Documents for NPF Management
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Questions and Answers

Which document is specifically required for the maintenance of the Canteen Account?

  • Audit Reports
  • Daily Sales Book (correct)
  • Balance Sheet File
  • Property Ledger

    • What is the profit percentage charged on items other than liquor or bonded items?

  • 15%
  • 10%
  • 20%
  • 5% (correct)

    • Which document is required to maintain financial records for Non-Public Funds?

  • Payment Vouchers
  • Cash Account Book (correct)
  • Diet Register
  • Canteen Smart Cards

    • What percentage of canteen profit is allocated to the Sailors’ Welfare Fund?

    <p>65%</p> Signup and view all the answers

    Which of the following is NOT a document commonly maintained for NPFs?

    <p>Daily Bazaar Book</p> Signup and view all the answers

    Which document serves as a record for the approval of proposals related to NPFs?

    <p>Record of Approval (Proposal-cum-Approval)</p> Signup and view all the answers

    What is the distribution percentage of canteen profit retained to build up Canteen Capital?

    <p>10%</p> Signup and view all the answers

    Which type of account requires the maintenance of a Wine Card?

    <p>Ward Room Mess Account</p> Signup and view all the answers

    What is the prescribed limit for cash in hand according to the operating instructions?

    <p>It should not exceed a specified amount.</p> Signup and view all the answers

    Who must countersign the cash account when it is closed?

    <p>The CO.</p> Signup and view all the answers

    Which of the following should be mentioned while making receipt/payment entries in the cash account book?

    <p>Cheque numbers.</p> Signup and view all the answers

    How often should the Bank Reconciliation Statement be written?

    <p>Every month.</p> Signup and view all the answers

    What is the depreciation percentage for linens every six months?

    <p>20%</p> Signup and view all the answers

    What should be done with ledger pages that have nil stock?

    <p>Transfer them to a dead ledger.</p> Signup and view all the answers

    What is the depreciation rate applied to rubber items?

    <p>10% every six months</p> Signup and view all the answers

    Which items should not be depreciated according to the provided guidelines?

    <p>Silver and precious metal items.</p> Signup and view all the answers

    What must be included on the first page of the ledger?

    <p>Indexed list of items.</p> Signup and view all the answers

    Which authority has the power to decide on the depreciation of items not covered by specific guidelines?

    <p>The CFA</p> Signup and view all the answers

    What should be done if an item is rendered unserviceable?

    <p>The Audit Board must recommend its residual value to be written off.</p> Signup and view all the answers

    What is the maximum amount of property value that can be written off during a half-yearly audit without higher authority approval?

    <p>The financial powers vested with each authority</p> Signup and view all the answers

    When should the mess bills be cleared by the officers?

    <p>By the 10th of the following month</p> Signup and view all the answers

    Under what conditions can a Ty Loan of cash be given to an officer or sailor?

    <p>In extreme pressing circumstances with written permission from the CO</p> Signup and view all the answers

    How frequently should surprise checks of cash in each NPF be carried out?

    <p>Quarterly</p> Signup and view all the answers

    What is the primary purpose of ensuring all transactions within the CO's financial powers are recorded in the Approval Register?

    <p>To increase transparency and oversight</p> Signup and view all the answers

    Why is it necessary to have three persons involved in auditing an account?

    <p>To divide labor effectively</p> Signup and view all the answers

    What does a Balance Sheet reflect?

    <p>Liabilities and assets as of the audit closing date</p> Signup and view all the answers

    Which factor does NOT affect the Balance Creditor?

    <p>Directors' remuneration</p> Signup and view all the answers

    What is one of the primary checks for the Liabilities section during the scrutiny of the Balance Sheet?

    <p>Check that all outstanding bills are correctly reflected</p> Signup and view all the answers

    What should be verified in the Assets section of the Balance Sheet?

    <p>Value of stock and cash in hand</p> Signup and view all the answers

    Which element is crucial to check regarding cash during the scrutiny of the Balance Sheet?

    <p>The cash balance as shown in the bank is up to date</p> Signup and view all the answers

    Which common error might occur during the audit process?

    <p>Neglecting operating instructions in cash accounts</p> Signup and view all the answers

    What should be indicated on the Balance Sheet during the scrutiny process?

    <p>The name of the fund and the audit period</p> Signup and view all the answers

    What is a common error regarding cash holdings?

    <p>Cash holdings are not being restricted to minimum.</p> Signup and view all the answers

    What should be avoided according to corrective measures?

    <p>Holding frequent events.</p> Signup and view all the answers

    Which of the following is NOT a common error regarding balance sheets?

    <p>Balance sheets are meticulously checked for accuracy.</p> Signup and view all the answers

    What is a recommended corrective measure regarding expenditures?

    <p>Avoiding large expenditures for parties and get-togethers.</p> Signup and view all the answers

    What is a consequence of incorrectly charging off depreciation on items?

    <p>Misrepresentation of financial health.</p> Signup and view all the answers

    What error is associated with minor income and expenditure categorization?

    <p>Minor receipts are clubbed as 'Sundry Income'.</p> Signup and view all the answers

    What should be ensured regarding transactions according to financial authority?

    <p>All transactions are within the Financial Power of the supervisory head.</p> Signup and view all the answers

    Which error relates to the handling of bonded goods?

    <p>Bonded goods are not properly recorded in the gangway books.</p> Signup and view all the answers

    Study Notes

    Documents to be Maintained

    • Cash Account Book (IN-12): This document is a record of all cash transactions for NPFs.
    • Detailed Instructions for Operating & Maintenance of NPFs: These instructions provide guidance on how to manage and maintain NPFs.
    • Pass Book / Statement Pertaining to Bank Account: These documents show the bank transactions for the NPFs.
    • Balance Sheet File Containing Audit Reports: This file holds audited financial statements of the NPFs.
    • Payment / Receipt Vouchers Files in Original: These files contain original payment and receipt vouchers, essential for verifying transactions.
    • Property Ledger (PLL): This ledger tracks all property owned by the NPFs.
    • Stock Ledger: This ledger details all stock held by the NPFs.
    • Correspondence File: This file contains all correspondence related to the NPFs.
    • Record of Approval (Proposal-cum-Approval): This document records proposals and their approvals for NPF activities.
    • Policy File – NPFs: This file contains policies and procedures relevant to the NPFs.
    • Suggestion and Complaint Book: This book allows for recording suggestions and complaints related to the NPFs.

    Ward Room Wine Account

    • Day Book (IN-453): Daily record of transactions in the Ward Room Wine Account.
    • Wine Book (IN-435): Detailed records of wine purchases and sales.
    • Wine Card: Used to track individual consumption of wine.

    Ward Room Mess Account

    • Daily Bazaar Book: Records daily purchases of goods for the mess.
    • Bill Abstract Book: Summarizes all bills incurred by the mess.
    • Extra Order Book: Records extra orders placed beyond the regular menu.

    Canteen Account

    • Meal Book: Records meals served by the canteen.
    • Tradesman Account: Keeps track of transactions with tradesmen.
    • Cash Deposit Register: Logs all cash deposits made to the canteen account.
    • Stock Register: Records the quantity and value of stock in the canteen.
    • Canteen Smart Cards: Used by personnel to purchase items in the canteen.
    • Guest Register: Records details of guests using the canteen.
    • Stock Account: Maintains a running balance of stock held by the canteen.
    • Daily Sales Book: Records daily sales made by the canteen.
    • Minutes of the Mess Meeting: Records decisions made at meetings of the Mess Committee.
    • Wardroom Mess Rules: A document outlining the rules and regulations for using the wardroom mess.

    Profit Percentage and its Distribution

    • Canteens operated by afloat units not registered with CSD should charge a profit percentage of:
      • 5% on all items except liquor/bonded items
      • 10% on liquor/bonded items
    • URCs registered with CSD should charge profit in accordance with IHQ MoD(Army)/QMG’s Branch/DDGCS guidelines.
    • Transfer of Canteen Profit by IN Ships/Estabs:
      • The CO/Controlling Officer is responsible for transferring canteen profit to other NPFs as follows:
        • Officers Welfare Fund: 25%
        • Sailors’ Welfare Fund: 65%
        • Canteen Capital: 10%
    • Units operating Civilian Welfare Fund or Nursing Officer Welfare Fund: The profit distribution should be:
      • Civilian Welfare Fund: 5%
      • Nursing Officers Welfare Fund: 10%
      • Sailors Welfare Fund: The share of Sailors' Welfare Fund will be reduced accordingly.
    • Cash in hand should not exceed the prescribed limit.
    • Bank Reconciliation Statement should be prepared at the end of each month.
    • Authentication of Entries: When someone other than the AO writes the cash book, each entry must be initiated by the AO.

    Maintenance of Cash Account

    • Closure: The account should be countersigned by the CO every time it is closed.
    • Contra Entries: Contra entries for cheque/cash deposits should be made according to regulations.
    • Cheque Numbers: Ensure cheque numbers are always mentioned when making receipt/payment entries in the cash account book.
    • Corrections/Amendments: No corrections/amendments are allowed – avoid them.

    Ledgers

    • Indexed List: Prepare an indexed list of items and insert it on the first page of the ledger.
    • Custodian Certificate: Insert a custodian certificate.
    • Muster Certificate: Insert a muster certificate showing audit and handing/taking over details.
    • Separate Ledgers: Maintain separate ledgers for permanent and consumable items.
    • Individual Ledger Pages: Each item should have its own ledger page, noting purchase date, cost price, location, distribution, transfer etc.
    • Items of Similar Description: If the cost price is the same, items of similar description can be grouped on the same page.
    • Full Details: Provide full details for items constituting more than one unit (e.g., silver plates, bowls, spoons).
    • Update Ledgers: Update ledgers on receipt of new items and when items are written off.
    • Dead Ledger: Remove ledger pages with nil stock and transfer them to the dead ledger.
    • Physical Sight: Physically inspect the items during muster.
    • State of Item: Ascertain the state of the item (usable or defunct).
    • Balance Stock and Total Value: Check the balance stock and its total value at the time of muster.
    • Full Description: Ensure full descriptions (with dimension, quality, material) for all items.

    Depreciation

    • Depreciation Rates: See the depreciation schedule in the document for details.
    • Total Value of Written Off Property: The total value of property written off during a half-yearly audit should not exceed the CFA's financial powers.
    • Property Value Exceeding CFA Powers: For property value exceeding the CFA's powers, submit a request to the next higher authority.
    • Guideline for Depreciation: The depreciation percentages are guidelines; maximum depreciation is not compulsory.
    • Loss Due to Negligence: Loss of an item due to negligence is valued at replacement cost, and recovery is effected accordingly.
    • Mess-traps: No depreciation is allowed on mess-traps supplied by the government.
    • Unserviceable Items: The Audit Board recommends the residual value of unserviceable items for writing off.

    DOs

    • Ensure operating/accounting instructions are issued for all funds and pasted at the beginning of the cash account book.
    • Ensure Mess/Wine and Canteen bills are cleared by the Officers by the 10th of the following month.
    • Ensure the same profit rate is charged from all personnel. The profit percentage should be notified by memo.
    • Ensure bank account reconciliation whenever the account is closed, during surprise checks or audits, and signed by the AO.
    • Obtain prior approval from the Admin Authority for expenditure exceeding the upper limits.
    • Do not provide Ty Loans of cash to any Officer/Sailor except in extreme circumstances with written CO permission.
    • Do not allow personnel to retain NPFs money except when required for immediate purchase.
    • Ensure all transactions within the CO/Supervisory Head’s financial powers are recorded in the Approval Register for each fund.
    • Obtain prior approval from the Admin Authority for expenditure in excess of the prescribed Financial Powers.
    • Conduct surprise checks of cash in each NPF, including canteen account, regularly and at least once a quarter by the CO or a Board of Officers appointed by the CO.

    DON’Ts

    • Avoid excessive cash holdings.
    • Do not nominate one person to audit more than two funds across different ships/establishments in the same audit period.
    • If there’s insufficient personnel in a unit, the Ops Authy/Area Cdr/AA can constitute audit boards/nominate members from other units.
    • Audit boards must jointly carry out the audit.

    Why Three Persons are Required to Audit an Account

    • **To prevent any one person from making a mistake and to ensure accountability. **
    • To divide the workload.
    • To ensure that if one person misses something, the others will notice it.

    Balance Sheet

    • Definition: A balance sheet shows liabilities and assets on the date the account closes for audit.
    • Submission: The audited and CO-approved balance sheet of a fund should be sent to the AA on the last day of the month following the audit period.

    Balance Creditor

    • Reflects the financial health of the fund during the half year.
    • Fluctuations depend on income/profit earned, expenditure incurred, and property written off.

    Scrutiny of Balance Sheet

    • Heading: Check whether the fund name and period covered are correctly mentioned at the top.
    • Date: Ensure the date the balance sheet is finalized and signed by the Audit Board is indicated.

    Liabilities

    • Outstanding Bills and Accounts: Verify that all outstanding bills and accounts are accurately reflected.
    • Reconciliation: Check if "Owing to" in one account is consistent with "Owing from" in another – ensure they reconcile.
    • Complete Details: Ensure all liabilities are reflected with complete details (e.g., "Owing to Mailman on account of Hon. For the month of Mar 20").

    Assets

    • Cash in Hand: Check the "Cash in Hand" amount listed under "Assets" in the Balance Sheet.
    • Bank Balance: Compare the cash balance in the bank with the bank passbook/statement of account.
    • Bank Passbook/Statement: Ensure the passbook/statement is up-to-date.
    • Bank Reconciliation Statement: Review the Bank Reconciliation Statement prepared by the Accounting Officer.
    • Value of Stock: Check the value of stock recorded.
    • Certificate Completion: Ensure the entire certificate on the reverse side of the Balance Sheet is completed.
    • Abnormal Increase/Decrease in Balance Creditor: Explain reasons for unusual increases or decreases in the balance creditor.
    • Undue Profits or Excessive Charges/Expenditure: Auditors should highlight any undue profits or excessive charges/expenditure.

    Common Errors

    • Operating instructions are not held in the cash account or are incomplete.
    • Closing/muster certificates are not endorsed as per NO(Spl) 02/2019.
    • Excessive over-writings, erasures, and corrections using correcting fluid.
    • Incorrect handing/taking over procedures.
    • Items written off in previous half-years are not removed/charged off from PLLs/Stock.
    • Depreciation on items is incorrectly charged off.
    • Item Numbers for Receipts/Payments are omitted from the Cash Account and vouchers.
    • Bonded goods are not entered in gangway books or taken on charge.
    • Surprise muster of cash is not done by the Commanding Officer at least once a quarter.
    • Minor receipts are clubbed under "Sundry Income" and minor expenditure under "Miscellaneous Expenditure".
    • Poor maintenance of ledgers.
    • Incorrect entries in the Cash Account Book.
    • Cash holdings are not restricted to a minimum.
    • Cash received from sales is not deposited promptly in the bank to earn interest.
    • Balance Sheets are not prepared according to NO(Spl) 02/2019.
    • Late submission of balance sheets due to delays in analysis by Audit Members and the Board President.
    • List of Owings From/To is not attached to the balance sheets.
    • Amount of Owings From officers does not match subsidiary balance sheets.
    • Items written off from VOP during the current half year were not recommended during the previous half year by board members.
    • VOP/Stock is not rounded off to the nearest Rupee.
    • Transactions exceeding the financial powers of the CO/Supervisory Head/AO.

    Increase in Balance Creditor

    • Assets > Liabilities

    Decrease in Balance Creditor

    • Assets < Liabilities

    Corrective Measures

    • Avoid excessive expenditure on parties, get-togethers, and picnics.
    • Consider raising contributions for parties, get-togethers, and picnics.
    • Minimize the frequency of events.

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    Related Documents

    NPF Guidelines PDF

    Description

    This quiz covers essential documents required for the proper management of Non-Profit Funds (NPFs). Test your knowledge on cash accounts, ledgers, bank statements, and other crucial records necessary for maintaining financial integrity. Understand the importance of documentation in managing NPF operations.

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