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F.No.6 (57)/FRU/04-Part-III Government of India Ministry of Finance

Department of Expenditure ***

New Delhi, the July, 2010

Office Memorandum

Subject: Mission Mode Project (Treasury computerization) under the National e-

Governance Plan (NeGP)

The undersigned is directed to state that the Government of India has approved the

scheme for implementation of the Mission Mode Projects Computerization of State

Treasuries. A copy of the scheme guidelines is enclosed.

2. State Governments are eligible for Central Assistance as per the approved scheme.

State Governments requested to send their proposals for appraisal/approval. The

proposal should be prepared in accordance with the attached guidelines. The proposal

may also please be duly aligned with the Guidelines for Operational Model for

implementation of State MMPs issued by the Department of Information Technology,

Government of India available at http://mit.gov.in/content/templates-guidelines .

Encl.: as above

(P.K.Monga) Director (PF-1)

Tel. No. 23092578 Chief Secretaries of all States/UTs

http://www.rediffmail.com/cgi-bin/red.cgi?red=http%3A%2F%2Fmit%2Egov%2Ein%2Fcontent%2Ftemplates%2Dguidelines&isImage=0&BlockImage=0

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GUIDELINES FOR SCHEME OF MISSION MODE PROJECT (TREASURY

COMPUTERIZATION) UNDER THE NATIONAL E-GOVERNANCE PLAN (NEGP)

1. Background

1.1 The bulk of States and Union Territories financial transactions pass through

treasuries. Therefore computerization of treasuries is crucial for achieving greater

efficiencies, reducing costs, eliminating redundancies and facilitating the adoption of

modern public expenditure management practices.

2. Objectives

2.1 The treasury computerization project is expected to make budgeting processes

more efficient, improve cash flow management, promote real-time reconciliation of

accounts, strengthen Management Information Systems (MIS), improve accuracy and

timeliness in accounts preparation, bring about transparency and efficiency in public

delivery systems, better financial management along with improved quality of

governance in States and Union Territories.

2.2 This scheme aims at supporting the State/UT Governments to computerize their

treasury functions and provide required interface for data sharing among treasuries,

State/UT finance departments, Accountant General (AG) offices, Reserve Bank of

India(RBI), agency banks, Central Plan Schemes Monitoring System (CPSMS) of

Controller General of accounts (CGA), minimal reconciliation and feeding treasury data

seamlessly in to State Data Centers resulting in reduced incidence of missing credits,

facilitation of pension payments and web-based citizens queries regarding receipts and

expenditure etc.

2.3 Objectives of the MMP will be achieved by supporting the States/UTs to fill the

existing gaps in their computerization, up-gradation, expansion and interface

requirements, apart from basic computerization. Since each State/UT would have its

specific requirements based on the present level of treasury computerization, the

scheme has been structured as a menu of components. The States/UTs would be free

to decide their plans but would need to factor in minimum deliverables with regard to

functionality, connectivity, service delivery and standards.

3. Coverage:

3.1 The functional coverage of the scheme will as under:

(i) Design and development of Business Process Re-engineering (BPR) to

introduce new processes and re-engineer existing processes to ensure synergies with

new system.

(ii) Scalability and maintainability while ensuring performance

(iii) Interface for data sharing among treasuries, State/UT finance departments,

Accountant General (AG) offices, Reserve Bank of India (RBI), agency banks and the

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Central Plan Schemes Monitoring System (CPSMS) of Controller General of accounts

(CGA).

(iv) Identified minimum deliverables with regard to functionality, connectivity, service

delivery and standards.

4. Indicative minimum set of deliverables

4.1 Business Process Re-engineering (BPR): Re-engineering of existing processes,

and introduction of new processes where necessary, to ensure synergy of processes

with electronic systems.

4.2 Design and development of standardized formats for Data exchange

4.3 Budget module: Aims at providing support for Budget management, including

preparation, communication and revision of budgets for the State/UT Governments. It

will enable the departments to moderate the demands made by field offices and submit

them to the Finance Department, indicating their requirements of funds. The Finance

Department would analyze the demands from various perspectives and finally

recommend provisions for each of the budget heads/ departments. The module should

be able to print the document for being placed before the legislature for approval. This

module will facilitate timely releases as well as adherence to the authorized limits of

expenditure by the DDOs. The module allows re-appropriation / supplementary grants,

surrenders to be handled through it in similar manner.

4.4 Accounts module: Aims at comprehensively capturing all accounting information

including departmental personal ledger accounts and all recoverable/receivable

accounts. The module shall maintain the departmental cashbook and consolidate

monthly accounts in the prescribed format for online transmission to Finance

Department / Accountant General.

4.5 Personnel Management & Pay Roll module: Has the objective of providing

support for Personnel Resource Information and Salary Management for the generation

of pay bills electronically and electronic submission of the same to the treasury. This

module will have pre-audit features to apply initial checks and minimize the time

required for processing of bills. This system will handle establishment functions such as

advances, medical and travel allowances, GPF, defined contribution pensions, GIS,

LTC, etc.

4.6 Pension module: Will process pension payment orders (PPOs) received from the

AG for monthly payment of pension / family pension and social pensions, etc. The

module will generate monthly pension bills and provide for calculation of arrears of

pension. The module will also provide for online accounts statements to the pensioners

and various transactions with the pensioners, including their annual live certificates etc.

4.7 Receipt module: Will provide for the online receipt / refunds of tax dues to the

State/UT from the taxpayers through ECS / EFT related electronic facilities.

4.8 Fund Management module: Aims at day to day control over spending /

expenditure, fixing up priorities of payments, allowing expenditure based on objectives,

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finding additional sources, monitoring of revenue generation and managing cash flow to

avoid over drafts. This module enables working out cash flows on day to day basis.

4.9 Virtual Treasury module: Would enable the taxpayers / receipt paying agencies

to fill challans (e-challans) on its website and make online payments using the

participating Banks Internet Banking Facility.

4.10 Banking Interface module: Would enable electronic capture of receipt as well as

payment data from the commercial banks authorized to do Government business, as

well as the RBI. It would also allow departments to exchange information of receipts.

4.11 C&AG interface module: Shall provide linkages with the Accountant Generals

office and allow access to AG to make modifications / add transactions on an online

basis. Alternatively, it can allow exchange of voucher level data electronically with the

Accountant Generals office, thus providing an efficient means for reconciliation of

accounting transactions. Further, the module would enable compilation of accounts, so

that monthly/annual accounts are available expeditiously. This would facilitate decision-

making. The module will also facilitate audit of Government offices by providing data

samples for verification to the audit and ensure quick availability of audit reports of

C&AG along with reference data for Legislative oversight.

4.12 Financial Data Warehouse module: Data generated by all modules is processed

on a central server for generating various MIS reports. The processed data is made

available on INTRANET and INTERNET. The objective of this MIS portal would be to

make available up to date financial information required for various departments of the

Government. The system would impart detailed information for various financial

transactions like budget of the State/UT, ways and means position, Payment Data,

Receipt Data, and Bills in Process etc. It would also give reports for various payments.

It would provide a multi dimensional query support based on various financial

parameters.

4.13 E-Status enquiry from DDOs and banks regarding pensions, debt, debentures

allotment, cheques and challans.

4.14 E-Audit: Shall provide for applying initial audit checks online and facilitate Internal

Audit management.

4.15 Any other relevant activity, particularly an activity that increases financial

inclusion through use of technology.

5. The scheme will cover those districts in States and Union Territories as are in

existence on 1 April, 2010, that is 626 districts.

6. Admissible and Inadmissible components

6.1 Since a large part of treasury computerization would become possible only after

relevant codes are amended by the States/UTs, the cost of setting up of a task force to

examine codes will be a valid cost under the scheme.

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6.2 Funding under the scheme would be subject to availability of infrastructure and

actual needs. There will be a need to demonstrate linkage of every proposed activity

with the objectives of the scheme.

6.3 Inadmissible components include recurrent costs, soft costs like manpower cost,

operation and maintenance costs, and costs not directly linked with the scheme

objectives.

7. Project preparation and approval

7.1 The States/UTs will be required to prepare project proposals based on their

current level of treasury computerization and the desired level to be achieved. The

suggested format for preparation of DPRs may be seen at Annex-I, and should cover,

inter alia, the following:

i) Robust application software with centralized architecture at the State/UT level

to automate various functions of the finance department and service delivery.

ii) Provision for certification and testing of application software by an

independent agency like Standardization, Testing and Quality Certification

(STQC).

iii) Strategy to integrate State Service Delivery Gateway, State portals, State

Data Centers (SDC), and Common Services Centers (CSC) being set up

under the National e-Governance Plan.

iv) Adequate and secure network infrastructure to cater to the entire

geographical spread of the State/UT on a sustainable basis and strategy to

use and integrate with State Wide Area Network (SWAN).

v) Disaster recovery and business continuity plan to ensure that the system runs

24x365 even in the case of long power outages, floods, earthquake, virus

attacks and situations like vendor abandoning the project etc.

vi) Use of open Standards, frameworks and platform independence to ensure

interoperability and prevention of technology lock in.

vii) Clear strategy for capturing transaction level data in each case and

integration with legacy applications, wherever possible.

viii) Standardization and inter-operability of the implementation in different districts

as well as facilitate faster development of the computerized system and its

hosting at State/UT level.

ix) Data sharing with other agencies like GoI Central Plan Schemes Monitoring

System (CPSMS) and State AG etc.

x) Standards prescribed by the Department of Information Technology, GoI.

xi) Capacity building, awareness generation, training and orientation including

change management strategy.

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7.2 Each State/UT would be required to prepare an action plan covering the following

points:

i) Changes required in procedures, practices, codes, manuals and laws (like

provision for use of digital signatures, file formats, transfer of funds

electronically) with explicit time lines to ensure achievement of these

objectives.

ii) All the deliverables linked to specific time lines.

iii) Constitution of project e-Mission team and deployment of requisite manpower

at the State and sub-state/UT level.

iv) Capacity building, awareness generation, training and orientation including

change management strategy.

7.3 The Detailed Project Reports and Action Plans sent by States/UTs would be

scrutinized by an inter-ministerial committee namely, Programme Steering Committee

(PSC) for technical and financial soundness before approval by Empowered Committee

(EC).

7.4 The Programme Steering Committee (PSC) will also monitor the implementation

of the State Treasury Computerization projects as Mission Mode Project. The inter-

ministerial approval mechanism ensure that funding for Treasury Computerization does

not result in mere purchase of hardware without being backed by appropriate

application software with required functionality to achieve the outcomes from the MMP.

The Programme Steering Committee (PSC) will periodically monitor the scheme

through designated officers for each State/ Union Territory. Quarterly Progress Reports

will be submitted on the progress by each State/UT Government to the PSC.

7.5 After technical and financial appraisal the proposal will be approved by an

Empowered Committee (EC) under the chairpersonship of Special Secretary/ Additional

Secretary (Expenditure) in the Department of Expenditure. The EC will have full

financial powers to approve State/UTs projects, provide guidance and take all policy

decisions within the ambit of the scheme.

7.6 The implementation of the scheme will be reviewed after two years or earlier, and

any minor amendments, as well as those indicated by technological advancements,

effected with the approval of the Finance Minister.

8. Financing Pattern

8.1 The Mission Mode Project (Treasury Computerization) would be implemented as

a State Plan Scheme under NeGP and the financial support to the States/UTs projects

would be upto 75% (90% in case of North Eastern States) of the individual project cost

of admissible components limited to Rs. 75 lakh per district (Rs. 90 lakh per district for

North Eastern States).

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8.2 Funds would be released as Central Assistance (100% Central Grant in respect

of central share) to the designated State/UT agency in three installments of 40%, 30%

and 30% each, subject to satisfactory receipt of utilization certificates (Annex-II). Money

towards hardware purchase would be released only after the required application is

developed /modified /customized ensuring reusability, scalability and interoperability of

solutions, as per the guidelines and standards issued by Government of India from time

to time.

8.3 Milestones for disbursement of Additional Central Assistance as Central Share

a) Disbursal of 40% to State/UT Government, based on approved treasury computerization plan.

b) Disbursal of 30% upon:

i. Utilization of the amount released earlier

ii. Purchase or part purchase of hardware/ upgrade of hardware

iii. Purchase/development of software

iv. Completion of Business Process Re-engineering (BPR) exercise.

v. E-connectivity (at least through e-mail) between district treasuries and State/UT Finance Department

vi. Commencement of training of staff

vii. Achievement of milestones as per approved Plan layout.

c) Disbursal of remaining 30% upon:

i. Utilization of the amount released earlier and State/UTs share of 25%

ii. Completion of code amendment exercise

iii. Demonstrated connectivity with RBI, AG, CGA and agency banks

iv. Operationalization of all the modules as per para 5 of these guidelines.

9. Duration of the Scheme

The States/UTs would be required to complete their projects in three years. Considering

that the States/UTs would take some time to firm up their plans under the scheme,

some residual components may spill over into the fourth year.

10. Monitoring and Evaluation

10.1 The inter-ministerial approval mechanism will ensure that funding for Treasury

Computerization does not result in mere purchase of hardware without being backed by

appropriate application software with required functionality to achieve the outcomes

from the MMP. Programme Steering Committee (PSC) will periodically monitor the

scheme through designated officers for each State/ Union Territory. Quarterly Progress

Reports will be submitted on the projects by each State/UT Government to the PSC.

10.2 The implementation of the scheme will be reviewed after two years, or earlier if

warranted, to bring about any needed amendments, as well as those indicated by

technological advancements.

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11. Audit:

11.1 All funds released under the scheme will be subject to audit scrutiny by AG audit

parties and by any of the agencies entrusted with such responsibility by the Department

of Expenditure.

ANNEX-I

(Refer para 7)

FORMAT FOR SUBMITTING PROJECT PROPOSALS

1. Introduction: The Detailed Project Report (DPR) must start with a brief on the

treasury administration its location, size, structure in terms of service levels and

other parameters. The brief must include the functions of treasury administration and

the organization structure. The DPR should highlight the existing infrastructure, any

back end computerization already completed and overall e readiness.

2. Define project Objectives in line with NeGP mission: The DPR must indicate

which of the specific objectives of National e Governance Plan could be achieved by

the project and in particular, how the project, if successful will influence the

attainment of these objectives.

3. Define Project Outcomes envisaged: The outcome(s) of the project should

specify its impact on and benefits to a target beneficiaries that are anticipated on the

achievement of project objectives. The identification project outcomes should help in

deciding on which activities and services are required to be undertaken.

4. Identify and detail out various services offered

5. Define Target beneficiaries

6. Identify various stakeholders and define roles and responsibilities: The

stakeholders should include all sections such as Ministry, department, district,

vendors, consultants, implementing agencies, monitoring agencies, citizens etc.

7. End user consultation to understand stakeholders expectation

8. Business Model: The DPR must provide details of the proposed business model

of the project to ensure self-sustainability of the project in terms of continuity of the

services to the beneficiaries. The demand for targeted services, estimated adoption

rate and revenue must be estimated.

9. Business Process Re-engineering: The DPR must indicate the requirement of

process re engineering and a brief methodology to conduct the same.

10. Service Levels and Measurement: The DPR must detail out the service levels

for each offered service and propose a methodology for continuous measurement

and reporting.

11. Capital Expenditure: The DPR must provide complete details of capital

expenditure proposed for the project. The location wise numbers of each hardware,

software, furniture, data digitization, project management cost etc required must be

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provided. The DPR must indicate existing hardware/ software etc and identify its

usage in the proposed project. The requirement of database and application server

needs to be justified in the DPR since it is expected that all the databases and

application would be hosted in the State Data Centre (SDC) proposed by the

Department of Information Technology (DIT). In case machines at client end and

LAN, the same to be planned on the basis of requirement at each office (net of

existing machines or machines planned under any other projects).

12. Operating expenses: The DPR must detail out projected year wise operating

expenses

13. Capacity Building: The DPR must indicate the proposed organizational

structure of the project with clear reporting relationship. The detailed number of

personnel at various levels required to be indicated. The training needs of the

personnel to be highlighted with clear training plan, training modules and time frame

for the training identified

14. Contracting Arrangements: The DPR must provide details of all contracts

identified (even if not finalized) and the annual contract values.

15. Risk: The DPR must explain the various categories of risks which are most likely

to impact on the performance on delivery of services. The DPR must highlight the

method to evaluate the overall chances of potential loss and the plan to control &

monitor the same.

16. Cost Benefit Analysis: The DPR must show the results of cost benefit analysis

17. Service Delivery Mechanism: The DPR must clearly detail out the proposed

channel for delivery of services and plan for integration with other NeGP scheme.

18. Institutional Mechanism for Project Management: The DPR must indicate the

Project Management and Monitoring structure proposed, in consultation with the

Stakeholders.

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ANNEX-II

(Refer para 8.2)

GFR19-A

[See Rule 212(1)]

Form of Utilization Certificate

Cert if ied that out of Rs. ____ of grant-

in-aid sanctioned during the year____

in favour of_____vide Ministry of

Finance,Department of Expenditure

letter no. given in the margin, and the

unspent balance of the previous year

amounting to Rs. ______, a sum of

Rs_______has been util ized for the

purpose of (please give details of

items etc), for which it was sanctioned.

Cert if ied further that the unutil ized

balance of Rs__________remaining at

the end of the year has been

surrendered to Government (vide

no.____dated ______)/wil l be adjusted

towards the grant -in-aid payable during

the next year______.

2. Certified that I have satisfied myself that the conditions on which the grants-in -

aid was sanctioned have been duly fulfilled/are being fulfilled and that I have exercised

the following checks to see that the money was actually utilized for the purpose for

which it was sanctioned.

Kinds of checks exercised

1.

2.

3.

4.

Signature________________

Designation_______________

S.

No.

Letter No. and date Amount Rs.

Total

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Date____________________

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