NationalTrainingProgramforC&DEmployees VariantIII

FinancialManagement,Stores Accounting&OfficeAdministration

REFERENCEMATERIAL

National Training Programme for C&D employees

Variant III

FINANCIAL MANAGEMENT, STORES ACCOUNTING AND OFFICE ADMINISTRATION

Reference Material Prepared by CIRE Faculty and Consultants

Organized by

CENTRAL INSTITUTE FOR RURAL ELECTRIFICATION

of
Rural Electrification Corporation Ltd
(A Government of India Enterprise)

Shivarampally, NPA Post, Hyderabad 500 052 Phones Office: 040-2401-8583, 2401-8584, Hostel: 2401-7252 Fax : 040-2401-5896, E-mail : cire.rec@gmail.com Regd. Office: Core-4, SCOPE Complex, 7 Lodi Road, New Delhi 110 003

INDEX
Sl. No. 1 2 3 4 Introduction Electricity Distribution Company Functions Electricity Act 2003 Rajiv Gandhi Grameen Vidyuthikaran Yojana (RGGVY) Accelerated Power Development and Reforms Programme (APDRP) Work Execution Revenue Management Financial Accountancy & Budgetary Control Stores Management And Accounting Section Service Regulations Office Procedures Pension Pay Bills & TA Bills Disciplinary Regulation Consumer Service and Care Motivation Communication Skills Stress Management Right to Information Act Procurement contracts CVC Guidelines in Procurement contracts Office Automation Equipments 120-131 132 133-143 144-157 158-163 164-165 166-170 171-172 173-177 178-179 180-186 187-191 192-198 100-119 24-30 31-43 44-99 20-23 6-11 12-19 Topic Page No. 1 2-5

5 6 7 8

9 10 11 12 13 14 15 16 17 18 19 20 21 22

CHAPTER-1
C&D Employees:

Introduction

Large number of non-executives in secretarial staff, accounts wing, technical staff in non-executives and Class-IV In Power Distribution Companies are categorized as C&D employees. The UDCs, LDCs, Stock Verifiers, Store Clerks, Typists etc. are the ministerial staff. Helpers, Linemen, Line Inspectors, Electrician, Sub-station Operators, Consumer Complaint Attendants, Meter Readera fall under the technical staff whereas Peon, Chowkidars, Jamadar setc. belong to Class-IV employees. National Training Program for C&D employees: A comprehensive plan titled as, National Training program for C&D employees aiming at skill upgrades of the C&D employees working in Power Distribution companies in the Country is approved by the Ministry of Power, Government of India, with Rural Electrification Corporation Limited as the nodal agency for implementation. The program will run through the remaining period of 11th five year plan. The program envisages imparting training to around 75,000 Group C&D employees in association with various power distribution companies. Among many other things, it provides for the development of course ware, training of the faculty, partial financial support to the power companies/empanelled training institutes as the case may be. The component of training program delivery consists of the following objectives. Objectives: Identify three or four major categories under the C&D category of employees in power distribution companies, and design custom made training programmes for these employees Develop reference material and other instruments necessary to conduct these training programmes. Identify and empanel the power utilities and the qualifying training institutions under the power utilities or otherwise to deliver the training programmes. Develop an MIS as an online portal to capture and report updates and also serve as a platform to provide information to all concerned. This course is intended for Non-executives category of C&D employees i.e, LDCs/UDCs/Typists/Accountants/Store-keepers/Store Clerks and such office assistants. It contains useful information on various topics such as Works Execution, Revenue Management, Financial Accounting and Budget Control,

Human

resources

development.

CHAPTER-2 ELECTRICITY DISTRIBUTION COMPANY- FUNCTIONS

DISTRIBUTION SYSTEM Distribution is a network of lines, receiving Power at 66 Kv/33 Kv and derating to 11 Kv, and 440 volts and supplying Power to customers The distribution is divided into two divisions 1. Primary Distribution: Primary Distribution is the network at 11 KV emanating from 33/11 Kv SS or 66/11 KV SS 2. Secondary Distribution: It is the network operating at utilization voltage i.e. 440v/220 volts at consumer premises.

CUSTOMER:
One who receives Power supplied by Licensee (Power Co) at appropriate tariff. At what voltages customer gets Power in a Distribution: 33KV 22KV 11 KV 440 volts

General Terms Used in Distribution:

1. CURRENT: Current is measured in Amps. The Ampere is the basic unit of electric current. It is that current which produces a specified forces between two parallel wires. 2 VOLTAGE: It is measure of electric potential. A potential of one volt appears across a resistance of one ohm when current one Amp flow through that resistance. 3. RESISTANCE: Voltage Current The unit of resistance is ohm () 4. KILOVOLT AMPERE: (KVA): It is the product of Kilovolts and Amps. This measures the electrical Load on a Circuit or a System. For Single Phase Circuit KVA: Voltage x Amps/1000 For Three Phase Circuit KVA: 13 x Voltage x Amps/1000

5. KILOWATT (KW) ACTIVE POWER`: It is the active power of work producing Part For Single Phase Power (KW): Volts x Amps x Power Factor 1000 For 3 Phase: Power Kw = 3 x Volts x Amps x Power Factor 1000 POWER FACTOR: it is the ratio between KW and KVA. Power Factor = Kw KVA

6. KILOWATT HOUR: (Kwh): It is the energy consumed by 1000 watts in one hour. If 1 kw of electrical equipment is operated for one hour, it would consume 1 kwh of energy (one unit) 7. MAXlMUM DEMAND: It is highest average KVA recorded with in a month. The demand is measured using trivector meter Digital Meter. 8. POWER TRANSFORMER: At 33 KV It receives Power at 33 KV and derate to 11 KV Capacities of Power Transformers: 10 MVA, 8 MVA, 5 MVA, 3.15 MVA, 1.6 MVA 9. Distribution Transformer: it receives Power at 11 KV and derates to 4 33 Volts ELECTRICITY DISTRIBUTION COMPANY 1. What is Electricity Distribution Company: It is a company having license and distribute power to various categories of customers in the area at tariff fixed by Electricity Regulatory Commission and responsible for energy purchased, and sold.

2. Who will be the Head of Distribution Company Distribution Company will be headed by Chairman - Managing Director with 3-4 Directors. 3. What is the role of Distribution Company Distribution Company purchases power from Transco National Grid and sell to Customer, maintain quality and reliable supply to Customers

4. Administration of Distribution Co

a. Distribution Company is divided in to Zones headed by Chief Engineer Zone b. Each Zone is divided into Circles, headed by Superintending Engineers c. Each Circle is divided in to Divisions, headed by Divisional Engineer/Executive Engineers d. Each Division is divided into Sub-Divisions, headed by Asst. Divisional Engineer/Sub-Divisional Engineer e. Each sub-division is divided into sections headed by Assistant Engineer/junior Engineer. Each section comprising of average 60007000 connections. FUNCTIONS OF ELECTRICITY DISTRIBUTION COMPANY Purchase of Power from Transco/ National Grid Distribution of Power to Customers Accounting of Energy (input Units) purchased Accounting of Energy (Sales) sold to customers Maintaining company assets i.e. No. of 33/11 KV Sub-Stations, 33 KV network length, Power Transformer Capacity, 11 KV network, Distribution Transformers, LT network, Customer metering. Planning for Expansion of substation Capacity New sub-stations, lines, additional transformers etc. Good Customer Service Periodical review of Distribution System

1. Line Losses 2. Overloaded Distribution Transformers 3. Overloaded HT Lines 4. Over loaded Substations 5. Revenue Collections 6. System Defects 7. Low Voltage Pockets 8. Purchase of Line material, and Equipment 9. Execution of new Sub-Stations, Lines 10. Providing Quality Metering to Customer 11. Maintaining Quality and reliable Power to Customer 12. Providing training to employees for upgrading their skills. 13. Execution of new Sub-Stations, Lines 14. Providing Quality Metering to Customer 15. Maintaining Quality and reliable Power to Customer 16. Providing training to employees for upgrading their skills.

FUNCTIONS OF DISTRIBUTION SECTION A. Distribution Section is having workload of average 6000-7000 customers 1. Who will head the Section: Assistant Engineer/Junior Engineer will head the Section 2. What are the functions carried out in section a) Maintaining Assets of Section i.e. length of 33 kv line, No. of Poles, Power Transformers, 11 KV lines, Distribution Transformers and LT lines, Meters etc. b) Maintaining and up dating route maps of 33 KV, 11kv and LT Lines with Distribution Transformers c) Customer index d) Maintaining Equipment registers Power Transformers, Distribution Transformers e) O&M of 33/11 Kv Sub-station f) Maintenance of Lines, and Equipment g) Monthly meter reading, billing and Collections h) Peak Load Average readings of DTRS i) Maintaining fuse call centre j) Customer Care k) Releasing New Connections l) Execution of Extension Works m) Study on losses and Planning for revamping M. I.S. reporting to higher-ups Arresting Pilferage Proper allocation of work to O&M Staff Guiding employees, workers on safety precautions Educate Employees, workers on System Losses Educate Customer on Energy Conservation Educate Workers, employees about Best Practices in Operation and Maintenance of System.

CHAPTER -3 ELECTRICITY ACT 2003

Its content supercedes and consolidates the provisions of a. The Electricity Act 1910 b. The Indian Electricity Act 1948 c. The Electricity Regulatory Commission Act 1998 Brief discussion of the above acts Electricity Act 1910 :This act regulates 1. License 2. Works 3. Supply 4. Transmission & Usage of Energy by non licensee 5. Administration and Rules 6. Criminal offenses and Procedures Electricity Act 1948

This act rationalises the production and supply of Electricity. It enacts a. The Central Electricity Authoirity b. State Electricity Boards, Transmission companies, Generating companies c. Powers & duties of State electricity boards, transmission companies and generation companies d. The works and trading procedures of Board and companies e. Boards, Finance, Accounts and Audits The Electricity Regulatory Commission Act 1998 This Act provides 1. Establishment of Central Electricity Regulatory commission and State electricity commission 2. Central and State Transmission Utilities

3. Rationalization of Electricity tariff 4. Transparent policies regarding subsidies Electricity Act 2003:This Act was enacted by the Parliament with the objective of Consolidating the laws relating to distribution, trading and use of electricity. Generation, transmission,

Taking measures conductive to the development of electricity industry. Promoting competition in electricity industry Protecting the interests of consumers Supply of electricity to all areas Rationalization of electricity tariff Constituting a central electricity authority, Regulatory commissions and Appellate tribunals. Section 3: The Central Government shall from time to time prepare National electricity policy and tariff policy in consultation with State Government and authority for development of power system. Section 4: National Policy on stand alone system for rural areas and non conventional energy systems. Section 5: National policy on electrification and local distribution in rural areas.

The Central Government in consultation with State Government and State Commission formulate a National policy for rural electrification of Local distribution in rural areas through franchises. Section 6: The Government shall endeavor to supply electricity to all areas including villages and hamlets.

Generation of Electricity Section 7: Any Generating Company may establish operate maintain a generating station without obtaining License if it complies with technical standards. Section 8: Hydro electric Generation

Not withstanding anything contained in section 7 any Generating Company intending to set up hydro station shall obtain license Section 9: Captive Generation:

A person may construct, maintain or operate a captive plant and dedicated transmission lines. He has the right to open access for the purpose of carrying electricity from generating plant to destination of his use. Section 10: Duties of Generating Company:-

The company shall be able to establish, operate and maintain Generating station, tie lines, substation and dedicated transmission lines. Generating company may supply electricity to any licensee for distribution of power. Section 12: Licensing

No Person shall Transmit electricity Distribute electricity or Undertake trading in electricity unless he is authorized to do so by a license issued by appropriate commission. Section 13: Power to Exempt:-

The appropriate commission direct by notification that the provision of section 12 shall not apply to ay load authority or franchises. Section 24: Suspension of distribution license: The appropriate commission may suspend the license if:o The distribution licensee failed to maintain uninterrupted supply of electricity to consumer. o The distribution licensee unable to discharge the functions. o Persistently default. o The distribution licensee broken the terms conditions of license Transmission of Electricity Section 25: The central Government may make region wise demarcation for the purpose of inter state, regional and interregional transmissions. Section 26: The central Government may establish National load dispatch centre at National level, and at regions- Regional level dispatch centers. Section 30: The State Commission shall facilitate and promote transmission, wheeling and inter connection arrangements.

Section 31: The State Government shall establish a centre known State level Dispatch Centre. Section 34: Every transmission licensee shall comply with such technical standards of operation and maintenance of transmission lines. Section 39:

State Transmission Utility The state Government may notify the Board or a Government Company as state transmission utility. The state transmission utility shall not engage the business of trading in electricity. Distribution of Electricity Section 42: Duties of Distribution License:The License shall develop and maintain efficient, coordinated and economical distribution system. The state commission shall introduce open access. State Commission permits a consumer to receive supply of electricity from a person other than the distribution license of his area of supply; such consumer shall be liable to pay an additional surcharge on wheeling charges. The license may establish a forum for redressal of grievances of consumers. State commission appoints Ombudsman for redressal of grievances of consumers who aggrieved by non-redressal at Forum Section 43. Every Distribution License shall, on an application by the owner - give supply to the premises with in a month after receipt of application. Section 50: A distribution license may with prior intimation to appropriate commission, engage in any other businesses. Section 53. The Authority may in consultation with State Government specify suitable measures for Protecting public from danger (including persons in Generation, Transmission and Distribution) arising from Generation, Transmission, Distribution.

Eliminating or reducing the risk of personal inquiry to any person

Section 55: No License shall supply electricity except through installation of correct meter. Section 56: Where any person neglects to pay any charge for electricity, the license may cut off supply after giving 15 days notice. Section 57: The appropriate commission specifies standards of performance.

Tariff
Section 61: Tariff Regulations

The appropriate commissions shall specify the terms and conditions determination of tariff Offences and Penalties Section 135: Theft of electricity:Whoever dishonestly Taps overhead lines, underground cables or service wires of a license Tampers a meter, loop connection or any other device or a method which interferes with proper recording of units. Damage electric meter. Shall be punishable with imprisonment for a term which may extend to 3years or with fine or with both. Section 153: The State Government may further purposes of providing speedy trial of offenses referred constitute as many special courts as may be necessary

A special court consists of a single judge appointed by Government with concurrence of High court.

CHAPTER-4
RAJIV GANDHI GRAMEEN VIDYUTIKARAN YOJANA

Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) was launched in April 2005 by merging all ongoing schemes. Under the programme, 90% grant is provided by Govt. of India and 10% as loan by Rural Electrification Corporation (REC) to the State Governments. Rural Electrification Corporation (REC) is the nodal agency for the programme

The RGGVY Aims at :

Electrifying all villages and habitations as per new definition Providing access to electricity to all rural households Providing electricity Connection to Below Poverty Line (BPL) families free of charge

Infrastructure under RGGVY

Rural Electricity Distribution Backbone (REDB) with 33/11 KV (or 66/11 KV) sub-station of adequate capacity in blocks where these do not exist. Village Electrification Infrastructure (VEI) with provision of distribution transformer of appropriate capacity in villages/habitations. Decentralized Distributed Generation (DDG) Systems based on conventional & non conventional energy sources where grid supply is not feasible or cost-effective.

Implementation Methodology and conditions under RGGVY

Preparation of District based detailed project reports for execution on turnkey basis. Involvement of central public sector undertakings of power ministry in implementation of some projects. Certification of electrified village by the concerned Gram Panchayat. Deployment of franchisee for the management of rural distribution for better consumer service and reduction in losses. Undertaking by States for supply of electricity with minimum daily supply of 6- 8 hours of electricity in the RGGVY network. Making provision of requisite revenue subsidy by the state. Determination of Bulk Supply Tariff (BST) for franchisee in a manner that ensures commercial viability.

Three tier quality monitoring Mechanism for XI Plan Schemes made mandatory. Web based monitoring of progress. Release of funds linked to achievement of pre-determined milestones. Electronic transfer of funds right up to the contractor level. Notification of Rural Electrification Plans by the state governments.

RGGVY in the XI Plan

Continuation of "Rajiv Gandhi Grameen Vidyutikaran Yojana Scheme

of Rural Electricity Infrastructure and Rural Household Electrification", has been sanctioned in the XI-Plan for attaining the goal of providing access to electricity to all households, electrification of about 1.15 lakh un-electrified villages and electricity connections to 2.34 crore BPL households by 2009. The approval has been accorded for capital subsidy of Rs.28000 crore during the Eleventh Plan period, at this stage.
Rural Electrification Corporation (REC) is the nodal agency for the

scheme.
Ninety per cent capital subsidy is provided towards overall cost of

the projects under the scheme, excluding the amount of state or local taxes, which will be borne by the concerned State/State Utility. 10% of the project cost to be contributed by states through own resources/loan from financial institutions.
The states will finalize their Rural Electrification Plans in consultation

with Ministry of Power and notify the same within six months. Rural Electrification Plan will be a roadmap for generation, transmission, sub-transmission and distribution of electricity in the state which will ensure the achievement of objectives of the scheme.
For projects to be eligible for capital subsidy under the scheme, prior

commitment of the States be obtained before sanction of projects under the scheme for: i. Guarantee by State Government for a minimum daily supply of 6-8 hours of electricity in the RGGVY network with the assurance of meeting any deficit in this context by supplying electricity at subsidized tariff as required under the Electricity Act, 2003. ii. Deployment of franchisees for the management of rural distribution in projects financed under the scheme and to undertake steps necessary to operationalize the scheme. SCOPE OF THE SCHEME

Under the scheme, projects could be financed with capital subsidy for provision of: 1. RuralElectricity Distribution Backbone (REDB) Provision of 33/11 KV (or 66/11 KV) sub-stations of adequate capacity and lines in blocks where these do not exist. 2. Creation of Village Electrification Infrastructure (VEI) i) Electrification of un-electrified villages. ii) Electrification of un-electrified habitations with a population of above 100. iii) Provision of distribution transformers of appropriate capacity in electrified villages / habitation(s). 3. Decentralized Distributed Generation (DDG) and Supply: Decentralized distribution-cum-generation from conventional or renewable or non-conventional sources such as biomass, bio fuel, bio gas, mini hydro, geo thermal and solar etc. for villages where grid connectivity is either not feasible or not cost effective. The funding will be on the pattern of 90% subsidy from Government of India and 10% loan from REC or from own funds of the state/loan from financial institutions. The Monitoring Committee on RGGVY, while sanctioning DDG projects under RGGVY, shall coordinate with MNRE to avoid any overlap. The provision for subsidy requirement for DDG is Rs.540 crore. 4. REDB, VEI and DDG would indirectly facilitate power requirement of agriculture and other activities including irrigation pump sets, small and medium industries, khadi and village industries, cold chains, healthcare, education and IT etc. This would facilitate overall rural development, employment generation and poverty alleviation.

5. Rural Household Electrification of Below Poverty Line Households: i) BPL households will be provided free electricity connections. The rate of reimbursement for providing free connections to BPL households would be Rs.2200 per household. ii) Households above poverty line are to pay for their connections at prescribed connection charges and no subsidy would be available for this purpose. iii) Wherever SC/ST population exists amongst BPL households and subject to being eligible otherwise, they will be provided connection free of cost and a separate record will be kept for such connection. 6. The over-all subsidy of components from Paras 1, 2, 3 and 5 (above) taken together should be kept within 90% of the over-all project cost.

THREE-TIER QUALITY MONITORING MECHANISM The projects under the scheme will be subject to Quality Monitoring Mechanism. The details of the Three Tier Quality Control Mechanism are as under :a. FirstTier: Project implementing agency (PIA) would be responsible for the first tier of the Quality Control Structure. Further PIA will engage third party inspection agency, whose responsibility will be to ensure that all the materials to be utilized and the workmanship confirm to the prescribed specifications. It will be synchronized with phased release of funds under RGGVY and inspection and proof of corrective action will be mandatory requirement for release of funds. This inspection will cover approx. 50% villages on random sample basis for each project and 10% pre-despatch inspections of major materials. b. Second Tier : Rural Electrification Corporation, will get the inspection done of the works/materials from its non-field staff and by outsourcing it. REC may outsource it to retired employees of State Electricity Boards/State Utilities/ CPSUs. All such reports should be organized and analyzed by REC through the project implementation. These individuals would be designated as REC Quality Monitors(RQM). The inspection will cover quality checks at pre-shipment stage at the vendors' outlet of major materials and 10% villages on random sample basis.

c. Third Tier 1. Independent Evaluators (Individuals /Agency) will be engaged by the Ministry of Power for evaluation, at random, of supply and erection under the programme. These persons would be designated as National Quality Monitors (NQM). It will be the responsibility of the state to facilitate the inspection of works by the NQM, who shall be given free access to all administrative, technical and financial records. Evaluation will cover 1% villages. They shall also report on the general functioning of the Quality Control mechanism in the District. 2. The Monitors shall submit their report to the Ministry. The reports of the NQMs will be sent by REC to the RQM for appropriate action within a period to be specified. In case quality check by RQM or NQM reveals 'unsatisfactory' work, the implementing agency shall ensure that the contractor replace the material or rectifies the workmanship (as the case may be) within the time period stipulated. In respect of NQM Reports, the REC Quality Coordinator shall, each month, report on the action taken on each of the pending Reports. All works rated 'unsatisfactory' shall be re-inspected by RQM or NQM after a rectification report has been received from the REC Quality Coordinator. REC will designate an Executive Director as in-charge of the Monitoring system. 3. Recurrent adverse reports about quality of works in a given District / State might entail suspension of the Programme in that area till the underlying causes of defective work have been addressed. 4. The REC Quality Coordinator / Third party inspection unit shall be the authority to receive and inquire into complaints / representations in respect of quality of works and they would be responsible for sending a reply after proper investigation to the complainant within 30 days. The REC for this purpose, shall ensure the following:i. The name, address and other details of the REC Quality Coordinator / third party inspection unit will be given adequate publicity in the State (including tender notices, websites, etc.) as the authority empowered to receive complaints. ii. All complaints shall be acknowledged on receipt (giving registration no.) and likely date of reply shall be indicated. On receipt of the report, the complainant shall be informed of the outcome and the action taken / proposed. iii. Complaints received through the Ministry of Power, REC will normally be sent to the REC Quality Coordinator for enquiry and necessary action. In case report from an RQM is desired, this shall be furnished within the time specified. In case an adequate response is not received

within the stated time schedule, the REC may depute an NQM and further processing will be done only on the basis of NQM report. iv. The RQC shall make a monthly report to the REC (in a prescribed format) and the status of action on complaints shall be discussed in the District Committees. v. REC could develop a web site for complaints, inspection and rectification. 5. The Quality Control Mechanism would be governed by the Quality Control Manual prepared by REC for the scheme. OTHER FEATURES Monitoring Committee: The Monitoring Committee constituted by the Ministry of Power under the Chairmanship of Secretary (Power), Government of India will sanction the projects, including revised cost estimates, monitor and review the implementation of the scheme in addition to issuing necessary guidelines from time to time for effective implementation of the scheme. Cost Norms: The cost norms for village electrification are as below. 90% grant will not be applicable to the amount of state or local taxes, which will have to be borne by the concerned State / State Utility. They would be released by the Monitoring Committee in exceptional cases to be analyzed for border area, remote districts etc. COST NORMS FOR VILLAGE ELECTRIFICATION Electrification un-electrified village In normal terrain In hilly, desert areas tribal, of Cost (Rs. lakhs) 13 18 in

1. a b

2.

Intensive electrification of already electrified village A normal terrain In hilly, tribal, 4 6

desert areas 3. Cost of electricity connection to BPL household 0.022

FRANCHISEE: The management of rural distribution would be through franchisees who could be Non-Governmental Organisations (NGOs), Users Association, Panchayat Institutions, Cooperatives or individual entrepreneurs. The franchisee arrangement could be for system beyond and including feeders from sub-station or from and including Distribution Transformer(s). The franchisee should be preferably input based to reduce AT&C losses so as to make the system revenue sustainability Revenue Sustainability: Based on the consumer mix and the prevailing consumer tariff and likely load, the Bulk Supply Tariff (BST) for the franchisee would be determined after ensuring commercial viability of the franchisee. Wherever feasible, bidding may be attempted for determining the BST. This Bulk Supply Tariff would be fully factored into the submissions of the State Utilities to the State Electricity Regulatory Commissions (SERCs) for their revenue requirements and tariff determination. The State Government under the Electricity Act is required to provide the requisite revenue subsidies to the State Utilities if it would like tariff for any category of consumers to be lower than the tariff determined by the SERC. While administering the scheme, prior commitments may be taken from the State Government regarding a) Determination to bulk supply tariff for franchisees in a manner that ensures their commercial viability. b) Provision of requisite revenue subsidy by the State Government to the State Utilities as required under the Electricity Act. c) The capital subsidy for eligible projects under the scheme would be given through REC. These eligible projects shall be implemented fulfilling the above conditionalities. In the event the projects are not implemented satisfactorily in accordance with the conditionalities indicated above, the capital subsidy would be converted into interest bearing loans. The services of Central Public Sector Undertakings (CPSUs) have been offered to the states for assisting them in the execution of Rural

Electrification Projects as per their willingness and requirement. With a view to augment the implementation capacities for the programme, REC has entered into Memorandum of Understanding (MOUs) with NTPC, POWERGRID, NHPC and DVC to make available CPSUs' project management expertise and capabilities to states wishing to use their services. This is being operationalised through a suitable Tripartite / Quadripartite Agreement.

CHAPTER-5

ACCELERATED POWER DEVELOPMENT AND REFORMS PROGRAMME (APDRP)

Distribution Reforms The Distribution Reforms was identified as the key area to bring about the efficiency and improve financial health of the Power Sector. Ministry of Power took various initiatives in the recent past for bringing improvement in the distribution sector. 29 states have signed the Memorandum of Understanding with the Ministry to take various steps to undertake distribution reforms in a time bound in the direction of rationalizing the tariffs, States are now better committed towards subsidy payment to the utilities. Accelerated Power Development and Reforms Programme (APDRP) Government of India approved a scheme called "Accelerated Power Development and Reforms Programme (APDRP) in March 2003 to accelerate distribution sector reforms. The main objectives of the programme are: Reduce Aggregate Technical & Commercial (AT&C) losses Bring about commercial viability in the Power Sector Reduce outages & interruptions Increase consumer satisfactions

Re-structured APDRP (R-APDRP) The Govt. of India has proposed to continue R-APDRP during the XI Plan with revised terms and conditions as a Central Sector Scheme. The focus of the programme shall be on actual, demonstrable performance in terms of sustained loss reduction. Establishment of reliable and automated systems for sustained collection of accurate base line data, and the adoption of Information Technology in the areas of energy accounting will be essential before taking up the regular distribution strengthening projects. Programme Coverage It is proposed to cover urban areas - towns and cities with population of more than 30,000 (10,000 in case of special category states). In addition, in certain high-load density rural areas with significant loads, works of separation of agricultural feeders from domestic and industrial ones, and of High Voltage Distribution System (11kV) will also be taken up. Further, town / areas for which projects have been sanctioned in X Plan RAPDRP shall be considered for the XI Plan only after completion or short closure of the earlier sanctioned projects. Scheme :

Project under the scheme shall be taken up in Two Parts. Part-A shall include the projects for establishment of baseline data and IT applications for energy accounting/auditing & IT based consumer service centres. Part B shall include regular distribution strengthening projects. The activities to be covered under each part are as follows. Part A: Preparation of Base-line data for the project area covering Consumer Indexing.GIS Mapping, Metering of distribution Transformers and Feeders, and Automatic Data Logging for all Distribution Transformers and Feeders and SCADA/DMS system(only in the project area have more than 4 lacs population and annual input energy of the order or 350 MU). It would include Asset mapping of the entire distribution network at and below the 11 KV transformers and include the Distribution transformers and Feeders, Low Tension lines, poles an other distribution network equipment, It will also include adoption of IT applications for meter reading, billing & collection; energy accounting & auditing; MIS; redressal of consumer grievances; establishment of IT enabled consumer service centres etc. The base line data and required system shall be verified by an independent agency appointed by the Ministry of Power. The list of works is only indicative. Part- B: Renovation, modernization and strengthening of 11kV level Substations, Transformers/Transformer Centres, Re-conductoring of lines at 11kV level and below, Load Bifurcation, feeder separation, Load Balancing, HVDS(11kV), Aerial Bunched conductoring in dense areas, replacement of electromagnetic energy meters with tamper proof electronics meters, installation of capacitor banks an mobile service centres etc. In exceptional cases, where sub-transmission system is weak, strengthening at 33kV or 66kV levels may also be considered. Eligibility Criteria for R-APDRP assistance : The States/Utilities will be require to: 1) Constitute the State Electricity Regulatory Commission 2) Achieve the following target of AT&C loss reduction at utility level: a. Utilities having AT &C loss above 30%: Reduction by 3% per year b. Utilities having AT&C loss below 30% : Reduction by 1.5% per year 3) Commit a time frame for introduction of measures for better accountability at all levels in the project area 4) Submit previous years AT &C loss figures of identified project area as verified by an independent agency appointed by Ministry of Power (MoP) by 30th June; the independent agency would verify that: a. All input points are identified and metered for energy inflow accounting in scheme area b. All outgoing feeders are to be metered in substation with downloadable meter

c. Scheme area should be ring fenced i.e. export and import meters for energy accounting shall be ensured besides segregating the rural load of the scheme area by ring fencing if not on separate feeder. d. The above shall provide the input energy and corresponding cash collected for calculating AT&C losses. The same shall be carried out for at least for there billing cycles and got verified by the independent agency. This loss level will be the baseline for considering conversion of loan into grant for part B projects 5) Devise a suitable incentive scheme for staff linking to achievements of 15% AT&C loss in the project area. Funding Mechanism : 1) GoI will provide 100% Loan for part A of the R-APDRP schemes which shall include projects for establishing Base Line data and It applications for energy accounting/auditing and IT base consumer services etc. 2) GoI will provide up to 25% (90% for special category States) Loan for Part B of the R-APDRP schemes which shall include regular distribution strengthening projects. 3) The entire loan from GoI will be routed through PFC/REC (FIs) for the respective schemes funded by them 4) The counterpart funding will be done by PFC/REC(FIs) as per its prevailing policy. 5) PFC/REC will be the prime lender for funding these schemes. In case of default by the utility the commercial loan of PFC/REC will be recovered first(being the primary Lender) before that of any othe lender for funding such schemes. Conversion of GOI Loan to Grant: 1) The entire amount of GoI loan (100%) for par A of the project shall be converted into grant after establishment of the require Base-Line data system within a stipulated time frame and duly verified by TPIEA. 2) Up to 50% (90% for special category States) loan for Part-B projects shall be converted into grant in five equal franchise tranches on achieving 15% AT&C loss in the project area duly verified by TPIEA on a sustainable basis for a period of five years. 3) If the utility fails to achieve or sustain the 15% AT&C loss target in a particular year, that years tranche of conversion of loan to grant will be reduced In proportion to the shortfall in achieving 15% AT&C loss target from the starting AT&C loss figure

CHAPTER -6

WORKS EXECUTION
The operations of the power utilities are divided primarily into two categories: I. II. Construction works Operation and maintenance

The works of the power utilities are divided primarily into the classes below: 1. 2. 3. 4. Capital works including extensions and improvements. Revenue works including O & M and Tools and Plant; Depreciation fund works. Misc. Works, Non-Departmental Works.

Account Number The accounts of Electrical undertakings are maintained under statute on the Double Account System. Cost accounts are maintained on the commercial double entry basis for all transactions. The departmental sub-divisions of accounts for cost and statistical purposes are known as ACCOUNT NUMBERS. They are designed for administrative and financial control and maintenance of commercial accounts. The transactions of the utility have been classified under various group heads. Main divisions and sub-divisions, with different account numbers. The account numbers so prescribed are found in the Manuals of utilities. Now the commercial accounting systems with the revised account No's as per the directions of Government of India (Ministry of Energy) is in vogue in the utilities. Execution of Works The strict observance of the classification has to be ensured at all stages in the execution of works and the following are to be ensured for taking up works.

I. II. III. IV. V. VI. VII. VIII. IX. X. XI.

Preparation of estimates; Scrutiny of estimates; Sanction of estimates; Sanction of working estimates; Preparation of Budgets; Application of Budgets; Issue of work order; Incurrence of expenditure; Booking of expenditure; Closing of working orders; Preparation of completion reports;

Administrative Approval

The proposal for incurring any expenditure in the utility on a work initiated is formally accepted by the Board / Corporate Office and is called an Administrative approval. This approval is accorded by the Board / Corporate office or the officers of the utility to whom powers have been delegated. All works in the utility require the Administrative approval from the competent authority and no work can be taken up for execution without such an approval. The approval in effect is an order to the department to execute certain work at the stated cost. After Administrative approval for each work a detailed estimation must be prepared for the Technical sanction of the competent authority. Technical Sanction The order of the competent authority sanctioning a properly detailed estimate of the cost of Construction repair or maintenance proposed to be carried out in the department. As its name indicates, it is no more than a guarantee that the proposals are technically sound and the estimates are accurately calculated and based on adequate data. No work should be executed without proper technical sanction. The estimate should be prepared in the department form in such a way the detailed accounting against the departmental account numbers is facilitated. The Abstract should be made up of the individual details of the estimate. No provision on account of establishment and general charges and tools and plant need be included in the working estimates prepared for each component part of a scheme as they relate only to the works provision of the project. Necessary provision for these charges should however, be made in the detailed sanction of the main scheme. If in working out a detailed estimate, it is found necessary to make any important deviations for the design for which Administrative approval was obtained or If the cost will exceed 10% a revised Administrative approval should be obtained before technical sanction f is accorded. Estimate and the amounts of sanctions are strictly confidential and it is forbidden to communicate them to any contractor, piece worker or tenderer. Whenever there arises necessity for the revision of a sanctioned estimate, a detailed comparative statement showing the sanctioned and revised amounts with detailed explanations for all excess or savings under each account number should accompany the detailed estimate. Renewals and replacements chargeable to D.R.F. account should not be included in O&M estimates. Separate estimates, should be got sanctioned for which following particulars should be furnished with the proposals. 1. Approximate period during which the material now proposed to be replaced was in

service. 2. Normal guaranteed life of the material. 3. Reasons of their deterioration earlier then the expected time. 4. Whether the material to be replaced could be used elsewhere and if so, the approximate value that could be assigned there to. 5. The latest date by which the replacement is considered necessary. The estimates for tools and plant chargeable to Revenue expenses for each year should be got prepared and sanction obtained. The estimate should be classified under Tools and Plant, Furniture, Instruments etc., and should provide for the minimum. Work Order Although the primary object of the accounts of works is to exhibit simply but accurately, the actual cost of works, the rules require the upkeep of separate accounts for the several component jobs. This is done by means of work orders for each construction account or operation & maintenance account and is designed to 1. Control effectively the financial operations in the field with minimum office work to the Engineer. 2. Analyse the comparative costs of the various jobs. 3. Maintain statistical information required. The work order system effectively controls the expenditure in the field even in the case of large works and though the period of Construction is prolonged. Work order is an order which contains a descriptive and an estimate of cost of proposed work and also conveys the executive approval to proceed with the work, it is an immediate authority for the field to proceed with the work. An application for work order should be sent. The particulars of cost of materials and labour should be exhibited separately. This application is prepared by the field with reference to the sanctioned estimate and should ordinarily cover expenditure to be incurred with in a period of a month beyond the target date fixed of the completion of the work. Initial accounts however to be maintained by the concerned field officer operating the work order for the materials drawn etc., It is a fundamental rule that the commencement of execution of any works should not definitely be authorized by any authority unless a work order is issued by the proper authority to issue a work order are available. Orders conveying administrative approval or technical sanction or communication or budget provisions shall not be taken as authority for commencing the work without the work order. Such orders are communicated on the implied under, standing that before any expenditure is incurred, work orders shall be obtained.

Service Connection Works Even though provision for service connection is included in the extension, service connection works will be executed on separate work orders. The estimate for extensions for rural distribution should be split up during execution into two parts. Viz., Extension /service connection works. Service connection work should be executed by the O & M staff after receipt of deposit, agreement and security deposit from the consumer. In other cases the expenditure chargeable to the consumer should be worked out as per an estimate and such an amount collected as a service connection deposit. No work order for a service connection should be issued without obtaining the S.C. deposit, Security Deposit and obtaining an agreement where necessary. Copies of the work order supported by the estimate accompanied by a detailed report, necessary sketches etc., application, agreement and deposit receipts should be sent to the office as and when work orders are issued. A monthly return of work orders issued should be sent by each sub division to the Division Office to reach by the First of the month. The work order should commence only when the consumers wiring is completed and after the issue of work order which should exhibit separately materials, and labour as estimated. The field accosts of the work order should be maintained by the Distribution Engineer. The accounts should show the estimated quantity of materials and labour in the horizontal columns. The requisitions should be noted in the vertical columns. Within six weeks from the date of giving service or earlier, the completed work order should be closed and sent to the Divisional Office. The work orders should be sent with a detailed bill of service connection showing the allocations between the consumer and the Board and supported by requisitions and Devolutions, so that the accounts of the service may be closed and any refunds or charges due from the consumer settled promptly. Certificate of disposal of surplus materials and check-measurement should be furnished.

Temporary Services H.T. and L.T. the deposited in consumer. The cost should be below: 1. Cost of materials 2. Cost of labour 3. Total 1 + 2 4. Centage charges on item -3 5. Total 3+ 4

The total expenditure incurred to give temporary services should be advance by the as Rs. Rs. Rs. Rs. Rs.

6. Deduct cost of retrievable materials 7. Add cost of labour of dismantlement 8. Total to be deposited by the consumer

Rs. Rs. Rs.

The procedure regarding estimates, work orders and issue of bills etc., shall be the same in respect of temporary service, as for ordinary except the meter readings shall be taken at the end of each period, and bill rendered promptly. Temporary services are not entitled to 100 feet of service line free on public road. Ah the charges incurred in respect of temporary service should be charged against the consumer and no portion of it is charged to the Board under the provisions. Subsidary Records and Financial Records: In the double entry system of book-keeping the books of original entry are: 1. Cash book 2. Stores ledgers (comprising of Requisitions, devolutions, S.R.B's and S.I.Bs) 3. Journal book including purchase day book. 4. Centralised payments adjustment journal. 5. Bills payable journal. All expenditures works is recorded month by month in any of the ledgers. 1. Construction operation ledger in cases of Capital works. 2. Operation and maintenance ledgers in cases of work chargeable to revenue and working expenses. 3. Clearing account ledger in case of remittance, suspense, debit and deposit transaction. 4. Service connection cost ledger in the case of service connection works. 5. Deposit of works ledger for D.C. works. The construction accounts of capital works are separated in three main divisions. 1. Fixed capital accounts. 2. Clearing accounts. 3. Construction operation accounts. The construction operation accounts are kept in C.O. Ls. These are subsidiary to the Fixed Capital accounts and some times to clearing accounts.

The construction operation accounts should be classified and separate ledgers kept for each class of transactions so as to facilitate future reference. These accounts are designed to control work on the field and to facilitate detailed costing. These will be on the basis of work orders. Each work order is given a number by adding to the Fixed Capital Account or clearing account number concerned such subsidiary heading as may be applicable to the particular job. Foe each work, sufficient number of folios will be opened by the main and subsidiary accounts numbers as given in the sanctioned estimate. The provisions under each subsidiary account number as per estimate should be noted on the top of the folio concerned. The amount of the work orders issued should similarly be noted with their numbers from the cash book, journal requisition and Revolutions etc. Both the charges and receipts relating to each work order are posted on the debit or credit of the folios for the various account numbers in the C.O.L. The object of the detailed accounts kept in the C.O.L. is to control expenditure on each distinct unit or component part of a work, in order to facilitate the correct posting to the fixed capital. The accounts in the construction ledgers should be closed to FCL as often as possible but not less than once every half year. In the case of small works, the control of expenditure against estimates can be exercised with reference to C.O.L. itself. For this purpose the monthly progressive figures should be noted in red ink in the C.O.L. In the case of large construction works, expenditure against estimate is watched with the help of the Fixed Capital ledger and the C.O.L. If the execution of works or additions or improvements which will be accounted for under the F.C.L. main account is likely to be spread over a long period, the total expenditure against estimate will be watched from schedules and against each account number from the totals in the F.C.L. and the unclosed total in the C.O.L's. The F.C.L. accounts are designed as a permanent and continuous record of the cost of each unit of property. All additions improvements and extensions with information as to their description, period of installation or removal and cost should also be brought together under each unit of property. No transactions are posted in the F.C.L. without first being passed through the C.O.L.'s. To this end, the work order issued for the construction operation account concerned so that the expenditure with the field may be controlled. Each time a transfer is made from the C.O.L. to the F.C.L. the name of the work order and brief particulars with estimate number should be given in support of the entry in the F.C.L. The estimate amount for the first construction work Should be noted at the top of each folio in the F.C.L.

The Accounts of work orders relating to O & M ledgers in the ordinary ledger form. Expenditure is classified in the ledger according to the detailed account numbers. In the case of works expenditure chargeable to revenue, a separate folio is opened for each work order. The clearing accounts represent all running and operation expenses during construction and all unallocated charges of a general nature works as well as office on cost which are to be distributed periodically to the various accounts concerned. But in cases where specific appropriations have been allotted for a clearing account, the clearance will be deferred till the closure of the construction estimate when the net expenditure under each clearing account will be transferred to F.C.L. in proportion to work cost on each work at the discretion of the Chief Engineer on some reasonable basis. Personal ledgers containing the account for contractor or running account or account of supplier of materials on credit are to be maintained.

CHAPTER -7 REVENUE MANAGEMENT

General: The Revenue of the Utility by sale of Power are obtained from H.T. Consumer & L.T. Consumers. The Revenue is also derived from Misc. Revenue like Customers charge, Surcharge for belated payments, reconnection fees and penalties etc.. The Revenue billing requires meticulous attention and close supervision in view of the fact that is derived from huge No. of consumers and various categories of supply. Any laxity in supervision and proper application to tariff will result in loss of revenue to the utility. For ensuring correct billing and assessment of revenue thorough knowledge of the tariffs is essential. The tariffs of the utility are formulated depending on the operation expenses, wages ~ill, cost of generation etc., these tariffs are revised from time to time with the approval of the State Regulatory Commission. The procedure for release of service connection, obtaining of Agreements from consumers, consumption deposit etc., are notified in "Terms and Conditions of Supply. In some Utilities the accounting and collecting of Revenues in E.R.Os is entrusted to private Agencies. Computerization of Revenue Billing and Accounting In some of the Electricity Revenue Officers (E.R.Os) the consumers account under slab system of billing are computerized. The particulars of the consumer related to connected load, contracted load Meter No. and capacity consumption deposit paid etc., are entered into the master file. The slab amount fixed and the amount due from the consumer as on a given date are fed into the master file including the monthly payments made in the E.R.O. This data is processed and Monthly ledger is produced by the Computer duly indicating opening balances, Debits/Credits and closing balances in respect of all the consumer grouped Mandal- Wise/Distribution wise/Category wise. In respect of slab services due for billing in a month the weekly reading obtained from the field are entered in the Meter Blank Forms. These meter readings are fed to the Computer which process the same and produce adjustment bills with the help of data already available in the master with regard to opening meter reading anal payment particulars. In the E.R.O. the work relating to Computerized Billing and Accounting can be broadly classified as i)furnishing input and ii) Check of out puts. Input Data to be Furnished by E.R.O.

1. Meter Readings of the consumers pertaining to the cycle to be billed obtained from Section Officer 2. Collection Data: Details of payments made by consumers from E.R.O. records. 3. Miscellaneous Data: a. Updating the Meter charges, slab charges, load charges etc. b. Creation for master for New services and deletion of some of the services. c. Carrying out corrections in verified outputs of previous months through appropriate card codes. d. Adjustment bill amounts, Bill revisions, credits and debits on account of adjustments. e. Dates relating to disconnections and reconnections. Out Put Data: The following output data furnished by the Computer is verified in the E.R.O. I. II. III. Consumer Ledger. Adjustment Bills. Exception Report and Financial Reports.

GENERAL INSTRUCTIONS TO AUTHORISED PERSON/INSTITUTION FOR MAINTENANCE OF ACCOUNT RECORDS AS NOMINTED BY THE UTILITY 1. This scheme will be applicable to the services covered under slab systems of billing only 2. The utility will notify the consumers in specified area/areas, the accounting agency nominated by utility to maintain the accounts records relating to the electricity bill amounts collected by the utility or its authorized agents. 3. The accounting agency shall be supplied with the number or required consumer ledgers. 4. The consumer's ledgers shall be maintained by the Accounting agency on behalf of the utility Distribution wise in the case of rural services and section/transformer wise' in the case of the urban services and shall be open for inspection by the officials of the utility as notified form time to time. The records should also be produced for check for by the Accountant General or utilities agency whenever required. 5. The ledgers so maintained by the accounting agency will be treated as ledgers maintained by the utility. 6. As and when new services are released in a Distribution/Urban Area the Asst. Engineer in charge of the Distribution/Urban shall prepare a Test report (Already approved by the utility) in duplicate and after filling in the necessary details, shall deliver one copy of the Test Report to the accounting agency under proper acknowledgement. The Asst. Engineer incharge of the Distribution/Urban area will register the fact of release of services in the register of service connection, assign the consumer No. prepare and deliver the initial slab card to the consumers. The Test Report shall be delivered to the accounting agency along with return of new services released indicating the assigned slab against each services. The prompt submission of the Test Reports. return of new service should be reviewed monthly by the Asst. Divisional Engineer of the Distribution The Accounting agency shall also maintain the Register of service connections distributions wise and open consumer-wise docket. In the case of service released from 1st to 15th of month, the Test Reports with the return should be delivered to the accounting agency before 20th of the month, and for the services released from 16 to end of the month the Test Reports and the return should be handed over to the accounting agency before 5th of the succeeding month. 10. On the receipt of the Test Reports and statement of slab amounts (i.e., Monthly Returns of Services released containing the assigned slab) from the Distribution Engineer, the accounting agency shall fill in the details in the consumer ledger.

11. Operating of Consumer Legers: The consumer ledger shall be in suitable modified form of a columnar ledger. The consumer ledger shall be category wise and meter reading cycle wise and distribution wise. The consumers should feature as appearing in meter reading cycle mainly to ensure that the readings received cycle wise in a month are fully noted in the ledger. Separate meter reading registers shall be opened for the services for which maintenance of accounts is entrusted to the accounting agency and the meter reading registers sent to the accounting agency with the readings as per the cyclic arrangement. 12. In the case of existing services for which the accounts are presently maintained by the E.R.O. the agency entrusted with the maintenance of accounts shall copy the required opening entries i.e., Balancing figuring in the concerned accounts and commence further accounting. Wherever the closing balance is not readily available the agency will start the work without the opening balance and maintain the accounts pending incorporation of opening balance later. The E.R.O. shall furnish the information to the accounting agency within a reasonable time i.e., before two months so that the arrears may not remain unrealized. 13. The Revenue Cashiers and collections agency nominated by utility shall continue to render every day a copy of the B.CR.C scroll to the E.R.O as per the existing arrangements. The Asst. Accounts Officers/Accountant (cash) of the Electricity Revenue Office shall after ensuring that the money realized are either remitted into the bank or handed over in E.R.O. as the case may be prepared by the Petty cash book shall deliver the bill collector remittance challan scrolls to the accounting agency nominated under proper acknowledgement in the register called Register of B.C.R.C. handed over the Agency incharge of maintenance of Account. Similarly, B.C.R.C.S. relating to collections made at the E.R.O. counters in respect of services entrusted to the accounting agency shall be furnished Note: If the collection relates to arrears, the details of the month to which credit relates and the surcharge amounts should be indicated distinctly in the B.C.R.Cs 14. Drawal of Demand Abstract: Under slab system of billing the demand of major number of services being almost static, the demand point need not be made against each consumer of the slab amount in the consumer ledger. A final abstract distribution wise and category wise shall, however, be drawn from the columnar ledgers. The total demand for the slab amounts for the month shall be arrived with reference to fixed slab amounts noted in the consumer ledger and the adjustment bills prepared in the month. Its correctness should be checked up taking into account the changes in the demand due to change of slab and also enhancement in demand by way of new services. After ensuring this the total demand of the month for the services entrusted shall be notified by the

accounting agency to the E.R.O. distribution-wise/urban as the case may be for being posted in the Financial Ledger. 15. Credit Posting in the Consumer Legers: The credit postings are to be made in the consumer ledger from the B.C.R.Cs noting the surcharge amounts if any collected in the column provided for . After posting credits in consumer ledger the accounting agency shall confirm the total amount of credit (with break up of c.c. charge and surcharge) that has been posted in the consumer ledger distribution wise to the E.R.O to enable maintenance of Financial Ledger.

The Asst. Accounts Officer/Accountant (Cash) shall compare the total credits as confined by the agency incharge of maintenance of accounts as figured in the respective heads in the Financial Ledgers and any discrepancy in the credits and debits shall be got reconciled before rendering the Trial-Balance. 16. Preparation of 'D' Lists: The Revenue Cashier/Collection Agent of the utility shall attend the Revenue office on 30th of the month for reconciling the lists with them. The Revenue Cashiers will attend the E.R.O. on 15th of the month for reconciling the accounts relating to non slab services. The accounting agency shall prepare the fist of defaulted consumers as per the consumer accounts to the Asst. Accounts Officer/E.R.O. This list should be got reconciled by the Asst. Accounts Officer E.R.O. with the list of defaulters as arrived at from the Register of Revenue Cashier/Collection Agency, duly updating with the credits received in the E.R.O. counter through money order or Demand Drafts (D.Ds) and on reconciliation they shall be sent to Section Officer before 5th of the succeeding month. The section officer should return the 'D' list within 5 days after attending, to the Asst. Accounts Officer/E.R.O. who will forward the same to the agency incharge of maintenance of accounts for review. The list of services found not disconnected during review shall be communicated by the agency to the Asst. Divisional Engineer/Asst. Accounts Officer (E.R.O.) for pursuant action. The Divisional Engineer Electricity shall invite to the monthly coordination meeting the accounting agency also to review the position relating to furnishing of meter readings and returning of 'D' lists, status of meters etc. 17. When the service is disconnected and the consumer comes up for reconnection, the agency maintaining accounts should notify the arrears through the cash memo, slip and direct the consumer for payment to E.R.O. The Asst. Accounts Officer shall then issue reconnection order on receipt of total arrears due. These credits will be notified to the accounting agency through B.C.R.Cs. for posting in the consumer ledger. Where the closing balance as on the date of transfer has not been intimated to the accounting agency, the outstanding in the ledger of the E.R.O. should also be verified and the slip corrected if necessary, before collection of arrears and issue of reconnection order.

18. The Asst. Accounts Officer/Divisional Engineer Electricity shall nominate an Accountant to enforce an effective internal check as regard preparation of 'D' list and result of review of the returned 'D' list by the Section office to act as liaison among the agency incharge of maintenance of accounts Distribution Office and E.R.O. and will be responsible for proper coordination in the matter of collection and maintenance of consumer accounts. 19. The following information in the form of a- monthly return is to the E.R.O. by the Accounting Agency in so far as those services for which maintenance of accounts are entrusted. I. Financial Progress Report (Monthly) Sale and Revenue Return doNew Services released and first bill/cards issue doC.C. Charges arrears report doNo. of services ordered for disconnection and actually disconnected doNo. of services under door lock doReturn of meter burnt and stuck-up cases -

II.

III.

IV.

V. VI. VII. VIII. IX. X. XI. XII. XIII.

Assessment return doD.S.M doElectricity Duty Return Return of adjustment bills (to be issued, actually issued and balance) doReturn of abnormal consumption and low consumption doReturn of additional consumption deposit assessed, realised and that balance due do-

20. An agreement will have to be executed before taking up the work by the agency besides a bank guarantees required by the utility. The utility at liberty to terminate the contract with 3 months notice if in the opinion of the utility, the performance of the agency is found not satisfactory and to invoke Bank Guarantee. Procedure for Claiming Commission:

Remuneration for attending the work "Maintenance of Accounts' per account per month shall be paid. The Accounting Agency shall prefer the claim relating to the months to Asst. Account Officer/E.R.O of utility concerned in the 1st week of succeeding month, duly supported by the statement of work done. The Astt. Accounts officer on receipt of the claim, after satisfying himself that the entire work entrusted has been completed in all respects by the accounting agency, should arrange for payment of remuneration within 20 days from the date of actual receipts of the claim in the E.R.O. duly appending a certificate to the effect that the work entrusted and the returns due from the agency is complete in all respects. The Divisional Engineer Electricity (Distribution) shall then affix the payment order charging the expenditure to O&M expenses. Copies of the scheme of slab system of billing of and connected instructions as available in Board will be made available to the agency for guidance. Any doubts arising is so far- as they relate to maintenance of Consumer ledgers, drawl of demand credit postings reconciliation, preparation and issue adjustment bills will be clarified by the concerned Asst. Accounts Officer incharge of the E.R.O.

Noting the Meter Readings and Units

The readings taken under cycle-system with the units, should have been noted by ledger clerks in consumer ledgers, as and when received. The readings and units shall be noted in the data sheet duly checking the correctness of units. For the period during which meter was stuckup or there was no meter, care should be taken to arrive at the consumption with reference to average/computed consumption as per rules. The consumption for the entire period should be totalled.

Calculation of Energy Charges & Minimum Charges

The fixed charges and customer charges for all services as per tariffs for the period to which bill relates shall be calculated and noted in the data sheets/bill.

Other Charges:
Any item and also the short billing cases noticed, shall be included in the adjustment bill.

Additional Charges for Late Payment:

The surcharge is leviable per week or part thereof. Care should be taken to assess the surcharge correctly. As per new slab system surcharge for late payment is collected by Revenue Cashier along with Slab amount after due date and also in E.R.O. at the time of issue of reconnection order and directly credited to Misc. Revenue. The correctness should be checked ensuring that there are no omissions and if there is any omission in collection of surcharge, the amount of surcharge, short collected, should be included in the adjustment bill. For surcharges already collected by Revenue Cashiers, this aspect should be checked in particular in respect of general slabs and difference to be included in the adjustment bill. Penal interest leviable on installments allowed should also be included in adjustment bills.

Total Bill Amount:

Taking the above charges, the total amount of the bills shall be arrived at from which the slab amount as assessed for the period (net payments made) shall be deducted and difference amount (+) or (-) arrived at. Care should be taken to note the slab amount assessed keeping in view of slab changes if any, during the period. The difference amount (+) or (-) shall be noted in Col. 14 of the consumer ledger against the respective consumer and total of such amounts (net) shall be taken as demand under adjustment bills for the month. At the time of the demand consolidation of adjustment bills, the surcharge of late payment included in adjustment bill shall be credited to appropriate head of account under Misc. Revenue.

Adjustment of Interest on Consumption Deposit:

The credit to be given to consumers towards annual interest on consumption deposit as per tariff condition, be adjusted from the 'difference' amount of the adjustment bill (i.e.) before arriving at the amount due from the consumers Where the difference amount is positive (+) for a consumer, the same amount shall be repeated against the Col. Amount due from consumer and also expressed in words in the adjustment bill form Where the difference amount is negative (-) the column" Amount due from consumer be noted as NIL.

Adjusting Excess Credit Against Future payments:

Where the difference amount is negative (-) as per instruction already issued such credit be adjusted against future payment by suitable entry in the refresh cared being issued for the succeeding year. Before adjusting against future months, it should be checked whether the consumer has any arrears outstanding, if so, the credit should be adjusted first against the arrears and should there be excess credit(after setting off against arrears) then only, it shall be adjusted against future payment., A suitable mention shall be made in the adjustment bill and an entry to that effect should be clearly made on reverse of new card against the relevant month and part amount if any due against the month shall be clearly indicated. The adjustment bill amount due from consumer if positive (+), may be indicated in the card before issue to consumer.

Issue of Adjustment Bill

The adjustment bills shall be dated 15th of the succeeding month and forwarded to Section Officer along with new cards immediately. The section Officers are to arrange delivery of the bills/cards to the consumers before 25th of the month positively, to enable the consumer to make payments from 1st of the next month along with slab amount as per new cards. The data sheets/ adjustment bill/new cards shall be checked by the Billing superintendent 100%, other supervisory officials to the extent prescribed by the utility. On receiving the adjustment bill amount along with slab amount, Revenue Cashier shall issue a single receipt covering total amount indicating distinctly, the adjustment bill amount against the column provided for. The B.B.A. prepared by E.R.0 for adjustment bills and handed over to Revenue Cashier shall be returned back to E.R.O. duly indicating the date's payment.

Renewal & Issue of New Card for the Succeeding Year

It should be examined whether the consumer has to be allowed the same slab with reference to latest average consumption. Appropriate slab with reference

to average consumption of the latest period as per adjustment bill, should be allotted and an indication to the effect shall be made in the adjustment bill.

Collection
The collection shall be monthly for all slab system consumers. The consumers shall present the Card/Pass Book to revenue (Cashier/Bank and private agency on the schedule date in a month. The collections of the E.R.O. are obtained from Revenue Cashiers/bank/Private Agencies stationed at various stations under jurisdiction of the E.R.O. by cheques, demand drafts, money orders and payments at E.R.O. Countermand collections through Banks including Private Agencies. All these transactions will feature in the Cash Book of the E.R.O. Collections from consumers are received upto 14th of every month without surcharge and surcharge fill 29th of the month. However, for the cations made after 29~ of the month, the surcharge shall have to be collected by the Revenue Cashier/Bank/Private Agency besides slab amount. The surcharge shall be at flat rates as indicated in the previous paras. Where collections are to be made at the outstations (villages) by Revenue Cashiers as per scheduled programme the Revenue Cashiers are to receive from all types of slab system consumers during the first 14 days of the month on the day he visits the village without any surcharge, as he may not be in a position to cover all villages more than once in the first 14 days and upto 29th with surcharge in 2nd round visit. The slab and non-slab (Monthly bills) amount paid belatedly beyond a month, will be accepted in Electricity Revenue Office only. On presentation the Card/Pass book by the consumer at the counter the Revenue Cashier/Bank/Private agency while receiving the amount, makes an entry duly attested n the reverse of the Card/Pass Book and also issue a receipt under her signature. Collection should not be refused if the consumers fail to present the card and the collection may be accepted. The entries in the card may be made up to date when the consumers make payment invariably and entries get attested by Revenue Cashier/Bank/Private Agency. The receipt form shall be in duplicate original copy to be furnished to the consumer. The double side carbon/shall be used in Receipt Book by Revenue Cashier/Bank. An entry also be made in B.C.R.C.(Collection Scroll Book printed duplicate). Original copy of B.C.R. C to be sent to E.R.O. daily by Revenue Cashier/Bank. The B.C.R.C shall be written by Revenue Cashier distribution wise/Clerk-wise as now being done. Advance Collection: Where the consumers desire to pay in advance, such advance collections for the period of 6 months and above will be accepted in Electricity Revenue Office and necessary entries are made in the card to the effect. A separated receipt is also issued

Revenue Cashiers Register

The Revenue Cashier shall maintain a list of slab system consumers distributions-wise and the list would be got updated in Electricity Revenue Office monthly with any changes in slabs and also additions for new services and deletion for billing stopped services. The list shall be the basis for both noting the monthly payments and to prepare uncollected items every month by Revenue Cashier.

Credit Postings in the Ledgers

The credit posting are made in the-consumer ledgers by the Clerks from B.C.R.C's and the surcharges amount if any collected shall be noted distinctly in the ledger in the column provided for. The total figure of collection in respect of each distribution will be arrived. To ensure misclassifications and misappropriations, these figures have to be tallied and reconciled with other source which are not directly from the source of collection. maintenance of financial ledgers. Defaulter List The Revenue Cashier shall attend Electricity Revenue Office on 30th of every month and reconcile his accounts. The defaulter lists shall be prepared by the Ledger clerks with reference to uncollected cases blanks as per consumer ledgers, taking into account the amounts directly received in Electricity Revenue Office by Money Order and DD/Cheque. The lists will be reconciled with the list of the Revenue Cashier. The defaulter lists for slab system consumers/monthly Bills consumers shall be sent to Section Officers on the same day or next day by Electricity Revenue Office.

Drawal of Demand Abstract and Credit Reconciliation

Through demand posting need not be made against each consumers for the slab amount in the consumer ledger, the final abstract distribution-wise and category wise shall be drawn by the clerk for his seat in a separate register as now drawn from the column ledgers. The total demand for the slab amounts for the month shall be arrived with reference to fixed slab amounts noted in the consumer ledger. Based on the final abstract drawn by the clerks, the billing Superintendent shall have to draw a consolidated demand abstract for his section and in turn a final demand consolidation for Electricity Revenue Office as a whole shall be drawn for slab system consumers, Up to this stage, the total demand shall be inclusive of customer charges, At the stage of preparation of consolidated journal entry, the customer charges shall be separately computed based on number of consumers at the prescribe rate for domestic, non domestic and other categories and the balance amount be reckoned as sale of power

Accounting and Maintenance of Financial Ledgers:

The financial ledgers will be maintained in the E R.O. for billing suspense, Security Deposit and Miscellaneous Revenue, and bank-wise remittances.

Distribution-wise and taluk-wise/Mandal-wise financial ledgers are to be maintained under billing suspense and security Deposit. The financial ledgers have to be posted directly from the cash book (P.C B) giving contra entries in financial ledgers and cash book vice-versa. Thus the total amount of collections of the E.R.O. will be featured in the financial ledger.

Credit Reconciliation
The totals of all the financial ledgers will have to be tallied with the total receipts of the cash book. The figures of financial ledgers will be checked and reconciled by each Clerk to ensure that the distribution credits arrived at from his' ledgers are correct. The financial ledger-should contain the opening balance, the monthly demand raised during that month and the collection made during the month against the opening balance and demand of the month; Thus, the closing balance against each distribution for the month will represent the arrears due from the consumers for the Board. An abstract is also to be maintained in the financial ledger indicating distribution-wise O.B. Debit, Credit and C.B. Such reconciliation Is also to be made in respect of security deposit register maintained by each Billing Superintendent with the Security Deposit financial ledger maintained in the General ledger. Thus, the maintenance of financial ledger in the E.R.O. is an important item of work should be entrusted review by an Accountant /A.A.O. The balance shown in the monthly/quarterly return of D.C.B. should tally with the closing balance financial ledger to depict correct position of E.R.O.

Disconnected Services
When the services are under disconnection, the charges during disconnection period shall be corresponding to the first slab amount in respect of domestic and non-domestic and fixed charges and customer charges in respect of Agricultural category. The period of disconnection of completed months only shall be taken into account for the above purpose and if the supply is under disconnection for a portion of the month will not be treated as under disconnection for purpose of calculation as above. This shall be calculated in E.R.O. at the time of preparation of adjustment bills. The Revenue Cashier / Private Agency shall have to collect as per cards slab amounts only.

Review of Additional Consumption Deposits

The review of additional consumption deposit shall be done as usual every year. The review of non-domestic category shall have to be done by Ledger Clerk. The review of additional consumption deposit in respect of domestic category above Rs.500/- (as per recent amendment) shall have to be done by Billing Superintendent. Interest on Consumption Deposit

The interest on consumption deposits shall be allowed in adjustment bill only. Several innovative procedures are being implemented in the Revenue Billing and Collection by various Utilities.

Chapter -8
A) FINANCIAL ACCOUNTANCY AND BUDGETARY CONTROL

General Accountancy 1. Since the money transactions have come into vogue in the World, in the place of barter system, literate people have been trying to maintain their accounts for the receipt of money and its spending in one fashion or other in their own way. In such a process, one formal system that evolved a Single Entry of Accounting. Single Entry System of Book- Keeping: Single Entry is a crude form of Book-keeping under which only Personal Accounts and a Cash Account are maintained, and only aspect of each transaction as it effects the Personal Accounts is recorded. The original records such as the Cash Book, the Purchase Book, the Sale Book, and the Return Books and even the Bill Books are sometimes maintained, but the postings there from are only made to the Personal Accounts concerned. 2. The only information that can thus be secured from the Ledger kept under Single entry would be in relation to Debtors and Creditors, i.e., how much is due to the trader from his customers and how much he owes to his creditors, In the absence of any Impersonal Accounts being kept, the books fail to disclose information for the preparation of a Profit and Loss Account, or particulars of Assets and Liabilities for the preparation of a Balance Sheet. Evidently, therefore this from of BookKeeping is of very limited value, and is seldom found in use in any concern of importance. Elements of Double- Entry book keeping: Definition: Book- Keeping is the art of recording business dealings in a set of books. Objects of Book- keeping: The primary object of Book-keeping is to enable a person ascertain accurately and with as little trouble as possible: i. The amount he has gained or lost in the business during a given period; and ii. The amount of his Assets, Liabilities and Capital in the business on any particular date.

In addition to the above information, however, a dealer would naturally like that his book should also show the following particulars. iii. How the amount he has gained or lost is made up. iv. What amount is owing to him by each of his customers or debtors; and v. What amount is owing by him to each of his creditors. vi. What is his liability for payment of taxes to Government. vii. How his business stands in comparison to other similar business. This information can only be derived if an accurate and completed record is kept of all business transactions. Double- Entry Book- Keeping 3. Double- Entry is the only system of Book- keeping by the employment of which all the above objects can be achieved, and it is to the elementary study of this system. It is this system of book-keeping that enable the trader to obtain a permanent record of his dealings with those with whom he transacts at any given date. It further helps him to ascertain whether the result of his transactions has been profitable or otherwise, and what his exact financial position is at any time. It is both simple, and universal in its application. It may be applied with equal success to ones own domestic accounts, to the varied and voluminous transactions, of the largest business enterprises, as also to the vast records of the National Exchequer. Explanation of Terms: 4. Before proceeding further, it is desirable that the reader should study the exact significance of the following terms which are constantly used in this work. Debtor Dr. is an Creditor creditor. : : A person who owes something is called a Debtor. abbreviation of Debtor. A person to whom something is owing is called a Cr is an abbreviations of creditor.

Thus if A owes B Rs. 10/-, A is Bs Debtor and B is As Creditor. Accounts affecting one gains or losses. : An account is a summarized record to transaction person, one kind of property or one class of

Personal Accounts: Accounts recording transaction with persons or Firms are known as personal Accounts. Accounts recording transaction which do not affect particular persons but affect business in general, are known as Impersonal Accounts. Impersonal Accounts may be ether Real Accounts or Nominal Accounts.

Real Accounts: Real Accounts are accounts of property or possessions, e.g., Goods Accounts, Cash Accounts, Bank Accounts, Office Furniture Accounts etc.

Nominal or Fictitious Accounts: : Record of expenses, gains or losses e.g., Rent Account, Salaries Accounts, Advertisement Account etc. Debit and Credit: In Book-keeping the receiver of any benefit is termed a debtor and is debited, whereas the giver of any benefit is termed as a Creditor and is Credited. To Debit an Account means to enter a transaction on the Debit or lefthand side of the account. To Credit an account means to enter a transaction on the Credit or right- hand side of that account. Goods : The terms Goods is used in general sense to include all merchandise, commodities or wares in which trader deals. On Credit: To purchase or sell goods on credit, means receive the goods or part with them without any payment of cash at the time. In case of Credit Purchases and Sales, delivery of goods is first made, and the payment is made after the expiry of an agreed period. In case of Cash Purchases and Sales, payment is made on delivery of goods. Assets are Properties: Of every description belonging to a person, such as, good, cash, furniture, etc. and includes all sums of money owing to him. Liabilities: Are the debts owing by a person Capital: Is the excess of assets over liabilities. In other words, Capital is the amount of a persons assets remaining after providing for the discharge of his liabilities. (If for example, a persons Assets amount to Rs. 10,000/- and his liabilities to Rs.4000/- his Capital is Rs. 10,000/- less Rs.4,000/-ie.,Rs.6,000/-) Therefore Capital+ Liabilities= Assets.

Solvent : or equal his Insolvent Assets. :

A person is said to be Solvent when his Assets exceed Liabilities. A person is Insolvent when his Liabilities exceed his

First Principles of Double- Entry: 5. As has been said before, Book- keeping consist in writhing up Accounts in a set of books and Accounts are records of facts relating to business transaction. Now there cannot be a business transaction unless there are two parties to it. Further , a transaction might either mean the receipt of a benefit in shape of money, goods or services, or the giving of such benefit. In order, therefore, to clearly indicate whether any particular transaction has resulted in the receipt of benefit or the giving of the benefit it has found necessary to divide each account into two sections. One section (the left-hand side) of account is thus utilized for the recording of transaction in respect of which benefit has been received by that account, and other section (the right-hand side) for recording transactions in respect of which benefit has been imparted by that accounts. In this way, the total benefit received and imparted by each account may be readily perceived by looking at both the sides of the account and the ultimate position it has parted with or vice versa, may easily be ascertained by adding up each side and striking a balance. Another important point to be borne in mind, at this stage, is that the following facts are common in practically every business. i. That there must be a number of persons, firms or companies with whom the trader had to deal. ii. That the trader must also have some goods, cash, furniture and other assets or possessions in which or with the help or which may carry on the business; and iii. That certain expenses, such as rent wages, salaries advertising etc., must necessarily be incurred in course of carrying on the business and that there must be certain sources from which the income of the business is derived. Double Entry: 6. In order to decide which account is to be debited and which credited for the purposes of recording any particular transaction, the first important point is to see which class of accounts are affected by that transaction. Having ascertained that, the following rules of debit and credit will have to be followed. i. Personal Accounts: These accounts record a traders dealing with other persons, firms or companies. A separate account is kept of each such person, firm or company from whom goods may have been purchased or to whom goods may have been sold on credit, so that the amount owing to and by the trader can be readily ascertained at any time.

On the debit side of each Personal Account are recorded the transactions in respect of which the person becomes the debtor and on the credit, those in respect of which he becomes the creditor. In other words, the account of each person, firm or company is debited with any benefit such person or firm receives and is credited with any benefit such firm or person imparts.

Dr Cr

NAME OF PERSON, FIRM OR COMPANY AMOUNT Date Particular of benefits

Date Particulars of benefits AMOUNT

Rs.

Receive by the person Rs. Ps Ps.

Imparted by the person

ii. Property of Real Accounts : These accounts record dealing in or with property, assets or possessions, separate account is kept for each class of property, such as cash, stock, plant machinery, furniture, etc., so that recording therein particulars of each such assets received or given away, the away, the trader can ascertain the value of the assets on hand on any particular date. When any assets is received, the amount, the amount is entered on the debit side (left-hand side) of that asset account, and on the asset being given away. That asset account is credited. Dr. Cr NAME OF ASSET Amount Rs. Ps Rs. Ps iii. Nominal or Fictitious Accounts: These accounts of traders expenses or gains. A separate account is opened for each head of expenditure or income, such as, rent, salaries, wages, printing, stationary, cartage, interest, discount, commission, etc., So that the trader can see the amount expended, lost or gained under each heading. Each such account is debited when an expenses or a loss is incurred and is credited when there is any gain. Dr. NAME OF ASSET Cr. Date Particular of outgoings

Date Particular of Incomings Amount

Date Particular of amounts Amount Expended or lost Rs. Ps

Amount Rs. Ps

Date Particular

of

amounts

Gained

Rules for Debit and Credit: 7. The above rules of debit and credit in regard to the three classes of account may thus be summarized. -Personal Accounts : Debit the receiver and Credit the giver -Asset or Real Accounts : Debit what comes in, and credit what goes out. -Nominal or Fictitious Accounts : Debit expenses and losses and credit gains Paid Landlord, Office rent Rs. 150.00 The two Account affected in this case are Rent Account and Cash Account. The twofold effect of his transaction is that an expense under the heading of Rent has been incurred and Cash has been paid out to meet the liability. Therefore, Rent Account will be debited and Case Account credited. Summary: 8. As this Chapter is of very great importance, it may not be out of place to briefly re-state the subject-matter herein, as under. 1. Book- keeping is the art of recording transactions in money or moneys worth. 2. Its object is to show the trader: a) How much his customers owe him. b) What he owes to other people. c) What profit or loss he makes in the business. d) What capital he has in his business, and what assets and liabilities makes up such capital. e) Comparison of his business with other similar business. i. Every business Transaction has a two- fold aspect. ii. In making a complete record of any business transaction, one account will have to be credited. iii. Double-Entry is the only scientific system of Book-keeping, as it records the double or two-fold effect of every transaction. iv. For a proper record of all business transaction accounts are classified into (a) Personal Accounts, (b) Real Accounts and (c) Nominal Accounts. Subsidiary Records and the Ledger:

It must be made clear, at this stage, that although all transactions find their ultimate place in shape Accounts in a book called the Ledger, which is the Chief Book of Accounts, they are entered first in some other books which are know as Books of Original Entry and are subsequently transferred from such books to their respective Ledger Accounts. The Books of Original entry are called Subsidiary Books and the transferring of the entries from the Subsidiary Books into the Ledger is termed Posting. It should be noted that the Subsidiary Books as also the Ledger have each distinct object to fulfill. Thus whereas the Subsidiary Books are used for the purpose of maintaining a continuous record of transactions in regular order of dates, the ledger serves to maintain a classified record of these transactions with each individual or in any particular commodity, or transactions relating to any particular head of expenditure or source of again, so as to facilitate reference when any information is needed in regard to any particular account. Journal is one of these Subsidiary Books, and we shall study its form and use in this Chapter. The Journal literally means Daily Record, and in former times all transactions used to be entered in this Book. Its use now is, however, restricted to record of certain transaction, as, in modern Bookkeeping, other subsidiary books have taken place of Journal. From the previous pages, one must have seen how it is possible to record any conceivable series of transactions through the two books the Journal and the Ledger. These are, no double, the main books in Double entry Bookkeeping even now, but ,if all business transactions were passed through the Journal, the Labour of recording each transaction with its separate narration in the Journal and then posting each such entry to two different accounts in the Ledger would be enormous in a business of any large dimensions necessarily involving a large number of transactions. Labour-saving methods have, therefore, been applied to the art of Book-keeping. Experience has shown that transactions in a trading or manufacturing concern consist mainly of: i. Receipts or Payments of Cash; and ii. Purchases or Sales of Goods; and it has been found that if transactions of a similar nature were recorded together, through some altered forms of the journal, a considerable amount of labour can be saved. We find, therefore, that in modern Book-Keeping the original Journal has superceded by subsidiary Journals, each used for recording a certain class of transactions. The following Subsidiary Journal have thus found their place in modern Bookkeeping. 1. The PURCHASES BOOK to record all Credit Purchases.

2. The SALES BOOK to record all Credit Sales. 3. The RETURNS INWARDS BOOK to record all goods returned to us by our customers. 4. The RETURNS OUTWARDS BOOK to record all goods returned by us to our suppliers. 5. The CASH BOOK to record all cash received and paid. 6. The BILLS RECEIVABLE BOOK to record all Bills received duly accepted by our debtors. 7. The BILLS PAYABLE BOOK to record all Bills granted by us to our Creditors. The original JOURNAL is now retained only for the purpose of recording transactions of an extraordinary nature which do not fall within any of the above sub-divisions. 7. Division of Accounts: The following Diagram shows the division of accounts in different classes: LEDGER ACCOUNTS

PERSONAL ACCOUNTS ACCOUNTS

IMPERSONAL

Real Accounts Nominal Accounts The Importance of Ledger: As has been already stated, the ledger is the chief book of Accounts, and it is in this book that all the business transactions would ultimately find their place under their respective accounts in a duly classified form. This process of transactions which have been previously recorded in the Journal into the appropriate accounts in the ledger is called Positing. The debit aspects of the transactions as entered in the debit column of the Journal are posted to the debit side of the Ledger Accounts concerned, whilst the credit aspects are entered on the credit side. In posting the entries from the Journal, therefore, each item is entered into the Ledger, on the same side as it appears in the Journal, thus a debit amount in the Journal would become a debit amount in the Ledger and a credit amount in the Journal would become a credit amount in the ledger.

The importance of transferring all the entries from the Journal into the Ledger in a well- arranged and classified form needs to be thoroughly understood. Now one of the objects of Book-keeping is to ascertain, with the least amount of trouble, what is owing to a dealer by each of his customers, and what is owing by him to each his creditors, and it is clear that this cannot be readily done by recording the transactions in the Journal alone. For instance, if at different times, I sell goods on credit to A, and look at the Journal entries to what extent A is indebted to me, on any one particular date. In order to get this information, I must search through all the entries relating to goods sold to A, and thus ascertain the total value of the goods I have sold him. Then again, I must sort out entries relating to the various sums of money, I have received from him to find out the total amount paid by him. It is clear, therefore, that if this process is to be gone through in order to ascertain my position realized. Some other means of bringing together the entries referring it each person or firm must, therefore, be found. This is done by collecting and condensing in another book called ledger which so far stand dispersed through the Journal. This is why the Ledger becomes and indispensable book in Account- Keeping. What is Trail Balance: Since accounts are thus debited and credited with like accounts to give effect to the double aspect of every transaction, it follows that the total of the debit entries must equal in amounts the total of credit entries. It also follow as a corollary that the total debit balance must equal the total credit balances. This, however, would be irrespective of the number of accounts opened or the number of posting made When, therefore, all transactions for particular period have been duly entered in the books and properly posted, you will need to try whether you have correctly transferred all the entries from the Original Record into a Ledger. With this object in view, you will prepare a Trial Balance, i.e., a list of Balances debit or credit standing in the books of trader at any given date. The agreement of the Trail Balance provides a very useful check upon the Ledger postings. As a matter of fact, it provides two things, viz. 1. That both aspects of each transaction are recorded and 2. That the books are arithmetically accurate. Should the Trial Balance disagree, it reveals the presence of errors which must be found and rectified. How to prepare a Trial Balance: A Trial Balance is usually prepared on loose sheets ruled in a form similar to that of the Journal i.e., with debit and credit money columns side by side. Each

account is given a line, and the name of the account is written in the particular column. The date column is used for entering the folio or page of the Ledger on which account appears. The first money column is used for entering the total of, the debit side of each Ledger Account, and the second column for the total of the credit side of the account. If the books are correct, the Debit Total will equal the Credit Total. The power utilities maintain their accounts in Double Entry System of Accounting. The following important records are to be maintained in the utility. SUBSIDIARY RECORDS AND FINANCIAL LEDGER In the double entry system of book-keeping the books of original entry are. 1. Cash Book, 2. Stores ledgers (comprising of Requisitions, devolutions, S.R.Bs and S.I.Bs); 3. Journal book including purchase day book; 4. Centralised payments adjustment Journal; 5. Bills payable Journal; All expenditure on works is recorded month by month is any one of the ledgers. 1. Construction Operation ledger in cases of Capital works. 2. Operation and maintenance ledger in cases of works chargeable to revenue and working expenses. 3. Clearing account ledger in case of remittance, suspense, debit and deposit transactions. 4. Service connection cost ledger in the case of service connection works. 5. Deposit contribution works ledger for D.C. works. The construction account of capital works are separated in three main divisions. 1. Fixed capital accounts. 2. Clearing accounts. 3. Construction operation accounts. The accounts of utility are maintained under the Book-keeping principles. To suit the departmental accounting the following are the various subsidiary records of Books of original entry that are maintained in the department. Purchase Book To record all Purchase made credit The transactions are posted to the credit of and Individual suppliers accounts and the periodi

Cash Book

admitted for during month total of the F.D. posted to the debit of the sto account To record cash receipts and Transactions recorded on the debit side are payments posted to the credit of the ledger accounts. Transactions recorded on the credit side are posted to the debit of the ledger accounts. Red ink entries on the credit side (unpaid wages) are posted to the credit of the ledger account. To record all Transactions a) Requisitions: The transactions receipts and issues a) Requisitions: The transactions of issue are posted to the debit side of the ledger accounts. The total of the S.I.Bs (The total requisitions is credited to the stock account. b) Devolutions: The transactions of the receipts are posted to the credit of the ledger accounts. The total of the devolutions is debited to the stock accounts. All authorizations issued Debit the various ledger accounts individually for payment towards bills and credit the total amount of journal for the admitted, on the pay officer month of Centralise Journal payments adjustment account.

Stores Ledger(Requi sitions, devolutions receipts and issues

Centralised payment adjustment

Bills Payable All transactions relating to Debit the individual account credit the Journal the acceptance of Bills of progressive total to Bills Payable Adjustment Exchange Account. Journal To record all transactions of The posting are made as per the debit or credit transfers or adjustments not accounts numbers as indicated in the Journal to involving cash receipts or the debit or credit of the ledger accounts. payments and stock receipts or issues

Preparation of Trial Balance and Check Figures and Agreement of the Trial Balance: Posting are made in various financial ledgers from the various sources and trial balance will be prepared. The Central government in consultations with the Comptroller and Auditor General of India and the State Government have framed the Electricity (supply) and (Annual Accounts) Rules commonly known as Commercial Accounting System for the State Electricity Boards. This systems of Accounting is since being followed by the power utility(Viz. Electricity Boards/their successor utilities)

Financial Statements
-Balance Sheet (BS),Profit and Loss Account (P/L) and Cash flows
Understanding Balance Sheet
1. What is Balance Sheet?

Balance sheet is a financial statement showing assets on the right side (or bottom half of the balance sheet) and liabilities on the left (or top half of the balance sheet). A balance sheet provides an overview of a companies financial position at a given date. The function of the balance sheet is to show what the company owns and what it owes. It is one of the main documents that are legally required to be produced by the companies as part of their annual accounts. Equity+ Surplus+ Debt+ Liabilities= Fixed Assets+ Current Assets+ Other Assets

2.

Composition of Balance Sheet

a. Model- Balance Sheet of Bescom for 2003-04 SCH. Current Year 2003-04 No. Previous Year 2002-03

Sl. Particulars No. SOURCES OF FUNDS I

Share holders Funds Share capital Share Deposit Share Deposit Adjustment account Reserves and Surplus Loans Funds Secured Loans Unsecured Loans Other Funds Service Line and Security Deposit

1 1A 1B 2 3 4 5

500,000 2,059,151,353 (49,281,953) 1,285,477,690 3,310,689,866 104,759,535 3,295,847,090

500,000 2,059,151,353 12,607,834 567,046,143 2,672,657,145 113,114,980 2,639,305,330

3,415,449,401 8,620,832,820

2,785,772,125 7,677,162,484

TOTAL I II
APPLICATION FUND :Fixed Assets a) b) c) d) OF

15,332,129,31 1

13,102,239,939

Gross Block Less: Depreciation Net Block Capital work in progress Current Assets, Loans and Advances

6 7

13,617,123,654 6,031,309,316

7,585,814,338 451,047,005

12,789,741,724 5,276,877,742

7,512,863,982 534,502,281

a) Inventories, stores & spares b) Sundry Debtors c) Cash and Bank Balances d) Loans, Advances and Deposits e) Other Current Assets Total -2 Less: Current Liabilities & Provisions Significant Accounting Polices and Notes on Accounts TOTAL -II

8 9 10 11 12

434,725,983 14,253,315,110 332,536,662 147,240,968 4,619,893,954 19,787,712,677

523,769,133 9,385,454,524 628,346,551 107,638,665 1,679,308,356 12,324,517,229 7,295,267,968 7,269,643,553 5,054,873,676

13 24

12,492,444,709

15,332,129,311

13,102,239,939

3.

Statutory overview requirement of the Companies Act, 1956 Sec 209 proper books of account to be maintained Sec 211 every Balance sheet to conform to the accounting standings issued ( as per given in the accounting standards Sec 212- Details of subsidiaries to be provided Part I of Schedule VI form of presentation of Balance sheet and its contents. Horizontal or Vertical formats Description of items to be included under each subhead and their discloses. Notes assisting in interpretation and disclosure. Statutory overview Accounting Standards Treatment and disclosure under various heads - Assets Fixed Assets As 10 (Accounting for fixed assets), As 11 (Accounting for the effects of change in foreign exchange rates), As 16 (Borrowing costs), As 19 (Leases) Investment As 13 (Accounting for investments) Current assets : Inventories AS (Valuation of inventories) Others Deferred taxation AS 22 ( Accounting for taxes on income) - Liabilities Share capital Reserves & surplus Long term debt Deposits from Consumers Current Liabilities Consumers contribution towards capital assets AS 10, AS 12 Retirement benefits to employees AS 15

4.

o Notes to include AS 1 (disclosure of detailed accounting policies), AS 4 (contingencies and events after balance sheet) 5. Statutory overview License clauses Generally accepted accounting principles to be approved and used Voltage wise classification of all Balance sheet items may become mandatory - especially, in view of setting costs across different voltages to allow Open Access Disclosure to follow Accounting Standards Business segment wise reporting encouraged/ to be mandatory AS 17 Accounting for de- mergers AS 14 ( Purchase method) Capex above certain limit to be approved by ERC Alienation of assets above certain limit to be approved by ERC Fixed Assets Generally consists of o Gross fixed assets put to use o Accumulated Depreciation on the above o Capital work in progress Expenditure is booked in CWIP as and when incurred materials, contract labour or payment for turnkey contracts . Every year overheads, if specifically identifiable for projects, like the following are capitalized: o Interest during construction o Employee costs o Administrative over heads are transferred from expense accounts to capital work in progress accounts On completion of assets, expenditure transferred from Capital work in progress to Asset group. Assets put to use are recorded in Fixed assets register along with other particulars such as date on which put to use, residual value estimate, useful life, rate of depreciation to be followed, additions deletions to the asset value etc. Common Issue o Works register generally not maintained in many SEBs o Pre- 1985 asset classification almost impossible in many SEBs o Post 1985- assets completion certificate not properly issued. o Assets capitalized in the financial record in an arbitrary fashion. o Current situation, wherein theres no physical and financial reconciliation.

6.

o Corporatization couldnt handle this situation o Invitation of private players would create chaos (especially if theres dispute on the value of each asset) o Audit qualification under CARO (erstwhile MACARO) is inevitable. o Consumers contribution to capital assets- been consistently not treated as recommended by AS 12 or AS 10. The balance as on- date, can be should be treated as free reserve for either Bonus shares or as part of Equity. o Accounting policy to be modified by companies for future treatment o ERCs are beginning to request for Voltage wise classification of assets, to understand the cost-to-serve model better o ESAAR suggests for depreciation in the year subsequent to the year in allow it (Is there rationale to do so?) o Better to deactivate account codes relating to Generation, Transmission in a Discoms chart of accounts. Importance of this blocs in the Balance sheet o Under Schedule VI (of the Electricity (Supply) Act, 1948) rate of return, net block forms the base for calculation of return, Commission or consumers can raise serious objections, if proper accounting records are not available o Even, if Schedule VI rate approach is not taken, the net asset value is the equity owners block and hence the correct value is critical for calculating the return to company. 7. Investments Investments in subsidiaries, fixed deposits, shares, bonds etc o Investment in subsidiaries and associates would require consolidation of accounts as per Accounting Standard Classification according to Schedule VI to Companies Act needed (quoted, unquoted under trade or others) Market value to be ascertained for commenting on the permanent diminution in value ,if any. Investments for contingency reserve as per Schedule VI of E(S) Act- based on the Cost= tariff, an allowance is made in tariff and the same is to be invested (failing which the tariff will be deescalated to that extent)- which could be replaced. Issues o Evaluation of quoted securities and their fair market values Current Assets- Stories, Spares etc. Relates to various stores, spares, tools that are held in inventory Capital stores ( insurance spares) should be identified separately Issues

8.

o Stores issue etc to be valued strictly according to AS 2 (FIFO or weighted average method) o Closing inventory needs to be valued as per AS 2 o Physical verification of year end or continuous verification processes to be introduced o Slow moving or obsolete stores to be identified and written off o Materials at- site to be accounted separately o Existing ESAAR rules to be continued, however, the year end reconciliation to historic accounting is crucial- some SEBs carry this differences in Reserves- usually corrected at the time of corporatization o One of the major culprits in the inter-unit- account (IUA) balances- needs an good IT software to eliminate this issue o Outstanding IUAs should be swept away in the corporatization restructuring activities? o Cost accounting rules requires classification of capital spares between< 12 months and > 12 months o Obsolete / damage / unserviceable spares to be identified and written off. 9. Current Assets- Assets- Receivables against supply of power On sale of power (including unbilled estimates), utility has a right to receive monies from consumers Sections/ Divisions raise bills on consumers and collects the same Individual consumer ledgers are maintained in sections/ divisions and the control account ( summation of these) maintained at divisional level Demand Collection Balance is prepared on the consumer category wise basis for Management control purposes Issues o One of the major problems in the sector no authoritative accounting of exact status of receivables o Weak systems in creation of consumer accounts o Subsidiary ledgers have, Trial Balances carry out global accounting of DCB o Second largest asset block in the Balance sheet- in some places can equal the fixed assets block o Financed in myriad ways- default to suppliers, lenders, government, retaining of electricity duty etc. o Can release more cash in the system, than tariff hikes o Delayed payment surcharges- one of the components, that increase the receivable with low probability of collections o Evaluation of past receivables show large provisioning requirements (in some cases as close as 75% to 100%)

10.

Current Assets Cash and Bank Balance Cash balance- physical cash handled Bank balances o Remittance account- which can be remitted into only. Balance are swept periodically to Head office o Disbursement account from which payments are made o In transit accounts to account to account for cheques in transit Issues o Floats- money deposited into bank account and not yet utilized for payment or investment is yet to managed buy many SECsopportunity cost/gain o Reconciliation of cash collected and deposited yet to be strengthened o Introduction of Billing & collection agents/ franchisees need for control and monitoring o Escrow account & monitoring how to record the same in accounts management control systems.

11. Current Assets Others Advances to suppliers Advances to contractors Loans and advances to employees Tax deducted at source on payments Loans to subsidiaries Other sundry debtors Subsides receivable ( another major category) Deposits Issues o Advances- reconciliation of subsidiary ledger to control accounts o Inter- unit accounts on transfers of cash, materials, assets, othersassumes gargantuan proportions- accounts are unable to treat the balances, since there could be large compensating credits and debits leading to confusion. Some of the states have attempted to analyses transaction with a cut-off and treat the balance as reduction/ increase of values under natural head. Software or systems needed to resolve this on urgent basis. 12. Current Liabilities- Others Liabilities to suppliers Liabilities to Staff Other Liabilities (deposits, EMDs, interest accrued but not due, tax deducted at source on income earned etc.) Issues o Liabilities for suppliers materials awaiting clearance liability created on basis of past bills? (Should be created only

on title rights passing to buyer and not before. If the title rights have been assumed, then the rate should be on the basis of Purchase Order) o As per Schedule VI to the Companies Act, need to create classification of dues to small scale units and others. 13. Current Liabilities- Power Purchase Currently only to Transco which is also single buyer ( Position will change with assignment/ vesting of PPAs to Discoms since Transco no longer handle the trading activity) May be split into individual generators- should states follow assignment of individual PPAs to discoms Need to be managed within the payment terms- failure can invite penalties including invocation of Escrows, curtailment of power Issues o Cash flow availability single buyer had the luxury of mixed pool from all discoms. o Will default by one discom to NTPC, curtail power for the entire state or to a discom area alone. o Similarly, on assignment of PPA on %basis, will default of one discom invite invoking of escrow on all discoms o Will state generation continue to be treated as Banker by all Discoms

14. Current Liabilities - Borrowings All short terms loans (payable within 12 months), overdrafts for working capital etc must be classified here All capital liabilities amount payable within one year, will also be classified here (international practice) As far as possible distinct classification to be made Issues o Regulatory treatment of interest on liabilities 15. Consumer Security Deposits Calculated as per ERC regulations usually 2 or 3 months of minimum demand ( MMD) is collectable from consumers Distinction is made for collection of cash and non-cash deposits (guarantees etc) Issues o Reconciliation of individual balance with control account o Periodical evaluation of consumption so that higher amount can be collected from consumers o Many ERCs have ordered utilities to pay interest (is there any arbitrage to collect higher MMD) o Balances of consumers who have left the grid/ disconnected/ discontinued whether their balances have been properly adjusted? o Not to be confused with the amount given by consumer for creation of asset- which is treated separately 16. Long term liabilities ( capital liabilities) Loan taken for more than a year are classified under this head Loans from each source is to be identified clearly including Bonds, debenture etc., Loans to be classified as Secured or Unsecured Loans from state government to be classified separately o Issues Interest accrued and due are to be shown along with the major head

17. Reserves and Surplus Reserves & Surplus o Appropriated from profits contingency reserve, redemption reserve etc. o Specific cash received share premium, redemption of debentures/ bonds etc o Accounting (non- cash) revaluation reserve

Tariff and dividend control reserve - special appropriation of revenues by regulator without reducing tariffs - effect to smoothen out cyclical trends for operators Surplus - post-appropriation profits issues o Forex variance reserve, material variance reserve etc - should be settled within the accounting period, since standard rates may be used within the period o Proper classification and accounting would be required - for eg. Certain reserve would require statutory investments - contingency reserve and accounts should be able to monitor the same o Schedule Vl of the Companies Act has clear definitions to be followed and this would b important once the companies start declaring dividend or issue bonus shares etc o Classification would also be important to use certain reserves - Eg set off against share premium or a capital reserve

17. Share Capital o This is the shares issued to shareholders for the consideration paid by them o Usually issued as Equity but other type of instruments available o Returned last to the shareholder after repaying all the monies to other lenders, creditors Profit and loss account 1. What is profit and loss account? It is a financial statement in which the profit or loss made by a business organization during a defined period of time is shown. Its fundamental concepts are to recognize and account all the income and expense during the period in question. It is a legal document which must be produced periodically in the form required under the Companies Act 1956 Income + Subsidy - Expenses = Profit or Loss

2. Composition of profit and loss account a) P&L account of Bescom for the year 2003-04
Sl.No I Particulars -INCOME 1. Revenue from sale of power 2. Rural Electrification Subsidy-GoK 3. Other Income SCH .No 14 Current year 2003-04 Previous year 2002-03

32,424,670,349 1,885,076,460 228,633,993

23,535,024,628 3,156,451,760 210,621,425 34,538,380,802 22,076,703,846 894,000,000 285,857,786 2,023,931,126 219,265,444 142,3666,567 33,030,543,601 26,902,097,813

II

TOTAL

15

III

IV

VI

VII

VIII IX

-EXPENDITURE 1. Purchase of power-KPTCL 2. Provision for increase in power purchase(share) 3. Repairs and Maintenance 4. Employee costs 5. Administrative and Other Expenses 6. Other Charges(Debits) 7. Total Less : Expenses capitalized -PROFIT BEFORE DEPRECIATION AND INTEREST Depreciation(net) -PROFIT BEFORE INTEREST AND TAXES Interest and other Charges -PROFIT BEFORE PRIOR PERIOD CHARGES OR CREDITS Prior period charges(+)credits(-) -PROFIT BEFORE RESERVE & TAXATION Reserve for contingencies Profit before Taxation Reserve for Contingencies -PROFIT BEFORE TAXATION Provision for Taxation -PROFIT AFTER TAXATION -BALANCE OF PROFIT BROUGHT OVER FROM PREVIOUS BALANCE CARRIED TO BALANCE SHEET APPROPRIATIONS Balance surplus carried to Balance sheet Significant Accounting policies ant notes on

16 16 17 18 19 20

29,806,423,742 -312,734,988 2,487,500,324 269,578,182 154,306,365

25,642,124,769 1,259,973,044

1,507,837,201 21 943,533,416

7,12,823,204
547,689,840

564,303,785

318,472,214
22 340,961063 223,342,722 229,217,626

23

8,631,658 214,711,064 --214,711,064,

---31,974,354 18,00,000
229,217,626 197,243,272

87,070,000 179,243,272

127,641,064

___

179,243,272 179,243,272 179,243,272

306,884,336 306,884,336

VIII

IX

Source: Bescom Annual Accounts 2003-04 3. Statutory overview - requirement under the Companies Act, 1956 section 209 - Maintenance of proper books of accounts Section 211 - Every P&L to conform with the accounting standards issued

Section 212 - Details of subsidiaries & its treatment Part I I of Schedule Vl o Vertical formats o Aggregate amount of sales by company, with each class separately, volume of each class sold o Notes to guide preparation and disclosure Electricity duty to be shown separately Major items of expenditure to be shown separately- power, rent,repairs to buildings, insurance, salaries and wages (with sub grouping of salaries and wages, contribution to PF and other funds, workmen and staff welfare), taxes, miscellaneous expenses Depreciation, interest payments, dividends to be shown appropriately Payments to auditors, Managerial remuneration shown separately Income tax provision, appropriations to various heads 4. Statutory overview - Accounting Standards Treatment and disclosure under various heads o income - By category AS 9 (Revenue recognition) o Subsidy accounting - AS 12 (Accounting for Government grants) Expenses o o o o o o o o o o o AS 4 Contingencies AS 6 Depreciation AS 8 R&D AS 1 1 Forex variation AS 1 5 Retirement benefits AS 1 6 Borrowing costs AS 19 Leases AS 22 Taxes Notes to include AS 1 Detailed accounting policies), AS 17 Segment wise reporting, AS 21 Consolidation of financial statements

5. Statutory overview- License clauses

Generally accepted accounting principles to be approved and used. o Voltage wise classification of all income and expenditure may become mandatory - especially, in view of setting costs across different voltages to allow Open Access o Disclosure to follow Accounting Standards o Business segment wise reporting encouraged/ to be mandatory AS 17 o Borrowing costs - careful disclosure to avoid disentitlement 6. Income- Revenue from sale of power Category wise sale of power (both billed and unbilled) Other tariff related charges - power factor, fixed demand charges, consumer charges etc Electricity duty (state government levy, miscellaneous income (meter hire) Issues: o Billing efficiency- raising of bills on all those liable to pay o Acceptable bill - without billing errors o Raising of fuel surcharge, wherever applicable o Period of bill raising and submission for payment o Reduction of commercial losses - convertibility to billing 7. Income - Subsidy and Others Subsidy - Receivable from State Government on the basis as fixed by Commission and for other policy directives Grants from other statutory bodies/ governments Incentives under special schemes like APRDP interest & other income, delayed payment surcharge (caveat is ability to collect) Issues o Booking of subsidies - timing of receipt, since this would affect cash flows

o Calculation, justification to ensure that subsidy bridges the gap in service to those consumers for whom its paid - not a mere gap filling between revenue and expenses 8. Expenses - Power purchase Currently, payable to single buyer (Transco or SEB) May be payable to individual generators in future, on full allocation of PPAs to Discoms Includes fuel surcharge payable Excludes discounts received/ penalties levied on early/ late Payments (to be accounted separately) Issues o Fuel surcharge is a pass through (on orders of ERC) and needs to be tracked independently o Mix of power purchase and hence need to be passed on to consumers as power purchase mix adjustment (part of fuel adjustment) o In MYT, disallowance on inefficiencies of operation (not competitively procured, higher loss than allowed - draft NTP currently proposes that all power purchase costs should be pass through) 9. Expenses - Major heads Salaries and Wages - includes temporary/ contract labour Repairs and Maintenance - to network, vehicles, buildings etc Administration and general expense - rent, insurance, telecom, travelling, training, license fee etc Expenses capitalized should be shown as a reduction in a distinct fashion Issues o Ensure that the employee cost includes retirement benefit charge on actuarial valuation Capitalisation of employee expenses - proper records to justify such capitalization o Capitalisation of Admin expenses - proper records to justify inclusion o In MYT regime (as per draft NTP), expenses could be benchmarked and may be disallowed for inefficiency 10. Expenses - Depreciation Depreciation of all assets used in a year to be charged Disclosure of various groups - network, buildings, leases etc Assets written-off Issues o Unlike ESMR, depreciation should be charged as per AS 6 on all assets used in a year (matching principle) o Voltage wise classification may be required in future 10. Expenses Interest and borrowing costs:Interest on all long term and short term liabilities booked here Individual details to be presented

o Various categories and classes o Lease charges should be distinctly displayed AS 19 Guarantee charges, premium / discount on loans raised should be separately disclosed Issues o Interest on loans not approved by regulator may be disallowed o Interest capitalization follows Balance of Net Assets Method. More appropriate would be to identify specific loans for specific purposes for example in AP, Balance Net Assets Method is followed, whereas in Karnataka IDC on specific loans are debited to specific projects. 11. Expenses Tax Companies should calculate as per AS 22 and provide for income tax In view of government providing subsidy, there could be profit as per income tax calculation. Timing difference should be calculated and tax provisioning calculated issues. o IT may disallow expenses, in view of regulatory orders (especially power purchase) o Tax provision should also take into tax deferral and suitable tax planning to be carried out 12. Others Prior and Extraordinary Items: As 4 would require separate treatment for infrequent prior period and extraordinary items Disclosure requirements as set out in the Accounting Standards Issues o SEBs were, over years, treating errors in accounting estimates as prior period charges o These are not so and should be accounted under natural heads.

Cash Flows: 1. What is a Cash Flow Statement? Business organizations carry on their activities to earn profit. Yet, no business entity can rest contended unless such profits are, periodically and ultimately are converted in to cash. Financial Statements are prepared on accrual basis and therefore do not throw light on cash management by the Company. A cash flow statement provides a summary of cash receipts and cash payments, and displays a reconciliation of the opening and closing balances in cash payments, and displays a reconciliation of the opening and closing balances in cash with the cash flows that occurred during the period. Cash flows are inflows and outflows of cash and cash equivalents. A cash flow statement (CFS) covers an accounting period.

Sources

Application Investment

Operation Finances Investments

WorkingCapital Cash

2. Composition of Balance Sheet b) Cash Flow Statement of BESCOM CASHFLOWSTATEMENTFORTHEPERIODENDED31stMARCH2004

in Rs Amount

Particulars
A Cash Flow from Operating Activities Net Profit before Tax Adjustment for: Depreciation Interest & Other Charges Interest Income on Investment Contingency Reserve Other Income Prior period charges (+) or credits (-) Income Tax Operating Profit before Working Capital Changes Adjustment for Changes in Inventories Changes in Sundry Debtors Changes in Loans and Advances Changes in Other Current Assets Changes in Current Liabilities Changes in Provisions Operating Profit after Working Capital Changes Prior period charges (+) or credits (-)
Extraordinary items Contributions from Consumers

Current Year 2003 2004

214,711,064 943,533,416 340,961,063 (228,633,993) 8,631,658 (87,070,000) 1,192,133,207

Previous Year 2002 - 2003

197,243,272 712,283,204 318,472,214 31,974,354 (210,621,425) (18,000,000) 1,031,351,619

89,043,150 (4,867,860,586) (36,602,303) (2,940,585,598) 5,185,186,633 37,614,523 (1,344,070,973) (8,631,658) 590,790,483 (761,912,148) (1,016,483,772) 83,455,276 (933,028,496)

(523,769,133) (9,385,454,524) (107,638,665) (1,679,308,356) 7,101,939,000 167,704,553 (3,395,175,506)

355,828,517 (3,039,346,989) (8,225,147,186) (534,502,281) (3,039,346,989) 2,072,259,187

Net Cash inflow from Operating Activities B Cash Flow Investment Activities Changes in Fixed Assets (Net) Changes in Capital Work in Progress Net Cash Outflow from Investment Activities C Cash Flow from Financing Activities Changes in Capital / Share Deposit Account Changes in Secured Loans Changes in Unsecured Loans Service Line and Security Deposit Interest & Other Charges Other Income Net Cash available from Financing Activities D Net Change in Cash and Cash equivalents Surplus Cash [(A)+(B)+(C)] Add: Opening Cash and Cash equivalents E Closing Cash and Cash equivalent as on 31.03.2003 Source : BESCOM Annual Accounts 2003 - 04

638,032,721 (8,355,445) 943,670,336 (340,961063) 228,633,993 1,461,020,542 (233,920,102) 628,346,551 394,426,449 332,536,662

2,672,657,145 113,114,980 7,677,162,484 (318,472,214) 210,621,425 12,427,343,007 628,346,551 628,346,551 628,346,551

3. Statutory overview- Companies Act - Not forming part of the requirements in Schedule VI

- Sec 211- reference to the compliance of AW and hence the following of AS 3 for reporting 4. Statutory overview Accounting Standards Treatment and disclosure as per AS 3 - Operations o Refers to the revenue producing activities. Change in working capital is also part of the revenue producing activities o Depreciation, interest and dividend are added back o Taxes are se off under this head - Investments o Acquisition and disposal of long term assets including investments o Interest and dividend on investments are included here - Financing o Interest and loan repayments are shown under this head o Fresh borrowings are also shown under this head 5. Statutory overview License Clauses Cash flows are generally not required for filing with ERC Tariff orders generally ignore the collection efficiency (except in case of Delhi privatization MYT principle) MYT as proposed in NTP recognizes collection efficiency being less than 100% 6. Sources of Cash flow Operating activities Sources o Profit before Tax o Add: Depreciation, interest and any other non-cash charge o Less: Tax o Add/Deduct: working capital adjustments Opening balance of creditor (PP) closing balance of creditors (PP), suppliers and other current liabilities Difference is the Net flows from Operating Activities

7. Sources of Cash flow Investment activities o Sources o Net Value of asset sold (i.e. sale value less net book value) o Sale of investments (similar to above) o Income from investments dividend, interest o Receipt of loans and advances to third parties Applications o Capital expenditure o Investment made o Loans and advances to third parties Difference is the Net flows from investment activities 8. Sources of Cash flow Financing activities Sources o Fresh borrowings working capital, long term loans o Equity raised from shareholders o Consumer security deposits Applications o Loan repayments including working capital loans o Interest payments o Dividend to equity holders o Consumer security deposits Difference is the Net flows from Financing activities 9. Summary Net flow from Operating activities + or - Net flow from investment activities * Net flow from financing activities = Net increase/decrease to cash position Opening Cash position + or - Net increase/decrease = Closing cash position 10. Exclusions in AS 3 Transactions that do not require cash or cash equivalent need not be included in cash flow and can be disclosed elsewhere o Eg. Acquisition of a plant and machinery by issue of shares, debt-equity swap, issue of bonus shares Use of total movements in a resource of a company will reflect these changes also. Disclosure is needed, when the cash or cash equivalent held by an enterprise that is not available to it. o Eg. Cash balances of a branch or subsidiary that is legally prevented from repatriating it to the company

Annexure
Accounting standards applicable in India Accounting standard sets out the way in which accounting treatments should be carried out. These accounting standards are issued by the Institute of chartered accountants of India (ICAI) AS-1 AS-2 AS-3 AS-4 AS-5 AS-6 AS-9 AS-10 AS-11 AS-12 AS-13 AS-14 AS-15 AS-16 AS-17 AS-18 AS-19 AS-20 AS-21 AS-22 AS-23 Disclosure of accounting policies Valuation of Inventories Cash Flow Statement Contingencies and events after Balance sheet Prior period and Extra- ordinary item Depreciation Accounting Revenue Recognition Accounting for Fixed Assets Accounting for Effects in changes in Forex rates Accounting for Government Grants Accounting for Government Grants Accounting Amalgamation Accounting for Retirement benefits for employees Borrowing costs Segment Reporting Related party disclosure Accounting for leases Earning per share Consolidated Financial Statement Accounting for Taxes Consolidation of Investments in Associate Common abbreviations APDRPASAccelerated Power Development and Reform Programme Accounting Standard

BSCAROCERC-

Balance sheet Companies (Auditor Report) Order Central Electricity Regulatory Commission

Companies Act- The Companies Act, 1956, as amended from time to time CWIPE(S) ActEA 03ERCESAARFIFOITMACAROMISMMDMYTNTPNTPCP/L, P&LPFPPASEBSERCCapital Work-in-Progress Electricity (Supply) Act, 1948 Electricity Money Deposit Electricity Regulatory Commission Electricity Annual Accounting Rules, 1985 Rules,1985 First in First Out Income Tax Manufacturing and Companies (Auditor Report) Order Managerial Information System Months of Minimum Demand Multi year Tariffs National Tariff Policy National Thermal Power Corporation Ltd Profit and Loss account Provident fund Power Purchase Agreement State Electricity Board State Electricity Regulatory Commission

BANK RECONCILIATION RECEIPT ACCOUNT

A remittance register is maintained for recording the remittance made during the month into the various bank branches. At the end of the month, but before the closing of the monthly accounts, the total amount of the remittances made into the banks branch wise should be journalized as below: Head office (Bank remittance) account Debit To remittance into Bank (Branch- Wise) Credit

(Being the remittances made into the bank branches during the month and transferred to Head Office suspense account. The branch accounts of the bank will be debited with the amount of remittances advised and crediting to head office suspense account thus clearing the later account. The advice of credits in the branch offices of the bank is sent to Head Quarters by the main office of the bank. The total credits during the month of each branch should normally agree with the remittance intimated from the field, though the journal voucher. If however, there is a difference between the credits advised by the bank and the remittances intimated from the circle office , the same should feature in the bank reconciliation statement and rectification attended then and there. All receipts should be credited to the current account of the utility in the Bank. The receipts are remitted in various bank branches in the state, and the banks in turn will transfer the credits to the Main account at the Head Office Bank daily. The credits advised by the branches will also be intimated to the various offices. The total remittance made as par the cash book should agree with the statement of credits so transferred. The offices will furnish details of remittances made by them into banks in every 10 days in the printed proforma giving details of remittances, date of remittance, cash book voucher number, amount etc., to the concerned section at the headquarters. It should be ensured that all the remittance made in dishonoured cheques, necessary cancellation entries should be made in the cash book ( both debit and credit sides) Which should be deducted in the gross remittances furnished in the statement. The concerned accounts officers are responsible for the reconciliation of the remittances between the cash book and bank statements. 1. All the remittance made into the current account receipts and bill collection accounts are transferred by the branches of the bank to the head office main account. 2. Returns covering the above transactions from 1st to 10th, 11th and 21st to the last day of every month should be sent. 3. Returns should be furnished in the prescribed forms. 4. Separate returns shall be submitted for each branch account. 5. The returns have to be submitted in time so as to reach the Head Office not later than 4th day after the date upto which the return is to be made. 6. If there are no transactions in any particular period, a NIL return shall invariably be sent. 7. All returns relating to a particular branch account shall be consecutively numbered from one upwards for each financial year. 8. The returns shall be prepared by hand in ink legibly 9. On no account should any column be left blank unless it is a case of NIL return

10. If any cheque is dishonoured and the bank makes a debit entry for this reason, such debits should be separately shown in the space provide therefore in the form of the return. Such amounts should not be deducted from the days remittances on any day. 11. No covering letters are required to be sent. 12. All the returns should be sent to concerned section at Head quarters. 13. One Copy of the return should be retained in the office. GENERAL OMISSIONS IN THE BANK RECONCILIATION STATEMENTS AND CHECK SLIPS FURNISHED BY UNITS/ CIRCLES. i) The closing balances of previous year (i.e.) difference between remittance and acknowledgement and remittance and transfers are not correctly taken in the current return as Opening Balance of Various Branches/Banks. ii) The check slips indicating the transfer amounts in the scrolls are either not furnished or furnished incompletely. GENERAL MISTAKES NOTED IN THE PREPARATION OF CHECK SLIPS a) The Check slip format communicated by the office of the Financial Adviser and Chief Controller of Accounts is not strictly adopted by some of the circles and modifications are made at circle level. b) Transfer amounts in the scroll are not noted in the check slips against the correct date. c) d) The amounts in the scrolls are not correctly copied in the check slips. No distinction in respect of cash transfers and other debits noted in the withdrawal column of the scroll is made. Debit entries in the scroll on account of returned cheques and T.T. charges etc., (i.e.) other than actual cash transfers also are noted in column 2 of the check slip instead of column 3. e) Only one check slip is prepared for two accounts (i.e.) operative and non-operative accounts of a branch instead of 2 check slips separately for each account. f) Transfers during the month shown in the last Branch Scroll are not taken either in the last month or in the current month. g) Check slips are not authenticated by Asst. Accounts Officer / E.R.O and not countersigned by Senior Accounts Officer / Accounts Officer, Circle Office.

iii.

Branch scrolls are not furnished along with check-slips in respect of certain branches.

iv.

One branch scroll is obtained and furnished for two accounts (i.e.) operative and non-operative A/c, noting transactions on both sides of the Branch scroll.

v.

Statement and check slips are not properly scrutinized in Circle Office before furnishing to Headquarters.

vi.

Large

differences

between

the

balances

(i.e.)

remittance

and

acknowledgement and remittance and transfer are appearing without being analyzed and identifying the items for pursuance with Banks at ERO/Divisional/ Circle Office with the above item wise details. BRANCH SCROLLS The following are some of the defects noticed generally in the Branch Scrolls. i. Branch names are not noted nor rubber stamp indicating the name of the Branch, affixed on the scroll. ii. iii. iv. E.R.O/Division name is not noted on the scroll. Debiting of T.T./Bank charges at Branch level. Name of the bank head office to whom amounts are transferred are not indicated Branch scrolls. v. Wrong posting of debits/credits in one A/c. instead of another of utility. vi. vii. Totalling mistakes. Omission of incorporation of amounts remitted by the utility, in the scroll. viii. Omission of incorporation of certain items of transfer of amounts to Local Head Office in the withdrawal column of the scroll. MIS-MATCH IN COMPUTER: In the computer process individual items of amounts transferred by Branch to bank Head Office and credited by bank head office to the current Main A/c, of utility are automatically matched and paired off by the computer. In this process the following types of omissions etc., are creeping in and the Banks were required to follow the following instructions to avoid mistakes.

i.

Transfers made by the Branch on day to day basis, but shown in the Branch Scroll as lumpsum transfer at the end of the week or month. As this is resulting in mismatching of the limpsum amount indicated in the scroll as transferred and amounts transferred on day to day basis from the Branch and received as such at Bank Head Office amounts as and when transferred may be shown in the scroll as transfers to Bank Head Office instead of clubbing and exhibiting in the Branch scrolls.

ii.

Amounts shown in the Branch scrolls as transfer to Bank Head Office from the Branch where more than one A/c. is available, but one limp sum amount clubbing the item in the individual accounts is actually transferred to Local Head Office does not match with individual items of transfers as shown in the Branch Scroll may be indicated Account wise in the T.T./M.T. from the Branch and noted as such in Bank Head Office supporting statements furnished to utilities Headquarters daily.

iii.

Although individual amount from different accounts or of different dates are transferred by the Branch, while crediting the same to main current A/c of utility amounts are clubbed together by the B.H.O. and given as one lumpsum credit. This also results in mismatch of items of both Branch and B.H.O. Hence amounts as transferred from Branch may be given credit at B.H.O. without clubbing.

iv.

Although individual amounts are shown as transfers in the withdrawal column of the Branch Scroll, the amounts are actually transferred to B.H.O. Clubbing 3 or 4 items on the day. This results in mismatch of items in Branch and B.H.O. data. Hence amounts as shown in the

withdrawl column of the Branch scroll may be transferred on that day itself.

DRAWING ACCOUNT
Based on the letter of credit applications, the requirement of funds are placed by the Head Office in the drawing accounts of the various banks for the withdrawal and spending. As soon as the advice is received, the fact is recorded in the cash book against this amount. The cheques are drawn for payment. The balances in the drawing account also has to be reconciled periodically. The difference between the debit total and credit total of the cash book represent the balance in the drawing account. It must be ensured that the funds advised by the Headquarters are properly credited to the drawing accounts in the local banks. It must be ensured that the cheques issued are encashed and properly debited to the drawing accounts in the banks. A periodical return in the prescribed form will have to be sent. 1. The returns shall be made covering the remittance made from headquarters to the drawing account from 1st to 10th, 11th to 20th and 21st to the last day of every month. 2. The details to be shown shall refer to the remittances received from headquarters into the branches to the credit of the drawing account. 3. The returns should be sent in the prescribed forms supplied by Headquarters. 4. The returns should be submitted in time so as to reach the headquarters not later than the 4th day after the date upto which the return is to be made. 5. A NIL return should be sent if there are no transactions in any period. 6. All return relating to a particular branch account shall be consecutively numbered from one upwards for each financial year. 7. These returns should be prepared by hand in ink legible. 8. No column should be left blank unless it is a case of Nil return and in the portion intended to be filled up at Headquarters. 9. No covering letters are required. 10. One copy should be retained by the office. The receipts at Headquarters will comprise of i. ii. iii. Revenue Receipts. Receipts on account of deposits for service connections etc. Receipts on account of voluntary Loan collections.

iv. v.

Receipts on account of Rural Electrification corporation remittances: and Miscellaneous collections:

Out of the total amounts received the revenue receipts only are being compared and statement of upto-data receipts during the month are being put up to the Chief Controller of Accounts/Member (Accounts) comparing the same with reference to the actuals of previous months to know where is shortfall in receipts and to pull up the banking system of where there is no response in accounting and Mail Transfers / Telegraphic Transfers. The statement shown above shows the comprehensive position of the entire banks position daily for review by the Chief Controller of Accounts / Member (Accounts), wherever there is likelihood of getting over draft in the various banks inter-bank transfers are arranged by the section from the banks where cash is available to see that over draft is reduced or does not arise. The Cash required for meeting payments by the Divisional Engineers salary payments, remittances to Provided Fund, etc., are released by the headquarters daily as per the applications received by the Chief Controller of Accounts. The application for letter of credit issue up to the date of application and balance grant and the amount now required the details for the payment required, will be furnished by them. These are scrutinized by the section and after getting approval of the Deputy Chief Controller of Accounts. Cash is being arranged to be transferred. Daily transfer of cash balance will be based on the applications received from the field officers and there is no restriction in applying for cash by the field officers. For payment of salaries on every 1st the concerned drawing officers will submit the applications by 15th of previous month for payment of monthly pay for which cash is required on 1st. These are orders to be issued to the concerned drawing officers on 1st of each month so that the drawing officers can credit the payment order to the drawing account and draw salaries. The debit for this is received in the main account with State Bank of Hyderabad on the 1st i.e. salary day. Based on the Bank scroll daily cash book is written in the Banking and Resources section and checked by the Chief Accountant (Budget). As cash control is made at headquarters a weekly statement of receipts and payments and the balance in the bank are drawn and authorization for the payment already made during the previous work and for payments to be made during the next week are put up to the Chief Controller of accounts / Member (Accounts) and Chairman and discussed in the ways and means Meeting every week and approved by the Member (Accounts) Chairman and proceedings are issued. These ways and Means Statement are compiled with reference to the applications received from field officers under various heads. The statement

shows expenditure against the grants in respect of capital accounts of Operation Circles and Projects only. It is only very rarely that the balances shown in the cash book and the bank scroll are the same. A bank reconciliation statement is prepared explaining the reasons for the disagreement of the balances as per the cash book and the bank scroll. The following are the reasons for the dis-agreement between the two balances. Reason for the disagreement between the balances shown by the Bank scroll and the cash book. The disagreement between the balances as per the cash book and the bank scroll is only due to some of the entries made in one not being made in the other. 2) CHEQUES ISSUED BUT NOT PRESENTED: Cheques issued are entered in the cash book immediately they are issued. Since the entry is made immediately after issue of the cheque, the result of issuing a cheque is to reduce the cash book balance. Both the corresponding entry in the books of the banker will be made only when the cheque is presented for payment of the Bank. If the reconciliation statement is prepared after the cheque is issued and entered in the cash book but before it is present for payment at the bank, there is bound to be difference between the balance shown by the cash be difference between the balance shown by the cash book and that shown buy the Bank scroll. In this case the Bank scroll balance will be greater than the cash book balance. 2) CHEQUE DEPOSITED BUT NOT COLLECTED: Cheques deposited in the bank for collection are immediately entered in the cash book. But the corresponding entry will be made in the banks book only after the cheques are collected. In such a case the cash balance will show a higher figure on the date on which the Reconciliation statement is prepared. 3) DIRECT PAYMENTS INTO THE BANK BY CUSTOMER OR THE TRADER: Some times payments due may be made into the bank direct by customers, and the intimation relating there to might not have been received. In this case the Bank Scroll balance will be higher than the cash book balance. 4) BANK COMMISSION AND CHARGES: Bank commission and charges might have been debited to the Transco account in the banks books, but the same might not have been entered in the cash book. As a result, the Bank Scroll balance will be lower than the cash book balance. 5) INTEREST ALLOWED ON BOOK BALANCE BUY THE BANKER:

Interest might be credited to the Transco account and may appear in the Bank Scroll. The corresponding entry might not have been passed in the cash book. The bank scroll therefore shows a larger balance. 6) CHEQUES RECEIVED AND ENTERED IN THE CASH BOOK BUT NOT SENT TO THE BANK: If cheques are received and are entered in the bank column of the cash book, but for some reason are not sent to the Bank, the cash book shows a larger balance. 7) CHEQUES ARE SENT FOR COLLECTION AND DISHONOURED: Some times cheques might have been sent to the bank for collection and the entry might have been made both in the cash book and also in the Bank Scroll. If such cheques and dishonored, the banker might have passed the entry, but the corresponding entry has not been made in the cash book in this case, the cash book balance will be higher.

8) INTEREST COLLECTED AND CREDITED BY THE BANKER: The Transco may keep securities with the banker and the banker may be authorized to collect interest accruing upon them. Such interest might have been collected and credited to the account in the banks books, but he same may not appear in the cash book. 9) WRONG ENTRIES: The banker might have made some wrong entries, or wrong entries might have been made in cash book. The cash book balance or the pass book balance will be higher depending upon the nature of the wrong entry. A reconciliation statement may be prepared reconciling the cash book balance with the Bank Scroll balance. This statement is prepared at periodical interval. It must be headed Bank reconciliation statement.

CHAPTER 8

B) BUDGETS AND CONTROL OF EXPENDITURE

A) Classification and System of Accounts 1. CLASSIFICATION OF TRANSACTIONS: In the Budgets the Receipts and Expenditure of the utility are grouped as shown below:

1. 2. 3. 4.

Revenue Receipts Revenue Expenditure Capital Receipts Capital Expenditure RECEIPTS EXPENDITURE A. Operating Budget 1. Purchase Power 2. Generation of Power 3. Repairs & Maintenance 4. Employees cost 5. Administration and General Expenses 6. Less Expenses Capitalized 7. Other debits 8. Total Expenses 9. Operating Income

A. Operating Budget 1. 2. 3. 4. Revenue from Sale of Power Less Electricity Duty Revenue subsidies Grants Other Income

B. Finance Charges 1. Operating Income

B. Finance Charges 1. Depreciation 2. Interest and Finance Charges 3. Less Capitalised 4. Surplus

C. Surplus Appropriation 1. Surplus Loans

C. Surplus Appropriation 1. Payment of principal of

2. 3.

Depreciation Other capital receipts

2. Interest during construction 3. Internal Resources D. Capital budget 1. Plan Capital out-lay 2. Out side plan out-lay 3. Non-Plan out-line

D. Capital budget 1. 2. 3. Plan Receipts Out side plan (receipts) Non-plan (receipts)

2. Section 61 of the Electricity (Supply) Act 1948 lays down that the utility should submit to State Government in February every year an Annual Financial Statement in the prescribed form of the estimate of Capital and Revenue Receipts and Expenditure of the ensuring year, including a statement of salaries of Members and officers and other employees of the utility. Sub-section (3) of section 61 requires the State Government to lay the statement so received on the table of the House. Sub-section (4) lays down the utility to take into consideration any comments made in the State Legislature on the said statement. Sec: 16 of Electricity (Supply) Act requires the utility to place before the State Electricity Consulative Council the Annual financial Statement and Supplementary Statement, if any and take into consideration, any comments made on the Statement, in the said Council, before submitting the same to the State Government under sec.61.

3.

The departmental subdivisions of accounts for cost and statistical purposes are known as Account Numbers and are designed for administrative financial control and maintenance of commercial accounts. SYSTEM OF ACCOUNTS: The system of accounting in the Department is in accordance with Modern Engineering Accounting, sufficiently detailed to furnish the true costs of the various jobs and sections and is managed and maintained by a centralized accounting organization. The various Divisional and Sub divisional officers in the unit have only the field work to do and furnish the Circle Office or division office such information and data as are required for the maintenance of a perfect record of accounts. The Field Officers have however to maintain the initial accounts of cash and stores handled and of works in good order and on the basis of these the accounts are written up and dept. The field officers maintain a list of material s drawn work order-wise under the various requisitions for or devolutions to stores. All petty cash expended by them out of their impress is also noted. The Central Office / Division Office checks the actual against books and closes the works accounts on the basis of completed work orders.

4.

5.

6.

All expenditure is subject to check in the Head Office, Circle Office / Division office as the case may be before payment, except the payments made out of impreset, and payments against letter of credit opened with Banks which are post audited before admittance. The revenue is assessed and billed for and realization considered in the Branch. The receipts and expenditure are incorporated in the departmental cost and commercial accounts and monthly accounts are prepared.

7.

B. PREPARATION OF BUDGETS
8. PREPARATION AND SUBMISSION OF BUDGETS: The Central Office of the system is the unit for the preparation, consolidation and submission of budgets. The detailed procedure is explained below, Budget is an estimate of annual receipts and expenditure. Budget estimates for every year should generally follow the revised estimate of the current year after taking into account any abnormal circumstances that have been in the current year or expected in the next year. No increase should be made over the revised estimate unless adequate reasons are given. It shouldnt be assumed that provision should always be made in the budget for next year on the basis of Revised Estimate as a matter of course. But revised estimate should be taken as guide.

The following precautions are taken in preparation of the budget: 1) Budget Estimate should be in the prescribed of the budget. 2) Budget Estimate should be submitted by the due date. 3) Budget Estimate should be for the sanctioned schemes only. 4) Provision in the Budget should ensure that the total expenditure is with in the sanctioned estimate only. 5) Clear and cogent explanation for variations between Budget Estimate and Revised Estimate for the current year and Revised estimate for current year and Budget for next year are to be furnished. 6) Provision for expenditure to be incurred for 12 months APRIL to MARCH. 7) Budget estimate should be for the works entrusted to the concerned department or system. Revised estimate should be prepared with great care assuming that at the time of preparation of Revised estimate that actual for the first six months of the current year available. Revised estimated estimate may be calculated by adopting any of the following methods:

(1) By adding actual for the first six months of the current year and those of the last six months of the last year. (2) By the method of preparation so that revised estimated equals to the twice the six months actual of current year. (3) Calculate the ratio between six months actual estimated equals to the twice the six months actual of current year. (4) Average previous three years may be taken and any special weather and extraordinary conditions considered for greater accuracy.

1. GROSS RECEIPTS: The Senior Account Officer / Accounts Officer should prepare the revenue statement in the utility from against each source, showing actual of last year, actual to the end of the month during the year, and the probables as may be estimated. The sources of revenue should be grouped under H.T. consumers, licensees, Government departments, L.T. distribution, etc., as may be convenient and under departmental classification. Any new sources of revenue, marked decrease or increase should be indicated and noted on by the Divisional Engineer. Additional revenue expected from new services likely to be given during the year as well as revenue expected from places under electrification should be taken into consideration when framing the estimates. The statements received should be consolidated by the Senior Accounts Officer / Accounts Officer and submitted to the Superintending Engineer for approval before submission to the Financial adviser and Chief controller of Accounts. The Commercial section may also be required to give its forecast for checking the divisional revenue estimates. In respect of miscellaneous revenue and other items or groups of items, the estimates should be worked out in the Circle Office on the basis of actual and the information available. 2. ELECTRICITY DUTY: Provision fund, Electricity Duty should be worked out as per the Electricity Duty Act. In respect of sale of power to Central Government officers to other utility licenses and electricity consumed in construction, generation and operation works including the officers of the Transco and sale of power to agricultural services no Electricity duty is leviable and payable to the State Government . This aspect should taken into account while making provisions for electricity duty.

3. REVENUE SUBSIDIES AND GRANTS: i. Subsidies and grants from State Government ii. Grants for research and development. The estimates for items i and ii are prepared in head quarters iii. Grants in aid for education 4. REVENUE EXPENSES: a. Purchase of power b. Generation of power c. Repairs and Maintenance

d. Employees cost e. Administration and general expenses

f. Depreciation and related costs g. Interest and finance charges h. Interest and finance charges capitalized i. Other expenses capitalized j. Other debits k. Extra ordinary items a. PURCHASE OF POWER: Provision in respect of power purchased from central generating stations, State Government, other utility and other will be made.

b. GENERATION OF POWER: In preparing estimates condition of the generating units, programme for over hauling the units, additional generating units coming up should be taken in to consideration. Provision for coal, oil, gas, water charges, fuel related costs (i.e. handling charges, demurrages on wagons, siding charges, losses in transit of coal / oil, losses in storage etc.,) consumable lubricants, station supplies should be made. c. REPAIRS AND MAINTENANCE: In respect of maintenance and other charges directly incurred by the field staff, the Divisional Engineers should be required to send in their budget estimates in utility formed the

budget should be worked to a fair approximation with reference to previous years expenditure under ordinary items. In the case of special items such as renewals of lamps, repairs to plant and machinery, jungle clearance, repairs to buildings, etc., working estimates should be enclosed. Renewals Replacements: The cost of heavy renewals and replacements of plant and distribution lines should be capitalized. Minor renewals, replacements and improvement should be charged to grant provided for under Repairs and maintenance account. The maintenance budget should further correspond to the annual maintenance estimates sent by the Divisional Engineers in the financial progress report from. Any variations (savings or excesses) being explained in details. The opportunity should be taken to keep the maintenance charges to the absolute minimum. The following items should be carefully reviewed and results reported along with the budget estimates. i. Consumable and the standard fixed ii. iii. Work establishment sanctions and Other labour and repairs including renewals to buildings and equipment vide also instructions on the preparations of maintenance estimates. iv. Tools and plant --- in all estimates for works relating to capital expenditure provision for tool & plant (ordinary) at 1% of works expenditure is made. In the budget estimate details of cost of purchase of tools & plant (against the 1% Tools & Plants provision in the sanctioned estimate) should be submitted shall all operation, generation, construction circles and divisions under capital outlay. As cost of T&P is capitalized no percentage

adjustment in operation branch will be made in account by debit to capital and crediting O&M. d. EMPLOYEES COST: The budget for this should be prepared under the following sub-heads: i. Pay of Directors of Utility Officers, and other employees including workmen ii. Allowances a. Dearness allowance b. Other Compensatory allowance etc.,

iii. iv. v. vi. vii. viii. ix.

Bonus Medical expenses reimbursement Leave Travel Assistance Earned Leave encashment Staff Welfare expenses Pension and gratuity (i.e. Terminal benefits) a) Proportionate charges transferred to capital towards

establishment charges in respect of capital works executed by operation circles divisions and Head quarters charges. b) Pension charges including gratuity should be calculated at prescribed rate on total pay and allowances and provision made in the budget. c) The estimates relating to pay and allowances should be prepared based on sanctions supported by number statement which is prepared in prescribed form. In respect of pay and allowances of officers and staff, it is worked out taking into account the actual of the first six months of the current year and the actual strength of staff. With reference to details and information available in the office copies of the bills, Audit Registers and Service Books, the salaries and allowances that should be payable for the next six months the salaries and allowances that should be payable for the next six months and next year will have to be worked out and adopted as probables. e. ADMINISTRATION AND GENERAL EXPENSES: The budget for this should be prepared under the following sub-heads: i. ii. iii. iv. v. vi. vii. viii. ix. x. xi. xii. Rent, Rates and Taxes Insurance Telephone charges Postage Telegram and Telex charges Legal charges Audit fees Consultancy charges Technical Fees Other Professional charges (privatization of billing and collection) Payment to Electricity workers of Panchayats Conveyance & Travelling

a) Conveyance charges b) Travelling charges c) To Employees d) Vehicle running expenses petro & oil e) Vehicle Licence & Registration fee xiii. a) Fees & Subscription b) Books & Periodicals c) Printing d) Stationery e) Advertising expenses Electricity expenses Water charges Entertainment charges Material related expenses After adopting the actual for the first six months of the current year as per monthly accounts, the probables for next month and next year should be arrived at for each head of expenditure based on miscellaneous sanction register, stationery purchase, printing programme, past experience, average expenditure for the previous three years, extra ordinary circumstances and abnormal conditions. The total of all these will be incorporated in the budget proposal. f. DEPRECIATION AND RELATED COSTS: Provision for depreciation is worked out at the prescribed rates at Head quarters and the amount is included in Revenue expenses budget. In respect of works executed by the divisions/circles of transmission line construction/project construction provision for depreciation for on 1. Vehicles, 2. Furniture & Fixtures and 3. Office equipment is worked by the concerned divisions and circles and the amount provided as debit to capital works and credit to Revenue expenses Depreciation. g. INTEREST AND FINANCE CHARGES: The budget should be prepared under the following sub-heads as per the general instructions. i. ii. iii. iv. v. Interest on various Loans Interest on consumption deposits Interest on borrowings for working capital Interest on GPF Interest on other finance

xiv. xv. xvi. xvii.

vi. vii. viii. ix.

Cost of raising finance Lease rentals on lease finance Bank charges Guarantee commission

Items i, iii, vi to ix are prepared in Head quarters office item iv and v will be prepared in Head quarters office and field units while item 2 will be prepared in field units and included in Revenue expenses budget. h. INTEREST AND FINANCE CHARGES CAPITALISES: Interest during construction (i.e. interest to be capitalized) will be worked out at head quarters office as per rules prescribed and provided as debit to capital and credit to Revenue expenses interest. i. OTHER DEBITS: Other Debits : In preparing the estimates, general instructions are followed in respect of the following items and incorporated in budgets. i. Provision for Bad, doubtful and disputed debts in respect of a) Consumers b) Suppliers and contractors and advances c) Employees ii. iii. iv. Write off of the above item All other losses Research and development expenses

Note: Other Debits i.e. losses will not be capitalized. j. OTHER EXPENSES CAPITALISED: As all the expenses as per items b to f are initially charged to Revenue expenses in the transmission construction / project construction circle/divisions executing the capital works they are transferred to capital works by credit the revenue expenses under the classification Other expenses capitalized. k. EXTRA ORDINARY ITEMS: Losses on account of flood cyclone, fire etc. are classified under this heads of account. Estimates are based on the actual for first 6 months of the year and probables for next six months are proposed as per the balance of works to be executed. 5. SUSPENSE : The budgets for the detailed head of suspense fall under the major heads. Capital outlay on Electricity Schemes and Revenue

Expense.

The suspense is divided in accounts under miscellaneous

advances (Sundry receivable). Purchase, stock, and sundry Debitors for sale of power for which the initial accounts are maintained under the various departmental clearing accounts which should be grouped in budgets as indicated in the form utility and briefly explained below. Suspense transactions under sundry receivables, purchases and stock are grouped under capital budget while those under sundry debtors for sale of power are grouped under revenue budget. SUNDRY DEBITORS FOR SALE OF POWER : Provision for sundry debitor for sale of power should be furnished both under debits and credits. The debits to this account represent the amount of revenue assessed for the year. The credits represent the amounts that have been realized out of the assessment of the years and the arrears outstanding at the commencement of the year. The details should be furnished towards the assessment of revenue made or to be made during the year as a debit provision. The amount that is likely to be realized during the year towards that years demand and the amount to the realized during the year out of the outstanding arrears at the commencement of the year should be clearly given so as to enable to know the actual cash of collection that would be available during the year for meeting revenue expenditure. At the headquarters, the revenue receipts budget is finalized taking into account the generation pattern i.e. power generation and the power purchase from central sector stations and other boards. The budget estimates are prepared by the Asst. Account Officer / Sr. Accounts Officer with reference to the details of each transaction, their clearance, opening balance at the beginning of the year and the probable balance expected at the close of the uyear under each item. This shall be based on an intimate knowledge of the transactions and information obtained from field officers. 6. CAPITAL BUDGET: A statement should be prepared showing the name of work estimate amount for works only, work order amount, expenditure to end of the year, expenditure during the year and probables. It should also show the sanctioned works for which work orders have not been issued and the proposals likely to be sanctioned as for as information is available. The Divisional Engineers should carefully scrutinize the programme of works and fill in the estimated works expenditure for which funds are required within the official year. The urgency of works, the Departments liability to consumers to supply power, the proposals expected to be sanctioned should

be carefully taken into account.

Remarks subjects to availability of

materials in sanction of estimates should be avoided as the Divisional Engineer are primarily responsible to ensure these factors in time. The estimates of works expenditure furnished by the Divisional Engineers shall be scrutinized, consolidated by the Senior Accounts Officer / Accounts Officer any adjustments necessary as seen from the accounts shall be provided for in the Central Officer for example -Released equipments in so far as concerns the wiping out of original erection and establishment and other charges from capital cost. Instructions in respect of preparation of budget relating to i. Generation of power (i.e. trial stage costs in respect of new generating units) ii. iii. iv. v. vi. Repairs and maintenance Employees cost Administration and general expenses Depreciation and related costs Interest and Finance charges ---- apply in preparing budget estimates for capital expenditure 7. PURCHASES : The estimate under this is closely connected with the stores budget. The budget under this head is also prepared by the Senior Accounts Officer / Accounts Officer with reference to following principles. Provision has to be made both for Debits and Credits Debits provision represents payments to supplies Credits provision represents receipts of materials by debits to stock. It is closely connected with stock and works provision for debits and credits has to be made as follows: a) Actual for the first six months. b) Expected receipts in respect of pending L.P.O.S already placed. c) L.P.O.S yet to be placed during the current year for revised estimate. d) Similar provision for budget estimate for next year has to be made in respect of items (b) & (c). The deliveries of materials expected and the payments which can be made within the financial year after taking into account the contract conditions the time taken for verification scrutiny and payment of bills should be carefully examined and the programme of clearance well planned.

8. SUNDRY RECEIVABLE: (including advances to suppliers etc.) Debit to this head represents amounts paid as advance to suppliers ending receipt of materials in good condition, credit represents clearance by transfer to purchase account after receipt of materials in good condition. Provision in the revised estimate should be made by adopting actual for the first six months and probable for the next six months. In the proposals for budget estimates for next year, provision should be made both for debits and credits as per the terms and conditions of the purchase order. 9. STORE BUDGET: The budget under stock suspense needs careful attention. The budget estimates should be prepared showing the value of stock on hand, the amount of stores required to be purchased and the probable value of stock on hand, the amount of stores required to be purchased and the probable value of stores likely to be issued during the year under the various works. The stores budget should show separately the stores meant for ordinary operation and maintenance works, spares, service connections and construction works. Heavy materials required for large capital works, or renewals or replacement should be carefully analysed. Time allowed as per local purchase orders for delivery of

materials should be noted and the reserve limit of stock prescribed should be taken into consideration in preparing the budgets for stock. The stores budget shall be consolidated under orders of the Superintending Engineer and sent to him through the Senior Accounts Officer / Accounts Officer for his check and remarks. Arrangements should to be made to have the stores budget received sufficiently early and scrutinized for incorporation in the budget estimates. i. Provision for debits and credits has to be made. ii. Materials provision under capital, Operation & Maintenance and Service Connection cost ledger and other works has to be provided as credits. iii. Debit provision represents receipts of material in stores. This is closely connected with the purchases budget. 9. As far as possible, utility form should be used as working sheets in the preparation of budgets.

10. While framing the budget estimates, the revised estimate for the current year and the budget estimate for the ensuring year should be taken up together for consideration. 11. The budgets as obtained from the Divisional Engineers in respect of field details and as prepared in the Central Office will be scrutinized by the Senior Accounts Officer / Accounts Officer and consolidated in the form prescribed and submitted to the Superintending Engineer with his comments and review for approval. 12. The following are the special features of appropriations relating to the major head Capital outlay on Electricity Schemes To meet the demands of consumers promptly, lump sum provisions are made in respect of operating systems to cover expenditure on construction of line extension each system is split up into two portions, the one for works and the other for minor extensions. As new extensions are sanctioned, funds to meet the expenditure thereon provided for by re-appropriation by Transco and the Chief Engineer or the Superintending Engineer can re appropriate funds from Lumpsum for minor extensions to meet expenditure under the head Distribution of power in the system. Copies of orders of re appropriation sanctioned by the Superintending Engineer will sanction no expenditure will be booked directly against the lump-sum provisions. 13. The Superintending Engineer should scrutinize the field estimates the capital expenditure, the stores budget and the maintenance estimate, with a view to controlling the programmes of the respective Divisions Engineer and co-ordinate the works and stores. It should also be seen that the budgets are economical and extravagance or rush of expenditure is avoided. The Gross Receipts and working expenses should be personally scrutinized to keep down the working expenses to absolute minimum and ensure progress in the development of the revenues. The works

expenditure should also be programmed with this object. It should be borne in mind that the Superintending Engineers and Divisional Engineers are personally responsible for steady growth of revenues with minimum outlay and for the commercial stability of the system. This should be portrayed by the results of the budget.

14. If necessary a conference of the Divisional Engineers, Assistant Divisional Engineers and the Senior Accounts Officer / Accounts Officer shall be held before the consolidation of budgets provisions can be discussed and settled. 15. The budget estimates thus prepared will be forwarded by the Superintending Engineers to the Chief Engineers / Zone on the due dates who will scrutinize and consolidate the various estimates and forward them to the Chief Engineers concerned at head quarters and Financial Adviser and Chief Controller of Accounts and the Chief Engineer at head quarter will forward incorporating his estimates to Financial Advisor and Chief Controller of Accounts.

Note: 1. Provision of funds by competent authority is a condition precedent to incurring expenditure on a work or other object. The terms

expenditure used here includes working expenses of Electric Schemes but not funds of revenue receipts. 2. For payments chargeable to the accounts of other Govt. Departments or of non-Govt. works and repayments of deposits, no specific provision of funds is necessary. It is sufficient to see that such payments are made only in accordance with the rules in the relevant chapter of this code. 3. The budget should in full details in respect of major works showing separately, works sanctioned and in progress, works sanctioned to be started, works not yet sanctioned. It should be seen that the works in progress are completed before fresh works are undertaken and that the execution of works is not prolonged by short provisions of funds. The unexpended allotments of the official year will not be available for expenditure in the following year, unless specific provision is previously applied for well in time explaining the reasons for the delay in completing the works before the end of the year. 4. No provision should be made for any unsanctioned works. Allotment of funds in anticipation of sanction estimates should be exceptional and on the express orders of competent financial authorities. 5. The outlay on the works and services must be kept within the provision and under no circumstances any liability be in one year against anticipated grants in the next year. 6. Estimates relating to Loans and advances to employees, loans and advances to licenses, building, furniture & fixture office equipment (including computer), rolling stock of meters / transformer (i.e. spare units / service units) are prepared keeping view the instruction s for preparations of budget estimates and provisions made in revised estimates and budget estimates. Redemption of Loans The term Loan implies that the loan is to be redeemed at the end of a specified period as per terms and conditions of loan. The amounts of loans to be repaid (as redemption) to various agencies are provided in the estimate of budget at headquarters office of the utility.

C. COMMUNICATION OF GRANTS
16. COMMUNICATION OF GRANTS: The sheets of detailed budget estimates containing the grants are communicated by the Transco. They show the budget estimates as finally fixed for the various units of appropriation. Figures are entered not only against the various subheads of appropriation but also against the detailed account heads of which they are composed. Copies of these estimates are communicated to the Superintending Engineers / Chief Engineer / Financial advisor and Chief Controller of accounts. Note: (1) Distribution of the amounts allotted against the various units of appropriation among the several systems will not ordinarily be necessary in the utility as the units of appropriation are arranged by systems and therefore each unit will in variably relate to one system only, in the case of capital works however if any work of importance relating to a system is executed by the special construction circle, it may be necessary to distribute the grant for a unit of appropriation between the system concerned and the construction circle. This distribution is made by the Chief Engineer and intimated to the Superintending Engineers. (2) The Divisional Engineers will be intimated by the Central Office of the funds allotted with information whether the estimates have been sanctioned. It shall then devolve on the Divisional Engineer to see that the estimates are sent in time, stores arranged and the work orders issued, amount spent in full time. It may be taken that the work orders issued are for the funds available. 17. An appropriation or re-appropriation with in the grants of a year can be authorized at any time before, but not after the expiry of the year.

Note:

(1) Appropriation is intended to cover all the charges including the liabilities of past years, to be paid during the year or to be adjusted in the accounts of it. It is operative until the close of the financial year. (2) A register of appropriations should be maintained in each system wherein all appropriations and re-appropriations sanctioned should be entered. 18. The expenditure should be strictly limited to the grants sanctioned and no expenditure should be incurred without appropriation or in excess of it, should any necessary arise for charges for which no appropriation is made, supplemental grants should be applied for as soon as possible. Note: Whenever a proposal is made in the course of a year to incur expenditure on an object for which no provision has been made in the budget, the application for sanction to the expenditure should be accompanied by reappropriation statement for the additional re-appropriation during that year.

CHAPTER 9 STORES MANAGEMENT-I

Section 1 1. Scope: (a) In a Power utility store are required for the following purposes: (i) Operation & Maintenance works (ii) Other Commercial activities; like hiring equipment etc; (b) They are broadly classified as below for purpose of accounting: Stores consisting of : (i) Materials held under Stock suspense account (ii) Tools and plant charged off to final head of accounts under Generating station, Transmission lines, Substations,

Distribution lines, Offices etc., (iii) (iv) Spares and other equipment charged off to works Consumable charged off to Operation and Maintenance

(c) The detailed accounts procedure for stores held under Stock suspense is given hereunder. In respect of items (ii) to (iv)

mentioned above, though their cost in charged to final head under the works concerned or quantity accounts of receipts, issues and balances should be maintained, with a view to have proper control over the materials. This is dealt with later. 2. Stock Suspense Account: The stores transactions emanate as detailed below: (a) Receipts: (i) By purchases from suppliers (ii) By diversion from other stores (iii) By devolution from works

(b) Issues: (i) By issue of material of works. (ii) By issue of material to contractors, consumers, D.C. works, sale etc., (iii) By diversion to other stores of the Transco.

The accounts of the stores are based on the fundamental principle that all materials purchased shall be charged to the suspense account stock in the first instance though the materials purchased may be for a particular work and are chargeable ultimately to works for which the materials are issued. However the following transactions need not pass through stock account and should be charged direct to works by entry in measurement book or special stores received book. (a) All machinery for large projects, purchased under supply and erection contractors. (b) All special tools and plant for large project including heavy transport vehicles of 5 Tons and above. (c) All towers and tower line materials for high voltage transmission lines. (d) In the case of materials ordered by the Assistant Engineer / Divisional Engineer by local purchase under their powers for emergency use and delivery at site, measurements may be recorded in measurement book charging the same to the works concerned. 3. Initial records and other accounts books: (a) The following initial record and other books of accounts are maintained, for purposes of recording transactions under Stock suspense account. A. INITIAL RECORDS (i) Stores Received Book (ii) Devolution (iii) (iv) Stores Issued Book Requisition B. OTHER BOOKS Numerical Ledger Priced Ledger Numerical Abstract Priced Abstract

Note: (i) The Requisition Books, Devolution Books, Stores Received Books and Stores Issued Books are of financial value and should be treated as valuables like cheque books. These books will be available with the head of the stores and will be issued to the Field Assistant Engineers as per their requirement. As in the case of cheque books, a register of Requisition Books / Devolutions Books etc., should be maintained in each stores. The receipts and issues should be accounted for under proper authority. When ever new book is operated it should be

intimated to the officer (by Designation) in charge of stores by a covering letter from the Section Officer. (ii) Each Section Officer should operate only one Requisition Books / Devolution book at a time for the purpose. This Requisition Book / Devolution Book should not be made use of by another Section Officer. The Requisition / Devolution Books should be under the personal custody of the officer concerned. 4. Stores Material Index: An up to date stores material index should be maintained and correct code no. assigned to each material both for receipt and issue i.e. Devolution / Stores Received Book and Requisition / Stores Issued Book. This will serve as guiding factor for posting the transactions correctly both in numerical and priced ledgers. 5. Bin Card: A Bin Card is hung up outside each bin or rack in the stores. The minimum and maximum quantities to be stocked in respect of the material as fixed by the Superintending Engineer are noted in it. Each time articles are placed into or taken out of a bin or rack an entry is concurrently made in the Bin Card and the balance struck. Where materials are stocked out-door, Bin Cards should be separately maintained by the Store-keepers and ill issues and receipts concurrently noted. The Bin Cards should show the balances at any moment and this should tally with numerical accounts. An entry of receipt of a material is first made in Stores Received Book and then in the Bin Card while in

the case of issue an entry is made first in the Bin Card and then in the Stores Issued Book. Accounting in Field Organisation 6. Receipt of Stores: (a) By purchases from suppliers: The requirement of materials for works is estimated with reference to approved budgets and purchase orders are placed y the competent authority. The supplies against these orders will arrive into the stores. The value of these supplies will be debited to Stock suspense account crediting suppliers account (Sundry Creditors). (b) By diversion from other stores: Materials are obtained from other stores within the system by issue of requisitions signed by the officer of the indenting stores or by issue of requisition by the Field Assistant Engineer coming under the jurisdiction of the indenting stores while charging the materials to works. These are classified as inter Divisional Stores drawals. It is of great importance that these transactions, are responded in the same month to avoid administrative and accounting difficulties. Also materials are obtained from the stores of other systems by issue of requisitions signed by the officer in charge of the indenting stores. These issues are charged to intermediary signed by the officer-in-charge of the indenting stores. These issues are charged to intermediary suspense. Transfer Divisional Account: and should be responded by the receiving stores in the same month before the accounts of the month are closed and trial balance is struck. (c)By devolutions from work: (i) The stores should be drawn generally to the extent required before the work is commenced. In exceptional cases materials drawn for works may become surplus for various reasons. Such materials should be devoluted to the stores explaining in detail the reasons for the same. When materials drawn for works and found surplus are returned to stock, they should be accompanied by a stores devolution note. (or stores return note). The devolution notes are written by carbon process in quadruplicate by the officer in charge of the work. In order to enable the Accounts Office to correctly value the stores and credit the account number concerned reference to the original

requisition and the work order for which the materials were originally drawn from the stores should be given in the devolutions. In the case of dismantled materials devoluted to stock, if the number and date of the original requisitions could not be given by the field, such particulars will enable the stores to trace the original requisition correctly should be given in the devolution. Alternatively, the depreciated value of materials may be arrived at and furnished. One copy of the devolution notes should be retained by the Supervisor and the other three copies sent to the stores. (ii) Each devolution should be accompanied by a detailed

report containing the following information: (except for retrieved materials) Quantity estimated. Quantity drawn. Quantity issued as actually measured or counted Surplus Explanation for excess drawl. (iii) Materials devoluted from works should be accepted in stores only if they are usable and can again be issued for new works. If the condition of the material is such that they cannot be reissued, they should be deemed a scrap and such material should be accepted as scarp only, if the Devolution gives reference to survey report in which its write off has been sanctioned by the competent authority. If however, materials are such that they can be re-issued after repairs such materials should be accepted only if they are got repaired, brought to working condition and then devoluted by the field staff. The responsibility of accepting such materials and getting them repaired is not that of the stores. (iv) The free samples received from companies are generally returned to them at their cost, if required by them. If the samples are not required by the company, they may be taken to stock by credit to Misc. Revenue quoting the firms letter as

authority in the devolution which will be prepared by the store-keeper. These devolutions should be classified along

with the devolutions for return of materials from works. (d) Stores received book: General: (i) All materials received should be examined, counted, weighed or measured as the case may be, by the custodian with assistance of O.S.S. or work charged staff provided for the purpose. After taking delivery of materials and after verification and check-measurement, the receipt of the material is recorded in the Stores Received Book. This is an initial record and serves the purpose of measurement book in so far as stores are concerned. The pages of the Stores Received Book are in triplicate and they are machine numbered. (ii) The following are in the instructions for writing up the Stores Received Books. It will be written up in triplicate All the columns in Stores Received Book should be filled in with diligence and care. Entries should be made in ink or indeliable pencil. Entries should be recorded continuously. No blank page should be left or torn off. Pages left blank should be cancelled by diagonal lines and attested. None of the lines should be left blank. Any lines not required should be scored through in order to prevent additional entries being made later on. No entries should be erased. If mistake, is made it should be corrected by scoring out the incorrect words of figures and re-writing the correct words or figures and the corrections attested with dated initials. Detailed account of measurements of stores should be recorded in the Stores Received Book. Quantities to be noted should be in the same unit as is found in the purchase order and written both in figures and words.

Account No. / Head of Account should be furnished. Stores Received Book should be written up on the day the materials arrive into the stores and except in very exceptional cases, should not be delayed beyond 3 days from the date of arrival into stores.

(e) The following additional information should be furnished for materials received from different sources under foot-note in Stores Received Books. (i) When received from suppliers: Purchase / Order No. Railway Receipt / Lorry Suppliers Despatch advice No. Damages / Defects RF/under charges / Over Dimension charges Warfage Demurrage Consignees Acknowledgement Date Date Date Date Date

(ii) When received from other stores: (iii) Date of Receipt of materials into the stores Transport Note No. and Date. Date of drawl of material Mode of conveyance Railway receipt / Lorry receipt no. Damages, defects, shortages etc.,

When received through Devolutions from works: Quantity estimated. Quantity drawn and date Quantity used as actually measured or counted Surplus Reasons for excess drawl

The materials received should be check-measured by the competent authority and a certificate to that effect recorded in all the copies of the Stores Received Book under the full signature of the check-measuring officer with date. It should

be done within 10 days from the date of receipt of material into stores where the check measurement is to be done by Divisional Engineer / Executive Engineer. In all other cases, where the Assistant Engineer is competent, checkmeasurement should be done on the date of recording entries in this Stores Received Book. The original and duplicate copies of the stores received book should be forwarded to the stores accounts section (pricing section and the triplicate (fast copy) will be retained in the stores).

ISSUES OF STORES 7. General Instructions for issuing stores: (a) Materials under no circumstances, should be issued on Transport Notes, on chits or on oral instructions. should issue only against an The physical custodian requisition duly

authorized

countersigned by the Assistant Engineer in-charge of the work. (b) The specimen signatures of all the officers (i.e.) Section Officer and above including Head Clerk of Central Office / Deputy Chief Accountant / Chief Accountant drawing the materials operating requisitions, as well as officers who countersign the requisitions, should be available in the register of specimen signatures with the custodian. (c) Whenever there is change of incumbency of the Section Officer and the Assistant Engineer, and other officers the fact should be intimated to the Head of the Stores with the specimen signature of relieving officer duly attested by the relieved officer. If the materials are issued to any messenger other than the officer who signed the requisition it should be done only on production of the specimen signatures of the messenger duly attested by the officer who signed the requisition. Such messenger should be of the rank of a lineman or above. (d) The issue of materials should be based on the principle of First-in and First-Out method in order to avoid loss due to deterioration etc.,

(e) The physical custodian is personally responsible for the preparation of Stores Received Book and Stores issued books correctly. (f) At each store the gate-pass system should be introduced and for each issued there should be supporting gate-pass. Even where stores are at Railway yard this gate pass should be issued. The vehicle no. with name of owner and name of driver in which the materials are being loaded should be noted on the gate-pass. The officer-in-charge of stores should correct all the gate passes from the Gate-Keeper on the same day in the evening and check the counterfoils with issues of the date. Any discrepancy should be investigated into and rectified

immediately. Requisitions:

The issues in the stores are made in all cases only on the authority of requisitions. The requisitions are written up in quadruplicate in carbon process. All requisitions should bear reference to work order no. and account no. in addition to the brief description of the work. The quantity should be furnished both in figures and words. The Assistant Engineer counter signing the requisition is responsible to ensure that the correct work order no. and account no. are furnished in the requisition and the quantity is limited to the estimated requirements. He should verify the estimated quantities in the material card issued along with the work order. One copy of the requisition is to be retained by the officer who makes out the requisition as his office copy which should not be detached from the book. The other three copies after counter-signature by the Assistant Engineer should be presented in the stores for issue of materials. Stores issued books:

A daily record of stores issued is kept in the stores issued book in form no. S-6. The pages of the stores issued book are in triplicate and entries are made on the authority of the requisitions. This daily account is the basis of the stock transactions.

8. Maintenance of Numerical Ledgers: (a) Posting of Receipts: In the stores, the receipts of each day should be posted in the following order: (i) Stores Received Books for materials received from suppliers. (ii) Stores Received Books for materials received from other stores. (iii) Stores Received Books for materials received from the works through devolution notes. The closing balance should be arrived for each transaction of receipt during the day and this should be furnished in the Stores Received Book against the transaction in the last column. This will indicate stock position in the stores and will facilitate the quantity reconciliation work. In the numerical ledgers all the receipt items of the day should first be posted and then the issues posted. This will ensure that issues are not made without taking real arrivals into stock. (b) Posting of Issues: The quantity recorded in the stores issued book is to be posted in the numerical ledger and the closing balance arrived at. This closing balance so arrived should be recorded in the stores issued book in the last column. After posting in the original and duplicate of the stores issued book with the requisitions in triplicate should be sent to stores pricing section on the same day. 9. Closing of Stores Accounts: The Accounts of all stores for the month should be closed on the 23rd and the last.

9 STORES ACCOUNTING SECTION-II

1. SCOPE:The main functions of the Stores Accounting Section are:i. ii. iii. iv. v. vi. Printing Receipts and issues and maintenance of stores priced ledgers. Preparation of the stores priced abstracts and the periodical returns due to the management. In respect of sales, arranging for the recovery of cost including incidental and centage charges. Arranging quantity reconciliation every month between the numerical ledger and priced ledger balances. Stock reconciliation certificate i.e. reconciliation between Priced Ledger balances and Financial Ledger balances. Annual verification and adjustment of discrepancies noticed.

CHAPTER

2. MAINTENACE OF PRICED LEDGERS Stores accounting and maintenance of priced ledgers, divides itself into the following groups of operations. GROUP A a) Receipt and check of Stores received Books/Devolutions/Stores Issued Books/ Requisitions. b) Pricing of the same GROUP B a) Opening and closing of priced ledger folios with reference to numerical ledger folios and the maintenance of an index of priced ledgers in the ledger itself allotting adequate sheets for the same. b) Posting of priced ledgers GROUP C a) Review and revision of rates. b) Review of priced ledgers. GROUP-D a) Posting of stores priced abstracts. b) Reconciliation of quantity accounts between numerical and priced ledgers. c) Stock reconciliation (i.e.) between priced ledger balances and clearing ledger balances. Each of the above groups of operation should be allotted to different persons or to different sub-sections in such a manner that all the processes of work are properly detailed and the work will not only be upto date, but the

accuracy thereof will be proved day to day by checks and cross checks made by independent sets of persons. 3. DESPATCH OF STORES RECEIVED BOOKS AND STORES ISSUED BOOKS FROM STORES TO PRICING SECTION:a) The documents of a date say the 1st of the month should be completely delivered to Stores Pricing section without fail on the morning of 3rd within one hour of the opening of the office. This cycle will continue to operate, wherever holiday intervene the delivery dates should be adjusted co-extensively. b) A register of Stores Received Books, Stores issued books, Devolutions, Requisitions etc., should be maintained in Pricing Section to watch the receipt of the same in serial order so that if any serial is withheld by stores, it can be located and called for. 4. SCRUTINY OF THE STORES RECEIVED BOOKS AND STORES ISSUED BOOKS: a) The Stores Received Books and Stores Issued Books should then be examined to see that: i. They are prepared on the proper form. ii. They are signed and countersigned by the proper authority as required by the rules. iii. They are received without any serial No. missing. iv. They are legible written, particularly regarding quantities, and all corrections thereof are attested by the proper authority i.e. custodian. b) The particulars in Devolutions and Requisitions do not vary with those recorded in the Stores Received Books and Stores Issued Books respectively.

PRICING
5. GENERAL:The pricing is an operation which, for an efficient division of clerical labour, is best allotted to a set of clerks other than the priced ledger posters. For this purpose it should be expedient for each pricing clerk to be provided with a copy of the price list for each class of materials allotted to him in which he could himself note down in pencil the book average rates from the priced ledgers, and price and issue documents by reference to such rate lists only.

6. UPTO DATE MAINTENANCE OF AVERAGE RATE LISTS:In order to ensure that fresh average rates are struck in the priced ledgers wherever required the pricing clerks should at the end of the posting of priced ledger per a day, review the rates shown in Stores Received Books of the day for purchases from suppliers. Wherever he finds that the rate is more or less than the average rate, he should note down the item and before commencing the pricing of the issue vouchers of the following day, he should strick the fresh average rate, at the same time noting the new rates in his copy of priced list erasing the previous entry. This ensuresi. ii. iii. Minimum handling of the priced ledger A check on the average rate Quicker pricing by reference to the price list involving less time and less labour than a reference to individual priced ledger leaf in various parts of the cabinet.

7. PRICING OF RECEIPTS:The materials received into the stores and accounted for the Stores Received Book by the stores office will be priced as detailed below. 1) When the materials are received from suppliers against Purchase Order:In this case, the rate and the value of the total supply as furnished by the stores office will be checked with reference to Purchase Order and correctness attested by the Sectional Accountant. The prescribed percentage handling charges will be added to the value of the purchase order by the Pricing Clerk. 2) Diversion from other stores:With reference to the average rate prevailing, the value of materials received will be filled in by the stores pricing clerk as the debit advice containing the correct values will generally reach the receiving end after a lapse o f time say in the next month. On receipt of debit advice from the supplying stores the value given in the Original Stores Received Book will be regularized, preparing adjustment Stores received Book will be regularized, preparing adjustment Stores received Book for excess or less value as the case may be 3) Devolution from Works: a) The value furnished by the Section Officer/Asst. Engineer will be adopted by the Pricing Clerk. b) The cost of transport work from spot to stored and handling charges if any incurred will be charged to the work concerned. c) In respect of unclaimed samples valuation will be at book rates. 4) During stock verification or handing over : These materials will be priced at the ruling average rate or market rate whichever is higher on the date of taking the material into stock through Stores Received Book.

8. FIXING ISSUE RATE:a) When the materials are issued from stock the issue rate is fixed according to the principle of average pricing method of valuation of stores as explained below: i. The issue rate should be worked out in the priced ledgers according to weighted average method, namely by dividing the total value of the stores by the total quantity in stock. This method should be adopted every time when fresh, stock is received, the quantity received together with the value thereof being recorded in the ledger and the issue rate is calculated a fresh for the entire quantity including the articles newly received. In the process when the last quantity is fully issued bringing the quantity to zero, the value also should be zero and there should be no case of NIL quantity with plus or minus value.

9. ROUNDING OFF PAISE IN FIXING ISSUE RATESThe issue Rate should be rounded to the nearest 10 paise in respect of high value items ignoring 5 paise and less. In respect of service connection materials the rate should be rounded to the nearest 5 paise, ignoring 2 paise and below. 10. PRICING OF ISSUES:The pricing clerk will record in the ledger the weighted average rate to be adopted for the issues. This issue rate will be incorporated in the average rate list maintained by the pricing clerk. As soon as the batch of requisitions with Stores Issued Books is received he will fill-up the rate column with reference to average rate list, calculated and furnished amount for the total quantity. 1) Issue of materials to works:The pricing clerk will adopt the weighted average rate when materials are issued to works. 2) Issue of stock materials on sale:Stock materials are sold without inconvenience to works or on account of surplus or obsolete condition as below:i. ii. iii. iv. v. To contractors for Transco Works To consumers for the purpose of load development To officers and staff of the Transco To other Departments In public auction in respect of surplus, scrap obsolete materials, etc.

3) SALES TO CONTRACTORS FOR DEPARTMENTAL WORKS:Materials, to be issued to contractors according to terms and conditions of agreement for execution of Transco works, should be drawn by the concerned Section Officer operating the work order on valid requisition duly supported by written demand from the Contractor for every drawal ONLY BY CHARGING THE AMOUNT TO THE CONCERNED WORK ORDERS.

Such issues to contractors should however be regulated after drawal on requisitions, through unstamped Receipts or Transport Notes. Valuation of these unstamped Receipts or Transport notes will be regulated as per rates provided in the agreement. At the time of preparation of the contractors Bill, these issues will be valued at the agreement rates and shown as deductions. The requisitions issued by the field officer quoting work order numbers will however be valued as per book rates and taken to Accounts. The difference between the Book rate and the rate provided in the contract will get debited or credited as the case may be to work concerned. 4) SALE TO PRIVATE PARTIES, OFFICERS AND STAFF AND OTHERS:i. Sales outsides the agreement should be based on out-right Cash Payment at book-rates or market-rates whichever is higher, plus Sales Tax and usual centages, etc. ii. On receipt of payment by means of Demand Draft the custodian of the stores will issue the material, prepare the requisition, obtain the acknowledgement on the requisition itself from the purchaser, make out a Stores Issued Book and after posting the same in the Numerical ledger, send the Requisition/Stores issued Book to accounts Office. The Demand Draft should be entered in the Petty Cash Book with full particulars by the Stores custodian and sent to accounts Office separately for being accounted for in Cash Book. iii. In the pricing section the book value will be adopted for the purpose of pricing and the difference between the book value and the sale price will be adjusted as below in the requisition itself crediting the same to Miscellaneous Revenue. 5) SALE BY AUCTION:Obsolete, surplus materials etc., when sold by public auction, the highest bidder will deposit the a`mount agreed to in the auction. This amount will be taken to cash book by credit to sales Account (material). In the stores, a separate requisition/Stores Issued Book will be prepared charging the material auctioned to sales account. In the pricing section the book value will be adopted for the purpose of pricing and the difference between book value and the amount collected from the highest bidder will be adjusted as below in the requisition itself. If the book value is less than the bid value, the difference will be credited to Loss of Gain on Stock Account by means of passing minus entry for the excess value in the same requisition as shown below:Head of Account (i) Sales Account (ii) Loss or Gain on stock REQUISITION Rate Rs. Rs. ------Book Value: 1,000.00 (Book Value to be adopted in Stores Issued Book towards credit to stock Account) --Amount Rs. Rs. --1,200.00 (-) --200.00

If the book value is more than the bid amount, the difference will be changed to loss or Gain Account in the requisition as shown below.

Head of Account (i) Sales Account (ii) Loss or Gain on stock

REQUISITION Rate Rs. Rs. --------Book Value:

Amount Rs. Rs. --800.00 (-) 200.00 ---

1,000.00 (Book Value to be adopted in Stores Issued Book towards credit to stock Account) 6) Issue of materials to other stores: When the materials are issued to other stores as per the orders of competent authority, the weighted average rate will be adopted at the issuing end. 11. Striking Progressive Totals of Devolutions/Stores Received Books and Requisitions / Stores Received Books and Requisitions/ Stores Issued Books:The pricing clerk after completing the pricing, will strike the progressive totals on the reverse of the devolution notes, Stores Received Books, requisitions and stores issued Books independently and reconcile the total values between devolutions and Stores Received Books as also between requisitions and Stores Issued Books. He will incorporate the same in the register of Devolutions/Stores Received Books and Requisitions/Stores issued Books, and then pass on them to ledger poster for posting in the priced ledgers. In respect of each batch of documents sent to Accounts Section, the Pricing clerk, the ledger poster and the Sectional Accountant should initial at the progressive totals in token of reconciliation of total values as per requisitions and as per Stores Issued Books. 12. Opening the Initial and Continuation Priced Ledger Sheets: Priced ledgers should be maintained by categories of stores. Separate card or loose leaf should be opened for each item of Stores just as they opened in the stores numerical ledgers. Every sheet opened for an item should be serially numbered and each completed sheet should have a remark, carried over to sheet No. endorsed thereon the continuation and value so brought forward should be checked and attested by the Sectional Accountant in order that there will not be any serious irregularity in the figures of quantity and value brought forward from the previous sheet. 1) Exhibition of Maxima and Minima in the Priced Ledger:The Maxima and Minima may be shown on the priced ledgers to review whether the stock receipts and issues and issues are moving, restricting the balances to the limits prescribed.

2) Index of Priced Ledger:To facilitate easy identification of the ledger folio, it is necessary that an index of priced ledger is maintained in the ledger itself by allotting some sheets for this purpose. 3) Closing of Non-operated Priced Ledger Sheet:The priced ledger sheet not operated for more than one year will be closed based on the full particulars given by the stores. These particulars consist mainly of:i. ii. The number and the date of last Stores Received Book or Stores Issued Book and: Closing balance (which should be NIL) posted in the numerical ledger upto the time of closing the card, have also been posted in the priced ledger. Before the cards are closed it should be seen that there are no balances both in quantity and value in the card, have also been posted in the priced ledger. Before the cards are closed it should then be endorsed with the words closed as per advice with reference to No. & date of Stores Received Book / Stores Issued Book from the stores over the initials of the sectional accountant of the pricing section.

Closed cards should be kept in the same binder in which the completed sheets of other items of the same class are kept. This will enable the cards to be easily traced if at any time it is proposed to reopen them. 13. The priced ledgers are the basis of all stores accounting and utmost care should be taken to avoid errors therein. The following instructions are therefore issued for the guidance of ledger posters with a view to minimize all chances of errors in ledger posting. 1) Upkeep of Priced Ledgers:The ledger poster will be responsible for opening the first and continuation ledger sheets and for their safe and tidy maintenance. The sheets will be opened in the same manner as the numerical ledger sheet. 2) Posting of Vouchers:Before starting his posting for day, a ledger poster should see that the Devolutions/ Stores Received Books and Requisitions / Stores Issued Books on hand relate to the correct stores and group of stores. During the course of posting, the poster should take care to see: i. That the nomenclature and material index No. / (priced list number) of each item or stores as shown in the document corresponds with the nomenclature and material index No. / (price list number) of the same item of stores in the priced ledgers. An item in voucher should be posted in the priced ledger only when the above particulars agree. That the number and date of the Stores Received Book / Stores Issued Book, the figures of quantities and values, are distinctly written in the

ii.

columns allotted for the respective figures so that mistake of the following nature do not arise. Value posting such as Rs.42.50 capable of being read as Rs.425.00 or Quantity posting such as (7.5 M. Tons capable of being read as 75 M. Tons) iii. iv. That all Stores Received Books and Stores Issued Books received by him and all items thereof have been posted in the priced ledgers correctly. That he should write the letter P against each item in Stores Received Book / Stores Issued Book after it has been posted in the priced ledger to avoid posting twice. He should post all the vouchers received by him on the date of their receipt. Should a ledger posters work fail into arrears for any reasons, e.g., rush of vouchers on a particular day,; he is expected, as it is a job with yardsticks duly prescribed for the post, to pull up his arrears. In cases of sudden illness or other absences beyond ones control, the supervisory head of the section should make arrangements to get the work done, through other clerks with the approval of the Deputy Chief Accountant, and a note should be kept of the documents for the correct posting of which responsibility will rest on the person to whom the work is allotted. He should total up receipt and issues if a page is completed during a month and reconcile the last closing balance struck, by taking the opening balance of the page, adding the total of receipt and deducting the total of issues, of the page and should initial the last balance in token of such, reconciliation. The Accountant initializing the continuation ledger sheet should ensure that this reconciliation has been actually done. In the course of posting the ledgers, the posters should note down in a special register in manuscript (to be maintained by him) particulars of material and Priced Ledger folio No., whenever he finds. a) Credit balances either in quantity of value: b) Quantities existing without value or values without quantities ; and c) The numerical ledger balances as noted on the stores received book/stores issued book vary from the balances in the priced ledgers; viii. Ledger poster will be responsible for all corrections made in the ledgers. When wrong posting are detected, the correcting entry should be made at the end of the postings already made by giving cross reference at the place where the mistake has occurred. Thus the mistakes would be rectified without disturbing entries made since the date of the errors. This will be done under the attestation of the Sectional Accountant.

v.

vi.

vii.

3) Other Adjustments such as write-backs, under valuation or over valuation:i. In all such cases, the ledger poster should verify the posting of the original transaction and should give a cross reference against the entry of original Stores Received Book/Stores Issued Book as well as against

the posting of the Adjustment Stores, Received Book/Stores issued book. ii. There should be no over-writings, erasures, smudging scoring off the entries once made etc. These are strictly prohibited.

14. Stock-verification and adjustment of Differences: a) The stock in the system should be got verified by an independent agency once a year, Verification of physical balance of materials at the stores with that of the ledger balances is called stock verification. b) The following instructions should be followed for verification. A list of items to be verified each day should be obtained. The verification report should be filled up in the prescribed form. Before starting the verification of the stores, it should be ascertained upto what date and serial No. of stores Received Book and Stores Issued Book transactions have been posted in the ledger. iv. Materials of the same nature should be verified at the same time. v. The verifying officers should not refer to the ledger of the stores before verification. vi. The actual quantity verified should then be recorded in the daily report in link and then the balance as per ledger should be noted. vii. The issues or receipts, took place after last transaction in the ledger and before the verification, should be posted and the correct ledger balance arrived at. viii. Any discrepancy between the physical balance and the ledger balance, should be noted in the report with a brief note on the action taken., ix. These reports should by both the stock verifier and custodian of stores/ Assistant Engineer stores in the case of central stores. c) The verification reports should be checked up in the office each day they are received. Stock found surplus should be taken as receipts both in the quantity and value accounts, the stock as finally determined as surplus should be credited to Revenue. In the case of stock found deficit the accounts should be examined to see if the deficiency is due to error in accounts. It is not so, the deficiency should be shown as issues both in the quantity and value accounts and the value debited to Miscellaneous Advances (Personal Account of the custodian concerned) pending recovery of sanction to write off. d) No preliminary adjustments should be made. The discrepancies should be analyzed and final adjustments carried out within one month. All final adjustments should be done only after ensuring that the book balances as per numerical ledger and the priced ledger agree on the date of verification. e) Final adjustment should be prepared in the following classification i. Statement of excesses and shortages for which no accounts adjustments are made, being petty. i. ii. iii.

ii. iii. iv.

Statement of excesses which are taken to Stock. Statement of Excesses and shortage of materials of like nature and like quantities. Statement of excesses and shortage of materials of like nature but unlike quantities.

The adjustments are to be done both in stores ledgers and priced ledgers by means of adjustments Stores Received Books / Stores Issued Books duly supported by devolutions and requisitions as the case may be.

CHAPTER 10 SERVICE REGULATIONS I

Service Regulations vary from one utility to another. However, there will be only minor variations / deviations. As a reference material, service regulations of AP Transmission Corporation are given. Many utilities are following the Government rules and regulations only. As such, we try to go through certain salient Regulations which are in vogue in AP Transco PERMANENT POST:Post carrying a definite rate of pay sanctioned without limit of time. REG. 16(a) AGE OF RETIREMENT:The date of retirement of an employee of the Transco other than ClassIV is the date on which he attains the age of 58 years and of a Class-IV employee the date on which he attains 60 years. WHOLE TIME EMPLOYEE:Regulations 20: Unless otherwise distinctly provided, the whole time of an employee of the Transco is at the disposal of the Transco which pays him, and he may be employed in any manner required by proper authority without claim for additional remuneration. REG.21: LIEN ON A POST Unless otherwise provided, an employee of the Transco on substantive appointment to may permanent post acquires a lien on that post and ceases to hold any lien previously acquired on any other post. For terminating a lien, Issuance of show cause notice is necessary. REG. 29(1): No Transco Servant shall be granted leave of any kind for a continuous period exceeding 5 years. REG. 28(3): Any employee of the Transco who remained unauthorisedly absent from duty for a continuous period of one year shall be deemed to have resigned from the service from that date of absence and shall automatically cease to be in Transco Employment.

REG. 30 PAY ON PROMOTION: When appointed to the new post involves assumption of duties and responsible of greater importance than those attached to the permanent post, employee will draw as initial pay the stage of the time scale next above his substantive pay in respect of the old post. REG. 32: DRAWAL / WITHHOLDING OF INCREMENTS: An increment shall ordinarily be drawn as a matter of course unless it is with held. An increment may be with held by an authority to whom the Transco may delegate this power if his conduct has not been good or his work has not been satisfactory. In ordering authority shall state the period for which it is withheld and whether the postponement shall have effect of postponing the future increment i.e. (with or without cumulative effect). REG. 34(A): ADVANCE INCREMENTS: The Transco may grant premature increments to an employee in a time scale in exceptional circumstances. In view of the stagnation in the various cadres for promotion, advance increments granted for specific purpose like (1) Post Graduate Increments (2) First and Second position in National Sports meets and in AP Transco Sports are given as personal/pay equal to the said increments. REG. 34(B): Notwithstanding anything contained in these regulations or any other Regulations of the Transmission Corporation of AP Ltd. where a Transco Employees, who is junior, is receiving emoluments in excess of those paid to persons who are senior to him in that cadre, due to reasons personal to him and also arising out of fixation of pay by virtue of holding office in a particular post of the establishment under the Transco such factor alone shall not entitle the seniors to claim a re-fixation of their emoluments at a higher level on par with the emoluments of the junior employee. REG. 47: The Transco has the power to create or abolish, any post in connection with the affairs of the REG. 54 COMBINATION OF APPOINTMENTS : The Transco may appoint an employee to hold substantively, as a temporary measure or to officiate in not more than two independent posts at one time. His pay then is regulated as follows: a) The highest pay to which he would be entitled if his appointment to one of the posts above may be drawn b) For the other post, he draws such reasonable pay in no case exceeding half the presumptive pay of the post as the Transco may fix. REG. 54(1) (B): ADDITIONAL CHARGE APPOINTMENTS:

If an employee is appointed to hold full charge of a second post in addition to his own, the additional pay which may be granted to him in respect of the additional post should not exceed 1/5th of his substantive pay. REG. 54(1) (C): CURRENT DUTIES: If an employee is appointed to discharge only the current duties of second post in addition to his own, the additional pay should not exceed 1/5th of his substantive pay. The Chief Engineer is empowered to sanction additional charge allowance to all his sub-ordinates for a period of 3 months only. REG. 56(1): PAYMENTS DURING SUSPENSION PERIOD: An employee under suspension shall be entitled to a subsistence allowance equal to half the pay drawn by him in addition to D.A. where the period of suspension exceeds six months, the authority that ordered the suspension shall be competent increase the said subsistence allowance not exceeding 50% after 12 months of suspension if in its opinion the suspension is prolonged for reasons not directly attributable to the employee. REG. 56(II) (A) (I): The subsistence allowance may be reduced by a suitable amount not exceeding 50% upto 12 months if in the opinion of the said authority the period of suspension is prolonged due to reasons directly attributable to the employee. REG. 56(1) (A) (III) (B): The suspending authority may direct that employee under suspension shall be granted other compensatory allowances also. If an employee under suspension is dismissed or removed from service with retrospective effect, subsistence allowance paid will not be recovered from him. REG. 57(1): PAY ON REINSTATEMENT: 1. Where an employee who has been dismissed, removed, compulsorily retired or suspended is reinstated, the authority competent to order the reinstatement shall consider and make specific order. a) Regarding the pay and allowances to be paid to the employee for the period of his absence from duty: and b) Whether or not said period shall be treated as duty.

2. Where the authority mentioned in CL. (1) above is of the opinion that the employee is fully exonerated of in the case of suspension, the same was wholly unjustified, the employee shall be given full pay and allowances to which he would have entitled had he not been dismissed, removed, compulsory retired or suspended as the case may be.

3. In all other cases, the employee shall be given such proportion of pay and allowances as the competent authority may prescribe which shall not be less than the subsistence allowance. REG. 57(6): EMPLOYEE PROSECUTED FOR CRIMINAL OFFENCE: Where an employee is prosecuted in respect of a criminal offence whether arising out of his official duties or not imprisoned for debt or is detained under any law providing for preventive detention for a period longer than 48 hours, he shall be deemed to be under suspension and shall be entitled only for subsistence allowance. REG. 59.JOINING TIME: Joining time may be granted to an employee to enable him to join a new post, on return from Earned leave of not more than 120 days etc REG. 59(5): Where a Transco employees on return from leave has to wait compulsorily for order of posting, such period of waiting is treated as duty and joining time shall be allowed to such employee in continuations of such waiting. REG. 60(1): 1. Not more than one day is allowed to an employee in order to join a new post when appointment to such post does not necessarily involve a change of station. Holidays count as a day for this purpose. No joining time is admissible in cases where the change of post does not involve actual change of office. 2. In cases involving change of station, the joining time of six days are allowed for preparation in addition to the period to cover the actual journey to the new station. REG. 61: An employee on joining times shall be regarded as on duty. REG. 62: An employee who does not join his post within his joining time is entitled to pay or leave salary after the end of the joining time willful absence from duty after the expiry of joining time may be treated as mis-behaviour for the purpose of Reg.27

REG. 65(a): No employee may be transferred to foreign service against his will. REG. 70(a): While an employee is in Foreign Service, contributions towards the cost of his Pension and / or Provident Fund must be paid to the Transco on his behalf.

REG. 70(b): If the foreign services is in India, contributions must be paid on account of the cost of leave salary also.

CHAPTER 10 SERVICE REGULATIONS PART II

These regulations generally correspond of A.P. State and Sub-ordinate Service Regulations of the Government of Andhra Pradesh. Certain salient features of these regulations are given below: REG. 4(1) APPOINTMENT TO SERVICE: A person is said to be appointed to a service when in accordance with these regulations he discharged for the first time, the duties of a post borne on the cadre of such services or commences the probation, instruction, training prescribed for members thereof. REG. 4(8): A person is said to be on duty as a Member of a service when he is performing the duties of a post borne on the cadre of such service or is undergoing probation, training deputation, on joining time, leave, on duty with the Army. REG. 8: APPROVED CANDIDATES: All first appointments and promotions to a service shall be made by the appointing authority from a list approved candidates. Such lists shall be prepared in the manner prescribed by the appointing authority or any other authority empowered by the Regulations. Where the candidates in such lists are arranged in their order of preference, appointments to the service or promotions therein shall be in such order. List approved for appointment by transfer shall be prepared in the month of September every year so as to be force until the list of approved candidates for the succeeding year is prepared. For this purpose, as many eligible candidates as such authority considers necessarily shall be considered. 8(III): The list of approved candidates shall be valid for one year from the date of approval by the competent authority. The Transco may for reasons to be recorded extend the validity of the list of approved candidates by a period not exceeding six months. It shall lapse thereafter. TEMPORARY APPOINTMENTS AND PROMOTIONS: REG. 14(A) (i) (2): The appointing authority may appoint or promote temporarily a person otherwise than in accordance with the provision of those regulations in the following cases until a person is appointed in accordance with the regulations: 1. Where it is necessary in the interest of the administration to fill up a vacancy immediately and there would be undue delay in making an

appointment or promotion as the case may be in accordance, with these regulations. 2. Where it is necessary to fill a short vacancy in a post and the appointment or promotion, as the case may be, would involve excessive expenditure on travelling allowances or exceptional administrative inconvenience. NOTE: i. No appointment or promotion shall ordinarily be made under the above clauses of a person who does not possess the qualification, if any, prescribed for the post. Every person appointed or promoted under clause a (i) who does not possess the qualifications shall be replaced as soon as possible by a person possessing the prescribed qualifications. A person appointed or promoted under clause (a) shall, whether or not he possess the prescribed qualifications, be replaced as soon as possible by an approved candidates qualified to hold the post or by a member of the service, who is entitled for promotion to the post.

ii.

REG. 16(2): LANGUAGE TEST IN TELUGU: Every person appointed to a service after 15.11.66 shall be within the period of probation pass the language test in Telugu failing which his probation shall be extended and the increment postponed without cumulative effect until he has passed the test. Any employee by virtue of his having an examination of equivalent standard in that language shall not be required to pass the language test. REG. 22: Where special Regulations (Part III) lay down that the principle of reservation of appointment shall apply to appointment by direct recruitment to any made on the basis of regulations for reservation of appointment. REG. 22 (A): PREFERENCE TO WOMEN IN DIRECT RECRUITMENT: 1) In the matter of direct recruitment to posts for which women are better, suited them men, preference shall be given to women. Provided the preference given to women shall not result in total exclusion of men in any category of posts. 2) In the matter of direct recruitment to posts and men are equally suited, other things being equal, preference shall be given to women. Provided the preference given to women shall not result in total exclusion of men in any category of posts. REG. 24(1): PROMOTION: No employee shall be eligible for promotion to a higher post unless he is an approved probationer.

REG. 24(1) B:

Promotions in all cases are on merit and ability excepting for 1 stage promotions I, e AE to ADE (Direct Recruit). PROBATION: Where the Special Regulations of any service prescribe a period of probation for all direct recruits, it is generally for 2 years within a continuous period of three years. After satisfactory completion of the period and after passing the tests etc. prescribed in this regard the period of probation, the employee is declared to have satisfactorily completed the prescribed period of probation by the appointing authority. In case of failure to pass the tests prescribed or due to unsatisfactory service during the period of probation, the competent authority may; 1) Terminate the probation 2) Discharge the probationer 3) Extend the period of probation REG. 37(A): A member of service may resign on appointment and the acceptance of his resignation by the appointing authority shall take effect from the date on which he is relieved. Memorandum: When any information as to be obtained from the subordinate offers by an official reference the Memo, is ordinarily used. Sometimes a Memo may include final orders of the Utility on very un-important matters. It is written in the third person. Endorsement: When a paper is to be returned in original to the sender or when it is referred to a subordinates officer for remarks or for information, the disposal takes the form of Endorsement. Companies, Contractors and other public should not be addressed in this form. D.O. Letters: In case where an officer has to be addressed in the form of official procedure and with a view to draw his personal attention, the communication takes the form of D.O. (Demi Officials) U.O. Note :( Un-Official Note) U.Os are made by sending the file to the officer concerned with a note on which his views are required.

Telephone and Fax Message: They are used on matters of extreme urgency and the text of the FAX and telephone messages should be clear and contain Reference No. and the date and subject matter of the issue. Notifications: They are used for notifying the matters in the State Government Gazette or in the new papers 6) The following Registers are maintained in Head Quarters Offices and most of these are required to be maintained in other offices also. Attendance Register Register of Visitors Movement Register Personal Register Call Book Entry Register Register of Securities Service Books Per Periodical Register Local Delivery Register Daily Receipt of Tappals Register Register of movable and immovable properties of the Staff Register Reminder Diary Outgoing Tappals Register (Dispatch Register) Stamp Account Register 7) The following rules are to be kept in mind in the day- to- day correspondence: i. Correspondence shall be condensed as much a possible and repetition of un-necessary details should be avoided. ii. As far as possible it is desirable to avoid personal address in the communication to the higher authorities. iii. Separate letter should be written on distinct subject iv. Every communication should be carefully punctuated and the pages and paragraph numbered. 8) It should be ensured that the enclosures to the letters are sent without fail. The references received from the State Government legislative Assembly, Government of India, other Electricity Utilities and State Government should be given top priority and replies sent as expeditiously as possible. All papers should be treated as confidential. There are certain papers which are to be classified as Top Secret, Confidential, and their circulation should be confined to the officers concerned with the subject and their movement should be made in a Confidential Box Typing and dispatching of secret papers should be entrusted to selected persons.

Maintenance of Records: 9) Modern Computer Techniques and Principles of Archival Science have been adopted for the physical care and upkeep of records and microfilming is also being undertaken on large scale to provide security to the content historical records and make them easily available to the posterity. 10) The Record Section in an office will receive the closed files from the sections and keep them in bundles and arrange them chronologically. Records of each class / subject should kept in separate bundles. 11) Materials used for binding the records are affected by high temperature, dust, humidity, acidic gases, and sunlight. Paper kept in a hot and dry climate becomes brittle leather and board get desiccated under similar conditions. In the presence of excess humidity, paper often tends to crumple and become faggy. Pests like Cockroaches, Bookworms, Termites Etc., as well as variety of fungus are dangerous and preventive measures should be taken to arrest their growth by using D.D.T., Repellants, Chemicals, etc. 12) Records should be handled with care. They should be not be dragged out from the record shelves. Smoking should be prohibited in the records room and firefighting equipment should be kept. Records that have been effected equipment should be kept. Records that have been effected by drenching in water should be treated immediately in order to avoid their decay. After preliminary squeezing of water from the bundles of files, they are spread open under a fan. wet paper should be separated from one another. Blotting paper should be pressed to squeeze out any residual water. Rehabilitation of charred documents and revival or faded and washed out writing should be done after obtaining advice of the experts. Periodical use of insecticidal powers like D.D.T. and spray is a good precautionary measure to prevent insect infection of records. Regular dusting of records is necessary for keeping them in tidy condition and the room should be well ventilated. Vacuum cleaners could be employed. In order to avoid contact of Records with the walls, the Records racks should be installed at least 15 cm away from the wall. The following are the repairing equipment that should be kept in a record room. 1. 2. 3. 4. 5. Repairing tables preferably with glass top Small hand press Scissors big and small Twin thread and Bodkin for piercing the holes.

13) The Records kept in the sections are collected by the Record Assistant periodically. The Records that are handed over should be entered in the Register of Records Received. After the Records are collected from the sections, they are stitched firmly by the Record, Assistant and arrange in chronological order and according to each class and the arranged properly in racks. Records are supplied on requisitions made in the prescribed form by the Section concerned. After a record is taken out, a made in the prescribed form by the section concerned. After a record is taken is taken

out, a Dummy Slip is kept in its place for reference. All Records issued should be entered in the Records Issue Register. In case of records kept for long periods, the Records section should issue reminder to the section for return of the same after done with. The Records Branch will be held responsible if any record is found missing after it is received from the section. The records issued to the sections should invariable be supported by requisition in the prescribed form. Destruction of Records: The periodical destruction of records shall be generally regulated according to the following broad principles: DESTRUCTION OF RECORDS YEAR OF DESTRUCTION

1. Board proceedings in Routine series, At the end of Five Years from the year Memoranda, Endorsements, to which they relate. Telegrams and Tour Programmes. 2. Lodge papers At the end of 3 years from the year to which they relate. 3. Call Books, Arrear Lists, Tappal At the end of 3 years from the close of Books, Circulation Register, Turn Lists the year to which they relate. and similar Registers. 4. Office Orders At the end of 40 Years from the close of the year to which they relate. The following Records should on no accounts be destroyed 1. Proceedings of the M.S. series. 2. Minutes of the Board Meetings (Confidential Records) The destruction of records and registers shall be carried out by the Records clerks after obtaining the orders of the concerned officer. For this purpose the clerk will take out a list of records to be destroyed in the month of January. Before the Records are destroyed, action should be taken as follows: (a) The dockets sheets which are in good conditions should be separated from the records and passed on the Assistant in charge of stationery for being supplied for use again after scoring out nearly, or pasting over the original entries. (b) Such of the sheets in the Records as are written on one side only should similarly be removed and passed on to the Assistant in charge of stationery for supply as rough slip. (c) The Dummy Slips in these Records bundles which are not fully written up should be removed and used again by the Record Branch with necessary alterations in the entries made on them. (d) Mode of Destruction:

Each sheet of the record books and papers to be destroyed should be torn into small bits and then sent for destruction. (e) A Register of Records destroyed shall be maintained by the Records Clerk who will enter therein particulars of the records destroyed.

CHAPTER 11 OFFICE PROCEDURES

1. Efficient administration means transacting the business promptly, avoidance or check of delay at all stages, elimination of arrears and efficient working of the organization. Real administrative efficiency is a result and effect of an officers zeal and progressive outlook, intensive supervision, personal attention, constant review, maintenance of highest standards, real competence. 2. While in office, all members of the establishment must be behave in a decent and disciplined manner and give respect to superior officers. All the visitors should be received cordially and given as much attention as possible in order to comply with the object of their visit in the quickest and most efficient manner. 3. At the head quarters, the proposals received from the field officers are examined by the Technical, Administration and Accounts wings. The officers of the rank of Assistant Divisional Engineers. Assistant Account Officers and Personnel Officers process the cases and circulate files, to their respective heads of the departments and through them to the members of the board and chairman. Proposals received from the field are examined with reference to the technical aspects, precedents, legal implication, financial aspects, etc., and once they are approved by the competent authority, orders are issued in the form of board proceedings, memo, etc., depending on the importance of the case. 4. The tappal clerk sends the tappals to the Officer concerned who peruses them and records his views about the action to be taken on such of the reference which need immediate attention. The tappals are sent then to the sections concerned who submit the files to the immediate superior with the notes after observing the following: Scrutiny of the currents with reference to corresponding rules and precedents. ii) Tagging of currents and enclosures iii) Page numbering iv) Referencing of the notes. v) Putting up of previous papers vi) Flagging vii) Referencing viii) Linking the connected files if any ix) Assigning importance to the file by indicating Urgent, Ordinary, Special, Most Immediate. 5. The following are the forms of communications observed: Corporate Office Proceedings: When orders are issued based on the decisions of the Utility board, the corporate office issues proceedings. Orders sanctioning of expenditure and other important policy matters will be communicated. i)

CHAPTER 12

PENSION
Classification of Pension: Pension is classified into the following different kinds: 1. Superannuation Pension: This pension is granted on being compulsorily retired due to attaining a particular age. Such age in the case of those in superior services is 58 years and in respect of those in inferior services is 60 years. NOTE: It should be noted here that afternoon of the last date of the month in which the actual date of retirement falls is to be taken as to be date of retirement. In case where the date of birth is a first of a month, afternoon of the last day of the preceding month shall be the date of retirement. 2. Retiring Pension: Retiring Pension is granted to a Transco servant who is permitted to retire or is required to retire in advance of attaining the age of superannuation as: a) On completion of 20 years of quality service, a Transco servant may retire on giving written notice of atleast 3 months (or less subject to acceptability of competent authority) of his intention to do so to the authority competent to make substantive appointment to that post. Once such notice is given it cannot be withdrawn except with specific approval of such authority and such request for withdrawal being made within the intended date of retirement. When a Transco servant opts to retire while on leave not due commenced and in such case, leave salary drawn is to be refunded. For purpose of pension, service upto maximum 5 years can be added to make the difference between qualifying service and 33 years or date of superannuation whichever is earlier. Such Government servant shall not however be eligible for weightage under Rule 28 E.O.L. on any ground including on M.C. shall not be reckoned as qualifying service to arrive at 20 years of qualifying service. b) On completion 30 years of qualifying service but before attaining the age of superannuation, a Transco servant may retire giving 3 months notice of the appoint authority in writing. Withdrawal of election to retire once intimated is not permitted subsequently except with the approval of such authority and unless made within intended date of retirement. In both such cases of retirement, order permitting or requiring retirement shall not be issued unless completion of qualifying service is verified in consultation of Pay and Accounts Officer, Hyderabad / Head of Department / Head of Office who maintains the services particulars / book of the Transco servant concerned. (When service cannot be verified due to loss of Intra-ceceability of service book, once the date of appoint is established by independent direct evidence, an affidavit given by the employees in respect of his service

supported by collateral evidence of contemporary employees shall be accepted. G.O.Ms. No. 224 Fin. Plg Dt.28.6.1982) 3. Invalid Pension: Those declared by the appropriate Medical Authority to be permanently in capacitated for further service are granted invalid pension. In case, if a Transco servant is declared to be fit for further service of less laborious character than he was doing, then he may be employed on lower pay, No in-valig pension should be granted if the incapacity is directly due to irregular or intemperate habits of the Transco servant. However, if the incapacity is not directly due to such habits, but is only accelerated or aggravated by them, then the pension sanctioning authority should decide about the deduction to be made on this account. The amount of in-valid pension shall not be less than the amount of family pension which would have been admissible to his family had he not been alive instead. 4. Compensation Pension: Owing to abolition of permanent post if a Transco servant is selected to discharge, unless appointed to another post condition of which are atleast equal to those of his own, he shall have option of taking compensation pension for service rendered or accepting another appointment on such pay as offered with previous service counted for pension. Notice of atleast 3 months should be given to a Transco servant before his services are dispensed with, otherwise for such period by which notice falls short of 3 months he shall be paid the pay and allowances. For period for which pay is paid in lieu of notice, no compensation pension is payable. If a Transco servant entitled to compensation pension accept instead of another appointment entitling subsequently to any class of pension, such pension shall not be less than the compensation pension admissible had he not accepted such appointment. 5. Compulsory Retirement Pension: A Transco servant compulsorily retired from service as a penalty may be granted pension or gratuity or both at a rate not less than 2/3 and not more than full invalid or gratuity or both admissible on the date of compulsory retirement. When gratuity of such pension/gratuity is less than admissible, the A.P.P.S.C is to be consulted. However, the pension granted or awarded shall in no case be less than Rs.45/-. Amount of pension :- The amount of pension to be granted-and to which a Transco servant retiring is entitled to is determined by length of service in terms of six monthly completed years of qualifying service and average emoluments drawn during last ten months of service. Pension is admissible after completing qualifying service of not less than 10 years (20 six monthly periods) and for less than 10 yeas, service gratuity admissible. In calculating length of service, fraction of a period less than this months is ignored and three months and above period is treated as completed six monthly periods. D For example : M : 3 5 to be treated as six monthly period to be treated only

: :

5 5

to be treated only as 1st six monthly period only as one year 2 six monthly period.

Fixation of pension is at monthly rates expressed in which rupees rounding of the fraction to the next higher rupee. When the amount of pension calculated is less than Rs.45/- pm it should raised to Rs.45/- pm full quantum of pension is admissible on putting in 33 years (sixty six (66) monthly periods) of qualifying service which is also the maximum admissible. Qualifying Service: Determination of amount of pension is based on qualifying service and average emoluments (points regarding average emoluments will follow in further paras). Qualifying service means that service which is eligible to be taken into account for purpose of pension, i.e. countable service or in other words gross service less service which is not countable. The Service of a Transco servant shall not qualify unless his duties and pay are regulated or conditions determined by the Government. Service in nonpensionable establishment does not qualify unless treated as such by the Government (Regulation) 361 A of (A.P. Pension Code 1st) Civil Service Regulations). Qualifying service commences from one date change is taken of the post of which first appointed either substantively or in an officiating or temporary capacity. Boy service (i.e.) service rendered before attaining the age of 16 years of case of Government servants in class-IV service who held a lien or suspended lien on a permanent pensionable post prior to 17.11.1960 and 18 years in all other cases, does not count. In short, following periods in service count/do not count as qualifying service. Countable (Qualifying (a) service rendered from the date of attaining the age of 16/ 18 years. (For purpose of compensation gratuity, service rendered before the age of 18 years also count). b) Service rendered from taking charge of the post to which first appointed. c) Service rendered upto last date of retirement (last date of the month in which the actual date of retirement falls is to be taken as the date of retirement. (DB 1.11.88) retire on 31.10.1988, DB 1.12.88 retires on 30.11.88, and also (DB 31.10.88 shall retire on 31.10.88 only). d) All kinds of leave for which leave salary is payable. e) Extra ordinary leave granted on Medical certificate. f) Extraordinary leave granted due to inability to join or rejoin duty on account of civil commotion or for prosecuting higher scientific and technical studies is allowed by appointing authority while granting. g) Extraordinary leave upto 36 months in entire service for reasons other than in (e) and (f). h) Extraordinary leave sanctioned for taking employment else where subject to payments of pension and leave contributions.

NOTE: E.O.L. on any ground including on M.C. shall not be reckoned as qualifying service for arriving at 20 years of qualifying service of those retiring voluntarily on completion of 20 years of qualifying service (Rule :43). i) time spent under training period selected for the post as direct recruit and appointed prior to being sent on training with initial pay of the scale paid. j) Continuous service rendered under Central Government followed without interruption by substantive appointment to post to which these rules apply on permanent transfer on deputation from Central Government. k) If initially engaged on contract for specific period and subsequently appointed in regular Capacity in a pensionable Establishment without interruption of duty subject to refunding of or foregoing of monetary benefits of Transco contribution to G.P.F. (with interest thereon) including other compensations for that service, such period in contract for which such monetary benefits may have been payable shall count. l) Pre-retirement Civil service in case of re-employment subsequent to having retired on compensation/invalid pension or compensation/invalid gratuity subject to cessation of drawal of pension or refund of gratuity sanctioned for earlier service. m) Regular Military service rendered after attaining 18 years of age before Civil employment but restricted to service for which paid from consolidated fund of India or for which pension contribution is received by the Transco subject to refunding of gratuity received on discharge or cessation of drawal of military pension, as the case may be. n) Time passed under suspension pending enquiry into conduct where on conclusion of enquiry fully exenterated or suspension held unjustified, in other cases such period as expressly declared as countable by the competent authority while passing order. o) Past service on reinstatement on appeal or review after dismissal, removal or compulsory retirement. However the in between interruption period countable, only if regularized as duty or leave by specific order of authority passing order or of reinstatement. p) Service rendered in Foreign Service subject to payment to payment salary and pension contribution for such period. Non-countable (Non-qualifying): a) Service rendered as an apprentice. b) Boy service except for purpose of compensation gratuity. c) E.O.L. exceeding 36 months (other than on M.C. and for prosecuting higher scientific and technical studies and on inability to rejoin duty on account of civil commotion).

d) E.O.L. on any ground including on M.C for arriving at 20 years of qualifying service of those retiring voluntarily on completion of 20 years of qualifying service. e) Suspension period other than expressly declared to be countable. f) Whole past service on dismissal or removal. g) Period of interruption between date of dismissal/removal/compulsory retirement and date of reinstatement unless regularized as duty or leave by authority passing order. h) Whole of past service on resignation except when resignation is submitted to take up another appointment under the government where service qualities, with proper permission. i) Whole of past service on interruption in service except in cases as provided in Rule (27). It should be noted that interruption in spells of Transco service or between non-Transco service like under municipalities, etc., and Transco service or between spells or non-Transco service will automatically be condoned irrespective of period of interruption and period proceeding, interruption, excluding however the periods of interruptions themselves. j) Past service on voluntary retirement during period of suspension with no subsequent reinstatement, unless ordered specifically otherwise. ADDITION TO QUALIFYING SERVICE: As stated earlier full amount of pension is admissible only on putting in 33 years of qualifying service. Rule 29 helps those whose service at the time of retirement on superannuation falls short by 3 years as such Transco servants who have put in qualifying service of less than 33 years, shall be entitled to add to the qualifying service the difference (provided not exceeding 3 years) between such qualifying service and 33 years. This benefit however is not admissible to those eligible to benefit under rule 10 and 20. Benefit under Rule 29 is also not admissible to those benefited by Rule 43 (5). Rule 43 (1) allows a Transco servant to retire voluntarily after putting in 20 years of qualifying service between 33 years or date of superannuation whichever is earlier and qualifying service put in subject to such difference being limited to maximum of 5 years. AVERAGE EMOLUMENTS: Pension is based on length of service and emoluments drawn during last 10 months of service. What pay and allowances should be reckoned as emoluments and what should be considered as emoluments in different circumstances is dealt in Rule 34. Rule 32 deals with the average emoluments, the emoluments which should be taken into account for determining average emoluments, the period which should be taken as last 10 months of service for purpose of calculating average emoluments. Provisions of rules 31 and 32 dealt with average emoluments to be arrived at. Keeping these provisions in mind,

to determine average emoluments, emoluments drawn in last 10 months should be added and such total of addition should be divided by 10. RETIREMENT GRATUITY: On completion of 5 years of qualifying service, a Government servant who retires from service is entitled for retirement gratuity equal to one third of his emoluments, for each completed six monthly period of qualifying service, subject to maximum of 2,50,000/- whichever is less w.e. to 1-10.99 ride Too No. Addl. Sery (per) MS No.346/13-10-99. If after completing 5 years of qualifying service dies a Government servant while in service, retirement gratuity as per normal method for calculation of gratuity adopted whichever is higher, subject to maximum of Rs.2,50,000/- shall be paid to his family. If a Transco Servant who has become eligible for service gratuity or pension dies within 5 years from the date of retirement including compulsory retirement as a penalty and the service received by him towards gratuity and or pension are less than 12 times of his emoluments, his family should be paid a residuary gratuity equal to such difference. If a Government servant dies in first year of qualifying service, two times of his emoluments and if he dies after completion of one year but before completion of 5 years of qualifying service 6 times of his emoluments shall be paid as retirement gratuity to his family. Emoluments, as reckoned in accordance with Rule 31 shall for purpose or retirement gratuity as referred in above cases, be subject to a maximum of Rs.2,400/- p.m. (limit deleted from 31.4.89). Average emoluments as referred in rule 32 may be treated as emoluments by person sanctioning authority in case emoluments have been reduced during last ten months of service otherwise than as penalty. FAMILY PENSION: As per rule 50 (2) family of a deceased Government servant is entitled to a family pension at 30% of pay last drawn pay in the case of Government servant on date of death or immediately before retirement was on leave with allowances, will be taken at what it would have been, had he not been absent from duty, and in case he had been absent on E.O.L. or suspension, that which he drew immediately before on such leave or suspension. Enhanced rate of F.P. at 50% of pay last drawn is allowed where a Transco servant dies while in service after rendering 7 years or more of continuous service. Enhanced rate is also allowed in the event of death of a Transco servant after retirement. Such enhanced rate however is payable for 7 years or till such date on which Transco servant would have reached 65 years of age had he served, whichever is earlier and thereafter if shall be at the ordinary rate of 30% of pay last drawn.

Family pension determined on enhanced rate shall in no case exceed pension sanctioned on retirement. However, where the pension sanctioned on retirement, is even less than Family pension admissible ordinary i.e. at 30% of pay last drawn, then enhanced rate shall be limited to such family pension as admissible rate of 30% of pay last drawn. Family pension is fixed at monthly rates expressed in whole rupees with fractions if any rounded off to next higher rupee. In case of widow or widower, F.P. payable is till the date of death or remarriage whichever is earlier, in case of son till he attains 25 years or gets employments whichever is earlier and in case of unmarried daughter till she attains 25 years of age or till she gets married or gets employments whichever is earlier, Provided if son or daughter mentally or Physically disabled so as unable to earn living, payable for life time subject to certain conditions.

(G.O.Ms. No.52, F&P dt.20.2.1984) MODEL

Mr. X has retired on 30.6.1989 A.N. being his date of birth is 29.6.1931. Other details are indicated below Calculate Pension/Retirement Gratuity/Family Pension/Commuted value of pension of maximum eligible. Date of Entry into service : Pay as an 1.12.1999 : 10.8.1954 Pay Rs. 4330/- +Rs.25/- F.P.I in the scale of Rs.3580-150-5380 He was on deputation to Rural Electricity Corporation from 20.1.1984 to 19.1.1986, at the instance of Transco but pension and leave salary contributions are still awaited from the foreign employer. He was on E.O.L. during the following periods. He has submitted his application for communication along with pension papers on 28.12.1968. 12.8.54 to 31.8.1954 10.6.57 to 4.7.57 He was not confirmed in any post. There is some gap from 10.8.58 to 19.8.58 consequent on his promotion from Non- Gazetted post to Gazetted post on transfer from Anakapalli to Vjayawada, which could not be verified whether the period is treated as joining time or leave or otherwise. He was under suspension from 13.4.66 to 10.9 1966 AN and the period was treated MODEL ANSWER

Calculation sheet for superannuation pension, Retirement gratuity, end Enhanced family Pension and Normal F.P. and Commuted value of pension. Date of Birth : 29.6.31 Date of appointment : 10.8.54 Date of superannuation : 30.6.89 AN Gross qualifying service ; From 1 0.8.54 to 30.6.89 Y m D 34 10 21 Less non-qualifying service: i) The period from 10.8.58 to 19.8.58 (10 days) is condoned and the same has to be deduct. Rule 2800-00-10 ii) The suspension period treated as such has to be deducted Rule 27 (1) (c) 00-04-28 Net qualifying service

00 34

05 05

08 13

The E.O.L periods from 12.8.54 to 31.8.54 and from 10.6.57 to 4.7.57 are to be ignored as the same is less than 36 months Rule 21 (2). Average emoluments Rule 31/32 Period of 10 months from 1.9.88 to 30.6.89 Emoluments drawn during last 10 months.

From 1.9.88 1.1 2.88

to 0.11.88 30.6.89

Months days pay 3 7 4181 4330

FPI 25 25

Rate per month 4205 4355

Total 12,615 30,485 43,100

Average emoluments of 10 months = Rs. 4,310/ Superannuation pension = 4310 x 33/66 = Rs.2,155/- pm Retirement gratuity = R.G. raised to 10,000/- with effect from 31.3.89 deleting the pay limit of Rs.2,4001- as per B.P.Ms. No.1124 dt 21.10.89. Last pay drawn x Maximum of 20 months. 4355 x 20 = 87,100/ Family pension Rule 50 (3) (a) (ii) Enhanced F.P. upto 28.6.96 = 50% of last pay limit to pension Rs.2,155/Normal F.P. - from-29.6.96 x = Rule 50 (3) (b) read with 50(2) 4355 x 30/100 = 1306.50 rounded to Rs.1307/- pm Commuted value: 1/3 of eligible pension maximum/ Table in Commutation rules 1944 = 59th year value 10.46 Commuted value = 10.46 x 12 x 718 = Rs.90,123.36 rounded to Rs. 90.124 (B.P.Ms.No.847 dt 21.10.86 w.e.f. 16.6.86 B.P.Ms.No.332 dt.13.3.87 (half monthly periods) The latest amendments of pension rules may be verified while dealing with pension cases. 5. Study leave 6. Maternity Leave 7. Casual Leave ELIGIBI LITY OF LEAVE: Earned Leave (to all employees) ..15 days in six months credited on 1st : January and July of each year. Maximum limit 240 days. Half pay leave: ..(1) 20 days for each completed year of service commuted leave during entire service is limited to 240 days (8 months) (2) For heart disease T.B. Cancer etc. 6 months of half pay leave is treated as on full pay.

EXTRAORDINARY LEAVE: May be granted to a permanent employee if no other leave is available and the employee applies for extraordinary leave. Non-permanent employees may be granted, extraordinary leave upto a limit of six or twenty four months at any one time. Longer periods may be considered for T.B. etc. if one is in continuous service for more than one year. Chairman is competent to sanction extraordinary leave without any limit. SPECIAL DISABILITY LEAVE: This leave is counted as duty. Chairman/Chief Engineer may grant the side leave if an employee consequence to performance of his official duties is disabled by injuries etc., that manifest within 3 months of the occurrence. The leave may be for a period as certified by Medical Board for class-I and II Officers and as certified by Civil Surgeon or a Doctor with Post-Graduate degree for Class-III and IV. It can extended upto 24 months only again on a certificate from medical Board/Civil Surgeon. Leave salary for special disability leave is regulated as follows: 120 days on full pay for permanent employee in Class-I, II and III. 50 days for Class-IV on full pay. For the remaining period of half pay at employees option. MATERNITY LEAVE: Upto 3 months for married women employees. Upto six weeks maternity leave for miscarriage including abortion. STUDY LEAVE: May grant leave to its employees in the interest of Transco's service to study scientific technical or similar problems at their own cost as follows: 1) On half pay leave 2) Should have completed 5 years service and within 3 years before retirement. G.P.F. REGULATIONS A fund known as "A P Transco General Provident Fund" was constituted by the Transco with effect from 1.3.1972. Transco of Trustees comprising of Secretary to the Government finance, Member (Accounts)/F.A. and C.C.A. and one or two representatives of the employees shall administer the Fund. All temporary and officiating employees on completion of one year's of service shall be eligible to join the Fund. The employees whose services were transferred to Transco on permanent basis the amount of subscription at his credit along with interest was transferred to Transco G.P.F. A Member can discontinue from subscribing to the Fund in which case his right to removing subscription shall lapse.

NOMINATION: A subscriber may nominate one or more to receive the amount in the event of his death duly specifying the share payable when more than one is nominated. Nomination can be cancelled any time by duly sending a fresh nomination. SUBSCRIPTION: Non-Compulsory Compulsory Interest Advance Rs.1000/- and above 6% of his emolument and not more than his emoluments. : 11% the emoluments. : Interest is determined by the Transco annually as in Government and paid into the account annually. : Temporary advance normally not exceeding 3 months pay or half of the amount in the credit may be sanctioned for reasons given under Regulation-16. When applicants pecuniary circumstances justify the same. :

DECREASE/INCREASE OF SUBSCRIPTION: The employee may at his discretion increase the subscription twice in a year or decrease it once in a year. Any arrears of salary received in lumpsum may at the option of the subscriber credited to G. P.F. subject to the condition that not less than half such lumpsum is credited to the G.P.F. PART-FINAL WITHDRAWLS: Part-final withdrawals are permitted any time after completion of 20 (twenty) years of service or within ten years before the date of his retirement on superannuation reason specified in Regulation-1 B of the G.P.F. regulations.

PAY BILLS & TA BILLS

A. Bill or other Voucher presented as a claim for the payment of any amount shall contain particulars of: 1. The nature of claim. 2. The amount claimed. 3. The period to which the claim relates if it arises periodically e.g. claim for pay & fixed allowances. 4. The orders sanctioning charge, if it was incurred under special order. 5. The authority for any deduction made in the bill. 6. The major head, minor head, sub-head and detailed account head to which the charge (or each part of it) is debitable, and 7. The allocation of charge between Govts. (including Central Govt.) and the departments, if any such allocation is necessary. B. Every bill or other voucher shall be prepared in form prescribed under the rules or in the departmental manual or code concerned for bills or vouchers. C. Every bill or the vouchers shall bear the office seal and shall be filled in and signed in ink; entries and signatures with ball point pens are also permissible provided the same are clear and legible. The designation and the seal of the drawing officer should be duly affixed below the signatures. D. No bill or the voucher containing any erasure shall be presented. Every correction or alteration in the total of a bill shall separately attested by the full signature of the person who signs the receipt. E. When a charge is debitable to more than one major head of account the drawees shall ordinarily present a separate list for the amount debitable to each major head, but a single bill shall be prepared for the pay and allowances of Govt. servant or an establishment debitable to two or more major heads when the whole charge is met from the revenues of the state. F. The procedure prescribed for the rounding of the transactions in Govt. accounts and contractors bills. 1. Transactions of Govt. involving fractions of rupee shall be brought to account in multiple of 5 paise, portion not below 2 1/2 paise being rounded off to 5 Paise and those below that amount being ignored. 2. In the case of travelling allowances bills, the rounding shall be done only at the last stage and not in respect of each item e.g. Railway fare, Mileage, Daily allowance etc. comprising the claim of an individual . 3. Transactions which do not involve cash payment shall not be rounded off.

CHAPTER 13

G. No bill or any other vouch and no payment orders shall be signed by a clerk for the head of the office even if it customary for the clerk to sign letters for him when he is absent. No bill or the voucher and no payment order shall be signed with a stamp. H. When a rule or orders requires that the bills of a certain kind shall be countersigned before payment no such bill shall be presented until it has been duly counter signed. I. The drawing officer shall deduct from a bill for the pay etc., of an establishment any amount attached by a prohibitory orders of a court of law. Schedule of recoveries effected in the form prescribed should be attached intriplicate. One copy of the Schedule should be sent to the Court. J. Deductions made in the bill shall where required by the rules relating to such deductions e.g. Provident Funds, Life Insurance Fund, Postal Life Insurance Fund etc., be supported by Schedules in the prescribed form detailing the deductions made. PAY AND ALLOWANCE (INCLUDING LEAVE SALARY) OF GOVT. SERVANTS: In the absence of any special order of the Govt. to the contrary, a Gazetted Govt. servant may draw the bills for his own pay allowances and leave salary. Exception: The Secretary, T. B. Board may draw the pay and allowances of A. P. Gazetted Officers working under the Board in Non-Gazetted bill, so long as the A.P. Gazetted Officers are in T. B. Board. b) When a Gazetted Govt. servant draws his first pay bill on being appointed permanently or no probation to a post in Govt. service for the first time or on being re-employed after resignation, or forfeiture of past service he shall submit to the competent authority the health certificate. c) When claiming leave salary a Gazetted Govt. servant who is on leave within the state shall submit duplicate bills one of which shall be headed Not payable. Non - Gazetted Govt. Servants: The bil1s for the pay, fixed allowances and leave salaries of nonGazetted servants drawn by the head of the office for disbursement to them should be drawn on the forms prescribed. Separate bills shall be prepared in each office for each of the- following classes; if. It exists; a) Permanent establishment b) Temporary establishment c) The Govt. servants for whom no establishment returns are submitted and no service books maintained.

In the pay bills reference to sanctions should be invariably quoted if the posts are covered under temporary sanctions. The currency of ports sanctioned should invariably be noted in the pay bills prominently. The posts vacant also should be indicated in the pay bills. The following details also should be invariably available: 1. Name and designation. 2. Scale of Pay of the post along with monthly rates of Basic pay, Spl. Pay if any, DA, HRA, CCA and the allowances should be noted. 3. Duty period pay and leave period pay should be distinct y exhibited. Claim for leave period should be supported by leave sanction memo. The following should be attached to the pay bills: 1. Absentee statement. 2. Last pay certificate 3. Increment certificate 4. Pay fixation orders. ARREARS B ILL Arrear pay shall be drawn on a separate bill and not in the ordinary monthly pay bill. A note of the arrear bill shall invariably be made in the office copy of the bills for the period to which the claim pertains, over the dated initials of the drawer of the arrear bill in order to avoid risk of arrears being claimed over again. The drawing officer shall also record the following certificates on the arrear bill under his dated signature 1) That no part of the amount claimed has been drawn previously and that a note of the arrear claim has been made in the office copy of the bill for the period to which the claim pertains. NOTE: 1) In respect of arrear claims of Govt. servants who are transferred from one office to another the certificate mentioned above, will be recorded by the old office which proposes the bill and sends them to the next office for arranging payment. 2) A travelling allowance bill presented after the end of the month succeeding that in which the journeys covered the claims are performed shall be treated as arrear bill for the purpose of the rule.

TRAVELLING ALLOWANCE RULES

The following are the definitions given under A.P.T.A Rules: ACTUAL TRAVELING EXPENSES means the actual cost of transporting a Government servant or other person to whom these rules apply, with his servants and personal luggage, Include charges for ferry and other tolls. They do not include charges for hotels, travelers bungalows or refreshments or for the carriage of stores, or conveyances or for presents to coachmen and the like; or any allowance for which incidental losses or expenses as the breakage of crockery, wear and tear of furniture or the employment of additional servants. [Rule 2 (1)3] COMPENSATORY ALLOWANCE means an allowance granted to meet personal expenditure necessitated by the special circumstances in which duty is performed. It includes travelling allowance. [RULE 2 (a)] CONVEYANCE ALLOWANCE is an allowance granted to a Government servant, who has to tour regularly within a specified area, for the maintenance of a specified conveyance and is in lieu of all travelling allowance ordinarily admissible for the Journeys in the specified area. [Rule 15, Para l] DAILY ALLOWANCE is a uniform allowance for each day of absence from head quarters, which is intended to cover the ordinary dally charges incurred by a Government servant in consequence of such absence. [Rule 39 (a)] DAY means a calendar day beginning and ending at midnight. But an absence from headquarters which does not exceed 24 hours reckoned for "all purposes" as one day at whatever hour the period begins and ends. [Rule 2 (ii) FAMILY includes the wife and children, including an adopted son and step children of a Government servant residing with and wholly dependent on him. A female Government servant is in no case entitled to charge travelling allowance on account of her husband except when he is wholly dependent on tier. No claim can be made on behalf of a married daughter after the date on which she was placed under her husband's protection. In the case of both Gazetted and Non-Gazetted Government servants, for the purpose of Transfer Travelling Allowance family shall include also their parents, who are wholly dependent on them. [Rule 2 (III) read with G.O.MS. No. 30 Finance and Planning Dated 11_ 2 _87] FIXED TRAVELLING ALLOWANCE is an allowance granted to a Government servant who is required to tour within specified area for not less

than a given period in a week, month, quarter, half-year or year, as the case may be. [Rule 13] HEAD QUARTERS means "DUTY POINT". Duty point means the place or office where the Government servant remains on duty. [Rule 2 (x) read with Rule 22] HEAD QUARTERS STATION means the area within the limits of Corporation, the Municipality the Panchayat or the Village, as the case may be, in which the duty point is located. LAST GRADE SERVICE includes all services in the following appointments unless otherwise declared by the local Govt.:a. Service as attenders, head attenders, daffadar, or chober; b. Service in posts the pay of which does not exceed Rs. 30 MILLEAGE ALLOWANCE is an allowance calculated on the distance travelled which is given to the cost of a particular journey [Rule 181 NIGHT JOURNEY: - A Journey will be reckoned as night journey when a Government servant travels by train for atleast three hours between 9 p.m. and 6 am. [Rule 8 under Ann 1] PERIOD OF ABSENCE FROM HEAD QUARTERS:- A period of absence from headquarters begins when a Government servant actually travels his head quarters and when he actually returns to the place in which his head quarters is situated, whether he halts there or not. [Rule 41] PAY:- For the purpose of the calculating travailing allowance, pay means the actual pay drawn by a Government servant in his substantive or officiating post. It includes personal pay granted to protect a Government servant from loss of emoluments and overseas pay, but excludes personal pay granted on other considerations, special pay, language pay, judicial pay/additional pay under F,R.49 (b) and exchange compensation allowance.[Rule 2(vii)] PUBLIC CONVEYANCE means a train or other conveyance which plies regularly for the conveyance of passengers, but does not include a taxi car, hackney carriage or other conveyance which is hired for a particular Journey. [Rule 2 (vii)] SHORTEST ROUTE is a route by which a traveler can most speedily reach his destination by ordinary modes of travelling. [Rule 19]

TRANSFER means the movement of a Government servant from headquarter station in which he is employed to another such station, whether to take up the duties of a new post, or in consequence of change of his headquarters. [RULE 2(x)]

TRAVELLING ALLOWANCE means an allowance granted to a Govt. servant to cover the expenses which he incurs in travelling in the of the public service. Rule 2 (b)] CONTROLLING OFFICERS: The travelling allowance bills shall be countersigned by the Controlling Officers before payment at the Treasury. The classes of Government servants who may present bills for travelling allowance without the countersignature of a Controlling Officer are given In Rule 5, A.P.T.A. Rules. DUTIES OF CONTROLLING OFFICERS It is the duty Controlling Officer, or of a Drawing Officer when a bill does not require countersignature, before counter signing or signing a travelling allowance bill. a. To scrutinize the necessity, frequency and duration of Journeys and halts for which travelling allowance is claimed and to disallow the whole or any part of the travelling allowance claimed if he considersi. That a Journey was unnecessary or unduly protracted or ii. that a halt was of excessive duration; b. To scrutinize carefully the distances as well as the rates and the calculations entered in travelling allowance bills; c. To satisfy himself that, where the actual cost of transporting servants, personal effects, etc., Is claimed under these rules, the scale on which such servants, effects etc., were transported was reasonable; and to disallow any claim which in his opinion, does not fulfill that conditions d. To check any tendency to abuse the option of exchanging daily allowance for railway fare, mileages allowance; and e. To observe any subsidiary rules which the State Govt. may make for his guidance f. To satisfy himself that official claiming regular travailing allowance for Journeys within his Jurisdiction is not in receipt of any conveyance allowance. [Rule 7]

CONTROLLING OFFICER - REDUCING THE CIAIM The Controlling officer may reduce the Travelling Allowance of a subordinate in the following circumstances, even if the facts given are correct and the claim is accordingly to relevant rules:

a) If in the opinion of the Controlling Officer the Journey was unnecessary or unduly protracted, or that halt was of excessive duration. Rule 7 (a)3 b) Any claim where the actual cost of transporting servants personal effects etc., was, in his opinion, unreasonable. c) In the case where concessional fares are allowed, the railway allowance may be limited to such concessional rate, though the Gove servant has not availed the concessional return tickets, if the Controlling Officer is not satisfied with return tickets the Controlling Officer is not satisfied with the reasons for not availing the concessional rates obtainable. [Rule 31] d) Travelling Allowance to attend an obligatory examination admissible under rule 82 and 86 may be disallowed if. in the opinion of the Controlling Officer, the subordinate has culpably neglected the duty of preparing himself for the examination or has not displayed a reasonable standard of proficiency in an examination which is not obligatory. ADMISSIBILITY OF TRAVELLING ALLOWANCES i. ii. iii. iv. v. vi. vii. viii. ix. x. xi. Travelling allowance is also admissible for the following kinds of Journey: Journey on tour Rule 581 Journey on transfer: [Rule 693 Journey to a newly appointed Government servant to Join his first post; [Rule 65] Journey to attend an examination;[Rule 82] Journey when proceeding on or returning form leave; Journey on retirement, dismissal or termination of employment;[Rule 89] Journey to give evidence; [Rule 92] Journey for medical purposes; [Rule 941] Journey on a course of training; [Rule 102] Journey for special purposes [Rule 103]

DAILY ALLOWANCE Daily allowance is a uniform allowance granted to a Government servant for each day of his absence from head quarters which is intended to cover the ordinary daily charges incurred by a Government servant [Rule 39(a)] It can be exchanged for mileage including railway and steamer fare subject to the conditions prescribed under the Rules [Rule 39(a)] It is admissible only for journeys or halts in the course of journeys on tour [Rule 39(b)]

RECKONING A DAY FOR THE PURPOSE FOR CALCULATION OF DAILY ALLOWANCE: The period of absence form headquarters of a Government employee for being eligible to draw daily allowance irrespective of the mode of the travel shall be as indicated below: 1) A day should be reckoned as to cover 24 hours of absence from headquarters commencing from the minute the officer leaves the headquarters. The rate of Daily allowance shall be as follows; a) Absence of 12 hours and more..1 day allowance b) Absence of six hours and more.. 1/2 daily allowance c) Absence of less than six hours. No daily allowance 2) This will apply to all modes of transport. a) For this purpose the restriction against drawing daily allowance in case of journey by Bus between 8km and 32km D.A. is not admissible in the following cases b) For any day spent on casual leave while on tour c) For any Sunday or holidays unless the officers is actually in camp. DAILY ALLOWANCE FOR HALTS EXCEEDING TEN DAYS: The restriction for drawal of full daily allowance for the period of stay at one place for more than ten days has since been remove and all Government employees are eligible to draw full daily allowance for the entire duration of their tour. Travelling allowance on transfer Travelling Allowance is allowed to a Government servant transferred from one station to another subject to the following conditions: 1. The transfer was for public convenience; and 2. That the Government servant is entitled to pay during the period occupied by journey. It should be noted that the transfer T.A. is not admissible in the following cases; i) When the transfer is made at the request of the Govt. Servant ii) When no transit pay is admissible for the period of transit(i.e) a) When the Government servant returns form leave on average pay exceeding four months or earned leave exceeding s120 days b) When the Government servant returns from leave on half pay or extraordinary leave. Overstayed of Joining Time: In the case of overstayal of joining time dealt with under F.R. 108, the Government may reduce travailing allowance by not more than 50% of the amount that would, otherwise be admissible. In the absence of an order reducing the travelling allowance as aforesaid, travailing allowance shall be paid in full[Rule 69(a))

ADMISSIBILITY OF T.T.A Travelling allowance to a Government servant on transfer is admissible to (i) Self(ii) Family and (ii)personal effects. FAMILY: The following points to be noted while treating a person as the member of a Government servant's family for the purposes of travailing allowance:I. II. III. IV. He should be wholly dependent on the Government servant and residing with him. Parents do not include adopted-Father, adopted-mother, step-father, Step-mother. When the Government servant has more than one wife, claim for T.A shall be limited to one wife only.[Ruling 1 under Rule 2(iii)] When both husband and wife who are employees of the Andhra Pradesh Government are transferred at the same time or with six months of his/her transfer, from one and the same old station to one and the same new station, only one of them shall be entitled to travailing allowance as on transfer, the other being treated as a member of his/ her family not in the employment of the Andhra Pradesh Government. [Note 3 under Rule 2(iii)] WHO are treated as members of the family:- i) Wife/Husband (ii) Children(iii) step children(iv) Adopted son other than adopted son of an unmarried Christian lady(v)parents(Vi) Married daughter not placed under the protection of her husband (vii) Widowed daughter vi) Who are not treated as member of the family:- (i) adopted daughter(ii) Married daughter placed under 1 he protection of her husband(iii) Brother and (iv) Sister.

V.

PERSONAL EFFECTS (Packing and unpacking charges)

In the case of transfer outside the state the employees shall be eligible for the charges stipulate d for various grades Note (i): For this purpose, they must produce the receipts Note (ii) :If an employee carries his personal effects by passenger train or by air instead of by goods train, he may draw Me actual cost of carriage up to a limit of the amount which would have been admissible had he taken the maximum number of kilograms by Goods train. Note(iii): Subject to the prescribed maximum number of kilogram, an employee may draw the actual cost of transporting personal effects to his new station from a place in India other than his old station(Eg from a place where they are purchased enroute or have been left on the occasion of a previous transfer) or from his old station to a place in India other than his new station, provided that the total amount drawn, including the cost of transporting those personal effects shall not exceed that admissible had the maximum admissible

number of kilograms been transported by good train from the old to the new station direct. Note(4): The cost of transportation of personal effects on transfer may be allowed, subject to the maximum quantity prescribed above the Quick Transit Service rates, if personal effects are actually transported by the Quick Transit Service and that they reached the destination within the specified period should be recorded by the claimant on the Travelling Allowance Bill. Note (5): An employee carrying goods by road between place connected by rail can draw actual expenditure on transportation of personal effects by road or the amount admissible on transportation by railway by goods train, whichever is less. Note (6): In case the personal effects are transported by other modes of transport like lorry, etc., the existing rules mentioned in Rules and Orders Issued from time to time shall continue to apply, except as provided for in this order. JOURNEY TO ATTEND EXAMINATION: A Government servant is entitled to draw travelling allowance for the journey to and from the place at which he appears for an examination of nay if the following kinds:a. Any special test or departmental or language examination which is compulsory under any rules or orders for the time being in force applicable to the Government servant concerned. b. An examination held under any rules in force in the vernacular language of hill tribe. c. In the case of a military officer in civil employ any examination for promotion in military rank. d. In the case of a Assistant Surgeon, an examination designed to test his fitness to rise above an efficiency bar in a time scale. Provided that: 1) Travelling allowance shall not be drawn under this rule more than twice for any particular examination or standard of examination and 2) The head of a department may disallow travelling allowance under this rule to any candidate who, in his opinion, i. Has culpably neglected the duty of preparing himself for an obligatory examination; or ii. Does not display a reasonable standard of proficiency in an examination which is not obligatory. [Rule 82]. Note: - A claim for travelling allowance under this rule should be supported by a certificate by the controlling officer to the effect that the conditions prescribed in the rule have been satisfied. The examinations to be obligatory passed are those prescribed in the Service Rules. JOURNEY WHEN PROCEEDING ON OR RETURNING FROM LEAVE: - A

Government servant is not ordinarily entitled to any travelling allowance for a journey made during leave or while proceeding on or returning from leave. The following cases are exceptions to this rule:a. Government servants on leave or during vacation, if employed with consent, In each case, of the head of the department or office as honorary organizers under the Registrar of Co-Operative Societies may be granted travelling allowances at the rates to which they would be entitled If they were not on leave but were performing their ordinary official duties. b. A Government servant on leave for a period not exceeding four months is entitled to travelling allowance for a journey undertaken for the purpose of passing an examination, provided he is otherwise eligible calculated either from the place where he was last on duty or from the place where he is residing, whichever would give him least travelling allowance. If the place where the Government servant was last on duty Is also one of the centers where the examination is held, no travelling allowance will be admissible under this rule. c. If a Government servant, while on leave makes a Journey under proper authority and in the public interest, he may, with the approval of Government, be granted travelling allowance as for a journey on tour. [Rule 86] JOURNEY TO GIVE EVIDENCE: A Government servant who is summoned to give evidenceIn a criminal case, a case before a court martial, civil case to which Government is a party or a departmental enquiry held by a properly constituted authority in India including an Inquiry preliminary to acquiring land; provide that the facts to which he is to give evidence have come to his knowledge in the discharge of his public duties: i. May draw travelling allowance as for a Journey on tour attaching to his bill a certificate of attendance given by the court or other authority which summoned him. ii. When he draws such travelling allowance, may not accept any payment of his expenses from the court or authority. Any fees which may be deposited in the Court for the travelling and subsistence allowance of the witness must be credited to Government; If the court in which he gives evidence is situated within five miles of his headquarters no travelling allowance is therefore, admissible for the Journey, and may, if he is not in receipt of permanent travelling allowance accept such payment of actual travelling expenses as the court may make, [Rule 921]

iii.

GIVE EVIDENCE WHILE ON LEAVE: -

A Government servant summoned to give evidence while on leave is entitled to the concession described in this rule, and he shall be allowed travelling allowance from and to the place at which received the summons. [Note 1 under Rule 92] TO GIVE EVIDENCE IN DEPARTMENTAL ENQUIRY WHILE UNDER SUSPENSION: A Government servant under suspension summoned to attend any departmental enquiry may be paid travelling allowance under this rule from and to the place from which he is summoned as if he were on duty and the charge debited to the department to which he belongs. [Note 2 Rule 92] FOR PERUSAL OF OFFICIAL RECORDS CONNECTION WITH THE CHARGES AGAINST HIM:A Government servant who undertakes a Journey for perusal of official records in connection with any charges pending against him may be paid travelling allowance under this rule from and to the place from which he undertakes the journey, In case he is honourable acquitted of the charges[Note 4 under Rule 92] FOR PERUSAL OF OFFICIAL RECORD TO GIVE EVIDENCE: When a Government servant, who is summoned to give evidence before a Court, undertakes a journey to a place other than that at which the Court is situated for the purpose of perusing official records in connection with the giving of such evidence, he may be paid travelling allowance under this rule for such journey also. [Note 5 under Rule 92] TO ATTEND DEPARTMENTAL ENQUIRY AGAINST HIM:A Government servant is entitled to travelling allowance as on tour for Journeys to attend departmental enquiries into his conduct whether such journeys are performed while he is on duty or on leave or under suspension; subject to the following conditions: I. The travelling allowance will be restricted to that admissible from his headquarters to the place of enquiry or from the place at which he has been permitted to reside during suspension to the place of enquiry, whichever is less. No Travelling allowance will be admissible, if the enquiry at the outstation is at the request of the Government servant under suspension. [Ruling 8 under Rule 92]

II.

TRAVELLING ALLOWANCE TO THE FAMILY OF A GOVERNMENT SERVANT WHO DIES IN SERVICE: If a Government servant dies while in service, members of his family may be granted travelling allowance for the Journey to his or to any other place, where they may wish to reside, either from his headquarters or from the

place of his death: provided that the amount shall not exceed what would be admissible for Journey from the Government servant's headquarters to his home For the purpose of this rule the headquarters of Government servant on leave shall be considered to be the place of his headquarters when he was last on duty. The rates of travelling allowance shall be those which would be admissible for a Journey on transfer by the deceased Government servant less one fare for Journey by rail. The allowance must be claimed within three months of the death of the Government servant and may be drawn in advance, if the officer drawing the bill is satisfied that the Journey will be made. Bills of non- Gazetted Government servant's family members may be drawn and countersigned by the officers authorized so to deal with the bills of the deceased Government servant. In the case of a Gazetted Government servants family bills-may be drawn by the officer who is the countersigning authority, for the travelling allowance bills of the deceased officer. If the deceased Government servant was himself the countersigning authority, the Head of the Department or the Secretary to Government concerned may draw travelling allowance bills. Travelling allowance under this rule is admissible only when the distance to be travelled exceeds 80 kms. TRAVELLING ALLOWANCE ON RETIREMENT: Travelling Allowance is allowed to a retired Government servant and members of his family from the place of duty to his Horne Town and in respect of transportation or his personal effects between the same places as admissible under the rules on the date of his retirement subject to the following conditions: 1. The concession will be admissible by the shortest route from the place of duty to his Home Town. The word 'Home Town' means the place which is so declared by the Government servant in connection with the LTC Rules. 2. Only expenditure incurred between the place of duty to the Place nearest to the Home Town and if the Home Town is outside the State within the limits of the State shall be reimbursed by Government as per the Travelling Allowance Rules. 3. The concession may be availed by the Government servant at any time during his leave preparatory to retirement or during refused leave or within 6 months of the date of his retirement. 4. The concession will be admissible to permanent State Government Servants who retire on a Retiring Pension or on super annuation, invalid or compensation pension. It will not be so admissible to Government servants who quit service by resignation or who may be dismissed or removed from service.

5. The concession will also be admissible to temporary employees who retire on attaining the age of super annuation provided they have put in a total service of not less than 10 years under the State Government. 6. Where an officer is re-employed under the State Government while he is on leave preparatory to retirement or within 6 months of the date of his retirement, the concession admissible under these orders shall be allowed to be availed of by him within 6 months after the expiry of the period of his re-employment. 7. A member of a Government servant's family who follows him within six months or precedes him by not more than one month will be treated as accompanying him. This period will be counted from the date on which the retiring Government servant himself actually moves to his 'Home Town'. The claims of travelling allowance in respect of the family members will not be payable until the Government servant who is eligible for this concession actually moves to the 'Home Town'. 8. The Travelling Allowance claims admissible under these orders will be drawn on Travelling allowance bill forms like the Transfer Travelling Allowance claims. The claims of officers who were their own Controlling officers before retirement will, however, be countersigned by the next Higher Officer. 9. Payment of Travelling Allowance claims under these orders may be made by Treasury Officer in relaxation of the State Treasury Rules. 10. The concession admissible under these orders will be admissible to all personnel who retire on an after the date of issue of these orders. 11. These orders do not apply to persons who a) are not in whole-time employ of the Government but engaged on contract; b) are paid from contingencies; c) are eligible for any other form of travel concession on retirement. (G.O.Ms.No. 80 Fin & Plg (T.A.) Dated 20-3-1975)

CHAPTER - 14

DISCIPLINARY REGULATIONS
Every employee should conduct himself in a disciplined manner and set an example to the society. Every utility sets certain acts and omissions which constitute misconduct. The following shall be treated as misconduct; 1. Willful insubordination or disobedience. Whether alone, or in combination with another or others, of any lawful and reasonable order of a superior 2. Striking work or deliberate slowing down of work either singly or along with another or others in contravention of any lawful and reasonable order of a superior 3. Striking work or deliberate slowing down of work or inciting other employees to strike work or slow down work in contravention of orders of any statue, law, enactment or rule for the time being in-force or as applied from time to time 4. Concerted or organized refusal on the part of employees to receive their pay 5. Theft, fraud or dishonestly in connection with the Transco a property or business 6. Taking or giving bribes or any illegal gratification whatsoever 7. Collection or canvassing for collection without the written permission of the management of any money 8. Habitual late attendance and habitual absence without leave or without sufficient cause 9. Carrying on money-lending or any other private business without the permission of the management 10. Drunkenness, lighting riotous or disorderly or indecent behavior in the premises of the establishment 11. Chit-chatting or loitering in the work premises, habitual negligence or neglect or work 12. Habitual indiscipline 13. Smoking within the premises of the establishment in places where it is prohibited 14. Causing willful damage to work in progress or to any property in the establishment

15. Distribution, exhibition, display or use within boundaries of work-spot or premises or any Newspapers, handbills, pamphlets or posters, flags or loud speakers without previous sanction of management 16. Refusal on the part of an employee to work on a job or a machine other than the job or machine on which is usually engaged without adversely affecting his service conditions 17. Holding meetings within the boundaries of the establishment or in any of the premises owned by the utilities without the previous sanction of the management 18. Gambling within the premises of the establishment 19. Sleeping while on duty 20. Malingering or slowing down of work 21. Unauthorised use of utilitys quarters or land or vehicles 22. Lending or borrowing money to or from subordinate employees 23. Insolvency 24. Writing of anonymous or pseudonymous letters criticizing the utility or any of its employees 25. Spreading false rumour, or (giving false information, which tend to bring into disrepute the utility or its employees or spreading panic among them 26. Conviction in any court of law for any criminal offence involving moral turpitude 27. Theft of employee's property inside the premises of the establishment 28. Continuous absence without permission without satisfactory cause for more than five days 29. Giving false information regarding name, father's name, qualification, age or previous service or any other information connection with employment, at the time to employment or any other time during service 30. Any breach of any rules 31. Abetment of or attempt to commit any of the above acts or misconduct. Habitual breach of any rules of instructions for the maintenance and cleanliness or workplaces, Willful disobedience of any order expressly given or any rule expressly framed for the purpose of securing safety or willful removal or

disregard of or interference with any safety guard of other device provided for securing safety. Accepting service in any establishment other that belonging to the utility or private employment from any person in the utilitys service. Leaving one's post without handing over change or without permission or abandoning or deserting one's post. Conducting or participating in or promoting an unauthorized raffle, lottery or benefit performance. Enrolling as member in any political party. Engaging in divulgence of an official information or document. Failure to exercise efficient control and supervision on the subordinate Staff resulting in general inefficiency or the Branch or Unit. Unauthorized divulgence of an official information or document. Bidding or tendering for supply to the utility or for purchasing any property of the utility either in person or through the press or leaflets, etc. Unauthorisedly making any statement in the press or contributing any articles to the press or any magazine or giving talk on the radio without prior approval of the appropriate authority or ventilating grievances through the press or leaflets, etc. Save in accordance with the provisions of any law for the time being in force, becoming a member or appearing as a representative of any Association or Union representing or purported to represent the employees or any classes of employees of the utility unless such association or union has been recognized by the utility. Any other act or omission which may be declared by the utility to be misconduct. Leaving the country for any reason, whatsoever without obtaining specific permission or staying in other country for more days than the days permitted by the utility, in the 'No Objection Certificate' and being employed in other country without permission of the utility. (B.P. (P& G. Per) Ms. No. 94 dt 25.5.92) a) Competent and appellate disciplinary authorities: The authorities which may impose any of the penalties mentioned in regulation 5 and the appropriate authorities to whom appeal lines shall be as specified against each of the categories in Schedule.

b) Competency of authorities superior to disciplinary authority: c) Where in any case a higher authority has imposed or declined to impose a penalty under this regulation, a lower authority shall have no jurisdiction to proceed under this regulation in respect of the same case. Provided that in cases where a case is sought to be reopened after one year, the authority concerned (the reopening authority) should obtain the permission of the next higher authority or the Transco as the case may be. d) The fact that a lower authority has dropped a charge against a person as not proved shall not debar a higher authority from exercising it. e) Power vested in an authority may be exercised by a superior authority in its discretion.

Disciplinary authority in certain cases: 1) Where on promotion or transfer, a member of a service in a class, category or grade in holding an appointment in another class, category or grace thereof or in another service no penalty shall be imposed upon him in respect of his work conduct before such promotion or transfer except by an authority competent to impose the penalty upon a member of the service in the latter class, category, grade or service, as the case may be. This provision shall apply also to cases of transfer or promotion of a person from a post under the jurisdiction of one authority to that another authority within the same class, category or grade. 2) Where a person has been reverted or reduced from service to an another or from one class category or grade of a service to another class, category or grade thereof no penalty shall be imposed upon him in respect of his work or conduct while he was a member of the service, class, category or grade, as the case may be, from which he was reverted or reduced, except by an authority competent to impose the penalty upon a member of such service, class, category or grade.

Disciplinary action in respect of employee of State/Central/Government of outside bodies: a) If any employee to be proceeded against is an employee of the State or Central Government or of any other outside body and is on deputation to the utility, no punishment shall be imposed on him without the concurrence of the authority who lent his services to the utility. If it is considered that the penalty of compulsory retirement, reduction in rank, removal or dismissal is to be imposed, the competent authority shall complete the enquiry in accordance with the provisions of subregulation (2) of regulation 10 and revert the employee concerned to the State of the Central Government of other employer, as the case may be and also toward the record of enquiry for such action as is considered necessary. b) If a utility's employee is not Foreign Service, the employer shall not impose any punishment on him without the concurrence of the utility. If one of the major punishments of reduction, compulsory retirement, removal or dismissal is to be imposed, the foreign employees necessaryenquiry, send the complete papers to the utility and also revert the employee concerned to the utilitys services for such action as is considered necessary by the utility against him. c) In case an employee referred to in clause (a) or (b) has to be suspended pending enquiry the foreign employer shall place him under suspension, but shall report forthwith to the lending authority the circumstances leading to the suspension. Procedure for imposing penalties: 1. No order imposing or a member of a service a penalty shall be passed except after. a) The member of the service is informed in writing by the authority competent to impose the penalty of the proposal to take action in regard to him and of the allegations on which the action is proposed to be taken, and is given an opportunity to make any representations he may with to make to such authority, and b) Such representation, if an, is taken into consideration by the authority competent to impose the penalty. 2. In every case where it is proposed to impose on a member of a service any of the penalties specified in items (iv), (vi), (vii) and (viii) in Regulation 5, the authority competent to impose the penalty shall appoint an enquiry Officer, who shall be superior in rank to the person on whom it is proposed to impose the penalty, or shall itself hold an enquiry either SUO-MOTU or on a direction from a higher authority in every such case the grounds on which it is proposed to take action shall be reduced to the form of definite charge or charges, which shall be communicated to the person charged together with a statement.

3. of the allegations on which each charge is based and of any other circumstances which it is proposed to take into considerations in passing orders in the case. He shall be required, within a reasonable time, to file a written statement of his defense and to state whether he desires an oral enquiry or to be heard in person or both. The person charges may for the purpose or preparing his defence be permitted to inspect and take extracts from such official records as he may specify, provided that the enquiry officer may, for reasons to be recorded in writing refuse such permission, if in his option, such records are not relevant for the purpose of it is against public interest to allow access thereto. On receipt of the statement of defence within the specified time or such further time as may have been given, an oral enquiry shall be held if such an enquiry if desired by the person charged or is decided upon by the enquiry officer or is directed by the competent authority. At that enquiry office may, for special and sufficient reason to be recorded in writing, refuse to file, call a witness. After the oral enquiry is committed, the personal hearing shall be given to him. The enquiry officer shall on completion of the enquiry or the personal hearing of the person charged or both, forward the proceedings of the enquiry or the personal hearing of the person charged or both, forward the proceedings of the enquiry or the authority competent to impose the penalty unless he is himself such an officer. The proceedings shall contain the charges trained against the person charged along with the grounds of charge, written statement field in defence, if any, a sufficient record of the evidence adduced during the oral enquiry, a memorandum of the point urged by the person charged during the personal hearing, if any, a statement of the findings of the enquiry officer on the different charges and the grounds thereof. Every employee should desist from committing any of the above mistakes.

CHAPTER - 15 CONSUMER SERVICE AND CARE

Customer Service Centre: Customer Service centre can be set up by the utilities to provide a Single Window interface for all the customer related activities. Customers are thus spared for the tedious process of approaching several officers for getting their work done. Customers can approach the Customer Service Centres for availing new service connections; resolving their complaints related to metering, billing, disconnections, reconnections, etc; and for processing their service requests related to category changes, title transfers, load changes, etc. Generally these customer service centers work on extended and convenient timing for the benefit of the customers. The entire process of registration of complaints / service requests, dispatch, status updating, closure is managed through custom designed software solutions or Software Products. In case the complaint / service request is not resolved within a specified time limit, the same is escalated to the notice of higher authorities for expediting the resolution process. The escalation process is enabled through the intelligent components of the software. These service centers are generally setup with good ambience to enhance the customer interaction experience. Customer service centers have been successful in bringing down the processing time and have thus significantly enhanced the customer satisfaction levels. Customer Service Centers have been implemented in the states of Andhra Pradesh, Delhi and Karnataka. With the help of these service centers the distribution utilities have been able to confirm to the stringent service levels defined by their respective State Electricity Regulatory Commissions. Electricity Call Centre: To address the power supply related complaints on a proactive basis and provide effective, assured and timely services to the customers several power distribution companies and state electricity boards have set up an Electricity Call Centers. The call centers work round the clock to receive customer complaints through several channels such as telephone, fax, email, etc. The customer complaints are registered and forwarded to the field personnel for timely action and rectification. The status of the complaint is periodically tracked and updated. The customer can know the status of the complaints registered by contacting the call centre personnel. In case the complaint is not resolved with in a specified time limit, the complaint is escalated to the notice of higher authorities for expediting the resolution process. The Electricity Call Centers are managed through specially software solutions, which form the backbone of operations. The software deployed may vary from technically advanced to simple solutions. The software generally

comprise of Contact Management Solution and /or Process Monitoring Solution. These call centers are either managed by the utilities personnel or outsourced to third parties. Electricity Call Centers have been implemented in the states of Tamil Nadu, Andhra Pradesh and Karnataka. In the states such as Rajasthan, Delhi, Madhya Pradesh, etc the call centers are at the various states of implementation. Collection through Banks, Post Offices and Camps: Payment of electricity bills has generally been an unpleasant & timeconsuming experience for the customers. Long queues, inconvenient timings, limited modes of payment have made payment of electricity bills a difficult task for the customers. Collection Centers could be setup by utilities under proper governance to enable customers to make payments in an easy and convenient manner. Collection centers work on extended timing and payments can be made in any of the centers either through cash, cheques, demand draft, credit cards, debit cards, etc. Collection centers have been successfully implemented in many states. Similarly some banks and post offices can be contact for their services for collecting electricity bills from the consumers. Customers can go to these banks or post offices and pay their bills either various payment modes

CHAPTER 16

MOTIVATION
This is a compilation of few free articles by Nido R Qubein from the source below. We acknowledge with thanks for the permission given to use them in the reference book to be used for Distribution Reform, Upgrades, and Management (DRUM) program of the USAID. http://www.nidoqubein.com/articlesanddownloads.cfm Motivating employees in an organization is one of the challenging tasks for the seniors. It becomes more and more difficult with the differences in caste creed, and religion. However, there are some fundamental motivators, which when brought into play can have extraordinary results. Instead of writing a paper on Motivation Issues and Aspects, we thought that the objective would be better served if the following seven free articles by Nido R. Qubein is compiled and presented here. There is no logic in arranging them in the order it has been done. 1. 2. 3. 4. 5. 6. 7. Ten Principles of Motivation What Motivates your Employees? Balanced and Motivated How to Inspire others to peak performance Employees vs Machines Robotic Performance Cultural Diversity: Our future Ten Principles of Motivation One of the questions I hear most often from executives is How do I motivate my employees to do the things I want them to do? The answer is: You dont ! We cant motivate people. They are already motivated. But we can determine what motivates them and use this knowledge to channel their energies toward our company goals. From my 20 years of helping executives solve their people challenges, Ive learned a few basic principles about motivation. Let me share them with you:

ALL PEOPLE ARE MOTIVATED

Some people are like water in a faucet. They have the motivation; all you have to provide is the opportunity. The water is already motivated to flow. But it doesnt have the opportunity until you open the tap. Others are like mountain streams, which flow swiftly but follow their own channels. People, too, may move energetically, but toward their own goals. We in management should make it worth their while to channel their motivations toward the results management is seeking. PEOPLE DO THINGS FOR THEIR REASONS; NOT FOR YOURS OR MINE We in management have to show employees whats in it for them when they follow behaviors that benefit the company. We can show them by using rewards and recognition, appealing to their sense of pride and achievement. PEOPLE CHANGE BECAUSE OF PAIN When the pain of staying the same becomes greater than the pain of changing, people will change. For example, Americans didnt start buying smaller, fuel-efficient automobiles until the pain of high gasoline prices became greater than the pain of switching to less roomy and less powerful cars. THE KEY TO EFFECTIVE COMMUNICATION IS IDENTIFICATION When something becomes personal, it becomes important. When our clients or our employees begin to identify with who we are and what we are, good things begin to happen. Large corporations have discovered that. Prudential, for example, knows that its customers want to buy security. So it doesnt just sell insurance; it markets peace of mind by inviting all of us to buy a piece of the rock. Kodak doesnt sell film; it invites its customers to trust your memories to Kodak. AT&T doesnt tell us to make long-distance calls. It asks us to reach out and touch someone. In dealing with employees, it isnt enough to appeal to them on the basis of loyalty to the company. They need personal reasons for showing this loyalty. Whether were instituting a new educational program or undergoing a total restructuring, we can get our employees on board more readily if we show them how the change will affect them for the better. When my company sets out to lead corporate teams in developing their human-relations skills, we dont tell them what were going to do for the company. We talk about what were going to do for the individual. For example, in the introduction to one of our manuals, we tell supervisors.

Weve designed this complete educational system to help you master the skills of supervisory management and enjoy the rewards of leadership and career enhancement. From managements standpoint, the training was designed to increase the effectiveness of the organization. Thats what sold the company on the program. But from the employees standpoint, it was to upgrade the skills of the individual. Thats what sold the employees on the program.

THE BEST WAY TO GET PEOPLE TO PAY ATTENTION TO YOU IS TO PAY ATTENTION TO THEM That means listening to others and not just hearing them. Listening is active; hearing is passive. If you listen to individuals long enough, theyll tell you what their concerns and problems are. Its very important that executives listen to their staff and associates. We need to take the time to get to know them, not just by name, but also by their interests and aspirations. We should try not to come across as interrogators, but ask them friendly questions about how they are, what they did over the week-end, and what theyre doing on vacation Then listen. Its amazing what youll learn. PRIDE IS A POWERFUL MOTIVATOR Everybody is proud of something. If we find out what makes our people proud, we can use that insight to channel their motivation. Pride is tied closely to self-esteem. My friend, Robert W. Darvin, has founded several successful companies, including Scandinavian Design, Inc., and has often used our consulting services and invited me to speak to his people. His observations on self-esteem are worth repeating: Theres only one thing that counts in a business: building the self-esteem of your employees. Nothing else matters, because what they feel about themselves is what they give to your customers. If an employee comes to work not liking his job, not feeling good about himself, you can be sure that your customers will go away not liking or feeling good about your company.

YOU CANT CHANGE PEOPLE; YOU CAN ONLY CHANGE THEIR BEHAVIORS To change behavior, you must change feelings and beliefs. This requires more than training. It requires education. When you train people, you just try to teach them a task; when you educate people you deal with them at a deeper level relative to behavior, feelings and beliefs. THE EMPLOYEES PERCEPTION BECOMES THE EXECUTIVES REALITY This is a very important point. When we speak to employees, they dont respond to what we say; they respond to what they understand us to say. When employees observe our behavior, they respond to what they perceive us doing, and will try to emulate us. Suppose you send an employee to developmental workshop or seminar and she comes back brimming with new ideas and information. But you havent been exposed to all this stimulating stuff, so your behavior doesnt change. The employee realizes this and concludes that the behavior she observes in you is the behavior you want. This may not be the case at all. You may want the employee to implement all these new ideas, but your employees perception is the reality you get.

YOU CONSISTENTLY GET THE BEHAVIORS YOU CONSISTENTLY EXPECT AND REINFORCE We should look for ways to reward employees for doing the things we want them to do. The reward may take the form of financial incentives, prizes, or simply public recognition of a job well done. Reinforcement can be positive or negative, as my Roundtable partner, Ken Blanchard, has taught us all. If employees learn that a certain type of behavior results in lower earnings, less favorable hours or less desirable territories, theyll adjust their behavioral patterns. The purpose of most communication is to influence the attitudes and behaviors of those whom we address. Since the human race is composed of billions of individuals, each with a different way of responding, no one approach is universally effective. So its important that you learn to express yourself accurately and in a way that will accomplish your purpose towards the individual youre addressing. The basic process of Communicating

To achieve precision and effectiveness in communicating, you should understand the basic process of communication. It has four requirements: A message must be conveyed The message must be received There must be a response Each message must be understood

Lets look at these requirements one at a time. A message must be conveyed That sounds simple enough. You know what your thoughts are, and you know how to translate them into words. But thats where we lose the simplicity. Each of us has our own mental dialect. It is the common language of the culture in which we grow up, modified by our own unique lifes experiences. Our lifes experiences add color and shades of meaning to different words. When you speak, your mental dialect must be translated into the mental dialect of the hearer. So the words you speak acquire a different color when they pass through the ears of the person who hears you. It depends upon where you are You can probably think of numerous opportunities for misunderstandings on your job and in your culture. If you tell your travel agent you want a flight to Portland, be sure to specify Maine or Oregon. Otherwise, you may end upon the wrong. WE ALL JUDGE OURSELVES BY OUR MOTIVES; BUT WE JUDGE OTHERS BY THEIR ACTIONS Put another way, were inclined to excuse in ourselves behavior that we find unacceptable in others. When our employees are late for work, its because theyre irresponsible and have no interest in their jobs. When were late for work, its because we were attending to necessary details that had to be taken care of. When employees engage in undesirable behavior, we shouldnt try to assess motives or change them. Just deal with the behavior. We cant change the motives of our employees, but through positive or negative reinforcement you can affect their actions. Follow these principles and youll find yourself surrounded by motivated employees who are channeling their energies towards your corporate goals - goals in which they have personal stakes.

CHAPTER 17

COMMUNICATION SKILLS
This is a compilation of few free articles by Nido R Qubein from the source below. We acknowledge with thanks for the permission given to use them in the reference book to be used for Distribution Reform, Upgrades and Management (DRUM) program of the USAID. http://www.nidoqubein.com/articlesanddownloads.cfm The effective communication in an organization is important for its growth and success. The communication is both ways, viz., top to bottom and bottom to top. The players in the communication must learn how best to communicate to their seniors as well as to their juniors. Instead of writing a paper on Communication Issues and Aspects, we thought that the objective would be better served if the following ten free articles by Nido R. Qubein is compiled and presented here. There is no logic in arranging them in the order it has been done. 1. Fundamentals of Communication 2. Principles for communicating with people 3. Building a Boundary less Company 4. How to be an effective communicator 5. How to write effectively 6. Silent communication 7. Unproductive games communicators play 8. Productive games communicators play 9. How to avoid communication barriers 10. How to communicate like a Pro Fundamentals of Communication Most of the verbal communicating you do is from one individual to another. This is true whether youre in a family, social, or a work setting. One-on-one verbal communication affords the greatest opportunity for precision, because immediate feedback can tell you whether you were understood accurately. But communicating effectively involves more than just accuracy.

Principles for communicating with people 1) All people are motivated We cannot motivate them

We can only guide them by their motivations. 2) People do things for their own reasons not for yours or mine. Show people what they want and they will move heaven and earth to get it 3) People change because of pain When the pain of staying the same becomes greater than the pain of changing, people will change. 4) The key to all effective communication is identification When something becomes personal, it becomes interesting 5) The best way to get people to pay attention to you is to pay attention to them Little things mean a lot 6) Pride is a powerful motivator Everybody is proud of something 7) You cannot change people; only their behaviors Attack the behavior; not the person 8) The workers perception becomes the supervisors reality What they see is what you get. 9) You consistently get the behaviors you consistently expect and reinforce Reinforcement can be positive or negative 10) We all judge ourselves by our motives; but we judge others by their actions. Any of us can do anything we can convince ourselves we are justified in doing.

CHAPTER 18 STRESS MANAGEMENT

Distress To Destress A Recipe For Relaxation

Stress, strain and anxiety plague the life of people in the current era. Not a day passes without a report in the newspapers containing information about people succumbing to trials and tribulations of stress. Stress throws the homeostasis of the body and tranquility of the mind out of balance. Stress related disease is reaching an epidemic proportion taking a heavy toll of human life these days. Stress like relatively, is a scientific concept which has the mixed blessing of too well known but too little understood lamented, Hans Selye, who has been referred to, as the Father of Stress research. He defined stress as General Adaptation Syndrome in which the body reacts to any threatening stimulus through a predictable sequence of internal changes including the release of hormones. Stress is the accumulation of normal and abnormal pressures of the modern living, which tests the individuals ability to cope. It is the coupled action of the body and mind involving instant appraisal of the threat and modulation of the response. In other words, it is the twin action of the body and mind arising out of threat perception of an unforeseen event and the individuals inability to cope with it by an individual. Dr. Walter Cannon calls this as the fight or fight reaction of an organism to meet any emergency threatening its existence. No doubt, this kind of protective mechanism was necessary for the early man whose life constantly confronted danger of annihilation from wild animals and forces of nature. In such a situation, this defence mechanism was handy either to fight or flee from the enemy for survival. Despite the changed scenario in which people no longer face such a threat, the body still continues to react in the same old fashion. Anatomy of Stress: If any stress promoting activity is carefully analysed, one can easily identify the following components: 1. 2. 3. 4. Happening of an event Evaluation of the threat Response from the body Outcome

While the triggering mechanism of the stress is always threat perception of an individual, the reaction is the resultant effect depending upon the mental makeup.

Biochemistry of Stress: Whenever a person perceives any stressful event, the brain triggers the Hypothalamus to secrete a hormone called Cortisol Releasing Factor, which sends messages down in two pathways. On the one track, the nerve cells in the brain stem and the spinal cord relay these impulses to the core of the adrenal glands to secrete Epinephrine and nor epinephrine which increases the heart rate, breathing, alertness and muscle responses. Simultaneously, Cortisol releasing factor prompts the pituitary gland to produce a hormone called Adrenocorticotropin to release Cortisol from the cortex of the adrenal glands into the blood stream in order to speedup the metabolic activities. Physiology of Stress: When the hormones are released, it leads to a series of physiological changes inside the body. At first pupils dilate, so that there will be better vision followed by mouth drying up to ensure that no fluid enters the stomach. Thereafter the digestive process stops in order to divert blood supply to the brain and the muscles in the neck and shoulder. Simultaneously, the heart starts pounding and the pace of breathing increases many fold. Besides, the energy is released in the form of glucose and fat from the liver. Pathology of Stress: Certain amount of stress is required to meet any emergency. But when the stress response reaches the point beyond which an individual cannot cope, it has a terrible impact on health and it may develop into a variety of illnesses. It has been found in research that the impact of stress accounts for 75% of the visits to the family doctor. It has also been noticed in research that chronic dilation of the pupils may result in vision problems while the drying of mouth may cause difficulty in swallowing. Similarly, muscle tension may lead to pain in the neck, shoulder and back whereas breathing fast may cause asthma. The pounding of heart may lead to rise in blood pressure causing cardiovascular and cardio cerebral diseases. Psychology of Stress: When stress level surpasses the individuals capacity to cope, it also affects mental health. Consequently, people become easily irritable, impatient, angry, restless, unfocussed and depressed. Management of Stress: People, who are unable to cope with stress, take to faulty methods of relaxation. Invariably, they resort to smoking cigarettes, marijuana-drinking alcohol or drug use. These bad habits will become addiction in addition to causing major health hazards. Psychologists suggest two-pronged strategy to combat the impact of stress. On the physiological front, the individual can do regular physical exercise in consultation with the family physician. Taking right food at the fixed time and sleeping for a minimum duration of six hours every day will help. On the psychological plane, people are encouraged to follow anyone or more of the following techniques:

1. 2. 3. 4. 5. 6.

Savasana (Yoga) Meditation Autogenic training Relaxation response Rational emotive therapy Hypnosis

Hypnosis Myths and Realities: People in general equate Hypnosis with black magic or witchcraft overlooking the fact that it is a naturally occurring state and a scientific phenomenon. It is a fact that each one of us goes through hypnotic state whenever we are in an altered state of consciousness. The notion that a subject under hypnosis will lose consciousness is far from truth. The impression that the subject reveals secrets while in hypnosis is also not true. Mechanics of Hypnosis: Hypnosis is a safe technique which offers instant relaxation to the body and mind. The individual shall sit in a sofa comfortably or lie down on the floor. It is necessary that the subject shall remove the spectacles and loosen the tight fitting clothes. Thereafter, suggestions for relaxation must be addressed to every part of the body. Enough pauses between instructions is necessary to allow the unconscious mind to act on the suggestions. This process when performed by one individual on the other is called Hetero Hypnosis and when it is practiced by an individual without help of an outsider is called self-hypnosis. Step by step instructions for any individual who desires to relax using hypnosis is given hereunder: As I am sitting comfortably on the chair (or lying down on the floor) with eyes closed, my whole body has already started going into a wonderful state of relaxation. If relaxation means a heavy feeling, such a feel is coming over my entire body. If relaxation means a light feeling, such a feel is enveloping my whole body. With my eyes comfortably closed, I have started enjoying the excellent state of relaxation throughout my body. I feel so good and so comfortable and I am enjoying this wonderful state of relaxation. Throughout this period of relaxation, I will be fully alert, awake and conscious. Now I am going to mentally count from one to ten and at the end of the count, I will relax even more than I am relaxing now.

ONE TWO THREE FOUR FIVE SIX SEVEN EIGHT NINE TEN

The muscles in my face and my jaws are completely relaxed. The muscles in my neck are extremely relaxed and so are the muscles of my shoulders. Both my hands are relaxing now and the fingers even the finger tips are enjoying this relaxation. With every breath I take, the muscles in my chest are relaxing. This feeling of relaxation is flowing over the muscles of my shoulder, stomach and the back I feel so relaxed now and this relaxation is going down over the muscles in my thighs. The muscles in my knees are relaxed now. The muscles in my ankles and the feet are very relaxed now. I feel so calm, comfortable and peaceful in every part of my body. My whole body is relaxed now. With every thought that crosses my mind the relaxation in my body becomes deeper and deeper. With every breath I take, the relaxation in my body becomes double.

I am going to keep silent for two minutes and during this period of silence my body moves into a very deep state of relaxation. I am going to count one to three. At the count of three I will open my eyes feeling refreshed, relaxed and wonderful. ONE TWO wonderful THREE I feel so calm and comfortable I am about to open my eyes feeling refreshed, relaxed and My eyes are open now and I feel wonderful, alert and awake.

The procedure outlined above can either memorised and recorded in a tape for personal use. However, this exercise is subject to compliance of the following conditions:

There should be a gap of two hours after taking food. People suffering from major psychosomatic disorders and other illness such as epilepsy can do this exercise only after clearance from the doctor. Since leading a life with stress or coping with stress is a matter of choice, every individual has to take a conscious decision. In this regard, the following verse from a poem written by ROBERT FROST is quoted reading as under: Two roads converged into a wood I choose the one less travelled And that has made the difference

CHAPTER 19

RIGHT TO INFORMATION ACT

With the objectives of enforcing Transparency & Accountability in the working of every public authority, the right of any citizen of India to request access to information and the corresponding duty of government to meet the request, the duty of government to proactively make available key information to all and a responsibility on all sections, citizenry, NGOs, media the RTI has been enacted. Public authority means anybody or institution established by constitution, any other law made by Parliament or State Legislature or by notification issued by the appropriate government which includes anybody owned, controlled or substantially financed or any non-government organization substantially financed directly or indirectly by the funds provided by the appropriate government. Right to Information means: Inspect works, documents, records Take notes, extracts or certified copies of documents or records Take certified samples of material Obtain information in the form of printouts, floppies, tapes, video cassettes or in any other electronic mode or through printouts. By the term Information, it means Records, documents, memos, opinions & advices, press releases, circulars, orders & log books, contracts and reports, papers samples & models. RTI Act came into effect from 12th October, 2005. The act covers: Central, State & local governments and all bodies owned, controlled or substantially financed directly or indirectly by the respective governments Non-government organizations substantially financed directly or indirectly by the funds provided by the appropriate government Executive, judiciary and legislature Information relating to private body which can be accessed by / under other law for the time being inforce. The act makes it obligatory that every public authority maintain all its records catalogued and indexed properly. It also calls for computerization of all records within a reasonable time and subject to availability of resources.

These are certain items exempted from disclosure of information like those: which would prejudicially affect the sovereignty and integrity of India Security, strategic, scientific or economic interests of the state Relation with foreign state Lead to incitement of an offence Forbidden to be published by any court of law or tribunal or the Disclosure of which may constitute contempt of court Which would cause a breach of privilege of parliament or the state legislature Commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, competent authority if satisfied that larger public interest is served can allow the disclosure of such information Information available to a person in his fiduciary relationship, competent authority if satisfied that the larger public interest can allow the disclosure of such information Information received in confidence from foreign government Following are types of issues that can be solved using RTI (for a legitimate work which is pending) Issue of passport Decision by the administrative authority Faulty construction Issue of any type of license Issue of various certificates of marriage, death, birth, SC/ST & OBC etc. Inclusion of name in voters list Issue of voter ID card Connection of water, electricity, telephone bills, change of faulty meter, providing new water or electricity connection etc. Filing of FIR Claiming various kinds of refunds or payments etc. like tax refund, medical reimbursement, provident fund etc. Anyone can apply in writing or through electronic means in English, or Hindi or in the official language of the area to the PIO (Public Information Officer) specifying the particulars of the information sought for. No reason for seeking information is required to be given. Fee as prescribed (if not belonging to BPL category) is to be paid.

CHAPTER 20

PROCUREMENT CONTRACTS
Purchasing means the process of buying learning a need, selecting a supplier, negotiation a price and fixing terms for delivery and payment. Procurement is a generic term, much broader than purchasing, which includes purchasing and all additional functions connected with the acquisition of goods, such as inspection upon arrival, supervision, and inventory control and salvage operation. However purchasing managements role as sub function of materials management is important, since it is the responsibility of purchasing department to procure materials economically and efficiently. Five basic principles of purchasing There are five basic principles of purchasing buying materials in right quantity of right quality at right price, from a right source, at right time and place. 1. Right quality vis--vis inspection/quality control/specification and standardization 2. Right quantity vis--vis inventory control/store and physical up keep/distribution and warehousing 3. Right price vis--vis market analysis and market intelligence/forecasting and market research 4. Right source vis--vis sub-contracting/vendor relations/vendor development 5. Right time and place vis-a-vis production, store/traffic and transportation/materials handling. Inventories Inventories are stock of materials of any kind stored for future use. Inventories tend to become big without proper control. Inventories are materials or resources of any kind having some economic value, either awaiting conversion or use in future. There is need to maintain some safety or buffer stock in order to maintain the smooth flow of materials without imparting production. As more and more stocks of materials are held, this entails grater investment. If minimum inventory is held with the increase in frequency of buying the cost of ordering and processing increase. Also this cost of stock-out poses economic problem. This inventory control is a major material management function which requires the reduction in material cost without impairing operational efficiency and there for needs careful attention.

VENDOR DEVELOPMENT

In stores and materials organization, it is essential to have many sources of supplies so that supplies may be had as per requirement as well as at economic cost. From commercial view-point it is always preferable to have more than one supplier for a particular item. Vendor development is, however, a continuous process and may start from the collection of names and address from the DGS&D Trade journals and also form other trade direction, such as directory or SS industries etc. COMPETITIVE BIDDING Purchaser must not only buy the right material, in the right quantity, at the right time but also at the right evaluated prices. There must be a primary force requiring broad knowledge of the requirements, operation and their use and awareness of where new ideas are needed. The urge shall be to find a better way to buy and a better source of supply and continuous coordinated buying efforts to improve the purchase of services as related to the works. Functions of purchase are: 1. Standardisation of specifications 2. Market study and cost analysis 3. Maintaining catalogue library 4. Vendor registration 5. Calling for bids 6. Analysis of bids 7. Negotiations where required 8. Selection of suppliers 9. Entering into contract 10. Follow up actions The central vigilance commission issues guidelines for procurement of materials for the government organisations. A codified purchase manual containing detailed purchase procedure, guidelines and also proper delegation of powers, wherever required, needs to be made by all the organisations so that there is a system and uniform approach in decision making. Such an integrated approach is likely to put a cap on the corruption and would also ensure smoother and faster decision making. Procurement files are very important and sensitive documents and thus there is a need to have a single file system with proper page numbering. The decisions and deliberations of the individuals or the tender committee also need to be properly recorded and well documented. Provisioning of the stores needs to be done with utmost care taking into account the available stock, outstanding dues/supplies, past consumption,

average life of the available equipment/spares. The requirements also need to be properly clubbed so as to get the most competitive and best prices. Requirements should not intentionally be split so as to avoid approval from higher authorities. One time purchase for projects or capital equipments / spares should have proper justification depending on the actual requirements, usage, rate of return etc. Further the obsolescence factor should also be taken into account i.e., the equipment to be purchased should confirm to the latest specifications and technologies available in the market. Estimated Rates As the estimated rates is a vital element in establishing the reasonableness of prices, it is important that the same is worked out in a realistic and objective manner on the basis of prevailing market rates, last purchase prices, economic indices for the raw materials/labour, other input costs, wherever applicable and assessment based on intrinsic value etc. The below mentioned methods may be adopted for the purpose of procurement of materials based on the nature of materials to be procured, the value of purchase, urgency for the materials and the number of known sources of supply. OPEN COMPETITIVE BIDDING For ordering in bulk, with deliveries spread over a long period of time, a brief advertisement of notice inviting bids (nib) is to be issued in the leading news papers covering English and other local languages, giving details of materials to be procured and the dates of opening of bids, for the items covered in the NIB. Full details of the bid specifications are to be made available on the web address of the purchaser. Interested bidders will download the required information and submit their bids as per the NIB. Procurement of materials from registered vendors shall be treated as procurement by open bids since vendor registration is open to all and all the eligible vendors are free to participate in the bid. In case of items for which there is no registered vendors or for major works involving supply and erection, the purchasing authority may invite bids through proper advertisement with the prior approval of the competent authority. In all such cases, open bidding may be resorted to, by advertising in the dailies having wide circulation both within and outside the state. Sufficient time must be given, counted from the date of publication of nib, for the bidders to submit their bids. The bids should have sufficient validity time to enable the purchaser to evaluate the bids properly.

There must be a minimum of atleast 3 valid bids to finalize the purchase. In case of insufficient response, the bids have to be called once again, ensuring wider publicity. If even then the response is poor, the bid may be decided on the basis of bids received but with the prior approval of the competent authority, taking into account rates from earlier orders, duly taking into account updated rates. LIMITED COMPETITIVE BIDDING This is a method of purchase resorted to when the materials are needed urgently and at short notices. In this mode, the bid invitation and complete specification will be sent by the purchaser to a limited number of vendors, who are regular suppliers of the materials. Such vendors are to be selected from out of the registered vendors. These vendors should have proven past performance, delivery and quality. In this case the competent authority decides the number of vendors to be addressed and bids from only those vendors who received the enquiry are eligible to quote. Value of materials to be procured in such an event shall be small, and subject to delegation of powers only. A minimum of 15 days time is to be given for limited competitive bidding process. Proper justification for procuring materials under this procedure should be recorded by the purchasing authority and such procurement shall be resorted to only for emergency requirements. Validity of bids under this procedure is only 30 days, counted from the date of opening of bids because the very purpose is emergency purchase. Limited competitive bidding should be for the entire quantity indented and no split up shall be made. When only one quotation is received against competitive bidding this should be treated as a single bid and should be decided as per the powers under single bid system.

SHORT NOTICE BIDDING: When materials required are for immediate use, short notice bidding is resorted to, subject to the delegation of powers. In this case, the complete description and standards applicable are spelt out in enquiry letter itself to be sent to the vendors. No separate specification need be issued. Generally, time frame of about one week to ten days is given for the vendors to respond, keeping validity of thirty days from the day of opening of bids. PURCHASE THROUGH SINGLE BID SYSTEM: Items of proprietary nature are purchased through single bid process. These are generally spares etc. These are to be directly procured either from the original manufacturer or the sub-assembly manufacturer or one of the dealers approved by the original manufacturer. These purchases are also subject to the provisions of delegation of powers and proper recording of reasons for purchase under the system. RATE CONTRACT ITEMS: For such of those items which need to be procured regularly and repeatedly and items of proprietary nature, it may be advantageous to enter into a rate contract with the manufacturer. Rate contract shall be entered only with reliable and reputed manufacturers of proven performance and ability. Term of rate contract shall be for a period of one year. The rate contract enquiries may be through open/limited/single bid process depending on the nature of item. PURCHASE BY REPEAT ORDERS: Repeat orders may be considered under special circumstances as and when need is urgent. The procedure enables to cut down lead time of procurement. Repeat orders may be considered. 1. Quantity in repeat orders should not exceed 50% of quantity ordered in the original order. 2. Rate in the repeat order should be the same as in the original order make sure that prices have not gone down. 3. Repeat orders are permitted only once against an order placed and within six months from the date of completion of execution of the original order. 4. Reasons for going for repeat orders to be recorded by the competent authority. 5. The authority who is empowered to make the purchase is the authority for approving the repeat order. 6. Repeat order shall be placed when the market is in an up-trend.

Generally a Notice Inviting Bids is issued which contains: 1. The authority authorized to issue the bid documents and the last date for sale of the bid specifications. 2. The authority authorized to receive the completed bid documents. The last date and time upto which completed documents would be received. 3. Place, time and date of opening the bid. 4. Cost of bid documents and cost of the documents. 5. Amount of bid security and mode of payment. Other general conditions are covered in the specification. Specific mention should be made about price variation formulae, f.e. requirement, f.e. variation risk cover, delivery schedules etc. Preference is for prices in rupees. In case of foreign bids exchange variation to be clearly mentioned by the bidder. Purchaser has to clearly indicate quantities. Bidder to submit documents establishing their eligibility criteria and also qualification criteria. Bidder should ensure that there are no ambiguities. In case of competitive bidding documents to contain: 1. 2. 3. 4. 5. 6. 7. 8. Detailed technical specifications and drawings Qualification requirements General terms and conditions of contract Salient features of contract, if any Schedule of quantities Schedule of deliveries Bank guarantee towards bid security and performance guarantee Deviations taken by the bidder, if any.

1. In certain cases, where, only written specifications may not clarify the situation, the purchaser may hold a pre-bid meeting with the intending bidders and clarify all points to all the bidders at one place and time. It is also possible that the bidders may supplement latest technical developments that may be considered, if found advantageous to the purchaser. 2. Discussions during the pre-bid meeting should be copied to all the bidders. All written questions from bidders should be replied in writing by the purchaser. Bid opening group of officers shall include one Accounts officer also. All the officers present should sign in the bid opening register wherein the number of bids received and the number of bids opened and the number of bids rejected (reasons for rejection shall be recorded) and they shall sign on all pages of the original bid document. This is done in the presence of the bidders present for bid opening.

Bids are evaluated in a prescribed proforma following all rules. Each organisation would have developed their own proforma depending on the long experience. After evaluation of bids, negotiations might be held with the lowest bidder to explore possibility of further reduction in prices. As per government practice, generally, the lowest bidder will get the order. Considering other than the lowest bidder (l 1) would be limited to the below mentioned cases: 1. 2. 3. 4. 5. When it is definitely felt that L1 cannot supply the total quantity in the time frame specified. When it is clearly felt that it is undesirable, in view of the critical nature of items to be procured, to depend on one supplier. When the local manufacturer need to be given an opportunity to match the rate quoted by L1. Considering other than L 1 shall be limited to two or three bidders only, say upto 4. In case of negotiations L 1 should get atleast 25% of the quantity to be ordered. a) Prior to expiration of bid validity, the purchaser should notify the successful bidder, in writing, that their bid has been accepted. This notification of award will constitute the formation of contract. Upon the successful bidder furnishing the performance security, the purchaser enters into the contract. b) The purchaser will also promptly notify each unsuccessful bidder and discharge the bid security of all of them.

CHAPTER 21

CVC GUIDELINES IN PROCUREMENT CONTRACTS

CVC Guidelines For Improvement In The Procurement System And Common Irregularities/ Lapses Observed In Stores / Purchase Contracts: PURCHASE MANUAL The cardinal principle of any public buying is to procure the materials / services of the specified quality, at the most competitive prices and, in a fair, just and transparent manner. To achieve this end it is essential to have uniform and well documented policy guidelines in the organization so that this vital activity is executed in a well-coordinated manner with least time and cost over runs. In some of the organizations, the purchase manual is either not at all there or has not been updated for years together. Thus the system of procurement is quite adhoc and arbitrary. A codified purchase manual containing the detailed purchase procedures, guidelines and also proper delegation of powers, wherever required needs to be made by all the organizations so that there is systematic and uniform approach in the decision-making. Such an integrated approach is likely to put a cap on the corruption and would also ensure smoother and faster decision making. PROVISIONING It has been noticed that in certain cases excessive, fraudulent and infructuous purchases were made without taking into consideration the important aspects like available stocks, outstanding dues / supplies, past consumption pattern and average life of the equipments / items etc. These excessive / infructuous purchases were at times made in collusion with the firms. This resulted in not only the material lying unutilized for years together with no residual life but also a lot of extra expenditure was incurred on the inventory carrying cost. One of the organizations took double procurement action for purchase of tyres against the same liability. Even the factors like shelf life of 5 years and the past consumption pattern were ignored while placing the orders. As no action was taken to dispose off the surplus tyres, the department is incurring inventory carrying cost of about 20-25% per year for the last 10 years and the salvage value of the quantity held in stocks is likely to be Nil due to expiry of the shelf life. In few cases, it was noticed that though the demand for the stores was simultaneously received from different wings / field units but, they were not clubbed together and were rather processed individually against the established principle of bulk buying.

The provisioning of the stores needs to be done with utmost care taking into account the available stock, outstanding dues / supplies, the past consumption pattern, average life of the equipment / spares. The requirements also need to be properly clubbed so as to get the most competitive and best prices. The requirements should not be intentionally bifurcated / split so as to avoid approval from higher authorities. ESTIMATE RATES It was observed that the estimated rates are being worked out in an unprofessional and perfunctory manner, at times by extrapolating the price of the lowest capacity equipment or by applying a uniform yearly compounded escalation over the prices of similar equipment purchased few years ago. Consequently, the inflated estimated rates prepared by the organizations resulted in acceptance and payment of higher prices to the firms. As the estimated rate is a vital element in establishing the reasonableness of prices, it is important that the same is worked out in a realistic and objective manner on the basis of prevailing market rates, last purchase prices, economic indices for the raw material / labour, other input costs, IEEMA formula, wherever applicable and assessment based on intrinsic value etc. NOTICE INVITING TENDER Against the most preferred and transparent mode of Global tender enquiry / Advertised tender enquiry, some of the organizations are generally issuing limited tender inquiry to select venders, irrespective of the value of purchase. Further, the credentials of the firms and the criteria adopted or selection of such venders, in most of the cases, are not put on record. This not only results in lack of competition but also favoritism to the select vendors. In some cases of global tenders it was observed that though the organization had given a time of 6-8 weeks for tender opening but the tender sale was closed 2-4 weeks in advance of tender opening, thereby effectively giving only one month time to bidders for purchase of tender documents. The very purpose of floating global tender which is to give wider publicity and sufficient time to bidders to get the bidding documents and submit their offers, in such cases seems to have been defeated. With a view to have wider, fair and adequate competition, it is important that sufficient time to say 4-6 weeks in case of Advertised/Global tenders and 3-4 weeks in case of limited tenders is allowed, except, in cases of recorded emergencies, wherein also, a reasonable time should be permitted and tenders should be sent by faster means like speed post/fax. The tenders should preferably be kept open for sale till the date of tender opening or just one day prior to the date of tender opening. With the widespread use of

information technology, the tender notices should also be put on the website and e-mail address of the organization should be indicated in the tender notice. In case of proprietary purchases, the detailed justification for purchase from a single vendor is not being placed on record. As by issuing single tender, the competition is totally eliminated and the possibility of paying higher prices cannot be ruled out. It is imperative that the purchase on single tender basis be made with the detailed justification in its support and with the approval of competent authority, including associated finance. TENDER / BID DOCUMENT The terms and conditions being stipulated in the bid documents by some of the Organizations are quite insufficient and sketchy. Sometimes, the bid document contain obsolete, unwanted matter and conflicting and vague provisions, resulting in wrong interpretation, disputes and time & cost overruns. Even the time/date for receipt and opening of tenders is not being incorporated in the documents. The important clauses relating to Earnest money, Delivery Schedule, Payment terms, Performance/Warrantee Bank Guarantee, Pre-despatch inspection, Arbitration, Liquidated Damages/Penalty for the delayed supplies and RiskPurchase etc. are not being incorporated in the bid documents. All these clauses are important for safeguarding the interest of the purchaser and also have indirect financial implications in the evaluation of offers and execution of the contracts. All the important clauses as brought out above need to be incorporated in the bidding documents so as to fully safeguard the interest of the Govt. and for evaluation of bids on equitable and fair basis and in a transparent manner. In some cases, it was noticed that the amount of Earnest Money Deposit stipulated in the tender document was grossly insufficient to protect the Govt. interest in case of breach committed by the bidder. Some of the organizations instead of ignoring the bids not accompanied with earnest money deposit along with the tenders as per bids requirements, asked the bidders to submit EMD, after tender opening. The primary objective of submission of Earnest Money Deposit is to establish the earnestness of bidder so that he does not withdraw, impair or modify the offer within the validity of the bid. It also helps in restricting if not eliminating speculative, frivolous or wait and see bids. Since any relaxation regarding submission of Earnest Money Deposit has financial implications besides giving encouragement to the bidders to submit frivolous bids as indicated above; the terms & conditions should clearly stipulate that

the offers without Earnest Money Deposit would be considered as unresponsive and rejected. Some of the organizations incorporate a specific delivery schedule interalia mentioning that bids offering delivery beyond stipulated date will be treated as non-responsive and will be summarily rejected. However, after opening of the tenders, the bid by one of the organizations with slightly longer delivery period was not rejected as per the bid guidelines, rather that offer was also considered and evaluation was made after loading the offer by applying some unilateral loading criteria. The same resulted in inter se change of ranking position. The evaluation / Loading criteria with respect to the important terms like payment terms, delivery period, performance bank guarantee etc. having financial implications need to be specified in unambiguous terms in the bid documents so that the evaluation of bids after tender opening could be made in a transparent manner without any subjectivity. The exemptions/reservation of a particular item which normally apply to SSI units are not being specified in the tender notice / bid documents. The applicable purchase preference to public sector enterprises as per the guidelines circulated by Department of Public Enterprises is also not being incorporated in the bid documents leading to lot of complaints from SSI/PS Units. The Government instructions on reservation of items and price preference to SSI Units and purchase preference to PSUs need to be incorporated in bid documents. It has been noticed that some tenderers offer conditional discounts for coverage within a shorter period, for early inspection/payment etc. and, such discounts are being considered, at the time of evaluation of tenders by the organizations. It needs to be ensured that the evaluation of tenders should not be based on such conditional discounts and suitable clause should be included in the bidding documents. RECEIPTS OF TENDERS Some of the organizations do not have proper arrangement for receipt of tenders. There is no tender box for receipt of tenders at scheduled date and time fixed for tender opening. Instead the trade representatives leave the tenders with the receptionist or the concerned Purchase Officer(s). This procedure is highly objectionable as the possibility of tampering and interpolation of offers cannot be ruled out.

A proper arrangement for receipt of tenders at scheduled date and time through tender box needs to be adopted. OPENING OF TENDERS Some of the organizations are not opening the tenders in public i.e. in presence of the trade representatives. The system of not opening the tenders in public is against the sanctity of tender system, and is a non-transparent method of handling tenders. There could be a possibility of tampering and interpolation of offers in such cases. The rates at times are not quoted in figures and words, cuttings / over-writings are not attested by bidders. Some of the organizations justify such opaqueness in tendering system by making a reference to their manuals. This is not acceptable. POST TENDER NOGOTIATION As per CVC guidelines circulated vide letter No.8 (1) (h) / 98 (1) dtd. 18.11.98, it has been brought out that the tenders are generally a major source of corruption. In order to avoid corruption, a more transparent and effective system must be introduced. As post tender negotiations are the main source of corruption, post tender negotiations are banned with immediate effect except in the case of negotiations with L-1 (i.e. Lower tenderer). In continuation to these instructions, following further clarifications were issued vide letter NO. 98/Ord./1 dtd. 15.03.99: i) The Govt. of India has a purchase preference policy so far as the public sector enterprises are concerned. It is clarified that the ban on the post tender negotiations does not mean that the policy of the Govt. of India for purchase preference for public sector should not be implemented. ii) Incidentally, some organizations have been using the public sector as a shield or a conduit for getting costly inputs or for improper purchases. This also should be avoided. iii) Another issue that has been raised is that many a time the quantity to be ordered is much more than L-1 alone can supply. In such cases, the quantity order may be distributed in such a manner that the purchase is done in a fair, transparent and equitable manner. Despite the above instructions, it has been noticed that still repeated negotiations with the select / all the vendors are being carried out by some of the organizations in gross violation of the above instructions. The instructions / guidelines circulated by CVC on post tender negotiations only with L-1 need to be strictly followed.

CHAPTER -22

OFFICE AUTOMATION EQUIPMENTS

COMPUTER:

Technically, a computer is a programmable machine. This means it can execute a programmed list of instructions and respond to new instructions that it is given. Today, however, the term is most often used to refer to the desktop and laptop computers that most people use. When referring to a desktop model, the term "computer" technically only refers to the computer itself -- not the monitor, keyboard, and mouse. Still, it is acceptable to refer to everything together as the computer. If you want to be really technical, the box that holds the computer is called the "system unit." Some of the major parts of a personal computer (or PC) include the motherboard, CPU, memory (or RAM), hard drive, and video card. While personal computers are by far the most common type of computers today, there are several other types of computers. For example, a "minicomputer" is a powerful computer that can support many users at once. A "mainframe" is a large, high-powered computer that can perform billions of calculations from multiple sources at one time. Finally, a "supercomputer" is a machine that can process billions of instructions a second and is used to calculate extremely complex calculations.

CD(COMPACT DISC)

Stands for "Compact Disc." CDs are circular discs that are 4.75 in (12 cm) in diameter. The CD standard was proposed by Sony and Philips in 1980 and the technology was introduced to the U.S. market in 1983. CDs can hold up to 700 MB of data or 80 minutes of audio. The data on a CD is stored as small notches on the disc and is read by a laser from an optical drive. The drives translate the notches (which represent 1's and 0's) into usable data. The first CDs were audio CDs, which eventually replaced audio tapes (which earlier replaced records). Audio CDs have the advantage of allowing the user to jump to different places on the disc. CDs can also be listened to an unlimited number of times without losing quality. Audio tapes can start to lose quality after listening to them as few as ten times. This is because the laser that reads the data on a CD doesn't put pressure on the disc, whereas the play heads on a tape deck slowly wear away the magnetic strip on the tape. In 1985, CD-ROMs hit the computer market. Because they could store far more information than floppy discs (700 MB compared to 1.4 MB), CDs soon became the most common software format. In 1988, the CD-R (CD-Recordable) technology was introduced, allowing computer users to burn their own CDs. However, this technology did not become mainstream until the late 1990s. A smaller 3" CD, called "CD-3" is also available and is readable by most trayloading CD-ROM drives. For a timeline of the history of the CD,

DVD (Digital Versatile Disc)

Stands for "Digital Versatile Disc." It can also stand for "Digital Video Disc," but with the mulitple uses of DVDs, the term "Digital Versatile Disc" is more correct. Yep, the technology naming people just love to confuse us. A DVD is a high-capacity optical disc that looks like a CD, but can store much more information. While a CD can store 650 to 700 MB of data, a single-layer, singlesided DVD can store 4.7 GB of data. This enables massive computer applications and full-length movies to be stored on a single DVD. The advanced DVD formats are even more amazing. There is a two-layer standard that doubles the single-sided capacity to 8.5 GB. These disks can also be double-sided, ramping up the maximum storage on a single disc to 17 GB. That's 26 times more data than a CD can hold! To be able to read DVDs in your computer you'll need a DVD-ROM drive. Fortunately, DVD players can also read CDs. To play DVD movies on your computer, you'll need to have a graphics card with a DVD-decoder, which most computers now have. It's hard to remember what our lives were like without e-mail. Ranking up there with the Web as one of the most useful features of the Internet, e-mail has become one of today's standard means of communication. Billions of messages are sent each year. If you're like most people these days, you probably have more than one e-mail address. After all, the more addresses you have, the more sophisticated you look...

E-MAIL: (ELECTRONIC MAIL)

E-mail is part of the standard TCP/IP set of protocols. Sending messages is typically done by SMTP (Simple Mail Transfer Protocol) and receiving

messages is handled by POP3 (Post Office Protocol 3), or IMAP (Internet Message Access Protocol). IMAP is the newer protocol, allowing you to view and sort messages on the mail server, without downloading them to your hard drive. Though e-mail was originally developed for sending simple text messages, it has become more robust in the last few years. Now, HTML-based e-mail can use the same code as Web pages to incorporate formatted text, colors, and images into the message. Also, documents can be attached to e-mail messages, allowing files to be transferred via the e-mail protocol. However, since e-mail was not originally designed to handle large file transfers, transferring large documents (over 3 MB, for example) is not allowed by most mail servers. So remember to keep your attachments small! A printer is an output device that prints paper documents. This includes text documents, images, or a combination of both. The two most common types of printers are inkjet and laser printers. Inkjet printers are commonly used by consumers, while laser printers are a typical choice for businesses. Dot matrix printers, which have become increasingly rare, are still used for basic text printing.

PRINTER

The printed output produced by a printer is often called a hard copy, which is the physical version of an electronic document. While some printers can only print black and white hard copies, most printers today can produce color prints. In fact, many home printers can now produce high-quality photo prints that rival professionally developed photos. This is because modern printers have a high DPI (dots per inch) setting, which allows documents to printed with a very fine resolution. In order to print a document, the electronic data must be sent from the

computer to the printer. Many software programs, such as word processors and image editing programs, include a "Print..." option in the File menu. When you select "Print," you will typically presented with a Print dialog box. This box allows you to select the print output settings before sending the document to the printer. After choosing the appropriate settings, you can hit the Print button, which will send the document to the printer.

SCANNER A scanner is a device that captures images from photographic prints, posters, magazine pages, and similar sources for computer editing and display. Scanners come in hand-held, feed-in, and flatbed types and for scanning black-and-white only, or color. Very high resolution scanners are used for scanning for highresolution printing, but lower resolution scanners are adequate for capturing images for computer display. Scanners usually come with software, such as Adobe's Photoshop product, that lets you resize and otherwise modify a captured image. Scanners usually attach to your personal computer with a Small Computer System Interface ( SCSI ). An application such as PhotoShop uses the TWAIN program to read in the image. Some major manufacturers of scanners include: Epson, Hewlett-Packard, Microtek, and Relisys. FAX MACHINE A fax (short for facsimile and sometimes called telecopying) is the telephonic transmission of scannedin printed material (text or images), usually to a telephone number associated with a printer or other output device. The original document is scanned with a fax machine, which treats the contents (text or images) as a single fixed graphic image, converting it into a bitmap. In this digital form, the information is transmitted as electrical signals through the telephone system. The receiving fax machine reconverts the coded image and prints a paper copy of the document. Almost all modems manufactured today are capable of sending and receiving fax data. Fax/modem software generates fax signals directly from disk files or the screen. Even if a document is text only, it is treated by the computer as a scanned image and is transmitted to the receiver as a bitmap. Faxing a message online works well if the recipient wants only to read the message. However, if the document requires editing, it must be converted into ASCII text by an OCR

(optical character recognition) program, or it must be retyped manually into the computer. A more efficient method of sending documents that require modification is through the e-mail system. E-mail files are already ASCII text so they can be edited immediately in any text editor or word processing program. The Internet now provides a new and cheaper way to send faxes in some cases. A number of free and commercial companies provide arrangements for using the Internet rather than the public telephone system for most or part of the path to the fax point. Some services also provide the ability to broadcast a fax to multiple addresses.

XEROX MACHINE Xerox machine - a duplicator (trade mark Xerox) that copies graphic matter by the action of light on an electrically charged photoconductive insulating surface in which the latent image is developed with a resinous powder

PENDRIVE A pen drive, or a USB flash drive, is a portable data-storage device. Pen drives have replaced the floppy drives of old and have become the most popular datastorage devices among consumers. Micro, lightweight and handy, a pen drive can be easily carried from place to place by students, professionals, academicians and independent tech consultants. Currently available pen drives with storage capacities ranging from 8GB and 32GB can be used to store graphics-heavy documents, photos, music files and video clips.