Most state governments have rejected the Union Human Resource Development (HRD) Ministry proposal to adopt a uniform accounting standard in schools and institutes of higher learning, both government and privately run, in order to ensure greater transparency.

The proposal was made at a recent meeting of State education ministers here on June 5.

Madhya Pradesh education minister Archana Chitnis stonewalled the suggestion saying, “We don’t want to implement it in schools”. 

Her counterparts from most other states echoed her sentiment, even while the Ministry insisted that adopting a common accounting standard would assist states in estimating the expenditure incurred by schools and the quantum of reimbursement due to private schools under the Right to Education (RTE) Act.

On adopting the uniform accounting standards in higher educational institutions in their jurisdiction, the states sought time from the Ministry to give it a thought.
The accounting standard for educational institutions has been formulated by a working group which included representatives from the Institute of Chartered Accountants of India (ICAI) and officers of the HRD Ministry, University Grants Commission and Kendriya Vidyalaya Sangathan (KVS).

The group, in its report to the HRD Ministry in January this year, has recommended that all educational institutions should be “mandated” to apply accrual basis of accounting. Fund based accounting may be introduced for earmarked or designated funds.

“The present system of accounting and financial reporting followed by educational institutions do not meet the accountability concerns of the donors, including government and other stakeholders, including general public,” the report noted.

Educational institutions in India follow not only diverse accounting practises but also different basis for accounting. “Due to this, the financial statements of various educational institutions are incomparable,” it underlined

The panel felt that there was a “greater need” for accountability of the financial resources used by the educational institutions in view of the increase in government aid, particularly in the form of concessions and incentives.

The HRD Ministry has decided to implement the new system for accounting and financial reporting in the centrally funded or aided educational institutions from the financial year 2013-14 in view of the increased donations received by many educational institutions from various agencies other than the government, besides enhanced tuition fees collected from students.

The accounting formats prepared by ICAI will be circulated to all the states governments “States have been requested to revert on the account formats at the earliest,” a HRD Ministry official said.  
DH News Service