Railway Accounts Department Examinations

Showing posts with label verification of etimates. Show all posts
Showing posts with label verification of etimates. Show all posts

Friday, April 10, 2020

Estimates and Verification of Estimates - Engineering Code


Most important question


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·         7th Chapter of Engineering Code  - 7 Kinds of Estimates


·                  Estimate meaning: To form an approximate judgment regarding cost of the work or Calculate the approximate cost of the work.


·                  Estimates required for :


v  Construction or Purchase of new works or Assets

v  Renewals & replacements of existing works or assets

v  Scrapping or dismantling or abandonment of existing works or assets

v  Reconditioning of existing works or assets

v  Repair works

v  Temporary & experimental works

v  Renewals & replacement of worked lines

v  Renewals of Ballast


·         Estimates not required for


Recondition works

Renewal works (Revenue)

Repair works (Revenue)

Up to Rs. 1 Lakh

Up to Rs. 2 Lakhs

Up to Rs. 5 Lakhs


·         Currency of the Sanction:   5 years    ( 2 years, if work is not commenced)


·     Names of Estimates - easy to remember - A D S R P C C





Abstract Estimate


Detailed Estimate


Supplementary Estimate


Revised Estimate


Project Abstract Estimate


Construction Estimate


Completion Estimate



Open Line Works

Construction Projects


1. Abstract Estimate

5. Project Abstract Estimate

For obtaining Administrative approval

2. Detailed Estimate

6. Construction Estimate

For obtaining Technical Sanction

3. Supplementary Estimate

Prepared both for Open Line Works & Construction Projects

4. Revised Estimate

Prepared both for Open Line Works & Construction Projects


7. Completion Estimate

Stock taking Estimate for Construction Projects



1.       Abstract Estimate:    (for Open Line Works)


·         Prepared to obtain Administrative approval of the Competent Authority.

·         To form a reasonable accurate idea of the probable expenditure and such other data

·         Consists of A. Brief Report,   B. Justification,  C. Specifications  & D. Funds required in Current year or not.

·         Source of Finance is to be identified i.e., Capital, DRF, DF etc for different items.

·         Inclusion of item in Works Programme/M&P Programme/RSP with Budget provision - Deemed to be the administrative approval of the Abstract Estimate.



2.       Detailed Estimate: (for Open Line Works)


·         Prepared to obtain Technical Sanction of the Competent Authority

·         Prepared in sufficient detail

·         Ensure that the cost should not exceed the Abstract Estimate.

·         Work should commenced after the technical sanction of the Detailed Estimate and provision in the Budget


The sanction of the Competent Authority to the Detailed Estimate of a work is called the

 " Technical Sanction"


Detailed Estimate of Open Line Works consists of

Statement of

Details of Estimated cost

Outer sheet consists of Abstract cost of work, Report, financial Justification & Allocation


·         If Administrative approval and Technical sanction - both within powers of GM - Sanction for the both can be accorded at the stage of Detailed Estimate, skipping the Abstract Estimate.



3.       Supplementary Estimates: (for both Open Line works and Construction Project)


·         Two occasions:


A. An item of work which ought to have been included in the estimate already sanctioned, but has not been included.


B. An item of work, which it is found later, should be considered as being a part of an estimate already prepared and sanctioned.


·         Prepared in the same form and same degree as the Main estimate


·         All purposes, supplementary estimate be treated as a part of Main Estimate.



4.       Revised Estimate: (for both Open Line works and Construction Project)


·         If the expenditure on a work likely to exceed the sanctioned one.


·         Prepared and submitted for sanction of the Competent Authority


·         Prepared in the same degree, same form like Original Estimate.


·         Comparative statement showing excesses/savings under each sub head.



5.       Project Abstract Estimate  (for Construction works)


·         Prepared to obtain the approval of Railway Board. 


·         Prepared from an Engineering Survey Report


·         Accompanied by A. Narrative report explaining the salient features and major items of expenditure B. Detailed estimates prescribed under various heads.



6.       Construction Estimate: (for Construction works)


Detailed estimates of all works in the Project are collectively known as " Construction Estimate"


·         Prepared from the Final Location survey report.


·         Divided into convenient sections like engine runs, branch lines, junction arrangements, sections based on topography, divisions etc.


·         In special cases work may commence by preparing the Part estimates for sub - works, before preparation of Construction estimate for whole Project . But the same (sub works) should not be redundant at the time of Project Construction estimate is prepared.  Examples are A. Preliminary works B. Final Location survey C. Project office D. Land acquisition etc


7.       Completion Estimate: (for Construction works)


·         Prepared in supersession of a Construction Estimate


Also called as Stock taking estimate



·         Shows in tabular form as shown below.


Amt of Sanctioned estimate

Actual expenditure as on date

Commitments as on that date

Anticipated further outlay

Total estimated cost

Differences between sanctioned cost and the estimated cost










·          Prepared with brief explanations  - Excesses - Rs. 10,000 or 10% which ever is less and Savings - Rs. 1 Lakh or 20% which ever is less


·          Prepared  - At the end of one of the first three financial half years after the date of "opening"  




Verification of Estimates


·         Important phase of the Control of Expenditure


·         Regular check by the Accounts Officer on all estimate before they are sanctioned by the Competent Authority.


·         Object: To avoid irregular expenditure


Main Points - Easy to remember -  P I B E C


Propriety of Expenditure

Ensure expenditure charged to Railways is legitimate & proper. Ensured canons of financial propriety as enunciated in Para 116F. Proper financial justification.

Incidence & classification of charges

Incidence = Source of Funds,  Classification = Allocation as per Finance Code volume II. Ensure both as per rules in force.  while certifying the Estimate, Accounts officer should clearly state that both have been verified.

However, the estimate should not be delayed if any doubt in allocation. In such cases estimate should certify provisionally.

Budget provision in current year

Verified from the sanctioned budget allotment for the year

Errors & omissions - Freedom from

Executive is responsible for correctness of errors and omissions noted in the course of accounts verification. If not done, a check note appended to the verification certificate  duly pointing out the errors and omissions.  

Competency of Sanction

As per MSOP - checked and certified about the Competent authority empowered to sanction the estimate.


Subsidiary points   - Easy  to remember  - P I C A D O R (means Bullfighter)


Proper distribution between Cash & Stores

Proper distribution is made of the estimated outlay between Cash & Stores

Incidental expenditure

Incidental expenditure that can be foreseen has been provided in the estimate

CRRM - Credit for Railway Released Material

Provided CRRM in case of renewal, replacement or dismantlement of works

Abstract Allocation of all items

Abstract allocation for all items

Departmental Charges for Deposit works

Work done for other govt. depts or private parties, ensure provision of Departmental charges

Outlay & Outturn - manufacturing operations

Outlay & Outturn should be shown distinctly

Rent Statements in case of Railway Quarters.

Ensure 6 % return in case of each class of staff quarters & other rent returning buildings