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monitoring level, the second group was the accountants and other support staff at the Results achieved
ULBs and the third group identified was District Urban Development-Agency (DUAD). In the he goals of the initiative and the level of their achievement are massive regarding its
first phase, accountants for 131 locations, followed by the second set for 176 locations Teffect. Implementation of common accounting procedures (NMAM/CGMAM) in all
were mobilized for execution of this work. The teams from Directorate and the financial 168 urban local bodies of Chhattisgarh resulted in homogeneity in accounting procedure
resources required for this project were from State Urban Development Agency (SUDA) throughout the State. Maintenance of Fixed Assets Register has been initiated or updated,
constituted under Urban Infrastructure Development Scheme for Small and Medium Towns
(UIDSSMT). The technical resources included the National Municipal Accounts Manual which provides details of all asset owned by ULB. Balance sheets were prepared, which give
the financial position of ULBs. Income and Expenditure accounts were prepared, which help
(NMAM), Chhattisgarh Municipal Municipal Accounts Manual (CGMAM), Tally and the in assessing profitability of the ULB concerned. After preparation of Bank Reconciliation
guidance notes issued by the Institute of Chartered Accountants of India. Statement (BRS), many unidentified transactions were cleared and corrections were made
Process in the books. The accounts, which are not operative for years are identified, and process
uring the planning phase, it was decided that approach to the whole process would for closure of such accounts were initiated. Identification of assets opens new ways for
Dbe goal based. Focus areas were identified and entrusted to different sets of people revenue mobilization such as unused land could be used in various ways to generate
based on their core competence and/or experience. Standardization of the forms, formats revenue.
and procedure was achieved through development of CGMAM based on NMAM. CGMAM
provides detailed procedures and formats for the books and registers to be maintained. It
also provides the procedure for valuation of assets and preparation of Opening Balance
Sheet (OBS). Detailed accounting codes are given to maintain uniformity.
For ensuring the quality and timelines in work, consultants were selected through
e-tendering process from State level. Quality Based Low Cost Method was followed
and committee at state level was formulated to review the work of consultants. Project
Monitoring Consultants were formed at State Level for maintaining the quality of work and
payments to consultants was made through e-transfer.
Identification and valuation of assets and liabilities were carried out by chartered firms for
placing them in balance sheet, updating records and registers, survey, cross checking with
source document and, third party certificate and physical verification of assets. Principle
of rigour and simplicity was followed while drafting the balance sheet. Financial statement
under Accrual Based Double Entry System of Accounting has been prepared for F.Y.2011-
17 till 30 June 2018 and financial statement under Accrual Based Double Entry System of
Accounting has been prepared for F.Y. 2017-18 till 30 November 2018. Updating records and registers
• CGMAM developed by DUAD in line with the NMAM in 2013 and Transferability and Lesson learned
implemented from 01.04.2011
CGMAM epartments handling schemes of Government of India and foreign funded projects
Drequire to follow Accrual Based Double Entry Accounting System as reporting
•The migration started in phased manner. In phase I, 131 Municipal bodies were requirements of foreign funded schemes can be fulfilled by adoption of this system only.
covered. The work was done through independent consultancy firms. Technical
Migration assistance was provided by PMC to these ULBs in Selection of consultants. In case of replication of this initiative, selection of consultants should be made centrally.
RFP should be designed in such a manner that reputed consultancy firms only can
• Remaining 37 Municipal bodies were covered in Phase II. Tendering was participate. Process of selection of consultants and payment should be transparent and
done at DUAD level technically competent persons should do the monitoring. Regarding learning from this
Migration exercise, it is to say that success of client and consultants relationship depends on factors
• After assessing capacity and competence of the Accounting staff of the ULBs, that include proper monitoring of works, sincere efforts by the consultant, transparency
it was found that migration to ABDEAS could only done through independent and timely payments.
Consultants agencies. Decision was taken to appoint Chartered Accountant firms for doing
the migration work. Cash vs accrual basis of accounting are two methods of recording transactions for a business.
Under the cash method of accounting basis, transactions are recorded when cash is received
or paid, under the accrual basis revenue, earnings and expenses are recorded when incurred.
Process flow The accrual method is the preferred method as it complies with the matching principle in
Capacity building of staff of ULBs has been done through detailed handholding and accordance with generally accepted accounting standards, which ensures that expenses are
prolonged training, organizing workshops and training of accounting staff of ULBs on matched revenues.
periodic basis. A set of 121 accountants have been approved to be placed at urban local
bodies to handle the accounting under double entry accounting system, preparation of
registers, preparation of BRS and all other activities to sustain migration to accrual basis. The double-entry system of accounting or bookkeeping means that for every business
transaction, amounts must be recorded in a minimum of two accounts. The double-entry
system also requires that for all transactions, the amounts entered as debits must be equal to
the amounts entered as credits.

74 Amendment Act, 1992 has introduced a new Part IXA in the Constitution, which deals
th
with municipalities in an article 243 P to 243 ZG, which came into force on 1st June 1993. It
has given constitutional status to the municipalities and brought them under the justifiable
part of the Constitution. As per Article 243 W, all municipalities would be empowered with
such powers and responsibilities as may be necessary to enable them to function as effective
institutions of self government.
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