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Schedule of Rates and Analysis of Rates:

Schedule of Rates is a schedule maintained in a Public Works Division to


incorporate the rates in respect of all the classes of works that are commonly undertaken
in the Division. This schedule facilitates the preparation of the estimates in the Division.
It is prepared on the basis of rates prevailing in each locality. It is supplemented by a
detailed analysis showing how the elements of cost of component items of work have
been added up to arrive at the final rate. The schedule of rates is subject to revision after
intervals when it is felt that the market rates have gone up or down to such an extent that
the schedule of rates has become redundant. This schedule is also referred to at the time
of settling rates for work during negotiation with the contractors.

Analysis of rates is a component-wise break up of the rate indicated for each item
of work in the schedule of rates or in the estimate of work or a non-scheduled item in a
contractors bill. It is a detailed working sheet showing the quantity and value of each
input required to completely do an item of work. If some inputs are to be replaced by
superior or inferior input, then Analysis of Rates is handy to work out the rate for the
modified item of work. It, thus, supplements or supports the Schedule of Rates.

Market Rate and Issue Rate:

Market rate indicates the cot per unit at which the article (or an article of similar
description) can be procured, at a given time from the public market suitable to the
Division to obtain it supply. This cost should include the expenses likely to be incurred
on carriage and incidental charges also. In determining the market rate, reasonable
provision may be made for wastage and depreciation where these are inevitable.

Issue Rate is fixed on the principle that the cost to be charged to works on which
the materials are to be used should approximately equal the actual cost of the stores and
that there may be no ultimate profit or loss on stock account. Thus, the issue rate
provides for the element of (i) purchase price, (ii) cost of carriage to stores and (iii) Cost
of storage (ie., expenses on work charged establishment employed on handling, custody
and keeping initial accounts of stores besides expenditure of maintenance of stores
godown). The issue rate of an article of stock is fixed at the beginning of each year. But,
as purchases during the year are made variation of cost should be watched. If there is
material variation in the purchase price, the issue rate can be revised at the discretion of
the divisional officer.

If, the issue rate is appreciably lower than the market rate, the following
precautions are observed.

I) All sales and issue to contractors shall be made at market rates.


II) Issues to other Divisions and Departments shall be restricted and may be
made at a rate higher than the Issue Rate.

Operation and Out turn:

Operation is the expenditure incurred in connection with the manufacture of an


article or a job (say, bricks or RCC slabs etc.). This is a term used in manufacture
accounts and workshop accounts. This includes direct materials, cost of labour and other
general and indirect expenditure in connection with manufacture (in addition to the
proportionate share of capitalized land and kiln).

Out turn is also a term used in manufacture accounts and work shop accounts.
But it represents the value of the finished products derived from the manufacture or work
shop.

Imprest and Temporary Advance:

Imprest is a standing advance of a fixed sum of money given to an individual to


enable him to make certain classes of disbursement, which may be entrusted to his
charge. The amount of an imprest is to be kept as low as possible and in no case should
exceed Rs.5000 without the sanction of government. The account of imprest cash along
with the paid vouchers is sent to the officer from whom the imprest is held. This account
of imprest should be submitted at the time of closure of monthly account by the
Divisional Officer. It may be closed earlier also if, (i) the balance of imprest is small and
needs recoupment or (ii) it is proposed to increase/decrease the amount of the impest or
(iii) the account of the imprest is to be closed altogether.

Temporary Advance when a Disbursing Officer makes a remittance to a


subordinate officer to enable to make specific petty payments on vouchers which have
been already passed for payment, the amount remitted is treated as temporary advance.
After making the payment the subordinate submits an account of the advance along with
the unspent balance, if any.

The following are also treated as Temporary Advance:

i) Money taken out by the Disbursing Officer himself for making


disbursements at out stations when on tour.
ii) Advance on transfer to a government servant pending drawal of the
advance from the treasury/bank in the normal course.

Imprest is a standing advance of a fixed sum for making payments left to the
charge of a subordinate which the latter is an advance made temporarily to a subordinate
to make a number of specific petty payments on muster rolls and vouchers which have
already been passed for payment.

Administrative Approval and Technical Sanction:

A government college building is to be constructed by Public Works Division but


is to be used by the Education Department. PWD is the Technical Department whereas
Education is the Administrative Department to the incurring of expenditure on their
behalf. It only signifies acceptance of the Administrative Department that the proposed
work meets their needs. It carries no more authority.

Technical sanction is the responsibility of the PWD, the technical Department.


The grant of technical sanction signifies that the design is technically sound, suitable to
the needs and reasonably economical. It also signifies that the estimate of quantities of
work and of cost have been based on adequate data and sound and authorized rates (like
the Schedule of Rates).
Sub-head and Sub-work:

The term sub-head is the sub-division into which the cost of the work or its sub-
works, if it is large work is divided for purpose of financial control and statistical
convenience e.g., excavation, brick work, concrete wood work, etc., on the other hand the
term sub-work is applied to a distinct unit of a work, when it is sufficiently important to
be kept distinct for the purpose of accounts. For example, the solitary cells, the cook
houses and the jailors quarters are sub works in the case of a large Central Jail whereas
the excavation, brick work, etc of these sub-works are sub-heads.

Earnest Money and Security Deposit:

Earnest money is the amount of money that a tender has to deposit along with his
tender to assure the government that he is earnest in executing the work at the rates
tendered. Incase his tender is accepted, and he fails to proceed with the work in
accordance with the rates and terms of his tender, his earnest money can be forfeited.

After a work of construction or supply has been allotted to a contractor, a sum of


money (5% to 10%) is deducted from the amount for work or supply due t him as
security for satisfactory completion of the work or supply as per agreement. Earnest
money received with his tender is also treated as part of his security deposits. No
security is deducted from his payments so long as the amount deductible is less than the
earnest money. This also safeguards/ensures that government property handed over to
contractor is received back on the completion of the work.

Deposit works and Takavi works:

Deposit works is applied to work executed in PWD but the cost of which is met,
not out of government funds, but from funds provided by non-government sources. The
property of the work will also vest in the body funding it. Works executed for
Municipalities, Corporations, Panchayats, Non-government organizations and private
parties fall in this category. Funds for the work may be deposited by these bodies either
in cash or otherwise placed at the disposal of PWD Division. Normally, no expenditure
shall be incurred by PWD on Deposit works unless there are sufficient funds at its
disposal to meet their cost (including departmental charges). Any expenditure incurred in
excess of deposits received must be removed form the account of deposits and taken
under Miscellaneous Public Works Advances till more funds are made available.

Takavi Works denote works of construction or maintenance of water courses etc.,


expenditure on which is treated by government as Takavi Advance (ie., an advance to
cultivators). The transactions relating to Takavi Works are recorded in the Divisional
Accounts against 8550-Civil Advances, Takavi Works Advances. Thee are
consolidated in the schedule of Takavi Works Form 66 which shows (i) the expenditure
incurred during the month and up-to-date, (ii) Realisations during the month and up-to-
date. The percentage charges leviable should be adjusted in the expenditure month by
month.

The account of all completed works should be closed as soon as possible. Takavi
works relating to ordinary maintenance and repair should be treated as closed on 31 st
October each year (or any other date prescribed by the government as the end of Takavi
year). Expenditure incurred on them subsequently should be treated as pertaining to new
work of the following year.

Ordinary Tools and Plant and Special Tools and Plant:

Tools and plant which are kept in a Public Works Division for general use in the
Division, e.g., Hammers, spades, Kassis, Measuring Tapes, RCC mixers, vibrators, Road-
rollers etc., are examples of ordinary tools and plant. These are purchased from the
budget under the minor head Machinery and equipment of the major head of the
Division.

Special Tools and Plant acquired by the Division for a particular work mainly
because these are specially needed for it and are not ordinarily stocked in the Division.
These are almost invariably required for major irrigation projects, say bulldozers for a
canal.

Direct Charges and Indirect Charges:

Direct Charges mean charges that pertain exclusively to any job under suspense
head Work shop Suspense. These represent direct inputs in the execution of a job, such
as direct material and direct labour. Materials purchased or issued for a job and wages to
labour doing that job are examples of direct charges.

Indirect Charges are those which are not direct input on the job but have
necessarily to be incurred for the work shop as a whole. For example machinery, cost of
supervisory staff, watch and ward, interest on capital invested, water, rent of work shop,
etc are not directly incurred for carrying out a single job. But each job must par take of a
portion of these costs when we work out its manufacturing cost. Thus, supervision
charges, depreciation charges, interest charges, rents are all indirect charges relating to a
job undertaken.

Advance Payment and Payment on Account:

Advance payment denotes a payment made to a contractor on a Running Account


for work done but not measured. Such payment is usually made to enable the contractor
to discharge his liabilities like payment of wages to workers and his suppliers in cases
where there is delay in measuring up the work done by him. This gives financial support
to the contractor till On Account payment is made for the work done after its
measurement. The amount of advance payment is always less than the expected amount
due for work done.

A contract may run over a long period. In that cases, the work done by the
contractor is measured at intermediate stages and payment made for it on a running
account basis. This is called Payment On Account. Such payments are based on actual
measurement of work done.

First and Final Bill and Running Account Bill:

When a single payment is to be made to a contractor or supplier on its completion


and after satisfying that the work has been completely done as per specifications and as
per agreement and no item of the contract remains to be done, it is paid on a First and
Final Bill.
In cases where a contractor is to be paid at periodic intervals for that part of the
work done, till then, as per specifications, the payment is called a Running Payment. The
bill on which these payments are made are called Running Account Bills. Thus, when (i)
periodic payments on account, (ii) advance payments, (iii) secured advances are paid to
the contractor, it will be obvious that the system of Running Payments is in force and
such will be made on Running Account Bills. In the system of making First and Final
payment, there is no scope for grant of advance payments or secured advances or
payment for a part of the work done.

Rate of Cost and Inclusive Rate of Cost:

Rate of cost generally means the total cost of a work or supply divided by its
quantity, it means cost per unit. Rate of cost of a sub-head of work can similarly be
derived by dividing the up-to-date final charges of that sub-head by the up-to-date
quantity of work executed under that sub-head. If materials are posted under a sub-head
separately, then the rate of cost will naturally not include the element of cost of materials
used on that sub-head.

Inclusive rate of cost means the rate of cost of a sub-head of work including the
cost of materials used on that sub-head of materials issued to the work are recorded
separately in a sub-head Materials in the works abstract.

Intermediate Payment and On Account Payment:

Any payment on a running account except Final Payment is called Intermediate


Payment. Thus, advance payments, secured advances and on account payments are all
examples of intermediate payments. Such payments one of the many that are to be made
according as the work progresses. In the process of execution of a work, a contractor
may be paid (i) payment for part of the work done at various intervals of time or (ii) an
advance payment for work done but not measured, or (iii) payment of secured advances
as per rules.

A contract may run over a long period. In that case, the work done by the
contractor is measured at intermediate stages and payment made for it on a running
account basis. This is called payment on account. Such payments are based on actual
measurement of work done.

Deposit Work and Local Loan Work:

Deposit work is applied to work executed in PWD but the cost of which is met,
not out of government funds, but from funds provided by non-government sources. The
property of the work will also vest in the body funding it. Works executed for
Municipalities, Corporations, Panchayats, Non-government organizations, private parties
fall in this category. Funds for the work may be deposited by these bodies either in cash
or otherwise placed at the disposal of PWD Division. Normally, no expenditure shall be
incurred by PWD on Deposit Works unless there are sufficient funds at its disposal to
meet their cost (including departmental charges). Any expenditure incurred in excess of
Deposits received must be removed from the account of Deposits and taken under
Miscellaneous Public Works Advances till more funds are made available.
Local Loan Works In this case, works expenditure incurred by PWD on the
works is treated as loan to the party on whose behalf the work is done. Thus Local Loan
woks are works undertaken on behalf of a local body, Municipality, Municipal
Corporation or a Port Trust, etc., when the cost of the work is to form a part of the loan
given to it by the Government for the purpose.

Expenditure on a local loan work is accounted for under the Loan head concerned
and shown in the Schedule of Debit of Miscellaneous heads of account Form 76,
supported by a schedule of works expenditure. All charges relating to a loan work should
be brought to account immediately as they occur so that interest charges may be correctly
calculated and adjusted by the Accounts Officer.

Secured Advance and Security Deposit:

Secured Advance is an advance given to a contractor on the security of materials


brought to the site of work in case where the contract is for completed items of work.
Secured Advance can be sanctioned by the Divisional Officer subject to the following
conditions:-

1) The amount of advance does not exceed 75% of the value of materials brought to
site by him.

2) The materials of an imperishable nature and a formal agreement is drawn up with


the contractor which gives government a lien on the materials and safeguards its
interest against losses or misuse.

3) Expenses for the watch and ward of the materials shall be born by the contractor.

4) SDO in-charge should certify that:-

i) stated quantity of materials have actually been brought to site,


ii) no secured advance has been paid on them previously,
iii) materials are required for use by the contractor on item of work being
executed by him on finished rates.

5) Account of Secured Advance is kept in Form 26A as annexure to the Running


Account Bill.

6) Recoveries of this advance are made progressively from contractors On Account


Bill as the materials are consumed on the work.

7) The Secured Advance paid is posted both in the Works Abstract and contractors
ledger in the column Contractors secured advance to watch recovery.

Security Deposit: After a work of construction or supply has been allotted to a


contractor, a sum of money (5% to 10%) is deducted from the amount for work or supply
due to him as per agreement. Earnest money received with this tender is also treated as
part of his security deposits. No security is deducted from his payments so long as the
amount deductible is less than the earnest money. This also safeguards/ensures that
government property handed over to contractor is received back on the completion of the
work.
Recoverable Payment and Running Account:

Any payment to or on behalf of a contractor which does not represent value


creditable to his account (or payable to him) for work done or supplies made is called
recoverable payment. Such payment has to be made good from him by equivalent cash
recovery/short payment from his dues. For example, payment of wages to set right the
work done by a contractor is a Recoverable payment.
Running Account Bill: In cases where a contractor is to be paid at periodic
intervals for that part of the work done, till then, as per specifications, the payment is
called a Running Payments. The bills on which these payments are made are called
Running Account Bills. Thus, when (i) periodic payments on account, (ii) advance
payments, (iii) Secured Advances are paid to the contractor, it will be obvious that the
system of Running Payments is in force and such payments will be made on Running
Account Bills.

Secured Advance and Advance Payment:

Secured Advance is an advance given to a contractor on the security of materials


brought to the site of work in case where the contract is for completed items of work.
Secured Advance can be sanctioned by the Divisional Officer subject to the following
conditions:-

1) The amount of advance does not exceed 75% of the value of materials
brought to site by him.

2) The materials of an imperishable nature and a formal agreement is drawn


up with the contractor which gives government a lien on the materials and
safeguards its interest against losses or misuse.

3) Expenses for the watch and ward of the materials shall be born by the
contractor.

4) SDO in-charge should certify that:-

i) stated quantity of materials have actually been brought to site,


ii) no secured advance has been paid on them previously,
iii) materials are required for use by the contractor on item of work being
executed by him on finished rates.

5) Account of Secured Advance is kept in Form 26A as annexure to the


Running Account Bill.

6) Recoveries of this advance are made progressively from contractors On


Account Bill as the materials are consumed on the work.
7) The Secured Advance paid is posted both in the Works Abstract and
contractors ledger in the column Contractors secured advance to
watch recovery.

Advance payment denotes a payment made to a contractor on a Running Account


for work done but not measured. Such payment is usually made to enable the contractor
to discharge liabilities like payment of wages to workers and his suppliers in cases where
there is delay in measuring up the work done by him. This gives financial support to the
contractor till On Account Payment is made for the work done after its measurement.
The amount of advance payment is always less than the expected amount due for work
done.

Bin Card and Priced Stores Ledger:

Bin Cards are kept in stores godown in Form8. They record chronologically all
receipts, issues and the running balances of each article of stock. These cards are kept
right at the place where the article is placed so that entries may be easily and quickly
made. It is kept only in terms of quantities.

Accounts Branch of Divisional Office keeps a Priced Stores Ledger in form


CPWA 12. In it, pages are set a part for each article. The columns of the ledger provide
for receipt, issues and balances, both in terms of quantities and value. Goods received are
valued from the suppliers bills while goods issued are priced at issue rate fixed for the
purpose. This gives a complete priced and quantity account of the stores of the division.
The ledger is closed monthly for quantities and value and abstract of total receipts, issues
and balances is worked out.

Storage charges and Supervision Charges:

Storage charges are levied on issue of stores from Divisional stock to contractors
or to work executed departmentally. By levying this charge, it intended that PWD should
be able to recover the expenditure incurred by it on the stores after they were received,
such as expenditure on work-charged staff employed for their custody (like watch and
ward, maintenance of stores godown and yard, rent of store-shed, etc, handling or
stocking of articles, etc., and on maintenance of their records).

The storage charges are levied on percentage basis on the rate at which stores are
issued. The percentage rate is fixed for each division on the principle that the total
estimated annual expenditure of this nature is, as far as possible, recovered from the
issues likely to be made during the year.

Supervision charges are the charges levied in addition to book value in respect of
stock materials sold or transferred and are intended to cover such items of expenditure
incurred on supervision of stores like salaries of regular staff employed such as store-
keeper and his assistants, share of cost of regular staff employed on purchase, inspection,
accounting, etc. It is levied as a percentage of issue rate plus storage charges.

Direct and Indirect Receipts:

Direct Receipts signify those Revenue Receipts which are realized in connection
with the supplies of water etc., made from the canal or project. These are brought to
account as directly pertaining to the project. The examples are sale of water for irrigation
purposes, sale of water to towns, other canal produce, etc.

Indirect Receipts are those receipts which are only incidental to a work or project.
These do not arise directly from the canal or project and can not be taken as arising from
it directly. For example, Land Revenue may increase due to better irrigation facilities,
and a portion of such increased Land Revenue may be credited to the account of the
project. But this portion of Land Revenue due to Irrigation Projects would be indirect
receipts.

Issues to contractors and Issues directly to works:

In this case materials are issued to contractors whose contract is for completed
items of works but materials are required to be issued to him at a price in accordance with
the contract (either in the interest of the quality of work or for other considerations like
short supply in the market). The custody of such materials lying at site is that of the
contractor and he is responsible for its safety. But the contractor is not at liberty to take
away the un-used material without the consent of the Divisional Officer. If there is no
such stipulation in the contract, materials should not be issued to the contractor except in
exceptional circumstances.

Material is treated as issued to work when the work is executed (i) departmentally,
or (ii) by contractor whose contract is for labour rates only. A register of material at site
is kept for such materials issued and watch is kept against actual consumption and
wastages and losses etc. Such material at site is in the custody of PWD.

Original works and Repairs: