Class 10 Account

To run daily administration and carry out development and construction activities, the government collects various taxes (such as income tax and customs) and non-tax revenues (such as fees and fines) from the public. The entire process of systematically recording this collected amount in the prescribed format and forms required by law, depositing it in the bank, and preparing reports is called Revenue Accounting. It performs the crucial function of increasing the transparency of government income and preventing the misappropriation of revenue.

Revenue Accounting Code:
The 5-digit number assigned to each revenue heading — to easily identify from which source or heading government revenue was received and to enter it into the computer system — is called a Revenue Accounting Code.

Five Accounting Codes used in Revenue:

• 1. 11000 — Tax Revenue
• 2. 13000 — Grants Received
• 3. 14000 — Other Revenue
• 4. 15000 — Arrears Recovery and Previous Year’s Cash Balance
• 5. 11111 — Income Tax on Remuneration (Sub-heading)

The financial statement prepared to provide detailed information about how much total revenue a government office collected during the month, how much was deposited under which heading, and how much was transferred to the Consolidated Fund is called the Monthly Revenue Report. This report must be prepared and mandatorily submitted to the District Treasury Controller Office (DTCO/KOLENIKA) and the superior department within 7 days of the end of each month. It helps the government evaluate the target and actual progress of revenue collection.

When preparing a Revenue Statement (Faantwari), special attention must be paid to the following:

• The date of revenue collection, receipt number, and amount must be clearly stated.
• The collected amount must be entered under the correct revenue heading and official accounting code number.
• Whether cash or cheque was received, the official voucher (Voucher) evidencing its bank deposit must be attached.
• The total collected amount and the amount deposited in the Consolidated Fund must be exactly equal.
• The prepared statement must mandatorily bear the official signature and seal of the Head of Office and the Head of Accounts.

The sequential series of tasks from revenue collection through to report preparation is the Revenue Accounting Process. According to Nepal’s Government Accounting System, its main steps are:

• 1. Revenue Collection and Receipt Issuance: After receiving cash or a cheque from a client as tax or fees, the office issues an official Cash Receipt according to the prescribed OAG Form.
• 2. Entry in Daily Income Account: The total amount of all receipts issued throughout the day is recorded in the ‘Daily Revenue Income Account’ as income earned.
• 3. Bank Deposit: The collected cash or received cheques are mandatorily deposited in the designated government bank’s Revenue Account on the same day or the next day.
• 4. Recording in Revenue Bank Cash Book: On the basis of the bank deposit voucher, the daily transactions are recorded in the ‘Revenue Income Bank Cash Book’.
• 5. Transfer to Consolidated Fund: The revenue amount deposited in the bank is regularly transferred to the government’s central Consolidated Fund.
• 6. Report Preparation and Submission: At the end of the month and year, a comprehensive monthly and annual report covering all collected and deposited revenue is prepared and sent to the relevant body and the DTCO (KOLENIKA).

In Nepal’s Revenue Accounting System, the banking arrangement is used as an extremely secure, fast, and transparent medium. This can be reviewed under the following points:

• Mandatory Bank Deposit System: Any cash collected at the office cannot be kept in the office itself or spent there. There is a legal requirement to deposit it directly into the designated commercial bank’s ‘Revenue Account’ on the same day or the next day.
• Development of Direct Bank Deposit System: Nowadays, most government offices give clients a voucher and ask them to deposit the amount directly into the bank, or accept payment online (via ConnectIPS, eSewa, etc.). This has completely eliminated the risk of cash embezzlement or theft at the office.
• Use of Treasury Single Account (TSA): An automatic banking system has been developed whereby all revenue deposited in the bank is automatically transferred into the government’s central account (Consolidated Fund).
• Ease of Bank Reconciliation: Each month, a ‘Bank Reconciliation Statement’ is prepared to compare the bank statement provided by the bank with the office’s Cash Book — enabling errors to be immediately identified and corrected.

The arrangement made to transparently inform superior bodies about how much government revenue was collected and how much was deposited in the bank is the Reporting System. It can be discussed under two main parts:

• 1. Monthly Reporting System: This includes a clear statement of the month’s revenue collection, bank deposits, and the amount transferred to the Consolidated Fund. This report must be prepared and mandatorily submitted to the District Treasury Controller Office (DTCO/KOLENIKA) and the superior department within 7 days of the end of each month.
• 2. Annual Reporting System: This is a comprehensive report prepared to include the total revenue collected throughout the fiscal year, any outstanding arrear amounts, and the final total deposited in the Consolidated Fund. This statement must be prepared and submitted to the Office of the Auditor General and the relevant body for final audit within 35 days of the end of the fiscal year.