Thoughts and perspectives as a former Finance Officer

SB SUBBA

In pursuance of the policy of financial decentralization and to ensure timely release of payments to contractors, work charged personnel and muster roll employees of regular gangs under various Works Departments, the Government issued instructions vide Notification No. ___ dated ___.

1. Withdrawal of self-drawing powers has hitherto vested with the Works Departments.

2.  All payments related to works bills and entrusted works of the Works Departments shall henceforth be processed and released by the respective District Treasury and Pay & Accounts Office pertaining.

3. Objective

The primary objective of this decentralization is to:

(a) Ensure prompt and transparent release of payments

(b) Reduce delays caused by centralized payment systems

(c) Strengthen financial discipline and treasury control

(d) Facilitate real-time monitoring of works expenditure at the district level.

Accordingly, adequate manpower was to be positioned in the District Treasury & Pay and Accounts Office. The posts of one additional Deputy Chief Pay & Accounts Officer along with other officers and supporting staff were created.

In addition to the already existing Deputy Chief Pay & Accounts Officer (Civil), a new Division for works was brought into operation.

As the apex of these two divisions, the overall technical and administrative head of the district was to be the Chief Pay & Accounts Officer of the respective district.

Following the issuance of the notification, the Chief Pay & Accounts Officers for the four districts were posted. Thereafter, the Deputy Chief Pay & Accounts Officers, other Officers and staff required to man the Works Division of the Treasury Office were also appointed.

I was posted as the Chief Pay & Accounts Officer, East District, Gangtok. The Deputy Chief Pay & Accounts Officers, other officers and staff were posted in different batches.

The mandate was to establish the Works Division with all required minganpower to ensure smooth processing and payment of works bills.

The assignment proved quite challenging, both physically in terms of setting up a new establishment within a very short time frame and intellectually also, in discharging the substantial responsibilities with inexperienced hands managing the works accounts.

With great difficulty, office premises were hired in a private building, as no space was available in the District Administrative Centre, Gangtok. The offices were established on a war fooling procuring furniture and other logistics for the officers and staff. The required books of  accounts were created and maintained. A comprehensive official system to regulate the receipt, processing, pre-checking, passing and payment of works bills was developed. Procedural guidelines for the payment of works bills were prepared and circulated to the new officers and staff.

From the second week of August 2003, works bills began pouring in from various departments. The hitherto self-drawing departments were uncooperative, as their intention was to reverse the Government’s decision. Even contractors and suppliers were aggressive and uncooperative. Nevertheless, the first test of efficiency and patience came with the smooth handling of the initial rush of works bills and payments during December 2003. It marked the first victory against the unhappy departments over withdrawal of their self-drawing powers.

The officers and staff were briefed and made aware of the new procedures and systems for handling works bills and managing the pressure of public demands.

Any bills that were incomplete or not in accordance with the relevant rules were immediately sent back to the concerned departments for necessary corrections and compliance. To avoid unnecessary delays, the circulation of bills within the Works Division was kept as short as possible. This system left hardly any room for grievances and even dissatisfied departments eventually accepted its merits. The following were the key decisions and actions implemented for the betterment of public welfare and to rectify issues in the Government accounting system:

1.      Timely disposal of bills through the establishment of a robust in-house system.

2.      Thorough pre-checking of bills without any external pressure – a practice that had sometimes been compromised under the previous self-drawing system.

3.      Abolition of the temporary advance system – Under the erstwhile self-drawing system, the temporary advance mechanism was widely prevalent. Payments for salaries of work-charged employees, regular gang muster roll workers in Works Departments, and casual muster roll labourers engaged for departmental works were made as temporary advances, as defined in the Public Works Code. In this system, the final expenditure was debited only after disbursement upon obtaining acknowledgement from the payees.

Until adjusted, these temporary advances were treated as cash in hand within the departments. Consequently, the closing balance of departmental cash often amounted to huge sums, exceeding thirty percent of the State’s total budget. Maintaining such substantial cash balances outside the Government treasury contravened the provisions of the Public Works Code and financial rules, leading to irregularities and disrupting planned programmes. Such a situation severely depleted the State Government’s resources, adversely affecting the smooth execution of its regular budget. Considering the serious implications of the former temporary advance system, as well as the anticipated practical challenges for treasury officers, I took personal initiative to abolish the imprest and temporary advance mechanisms in the newly established Works Division of the Treasury and Pay & Accounts Office. This step represented a significant measure in safeguarding the State exchequer, as would be evident from a thorough analysis.

4. Introduction of Labour Clearance Certificate for departmentally executed works

The requirement of a labour clearance certificate for processing bills related to departmentally executed works was initiated by the undersigned and subsequently adopted and introduced by the Government. This measure was prompted by the extensive engagement of labourers in the execution of works by various departments and the imperial.

The following measures are recommended to the State Government for system improvement in the public interest and for the benefit of the people of the State:

1. Review of the practice of directly charging stock purchases to works heads in strict adherence to the codified procedure of the Public Works Code. Even when stock materials are exceptionally purchased by directly charging to a work head—a practice not voluntary  permissible—such purchases must be limited to quantities that can be fully consumed within the same financial year, with corresponding adjustments completed within that year. However, there has been a long-standing practice in the Works Departments of procuring bulk stock materials by directly charging them to capital works heads. These materials are often not fully consumed within the financial year, rendering expenditure as in fructuous and the very purpose of the voted appropriation.

The net effect is non-achievement of the objectives outlined in the budget estimates approved by the Legislature. furthermore, crediting the original works head, actually inflates budgetary operations beyond the amounts authorized by the Legislature. Such bulk purchasing of annual requirements, followed by transfer to other works, constitutes an irregularity.

To address these issues while ensuring Timely availability of stock materials for speedy progress of works and thereby enabling timely delivery of intended public services the operationalization of a stock suspense accent is essential.