Training Module on

“Internal/ Accounting Controls”

April, 2014
Learning Objective of the Module

The aim of this training module on "Internal/ Accounting Controls" is to help the finance and
accounts staff to develop an understanding of the following:
 Concept of Internal/ Accounting Controls
 Key elements of Internal Controls & its importance to bring in transparency & accuracy
in the financial systems
 Some of the important accounting/internal controls to be implemented under NRHM
including cash & bank transactions, expenditure payments, advances, etc.
Table of Contents

 Introduction
What are Internal/Accounting Controls?
Importance of Internal/ Accounting Controls
 Key Internal/Accounting Controls
Cash Transactions
Bank Transactions
Expenditure Controls
Procurement
Inventory / Stock
Fixed Assets
Advances
Other Administrative Controls
 Case Study
 Self Assessment
 Annexures
INTRODUCTION
What are Internal/ Accounting Controls?

 “Internal Controls” refer to the methods and procedures adopted by an entity to assist in efficient
conduct of its operations and help in preventing fraud & errors
 Those Internal controls which ensure validity & accuracy of the accounting records and financial
statements are also referred to as “Accounting Controls”

Internal Controls aim at the following:

• Segregation of Duties
-Separation of accounting and custodial functions
-No single person should handle a transaction
from beginning to the end

• Securing proper documentation at • Specifying proper authority to enter

each stage into the various transactions and making
• Correctly Recording the transactions Key Elements payments/ signing cheques (i.e. clear
in the books of accounts on a timely of Delegation of Power)
basis Internal Control • Fixing responsibility for the work and
responsibility for deviations

• Instituting sufficient Internal checks under each

transaction/ operations – work of one person
should get automatically checked by other
Importance of Internal/ Accounting Controls

Effective Internal/ Accounting Controls results in:

1 Safeguarding of Assets

2 Timely & Accurate Accounting / Financial Information

3 Making Errors and Frauds Difficult

4 Better compliance with Organizational Guidelines / Policies

5 Properly Authorized Transactions

KEY INTERNAL / ACCOUNTING CONTROLS
Internal / Accounting Controls

• NRHM is a large & complex programme with multiple implementing units and
decentralized framework
• An effective Internal control system is essential to ensure proper fund utilization and
financial reporting under the programme at various levels
• This modules outlines key internal/ accounting controls relating to various financial/
operational transactions including:
 Cash Transactions
 Bank Transactions
 Expenditure Control
 Procurement
 Inventory/ Stock
 Fixed Asset
 Advances
 Others Administrative Controls
CASH TRANSACTIONS
Cash Transactions - Internal / Accounting Controls
Daily Cash Balance:
 The limit of maximum cash balance to be retained at each unit should be decided as per
State Finance Rules.
 Heavy Cash balances should not be maintained at any unit.
 Cash should be withdrawn from bank account only as per the actual/ average
requirement by each unit based on the usage in the previous months.

Cash Payments:
 All cash payments/disbursements should be entered in the cash book on the day of the
payment/ disbursement
 All vouchers/ bills/ invoices should be scrolled (serial numbered) and entered in cash
book with appropriate referencing
 Vouchers/ payment documents should be cancelled after reimbursement to prevent
duplication of payment
 Only original supporting/ bills should be accepted for cash payments
 Generally, cash payments should be discouraged, however payment by cash may be
made, subject to directives/ limits prescribed by the State
 Cash payments should be made only after preparing the payment voucher and signature
must be taken on the voucher from the payee.
 Revenue stamp should be put on all cash vouchers for payments above Rs 5000/-
Cash Transactions - Internal / Accounting Controls

Cash Receipts/ Withdrawals:

 All payments received in SHS/DHS and Block CHC/PHC, either in cash or through
cheques/bank drafts/money orders/bankers cheque etc. should be first entered into the
prescribed register (e.g. cheque receipt register) and then entries should be made in the
cash book, on the same day i.e. day of receipt of cash/ cheque, etc.
 Receipts shall be issued, for the cash/bank Drafts/Banker’s cheque and money orders
on its entry in the prescribed register, which should be signed either by one of the fund
operator or by an authorized officer
 Signature of the person presenting the cheque and receiving the cash should be attested
on the back side of the cheque by one of the authorized signatories
 Cash Receipt voucher should be prepared and accounted for by the accountant on the
same day
 Cash Account should be updated for receipt/ withdrawal of cash on the same day
 Cash should be withdrawn by an authorized person (Cashier) only
 All cash/cheques/Demand Drafts etc. received should be deposited into bank as far as
possible on the same day itself, otherwise on the next working day
 A Fidelity insurance policy at the state level may be taken for the entire state covering
the handling of cash
Cash Transactions - Internal / Accounting Controls

Maintenance and Custody of Cash Book:

 “Double Column Cash/ Bank Book” should be maintained for SHS, DHS and Block,
while at Sub Center and VHSNC, a “Columnar petty cash book” should be maintained
as per the formats suggested (formats attached under Annexure I, II & III)
 Cash book should be updated on a daily basis in case of Block, CHC/PHC, RKS &
atleast on a weekly basis in case of Sub-Centre/VHSNC
 Cash book should be closed daily and if no transaction has taken place during a day, the
entry "No Transaction" to be noted in the cash book on that day and balances should be
carried over to next day
 Over writing in cash book should be avoided and corrections, if any, should be attested
by the authorized officer under his dated initials.
 Voucher serial number should be entered in the cash book alongside the expenditure
 All pages in the cash book should be pre-numbered in order to avoid tampering
 Access to petty cash book should be restricted to one person only
 Cash book should be authenticated by the drawing/ disbursing officer or any officer
authorized for the purpose
Cash Transactions - Internal / Accounting Controls

Physical Verification of Cash:

 Cash chest/ box to be verified at least once in a month, at the close of the month & on
first day of the next month by
 SFM/ SAM at state level,
 DAM at District level
 Block Accountant at Block Level
 Medical officer/ accounted at Health Facility level
 Concurrent Auditor should also verify physical cash during their visit
 Cash chest/ box should be kept at the facility under proper lock & key, preferably under
insurance cover
 Cash should also be periodically (at least once a quarter) counted on a surprise basis by
someone other than the custodian of the fund
 The physical cash should be counted and recorded in denominations and compared with
the cash balance shown in Cash Book
 Result of verification should be recorded in the cash book each time as “ Certified that
Cash Balance checked and found correct”
 In case of any discrepancy, a formal report should be submitted to the next higher
authority for further necessary action
 Cash balance certificate should be prepared and kept ready for audit at the end of each
year
BANK TRANSACTIONS
Bank Transactions - Internal / Accounting Controls

Bank Payments:
 All payments to the extent possible should be made by account payee cheques/ e-
transfer
 Entry in the books of accounts should be made immediately upon transfer of funds /
issue of cheque
 Any payment above the prescribed limit for Block, CHC/PHC, RKS, Sub center &
VHSNC should necessarily be made through crossed Account payee cheques only
 Acknowledgement of receipt of cheques issued should be obtained from the payee
 The limits for approval of expenses/ payments should be as per the delegation of power
at respective implementing units
 The supporting documents (such as bills, vouchers, etc.) should be stamped as ‘PAID &
CANCELLED’ to avoid duplicate payment against the same document
 While making payments through cheque, its number should be invariably noted in the
cash book/bank register for cross checking
Bank Transactions - Internal / Accounting Controls

Cheques:
 All cheques should be signed by the two authorized signatories
 Cheque books (new/ used /currently under use) and their counter foils should be kept in
the personal custody of one of the officers who is authorized signatory on the cheques
 All Cash/Cheques/Demand Drafts etc. received should be deposited into bank as far as
possible on the same day itself, otherwise on the next working day
 The issue of bearer cheques should be avoided as far as possible except for drawing
cash from Bank for day-to-day official transactions
 Signatories should ensure that the amount of cheque is within their delegated power &
the vouchers have been authorized by the concerned accountant
 Before signing the cheques, it should be ensured that funds in the concerned bank are
sufficient to honour the cheque
 Staggering one payment into multiple cheques with smaller denominations mainly to
avoid delegation limit should not be allowed
 As far as possible, the person responsible for preparing cheques should not be a cheque
signatory himself
 Practice of signing of blank cheques in advance by any signatory should be completely
prohibited
 Details of cheques in hand at the end of each month should also be maintained
Bank Transactions - Internal / Accounting Controls

Maintenance of Bank Book:

 “Double Column Cash/ Bank Book” should be maintained for SHS, DHS and Block as
per suggested format (formats attached under Annexure I)
 Sub-Centre & VHSNC should maintain a bank register to record receipt and payment of
funds through cheque (formats attached under Annexure IV)
 Bank pass book / bank statement should be updated regularly (atleast once a month)
 Over writing in bank book should be avoided and corrections, if any, should be attested
by the authorized officer under his dated initials
 All vouchers / bills / invoices to be scrolled (serial numbered) and entered in bank book
with appropriate referencing

Cheque Issue Register:

 Cheque issue register should be maintained properly
 RTGS / ECS instructions should be appropriately authorized, recorded and filed. These
should also be noted in the bank payment register
 All the cheques shall be entered in the Cheque issue register before they are submitted
for signatures, indicating its number, amount, name of the person or party, purpose and
date of issue, etc.
 Signatures should be obtained from Cashier/Accountant on the Cheque Issue Register
in respect of each cheque handed over to him for cash withdrawal from the bank
Bank Transactions - Internal / Accounting Controls

Bank Reconciliation Statement (BRS):

 Bank reconciliation statement should be prepared on a monthly basis (by the 10th of the
following month) (format attached under Annexure V)
 Separate Bank reconciliation statement should be prepared for each bank account
 BRS should be reviewed and signed by the supervisor and a copy of BRS should also
be sent to the supervisory units
 Reconciliation items should be grouped under the following heads;
• Cheques deposited but not credited
• Cheque issued but not presented into bank
• Excess/ short amount debited / credited by bank
• Bank interest not accounted for
• Bank charges not accounted for
• Bounced cheques/ cheques presented but not honored, etc.
 Proper explanation by the person in-charge should be recorded in case of any
unreconciled / old entries
 Sequence of cheque number & cheque details should be compared with the details
recorded in the cash book
 Attention should be given to long standing unpresented cheques, stop payment notices
 Any stale cheques appearing in the BRS should be reversed
Bank Transactions - Internal / Accounting Controls

Maintenance of Bank Account:

 As far as possible, Bank Account should be opened and operated under joint signature
 Personal bank accounts should not be allowed for making any official transactions
 Generally, bank account should be maintained in any of the scheduled bank / Grameen
bank, however, account can also be maintained in post office in areas where bank
availability is a problem
 Interest income should be clearly identified and reported in the SoE/ UC on timely basis
 Bank account should be posted from the daily totals of cheques issued and
challans/remittances (deposited) made into the Bank
 Idle bank accounts should be closed urgently after appropriate approval.
 Funds related to non-NRHM programme should be avoided to be deposited into the
bank account maintained for NRHM funds
EXPENDITURE CONTROLS
Expenditure - Internal / Accounting Controls

Vouchers / Supporting Documents:

 Voucher should be prepared for each financial transaction.
 Each voucher should be properly filled, serially numbered and signed by the authorized
person. It should be supported with a supporting duly authorized from the appropriate
authority.
 Before authenticating a cheque for any payment/ disbursement, the cheque drawing
officer should ensure that there is a proper and formal statement of claim (Bill) or
invoice through which payments have been demanded by the concerned person or party
or firm.
 The purchases made or services received are according to the approved plan and the
claimant is entitled to get it. A competent sanction to incur expenditure should be
attached with the claim.
 The particulars of the claim i.e. rates, calculations, net payable amount etc. should be
examined/checked by the Accountant or by an authorized accounts person
Expenditure - Internal / Accounting Controls

Post Payment Controls:

 Paid invoice and supporting documents must be defaced with the seal of “Paid &
Cancelled”. In case of advance adjustments, it should be marked “Passed for
Adjustments”.
 The reference of cheque vide which the payment made is to be recorded on invoice.
 All the paid vouchers must be serially numbered and maintained box file.

Sanctions / Approvals:
 Necessary approval from competent authority should be taken before hand for
expenditure made.
 Expenditure made should be within approved budget limits.
 All approvals/expenditure made should be under the jurisdiction of the sanctioning
authority in line with delegation of power as prescribed by the State.
PROCUREMENT
Procurement - Internal / Accounting Controls
Requisition and Purchase Order:
 All procurements should be made as per the approved guidelines for procurement
issued by the State Government
 All purchase requisitions should be reviewed by a senior official to ensure
reasonableness and appropriate delivery address
 All purchase orders should be prepared on the basis of approved purchase requisitions
 The purchases made or services received should be according to the approved plan
 Purchase orders should have all the relevant information pertaining to purchase and the
information should be classified in an orderly manner
 Before making any purchases, stock position must be assessed
Receipt of Item and Recording:
 Goods receiving officers should certify that the quality and quantity of the goods
received on the receiving document (invoice/ challan) are as per the specifications
mentioned in the purchase order
 Any discrepancy in the quality specifications as per the order document should be duly
authorized by the concerned person
 It should be ensured that evidence to deliver goods and services at the agreed time and
place of delivery has been obtained.
 Entry should be made in appropriate stock/store register and certification on this
account should be made on the bill/invoice by an authorized officer
Procurement - Internal / Accounting Controls

Approval/ Authorization:
 Payments should be made in accordance with the terms and conditions of the Purchase
Order/ contract
 Evidence of delivery of goods /services at the agreed time and place should be obtained
before making payment
 Procurement against verbal order, if any, should be regularized through preparation of
written purchase order and it should be approved by competent authority
 All procurements of goods/ articles should be made as per the State Government
Procurement Rules which includes the limit for invitation of tenders, limit for
quotations, formation of procurement committee, etc.
INVENTORY / STOCK
Inventory / Stock - Internal / Accounting Controls

Inventory / Stock:
 Proper written policies and procedures to control and monitor inventories should be in
place
 Store should be managed by an authorized store keeper and store records should be kept
under his custody only
 Appropriate stock records should be maintained for receipt and issue of material
 Stock record should be maintained as per the prescribed format to reflect stock-wise
quantities and locations by individual items
 All stock movements should be supported by formal pre-numbered documentation and
be appropriately authorized
 Stock records should be updated immediately on issue/ receipt of any item
 Bin Card system should be adopted at least in respect of stores at District & above
 Items / material should be arranged/ stacked properly in the store to facilitate follow of
FIFO (First In, First Out) method of issue of store items
 Access to the store should be limited to authorized personnel only
 Periodical stock verification should be conducted by the store keeper along with an
independent officer appointed by head of office, any discrepancies should be
appropriately recorded and reported to the higher authorities.
 Obsolete, damaged, and slow-moving items should be identified on periodical basis
(monthly/ quarterly basis) and reported to higher authorities
FIXED ASSET
Fixed Asset - Internal / Accounting Controls
Approval/ Sanction:
 The prescribed procurement guidelines (to be specified by each state) for purchase of
assets should be followed
 Appropriate budgetary approval should be available for purchase of fixed assets

Fixed Assets Register (FAR):

 A register for Assets of Permanent Nature should be maintained to record assets of
permanent nature like furniture & fixtures, Computers, etc. either procured by the block
or received from districts / other offices.
 Another register for stocks of temporary nature should be maintained to record various
consumables used by the block like stationery, printing material, etc.
 All assets received in kind from the supervisory units should be included in the register
 Entry should be made in register for each individual item of fixed asset purchased/ sold/
discarded
 Fixed asset register should include the description of the asset, classification of the
head for e.g. Furniture and Fixtures, equipments, etc., location of the asset, quantity/
numbers, original cost, date of purchase, details of assets sold/ discarded, distinctive
number of the assets etc.
Fixed Asset - Internal / Accounting Controls

Physical Verification:
 Annual physical verification of fixed assets should be conducted
 Verification should involve comparing the physical balance with book balance,
identification of assets to be scrapped/written off & missing assets
 Any major discrepancies in physical verification should be appropriately recorded in
the fixed asset register and reported to the higher authorities

Fixed Assets Movement:

 All fixed asset movements between units should be appropriately approved and
recorded in the FAR along with the new location of the fixed asset

Others:
 No depreciation should be charged on the fixed assets
 Procedures and policies for transfers and disposals of fixed assets should be followed
 If any asset is disposed off/ discarded / demolished or destroyed, the net surplus /
deficiency (if material) should be disclosed separately
 Permanent Identification Numbers should be mentioned on each item of fixed assets to
permit easy identification. The same should also be reflected in the FAR
 Disposal of fixed assets should be made by the appropriate committee competent to do
so
ADVANCES
Advances - Internal / Accounting Controls

Advances:
 All advances should be duly approved by the competent authority.
 Before sanctioning further advance, it must be ensured that all earlier advances to the
same person/party and for the same purpose have been settled/adjusted
 No advances should be made to a person/party if an advance is already pending for
settlement for the same purpose, unless appropriately approved and reasons
documented
 Advance should be given only for activities which are admissible under the programme
 All the advances should be settled within a maximum period of 90 days
 Advance Tracking Register should be maintained and regularly updated
 Age wise analysis of unsettled advances should be prepared and periodically be
reviewed by Programme Officers at each unit
 Cases where huge un-adjusted advances have been lying for long should be brought to
the notice of higher authorities (BCMO, DAM, CMHO etc.)
 Independent monitoring should also be carried out by the supervisory units in respect of
the advances lying at the lower units based on the periodical MIS obtained
OTHER ADMINISTRATIVE
CONTROLS
Others Administrative Controls

Document custody:
 The all important documents, rules and regulations should be placed in a dedicated area
for easy retrieval
 Suitable responsibility should be assigned for keeping the rules and regulations file up
to date

IT Back-up:
 All critical data files should be periodically backed up and stored in a secure off site
location
 A tested backup and recovery procedure to protect daily work files should be put in
place
 There should be appropriate security on the access of all the sensitive/ important data
and information

Password Controls:
 There should be a comprehensive internal policy on password protection
 All the sensitive information should be protected by appropriate passwords
 Passwords should be frequently changed to avoid unauthorized access
Others Administrative Controls

Attendance / Leave Records:

 The attendance and leave records should be duly maintained at all units as per policy
and updated regularly.
 Leave applications should be scrolled (serial numbered) & properly filed, these should
be verified by supervisor/ head of office periodically including leave records, etc.
 There should be a system of recording attendance and making payment of salary/
honorarium, in accordance to such records.

Delegation of Power:
 Guidelines on ‘Delegation of Power’ issued by GoI/ State should be appropriately
adopted and implemented
 Any internal delegation of authority by the supervisors should be appropriately
documented

TDS:
 TDS should be deducted appropriately and deposited as per the guidelines
 Quarterly / monthly TDS returns should be submitted in the prescribed format
 Instructions on e-TDS as circulated by the District Health Society should be followed
CASE STUDY
Case Study
Some cases of lapses in implementation of internal controls are given below. Kindly
suggest appropriate internal control measures which should be adopted in these cases.

1) Following lapses were noticed during examination of the file for Vouchers / Supporting
Documents. List down the possible internal controls that should be implemented in
order to avoid similar lapses in future

a) A cash voucher was entered twice in the cash book

b) Two cheques were issued against the same voucher
c) Few vouchers were found to be missing from the file

2) While carrying out review of bank transactions/ maintaining bank records following
practices are observed by the accountant. What possible improvements should be
suggested for better internal controls ?

a) There is invariable delay in clearance of Cheques deposited

b) Details noted in the bank register are: cheque amount, date & party name
c) It is always difficult to track if a cheque issued had been handed over to the payee
Case Study
3) List down the possible internal controls that should be in place for smooth settlement of
advances w.r.t. the following lapses?
a) It is difficult to identify exact balance of advances lying against individual party/
employee. Accountant is planning to review all ledger accounts in detail.
b) Multiple advances are outstanding against same employees
c) Advance given to an employee for a travel of 10 days included 2 days of personal trip
d) Most of the advances are pending for settlement for last 4-5 months
e) Some of the old advances from the external parties are being rejected by the payee
party

4) Accountant, who has been recently appointed at a health facility is facing following
difficulties w.r.t. Fixed Assets. Suggest him relevant internal control measures which he
should follow to avoid similar situations in future.
a) Accountant is preparing a list of all assets physically available but he is not able to
identify details of assets which have been received in kind from other units/ donors
b) Certain items of old assets are being disposed off, however
• Their costs are not traceable, though their quantity / date of purchase is available
in the FAR
• It is difficult to identify them in the FAR as there are similar items with same
date of purchase
SELF ASSESSMENT
Self Assessment
Please tick mark () the correct answers. A question can have more than one correct
answer.
1. Which of the following statements is not true with respect to Internal Controls?
a. Internal Controls helps in providing timely & accurate information
b. Internal Controls help safeguard assets
c. Internal Controls encourages Errors and Frauds
d. Internal Controls leads to better compliance with Organizational Guidelines/
Policies

2. Which of the following is incorrect in terms of Elements of Internal Control?

a. Work of one person should get automatically checked by other
b. Responsibility for the work and for deviations should be fixed
c. The transactions should be correctly recorded in the books of accounts on a timely
basis
d. A single person should handle a transaction from beginning to the end

3. Which of the following Internal Control statement is True?

a. Cash book is to be updated on a daily basis in case of Block, CHC/PHC, RKS
b. Cash book to be updated on a monthly basis in case of Sub-Centre/VHSNC
c. Cash book should be closed on yearly basis
d. All of the above
Self Assessment

4. Which out of the following are the Internal Controls that have to be implemented in
respect of Cheques?
a. Cheques can be signed by one of the two authorized signatories
b. Cheques received should be deposited into bank within a week
c. Acknowledgement of receipt of cheques should be obtained from the payee
d. All of the above

5. Which of the following is/are correct in terms of implementing internal control in

respect of maintaining a voucher?
a. All vouchers/bills/invoices should be scrutinized after making payments
b. All vouchers should be supported with appropriate documentary evidence
c. Invoice must be marked “Passed for Payment” on in case of advance adjustments.
d. All supporting documents should be stamped as ‘APPROVED & PAID’

6. Which of the following controls have to be kept in mind while dealing with advances?
a. Advance can be given for any activity
b. All the advances should be settled within a maximum period of 120 days
c. No advances should be made to a person if an advance is already pending for
settlement
d. All of the above
Self Assessment
7. Which of the following points should be kept in mind while handling cash receipts?
a. Signature of person presenting the cheque and receiving cash should be attested by
one of the authorized signatories
b. All payments received should be first entered into the prescribed register and then
entries should be made in the cash book
c. Only a
d. Both a & b

8. Which of the following statements is true with respect to Bank Reconciliation Statement?
a. Bank reconciliation statement should be prepared atleast on a weekly basis
b. Any stale cheques appearing the BRS should not be reversed
c. Single Bank reconciliation statement should be prepared for all the bank accounts
d. Proper explanation by the person in-charge should be recorded in case of any
unreconciled entries

9. Which of the following statements is true with reference to implementing controls over
fixed assets?
a. Physical verification of fixed assets should be conducted atleast on annual basis
b. Depreciation should be charged on the fixed assets
c. A single register for assets of permanent & temporary nature should be maintained
d. Assets received in kind from the supervisory units should not be included
Self Assessment

10. Which of the following should be adhered to with reference to bank accounts?
a. Private bank accounts can be allowed to be maintained
b. Account should be maintained in post office in areas where bank availability is a
problem
c. None of the above
d. All of the above

11. Which of the following points should be kept in mind while implementing internal
controls over inventory/ stock?
a. Stock record should be maintained as per the prescribed format to reflect stock-wise
quantities and locations by individual items
b. Stock records should be updated immediately on issue/ receipt of any item
c. Store records should be kept under the custody of the dedicated store keeper only
d. All of the above

12. Which of the following statements is true with respect to administrative controls?
a. All the sensitive/ important data and information should be easily accessible to all
b. Passwords should not be frequently changed
c. A tested backup and recovery procedure to protect daily work files should be put in
place
d. All of the above
ANNEXURES
Annexure I - Format of Double Column Cash/ Bank Book

Receipts Payments
Dr. Cr.
Particulars V. L. Amount (Rs.) Particulars V. L. Amount (Rs.)
Date (including party name, S. F. Date (including party name, S. F.
activity head, etc.) No. No. Cash Bank activity head, etc.) No. No. Cash Bank

V.S.No. - Voucher Serial Number

L.F.No. - Ledger Folio Number
Annexure II - Format of Petty Cash Book for Sub Center

Payments *

Date S. Particulars Receipts Total Cleaning Minor Transport of Payment/ Other Daily
No (Including (A) Expenditure of Sub modifications emergencies Reward to Expense Balance
party name, (B) Centre and repair ASHA (C= A-B)
activity head,
etc.)

Monthly Total

S No. - Serial Number

Note: Cash book should be serially page numbered and authenticated by the supervisor
* Illustrative expense heads have been mentioned here, however, additional heads can be added as per requirement.
Annexure III - Format of Petty Cash Book for VHSNC

Payments*

Date S Particulars Receipts Total Village level Revolving Nutrition, Education Daily
No. (Including (A) Expenditure public health fund for & Other Balance
party name, (B) activity households Sanitation Expenses (A-B)
activity (cleanliness
head, etc.) drive etc )

Monthly Total

S No. - Serial Number

Note: Cash book should be serially page numbered and authenticated by the supervisor
* Illustrative expense heads have been mentioned here, however, additional heads can be added as per requirement.
Annexure IV - Format of Bank Register

Receipts Payments

S. Particulars S.
Particulars Amount Amount
Date N Date (Details of the activity for which N
(Details of the source) (Rs.) (Rs.)
o. amount is spent) o.

Grant - in - aid for VHSNC untied

Cash Withdrawal
fund

Payment for (Explanation of the

activity for which payment has
been made)
Cash Deposit

Interest Received

Monthly Total (A) Monthly Total (B)

Balance (A-B)

S.No. - Serial Number of the Invoice / voucher

Annexure V - Format of Bank Reconciliation Statement

Bank Reconciliation Statement for the month of ____________

Name of the Unit:

Balance as per Cash Book (as on date ......................)

Add:
(i) Cheques issued but not encashed
(ii) Credit entries made in the bank pass book but not shown in the
cash book
(iii) Interest credit in Bank
Total

Less:
(i) Amount sent to Bank but not credited in the Saving Bank Account of the unit
(ii) Bank charges debited in the bank account but not accounted for in the cash book

Total
Balance as per Pass Book
Prepared by :
Examined by :
Date : ___________
THANK YOU
 Course Module on Accounting/ Internal Controls

Session Title: Accounting/ Internal Controls

Session-at-a-glance

Time
Session learning Teaching Teaching Required
Session Structure
objectives Method Used Material used
Objective of Session: Learning Objective Slides 2-3 5 mins
of the module
The objective of the
module is to help the
trainees to understand Key Teaching Slides 4-6 10 mins
the importance and need Point 1: What are
of internal controls Internal/ Accounting
under NRHM. Controls and Instructional
It explains the important Importance of and
accounting/ internal Internal/ Accounting Participative
controls to be controls
implemented under
NRHM in respect of Key Teaching Slides 7-35 60 mins
various transactions Point 2: Key
including cash, bank, Accounting Controls
fixed assets, advances on various aspects
etc.
Case study Group Slides 36-38 20 mins
Materials Required : discussion /
1. Slides individual
2. Case studies attempts by
3. Self-Assessment participants

Self-assessment Individual Slides 39-43 15 mins

attempts by
Participants

TOTAL TIME 1hour 50

REQUIRED mins
 Solution: Case Study

Solution 1:
1. All vouchers should be scrolled serially numbered and entered in cash / bank book or register
with appropriate referencing
2. All supporting documents in originals should be defaced / stamped as ‘PAID & CANCELLED’
with details of cheque number & date
3. Cash book should be closed daily and physical cash balance should be cross-verification on daily
basis with closing balance in the cash book
4. All vouchers should be properly filed on daily / weekly basis

Solution 2:
1. All cash/cheques/Demand Drafts etc. received should be deposited into bank as far as possible on
the same day itself, otherwise on the next working day positively
2. Date of actual deposit/counter-foil of deposit should be mentioned/ attached with the bank book
3. Cheque number should invariably be noted in the cash book/bank register for easy cross-checking
4. Acknowledgement of receipt of cheques issued should always be obtained from the payee

Solution 3:
1. Advance Tracking Register should be maintained
2. While sanctioning fresh advance, it should be ensured that no previous advance is pending for
settlement against the same party/ employee
3. Advance should be given for activities admissible under the programme only, no advances on
personal account should be given
4. All the advances should be settled within a maximum period of 90 days
5. Ageing of advances should be periodically carried out to identify any old advances
6. All advances from external parties should be confirmed on quarterly/ yearly basis

Solution 4:
1. All assets received in kind should also be recorded in FAR with all appropriate details
2. Full particulars of purchase / receipt of fixed assets including the identification no., date of
purchase, its current location / user, value of purchase, etc. to be included
3. Permanent identification no. should be marked on each item of fixed asset and same should be
mentioned in the FAR
 Accounting Controls
Solution: Self-Assessment
1. c
2. d
3. a
4. c
5. b
6. c
7. d
8. d
9. a
10. b
11. d
12. c