With the objective of ensuring planned development of urban areas and providing housing to various sections of the society, the State Government have constituted Development Authorities in 22 major cities of the State under the provisions of Uttar Pradesh Urban Planning and Development Act, 1973. These Authorities have been quite enthusiastic in the initial stages of their creation and contributed a lot in building up of housing stock and development of infrastructure. Despite of their significant contribution during the past two decades, most of the Development Authorities are at present confronted with an interrelated set of complex problems centering mainly on finances, delivery systems and general functioning. These Authorities have been financing a continuously shrinking portion of their schemes from self-generated resources and are relying increasingly on the State Government and Financial Institutions to make up for shortfalls in their operating budgets. Another disappointing indication is the continuous defaulting on loan repayments of the State Government and Financial Institutions. As a result, these Authorities which were high performers at one time, have been humbled. The declining performance of Development Authorities is attributed primarily to lack of financial and manpower management systems. The deteriorating financial health of these Authorities is of great concern to the State Government.

The State Government have been making concerted efforts to improve the overall financial health of these Authorities. It is obligatory on the part of the Government to make provisions for maintenance of proper accounts and other relevant records and prepare annual statements of accounts including the balance-sheet in accordance with section 22 of the U. P. Urban Planning and Development Act, 1973. Lack of a defined financial management system by the Government, notwithstanding the aforementioned provision in the said Act, compelled the Development Authorities to formulate their own procedures and conventions for budgeting, accounts, record keeping and preparation of annual statements of accounts including the balance-sheet. Due to aforesaid reasons and in compliance to the provisions of the Act, the Housing Department for the first time has prepared the “Uttar Pradesh Development Authorities Finance and Accounts Manual, 2002” under the aegis of Awas Bandhu. The Manual is in consonance and resonance with the Financial Handbook and Orders issued by the Government of Uttar Pradesh.

In this Manual an attempt has been made to address all aspects relating to financial matters ranging from maintenance of proper accounts, record keeping and preparation of annual statements of accounts including the balance sheet. The Manual clearly defines the accounting policies, operating system procedures and accounting procedures for property, material, revenue, costing, budgetary controls as well as powers, duties and responsibilities of the finance managers. The Proformas, Registers and Books of Accounts on all aspects relating to budgeting and account keeping are designed in simple and explicit form. The Manual will assist in computerising the entire operations of the Development Authorities. It would be an effective tool for the finance managers to ensure time-bound recovery of dues, laying down procedures for billing, collection of revenues, methods of costing, budget preparation and audits. The Manual will be useful as a reference tool to each member of the Authority besides the finance managers. It would also assist in monitoring the financial status of the Development Authorities not only at the Local level but also at the State level.

I am sure that the Development Authorities will now keep pace with changing time to perform their duties in a more efficient, professional and transparent manner and pave the way for a better cash-flow management and ultimately provide yeomen service to the public at large. The Manual will also herald a new era of financial reforms in the housing sector.

I wish to congratulate the officers of Awas Bandhu, Development Authorities, U.P. Housing and Development Board and Professional Experts whose efforts have brought this Manual in its present form.

Atul Kumar Gupta
Principal Secretary, Housing
Dated : 16th March, 2002 Government of Uttar Pradesh


The policy of economic liberalisation and financial reforms initiated by the Government of India, declaration of National and State Housing Policies coupled with increasing shortage of affordable housing and services in the urban areas make it necessary to strengthen the role of housing agencies especially the Development Authorities as “facilitators”. The State Government have been making concerted efforts to improve the overall functioning and financial position of Development Authorities through regular monitoring and performance evaluation to bring in accountability, ensure efficiency, transparency and financial viability.

In order to streamline the financial management of the Authorities, the present Accounting Systems and Procedures prevailing in different Development Authorities of the State was thoroughly studied by a group of experts and professionals engaged by the Housing Department. The objective of the study was to have an in depth view of various pitfalls and problems, which these authorities have been confronted with since their inception.

The group of experts and professionals observed following lapses and procedural lacunae: –

(a) The Accounting is done either on Cash, Accrual or Hybrid basis which does not depict the true and comprehensive picture of the financial status at the end of the financial year or at any given point of time. The realizable and outstanding liabilities are also not determined properly and therefore, no efforts could be made for time-bound realization of the same and to correctly estimate the quantum of outstanding liabilities for a given period of time.

(b) The Books of Accounts are not maintained on Double Entry System following Accrual System of Accounting. The accounting standards as promulgated by Institute of Chartered Accounts of India are also not followed. Consequently, it is not possible to determine the Profit or Loss of the Authority. Besides, timely preparation of the Balance Sheet and Income and Expenditure Account reflecting true scenario at the end of the financial year also becomes difficult.

(c) There is no proper and well defined System or Manual or Procedure for Demand and Collection recordings, Property Accounting, Cost Accounting, Budgetary Control, Fund Management, Loan Management, Internal Checks, Audit and Management Information System. Proper demarcation of roles leading to co-ordination between Property, Engineering, Establishment and Finance Department is also lacking.

Keeping in view above shortcomings, the need for a comprehensive Finance and Accounts Manual is sine qua non for any Development Authority to plug the loopholes and lay a futuristic, comprehensive and adaptable approach towards Finance and Accounts Management.

The “Uttar Pradesh Development Authorities Finance & Accounts Manual, 2002” conceived, designed and developed by Awas Bandhu is a stepping stone in the annals of financial management. The Manual comprises of Four Parts divided into 27 sections. The complete listing of these parts and sections is given in Index at the beginning of the Manual and further details are given in the 27 Indexes for each section. Every section contains the descriptive analysis of various aspects and relevant proformas, tables, etc., which are easy to comprehend and understand. In the era of E-Governance the Authorities will be at ease to trigger-off total computerization for efficient and transparent functioning, subsequent to the implementation of this Manual. It will also assist in the effective transmission of data between the Development Authorities and the Government.

I am confident that this Manual would bring conspicuous change in the approach and attitude of the Finance Managers and strengthen the entire gamut of operations of the Development Authorities.

Sanjay Bhoosreddy
Special Secretary, Housing &
16th March, 2002 Executive Director, Awas Bandhu

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