MEMORANDUM OF UNDERSTANDING ON FINANCIAL AND ACCOUNTING MATTERS.

Memorandum of Understanding on Financial and Accounts matters made this 22nd day of May 2000.

BETWEEN

The Ministry of Information & Broadcasting, New Delhi, (hereinafter referred to as “Central Government”).

AND

Prasar Bharati (Broadcasting Corporation of India), an autonomous Corporation established under the Prasar Bharati (Broadcasting Corporation of India) Act, 1990 having its Head Quarters at Mandi House, New Delhi-110001, (hereinafter referred to as “Prasar Bharati”).

WHEREAS

A. Prasar Bharati has been established under the Prasar Bharati (Broadcasting Corporation of India) Act, 1990 (hereinafter referred to as the “Act”), which came into force with effect from 15th September, 1997.

B. The Central Government and the Prasar Bharati (Broadcasting Corporation of India) in consistence with the provisions of the Act, shall take necessary action, as follows:-

1. Prasar Bharati will switch over from the existing system of Governmental budgeting followed by AIR and Doordarshan to a new accounting system with effect from the beginning of the next financial year i.e. 2000-2001. Pursuant to this de-linking from the Governmental budgeting system, Prasar Bharati will receive financial support from the Central Government in the form of Grant-in aid to cover part of its revenue expenditure (Plan and Non-Plan) and Loan to cover part of its Capital expenditure(Plan), the quantum of which shall be determined by the Ministry of Finance (in consultation with the Ministry of Information & Broadcasting).

2. Prasar Bharati will retain its revenue earnings which under the existing arrangement, are required to be credited into the Consolidated Fund  of India. Consequently, the AIR and Doordarshan (Commercial Services Revenue)Non-Lapsable Fund (NLF) would cease to exist. The Central Government will ensure that the balance in NLF as on 31.03.2000 is transferred to the Prasar Bharati as early as possible.

3. All the commercial revenue receipts and miscellaneous receipts of Prasar Bharati in relation to AIR and Doordarshan as well as Grants-in-aid and Loans to be received from the Central Government will be credited into separate bank account(s) to be opened by the Prasar Bharati with a Nationalised bank for this purpose. The balance in the NLF as on 31st March, 2000, will also be credited into the bank account of the Prasar Bharati.

4. The Prasar Bharati will make alternative arrangements for all payments including salary to its employees from its own bank accounts. For this purpose bank accounts will be opened by Prasar Bharati at required places and its officers authorized to operate them. Withdrawal of funds from Prasar Bharati Account will be made by the designated officers working under the LOC system. PAO Unit would assign spending limits to DDOs under intimation to the concerned Branch. Further, Prasar Bharati will work out overdraft arrangements with their banker(s) to meet temporary mismatch in inflow and outflow of cash to and from its account(s). Necessary arrangements will be made by Prasar Bharati to ensure timely transfer of funds to all the bank branches.

5. Detailed instructions will be issued by Prasar Bharati regarding limits on drawal of funds from various bank accounts, observance of financial prudence and propriety. Till alternative financial and accounting  systems are evolved by Prasar Bharati, it will follow the present system regarding (a) expenditure control, i.e. headwise allocation of funds and maintenance of original and subsidiary records (expenditure control registers and other records); and (b) maintenance of accounts. The Central Government will allow Prasar Bharati to continue to avail of services of its accounts staff on deemed deputation basis till either alternative arrangements are made by Prasar Bharati or the staff is absorbed by it by mutual consent. Prasar Bharati will take necessary steps for training its staff when its own accounting system (duly approved by the CGA and C & AG) is introduced.

6. Prasar Bharati shall endeavour to augment its revenue earnings year after year, strengthen its mechanism for resource mobilization and take effective steps for optimally utilizing the available resources to progressively reduce dependence on Grant-in-aid from the Central Government.

7. The principles of allocation of receipts and expenditure between Revenue and Capital will be settled by the Prasar Bharati in consultation with C&AG of India. Till such arrangements are formalized, the existing system of apportionment of receipts between Revenue and Capital will continue to be followed.

8. In September each year, the Prasar Bharati shall prepare an Annual Financial Statement for the next financial year, in the prescribed format and forward it to the Central Government for making a tentative assessment of  its requirements. The Prasar Bharati shall also indicate its firm and final requirements in the prescribed format and after its approval by Prasar Bharati Board, forward the same to the Central Government by end of October each year for deciding the quantum of financial support.

9. The Prasar Bharati will ensure proper maintenance of its accounts and other relevant accords and get these audited every year by the C&AG of India. The certified accounts together with the Auditor’s report thereon, shall be submitted annually to the Central Government and laid on the Table of both the Houses of Parliament. The Prasar Bharati will also render to the Central Government, monthly account of income and expenditure as well as monthly position of cumulative cash balance in its bank account(s).

10. Central Government, after due scrutiny of the Annual Financial Statement as well as the monthly accounts of income and expenditure of Prasar Bharati and the position of cash balance in its bank account(s), will release Budgetary Support to the Prasar Bharati, in three or more instalments in accordance with the Rules to be framed for this purpose. The first instalment of Grant-in-aid for the year 2000-2001representing one-sixth of the budgeted amount will be released in April 2000 for expenditure during April and May, after the Parliament has passed the Vote on Account.

11. The arrangement and understandings recorded above may be varied, altered or substituted by mutual consent of the Central Government and the Prasar Bharati in consistence with the provisions of the Act and the rules /regulations framed as prescribed thereunder. The Central Government and the Prasar Bharati also agree to amend or substitute by mutual consent, any understanding recorded above, in so far as the same is or may become inconsistent with the Act or the rules/regulations which are framed thereunder. Any amendment to this MOU shall be effective only after the concurrence of Ministry of Finance.

12. The arrangements and understandings recorded above, shall remain in force till such time that the Central Government and Prasar Bharati mutually decide to terminate the same.

Signed on behalf of the Central Government                                           Signed on behalf of the 
By Shri Y.N. Chaturvedi                                                                                 Prasar Bharati (Broadcasting
Secretary, Ministry of Information and                                                        Corporation of India) on the
Broadcasting                                                                                                 authority of its Board By
                                                                                                                         Shri R.R. Shah C.E.O.
                                                                                                                         Prasar Bharati