Page 294 - Account 10

1. Introduction
Recording of financial activities is regarded as the first step and preparation of
financial statement as the final step of the accounting process. When reporting of the
financial statements is made, accounting process comes to an end for operating level
office.
Financial reporting is the transmission of financial information to the controlling units in
accordance to the rules and regulations of the entity concern. All operating level offices are
required to submit their financial reports regularly to the central level office or controlling
units like Office of District Treasury and Comptroller. These reports are prepared in the
prescribed format and submitted on monthly basis. Government of Nepal uses monthly
budget release system based on monthly statement of expenditure. Unless the operating
level offices submit the monthly expenditure report, budget is not realized for the next
month. Following reports are to be submitted by operating level offices to controlling
units: (i) Statement of Expenditure (AGF No. 13) (ii) Monthly Advance Expenditure
Report (AGF No. 14), (iii) Bank Reconciliation Statement (AGF No. 15), (iv) Monthly
Statement of (AGF No. 9) and (v) Monthly Statement of Security Deposit (AGF No. 19).

Key Point Monthly statements/reports refer to the financial statements/reports
prepared in the prescribed forms and formats on the monthly basis by the
operating level offices and are submitted to the central level office.

2. Objectives and Importance of Monthly Statement
Monthly expenditure report is the most important report prepared under operating
level accounting. It is prepared at the end of each month, to submit it to the central level
office to get clearance of the advance remained in its name. Its importance can be studied
in terms of the following objectives:

i. Provides Necessary Data
They provide various financial data and information like budget release, budget
expenditure, outstanding advance, position of fund, security deposit, surplus budget, etc.
They help to prepare central level accounting and budget for forthcoming year.

ii. Controls Over Budget
They help in effective control over budget, as they provide different pieces of
information related with the budget and its expenditure. They help to maintain the
expenditure within the limitation of budget.

iii. Helps in Auditing
They provide up-to-date financial data and information for internal and final audit.
Auditor can check the amount related with budget like annual appropriation, release,
expenditure and surplus with the help of monthly statements.

iv. Helps to Evaluate
They are the main administrative tools for evaluation of the financial activities of the

294 Aakar’s Office Practice and Accountancy - 10 Monthly Statement 295