Draft Departmental Ministries

Bangladesh Financial Management Reform Programme
Government of Bangladesh Financial Management Reform Programme
Funded by DFID and RNE (Problems in Departmental Ministries and the impact on the quality of Government Accounts) March 2004
CNTR 012269
Draft
FMRP Management Office:
BTMC Building (7th Level) 7-9 Kawran Bazaar, Dhaka-1215
Tel: 8110134-7 Fax: 880-2-8117968 E-mail: fmrp@bol-online.com Web: www.fmrp.org
Atos KPMG Consulting Limited This report contains 67 pages Annex A to C contains5 pages
Executive Summary
Report Design This report has been prepared as part of the Financial Management Reform Programme (FMRP). The purpose of the report is to examine the problems that exist in the accounts preparation and reporting of Departmental Ministries within government. As Departmental Ministries have for some time been viewed as an area of government accounting where the quality of accounting data may be lower than expected, it was thought that FMRP should in some way address this issue. To provide the FMRP team with an initial assessment and insight into the scale of potential problems that exist, this report was commissioned. This report is not designed to provide a definitive answer to the problems, but rather to enable a more informed decision to be taken as to the benefits that FMRP may bring to this area of government accounts. To enable FMRP to gain a fuller understanding of the issues, it was decided to examine both Departmental Ministries and Ministries that exhibit departmental characteristics. Observations The issues identified in the course of this study may be summarised as follows: There is minimal communication between the Chief Accounts Officers (CAO) and Departmental accounting offices. This goes totally against the idea that the CAO is the interface between the Ministries/Departments and the CGA. There is currently a great deal of confusion surrounding the accounting responsibilities of both the Departments and Chief Accounts Officers (CAOs). There is a lack of clarity into the actual legal status of some departments, which must be resolved before responsibilities may be correctly assigned. Departments such as Railway, Postal and BTTB currently operate under a commercial system of accounts. These do not integrate easily with the cash based system of government budgeting and accounting. There appears to be a serious lack of knowledge and understanding of the departmental accounting systems within the CAO offices. While the CGA office is aware of the lack of quality of accounting data produced by Departmental Ministries and reported by CAOs, there has been no significant attempt made to address this issue. Departmental accounting offices are viewed by the CGA office as largely outside their jurisdiction. It is therefore reluctant to impose the financial controls and disciplines that have been made in relation to DAO and UAO accounting offices. The guidance documentation provided for the Departments generally dates back to the 1930s, with minimal updating having taken place over the intervening period. This guidance must be completely revised for each Department following an in-depth analysis of each on an individual basis.
The CAOs do not accept responsibility for the quality of the accounting information that is reported for their Department. In most cases, the CAO office acts simply as a data input function for the information provided.
Recommendations It is clear from the abundance of errors and lack of knowledge that was found during the preparation of this report that the introduction of short-term recommendations to address the problems identified will not produce a tangible improvement in the quality of accounts produced. A piecemeal solution, following the very limited time available for this study would simply continue the current practice of introducing knee jerk solutions to minor issues, without the implications or impact being fully understood. As stated earlier, this report is not designed to fix the problems identified, but rather to provide the much more important and higher level solutions that will have a major impact on the overall quality of accounts. The findings of this report should be used as a starting point for more detailed investigation, but should not be considered as absolute findings that can be addressed immediately. Rather the findings of this report are indicative of the problems that may exist throughout the Departments assessed. The major recommendation of this report is that the CGA office adopts a more fundamental change of approach. It is clear that the current practices are outdated, misunderstood and in many instances detrimental to the overall quality of accounting information produced. While some government officers currently advocate the preparation of individual procedure manuals for each Department, it is the opinion of the authors that this will not address the major problems identified above. Procedural manuals are therefore not considered appropriate until the more fundamental problems have been rectified. Once this has been achieved, it is strongly recommended that individual procedure manuals be prepared for each Department. The fundamental changes required focus on the lack of understanding, responsibility and interaction outlined above. It is the CGAs wish that Chief Accounts Officers take responsibility for the accounting data that is produced under their jurisdiction. The role of Chief Accounts Officer will be significantly enhanced during the lifetime of FMRP and beyond to achieve this. It is therefore recommended that rather than impose manuals, which have been prepared externally by consultants, that the CAO play a major role in the reform. FMRP consultants would be more optimally utilised in assisting each of the CAOs to investigate, understand and enhance the current accounting procedures and those of the concerned Department. In this way, The CGA representative, namely the CAO, will develop a full understanding of the current practices, be encouraged to address the potential improvements and develop a real and sustainable relationship with the accounting personnel of the Department. The FMRP project team, acting as facilitators, would be in a position to provide the CAOs with guidance, coaching and other support to ensure that the knowledge transfer takes place as quickly and completely as possible. The information gained in the preparation of this report is clearly not sufficient to enable the problems of nine problematic Ministries to be solved, but is more than sufficient to enable the FMRP
consultants to identify areas where the capacity building that must be provided should be focused. In line with the overall aims of the FMRP project, being to provide sustainable reform to the government, this use of consultants knowledge, skills and experience would be significantly more beneficial in the long term. Government officers and CAOs in particular, must be given this assistance to develop their skills and accounting knowledge if this reform is to remain and become established with government. It is only through the detailed assessment carried out by the concerned CAO that the required amendments will be identified. Any short-term recommendations made, as a direct result of the findings of this report cannot be relied upon to offer the optimal solution to the problems identified. The time limitations of assessing 9 Ministries or Departments cannot be expected to fully assess all the implications of each issue identified. For this reason, this report is presented as an indicative tool to assist the CGA office in focusing attention on the major difficulties identified and to therefore enable a genuine and sustainable improvement in the quality of government accounts.
EXECUTIVE SUMMARY................................................................................................2 1 INTRODUCTION.............................................................................................................8 1.1 DEPARTMENTAL STRUCTURE..........................................................................................10 2 COMMON PROBLEMS OF DEPARTMENTAL MINISTRIES............................11 2.1 OVERVIEW..................................................................................................................11 2.2 REMITTANCES..............................................................................................................12 2.3 CONFUSION AND DUPLICATION OF DEPARTMENTAL RECEIPTS ..............................................13 2.4 DEPOSITS....................................................................................................................13 2.5 SUSPENSE ACCOUNT & OTHER CASH REMITTANCE............................................................14 2.6 BANK RECONCILIATION..................................................................................................15 2.7 RELIANCE ON CONSOLIDATED FUND REPORTING..............................................................16 3 POSTAL DEPARTMENT.............................................................................................17 3.1 BACKGROUND..............................................................................................................17 3.2 SUMMARY OF MAIN ACCOUNTING ISSUES IDENTIFIED..........................................................18 3.3 ACCOUNTS PREPARATION...............................................................................................18 3.3.1 Alpha Numerical Coding Structure of Postal Department...............................20 3.4 THE NEED FOR 3RD LEVEL FUNCTIONAL CODE...................................................................22 3.5 RELATIONS WITH THE BANKING TREASURY......................................................................23 3.5.1 Bank Reconciliation...........................................................................................23 3.6 MONEY ORDERS..........................................................................................................25 3.7 POSTAL SAVINGS ACCOUNTS.........................................................................................28 3.8 SALE OF ORDINARY AND SERVICE POSTAGE STAMPS...........................................................30 3.9 OTHER OBSERVATIONS..................................................................................................31 4 FOREST DEPARTMENT.............................................................................................33 4.1 OVERVIEW..................................................................................................................33 4.2 OBSERVATIONS............................................................................................................33 4.3 RECONCILIATION WITH THE BANKING TREASURY..............................................................34 4.3.1 Opening and closing cash balance....................................................................35 4.4 BUDGETARY CONTROL...................................................................................................35 5 BANGLADESH TELEPHONE AND TELEGRAPH BOARD................................36 5.1 OVERVIEW..................................................................................................................36 5.2 OBSERVATIONS............................................................................................................36 5.3 CONSOLIDATED TREASURY RECEIPTS (CTR)...................................................................36 5.4 RELATIONS WITH THE BANKING TREASURY......................................................................37 5.4.1 Bank Reconciliation...........................................................................................37 5.5 ACCOUNTS PREPARATION...............................................................................................39 5.6 TEMPORARY USE OF CASH..............................................................................................40 5.7 DEPARTMENTAL RECONCILIATION...................................................................................41 5.8 FOREIGN AID...............................................................................................................41 5.9 SETTLEMENT OF INTERNATIONAL REVENUES ....................................................................41 5.10 TELEGRAPH STORES AND WORKSHOP...........................................................................41 6 PUBLIC HEALTH ENGINEERING DEPARTMENT.............................................43 6.1 OVERVIEW..................................................................................................................43
6.2 OBSERVATIONS............................................................................................................43 6.3 BUDGET......................................................................................................................43 7 PUBLIC WORKS DEPARTMENT.............................................................................45 7.1 OVERVIEW..................................................................................................................45 7.2 MAIN ACCOUNTING PROBLEMS IDENTIFIED........................................................................45 7.3 OBSERVATIONS............................................................................................................45 7.4 SUSPENSE ACCOUNT.....................................................................................................48 8 ROADS AND HIGHWAYS DEPARTMENT.............................................................49 8.1 OVERVIEW..................................................................................................................49 8.2 OBSERVATIONS............................................................................................................49 8.3 CONTRACTORS SECURITY DEPOSITS................................................................................51 9 MINISTRY OF FOREIGN AFFAIRS.........................................................................54 9.1 OVERVIEW..................................................................................................................54 9.2 OBSERVATIONS............................................................................................................54 10 RAILWAY DEPARTMENT.......................................................................................57 10.1 OVERVIEW................................................................................................................57 10.2 OBSERVATIONS..........................................................................................................57 10.3 BANK RECONCILIATION................................................................................................58 10.4 MONTHLY ACCOUNT TO THE CGA..............................................................................62 10.5 TRAFFIC SUSPENSE......................................................................................................62 11 MINISTRY OF DEFENCE ........................................................................................63 11.1 BACKGROUND............................................................................................................63 11.2 OBSERVATIONS..........................................................................................................63 11.3 RELATION WITH BANKING TREASURY / DAO.................................................................63 11.4 USE OF EXCHANGE ACCOUNT......................................................................................64 11.5 RIBEC RECOMMENDATIONS.......................................................................................66
Report on Problems in Departmental Ministries
LIST OF ABBREVIATIONS
BRA BTTB C&AG CAO CDPU CGA CGDF CPWAC CRU CSD CTR CTS DAO DCA DDO FA&CAO FMRP FMU GoB GPF GPO HPO IRLA MoD MoF NBR PHE PT&T PWD R&H RIBEC RNE T&T Bangladesh Railway Authority Bangaldesh Telegraph and Telephone Board Comptroller and Auditor General Chief Accounts Officer Central Data Processing Unit Controller General of Accounts Controller General Defence Finance Central Public Works Account Code Central Reconciliation Unit Contractors Security Deposit Consolidated Treasury Receipt Controller Telegraph Stores District Accounts Office Divisional Controller of Accounts Drawing and Disbursement Officer Financial Advisor and Chief Accounts Officer Financial Management Reform Programme Financial Management Unit Government of Bangladesh General Provident Fund General Post Office Head Post Office Individual Running Ledger Account Ministry of Defence Ministry of Finance National Board of Revenue Public Health engineering Postal Telegraph and Telephone Public Works Department Roads and Highways Reforms in Budgeting and Expenditure Control Project Royal Netherlands Embassy Telegraph & Telephone
Introduction
Following the inception of the Financial Management Reform Programme (FMRP), one area that was identified as a major concern was the accounting treatment and subsequent impact on the quality of accounts for transactions taking place within departmental ministries. To this end, a limited period of time was allocated to provide an initial study of the major issues that would have an impact on the quality of accounts, to direct future work plans and provide an updated view on previous analytical work that had been carried out in these departments. The primary concept of introducing departments within the governments accounting structure was to provide an element of autonomy that would in turn provide the required freedom to operate in an optimal manner. Additionally, the provision of cheque issuing responsibility allows more freedom for officers located within these departments to operate without the hindrance of involving the standard pre-audit accounting system operated by local accounting offices of the Controller General of Accounts (CGA). As responsibility for these departments lies outside of the CGA office, with the concerned ministry, it has become increasingly difficult for the CGA office to excerpt control over the departments, and the quality of accounting information that feeds from them into the CGA monthly and annual accounts. Even within the CGA and CAOs, there is wipe gap of understanding of the peculiarities and complexities of departmental accounting system. Besides, RIBEC classification structure could not fulfil the requirements of internal budgeting and financial control of the departments. Nine departments of the government under review, by virtue of their specialized nature of work or commercial considerations are authorized to keep their initial accounts departmentally. Those departments do not follow any uniform system in rendering accounts to the CGA for integration into the centralised budgeting and accounting framework. Bangladesh Railway being fully independent of CGA does not route their transactions through banking treasuries while BTTB, Defence, Forest and Postal departments have transactions limited to cash withdrawal and deposit with the banking treasury. Other departments such as Roads & Highways, Public Works and Public Health Engineering partially route their transactions through CAO, DAO, & UAO offices. Foreign mission is not considered departmental because they strictly operate under cash control by the CAO, Foreign Affairs. These departments render their accounts to the concerned CAO with the exception of Defence and Railways. Together these departments currently account for approximately 8 % of total revenue and 10% of total public expenditures. Based on the extent of autonomy, some of the departments were given senior accounts officials by the C&AG to exercise adequate financial control and accounting on behalf of the C&AG office. There still persists confusion in rendering the commercial system of accounts by Railways, Postal and BTTB where there is no accommodation in the national budget and accounts for certain types of transactions. These departments have their internal classification structure as per their old departmental codes which have not, as yet been revised.
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Only one of these departments currently has a Financial Management Unit (FMU), being in the Roads and Highways Department. This FMU operates through a project entitled CIDC-3, but it is found that the FMU is working independently of the CAO. During the initial design phase of this report, the need was identified for an in-depth analysis of Postal Department, which appeared to be the most problematic and misunderstood department in accounting terms, and the department in which any issues identified will have the most serious impact on the quality of accounts produced by the CGA office. Furthermore, the internal accounting procedures of this department had not previously been assessed to the same degree as other departments during the previous Reforms in Budgeting and Expenditure Control (RIBEC) project. Other departments (and ministries which exhibit some similar characteristics to departments) were assessed for this report in a different manner. The accounts of these departments were thoroughly analysed and interviews held with relevant stakeholders to identify issues at a higher level that may have an impact on the quality of accounts. A total of 9 departments, (or ministries with similar characteristics), were assessed in a six week period and it is therefore not feasible for this report to assess in detail the internal accounting procedures carried out within all of these units. To this end the analysis of departments other than Postal Department was focused on the monthly and annual accounts of each department, the quality of accounting data provided by the departments and procedures carried out by the CAO offices. The issues identified from this study should give a clear indication of the problems at each department and enable a valid opinion to be formed as to the impact these problems will have on the quality of the accounting data produced. The table on the following page provides an overview of the accounting and reporting structure of each of the Departments analysed as part of this study.
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1.1
Departmental Structure
Postal Government semi commercial Account # 191 PT&T Initial account code Vol. I PT&T Departmental code Savings certificates, Motor Vehicle Tax Limited to Letter of Credit. Permitted No Independent of CAO/DAO Remittance Account Monthly initial cash account BTTB Autonomous govt dept commercial Account # 190 PT&T Initial Account Code Volume II,III,IV PT&T Departmental code None PWD Pure government Merged with A/C # 132 CPWA Code Civil Acct Code Vol. III None R&H Pure government Merged with A/C# 150 CPWA Code Civil Acct Code Vol. III None PHE Pure government Merged with A/C # 138 CPWA code Civil Acct Code Vol. III None Forest Pure government Merged with A/C# 145 Forest Manual Civil Acct Code Vol. III None Foreign Affairs Pure government Not required Official instructions N/A Passport & visa fees Limited to imprest Permitted No Not required Foreign Remittance Monthly initial account Railway Pure government Account # 192 Railway Dept. Code Railway Manuals None Defence Pure government Account # 119 Defence Code Defence Manuals None Limited to imprest fund Not allowed No Independent of CAO/DAO Exchange Account Initial account to C.G.D.F.
Accounting Issues Autonomous or pure government Account with B. Bank Guide to initial accounts Guide to departmental accounts Transaction on behalf of other ministries/ dept. Departmental Cheque Issuing Authority Use of cash receipts for departmental payments Divisional Accounted deputed by the CAO Salary Payments routed though CAO/ DAO Relation with Banking treasury Relation with CAO
Full Limited to temporary use Yes Independent of CAO/DAO Remittance Account Monthly initial cash account
Full Not allowed Yes Routed through CAO/DAO Remittance Account Monthly initial account
Full Not allowed Yes Routed through CAO/DAO Remittance Account Monthly initial account
Full Not allowed except relating to deposit. No Routed through CAO/DAO Remittance Account Monthly initial account
Full Yes No Independent of CAO/DAO Remittance Account Monthly initial account
Full Not allowed No Independent of CAO/DAO Settlement Account None
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2
2.1
Common problems of Departmental Ministries

Overview
There are many issues identified in the preparation of this report that are found in several of the departments assessed. These general problems are summarised below, with the specific findings of each department individually detailed in their own section later in the report. The peculiarities and complexities of departmental accounts guided through their respective initial account codes and their methods of integration into the central accounting framework cannot realistically be achieved without detailed examinations being carried out for each department. The limited time allocated to the study of these departmental and quasi departmental ministries did however reveal the following high level concerns: There is a widespread lack of understanding in relation to the correct accounting procedures required for the preparation of departmental accounts Many departments are operating under instructions produced approximately 60 years ago A policy of issuing disjointed government orders in place of comprehensive accounting manuals has caused confusion for those officers preparing departmental accounts The confused legal status of Railways & BTTB to render commercial accounts, such as, profit and loss account and balance sheet. Some departments Railway, Postal and BTTB retained old internal classification structure not recognized by the Budget or RIBEC coding structure. Despite the fact that some departments such as Forest, R&H, PWD use RIBEC codes in sending Initial Cash accounts no substantial improvement in producing quality accounts is noticed. It almost appears to be a forcible integration of figures in the CDPU. Departmental Cash Control balances are overstated in the monthly accounts, as the stated closing balances are actually the monthly closing balances for the year to date added together. Overlapping public accounts codes do not fully explain what type of transactions should be routed through those accounts. This resulted in misclassification, for example imprest, remittance, cash control etc. The concerned CAO offices are not being made responsible for the departmental transactions entered into the Initial Cash Accounts. There is minimal communication between the departments and the concerned CAO offices Bank reconciliation for departments has not been seriously addressed by the CGA office Public accounts are not controlled or monitored, resulting in major black holes for consolidated fund expenditure in the governments accounts.
The quality of those accounts is dictated primarily by the treatment of public accounts transaction at each level of compilation. The management report is currently produced from the CGA database to state how much each ministry/ department spends or - 11 -
overspends against budget appropriation. This cannot be a yardstick to measure the quality of accounts if there is an accumulation of balances of various types of public accounts transactions i.e. advance, remittance, deposit, depreciation and reserve fund, imprest account, suspense, departmental cash control etc. The transactions of public accounts are varied and almost half of the government transactions pass through the public account. These transactions are not fully identifiable to individual departments, from the CGA system. The multiplicity of public account codes and continued absence of reconciliation process of each and every balance of public accounts created wider scope for departmental cheque issuing authorities to hide unauthorized expenditure or defalcation of money. This was found to be the case recently when some fraudulent payments occurred in BTTB that could not be detected by CAO T&T, yet were detected by the Director of Audit, PT&T. The Annual Finance Accounts produced by the CGA for certification by the C&AG do not make reference to the implications of positive or negative public account balances on the quality of accounts nor their impact on fiscal operations. The balances appearing in the Finance Account and in the departmental Balance Sheets are different despite both certified by the C&AG. Some balances which it is felt should have a debit balance have been shown as credit balances and vice versa which in itself raises serious doubts over the integrity of the governments accounts. Examples are found in relation to the huge accumulation of positive and negative balances in the Postal Money Orders or Embassy Remittance codes for which explanations were not received. These may be due to irregular activities or simply the result of classification errors embedded in the compilation system. 2.2 Remittances
Remittances are unclassified departmental receipts or payments transacted through the banking treasury. The balances of these outstanding receipts and payments should automatically clear as the CAO office and Treasury office enter contra entries in the remittance code for each transaction. The unreconciled accumulation of balances in the remittance code signifies that there exist fundamental flaws in the current reconciliation process. (All figures in Thousand Taka) Opening Closing Balance Movement Code-Public Account Remittance Balance Balance Reconciled 2002/03 July 2002 June 2003 Yes/No Post Office 12,141,232 -263,408 11,877,824 No T&T 15,749,699 -3,686,276 12,063,423 No Public Works -30,34,370 483,715 -2,550,655 No Housing & Settlement 824,805 -110,111 714,694 No Roads & Highways 1,902,348 -395,121 1,507,227 No Public Health Engineering 1,522,389 -163,529 1,358,860 No Forest 398,888 190,740 589,628 No Customs 18,778 -226,864 -208,086 No GPF Transfer 328,345 323,383 651,728 No Others -1,215,215 -725,171 -1,940,386 No Total 28,636,899 -4,572,642 24,064,257 - 12 -
It was found that the required reconciliation between Divisional Accountants and DAOs is not taking place in most instances, despite a clear requirement for this to take place on a monthly basis in the Account Code. It is a requirement of Article 158 of Account Code Volume III. 2.3 Confusion and duplication of departmental receipts
Initial cash accounts record all receipts in the appropriate final 13-digit code. After depositing the money with the banking treasury, the same amount is also recorded on the credit side of the initial accounts. To avoid any duplication DAO/UAO is to record this to the floating public account code - Remittance. The CAO on receipt of accounts from divisions has to clear the remittance. In many cases DAOs classified these transactions in the final code as written on the challan. In addition, there are instances when a trader or contractor directly deposits departmental receipts into the bank without any intimation to the divisions. To avoid duplication, it is observed that some Head Post Offices (HPO) put the 13-digit code of Remittance to assist to DAO to correctly code the transaction, in addition to final 13-digit destination code. This could be applied to other departments. Double coding also creating confusion in the Banking treasury to credit specified bank accounts. For example, the National Board of Revenue (NBR) may not like to deposit tax in the bank account # 215- Public Accounts. 2.4 Deposits
Deposit balances in the Public Account are viewed by many as one the most complex areas of the governments accounting system. The accounting treatment of departmental deposits is governed by the respective departmental account code. The accumulation of balances is a great concern because as per article 33 of Account Code Volume II, the operation of deposit accounts is governed by specific government orders. The relevant orders describe the procedure of deposits, withdrawal and the treatment of unclaimed deposits. It was found that these procedures are not clearly understood by the concerned officers and are therefore not being correctly applied. Deposits lying beyond a specified period of time are to be transferred to the Lapsed Deposit for credit to the governments revenue but this is not being done. Thousands of such individual accounts are accumulating in the DAO offices. Now, the CGA is contemplating the action required to take an inventory of those balances. (In thousand Taka) Opening Closing Balance Code- Departmental Movement Balance Balance Reconciled Deposit 2002/03 July 2002 June 2003 Yes/No Forest 191,400 5,984 197,384 No Post Office 23,804 62,539 86,343 No Railway -1,843,926 433,997 -1,409,929 No T&T 563,785 -86,490 487,295 No Public Works 1,536,128 -38,221 1,497,607 No Public Health Engineering 99,070 -96,430 2,640 N0 Defence 109,774 -6,664 103,110 No - 13 -
2.5
Suspense Account & other cash remittance
As per paragraph 313 of the Introduction to the Accounts and Audit issued by the Auditor General of India in 1934, there is no scope of running suspense account balances beyond a reasonable period of time. There is a clear instruction that the suspense account must be removed either by payment or recovery in cash or by book adjustment. It was found that this instruction is not being adhered to in most departments. There is a debit balance reported under suspense codes in the Finance Account of 1484.42 crore on 30.6.03 The accumulation of suspense account balances should be an audit concern. It is created by a combination of the following factors: Some departments make use of suspense codes to avoid budgetary limits or lapses at the end of the fiscal year. Classification errors Non-availability of RIBEC code for accounts payable or receivable, stores, work-in progress, unpaid wages etc. No provision being kept in the budget for the purchase of stores by the working divisions or projects.
Government in fact is not favourable to provide fund for stores and inventories as those facilities were misused in the past by the departments. BTTB and Railway possibly require some accommodation in their accounts. Ministry of Finance in consultation with the CGA should take a decision on this issue. The writing off of some balances of suspense account carried over for many years is also an audit issue and has to be resolved. But any change in the balance of Public Account has an effect on the Consolidated Fund balances in the Finance Account because the difference between the two balances should be the cash balance of the GoB with Bangladesh Bank. This is therefore a decision that should be taken by higher management of the MoF. Other cash remittance accounts are operated by the postal department for internal and foreign money orders but it was found that the foreign remittance code is currently being used by the Bangladesh missions abroad for replenishing imprest accounts. This is only one example of departments lacking clear guidance and instructions in the operation of public account balances. Other examples have been identified and will be discussed within the appropriate sections of this report.
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Reported Suspense Account Movement for FY 2002-2003 Code- Suspense Account Railway Public Works Defence -233362 Roads & Highways -393333 Code- Cash Remittance Inland Money Order (postal) Foreign Money Order(postal) Foreign Remittance(Embassy) 2.6 Bank reconciliation -728282 686070 202613 O/B 01/07/02 -10954145 -1958813 Changes FY 02-03 -18202 No posting allowed No posting allowed No posting allowed -541186 517049 850747 (In Thousand Taka) C/B Reconciliation 30/06/03 Status -10972347 Not done No posting Not done allowed No posting Not done allowed No posting Not done allowed -1269468 1203119 1053360 Not done Not done Not done
Although all ministries have individual bank accounts with the Bangladesh Bank, out of 9 departments only three- Railways, BTTB, and Postal have individual bank accounts in addition to their ministries. As the public accounts transactions are not functionalized, the separation of departmental accounts is not expected to have any positive impact on the reconciliation process. It was found that no department or CAO is actively taking an interest in reconciling the reported bank balance or movement with the departments accounts. In fact, it is found that CAOs have no access to the monthly bank statement. The Central Reconciliation Unit (CRU), an outfit of CGA is responsible to match presidency pre-audit cheques only and departmental cheques remain outside the scope of the CRU. The current structure of both the governments accounts and Bangladesh Bank account hinder the accurate reconciliation of transactions to the monthly and annual bank statement. This has been examined in other FMRP reports and recommendations made to address the associated problems. No evidence was found during this study to suggest that any measure of control is currently being exercised in relation to the bank accounts of the concerned departments. As shown below, many departments are currently producing accounts where it is not feasible to identify the transactions passing through the bank account. These transactions are often recorded by means of the remittance account. This account is also used for other transactions such as uncashed departmental cheques and receipts. Additionally, many departments do not currently maintain an individual bank account. Instead, the transactions of these departments are simply incorporated into the concerned Ministry bank account. - 15 -
It is clear from the above that departmental bank reconciliation is not currently available to the majority of departments. The reasons are: Initial cash account reports only withdrawal and deposit into banking treasury without any reference to Bangladesh Bank account. CAOs do not receive a monthly bank statement for their departments. Lack of visibility of departmental cash transactions both within the government accounts and Bangladesh Bank. Reliance on Consolidated Fund Reporting
2.7
The general perception within GoB appears to be that the operational performance of each commercial department is most clearly identified through the movement in cash balances reported by Bangladesh Bank. The Public Account cannot be analysed by department as the transactions are entered into this account under generic functional codes, not by individual departments or ministries. An examination of the Consolidated Fund receipts and payments for the financial year 2002-03 against the movement reflected in the Bangladesh Bank Statement for these commercial departments is provided in the table below. Comparison of Consolidated Fund Receipts and Payments Against Bangladesh Bank Statement for the Financial Year 2002-03. (Figures in Thousand Taka) As per Bangladesh Net Difference Bank in FY 2002-03 Net -6,625,433 245,234 4,675,053 1,498,047 1,903,250 210,661
Department
As per CGA (Consolidated Fund only) Receipts Payments 8,635,636 2,222,666 10,562,456 Net -5,127,386 -1,858,016 4,885,714
Railway Postal BTTB
3,508,250 564,650 15,448,170
It may be seen from the table above that the reported operational performance of each department and the resulting cash movement implications are not closely linked. Many transactions for each of the commercial departments are recorded in the Public Accounts and cannot therefore be attributed to the departments themselves. It is clear therefore that analysis of performance through the bank statement alone is providing government with a distorted view of the actual performance of each commercial department. This is clearly seen in the case of Postal Department. While the Consolidated Fund shows a net deficit resulting from operational activities of almost Taka 186 Crore, the bank statements would give the impression that Postal Department is actually generating Taka 24 Crore in cash through its activities. - 16 -
3
3.1
Postal Department
Background
As stated earlier, discussions with key stakeholders clearly identified Postal Department as the most serious concern to the CGA office in relation to the production of quality accounting information. As this area of the governments accounting network has remained largely untouched in previous projects, it was considered appropriate therefore that this department should be the main focus of this report, with other departments receiving a less detailed analysis. Postal Department is a very large and important department within Bangladesh, due not only to the considerable sums passing through its books of account, but also due to the remote nature of many of its offices. Postal department is headed by the Director General, who is supported by 5 Additional Director Generals. Total employment figures for Postal Department currently stand at 16,000 permanent employees with a further 25,000 departmental agents, who work outside of the government. There are 70 Head Post Offices (HPO), 1728 Sub-Post Offices and 8,500 Branch Offices. The principal activities of Postal Department may be summarised as: Activity Banking Narrative Approximately 3 million account holders currently bank through the Postal Department. This is largely due to the absence of service charges and the remote nature of many post offices, where banks are not located. Receipts received for stamps in relation to letters and parcels posted, operating expenditure for postal service and franking machine receipts. Relates to Inland and Foreign money orders, Bangladesh postal orders, British postal orders and related commission earned. Relates to the operation of Postal Life Insurance Includes Prize Bonds, Savings Bank deposits (general, term or bonus) and Savings Certificates (3 year, 5 year, Defence or Family) Payments in relation to officers and staff are accounted for through a separate fund, outside of the standard pre-audit system operated through local accounting offices. Various duties are carried out such as operations on behalf of NBR (non-judicial stamps, revenue stamps, income tax deductions from savings and motor vehicle taxes), counter services and radio license issuance (discontinued from financial year ending June 2004).
Mail Service Money Orders and Postal Orders Life Insurance Savings Instruments Pension Payments
Services on behalf of other departments
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3.2
Summary of main accounting issues identified Budget is given in RIBEC code under one functional code 5431- Postal Department with required allocation in detail economic code while the department subdivided the allocation in a combination of functional and economic codes for the purpose budgetary control. HPOs maintain only the cashbook and send all vouchers to the CAO for accounts preparation. An overly complex method of recording the sale and stock of postal stamps exists, where it is found that the value of stamps held is being included within cash balances. The issue of cheques by HPOs in favour of money order payee creates problems in the remittance account. Initial accounts not presented in RIBEC code for consolidation and incorporation Money order transactions are not monitored or matched. The maintenance of a broadsheet of savings certificates and savings banks accounts ledgers in the CAO Postal office has been abandoned since the 1980s which reflects badly upon the integrity of the GoB financial liability As with other departments, the common problem of a lack of departmental bank reconciliation and remittance account reconciliation. There are wide differences found in most balances appearing in the Finance Accounts when compared with the departmental balance sheet items attached to the Appropriation Accounts. The C&AG however certifies both the documents as correct. No effort is taken to reconcile the balances of savings certificates, savings bank, remittance etc. The postal department is following guidance written in 1928 which clearly needs to be updated. Accounts preparation
3.3
The principal accounting unit is the Head Post Office (HPO), which incorporates in its initial accounts the accounts of the sub and branch post offices under it. In each HPO one of the clerks is appointed as Treasurer who receives and pays all money. The primary accounts maintained by a HPO are: 1. The Treasurers Cash Book 2. The Head Office Summary 3. The Head Office Cash Book. Branch Offices prepare daily cash accounts that are sent to the respective Sub-Post Offices. However, within the jurisdiction of the HPO, the branch offices send accounts directly to the HPO. These Sub-Post Offices consolidate the daily statements and in turn issue a daily statement to the concerned HPO where the individual returns are integrated into the internal monthly accounts. Each of the 70 Head Post Offices then submits monthly accounts to the General Post Office (GPO) Dhaka, from where they are forwarded to the Record Section of the CAO Postal office. The accounts are received in two instalments. Firstly the pay vouchers and schedules are submitted to allow the CAO office the opportunity to carry out some advance work, before the second instalment, incorporating the complete transactions for the month in question, is submitted. - 18 -
The CAO Postal accounts compilation work is segregated into five Postal Account Sections, with each section being made up of one superintendent and approximately six auditors. Each section receives their respective HPO accounts and supporting documentation to prepare monthly final accounts. Unlike all other departments, the responsibility for the preparation of a great deal of both the initial and final account for the Postal Department lies with the CAO Postal office. The department itself prepares only basic initial accounts which along with figures for money orders, savings bank and similar functions, separately identifies the gross total for unclassified receipts and payments. These totals are supported by all of the individual vouchers and challans from which the CAO office must prepare detailed accounts. Article 4 of Account code Volume I states that the Postal Department is responsible for the preparation of the annual appropriation account, rather than the CGA. This is presented to Parliament as a detailed, 115 page book which also includes the appropriation account of the T & T Board. Attached to this document is a financial review statement, which is signed by the Director General Postal. Before the figures are certified and signed by the C&AG, they are compared to those appearing in the finance accounts. As the Postal Department is authorised to reallocate funds within the overall national consolidated appropriation, the presentation of a detailed appropriation account may be considered to be a futile exercise. Postal department prepares internal accounts, not under the 13-digit RIBEC coding structure, but rather by means of an alphanumeric system. The figures are prepared relating to internal functions under major, minor and detailed head of account.
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3.3.1
Alpha Numerical Coding Structure of Postal Department
Receipts A Postal Revenue B Miscellaneous Revenue Expenditure C General Administration C 1 Director General C 2 Postal Department Residential Dispensary C 3 Postal Life Insurance Department C 4 Postal Welfare Fund C 5- Loss or Gain on Exchange C 6 Training Abroad D Audit and Accounts E Control Circle Offices (F Relates to T & T Department) G Pension H Printing of Stamps and Stationery H 3 Stamps Offices H 4 Postal Printing I - Maintenance of Assets J Post Offices J 1 General Maintenance of Post Offices and Railways Mail Services J 2 Post Offices J 3 Railway Mail Services J 4 Mail Vans J 4A Postal Mail Motor Services J 5 Miscellaneous Expenses J 6 Postal Training Centre J 8 Bag Control Office N Contribution to Renewal Reserve Fund NA Contribution to Amenities Fund NN Contribution to Residential Accommodation O Deduct Credit to Working Expenses
On receiving the initial cash account of post office the auditor checks the opening balance of the cash account with the closing balance of the previous month. The bills paid which represent the unclassified expenditure is reclassified into budgetary code of expenditure and deductions and a working sheet is prepared to check with the net cash flow of the bills paid.
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The unclassified receipt is also classified into 13-digit code classification from the schedules attached. The sale of ordinary postage stamps and other stamps are classified on the basis of the figure shown on the reverse side of the cash account. The amounts on the initial cash account such as money order or savings bank accounts, as well as those calculated on the working sheets from the unclassified receipts and expenditure are entered into the classified abstract which is a 76 page document. The classified abstract is devised to check the correctness of transactions shown in the initial cash account with reference to plus minus memorandum shown on the reverse side of the initial account. From the classified abstract another statement of account is prepared for data entry as per 13-digit code budgetary allocation of the national budget and Public Account transactions. As shown below, this system allows the CAO office to enter onto the CDPU system both the relevant initial account code data and the detailed transactions for unclassified receipts and payments.
Initial Account
Working Sheet for Unclassified Receipt and Expenditure Alpha Numerical Receipts Payment OB & CB
Direct Entry Money order, Savings bank, Remittance and receipts for other departments
Classified Abstract
Data Entry Sheet
CDPU
In the preparation of initial and final accounts, Postal Department follows the Initial Account Code of 1928, and thereby maintains its commercial character of accounts. It prepares a profit and loss account and balance sheet for certification by the C&AG. As the central accounts maintained by the CGA follow the budget, there can be no reflection of this commercial system of accounts. This commercial character is lost in the national budget document as the postal revenue and expenditure codes are distributed throughout the document and require considerable searching and calculation to gain a consolidated view. Similar inconsistency exists in the preparation of Finance Account wherein loan repayment and acquisition of assets are shown as expenditure items of profit and loss account. The confusion may arise due to the current objective of the government to - 21 -
determine the fiscal deficit and this is not clearly shown on the profit and loss account or balance sheet. Clearly, national government is absorbing its continued operational losses through increased overall fiscal deficit. It was found that for the national budget, on which parliamentary approval is taken, the Postal Department is considered as one functional unit for the appropriation of money. But to conform to the departmental account code, Postal Department sub-divides the units of budgetary appropriations to various internal departments such as, General Administration, Audit & Accounts, Control Circle Offices, Post Office expenses etc. as shown previously. 3.4 The need for 3rd level functional code
The third level functional code used by the postal department for its internal financial control does not conform to the RIBEC classification structure. It is a cocktail of functional and economic classification using alphanumerical codes. CAO Postal prepares appropriation accounts based on the departments internal sub-division of appropriations and thereafter obtains the certification of the C&AG. Following this exercise, the CAO Postal officers must then prepare a separate set of accounts, which transposes this data in to the governments accounting structure. The requirement of 3rd level functional code has to be assessed with reference to the overall objective of the Ministry of Finance, which recognizes only a single parliamentary appropriation. For greater financial control, the unit of appropriation under each second level functional code would be increased from 4 to 30. As the department has to give acceptance of actual expenditure from their controlling officers there could be some accommodation in 3rd level code either internally or nationally. Mere conversion of Initial Accounts in RIBEC code will not improve the quality of accounts unless HPOs have the training and resources to accurately compile classified accounts with gross and net transactions. The capacity of HPO Dhaka and HPO Chittagong to compile huge transactions (with reference to numbers if not amount) could not be assessed. The introduction of 3rd level functional codes should be seen as a temporary measure to improve the reliability of Postal departments accounting data. It is not currently thought to be advisable to revise the departmental account code without a high level decision being taken in relation to the requirements of the national budget and appropriation account.
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3.5
Relations with the Banking Treasury
Post Offices do not remit all their departmental receipts directly into treasuries but are permitted to utilize their cash receipts for departmental purposes. They therefore remit only the surplus cash to the treasury. Post offices receive funds for their cash requirements upon the presentation of a cash requisition slip. Head Post Offices are authorized to issue departmental cheques for payments to individuals, firms, and also to the treasury account for transactions such as taking delivery of postage stamps etc. All payments are made against the letters of credit issued by the CAO Postal. 3.5.1 Bank Reconciliation
It is found that there was no scope for the reconciliation of cash movement of Postal Department prior to October 2002 when a separate bank account for Postal Department was established in Bangladesh Bank. In the past bank reconciliation was limited to the cash deposits and withdrawals from the banking treasury charged and settled through the Exchange Account. The operation of the Exchange Account was stopped in 1983 and since then postal transactions have been routed through the Remittance account. From October 2002, a new bank account No 191 has been assigned to Postal department but there has to date been no effort to reconcile this bank account by the CAO Postal. This is a general problem of the current account structure of the government, which is to be addressed separately. The following table, derived from data taken from the CDPU and Bangladesh Bank statements, clearly shows the problems of reconciliation with the individual bank accounts: Transactions from October 2002 to June 2003 DAO Source Code Amount Drawn from Treasury Deposit into Treasury Net cash inflow to Bangladesh Bank Bangladesh Bank A/c 191 Shortfall against reported balance of Bangladesh Bank 9801 8801 6,454,504 15,664,541 9,210,037 245,234 8,964,803 (Figures in thousand Taka) CAO Source Difference Code Amount Amount 8801 9801 6,643940 15,421,903 8,777,963 245,234 8,532,729 189,436 242,638 432,074
The above table clearly shows that there is an unexplained difference between the Treasury transfers as reported by the DAO offices and the Postal Department. It may also be seen that there is a huge difference between the figures reported on the bank statement and the Postal remittance account. This is largely due to the fact that departmental cheques issued by the HPOs for payment to the holders of National Savings Certificates are charged in the accounts under the functional code of Postal Department yet the cash is taken from bank accounts other than Postal Department.
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Initial investigations revealed that different HPOs treat these payments and other similar payments in different ways. For example, the HPO in Sylhet cashed the payment from bank account number 219, Savings Certificates yet the HPO in Bogra cashed the payments from bank account number 215, Public Accounts. Furthermore, the HPO in Jessore was found to issue no cheques for such payments, but draws cash in place of transfer. There is clearly a lack of understanding and guidance between different offices of the Postal Department, which is resulting in inconsistent and inaccurate reporting to the CAO Postal office.
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3.6
Money Orders
The accounting for and reconciliation of money orders is another area that is of concern to the CGA office. The correct treatment of money orders is detailed below: Sender
Cash
Receiver
Cash Money Order
Post Office / Head Post Office

Issue List
Post Office / Head Post Office

Paid Voucher
Head Post Office

Monthly Initial Accounts
Head Post Office

CAO Postal
Paid Voucher
Issue List
Money Order Section Matching of money orders issued and cashed
Reconciliation of money order figures
Accounts Section
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Step 1. The sender pays cash to the local Post Office, for both remittance and commission and a receipt is provided detailing the money order number. Step 2. The Post Office remits the money order to the local Post Office of the recipient. Step 3. The sending Post Office provides a list of all issued money orders to the concerned Head Post Office. This list details the names of recipients, money order numbers, amounts and commission earned. Step 4. The cash and a portion of the money order are supplied to the recipient at their local Post Office. Step 5. The receiving Post Office issues a portion of the paid money order to the concerned Head Post Office. Step 6. Each Head Post Office remits their monthly initial accounts to CAO Postal, along with a list of all money orders issued and a copy of all money order vouchers cashed from Post Offices under its jurisdiction. Step 7. The CAO office issues the money orders issued list and cashed money order vouchers to the Money Order Section and the monthly initial accounts to the Accounts Section. Step 8. The Money Order Section is to calculate the total amounts issued and paid and reconciles these with the amounts appearing in the monthly accounts prepared by the Accounts Section. Step 9. The Money Order Section is to match the money orders issued with the paid money order vouchers and notify the Postal Department of any discrepancies identified. It was found to be the case however that the steps 8 and 9 above are not taking place. When the Money Order Section receives the money orders issued list and paid money order vouchers, the totals are not calculated. The money order section simply stores the latest documents received without carrying out any examination. No reconciliation therefore takes place between the money orders issued and paid and the corresponding amounts reported in the monthly accounts. The matching of issued and paid money orders is seen as the principal duty of the section. However, due to severe staff shortages, the section is currently experiencing a serious backlog in the matching process. Despite the fact that money orders are only valid for two months after issue, the CAO Postal staff shortages have resulted in the section still carrying out the matching process for money orders issued and paid in 1995. There appears to be a generally held belief that there exists the possibility for some degree of fraud surrounding the issuance of money orders. Despite this, Postal Department have stated that they no longer receive any notification of discrepancies identified by the money order section of the CAO office. In previous years, it appears that such notifications were made on a regular basis. No evidence was found in the course of this study to suggest that such fraudulent action is taking place, however the lack of controls present a very real risk of such actions occurring. As the CAO office takes no role in reconciling or monitoring the movement in the Postal bank account, it is therefore totally reliant on the department to ensure that money order movements reported in the monthly accounts are supported by corresponding transactions in the bank account.
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There may be several risks in relation to the accounting for money orders in that not only may the figures reported by the CAO Postal be incorrect, but also that potentially largescale misappropriation of public monies may be occurring. Prior to July 1999, money order transactions were incorporated into the code Other Remittances in the government books of account. It is therefore not feasible in the study carried out for this report to calculate an opening balance for money orders as at July 1999. As money orders are valid for only two months from the date of issue, this should not have a seriously detrimental effect on the following analysis, which is designed simply to provide an indication of the net movements. The following table shows the amounts recorded in the Finance Accounts for both inland and foreign money order receipts, payments and resultant closing balances from July 1999 to June 2002. Financial Year Money Orders Inland Foreign Inland Foreign Inland Foreign Opening Balance Taka 000s 0 0 25,435 42,764 -319,521 505,625 (Figures in thousand Taka) Net Closing Payment Movement Balance Taka 000s Taka 000s Taka 000s 3,694,776 314,670 3,580,045 295,563 4,229,823 444,252 25,435 42,764 -344,956 462,861 -408,761 180,443 25,435 42,764 -319,521 505,625 -728,282 686,068
Receipt Taka 000s 3,720,211 357,434 3,235,089 758,424 3,821,062 624,695
1999-2000 2000-2001 2001-2002
The nature of inland money order payments, whereby cash is received from the sender before being paid out, would suggest that there should generally be an excess of receipts over payments, while at the same time allowing for previous year transactions. However, for two successive years, 2000-02, there are considerable negative net movements reported. Foreign money orders on the other hand are paid by the domestic Post Office in advance of the cash being receipted by Bangladesh Bank. It is therefore logical to assume that payments should exceed receipts, again allowing for previous years transactions. As with inland money orders, it is of concern that the annual movements do not reflect the expected pattern. The positive net movement for 2000-1 is greater than the total payment for the previous year. This could be due simply to misclassification or defalcation. As shown in the table below, financial year 2000-2001 shows a positive net movement that amounts to almost 44% of the combined receipts and payments during the year. This appears to be largely offset by the large payment reported under inland money order during the same period. While the absence of an actual opening balance in July 1999 prohibits these figures from being conclusive, it may indicate that there are some errors appearing in the reporting. - 27 -
Each of the three years stated show foreign money order receipts exceeding payments, resulting in a cumulative balance over the same period of over 68 Crore Taka. The net movement as a percentage of the combined receipts and payments for each year is as follows: Financial Year Money Orders Inland Foreign Inland Foreign Inland Foreign Net Movement as % of combined receipts and payments 0.34 % 6.36 % -5.06 % 43.92 % -5.08 % 16.88 %
1999-2000 2000-2001 2001-2002
This table clearly highlights the large variation in movement reported in the government accounts. No action has been taken to date to address this issue. 3.7 Postal Savings Accounts
The Postal Department currently operates a banking service for approximately 3 million account holders. This was initially introduced as a service to enable members of the public to save money in rural areas where there were no banks located. This service has grown dramatically, in large part due to no service charges being imposed on account holders. This encourages small savers to open accounts. Each account holder receives a passbook where all lodgements and withdrawals are recorded and verified by the concerned Postmaster. Historically, a ledger was maintained for all account holders by the department. This recorded all lodgements, interest received, withdrawals and resulting balance. This balance is a liability of the government. It was found that the responsibility for maintaining this ledger has now officially been placed with CAO Postal. However, the ledger is not being maintained and has not been for approximately fifteen years. This is due in large part to the governments inability to procure Remington Book-keeping machines. These are stated as the required ledger keeping system in the document, An introduction to the accounts and audit of the Government of Bangladesh, first printed in 1930. This issue must be addressed by the CGA office.
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The figures reported as lodgements and withdrawals in the accounts of the CDPU for financial years 1998 to 2002 are shown in the following table. (Figures in Thousand Taka) Net Closing Withdrawals Movement Balance Taka 000s Taka 000s Taka 000s 7,751,358 8,349,104 11,127,636 13,226,181 40,454,279 10,113,569 197,132 1,511,962 641,735 4,018,935 6,369,764 1,592,441 19,730,259 21,242,221 21,883,956 25,902,891
Financial Year
Opening Balance Taka 000s 19,533,127 19,730,259 21,242,221 21,883,956
Deposits Taka 000s 7948,490 9,861,066 11,769,371 17,245,116 46,824,043 11,706,010
1998-1999 1999-2000 2000-2001 2001-2002 Total over 4 years Average
It may be noted that the balance stated in the 2001-2002 Finance Accounts of government state the government liability for Postal Savings Accounts as approximately Taka 2,600 Crore. The accurate figures for the liability of the government in relation to the Postal Savings Account may however be significantly understated. As the CAO office takes no role in reconciling or monitoring the movement in the Postal bank account or individual account holder balances, it is therefore totally reliant on the department to ensure that lodgements and withdrawals reported in the monthly accounts are accurate and supported by corresponding transactions in the bank account. This lack of CAO office control means that it appears to be possible for cash to be illegitimately withdrawn without the need to amend the account holders passbook. This could still be reported through the postal monthly initial account and reported in the CGA accounts. The absence of a ledger in the CAO office however means that the withdrawal will never be apportioned to the stated account holders account. As the account holder will still retain a passbook showing the initial unadjusted balance, the liability of the government will remain unchanged despite the payment having been made. The CAO Postal is totally reliant on the Postal department controls that are currently in place to ensure the reliability and accuracy of Postal Savings Account data. This is not acceptable, given that the responsibility for this account has clearly been placed on the CAO office. With the above concerns in relation to the legitimacy of withdrawals, the average increase in lodgements of 1,170 Crore Taka over the previous four years shows the scale of the potential liability that may face the government. While no evidence has been found in the course of this study to suggest that any inappropriate actions have taken place, there exists a serious risk that should be addressed - 29 -
by government as a matter of urgency. This is a fundamental lack of control that may have serious implications for both the stated liabilities of government and the safe guarding of public monies. 3.8 Sale of ordinary and service postage stamps
The principal revenue of the Post Offices arises through the sale of ordinary and service postage stamps. However, the system currently in place to record these transactions was found to be both complicated and widely misunderstood. Postmasters draw stamps and cash from the Treasury as required. A cheque is written which is entered into the accounts under remittance, yet not processed through the bank. Simultaneously, a challan is prepared for the total amount of stamps and cash drawn from Treasury and again recorded under remittance. The Post Office does not distinguish between cash and stamps; rather, stamps are simply treated as a cash item. As only the total is recorded under remittance the value of stamps drawn may not be ascertained from the accounts prepared by the CAO Postal office. The figures reported by Head Post Offices under the code Sale of ordinary stamps are the not actually the amounts for stamps sold. Rather they are simply the movements in the balances of stamps held at Post Offices, which may be positive or negative, depending on the number of stamps drawn from Treasury and the number sold. The actual revenue of Postal department from the sale of stamps, is only recorded in the books of account when the Treasury Officers, acting as custodian of the stamps, report the value of stamps drawn from Treasury. This may be explained more simply using the following example: The Post office reports the movement in closing balances of stamps held. Narrative Balance of current month Balance of previous month Reported to CAO Postal Adjustment required in relation to stamps drawn from Treasury Actual revenue to be reported in books of account July 2003 Taka 5,000 7,500 2,500 50,000 52,500 August 2003 Taka 6,300 5,000 -1,300 60,000 58,700
If the information from Treasury Officers for stamps drawn from Treasury is not incorporated into the accounts, the figures that will be reported for sale of ordinary stamps will be only Taka 2,500 for July and negative Taka 1,300 for August. However, the actual revenue for ordinary stamps may be seen to be Taka 52,500 and Taka 58,700 for the months in question. - 30 -
Prior to 1983, an exchange account was in operation to facilitate this reporting of stamps drawn from Treasury. This system was then discontinued and Postmasters were instructed to collect this information from Treasury Officers and send it to the CAO office for incorporation in the monthly accounts. This new system has not been included in the Account Code however and as a result, it appears that neither Treasury Officers nor Postmasters has been consistently applying the new procedure. The following table, prepared from data from the CDPU system, shows the reported figures for sale of ordinary stamps for the periods July 2003 December 2003 compared to monthly budget estimates for the same period. Monthly budget estimate Taka 000s 38,542 38,542 38,542 38,542 38,542 38,542 231,252 (Figures in Thousand Taka) % of Monthly Difference Budget Estimate Taka 000s % 27,911 34,527 39,663 41,387 34,245 42,572 220,305 27.58 10.42 -2.91 -7.38 11.15 -10.46 4.73
Month
Sale of ordinary stamps reported Taka 000s
July 2003 August 2003 September 2003 October 2003 November 2003 December 2003 Total for 6 month period
10,631 4,015 -1,121 -2,845 4,297 -4,030 10,947
The table above clearly indicates that there are serious errors in the figures recorded for the sale of ordinary stamps. 3.9 Other observations
There is currently no system in place to agree figures reported by the CGA office for Postal Department with the Postal Department balance sheet. These figures should theoretically be the same as they are both derived from the same source, namely the HPOs. The C&AG currently certifies that both of these statements is correct. C&AG is currently introducing an Exchange Account for Postal receipts and payments. If the exchange account is introduced correctly and proves to be accurate and sustainable, this should allow for an accurate reconciliation of outstanding receipts and payments between the data provided by the department and that recorded in the monthly accounts of the CGA. In accordance with the rules laid down in Account Code Volume IV, the Postal department is a separate accounting unit from the various other units on whose behalf it carries out transactions. Receipts made on behalf of others were previously recorded in the Postal departments accounts under the final code of the concerned department and those made on behalf of T & T Board as Remittance. However, all of these receipts will now be recorded on the Exchange Account. The CAO Postal will forward this Exchange Account to the CGA office, where the appropriate reconciliation with the concerned - 31 -
Departments will be facilitated and the contra entries made to the Exchange Account code. The concerned departments will then allocate the receipts to the relevant final code. It is not clear at this stage, what measures the CGA office proposes to take to correctly calculate and reconcile the carried forward balance of remittance and to ensure that the Exchange Accounts are managed and controlled to the required standard. Evidence elsewhere throughout the CGA network suggests that special consideration should be given to the sustainability of the Exchange Account system to prevent it becoming obsolete within a short period of time. A comparison may be made between the figures reported on the Postal Department balance sheet and those balances appearing in the Finance Accounts. This comparison, summarised in the following table is shown in detail in Annex B. Difference between Postal Balance Sheet & Finance Accounts as at 30th June 2002 (Amount in Crore Taka) As per Departments Difference Balance Sheet
27.76 1923.87 77.23 21.77 4309.97 345.62 5.45 32.62 45.18 146.02 6647.78 4.23 666.41 16.50 21.77 n.a 868.50 1.23 22.51 61.22 n.a. n.a
Balances on 3oth June 2002

LIABILTIES General Provident Fund Postal Savings Bank Postal Life Insurance Suspense Account Savings certificate Remittance Renewal Reserve Fund ASSETS Departmental cash control Money order Fixed Asset Balance with the Government
As per CGAs Finance Account

23.53 2590.28 93.73 0 Merged with NBR 1214.12 4.22 10.11 -16.04 n.a n.a
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4
4.1
Forest Department
Overview
The Forest Department, under the Ministry of Environment and Forest, is made up of 71 Divisions, each headed by District Forest Officers with reporting subordinate offices. The Forest Department was initially established with cheque issuing authority due to the lack of Treasury Offices in the remote locations that offices were, by their very nature, required to be established in. The accounting unit is the division which includes one or more sub-divisions. Each division is under the charge of a Divisional Officer functioning under the control of the Conservator of Forest who is in charge of a circle comprising a number of divisions. 4.2 Observations
The following observations were made in respect of Forest Department: Approximately 85% of Divisions send their monthly accounts to the CAO Forest and Environment within 15 days of month-end. All Divisions are currently preparing monthly accounts under the same 13-digit code structure introduced by RIBEC, in line with the CAO office. There is currently no register maintained to identify and record those Divisions that have submitted accounts for a particular month. Instead, the CGA computer consolidation system is updated upon receipt of monthly accounts from individual Divisions. Given the general lack of reconciliation taking place at either the CAO or CGA offices, there may be a very serious risk of receipt and expenditure data for entire Divisions being omitted from the CGA accounts. CAO Forest and Environment does not maintain any consolidation registers for the preparation of monthly accounts for the Forest Department. Data entry is made from the individual initial accounts of the divisions. There is only one member of staff in the CAO office charged with the preparation, reconciliation and monitoring of the entire Departmental monthly accounts. There is no specific instruction contained in Account Code Volume III that Divisional Forest Officers should reconcile the Consolidated Treasury Receipts or Payments with the local District Accounts Office. However, Form FA -2 Register for Cheque drawn from treasury and FA-6 Schedule for Remittance into treasury are to be maintained. It was found that during FY 2002-03 there had been a further net accumulation of Forest Remittance amounting to Tk 19.07 crore leading to total unadjusted remittance balance of Tk 58.96 crore at the end of FY 02-03. In line with the lack of guidance, it was found that no significant attempt has been made to reconcile this balance. Even when the reconciliation is initiated by the Departmental Officers, it is claimed that many District Accounts Officers attempt to frustrate the reconciliation process on the plea of overwork, resulting in no reconciliation taking place. - 33 -
The CGA has recently instructed District Officers to carryout the reconciliation in line with Government Orders. In light of this, an Executive Order has been issued by the Chief Accounts Officer, to the effect that the Consolidated Treasury Receipt (CTR) should be attached to all monthly accounts submitted to the CAO office. This order has not been adhered to. This problem has arisen as the CTR was discontinued in the past and it is not possible to work out opening balances. It should therefore be examined whether the CTR may be prepared and utilised stating only the transactions during the current month/year. Each Division is required to supply a breakdown and reconciliation of Forest Advances. However it was found that no central record is maintained to show opening balances of advances, cash drawn, expenditure and closing balance. At most, a superficial analysis is carried out on a minimal number of individual returns. It was seen also that in many cases, Forest Advances are being made to subordinate offices long before any expenditure is recorded against the advance. Large cash balances held at the subordinate offices beyond the authorized limit are an audit issue that needs to be addressed. Data relating to Forest Advances does indicate that there may not be a serious problem in relation to the reporting of Forest Advances. The accounts show that during FY 2002-03, Code 8521, showed a receipt (adjustment) of Tk 165.33 crore against Code 9521, showing an advance of Tk 165.65 crore. Although the basic figures suggest that the transactions are properly controlled and recorded in the books of account, it is of concern that no evidence of a reconciliation procedure was found during this study. In the East Pakistan Forest Manual (Part II) obtained from CAO Forest, there are references to the Civil Accounts Code and the Forest Department Code. However, it was not possible to trace the Forest Department Code. As per instruction contained in the updated Account Code Volume III (Issued on September 1996), the following accounts are to be sent by the divisions to the CAO Environment and Forest: : (1) Cash Account containing receipts and disbursements for all divisions. (2) Classified Abstract of Revenue and Expenditure (3) Schedules of Remittances to the Treasury (4) Abstract of Contractors and Disbursers Ledger. The updated Accounts Code does not take into consideration the updated classification structure nor the framework of the national budget for forest department but has instead continued with the old classification, namely Establishment, Conservancy and Works. The dual classification structure has created a great deal of confusion in relation to the rendering of accounts. The accounts submitted by the divisions do not follow the instructions contained in Account Code Volume III. It should be noted however that further revision of Account Code Volume III cannot be taken up without taking into consideration the requirements for the relevant portions of the departmental manual. 4.3 Reconciliation with the Banking Treasury
Bank Account number 145 Ministry of Environment and Forest is held within the main Government balances in Bangladesh Bank and Sonali Bank. However, it is seen that CAO Environment and Forest does not receive a monthly or annual bank statement for - 34 -
this account. Reconciliation of this account is not considered to be a responsibility of the CAO office. 4.3.1 Opening and closing cash balance
As per Article 256 & 282, Account Code Volume III, Forest Department has to render account FA1, which does not have any provision for recording opening and closing balance. Although no explanation was received for this omission in the codebook, it is thought that the cash balance position is regulated under the code for Forest Advances. 4.4 Budgetary control
The Chief Conservator of Forest is competent to apportion the annual budget to the respective Conservators of Forest and thereafter to the individual Divisions. No local budget database for the individual Divisions is maintained at the CAO office. The CAO is therefore unable to verify the monthly returns of each Division showing budget, receipt and expenditure and remaining balance for each Division. Any over expenditure identified on a national basis by means of the Management Report is similarly not traceable to a specific Division by the CAO. This is an alarming finding as there is currently no effective expenditure ceiling in place for individual Divisions. Comparison of budget and reported figures for financial year 2002-2003 (Amount in Crore Taka) Forest Department (Code 4531-4535) Forest Revenue Non- Dev Expenditure Operational surplus Development (Project Aid Component) Budget Estimate 0203 131.74 57.61 74.13 118.11 Revised Estimate 02-03 92.82 61.06 31.76 104.00 (52.64) Accounts 02-03 78.03 62.66 15.37 107.41 Variation % Revenue Shortfall 41 % Excess expenditure 10% Shortfall 80% Not applicable. Detailed analysis may be obtained from FMRP document Foreign Aid Reporting Process Review
It is clear from the above table that any measures implemented in relation to budgetary control are currently ineffective. The impact on the operational surplus of the Forest Department shows a shortfall of 80%. This must be of concern to both the department and government as a whole.
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5
5.1
Bangladesh Telephone and Telegraph Board

Overview
There persists some confusion in relation to the correct legal status of Bangladesh Telephone and Telegraph Board (BTTB). It was created in 1975 as an autonomous authority and then reverted back to a full government department in 1979. There are implications in this regard in terms of the accounting policy that should be followed. BTTB currently prepares accounts under a commercial accounting system, whereas the government accounts are prepared under the cash basis of accounting. As a condition of IDA credit, BTTB was instructed to prepare a profit & loss account and balance sheet for certification by the Chartered Accountant, however this requirement was abandoned in 1996. The government accounts follow the national budget and the appropriation accounts prepared for certification by the C&AG. The BTTB is headed by a chairman who is supported by the four members of the Board including one Member Finance. The Chief Accounts Officer of BTTB, placed under Member Finance is different from the Chief Accounts Officer T&T of the CGA. It should be noted however that neither of these officers have direct responsibility for the operation of the bank account. Rather, it is the Divisional Engineers who have the power to issue departmental cheques and are therefore responsible to BTTB. Out of 89 divisions, only 11 account for telephone revenues. The divisions, headed by the Divisional Engineers, send monthly accounts to the CAO T&T for incorporation into the government accounts. 5.2 Observations
The financing and expenditure of BTTB is a part of government general revenues and expenditures appropriated by the national budget process. Thus BTTB has no title to profit and loss as these are merged in the main government account. The accounting problems of T&T Department are similar to those of the Post Office. The divisions keep initial cash accounts as per the Initial Account Code Volume II of 1937 issued by the Accountant General Post and Telegraph. In the national budget, BTTB is considered to be a functional unit for appropriation of money. Despite the fact that there is no requirement under the existing parliamentary approval, CAO T&T prepares appropriation accounts based on the departments internal sub-division of appropriations and obtains the certification of C&AG. 5.3 Consolidated Treasury Receipts (CTR)
The Posts and Telegraph Initial Account Code Volume II gives detailed instructions for the settlement of T & T accounts with treasuries. Articles 618 to 620 states As soon after the expiry of the month as possible, a monthly settlement should be effected with all treasuries in respect of the transactions of the entire division with them. For payments into treasuries , Consolidated Treasury Receipts (CTRs) should be prepared in form A.C.E.-57 for the whole of the remittances made to each treasury and sent to the Treasury Officers for signature. For cheques drawn, the - 36 -
pass-book duly completed for the month, should be sent to the Treasury Officers and certificates of issues from treasuries (which are prepared in the form reproduced below) should be obtained from them. I hereby certify that the total issues made from this treasury on cheques drawn against the account of Mr Officer-in-Charge .Division, during. 19.., amounted to Rs (in words) (Sd). Treasury Officer, Treasury. Their agreement with the Cash Book of the Division should be effected in Part II of form P.W.A.-51, Schedule of Monthly Settlement with Treasuries, which also gives details of the differences. The certificate of agreement should be recorded in the pass book over the signature of the Divisional Engineer, without recording any details of the uncashed cheques or other differences. It is found that this reconciliation is not taking place in most instances. This order is not being followed by the Divisional Engineers, DAOs or CAO T & T and there is therefore no effective reconciliation of T & T cheques and receipts. In March 1999, RIBEC s Feasibility study on the integration of T&T accounts with the civil accounts of the GOB clearly established that duplicate accounting activities within T&T Board and within the CAO T&T do not complement each other, nor do they provide the requisite financial information. It was found that a similar situation still exists today. It is therefore a concern for the CGA office and as such, there currently exists a strong desire to prepare a comprehensive manual to facilitate the integration of the initial accounts into CGAs central accounting framework. 5.4 Relations with the Banking Treasury
11 divisions of BTTB, headed by a Senior Accounts Officer are responsible for collecting revenues from the telephone subscribers and ensuring that revenues collected by the commercial banks are deposited into the banking treasury. This is carried out by the commercial banks producing pay orders in favour of the Accounts Officer Telephone Revenue, which is then deposited into the concerned Bangladesh Bank branches at Dhaka, Chittagong, Khulna and Rajshahi. BTTBs expenditure is met by drawing departmental cheques from the banking treasury. 5.4.1 Bank Reconciliation
BTTB has been assigned a bank account, No 190 with the Bangladesh Bank, as part of the main government account. There has been no effort to reconcile the bank account by the CAO T&T. This is a general problem of the current account structure of the - 37 -
government, which is to be addressed separately. The following table clearly indicates the problems of reconciliation with the individual bank accounts: (Transactions from July 2002 to June 2003 in Thousand Taka) Difference % DAO Source CAO Source between DAO Difference & CAO figures Code Drawn from Treasury Deposit into Treasury Net Inflow Combined DAO & CAO Net Inflow Net flow reported by Bangladesh Bank Difference with Bangladesh Bank % Difference with Bank 9806 8806 8,013,612 19,297,246 11,283,634 19,238,956 4,675,053 Code 8806 8,559,185 -545,573 2,782,739 3,328,312 -6.8 14.4 29.5
BTTB
9806 16,514,507 7,955,322
14,563,903
311.5
It is clear from the above table that there are serious differences appearing in the government accounts in relation to economic codes 9806 and 8806 as reported by the DAO and CAO offices. These differences should not appear, as they are contra entries for the same transactions. Possible reasons for these differences appearing include:

Lack of guidance for departmental accounting officers Misallocation of codes Compilation error of initial accounts Data input error on CDPU system
Ideally the difference of the amount shown under economic code 8806 and 9806 should represent or be equal to the net cash balance shown in bank account No 190, however the above table shows a difference of Tk 1,456 crore. This indicates that there is a basic structural flaw in the reconciliation of bank account No. 190. This difference exists between the balance reported by Bangladesh Bank and the DAO and CAO offices due, among other reasons, to the fact that debt servicing paid from the T & T bank account is not routed through the functional code of T & T in the government accounts. Instead, it is recorded under the functional codes of the Ministry of Finance, namely Finance Division and Economic Relations Division. - 38 -
In its revised fiscal policy of FY 2002-03, GoB anticipated an operational surplus of Tk 1064 crore and recovery of 182 crore in respect of re-lent foreign loans of BTTB. It was also expected that a substantial portion of its development expenditure would be financed by raising T&T bond of Tk 200 crore. Due to non- functionalization of debt and remittance code of account, it is not possible to identify and reconcile cash balance with the fiscal operations. 5.5 Accounts preparation
Despite the introduction of a new classification code by the C&AG with effect from 1st July 1999, BTTB still follows the old monthly account format derived from the Initial Account Code 1937. It was found however that different forms are used for: (a) (b) (c) (d) Accounts Officer Telephone Revenue Engineering Offices Departmental Telegraph offices Accounts officer Telegraph Office & Workshop.
It was found that some accounting forms indicated the new codes, entered manually to enable data entry. Some units however were found to have replaced the old format with the new format incorporating the new classification codes. It was also found that most of the descriptive items of receipts and expenditure of the initial accounts showed no transactions on the CDPU system and thus appeared to be redundant. This is most likely due to the fact that the national budget does not make such detailed appropriation. Despite the fact that the national budget recognizes BTTB as a single budgetary unit, BTTB itself distributes the annual budget amongst the various Divisions. Based on such internal budgetary distribution, the CAO office compiles accounts based on 9 working circles and maintains 32 detailed book consolidation registers. This appears to be a duplication of duties not mandated by the appropriation act. There is a need for clear cut demarcation of financial control to be exercised within BTTB and within the CAO T&T to eliminate duplication of functions because BTTB is now recognized as a department and there exists a fully fledged accounting and audit outfit similar to Railways. This should decide how individual divisional data might best be recorded on the CDPU system. The latest Appropriation Accounts for 2000-2001 are prepared and published under the internal Divisional structure as detailed below. 5441-0000- General Administration Central Office 5441-0000- General Administration- Development Branch 5441-0000- General Administration-Planning Branch 5441-0000- Central Store Depot 5441-0000- Telegraph Workshop 5441-0000- Director Telegraph Stores & Workshop 5441-0000- Departmental Dispensaries 5441-0000- Accounts Officer, Telegraph Stores 5441-0000- Deputation and Training Abroad - 39 -
5441-0000- Control Regional Offices 5441-0000- Engineering Charges 5441-0000- Training Organizations 5441-0000- Supervision- Joint Telegram and Wireless 5441-0000- Telegraph & Trunk Telephone Line Establishment 5441-0000- Radio Signal Offices 5441-0000- Telephone Offices 5441-0000- Local Telephone Line Establishment 5441-0000- Telephone Accounts 5441-0000- Telephone Districts 5441-0000- Telephone Divisions This fragmentation of the internal budget exercise is made at the cost of reconciliation of bank balances, debt balances and remittance accounts, which are so vital for the correctness of accounts. Furthermore, within the total appropriation, BTTB is fully entitled to allocate funds to the various units as required. The variation analysis of individual units has little value to the users of the CGA data. Rather, BTTB is accountable only if it exceeds the amount appropriated by Parliament. In FY 2000-01, BTTB exceeded the operational budget set by Tk 32.49 crore as reported through the Appropriation Account. It is alarming to note that in the Balance Sheet ending 30th June 2002, the profit and loss balance is shown on both sides of the Balance Sheet. The reason given for this is that as the balance may be a debit or credit balance, the guidance documentation pro-forma shows a balance on both sides. This indicates a serious lack of understanding and urgent need for training within both the CAO office and Department. Despite the requirement under Rule 312-324 of PT&T Account Code for ledger balances and trial balances to be maintained to support the balance sheet, these are not currently being maintained. If the Principal Accounting Officer desires to involve CAO T&T in BTTBs internal financial management, action may be taken to prevent the production of such fragmented appropriation accounts. A third level functional code could be allotted to BTTB for internal management. To ensure effective bank reconciliation, the 89 accounting units should have clearly specified DAO offices through which their transactions are routed. Article 4 of Account code Volume I states that the T & T Board is responsible for the preparation of the annual appropriation account, rather than the CGA. This is presented to Parliament as a detailed, 115-page book, which also includes the appropriation account of the Postal Department and is supported by the financial review statement, which is signed by the Chairman of the T & T Board. Before the figures are certified and signed by the C&AG, they are compared to those appearing in the finance accounts. 5.6 Temporary use of cash
Unlike most other Departments, BTTB is authorised by Rule 1c of the Initial Account Code Volume 1, to make use of cash receipts temporarily for current expenditure - 40 -
provided a cheque is paid to the treasury before the end of the month. Such transactions appearing in red ink in both sides of the initial accounts further complicated the overall bank reconciliation of BTTB. 5.7 Departmental reconciliation
In the past each Division was required to send a member of staff with the office copy of the monthly initial accounts to the CAO office to reconcile the Divisional figures with those recorded in the books of account of the CAO. This reconciliation is not currently taking place. There was found to be total confusion surrounding the treatment of accounts in respect of deposit work, where members of the public are required to deposit directly to the bank by challan, coded under the T & T deposits code. The District Accounts Office, upon receipt of the daily credit scroll from the bank, books deposit transactions under T & T Remittance. However, when the deposit work is actually carried out by T & T, the expenditure is booked under Deposits. As no analysis or reconciliation of these codes is carried out, those remain indefinitely in the CGA accounts and increase the complexity of future reconciliation efforts 5.8 Foreign Aid
There is a clear lack of internal controls concerning Foreign Aided projects within the BTTB. During FY 2002-03 the budget allocation of development expenditure was reduced from Tk 859 crore to Tk 641 crore (including project aid of Tk 217 crore), of which Tk 592 crore was spent. While more detailed analysis is required to form a conclusive opinion, this does indicate that many accounting transactions are simply not entering the accounts, whether through error or not. 5.9 Settlement of international revenues
International agencies, such as the International Telegraphic Union (ITU) remit amounts directly to Bangladesh Bank in respect of overseas telephone calls, which is credited to the Account No 190 BTTB and reported by the Government Accounts Department (GAD) of Bangladesh Bank to the CGA. There is no prescribed internal CGA process currently in place to inform the CAO of the receipt. This clearly hinders the reconciliation and control responsibilities of the CAO office. As in many other areas of the CGA accounts preparation process, it was found that misclassification in the coding of transactions is occurring and remaining largely undetected. 5.10 Telegraph Stores and Workshop The purchasing and storage of stocks by T & T department are entrusted to the Controller of Telegraph Stores (CTS). The Accounts Officer Telegraph Stores is responsible to ensure that all transactions of the CTS, receipts and issue are properly accounted for. The Telegraph Workshop at Tejgoan is responsible for manufacturing various pieces of equipment that are required by the department. The stocks purchased or manufactured in - 41 -
the workshop are generally distributed to the divisions for executing development projects or for the maintenance of the department. The materials purchased, labour costs and other charges are recorded in the manufacture suspense code while finished goods are recorded under store suspense. When the CTS issues stores to the divisions, this is recorded under the head of store remittance. Store remittance is debited and stores credited. In response to this, the divisions recorded the transaction by crediting store remittance and debiting stock or the relevant expense code. The current coding structure does not accommodate this internal accounting procedure for materials purchase, manufacture and distribution to divisions. A comparison of the BTTB balance sheet and finance accounts is summarised in the table below, showing areas of significant differences. A more comprehensive analysis is included in Annex C. Difference between T&T Balance Sheet & Finance Accounts as at 30th June 2002 As per CGAs Finance Account
4,020.6 96.3 56.4 4,020.6 39.8
Balances on 3oth June 2002

LIABILTIES Capital Investment General Provident Fund Miscellaneous Deposits ASSETS Fixed Asset Cash
(Amount in Crore Taka) As per Difference Departments % Balance Sheet

4,080.8 163 0.84 4,080.8 0.02 -1.50% -69.26% 98.51% -1.50% 99.95%
C&AG is introducing an Exchange Account for T & T receipts and payments. If the exchange account is introduced correctly and proves to be accurate and sustainable, this should allow for an accurate reconciliation of outstanding receipts and payments between the data provided by the divisions and that recorded in the monthly accounts of the CGA.
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6
6.1
Public Health Engineering Department

Overview
The Public Health Engineering Department (PHE) is made up of 71 Divisions. The department is responsible for the supply of drinking water and sanitation. Some of its urban functions have ben taken over by the Water and Sewerage Development Authority. In the original Account Code Volume III Departmental Accounts, reprinted in 1986 there was no mention of PHE. But in the revised edition of 1996, PHE is included alongwith PWD and Forest in the Departmental Accounts Code. Although specified account forms for PWD and Forest were appended with the Code, there is nothing for PHE. The initial monthly accounts of PHE follows the prescribed PWD forms. In respect of expenditure on works, maintenance, and other items of supplies and services the PHE issues departmental cheques. It is observed that PHE divisions are using PWD Accounts Form 24 as per instruction contained in the East Bengal Financial Rule 197 (Corresponding to Bengal Financial Rule 206). 6.2 Observations
Divisions within Public Health Engineering are using both the old 3-digit code of 1983 as well as the current 13-digit code. The cash account shows monthly receipts and payments along with opening and closing balances in the RIBEC code supported by a number of schedules. CAO PHE maintains one register for each division, which records the items shown in the cash account. After making entries in the register the auditors prepare the data entry sheets in two segments- chargeable to departmental functional codes 3741-3745 and on behalf of other departments. After data entry, it was found that the CAO is not in a position to derive a total consolidated position, from the existing computer network. 6.3 Budget
The Director General of Public Health Engineering distributes the budget to each division. As with other departments, the CAO does not currently obtain a copy of this divisional budget, or the details of any re-appropriation during the year. Each division shows budget, expenditure, receipts and resultant balance in the monthly accounts, but the CAO is not in a position to verify the correctness of this information. This is alarming as there is currently no ceiling on the expenditure of individual divisions. However, from the following data derived from the CDPU it is clear that the reported departmental revenue and expenditure does quite closely follow the budget. The table does however show some alarming statistics that should have been addressed by the CGA office, CAO office or PHE Department.
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FY 2002-03 PHE Department (Code 3741-45) PHE Revenue Non- Dev Expenditure Development (Project Aid Component) Original Budget 20.91 43.81 367.35 Revised Budget 20.69 44.21 302.57 (148.15)
(Amount in Crore Taka) FY 2003-04 Actual Actual up to Original Accounts as March 2004 as Budget per CDPU per CDPU 20.89 23.46 5.7 44.41 45.38 28.86 233.83 15.79 91.52 (90.25)
Both revenue and non-development expenditure were almost exactly on target against the budget for FY 2002-03. However, for the first nine months of 2003-04 they are markedly off target, particularly in relation to revenue, where the actual figures for the first nine months relate to only 25 % of the estimated budget for the year. Reported figures for Development expenditure are significantly higher for the current financial year than for the previous. It was not possible in the course of this study to ascertain the reasons provided for these discrepancies, or whether any investigation had actually been carried out by any of the offices responsible. The management report is compiled on a monthly basis and relevant comments are noted on this report by the CAO. This report is forwarded to the Secretary, but there appears to be a breakdown in communication between the CAO and Secretary. No response to the management report is received from the CAO. As stated in the introductory chapter, it was found that the quality of accounts cannot be screened through the management account without going through the related public accounts and that aspect is totally missing. The CAO does not receive any information from Bangladesh Bank and does not consider bank reconciliation to be either achievable or the responsibility of the CAO. There appears to be no monitoring of balances of cash held by individual divisions. It is understood from discussions held that in many cases DAO offices are incorrectly recording receipt transaction by crediting revenue in the Consolidated Fund, rather than remittance in the Public Account. As the divisions are crediting revenue and debiting remittance for the same transactions, this will result in an overstatement of the departmental revenue and permanently distort the balances reported under remittance. There is no attempt to reconcile the remittance balances in the departmental accounts. Cashed cheques and challans are supplied to the CAO by the CGA and the divisions supply information relating to cheques issued. However, neither the CAO nor the divisions are currently maintaining a register of outstanding cheques. The divisions have not been instructed to supply the CTR to the CAO and are therefore not currently doing so. - 44 -
7
7.1
Public Works Department

Overview
The Public Works Department is made up of 108 divisions. Public Works Department is divided into circles, which are under the charge of Superintending Engineers. Each circle is divided into divisions, which are again subdivided into subdivisions. Divisions are overseen by Executive Engineers and sub-divisions by Assistant Executive Engineers. The CAO Public Works and DAO offices are responsible for the payment of the pay and allowances elements of regular government employees of PWD and some portion of supplies & services of non- development budget. All other payments relating to construction and maintenance (inclusive of work charged employees) are paid by departmental cheques. 7.2 7.3 Main accounting problems identified Despite conversion of Initial Accounts into RIBEC code, the improvement of quality of accounts is not up-to the mark. Balances of public accounts- Deposit, Remittance, Advance and Suspense still remains a concern Blocking of suspense account transactions without providing a solution for recording expense account for the materials issued, unpaid wages etc. No clear job responsibilities between CAO, Works and Director of Works Audit. No separate bank account. Only recently a code is provided to record departmental cheques. Double accounting of receipts reported. Non-revision of CPWA code. Observations
The directions in accordance with which the initial and subsidiary accounts should be kept in the Public Works divisions and the forms in which the compiled monthly account is to be rendered to the CAO Housing and Public Works is described in the Account Code Volume III updated by the C&AG in September 1996. The code did not take into consideration the new classification structure but rather copied the reprint of Account Code Volume III of 1886. For internal accounting purposes, it was found that the divisions of Public Works follow the rules and instructions contained in the Central Public Works Account Code (CPWAC) produced in 1935 under the Government of India. This was updated in 1951, by changing the word India to Pakistan. No further updating has taken place since then. The rules contained in CPWAC describe primarily the financial methods and procedures to be observed by Public Works officers in dealing with transactions and in keeping and rendering accounts and is circulated under the authority of the Secretary of Finance. This code covered relevant portions of treasury rules, general financial rules and Account Code volume III, as they were in 1935. To assist Divisional Officers in the discharge of their responsibilities, the Director General of Works Audit posts a divisional accountant to each divisional office. The CAO - 45 -
office is taking guidance from Account Code Volume III but has no administrative control over divisional accountants on the quality of accounts. As required under Article 171, Account Code Volume III, initial accounts are to be supported by 17 schedules. On examination of accounts it was observed that some of those schedules are not in use because PWD suspense transaction for procurement of stock was stopped in 1989. The other schedules are generally found to be used correctly. There is no consolidation of divisional data at the CAO office. When the individual monthly accounts are received, a top sheet is prepared to assist in the data entry process. The individual accounts are then entered onto the CDPU system. The CAO office does not receive a copy of the monthly bank statement. There is therefore no bank reconciliation carried out for Public Works Department. There is no reconciliation of cash balances held at Public Works Divisions carried out by the CAO office. As with other departmental ministries, the CAO Public Works does not receive a copy of the budget for each division within the department. Although the divisions report budget, expenditure, receipts and resultant balance on their monthly returns, the CAO office is unable to verify these figures or identify where the budget has been exceeded. The monthly management report may identify where budget has been exceeded for the department as a whole, but the CAO is unable to specify which divisions are responsible and is therefore unable to take any action. Comparison of Budgeted Revenue and Expenditure against Actual for Public Works Department FY 2002-03 Public Work Department (Code 3251) PWD Revenue Non - Dev Expenditure Development (Project Aid Component) Original Budget 36.78 275.86 24.21 Revised Budget 28.61 319.06 27.31 (00) Actual accounts as per CDPU 37.83 321.26 27.35 (Amount in Crore Taka) FY 2003-04 Actual up % of Original to March Original Budget 2004 as per Budget CDPU 39.77 26.78 67.3 402.23 214.26 53.3 40.20 00 N/A (00) (00)
Public Works Department currently has no Project Aid Foreign Aided projects to assess. For financial year 2003-03, it is seen that revenue is roughly in line with budget expectations, however non-development expenditure is approximately 16% higher than initially budgeted. It may be seen from the above table, that revenue for the 9 months to March 2003 is generally in line with the original budget, having collected roughly 2/3 of the annual expected revenue. - 46 -
Non-development expenditure is also roughly in line with budget expectations, as a significant proportion of unused budget will be utilised during the final three months of the year. It is alarming however to note that there is no development expenditure reported for the first nine months of the year. The previous financial year shows development expenditure slightly higher than the original budget figure, which was increased for the current financial year. It is reasonable to assume therefore that there should be development expenditure reported. This issue has not yet been addressed by any party. The management report is produced on a monthly basis and currently reviews the progress of development expenditure only. This is not currently used for any management function, but rather is simply taken to the monthly Secretarial meetings. The figures on the report are not discussed and there is no reconciliation of data between the CAO and the Ministry. Furthermore, it is noted that revenue expenditure as a whole is not discussed. These meetings are instead focused entirely on the specific large projects undertaken by Public Works Department. There is little or no reconciliation of Public Works data at the field level, between Drawing and Disbursement Officers and District Accounts Officers. It is clear therefore that the there is little chance of the CGA and Ministry reporting the same figures at yearend budget meetings. Public Works divisions supply complete details of cheques issued to the CAO office. Despite receiving no guidance or orders to do so, the CAO office is attempting to reconcile the information received from divisions with the cashed cheques supplied by the CGA. This attempt has yet to be fully successful and currently only the number of outstanding cheques is recorded by the CAO. With the exception of the attempted reconciliation of outstanding cheques, no Public Account balances are currently being monitored or reconciled within Public Works Department. PWD Deposit, Advance, Suspense and Remittance as per Finance Account FY 2001-02 (Amounts in crore Taka) Opening Receipts Payments Closing Balance during year during Balance year Departmental deposit 172.83 5.16 24.38 153.61 Contractors Security deposit Not functionalized Advances recoverable Not functionalized Suspense Account -195.88 0 0 -195.88 Departmental Cash control -.01 1.05 1.09 -.06 Remittance -289.59 730.78 744.63 -303.44 Remittances within the divisions Not functionalised as merged with others. Despite the significant values of balances reported, no reconciliation is currently carried out. - 47 -
As identified for other departments, there is a serious concern that District Accounts Offices are incorrectly classifying receipts collected by the Public Works Department and deposited into treasury banks. Rather than crediting remittance, some offices may be crediting revenue, thereby overstating departmental revenue and permanently distorting the remittance balance stated in the Public Accounts. The lack of reconciliation of remittance makes it difficult to identify the extent of this misclassification. 7.4 Suspense Account
As per paragraph of 270 of the Central Public Works Account Code,(CPWAC), Suspense Accounts are an acceptable accounting item and are to be expected in the normal course of government transactions. These represent a few routine temporary transactions such as, cost of materials issued to a job, advance to a contractor or some unpaid wages to labourers. It is found that the closure of suspense accounts, without placing an alternative accounting entry has created some accounting problems. Stock suspense - Prior to 1989, stocks and materials purchased and stored were coded to these balances. They were to be reduced as the stocks were utilised. Since 1989 however, these codes have not been utilised and the balance does not represent any actual stock held. Loss suspense Prior to financial year 1992/93, the value of any stock written down was coded to loss suspense. This account is no longer used and the government must at some point write off the balance. The balance as at June 2003 is not identifiable as all Public Works suspense codes are shown as one figure. It is felt that the reliability of this figure may be questioned, as there is no supporting documentation. The Public Works books of account show several residual balances under the Public Account that need to be adjusted or written off, following agreement in principle from the MoF.
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8
8.1
Roads and Highways Department

Overview
The Roads and Highways Department is made up of 120 Divisions and operates under the jurisdiction of the Ministry of Communication. The approved strength of officers and staff is 8,982, as communicated to the CAO Works in 1992. [Chief Engineer 1, Additional Chief Engineer 8, Superintending Engineer 34, Executive Engineer 100, Deputy Executive Engineer 193, Assistant Engineer 183, Other Officers 47, Class III staff 5196 and Class IV staff 3220] However, as a result of development projects, CAO office indicated that the Ministry of Works sent another list on 6.1.04, detailing CAO personnel payments that showed some increase in this number. This list was not however supported with the approval letter from the Ministry of Establishment or concurred by the Ministry of Finance. 8.2 Observations
Divisions within the Roads and Highways Department are using the current 13-digit coding structure. The divisions of the Roads and Highways Department are currently taking guidance from the Public Works Account Code. The first edition of this code was produced in 1935 under the Government of India. This was updated in 1951, by simply changing the word India to Pakistan. No further updating has taken place since 1951. The monthly accounts received from the 120 divisions were found to be well presented and were accompanied by a supporting list of receipts and payments. The monthly accounts for the 120 divisions are entered onto the CGA system directly upon receipt. The CAO does not maintain a register to ensure that all 120 divisions report their monthly financial data. Rather, an analysis could be carried out after all of the data has been entered. This analysis is not currently taking place. This is a serious risk as it could result in the absence of some divisional data in the government accounts. CAO Ministry of Communications does not obtain a copy of the local budget database for each division and so is not in a position to monitor whether expenditure has exceeded budget on a local level. This reduces the value of the monthly management report, as the CAO cannot take any action where excess expenditure is identified for the department, other than simply bringing it to the attention of the Principal Accounting Officer. The CAO attends a monthly meeting with the Ministry to review performance for the month. It is found that the management report is taken to the meeting, but is felt to be of little value. - 49 -
The management report includes data relating to the Railways Department. This may lead to some confusion when assessing the performance of the Roads and Highways Department and thereby further reduce the usefulness of the management report. There is a separate bank account maintained in Bangladesh Bank for the Roads and Highways Department. CAO Ministry of Communications does not receive a copy of this bank statement and therefore is not in a position to carry out any reconciliation. The Roads and Highways Department also does not carry out any reconciliation on the bank account. An analysis of the financial performance of the Roads and Highways Department for the financial year 2002-03 shows the following: (Amount in Crore Taka) R&H Department (Code 5041) Original Budget R&H Revenue Non- Dev Expenditure Development (Project Aid Component) 281.11 390.71 2498.60 FY 2002-03 Revised 214.76 438.75 2360.45 (1091.80) Actual accounts 184.49 444.73 2,867.65 FY 2003-04 Budget 276.69 587.39 2402.49 (1259.15) Actual up to 3/04 129.04 309.27 1139.17
It may be observed from the above table that while revenue feel significantly beneath the original budget during FY 2002-03, both non-development and development expenditure were significantly higher than budget. This shows that are some weaknesses in the R&H internal controls. It is interesting to note that the budget for development expenditure was revised downwards, yet actual expenditure exceeded the original budget by 15%. There is no ceiling in place to limit the value of cheques that may be issued from any division. Given the absence of a local budget database and the lack of any bank reconciliation, this further increases the possibility of budget being exceeded, misclassification or misappropriation taking place. The Roads and Highways divisions provide a list of all cheques issued to the CAO office. All cashed cheques are similarly provided to the CAO by the CGA to enable the reconciliation of outstanding departmental cheques and departmental receipts. This reconciliation does not place and given the confusion surrounding the purpose and workings of the remittance codes and the combination of outstanding cheques and receipts under the same code, the resultant balances appearing in the governments accounts are therefore more likely to be incorrect. It is found that there is a great deal of confusion surrounding the correct operation of Departmental Cash Control and Remittance codes. The following table shows the transactions recorded under selected Public Account codes.
Roads and Highways Departmental Cash Control, Remittance and Suspense - 50 -
transactions for period 2001 March 2004 (Amount in Crore Taka) 2001-02 2002-03 2003-04 (up to March o4) 3.38 1.82 21.11 1.82 21.11 21.24 1.82 21.11 21.24 1531.76 1808.09 1018.04 1855.08 1847.60 1141.43 190.23 150.72 27.33 0 0 0 0 0 0
-195.881 -195.881 -195.881
Description Departmental cash control

Year end balance
Code 8757 9757 8821 9821 8736 9736
Opening balance Closing balance
Remittance
Year end balance
Suspense
Year end balance
Note: It is found that in the CDPU there are some mistakes in reporting balances of code 8757 & 9757
It may be observed from the above table that for the period July 2002 to March 2004, a large balance of Departmental Cash Control appears to have been maintained. No reconciliation has been carried out to ensure the accuracy of this balance. There are large movements over the year reported under Remittance. There should in principle be minimal movement (due to time lags) as the transactions are by their very nature self cancelling and no explanation could be obtained to explain these movements. No reconciliation or analysis is carried out to ensure the accuracy of the Remittance figures. There are no transactions reported under Suspense as per government orders, however the large and consistent balance has not been reconciled or any analysis carried out upon it. There are currently no plans to address this balance in the foreseeable future. 8.3 Contractors Security Deposits
The divisions provide a statement to the CAO office detailing the opening balance, deposits, refunds and closing balance of Contractors Security Deposits (CSD). In the absence of functionalization of public accounts codes it is not possible to reconcile the balances with the balances shown in the Finance Account. Furthermore it is not possible to extract balances by referring to source code because non-departmental ministry deposits are recorded in the same code.
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Movement in Departmental Security Deposits for FY 2002-03 Code Opening balance (All departments) BTTB R&H PWD all other departments Total (Amount in 000 Taka) Changes during FY 2002-03 Balance Receipt Payment Net 2,947,826 3,436 957,659 691,986 20,765 856,607 460,319 -17,329 101,052 231,667 184,627 500,017
X391 X391 X391
3,447,843
Annual Finance Accounts (Schedule 13 Kha) showed a total security deposit of Tk 344.78 crore at the end of 30th June 2003. It is also observed that CAO R&H does not maintain any register of balances. Roads and Highways is a department that generates considerable revenue for the Government. There is a lack of agreement however over the actual amount of revenue generated. CAO Ministry of Communication recently quoted figures for revenue in the financial year 2002/03 produced by three separate, yet closely related sources. These are: Data Source Roads and Highways Department Financial Management Unit, Ministry of Communications Controller General of Accounts Revenue reported in Financial year 2002/03 128 Crore 133 Crore 184 Crore
There is no reconciliation between the three offices to calculate the correct figure. The reconciliation that should take place between Departmental Officers and District Accounts Offices is not taking place, which unnecessarily complicates the reconciliation between the Department and the CGA office at year-end. The difference between the FMU and CGA is even more difficult to justify, given the close working relationship that could and should exist between the two offices. It is considered likely that the CGA figures are inflated due to lack of understanding of the correct accounting procedures in District Accounts Offices. As with other departments examined, money received is recorded in the divisions accounts by debiting cash and crediting revenue. When the receipts are lodged by the concerned division into the local bank, the division contra the cash balance out of the accounts by crediting cash and debiting remittance. When the bank credit scroll is received by the DAO office, the transaction should be reported by debiting cash and entering a contra credit entry against remittance. However, it appears that many DAO offices are crediting revenue rather than remittance. This will overstate the departmental revenue and will further distort the unreconciled balance of remittance in the public Account. Roads and Highways Department has a separate monitoring cell that provides data for foreign aided projects within the department on a cumulative expenditure statement. Journals are prepared directly from this statement and the figures entered onto the CGA - 52 -
system. The present reporting system cannot distinguish expenditure from foreign aid resources. This data is entered into the governments accounts without the CAO being aware if the required bank reconciliations have been carried out or whether the concerned Project Directors have agreed with the figures. The monitoring cell, being outside of the control of the CGA, is not required to provide any supporting documentation for the expenditure reported.
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9
9.1
Ministry of Foreign Affairs

Overview
The Ministry of Foreign Affairs is a non-departmental ministry, yet does operate with several characteristics, in relation to overseas missions, that may be viewed as similar to a departmental ministry. For this reason, to provide a comprehensive analysis of factors influencing the quality of accounts, Ministry of Foreign Affairs has been included within the scope of this report. 9.2 Observations
It is found that the accounts within the Ministry of Foreign Affairs are generally well prepared and presented. Economic codes 8881 and 9881 are currently used for the reporting of Foreign Remittance. This relates to cash issued for the replenishment of imprest accounts for expenditure of overseas missions. The Foreign Remittance codes are designed to operate on the following example basis:
1. Payment advice issued by CAO
CAO Foreign Affairs
DAO Dhaka
4. Statement of cash remitted by bank
Bangladesh Bank
2. Cash remitted overseas
3. Mission issues: Statement of amount received Monthly expenditure statement Certificate of cash balance
Foreign Mission
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The accounting entries that are to be recorded at each step of the above flow is as follows:
. DAO office CAO office Debit Credit Debit Credit 7-1051-0000-9881 :Foreign Remittance Cash Expenditure 6-1051-0000-8881:Foreign Remittance
No reconciliation of the Foreign Remittance accounts is carried out by any party. The CAO office monitors that the remittance advice issued to Bangladesh Bank matches the amounts issued by the bank and received by the overseas mission. This merely follows the cash movement, but does not ensure that the accounts are accurately prepared. No assessment of the net balance remaining is carried out or that DAO Dhaka has correctly coded the cash remitted. It is not clear if the initial imprest placed with the foreign missions was booked under economic code 9501- Permanent advance or under 9881- Foreign Remittance. Logic would suggest that the net balance on Foreign Remittance should always have a debit balance until it is expended and replenished. However, the accounts of FY 2002-03 shows a net credit balance for Foreign Remittance of Tk 50.30 crore between the codes 8881 for Tk 72.33 crore and 9881for Tk 22.03 crore. No explanation of the large credit balance was obtained. The term of Foreign Remittance in itself is exposed to the increased possibility of misclassification and that should be termed as Imprest to Foreign Mission. Confusion may arise when excess balances in overseas accounts are remitted back to Bangladesh Bank. The same Foreign Remittance code of 8881 is used by DAO Dhaka to record the cash returned. This reduces the opportunity for the CAO office to reconcile the balance in the Foreign Remittance codes, especially if there is a breakdown in communication between DAO Dhaka, the CAO office and the overseas mission. Month end closing cash balance is coded under 9753- Departmental Cash Control -Foreign Affairs. The CAO office maintains registers for each mission and verifies that the amount remitted is reciprocated in the monthly accounts sent by the missions. This aspect of reconciliation is found to be very satisfactory. However, it is found that the accounts maintained on the CDPU system do not reflect the figures that appear in the CAO register. No action has been to date to address this issue. As there is no specific code for foreign embassy remittance, other types of foreign remittances are also being included under the same economic code. This is further complicating the reconciliation process. It is also observed that some missions are retaining consular fees in the bank account, which causes the balances to exceeded the authorized imprest limit. In those cases no further remittance is made. CAO identified 14 foreign mission keeping cash beyond the authorized limit. Those missions have been asked to send back the excess cash. It may be noted that CGA is producing misleading monthly accounts of Departmental cash control by taking cumulative monthly totals of opening and closing cash balances - 55 -
instead of repeating the current month figure for year to date figure. The closing balance is therefore grossly inflated by being the closing balance of each previous month added together. It is found that Departmental Cash Control is the only code for which this anomaly exists.
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10 Railway Department
10.1 Overview Railway Department is the most autonomous of the departments assessed in this report. There is a clear commercial focus in the operations of the Railway Department and the accounting function within it reflects this fact. Railway as a functional division of the Ministry of Communication was abolished in 1995 to create an autonomous authority, known as Bangladesh Railway Authority (BRA), headed by the Minister of Communication. The authority comprises of 9 members including the Secretary of Finance, Secretary of Communication, Director General of Railways and four other nominated members. The day-to-day administration is vested with the DG Railways. However, the Secretary of Communication is the Principal Accounting Officer. On practical grounds, directions relating to initial and subsidiary accounts kept by the officers of the Defence and Railways have been excluded from Volume III of the Account Code. Unless otherwise questioned by the C&AG, these two departments are authorized to determine the forms and manner of keeping accounts. (Account Code Volume I- 1938, preface & Article 3 of Account Code 1996). 10.2 Observations The Railway Department prepares its accounts using the 13-digit RIBEC coding structure which greatly reduces the confusion and workload involved when incorporating the initial monthly accounts into the CDPU system. Additional Director General of Finance is the head of financial control and accounts deputed by the C&AG .There are two Financial Advisor and Chief Accounts Officers, FA&CAO one for East Zone and the other for West Zone both deputed by the C&AG but FA&CAO of East Zone renders consolidated monthly accounts to the CGA for entry in the CDPU. There are 6 accounting circles in the West Zone and 8 in the East Zone, each headed by Deputy Financial Advisors rendering accounts to their respective FA&CAO. Although there appears to be a strong internal financial management structure operating in the Railway Department, the system lacks clarity in the process of integrating with the national budget and accounts. Financial operations of Railway Department are currently based on the following codes, which were revised and reprinted in 1987. Railway Code for Accounts Department Volume I & II State Railway General Code Volume I & II
In addition to the above codes there are many operating manuals for different railway departments, which are relevant to the correct application of account code, but those have been out of print for many years and were never updated with the changes of directives and instructions issued by the government, railway authority or C&AG during the intervening period.
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Although the financial data of Railway Department is incorporated into the CGA accounts under the Ministry of Communications, the monthly accounts are forwarded directly to the CDPU in the CGA building. It is seen that CAO Ministry of Communications has no involvement in the control or recording of financial data for the department, yet the monthly transactions all appear in the CAO offices monthly management report that is to be used for financial management. 10.3 Bank reconciliation The CGA office is clearly not currently in a position to reconcile either the movement or balance of the Railway Department bank account, held as part of the governments main bank account. It is claimed that the Railway Department are currently attempting to reconcile the bank account, but they have, as yet, been unsuccessful. The balances, as of 30th June 2003 stated in the Bangladesh Bank statement and CGA accounts are as follows: Source As per Bangladesh Bank statement As per CDPU consolidation system Difference (Figures in Crore Taka) Stated balance as of 30th June 2003 -662.54 -7,370.71 6,708.17
The very large difference of Tk 6,708 Crore between the two balances is explained by the fact that Bangladesh Bank clears the annual movement in the Railway Bank Account into Account Number 100 General at the end of the financial year. CGA however, maintain a cumulative balance of cash movement since the Independence of Bangladesh in 1971. There is no direct communication between the CDPU officers and those of the Railway Department. This results in the CDPU officers simply acting as data input operators, blindly accepting any figures submitted by the department. The CGA officers involved in entering the Railway Department monthly data are therefore unaware whether the most basic of controls, such as bank reconciliation are being carried out. The monthly accounts are currently being transmitted to the CDPU without either a supporting bank statement or certification of bank balance. Railway Department officers state that Bangladesh Bank often takes 2 or 3 months to furnish the daily debit and credit scrolls with supporting vouchers. It is therefore not possible for them to reconcile the monthly figures reported to the CDPU. When the scrolls are received, they are incorporated into the accounts of the month of receipt. For this reason, the figures reported by Bangladesh Bank and Railway Department will inevitably be different on a month-by-month basis. After the 30th June, any scrolls received relating to the previous financial year are compiled in the June final account adjustment. It was not possible to verify that Railway Department reconcile at June final the accounting figures reported for the financial year with the movement in the bank statement over the year. A detailed register is maintained by Railway Department to reconcile the cheques issued for each of the 18 cheque issuing offices against the cheques cashed as per the credit - 58 -
scroll. The process of recording the cheques issued, and ticking them off as they are cashed is a time consuming exercise and it is unclear whether any summary figures are reconciled to ensure the accuracy and completeness of the exercise. As per government orders, DAOs and DCAs are not to enter any transactions in relation to the Railway Department. As such, when the daily and monthly bank scrolls and statements are received, any figures reported by the bank under account 192-Railway are ignored, as they should be accounted for by the Railway Department itself. However, it was found to be the case that there are transactions reported by the bank under bank accounts 193- Pensions and 213- GPF that relate to Railway Department. When preparing the monthly accounts, it is found that the DAOs and DCAs identify that these two account balances do not match with the accounting office records. Any difference is simply assumed to relate to Railways and is therefore ignored. No reconciliation is carried out with either the bank or Railway Department to assess the accuracy of the differences identified. The CGA office must carry out a full investigation into the bank reconciliation at Railway Department. The national budget showed railway as a government department by showing its expenditure and revenues on a gross basis instead of its net impact on fiscal operations. The bank account shows a cumulative net cash outflow for the Railway bank account of Tk 662.54 crore. However, the figures under codes 8906 and 9906 for Railway bank account on the CDPU system indicate a positive cash movement of Tk 319.36. An attempt was made in the following table to show how much of this deficit relates to operational losses and how much was due to spending on development projects.
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Comparison of Budgeted to Actual performance of Railway Department for financial year 2002-03 Railway (Code 5031) Budget CONSOLIDATED FUND Railway Revenue Non - Dev Expenditure including DSL of Foreign Loan Operational deficit (-) Development (Project Aid Component included in above) Overall deficit (-) Less: Foreign Aid financing PUBLIC ACCOUNT (net) GPF-Railways 8111 & 9111 Railway deposit 8358 & 9358 Railway advance 8526 & 9526 Railway suspense 8716 & 9716 Departmental cash control 8758 & 9758 Transfer between Rly. Officers 8856 & 9856 Reported deficit for railway Bangladesh Bank Deposit 8906 & 9906 Bangladesh Bank A/C deficit (-) for the year 405.13 565.13 -160 613.61 -773.61 -7 0.62 0 235 0 0 0 -7 0.62 0 235 0 0 0 (Amount in Crore Taka) Variation against FY 2002-03 original budget % Revised Actual 414.59 596.93 -182.34 579.98 (131.04) 411.82 627.12 -215.3 575.37 -790.67 Not traceable 1.65 45.4 -0.02 -1.82 -25.34 -67.75 -838.53 -319.36 -662.54 1.65 10.97 34.56 -6.23 2.21 -123.57 7222.58 N/A -100.77 N/A N/A N/A N/A
It may be seen from the above table that actual operational loss before development expenditure stood at Tk 215.30 crore as against as original projection of Tk 160.00 and a revised budget of Tk 182.34. This reported overspend indicates weaknesses in the Railway Department budgeting and accounting systems. The reported cash movement for the year of Tk 319.36 Crore is not supported by a bank statement. The resulting difference of Tk 343.18 Crore is an alarming and unreconciled difference for just one year. As the Railway expenditure and revenue are not fully functionalised, it is not possible to accurately collate information specifically for Railway Department. This negates the value of the above analysis, as incomplete data is included. Fully functionalising the government accounting procedures would rectify this problem to a large extent. Many Public Account transactions of the Railway Department are coded under the generic CGA function code. This makes it very difficult for the CGA to reconcile the bank account movement reported by the bank back to the movement shown in the accounts. The DSL of foreign aid is included as operational expenditure of Railways but shown as contra receipts under interest income and loan repayment in the national budget under ministry of Finance. However, the component of aid in flow by the recipient organization is not traceable in the present classification structure. All such budgetary treatment - 60 -
complicated the processes of bank reconciliation and accurate calculation of fiscal deficit and operational losses of railways. This is a very basic consideration that must be addressed if the current practice of operating a separate bank account in Bangladesh Bank under the governments main account is to be maintained. There remains a great deal of confusion and political manoeuvrings surrounding the actual legal status of the Railway Department. A clear decision is required as to whether the Railway Department is required to act for the national requirement, or whether it should instead operate as a separate, commercial operation. It is clear from Account Code Volume 4, (Updated 16th February 1999) that Railways should be treated as a separate entity, and that only the net cash movement should be reflected in the governments books of account through the Settlement Account. As per Article 87 of the Account Code, the transactions on behalf of Railways, taking place at the bank shall not pass through the accounts of the District / Thana Accounts Officer or consequently through the accounts of the Controller General of Accounts, but shall be brought to account directly against the Account of the Railways in the books of the Bank. Currently however, the accounts of the department are being fully incorporated into the CGA accounts as if it were a fully integrated body. This is in line with the budget, which still stipulates the budgeted receipts and expenditure under CGA coding heads. Article 4 of the Account code Volume I states that the Railway department is responsible for the preparation of the annual appropriation account. This is prepared by the Financial Advisor and Chief Accounts Officer within Railways Department and signed by the Director General of Railways. The Director General Railway Audit then audits the accounts, before they are certified by the C&AG. It is seen that Railway Department consistently operates at a loss. Despite the separate legal identity discussed above, these losses are effectively being silently absorbed by the government without any clarity of reporting. The CGA office amends the negative figure reported at the end of the revenue report. It was not possible to obtain an explanation for this negative figure, or for why it was coded under economic code 3199 Adjustment against expenditure. This code is not included in the budget for Railways. There appears to be no reconciliation between the net operating loss of the Railway Department and the funds drawn from government to accommodate these losses. This shows a lack of fundamental control and presents a serious risk to the integrity of accounting data produced. To provide clarity on the performance of Railways, a separate window of cash borrowing should be opened with Bangladesh Bank. The cash outflow of the Railway Department is currently being financed through the general issuance of Treasury Bills and Ways and Means Advances, which further obscures the financial performance of the department. There are currently several development projects being carried out by the Railways Department. However, the accounting structure within the department means that it is not - 61 -
possible to classify these projects separately as they are not treated as segregated projects. This means that it is not possible to measure the expenditure against budget for each project. 10.4 Monthly Account to the CGA Prior to 1st July, 1998 the following accounts were sent to the CAO office every month: Abstract Statement of Accounts for the month and period ending. (Form A-1126Revised). Statement of Profit & Loss Account But with effect from 1st July 1998, a revised form of monthly account was introduced using the RIBEC coding structure and also in conformity to budgetary allocation in the national budget. 10.5 Traffic suspense This represents any earnings of Railways, which are as yet under verification to classify under the following codes: 3101- Passenger Fares 3111-Goods Fares 3121-Other Fares 3131-Other Railway Receipts Despite still not being computerised, the financial activities of Railway Department are carried out under the accruals basis of accounting, incorporating large balances for assets and liabilities, unlike the cash basis operated throughout the CGA. This is causing confusion in the recording of accruals balances, as it is found that all accruals are simply coded to Railway Suspense in the public Account. Traffic suspense is a revenue item, yet is stated as a suspense account under bills receivable in the Railway internal accounts. The CGA accounts should however show this as revenue, but instead shows them as transactions in the Public Account under suspense.
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11 Ministry of Defence
11.1 Background The updated Accounts Code printed and circulated in September 1996, did not prescribe any procedure for Defence Accounts excepting a reference to Exchange Account. The keeping of the accounts of Defence Services is the exclusive responsibility of Military Accounts Department. The accounts, internal checks and disbursements are under an Accounts Officer called a Controller attached to each of the Divisional Commanders of Armed Forces. 11.2 Observations Accounting for the Ministry of Defence is divided between the CAO Ministry of Defence and the Controller General of Defence Finance (CGDF). The CAO office accounts for the civil side of operations such as Metrological Department and Survey Department while the CGDF accounts for the more confidential armed forces data. The published annual budget shows a detailed breakdown for the data accounted for by the CAO office and one line lump sum budget for the CGDF portion. The full detailed budget is prepared by the Ministry of Defence (MoD) and issued to the MoF for approval. This detailed budget will then be distributed to a select number of users. There are 7 unit offices that provide financial data directly to the CGDF, being: Senior Finance Controller Army Senior Finance Controller Navy Senior Finance Controller Air Force Senior Finance Controller Defence Purchase Senior Finance Controller Works Financial Controller Bangladesh Ordinance Factory Financial Controller Miscellaneous These units are currently preparing internal accounts under the 13-digit codes introduced under the RIBEC project. The CGDF compiles this data and issues copies to the MoD, CGA and C&AG. The CGA data is received by the electronically by the CDPU. 11.3 Relation with banking treasury / DAO Defence Accounts Officers are authorized to draw cash by departmental cheques on any treasury under the control of DAO/UAO limited to assignments. It is found that CAO Ministry of Defence does not monitor or take responsibility for the accounting data of CGDF. An area of concern identified in the accounting operations of CGDF is the Exchange Account system that operates between CGA and CGDF. When the CGDF issues a cheque for any expenditure, including subordinate office advances, the following accounting transaction is recorded: - 63 -
Debit: Expenses / Advance Credit: Exchange Account When the cheque is cashed and presented to a DAO office, the DAO office will recorded the transaction as follows: Debit: Exchange Account Credit: Cash This system is briefly explained below using the following example, where: A member of defence personnel working in a civil department, such as food department. Monthly pay issued by CGA is 10,000 Taka gross with 1,000 Taka GPF deduction. CGDF issues cheques during the month for 50,000 Taka of which 40,000 Taka is cashed. 5,000 Taka is deposited into the bank.
As with other departmental offices, all challans and cashed cheques are forwarded to the CGDF from the CGA office. The CGDF receives information from the treasury banks in relation to the receipts and payments of CGDF that have passed through the bank. 11.4 Use of Exchange Account The CGDF and CGA are both to prepare exchange accounts as detailed below for the above transactions. CGDF Outward Exchange Account Head I II III IV Drawing from Treasury Payment into Treasury Item adjustable by Civil Item Adjustable by Defence Receipt 40,000 5,000 10,000 1,000 Payment
CGA Outward Exchange Account Head I II III IV Drawing from Treasury Payment into Treasury Item adjustable by Civil Item Adjustable by Defence Receipt Payment 40,000 5,000 1,000 10,000
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The significant balances (highlighted in the following table) reported for the Exchange Account should be carefully controlled and reconciled by the CGA office Opening Balance 1.7.02 Receipt 2002-03 code 8891 Payment 2002-03 code 9891 4250.19 (Amounts in Crore Taka) Change during Closing the year balance 30.6.03 7.04 Cr 558.22 Dr.
565.26 Dr. 4257.24
The CGA office sends their Outward Exchange Account along with all challans and cashed cheques to the CGDF on a monthly basis. It was found that the CGDF is not reconciling the CGA Exchange Account with that of the CGDF. Instead, the cheques and challans are simply forwarded to the concerned Financial Controller and no feedback is given to the CGDF office. This lack of reconciliation is a serious breach of control, which should be rectified as a matter of urgency. It is found that there is no local budget database for individual units within CGDF. This means that CGDF is unable to compare expenditure against budget for the individual reporting offices. International receipts obtained by the CGDF for overseas duties carried out by the Bangladesh Armed Forces are credited under revenue code 2535 - United Nations Receipts and revenue code 2537 Military to UN Program. The annual receipts shown in the Finance Account of FYs 2000-01 to 2003-2004 are shown in the following table. FY 2000-01 Revenue reported 5.55 FY 2001-02 581.73 (Amounts in Crore Taka) FY 2002-03 FY2003-04 587.22 444.00
There is some confusion surrounding the correct accounting treatment of these transactions. It is felt that there may be some misclassification because these may not be government revenues, but instead may belong to the defence personnel engaged by the United Nations. It is worth noting that there is also no budget provision for such earnings. It may be that a small percentage could belong to the government as a service charge. If this is found to be the case, the remaining portion should have been routed through a Public Account deposit code. The Ministry of Defence only obtained a separate bank account with Bangladesh Bank in September 2002. This account incorporates both the Civil and CGDF transactions. As the CGDF does not have a separate bank account, it is not in a position to carry out any bank reconciliation duties. The CAO Ministry of Defence is similarly not in a position to reconcile the bank account. There are 2 distinct systems for accounting within the CGDF, peacetime accounting and wartime accounting. The CGDF has been operating under the wartime accounting system for several years, despite the lack of any explicit wartime activities. Under the wartime - 65 -
accounting system, subordinate offices of the Financial Controller offices are to draw advances, which are maintained in commercial bank accounts and then submit bills for the adjustment of these imprest advances. It appears that the subordinate offices are given full responsibility for monitoring the advances received, expenditure made and balances remaining. The only control measure that was found during this study in relation to these advance payments is a ceiling that is placed on the amount that subordinate offices may draw. The CGDF does not appear to monitor these advances, either in terms of inter-bank transfers or expenditure reported, but rather simply enters debits or credits as reported by the subordinate offices. This may indicate a serious lack of control, which should be investigated further. As stated previously, there is no reconciliation of the Deposits maintained within CGDF. The accounts indicate that for the financial years 2000-2003, the following amounts were recorded: Economic Code 8377 9377 Code Deposits for Armed Forces Deposits for Armed Forces Narrative Deposits lodged with CGDF Deposits repaid by CGDF Net Movement 2000-2001 Taka 000s 202,057 748,54 127,203 2001-2002 Taka 000s 112,545 142,003 -29,458 2002-2003 Taka 000s 4,510 10,481 -5,971
It was found that the deposits stated in the above table relate to the construction work of cadet colleges borne under Defence Ministrys budget. The correct coding is 8401/9401Deposit for supplies and works. This is one example of misclassification due to overlapping and multiplicity of public accounts code. The appropriation account of Defence is prepared and presented to Parliament by the CGDF, not the CGA office. The Director General Defence Audit audits this, before it is certified and signed by the C&AG. 11.5 RIBEC Recommendations The RIBEC project prepared an analytical report in March 1999, entitled Feasibility Study on Defence Account. The main recommendations of this report were as follows: Short-Term: Preparation of a translation table to report accounts under the 13-digit RIBEC coding structure Mapping software introduced to assist this reporting change Introduction of a consolidation database
All of these short-term recommendations have since been successfully adopted. Long-Term: - 66 -
Extending the new classification throughout defence Enhancing Individual Running Ledger Accounts (IRLAs), which are systematic controls Introducing an effective bank reconciliation system
It was found that while the new classification has been successfully introduced throughout CGDF, neither the enhanced IRLAs nor bank reconciliation system have yet been addressed.
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Annex A: Interview List
Postal Department
HPO Sadarghat
CAO Officers
CGDF CGA
Mr S.M. Abdus Salam Direct General Mr Alauddin Ahmed Additional Director General Accounts Mr Mansur Ali Shaikh Director of Accounts Mr Shafi Uddin Accounts Officer Mr Khaja Mainuddin Deputy Postmaster Mr Shafiur Rahman Director Planning Mr Abu Taleb Assistant PMG cum Post Master Mr Asadullah Khan Assistant Post Master Mr Hafijur Rahman Treasurer Mr Golam Mowla Junior Accountant Mr Motiar Rahman Budget Assistant Mr Mazibur Rahman Establishment Clerk Mr. Abu Naser, Dy Chief Accounts Officer, Foreign Affairs Mr. Shamiran Kumar Dutta, Accounts Officer, CAO, Foreign Affairs Mr. Anwar Hussain, Supt. CAO, Foreign Affairs. Mr. Uttam Kumar, CAO Ministry of Communication Mr. Monwar Hossain, AAO, CAO, Communications Mr. Salahuddin, CAO, Ministry of Public Works and Housing Mr. Chayan Kumar Das, CAO, Postal & T&T Mrs Shireen Sultana CAO, Forest and Environment Mr Abdur Rouf, CAO Local Government Rural Development (PHE) Mr. Zahidul Haque, Joint CGDF Mr. Moqsood Ali Chowdhury, AAO, CGDF Mr. Abdur Rashid, Deputy CGA Mr. Shabbir Ahmed Khan, AAO Mr. Neaz Mohammed Khan, AAO
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Annex B: Postal Department Balance Sheet - Postal Department as at June 2002 2000-2001 Liabilities Government of Bangladesh for capital investment in the fixed assets of the department (Contra) Sundry Creditors: Post Office Savings Bank Saving Certificates Postal Life Insurance and annuity fund General Provident Fund Post Office Welfare Fund Government Servant Benevolent Fund Government Servant Group Insurance Suspense Postal Deposits Postal Renewal Reserve Fund Remittance 15156858 35294883 600639 271844 5882 7805 439 217672 -216921 54544 12422109 65220719 19238654 43099740 772315 277646 6447 12154 1037 217672 -70267 54544 3456206 68526353 65220719 68526353 Taka 000 2001-2002 Taka 000 Assets Fixed Assets: Buildings, Railway, Mail vans and Machinery Sundry Debtors: Money Order Advances recoverable from employees and department Cheques and Bills Cash in hand (departmental cash control) Accounts with Government of Bangladesh 678772 -297192 75598 338214 63020362 451812 -296845 107194 326212 66477775 2000-2001 Taka 000 2001-2002 Taka 000
1404965
1460205
1404965
1460205
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Annex B: Postal Department

Comparative figures from Postal Balance Sheet as at June 2002 and Finance Accounts 2000-01 As per Finance Accounts Taka 000 Liabilities Post Office Savings Bank Postal Life Insurance and annuity fund General Provident Fund Post Office Welfare Fund Postal Deposits Postal Renewal Reserve Fund Assets Fixed Assets: Buildings, Railway, Mail vans and Machinery Inland money Orders Foreign Money Orders Total Money Orders (Normally liability) Cash in hand 21,883,956 754,539 203,687 2,534 195,360 42,215 15,156,858 600,639 271,843 5,882 -216,921 54,544 6,727,098 153,900 -68,156 -3,348 412,281 -12,329 31 20 -33 -132 211 -29 25,902,879 937,253 235,307 5,747 191,400 42,253 19,238,654 772,314 277,646 6,447 -90,267 54,544 6,664,225 164,939 -42,339 -700 281,667 -12,291 26 18 -18 -12 147 -29 As per Postal B/S Taka 000 Difference Taka 000 Difference as % of Finance Account Balance As per Finance Accounts Taka 000 2001-02 As per Postal B/S Taka 000 Difference Taka 000 Difference as % of Finance Account Balance
1,404,965
1,404,965
1,460,205
1,460,205
344,956 -462,863
728,282 -686,070
-117,907 152254
678,772 338213
-796,679 -185959
676 -122
42,212 101065
451,810 326212
-409,598 -225147
-970 -223
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Annex C: T&T Department
Balance Sheet T & T Department as at June 2002 2000-2001 Liabilities Capital Investment Sundry Creditors: General Provident Fund T & T welfare Fund T & T Renewal Reserve Fund Miscellaneous Deposits 1,725,874 788 1,658,871 2,349 1,630,693 788 1,688,502 8,351 Taka 000 32,087,513 2001-2002 Taka 000 40,807,846 Assets Fixed Assets Sundry Debtors: Store Surplus Advances Recoverable Permanent Advances Cash Accounts with Government of Bangladesh : Remittances Profit & Loss 1,265,798 408,077 252 170 3,611,283 6,594,752 43,967,845 1,360,542 403,505 248 183 351,008 10,861,084 53,784,416 2000-2001 Taka 000 3,2087,513 2001-2002 Taka 000 40,807,846
Profit / Loss
8,492,450 43,967,845
9,648,236 53,784,416
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Annex C: T&T Department
Comparative figures from T & T Balance Sheet as at June 2002 and Finance Accounts
2000-01 As per Finance Accounts Taka 000 As per T&T B/S Taka 000 Difference Taka 000 Difference as % of Finance Account Balance As per Finance Accounts Taka 000
2001-02 As per T&T B/S Taka 000 Difference Taka 000 Difference as % of Finance Account Balance
Liabilities Capital Investment General Provident Fund T & T welfare Fund T&T Renewal Reserve Fund Miscellaneous Deposits Profit / Loss
Assets 31,674,81 4 32,087,51 3 -412,699 -1 40,205,560 40,807,64 6 -602,086 -1
799,744 -4,663
1,725,874 788
-926,130 -5,451
-116 117
963,235 1,863
1,630,693 788
-667,458 1,075
-69 58
1,412,009 671,881 8,492,450
1,658,871 2,349 8,492,450
-246,862 669,532 0
-17 100 0
1,435,506 563,785 11,811,08 4
1,688,502 8,351 9,648,236
-252,996 555,434 2,162,848
-18 99 18
Fixed Assets Cash
31,674,81 4 203,400
32087513 170
-412,699 203,230
-1 100
40205560 397855
40807846 183
-602,286 397,672
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Draft Departmental Ministries

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Draft Departmental Ministries

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Bangladesh Financial Management Reform Programme

Government of Bangladesh Financial Management Reform Programme

Tel: 8110134-7 Fax: 880-2-8117968 E-mail: fmrp@bol-online.com Web: www.fmrp.org

Report on Problems in Departmental Ministries

Report on Problems in Departmental Ministries

Report on Problems in Departmental Ministries

Report on Problems in Departmental Ministries

Full Yes No Independent of CAO/DAO Remittance Account Monthly initial account

Full Not allowed No Independent of CAO/DAO Settlement Account None

Report on Problems in Departmental Ministries

Common problems of Departmental Ministries

Report on Problems in Departmental Ministries

Report on Problems in Departmental Ministries

Report on Problems in Departmental Ministries

Suspense Account & other cash remittance

Report on Problems in Departmental Ministries

Report on Problems in Departmental Ministries

Railway Postal BTTB

3,508,250 564,650 15,448,170

Report on Problems in Departmental Ministries

Services on behalf of other departments

Report on Problems in Departmental Ministries

Report on Problems in Departmental Ministries

Report on Problems in Departmental Ministries

Alpha Numerical Coding Structure of Postal Department

Report on Problems in Departmental Ministries

Data Entry Sheet

Report on Problems in Departmental Ministries

Report on Problems in Departmental Ministries

Relations with the Banking Treasury

Report on Problems in Departmental Ministries

Report on Problems in Departmental Ministries

Post Office / Head Post Office

Post Office / Head Post Office

Head Post Office

Head Post Office

Monthly Initial Accounts

Money Order Section Matching of money orders issued and cashed

Reconciliation of money order figures

Report on Problems in Departmental Ministries

Report on Problems in Departmental Ministries

Receipt Taka 000s 3,720,211 357,434 3,235,089 758,424 3,821,062 624,695

1999-2000 2000-2001 2001-2002

Report on Problems in Departmental Ministries

1999-2000 2000-2001 2001-2002

Report on Problems in Departmental Ministries

Opening Balance Taka 000s 19,533,127 19,730,259 21,242,221 21,883,956

Deposits Taka 000s 7948,490 9,861,066 11,769,371 17,245,116 46,824,043 11,706,010

1998-1999 1999-2000 2000-2001 2001-2002 Total over 4 years Average

Report on Problems in Departmental Ministries

Report on Problems in Departmental Ministries

Sale of ordinary stamps reported Taka 000s

10,631 4,015 -1,121 -2,845 4,297 -4,030 10,947

Report on Problems in Departmental Ministries

Balances on 3oth June 2002

As per CGAs Finance Account

Report on Problems in Departmental Ministries

Report on Problems in Departmental Ministries

Report on Problems in Departmental Ministries

Report on Problems in Departmental Ministries

Bangladesh Telephone and Telegraph Board

Report on Problems in Departmental Ministries

Report on Problems in Departmental Ministries