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Accounting Policies and Procedures Manual - FABS CGA · PDF fileAccounting Policies and Procedures Manual Introduction Issued: 13 -Feb-99 Page 1.4 1.2 Structure of the Manual 1.2.1.1

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Text of Accounting Policies and Procedures Manual - FABS CGA · PDF fileAccounting Policies and...

Government of Pakistan

Accounting Policies and Procedures

Manual

Accounting Policies and Procedures Manual Table of Contents

_______________________________________________________________________ Issued 13-Feb-99 1 appmcover

Table of Contents 1 Introduction 1.1

1.1 Purpose of the Manual 1.3 1.2 Structure of the Manual 1.4 1.3 Reader Guidance 1.5 1.4 Authority, Applicability, Distribution and Maintenance of the Manual 1.6

2 Overview 2.1

2.1 Introduction 2.3 2.2 Organisational Structure of the Accounting System 2.4 2.3 The Accounting System 2.8 2.4 Outline of Chapters 2.13 2.5 Abbreviations 2.15 2.6 Definitions 2.17

3 Budgetary Control 3.1

3.1 Introduction 3.3 3.2 General Policies 3.5 3.3 Detailed Procedures 3.8 3.4 Specific Budgetary Procedures 3.22

4 Expenditures 4.1

4.1 Introduction 4.5 4.2 General Policies 4.6 4.3 Accounting Policies 4.12 4.4 Accounting for Expenditures 4.16 4.5 Detailed Procedures 4.22 4.6 Salaries and Wages 4.36 4.7 Pension Payments 4.46 4.8 General Provident Fund 4.57 4.9 Contractor/Work Payments 4.64 4.10 Loans And Advances 4.72 4.11 Overseas Payments 4.79 4.12 Grants-in-aid, Contributions etc. 4.80 4.13 Assignment Account and Personal Ledger Account 4.82 4.14 Maintenance of Permanent Accounting Records 4.83

5 Receipts 5.1

5.1 Introduction 5.3 5.2 General Policies 5.4 5.3 Accounting Policies 5.7 5.4 Accounting for receipts 5.10 5.5 Detailed Procedures 5.12 5.6 Treatment of specific classes of receipt 5.20

Accounting Policies and Procedures Manual Table of Contents

_______________________________________________________________________ Issued 13-Feb-99 2 appmcover

6 Bank Reconciliation 6.1 6.1 Introduction 6.3 6.2 Overview 6.4 6.3 General Policies 6.5 6.4 Daily Procedures 6.9 6.5 Monthly Procedures 6.11

7 Financial Reporting Procedures 7.1

7.1 Introduction 7.3 7.2 General Policies 7.4 7.3 Year-end accounting policies 7.9 7.4 Detailed Procedure 7.11

8 Loss and Recoveries of Public Money 8.1

8.1 Introduction 8.3 8.2 General Policies 8.4 8.3 Accounting for Losses and Recoveries 8.7

9 Self-accounting Entities 9.1

9.1 Introduction 9.3 9.2 General Policies 9.6 9.3 Accounting Policies 9.7 9.4 Accounting for Self-accounting Entity Transactions 9.9 9.5 Detailed Procedures 9.10

10 Project Accounting 10.1

10.1 Introduction 10.3 10.2 General Policies 10.4 10.3 Accounting Policies 10.6 10.4 Accounting for Project Expenditures 10.8

11 Accounting for Liabilities 11.1

11.1 Introduction 11.3 11.2 General Policy 11.4 11.3 Categories of Liabilities 11.5 11.4 Accounting Policies 11.8 11.5 Accounting Procedures 11.10 11.6 Reconciliation of Liability Records 11.14 11.7 Reporting of Liabilities 11.15

12 Transactions Between Government Entities 12.1

12.1 Introduction 12.3 12.2 General Policies 12.5 12.3 Accounting Policies 12.10 12.4 Accounting for transactions between Government entities 12.13

Accounting Policies and Procedures Manual Table of Contents

_______________________________________________________________________ Issued 13-Feb-99 3 appmcover

12.5 Detailed Procedures 12.16

Accounting Policies and Procedures Manual Table of Contents

_______________________________________________________________________ Issued 13-Feb-99 4 appmcover

13 Procurement and Asset Management 13.1 13.1 Introduction 13.3 13.2 General Policies for Procurement 13.4 13.3 Accounting for Stores 13.5 13.4 Fixed Assets Management 13.8 13.5 General Policies for Disposal of Fixed Assets 13.11 13.6 Accounting for Proceeds from Disposals 13.13

14 Public Account Transactions 14.1

14.1 Introduction 14.3 14.2 General Policy 14.4 14.3 Accounting Policy 14.6 14.4 Detailed Procedures 14.9 14.3 Reconciliation of Public Account transactions 14.12 14.4 Reporting of Public Account balances 14.13

15 Insurance 15.1

15.1 Introduction 15.3 15.2 General Policies 15.4 15.3 Claims Against the Government 15.5 15.4 Accounting Policies 15.7

16 General Accounting 16.1

16.1 Introduction 16.3 16.2 Retention of Accounting Records 16.4 16.3 Maintenance of Accounting Records 16.6 16.4 Use of Suspense Account 16.8 16.5 Control of Official Forms and Chequebooks 16.9

17 Assignment Accounts and Personal Ledger Accounts 17.1

17.1 Introduction 17.3 17.2 Policies 17.4 17.3 Detailed Procedures 17.6 17.4 Appendix A - Assignment Account/Personal Ledger Account Transactions 17.12

18 Forms 18.1

18.1 Form layouts 18.1

Accounting Policies and Procedures Manual Introduction

Issued: 13-Feb-99 Page 1.1 Appmintr.doc

1 Introduction

Accounting Policies and Procedures Manual Introduction

Issued: 13-Feb-99 Page 1.2 Appmintr.doc

Table of Contents

1.1 Purpose of the Manual 1.3

1.2 Structure of the Manual 1.4

1.3 Reader Guidance 1.5

1.4 Authority, Applicability, Distribution and Maintenance of the Manual 1.6 1.4.1 Authority 1.6 1.4.2 Effective date 1.6 1.4.3 Application 1.6 1.4.4 Compliance 1.7 1.4.5 Distribution, maintenance and update 1.7

Accounting Policies and Procedures Manual Introduction

Issued: 13-Feb-99 Page 1.3 Appmintr.doc

1.1 Purpose of the Manual

1.1.1.1 The purpose of this Manual is to set out the detailed policies and procedures to be used in accounting for the Government of Pakistans financial transactions.

1.1.1.2 Under Article 170 of the Constitution, the Auditor General can prescribe detailed policies and procedures in respect of the following:

all transactions of centralised accounting entities

specific transactions of self accounting entities which operate within overall control of the Auditor General e.g. staff related payments

transactions adjustments of self accounting entities with the centralised accounting entities or in between themselves

reporting requirements of the self accounting entities.

1.1.1.3 This Manual contains the detail to accompany the overall framework set out in the Manual of Accounting Principles (MAP).

Accounting Policies and Procedures Manual Introduction

Issued: 13-Feb-99 Page 1.4 Appmintr.doc

1.2 Structure of the Manual

1.2.1.1 The Manual is structured according to the major financial management activities of the Government.

1.2.1.2 The organisation of the chapters and sections within the Manual is shown in the Table of Contents.

1.2.1.3 The first two chapters provide an introduction and an overview to the accounting system.

1.2.1.4 The following three chapters cover the core processes of budgetary control, expenditures and receipts.

1.2.1.5 Chapters 6 and 7 cover the supporting processes of bank reconciliation and financial reporting.

1.2.1.6 Subsequent chapters address the policies and procedures for supplementary processes and for other financial management activities of the Government.

Accounting Policies and Procedures Manual Introduction

Issued: 13-Feb-99 Page 1.5 Appmintr.doc

1.3 Reader Guidance

1.3.1.1 There are five levels of heading in the Manual:

level 1 - chapter

level 2 - section

level 3 - sub-section

level 4 - direction

level 5 - bullet point

1.3.1.2 The organisation of the sections and sub-sections within each chapter is shown in the Table of Contents at the front of each chapter.

1.3.1.3 The layout of each page within this Manual is standardised. The title of the Manual and the name of the chapter are displayed in the top left and right corners of each page respectively. The footer for each page contains the issue date, page number and file reference.

1.3.1.4 The general structure of each chapter within this Manual is standardised, dealing with the subject matter in the following sections (where this structure is inappropriate some chapters omit certain sections or are detailed in a different manner):

introduction

general policies

accounting policies

accounting treatment

detailed procedures

procedures for specific class of transactions.

1.3.1.5 A list of abbreviations and definitions of terms commonly used in this Manual is included for reference purposes.

1.3.1.6 The Appendix includes proformas of the registers and the forms to be used in the application of this Manual.

Accounting Policies and Procedures Manual Introduction

Issued: 13-Feb-99 Page 1.6 Appmintr.doc

1.4 Authority, Applicability, Distribution and Maintenance of the Manual

1.4.1 Authority

1.4.1.1 This Manual is issued under the authority of the Auditor-General of Pakistan, in accordance with Article 170 of the Constitution of Pakistan, read with Pakistan (Audit and Accounts) Order 1973.

1.4.2 Effective date

1.4.2.1 The effective date for application of this Manual is the date of issue of the Manual by the Auditor-General.

1.4.2.2 All accounting entities will have up to two financial years (commencing from 1 July subsequent to the effective date of release) to be in full compliance with this Manual.

1.4.3 Application

1.4.3.1 Accounting entities - An accounting entity is any unit of the Government e.g. ministry, division and department, whose principal source of funding is an appropriation from the Government of Pakistan, and which is not an exempt entity (as listed in Schedule 2 of the MAP).

1.4.3.2 There are two types of accounting entity, namely central

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