Department: Finance
Subject:
Government of West Bengal
Finance Department
Budget Branch
No. 110-F.B. Dated: 26.04.2013.
NOTIFICATION
Sub: Introduction of New Letter of Credit System
For some time past the Government in Finance Department was considering improving the present system of issuing and monitoring the âLetter of Creditâ (LOC) by different Works and Forest Departments of the State Government with a view to establishing accountability, transparency and uniformity in the system in a centralised manner.
Existing LOC System
In the existing system, âLOC Cheque Drawing Officersâ in the Works and Forest Divisions send proposal for issuing LOC (Project wise) to âLOC Issuing Authoritiesâ directly or through their immediate higher authority for execution of works in respect of (i) Projects/Plan related works (ii) (a) Maintenance Works, (b) expenses for âWork-Charged Establishmentâ and (iii) âDeposit Worksâ in the following manner:-
(i) Project/Plan related works: The proposal is submitted with administrative approval and financial sanction of the competent authority;
(ii) (a) Maintenance Works: Administrative approval and financial sanction need not accompany LOC proposal;
(b) Works-Charged Establishment: Administrative approval and financial sanction need not accompany LOC proposal;
(iii) Deposit Works: Copy of receipted Treasury Challan for deposit of fund for âDeposit Worksâ under major head â8782â.
Finance Department issues LOC authorisation (Project wise) on request from LOC Issuing Authorities.
âLOC Issuing Authoritiesâ issue LOC (Project wise), within the ceiling authorised by Finance Department, to the concerned Works/ Forest Divisional officers declared as âLOC Cheques Drawing Officersâ by their respective Administrative Departments with the approval of Accountant General (A&E), West Bengal.
The âLOC Cheques Drawing Officersâ send monthly accounts to the Accountant General (A&E), West Bengal and LOC utilisation reports to âLOC Issuing Authoritiesâ.
It may be noted that as per rule 4.150(3) of WBTR, 2005, appropriation under the departmental establishment head meant for execution of departmental works of any department through works divisions should be placed at the disposal of the authority of the works department for execution of the work within the authorised LOC limit.
New LOC System:
Under the guidance of Finance Department the National Informatics Centre [NIC] has developed a new system for on-line authorisation and issue of LOC to make transfer of fund faster for timely execution of the developmental works in a transparent manner. It will also facilitate proper monitoring of the progress of implementation of the project. For this purpose Finance Department in its website [www.wbfin.nic.in] has made necessary link âLOC Monitoring Systemâ [LOCMS] from the financial year 2013-14. All the LOC related works would be processed and monitored through this system.
After careful consideration of the matter, the Governor has been pleased to prescribe the following procedures in this respect.
1. Role of the Finance Department:
Finance Department shall authorise on-line the LOC Issuing Authorities through âLOCMSâ from time to time for issuing LOC to their authorised âLOC Cheque Drawing Officersâ within the limit of authorisation for (i) execution of Project related works and (ii) (a) Maintenance Works (b) Work-Charged Establishment separately.
2. Role of the LOC issuing authority:
(i) For project related Works: Based on the proposal received from the Divisional Officers of Works/ Forest Divisions, the LOC Issuing Authorities shall issue LOC on-line through âLOCMSâ to the concerned âLOC Cheque Drawing Officersâ on specific approved project according to head of account and the budget provision of that head. The LOC may be for a part or whole of the amount of financial sanction subject to overall authorisation of the finance department in this respect.
(ii) For Maintenance Works: Based on the proposal received from the âLOC Cheque Drawing Officersâ, the LOC Issuing Authorities shall issue LOC on-line through âLOCMSâ to the concerned âLOC Cheque Drawing Officerâ for (a) Maintenance Works (b) Work-Charged Establishment for requisite amount, subject to overall authorisation of the Finance Department as well as budget provision under the head in this respect.
3. Role of the âLOC Cheque Drawing Officersâ:
(i) For Project related Works: âLOC Cheque Drawing Officersâ shall upload the proposal request on-line through âLOCMSâ for issuing the LOC by filling up the required data in the prescribed format. They may also upload the scanned copy of relevant supporting document.
(ii) For Maintenance Works: âLOC Cheque Drawing Officersâ shall fill up the prescribed format for (a) Maintenance Works (b) Work-Charged Establishment.
(iii) Uploading the data in respect of utilisation of LOC Fund: âLOC Cheque Drawing Officersâ shall upload the data of the utilised LOC amount cheque number-wise in the âLOCMSâ against each LOC and each head of account in respect of (a) Project related Works, (b) Maintenance Works, (c) Work-Charged Establishment and (d) Deposit Works.
(iv) Remittance and recording of âDeduction at Sourceâ: All deductions from the âWork-Chargedâ Bills, Contractors Bills and other Bills such as, Income Tax, Sales Tax, VAT, P. Tax, GPF, G.I., Security/ Earnest Money Deposit etc., shall be remitted/ deposited to the appropriate head of account by issuing LOC Cheque along with Treasury Challan (T.R. Form No. 7) to the concerned Treasury-linked Bank.
Procedure for âDeposit Worksâ
(a) âLOC Cheque Drawing Officersâ shall deposit the cheque/ bank draft in respect of âDeposit Worksâ to the concerned Treasury-lined Bank in Treasury Challan (T.R. Form No. 7) under the head of account mentioned below. On application from the Depositor along with copy of receipted Challan, the concerned Treasury officer/ Pay and Accounts Officer shall issue the âCredit Verification Certificateâ in respect of that deposit within five working days. The âCredit Verification Certificateâ issued by the Treasury/ Pay and Accounts Office shall contain receipt head of account, Challan no. Challan date and amount in respect of that deposit. The receipt head of account for the purpose would be (i) â8782-00-102-001-20â for Works Division and (ii) â8782-00-103-001-20â for Forest Division.
(b) The âLOC Cheque Drawing Officersâ shall fill up the prescribed format on-line through âLOCMSâ. He may upload the scanned copy of the receipted Challan of deposit of demand draft or cheque along with the âCredit Verification Certificateâ received from the Treasury/ Pay and Accounts office on-line through LOCMS.
(c) The Administrative Department of the concerned âLOC Issuing Authorityâ shall verify the admissibility of the Deposit Works and the correctness of the deposit amount before authorising the âLOC Issuing Authorityâ to issue LOC for that Deposit Work. The âLOC Issuing Authorityâ shall issue the LOC to the concerned âLOC Cheque Drawing Officersâ upto the amount deposited without any authorisation from Finance Department.
(d) Receipt of fund for Deposit Works shall be debited in the books of accounts of the Works/ Forest Division when remitted to Treasury under head â8782-00-102-001-20â for Works Division and â8782-00-103-001-20â for Forest Division and credited to head â8443-00-108-001-07Ⲡfor Works Division [8443-00-108-002-07â for NHA] and â8443-00-109-001-07â for Forest Division. Payment made by LOC cheque shall be credited to head â8782-00-102-002-20â for Works Division and â8782-00-103-002-20â for Forest Division and debited to head â8443-00-108-001-23â for Works Division [â8443-00-108-002-23â for NHA] and â8443-00-109-001-23â for Forest Division respectively.
The existing LOC System and this New LOC System will run simultaneously for three months from 1st April 2013 to 30th June 2013 and thereafter from 1st July 2013 the existing LOC system will be discontinued.
Sd/- H. K. Dwivedi
Principal Secretary to the
Government of West Bengal
Finance Department
No. 110-F.B. dated 26.04.2013, Source
Copy forwarded for information & necessary action to:-
No. 110-F.B. dated 26.04.2013, Source