Accounting Policies and Procedures Manual - FABS

1 Government of Pakistan Accounting Policies and Procedures ManualAccounting Policies and Procedures Manual Table of Contents _____ Issued 13-Feb-99 1 appmcover Table of Contents 1 Introduction Purpose of the Manual Structure of the Manual Reader Guidance Authority, Applicability, Distribution and Maintenance of the Manual 2 Overview Introduction Organisational Structure of the Accounting System The Accounting System Outline of Chapters Abbreviations Definitions 3 Budgetary Control Introduction General Policies Detailed Procedures Specific Budgetary Procedures 4 Expenditures Introduction General Policies Accounting Policies Accounting for Expenditures Detailed Procedures Salaries and Wages Pension Payments General Provident Fund Contractor/Work Payments Loans And Advances Overseas

2 Payments Grants-in-aid, Contributions etc. Assignment Account and Personal Ledger Account Maintenance of Permanent Accounting Records 5 Receipts Introduction General Policies Accounting Policies Accounting for receipts Detailed Procedures Treatment of specific classes of receipt Accounting Policies and Procedures Manual Table of Contents _____ Issued 13-Feb-99 2 appmcover 6 Bank Reconciliation Introduction Overview General Policies Daily Procedures Monthly Procedures 7 Financial Reporting Procedures Introduction General Policies Year-end Accounting Policies

3 Detailed Procedure 8 Loss and Recoveries of Public Money Introduction General Policies Accounting for Losses and Recoveries 9 Self- Accounting Entities Introduction General Policies Accounting Policies Accounting for Self- Accounting Entity Transactions Detailed Procedures 10 Project Accounting Introduction General Policies Accounting Policies Accounting for Project Expenditures 11 Accounting for Liabilities Introduction General Policy Categories of Liabilities Accounting Policies Accounting Procedures Reconciliation of Liability Records Reporting of Liabilities 12 Transactions Between Government Entities Introduction General Policies Accounting Policies Accounting for transactions between Government entities Accounting Policies and Procedures Manual Table of Contents _____ Issued 13-Feb-99 3 appmcover Detailed Procedures Accounting Policies and Procedures Manual Table of Contents _____ Issued 13-Feb-99 4 appmcover 13 Procurement and Asset Management Introduction General Policies for Procurement Accounting for Stores Fixed Assets Management

4 General Policies for Disposal of Fixed Assets Accounting for Proceeds from Disposals 14 Public Account Transactions Introduction General Policy Accounting Policy Detailed Procedures Reconciliation of Public Account transactions Reporting of Public Account balances 15 Insurance Introduction General Policies Claims Against the Government Accounting Policies 16 General Accounting Introduction Retention of Accounting Records Maintenance of Accounting Records Use of Suspense Account Control of Official Forms and Chequebooks 17 Assignment Accounts and Personal Ledger Accounts Introduction Policies Detailed Procedures Appendix A - Assignment Account/Personal Ledger Account Transactions 18 Forms Form layouts Accounting Policies and Procedures Manual Introduction Issued: 13-Feb-99 Page 1 Introduction Accounting Policies and Procedures Manual Introduction Issued.

5 13-Feb-99 Page Table of Contents Purpose of the Manual Structure of the Manual Reader Guidance Authority, Applicability, Distribution and Maintenance of the Manual Authority Effective date Application Compliance Distribution, maintenance and update Accounting Policies and Procedures Manual Introduction Issued: 13-Feb-99 Page Purpose of the Manual The purpose of this Manual is to set out the detailed Policies and Procedures to be used in Accounting for the Government of Pakistan s financial transactions. Under Article 170 of the Constitution, the Auditor General can prescribe detailed Policies and Procedures in respect of the following: all transactions of centralised Accounting entities specific transactions of self Accounting entities which operate within overall control of the Auditor General staff related payments transactions adjustments of self Accounting entities with the centralised Accounting entities or in between themselves reporting requirements of the self Accounting entities.

6 This Manual contains the detail to accompany the overall framework set out in the Manual of Accounting Principles (MAP). Accounting Policies and Procedures Manual Introduction Issued: 13-Feb-99 Page Structure of the Manual The Manual is structured according to the major financial management activities of the Government. The organisation of the chapters and sections within the Manual is shown in the Table of Contents. The first two chapters provide an introduction and an overview to the Accounting system. The following three chapters cover the core processes of budgetary control, expenditures and receipts.

7 Chapters 6 and 7 cover the supporting processes of bank reconciliation and financial reporting. Subsequent chapters address the Policies and Procedures for supplementary processes and for other financial management activities of the Government. Accounting Policies and Procedures Manual Introduction Issued: 13-Feb-99 Page Reader Guidance There are five levels of heading in the Manual : level 1 - chapter level 2 - section level 3 - sub-section level 4 - direction level 5 - bullet point The organisation of the sections and sub-sections within each chapter is shown in the Table of Contents at the front of each chapter.

8 The layout of each page within this Manual is standardised. The title of the Manual and the name of the chapter are displayed in the top left and right corners of each page respectively. The footer for each page contains the issue date, page number and file reference. The general structure of each chapter within this Manual is standardised, dealing with the subject matter in the following sections (where this structure is inappropriate some chapters omit certain sections or are detailed in a different manner): introduction general Policies Accounting Policies Accounting treatment detailed Procedures Procedures for specific class of transactions.

9 A list of abbreviations and definitions of terms commonly used in this Manual is included for reference purposes. The Appendix includes proformas of the registers and the forms to be used in the application of this Manual . Accounting Policies and Procedures Manual Introduction Issued: 13-Feb-99 Page Authority, Applicability, Distribution and Maintenance of the Manual Authority This Manual is issued under the authority of the Auditor-General of Pakistan, in accordance with Article 170 of the Constitution of Pakistan, read with Pakistan (Audit and Accounts) Order 1973. Effective date The effective date for application of this Manual is the date of issue of the Manual by the Auditor-General.

10 All Accounting entities will have up to two financial years (commencing from 1 July subsequent to the effective date of release) to be in full compliance with this Manual . Application Accounting entities - An Accounting entity is any unit of the Government ministry, division and department, whose principal source of funding is an appropriation from the Government of Pakistan, and which is not an exempt entity (as listed in Schedule 2 of the MAP). There are two types of Accounting entity, namely centralised Accounting entities and self Accounting entities. Centralised Accounting entities - a centralised Accounting entity is any Accounting entity for whom the Accountant-General has primary responsibility for the transaction processing, recording and reporting functions of that entity.