Form FAM – 9.12);
l. Bank Reconciliation Statement (Form FAM – 9.13);

10.2 Preparation of Monthly Accounts

10.2.1 The monthly accounts shall be generated through the system. However,
the Agencies concerned may cross check on the modalities mentioned
below:
a. The Cashbook shall be balanced on every transaction.

b. A check shall be conducted to ensure that all the cash and

journal vouchers have been posted correctly in the Ledger and
the Sub-ledger accounts.

c. The amounts entered on the Debit and Credit columns of each

of the Ledger and Sub-ledger accounts during the month shall
be totalled.

d. It shall be checked to see that the difference between the totals

of Debits and Credits in each account plus the balance as on the
last day of the previous month agree with the balance as on the
last day of the current month minus the balance brought
forward from the previous year.

e. Each of the Ledger accounts totals shall be cross-checked with

the respective Sub-ledger accounts totals.

10.2.2 Although the Receipts and Payments Statement shall be generated by

the system, the agencies should make sure that the following
procedures have been followed in this context. The Receipts and
Payments Statement (FAM – 9.1) shall be filled in from the following
sources:

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a. The Opening balances of cash and bank shall be obtained from

the amount brought forward on the first day of the month in the
Cashbook. This amount shall be shown in the ‘Receipts for the
month’ column of the statement. In the column for annual
st
progressive amount, the opening balances of cash as on 1 July
every year shall remain static throughout the year.

b. Except for the broad heads listed under items (2) Releases
and(10) Budgetary Expenditure, the totals of Debits and Credits
(not Net results) for the month under each of the Ledger
accounts shall be posted in the ‘Receipts’ and ‘Payments’ for
the month columns respectively against the proper items in the
Receipts and Payments Statement.

c. The net of the total Debits and Credits for the month in respect
of broad heads listed under items (2) Releases and
(10)Budgetary Expenditure shall be posted in the ‘Receipts or
Payments for the month’ columns of the statement respectively.
Similar netting of the annual totals shall be done for the Annual
Progressive columns in respect of these two broad heads.

d. The annual totals of Debits and Credits shall be obtained by

adding the monthly totals in the Ledger accounts and shown
under the Annual Progressive amount column.

e. The Ledger account balances as on the last day of the month

shall be shown in column titled as “Cumulative”. The balances
in respect of those Ledger accounts, which are not carried
forward from one fiscal year to another, need not be posted in
the statement.

f. The Closing balances of cash and bank shall be obtained from

the Cashbook and posted in both the ‘Payments for the month’
and Annual Progressive columns of the statement.

g. The totals of numbers posted in both the Receipts and

Payments columns shall agree with each other.

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10.2.3 Schedule of Fund Releases (Form FAM – 9.2):

This schedule shall be prepared from the details of individual entries
made during the month in the respective Ledger accounts.

10.2.4 Schedule of Grants/Borrowings in Kind (Form FAM – 9.3):

The required details shall be obtained from the Ledger accounts and
the relevant Journal vouchers.

10.2.5 Forms FAM – 9.4 to FAM – 9.11.

The required details shall be filled in from the individual Ledger or
Sub-ledger accounts, the monthly and progressive totals of those
accounts.

10.2.6 Expenditure Statement (Form FAM – 9.12):

The Expenditure Statement shall be prepared from the information
available in the Sub-ledger accounts for the budgetary expenses
including suspense and personal advance items and the monthly and
progressive totals of the accounts.

10.2.7 Bank Reconciliation Statement (Form FAM – 9.13):

All information in this statement shall be provided on the progressive
values. The Cashbook, Cheques Issued Register and the Bank
statement shall provide the information required for the preparation of
this statement.

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CHAPTER – XI

11 PRESERVATION OF FINANCIAL RECORDS

11.1 Maintenance of Records

11.1.1 All Agencies shall ensure that adequate measures are undertaken for
the proper maintenance, and safe custody of all manual financial
records against loss, misplacement, mishandling, defacing, mutilation
etc.

11.1.2 Financial records shall include all forms and records prescribed in the
Financial Manual along with any corrigenda and addenda issued there
to by the Government from time to time.

11.1.3 The Ministry of Finance shall ensure proper maintenance, security and
safe custody of the system and data back-up.

11.2 Preservation period of Financial Records

11.2.1 The minimum preservation period shall be reckoned from the date of
completion of audit by the Royal Audit Authority and settlement of
audit observations pertaining to the contents of the records, if any.

11.2.2 The minimum period for preservation of the specific financial records
shall be as given hereunder:

Sl. Nature of records Minimum period

Forms and documents on preparation, proposal, 24 months.

1. discussion and approval of annual budget
2. Records on release of funds 24 months.
Bank statements and bank reconciliation
3. 24 months.
statements
Revenue receipt books and other revenue 36 months (provided revenue
4.
records for collection purposes excepting inspection is completed or
Revenue Cashbook waived in writing)

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5. Dishonoured cheques After settlement of audit.

6. Disbursement/Journal vouchers 36 months.

7. Ownership and other records on fixed assets,

Till disposal and settlement of
vehicles and equipment.
subsequent audit thereon.

8. Records pertaining to Supplies and Materials - Do -

12 months after liquidation of

9. Borrowing Agreements and related documents
the borrowing.
10 Grant Agreements and related documents 12 months after completion of
the project.

11 Cashbooks, used Chequebooks 60 months

12 Other books of accounts, monthly accounts 36 months

13 Books on works accounts 36 months after completion of

works or settlement of audit
whichever is later.
14 Records pertaining to award of contract 36 months after expiry of
contract or audit settlement,
whichever is later.
After completion of two five
15 Annual accounts statements
year plan periods.

11.3 Destruction of Records

11.3.1 The following procedures shall be followed with regard to the

destruction of financial records:

a. Upon completion of the specified preservation period as per

clause 11.2.2, the Head of Office shall prepare and submit a list
of records requiring destruction to the Head of Ministry who
shall forward the same to the Royal Audit Authority for
clearance. The Head of Ministry shall obtain a clearance from
the Royal Audit Authority before according approval to the
destruction.

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b. In the case of the destruction of revenue receipt books, registers

or other revenue records for collection purposes, the concurrence
of the DRC shall also be sought after obtaining the clearance of
Royal Audit Authority.

c. The financial records shall be destroyed by burning those in the

presence of the members of a committee constituted for this
purpose consisting of the Head of Office or his authorised
representative, the head of accounting unit and one
representative from the administrative Ministry. In case of
destruction of financial records pertaining to the administrative
Ministry, the third member may not be required. In case of
destruction of revenue receipt books and registers, a member
from the DRC shall be present. The committee shall:

i. Carry out a physical verification of the financial records

against the list cleared by the Royal Audit Authority and
approved by the administrative Ministry/DRC and certify
the correctness of the list vis-à-vis the financial records.

ii. Witness the actual destruction of the said records and

certify on the list cleared by Royal Audit Authority and
approved by the administrative Ministry/DRC indicating
the date, time and place.

11.3.2 Upon destruction of the financial records, a certificate signed by all the
members of the committee shall be submitted to the Head of Office,
Head of Ministry, and Royal Audit Authority. A copy of the same shall
be submitted to the DRC in case of revenue receipt books, registers or
other revenue records for collection purposes.

10.3.3 The Head of Office shall maintain a Register of destructed records.

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CHAPTER – XII

12 ANNUAL FINANCIAL STATEMENTS

12.1 General

12.1.1 The DPA shall prepare the Annual Financial Statements (AFS) of the
budgetary operations for each fiscal year within six (6) months after
the close of the fiscal year.

12.1.2 The Minister of Finance shall forward the Annual Financial Statements
to the Auditor General not later than six (6) months after the end of the
fiscal year to which they relate.

12.1.3 The Auditor General shall express an audit opinion within three (3)
months of the receipt of the Annual Financial Statements of the
Government.

12.1.4 The total receipts and expenditures of the Government during a fiscal
year shall be the basis for preparation of the Annual Financial
Statements.

12.1.5 Most of the annual financial reports shall be generated through the
system. The Annual Financial Statements shall include the following
statements and schedules:
a. Consolidated receipts & payments statement (FAM – 11.1);
b. Summary of original and revised budget estimates and
variations with actual outcome (FAM – 11.2);
c. Statement of outstanding loans (FAM – 11.3);
d. Statement of equity portfolio of the Government (FAM – 11.4);
e. Statement of operations on Refundable Deposit Account,
Revolving and Trust Funds (FAM – 11.5);
f. Government Consolidated Fund Reconciliation Statement;
g. Schedules giving details of Internal Revenue, Grant assistance,
Borrowings, Loan recoveries and Other Receipts;
h. Schedules of Budgetary Expenditure by object, by
administrative agencies at programme level compared with
budget provisions and by function;
i. Schedules of loan principals repaid and payment of interest;

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j. Statement of on-lending made;

k. Statement of Government guarantees;
l. Statement of arrears of government revenue;
m. Any other information/report as may be decided by the MoF.

12.2 Sources of Information and Methods

12.2.1 The closing bank balance as on 30th June of the previous fiscal year in
the Government Consolidated Fund Account shall be the opening bank
balance of the Government as on 1st July of the current fiscal year.

12.2.2 The total closing cash balances of all the budgetary bodies as on 30th
June of the previous fiscal year as reported in the monthly accounts
shall be the opening cash balance of the Government as on 1st July of
the current fiscal year.

12.2.3 All receipts in the Government Consolidated Fund Account through

the Government Revenue Account shall form the Internal Revenue of
the Government.

a. The DRC shall reconcile the receipts and refunds transacted

through the Government Revenue Account, classify the net receipts
according to the specified classes of taxes and other revenues and
submit the same to the DPA by end of August each year.

Note – 1.The DRC shall make arrangements with the Agent Bank/s so
that all bank charges involved in the collection of revenue and making
refunds are charged in their LC account for budgetary operations and
not in the Government Revenue Account.

Note – 2.The banks shall be instructed not to debit any collection or

bank charges in the Subsidiary or Principal accounts of the
Government. All such charges shall be levied on a pertinent LC or PLC
account.

12.2.4 The GNHC shall submit statements of Grant Assistance and External
Borrowings received in Cash and Kind, to the DPA by end of August.

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12.2.5 Any other Budgetary Body that has extended loans and/or made
recoveries shall send a statement of Recovery/Remittance of Loan
Principals and Interests to the DPA by end of August.

12.2.6 At the DPA, the remittance of Interests shall be reconciled with the
receipts in the Government Revenue Account as reflected in the annual
revenue statement submitted by the DRC.

12.2.7 Receipts in the Government Consolidated Fund through the

Government Budget Fund Account shall be classified under Grant
Assistance or Borrowings in cash, Miscellaneous Receipts, or
Recovery of Loan Principal.

a. The DPA shall reconcile the receipts and refunds transacted

through the Government Budget Fund Account and classify the
net receipts according to the nature of receipts by end of July
each year.

b. The Grant Assistance and External borrowings in cash, shall be

reconciled with the information provided by the GNHC.

c. The Recovery of Loan Principal shall be reconciled with the

information provided in the Schedule of Miscellaneous
Receipts/Payments by DMD in their monthly accounts and the
Receipts in the BFA.

12.2.8 Receipts in the Government Consolidated Fund through the

Government Non-Revenue Receipts and Deposits Account shall be
classified as Other Receipts after ensuring that the receipts reported by
the bank match with the deposits exhibited in the monthly accounts of
the Agencies.

12.2.9 Grant assistance and Borrowings in Kind shall be obtained from the
monthly accounts of the Agencies and reconciled with the information
provided by the GNHC and the records of DMD. It shall be ensured
that equivalent amounts have been booked as expenditure also in the
monthly accounts submitted by the Agencies.

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12.2.10 Net of the receipts and payments under the following heads as reflected
in the monthly accounts of the Agencies shall be classified as “Other
Receipts or Other Payments” as the case may be:

a. Revenue Receipts/Remittances
b. Other Recoveries/Remittances
c. Miscellaneous Receipts/Payments

Note – 1. On receipt of the monthly accounts from Agencies, the

DPA shall conduct the following checks:

i. The amounts shown under the head “Payments to DPA” shall

be reconciled with the corresponding receipts in the
Government Budget Fund Account.

ii. The amounts shown under the head “Deposits: Refundable

Deposits.” shall be reconciled with the bank statements for the
Refundable Deposit Account and Deposit Invoices received
from the Agent Banks.

iii. The amounts shown under the head “Deposits: Non-Revenue”

shall be reconciled with the bank statements and Deposit
Invoices received from the Agent Banks.

Note – 2. It is important to ensure that any Releases of any type,

Refundable Deposits and Non-Revenue deposits are not classified or
clubbed with any other items of receipts and payments in the accounts
of the Agencies.

12.2.11 The total amount of cheques remaining un-cashed from the different
LC and PLC accounts at the yearend as shown in individual bank
reconciliation statements shall be adjusted by making a receipt entry
for the equivalent amount under “Other Receipts”.

12.2.12 Net of the receipts and payments under the heads “Personal Advance
Account” and “Suspense” shall be classified as Increase or Decrease in
Advance & Suspense as the case may be.

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12.2.13 Current, Capital, Repayment of Loan principals and Lending

expenditure shall be obtained from the monthly accounts of the
Agencies duly reconciled with their expenditure statements.

12.2.14 The total of Closing Cash balances as on the 30th June as reported in
the monthly accounts of the Agencies shall form the Closing Cash
balance of the Government.

12.2.15 The Closing bank balance in the Government Consolidated Fund

Account as on 30th June of a fiscal year shall be the Closing Bank
balance of the Government.

12.3 Statement of Outstanding Loans

12.3.1 The DPA shall prepare an annual statement of loans outstanding as on

30th June in respect of borrowings from external agencies by end of
August.

12.3.2 Information on internal borrowings and servicing of such loans shall be

incorporated therein by the DPA from its own records and the monthly
accounts of the Common Public Expenditure and information received
from Public Enterprise Division (PED), MoF.

12.3.3 The statement of outstanding loans as stated in 12.3.1 and 12.3.2 shall
form the basis of the Outstanding Loans Statement appended in the
Annual Financial Statements.

12.4 Statement of Equity Portfolio

12.4.1 The Public Enterprise Division, MoF shall prepare and send an annual
statement on the position of Equity portfolio of the Government as on
30th June, indicating there in the quantum of transactions undertaken
during the fiscal year by end of August

12.4.2 Adequate remarks shall be appended in case any disinvestments were

undertaken outside the Government Consolidated Fund Accounts.

12.4.3 Other disinvestments shall be authenticated from the Revenue

statement of the DRC.

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12.4.4 Remarks shall be given by the PED, MoF on new investments caused
by conversion of status of a Budgetary Body or a completed project.

12.4.5 Other new investments shall be authenticated from the expenditure

data of the concerned Budgetary Body.

12.4.6 The verified statement on Equity portfolio of the Government shall be

appended in the annual financial statements.

12.5 Statement on other Bank Accounts

12.5.1 The Budgetary Bodies operating the Current Deposit Accounts shall
submit their annual financial reports to the DPA by end of August for
its incorporation into the Annual Financial Statement.

12.5.2 All Government Trust Funds shall prepare their annual report including
financial statements in accordance with the provisions of the Trust
Fund’s constitution, and submit to the Minister of Finance and the
portfolio Minister by end of August.

12.5.3 A consolidated statement of the Refundable Deposits Account, all the

Revolving Fund Accounts and Trust Fund Accounts shall be appended
in the Annual Financial Statements.

12.5.4 The bank balance in the Refundable Deposits Account shall be

reconciled with the information in the monthly accounts of the
agencies on the deposits made into it and information in the Budget
Fund Account on the withdrawals made from it. The opening balance,
receipts into this account, withdrawals made from it and the closing
balance shall be incorporated in the statement.

12.5.5 In respect of the Revolving and Trust Fund Accounts, the opening
balances, total receipt transactions, total payment transactions and the
closing balances shall be incorporated individually in the statement.

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12.6 Reconciliation of Govt. Consolidated Account

12.6.1 The reconciliation of the Government Consolidated Fund Account

shall involve reconciliation of the following two sub-principal accounts
operated by the DPA and DRC.

a. The Government Budget Fund Account shall be reconciled

with the bank statements by the DPA.

b. The Government Revenue Account shall be reconciled with the

bank statements by the DRC. The DPA shall cross-check the
revenue statements received from DRC with the one received
from the Bank.

12.6.2 The decentralised Government Non-Revenue Receipts & Deposits

Account shall be reconciled by the DPA in the following manner:

a. Each Bank branch shall send bank statements to the DPA in

respect of deposits made in the Government Non-Revenue
Receipts and Deposits Account by various agencies. The bank
statements shall be supported by one copy of the individual
deposit invoices.

b. The deposit invoices shall be sorted by Budgetary Body/LC

account number and the total deposit made by each Budgetary
Body shall be compared with the information provided in the
monthly accounts submitted by that Agency. Any discrepancy
between the two shall be reconciled and corrected in co-
ordination with the respective accounting unit in the Agency.

c. The total of receipts in this account by individual bank

branches shall be reconciled with the total bank statement for
this account provided by the Agent Bank (HQ).

12.6.3 The LC withdrawals from the Government Consolidated Fund Account

through the decentralized lines of credits shall be verified in the
following manner:

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a. The bank statements in respect of individual LC accounts sent

by the bank branches shall be cross checked and reconciled
with the bank reconciliation statements sent by the account
holders. Discrepancies between the two shall be reconciled and
corrected in co-ordination with the respective agencies.

b. The withdrawals from the individual LC accounts as sent by

the bank branches shall be cross-checked with the total LC
withdrawals indicated by the Agent Bank HQ.

c. The total of the reconciled withdrawals from all the LC

accounts shall be verified with the total LC withdrawal
indicated by the Agent Bank HQ.

12.7 Other Schedules

12.7.1 Information in these schedules shall be obtained from the Ledger, Sub-
ledgers of Budget Fund Operation and monthly accounts of the
Agencies.

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APPENDIX – I

MINIMUM REQUIREMENTS TO SUPPORT EXPENDITURE

1. Personnel emoluments (OBC group 01.00)

(a) First Salary:-
i. Appointment order issued by a competent authority.
ii. Last pay certificate in the case of a transferred employee.
(b) Change in Pay:-
i. Periodical increment order.
ii. Promotion/Pay fixation order.
iii. Demotion/Pay fixation order.
(c) Leave/Leave encashment:-
i. Sanction order from a competent authority.

2. Other Personnel emoluments (OBC group 02.00)

(a) First Salary:-
i. Appointment order issued by a competent authority.
ii. LPC in case of transferred employees

3. Medical benefits (OBC group 03.00)

(a) In-country:-
i. Admissible as per rules framed from time to time by the
government.
(b) Outside Bhutan:-
i. Authority/Letter of reference issued by a competent authority
for obtaining treatment outside the country.
ii. Acceptance, by the competent authority, of claims certified by
the concerned medical officer/institution.

4. Special Allowances (OBC group 04.00)

i. Relevant orders of the Government in general cases.
ii. Specific sanction issued by a competent authority in special cases.

5. Stipends (OBC group 05.00)

i. Sanctioned strength of enrolment in the institutions.

6. Travel (OBC group 11.00)

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i. Travel authorisation from a competent authority.
ii. Travel allowance claims, endorsed by the controlling officers, receipts
for entitled actual expenses, air tickets etc.,
iii. Certificate on submission of tour report in applicable cases.
iv. Original boarding passes along with claims for reimbursement/
adjustment of air fares for travel outside the country.
Note – 1.In case the boarding passes are lost, a copy of the relevant pages of
the Passport showing entry and exit from the airports.

7. Utilities - Telephone, Telex, FAX, E-mail, Internet (OBC 12.01)

(a) New installation:-
i. Sanction from competent authority.
(b) Monthly bills:-
i. For office utilities: Certificate of verification countersigned by
Head of Office.
ii. For residential instruments: Reimbursement claims with
certificates that calls were made for official purposes
countersigned by the Head of Office, copy of the bill and
receipt.

8. Utilities - Telegram, WT, Postage (OBC 12.02)

(a) Office:-
i. Statement of postage accounts and receipts in relevant cases.
ii. Verification of despatch register.
(b) Reimbursements:-
i. Copy of messages transmitted.
ii. Receipts for actual expenses.

9. Utilities - Electricity/Water, sewerage charges (OBC 12.03)

(a) Office, Public facilities:-
i. Verification from the concerned Office.
(b) Residential:-
i. Verification by the entitled consumer.

10. Utilities – Others

i. Sanction order from a competent authority.
ii. Verification from the officer in-charge.

11. Rental charges (OBC group 13.00)

(a) Buildings – First time:-
i. Sanction order, lease agreement as per the rates approved by
the DNP/Dzongkhag authorities.
(b) Vehicles:-
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i. Sanction from competent authority based on fulfilment of PRR.
ii. Certified log sheet from the user/officer in-charge
(c) Others:-
i. Sanction from competent authority

12. Supplies & Materials (OBC group 14.00)

i. Purchase order/Contract agreement/Sanction order.
ii. Original Invoices/bills duly verified and stock entry.

13. Maintenance of Properties (OBC group 15.00)

(a) Other than vehicles:-
i. Sanction order, Work order or Contract agreement.
ii. Technical Sanction in applicable cases.
iii. Completed Muster roll for labour payments.
iv. Measurement book and MAS account in applicable cases.
v. For materials, as specified under Supplies & Materials.

(b) Fuel & Lubricants for Vehicles:-

i. Supply or Cash memos with entries in Logbooks.
ii. Monthly performance analysis in Logbooks.
(c) Repairs of Vehicles:-
i. Sanction order, Work order or Supply order.
ii. Invoices duly verified and entered in the History sheet/Asset
Register.
iii. For major spares, certificate of receipt of unserviceable parts by
the office in-charge.

14. Operating Expenses (OBC group 17.00)

i. Supply order/ sanction in relevant cases.
ii. Invoices duly verified in all cases and stock entry in relevant
cases.
iii. Bank Statement for Bank charges.
iv. If other types of expenditures are booked then the requirement
should be as per that object code

15. Hospitality & Entertainment (OBC group 18.00)

i. Invoices/Cash memos duly verified and countersigned by the
Head of Office.
ii. Sanction/approval of the competent authority.

16. Write off – loss of Cash/Stock (OBC group 19.00)

i. Sanction order from the competent authority and budget line
from DNB in applicable cases.
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17. Current grants (OBC group 21.00)

i. Sanction from the competent authority and budget provision.

18. Subscriptions and Contributions (OBC group 22.00)

i. Sanction/approval of the competent authority. (No specific
sanction is needed for Government contribution to the GPF)

19. Retirement benefits (OBC group 25.00)

i. Order of retirement.
ii. Statement of service verification with approved working sheets
for gratuity.
iii. Clearances from RAA/Financial Institutions/DRC/NHDCL
iv. Sanction order for payment of entitlements.

20. Interest payments (OBC group 31.00)

i. Sanction/approval of the competent authority.
ii. Statement from Lender in respect of direct disbursement of
interest.

21. Expenses on Loan operations (OBC group 33.00)

i. Sanction from a competent authority.

22. Acquisition of Land/Buildings (OBC group 41.00)

i. Approval for acquisition.
ii. Copy of approved assessment details.
iii. Copy of Sale Deed.
iv. Entry in Property/Asset Register.
v. Sanction order for payment.

23. Training (OBC group 45.00)

(a) HRD – OBC 45.01:-
i. Sanction order from HRD/RCSC and competent authority
amongst other documents.
ii. Others – OBC 45.02:-
iii. Sanction from the competent authority.

24. Expenditure on Structures (OBC group 51.00)

(a) Departmentally executed (including deposit works):-

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i. Administrative approval and technical sanction.
ii. Completed Muster Roll and Measurement book
iii. Verified and certified bills of materials supplied to or procured
for the works in accordance with the Procurement Rules.
iv. Entries in Measurement books, MAS A/c, T&P account,
Dismantled materials register, empty container register,
Vehicle/Equipment Logbook as the case may be.
v. Approval and revised technical sanction for extra or additional
works where applicable.
vi. Entry in Works Cost sheet.
(b) Execution by award of contract:-
i. Administrative approval and technical sanction.
ii. Contract agreement/Work order.
iii. Verified and certified bills.
iv. Measurement book with entry of measurements..
v. Approvals for extra or additional works, price adjustment, time
extension where applicable.
vi. Entries in MAS A/C., T&P register, Empty container register,
Dismantled materials register, Site order book, Hindrance
register where applicable.
vii. Handing/taking over notes for final bill.
viii. Entry in Works cost sheet, Contractors’ Ledger.

25. Plants & Equipment (OBC group 52.00)

i. All requirements under Supplies and Materials.
ii. Verified disbursement information from donor where
applicable.
iii. Entry in Assets register.

26. Purchase of Vehicles (OBC group 53.00)

i. Verified and certified invoice.
ii. Import authorization and MoF approval
iii. Verified disbursement information from donor where
applicable.
iv. Entry in Assets register/History sheet.

27. Furniture & Office equipment (OBC group 54.00)

i. All requirements under Supplies & Materials.
ii. Import license in case of articles imported from third countries.
iii. Verified disbursement information from Donor where
applicable.
iv. Entry in Inventories/Asset register.

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28. Professional Services (OBC group 55.00)
i. Contract agreement & Terms of reference.
ii. Certified invoices/Disbursement information from Donors.

29. Capital Grants (OBC group 61.00 and 62.00)

i. Sanction of competent authority and Budget provision.

30. Acquisition of Equity (OBC group 63.00)

i. MoF approval/Budget provision.

31. Loans (OBC group 65.00)

i. MoF approval.
ii. Loan agreements.

32. Repayment of Debt Principals (OBC group 70.00)

i. Budget provision.

33. Personal Account Advances & adjustments (OBC group 88.00)

i. Sanction from the competent authority.
ii. Entry in relevant memorandum register.
iii. Adjustments: Recoveries/acceptance of claims

34. Advances and adjustments on Public Works and Deposit

Works, (OBC groups 93.00, 95.00)
i. Sanction from the competent authority.
ii. Entries in relevant memorandum registers.
Adjustments: Expenditure details/Debit notes from recipients, Recoveries or
Refunds.

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APPENDIX – II
LIST OF ACCOUNTING OBJECTS

Broad
Object
Name of Object Head Broad Head Name
Code
Code
1.01 Pay & Allowances 10.a B.E. - Current
2.01 Other Personnel Emoluments 10.a B.E. - Current
3.01 Medical Benefits – In-country 10.a B.E. - Current
3.02 Medical Benefits – Outside Bhutan 10.a B.E. - Current
4.01 Special Allowance 10.a B.E. - Current
4.02 Special Allowance – Kidu/Pensioners 10.a B.E. - Current
5.01 Stipends 10.a B.E. - Current
11.01 Travel – In-country 10.a B.E. - Current
11.02 Travel – Outside Bhutan 10.a B.E. - Current
Utilities – Telephone, Telex, Fax, E-
12.01
mail, Internet 10.a B.E. - Current
Utilities – Telegram, Wireless
12.02
Transmission, Postage 10.a B.E. - Current
Utilities – Electricity, Water, Sewerage
12.03
charges 10.a B.E. - Current
12.05 Utilities – Fuel wood 10.a B.E. - Current
13.01 Rental – Buildings 10.a B.E. - Current
13.02 Rental – Vehicles 10.a B.E. - Current
13.04 Rental – Furniture, Equipment & Land 10.a B.E. - Current
S & M – Office Supplies, Printing,
14.01
Publications 10.a B.E. - Current
S & M – Medicines, Laboratory
14.02
Consumables 10.a B.E. - Current

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Broad
Object
Name of Object Head Broad Head Name
Code
Code
S & M – Fertilisers, Chemicals,
14.03
Manure, Inoculants 10.a B.E. - Current
14.04 S & M – Seeds, Seedlings 10.a B.E. - Current
14.05 S & M – Animal feeds 10.a B.E. - Current
S & M – Uniforms, Extension kits,
14.06
Linens 10.a B.E. - Current
S & M – Text books, Stationery
14.07
(Schools & Institutes) 10.a B.E. - Current
14.09 S & M – Patient Diet 10.a B.E. - Current
14.10 S & M - Ration 10.a B.E. - Current
15.01 Maintenance of Properties – Buildings 10.a B.E. - Current
15.02 Maintenance of Properties – Vehicles 10.a B.E. - Current
15.03 Maintenance of Properties – Roads 10.a B.E. - Current
15.04 Maintenance of Properties – Bridges 10.a B.E. - Current
15.05 Maintenance of Properties – Equipment 10.a B.E. - Current
15.06 Maintenance of Properties – Plantations 10.a B.E. - Current
15.07 Maintenance of Properties – Computers 10.a B.E. - Current
Maintenance of Properties – Water
15.09
supply, Sewerage, Playfield 10.a B.E. - Current
17.01 Op.Exp. – Advertising 10.a B.E. - Current
Op.Exp. – Taxes, Duties, Royalties,
17.02 10.a B.E. - Current
Handling/Bank charges
17.03 Op.Exp. – Transportation 10.a B.E. - Current
17.04 Op.Exp. – Energy/Propulsion charges 10.a B.E. - Current
Op.Exp. – Items for
17.06
processing/manufacturing 10.a B.E. - Current
Op.Exp. – In-country Meetings and
17.08
Celebration 10.a B.E. – Current

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Broad
Object
Name of Object Head Broad Head Name
Code
Code
17.09 Op.Exp. – Survey/Census 10.a B.E. - Current
18.01 Hospitality & Entertainment 10.a B.E. - Current
19.01 Write Off – Stock, Loss of Cash/Goods 10.a B.E. - Current
Current Grants – Individuals/Non-profit
21.01
Organisations 10.a B.E. - Current
21.02 Current Grants – Sungchop 10.a B.E. - Current
Current Grant – Rural Life Insurance
21.03
Scheme 10.a B.E. - Current
22.01 Current Grants – Financial Institutions 10.a B.E. - Current
Current Grants – Non-financial
22.02
Institutions 10.a B.E. - Current
Subscriptions to International
24.01
Organisations 10.a B.E. - Current
24.02 Contributions – Other Governments 10.a B.E. - Current
24.03 Contributions – Provident Fund 10.a B.E. - Current
25.01 Retirement Benefits 10.a B.E. - Current
26.01 General Provisions 10.a B.E. - Current
31.01 Interest payments – Internal 10.a B.E. - Current
31.02 Interest Payments – External 10.a B.E. - Current
33.01 Expenses on Loan Operations 10.a B.E. - Current
Acquisition of Immobile Property –
41.01
Land 10.b B.E. - Capital
Acquisition of Immobile Property -
41.02
Buildings 10.b B.E. - Capital
Training – Human Resource
45.01
Development 10.b B.E. - Capital

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Broad
Object
Name of Object Head Broad Head Name
Code
Code
45.02 Training – Others 10.b B.E. - Capital
51.01 Exp. On Structure – Buildings 10.b B.E. - Capital
Exp. On Structure – Roads (Including
51.02
Culverts, drains) 10.b B.E. - Capital
51.03 Exp. On Structure – Bridges 10.b B.E. - Capital
51.04 Exp. On Structure – Irrigation channels 10.b B.E. - Capital
51.05 Exp. On Structure – Drainage Systems 10.b B.E. - Capital
Exp. On Structure – Water Supply &
51.06
Sanitation 10.b B.E. - Capital
51.07 Exp. On Structure – Plantations 10.b B.E. - Capital
51.08 Exp. On Structure - Others 10.b B.E. - Capital
52.01 Plant & Equipt. – Roads 10.b B.E. - Capital
52.02 Plant & Equipt. – Power Generation 10.b B.E. - Capital
Plant & Equipt. – Power Trans. &
52.03
Distbn. 10.b B.E. - Capital
52.04 Plant & Equipt. – Telecommunications 10.b B.E. - Capital
Plant & Equipt. – Agricultural
52.05
machinery 10.b B.E. - Capital
52.06 Plant & Equipt. – Livestock 10.b B.E. - Capital
Plant & Equipt. –
52.07
Hospital/Lab.equipment 10.b B.E. - Capital
Plant & Equipt. – General Tools,
52.08
Instruments 10.b B.E. - Capital
53.01 Purchase of Vehicles 10.b B.E. - Capital
53.02 Purchase of helicopters 10.b B.E. - Capital
54.01 Furniture 10.b B.E. - Capital
54.02 Office Equipment 10.b B.E. - Capital
54.03 Computers & Peripherals 10.b B.E. - Capital
55.01 Professional Services 10.b B.E. - Capital

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Broad
Object
Name of Object Head Broad Head Name
Code
Code
56.01 General Provisions 10.b B.E. - Capital
Capital Grants – Individuals/Non-Profit
61.01
Organisations 10.b B.E. - Capital
61.02 Capital Grants – Sungchop 10.b B.E. - Capital
61.03 Capital Grants – Revolving Funds 10.b B.E. - Capital
62.01 Capital Grants – Financial Institutions 10.b B.E. - Capital
Capital Grants – Non-Financial
62.02
Institutions 10.b B.E. - Capital
63.01 Acquisition of Equities/Shares 10.b B.E. - Capital
65.01 Loans – Individuals 10.c B.E. - Lending
65.02 Loans – Enterprises 10.c B.E. - Lending
70.01 Repayment of Debt Principal – Internal 10.d B.E. - Repayment
70.02 Repayment of Debt Principal – External 10.d B.E. - Repayment
80.01 Cash Transactions 12.a Reserved for Cash &
Bank accounts in the
80.02 Bank Transactions 12.b
computerised systems
81.01 Releases – Budgetary 2.a Rel.- Budgetary
81.02 Releases – Non-Revenue 2.b Rel.– Non-Revenue
81.03 Releases – Refundable Deposits 2.c Rel.–Refundable Dep.
81.04 Releases – Uncashed cheques 2.d Rel.- Uncashed Cheques
82.01 Grants in Kind 3 Grants in Kind
83.01 Borrowings in Kind 4 Borr. in Kind
86.01 Tax on Salary 5 Rev.Rects/Remittances
86.02 Tax Deducted at Source 5 Rev.Rects/Remittances
86.11 House Rent 5 Rev.Rects/Remittances
86.12 Health Contribution 5 Rev.Rects/Remittances
86.13 Sale Proceeds 5 Rev.Rects/Remittances
86.14 Interest on Loans 5 Rev.Rects/Remittances

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Broad
Object
Name of Object Head Broad Head Name
Code
Code
86.15 Departmental/Supervision Charges 5 Rev.Rects/Remittances
86.16 Other Revenues 5 Rev.Rects/Remittances
87.01 GPF : Employees Contribution 6.a Oth.Rec/Remit-GPF
87.02 Govt. Insurance Scheme 6.b Oth.Rec/Remit-GIS
87.03 Other Insurance Premia 6.c Oth.Rec/Remit-OIP
Oth.Rec/Remit-Loans
87.11 Vehicle Loan 6.d
from Fin.Instt.
Oth.Rec/Remit-Loans
87.12 GE Loans 6.d
from Fin.Instt.
87.21 Audit Recoveries for RAA 6.e Oth.Rec/Remit-Others
87.22 Other Recoveries 6.e Oth.Rec/Remit-Others
88.01 Personal Advances 7 Personal Advances
89.01 Deposits – Non-Revenue 8.a MRP: Non-Rev. Dep.
89.02 Deposits – Refundable Deposits 8.b MRP: Refundable Dep.
89.11 DPA: Prior Year Expenses 8.c MRP: Payments to DPA
89.12 DPA: Prior Year Advances 8.c MRP: Payments to DPA
89.13 DPA : Closing Cash Balances 8.c MRP: Payments to DPA
89.14 DPA: Refundable External Grants 8.c MRP: Payments to DPA
89.15 DPA: Loan Principals 8.c MRP: Payments to DPA
89.16 DPA: Others 8.c MRP: Payments to DPA
89.17 DPA: Uncashed Cheques 8.c MRP: Payments to DPA
89.21 Others : Storage Charges 8.d MRP : Others
89.22 Others: RMO Heavy Vehicles & Equipt. 8.d MRP : Others
89.23 Others : Loss/Gain in Exchange 8.d MRP : Others
89.24 Others : Others 8.d MRP : Others
89.25 Others : WFP Generated Funds 8.d MRP : Others
89.26 Others: Uncashed Cheques 8.d MRP : Others
91.01 Stock 9.a Suspense : Stock

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Broad
Object
Name of Object Head Broad Head Name
Code
Code
92.01 Purchases 9.b Suspense : Purchases
93.01 PWA : Employees 9.c Suspense : PWA
93.02 PWA : Suppliers – Others 9.c Suspense : PWA
93.03 PWA : Sales on Credit 9.c Suspense : PWA
93.04 PWA : Losses under Investigation 9.c Suspense : PWA
93.05 PWA : Others 9.c Suspense : PWA
PWA : Suppliers – Mobilisation
93.06
Advances 9.c Suspense : PWA
93.07 PWA : Suppliers – Secured Advances 9.c Suspense : PWA
95.01 Deposit Works 9.e Suspense : DW
96.01 Security & Earnest Money 9.f Suspense : Oth.Deposits
96.02 Closed Works 9.f Suspense : Oth.Deposits
96.03 Other Deposits – Others 9.f Suspense : Oth.Deposits

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APPENDIX – III
LIST OF FAM FORMS
Form
No. Title of Form Page No.
1.1A Deposit Invoice – Budget Fund Account 218
1.1B Deposit Invoice – Non-Revenue Account 219
1.1C Deposit Invoice – Refundable Deposit Account 220
1.2 Chequebook Register 221
1.3 Cheques Issued Register 222
1.4 Indemnity Bond for Lost Cheque 223
3.1 Non-Revenue Money Receipt 224
3.2 Stock Register of Receipt books/Deposit Invoices 225
4.1 Cash Account for Permanent/Temporary Advances 226
4.2 Bills Inward Register 227
4.3 Note for Sanction of Expenditure 228
4.4 Appropriation Control Register 229
4.5 Disbursement Voucher 230
4.6 Journal Voucher 231
4.7 Attendance Report 232
4.8 Pay Bill 234
4.9 Last Pay Certificate 236
4.10 Travel Authorisation 238
4.11 Travel Allowance Bill 240
4.12 Travel Register 242
5.1 Cashbook 244
5.2 Journal Book 246

5.3 Ledger 248

5.4 Sub-ledger 250
5.5 Bills Outward Register 252
6.1 Muster Roll Register 254

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Form Page No.

No. Title of Form
6.2 Muster Roll 255
6.3 Measurement Book 259
6.4 Measurement Book Register 260
6.5 Site Order Book 261
6.6 Hindrance Register 263
6.7 Works Cost Sheet 265
6.8 Contractors’ Ledger 267
6.9 Unpaid Wages Register 270
6.10 Works Completion Report 271
8.1 Stock Ledger 273
8.2 Bin Card 275
8.3 Goods Received Note 277
8.4 Goods Issue Note 279
8.5 Bin Card Register 281
8.6 Rejection Memorandum 283
8.7 Daily Summary of G.R. Notes 285
8.8 Daily Summary of G.I. Notes 287
8.9 Bill for Supply of Stock Items 289
8.10 Monthly Abstract of Stock Receipts & Issues 291
8.11 Monthly Abstract of G.I. Notes 293
8.12 Monthly Abstract of G.R. Notes 295
9.1 Receipts and Payments Statement 297

9.2 Schedule of Fund Releases 300

9.3 Schedule of In-kind Grants and Borrowings 302
9.4 Schedule of Revenue Receipts and Remittances 304
9.5 Schedule of Other Recoveries and Remittances 306
9.6 Schedule of Personal Advances 308
9.7 Schedule of Miscellaneous Receipts and Payments 310

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Form Page No.

No. Title of Form
9.8 Schedule of Public Works Advances 312
9.10 Schedule of Deposit Works 314
9.11 Schedule of Other Deposits 316
9.12 Expenditure Statement 318
9.13 Bank Reconciliation Statement 320
9.14 Consolidated Summary of Advances and Suspense Items 322
9.15 Broad-sheet for Consolidation of Monthly Accounts 324
11.1 Consolidated Receipts and Payments Statement 325
11.2 Summary of Variances 326
11.3 Statement of Outstanding Loans 327
11.4 Statement of Equity Portfolio 328
11.5 Statement of Refundable Deposit, Revolving and Trust Fund 329
Accounts

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APPENDIX – III (Contd.)

FAM FORMS
FAM – 1.1A.
ROYAL GOVERNMENT OF BHUTAN
MINISTRY OF FINANCE
BUDGET FUND DEPOSIT INVOICE No.
Original/Duplicate/Book Copy Date:

The Manager,
Bank of Bhutan, Thimphu.

Please accept a sum of Nu. …………….. (Ngultrums ……………………………………..

only) as per details given below and credit the proceeds to the Government Budget Fund
Account.
Cheque/Draft Date Amount Bank & Branch Received from Other Details
No.

Total:

Designated Officer
Department of Public Accounts
Acknowledgement by Bank:
Received Nu……………..
Received Cheque/Draft for Nu……………..

(Seal, Date and Signature of Bank)

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FAM – 1.1B.
ROYAL GOVERNMENT OF BHUTAN
MINISTRY OF FINANCE
NON-REVENUE DEPOSIT INVOICE No.
Original/Duplicate/Book Copy Date:
Disbursing Office: ……………………………

The Manager,
Bank of Bhutan, (Branch name)

Please accept a sum of Nu. …………….. (Ngultrums …………………………..only) as per

details given below and credit the proceeds to the Non-Revenue Receipts and Deposits
Account.

Details of cash Details of cheque/draft

Denomination: No. Amount Nu. Cheque/Draft Bank & Branch Amount
No. Date Nu.

Total: Total:

Drawing & Disbursing Officer

Name and Designation
Acknowledgement by Bank:
Received Nu……………..
Received Cheque/Draft for Nu……………..
(Seal, Date and Signature of Bank)

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FAM – 1.1C.
ROYAL GOVERNMENT OF BHUTAN
MINISTRY OF FINANCE

DEPOSIT INVOICE FOR REFUNDABLE DEPOSITS ACCOUNT

Original/Duplicate/Book Copy
Disbursing Office: ……………………………

The Manager, No.

Bank of Bhutan, (Branch name) Date:

Please accept a sum of Nu. …………….. (Ngultrums …………………………..only) as per

details given below and credit the proceeds to the Refundable Deposits Account.

Details of cash Details of cheque/draft

Denomination: No. Amount Nu. Cheque/Draft Bank & Branch Amount
No. Date Nu.

Total: Total:

Drawing & Disbursing Officer

Name and Designation
Acknowledgement by Bank:
Received Nu……………..
Received Cheque/Draft for Nu……………..

(Seal, Date and Signature of Bank)

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FAM – 1.2

Cheque Book Register

Date Book Cheque form Nos. Total No. Used from Initials Remarks
No. From To of Forms Date DDO (Closed or Returned)

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FAM – 1.3

Cheques Issued Register

Date of Cheque No. Amount Initials Date of Remarks

Issue Nu. DDO En-cashment (Cancelled etc.)

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FAM – 1.4

INDEMNITY BOND FOR ISSUE OF A FRESH CHEQUE IN LIEU OF A LOST

CHEQUE.

This deed of Indemnity made on the ……….. day of ………. in the year……… between
………………. , son/daughter of ………………., resident of ……………, carrying on
business under the name and style of ……………… (herein after called “the
indemnifier”) of the one part and the ………………………of …………. Department,
Ministry of …………, Government of Bhutan (hereinafter called “the Government”) of
the other part.
Whereas on the ……….. day of ………. in the year…….. cheque No……… dated
……… on ……… branch of ………(Bank name) for Nu. …………. was drawn by
the…………. in favour of the indemnifier.
And whereas the indemnifier has represented to the Government that the said cheque has
been lost by him/ during the transmission by post to him.
And whereas at the request of the indemnifier, the Government has agreed to issue a
second cheque for an amount equivalent to the amount of the previous cheque No.
…………. dated…………. upon the indemnifier giving such indemnity as noted below:
In consideration of the above premises and the Government agreeing to issue a second
cheque, the indemnifier hereby agrees and undertakes to refund to the Government on
demand the said sum of Nu. ……… in the event the previous cheque No………
dated…….. is presented to and paid by the bankers. The indemnifier also agrees to
indemnify the Government against all expenses which may be incurred by the
Government in connection therewith.
In witness whereof the parties hereto have set and subscribed their respective hands
hereunto on the day and year first mentioned.

Signature of the Indemnifier Signature for the Government

Witness (1) Witness (1)

(Name, Address) (Name & Address)
Witness (2) Witness (2)
(Name & Address) (Name & Address)

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FAM – 3.1
ROYAL GOVERNMENT OF BHUTAN
MINISTRY OF FINANCE

NON-REVENUE RECEIPT

Agency: ……………………………
No.:
Date:

Received/adjusted a sum of Nu. …………….. (Ngultrums …………………………..only)

From……………………………………… towards ………………………………………..

Details of which are given below:

Details of cash/cheque Details of adjustment

a) Cash Nu. a) Disbursement/Journal

Voucher No.
b) Cheque/Draft No.
Date:
Date:
Amount Nu.
Amount Nu.

Drawing & Disbursing Officer

Name and Designation

Note: Validity of the receipt is subject to realisation of cheque/draft/cash warrant proceeds.

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FAM – 3.2

Stock Register

FOR NON-REVENUE RECEIPT BOOKS/DEPOSIT INVOICES/GR NOTES

Date Ref. Name Quantity Received Quantity Issued Stock

No. of Form serial Nos. No. of Form serial Nos. No. of Form serial Nos.
Books From To Books From To Books From To

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FAM – 4.1
Cash Account for Permanent/Temporary Advances

Disbursing Office……………………………..
Cash Account of …(Name & designation of PAH/TAH)

Sl. Bill/Cash Payee Amount of Total in Head of account

No Memo No. Payment Progress

Nu. Ch Nu. Ch

( Signature & Designation )

Special Disbursing Officer.

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FAM – 4.2
Bills Inward Register

Date No. Received From Bill No. Date Amount Dated Verification Recd. Remarks
Initial Date
Sent to Date

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FAM – 4.3
NOTE FOR SANCTION OF EXPENDITURE

No.
Date :

SECTION – I. PROPOSAL:
1. Name of Activity : …………………………………………………..
2. Budget (Balance) Available : Nu. …………………
3. Estimated cost : Nu. ………………..
4. Mode of Execution : ………………………………………………………………………
5. Balance in Stock2 : ………………………………………………………………………..
6. Any other justifications :

Head of Unit.
SECTION – II VERIFICATION:
1. Availability of budget appropriation :
2. Ref. to Delegation of Financial Power :
3. Any other remarks :

Head of Finance Section

SECTION – III APPROVAL:

Sanctioning Authority.
Copies to:

2
In case of Procurements only.

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FAM – 4.4
Appropriation Control Register

Budget Line : …………………………

Original Appropriation : Nu.

Sl. Commitments/New Appropriations Amount Balance

Ref. Date Brief Particulars Nu. Available (Nu.)

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FAM – 4.5
Disbursement Voucher

Bank Account No.: Voucher No. :

Cash Book Page No. : Date :
Name of Payee :
Address :
GRN/Bill No.: Cash in hand/at Bank :
Particulars Exp./Recovery Detailed Account code Debit Credit
Broad Head Nu. Nu.

Passed for Nu. ……………. (Ngultrums …………………………………………………..

Net Payment Nu. ………….. (Ngultrums ………………………………………………….
Prepared by: … ………
( Date, Name & designation)

Head of Finance Approving Officer.

(Date, Name & Seal of Designation) (Date, Name & Seal of Designation)

Paid in Cash/by cheque No.: Received Payment

Nu.

Cashier.
(Date & Name) Name, Signature & Date.

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FAM – 4.6
Journal Voucher

Bank Account No.: Journal Voucher No. :

Journal Book Page No. : Date :
Particulars/ Account Codes Debit Credit
Explanation Broad Head Detailed Code Nu. Nu.

Passed for Adjustment of Nu. ……………. (Ngultrums

Prepared by:

Accountant/A/Cs.Clerk Head of Finance Section

(Name and Signature). (Name & Seal of Designation)
Date Date

Approving Officer
(Name, Date & Seal of Designation)

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FAM – 4.7
(Name of office/section/unit)

Attendance Report for the Month of ………, 20

Sl. Name of Employee Designation Emp.Id.No. Dates Remarks
No

(Signature of In-charge)
(Date, Name & Seal of Designation)

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Instructions for the Attendance Report (FAM – 4.7)

1. Sl. No. : Serial number of the entry in the form.

2. Name : Name of the Employee.
3. Designation : Designation of the employee.
4. Emp. Id. No. : Employee identity number.
5. Dates : Starting from 21st of the previous month to 20th of the current month.
6. Remarks : If any.

 This form shall be filled up and submitted by the Officers-in-charges where separate attendance registers are maintained in different field units and
sections located outside the office.
 Instead of filling up every date column with ‘P’, it is permitted to write words like “Present full month” or “E.L from … to …” etc. across the
columns.
 The attendance report shall be submitted to the accounting unit on 20th of each month for preparation of pay bills.

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FAM – 4.8.
(Name of Office)
Pay bill for the month of …………….., 20
Activity Code:
Activity Name:
Sl Name of Employee Designation ID # Dues Deductions Total Net Signature

Remark
Basic Allowances Total Sal. H.R H.C GIS GPF Deductio Payable
Pay Cont. DAA Dues Tax ns.

s
Total :

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Instructions for the Pay bill (FAM – 4.8)

1. Activity Code : Code of the Activity or Project. 9. Deductions : Deductions on account of Tax, House Rent etc.
2. Activity Name : Name of the Activity or Project. 10. Total Deductions : Total of the Deductions.
3. Sl. : Serial number of the entry. 11. Net Payable : Total Dues – Total Deductions.
4. Name : Name of the employee. 12. Signature : Signature of the employee on receipt of the payment
5. Designation : Designation of the employee. if the payment is disbursed in cash.
6 Id. No. : Employee identity Number. 13. Remarks : If any, like “PIC or LPC attached”.
7. Dues : Basic pay, Contract Allowance etc.
8. Total Dues : Total of the pay and allowances.

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FAM – 4.9
(Name of Office)
LAST PAY CERTIFICATE
Ref. No.
Issue Date

1. Name of Employee :
2. Gender :
3. Designation :
4. Cadre & Grade :
5. Employee ID No. :
6. Saving Account No. :
7. TPN :
8. Relieving Order No. :
9. Relieving Date :
10. Transferred To :

1. Certified that the above employee has been paid up to (Date) for the FY at the following
rates:

Particulars Amount
a) Pay:
b) Allowances:

2. The following advances are due from him/her for recovery/adjustment:

Particulars Amount Mode of Recovery/Adjustment
a) Personal Account Advances :
b) Audit Recoveries :
c) Public Works Advances :
3. The following deductions have been made from his pay bill:

Particulars Amount Account No./Other details.

a) Tax on Salary At applicable rates Deducted up to (mm/yy)

b) Health contribution At applicable rates Deducted up to (mm/yy)

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c) GPF A/C.No.

d) GIS A/C. No.

e) Others (please specify)

4. The following Floating and Loan deductions have been made from his pay bill:
Particulars Account No. Financial Institute Amount

1. Leave Travel Concession has been paid to him/her for the year ending (yyyy-yy).
2. Leave encashment has been paid for the FY 20xx to 20x1
3. Transfer Grant is not applicable.
4. Before getting relieved, he/she has handed over the charges held by him/her.

(Signature)
(Date, Name and Seal of Designation)

Copies to:
1. Employee concerned.
2. Others (please specify).

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FAM – 4.10
(Name of Office)
Travel Authorisation
Name of employee: Number:
Designation: Grade: Date:
From To Mode of Travel Halt At Purpose
Station Date Station Date

Proposed tour approved/

Estimated Travelling Expenses : Nu. Tr. Advance outstanding : Nu. Not approved.
Advance Required : Nu. Since (date) Advance of Nu.
Sanctioned/Recommended.

(Signature of employee) (Signature & Seal, Head of Finance) (Signature & Seal, Controlling Officer)
Date Date Date

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Instructions for Travel Authorisation (Form FAM – 4.10)

1. From:
a) Station : Place of departure
b) Date : Date of departure
2. To:
a) Station : Place of arrival
b) Date : Date of arrival
3. Mode of Travel : By public transport, own or hired vehicle, air etc.
4. Halt at : Place of night halt/stopover
5. Purpose : Purpose of travel/stopover

 The employee shall get the completed form (in duplicate) endorsed by the Accounting unit for the required advance.
 The authorisation form must be got approved by the Controlling officer before proceeding on tour.
 One copy of the approved/recommended authorisation form shall be submitted to the accounting unit for payment of the advance.
 Duplicate copy shall be submitted with the Travelling allowance bill.

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FAM – 4.11
(Name of Office)
Travel Allowance Bill
Name of employee: Number:
Designation: Grade: Date:
No. of fares: Travel Authorisation No. & Date :
Departure Arrival Daily Mileage Bus/Train/ Actual Total Purpose of Journey
Date Time Station Date Time Station Allowance Air fare Expenses

Total
Advance Taken
Amount claimed for payment/refunded

Certified that the travel was performed by me for official purposes and the claims are genuine.

Dated signature of employee

Certified that the travel was authorised by me for official purposes and the claims appear genuine and reasonable.

Signature, Date & seal of the Controlling officer.

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Instructions for Travel Allowance bill (Form FAM – 4.11)

1. Daily Allowance : DSA applicable as per CSR and DSA rules.

2. Mileage : Mileage claimed on the basis of distance travelled by own vehicle.
3. Bus/Train/Air fare : Self explanatory.
4. Actual Expenses : Lodging or any other actual expenses claimed.
5. Total : Total claim for each day or period.
6. Purpose of journey : Self-explanatory.
7. Advance taken : Amount of travelling advance obtained prior to the journey.
8. Amount claimed/refunded : Score out the not applicable item.

 When the journey starts from a station outside the Headquarters or the first item starts with a halt at an outstation, the date and time of arrival at the
outstation shall be indicated in the bill.

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FAM – 4.12
Travel Register

Name and Designation:

Employee Id No.:
Sl. Disbursement Purpose Duration Amount Advance Net Remarks
No admitted adjusted amount
Vr.No Date From To

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Instructions for Travel Register (FAM – 4.12)

1. Page No. : Page number of the register assigned for the employee.
2. Name & Designation : Name & Designation of the employee.
3. Employee ID No. : Self-explanatory.
4. Sl.No. : Serial number of the entry in the page.
5. Disbursement : Disbursement Vr. No. and date of the Vr. for the bill.
6. Purpose : Brief purpose of the journey.
7. Duration : Starting and ending dates of the journey covered in the bill.
8. Amount admitted : Gross amount of the claim admitted.
9. Advance adjusted : Amount of advance recovered from the bill.
10. Net amount : Net amount paid against the bill.
11. Remarks : If any.

 Separate pages shall be allotted for each employee.

 It is important to fill in the employee ID No. in order to avoid confusion among two employees
of the same name.

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FAM – 5.1
Page # Page #

CASH BOOK
Bank Account No…………………….
Dr. (RECEIPTS) Cr. (PAYMENTS)
Date Ref. Particulars L. SL. Amount Cash Bank Remarks Date Disb. Particulars L.F. SL. Cheque Amount Cash Bank Remarks
No. F. F. Nu. Nu. Nu. Vr.No F. No. Nu. Nu. Nu.

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Instructions for Cash Book (Form No. FAM – 5.1)

1. Bank Account No. : Number of the bank account to which the cash book pertains.
2. Debit (Receipt side)
a) Date : Date of Transaction.
b) Ref. No : Serial number of the receipt transaction.
c) Particulars : Particulars of the Transaction; Broad head code preceded by the word “To”; the detailed code in the next line; Narration
(including receipt number or disbursement voucher number in cases of deductions) in the following lines.
d) L.F. : Main Ledger folio number.
e) S.L.F. : Sub-ledger folio number.
f) Amount : Total amount of receipt.
g) Cash : i) Amount received in cash, cheque or draft ii) Deductions from disbursement vouchers iii) Cash withdrawn from Bank.
h) Bank : Amount released by the DPA in the bank account
i) Remarks : Additional information, if any.
3. Credit (Payment side)
a) Date : Date of transaction.
b) Disb.Vr.No. : Disbursement voucher number.
c) Particulars : Particulars of the Transaction; Broad head code preceded by the word “By”; the detailed code in the next
line; Narration in the following lines.
d) L.F/SL.F : Main Ledger and Sub-ledger folio.
e) Cheque No. : Serial number of the cheque issued.
f) Amount, Cash, Bank : Same as in Receipts side, applicable for amounts paid or deductions made
g) Remarks : Any other information.

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FAM – 5.2

Page #

Journal Book
Bank Account No.:

Accounts Codes Amount

Particulars/
J.V.No.

S.L.F.
Date Explanation Broad Dr. Cr. Attestation

L.F.
Head Detailed Head Nu. Nu.

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Instructions for Journal Book (Form No. FAM – 5.2)

Date : Date of Transaction.
J.V.No. : Serial number of the journal voucher.
Particulars/Expln. : Narration for the transaction.
Accounts Codes : Self explanatory.
L.F. : Ledger folio, Page number of the main ledger in which posting is made.
S.L.F. : Sub-ledger folio, Page number of the sub-ledger in which posting is made.
Amount Dr. : Amount by which the account head is debited.
Amount Cr. : Amount by which the account head is credited.
Attestation : Dated initial of the Approving officer attesting the entry on signing the pass order on the journal voucher.
 A separate journal book shall be maintained or separate sections of the journal book shall be earmarked for individual bank accounts.
 Journal voucher numbers shall be determined by the serial number of the entry in the journal book.
 Individual series of numbers shall be maintained for individual bank accounts.
 A red-ink line shall be drawn across the columns at the end of each entry.
 Each journal entry shall be attested by the approving officer.
 Narration shall quote reference of the supporting documents.

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FAM – 5.3

Page #

Ledger

Bank Account No.: ………………… Fiscal year:

Code No. & Name of Broad Head: …………………………………………
Date C.B.F/ Vr.No./ Amount (Nu.) Dr.
J.B.F Rct.Ref Cr. Remarks.
Debit Credit Balance

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Instructions for Ledger (Form No. FAM – 5.3)

1. Bank Account No. : Account No. to which the ledger account pertains.
2. Code & Name : Code No. and Name of the Broad Head appearing in the Receipts
& Payments Statement.
3. Date : Date of Transaction as recorded in the books of original entry.
4. C.B.F/J.B.F : Cash book or Journal book folio number.
5. Vr.No./Rct.Ref. : Disbursement/Journal voucher or Receipt number or Reference.
6. Amount Debit : Amount by which the account head is debited.
7. Amount Credit : Amount by which the account head is credited.
8. Amount Balance : Progressive balance of debits and credits.
9. Dr./Cr. : Whether the balance is a debit or credit balance.
10. Remarks : Any other information if necessary.

 Posting in the main ledger shall be carried out ideally as and when a transaction is completed but positively at the
end of the transaction hours each day.

 Cash book and journal book shall be the sources for posting in the ledger. Posting in the ledger shall be made for
only those entries, which bear the attestation or approval of the DDO/Approving officer.
 Simultaneous reference of ledger folio shall be entered in the Cash/journal book with each entry.

 Balance shall be worked out with each entry.

 Progressive total of Debits and Credits shall be worked out after the last entry of a month and written in red ink
between a pair of red lines drawn across the columns.
 The balance brought forward from the previous fiscal year shall be entered in the “Amount Balance” column only.

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FAM – 5.4

Page #

Sub-Ledger

Bank Account No.: Fiscal year:

Code No. & Name of Detailed Head:
Appropriations:
Original: Nu.
Revised:
1.
2.
3.
4.
Date C.B.F/ Ledger Vr.No./ Amount (Nu.) Dr.
J.B.F Folio Rct.Ref Cr. Remarks.
Debit Credit Balance

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Instructions for Sub-Ledger (Form No. FAM – 5.4)

1. Bank Account No. : Account No. to which the Sub-ledger account pertains.
2. Fiscal Year : The fiscal year to which the Sub-ledger account pertains.
3. Appropriations : Budget provisions where applicable.
4. Code & Name : Code No. and Name of the Detailed Head.
5. Date : Date of Transaction as recorded in the books of original entry.
6. C.B.F/J.B.F : Cash book or Journal book folio number.
7. Ledger Folio : Page Number of the main ledger where the transaction has been recorded.
8. Vr.No./Rct.Ref. : Disbursement/Journal voucher or Receipt number or Reference.
9. Amount Debit : Amount by which the account head is debited.
10. Amount Credit : Amount by which the account head is credited.
11. Amount Balance : Progressive balance of debits and credits.
12. Dr./Cr. : Whether the balance is a debit or credit balance.
13. Remarks : Any other information if necessary.

 Posting in the sub-ledger shall be carried out ideally as and when a transaction is completed but positively at the
end of the transaction hours each day.

 Cash book and journal book shall be the sources for posting in the sub-ledger. Posting in the sub-ledger shall be
made for only those entries, which bear the attestation or approval of the DDO/Approving officer.
 Simultaneous reference of sub-ledger folio shall be entered in the Cash/journal book with each entry.

 Balance shall be worked out with each entry.

 Progressive total of Debits and Credits shall be worked out after the last entry of a month and written in red ink
between a pair of red lines drawn across the columns.
 The balance brought forward from the previous fiscal year shall be entered in the “Amount Balance” column only.

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FAM – 5.5

PAGE #

(NAME OF OFFICE)

Bills Outward Register

Details of Claim Settlement Details Outstanding

Date Bill No. Particulars of bill Issued to Bill amount Date of Cheque/Draft Amount Balance Settlement

C.B.F
Nu. receipt Nu. Nu. Ref.
No. Date

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Instructions for Bills Outward Register (FAM – 5.5)

1. Date : Date of registration of the outwards bill. (This shall be the date recorded in the bill).
2. Bill No. : Serial number of registration of the bill. (This shall be the bill number recorded in the bill).
3. Particulars : Brief particulars like nature of articles supplied or services rendered.
4. Issued to : Identity and address of the person or party against whom the bill is raised.
5. Bill amount : Total amount of the bill raised.
6. Date of receipt : Date on which the payment against the bill is received.
7. Cheque/Draft No.&
Date : Number and date of the instrument (Please write “Cash” if the payment is received in cash).
8. Amount : Amount of the cheque/draft or cash received.
9. C.B.F : Cash book folio (Page number of the cash book in which the receipt is recorded).
10. Balance : The balance amount remaining unsettled if any after receipt of the payment.
11. Settlement ref. : Reference to the cash book entry or other orders through which the outstanding amount is settled.

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FAM – 6.1.
(Name of Office)
MUSTER ROLL REGISTER

Muster roll No. & Issued to Name of Work Period Remarks Signature of
Date approving authority
From To

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FAM – 6.2
(Front Cover Page)
(Name of Organisation)
MUSTER ROLL NO.
Name of work:
Budget Reference Code:

LABOUR STRENGTH SANCTION

Category Rate Nos. Man-Days

Issued to …………………………………..for the period from…………to………….

This Muster Roll contains …… Nos. of inner sheets.
(Signature)
Head of office

Nu. Ch.
Grand Total of this muster roll
Deduct. Payment not made, as per details in Part II.B.
Balance paid
Add. Arrears of previous muster roll now paid off as per details in Part II.
A Total amount paid

Date ……………….

(Signature & Name of DDO)

Designation.

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(Middle Spread) FAM – 6.2 Contd.

MUSTER ROLL
Part – 1. Nominal Roll
Unit:
Sub-Unit: Cash Book Voucher No dated Name of Work:
Category of Sl. Name of Id/Imm. Village & Father’s Dates …………………………… 20 Dated Signature or Dated initials and
Work-persons No. Work-person Card No. Dzongkhag Name Thumb impression remarks of the paying
of the payee officer at the time of

Deductions if any
payment.

Gross Amount

Net Payable
1 2 3 4 5 ……… up to 31Cols.

Total days

Rate
Daily Total.
Dated initial of the person marking the attendance.
Dated initial of the inspecting Officer.
Total

Certified that the Work-persons mentioned above were actually engaged during the days marked and for the days mentioned against each in
this work
Signature, Date and Name of Site Engineer…………………………. Signature, date and Name of the Supervising Engineer…………………….
Designation ………………………………. Designation………………………….

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(Back Cover) FAM – 6.2 Contd.

PART – II – DETAILS OF UNPAID WAGES

II.A. Payments against unpaid wages of previous Muster Rolls:
M.R No & period Sl. No. as per Name of Work-person ID /Imm. Card Amount due Amount Paid Dated signature or Dated initial &
to which the previous muster No. Father’s Name thumb impression of remarks of the
arrears relate roll the payee paying officer

(x)
Unpaid wages of previous muster rolls brought forward Nu.

Total Amount Paid Nu. (y)

Balance unpaid wages of previous muster rolls carried over to (B). Nu.: (x-y)

B. Unpaid Wages in this Muster Roll:

Sl. No. in Name of Work Person ID/IMM. Amount Due Remarks/Reasons

Part – I. Card No. (Nu)

Amount brought forward from (A) Nu. (x-y)

Total Unpaid Wages of this muster roll Nu. (z)

Total Unpaid Wages Carried forward Nu. (x-y) + (z)

Part – III – Measurement of work done during this muster roll period where the work is susceptible to measurement.*

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Description of work Deduct quantity up

(Each distinct item of work, grouped by sanctioned sub-heads where necessary) Quantity up to the last muster
Quantity of
(Separate abstract may be attached if the number of items are large) roll
to this M.R. work during
this M.R.**

Measurement taken on ……………….. 20 Measurement Book No. ………… Page ……..

(Date, Name and Signature of Site Engineer) (Date, Name and Signature of Supervising Engineer)
Designation Designation

* If the work is not susceptible of measurement, a remark to this effect should be recorded.
** If desired, rates may be shown in red ink below the quantities in this column.

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FAM – 6.3
MEASUREMENT BOOK

Content of Area
Particulars Physical Measurements
No. L B H

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FAM – 6.4.
MEASUREMENT BOOK REGISTER

Name of Office: …………………………………………

Issue Return of M.B Remarks

M.B. No. Issued to Date of issue Receipient’s Date Signature
Signature

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FAM – 6.5.
SITE ORDER BOOK
Name of work:
Date of commencement:
Name of contractor/Site Incharge:

Sl. Date Remarks of inspecting officer Signature of Signature of Action taken Remarks
No inspecting contractor/Site Dated
. officer Engineer Details Signature

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INSTRUCTIONS FOR SITE ORDER BOOK (FAM – 6.5)

1. Serial No. : Serial number of the entries in the site order book

2. Date : Date of entry

3. Remarks of the : Instructions/orders of the inspecting officer and

Inspecting Officer contractor’s difficulties/problems shall be recorded

4. Signatures : Self-explanatory.

5. Action taken - Details : Action taken to rectify the mistakes/difficulties/errors

6. Dated Signature : Of the official responsible for taking action

7. Remarks : Any other information/details

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FAM – 6.6
HINDRANCE REGISTER
Name of work: ………………………. Date of Commencement: ………….. Name of Office: ………………..
Name of contractor: …………………. Due date of Completion: ……………
Sl. Nature of hindrance Date of Date on Over- Remarks
No. Occurrence which lapping Signature of
hindrance hindrance Net Site/ Signature of
is over period hindrance Supervising Contractor Intimation to Head of Office
(Days) (Days) Engineer Ref. No. Date

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Instruction for Hindrance Register (FAM – 6.6)

1. Serial No. : Serial Number of the hindrance

2. Nature of hindrance : Brief particulars of hindrance
3. Date of occurrence : Date on which the hindrance occurred
4. Date on which hindrance over : Date on which the hindrance was rectified
5. Over lapping period : Over lapping period for two or more hindrances shall
be specified
6. Net hindrance : Net period lost due to the hindrances
7. Signatures : Self-explanatory
8. Reference to Head of Office : Self-explanatory.
9. Remarks : Any other particulars/information

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FAM – 6.7
(Name of Office)
WORKS COST SHEET
(Obverse side)
Name of Project/Work: …………………………………….. AA&FS No., Date: …………………. And Amount: …………….
Location: …………………..
Contractor (if applicable)………………………… Agreed/Planned Date of commencement:…….. Agreed/Planned Date of completion: ……
Contract Amount ………………………………. Actual Date of commencement ……………… Actual Date of completion ………….

A. Budget Appropriation:
Year Budget Code Activity/Project Title Funding Source Amount Remarks

B. Technical Sanctions:
Year Original/Revised Scope of Work/Component Name/Sub-Head Ref. No. Date Amount Remarks

C. Releases:
Year Release Order No. Date Amount Up to date Release Remarks

(Reverse Side/Continuation Sheet)

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FAM-6.7 contd
Sheet No.
D. Expenditure
Date Sub- Sub- Sub- Total Dated initials
Particulars Advances Head - 1 Head - 2 Head - 3 Prog. Exp.
Vr./Bill No. (payee, nature of payment, etc.) (Nu) (Nu) (Nu) (Nu) (Nu)

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INSTRUCTIONS FOR WORK COST SHEET (FAM – 6.7)

1. Headings : The accounting unit shall fill in all blank spaces provided in headings

A. Budget Appropriations:
a) Budget Code : Budget and accounts code number of the activity/project.
b) Activity/Project title : Complete title of the Activity as shown in the corresponding approved budget.
c) Funding Source : The source of the funds for the project, as indicated by the FI Code.

B.Technical Sanctions: : Details of different Technical Sanctions that might have been issued for all components of the
work.

C. Releases: : Details of releases made for the works.

D. Expenditure: : Details of expenditure incurred on the works. Recovery or adjustment of advances shall be
entered with Minus sign. Expenditure shall either be classified by specific sub-heads of the
Technical Sanctions as shown in the form or by Direct Labour, Materials, Transportation or
Machinery hiring charges etc., as may be prescribed by the Head of the Department concerned.

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FAM – 6.8
(Name of Office)
CONTRACTORS’ LEDGER

Name of Contractor ………………………………………………

Classification/Deduction Remarks
Payment Ref. Gross (+) for payments, (-) for deductions
Contractor’s Amount Mobilisa- Secured Security Others Net
Name of Work / Bill No. & Date Vr. No. Admitted tion Adv. Adv. Deposit Payment
Ref of Supply Order Date (Nu) (Nu) (Nu) (Nu) (Nu) (Nu)

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Instructions for Contractors’ Ledger (FAM – 6.8)

1. Name of Contractor :This ledger contains the personal accounts of all contractors with whom financial transactions have been
undertaken. Separate folio or set of folios shall be reserved for individual contractors.

2. Name of Work/ Ref. to S.O. :Reference to the work or supply order in connection with which the transactions are undertaken.

3. Contractor’s Bill & Payment ref. :Self-explanatory.

4. Gross amount admitted :Self-explanatory.

5. Classifications/Deductions :Sub-heads under this column indicate the classification of payment or deduction. Relevant amounts to be
recorded under proper columns. Deductions shall be indicated by a minus sign and preferably be entered in
red ink.

6. Net Payment :Self-explanatory.

 Contractors’ Ledger shall be maintained by disbursing offices where financial transactions take place with a contractor/supplier.
 The ledger accounts can be maintained continuously for a number of years provided that totals of transactions are struck between a pair of red lines
at regular intervals not less than once in every six months.
 A contractor requiring a copy of his accounts for any specific purpose may be provided with an attested copy of the same. A signature in token of
his having received the copy shall be obtained on the application of the contractor.

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FAM – 6.9
Register of Unpaid Wages
Name of Work:
Activity Code:

Muster Roll Period of M.R. Amount due Amount paid Initials

Sl. ID/IMM (Nu) (Nu) Vr.No.
Sup.
No. Name of Workman Card No and Remarks
No. Date From To F.O. Engr.
Date

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FAM – 6.10
(Obverse side)
Works Completion Report

Name of Office:
Name of Work and Activity Code:
AA & FS No., Date & amount:
Total amount of TS/Detailed Estimates:
Actual Expenditure:
Amount of Variation and percentage:
Date of Commencement: Date of completion:
Brief reasons for variation:

(Reverse side and continuation sheet)

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FAM – 6.10 Contd

Technical Sanction No. & Date:
Sl. As per Estimate As Implemented Variation
No. Name of item Quantity Unit Rate Amount Quantity Amount * Quantity Amount * Remarks
(Nu) (Nu) (Nu)

Total Nu A -
Actual Expenditure Nu. B -
Difference Nu. - - (A~B)

 As per estimated rate


Reference to the last entry in Sub-ledger:
Reference to the last entry in MB (Book & Page No.):

Signature, Name & Date Signature, Name & Date Signature, Name & Date Signature, Name & Date
(Site Engineer) (Supervising Engineer) (Head of Finance Section) (Head of Office)

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FAM – 8.1

STOCK LEDGER
Page No.:
Name of Article :
Item Code:
Unit:
Date Name of Party Receipts Weight Issues Balance Disb. Vr./ Journal Attestation
GRN/GIN ed Vr.
Qty. Total Value Avg. Qty. Value Qty Value No Date
(Nu) Rate (Nu.) (Nu.)
(Nu.)

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Instructions for Stock Ledger (FAM – 8.1)

1. Page No. : Printed page number of the register. 9. Wg.Avg.Rate : Total value divided by
the total quantity of an item of stock
2. Name of article : Name of stock item.
3. Item Code : If there is any. 10. Issue : Quantity issued as per GIN and
value obtained by multiplying the
4. Unit : Unit of measurement, count or weight. quantity issued with Weighted
5. Date : Date of receipt or issue of the item. Average Rate.
6. Party : From whom the supply is received or 11. Disb.Vr./ Journal Vr
to whom item is issued. : Reference of the documents through
which payment or adjustment has been
7. GRN/GIN : Number of the document. made for the supply/issue.
8. Receipt : Quantity and value of the supply received 12. Attestation : Signatures and dates of
as recorded in the GRN the recording clerk and the head of
Finance section.
 This ledger shall be maintained by the accounting unit of the Head of Office.
 Postings shall be made to record the daily transactions in respect of each item of stock.
 Different pages or sets of pages shall be allotted to each item of stock. An index of item names and page numbers shall be maintained in the first few pages. Some pages
shall be left blank at the end of the register to prepare monthly abstracts of stock transactions.
 Receipts and Issues shall be entered from the GRNs/GINs received daily from the Property Officer. Balance of stock and value shall be struck after each entry.
 At the end of a month, an abstract of monthly stock transactions shall be prepared in one of the reserved pages at the end of the register. The abstract shall give the month’s
total of receipts, issues and balance in respect of each item. A consolidated abstract shall be prepared if several ledgers are maintained for different sub-groups of stock.
 The total of receipts and issues in the abstract shall be reconciled with such totals in the monthly summary of receipts (FAM – 8.12) and issues (FAM – 8.11).
 If surplus or deficit in the quantity is found during physical verification or other checks, entries shall be made in the ledger with appropriate remarks as per rule 9.1.9.2.
Similar entries shall be made when items are declared unserviceable and/or disposed off.

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FAM – 8.2
BIN CARD

Name of Article: Bin Card No.:

Unit: Date issued:
Previous Bin Card No.:
Closing stock in previous card:
(Signature of the issuing officer)

Date GRN/GIN No. Quantity Initials Remarks

Received Issued Balance

Subsequent Card No.: Card Register Page No.

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Instructions for the Bin Card (FAM – 8.2)

1. Name of Article : Self explanatory.
2. Unit : Unit of measurement, weight or count.
3. Previous Card No. : Machine printed serial number of the old card surrendered
by the Property officer.
4. Closing stock… : Balance of stock of the item as per the last entry in the
previous card surrendered.
5. Bin Card No. : Machine printed serial Number of the card.
6. Date of Issue : Date of issue of the card.
7. Date : Date of receipt or issue of the item.
8. GRN/GIN No. : Serial number of the GRN or GIN number through which
supply is received or goods are issued.
9. Quantity Received/
Issued, Balance : Self-explanatory.
10. Initials : Initials of the Property officer.
11. Remarks : If any.
12. Subsequent Card No. : Serial number of the subsequent card issued. (To be
printed only on the reverse side)
13. Card Register page No. : Page number of the Bin card register where the
subsequent card issue is registered. (To be printed only
on the reverse side).
 The Bin Cards shall be kept in the stores at a place where the articles are kept wherever possible.
 The portion below the “Signature of the Issuing Officer” shall be printed on the reverse side of the card as well.
 Item numbers 12 and 13 shall be printed only on the reverse side. Information against these items shall be entered by
the card issuing officer on surrender of the card.
 On completion of a card, the same shall be surrendered to the Head of Office for issue of a new card. Balance in the old
card shall be carried over to the new card.

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FAM – 8.3
GOODS RECEIVED NOTE
Name of office:
No.
Name of Supplier:
Purchase Order No.:
Address:
Date:
Consignment Note No., Date:
Sl. Date Code Article Unit Rate Amount Other Total Bin Stock Voucher Remarks
Quantity
No. (2) (3) (4) (6) Nu. Nu. Value Card L.F (15)
(5) Charges
(1) (7) (8) Nu. No. (12)
Nu. No. Date
(10) (11)
(9) (13) (14)

Inspection/Test check Report: Documents attached:

Signature Signature
(Name, Date and seal of Inspecting officer) (Name, Date and seal of Property officer)

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Instructions for Goods Received Notes (Form FAM – 8.3).

1. No. : Machine numbered serial number of the form.13. Rate : Rate per unit of the item.
2. Name of office : Self-explanatory. 14. Amount : Value obtained by (Quantity x
Rate)
3.Name of Supplier : Self-explanatory. 15. Other charges : Taxes, transportation etc.
payable.
4. Address : Address of the Supplier. 16. Total value : Value obtained by (Amount +
Other
5. Supply order No. : Reference of the supply order.
Charges)
6. Date : Date of Supply order. 17. Bin card No. : Number of Bin card in which the

7. Consignment
receipt is entered.
Note No., Date : Reference of the supplier’s consignment note, bill etc.18. Stock L.F : Folio number of Stock
Ledger.
8. Sl.No. : Self-explanatory.
9. Date : Date of supply. 19. Vr. No., Date : Self-explanatory.
10. Code, Articles : Code & Name of the Goods. 20. Remarks : If any.
11. Quantity : Quantity of the material received. 21. Inspection/Test: To be given by
the inspecting Officer.
12. Unit : Unit of measurement, weight or count. 22. Documents : Reference to verified documents
attached with the GRN

 Column Nos.12, 13 and 14 shall be filled in by the accounting unit. .

 Separate GRN shall be prepared for each supplier and goods received against separate supply orders.

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FAM – 8.4
(Name of Office)

GOODS ISSUE NOTE

No.
Issued to:
Date :

Requisition Reference:
Sl. Code Description Bin Quantity Rate Value Remarks
No. Card Issued Nu. Nu.
No.

Prepared by: Approved by: Received by:

(Signature) (Signature) (Signature)

Name & Designation Name & Designation Name & Designation.
Date: Date: Date:

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Instructions for Goods Issue Note (FAM – 8.4)

1. No. : Machine printed serial number of the Goods Issue Note.

2. Issued to : Name of the person or authority to whom the goods are issued.
3. Date : Date of issue of the goods.
4. Requisition Ref. : Reference and date of the requisition.
5. Sl.No. : Serial number of the item.
6. Code : Code number of the item, if any.
7. Description : Description (name as per bin card) of the item.
8. Bin Card No. : Number of the Bin Card for the item.
9. Quantity Issued : Self-explanatory.
10. Rate : Weighted Average Rate of the item (To be recorded later in the third
copy only by the Accounting unit while posting in the Stock ledger.)
11. Value : Rate multiplied by quantity. ( -do- )
12. Remarks : If any.

 Goods Issue Notes shall be prepared in five copies through carbon process. (Rate & Value columns shall be
left blank)
 Separate GINs shall be prepared for items falling under separate sub-heads of stock where such sub-heads are
maintained.
 Signature of the consignee or his authorised agent or carrier shall be obtained on the GIN as acknowledgement
of receipt of materials.
 Original and second copy shall be sent to the consignee and the career respectively.
 Third copy shall be sent to the Head of Office with the daily summary of GINs.
 Fourth copy and approved requisition shall be retained in stores as voucher for the issue entry in the bin cards.
 Fifth copy shall be retained in the book.
 Materials shall be allowed to be taken out of the stockyard only on production of the GIN or a rejection memo.

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FAM – 8.5
BIN CARD REGISTER
Page No.:
Name of Office:
Sl. Old Date Card No. Article Issued to Signature Date New
No. Ref. returned Ref.

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Instructions for the Bin Card Register (FAM – 8.5)

1. Sl.No. : Serial number of the entry.

2. Old ref. : Serial number of the entry in which the old card was issued.
3. Date : Date of issue of the new card.
4. Card No. : Machine printed serial number of the new card.
5. Article : Name of the item for which the card is maintained.
6. Issued to : Name of the officer to whom the new card is issued.
7. Signature : Signature of the officer receiving the new card.
8. Date returned : Date of receiving back the completed card.
9.New ref. : Serial number of the entry in which the replacement card is issued.

 The Bin Card register and a stock of Bin cards shall be maintained by the Head of office.
 A new card shall be issued to the Property officer only on submission of the previous completed card or on the
opening of the stock account of a new item.
 Surrendered Bin cards shall be maintained by the Head of office till the period prescribed for it for future
reference.

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FAM – 8.6
(Name of Office)

REJECTION MEMORANDUM
No.:
To
Date :

Dear sir/madam,
The following items have been rejected due to reasons stated against each. You are requested to
collect the items immediately from our stock-yard /stores by producing this memorandum and
arrange their replacement at the earliest but not later than …….(Date).

Sl Description of item Delivery Reference Quantity Unit Brief

No No Date Rejected Reasons

Please note that the above mentioned articles are lying at your risk and cost. The undersigned will
not accept any liability for further deterioration of their quality or loss in quantity if these are not
collected by ……. (Date).
(Signature)
Property Officer.

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Instructions for Rejection Memorandum (FAM – 8.6)

1. No. : Machine numbered serial number of the form.

2.To : Name and address of the supplier/contractor/sender of materials.
3. Date : Date of issue of the Rejection memo.
4. Sl.No. : Serial number of the item.
5. Description : Name of the item
6. Delivery ref. : Consignment note number and date through which the materials
were delivered.
7. Quantity rejected : Self-explanatory.
8. Unit : Unit of measurement, weight or count.
9. Brief reasons : Brief reasons for rejection.

 Rejection memos shall be machine numbered. These shall be printed in three copies and bound in books of
convenient volumes. Two of them shall be detachable and the third shall remain bound in the book.
 A Rejection memo shall preferably be issued immediately on receipt of the items. If that is not possible, it shall
be issued at the earliest after inspection and check.
 The rejection memo shall be prepared in three copies through carbon process. The first copy shall be sent to the
supplier, the second copy to the Head of office. The third copy shall remain bound in the book.
 Materials shall be allowed to be taken out of the stock yard only on production of a rejection memo or a Goods
Issue Note.

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FAM – 8.7
(Name of Office)

DAILY SUMMARY OF G.R. NOTES

Date:
Sl. No. GRN No. Value of articles Remarks
Nu. Ch.

(Signature)
Property Officer.
Date:

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Instructions for the Daily Summary of G.R.Notes (FAM – 8.7)

1. Date: : Date of the GRNs prepared during the day.

2. Sl.No. : Serial number of the entry in the form.
3. G.R.No. : Printed number of the GR Note being sent.
4. Value of… : Total amount of the GR Note.
5. Remarks : If any.

 Daily summary of G.R. Notes shall serve as a docket for the Property Officer in keeping track of the GR Notes
prepared and submitted to the Head of Office.
 It shall be prepared in duplicate by carbon process.
 GR Notes prepared during a day shall be entered in this summary in serial order.
 Original copies of the GR Notes, together with the verified bills, consignment notes etc. shall be submitted to
the Head of Office with this summary.
 On checking of the contents, correctness of the GR Notes etc., the accounting unit shall return the second copy
after acknowledging receipt of the GR Notes and retain the original.
 The GR Notes shall be posted in the Stock Ledger by the accounting unit.

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FAM – 8.8
(Name of Office)

DAILY SUMMARY OF GOODS ISSUE NOTES

Date:
Sl. No. GIN No. Value of articles Remarks
Nu. Ch.

(Signature)
Name & Seal of the Property Officer.
Date:

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Instructions for the Daily Summary of G.I.Notes (FAM – 8.8)

1. Date: : Date of the GINs prepared during the day.

2. Sl.No. : Serial number of the entry in the form.
3. G.I.No. : Printed number of the GI Note being sent.
4. Value of… : Total amount of the GI Note. To be noted latter by the Accounting unit only.
5. Remarks : If any.

 Daily summary of G.I.Notes shall serve as a docket for the Property Officer in keeping track of the GI Notes
prepared and submitted to the Head of Office.
 It shall be prepared in duplicate by carbon process.
 GI Notes issued during a day shall be entered in this summary in serial order.
 The third copy of the GI Notes shall be submitted to the Head of Office with this summary.
 On checking of the contents, the accounting unit shall return the second copy after acknowledging receipt of
the GI Notes and retain the original.
 GI Notes shall be posted in the Stock Ledger by the accounting unit. The value of the items and the Stock
Ledger page No. shall be recorded against each of the items in the GI Notes.

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FAM – 8.9
(Name of Office/Stores)

BILL FOR SUPPLY OF STOCK ITEMS

Bill No.: Date:
Name of Consignee: Ref. of Requisition:
Date of Requisition:
Sl. GIN No. Item Name of Item Qty. Rate Value Storage Transpo Deptl. Total Remarks
No code charges rtation charge Amount

Total amount of the bill:

Less Advances Received
Net amount Payable/Refundable
Please return the duplicate indicating your acceptance of these debits Please remit the payment at the earliest.
for adjustment of Cash Settlement Advance account.
Prepared by: Checked:

(Signature) (Signature) (Signature)

Name & Designation. Name & seal of Head of Finance Section Name & seal of Head of Office
Date: Date: Date:

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Instructions for Bill for Supply of Stock Items (FAM – 8.9)

1. Bill No., Date : Shall include the registration number of the 8. Name of item : Name of item supplied.
Bills Outward Register and Despatch No. & date. 9. Qty. : Quantity supplied.
2. Consignee : Name/Designation and Address of the person 10. Rate : Average Weighted Rate of the item.
against whom the bill is raised. 11. Value : Quantity * Rate.
3. Ref. to Req. : Requisition/Letter No., CS assignment. 12. Storage Charge : Storage charges on value.
4. Req. Date : Date of the requisition/letter. 13. Transportation : Transportation charges, if applicable.
5. Sl. No. : Serial No. of the entry in the bill. 14. Deptl. Charge : Departmental charges, if applicable.
6. GIN : GIN number. 15. Total amount : Value + Storage + Transportation +
7. Item Code : Code, if any, of the item supplied. Departmental charges as applicable

 Bills for supply of stock items shall be prepared by the accounting unit in three copies.
 The first two copies shall be sent to the consignee. The third copy shall be used as supporting documents for the journal entries.
 The accepted copy of the bills shall be kept separately for future reference.

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FAM – 8.10
(Name of Office)

MONTHLY ABSTRACT OF STOCK RECEIPTS & ISSUES

Abstract for the Month of :
Sl. Bin Code Item Op.stock Receipts Issues Cl.stock Remarks
No Card

(Signature)
Name & seal of the Property Officer
Date:

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Instructions for Monthly Abstract of Stock Receipts & Issues (FAM – 8.10)

1. Sl.No. : Serial number of the entry in the form.

2. Bin Card : Number of the Bin Card.
3. Code : Code number of the item of stock, if any.
4. Item : Name of the stock item.
5. Op.Stock : Opening stock quantity of the item in the beginning of the month.
6. Receipts : Total quantity of receipts of the item during the month.
7. Issues : Total quantity of issues of the item during the month.
8. Cl. Stock : Quantity of closing stock of the item at the end of the month.
9. Remarks : If any.

 The abstract of stock items shall be prepared by the Property Officer at the end of the month and
submitted to the Head of Office.
 Accounting units shall reconcile the quantities mentioned in this report with those arrived at in the
monthly abstract of Stock Ledger.

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FAM – 8.11
(Name of Office)

MONTHLY ABSTRACT OF GI Notes

Summary for the Month of:

Sl. Office/Work to which GIN No. Date Value Remarks

No. Stock is issued. Nu. Ch.

Prepared by:

(Signature) (Signature)
Name & Designation Head of Finance Section (Name & Designation)
Date: Date:

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Instructions for Monthly Abstract of GINs (FAM – 8.11)

1. Sl. No. : Serial number of the entry in the form.

2. GIN : Serial number of individual GINs issued during the month.
3. Date : Date of the GIN.
4. Value : Value indicated in the GIN.
5. Remarks : If any.

 This form shall be posted daily in the accounting unit from the copies of the GI Notes.
 The total value of stock issues during the month shall be reconciled with the monthly abstract total of
the Stock Ledger.
 Transactions brought to account as a result of physical verification or through cash or journal entries
without passing through the GIN procedure shall be considered while reconciling with the Stock
Ledger.

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FAM – 8.12
(Name of Office)

MONTHLY ABSTRACT OF GR Notes

Summary for the Month of :

Sl. Supplier GRN No. Date Value Remarks

No. Nu. Ch.

Total Debited to Stock A/C.

Prepared by:

(Signature) (Signature)
Name & Designation. Head of Finance Section.(Name & Designation)
Date: Date:

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Instructions for the Monthly Abstract of GRNs (FAM – 8.12)

1. Sl. No. : Serial number of the entry in the form.

2. Supplier : Name of the party from whom the supply was received.
3. GRN : Serial number of individual GRNs received during the month.
4. Date : Date of the GRN.
5. Value : Value indicated in the GRN.
6. Remarks : If any, including “payment not made” etc.

 This form shall be posted daily in the accounting unit from the copies of the GR Notes.
 Total value of receipts during the month shall be reconciled with the monthly abstract total of the
Stock Ledger.
 Transactions brought to account as a result of physical verification or through cash or journal entries
without passing through GRN procedure shall be considered while reconciling with the Stock Ledger.

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 Royal Government of Bhutan Finance and Accounting Manual
FAM – 9.1
(Name of Office)
RECEIPTS AND PAYMENTS STATEMENT
FOR THE MONTH OF ……………. FOR A/C NO………..
GROUP/BROAD RECEIPTS PAYMENTS Cumulative
HEAD OF ACCOUNT For the Month Annual Progressive For the Month Annual Progressive balance
Nu Nu Nu Nu (+) Dr, (-) Cr.

1 Opening Balance:
a. Cash
b. Bank
2. Releases:
a. Budgetary
b. Non-Revenue
c. Refundable Deposits
d. Un-cashed Cheques
3. Grants in-Kind:
a. Donor A
b. Donor B
4. Borrowings in-Kind:
c. Lender A
d. Lender B
5.
Revenue Receipts/Remittances.
6.
Other Recoveries/Remittances:
a. GPF: Employees contribution
b. Govt. Insurance Scheme
c. Other Insurance Premia
d. Loans from Fin. Instts.
e. Others
7 Personal Advances.

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FAM-9.1 contd.
GROUP/BROAD RECEIPTS PAYMENTS Cumulative
HEAD OF ACCOUNT For the Month Annual Progressive For the Month Annual Progressive balance
Nu Nu Nu Nu (+) Dr, (-) Cr.
8. Miscellaneous Receipts/Payments:
a. Non-Revenue A/C. Deposits
b. Refundable Deposit A/C. Deposits
c. Payments to DPA
d. Others
Suspense:
9
a. Stock
b. Purchases
c. PW Advances
d.
e. Deposit works
f. Other Deposits
Budgetary Expenditure:
10
a. Current
b. Capital
c. Lending
d. Repayments
11 Closing Balances:
a. Cash
b. Bank
Total :

(Signature) (Signature)
Head of Finance Section Head of Office

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Instructions for the Monthly Receipts & Payments Statement (FAM – 9.1)
1. Opening Balance 7. Personal Account Advances :Total of transactions under this head.
a) For the Month : Cash & Bank balances at the Cumulative result of transaction shall
beginning of the month. be carried forward from year to year
b) Annual Progressive :Cash & Bank balances as on 8. Miscellaneous Receipts/ : Totals of transactions classified by
1st July of the fiscal year Payments prescribed account heads under this
2. Releases : Net Releases from the DPA. group.
classified by class of releases. 9. Suspense :-do-. Cumulative result of transaction
3. Grants in-Kind : Value of grants received in-kind, shall be carried forward from year to
classified by donors. year.
4. Borrowings in-Kind : Value of items directly paid for, 10. Budgetary Expenditure : Net of transactions under Current,
by the lenders classified by lenders. Capital and Repayment heads. Total of
5. Revenue Receipts/ payment transactions only under the
Remittances. : Total of transactions under revenue items head Lending (excluding Recovery of
6. Other Recoveries/ : Totals of transactions, classified under Capital or Interest).
Remittances prescribed Sub-heads under this group.
11. Closing Balances : Balance of Cash and Bank on the closing of the month. The same numbers shall be incorporated in both “For the month” and “Annual
progressive” columns.
 The Receipts & Payments Statement shall be prepared from the balances of Cashbook and monthly totals of Debits and Credits in the Main Ledger Accounts.
 Net of Debits and Credits shall be incorporated only under Releases, Expenditure Current, Capital and Repayment heads. The totals of Debits and Credits shall be
incorporated separately under Receipts and Payments columns in respect of all other heads of accounts.
 Except for Opening and Closing Balances, Stock and Purchases accounts all other heads of accounts shall be supported by schedules as prescribed in Rule 9.1.1.6 under
Chapter IX.
 Column for “Cumulative Balances” shall be used in respect of Personal Account Advances and all account heads under the Suspense group. These balances shall be
carried forward from year to year.

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FAM – 9.2.
(Name of Office)
SCHEDULE OF FUND RELEASES INCLUDED IN THE MONTHLY ACCOUNT
FOR THE MONTH OF ………………. FOR A/C. NO……….

Sl.No. DPA Release Order No. Date Amount Annual Progressive Amount Remarks
2a) Budgetary
Progressive up to last month - -
Total Budgetary Releases
2b) Non-Revenue
Progressive up to last month - -
Total Non-Revenue Releases
2c) Refundable Deposit
Progressive up to last month - -
Total Refundable A/C. Releases
2d) Dishonoured cheques
Progressive up to last month - -
Total Dishonoured cheque Releases
Total Releases

Head of Finance Section

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Instructions for the Schedule of Fund Releases (FAM – 9.2)

1. Column Titles : All self-explanatory.

 This schedule shall be prepared and submitted with the monthly Receipts & Payments Statements.
 The schedule shall be almost a copy of the entries made in the four Main Ledger accounts maintained under this group.
 A Debit entry in the Main Ledger account will signify a withdrawal of releases. Such transactions shall be shown as negative transactions in
the schedule. The amounts shall either be enclosed within a parenthesis or preceded by a minus sign in the schedule.

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FAM – 9.3.
(Name of Office)
SCHEDULE OF IN-KIND GRANTS/BORROWINGS
FOR THE MONTH OF …………….. FOR A/C. NO……..

Sl. Project title Project Donor F.I. Document from Amount in Amount in Exp. Brief Description
No No. Agency Code which inf. Derived FC Nu Booked of Goods/Services
No. under Received
Part I : Grants in-Kind:

Total Grants in-Kind

Part II : Borrowings in-Kind:

Total Borrowings in-Kind

Head of Finance Section

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Instructions for the Schedule of in-Kind Grants and Borrowings (FAM – 9.3)

1. Sl.No. : Serial number of entry in the schedule.

2. Project Title : Name of the Project against which the articles/services have been received.
3. Project No. : Identification number of the project as indicated in the project agreement.
4. Donor Agency : Name of the Donor Agency in short form (UNICEF, WHO, WB, ADB etc.)
5. F.I.Code No. : Financing item code number of the project as indicated in the budget.
6. Document… : Invoice or statement of account from Donor/Lender, letter from DMD, assessment by Project Manager etc.
7. Amount F.C. : Currency of disbursement made by the Donor/Lendor.
8. Amount in Nu. : Ngultrum equivalent accounted for.
9. Exp.booked… : Account head under which equivalent amount has been booked as expenditure (Current, Capital, PW Advance etc.)
10. Description… : Self-explanatory.

 This schedule shall be prepared and submitted with the monthly accounts whenever a paid for article or service is received and accounted
for.
 The Main or Sub-ledger accounts and relevant journal vouchers shall be the source of information for preparation of this schedule.

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FAM – 9.4.

(Name of office)
SCHEDULE OF REVENUE RECEIPTS AND REMITTANCES
FOR THE MONTH OF ………………… FOR A/C. NO…………

A/C. Object Object Name Receipt Annual Remittance Annual Remarks

Code Code Amount Progressive Amount Progressive
Receipt Remittance
5 86.01 Tax on Salary
86.02 Tax deducted at source
86.11 House Rent
86.12 Health Contribution
86.13 Sale Proceeds
86.14 Interest on Loans
86.15 Supervision/Departmental charges
86.16 Other Revenues

Total Rev. Receipts & Remittances

Head of Finance Section

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Instructions for the Schedule of Revenue Receipts and Remittances (FAM – 9.4)

1. Account Code : Code of the Broad Head of Account; in this case (5).
2. Object Code : Object code of the individual items of revenue as provided in the list of objects against A/C Code (5).
3. Object Name : Name of the individual item of revenue that has been classified in the list of objects.
4. Receipt Amount : Amount received or recovered during the month.
5. Progressive Receipt : Annual total including receipts during the month.
6. Remittance Amount : Amount remitted to the RGR A/C. or to the RRCO during the month.
7. Progressive Remitt.. : Annual total including remittances during the month.
8. Remarks : If any, including reasons for not remitting the whole amount of receipt or recovery.

 This schedule shall be submitted with the monthly accounts of the office.
 Revenue items, which do not pertain to the expenses through a LC/PLC account and for which separate books of accounts are maintained,
need not be incorporated in the monthly accounts of the LC/PLC accounts.
 Sub-Ledger accounts for the individual objects of revenue items shall be the source of information for this schedule.

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FAM – 9.5.
(Name of office)
SCHEDULE OF OTHER RECOVERIES AND REMITTANCES
FOR THE MONTH OF ……………. FOR A/C. NO……….

A/C. Object Object Name Receipt Annual Remittance Annual Remarks

Code Code Amount Progressive Amount Progressive
Receipt Remittance
6a) 87.01 GPF: Employees Contribution
6b) 87.02 Govt. Insurance Scheme (GIS)
6c) 87.03 Other Insurance Premia
6d) 87.11 Vehicle Loan
6d) 87.12 GE Loans
6e) 87.21 Audit Recoveries for RAA
6e) 87.22 Other Recoveries
Total Other Recoveries & Remittances

Head of Finance Section

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Instructions for the Schedule of Other Recoveries & Remittances (FAM – 9.5)

1. Account Code : Code of the Broad Head of Account.

2. Object Code : Object code of the individual items of Other Recoveries as provided in the list of objects against A/C
CodeNos.6a) to 6e).
3. Object Name : Name of the individual item of Other Recoveries that has been classified in the list of objects.
4. Receipt Amount : Amount received or recovered during the month.
5. Progressive Receipt : Annual total including receipts during the month.
6. Remittance Amount : Amount remitted to the respective funds or institutions.
7. Progressive Remitt.. : Annual total including remittances during the month.
8. Remarks : If any, including reasons for not remitting the whole amount of receipt or recovery.

 This schedule shall be submitted with the monthly accounts of the office.
 A suitable object code and name shall be obtained from the DPA whenever a new item of recovery is encountered.
 Sub-Ledger accounts for the individual objects of Other Recoveries shall be the source of information for this schedule.

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FAM – 9.6.
(Name of office)
SCHEDULE OF PERSONAL ADVANCES ACCOUNT
FOR THE MONTH OF ………….. FOR A/C. NO……………

Item Emp.Id Name of the official Opening Transactions Closing Activity Code Date of Purpose of Advance
No. No. Balance Payments Recov/Adj Balance Original & Other
Nu Nu Nu Nu Advance Remarks
Part – A. Affected
items

Total Affected items

Part – B. Total Unaffected - - - - -

items

Total Advances on - -
Personal A/Cs.

Head of Finance Section

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Instructions for the Schedule of Personal Advances Account (FAM – 9.6).

1. Item No. : Serial number of the entry in the schedule.

2. Emp. Id. No. : Identity number of the employee.
3. Name of the official : Self-explanatory.
4. Opening Balance : Balance of outstanding advance at the beginning of the month.
5. Transactions : Amount of payments or recoveries/adjustments effected during the month.
6. Closing Balance : Balance of outstanding advance at the end of the month.
7. Activity Code : Sub-Prog./Activity/F.I. code to which the advance has been linked.
8. Date of Original Adv. : The date on which the payment was made.
9. Purpose etc. : Self-explanatory.
10. Affected items : Details of items on which transactions took place during the month shall only be exhibited in this part.
11. Unaffected items : Total of outstanding advance items against which no transactions took place during the month. Opening and
Closing balances shall be the same amount.
 This schedule shall be submitted with the monthly accounts.
 The Main Ledger account for this broad head shall provide the Total Opening and Closing Balances, the total of transactions effected during
the month and reference to the individual vouchers.
 The memorandum control register and the Sub-ledger shall provide the rest of information in respect of the affected items.

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FAM – 9.7.
(Name of office)
SCHEDULE OF MISCELLANEOUS RECEIPTS AND PAYMENTS
FOR THE MONTH OF …………….. FOR A/C.NO………..
A/C. Obj. Object Name Receipt Annual Payment Annual Remarks
Code Code Amount Progressive Amount Progressive
Receipt Payment
8a) 89.01 Deposits: Non Revenue Account
8b) 89.02 Deposits: Refundable Deposits Account
8c) 89.11 DPA: Prior Year Expenses
8c) 89.12 DPA: Prior Year Advances
8c) 89.13 DPA: Closing Cash Balances
8c) 89.14 DPA: Refundable External Grants
8c) 89.15 DPA: Loan Principals
8c) 89.16 DPA: Others
8c) 89.17 DPA: Uncashed Cheque
8d) 89.21 Others: Storage Charges
8d) 89.22 Others: RMO – Heavy Vehicles & Equipt.
8d) 89.23 Others: Loss/Gain in Exchange
8d) 89.24 Others: Others
8d) 89.25
Others: WFP Generated Funds
Total Misc. Receipts and Payments

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Instructions for the Schedule of Miscellaneous Receipts and Payments (FAM – 9.7)

1. A/C. Code : Code number of the broad head of account as per Receipts & Payments Statement.
2. Obj. Code : Object code for the item as available in the list of objects.
3. Object name : Name of the detailed account head under the broad head as per the list of objects.
4. Receipt Amount etc. : All are self- explanatory.

 This schedule shall be submitted with the monthly accounts.

 Four broad heads of accounts have been prescribed under the group Miscellaneous Receipts & Payments. These are: 8a) Non-Revenue
Deposits, 8b) Refundable Deposit Account Deposits, 8c) Payments to Budget Fund and 8d) Others.
 Objects or detailed heads of accounts under each of these broad heads have been incorporated in the standardised List of Objects.
 The Sub-ledger Accounts shall be the source of information for preparation of this schedule.

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FAM – 9.8.
(Name of Office)
SCHEDULE OF SUSPENSE – PUBLIC WORKS (PW) ADVANCES
FOR THE MONTH OF …………… FOR A/C. NO………..
Item Identity Code Name Opening Transactions Closing Activity Code Date of Remarks
No. Balance Debits Credits Balance Orgl. Adv.
Part – A. Affected items

Total Affected items - -

A/C Obj.Code Part – B. Abstract of total PW
Code Advances
9.c 93.01 Employees - -
93.02 Suppliers
93.03 Sales on Credit
93.04 Losses under Investigation
93.05 Others
93.06 Suppliers – Mobilisation Advance
93.07 Suppliers – Secured Advance
Total PW Advances - -

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Royal Government of Bhutan Finance and Accounting Manual

Instructions for the Schedule of Suspense - PW Advances (FAM – 9.8)

A. Part – A. : The items of PW Advances on which transactions took place during the month shall be exhibited in this part.
1. Item No. : Serial number of the entry in the schedule.
2. Identity code : Emp. Id. code in respect of the employees: Identifying codes in respect of suppliers and others as and when such
codes are developed.
3. Name : Name of the party to whom the transactions relate.
4. Opening Balance : Balance at the start of a month of the unsettled item on which transactions have taken place during the month.
5. Transactions : Total amount of transactions on the particular item during the month.
6. Closing Balance : The resulting month ending balance of the item.
7. Activity Code : Code of the Activity/Project, or the name/code of the other suspense item to which the advance is linked.
8. Date of Orgl.Adv. : When the item of suspense was created.
9. Remarks : If any.
B. Part – B. : An abstract of the total balances under PW Advances shall be appended here.
1. A/C. Code : Account code of the broad head of account, which is 9C as per the Receipts & Payments Statement.
2. Obj. Code : Code number of the five different objects under PW Advances, as available in the List of objects.
3. Name : Name of the individual objects.
4. Op.Balance etc. : Self-explanatory.
5. Act.Code& Date : Shall be left blank in this part.
 This schedule shall be submitted with the monthly accounts.
 Information in Part – A shall be obtained from the Memorandum records and the Sub-ledger accounts.
 Information in Part – B shall be obtained from the Sub-Ledger accounts. Totals of this part shall match with the Ledger.

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FAM – 9.10.
(Name of Office)
SCHEDULE OF SUSPENSE – DEPOSIT WORKS
FOR THE MONTH OF ………………….. FOR A/C. NO……………….
Item Name of Assignment Responding party Opening Balance DW transactions Closing Balance Charged to PWA Remarks
No. Amount Dr/ Debits Credits Amount Dr/ Debits Credits
Cr Cr
Part – A. Affected items

Total Affected items

Part B. Total Unaffected

items

Total Suspense – Deposit

Works

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Instructions for the Schedule of Suspense - Deposit Works (FAM – 9.10).

A. Part – A. : Items in which DW transactions took place during the month shall be included in this part.
1. Item No. : Serial number of the entry in the form.
2. Name of Assignment : Self-explanatory.
3. Responding Party : Name of the office to whom the assignment is entrusted or from whom the assignment is received.
4. Opening Balance : In respect of the particular assignment.
5. DW Transactions : Total of Debit and Credit transactions undertaken in respect of the assignment during the month.
6. Closing Balance : Resulting Sub-ledger balance at the end of the month.
7. Charged to PWA : Public Works Advance transactions, if any, of the assignment.
8. Remarks : If any.

B. Part – B. : The rest of the balances outstanding as per Ledger account.

Totals : Self-explanatory.

 The schedule shall be submitted with the monthly accounts.

 The information shall be obtained from the Sub-ledger accounts.
 The totals in this schedule shall match with the Ledger account.

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FAM – 9.11
(Name of Office)
SCHEDULE OF SUSPENSE – OTHER DEPOSITS
FOR THE MONTH OF …………………… FOR A/C. NO. ……………….
Item Name of Deposit item Party Opening Balance Credits Debits Closing Balance Remarks
No. Name Id.Code (Nu) (Nu) (Nu) (Nu)
Part – A. Affected
items

Total Affected items

Part – B. Abstract of Total

Other Deposits
96.01
Security & Earnest Money
96.02 Closed Works
96.03 Others

Total Suspense – Other

Deposits

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Royal Government of Bhutan Finance and Accounting Manual

Instructions for the Schedule of Suspense - Other Deposits (FAM – 9.11)

A. Part – A. : The items on which transactions took place during the month shall be exhibited in this part.
1. Item No. : Serial number of the entry in the schedule.
2. Name of Dep. Item : Name of the work or purpose for which a deposit is made.
3. Party : Name of the party to whom the transactions relate. Identifying codes as and when such codes are developed.
4. Opening Balance : Balance at the start of a month of the item on which transactions have taken place during the month.
5. Credits/Debits : Total amount of transactions on the particular item during the month.
6. Closing Balance : The resulting month ending balance of the item.
7. Remarks : If any.

B. Part – B. : An abstract of the total balances under Other Deposits shall be appended here.

 This schedule shall be submitted with the monthly accounts.

 The information in Part A shall be obtained from the memorandum records for Other Deposits.
 The information in Part B shall be obtained from the Sub-ledger accounts and the total shall match with the Ledger account balance.

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FAM – 9.12
(Name of Office)
EXPENDITURE STATEMENT
FOR THE MONTH OF ………………… FOR A/C. NO. ………………..

Cash/
Codes Names Expenditure for the month Kind Annual Progressive Expenditure
PC SP AC FIC OBC Current Capital Lending/ Personal Suspense Current Capital Lending/ Personal Suspense
Repay Advance Repay Advance
Xx Xx xxx.xx xxxx xx.xx
Total for FIC
Total for Sub-Activity
Total for Activity
Total for Sub-Programme
Total for Programme
Grand total for the
Account

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Instructions for Expenditure Statement (FAM – 9.12)

 All Column Titles are self-explanatory.

 This statement shall be submitted with the Monthly accounts.

 The information in this statement shall be obtained from the individual Budget line Accounts and Advance or Suspense objects Accounts in
the Sub-ledger.

 The Columns for Names, and the Sub-totals at FIC, Sub-Activity, Activity, Sub-Programme or Programme levels need not be filled in if
this statement is prepared manually.

 Absence of any letter in the Cash/Kind column shall indicate Cash expenditure only. The letter ‘K’ shall invariably be inserted in this
column against a particular line, if the expenditure was incurred in Kind.

 Care shall be taken to distinguish between the Cash and Kind expenditure items. Information on Cash and Kind expenditure on the same
object code shall not be clubbed together. These shall be shown in separate lines marking the Kind expenditure item specifically.

 The Grand totals of all the columns in both “Expenditure for the month” and “Annual Progressive” sections shall match with the
information provided in the Receipts and Payments Statement and the totals of the respective Ledger Accounts.

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FAM – 9.13.
(Name of Office)
BANK RECONCILIATION STATEMENT
FOR THE MONTH OF ………………… FOR A/C. NO. …………………

Amount Remarks
A. Particulars:
1. Total Releases from DPA
2. Less. Closing Balance as per Cash book
3. Difference : Funds withdrawn as per Cash book (1-2)

B. Reconciliation:
1. Funds withdrawn as per Bank statement (Debit balance)
2. Add. Cheques issued but not cashed (Annex – 1)
3. Add. Amounts debited in cash book but not in bank statement (Annex – 2)
Total
4. Less. Amounts debited in bank statement but not in Cash book (Annex – 3)
Total 1+2+3-4

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FAM – 9.13 Contd.

Annex – 1.Cheques issued but not cashed up to …………..
Cheque No. Date Amount Remarks

Total Amount

Annex – 2.Amounts debited in Cash book but not in Bank Statement

Particulars Reference & Date Amount Remarks

Total Amount

Annex – 3.Debits in Bank statement but not in Cash book

Particulars Date Amount Remarks

Total Amount

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FAM – 9.14
(Name of Office)
CONSOLIDATED SUMMARY OF ADVANCE AND SUSPENSE ITEMS
FOR THE MONTH OF …………………………….

Broad Head of Advance/Suspense Item Opening Balance Dr/ Transactions during the Closing Balance Dr/ Cumulative Dr/
Head (Nu) Cr Month (Nu) Cr Balance Cr
Code Debits Credits (Nu)
(Nu) (Nu)
1. Personal Advance Account

2. Suspense Items
a) Stock
b) Purchases
c) PW Advances
d) Deposit Works
e) Other Deposits

Total Advance & Suspense

Items
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Royal Government of Bhutan Finance and Accounting Manual

Instructions for the Consolidated Summary of Advance and Suspense Items (FAM – 9.14)

1. All Column Titles are Self-explanatory.

 This statement shall be submitted with the Consolidated Monthly Account by the AFD/AFS.
 Respective schedule for the individual items of Advance and Suspense items from the unit accounts shall be the source of information for
preparation of this summary.

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FAM – 9.15
BROAD SHEET FOR CONSOLIDATION OF MONTHLY ACCOUNTS
FOR THE MONTH OF …………………
RECEIPTS:
Code Head of Account Total Bank A/C. Bank A/C. Bank A/C. Total for the Total Annual
Progressive up No. …….. No. …….. No. …….. Month Progressive
to last month Amt. Amt. Amt.
1a Opening Cash
1b Opening Bank

2a Releases Budgetary

Etc.

Total Receipts
PAYMENTS:
Code Head of Account Total Bank A/C. Bank A/C. Bank A/C. Total for the Total Annual
Progressive up No. …… No. …… No. …… Month Progressive
to last month Amt. Amt. Amt.
Revenue Remittances
5
6a GPF: Emp. contribution
6b GIS
Etc
Total Payments

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FAM – 11.1
CONSOLIDATED RECEIPTS AND PAYMENTS STATEMENT FOR ………..
(Nu in Million)
Sl.No. RECEIPTS AMOUNT Sl. PAYMENTS AMOUNT
No.
1. Opening Balance: 1. Expenditure:
i) Cash i) Current
ii) Bank ii) Capital

2. Internal Revenue: 2. Repayment of Loans:

i) Tax Revenue i) Internal
ii) Non-Tax Revenue ii) External

3. External Grants: 3. Lending

i) Cash
ii) Kind 4. Other Payments

4. Borrowing External 5. Increase in Advance/Suspense (Net)

i) Cash
ii) Kind 6 Closing Balance:
i) Cash
5. Recovery of Loans ii) Bank

6. Miscellaneous Receipts

7. Decrease in Advance/Suspense (Net)

Total Receipts Total Payments

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FAM – 11.2
SUMMARY OF VARIANCE BETWEEN BUDGET ESTIMATES
AND ACTUAL OUTCOME
Application of funds Budget Estimates Actual Variation Percentage Source of funds Budget Estimates Actual Variation Percentage
Original Revised outcome Original/ Original/ Revised/ Original Revised Outcome Original/ Origina Revised/
(Nu) (Nu) (Nu) Revised Actual Actual (Nu) (Nu) (Nu) Revised l/Actual Actual
A. EXPENDITURE: A. INTERNAL
i. Current RECEIPTS:
ii. Capital i. Tax
ii. Non-Tax
B. REPAYMENTS:
i. Internal B. RECOVERY OF
ii. External LOANS

C. LENDING: C. GRANTS
i. In Cash
D. ADVANCES ii. In Kind

E. MISC.PAYMENTS D. BORROWINGS
i. Internal
F. SURPLUS ii. External

E. MISC.RECEIPTS

F. DEFICIT

TOTAL PAYMENTS TOTAL RECEIPTS

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FAM – 11.3

STATEMENT OF OUTSTANDING LOANS

THE DETAILED STATEMENT OF OUTSTANDING DEBT OF THE GOVERNMENT FOR THE PERIOD ENDED JUNE 30, 20XX
(Amount in Millions)

DEBT SERVICE DURING

Loan Committed Opening THE YEAR Closing
Closing
Loan balance as Balances as
Sl.No. LENDERS AND PROJECTS Disbursement Balances
No. on July 1, on June 30,
during the FY Interest in USD
20XX 20XX
Principal & Total
Curr. Amount Charges
A INTERNAL:
1
2
B EXTERNAL: India
1
2
C EXTERNAL: Other than India
I
1
2
Grand Total Nu.
Note: Ex. rates used for
USD XDR EURO JYP('000)
conversion:
Nu. =

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FAM – 11.4
STATEMENT OF EQUITY PORTFOLIO
(In Million Nu)
Sl. Newly Equities
No. Name of Firm Opening Balance Acquired Disinvested Closing Balance Remarks

GRAND TOTAL

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FAM – 11.5
OPERATION OF REFUNDABLE DEPOSIT ACCOUNT, REVOLVING & TRUST FUNDS

(In Million Nu.)

Sl. Bank Account No. Name of Account Name of Agency Opening Total Total Closing Remarks
No. Balance Receipts Payments Balance
(Nu) (Nu) (Nu) (Nu)

Grand Total (Nu)

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