Concept of new accounting system :
Bhuktani srestha pranali was introduced in 2017 B.S. but this system also became unsuitable to record all the revenues and expenditure of the government in a more systematic and scientific way. Therefore, to make suggestions and recommendations in a more systematic efficient accounting system, an account committee, have four members was formed on magh 20, 2017 B.S. the four members of committee comprised of:
• Accounting general of his majesty government.
• Under secretary of ministry of finance (foreign aid department)
• Public administrative of the U.S. aid.
• Accounting specialist of the U.N.
The committee, after a detailed study for about 288 days. Presented a draft as suggestions and recommendations for the scientific, modernization, improvement and decentralization of accounting systems in Nepal. The draft was approved by the auditor general on 20th magh 2018. B.S. and it was also approved by his majesty the king of 2nd chaitra 2018. The system was introduced as a new accounting sytems of his majesty government and it was implemented in the office of Kathmandu valley since the fiscal year 2019/2020 B.S. it was called "New Accounting System". The new accounting system became fully operational from shrawan 2025 through Nepal.
Feature and characteristics of new accounting system :
Some of the basic features of new accounting systems of his majesty government may be studied under the following headings:
1. Based on the principle of double entry system: New Accounting System is based on double entry system of book keeping. Under this principle, each financial transaction has two aspects i.e. each tractions is recorded on both debit and credit sides of books of account with the same monetary value thus, arithmetical accuracy can be easily tested and accounting errors are also detected and rectified.
2. Uniformity and simplicity: New Accounting Systems are used in the entire government officer throughout the keepingof Nepal. It is simple to understand and easy to operate because it is based on the principle of double entry system. An employee having lower qualification can easily understand it.
3. Emphasis of banking transaction: There are more probability of misuse and manipulation of cash. The new accounting system of HMG has given more emphasis of banking transaction. every government officer should deposit all revenues into bank and payment are made through cheques except petty cash payment.
4. Classification of offices: Government organizations are classified into central level offices of organization (ministry) and operating level office on the basis of their financial transaction.
5. Secrecy: In New Accounting system, high degree of secrecy can be maintained for accounting records. Separate forms, receipts slips etc are used for the separate nature of transaction.
6. Based on budget heads: The New Accounting Systems is based upon different budget heads for making expenditures of public government officer should not make expenditures more than allocated to a head.
7. Inter-head transfer of budget: In new accounting systems, the surplus amount ofa budget head can be transferred from onebudget head to another budget head by taking permission of finance ministry.
8. Used of bracket: Use of bracket is another most important feature of new accounting system. The bracket is used to show the amount to be credited. It the timeof payment for effective budgetary control.
9. Treatment of advance: ln new accounting system, an advance payment given for any expenditure is treated as budgeting expenditures at the time of payment for effective budgetary control.
10. Level of government office and decentralization: The new accounting system is given emphasis is decentralization for accounting work.
The government officers have been classified into two level i.e. central level and operating level accounting. Central level account is maintained by central level office and operation level account by operating level office. Central level offices do not interfere in regular accounting work of operating level office.
11. Provision of auditing: In new accounting systems, there is the provision of audit, so audit of books of accounts is compulsory to detect and payment the misuse of government property and revenue. The office of the auditor general is responsible for audit in government officer.
Objective of new accounting system :
The following are the objectives of new accounting system started by the account committee 2017:
• To provide financial data this is required time to time for preparing financial report.
• To prepared proper systematic accounting for cash and other properties to control such possible misuses.
• Too provide necessary and relevant information required for the preparation of budget to the concerned office.
• To determine the level and position of officers who are responsible to submit the accounts of different projects implemented.
• To check the financial transactions if theyare true and fair thought the auditing.
• To make the audit job simple, less time consuming and economical.
• To collect the historical data of budget head.
Important of new accounting system :
The important of new accounting system are summarized below:
• To keep the real picture of financial transaction of government offices to prepared the records of government fund. Investment, revenue, and expenses.
• To provides all financial data, statistics and other information required for financialadministration and control.
• To provide proper guidance to government for the preparation and implementations of economic plan and policy of the nation.
• To provide necessary information and financial data to the government for preparation of annual budget.
• To control the financial activities of the government because all the revenues and expenditures of government are recorded according to the financial rules and procedures.
• To prevent the measure of government revenues and its properties because there is a to provision of audit of the books of account.
• To provide certain guidelines for preparation of finical statements.
• To ensure and effective uses of the aid and loan amount provided by foreign donors and agencies.
Limitation of new accounting system
New accounting systems of HMG are also not free from weakness and limitations. Some of the limitations are:
•There is no proper mechanism to check frauds and errors committed in the books of account and also if failed to control corruption, misuse and embezzlement of government cash and properties.
•It has given less emphasis on goods, properties and assets because it has given emphasis only on expenditures.
•It is based on cash basis of accounting. No record is made on accruals basis.
•There are higher chances of misappropriation of stock (investment) dueto the lack of systematic and proper store keeping system.
•It cannot provide necessary information or data for making decision on the cost of production and labor efficiency.
•It does not following the principle of double entry system in practice. For example, entry for advance transaction required triple positing inn bank cash book.
•All the forms are designed by the department of general do not fulfill the requirement of managerial need.
Happy new year to all accountants...!!!
Bhuktani srestha pranali was introduced in 2017 B.S. but this system also became unsuitable to record all the revenues and expenditure of the government in a more systematic and scientific way. Therefore, to make suggestions and recommendations in a more systematic efficient accounting system, an account committee, have four members was formed on magh 20, 2017 B.S. the four members of committee comprised of:
• Accounting general of his majesty government.
• Under secretary of ministry of finance (foreign aid department)
• Public administrative of the U.S. aid.
• Accounting specialist of the U.N.
The committee, after a detailed study for about 288 days. Presented a draft as suggestions and recommendations for the scientific, modernization, improvement and decentralization of accounting systems in Nepal. The draft was approved by the auditor general on 20th magh 2018. B.S. and it was also approved by his majesty the king of 2nd chaitra 2018. The system was introduced as a new accounting sytems of his majesty government and it was implemented in the office of Kathmandu valley since the fiscal year 2019/2020 B.S. it was called "New Accounting System". The new accounting system became fully operational from shrawan 2025 through Nepal.
Feature and characteristics of new accounting system :
Some of the basic features of new accounting systems of his majesty government may be studied under the following headings:
1. Based on the principle of double entry system: New Accounting System is based on double entry system of book keeping. Under this principle, each financial transaction has two aspects i.e. each tractions is recorded on both debit and credit sides of books of account with the same monetary value thus, arithmetical accuracy can be easily tested and accounting errors are also detected and rectified.
2. Uniformity and simplicity: New Accounting Systems are used in the entire government officer throughout the keepingof Nepal. It is simple to understand and easy to operate because it is based on the principle of double entry system. An employee having lower qualification can easily understand it.
3. Emphasis of banking transaction: There are more probability of misuse and manipulation of cash. The new accounting system of HMG has given more emphasis of banking transaction. every government officer should deposit all revenues into bank and payment are made through cheques except petty cash payment.
4. Classification of offices: Government organizations are classified into central level offices of organization (ministry) and operating level office on the basis of their financial transaction.
5. Secrecy: In New Accounting system, high degree of secrecy can be maintained for accounting records. Separate forms, receipts slips etc are used for the separate nature of transaction.
6. Based on budget heads: The New Accounting Systems is based upon different budget heads for making expenditures of public government officer should not make expenditures more than allocated to a head.
7. Inter-head transfer of budget: In new accounting systems, the surplus amount ofa budget head can be transferred from onebudget head to another budget head by taking permission of finance ministry.
8. Used of bracket: Use of bracket is another most important feature of new accounting system. The bracket is used to show the amount to be credited. It the timeof payment for effective budgetary control.
9. Treatment of advance: ln new accounting system, an advance payment given for any expenditure is treated as budgeting expenditures at the time of payment for effective budgetary control.
10. Level of government office and decentralization: The new accounting system is given emphasis is decentralization for accounting work.
The government officers have been classified into two level i.e. central level and operating level accounting. Central level account is maintained by central level office and operation level account by operating level office. Central level offices do not interfere in regular accounting work of operating level office.
11. Provision of auditing: In new accounting systems, there is the provision of audit, so audit of books of accounts is compulsory to detect and payment the misuse of government property and revenue. The office of the auditor general is responsible for audit in government officer.
Objective of new accounting system :
The following are the objectives of new accounting system started by the account committee 2017:
• To provide financial data this is required time to time for preparing financial report.
• To prepared proper systematic accounting for cash and other properties to control such possible misuses.
• Too provide necessary and relevant information required for the preparation of budget to the concerned office.
• To determine the level and position of officers who are responsible to submit the accounts of different projects implemented.
• To check the financial transactions if theyare true and fair thought the auditing.
• To make the audit job simple, less time consuming and economical.
• To collect the historical data of budget head.
Important of new accounting system :
The important of new accounting system are summarized below:
• To keep the real picture of financial transaction of government offices to prepared the records of government fund. Investment, revenue, and expenses.
• To provides all financial data, statistics and other information required for financialadministration and control.
• To provide proper guidance to government for the preparation and implementations of economic plan and policy of the nation.
• To provide necessary information and financial data to the government for preparation of annual budget.
• To control the financial activities of the government because all the revenues and expenditures of government are recorded according to the financial rules and procedures.
• To prevent the measure of government revenues and its properties because there is a to provision of audit of the books of account.
• To provide certain guidelines for preparation of finical statements.
• To ensure and effective uses of the aid and loan amount provided by foreign donors and agencies.
Limitation of new accounting system
New accounting systems of HMG are also not free from weakness and limitations. Some of the limitations are:
•There is no proper mechanism to check frauds and errors committed in the books of account and also if failed to control corruption, misuse and embezzlement of government cash and properties.
•It has given less emphasis on goods, properties and assets because it has given emphasis only on expenditures.
•It is based on cash basis of accounting. No record is made on accruals basis.
•There are higher chances of misappropriation of stock (investment) dueto the lack of systematic and proper store keeping system.
•It cannot provide necessary information or data for making decision on the cost of production and labor efficiency.
•It does not following the principle of double entry system in practice. For example, entry for advance transaction required triple positing inn bank cash book.
•All the forms are designed by the department of general do not fulfill the requirement of managerial need.
Happy new year to all accountants...!!!
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