Finance Department

Policy Note -  2004 - 2005

Demand No. 15

The Finance Department is vested with the responsibility of managing the public finances of the Government of Tamil Nadu. This includes preparation and presentation of the Annual Budget to the Legislative Assembly. Once the Annual Budget is voted by the Legislative Assembly, Finance Department coordinates with other Administrative Departments in achieving the development goals of the State Government. The Finance Department has an important role in evaluating expenditure proposals with reference to need, cost effectiveness, budget provisions, financial procedure, etc., with the objective of balancing the receipts and expenditure and achieving the overall development and fiscal objectives of the Government. The Finance Department also has to ensure that the targets under the Fiscal Responsibility Act 2003 are met.

2. The following seven Heads of Departments are under the administrative control of Finance Department.

• Treasuries and Accounts Department.

• Local Fund Audit Department

• Small Savings Department.

• Government Data Centre.

• Co - operative Audit Department.

• Internal Audit and Statutory Boards Audit Department.

• Directorate of Pension.

3. The functions of various Heads of Department under the control of Finance Department are as follows:

TREASURIES AND ACCOUNTS DEPARTMENT

4. Treasuries and Accounts Department was formed on 01.04.1962. It has 8 Pay and Accounts Offices, 30 District Treasuries, 203 Sub Treasuries, 3 Regional Joint Director of Treasuries and Accounts, one Pension Pay Office at Chennai and one Assistant Superintendent of Stamps and the headquarters office of the Commissioner of Treasuries and Accounts at Chennai within its fold. Its main function is disbursement of salaries and pensions to all the Government servants and Pensioners and disbursement of all moneys sanctioned by the Government for implementing various schemes by the departments of the Government. It is also responsible for the receipt of money due to Government and rendering detailed accounts therefor to the Accountant General. The Treasuries and Accounts Department also looks after proper distribution of Stamps for Registration. The Tamil Nadu Government Employees Health Fund is being operated by Treasuries and Accounts Department. Valuables and articles deposited by Government departments are kept under safe custody in the Treasuries.

5. The Treasuries and Accounts Department is being modernized with the objectives of improving financial reporting, accountability and improving service delivery. Payment of pension to the retired employees in Chennai City is made through Electronic Clearance System. Similarly Electronic Clearance System for payment of salaries has also been introduced for Government employees in Chennai & Madurai on a pilot basis in 2003‑2004.

6. To facilitate modernization, orders have been issued for the conversion of Non Banking Sub Treasuries into Banking Sub Treasuries.

7. It is proposed to introduce on-line Bill passing system in Treasuries and Pay & Accounts offices in a phased manner. Connectivity of Treasuries and sub-Treasuries with State Headquarter is also being looked into.

The Budget for 2004‑2005 provides Rs.5 crores for special e‑Governance initiatives in the Treasury System in 2004‑2005. Construction of new building for the Villupuram district treasury has also been included as a new scheme for 2004-05 at a capital cost of Rs.71.04 lakhs.

LOCAL FUND AUDIT DEPARTMENT

8. The Local Fund Audit Department is responsible for statutory audit of all local bodies, Universities in the State and other miscellaneous institutions under the provisions of the respective Acts governing the institutions.

9. The following institutions are under the audit control of Local Fund Audit Department.

10. The total value of transactions audited by this department during last year in respect of the above institutions is to an extent of Rs.8,240 Crores.

Concurrent Audit System in Panchayat Unions:

11. The Government has introduced “Concurrent Audit System” in all the 385 Panchayat Unions with effect from 2000-2001. This has been taken up on quarterly basis with effect from 15.9.2000. Accordingly, one Audit Party comprising of one Inspector and one Deputy Inspector/one Assistant Inspector for every three or four Panchayat Unions has been formed with headquarters in 119 Panchayat Union offices.

12. During the Concurrent audit, audit objections made during the audit are communicated to the Panchayat Union Commissioners then and there in the form of “Audit slips” by the audit parties. The replies furnished to these audit slips after rectifying the defects are verified by the audit parties with reference to the records and registers locally and the objections settled. On receipt of annual accounts from the Panchayat Unions, Annual Audit Reports are issued after verifying the correctness of the accounts and incorporating audit slip paras, which are not settled by the Panchayat Unions. The audit of Panchayat Union is almost in current. As on 29.02.2004, audit of all 385 Panchayat Unions have been completed upto the year 2002-03 and the audit of 333 Panchayat Unions have been completed for the First Half Year 2003-04.