Tuesday, December 15, 2015

Accounting of Public Spending

Our Honorable Chief Minister of Delhi, announced a special seven day drive of removing Malba, dust and garbage in case he receives photographs through a special mobile application. Huge amounts
were spent on the entire exercise specially on advertisement. Delhi did not see any result and the outcome couldn't be measured, in the absence of accounting, Management Information System, proper checks and control and no provision for monitoring of outcome.
The Chartered Accountant profession, hereby, volunteers setting up of the entire system of accounting of public spending including:-

  • A transparent pre sanction detailed techno economic feasibility study
  • Disclosure of the entire break up of plan, technical specifications, description of Bills of Quantity, including standard service level, quality levels and other terms or condition proposed to the potential bidders through a transparent electronic public procurement process.
  • Post sanction implementation monitoring including accounting, internal control, delegation of powers and record keeping of actual deliveries against the committed deliverable by measurement of actual physical outcome. A regular step by step website disclosure and invitation of public questioning will ensure that Bill of Quantity (BOQ) is adhered in letter and spirit.

Public Accounting in a transparent manner and its disclosure to the entire democracy is mandatory for structured and monitor growth. The government has specified detailed disclosure, transparency requirement beside compliance's for the private sector. The similar accounting disclosure requirement as well as internal control mechanism is to be put in place for the Central Government, State government and local bodies. The various social schemes, planned expenditure as well as unplanned expenditure needs to be properly accounted for, Management Information System to be put in place with clear cut governance process. In the absence of above, the public funds will always be misused. For Example- Education Cess meant for modernization and infrastructure had been mainly spent on mid-day meal for last several years. The Institute of Chartered Accountants of India (ICAI) can provide a framework and organise Chartered Accountants into groups to provide necessary technology including hand holding of the  implementation .This will ensure eradication of mad competition in the tendering process and will provide suitable remuneration for professional services and high quality result to the Central Government, State Government, Indian Railways, National Highway Authority of India, Public Sector Units (PSUs) and all other similar initiative & schemes of government. The exercise can be funded to ICAI body for onward Chartered Accountant groups to support the exercise professionally.

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