6b.common_PM_PROJECT BUDGETING _ REBE

• Budget is a best tool in the hands of management to overview: Funds Management, Projects undertaken in the business, its expenditure and its further requirement, Exercising expenditure control, Assessing financial capability of the organisation, To modify / Augment the business planning
• Budget in BSNL


  • Revenue Budget
  • Capital Budget

  
• Revenue Budget (Operating Expenditure)

  • Salary
  • Medical Expenses
  • Wages
  • Overtime Allowance
  • LTC
  • Pension/Leave Salary Contribution
  • Maintenance Expenditure
  • Business Promotion and Marketing
• Capital Budget (Capital Expenditure)


  • Land
  • Building
  • Apparatus and Plants
  • Electrical Installations
  • Lines & Wires
  • Cables
  • Subscriber Installation
• The capital works programme containing proposals for budgeting of the capital works to be submitted to Corporate Office, during February in the forms 'A','B' and 'C'
• The capital works programme should be thoroughly scrutinized before submission to the corporate Office by the planning branch and the IFA of the circle office
• Capital Expenditure in BSNL

  Primarily relates to Acquisition of Land, Constructing Telephone Exchanges, Procurement of equipments, Line and Wires, Laying of cable etc.
• Formulation of RE/BE


  1. The necessity for individual projects, newly proposed as well as works –in-progress should be fully examined from the point of view of the relevance of the project to the expansion or improvement of the network, the essentiality of the specific project and its profitability

  2. Works-in-progress may turn out to be not relevant and therefore not justifying further expenditure due to prolonged gestation of the projects or recent developments like policy decisions regarding changing technology, such as digitalization, change in Product-mix from factories, like phasing out of electro-mechanical system

  3. Decision should be taken in such cases regarding abandoning of the project, taking care to find ways and means of salvaging the investment already made

  4. In case of projects which have been included in the Demand-for-grants after the above scrutiny, the listing may be done on the basis of priority, so that the directorate could decide about any possible deletion in the context of inadequacy of allotment of funds

  5. In the case of works costing less than Rs.5 Cr each, where a lump sum allotment is asked for, a similar exercise, as mentioned above should be under taken so that only essential and remunerative projects are included in the programme
• Capital Works Budget Statements

  • Proposals in respect of projects costing 5 Crores & above
  • Component-wise consolidated demand - major works costing below 5 Cr
  • Works costing below Rs 5 Cr. But expenditure exceeded Rs 5 Cr.
  • Consolidated proposals of sanctioned works (A to D)
  • Material input-wise requirement for capital works
  • Consolidated component wise demand of ongoing projects
  • Profitability of capital works projects to assess expenditure on non-remunerative projects for the purpose of "USO" (Universal Social Obligation) Funding
  • Provision of targeted VPTs - technology wise break up with cost /line
• Funds for Capital works expenditure comprise: Specific provision for each project costing Rs.5 Cr and above, Lump sum provision for all other works
• Allotment of funds for Capital works expenditure

  1. Funds for major works, costing Rs.5 crores & above are allotted by the Corporate Office to Heads of Circles according to the components of each project

  2. In respect of all other works, allotments are made account head-wise in lump

  3. Allotments of funds are made subject to conditions that no appropriation of funds is to be made against any unsanctioned detailed estimate, no appropriation of funds is made beyond 10% of the sanctioned cost of a detailed estimate, and no appropriation of funds is made which has the effect of exceeding the sanctioned cost of the project beyond 10%
• Expenditure Control


  1. Corporate office is ultimately responsible for controlling the whole expenditure against the sanctioned grant and Heads of Circles are required to cooperate

  2. Expenditure should not be incurred under any head in excess of the funds allotted

  3. If any time it becomes apparent that there is likely to be a surplus under any head, then the amount of the probable excess must be promptly surrendered

  4. Every administrative officer should insist on the submission by each of his subordinate officers amongst whom he subdivides his allotment of a regular monthly basis
• Works not provided for in the sanctioned budget are termed as "Non-Budgeted works. No expenditure can be incurred on Non Budgeted works with out the prior approval of the competent authority
• Demands for funds for execution of projects beyond sanctioned cost

  1. As soon as the expenditure on a project reaches the level of 75% of the sanctioned cost, a review should be under taken to examine if the project can be completed within the sanctioned cost

  2. If it is anticipated that the cost is likely to go beyond 10% of the sanctioned estimate, immediate action should be taken to prepare a revised project estimate and have it sanctioned well in advance
• Revenue Budget


  • Annexure-A (Working Expenses)
  • Annexure-B (Revenue Receipts)
  • Annexure-C (Establishment Expenditure)
• No provision for new items of expenditure may be included in the budget without the prior approval of competent authority
• Cash Budget


  1. The Cash requirement of each SSA and Circle HQ are forecasted once in 15 days against Capital and Working Expenditure with reference to proportionate Budget Allotment

  2. Funds are released by Corporate Office after scrutiny of requirement through banking channel

  3. Monthly cash flow statement of Collection Accounts is prepared & sent by SSA to Circle Office, Circle Cash flow statement of Collection Accounts is prepared by Circle & sent to Corporate Office

  
• As approved by BSNL Management Committee in its 105th meeting held on 11-11-2008, the budget processing and related works have been modified in order to streamline the Budget processes and to yield more realistic budgetary estimates in the circles and corporate office

  
• Proposals under Capital outlay from Circles/Units to corporate Office

  Dispensed with
• Capital works programme


  Compiled only for works costing Rs.20 crores and above instead of Rs.5 crores and above
• Compilation of Capital works Programme

  Details to be submitted to BBF Division of Corporate office by the respective circles every year in the prescribed format to enable corporate office to monitor the progress of ongoing and New projects costing more than Rs.20 crores
• Budgetary control


  1. BBF Division will furnish details of expenditure to the concerned Circles and respective Planning branches of Corporate office, on quarterly basis for monitoring physical targets viz-a-viz capital expenditure recommended by planning branches

  2. Circles need not send variation statements at the close of the financial year to corporate office

  3. Variation statements will have to be reviewed by the respective circle

  
• Procedure for obtaining statements of physical achievements/progress/review

  Continues to be dealt in Planning Branches as hitherto followed
• "New Items of Expenditure" proposals from circles for fixing ceiling on New posts and expenditure therefore is dispensed with immediate effect
• Obtaining of expenditure statements of Loans & Advances, including HBA, is dispensed with immediate effect

  
• The existing procedure and related works on budget processing under capital outlay/working expenses stand modified to the extent noted above with immediate effect
• Entities to be informed


  • PGMs(F)/GMs(F)/DGMs(F&A)/IFA of circles
  • PGMs/GMs of Planning Branches of BSNL corporate office
• Consolidated statement showing account code-wise distribution of funds made at circle level to be forwarded to BBF Division of Corporate Office after receipt of RE –BE

  
• Circle-wise details financial assessment/recommendation under various parameters along with physical target assigned for achievement to be furnished to BBF division for allotment of funds to circles in lump sum for all works under various services and components under RE-BE
• Information to be provided in the proforma for capital works programme for the projects costing Rs.20 crore and above


  • BSNL No.
  • Full particulars of the project
  • Ac-code
  • Sanctioned particulars of project
  • Estimated cost
  • Expenditure incurred up to 31st March
  • Remarks
• Service-wise/component-wise allotment of funds under BE 2009-10 have been made in lump sum to the Circles
• Circles were requested to forward a consolidated statement showing account code-wise distribution of funds made by them to the SSAs etc. latest by 30-6-2009, the details for the same are still awaited

  
• Entire allotment as per approved Plan Outlay under BE 2009-10 has already been distributed to the Circles, no further allotment can be considered by B&FC Division at this stage
• Any request for additional requirement of fund/surrender of allotment made under BE 09-10 or Diversion of fund from one service/component to another

  May be taken up well in time with the concerned Planning wings of Corporate office for their specific approval/recommendation and inclusion in RE 2009-10

  
• Formats for budget allotment to circles and fund requisition from circles under Opex are being revised to incorporate the accounts heads and description of expenditure items

  
• Periodical cash fund will be released

  1. On the basis of prorata budget for each circle for all budgeted items including Salary, Wages, Water & Electricity and Commission/Revenue shares etc.

  2. On the basis of annual budget for special budget items i.e. Stores & Business promotion & Marketing
• Funds are sought for many items beyond the prorata entitlement of budget and also without considering the actual date of payment
• Funds are sought in 1st. spell of the month for which payment is due in 2nd. spell of the month and vice-versa
• Circles should make requisition

  1. Within prorata budget provisions

  2. Review the budget provisions with cash funds from time to time and should send requisition in prescribed performa with cogent reasons if additional budget provision is required against any items

  3. Only for the fortnight (1st or 2nd) in which the actual payment is to be made

  
• Advance payment due to implementation of ERP


  All these cases should be received in BFC&I branch through ERP-FICO branch of CO BSNL with recommendation