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RHD Operational Procedure – Management Services Wing
 
Audit and Accounts - Accounts
 
OP/AA/2.2 - Distribution of Final Budget Allocations
 
Purpose and Scope :

This procedure covers the process for the management and overseeing of the distribution of all final budget allocations to HQ and field offices for both the revenue and development budgets.
 
Definitions :

See also OP/AA/2.1.

RHD Budget Committee - An internal RHD body drawn from the senior officers involved in the RHD budgetary process, which aims to help facilitate a more systematic and better co-ordinated approach to all areas of the Budget process within the Department to ensure that the limited funding available is directed to the areas of most need in an efficient and timely manner.

Budget Allocations - In this context refers to the individual allocations made to divisions and circles by the Chief Engineer once he has been notified of the final budget allocation for RHD as a whole.

Distribution - the notification of individual allocations comes in the form of a written Budget Distribution Order, approved by the Chief Engineer and specifying the individual amounts budgeted for spend in the current financial year only. The individual distributions are initially made to the ACEs in charge of the Circles and/or Wings. They in turn distribute further breakdowns of their allocations to their operational units in the individual divisions.
 
Responsibility :

Superintending Engineer - Maintenance Circle – is responsible for:

· review the Revenue Budget allocated to RHD and ensure it is consistent with the Medium Term Budgetary Framework, with the breakdown supplied with the budget submission, and with RHD objectives.

· ensure appropriate information required for internal distribution of the Revenue Budget allocation is available to the RHD Budget Committee according to the timetable and the formats prescribed by the Committee.

· ensure any adjustments to individual allocations are properly recorded and explained so overall allocation is not affected by individual changes in level of allocation. All appropriate supporting information and calculations must be supplied to the Budget Committee before approval of the final listing.

Superintending Engineer - Planning & Programming Circle – is responsible for:

· review the Development Budget allocated to RHD and ensure it is consistent with the Medium Term Budgetary Framework, with the breakdown supplied with the budget submission, and with RHD objectives.

· ensure appropriate information required for internal distribution of the Development Budget allocation is available to the RHD Budget Committee according to the timetable and the formats prescribed by the Committee.

· ensure any adjustments to individual project allocations are properly recorded and explained so overall allocation is not affected by individual changes in level of allocation. All appropriate supporting information and calculations must be supplied to the Budget Committee before approval of the final listing.

RHD Budget Committee - responsibilities are:

· it’s principal responsibility is to recommend the proposed RHD internal budget distributions for approval by the Chief Engineer, RHD.

· the Budget Committee should agree and prescribe the timetable for the distribution of the RHD budget allocations throughout the RHD. In addition, they must prescribe the formats to be adhered to by the Superintending Engineers (Maintenance, Planning & Programming) for their proposed budget distribution.

· the Committee must satisfy itself that the budget distribution arrangements are followed by all concerned parties and that individual allocations are notified to the spending divisions as efficiently as possible. This will involve regular review of the existing processes and procedures undertaken during the distribution round, and the identification of specific weaknesses and areas where improvements can be made to enhance the quality of the overall process. The Committee should issue it’s guidelines for efficient budget distribution (within limitations for approval by the Chief Engineer), which should be followed subsequently for the RHD budget distribution.

· the Committee must review the proposed internal distributions for both budgets presented by the SEs and ensure these are consistent with the budget submission breakdowns, with the Medium Term Budgetary Framework, and with RHD objectives. They must also be satisfied that the proposed distributions have been prepared without substantial deviation from the approved guidelines. This should facilitate a rational distribution of budgetary allocations to the appropriate RHD projects and activities.

Areas of involvement for the RHD Budget Committee, regarding internal budget distribution include:

· ensuring timeliness & quality of information provided for individual budget distributions by exercising a ‘quality assurance’ role over all aspects of the distribution process before the recommendations are passed to the Chief Engineer.

· ensuring mutually dependant activities are reflected (and are consistent) in the distributions for both the Revenue and Development budgets.

· regular review of the procedures for breaking down budget allocation among RHDs activities and ensuring that all measures adopted are consistent with GoB regulations.

· ensuring full co-operation with the Office of the Director, Audit & Accounts and with the Financial Management Unit on all issues relating to the budget distribution.

Divisional Officer (e.g. EE) - The Divisional Officer must satisfy himself that all amounts included in the budget allocation received have been verified against the planned physical works concerned and the proposed expenditure is adequately profiled within the appropriate financial period. He must also manage the breakdown of his divisional allocation among the activities planned in all the sub-divisions within his area of jurisdiction.

He must satisfy himself as to the accuracy and completeness of the final allocation, and be able to reconcile any discrepancies and variations between this document, the original submission and any other draft allocations, which may have circulated.

He must ensure the budget as allocated is transparent (all individual budgeted amounts are clearly defined, accurately calculated and verifiable in relation to the physical works or activities proposed). He must also ensure all amounts are properly coded in line with the classification structure in use (internal and external) and that overall allocation is within the pre-determined cost limits.

Subsequently, all Divisional Officers must provide monthly consolidated summaries of receipts and expenditures from their division. These returns must be consistent with the allocation received for the year.

Divisional Accountant - The Divisional Accountant will assist the Director, Audit & Accounts in the clarification or confirmation of any issues arising during the distribution of the budget allocation for his division, such as providing details on individual planned activities and proposed activity costings and timeframes. The Divisional Accountant should also assist the Divisional Officer in his activities, as noted above.
 
Method :

4.1 GENERAL

One of the problems traditionally experienced with the GoB budget process as a whole has been lengthy delays before Budget allocations for the new financial year are notified to all users in time to allow classification of actual expenditure.

Technically, Divisional Officers are not permitted to pass expenditure pay-bills unless and until a corresponding Budget allocation is in place under the same accounting code. At present, the timeframe for the finalisation and circulation of the annual budget provision is unrealistic, with approval from Parliament only forthcoming once the new financial year has already begun.

To avoid a situation where essential expenditure cannot be approved for payment or urgent resources cannot be mobilised for essential services, it is critical that all officers charged with the distribution of the Budget allocations for their Department perform this duty as efficiently as possible and take all possible steps to expedite the circulation of Budget allocations to all user areas.

A major aid to efficient and timely disbursement of budget allocations will be full adoption of a Medium Term Budgetary Framework involving a rolling plan for all budgetary expenditure, which can conveniently be matched with budget plans and original submissions. The computerised implementation of this framework will permit a much more rapid response by the RHD to the full circulation of individual divisional budget limits once the overall allocation is received.

4.2 PREPARE DISTRIBUTION PROPOSAL

The total RHD budget allocations (Revenue and Development budgets) are formally notified by the MoC, with summary totals, capable of allocation on the basis of the appropriate budget codes.

The Director, Audit & Accounts should scrutinise this document to verify the total budget allocations against the budget submissions for the Revenue and Development budgets.

He should then convene a meeting with the two Superintending Engineers (Maintenance, Planning & Programming) to agree a preliminary breakdown of the total budget allocation according to the Revenue budget sub-code structure and by individual division, zone and circle. This should reconcile to the budget submission, and consider the implications of any cuts relative to that submission. (This should also be checked to ensure the proposed breakdown equals the total allocation). This breakdown must be supported by a reconciled further breakdown to the level of the individual divisional offices within each zone.

The Director-Audit & Accounts must be satisfied that the preliminary breakdown of the RHD’s total allocation reconciles and is consistent with the RHD budget submission and with the Medium Term Budgetary Framework. He should convene a meeting of the RHD Budget Committee to discuss and finalise this Distribution Proposal, which will be submitted to the Chief Engineer for approval.

The Director-Audit & Accounts must ensure that all members of the Budget Committee are provided with this Distribution Proposal (and all appropriate supporting calculations and detail), well in advance of the Budget Committee meeting, to allow sufficient time for adequate review prior to the meeting.

4.3 FINAL DISTRIBUTION PROPOSAL

When the Distribution Proposal has been amended as necessary and agreed by the Budget Committee, the Director-Audit & Accounts should again scrutinise this and carry out a final reconciliation. This reconciliation will verify that this distribution is consistent with the individual budget submissions for both the Revenue and the Development budgets. He should also satisfy himself again that the breakdown in this Distribution Proposal agreed by the Committee reconciles and is consistent with the total RHD budget allocation and the Medium Term Budgetary Framework. He should then forward the proposal to the Chief Engineer for approval.

If any amendments are required to this proposal then it should again be referred to the Budget Committee, until such times as the Committee and the Chief Engineer agree on the Final Distribution Proposal.

The Director-Audit & Accounts should then ensure this is document is authorised: (that it is attested by the signatures of the Chief Engineer and the Chairman of the RHD Budget Committee). Copies should then be passed to the Superintending Engineers (MC & PPC) who prepare individual letters of distribution which communicate the allocation to each Division Officers and Project Directors in the RHD

Before these letters are issued, they should be passed to the Director-Audit & Accounts for a final reconciliation with the totals and the breakdowns specified in this Final Distribution document. The letters of distribution will then be issued by the Superintending Engineers. This letter then acts as the legal sanction for incoming expenditure by each Divisional Officer or Project Director. The Director, Audit & Accounts should then produce a final schedule, detailing these breakdown agreed and should add his signature beside each of the individual amounts as a final check against the values being notified in the letters of allocation.
 
References :

a) General Financial Rules

b) Central Public Works Account (CPWA) Code

c) Treasury Rules and Subsidiary Rules

d) Account Code (Volume III)

e) Classification Chart of the Government of Bangladesh (November 1997)

f) Financial Management Reform in the RHD and the role of the FMU (Inception Report - Mar 2001)

g) Project Monthly progress reports
 
Procedure Flowchart :

 


 


 

 

For duties associated with each grade of personnel see

 

Updated on : 1/1/2004

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