Classification of Heads of Expenditures-I

1. Consumption Expenditure

Under this classification, the following sub-classification are provided:

1.01 Salaries: Under this head, the following expenditures are included:

1. Salaries, contribution to provident fund, annual increments, expenditures made on incentive and rewards.
2. Wages or remuneration paid to the temporary employees appointed under authorized or prescribed rules and remuneration paid to any person appointed for the specific period under contract.
3. The amount paid for Dashain expenses, home leave, sick leave and payment in lieu of leave.
4. Remuneration paid to the contracted personnel for a definite term.

1.02 Allowances: Expenses for all types of allowance such as remoteness allowance, allowance for departmental chief, overtime allowance, etc. as mentioned in the rule of Government.

1.03 Travelling allowance and daily allowance (TADA) on transfer of employees: This head includes the following items:

1. Travelling allowance: This allowance is paid to the employee when transferred from one office to another to meet the transport expenses under the prescribed rule. This includes bus fares, taxi fares, train fares, air ticket expenses, airport tax, insurance and other approved petty expenses including the journey on foot.
2. Daily allowance: This allowance includes the amount paid to the designated personnel when he is in transit on his transfer. This is paid to meet his daily expenses for lodging and food as per the prescribed rules and official rate.

1.04 Dress: This heading includes Dress materials such as uniforms, boots, hats, caps and allowance for dresses for foreign visits to be allowed to government employees such as police, army, postal worker and others.

1.05 Food and feeding materials: Expenditures paid under prescribed rules for:

1. Supplying food to government employees like police, military, and other government employees or amount paid in cash or in kinds for the purpose.
2. Expenses paid supplying, feedings for animals or birds.

1.06 Medical treatment: Expenses for the treatment of executives and staff fall under this heading.

1.07 Retirement facilities: This heading covers pension and gratuity to be paid to the retired employees.

1.08 Training Program Expenses: It includes the expenditures incurred in connection to conduct the training program, like seminars, workshop paid to government employees for their career development.

2. Office Operation and Service Expenses

2.01 Water and electricity charges: This heading includes charges to be paid for consuming water and electricity facilities. Besides, it also includes the erection cost and deposited amount required to get such facilities.

2.02 Communication charges: This heading includes charges to be paid for consuming telephone, telegram, trunk call, telex computer, fax and other communication facilities. Besides, it also includes the erection cost and deposited amount required to get such facilities.

2.03 Office operating expenses: Under this head the following expenditures are included:

1. Expenses for letters, parcels, postage stamps, registration, insurance and return receipts.
2. Publication expenses related to publicity, advertisement, notification, auction, tenders, etc.
3. Bank charges, compensation and other similar expenses.
4. Expenditures concerning to daily official materials like papers, envelopes, forms, files, stapler, punching machines and other stationeries item like pens, ink, pencils etc. fall under this head.
5. Other official consumable material having durability less than a year and security equipment's related light accessories. Similarly, other official consumable items having durability more than a year costing less than rupees one thousand includes.
6. Plants, equipment, and other equipment used for security purposes having the value less than rupees one thousand.
7. Heater, fan, telephone set, calculating machine, cheque writer, electrical appliances, torchlight, and the electronic materials required to maintain radio and television having values less than rupees one thousand.
8. Light agro-tools, light equipment concerned to veterinary treatments and light technical equipment and items used in drawings and designing purpose.
9. Beds (excluding furniture), sleeping bags, and kitchen utensil and light item, excluding machinery and equipment.
10. Sundry materials for internal and external decoration.
11. Consumable items used for cleaning and safety purpose.
12. The cost of similar other consumable items.
13. Printing cost including cost of letter pad, forms, registers, reports, and other related printing costs.
14. The cost of books, magazine, newspapers, directories and other technical publications purchases for office as well as library use.
15. Insurance premium paid for vehicles. machinery, office equipment, and office buildings.
16. Transportation and carriage expenses incurred while transporting government moveable properties. Transportation and carriage expenses incurred for newly purchased properties are capitalized.

2.04 Rent: This head includes the rent paid for the building, land warehouse, machinery and other capital assets hired and used for official work.

2.05 Repairs and maintenance: This head covers the expenses incurred for the regular maintenance of capital assets like office buildings, machines, equipment, furniture etc. including necessary materials and wages. However, expenses incurred for extension or addition of building replacing the vehicle's engine, the spare part that increases the life of assets would be treated as capital expenditures and they are charged to their respective heads.

2.06 Fuel and fuel for other purposes:

1. Fuel for transportation: Expenditures like fuel lubricant etc, incurred for the vehicle used for official purpose comes under this head, However, fuel expenditure concerned to the vehicle used for transporting construction materials under capital cost estimation is capitalized.
2. Fuel for other purposes: Fuel expenses incurred in official works and for use in batteries other than vehicle are included under the head. However, fuel expenses used for development works like industries, mining, groundwater, roads, and bridges, are incorporated/charged in the concerned project/work.

2.07 Consultancy and other service charges:Under this heading, expenditures like research and experiment, remuneration for experts and consultants/advisors that are not related to the capital expenditures and the amount paid for the workers employed on contract or daily basis like for cleaners, gardeners, drivers etc. are included.

2.08 Miscellaneous Expenses:

Under this heading, the following expenditure is included:

1. Expenses on approved entertainment programs, displays, refreshment, and parties.
2. Expenses on peace and security.
3. Expenses on the reception of delegates and guests.
4. Expenses on festivals.
5. Approved contingency expenses on foreign visits.
6. Other expenses not mentioned under any other heads of the budget.

3. Grants (Current transfer)

3.01 Grants to public enterprises:It contains the grants given to the government's partly or fully owned corporations, boards committees etc.

3.02 Grants to local bodies: It contains the operation grants given to government local bodies are included.

3.03 Grants to public utilities:

It contains the following expenses:-

1. Operational grants offered to the service oriented educational institutes and hospitals.
2. Donations and subscription gave to the national and international social organizations.
3. Food, clothes, and other facilities are given to the sick people and prisoners.
4. Grants are given to the helpless people due to the natural disasters and other reasons.

3.04 Grants on public securities:It includes grants given to the old, widow and deprived people. It also included the grant provided to the general pension fund and reimbursement of staff provident fund to help the family of death employee.

References:

Sharma, Narendra et.al., Principles of Accounting-XI, Bundipuran Prakashan, Kathmandu

Koirala, Yadav Raj et.al., Principles of Accounting-XI, Asmita Books Publication, Kathmandu

Shrestha, Dasharaha et.al., Accountancy-XI, M.K. Prakashan Kathmandu