CHAPTER 25
STORES AND STOCK ACCOUNTS AND AUDIT
(A)
GENERAL
Introductory
25.1 The term ‘Stores’ applies generally to all
articles and materials purchased or otherwise acquired for use of Government
including not only expendable and issuable articles in use or accumulated for
specific purposes, but also articles of dead stock of the nature of plant,
machinery, instruments, furniture, equipment, fixtures etc. Management of
Stores and stock embraces acquisition of stores, their custody and distribution
according to requirements and their disposal. Practically, every department of
Government has charge of articles purchased with public money. These articles
may be divided broadly into (i) unpriced articles and (ii) priced articles.
25.2 Unpriced articles comprise those articles
of stationery furniture, office equipment, etc. which are required for the
administrative purpose of an office. They are purchased and are stored in the
office for use as occasion demands. The accounting procedure is simple, as only
numerical account is maintained of each class of article.
🔲. Unpriced articles of stores comprises of:
(A) Old items
(B) Unserviceable items
(C) Load and building
(D) Stationary item
25.4 The general principles of the audit of
stores and stock accounts have been explained in paras 25.74 et seq. It remains
now to explain the system of accounts maintained of the various classes of
stores and stock. In this completion it is only possible to deal with a few of
them by way of illustration, The examples chosen for this purpose are:
(i) Public Works Stores,
(ii) Stores and Stock Accounts of Railways, and
(iii) Stores and Stock Accounts of the
Engineering Branch of the Posts and Telegraphs Department.
25.5 A brief account is also given of the
working of the purchase organization of the Government of India, which serves
these three and numerous other departments of Government.
(B) PUBLIC WORKS STORES
Administration
and Control
25.6 The general administration of all the
stores of a Public Works Division, under the headings, stock, tools, and plant,
materials charged to works and road metal, is vested in the Divisional Officer,
on whom primarily devolves the duty of arranging, in accordance with the rules
of the Government concerned, for (i) the acquisition of stores, (ii) their
custody and distribution according to the requirements of works and (iii) their
disposal.
25.7 The accounts of these stores are based on
the fundamental principle that the cost of their acquisition should direct to
the final head of account concerned or the particular work for which they are
required, and if either of these cannot be determined at once, it should be
kept in a suspense account pending clearance, as the materials are actually
issued, by debit to specific heads of account or works.
Maintenance
of Stock
25.8 The stock of a division is sometimes kept
in a single godown or yard in the charge of a storekeeper or each
sub-divisional officer may have separate stock in his charge, either at his
headquarters, or scattered over the sub-division in the direct custody of subordinates or other Sectional Officers.
Again, the stock, although scattered over the entire division may be in the
general charge of a single official and the sub-divisional officers may merely
indent upon him, the accounts being kept by the former.
Accounts
maintained by the Executive
25.9 Briefly, following is the accounting
procedure followed by sub-divisional officers who hold charge of stock. The
Divisional Officer follows similar procedure in regard to stock in his own
charge.
25.10 A chronological record by quantity only of the receipts, issues and the remaining balance of each article stock is kept by the officer in charge in the Bin Card, the value account of stores being maintained by the Divisional Officer, in the Priced Stores Ledger. The Bin Card is posted from the goods received sheet and stores indent and is sent on completion to the divisional office for checking with the Priced Stores Ledger*.
25.11 Goods received in the stores are examined,
counted or measured and entered in the goods received sheets printed in the
form of booklets duly machine numbered and the total number or quantity of
goods received is also entered immediately in the Bin Card. The goods received
sheets are generally prepared in triplicate (in quadruplicate if payments are
made by the Sub-Divisional Officer) by carbon process in indelible ink or
copying pencil one copy retained by the store keeper and the other two sent to
the Sub-Divisional Office, out of which one copy will be passed on to the
supplier and the other to the Divisional Office for posting the Priced Stores
Ledger and making payments.
25.12 An issue rate is assigned to each new article
as it is brought on stock. This rate is fixed on the principle that the cost to
be charged to works on which materials are to be used is approximately equal to
the actual cost of the stores and that there may be no ultimate profit or loss
in the Stock accounts. It should provide beyond the original price paid and the
cost of carriage, etc. for expenditure incurred after the acquisition of
stores, on the establishment employed on handing and keeping initial accounts,
the custody of stock, and maintenance of the store godown or yard etc.
The
issue rate of an article of stock is fixed at the beginning of each year.
Normally this rate remains constant throughout the year but in the case of
material fluctuation in the purchase rates during the course of the year, the
issue rates can be revised earlier. The issue rates are, however, kept within
the market
🔲 The
issue rate of stores is fixed in:
(A) At
the beginning of every financial year
(B) Once
in two years
(C) At
the time of purchase
(D) Half
yearly25.13 Materials are issued from the stores only on receipt of an indent signed by the Divisional Officer or Sub-Divisional Officer. But when a Sectional Officer has to issue stock materials for the requirements of works under himself, a consolidated indent for materials drawn during the month would suffice if so authorized.
25.14 The Store-Keeper or Sectional Officer
while issuing materials from the stores will sign the indent in the space
provided for the purpose, after entering the quantity issued in all the copies.
An entry of the stores issued is simultaneously made in the Bin Card, One copy
of the indent is retained by the stores as a voucher in support of the entry in the Bin-Card, the
second returned at once to the indenting officer. The third and the fourth
copies of the indent are sent to the Divisional Officer for further action.
25.15 The goods received sheets are valued in
the Divisional Office on the basis of price paid or payable as per bills or
other claims. The indents are also valued in the Divisional Office at the issue
rates fixed.
The goods received sheets and the indents are used for posting the
Priced Stores Ledger. The receipt and issue transactions of the entire division
are abstracted in the Summary of Stock Receipts and the Summary of Indents.
These forms are posted daily in the Divisional Office from the copies of the
Goods Received Sheets and Indents, the entries being made only in respect of
values and reconciled with the corresponding monthly totals of the Priced
Stores Ledger.
🔲 Priced Stores ledger is recorded from:
(A)
Indents
(B) Goods
received sheet and indents
(C)
Invoice of suppliers
(D) None of these25.16 The priced Stores Ledger maintained in the divisional office contains an account of the daily transactions relating to each item of stock, the ledger being kept in different sections or sets of pages for different articles of stock with columns for receipts, issues and balances of both quantities and values. The ledger is closed for both quantities and value at the end of each month. The transactions pertaining to each articles of stock are abstracted at the end of the month and monthly total of receipts, issues and balances are then worked out for each sub head and a consolidated abstract prepared for all the sub-heads which should agree with the Summary of Stock-Receipts and the Summary of Indents.
25.17 Certain State Governments, however,
maintain the Store Accounts in the manner indicated in the ensuring paragraphs:
(i) Two registers of stock are maintained, one
for receipts and the other for issues in which the transactions are posted as they occur. The
receipts and issue transactions are then abstracted monthly in the Abstract of
Stock Receipts and “Abstract of Stock Issues” showing the sources from which
articles are received and the account head or work to which the issues are to
be debited. These are then submitted to the Divisional Officer, the entries
being first posted in the half-yearly balance return, which is closed as soon
as the entries of the last month of the half year have been made. The registers
and returns represent only the quantity accounts, the value accounts being
ordinarily maintained in the divisional office. The abstracts of stock receipts
and stock issues are completed in the divisional office by valuation of the
quantities and incorporation of adjustments on accounts of manufacture
operations, storage charges and incidental charges such as those for carriage,
loading and un-loading of stock materials.
(ii) The monthly transaction of stock of the
sub-divisions as brought out in the monthly abstracts of receipts and issues
together with those of the divisional office, if any, are then posted in the
half yearly register of stock. This register is divided into three parts. In
part I are posted the quantities of each item and the aggregated values of the
total receipts and issues for each sub-head. The closing balances of the
aggregate values of sub-heads are struck at the end of each half year. Their
reconciliation with the accounts is effected through Part II of the register.
Part II of the register is used for the review of the state of affairs of stock
accounts by the Divisional Accountant and the orders of the Divisional Officer.
(iii) Under this method, the rate of articles
borne on stock is fixed on the same principle as enunciated in para 25.12 above
with the difference that a separate rate known as storage rate is fixed
annually for each division or sub-division on the principle that the total
estimated annual expenditure on establishment employed on handling and keeping
initial accounts, the custody of stock and maintenance of store godown or yard
etc. is as far as possible recovered from the issues likely to be made during
the year. At the time of closing the half yearly register of stock, the
Divisional Officer takes the opportunity to revise the issue rate of the
articles of stock on the basis of the rates prevailing in the market, and this
necessitates the adjustment of the difference in the values of stock as worked
out at the existing issue rate and the issue rate fixed for the future.
* Note: Each division maintains a priced
vocabulary of stores in stock showing their correct description and identifying
number order to ensure the accuracy of posting of all transactions and
facilitate the preparation and valuation of indents.
Stock
verification
Accounts
of Tools and Plant and Road Metal
25.19 The accounts of tool and plant and of road
metal are comparatively simple as only numerical accounts are maintained, their
value being debited to the final heads of account or work immediately after
their acquisition.
Tools
and Plant
25.20 (i) The consolidated account of receipts,
issues and balance of tools and plant, both general or ordinary tools and plant
i.e. those required for the general use of the division and special tools and
plant i.e. those required not for general purpose but for a specific work are
maintained in the sub-divisional office in the Tools and Plant Ledger. The
ledger which is posted from the Tools and Plant received sheets and tools and
plant requisition known as tools and plant indent, is kept in three parts.
Part I –
for articles in hand,
Part II-
for articles temporarily lent or sent out, and
Part III-
for shortages awaiting adjustment.
25.21 Part I and Part II of the Ledger are posted from the office
copies of the tools and plant received sheets and tools and plants as and when
a transaction takes place. Each separate transaction connected with articles
lent or sent out for repairs are further posted in Part II in the section
reserved for the contractor or person concerned , articles lent etc. being
shown in the column for issues and those received back in the column for
receipts.
25.22 In some States, however, the procedure as indicated below is followed for the maintenance of accounts of tools and plant.
The
sub-Divisional Officer in charge of the articles, maintains two accounts for
recording the receipts and issues respectively of these articles. The
transactions appearing in these accounts are consolidated monthly in a yearly
register of tools and plant. At the same time, the Divisional Officer maintains
a register of tools and plant for each subdivision which is posted from the
monthly returns received from the sub-divisions. Annually, a reconciliation is
effected of the closing balance in respect of each kind of article as worked
out in these two registers.
Road
metal
25.23 The Sub-Divisional Officer maintain a quantity account of
receipts, issues and balance of road metal, copies on loose sheets being
submitted monthly to the divisional office.
(C) STORES AND
STOCK ACCOUNTS OF RAILWAYS
Administration
and Control
25.24 The administration and control of the Stores Organization of the
Railways rests with the Stores Directorate in the Railway Board (Department of
Railways) which handles policy formulation as part of its functions. Each Zonal
Railway and Production Unit has a Stores Department headed by a Controller of
Stores, on whom devolves the duty of ascertaining the needs of the Railway in
the matter of materials and stores, and or arranging for procurement and supply
of such materials and stores in the most efficient, economical and expeditious
manner possible utilizing the purchasing agencies of the Director General,
Supplies and Disposal or the Railway Board, where necessary. He is responsible
for the receipt, inspection and distribution of stores to the various stores
depots, for their custody while in charge of the Stores Department and finally
for their issue on requisitions received from authorized officials of the
Railway. Each stores depot is in charge of a Depot Stores Keeper or a Depot
Officer, as the case may be, depending on the value and quantity of stores
held. The Depot Officers are assisted by store keepers, ward keepers etc.
25.25 The Stores Department is not required to
keep any priced accounts of the stores transactions of the Railway; its duties
in this respect are limited to the maintenance of numerical records of stores
in stock and the preparation of the initial documents of receipts and issues.
Priced accounts are maintained by the Stores Accounts Officers.
Supply
of stores
25.26 The sources of supply or receipts of
stores required by Railways are mainly purchases, manufacture by Railway
Workshops and from other Government Departments including Public Sector
Undertakings.
Purchases
of stores
25.27 The purchases of stores are made mainly by
three different agencies. These are Directorate General of Supplies and
Disposals, the Railway Board and the Railways/ Production Units themselves. The
purchases of stores which are entirely or largely peculiar to Railways (such as
rails, track materials, signaling stores etc.) are handled by the Railways
themselves. The items of stores which are of common use for other Government
Departments also are purchased through the agency of Directorate General of Supplies
and Disposals so as to avail of the benefits accruing from bulk purchases by a
centralized agency. However, where the value of the articles is less than the
monetary limit prescribed or where the articles are needed urgently, the
Comptroller of Stores may purchase the requirements locally. Among the railway
items of stores, certain items such as rolling stock steel, train lighting
equipment, etc., are purchased by the Railway Board. The centralization of
purchase of these items is intended to obviate competing demands and higher
prices.
Manufacture
25.28 Some specialized items of stores such as
locomotive spares, castings, signal material etc. required by a Railway are
manufactured in the Railway Workshop and brought on to stock.
Foreign
purchases
25.29 Proprietary items and articles which
cannot be manufactured in India economically are imported by placing indents on
the supply wing of the High Commission of India. London or the Supply Wing of
Embassy of India, Washington. Some items like rails, locomotives, etc. are
purchased direct by the Railway Board after inviting global tenders.
Funds
for purchases
25.30 The cost of all railway stores, is first
debited to a suspense head under Capital. Therefore even if stores are required
for revenue purposes, necessary funds have to be provided from capital in the
first instance.
Issue
of stores
25.31 When stores are supplied by the stores
Depots on indents, an issue note is prepared showing full particulars of the
stores supplied, the officer served, etc. and is receipted by the officer
supplied.
Numerical
Accounts in the Store Depot-Card Ledgers
25.32 The transactions of receipts and issues
are posted, as they take place in numerical record called the Card Ledger. A
separate card is maintained for each item of stores. The receipts are posted
from the receipt vouchers, viz. receipt notes, advices of despatch, workshop
receipts, advice notes of returned stores, depot transfers, book transfers and
departmental stock verification sheet while issues are posted from the issue
notes and depots transfers.
Daily
returns to the Accounts Office
25.33 At the end of each day’s work a memorandum
is prepared of the Day’s transactions and is submitted with the supporting
documents to the Stores Accounts Section of the Accounts office to enable it to
post the priced ledger and class summaries.
Permanent
Way Inspectors’ Imprests
25.34 For the purpose of ordinary maintenance
each Permanent Way Inspector is provided with an imprest of materials, the
amount and nature of which is fixed by the competent authority.
Divisional
Sub-depots
25.35 The aggregate of the imprests in each
Division forms the Divisional balance of materials, for which the Divisional
Engineer must account. Further, where local conditions, such as distance from a
regular stores depot, render it desirable a sub depot may be established at the
headquarters of the Division where a limited supply of material is kept,
sufficient to carry on normal maintenance and to make recoupments of the
Divisional Permanent Way Inspectors’ imprests. The balance in these sub-depots
forms part of the Divisional balance of materials.
Imprest and
Surplus Stores Accounts- The Divisional Engineer consolidates these accounts in
the Divisional Balance Register of Stores. The initial documents and accounts
vouchers will be dealt with by the Accounts Offices of the Engineering
Branch who will send the necessary
transfer certificates for the debits and credits to the Store Accounts Office.
Separate numerical accounts are maintained in respect of materials obtained
from the store depots for specific work.
25.36 The Divisional Engineer arranges that a certain number of items
is verified by actual count each month, so that the whole Divisional stock is
verified at least once in every six months.
Unserviceable
Stores
25.37 After stores become unserviceable owing to
depreciation or deterioration or damage, or are of obsolete pattern, or become
surplus, they are not allowed to remain long in stock. They are, if possible,
adapted to present requirements, but when such action is not practicable, a
special report on all such stores is made by Survey Committee appointed by the
General Manager. This Committee determines what stores should be retained in
stock for possible use in future classified as second-hand or as scrap, at what
rates they should be borne on the books and how they should be ultimately
disposed of. Further action is taken by the Controller of Stores in accordance
with the orders of the General Manger on the Committee’s recommendations.
Duties
of the Accounts Office
25.38 It has been explained in paragraph 25.25
above that the responsibility of the departmental authorities in regard to the
stores accounts is limited to the maintenance of numerical records of stores in
stock and the preparation of the initial documents of receipts and issues. All
other accounts work in connection with the stores transactions as for example
their valuation, allocation of expenditure to works, etc. is carried out in the
Accounts Office.
25.39 The work is done in a separate section
called the Stores Accounts Section under the control of the Financial Adviser
and the Chief Accounts Officer of the Railway, which is located at or near the
general stores magazine and the office of the Controller of Stores. The section
is responsible:
(i) for the maintenance of priced stores
ledgers,
(ii) for the scrutiny and payment of all bills
for purposes of stores,
(iii) for the regular periodical reconciliation
of figures in the different connected sets of books, and
(iv) for the maintenance of a regular and
effective system of stock verification and proper investigation of all
discrepancies which it brings to light.
25.40 The stores Accounts Officer also acts as
adviser to the Controller of Stores in all matters of stores accounts and
finance.
Pricing
of articles
25.41 The receipts into stores are priced from
the bills or invoices of suppliers, while the issues from stores are priced at
book average rates. The book average rate is the rate arrived at by dividing
the value balance shown in the priced ledgers by the quantity balance.
Priced
Ledgers
25.42 The Stores Accounts Section maintains
priced ledgers, in which a separate account is opened for each item of stores
for which a separate card ledger is kept in the depots. The postings in the
ledgers are made daily, (a) as regards receipts from the receipt notes in
respect of local purchase, the advices of despatch in case of imported stores,
the advice notes of returned stores and issue notes for transfers between depots
and receipts from workshops, and (b) as regards issues, from the abstracts of
issue notes. The ledgers are balanced after each day’s new postings as regards
quantities and as frequently as is considered necessary by the local
authorities in respect of values. The balancing at the end of each month is
completed as regards quantities, rates and values.
Reconciliation
between card ledgers and priced ledgers
25.43 It has been explained that the accounts
office maintains priced ledgers in respect of all the stores of the Railways.
It is therefore, necessary to secure a complete reconciliation of the balance
in stock as shown in the card ledgers with that shown in the priced ledgers
maintained by the Accounts Office. How this is done is explained below:
25.44 As each card ledger for an item of stores
is filled up, the depot store keeper, or the ward keeper in charge of each
section of the depot, counts the balance of the items in stock and records the
actual balance as the last entry on the card, for example balance by actual
count 475. Any excess is brought on as a receipt and any deficiency entered as
a minus receipt. Anew card ledger is then opened for the item of stores and the
balance by actual count is brought forward. The completed card ledger is than
sent to the Accounts Office for reconciliation with the priced ledgers. In the
case of articles of stock where the transactions are few and long intervals elapse
between the completion of each card, the verification by actual count is done
at such intervals as the Controller of Stores considers advisable. In such
cases, the result of the verification of the balance is recorded on the card
ledger which is sent to the Accounts Office for verification.
25.45 The procedures in paragraphs 25.42, 25.43
and 25.44 above are applicable to the stores accounts maintained manually. On
the Railways, the Stores Accounts and Stores functions have been computerized
in stages. The salient features of computerization are:
(1) Mechanization of priced ledgers- the issue
notes, receipt notes and stock verification reports are posted to stock files
maintained on the computers. The pricing of stores and preparation of various
schedules, priced ledgers and statements are done by the computer. As the same
source document is used for getting up-to-date priced ledger balance,
departmental summaries etc., the need for elaborate reconciliation does not
arise.
(2) Elimination of numerical ledgers by
replacing it with a transaction statement.
(3) Mechanization of order progressing to produce information
reports relating to over due supplies and suppliers’ performance.
(4) Stock review and recoupment.
Stock
verification
25.46 Each class stores in the custody of the
Stores Department is verified periodically by a staff of stock verifiers, who
are under the administrative control of the Accounts Officer. The periodicity
of verification depends on the annual usage value of the items checked. This
verification is independent of and in addition to the periodical counts made by
ward keepers. These stock verifiers also verify at intervals of not more than
two years, all engineering materials with Permanent Way Inspectors and
Divisional Engineers, and at, intervals of three years, the Tools and Plant of
all departments of Railway.
(D) STORES AND STOCK ACCOUNTS OF THE ENGINEERING
BRANCH OF THE DEPARTMENT OF TELECOMMUNICATION
Administration
and Control
25.47 The purchase of the stores of the Engineering
Branch of the Department of Telecommunication and their custody prior to their
issue for consumption are entrusted to the Stores Branch, supervised by the
General Manager of Telecommunication Stores, Calcutta who works under the
direct administrative control of the Director General, Department of
Telecommunication.
25.48 The department has its main depots at
Calcutta, Jabalpur, Bombay, Madras and New Delhi and several circle store
depots mainly at the Headquarters of circle office as well as a Branch Depot at
Bangalore. These depots works independently as regards Store Accounts and
submit their returns etc. relating to transactions in stores direct to the
Circle Accountant of the office of General Manager Telecommunication Stores,
Calcutta.
Accounts
in Executive Officers
25.49 The General Manager of Telecommunication
Stores is responsible for ensuring that numerical accounts are maintained by
all officers in charge of store depots in respect of transactions of receipt
and issues of stores and that the prescribed returns are submitted by them to
the Regional Accounts Officers concerned under the Chief Accounts Officer
Stores and Workshops.
25.50 The numerical accounts consist of series
of stock cards, one being maintained for each description of stores. Each
receipt or issue of stores is supported by a voucher of receipt or issue in the
prescribed form. The transactions are posted in the stock cards and the balance
struck therein. The vouchers relating to the Stores transaction of each day are
submitted to the Regional Accounts Officer on the first following day.
Pricing
of Articles
25.51 The issue rates, that is to say the rates
at which articles of stock are issued to works, are revised from time to time,
on the initiative of the Accounts Office, as may be necessitated by important
fluctuations in the market rate, and are notified by the General Manager
Telecommunication Stores.
25.52 When a revised rate comes into force the
Accounts Office revises the rate of the articles as entered in its books and
makes a book adjustment for the difference.
Stores
and Stock with the Divisional Engineers
25.53 The Divisional Engineers and
Sub-Divisional Officers also maintain numerical accounts of stores obtained for
use on, and released from works, which also form part of the store balances of
the departments.
25.54 Except for such stores as are purchased
locally or obtained direct from other departments of Government, all stores are
obtained either from the main depots or from the circle stores depots or the
branch depot and their value is debited under the head Remittance by the
Accounts Office. The divisional office compiles a monthly account and renders
it to the Circle Accountant, crediting the value of such stores to the head
Remittance and debiting it to the works or services concerned.
25.55 The Divisional Engineers maintain
numerical account of the receipts, issues and balances of all stores obtained
for the execution of works.
Unserviceable
Stores
25.56 Unserviceable and obsolete stores consist of (i) those released
from works or offices, etc. and (ii) those which become unserviceable while in
stock in stores depots. The bulk of the former are sold locally by the officers
in charge of works and the accounts of such sales form part of and are audited
with the accounts of works. A few kinds of line materials and all apparatus and
plant are, however, returned to the Store Depots for disposal. A surplus Stores
Committee is set up to deal with unserviceable or obsolete (i) instruments
received from divisions, and (ii) line material or apparatus and plant, borne
on stock. On the recommendation of the committee the articles are either sold
by auction or sent to the workshop as scrap.
Duties
of the Accounts Office
25.57 It has been explained in paragraph 25.49 above that the
executive officers are responsible for the maintenance of numerical accounts of
stores. All other work in connection with stores transaction as for example,
valuation, allocation of expenditure, etc. is carried out in the Accounts
Office.
25.58 The Accounts Officer makes all
disbursements of cash after initial check of vouchers for purchase of stores
etc.
25.59 The Accounts Officer is responsible for
compiling the initial accounts of stores and for the submission of the compiled
accounts to the Circle Accountant in the office of General Manager
Telecommunication Stores, Calcutta.
25.60 The Chief Accounts Officer, Stores and
Workshops also acts as an adviser to the General Manager Telecommunication
Stores, in all matters of stores accounts and general finance and assists that
officer in the preparation of the budget estimates and other returns, with all
information in connection with book rates and consumption of stores, balances,
etc. which may be available from his accounts.
Stock
verification
25.61 In order to secure efficiency in
store-keeping a continuous or progressive stock taking is carried out by officers
in charge of stores in such a manner that all stores are verified completely in
the course of the year. The stock held in the store depots is also verified
once a year by a stock verifier working under the orders of the Accounts
Officer. The progressive stock taking of a particular item as well as
independent stock verification are conducted in such a way that there is
sufficient interval between the two.
25.62 Discrepancies noticed in the course of
stock taking are reported to the authorities concerned and their orders
obtained for the adjustment of the value of excesses or write-off of the value
of deficiency in stock.
Note- With
effect from December 1, 1968 the accounting work of the Stores Organization has
been transferred to the control of the Director General Posts and Telegraphs
(Director General of Telecommunications from January 1, 1985). The consolidated
accounts with effect from that date are forwarded by the Director,
Telecommunication Accounts, Office of the Director General Posts and Telegraphs,
New Delhi, for incorporation in the General Accounts.
(E) PURCHASE ORGANISATION OF THE GOVERNMENT OF INDIA
Activities
of the Purchase Organization
25.63 It has been explained in the foregoing
paragraphs how the accounts of stock are maintained in certain Government
Departments and how they undergo audit scrutiny. These and other departments
consume a considerable quantity of stores and in order to procure these stores
in the most economical way, a central purchase organization under the Government
of India, namely, the Organization of the Director General Supply and Disposal
has been established in India. A Supply Wing, attached to the High Commission
of India at London and another attached to the Indian Embassy at Washington are
functioning for procurement of stores from the regions attached to them.
25.64 All indents for purchase are placed on the
Director General Supply and Disposal in India who arrange. for their
procurement as far as possible from local sources. Should indigenous production
be either insufficient or of unacceptable quality, the Supply Wings at London
and Washington are approached.
25.65 The Army Purchase Organization is working
separately under the Ministry of Defence. All purchase requirements of the Army
are attended to by this Organization. Food stuffs like sugar, rice and wheat
are procured by this Organization through the Department of Food who fix the
price and issue release/allocation orders for these items.
25.66 The Organization of the Director General,
Supply and Disposal effects purchases of stores on behalf of all Ministries of
Government of India and their attached and subordinate offices and also those
State Governments, Local Bodies, quasi-public bodies like Municipalities,
District Boards, Statutory Corporations and Government Undertakings converted
into joint stock companies who may desire to avail of its services. The
payments for the cost of stores purchased through DGS&D are adjusted by the
Pay and Accounts Office (Department of Supply) against the accounts officer of
the consignee.
25.67 No purchases are normally made against
indent received from non-Government indenters unless they are accompanied by an
advance deposit covering the cost of Stores plus departmental charges. In
respect of certain quasi-Government undertaking specially authorized by the
Government, the Pay and Accounts Officers first make the payments on behalf of
them to the suppliers and then obtain reimbursements from the indenters.
25.68 The function of the purchasing branches is
to receive indents and to arrange for compliance with them by placing contracts
with supplying firms, orders are placed in accordance with the “Rules for
Supply of articles required to be purchased for the Public Service” and
instructions issued thereunder by the Government of India.
25.69 Orders for supply of stores are placed in
one of two ways-either by placing a separate order for the stores demanded
(technically known as an Acceptance of Tender), or by combining the demand with
orders for compliance under a “running” or “rate” contract. In the case of rate
and running contracts certain departments and officers mentioned therein are
authorized to get their supplies by placing “Direct Supply Orders” on the firm
concerned. When an indenting officer is not authorized to operate directly
against the contract, supply orders are placed by the purchasing officers of
the Director General, Supplies and Disposals for each supply indented for.
25.70 There are also regional purchase officers
located at Calcutta, Bombay and Madras. These officers receive indents up to
certain money limits direct from indenters and normally comply with them from
sources within their local areas.
25.71 The effect of the purchase of stores for
the various departments of Government by this organization may be summarized
broadly as follows:
(i) They are procured in the most economical
way.
(ii) The locking up of capital in Stock is
minimized.
(iii) The wastage of articles which may
otherwise be considerable is minimized.
(iv) The indigenous sources and supply are
encouraged and fully utilized.
Settlement
of Accounts
25.72 In their capacity as Accounting Officers
the Pay and Accounts Officers, Department of Supply, raise debits for the cost
of stores purchased through the organization of the Director General, Supply
and Disposal by Government Officers ( and also for the Departmental charges
which are levied by the Organization for purchase and inspection conducted on
behalf of State Governments or for Defence and Commercial Departments) against
the Accounts Officer of the consignee through the cash settlement account of
the week in which the suppliers bills are paid.
The
Accounts Officer accepts the debits against the account of the indenting
officer and notifies the latter that he has done so.
Payments
for supplies of food stuffs procured through the Department of Food are
arranged by the Controller General of Defence Accounts.
25.73 In respect of stores received by civil consignees in one
financial year and paid in another year, the Pay and Accounts Officer sends an
intimation of debits to the consignee, so that the latter may take cognisance
of the liabilities for the purpose of exercising financial control against
provision of funds.
(F) AUDIT OF
STORES AND STOCKS
General
25.74 The audit of payments for the purchase of
stores is conducted according to the rules prescribed by the Comptroller and
Auditor General for audit of expenditure from the consolidated Fund of
India/the Union Territories with
Legislatures and of the States. Audit processes are applied to both the
purchase and disposal of Stores.
25.75 Whenever material assets have to be
retained for any time in the custody of Government servants, stores accounts
have to be maintained. Stores accounts, which are records of all articles
brought into and sent out of stores, may be either quantity accounts without
values or such accounts with value. The general principle to determine the
system of accounts to be used is that the former should be employed in the case
of stores the cost of which is charged to a final head on purchase or
manufacture whereas the latter applies when the cost of the stores is subject
to subsequent adjustment.
Audit
of Stores Accounts
25.76 The audit of the accounts of stores and
stock kept in an office or department of Government is conducted in accordance
with the instructions laid down below:
(1) Departmental regulations exist governing
purchase, receipt and issue, custody, condemnation, sale and stock taking of
stores. Audit should examine whether they are well devised and properly carried
into effect and should bring to the notice of the Government any important
deficiencies in quantities of Stores, held, or any grave defects in the system
of control.
(2) Audit should ascertain that the accounts of
receipts of stores, whether purchased or otherwise obtained and of their issues
and balances are correctly maintained. Where a scale has been prescribed by
Government or other authority for issue of Stores of any particular kind, it
should be seen that the scale is not exceeded.
(3) Stores, in many cases, represent a locking
up of capital, which is not justifiable unless essential. In order to effect
economy in this direction Audit should see that the balance in hand does not
exceed the maximum limit prescribed by a Competent Authority and is not in
excess of requirement for a reasonable period.
(4) Audit should scrutinize sanctions to writes
off of stores accorded by a competent authority and bring to the notice of
Government any defect of system which appears to require attention.
(5) The accounting for and maintenance of
unserviceable stores which cannot be utilized by the departmental in whose
custody they are kept, involve waste of labour and space. The retention of
stores in excess of the probable requirements of the department in the near
future may result in loss to Government through deterioration. Audit should,
therefore, see that measures are taken to survey, segregate and consider the
disposal of unserviceable surplus and obsolete stores in accordance with the
procedure prescribed by (6) It is an important function of Audit to
ascertain that the articles are counted periodically and otherwise examined to
verify the accuracy of the quantity in the books. Audit shall not except when
specially authorized to do so assume responsibility for the physical
verification of stores, but it has the right to investigate balance of stores
if any discrepancies in the stores accounts suggest that such action is
necessary. Audit has, however, to see that a certificate of verification of
stores is recorded periodically by a responsible authority, that the system of
verification adopted by the Executive is adequate and proper, that
discrepancies found on stock taking are properly investigated and adjusted and
that wherever possible the staff responsible for the verification is
independent of the staff which is responsible for the physical custody of the
stock or for keeping accounts of it. It should also be seen that wherever
practicable, verifiers of stock work directly under the control of Government
and not under the heads of individual department.
(7) Where a priced account is maintained, Audit
should see that,
(a) the stores are priced with reasonable
accuracy;
(b) the rate initially fixed are reviewed from time
to time and revised whenever necessary so as to correlate them with the market
rates;
(c) the value accounts tally with the accounts
of works and of departments connected with stores transactions;
(d) the total of the value accounts tallies with
the outstanding amount in the general accounts;
(e) the numerical balance of stock materials is
reconcilable with the total of value balances in the accounts at the rates
applicable to the various classes of stores; and
(f) steps are taken for the adjustment of
profits or losses due to revaluation, stock taking or other causes and that
these are not indicative of any serious disregard of rules.
The results of audit of Stores and Stock of
Civil and Public Works are incorporated separately in the Audit Report.
Audit
of Purchase of Stores
25.77 As regards purchases of stores, Audit will
see that:
(i) the purchases are covered by proper
sanction;
(ii) they are made economically in accordance
with any rules or orders made by competent authority;
(iv) the rates paid agree with those shown in
the contract or agreement made for the supply of stores;
(v) certificates of quality and quantity are
furnished by the passing and receiving Government servants before payment is
made, except where the contrary is allowed by the rules of Government
regulating purchase of stores; and
(vi) purchase
orders have not been split up so as to avoid the necessity for obtaining the
sanction of higher authority required with reference to the total amount of the
orders. Cases involving uneconomical purchases of stores and losses due to
defective or inferior nature of stores accepted and certified to the
satisfactory in quality are brought to the notice of the competent authority.
🔲 When the contractors are the suppliers which tender system is being adopted?
(A) Negotiation
(B) Open tender system
(C) Direct single tender
(D) Limited tender system