Indian Railway Codes and Manuals-Stores code- Vol-II-Chapter-31 (XXXI)

 


CHAPTER XXXI

 THE STORES BUDGET

 

3101. The stores Budget for the 'ensuing year' and the Revised Estimate for the current year should be prepared in the following form by the controller of stores with the assistance of the stores Accounts Officer and submitted to the Railway Board by the 23rd December each year accompanied by Annexures 'A', 'B' and 'C the forms shown below being used for the purpose.


Note.—Form No. 3101 or ANNEXURE A B C See at Page No. 174 to 181.

3102. The following instructions should be followed carefully in the preparation of the stores budget except for "Fuel Oils. The budget for these items should be prepared by the respective controlling officers and furnished to the Controller of stores for incorporation in the stores Budget.

3103. The figures to be shown as the opening balance for the ensuing year will be an estimated figure made up of :

(a) The estimated book value of stores expected to be in stock at the end of the current year;
(b) The estimated net result of outstanding balance under the Stores suspense heads of Purchases-imported, indigenous, sales, etc; and
(c) The amount expected to be outstanding in the stock Adjustment Account after the
accounts for the year are closed.

3104. Issues to 'Works' (Item I to III of the Statement).—The expenditure on stores purchased for specific 'works' that can be indentified as initio as such, should be debited directly to the 'Works' concerned and not passed through the general stores suspense head. The figures on this accounts should not, therefore, be included. 

Estimates for stores required for 'Works' which cannot be identified as stated above should be called for from the Divisional Officers/Heads of Departments by the Controller of Stores and incorporated against the relevant items.

3105. Modifications are sometimes made by the concerned Heads of Departments in the budget estimate submitted to them by the various divisions owing to changes in the programme of works. The effect on the Stores Budget of these modification should be intimated to the Controller of Stores as soon as they are carried out in the Works programmes finally submitted to the Railway Board.

3106. Issue to capital Manufacture Suspense.—These estimates should be initially prepare by the department entrusted with the manufacture and repair operations in consultation with the respective Accounts Officers and furnished to the stores Department for incorporation in the stores Budget. The value of materials budgeted for under this head should represent the value of materials likely to be drawn by the workshops during the year for the different types of products to be manufactured as per the approved production programme in respect of Production Units. The value of materials is assessed adopting the latest book average rates available at the time of preparation of the budget.

3107. Issues to Miscellaneous Advance Capital.—These represent issues of stores for fabrication etc.

3108. Issues to Revenue.—These are general purpose stores issued for use on works of the nature of maintenance, repairs and operation for which no detailed estimates ere prepared by the consuming departments. In these cases, the average consumption of the last three years would, after allowing for special items of expenditure, if any, peculiar to each year form fairly accurate guide. Such estimates should be prepared by the Controller of Stores and checked against similar estimates for funds for 'stores from stock' obtained from departments, divisions for the ensuing year with reference to the funds provided by them for "stores in the different Revenue Abstracts. Large variations between the figures communicated to the controller of stores through the departmental estimates and those arrived at on the basis of previous three years' consumption, should be brought to the notice of the principal officers concerned by the controller of stores in order to decide the figure to be finally adopted for the budget.

3109. Sales and Transfers.—While Railways exchange spares and other items, Production Unit supply spares to the Railways which is also included in this item. Controller of stores should base his estimate for this item on the value of indents submitted by the zonal Railways and to the extent accepted for supply during the year.

3110. Closing Balance-Stores in Stock.—The "Ideal" balance would be 40 per cent of the average issue of ordinary stores for one year plus the cost of emergency stores. As it will not always be possible to dispose of all scrap as and when received and avoid accumulation of surplus stores in spite of the most efficient store keeping, the value of such scrap and surplus stock should be taken into account in estimating the balance of store in stock, at the end of the year.

3111. Closing Balance Outstanding Stores Suspense Balances.—This is an item corresponding to the similar head under opening balances at the commencement of the year and the amount under this head should be a s low as possible.

3112. (a) Stores for works and construction depots-Item I(I).—The value of stores to be purchased and paid for during the year, for ultimate issue to works winch cannot be identified ab-initio as stated in 3104-S and as such passing through stores Suspense should only be included under this head.

(b) Stores for production of new Rolling Stock-Item I (2).—The value of stores to be purchased and paid for and passing through Stores Suspense for ultimate issue to the shop for production of new Rolling Stock against Polling stock budget orders should be included under this head. (This will apply only to Production Units and the Railways who are executing Rolling Stock Budget orders for manufacture of certain new Rolling Stock.).

(c) Stores for issue to Coach & wagon Builders-Item 1(3).—The value of stores to be purchased and paid for and passing through Stores Suspense for ultimate issue to Coach and Wagon Builders (in Private and Public Sector) for the purpose of building new Rolling stock should be included under this head, (steel, bought out components, etc. which are procured and kept under stores suspense for ultimate issue to these builders should only be included).

3113. Stores for General Purpose-Item I (4).—The value of general purpose stores to be purchased and paid for and passing through Stores Suspense for ultimate issue for maintenance repairs and operation should be included under this head. This should be the last item to be budgeted for in this estimate. When all the other items had been filled in on the Debit and Credit sides, the two sides should be totalled separately. The excess of the total of the entries on the credit side over those on the debit side will represent the amount required for the purchase of Stores for General Purposes.

3114. In estimating the value of stores to be purchased, the following factors should be taken into consideration

(a) Estimated throw forward from previous year, (i.e. value of stores, indents for which
were certified against previous years grants but which have not been paid before the close of the previous year).
(b) Indents of the current year.
(c) less estimated throw-forward to next year (i.e. value of stores, indents of which have
been certified against current year which are not likely to be paid before the close of the year).

3115. In order to enable the Ministry of Railways to know the supply position, etc. agains contracts placed on their behalf by the Director General, Supplies and Disposals, and to estimat the expenditure involved for budget purposes, fortnightly/weekly reports will be submitted to the Ministry of Railways by these agencies during January /March giving the following particulars.

(a) Railway Indenter.

(b) Indent Number.

(c) Contract Number and date, if placed. 

(d) Value of the Contract.

(e) Value of the Stores supplied during the period under report.

(f) Date of shipments.

(g) Remarks regarding outstandings.

3116. Receipts from Manufacturers into Stores (Item IT).—This should agree with the credit in the Manufacture Suspense Budget against ''IV-Issues to Capital-Stores Suspense." The amount to be provdied should, therefore, be settled by agreement between the stores Department and the various manufacturing departments."

3117. Material returned from Works (Item III),—This will be a consolidated figure of the estimates submitted by Departments.

3118. Other debits (Item IV).—When owing to the operation of the stock Adjustment Account the head 'Stores' as to be debited, such an Item of debit is an item of "Receipt" which is not covered by any of the Items I to III, Item IV "other charges" is, therefore, provided for this purpose. In the original budget estimate no amount ordinarily be shown under this head. This will also include the value of fabricated items which are kept in stock for issue. The provision for this item should be based on the value of fabricated materials likely to be received during the year based on the estimates furnished by the departments.

3119. Reduction in debits on account of issues made to "works and services" debatable to the same head as "Stores Suspense" (item VI). The value of stores to be issued to such "Works" 'Manufacture Operations' and 'Miscellaneous Advances Capital' from stores Suspense will be indicated as a reduction in debits. The same amount will also be shown as deduction under 'credits', against Item XIII.

The estimates for "Works", should be obtained from the Divisional/District Officers, thosee for 'manufacture Operations' and "Miscellaneous Advance-Capital" would be the same as shown against Items IV and V under "Credits".

3120. The "Net Debit or Credit" during the year would be the difference between the 'Total Debits and Credits' during the year. This would be the amount by which the closing balance is decreased (or increased) from the opening balance during a year.

3121. Budget Allotment Required.—This would be the total of the Debits during the year. 

3122. General.—A brief narrative explanation of the difference between the opening and closing balances should be given. Special features in the estimates should be brought out clearly and a full explanation thereof furnished indicating the amount involved in respect of each item in the debit and credit side.

3123. Particular watch should be kept over the actual booking of debits and credits on account of stores transactions. As soon as the grant for stores is known a complete statement of the expected debits and credits to stores under the various heads should be prepared working up to the net grant.

3124. The progress of debits and credits under each head should be watched by the" stores Accounts Officer through a monthly statement having particulars of debits and credits as in paragraph 3101 against each of which should be shown the figures under the following four heads.

1. Budget allotment (Budget year),

2. Actuals at end of last month, 

3. Approximates for current month, 

4. Total expenditure to end of the month.

3125. A copy of the monthly statement, referred to in the preceding paragraph should be furnished to the Controller of Stores to enable him to watch the progress with a view to regulate purchases and issues or to revise the budget estimates. The attention of the General Manager should be drawn to the progress of debits and credits if it shows the necessity for the curtailment of the programme of purchases. Debits and Credits may be subdivided by the more important items of stores, if the Railway Administration so require, in order to regulate Prurchases.

3126. Deleted.

Multiple choice questions:

1.When should the stores budget and revised estimate for the current year be submitted to the Railway Board?

A. By December 23rd each year
B. By November 30th each year
C. By January 15th each year
D. By December 31st each year

Answer: A. By December 23rd each year

2.Who is responsible for preparing the budget for 'Fuel Oils'?

A. Controller of Stores
B. Stores Accounts Officer
C. Respective Controlling Officers
D. Chief Accounts Officer

Answer: C. Respective Controlling Officers

3.What should the estimated opening balance for the ensuing year include?

A. Only the estimated book value of stores
B. Estimated book value of stores, net result of suspense balances, and stock adjustment account
C. Only the estimated net result of outstanding balances
D. The amount expected to be outstanding in the stock adjustment account

Answer: B. Estimated book value of stores, net result of suspense balances, and stock adjustment account

4.How should the expenditure on stores purchased for specific works be recorded?

A. Pass through the general stores suspense head
B. Debited directly to the 'Works' concerned
C. Recorded as miscellaneous advance capital
D. Included under 'Revenue' stores

Answer: B. Debited directly to the 'Works' concerned

5.What should be done if there are modifications in the budget estimates due to changes in the works program?

A. Ignore the modifications
B. Incorporate them into the revised budget
C. Intimate the effect to the Controller of Stores immediately
D. Submit a new budget estimate

Answer: C. Intimate the effect to the Controller of Stores immediately

6.Who should initially prepare estimates for issues to capital manufacture suspense?

A. Stores Department
B. Accounts Officers
C. Department entrusted with manufacture and repair operations
D. Chief Accounts Officer

Answer: C. Department entrusted with manufacture and repair operations

7.What should be included under 'Issues to Miscellaneous Advance Capital'?

A. General purpose stores for maintenance and repairs
B. Stores for fabrication
C. Stores for works and construction depots
D. Stores for production of new Rolling Stock

Answer: B. Stores for fabrication

8.For which purpose should estimates be prepared based on the average consumption of the last three years?

A. Revenue stores
B. Sales and transfers
C. Stores for general purpose
D. Issues to works

Answer: C. Stores for general purpose

9.How should the value of stores for new Rolling Stock production be accounted for?

A. Under 'Issues to Miscellaneous Advance Capital'
B. Under 'Stores for General Purpose'
C. Under 'Stores for Production of New Rolling Stock'
D. Under 'Stores for Coach & Wagon Builders'

Answer: C. Under 'Stores for Production of New Rolling Stock'

10.What is the "ideal" closing balance for stores in stock?

A. 50% of the average issue of ordinary stores for one year
B. 30% of the average issue of ordinary stores for one year plus the cost of emergency stores
C. 40% of the average issue of ordinary stores for one year plus the cost of emergency stores
D. 20% of the average issue of ordinary stores for one year

Answer: C. 40% of the average issue of ordinary stores for one year plus the cost of emergency stores

11.What should be done with the closing balance of outstanding stores suspense balances?

A. It should be as high as possible
B. It should be avoided
C. It should be as low as possible
D. It should be calculated based on past data

Answer: C. It should be as low as possible

12.What should be included under 'Stores for works and construction depots' (Item I(1))?

A. Value of stores purchased for ultimate issue to works which cannot be identified initially
B. Value of stores for production of new Rolling Stock
C. Stores for issue to Coach & Wagon Builders
D. General purpose stores for maintenance and repairs

Answer: A. Value of stores purchased for ultimate issue to works which cannot be identified initially

13.What is the purpose of providing for 'Other debits (Item IV)' in the budget?

A. To cover the value of fabricated items
B. To account for debits in the stock adjustment account
C. To include receipts from manufacturers
D. To account for issues to capital manufacture suspense

Answer: B. To account for debits in the stock adjustment account

14.What should be reported in the fortnightly/weekly reports submitted to the Ministry of Railways?

A. Forecast of future store purchases
B. Value of materials to be drawn by workshops
C. Details of contracts placed by the Director General, Supplies and Disposals
D. Summary of surplus stores

Answer: C. Details of contracts placed by the Director General, Supplies and Disposals

15.What should be done if there are large variations between departmental estimates and previous years' consumption estimates?

A. Adjust the budget estimates accordingly
B. Ignore the variations
C. Inform the Controller of Stores and Principal Officers for decision
D. Increase the budget estimate without review

Answer: C. Inform the Controller of Stores and Principal Officers for decision

16.What is the purpose of the 'Net Debit or Credit' calculation during the year?

A. To determine the total expenditure for the year
B. To adjust the closing balance from the opening balance
C. To assess the accuracy of budget estimates
D. To calculate the total debits and credits

Answer: B. To adjust the closing balance from the opening balance

17.How should the progress of debits and credits be monitored?

A. Through annual reviews
B. Through a monthly statement with details of debits and credits
C. Through quarterly reports
D. By reviewing historical data only

Answer: B. Through a monthly statement with details of debits and credits

18.What should the Controller of Stores do if the monthly statement indicates a need for curtailment of purchases?

A. Notify the Railway Board immediately
B. Review and regulate purchases and issues
C. Prepare a new budget estimate
D. Ignore the progress and proceed as planned

Answer: B. Review and regulate purchases and issues

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