Frequently Asked Questions – General Queries

1)Can a vendor submit his bill directly to the Pr. CDA (SC)?

Ans1. No. Vendors have to submit their bills to concerned units. Concerned units would send these bills to the Pr. CDA after due verification and enclosing all the documents like sanctions, Receipt vouchers etc.

2)What is the procedure for payment to the vendors through ECS

Ans2.Following procedural requirements are to be completed:
A MANDATE in the prescribed format should be submitted by the vendor through concerned Unit authorities.
All the columns in the MANDATE are to be completed with due care ; specially the Account Number of the Vendor.
The Mandate should be countersigned by the Vendors' Bank.
It would be preferable if the vendor enclosed a blank cancelled cheque which would facilitate in correctly transcribing the Account Number and MICR code of the vendor's bank.
Unit authorities should forward such completed MANDATES through a forwarding letter to the Pr. CDA (SC) Pune for commencement of the payments through ECS.

3)Can a vendor submit the ECS MANDATE directly to the Pr. CDA (SC) Pune with a request to commence the payment through ECS:

Ans3.No. ECS MANDATES are to be submitted to the Pr. CDA through concerned units authorities only.

FAQ on Internal Audit

1) What is the audit of sanctions to expenditure?

Ans: The audit of sanctions to expenditure is to see that each item of expenditure is covered by the sanction of the authority competent to sanction it. Audit has not only to see that the expenditure is covered by a sanction, either general or special, but it has also to satisfy that the authority sanctioning it is competent to do so by virtue of powers vested in it

2) What is the audit against propriety?

Ans: Main objective of the audit against propriety is to bring to light not only cases of clear irregularity but also every matter which, appears to involve improper expenditure or waste of public money.

3) What are provisional payments?

Ans: Payments made in exceptional circumstances in anticipation of the sanction of the appropriate authority or of additional allotments of funds to cover the expenditure is known as provisional payments. Such powers usually rest with the Controller of Defence Accounts.

4) What are the stages in conducting Appropriation Audit?

Ans: Appropriation Audit is conducted in two stages:-
Sanction Audit i.e. audit of orders of allotment of funds and re-appropriations.
Expenditure Audit i.e. audit of expenditure against allotments.

5) What is I.R.L.A?

Ans: A Pay & Accounts of Commissioned, Junior Commissioned Officers, and Other ranks in are maintained on Individual Running Ledger Accounts (I.R.L.A) system & I.R.L.A. exhibits a complete record of credits & debits relating to his account. I.R.L.A.s are maintained by Ledger Wing of the office of CDA (O) and concerned PAO (OR’s

6) What is the Scale Audit?

Ans: The Scale Audit is conducted to see that effective strength of Army Officers in a unit/formation as shown in the nominal roll is within the number authorized in the relative peace/war/interim establishment and that the number of officers paid in different ranks in each unit agrees with the number shown in the nominal roll.

7) What is a MFAI?

Ans: A The Controllers will prepare a quarterly report on the Major Financial & Accounting Irregularities dealing with the matters relating to units and formations for the Command as a whole for the quarters ending June, September, December and March by the 20th of the month following a quarter. It includes cases involving irregular maintenance of accounts or cases in which value of financial irregularities or loss involved is more than Rs 1lakh.

8)What is A.R.M.E.S.?

Ans: The Annual Review of M.E.S. Expenditure is prepared by the Secretary (Defence/Finance) Financial Adviser Ministry of Defence with reference to various statements, required to be submitted to them by PCDA/ CDA’s
9)What is the Internal Audit Report?

Ans: The Internal Audit Report is to be drafted & rendered to the CGDA half yearly covering the period up to 31st March & 30th September of every year under following broad categories:-

Regulatory Audit
Loss of Revenue
Generation of Revenue
Optimal Resource Management
Economy suggestion

10) What are the categories of losses of cash, overpayment etc?

Ans: Losses of cash, overpayments, etc are shown under the following two categories:-
Cash losses due to theft, fraud or neglect.
Cash losses due to other causes.


1) What is a Competent Financial Authority?

Ans: Competent Financial Authority is an authority duly empowered by the GOI to sanction & duly empowered by the Govt of India to sanction & approve expenditure from public accounts to a specified limit in terms of amount of such expenditure.

2) What is a Rate Contract?

Ans: A Rate Contract is an agreement between the purchaser & the supplier to supply stores at specified prices during the period covered by the contract. It is like a standing offer with no guarantee for a minimum drawl.

3) What is AHSP?

Ans: Authority Holding Sealed Particulars is the authority empowered to draw up the specification of the item & hold the detailed particulars of the item.

4) What is PAC Tendering?

Ans: Certain items, particularly equipment, are the propriety product of a manufacturing firm. Such items are only available with that firm or their dealers, as the detailed specifications are not available for others to manufacture the item. In such situations, a Propriety Article Certificate (PAC) is issued to the Original Equipment Manufacturer (OEM) & items are procured on PAC basis from that particular firm or their authorized dealers.

5) What is an Option Clause?

Ans: The purchaser retains the right to place orders for additional quantity up to a maximum of 50% of the originally contracted quantity at the same rate and terms of contract. Such an option contract is available during currency of the contract.

Note:-Option clause and repeat order should not be invoked in routine manner. The option clause may be exercised on approval of the CFA, within whose powers total value of original supplies plus value of the option clause falls, in consultation with IFA, where applicable as per the delegation of financial powers, during currency of the contract. It should be ensured that there is no downward trend in the market prices.

6) What is the Risk & Expense Purchase?

Ans: The Risk & Expense Purchase is undertaken by the purchaser in the event of the supplier failing to honour the contracted obligations within the stipulated period & where extension of delivery period is not approved. Whenever risk purchase is resorted to, the supplier is liable to pay the additional amount spent by the Govt., if any as compared to the contracted amount.

7) What is a Letter of Credit?

Ans: A Letter of Credit is a written understanding given by the buyer’s
bank (issuing bank) on behalf of and at the request of its customer (applicant) routed through the agency of a bank in the seller’s country (advising bank) to the seller that it (issuing bank) guarantees to pay the seller for the goods within a specified time provided that the conditions laid down in the documentary credit are fully satisfied.

8) What is Repeat Order Clause?

Ans: Under Repeat Order Clause the buyer can order up to 50% quantity of the items subject to certain conditions under the present contract within six months from the date of successful completion of contract.

9) What is Fall Clause?

Ans: The bidder undertakes that he has not supplied/is not supplying the similar systems at a price lower than that offered in the present bid in respect of any other Ministry/Department of the Govt of India and if it is found at any stage that the similar system was supplied by the bidder to any other Ministry/ Department at a lower price, then that very price, with due allowance for elapsed time, will be applicable to the present case and the difference in the cost would be refunded by the bidder to the buyer.

10) What is RFP?

Ans: Request for Proposals (RFP) is the true & complete reflection of the indent. The goods required, bidding procedures and contract terms are prescribed in the RFP.

11) What is two bid system?

Ans: In two bid system both the technical and commercial tender enquiry is resorted to. Two bid system is followed where technical specifications are to be ascertained and which involves techno-commercial evaluation viz, Plant & Machinery, IT and Communication systems etc.

12) What is CST?

Ans: On receipt of all accepted tenders, the purchase cell collates them in the form of Comparative Statement of Tenders (CST). The CST should be exhaustive and include all details given in the quotations. Deviations from the tender documents are to be brought out in the CST. CST should be vetted by the IFA’s
representative with regard to original quotations, indents and other supporting documents.

13) What is Liquidated Damage (LD)?

Ans: Compensation of loss on account of late delivery where loss is pre-estimated and mutually agreed to is termed as the Liquidated Damage (LD). Liquidated Damages can be levied as 0.5% of price of undelivered goods for each week or part thereof up to maximum of 10% of undelivered goods. LD cannot exceed the amount stipulated in the contract.

14) What is Single Tender?

Ans: Invitation to one firm only is called Single Tender. Single tendering for non PAC items is resorted to only on grounds of urgency or operational or technical requirements. Reasons for Single Tender Enquiry and selection of a particular firm is to be recorded and approved by CFA.

15) What is Committee CFA?

Ans: In the case of Committee CFA powers are not vested in an individual but in a committee which becomes a CFA. Finance member is invariably part of the committee. Such Committee CFA holds its own CNC and takes collective decision. Each member is responsible and accountable for the quality of decision made.

16) What is meant by Product Reservation?

Ans: In order to encourage indigenous manufacturing particularly by the SSI, Handloom and Khadi Bhandars, the Govt has issued administrative instructions to reserve certain items for procurement from the KVIC, ACASH, CCIC and SSIs only. These units are also exempted from payment of Performance Security Deposit.

17) What is meant by Price Preference?

Ans: As per existing Govt instructions, SSIs can be allowed price preference up to 15% in comparison to the large scale Industries. Such a preference is to be considered strictly on merit in consultation with IFA in such a manner as to discourage inflation and prevent profiteering and creation of sense of self complacency in economy.

18)What is meant by Purchase Preference?

Ans: Purchase Preference is to be granted to the Central Public Sector Enterprises (CPSE) at the lowest valid price (L1) if the quoted price by a CPSE is within 10% of the L1 price. Such preference is to be granted when tender is of Rs 5 Crores and above & CPSE’s
holding in Joint Venture is 51% or more. Purchase Preference shall be part of Notice Inviting Tenders (NIT).

FAQ on Accounts Section

1) What is an Accounts Area?

Ans: Accounts Area means an area the accounts of which are dealt with by one and the same Accounts Officer.

2) What is Debt Head?

Ans: Debt Head refers to heads of accounts under which transactions of Govt relating to Debt, Deposits, Advances and Suspense Accounts are recorded.

3) What is Remittance Head?

Ans: Remittance Head refers to heads of accounts to which transactions relating to remittance business are taken.

4) What is Revenue Head?

Ans: Revenue Head refers to those heads of accounts under which are recorded all proceeds of taxations and other receipts classed as revenue and expenditure met there from.

5) What is Consolidated Fund of India?

Ans: The Central Govt has a Consolidated Fund into which the revenues received by the Central Govt , loans raised by Govt by issue of treasury bills, loans or means and advances and moneys received by the Govt in repayment of loans are credited and from which the expenditure of that Govt when so authorized by the Parliament is met.

6) What is Public Account of India?

Ans: In Public Account of India all public moneys received by, or on behalf of the Central Govt are credited and from which disbursements are made in accordance with the prescribed rules.

7) What is Contingency Fund of India?

Ans: Contingency Fund of India is at disposal of President of India to enable advances to be made by him for meeting unforeseen expenditure, pending authorization of such expenditure by Parliament under appropriations made by the law.

8) What are the main divisions of accounts?

Ans: The accounts of Central Govt shall be kept in following three parts:-
Part I - Consolidated Fund of India
Revenue & Expenditure Heads.
Capital , Public Debt, Loans etc for receipt head & Public debt
Part II - Contingency Fund of India
Part III
– Public Account of India in which transactions relating to debt, deposits, advances, remittances and suspense shall be recorded.

9)What is the classification structure of Govt Accounts? Ans: The Sectors, Major Heads, Minor Heads, Sub-Heads and Detailed Heads together constitute a five tier arrangement of the classification structure of Govt Accounts.

10)What are transfer entries?

Ans: Transfer entries are intended to transfer an item from one head to another are necessary in order to correct an error of classification in the original accounts, to adjust , by debit or credit to its proper head an item outstanding under debt heads.

11)What are different classes of vouchers?

Ans: Class 1- Cash Vouchers
Class 2- Transfer Entries
Class 3- I.D. Schedules (Civil)
Class 4- Abstract of Receipts & Charges
Class 5- Cash Accounts
Class 6- Railway Bills
Class 8- I.D. Schedules (Defence)
Class 9- MES Bills
11)What is a Cash Assignment?

Ans: Cash Assignment is a letter of credit in favor of a Disbursing officer authorizing a particular treasury officer or the bank to make payments demanded by him up to the limits specified therein.

12)What is Suspense Account?

Ans: Receipts & Payments which cannot, in the absence of further information or orders, be allocated to any head of account and where the heads to which the transactions are likely to be adjusted are not known, will be taken to the head
“Suspense Head”.

FAQ on "E" Section

1) What are Original Works?

Ans: Original Works includes construction of buildings, docks, airfields, etc together with accessory services such as roads, E/M services, water supply, furniture, drainage etc.

2) What is Major Works Programme?

Ans: Major Works Programme is a list of Capital Works indicating the scope of works with rough cost released during a financial year at the Government level.

3) What are Minor Works?

Ans: Minor Works are those original authorized/special works costing unto Rs one lakh.

4)What are Ordinary Repairs?

Ans: Ordinary Repairs comprise of
petty repairs,
periodical services,
replacement & renewals costing Rs 1,50, 000 or less in each case.
Repairs, renewals and replacements of E/M installations and other external utilities costing upto Rs.2,00,000 in each case.
Replacements of furnitures ofvalue upto 50% of annual allotment for maintenance of furniture on station basis subject toa ceiling of Rs. 4.00 Lakh per annum to be allowed only in r/o furniture declared ascondemned/beyond economic repairsby the appropriate authority.

5)What are Special Repairs?

Ans: Special Repairs comprise of replacements & renewals costing more than Rs 1,50, 000.

6)What are Authorized Works?

Ans: Authorized Works comprises services authorized by the Govt in regulations, or by separate orders of general or specific nature as laid down in the Scale of Accommodation for Defence Services.

7)What are Special Items of Works?

Ans: Special Items of Works comprise of services not covered by Scales of Accommodation-1981. These are approved when exceptional local conditions justify the necessity.

8) What is Acceptance of Necessity?

Ans: A Acceptance of Necessity is approval in principle of the CFA to the proposed work or service.

9) What is Administrative Approval?

Ans: Administrative Approval is sanction by the CFA to the execution of work at a stated cost.

10) What are Barrack Damages?

Ans: Damages to buildings, fittings, fixtures and furniture caused willfully or by negligence are termed as Barrack Damages.

11) What are Transfer entries?

Ans: Transfer entries are intended to transfer an item of receipt or expenditure from the accounts of work in progress, or from one budget head to the accounts of another work or budget head respectively.

12) What are Construction Accounts?

Ans: Construction Account is maintained on IAFW-2242 for each work or service. In it will be recorded the amounts sanctioned and allotments received and day to day running account of the expenditure and liabilities incurred and credits expected.

13) What is a Measurement Book?

Ans: Measurement Book is the basis for all accounts of measured works and of materials received which has to be measured. It provides a complete record of works performed under a contract. It can be produced as evidence in court of law or before an arbitrator.

14) What are Revenue Works?

Ans: These are original authorized/special works costing more than Rs 1 lakh and up to Rs 2 lakhs.

15)What are Low Budgeted Works?

Ans: These are original capital works costing more than Rs 2 lakhs and up to Rs 10 lakhs.

16) What is an Approx Estimate?

Ans: It is the estimate of cost of works and services included in the BPs prepared by Competent Engineer Authority (CES) based on approved scales.

17) What is an Agency Work?

Ans: Work executed by the MES for users other than Defence Services such as KVS, DAD, and CSD without payment of Departmental charges.

18) What is a Deposit Work?

Ans: Works executed by the MES for other users like Central/State Got etc on payment of Departmental charges.

19)What does Financial Concurrence imply in Works Cases?

Ans: It means the acceptance of the CFA to expenditure more than catered for in Adm Approval based on the reasonable rates quoted by the lowest tenderer to avoid cost and time over run.

20)What is a Key Location Plan (KLP)?

Ans: It gives a list of formations, units etc to be located at a station on permanent basis.

21)What does Para 11 of DWP cater for?

Ans: It gives a list of formations, units etc to be located at a station on permanent basis.

22)What is Tolerance Limit in Works Cases?

Ans: Final cost of a work may vary within 10% above or below the amount of Adm Approval for which prior sanction of CFA is not required.

23)What is Revised Adm Approval (RAA)?

Ans: It is the revised sanction of CFA for the same work necessitated due to change in scope of the work/cost of service/escalation/change of rates or other specified reasons.

24)What is a Zonal Plan?

Ans: It is a plan showing space allocation for various Key Location Plan (KLP) units, amenities, town centers, external services etc.