CENTRAL PUBLIC WORKS PAPER V of JAO PART II

1. CENTRAL PUBLIC WORKS PAPER V of JAO PART II

2. CPWD–QUESTION PATTERN Question No 1 and 2 are compulsory which carries 50 marks and 40 marks respectively. 50 Marks question – Cash book 40 Marks question-Running account of contractor’s bill Question No.3 to 7 questions will carry 15 marks each. Out of this, only 4 questions has to attend. Thus total Marks = 50 +40+(4x15) =150 marks

3. CASH BOOK General Note on Cash Book Every Disbursing officer has to maintain a Cash book in the prescribed form (Form No. 1) All payments made out of cash are to be entered on the payment side of cashbook.(Right Side) Cash collected on account of Departmental receipts or drawn on cheques to be entered in the Receipt side of the Cashbook (Left side)

4. Cash has been defined as follows: • 1) Legel Tender Coins & Notes • 2) Cheques (in favour of self ) • 3) Deposit-at –call receipts of Banks • 4) Bank Drafts payable on Demand Viz . DD • 5) Revenue Stamps • Note : The service postage stamps should not be included in the definition of Cash • Does not include : • Debentures, Bonds, Govt.Securities, FD Receipts etc

5. All payments made and Receipts realized should at once be brought to account in the Cash book • Exceptions : 1) EMD • Temporary Advance should be posted only in the body coloum and not posted either in Receipts /payment side. • In payment side , only cheques issued by DDO are to be entered in the Bank Coloum and if a person tenders a cheque in payment of the amount due from him, such a cheque is treated as Cash receipt and is entered in the Receipt side of Cash book.When such a cheque is sent to Bank, it will be entered in the Payment side of the cash book in the Cash column and not in the Bank Column.

6. To be included • Legal Tender Coins,notes • Postal orders ,DD, Cheques • Cheques in favour of self • Revenue stamps • Imprest (or) Temp.advance • Undisbursed wages • Deposit at call receipts of Banks • To be excluded • Counter Feit coins • Private Cash cheques • DD in f/o of contractors • Service postage stamps • Sub office cash chest • Debenture, Deposit receipts etc. • Unpaid salaries or regular staff awaiting to be disbursed.

7. As far as Revenue stamp is concerned, no entry is required in the Cash book on sale as well as on purchases. The amount of Cancelled cheque is written back by an entry in the Bank column on the payment side of the cashbook, exhibiting the amount as a minus figure. If the currency of cheque expires, it can be revalidated. The amount of new cheque is not entered in the Bank column of Cash book and only a note that new cheque has been issued in lieu of old one is kept in the column.

8. EMD –When received , it will be classified on the receipt side of the cash book under the head ‘ Public Works Deposits’ when refunded, similar entry is made on the payment side. If refunded on the same day, need not be entered in the Cash book. • Cash found short (or) excess – Found excess is to be credited to ‘Public Works Deposits’ on the Receipt side and if found short, it is to be posted on the Payment side as ‘Misc.works advance’. Even if it is made good, two distinct entries are necessary.

9. CONTRACTOR’S BILLS • Security and Security Deposit : A distinction should be made between ‘Security ‘ and ‘Security Deposits’ . If, in the question, the word used as ‘Security Deposit’ then the amount recovered is to be credited to ‘Public Works Deposits’ If the recovery is on account of ‘security’ then it is creditable to the work itself if the amount of security likely to be deducted for the work from the contractor during the year is less than Rs.500. (or) otherwise, it is creditable to ‘Public Works Deposits’ • Fine : It will be credited to revenue as ‘ Other receipts’

10. Important classifications : • 8443 Civil Deposits, Public Works Deposits - All Deposits to be classified into this head. If we are not knowing about classification of receipts, it can be booked. • 2059 – Public works –Genl-Suspense-Misc.work Adv. - All items of payments if classification not known, then it can be posted into this head.Cash found short and imprest objection amount may be classified into this head. • 5054- Capital outlay on Roads & Bridges, NH and other Exp. - It any item is related to Capital , construction, stores purchased etc • 3054 – Repair and Mtce of Roads & Bridges , NH and Machinary & Eqp. • All mtce. Expenditure can be classified into this head. • 8009 – General Provident Fund • 2049 - Interest Payments on GPF/PPF etc. • 0059 - Other Receipts • 8550 - Civil Advances, other Departmental advances

11. 0070- Other Administrative Services, Fees for Govt audit etc. • 0071- Contribution and recoveries towards Pensions and other Retirement benefits. • 2245 – Direct Expenditure incurred on natural calamities , Flood , Cyclone etc. • 4701 – Expenditure on Irrigation,water courses. • 7610 – Loans and Advances • 8674 - Security Deposits made by Government. • 8782 – Cash remittances and adjustments between • 8761 – Departmental Balances (Civil) • 2071- Pensions and other retirement benefits , contribution to Provident funds. • 0021 – Taxes on Income

12. CONTRACTOR’S BILLS The Amounts due to Contractors for work done or supplies made are detailed in forms called as ‘ Contractor’s Bills ‘ Transaction with contractors for works undertaken by them fall into four catagories: Payments for work done and measured. Payments for work done but not yet measured. Payments for materials brought by them at the site of work for use by them on the work Other Transactions.

13. Payments for work done and measured (on account payment) - After an item of work has been done/carried out /executed by the Contractor as per the specifications, the department measures the quantity of work done and accepts its quality before making payment for that item. A record of all work done and measured for its quantity and quality is kept in a register called the ‘MEASUREMENT BOOK’ • Payments for work done and not yet measured (Advance pmt) - Necessity for this kind of payments arises, when a contractor has done some work and measurement is not taking place for some reason or the other. In such cases, the contractor needs to be paid some money so that he is enabled to pay to his labourers and employees. This is advance payment against the value of work done but not measured. It will be adjusted on final bill.

14. Payments for materials brought to site : - Payment as Secured advance can be made to the contractor only if his contract is for doing the work by using his own material, which he has brought to the site of the work. This is advance paid to the contractor on the security of non-perishable materials purchased by him and brought to the site for use on the work. This advance is payable only if his contract is for completed items of work. Ie. For labour as well as materials. When the materials so collected are used up on an item of the work, then the contractor will be paid at the contracted rates and the advance previously paid to him against the materials at site would be adjusted. If his contract is only for the supply of material, then Secured advance is not payable.

15. Contractor’s Other Transactions : - In addition to the above mentioned kind of payments, a PWD division has to issue materials to the contractor’s from Govt.stores and its value will be recovered from his bill relating to the items of work on which the said material is used. In some cases, some amounts may be withheld from the bill of the contractor till some deficiencies in the work are rectified. Amount relating to such transactions are kept in the account of work under the head – Contractors- Other Transactions’

16. Types of payments : • All payments for work done by a Contractor fall into two categories. • 1) Final Charges : (for work done and measured) • These are called as ‘ON ACCOUNT PAYMENTS’ relate to payment for work done & supplies made by him which have been duly measured. This can be in the form of ‘ FIRST & FINAL PAYMENT ‘ or on ‘RUNNING ACCOUNT’ 2) i) Advance Payments - (for work done and not measured) ii) Secured advance - for materials brought to the site for work except perishable items and related to such work. iii) Other transactions – For amounts recoverable from or payable to contractor on satisfaction of conditions.

17. First and Final payment & Running account : • This is a payment against a contract is made only on its completion and in full settlement . Bill for the first and final payment is prepared in form no. 24 • This term running account is applied to payments made to a contractor at periodic intervals for work done by him till then. In the first and final bill, there is no question of payment of secured advance or advance payments and running account is to be prepared in form no 26. • Substandard work – If a contractor does not rectify the defect which can be rectified by PWD Department at the contractor’s cost and adjusted from the bill.

18. Recoveries from contractor : • 1) Security Deposits – when the work is allotted to a contractor, he is required to deposit 5% of the amount of the tendered value of the work as Security deposit –performance Deposit. Earnest money Deposit (EMD) plus up-to-date security deposit does not exceed 5 % of the tendered value of the work and it is recoverable from each running account bill of the contractor till this amount arrived at. • 2) Income Tax : Under Sec 194 C of IT Act 1961, deduction of income tax is required to be made at source by DDO. This recovery is made on Gross amount of ‘On account Payment’ paid to the contractor. • 3) Materials issued to contractor from Govt’s stores – • i) if the contract is for labour rates only, the cost of materials issued is not recoverable from the contractor. • Ii) when materials have been issued , it can be recovered.

19. 4. Hire charges of Tools and Plant lent by govt.for use. • Rates at which Divisions tools and plant like Road Rollers and concrete mixure etc. would be issued to contractor for their use on the work. • 5. Fine for delay on completion of work • 6. Fine for defective work • 7. Recovery of cost of removing defects in Contractor’s work • 8. Recovery ordered by Court. • 9. Recovery of mobilization of advance – It is a loan on which interest is also recoverable.

20. Important checks on Running account: Filling up in Form 26 of CPWA Code . This form consists of three parts so far as account is concerned. (The Fourth part consists only certificates to be given by the Engg.officers in charge of work) 1) Account of work executed 2) Annexure – Form 26 A – Account of Secured Advances 3) Memorandum of payments -------- • 1) The amount payable to the contractor on running account (H) Minus Net value of work since previous bill (F) should be equal to • i) advance payments since previous bill (D) + Net secured advance since previous bill (E) –(deduct amount with held from this bill (5(b)+ payments now to be made for supplying materials (8(a). • Viz. H-F = D+E-G • 2) K= D+E+F-5(a) • 3) K=(A+B+C-Line 5 )

21. Model problems –Cash book • Q 1 - From the following details, for the month of Nov 2004, indicating the classification and giving an analysis of Closing balance : • 1.11 – Opening Balance - • (a) Notes and Coins -Rs.100 • (b) Service Postage stamps -Rs.20 • (c) Revenue stamps -Rs. 5 • (d) Chq.dt 31.10.04 on the local branch of SBI – from Shri.’X’ on account of rent - Rs.145 (e) U/D of TA adv to clerk - Rs.100 (f) Hand receipt for Temporary Imp.with A - Rs.50 Imp with B - Rs.400 Imp with C - Rs.100 2.11 – Remitted the chq.received from ‘X ‘ into treasury/bank 4.11 - Temp.adv a/c of ‘B’ submitted i. Muster roll for the construction of staff qtrs - Rs.300 ii) Charges incurred for conveyance of materials –Rs.50 iii) Cash returned - Rs.45 iv) Shortage unaccounted for - Rs. 5

22. 5.11 - SDO ‘C’ submitted an Imp.account for Rs.40 towards payment of charges in connection with repairs to non-deptlbldgs. The amount was recouped and the imprest was increased from Rs.100 to Rs.150 • 7.11 Drew Cash for Chest (self cheque) -Rs.150 • 8.11 Paid ‘Y’ in cash for materials supplied for Stock in July04- Rs.200 • 9.11 Received Ty.Adv a/c from ‘A” as below : • Charges incurred in connection with electric installation in the res.of Executive Engineer -Rs.45 • Cash returned by EE -Rs. 5 • 14.11 Paid by chq. On account bill of Contractor ‘P’ for constructing quarters for staff as below: Net payment by Cheque -Rs.7950 Deductions : Court attachment -Rs.500 Overpayment made on Another work -Rs.100 Security Deposit - Rs.650 Total Deductions - Rs.1250 15.11 Recd from SDO ‘B’ cash challan for Rs.100 remitted by him into the Bank on a/c of sale proceeds from public bldgs -Rs.100 21.11 Chq.no. 285 for Rs.1000 issued to contractor‘Q’ was revalidated. 22.11 Cash found short in chest Rs.5 23.11 Cash receipt on account of rent of bldgs.and furniture - Rs.1000 28.11 SDO “C’ rendered an imp.a/c of Rs.75/- as payment made and recouped in cash –Rs.75 30.11 Remitted into Treasury the receipts recd upto 23.11.04 by remitting the entire cash balance on hand and drawing a self cheque for the balance.

23. Working Sheet of Daily Cash Balance

24. Receipt side Payment side

25. Receipt side Payment side

26. Q 2 – Draft the Cash book by posting the following transactions in the Cash book of EE N Divn for the month of July 2004 and work out details of CB as on 31.07.2004 by indicating classification of each item and close the cash books. • 01/07 - Opening balance • 1. Notes and coins -Rs.2162 • 2. Revenue stamps Rs.30 • 3. Postage stamps Rs.500 • 4. Value of service books in stock Rs.45 Rs.575 • 5. Undisbursed TA of Work charged employee Rs.300 • 6. Private self chequedt 29.06.2004 Amt.was paid to him from • chest as it could be sent to Bank for collection Rs.100 • 7. General Provident Fund advance Rs.7500 • 8. NSS tendered as security by the cashier -Rs.5000 • 9. Chq.No.51 dt 30.06.04 drn in favour of contractor ‘X’ in lieu of • cancelled cheque for the work of constructing school bldg-Rs.5000 • 10. Chq.no.49 dt 29.06.04 for payment to supplier towards purchase • of office furniture Rs.9000 • 02/07 1. Self chq.no.52 dt 30.06.04 encashed -Rs.2400 • 2. Delivered chq.no.51 dt 30.06.04 to contractor as well as • chequefpr Rs.9000/- to supplier • 3. Refunded SD to Contractor ‘Y’ by Chq.no.53 -Rs.8100 • 4. encashed private self chq.dt 29.06.04 • 5. Purchased Revenue stamps Rs. 5

27. 6. Supplier returns ch.no.49 dt 29.06.04 as it is defective. It is cancelled and ch.no.54 for Rs.9000 issued in lieu. • 04/07 – 1. Received out-station cheque no.25 dt 24.06.04 from a party towards rent of leased land Rs.6020 2. Cash found excess Rs. 35 • 05/07 i. Sent the cheque recd from party on 04.07.04 to Bank • ii.AE ‘K’ Sub Divn renders Ty.Adv of Rs.500 as under • a. Petty repairs to office furniture -Rs.325 • b. Carriage on material for stock - Rs.25 • C. Cash lost - Rs.50 • d. Balance in cash - Rs.100 • 06/07 i. AE ‘L’SubDn holding permanent imprest of Rs.1800 render a/c a. Cost of repairs to a residential bldg Rs.600 • b. Wages of Chawkidar for watch and ward of godown Rs.1100 • The impreset was recouped and increased to Rs.2000 ii. Sale proceeds of auction of old Tools Rs.2000 07/07 i.Issued postage stamps(Rs.150)and Sold Rev.stamps for Rs.5/- ii.The receipt scroll received from bank indicated that outstation cheque no.25 dt 24.06.04 has been credited after charging Rs.10 as Bank commission. • 08/07 i. Received by AE ‘J’ Sub Dn rent of residential bldg in cash on 06.07.04 and remitted to bank on the same day and receive bank challan Rs.3500 • ii. EMD of Rs.5000 each , was recd from Z and S and returned to Z by chq.no.55

28. 15/7 – i. EE accounted for Rs.1900 out of Rs.2000 taken from chest on 08.07.04 • a. Cartage charge of GI sheets -Rs.600 • b. Wages of chowkidar for June 2004 -Rs.1300 • ii) Sale of Tender forms -Rs.2000 • 20/07 – Paid to Contractor ABC 3rd on Account Bill for construction of staff quarters by Chq.no. 56 The particulars are : • 1) Total value of work actually measured up to date –Rs.87000 • 2) Total up to date Advance payments - Rs. 12000 • 3) Total payments made in two previous on a/c bills - Rs.57000 • Recoveries : • a. Value of Timber supplied in May 2004 - Rs.17000 • b. Recovery from contractor advised by another Divn – Rs.50 • c. Materials supplied for ‘Constructing a hospital’ - Rs.900 • 25/07 i) Over payment of salary refunded by staff in cash and dep.in bank – Rs.4100 • ii) Issued fresh chq.no.57 in f/o contractor for supply of cement for • stock in lieu of chq.no.23 dt31.03.04 issued erroneously for Rs.67000–Rs.76000 • iii) Paid by self chq.no.,58 Temp.adv to JE ‘X’ for payment of MR labour–6000 • 29/07 i) Draw salary of EE and staff by Cq.no.85 Gross amount -Rs.31500 • Recoveries : Income Tax – Rs.1500 GPF –Rs.2300 HBA- Rs.2500 CGEGIS-Rs.1200 Advanceof Pay –Rs.700 Licence Fee – Rs.200 & Rs.3000 remained undisbursed • ii) Remitted into Bank Mis.receipts in cash -Rs.7000 • Balance misc,receipts remitted into Bank by chq.in f/o self and endorsed for credit bank.

29. Working sheet of Daily Cash Balance

30. Receipt side Payment side

31. Receipt side Payment side

32. Q 1/4 – Prepare the First Running Account Bill of a Contractor ‘X’ from the following details for constructing School Building on Contract. • Advance Payment of Rs.8000/- was made in this bill for Brick work in Cement • He had brought 100000 bricks and 500 bags of Material ‘X’ at site for use on the work for which secured advance is to be paid to him taking the assessed rate of these articles as Rs.800/- per 1000 bricks and Rs.140/- per bag respectively. • In the analysis of rates of work as per rates tendered by the contractor , the material element of cost was Rs.850/per 1000 bricks and Rs.120 per bag for Material ‘X’ An Amount of Rs.250 was to be withheld as he had not yet removed the surplus earth from site. 10% security was deducted and kept within the account of the work. Cost of material issued for this work (Rs.650) is also to be recovered . TDS @ 2% of the value of work done to be recovered.

33. I. Account of Work Executed Form 26 A – II – Account of secured advances

34. III Memorandum of Payments

35. Q 1/12 – Prepare the Second Running Account Bill of a Contractor ‘C’ from the following details for constructing Engineering college • In the Ist RA, Adv.payment of Rs.1750 and Rs.1500 on items (ii) and (iii) was made. Max.SecuredAdv.was allowed on 100000 bricks bought to site in the FA bill. Market rate of brick was Rs.160 per 1000. In 2nd RA, further Secured adv.on 60000 bricks brought to site was allowed. The cost of bricks actually used, in brick work done and measured since previous bill, was recovered in 2nd RA, 100 ft of brick work requiring 1200 bricks. In terms of contract, deduction was made from each bill @ 10% on a/c of SD. Income tax is to be @ 2%. Further recoveries : a) value of 20 bags of cement at Rs.50 per bag issued for this work. B)fine for delay in completion of another work at Rs.100 per day for 15 days. C) Hire of Tools and plant rent to the contractor Rs.450

36. I. Account of Work Executed Form 26 A – II – Account of secured advances

37. III Memorandum of Payments