Cash Drill & Disbursement Procedure: A Talk by Gcrout

CASH DRILL & DISBURSEMENT PROCEDURE
A TALK BY
G C ROUT
12 June 2019 G.C.R. 1

CASH DRILL PROCEDURE
• GENERAL PRINCIPLES
• MAINTENANCE OF CASH BOOK
• RECORDING ENTRIES IN CASH BOOK
• MONTHLY CLOSING OF CASH BOOK
• NATURE OF PAYMENTS DEALT WITH
• PROCEDURE FOR OBTAINING THE REQUIREMENT
OF CASH
• ACCOUNTING OF CONTINGENT EXPENDITURE
• AUDIT OF CASH BOOK
• HANDING & TAKING OVER OF CASH
• MRO & TR
• AFL(AGREEMENT FOM OF LABOUR) & DC
• SAFETY & SECURITY OF CASH
• TYPES OF MISTAKES G.C.R.
12 June 2019 2
1) Writing of Cash Book - by Cashier.

2) O.I.C. Cash will exercise direct supervision over all
money transaction(s).
3) Each entry in Cash Book to be initialed by O.I.C.
Cash.
4) All receipts and payments to be entered in Cash
Book.
5) Posting to be done on same day.
6) All Govt. recoveries to be remitted to treasury at
the very first opportunity (once in a week).
7) Money to be utilized for the purpose for which it is
drawn.
8) Extra money to be deposited to treasury.
9) Cash to be kept to the minimum in Cash and Bank.
12 June 2019 G.C.R. 3

1) All payments more than Rs. 500 should be
affixed with a revenue stamp.
2) For all recoveries receipts to be given.
3) Private deposits not to be kept in treasure
chest.
4) Signature to be taken at the time of
payment on the pay bill.
5) All payments to be attested by Officer.
6) Payment to IEs on 7th of the month when
IEs strength < 1000 & by 10th if > 1000.
7) F.O. to be published 3 day’s before
payment.
12 June 2019 G.C.R. 4
DISBURSEMENT OF PAYMENT TO IES .
1) Check roll to be received from LAO.

2) Total amount to be calculated for whole factory.
3) Payment to be made by LDC & above
4) Officer actually making payment to sign each individual item of
cash disbursed.
5) Individual has to sign on the bill.
6) Sometimes witness is also required to sign.
First payment
Cash drawn on 8.3.03 for wages Rs. 1,00,000
Paid at on 8.3.03 Rs. 90,000
Balance due to absentees Rs. 10,000
Second payment
Payment to be made in the presence of Officer

Un-disbursed amount to be returned to treasury.
12 June 2019 G.C.R. 5

PAYMENT OF ABSENTEE IES
• After regular payment particulars of absentee is entered in

acquittance roll.
• Payments subsequently made to such persons will be recorded in

absentee register.
• After all payments are made it will be affixed to the last page of the
acquittance rolls.
• Record to be kept for 35 years.
• Every month a D.C. has to be given for IEs wages.
12 June 2019 G.C.R. 6

Maintenance of the cash book
• Entries on the Dr & Cr sides on any one page on the cash book
should be for the same dates.
• Blank spaces should be ruled diagonally across the page.
• Cash book balance to be checked with physical cash.
• Dr & Cr side to be numbered.
• Bill & voucher No. posting in cash book.
• No overwriting or erasing of entries
• Entries to be scored through & attested by O.I.C. Cash.
• Monthly balance sheet
• Bank reconciliation statement.
• 12GM to sign
June 2019 Cash Book “ Cash counted
G.C.R. and found to be correct”. 7
Recording of entries in the cash book
• Recording of receipts ( Debit side)
i) Cheques sent by LAO to Bankers.

ii)Cash received from the factory’s current account.
iii)
Realisation of Govt. revenues – House rent etc.
iv)Deduction made from establishment on account of absence
without leave etc.
v) Misc. receipts.
• Recording of payments ( Cr. side)
i) Withdrawals from the current A/C

ii) Payment by Cheques.
iii) Disbursement of claims in cash.
iv) Payment into treasury of Govt. Dues.
12 June 2019 G.C.R. 8

1) Monthly closing of cash book
a) Debit side total
b) Credit side total
2) Balance at end of month in Credit side to be reconciled.
a) Bank reconciliation statement
b) Cash column of cash book = physical cash available
3) Balance Sheet.
12 June 2019 G.C.R. 9

NATURE OF PAYMENT
• Payment to GO, NGO & NIEs
• IEs Payment
• G.P. Fund dues.
• T.A. Advance.
• Medical reimbursement
• Contingencies
• Imprest.
12 June 2019 G.C.R. 10

HOW FACTORIES OBTAIN CASH
• LAO , PC of F & A (Fys) – Paymaster for factories.
• Normally RBI cheque is issued by AOs
• Every cheque is supported by a cheque slip.
• 2 cheque slips – one alongwith cheque & one to factory.
12 June 2019 G.C.R. 11

ACCOUNTING OF CONTINGENT EXPENDITURE.
• Every factory is allowed a fixed amount of payment advance.
• Imprest account is maintained under contingencies in cash book.
• Cheques received from LAO is booked in debit sides ( under column

“ CONTINGENCY “
• Daily payment is posted in cash book.
• Bills are submitted to AO for recoupment. In balance sheet,

Imprest fund will appear in Liability & asset side.
12 June 2019 G.C.R. 12

AUDIT OF CASH BOOK

• AO inspects cash book account every
month.
• AO to count cash at the time of Local Audit

& inspection at least twice in a year.
• Objections to be replied within 10 days.
• Corrections to be taken to objections, if

any.
12 June 2019 G.C.R. 13
Handing over & taking over of cash.

• Applicable to
a) GM/Sr GM
b) O.I.C. Cash
c) Cashier
2) The relieving Officer will record a Certificate in the cash book as

under :-
Cash counted ______________ & found to be Rs. ___________
which agrees with the C.B. Balance of date.
3) Certificate to be recorded on disbursement credit side of C.B.
4) Blank space between this certificate & last entry to be ruled
diagonally across the page.
5) Below the certificate the relieved & relieving Officer will jointly sign
6) The relieving Officer will also satisfy himself & then sign a
certificate.
12 June 2019 G.C.R. 14

BANK RECONCILATION STATEMENT FOR THE MONTH OF JANUARY / 2004
01) CLOSING BALANCE AS SHOWN IN BANK

STATEMENT AS ON 31/01/2004 - 1,14,66,580 = 11
02) ADD EXCESS OF CASH BOOK OPENING BALANCE
OVER THE BANK STATEMENT OPENING BALANCE
14,12,149 = 01 a) CASH BOOK OPENING BALANCE
( - ) 1,04,01,480 = 01 b) BANK STATEMENT OPENING BALANCE
------------------------ (-) 89,88,331 = 00
( - ) 89,88,331 = 00
24,78,249 = 11
03) ADD RECEIPTS SHOWN IN CASH BOOK BUT (+) 17,71,413 = 00
NOT AS CREDIT IN BANK STATEMENT: -----------------------
42,49,662 = 11
04) LESS CREDIT SHOWN IN BANK STATEMENT BUT (-) 7,43,565 = 00
NOT SHOWN AS RECEIPTS IN CASH BOOK:- -----------------------
35,06,097 = 11
05) ADD DEBIT SHOWN IN BANK STATEMENT BUT (+) 84,16,774 = 00
NOT SHOWN AS PAYMENT IN CASH BOOK:- -----------------------
1,19,22,871 = 11
06) LESS PAYMENT SHOWN IN CASH BOOK BUT NOT ( - ) 1,12,61,473 = 00
SHOWN AS DEBIT IN BANK STATEMENT -----------------------
6,61,398 = 11
CLOSING BALANCE AS PER THE CASH BOOK (BANK COLMN)
AS ON 31-01-2004:- RS. 6,61,398 =11
12 June 2019 G.C.R. 15
BALANCE SHEET FOR THE MONTH OF JANUARY / 2004
LIBILITIES ASSETS
NGO 1,14,286 = 00 CASH IN HAND 28,768 = 00
NIE 2,34,680 = 00 CASH IN IMP 22,047 = 00
IEs NIL
CASH IN BANK 6,61,398 = 11
IMPREST 75,000 = 00
BILL TO RECOUP 52,953 = 00
TA/LTC 21,999 = 00
R/CHARGES NIL
MISC 2,20,313 = 11
RD 54,257 = 00
E / FUND N I L
GPF 44,631 = 00
------------------ -------------------
TOTAL 7,65,166 = 11 7,65,166 = 11
------------------ -------------------
12 June 2019 G.C.R. 16

REGULARISATION OF LOSS STATEMENT

• OFB POWER
Loss of public money not due to - Rs.50,000 each case
Theft, fraud or neglect
Loss of public money due to theft - Rs.25,000 each case
Fraud or neglect
- Finance concurrence is required
- Regularisation after board of enquiry
• GM’S POWER
Loss of public money not due to - Rs.5,000 each case
Theft, fraud or neglect
Loss of public money due to theft - Rs. 500 each case
Fraud or neglect
- Finance concurrence is required
- Regularisation after board of enquiry
12 June 2019 G.C.R. 17

AUDIT BOARDS
• Quarterly audit
• Iternal audit
• Test audit
12 June 2019 G.C.R. 18

AUDIT BOARDS
(a)Quarterly Audit
• Every three months.

• By Officers of sister factories.
• Check Physical Cash & Cash Book entries.
• All receipts & disbursements are supported by
vouchers.
• All contributions to various funds have been duly
credited to those funds.
• Liabilities are not omitted.
• Assets are not omitted.
12 June 2019 G.C.R. 19

AUDIT BOARDS
(b)Internal Audit
• Once in 6 months by CDA (Fys).

• Check the public fund account.
• Check the cash book.
• Public Fund A/C to tally with cash in hand & cash
in bank.
• If there is any discrepancy then cash accounts are
declared as unsatisfactory.
• It is brought to GM’s Notice.
12 June 2019 G.C.R. 20

AUDIT BOARDS
(c)Test Audit
• Once in 6 months
• They check the work done by Internal
Audit.
• Submit Audit objections to P&P
section.
12 June 2019 G.C.R. 21

BALANCE SHEET
LIABILITIES ASSESTS
IMPREST CASH IN HAND
GO/NGO/NIE --
GPF CASH IN IMPREST
TA/LTC CASH IN BANK
CONT.BILL IMPREST DUE
12 June 2019 G.C.R. 22

DISBURSEMENT CERTIFICATE
Particulars Amt Particulars Amt
1. Advance received from 1. Total Earnings

CDA.
2. Total Amount on account 2. Govt. Recoveries
of wages remitted by MO
but returned
3. Net Amount payable for the month

4. Amount paid on account of wages for the month ----
Supplementary
DA Arrears
PL Bonus
5. Amount paid on account of wages for the month ---- on

account of wages which remained undisbursed in previous
month
Previous month wages Previous month supplementary
Previous month PL Bonus Previous month TPT Arrears
6. Amount paid during the month ---- for labour discharged

during the month. Total paid during the month ----. Balance
paid to the Treasury vide TR No. ---- dated ----
Total Total
12 June 2019 G.C.R. 23

MRO & TREASURY RECEIPT

- Govt. recoveries
- Govt. receipts/Sales Scrap or goods
- Unpaid IEs wages
- To be deposited to RBI through MRO ( military Receivable order)
- MRO No. is given by Cash Office
- MRO is prepared in quadruplicate
- RBI receives this & gives a No. known as TR No.
- One kept in Cash Office
- Three submitted to RBI
- Out of these three

- One for PC of A
- One O/C for RBI
- One returned to Factory
- This copy is sent to LAO for reconciliation with PC of A
12 June 2019 G.C.R. 24

SAFETY & SECURITY OF CASH
• STRONG ROOM PROPERLY GUARDED

• 3 LOCKS ON GATE- OIC CASH-CASHIER-GUARD
• DOUBLE LOCKING SAFE- ONE WITH CASHIER -OTHER WITH
OIC CASH
• CASHIER WITH A SMALL SAFE FOR DAILY HANDLING OF
CASH IN C.O
• OIC CASH TO ACCOMPANY CASHIER TO BANK FOR CASH
• MONEY TO BE TRANSPORTED FROM CO TO SECTION WITH
GUARD
• NO PERSON SHOULD BE ALLOWED WHEN CYLINDERING IS
IN PROGRESS
• AN ARMED GUARD IN C.O ON PAY DAY.
12 June 2019 G.C.R. 25
TYPES OF MISTAKES
PART - I
1. The payment side total is not correct.
2. The totals are not completed on day-to-day basis, but, done later on
with alterations.
3. After the Cash Officer’s attestation, the figures are altered.
4. Cash withdrawals from Bank are not correctly posted in the Cash
Book OR altered after attestations.
5. There are entries of ‘Double’ payments (i.e. One shown as cash
payment the other as if through Cheque/DD).
6. In some cases the total payment, that taken place in more than One
occasion, has been shown, higher than the actual pass figure.
7. While showing the payments of IEs on Absentees Sheets, at places,
the initially entered figures are altered/increased.
8. The liabilities are not shown properly with relevant break-up of each
head.
12 June 2019 G.C.R. 26

TYPES OF MISTAKES
PART - II
9. The figures shown in the liabilities are either fictitious OR imaginary
and not tallied with ‘Brought Forward’ ones.
10. Month ending Closing Balances are not correctly carried forward.
11. There are lot of over-writings on the entries made, instead of
scoring-out and making new entries with initials.
12. At many places the earlier made entries are removed with the help
of blade and new entries are made without any initials, attestations
and supporting vouchers.
13. The reconciliation has not done with the help of Bank Statement
properly.
14. The non-Govt. recoveries are not accounted correctly.
15. The relevant vouchers are not securely kept and in some cases there
are no authenticated vouchers.
12 June 2019 G.C.R. 27

SOME ADVICE
a) 90% of our tension is created by 10% of our carelessness.
b) An error becomes a mistake only when you refuse to correct

it,
c) The best use of today is the foremost preparation for

tomorrow.
d) Behavior is a mirror in which every one displays his own

image.
e) There is a great joy in selfless service.
12 June 2019 G.C.R. 28

BANK RECONCILATION STATEMENT FOR THE MONTH OF
JANUARY / 2004
01) CLOSING BALANCE AS SHOWN IN BANK
STATEMENT AS ON 04/01/2004 - 5,68,75,341
14,13,149 a) CASH BOOK OPENING BALANCE
( - ) 1,04,01,480 b) BANK STATEMENT OPENING BALANCE
------------------------ (-) 89,88,331
----------------------------------------------------------------------------------------------------------------------
4,78,87,010
03) ADD RECEIPTS SHOWN IN CASH BOOK BUT (+) 8,54,888
NOT SHOWN AS CREDIT IN BANK STATEMENT: -----------------------
4,87,41,898
04) LESS CREDIT SHOWN IN BANK STATEMENT BUT ( - ) 14,42,640
NOT SHOWN AS RECEIPTS IN CASH BOOK:- -----------------------
4,72,99,258
05) ADD DEBIT SHOWN IN BANK STATEMENT BUT (+) 30,26,198
NOT SHOWN AS PAYMENT IN CASH BOOK:- -----------------------
5,03,25,456
06) LESS PAYMENT SHOWN IN CASH BOOK BUT NOT ( - ) 16,20,372
SHOWN IAS DEBIT IN BANK STATEMENT -----------------------
4,87,05,084
CLOSING BALANCE AS PER THE CASH BOOK (BANK COLMN)
AS ON 04-01-2004:- RS. 4,87,05,084
12 June 2019 G.C.R. 29

FOR THE MONTH OF JANUARY / 2004
BANK RECONCILATION STATEMENT FOR THE MONTH JANUARY / 2004.
01) CLOSING BALANCE AS SHOWN IN

BANK STATEMENT AS ON 04/01/2004: - 5,68,75,341

14,12,149 a) CASH BOOK OPENING BALANCE

(-)1,04,01,480 b) BANK STATEMENT OPENING BALANCE
----------------------
(-) 89,88,331
12 June 2019 G.C.R. 30

BANK RECONCILATION STATEMENT FOR THE MONTH JANUARY / 2004.
03) ADD RECEIPTS SHOWN IN CASH BOOK BUT NOT 04) LESS CREDIT SHOWN IN BANK STATEMENT
SHOWN AS CREDIT IN BANK STATEMENT. BUT NOT SHOWN AS RECEIPT IN CASH BOOK.
02/01/2004 2,233 01/01/2004 2,46,000
03/01/2004 15,779 01/01/2004 1,40,000
03/01/2004 9,871 01/01/2004 94,752
03/01/2004 6,858 01/01/2004 56,851
03/01/2004 2,640 01/01/2004 7,600
03/01/2004 150 01/01/2004 34,320
03/01/2004 6,198 01/01/2004 1,125
03/01/2004 1,950 01/01/2004 2,574
03/01/2004 1,81,000 02/01/2004 2,908
03/01/2004 52,000 02/01/2004 5,188
04/01/2004 7,179 02/01/2004 31,222
04/01/2004 7,805 02/01/2004 3,013
04/01/2004 2,304 02/01/2004 2,898
04/01/2004 41,955 02/01/2004 1,308
04/01/2004 26,752 03/01/2004 1,989
04/01/2004 98,352 03/01/2004 704
04/01/2004 4,814 03/01/2004 9,700
04/01/2004 3,87,048 04/01/2004 2,340
------------------ 04/01/2004 7,93,500
TOTAL 8,54,888 04/01/2004 4648
------------------
12 June 2019 G.C.R. TOTAL 14,42,640 31
05) ADD DEBIT SHOWN IN BANK STATEMENT 06) LESS CREDIT SHOWN IN BANK
BUT NOT SHOWN AS PAYMENT IN CASH STATEMENT BUT NOT SHOWN AS
BOOK RECEIPT IN CASH BOOK
01/01/2004 17,714
01/01/2004 46,000 01/01/2004 1,15,599
01/01/2004 97,000 01/01/2004 46,245
01/01/2004 25,000 01/01/2004 50,000
01/01/2004 98,257 01/01/2004 50,000
02/01/2004 27,000 01/01/2004 40,000
02/01/2004 30,000 01/01/2004 70,000
02/01/2004 38,000 01/01/2004 1,27,000
03/01/2004 3,35,600
02/01/2004 36,209
03/01/2004 50,400
02/01/2004 7,00,000
04/01/2004 50,000
02/01/2004 6,63,513
04/01/2004 42,000
02/01/2004 75,005 04/01/2004 50,000
03/01/2004 3,03,931 04/01/2004 22,000
03/01/2004 24,665 04/01/2004 33,731
03/01/2004 2,09,212 04/01/2004 2,84,722
04/01/2004 4,61,834 04/01/2004 28,916
04/01/2004 89,272 04/01/2004 2,06,445
04/01/2004 1,300
04/01/2004 1,00,000 ----------------
TOTAL 16,20,372
TOTAL 30,26,198
12 June 2019 G.C.R. 32

Cash Drill & Disbursement Procedure: A Talk by Gcrout

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CASH DRILL & DISBURSEMENT PROCEDURE

12 June 2019 G.C.R. 1

1) Writing of Cash Book - by Cashier.

12 June 2019 G.C.R. 3

DISBURSEMENT OF PAYMENT TO IES .

1) Check roll to be received from LAO.

Payment to be made in the presence of Officer

12 June 2019 G.C.R. 5

PAYMENT OF ABSENTEE IES

• After regular payment particulars of absentee is entered in

• Payments subsequently made to such persons will be recorded in

• Record to be kept for 35 years.

• Every month a D.C. has to be given for IEs wages.

12 June 2019 G.C.R. 6

• Blank spaces should be ruled diagonally across the page.

• Cash book balance to be checked with physical cash.

• Dr & Cr side to be numbered.

• Bill & voucher No. posting in cash book.

• No overwriting or erasing of entries

• Entries to be scored through & attested by O.I.C. Cash.

• Monthly balance sheet

• Bank reconciliation statement.

Recording of entries in the cash book

• Recording of receipts ( Debit side)

i) Cheques sent by LAO to Bankers.

• Recording of payments ( Cr. side)

i) Withdrawals from the current A/C

12 June 2019 G.C.R. 8

1) Monthly closing of cash book

a) Debit side total

b) Credit side total

2) Balance at end of month in Credit side to be reconciled.

a) Bank reconciliation statement

b) Cash column of cash book = physical cash available

12 June 2019 G.C.R. 9

• Payment to GO, NGO & NIEs

• G.P. Fund dues.

12 June 2019 G.C.R. 10

HOW FACTORIES OBTAIN CASH

• LAO , PC of F & A (Fys) – Paymaster for factories.

• Normally RBI cheque is issued by AOs

• Every cheque is supported by a cheque slip.

• 2 cheque slips – one alongwith cheque & one to factory.

12 June 2019 G.C.R. 11

ACCOUNTING OF CONTINGENT EXPENDITURE.

• Every factory is allowed a fixed amount of payment advance.

• Imprest account is maintained under contingencies in cash book.

• Cheques received from LAO is booked in debit sides ( under column

• Daily payment is posted in cash book.

• Bills are submitted to AO for recoupment. In balance sheet,

12 June 2019 G.C.R. 12

AUDIT OF CASH BOOK

• AO to count cash at the time of Local Audit

• Objections to be replied within 10 days.

• Corrections to be taken to objections, if

Handing over & taking over of cash.

2) The relieving Officer will record a Certificate in the cash book as

12 June 2019 G.C.R. 14

01) CLOSING BALANCE AS SHOWN IN BANK

BALANCE SHEET FOR THE MONTH OF JANUARY / 2004

NGO 1,14,286 = 00 CASH IN HAND 28,768 = 00

NIE 2,34,680 = 00 CASH IN IMP 22,047 = 00

12 June 2019 G.C.R. 16