Budgetary Control

Objectives of Budget
The key objectives of proposed budgeting system are -
a)   to ensure budgetary control
b) to provide an estimate of the funds needed for the project and the time when such funds are required.
c) to set target, analyse variance and fix accountability.
d) to provide a basis for periodical monitoring.
 
Budget Period.
Budget shall be prepared for the financial year i.e. April to March of every year. The budget shall be further divided in to quarterly budgets. This would enable comparison of the quarterly budgets with the quarterly IUFRs which will help in monitoring actual progress against planned estimates and conducting variance analysis as well as in preparation of future budgets
 
Preparation of budgetary estimates
The Budgetary Estimate (B.E.) for the project is prepared for each financial year on the basis of guidelines of Steering Committee and the annual work plan.
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Objectives of Budget
The key objectives of proposed budgeting system are -
a)   to ensure budgetary control
b) to provide an estimate of the funds needed for the project and the time when such funds are required.
c) to set target, analyse variance and fix accountability.
d) to provide a basis for periodical monitoring.
 
Budget Period.
Budget shall be prepared for the financial year i.e. April to March of every year. The budget shall be further divided in to quarterly budgets. This would enable comparison of the quarterly budgets with the quarterly IUFRs which will help in monitoring actual progress against planned estimates and conducting variance analysis as well as in preparation of future budgets
 
Preparation of budgetary estimates
The Budgetary Estimate (B.E.) for the project is prepared for each financial year on the basis of guidelines of Steering Committee and the annual work plan.
Preparation of budget is a bottom-up exercise. All the participating agencies will prepare annual budget based on the activities planned to be implemented under MACP during each financial year. Preparation of the Annual Budget will be guided by the Work plan and Procurement Plan of each participating agency under MACP. The spending units will submit their budget proposals to the respective PIUs. The PIUs will submit their budget proposals to the respective departments in Mantralaya. Each PIU will submit consolidated budget to PCU. After the budget from all PIUs reaches the PCU a State level workshop of all concerned line departments/autonomous agencies including district level officers of line departments would be organised and after discussions, it would be consolidated by the PCU and it will send to DOCM for approval. Thereafter the Consolidated Project Annual Work Plan should be submitted to the World Bank by November 30 every year for review and approval. The consolidated budget with department wise provision will then be considered by the Planning and Finance Department, with the concurrence of DOCM. The consolidated budget for the project will then be placed before legislature for approval. In the State budget document the entire budget for MACP will be shown as a separate item under the budget of DOCM with a appropriate break up After approval of the budget by the State Government, the Dept. of Planning & Finance, GOM will allocate provisions as per the budget to the Department of Cooperation and Marketing.
Once the budget is approved by the State Government, the DOCM will allocate provisions as per the budget to the respective line departments. The budget allocation orders will give detailed break ups of district-wise provisions under each activity. The copies of the Budget allocation order will be given to the Secretaries of line Departments, PCU and PIU. The Department Secretaries will in turn allocate it to the District Offices of all concerned line departments through their respective controlling officers. This order will also be published on the website of MSAMB.
The time table for preparation of budget estimates at each level and its submission to the higher level is given below.
No.
Level
Budget send to
Latest Date
1.
Accounting center at District level
PIU
30th Aug
2.
PIU
PCU / Respective Mantralaya department
15thSept
3.
PCU
Co-operation & Marketing Department
15th Oct
4.
PCU
World Bank
November 30
Cash Flow and Budget Release
In accordance with the prevalent BDS system in the State, Cash Flow which is a part of the BDS should be prepared by all the accounting centres, the PIUs and the PCU before the beginning of the financial year. This cash flow which would be according to the approved budget plan would reflect the component wise, month wise expenses of the project for that year. Care should be taken while proposing the cash flow, as the actual budgetary allocation in BDS would be on the basis of the initially proposed cash flow. Accuracy in planning of cash flow would ensure that the grants are expended as per the fixed timetable and this would enable a fiscal discipline in implementation of the project.
It should be noted that the budget release path will be exactly the reverse from that of the path of budgetary estimates submission.
 
Revised Budget Estimates
Though the B.E. have been prepared and planned meticulously, in practice due to various reasons there may be a necessity of revision of the budgetary estimates. This shall be through the mechanism of the prevalent Govt. procedures in the form of
  • 4 monthly revised budget estimates
  • 8 monthly revised budget estimates
Time table for submission of revised estimates to higher level is given below.
No.
Level
Sent to
4 monthly
8 monthly
1
Accounting Centre at District level
PIU
30th Aug
5th Dec
2
PIU
PCU/ Respective Mantralaya Dept.
15th Sept.
 
20th Dec
3
PCU
Co-operation & Marketing Dept
1st Oct
5th Jan
Reappropriation & Redistribution of budget
The re-appropriation of budget between one major head, subhead and minor head to another will be as per the State Govt. rules and procedures. The Principal Secretary Cooperation & Marketing will be empowered to do redistribution of budget among the three line Departments after the recommendation of Project Director of MACP.
However, for re-appropriation in budgetary allocation between the activities for a particular accounting center the respective implementing unit shall the authority to do so. However the respective implementing unit will be responsible and see to it that the limits laid down in the cost tables for a particular activity are adhered to within the project time frame.
 
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