There is no denying the fact that the Accounting operation of Bangladesh Government sometimes may involve more than one Department. A government department may take services of another servicing department who will charge the former department for the services rendered. In many cases the service charge are accounted for as book transfer or in other word, departmental transfer. Some of the departments now charge and the payments are made by cash. The procedures to be followed for departmental transactions are discussed here. The main purposes of this note are:
1) to describe the procedure to be followed for Inter-Departmental Transfers;
2) to show some common adjustments to be made at the year end with examples, and
3) to discuss some common errors in classification and illustrate how to correct those errors.
Inter-Departmental Transfers
A Department of the Government may make charges for services rendered or articles supplied by it and the procedures to be followed in recording such charges are as follows.
Payment shall be required in all cases where a Department of the Government renders services or makes supplies to a non-Government body or institution or to a separate fund constituted as such inside or outside the Public Accounts, unless the Government by general or special order gives direction to the contrary. For example, an autonomous body may hire a building of the Public Works Department of the Government. In this case the former body shall have to pay for the use of the government building.
Relief in respect of payment for services or supplies given to any body or fund should ordinarily be given through a grant-in-aid rather by remission of dues. Sometimes the autonomous body gets grant-in-aid from the Government to run its affairs.
For the purpose of inter-departmental payments, the Department of the Government shall be divided into Service Departments and Commercial Departments according to the following principle:
1. Service Departments: These are constituted for the discharge of those functions which either (a) are inseparable from and form part of the idea of the Government, or (b) are necessary to, form part of, the general conduct of the business of the Government.
Examples of the first classes are:
Department of Police, Education, Health and Family Welfare, Forest, Defence.
Examples of the second classes are:
Department of Survey; Printing, Stationery, Forms and Publication; Public
Works.
2. Commercial Departments or Undertakings: these are maintained mainly for the purposes of rendering services or providing supplies, of certain special kinds, on payment for the services rendered or for the articles supplied. They perform functions that are not necessarily Government functions. They are required to work to a financial result determined through accounts maintained on commercial principles.
Generally, a Service department shall not make charges against another Department for services or supplies that fall within the class of duties for which the former Department is constituted.
The following exceptions to the rule have been authorised:
(a) The Forest Department may charge any other Department for vegetable, animal or mineral products extracted from a forest area.
(b) The cost of additional Police Guards supplied to a project, while under construction, may be debited to the project concerned.
A Commercial Department or undertaking shall ordinarily charge and be charged for any supplies and services made to or rendered to, or by other Departments of the Government.
Defence Services shall charge and be charged for services rendered and
supplies made to or by other Departments, unless in particular cases, Government in consultation with the C&AG, have decided that the inter-Departmental adjustment would be unsuitable and undesirable.
Payment of amounts due by one Department of the Government to another shall ordinarily be made by book transfer except when such transfers do not suit the methods of accounts or of business adopted by the receiving Department. Any question of doubt or dispute arising in connection with the interpretation of the Directions in this Chapter will be decided by the C&AG with the approval of the President.