Financial Management under NRHM

State Institute of Health & Family Welfare, Jaipur

Financial Management of NRHM in
Rajasthan


Ø Coordination
Ø Establishment of new procedures of
accounting
Ø Ensuring that institutions function in
accordance with FMG guidelines
Ø

SIHFW: an ISO: 9001 certified Institution 2

 Accounting?

Process of recording the financial transaction

of a business in a systematic manner and

preparing summarized financial statement.

SIHFW: an ISO: 9001 certified Institution 3

 Accounting Process

Ø Identification of Transaction
Ø Recording the Transaction
Ø Classifying the transaction
Ø Summarizing
Ø Analyzing and Interpretation
Ø Presentation or reporting
Ø

SIHFW: an ISO: 9001 certified Institution 4

Fundamentals of Accounting
Ø Personal Accounts
ØDebit - Receiver
ØCredit - Giver
Ø Real Accounts
ØDebit - What comes in
ØCredit - What goes out
Ø Nominal Account
ØDebit - All Expenses and Losses
ØCredit - All Income and Gains
Ø
SIHFW: an ISO: 9001 certified Institution 5
 Accounting Tools
Ø Ledger
Øsummarized statement of all the
transaction relating to Persons,
Assets, Income & Expenditure
Ø Cash Book
Øall the transaction in cash or cheque;
Receipt of Debit Side and Payment
on Credit side
Ø Types of Cash Book
ØSimple Cash book
ØCash book with discount
Ø
SIHFW: an ISO: 9001 certified Institution 6
 ØCash book with Discount and
Bank
ØBank Cash Book
ØPetty Cash Book
Ø Purchase Book /Purchase return Book
Ø Sales Book/Sales return books
Ø Bills receivable
Ø Bills Payable
Ø Trial Balance
ØStatement of total of all ledger
accounts. Prepared at given
time. Method checking
arithmetical accuracy
SIHFW: an ISO: 9001 certified Institution 7

 Genesis of FMG
Ø Weak Financial Management in WB/DFID
funded RCH-I (1997-2004):
ØRelease and Utilization tracked by each
Prog. Div. separately.
ØDisjointed picture of the programme (even
for Exp. Monitoring)
ØFin Management confined to mere
collection of UCs
ØMultiple interface for States and
Development partners
Ø FMG, as a new entity, came into existence in
2004 with the creation of a new post of
Director (RCH-Fin), only to look after RCH-II
SIHFW: an ISO: 9001 certified Institution 8
 FMG under NRHM
Ø After launch of NRHM, the mandate of FMG
was expanded to cover NRHM
Ø Key features are:
ØConcept of flexi pool
ØSingle nodal point for release,
accounting, tracking of utilization and
audit reports
ØSingle Window interface for all stake-
holders
ØHolistic picture of the program

SIHFW: an ISO: 9001 certified Institution 9

 Functions of FMG

Ø Reforms in the area of financial processes

Ø Financial Management studies of States
Ø Fund releases under Mission
Ø Monitoring of FMR & UCs etc.
Ø Audit arrangements
Ø Analysis of financial data and generation of
FMIS
Ø Skill up gradation of PMU staff at State,
District and Block levels
Ø
SIHFW: an ISO: 9001 certified Institution 10
Importance of Financial Management
Ø Two Way Process: Top-down, Bottom-up
Ø Flow of funds at each level (Top-down)
Ø Clear purpose, adequacy, timely and sufficient
guidance to spend
Ø Centre>States>Districts>Blocks (BMOs)>Other
CHCs/PHCs>SHCs>VHSCs
Ø Reporting of Expenditure through reports &
returns
Ø Timely, accuracy
Ø VHSCs>SHCs>PHCs/CHCs>Blocks
(BMOs)>Districts>State>Centre
Ø
SIHFW: an ISO: 9001 certified Institution 11
 Fund Flow under NRHM
Ø Fund Flow to States under 2 routes:
Ø Treasury Route: primarily salary component.
ØSalaries of the posts of ANMs & LHVs
ØTraining of ANMs.
ØSupport to Family Welfare Bureau at state
and district levels.
Ø Society Route:
ØFor program implementation
ØSalaries for the contractual employees hired
for strengthening of program
implementation under the Mission

SIHFW: an ISO: 9001 certified Institution 12

Financial Guidelines under NRHM

Ø Funds available for various interventions

under NRHM
ØRCH Phase-II Program
ØAdditionalities under NRHM
ØRoutine Immunization
ØVillage Level
ØSub Health Centre Level
ØPHC Level
ØCHC Level
ØDistrict Level
SIHFW: an ISO: 9001 certified Institution 13
Financial Guidelines under NRHM
Ø National Disease Control Programs
Ø Inter-sectoral convergence with drinking water,
sanitation, AYUSH, WCD, PRI
Ø Issues related to untied funds at Sub-centres,
PHCs, Block CHCs, FRUs & District Levels
Ø Problems relating to Funds release,
disbursement, SoEs, UCs at Facility Level
Ø Mechanism for optimal utilization of funds
under NRHM
Ø Importance of monitoring of Financial Mgt.
Ø Format for monitoring the fund flow
Ø
SIHFW: an ISO: 9001 certified Institution 14
Ø
Financial Accounting & Reporting at
NRHM
Ø State Level
ØCash Balance Certificate
ØTreatment of Interest Earned
in the Bank Account
ØPreparation of Cheques
ØCash Book with Cash & Bank
Columns
ØPetty Cash Book
ØSerial Numbering of
Vouchers
ØLedger
SIHFW: an ISO: 9001 certified Institution 15
Financial Accounting & Reporting at
NRHM
ØDistrict Program Management
Support Unit-wise ledgers
ØJournal
ØRegister of investments
ØRegisters for temporary
advances:
ØAdvance to staff
ØAdvances to
Contractors/NGOs
ØTA/DA Advance
SIHFW: an ISO: 9001 certified Institution 16
Financial Accounting & Reporting at
NRHM
ØStock Register for:
ØMachinery & Equipment
ØFurniture & Other Non-consumable
articles
ØRegister for drugs & medicines
ØRegister for consumable articles
ØDead Stock Register (Machinery &
Equipments, Other non-consumable
articles)
ØReceipts & Payments Statement
ØAnnual audited accounts to GoI
SIHFW: an ISO: 9001 certified Institution 17
Ø
 Fund Flow & Reporting
MoHFW

State NRHM

District NRHM PWD MNGOs

NRHM Sub District

Level (Block) NGOs Fund Flow

Reporting

CHC/PHC/SC/VHSC
SIHFW: an ISO: 9001 certified Institution 18
ntrally by FMG GOI
GOI Funds
Funds Parts of the State PIP

es and passing them on to FMG for e-transfer for entire NRHM

Fund
Fund Flow
Flow Fund
Fund Flow
Flow
Parts
Parts -- A,
A, B,
B, C
C Parts
Parts -- D
D

Main Bank Account State Health Society D1

D1 D2
D2 ...
...
entrally by FMG, State PMSU For Parts- A,B,C
ues on sanctioned issued by Different Prog. Divs.

Joint Signatories:
•MD/ED
•State A/cs Mngr/ State Finance Manager/State Prog. Manager
•State Prog. Officer

Main Bank
ged centrally by FMG, Distt. PMSU
Account
Distt. Health Society D1
D1 D2
D2 …
…
heques on sancts. issued by Different Prog.
ForDivs.
Parts – A, B, C Bank accounts for NDCPs
(For Part-D)

Joint Signatories:
•CMO
•DistA/cs Mngr/ Distt. Prog. Mngr
Block •Programme Officer
Block CHC/PHC
CHC/PHC

SIHFW:
Fund Flow an ISO 9001: 2008 certified
Reporting Institution
back of Expenditure 19
 N R H M
A. RCH B. NRHM C. Immu. D.NDCP

Funds
SPMU-SHS

District Health Society FMR

UC
Audit
Report
DPMU

N R H M

RCH NRHM IMMU. TB Malaria Blindness

SIHFW: an ISO: 9001 certified Institution 20
 FMR Format

RCH
NRHM Flexi Pool SRI
Flexi Pool

14 Main Heads 28 Activities 3 Heads

SIHFW: an ISO: 9001 certified Institution 21

 Reporting Requirements
Ø Financial Monitoring Report (FMR) – Within a month
after the close of quarter
Ø Statement of Fund Position (SFP) – Within a month
after the close of quarter and to be sent along
with FMR
Ø Monthly Bank Balance Statement – (within 10th of
the following month)
Ø Audit Report: annually by 31st July of the following
year
Ø A consolidated audit report for the integrated
Society (including all programms under
NRHM) from 2006-07 onwards.
Ø Utilization Certificates:
Ø Final UCs along with Audit Report.
Ø Provisional UCs along with March 07 FMR
SIHFW: an ISO: 9001 certified Institution 22
 Reporting
Ø Certificate by State (funds transferred to
Districts within 15 days)
Ø Monthly FMR from DHS to SHS
Ø Quarterly FMR from SHS to GOI
Ø Statement of fund positions
Ø Monthly statement of bank balances
Ø Annual UCs in form GFR-19A along with
audited statements
Ø Annual audited accounts to GOI
Ø

SIHFW: an ISO: 9001 certified Institution 23
 Monitoring
Ø DHS–Monthly SoEs/Bills/ Vouchers from Block
PHCs
Ø At State - monthly FMR from Districts
Ø At Centre –Quarterly FMR from States
Ø Finance & Accounts Manual clearly indicates dates
of all monthly, Quarterly & Annual reports with
responsibility matrix
Ø E-Banking:
ØTo evaluate the program implementation
status independently
ØShows red-alert districts
ØAllows mid-term corrections

SIHFW: an ISO: 9001 certified Institution 24
 E-Transfer of Funds
Intended outcome:
Ø To send funds electronically to the lowest possible
level
Ø 100% of funds going to States/UTs
electronically
Ø Delay in DDs reaching and loss in transit a thing
of past
Ø In the last 3 years not even a single complain
Ø In many states funds are transferred to Districts
electronically too
Trigger:

Ø FMG study showed that it took 1-3 months for the

funds to just reach the society
Ø Reporting of utilization taking undue time through
multifarious levels
SIHFW: an ISO: 9001 certified Institution 25
•
 Fund Flow through E-Transfer



GOI

E-Transfer (State Health Society, Rajasthan)

E-Transfer (District Health Societies)

E-Transfer in 200 DD/Cheque in 37

Blocks Blocks

DD Cheque in all CHC/PHC/SHS

SIHFW: an ISO: 9001 certified Institution 26

Unification of Financial, Accounting,
Auditing & Banking processes

 Intended outcome:


Ø To synergise the manpower and other related

resources scattered earlier under different

societies under NRHM.
Ø To provide the Mission with unified financial and
accounting processes for fund flow and

reporting back of utilization.
Ø For the first time provided a framework for
unification of NDCPs with other components of
NRHM.

SIHFW: an ISO: 9001 certified Institution 27

 Trigger:


Ø NRHM fund flow scattered and reporting of


utilization disjointed
Ø At any given time financial position of NRHM
not available at a single point either at

District, State or Centre
Ø Financial and accounting manpower
artificially segregated under different
NRHM components like RCH, NDCPs etc.

SIHFW: an ISO: 9001 certified Institution 28

Accounting Policies & Reporting
Requirements
Ø Accounting Centers
ØSHS
ØDHS
ØBlock CHC/PHC (provided the Block
Accountant has been posted; else
DHS should be the Accounting
Centre).
ØRKS of PHC/CHC/Rural Hospitals/Sub-
district Hospitals
Ø
SIHFW: an ISO: 9001 certified Institution 29
 Movement of Records

Ø SHS Level
Ø DHS Level & Block CHC/PHC level
Ø All transactions records to be kept at
concerned institutions itself.
Ø Records will not be moved from these
institutions
Ø Furnish SoE/FMRs to next higher
institution
Ø

SIHFW: an ISO: 9001 certified Institution 30

 Treatment of G-I-A
Ø Funds transferred from GoI but not received shall
be entered on the income side of the income and
expenditure account under the heading "Grants-
in-Aids” and taken in the balance sheet on the
assets side under the heading “Funds in
Transit" below Current Assets (Cash and Bank
Balance).
Ø G-i-A is reflected in the Income & Expenditure
accounts as income to the extent of fund
utilization against it.
Ø The Grant-in-Aid to the extent of unutilized at the
end of the financial year is shown as liability in
the Balance Sheet.
SIHFW: an ISO: 9001 certified Institution 31
Ø
 Recognition of Expenditure


Ø Releases to Public Health Institutions: shall not

be treated as expenditure unless they are
reported back as expenditure
Ø Advance to NGOs: NO
Ø Advances for Civil Works: treated as advance at
the time of release. On receipt of certificate of
stage of completion and part bill from PWD or
Contractor, it is booked as expense to the
extent it is certified by the PWD as per the
terms of the agreement.
•
SIHFW: an ISO: 9001 certified Institution 32
Releases to VHSCs:


Ø Untied Fund to VHSCs @ of Rs 10,000/ per

annum shall be deemed to be treated as
expenditure provided the Untied Funds
have been credited in the Bank Account of

VHSC.
Commodity Grants:


Ø Not reflected in the financial statements of the

Society
Ø They Should be appearing in the Notes on
Accounts and Disclosure of the Audit
Report
• SIHFW: an ISO: 9001 certified Institution 33
 Expenditure Reporting Basis


Ø From DHS: Based on FMR/SoE. (certification

that expenditure made for the approved items
and vouchers retained at the District level.
Ø From Block CHC/PHC: Based on FMR/SoE.
However, FMR or SoE must carry a
certification
Ø From PHC, SHC: Based on actual receipt of
vouchers and supporting documents.
Ø From Rajasthan Medical Relief Societies at
various levels: Based on Monthly and
Quarterly SoEs.
• SIHFW: an ISO: 9001 certified Institution 34
 Reporting from RMRS
Ø For Monthly/Quarterly FMRs: monthly Statement of
Expenditure (SoE) to the controlling Block
CHC/PHC or DHS.
Ø For Annual Audit of DHS/SHS:
ØSHS and DHS should ensure that Audit
of all the RKS is complete within 2
months of the closure of financial year
ØHowever, if the Audit can not be
completed then, Audit Report of the
DHS be finalized (without delay) based
on monthly SoEs for the last month
(i.e. March) showing monthly and
cumulative expenditure for the financial
year.
ØDifferences can be adjusted during next
yearan audit
SIHFW: ISO: 9001 correspondingly.
certified Institution 35
 Treatment of Fixed Assets


Ø Assets that are to be capitalized: to B/S while

sending Utilization Certificates (UCs), the
expenditure shown in UCs should include
the expenditure as per Income &
Expenditure Account plus the amount of
such Capitalized Assets.
Ø Assets not to be capitalized: in Income & Exp
Statement.
•

SIHFW: an ISO: 9001 certified Institution 36

 Financial Reports from SHS to Centre
Report Basis and Checks for Date on which
sending the Report to be sent
1. FMR To be prepared from the Quarterly
books of accounts (within a month of end
of the quarter)
2 SFP Along with FMR & duly Quarterly
reconciled with FMR and Within a month of end
books of accounts of the quarter
3 Bank On the basis of bank Monthly.
Balance Statement of the Bank By 10th of the
Report Accounts of DHS & SHS following month

This should be tallying the

SFP for the quarter ending
months.
SIHFW: an ISO: 9001 certified Institution 37
4 Statement of 1. This should include the interest Six Monthly.
Interest earned on all the bank account of all First Report –
earned by DHS and SHS. By 10th October
DHS & SHS. 2. Interest earned at State and District Second Report
level should be shown separately. – by 10th April.
3. The interest earned on different bank
accounts (for various programmes)
should be shown separately.
5 Audited As per the Audit Format provided. Annually.
Statement of By 31st July of
Accounts and the following
Audit reports year
of SCOVA

6 Utilisation 1. UCs should be sanction wise. By 31st July

Certificate 2. UCs should be as per Form 19 A. along with the
3. UC should be as per the expenditures Audited
certified in the Audit Report. statements

SIHFW: an ISO: 9001 certified Institution 38

Synchronization Demo

NRHM Accounting Software

Steps for Synchronization DEMO
Ø Step 1 : Install (DHS) NRHM Acc. SW
Ø Step 2 : Configure District for Synchronization
Ø Step 3 : Install Accounting SW on the Block
 /CHC/PHC side in a Separate Folder
Ø Step 2 : Configure Block->CHC/PHC for
 Synchronization
Ø Step 3 : Create Sync Rule on Block->CHC/PHC
Ø Step 4 : Handshake Process from Block-
 >CHC/PHC
Ø STEP 5 : Activate/Enable Sync Rule on District
Ø
SIHFW: an ISO: 9001 certified Institution 40
Ø
Highlights of Accounting Software
Ø Simple, efficient and cost effective mechanism
Ø Simple installation and set-up
Ø Simultaneous updating of data at District and
Blocks
Ø Single click for updating data
Ø Synchronization using SW network environment
Ø Synchronization over the Internet using a low
bandwidth dial-up connection
Ø Adaptable to an occasionally connected
environment

SIHFW: an ISO: 9001 certified Institution 41

 Guidelines for Use of SC funds
Ø SC untied fund - Rs.10, 000
Ø Joint bank account of the ANM and the
Sarpanch
Ø Decisions approved by the VHSC, administered
by the ANM
Ø Untied Funds - used only for the common good,
except for referral and transport in emergency.
Ø Untied Funds may be used for:
ØMinor modifications to sub center-
ØCurtains to ensure privacy
ØRepair of taps
Ø
SIHFW: an ISO: 9001 certified Institution 42
 ØInstallation bulbs
ØOther minor repairs
ØCleaning up sub center, especially
after
 childbirth
Ø Transport of samples during epidemics
Ø Purchase of consumables
Ø Purchase of bleaching powder and disinfectants
Ø Labor and supplies for environmental sanitation
Ø Payment/reward to ASHA for identified activities
Ø Not for salaries, vehicle purchase, and recurring
expenditures
SIHFW: an ISO: 9001 certified Institution 43
Management of Funds at the SC Level

Ø Expected Funds Inflow: Sub-Centres to

 receive funds under the following heads:
ØPermanent Advance for performance
 related incentive to ASHA
ØAnnual Maintenance Grant of Rs
10,000/-
ØUntied grant of Rs 10,000/- every
year
ØJSY


SIHFW: an ISO: 9001 certified Institution 44

Ø Banking System:
ØA bank account, signatories - ANM and
Sarpanch
Ø Records:
Øseparate register for each of the
activities – receipts and expenditure
(ANM)
ØVerification (Sarpanch)

SIHFW: an ISO: 9001 certified Institution 45



Submission of SoE:
Ø Quarterly, within 5 days of the end of the
quarter to MO/IC (ANM)
Ø Reconciliation with bank (ANM).
Ø SoE on the simple format on plain paper for
Untied Grant, Annual Maintenance Grant,
JSY, separately
•

SIHFW: an ISO: 9001 certified Institution 46

Guidelines for Use of Funds at PHC

Ø PHC untied grant Rs. 25,000/- p.a., Annual

Maintenance Grant of Rs.50,000/-
Ø A separate register indicating sources of funds
Ø Bank account of the concerned RMRS
Ø PHC - Panchayat level Committee/RMRS to
undertake and supervise the work from
Annual Maintenance Grant
Ø Expenditure monitored by RMRS
Ø

SIHFW: an ISO: 9001 certified Institution 47

Fund Management by BCMO and
MO/IC - CHC/PHC
Ø JSY
Ø Untied Grants/annual maintenance grants to
Sub-Centres and VHSC
Ø Workshops for Block Level Mission team
Constitution & Orientation of all community
leaders on PHC and CHC committees
Ø Training of community health workers (ASHAs,
AWW)
Ø ASHA support/mentoring mechanism
Ø
SIHFW: an ISO: 9001 certified Institution 48
Ø Training of ANM, PHN, Staff Nurses etc
Ø Support for School Health Programs
Ø Improving physical infrastructure
Ø Ambulances for PHC/CHC
Ø National Disease control Programs
Ø Health melas, RCH Camp
Ø Program Management, etc.
Ø

SIHFW: an ISO: 9001 certified Institution 49

PROGRAM IMPLEMENTATION
PLANS
 Planning Process
State Program Implementation Plan

34 District Program Implementation Plans

237 Block Program Implementation Plans

41000 Village Health Plans

(physical progress)
SIHFW: an ISO: 9001 certified Institution 51
Distribution of PIP Share
State PIP= 1010 Crores
54 %
Of
State
PIP
Total District PIPs= 545 Crores
80 %
Of
District
PIP
Total Block PIPs= 436 Crores
SIHFW: an ISO: 9001 certified Institution 52
 NRHM Projected Expenditure in
2009-10 Expenditure through SHS Rs. 4

State Health Society

District Health Society

Block Health Plans

Expenditure through DHS Rs. 1

penditure through Blocks
Rs. 436 Crores

SIHFW: an ISO: 9001 certified Institution 53

 Division Wise Distribution of PIP
160
144
140 136
Allocation (Rs. in Crore)

120 111

100 92

80 73 73

60 56

40

20

0
Kota Bharatpur Bikaner Ajmer Jodhpur Udaipur Jaipur

Division

•Jaipur I & II DHS have a PIP size of Rs. 53 Crore

•Udaipur District has a PIP Size of Rs. 42 Crore
•Nagaur District has a PIP Size of Rs. 33 Crore
SIHFW: an ISO: 9001 certified Institution 54
 A

0
1000
2000
3000
4000
5000
6000
j
B h me
il w r
a
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ga
ur
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ar k
at
p
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p
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p
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ne
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n u Ch
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i G an u
an ga
ga rh
na
ga
A r
lw
ar
Ja Dau
ip sa
ur
Jh -I &
un II
jh
un
u
Si
k
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is
al r
m
e
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lo
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dh
pu
r
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li
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ro
h
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aw i
ar
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n ta
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itt ar a
o
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un r h
g
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at pu
ap r
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District Wise PIPs

SIHFW: an ISO: 9001 certified Institution

am
an
Ud d
ai
pu
r
Rs. In Lacs

55
Resource Envelope for District PIans
1218 Rs . In Lacs
15501

37814

RCH-II

Additionalities

R. Im munisation

SIHFW: an ISO: 9001 certified Institution 56

Expenditure through District PIPs
R.I.
Additionali 2%
ties
33 %

RCH II
65%

SIHFW: an ISO: 9001 certified Institution 57

NRHM – Rajasthan State Health Society
Roles & Responsibilities
ØConsolidation of District PIPs and
finalization of State PIP

ØTimely release and transfer of funds to DHS
ØCollection & compilation of SOEs, UCs,
prepare reports & returns for monthly
meetings and reporting to State
Government & GoI
ØEnsure timely completion of statutory audit

SIHFW: an ISO: 9001 certified Institution 58

 NRHM Rajasthan– DHS
Roles & Responsibilities
ØFinalization of District PIPs
ØRelease of funds to district functionaries and
blocks
 ØAccounting for all programs, sending Financial
Monitoring Reports, UCs and Audit reports to
the State FMG
ØTimely completion of audit
ØLiaison with the Block Program Office (BPO)
and Block Accountant - expenditure reports
and UCs on a fortnight/monthly basis

SIHFW: an ISO: 9001 certified Institution 59

 NRHM Rajasthan – Sub District Level
(Block Level)

Primary Roles & Responsibilities

ØPreparation of Block PIPs
ØConsolidation of SoE from:

ØCHC
ØPHC
ØSC
ØVHSC
ØSubmission of consolidated SoE to District
Office

SIHFW: an ISO: 9001 certified Institution 60

 Total Accounts Under NRHM
12889 Bank
Accounts
1.All Bank Accounts operational
2 Bank A/c
SHS, Rajasthan 2. E-transfer is functional at all
 34 Bank A/c districts and out of 237 Block


DHS A/c 200 are covered through
E-transfer
237 Bank A/c
Block
3. We are negotiating talks with
365 Bank A/c
our Bankers to facilitate
CHC
E-transfer/ RTGS at Block &
1509 Bank A/c CHC level
PHC
10742 Bank A/c
SHC
SIHFW: an ISO: 9001 certified Institution 61
 

 Thank You
•

SIHFW: an ISO: 9001 certified Institution 62