Report on Implementation of Accounting Standards in Educational Institutions of Department of Higher Education, Ministry of Human Resource Development was presented that, Considering that presently, the accounting and financial reporting practices of educational institutions in India are oriented towards meeting the needs of the governing bodies running them and educational institutions follow not only diverse accounting practices but also different basis of accounting, the Group has recommended that all educational institutions should be mandated to apply accrual basis of accounting;

Accounting Standards issued by the ICAI should be made mandatory to all educational institutions should follow a common format for presentation of its general purpose financial statements to ensure proper accountability, financial discipline, end-use of funds and to meet the needs of stake holders. It is also recommended that the statutes having specific formats for financial reporting by educational institution may also modify the same in line with the suggested formats and Ministry of Human Resource Development in coordination with ICAI shall organise capacity building programme to train the staff of educational institutions.

An accounting system that presents a true and correct picture of the state of affairs of an educational institution is a necessary requirement for transparency and accountability and enables less intrusive but more effective regulation of the education sector besides assisting in prevention of malpractice that presently plague the sector. Previously, the education was considered as a not for profit activity, and due to that, accounting and financial reporting practices followed by non-governmental educational institutions have been oriented towards meeting the needs of the governing bodies running the educational institutions.

An efficient, accurate, and timely financial close cycle (beginning with the account reconciliation process) can create a foundation for evaluating business performance, supporting organizational decisions, and satisfying external reporting requirements. Automation of the account reconciliation process is a critical step on the road to achieving "balance sheet integrity" - and ultimately, a timely and efficient financial close. A robust, automated account reconciliation process will focus the right people on the right activities and give management real-time information around the close process.

Online receipt accounting system will enable all kinds of depositors, whether government or private, to make online payments through net banking. In the case of depositors who do not want to use net banking facility for making payments, the new system will enable them to generate the requisite challan to pay the fees. This gives the financial health condition in a single click at any point of time. Happiness Is DEBITS = CREDITS. Simplified.

Read More