Duties of I.S.A - Inspector of Stores Accounts

Duties of  I.S.A - Inspector of Stores Accounts

1.      To supervise the work of ASV’s working under his control.

2.      To distribute the work evenly among the ASV’s under his control in such a way, to complete the stock verification of stores , T & P in due time.

3.      To make surprise visits to ensure that the ASV’s are actually employed on the duties on which they have been deputed.

4.      To test check the works done by ASV’s wherever considered necessary and furnish Test check report to the Stores Accounts Officer.

5.      To submit Weekly Periodical report to the Stores Accounts Officer of progress made by each ASV.

6.      To attend Auctions where necessary.

7.      Disposal of stock sheets at the earliest and report on the action taken to Stores Accounts Officer.

8.      To overhaul the depot numerical ledgers and accounts of the after completion of Stock verification to see that:

A.      They are maintained in proper order.

B.      They are no unattested corrections or over-written figures in the ledgers and accounts.

C.      Find out any non moving stocks (if any) and bring to the notice of Executives for their disposal.

D.     Investigate the reasons for huge differences between the ground balance and ledger balance of stock items found out during actual stock verification.

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Engineering Plant Reserve

Engineering Plant Reserve

ü  Created for items of Plant which rendered surplus on completion of special works/schemes.

ü  On completion of special works or construction, all useful plants for which there is no demand on the OPEN LINE should be returned to this Reserve by Engineering dept to the nearest Stores depot accompanied by advice note.

ü  So that the items of plant in that reserve will be required for future special works.

ü  Created on each Railway with the previous sanction of the Railway Board.

ü  Maximum financial limit of such reserve is fixed by the Railway Board only.

ü  Engineering Dept. responsible for deciding what materials are to be maintained in that reserve.  Also responsible for arranging inspection of items plant on return from any work, such plant should be attended to and kept in readiness, for issue again, if need be.

ü  Stores Dept. responsible for  maintain the records i.e., receipts, issues and balances of the items in that reserve.

ü  Separate Priced Ledgers are maintained for such Plan represented by the No. painted on the items.

ü  Hired such plants to other Govt. Depts, Private parties:

ü  Resorted to that option, when it is used in the interest of public service.

ü  Hire charges and 12.5 % supervision of all handling , packing, loading and unloading etc also be levied on the parties.

ü  COS is responsible for recovery of such charges.

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Risk Purchase

Risk Purchase

·         is fresh purchase made by the Railways ordered at the risk and cost of the defaulting firm , by cancelling the original purchase order under the conditions of the Contract.

·         It happens, when a firm has failed to make supply against P.O/agreement wholly or in part within the Delivery period including extension granted if any.,   or

·         When supply made has been rejected and the firm has failed to replace the same in spite of additional time having been given.

·         Under the above circumstances, the contractor/supplier shall be liable for any loss which the railway may sustain provided:

·         Such a risk purchase is covered by the Agreement.,

·         Risk purchase is made within 6 months from the date of failure or cancellation of the contract owing to repudiation of the contract before the expiry of delivery period incl: extension period if any.

·         Important points to be observed, while making risk purchase are:

·         Risk purchase should be ordered in the same manner as for the original purchase. That is description, inspection method,  system of tender should be similar to the original purchase.

·         No offer with any unusual condition at variance with the original purchase should be accepted.

·         The defaulting firm should also be invited to tender against the Risk tender even though not obligatory.

·         If acceptable, the defaulting firm’s offer, ensure that the same may be accepted only after paying the security deposit, irrespective of the fact, that the said firm is exempted from depositing security money otherwise.

·         The original contractor becomes liable for to the difference between the higher price incurred and the contracted price.

·         For this purpose, MAR account to be operated for watching the realization of the above said difference amount.

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SMS - Stores Monthly Summary

S M S - Stores Monthly Summary

·         SMS is the summary of all store transactions about Stores issued from Stores Depots to the Consumers /consignees (various executives) during the month.

·         Contains particulars like Depot, Ward, Voucher No., Date of issue, P L (Price List) No, consignee code, Quantity drawn, Rate and Total value debited.

·         Also gives Allocation code and totals for Department and Division.

OBJECTIVE:   

·         To Bring into account, all the Stores Transactions (issues and receipts) about the Zone ( say S C Rly) for stock items, which are booked to Capital P (20-7100) – Stores Suspense Under Demand No.16.

·         Through SMS JV, the above transactions clubbed into FMIS, so the JV is incorporated in the Account Current wherever required.

·         Once the final processing is complete at EDP/SC, the reports generated and sent to WAO’s Offices are as follows.

1.      Transaction Ledger

2.      Stores Monthly Summary

3.      S A A/c (Stock Adjustment )

4.      SINT  A/c ( Stores in Transit)

5.      Sales A/c

6.      Class Ledger

7.      OB (quarterly)

8.      Multi depot print out ( for COS office use)

9.      Exception Report 1 – below the danger level ( for COS office use)

10.  Exception Report 2 – above danger level ( for COS office use)

11.  Exception Report 3 – Out of stock (for COS office use)

·         After the generation of the above reports, SMS JV is generated.

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Book Examination Clause

BOOK EXAMINATION CLAUSE

v  Meaning: Government/Purchaser to call for and verify and examine the books of the contractor/Supplier is called Book Examination Clause.

v  Books include Account books, vouchers, receipts, memorandum, paper or writing or any copy of or extract from any such document.

v  Object: Verifying or ascertaining the cost of execution of the contract.

v  When : before or after the prices have been finally fixed.

v  Contractor's duty: Afford facilities to the Government Officer concerned to visit the Contractors works for the purpose of examining the processes of manufacture and estimating or ascertaining the cost of production of the articles. If any portion of the work be entrusted by a sub-contractor or any of its subsidiary, the authorized Government Officer shall have power to examine all the relevant books of such sub- books of such sub-contractor or any subsidiary shall be open to his inspection as mentioned in clause.

v  Period: The Contractor or its agency is bound to allow examination of its books within a period of 60 days from the date the notice is received by the Contractor, or its agencies.

v  If Contractor fail to produce the Books:  The purchaser can reduce the Contract price according to his best judgment.  The decision of the Purchaser in regard contract price is final and binding on the Contractor and his agencies.

v  Result :  If on such examination, it is established that the contracted price is in excess of the actual cost plus reasonable margin of profit, the Purchaser shall have the right to reduce the price and determine the amount to a reasonable level.

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Differences between Government & Commercial Accounts

      Are the Government Accounts and Commercial Accounts are same or not?  If not explain the differences between both with the backdrop of Indian Railways ? 

      The Indian Railways is a departmental commercial undertaking of the Government of India. That means on one side, It performs as departmental functions like other Government depts such as Defence, Finance, CPWD, etc and on other side act as Commercial undertaking since Railways manufacture and sells the perishable commodity "TRANSPORT".  Hence the accounts of Indian Railways should comply the Government Accounts as well as Commercial Accounts.

       To achieve this distinguishing accomplishment,  Indian Railways has performing dual role of maintaining  the both sets of Accounts with the help of Four suspense Heads i.e., 1. Demands Payable (DP) 2. Labour  3. Traffic Account  4. Demands Recoverable.  These are called "LINK HEADS", since the same are linking Government accounts and Commercial Accounts.  The discussion on LINK HEADS will be discussed separately in the same blog.

      The following features are the differences between Government accounts and Commercial Accounts.

GOVERNMENT ACCOUNTS	COMMERCIAL ACCOUNTS
1. Government Accounts are maintained on CASH basis. It accounts Actual cash receipts and actual cash payments during the financial year.	A.  In Commercial Accounts, ACCRUAL is the basis. That means Accrued earnings, whether realised or not, and the liabilities incurred, whether actually disbursed or not.   In the above example,
2. The Govt. Accounts are technically known as "FINANCIAL ACCOUNTS"  and maintained in accordance with the requirements of Government Accounts.  These accounts compiled annually for the purpose of representing a Consolidated Fund duly classified under the heads of accounts prescribed for Government accounting system.	B.  The Commercial Accounts are technically knows as "CAPITAL AND REVENUE ACCOUNTS".   These accounts facilitate a review of finances of the Railway as Commercial undertaking.  These are compiled every and included in the Annual Report of the Railway.
3. Mostly Government Accounts are maintained on Single entry system.	C. Commercial Accounts are maintained on Double entry system. (For every Debit, there is equivalent Credit existed)
4. Government prepares Accounts of its incomings and outgoings only. (Not Profit & Loss A/c and Balance Sheet, since it is not commercial oriented)	D. Commercial firms prepares Profit & Loss A/c and Balance Sheet to know how much profit they earned during the year and what is their position (Assets and Liabilities) at the end of the year.
E. Government Accounts are designed "How little money it (Govt) need to take out of the pocket of the tax payer (citizen) in order to maintain its necessary activities i.e., welfare of the people, defence of the country etc".	E. Commercial Accounts are designed to show how much money the firm can put into the pockets of the owner/business in the form of Profit.

Differences between Lease & License

Differences between Lease and License

1991 with Books - 10 marks.

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Lease:   

1. It is an agreement between the Lessee (user) and the Lessor (owner) for use of an asset in return for specified rental/lease payments.

2. As per Section 105 of The transfer of Property Act, 1882   -  " A transfer of right to enjoy the concerned property for a pre-defined time period or in perpetuity subject to the consideration given by Lessee (user of the property)  to the Lessor (owner of the property).
License:

1. A promise by the Licensor not to sue the Licensee.  That means without a License, any use or exploitation of intellectual property by a third party would amount to copying or infringement.

2. As defined in section 52 of the Indian Easements Act, 1882  -  " License does not allow any interest in the Property on the Licensee's part.  It merely gives the Licensee the right to use and occupy the Property for a limited duration."

Basically looks both terms are one and alike.  But for entitlement/possession and title of property, many a difference between Lease and Licensee.  Those who ( Property owners) avoid risk will prefer License mode.  But they have to lose higher remuneration/compensation compare to Lease mode.

Lease	License
1.Parties: Lessor (owner) and Lessee (user)	1.Parties: Licensor (who accorded permission) and Licensee (to whom permission is accorded)
2. Exclusive possession of property to Lessee for a period of time.	2. No such exclusive possession of property to Licensee.
3. It is irrevocable.  Means cannot be cancelled before the completion of Agreement unless otherwise specified.	3. It is revocable/cancel before the completion of Agreement at the choice of Licensor.
4. Consideration is called Lease rental	4. consideration is called Fees.
5. It is transferable.  That means Lessee can transfer the lease to third party.	5.  It is not transferable.
6. Transfer of interest in the property to the Lessee.	6. Here the legal possession continues to be with the Licensor, not Licensee.  But Licensee is permitted to make use of the property for a particular purpose.  So it does not create any interest in the property to Licensee.
7. Can be terminated as per the terms of Agreement only.  ( But not at the will of parties).	7.  Can be withdrawn /terminated at any time by the Licensor.  For this reason organizations such as Indian Railways prefer License option rather than Lease option, while permit using of its assets by third parties.
8. It does not come to an end either by death of Lessor or the Lessee.	8. But here it come to an end either by Licensor or Licensee.
9. Lessee entitled to any improvement made to the property.	9.  No such entitlement to  Licensee for any improvement to the property.

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Differences between Demands Recoverable and Bills Recoverable

DIFFERENCES BETWEEN

Demands Recoverable (D.R)	Bills Recoverable (B.R)
1.       Introduced from 01.04.1988.	1. Existed since the beginning of Railway Accounts
2.       Purpose: to bring to account all dues pertaining to Rent/lease of Railway Land and Buildings and Interest and Maintenance Charges of Sidings.	2. Purpose: to bring into account all dues pertaining to Water, Electricity, Staff charges & AMC of LC gates
3.       When the amounts due for Railway has been raised in the form of Bills – Debited to Demands Recoverable and Credited to Abstract Z earnings.	3.When the amounts due for Railway has been passed for payment  - Debited to Concerned Revenue Demands and Credited to Cash A/c ( Cheques& Bills)
4.       On the receipt of remittance from the parties – Debited Cash A/c (RIB) and Credited to Demands Recoverable.	4. On receipt the remittance from the parties -Debited Cash A/c(RIB) and Minus Debited to concerned Revenue Demands. (exception : water charges. These will be credited to earnings)
5.       Closing Balance of D.R.: Represents unrealized amount in the form of outstanding “Demands Recoverable”.	5. No question of closing balance as there is no separate Bills Recoverable A/c
6.       Examples: A.Land rent charges for engineering and commercial plots. B. Interest, maintenance charges & Inspection charges for sidings. C. Rent of Buildings & D. Maintenance charges for ROBs, FOBs and level crossings.	6. Examples: A. Cost of commercial staff/other staff (engineering) deputed to sidings. & B. Maintenance/Wagon repair charges. C.Water bills D. Electricity bills
7.       These are form a part of Sundry earnings (Abstract Z	7.These are not part of Sundry earnings (Abstract Z).  Recovery from parties reduces the expenditure in Revenue Demands which are already accounted in Books. (exception : water charges. These will be credited to earnings)
8.       Clearance under the “Demands Recoverable” leads to reduction in Traffic Suspense.  Thus resulting in Better operating Efficiency.	8. Clearance under the “Bills Recoverable” leads to the reduction in Revenue Demands. Thus results in improving Operating Ratio.
9.       It is one of the “LINK HEADS” connecting Government Accounts with Commercial Accounts.	9. It is not a Link Head.

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Differences between Reserve Bank Suspense & Reserve Bank Deposit

DIFFERENCES BETWEEN

RESERVE BANK SUSPENSE AND RESERVE BANK DEPOSIT

Most important question asked several times in appendix 3A examination (in 1986, 1988, 1990 & 1997 (without Books) and asked as Short Notes question.

The below given material is useful for question of Differences between as well as Short notes.

Reserve Bank Suspense (RBS) :

Ø  It is a suspense head operated for settling INWARD transactions from other Accounts Officers      ( Except for Cheques & Bills and Remittance into Bank)

Ø  As and when, the ADVICES received, the RBS A/c is debited ( in case of receipts) or credited (  in case of expenditure).

Ø  on receiving "CLEARANCE MEMO" from RBI-Reserve Bank of India, the a/c in RBS is cleared by contra Debit or credit to Reserve Bank Deposit (RBD).

Ø  All balances under RBS should be NIL at the end of financial year i.e., 31st March.  If any balance is left over, the same should be transferred to MAR (if debit balance) or to Deposit Misc (if credit balance) as the case may be.

Journal entries:

example: Receiving Debit from other Accounts Officer.

1) On receipt of ADVICE ( Debit ) from the other Accounts Officer 

                                Concerned Revenue Demand        Dr.               xxxx

                                                To Reserve Bank Suspense (RBS)    Cr              xxxx

( Booking of expenditure to respective Demand and simultaneously placed under RBS for clearing due from RBI)

2) On receipt of CLEARANCE MEMO from RBI-Reserve Bank of India

                                Reserve Bank Suspense (RBS)      Dr                         xxxx

                                                To Reserve Bank Deposit (RBD)    Cr                  xxxx

(Clearing balance in RBS duly debited and credited to Railway Central Fund i.e., RBD- Reserve Bank Deposit)

RESERVE BANK DEPOSIT (RBD)

v  The original name is "Deposit with Reserve Bank" Major Head 8675.

v  It is a Railway Central Fund in the Books of Reserve Bank of India - CAS- Central Accounts Section at Nagpur.

v  It is operated to record, the "Clearance Memo" which are received from RBI in clearance of transactions intimated either by :-

a)      FA&CAO's for the transactions originating in Railway Books and are to be settled through RBI.

b)      In clearance of transactions which are intimated by other Accounts Officers to the RBI.

c)       The clearances of RIB-Remittances Into Bank  and C&B- Cheques & Bills( through PSB suspense - Public Sector Bank Suspense)

v  The Balance under RBD is closed to "GOVERNMENT" at the end of the year i.e., 31st March.

v  RBD is reconciled with the General Books.

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DIFFERENCES BETWEEN

RESERVE BANK SUSPENSE - RBS	RESERVE BANK DEPOSIT - RBD
1. Operated only for INWARD transactions	1. Operated for both INWARD & OUTWARD transactions
2. Operated for settling Inward transactions from other Accounts Office i.e., Defence, P&T etc	2. Operated for adjustment of transactions i.e., clearance of C&B, RIB and transactions settled with Non-Rly depts as well as outward transactions raised by FA&CAOs against other depts.
3. Nature of the Head is "SUSPENSE" in the books of Railways	3. Nature of the Head is FINAL i.e., "Railway Central Fund" in the books of RBI/CAS/Nagpur.
4. Until the transaction adjusted, this Head is bear the transaction.  Once the transaction is adjusted to RBD, the balance under this Head is cleared.	4. With the operation of this Head, the adjustment of transaction is over, thereby effecting the balance of Railway Deposit in RBI/CAS/Nagpur.
5. Clearance: All the items under this head should be cleared at the end of the year.  If any balance is left over, the same is transferred to MAR (debit balance) or Deposit Misc (Credit balance) as the case may be.	5. Clearance: The balance under this Head should  be transferred to GOVERNMENT at the end of the year i.e., March, 31st.

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Differences between MAR & Deposit Miscellaneous

5 marks question -1986 (WO) & 1993 (WO)

DIFFERENCES BETWEEN

MAR	DEPOSIT MISCELLANEOUS
1.It is a Suspense Head under the Major Head 3002   - Indian Railways Commercial Lines.	1. It is a Suspense Head under the Major Head 8445 - Indian Railways Deposits.
2. It records all DEBITS of transactions which cannot be booked directly to the final heads of accounts for want of allocation, inter-dept. transactions awaiting acceptance, Debit balance in Reserve Bank Suspense (RBS), etc at the end of the year.	2. It records all CREDITS like miscellaneous deposits made to Railways like Security Deposit, EMD, Court attachment recoveries, Deposit Works amount paid by concerned persons etc.
3. It always shown as Debit Balance.	3. It always shown as Credit Balance
4. The Balance under this Head should be examined to see "That there are no Credit Items"	4. The Balance under this Head should be examined to see "That there are no Debit items"
5. Direct Credit cannot be booked to this Head, unless there is corresponding Debit already there.	5. Direct Debit cannot be booked to this Head, unless there is a corresponding Credit already there.