FUND BASED DOUBLE ENTRY ACCRUAL ACCOUNTING SYSTEM

The Urban Local Bodies in Karnataka were maintaining their accounts under single entry cash based system. This was an incomplete accounting system wherein ULBs were not aware of what they own and what they owe. There were no financial reports generated by the accounting system for fund management, resource mobilizations and budgetary control. In view of this the Government of Karnataka, as part of its reforms process, initiated implementation of Fund Based Double Entry Accrual Accounting System including Computerization of Accounts in the ULBs of Karnataka. Objectives
  • To computerise the finance wing in ULBs
  • To enhance transparency and financial accountability in ULBs
  • Better management of funds and improved disclosure of financial performance by  ULBs
  • Preparation of citizen participatory budget by  ULBs
  • Generate additional revenues in ULBs through proper resource management backed up by strong financial records
  • To provide better citizen services
Approach
  • Review of existing accounting rules and introduced Karnataka Municipal Accounting  & Budgeting Rules (KMABR) 2006 & Karnataka Municipal Accounting Manual (KMAM) in line with the National Municipal Accounting Manual (NMAM)
  • Implementation in a phased manner; in 55 ULBs with effect from 2006 & in 69 ULBs from 2007
  • Accountants with B.Com qualification appointed for ULBs  through KPSC
  • Appointment of State level consultant for technical support
  • Appointment of Field Level Consultants (CA firms) for every ULB to provide professional assistance to switch over from single entry cash based accounting system to double entry accrual based accounting system
  • Deployment of eGov financial software developed by e-governments foundation to maintain accounts as per KMABR
  • Developed training modules
  • Training and capacity building  of staff of ULBs
  • Hosting of software in all applications in web based application should come in information
Expected outputs
  • Maintain the accounts of assets, liabilities, incomes & expenses of ULBs in Double Entry System
  • Generate financial reports for disclosing    financial performance and status of ULBs
  • Publish annual accounts of ULBs for better transparency
  • Ensure citizen participation in the ULB budgeting for proper fund management
  • Upto date information of financial status of the ULB