OFFICE OF CHIEF CONTROLLER OF ACCOUNTS

MINISTRY OF SURFACE TRANSPORT

GOVERNMENT OF INDIA

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Proposal as sent to Controller General of Accounts and Comptroller and Auditor General of India.

It was approved and implemented during 1999-2000. Approval was given upto March 2000.

BACKGROUND :- Construction and maintenance of National Highways is done by State Government/Union Territory Government on behalf of Govt. of India M/o Surface Transport. At present expenditure on National Highway is initially incurred by Executive Engineer of the State PWD from State Balances. Accounts are thus maintained by State AG, who books the expenditure under ‘suspense’. Subsequently, State Govt./Union Territory Government raises reimbursement claims for the work done on the agency basis. Claim for reimbursement is raised to Regional Pay and Accounts Officer O/o Chief Controller of Accounts, M/o Surface Transport, who makes the payment to State AG. There is a well laid procedure for making payment with respect to Nation Highway which is being followed by Regional Pay and Accounts Officer. State AG receives the payment for the admissible amount and clears the suspense operated by him. This procedure takes more than 3 months, thus, State remains out of cash to the tune of amount raised for reimbursement for such a long period. States are finding it extremely difficult to manage their a depleted cash and at times they utilised the money reimbursed for National Highway works for other purposes. Thus, this circle of incurring expenditure – getting reimbursement and incurring fresh expenditure is broken.

State Governments are time and again representing their problems relating to delay in the getting the reimbursement claims through the existing procedure. Mainly, in the case of a big project where financial implications are large, the State Governments are, some time, not in a position to issue the Letter of Credit with required amount in time. As a result of this, State PWD is unable to make payment for the project. In the absence of the payment, State Government can not raise its claim with the Central Government and this brings a vicious circle of cash flow problem with the State Government. On the other hand, despite money being available with the Central Government such projects suffer very badly along with adverse financial consequences, due to inordinate delay in payment.

2. PRESENT PROCEDURE :- At present the accounting procedure for maintenance of expenditure on National Highways is as per the accounting procedure formulated in 1977 by M/o Shipping & Transport in consultation with C&AG and Department of Expenditure. As per the said procedure, the expenditure is initially incurred by the State PWD and on receipt of the monthly compiled account from the Divisions the AGs send to PAO(NH), the Monthly statement of receipts (if any) and expenditure on National Highways with all schedules, vouchers, supporting documents etc for claiming reimbursement. The PAO, there after reimburses the AG by Cheque/Demand Draft after exercising the prescribed checks.

3. DIRECT PAYMENT PROCEDURE :- This procedure is for changing the procedure for payment on the lines of that approved for externally aided project for Punjab viz. :-

1. The Supervising Engineer will submit certified bills of contractors to the State Chief Engineer who will verify the payment and give all necessary internal approval as per PWD procedures.
2. The Chief Engineer will forward the bill for payment to Ministry’s Regional Officer who will pass the same for payment to Regional Pay & Accounts Officer. The bill submitted by the State Chief Engineer will include, separately, agency charges payable.
3. RPAO will draw the cheques as per payment instructions of RO in favour of the parties and pass them to RO who in turn will pass them to the State Chief Engineer after making necessary entries in his records. The State Chief Engineer will disburse the amount to the concerned parties.
4. As far as agency charges are concerned they will be paid by RPAO to the State Accountant General.
5. Office of the Supervising Engineer and State Chief Engineers will maintain all the records of payments/disbursements and send a monthly demand of disbursements to RO, RPAO,CCA and DGRD & AS.
6. RPAO will send details of payments of agency charges to the State Accountant General every month.
7. State Government will be responsible for physical and financial progress of the project.