Chapter 16 Solutions: Use of Information Technology in Office Operation and Accounting

Answers to the Chapter 16 exercises. Each answer is as long as its marks call for: a sentence or two for 1 mark, and five marks’ worth of explained points, tables or working for 5 marks.

Group A: Very Short Answer Questions (1 Mark Each)

1. Write the full forms of TSA, CGAS, SuTRA, LMBIS, RMIS, and PAMS.

• TSA: Treasury Single Account
• CGAS: Computerized Government Accounting System
• SuTRA: Sub-National Treasury Regulatory Application
• LMBIS: Line Ministry Budget Information System
• RMIS: Revenue Management Information System
• PAMS: Public Assets Management System

2. How does the use of computers in accounting help in cost control?

Computers cut paperwork, printing and stationery costs and prepare ledgers, the Trial Balance and reports automatically without extra clerical staff; in systems such as CGAS and TSA, they also block payment orders that exceed the approved budget, which prevents overspending and costly clerical errors.

3. Which accounting software is used by all 753 Local Levels of Nepal to manage their Consolidated Fund?

All 753 Local Levels use SuTRA (Sub-National Treasury Regulatory Application), a web-based system for the planning, budgeting, revenue collection, accounting and financial reporting of the Local Consolidated Fund.

Group B: Short Answer Questions (5 Marks Each)

1. Explain the importance of Information Technology (IT) in modern office operations and accounting.

Information Technology (IT) is the integrated use of computers, software applications, databases, internet networks, cloud computing and telecommunications to collect, process, store, secure and transmit administrative and financial information. Both private enterprises and the Government of Nepal have moved from manual paper registers to digital office management (e-governance) and computerized accounting systems. Its importance is:

1. Speed and accuracy through automation: Once a journal entry is made, the computer posts it automatically into the ledgers, Trial Balance, Budget Sheet and Final Accounts within seconds, without arithmetic errors. In CGAS, for example, a Journal Voucher (AGF 203) automatically generates the Budget Sheet (AGF 208), Bank Cash Book (AGF 209) and Monthly Statement of Expenditure (AGF 210).
2. Less paperwork and lower administrative cost: Computerized accounts remove the need for physical ledgers, printing and manual storage of vouchers. This directly reduces stationery costs and administrative overhead.
3. Real-time budget and cash control: CGAS and TSA automatically block any payment order that exceeds the approved budget, so overspending is prevented. The Ministry of Finance can also see the government’s daily cash position in real time.
4. Transparency and prevention of fraud: Digital audit trails show who entered or approved each transaction. Electronic Funds Transfer (EFT) and the online revenue portal (RMIS) reduce the handling of cash, which cuts the chances of leakage and embezzlement.
5. Instant reporting and secure backup: Monthly statements such as AGF 210, tax returns and daily national treasury reports can be produced instantly. Records are protected by secure cloud backup, so they are not lost through fire, theft or damage to paper files.
6. Efficient day-to-day office operations: Biometric e-attendance records staff arrival and departure accurately, and GIOMS handles electronic Darta-Chalani, digital Tippani routing and paperless file tracking. Digital signatures, legally recognized under the Electronic Transactions Act, 2063, authenticate documents and vouchers, while e-procurement (e-GP) and video conferencing save time and travel.

To enjoy these benefits safely, offices must also manage the risks of IT, such as hacking and server downtime, through role-based user IDs, two-factor authentication, regular encrypted backups, firewalls and staff training.

2. What is the Treasury Single Account (TSA) system? Write any four advantages of implementing TSA in Nepal.

Meaning: The Treasury Single Account (TSA) is the system under which all government bank accounts are consolidated into one unified treasury account structure managed through the District Treasury Comptroller Offices (DTCOs) and Nepal Rastra Bank, instead of thousands of government offices holding separate bank accounts in commercial banks. Under TSA, an operating office does not keep idle cash in its own account; it issues a Payment Order (AGF No. 204) or EFT instruction to the DTCO, which pays the exact amount directly from the TSA into the bank account of the supplier or employee.

Four advantages of TSA:

1. No idle cash in operating offices: Since government money stays in a single treasury account until it is actually paid out, cash balances no longer lie idle in the separate bank accounts of thousands of offices. The whole amount remains available to the government.
2. Less short-term borrowing: Because the government can see and use all its cash in one place, it needs less short-term borrowing or overdraft to meet its payments. This saves interest cost for the government.
3. Real-time cash position: TSA gives the Ministry of Finance the government’s daily cash balance in real time. This helps it plan budget releases, borrowing and payments accurately.
4. Strict budgetary control: Payments are released through the DTCO only within the approved budget ceilings, and a payment order that exceeds the budget is blocked. No office can therefore spend more than its approved budget.

TSA also makes payments faster and paperless, because salaries and vendor payments go by EFT directly into the payees’ bank accounts, and revenue collected by offices is transferred automatically to the Consolidated Fund.

3. Write short notes on: (a) CGAS, (b) SuTRA, and (c) RMIS.

(a) CGAS (Computerized Government Accounting System): CGAS is web-based accounting software developed and operated by the Financial Comptroller General Office (FCGO). It is used by Federal and Provincial operating-level offices. In CGAS:

• the office enters Journal Vouchers (AGF 203) and Payment Orders (AGF 204);
• the system automatically generates the Budget Sheet (AGF 208), Bank Cash Book (AGF 209) and Monthly Statement of Expenditure (AGF 210); and
• payments are made by direct Electronic Fund Transfer (EFT) to the payees’ bank accounts, and any payment order beyond the approved budget is blocked.

(b) SuTRA (Sub-National Treasury Regulatory Application): SuTRA is web-based public financial management software operated across all 753 Local Governments (Rural Municipalities and Municipalities) of Nepal. It:

• manages the Local Consolidated Fund of each Local Level;
• integrates local-level planning, budgeting, revenue collection, accounting (Journal Vouchers and ledgers) and financial reporting in a single system; and
• is linked with EFT, so that local payments are made directly into bank accounts.

(c) RMIS (Revenue Management Information System): RMIS is the online government revenue portal developed by the FCGO. Through it:

• taxpayers and service-seekers generate electronic revenue vouchers (E-Challan) from home;
• they pay government taxes, passport fees, traffic fines and non-tax revenues online through ConnectIPS, mobile banking, digital wallets or international cards; and
• revenue is reported in real time to revenue offices and the FCGO, which reduces cash handling and revenue leakage.