Two state departments have been chosen to kick-start a pilot project to make government accounting sharper and more realistic. For this, the education department and the public works department have been chosen by the state government and the Principal Accountant General.
The Principal Accountant General or PAG is a representative of the nation’s auditor or the Comptroller and Auditor General. The PAG audits accounts of government departments in the state.
The plan is to prepare a road map to implement a more-modern and widely used accounting system – ‘Accrual-based’ system by doing away with the currently used ‘Cash-based’ system of accounting. Most advanced nations follow the Accrual system and the switch over is an initial step to get government departments to change their accounting procedures to keep pace with global accounting practices.
Speaking to dna, a senior PAG official said, “The current accounting system’ records cash transactions of whereas the ‘accrual system’ also records non-cash transactions and gives a more accurate picture of a department’s financial health by factoring in future expenses.”
Citing an example, the official said, “When a person is recruited in a government job, the present accounting system accounts for the monthly salary the recruit will draw. On the other hand, the accrual system considers am entire gamut of financial implications connected to the recruit in future, like training, health benefits, pension.”
This, said the official, ensures that the department’s accounts reflect the future need for money for various transactions. According to officials, a team comprising principal accountant general Minakshi Mishra and the state government’s principal secretary (finance), K Shivaji, are monitoring the pilot project.
The education department and the public works department have been chosen by the state government to kick-start a pilot project to make government accounting more realistic.
The plan is to prepare a road map to implement a widely used accounting system — accrual-based’ system.