Note on Expenditure Report

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INTRODUCTION

Statement of affairs is the reports of books of account maintained and prepared by the operating level office and submit it to its corresponding central level office in a regular basis. It is a seven columns self-balancing monthly report of operating level office. This statement is submitted to central level by the operating level office at the end of each month as a monthly report. Therefore, it is also known as monthly expenditure report. It is maintained in the prescribed format under AGF No.13.

Source: slideshare.com
Source: slideshare.com

This report provides the information regarding the summary of annual appropriation of budget to the office with budget heads, and their budget head number, expenditure of the current month, budget release up to the current month, total expenditure up to the current month, balance of budget, unclear amount of advance, net expenditure up to current month, cash and bank balances, and loan receivables and payable amount at end of prepared month.

Importance of statement of expenditure

  1. It helps central level office to take important decisions through the office of the treasury and comptroller.
  2. It provides necessary information for keeping control over budget to central level.
  3. It helps in an estimation of a future budget of operating level offices.
  4. The office of the Auditor General and other authorities can get pertinent accounting information from this report.

Specimen of statement of expenditure

Government of Nepal AGF NO.13

……..Office/Department/Ministry
Statement of Expenditure
…………..Year…………..Month

Expenditure of …. month

Releaseup-tothe end of …

Budget Head No.

Budget Head (B.H.)

Annual Budget

Expenditureup-tothe end of ...

Balance of budget

(1)

(2)

(3)

(4)

(5)

(6)

(7)

Position of Fund

For the month of…………………
Total release up-to the end of……………..: XXX Bank balance: XXXX
Total expenditure up-to the end of………..: XXX Cash balance: XXXX
Total balance: XXXX
Uncleared advance: XXX Loan payable (-): XXXX
Net Expenditure (after deducting uncleared advance): XXX Loan receivable(+): XXXX

Submitted by: XXX Designation: XXX Date: XXX
Approved by: XXX Designation: XXX Date: XXX

Source: AGF.comFig; Sample format of statement of expenditure
Source: AGF.com

Division of Statement of Expenditure

The statement of expenditure has two sections:

  1. Position of budget
  2. Position of fund or Status of fund

Position of Budget

The first part of a statement of expenditure is a position of a budget. It helps to show the position of a budget of operating level office. It contains seven columns which are explained below:

  • Column 1: The expenditure incurred under a various head of the current month.
  • Column 2: Cumulative total of budget release received under various budget heads including revolving fund until the end of the current month.
  • Column 3: Budget head number for each allocated budget heads.
  • Column 4: The budget heads which are approved by the central level office for a current year.
  • Column 5: The amount of annual appropriation of the budget for a specified head.
  • Column 6: The cumulative total of budget expenditure made under various budget heads until the end of the current month.
  • Column 7: This column reveals remaining budget amount of each allocated budget head.

Determination of amount of different columns, if necessary:

Expenditure for the current month: (Expenditure up-to the end of current month– Expenditure up-to the end of previous month)

Release up-to the end of current month: [Expenditure up to the end of current month (6) – Expenditure of current month (1)]

Expenditure up-to the end of current month: [Expenditure up-to the end of previous month + Expenditure for the month]

Balance of budget: [Annual budget (5) – Expenditure up to end of current month (6)]

Position of Fund

This is the last part of a statement of expenditure. It includes the cash and bank balance, total amount of budget release, total expenditure, unclear advance and position of a loan.

Determination of amount of different components, if necessary:

Total release up-to the end of current month = Total of column no.2

Expenditure up-to the end of current month = Total of column no.6

Cash balance = Total budget release received up-to current month + Deposit or loan received – Total expenditure up-to current month – Bank balance – Loan provided.

Bank balance = Total budget release up-to current month + Deposit or loan received – Total expenditure up-to current month – Cash balance at petty cash fund– Loan provided.

Unclear advance = Amount of advance in given column – Amount advance in cleared column from Bank Cash Book.

Net expenditure = Expenditure up-to end of current month – Uncleared advance.

Bank Reconciliation Statement

Under new accounting system, all the cash receipts of the government have to be deposited into bank and payments are made through cheque except petty payments made out of petty cash fund. In other words, all the financial transactions of the government are carried out through the bank. Therefore, those transactions carried through a bank are recorded in bank cash book (AGF NO.5) in the office, Similarly, the bank also keeps records of financial transaction in its separate account book known as pass book. Thus, the banking transaction is recorded in both Bank Cash Book of Government and Pass Book of bank. The balance between bank cash book and pass book must be equal. But sometimes due to various reasons, the bank cash book and pass book may not be equal. In this condition, a statement is prepared to find out the exact reasons for showing the difference between balance by Bank Cash Book and Pass Book which is known as Bank Reconciliation Statement. This is prepared at the end of every month on format AGF No.15 and submitted to concern central level office by operating level office.

The specimen of this statement is given below:

Government of Nepal AGF NO.13

……..Office/Department/Ministry
Bank Reconciliation Statement
…………..Year…………..Month

Particulars

Details (Rs)

Amount (Rs)

Bank balance as per Pass Book (Bank Statement)
Add: Cheques deposited but in a transit:


Less: Issued Cheques but in a transit:

XXX

XXX

XXX

XXX

XXX
XXX
XXX

XXX

Balance as per Bank Cash Book

XXX

Certified that the above statement is correct:
Submitted by: XXX Position: XXX Date: XXX
Approved by: XXX Position: XXX Date: XXX




References:

Sharma, Narendra et.al., Principles of Accounting-XI, Bundipuran Prakashan, Kathmandu

Koirala, Yadav Raj et.al., Principles of Accounting-XI, Asmita Books Publication, Kathmandu

Shrestha, Dasharaha et.al., Accountancy-XI, M.K. Prakashan, Kathmandu

Importance of statement of expenditure

  1. It helps central level office to take important decisions through the office of the treasury and comptroller.
  2. It provides necessary information for keeping control over budget to central level.
  3. It helps in an estimation of a future budget of operating level offices.
  4. The office of the Auditor General and other authorities can get pertinent accounting information from this report.
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