QUESTION BANK WITH ANSWER - GROUP ‘B’ AMM ( Stores) Part V

QUESTION BANK WITH ANSWER - GROUP ‘B’ AMM ( Stores) Part V

Q.276. Discuss Merits And Demerits off two systems of provisioning, viz. the Annual Estimate System and Economic Order Quantity system for a large organisation, stocking a wide variety of item.

Ans. Annual Estimate system

Merits:

(i) Recoupment is made as per given time-table. Therefore, the possibility of lapse on the part of the staff is minimised.

(ii) It helps combining of demands of similar items into one purchase so log as the source of supply of this item is common. This reduces not only the ordering cost but gives a better bargaining power due to bulking of quantities.

(iii) The demands from more than one depot for the same item can be combined in the purchase office at the same time, as pr the timetable laid down and make the purchase for all depots together. (iv) Under this system, number of reviews to be made are the bearest minimum.

(v) Bulk order can be placed on the supplier to obtain a better rate for the item.

(vi) Inventory carrying cost can be kept low if order is placed with required no. of phased deliveries. (vii) Due to adequate buffer, chances of stock out may also be minimized.

 Demerits :

(i) In this system, stocks get depleted between two reviews, either due to failure of suppliers or due to violent fluctuation in consumption. This will cause stock out. The depot is forced to go in for an interim recoupment, leading to emergency procurement at higher cost. It results in stock out cost.

(ii). In this system, not only estimates are made in advance to the period of requirements but also contracts are finalised well ahead. In case, there is a drop in consumption or items become obsolete, dues cannot be cancelled due to contractual obligation. It will result in the increase of quantity of an item in stock already rendered surplus.

(iii) this system is not most suitable for the purpose of inventory control because we cannot take advantage of optimum economical order quantities and therefore, is not suitable for items with high consumption value. However, this disadvantage can be overcome by taking delivery into various installments. EOQ System/(Economic order quantity)-

Merits : i. Recoupments are made immediately as stock reaches the minimum. This will avoid stock out. ii. This will avoid accumulation of excess stock if there is reduction in consumption or becomes obsolete.

 De-merits – i. There will be frequent recoupments in a year. It will result in more order costs.

ii. The rate obtained for the item will be more, as the quantity ordered is less.

Q.277.Explain the Account Inspection Report Part I & II.

Ans. One of the functions of the Accounts Office is to inspect on the spot the source documents maintained in the Executive Offices which are not sent to the Accounts Office for check. The internal check is exercised in an Accounts Office on the bills and returns etc. prepared in the prescribed forms by the Executive offices. Many of the original records on which these bills and returns etc. are based are retained in the office where these originate. The Accounts Officer, or the staff deputed to inspect an office, should see that the bills, returns, vouchers etc, submitted to the Accounts office have been correctly prepared and accord with facts and that all such initial records have been maintained efficiently. 

In addition, the object of local inspection is to see that the financial rules and orders are being carried out, and that the executive authorities responsible for keeping the accounts exercise due care over the accuracy of the accounts. 

All irregularities and objections noticed during the course of inspection should be noted down methodically. At the conclusion of the inspection, the Account Inspection Reports should be compiled embodying all irregularities and objections for which no satisfactory explanations were forthcoming. The Report should be as brief as possible and the points covered in the report should be arranged in a proper manner and serially numbered. The reports should be prepared in two parts i.e., Part I and Part II. The first part should contain points of major importance only, all other items being relegated to Part II. 

Account Inspection Report Part-I: This should contain points of major importance only which may be held to include objections involving recurring over payments due to wrong fixation of pay, grant of leave and T.A. under a wrong set of rules etc. and any other irregularities which are required to be regularised under competent sanction. The remarks for individual paras should be called for from the Head of the Office Inspected. 

Part I of the Inspection Report should be prepared in Triplicate. One copy will be retained in the Accounts Office as Office copy and Two copies sent to the immediate superior of the Officer whose office was inspected, with a request that one copy may be forwarded to the Head of the Office Inspected for remarks. In the case of Divisional Office, all Part I Inspection Reports should be sent to the divisional officers personally. The officer whose office was inspected should return one copy with as complete replies as possible through his immediate superior to the Inspecting Officer. Before forwarding the replies, the immediate superior should satisfy that they are correct and complete and where necessary should have them amended or amplified to avoid further correspondence. The remarks so received should be scrutinised in the Accounts Office and further action that may be necessary taken under the orders of the Accounts Officer. If any cases of serious irregularities come to light in the disposal of Part I of the Inspection Reports the details thereof should be entered in the "Register of Serious Irregularities" and the progress of their disposal carefully watched. Part I of the Inspection Reports should ordinarily be seen by the Dy.CAO//Sr. DFM. Part I of the reports on the major construction and other important offices or those containing very important points should be put up to FA & CAO through the Dy.CAO concerned. 

Account Inspection Report Part II: All other items, which have not figured in Part I should be included in Part II.

 The disposal of paras in Part II may be left to the Head of Office inspected. Part II of the Inspection Report should be made out in duplicate. One copy should be retained in the Accounts Office as office copy and the other sent direct to the Officer in charge of the office inspected with the request that irregularities pointed out therein may be rectified and the recurrence of such irregularities guarded against. The officer in charge of the office inspected should acknowledge receipt of the report, and give suitable remarks as to the action taken by him against each item in the report before filing it in his office, The Accounts Officer should satisfy himself during his next inspection that suitable action has actually been taken on the points raised therein.

 Part II Inspection Report need not however be put up to Dy.CAO .

 Q.278. Explain the Merits & De-merits of E-auction over Manual Public Auction?

Ans. Merits:

(1) Purchasers/Bidders can do bidding ONLINE in E-auction at home/office. It facilitates the Depot Users and bidders by removing the restriction on their physical appearance at the place where Auction is taking place like in public auction, thus saving time and money for bidder and seller .

(2) Auction conducting officer in the depot can perform the auction operation within its chamber instead of presenting in Auction Hall. He/She can perform other office works simultaneously with E-auction.

(3) Bidders have to deposit only one time Registration Fee in E-Auction and they can participate in E-auction of Depots of various railways. In Manual Public Auction, they have to submit the refundable Entry Fee for each and every auction and for each depot of railways in the form of demand drafts.

(4) The depot staff including Accounts involved in auction can perform its regular office work during E-auction days. E-Auction also eliminates the requirements of Cash Office’s Staff for depositing EMD and RPF staff for security in Auction Hall.

(5) The Auction Catalogue is created ONLINE on the IREPS website in E-Auction. This results in Paper saving towards environment benefits.

(6) EMD is automatically deducted from the bidder’s account in E-Auction. There is not need to carry physically cash by the purchaser which eliminates the possibility of theft/loot of cash like in manual public auction.

(7) In manual public auction, the EMD is deposited by successful purchase after lot is sold to firm, some times the purchaser refuses to deposit the EMD. In this case, sold lot is withdrawn & only refundable entry fee Rs.10000/- is only forfeited & lot is cancelled. In E-Auction, the EMD is automatically deducted for the highest successful bidder and no need to cancel the lot.

(8) The Bidders can participation in more than one depots at same time in EAuction.

 Demerits: (1) Purchasers are normally less educated. They have to acquire proper knowledge of Computer working, internet, Net Banking etc.

(2) E-Auction is mainly dependent on Internet. Due to disconnectivity or less speed of Internet, sometimes a Bidder can miss the opportunity to bid in the lot.

 (3) In Manual Auction, the unsold lots can be re-opened for bidding more than 1 round on the same day. But in case of E-Auction, the lots once closed can’t be re-opened again for bidding.

 Q.279. Distinguish between the followings :

a. Book Average Rate and Reserve Price

b. IP and CP

c. EMD and BSV in E-Auction

d. Purchase Suspense and Sale Suspense.

Ans. (a) Book Average Rate and Reserve Price: The book average rate is the rate arrived at by dividing the value balance shown in the priced ledgers by the quantity balance. Whereas The reserve price is the price fixed by the Controller of Stores or the depot Officer for such item of scrap to be sold based on the bids obtained at past QuestionPaper.Org auctions and any other information available in order that the item may be withdrawn from the sale, if the bids are found unsatisfactory.

(b) IP and CP : In Annual Estimate System, the date on which the recoupment sheet for the item is to be prepared is fixed as per pre-decided time table to be followed for recoupment of the items. The period for which items are recouped is fixed and is called "Contract Period (CP)". This contract period is generally 12 months. The interval between the dates fixed for preparing the recoupment and the beginning of the contract period is known as the Interim Period (IP). This period is equivalent to lead time for that particular item.

(c) EMD and BSV in E-Auction : 

(i) EMD (Earnest Money Deposit) – Highest Bidder on the fall of Hammer or close of bid and its acceptance by Auction Conducting officer shall be required to deposit a token amount of total Sale Value known as Earnest Money Deposit. The EMD amount for sold lot in E-Auction will be 10% of Sale Value (accepted Bid Value) .

(ii) BSV (Balance Sale Value)- After depositing EMD against the sold lot, the purchaser has to submit remaining amount of the total Sale Value as per prescribed time schedule. This remaining amount is known as the Balance Sale Value. Balance Sale Value should be deposited as per time schedule given below:-

(i) Within 10 days from the auction date for lot valued upto Rs 1 Lakh.

(ii) Within 20 days from the auction date for lot valued above Rs 1 Lakhs. The date of auction is included in the time period. In case of failure to deposit the balance sale value within above time schedule, the Railway Administration at the request of purchaser may grant extension to deposit the balance sale value subject to levy interest charges for the belated period (not beyond 40 days) including the date of auction. The EMD shall Stand forfeited if the BSV is not deposited by the purchase within the said period of 40 days or 20 days as the case may be.

(d) Purchase Suspense and Sale Suspense:- Purchase suspense head is operated in the Stores Accounts Office in order to maintain the co-ordination between the balances of stores in the Stores Depot and the Stores balances in general books of the Railway. For indigenous purchases, this head is credited with the value of stores purchased (Received in depot) accepted and Receipt Note Issued) and debited when actual payment, in respect of stores purchase, is made. In case of advance payment i.e. payment made against inspection note and proof of dispatch (R.R.). This head is first debited and then credited as soon material is received in the depot. Whereas Sale suspense is a suspense account created for the purpose of acountal of the material (in value terms) in case of sale of material. Whenever, the payment is made by the scrap purchaser, this suspense is credited and the corresponding debit is done when the material is actually lifted and sale issue note is issued. In case of inter- railway sales, this account is first debited as the payment is realized after issue of the material.

Q.280 (a). Name the various points of Check List that should be checked before processing a Non-Stock Demand for Local Purchase?

(b). What is Advice Note ? How is the disposal of foils of Advice Note done?

Ans. (a) The various points of Check List that should be checked before processing a NonStock Demand for Local Purchase are given below:

1. Whether detailed description given in requisition complete alongwith drawing, Specification etc.

 2. Whether non-stock certificate given

3. Whether basis of estimated cost given ( copy of basis attached if required)

4. Whether funds availability certified in the requisition

5. Whether justification of purchase the item is given

6. Whether last purchase order reference given or justification for Ist time purchase given

7. Whether indent signed and approved by Competent Authority

 a) Upto Rs. 10000/- only. Signing Authority – J.S. Officer Approving authority – JS Officer

b) Exceeding Rs.10000/- but not exceeding Rs.50000/- only inclusive. QuestionPaper.Org Signing Authority – S.S. Officer Approving authority- S.S. Officer

c) Exceeding Rs.50000/- but not exceeding Rs.2 Lakhs. Signing Authority – JAG/SG Officer Approving Authority – JAG/SG Officer

d) Exceeding Rs.2 Lakhs but not exceeding Rs.10 Lakhs. Signing Authority – Counter Signed by CWM/ADRM/SAG Officer of the user department. Approving Authority- Counter Signed by CWM/ADRM/SAG Officer of the user department.

 8. Whether Essential Certificate by C.A. given:-

a) For Safety Items:- for requisition valuing upto 2 Lakhs by JAG/SG level and for requisition exceeding Rs. 2 Lakhs by SAG level i.e. CWM/ADRM/ DRM .

b) For items other than Safety Items:- for requisition valuing upto 1 Lakh by JAG/SG level and for requisitions exceeding Rs. 1 Lakh by SAG level i.e. CWM/ADRM/ DRM .

9. Whether Proprietary Articles Certificate by CA is given :- Competent authority to sign Preparatory Articles Certificate is as under :-

a) Indenting Officer upto Rs.25000/

b) JAG/SG Officer of consigning department up to Rs.75000/-

c) HOD/SAG Officer of consigning department upto Rs.3 Lakhs.

d) PHOD/CHOD of consigning department above Rs.3 Lakhs. Whether Urgency Certificate is given

10. Whether requisition is vetted by Associated Finance, if applicable. Vetting of NS demand required

(i) for safety items- Above Rs. 2 Lakhs

(ii) For items other than safety items- Above Rs. 1 Lakh

11. Whether NS demand is complete in all respect.

Ans. (b) Advice Note :- All stores which have been previously issued for the services of the railway and are no longer required on a work should, in the absence of special instructions to the contrary, be returned to the stores depots. All the returned stores are to be returned by various subordinates on form S-1539 which is called Advice Note for returned stores. This is also called "DS-8" on many Railways. First of all, returning subordinate will obtain approval of his controlling officer for returning the stores and then he will prepare Advice Note(D.S.-8) in 6 copies. He will get these advice notes signed by his controlling officer. If he is sending a material declaring it as unserviceable, he should obtain approval of competent authority. The material to be returned will either be booked by Rail to the nominated stores depot or through Trucks. Disposal of the Foils of Advice

Notes:- (i) As mentioned above the Advice Note for Returned Stores is to be prepared in 6 copies.

• The returning subordinate will retain one copy (1st copy) with him for his record. 
• Out of remaining 5, he will send 3 copies(2nd, 3rd & 4th) to the nominated Stores Depot either along with the material or along with R.R./P.W.Bill, if the material has been dispatched by Rail. 
• At the same time he will send one copy (5th) to the Stores Account office of the depot and last copy (6th) to his controlling officer. 
• The purpose of these 5th & 6th copies is to give advance information to Stores Accounts Officer and his controlling officer so that they can monitor for getting timely and proper credits for their returned materials. This procedure is explained in subparagraph (ii) below. 

(ii)The controlling officers are required to maintain a Departmental Register of Advice Notes(S1605) for keeping watch on the accountal of returned stores. As soon as 6th copy of the Advice Note is received from the subordinate, it is entered in this Register. If some information is found incomplete, further details are added in the Advice Note and then this is forwarded to the Stores Depot for getting credit particulars. Similarly Stores Account Office is also required to maintain an Accounts Register of Advice Notes (S-1622) to see that all the materials returned by various field subordinates are taken into books promptly and properly.

(iii) As mentioned in (i) above 3 copies of Advice Note are sent by the returning subordinate to the Stores Depot along with the dispatch details. On receipt of these copies necessary particulars are entered in a register known as Depot Register of Advice Notes (S-1609). This register is also to keep watch on timely receipt of materials and their accountal. If a material is not received within a reasonable time, claim is lodged on the carrier. On receipt of the wagon/material it is weighed and details are entered in a Wagon Weighment Register. Some of the stores depots also maintain field books, in which they enter the details of all the materials, quantity wise, received from a particular wagon. After receipt of the material, they are segregated classification wise and are taken into books by granting a Receipt Order(R.O.) Number.

(iv) After granting R.O. Number on all the 4 copies (3 received direct from the returning subordinate and one through his controlling officer) concerned ward of Stores Depot will retain one copy (2nd foil) for his record and will forward 2 copies(3rd & 4 th foil) to his Stores Account Officer and one copy (6th foil) back to controlling officer of the returning subordinate.

• Stores Accounts Officer, on receipt of 3rd and 4th foil will pair them with 5th foil, received by him direct from the returning subordinate, and will enter receipt particular as furnished by Stores Depot in 5th copy also. Stores Accounts Office will get the priced ledger posted by sending 4th foil to Electronic Data Processing Center, as per laid down time table. After posting of priced ledger ,4th foil will be brought back and filed in Store Accounts Office. 
• When the priced ledgers are completely posted for the month, computer will generate Credit summary along with many other Reports. This credit summary is also collected by the staff of Stores Accounts Office and is  forwarded to the controlling officer of the returning subordinate along with the 3rd foil of the Advice Note, for accepting the credits. At this time 5th foil of the Advice Note will also be returned to the controlling officer.

(v) Controlling officer on receipt of 6th foil of Advice Note will examine whether the Stores Depot has granted Credit for correct quantity under correct classification & nomenclature. In case of any discrepancy, he should take up the matter with the Depot Officer and the returning subordinate if the reasons given on the Advice Note are not satisfactory. The controlling officer will file 6th foil in his office and 3rd foil will be filed in the office of his associated account office. The 5th foil will be forwarded to Returning Subordinate for his record.

Q.281.(a). Explain following based on SAG committee recommendations?

(i) Selling of Low Value Scrap

(ii)Time for Delivery and depositing Payment

(b). Who are associated with the delivery of scrap materials in the depot? Explain the delivery of scrap materials in the depot after DO is prepared?

 Ans. (a) (i) Selling of lo value Scrap:- Divisions should finalise the list of low value items with the concurrence of DFM/Sr.DFM and with the approval of DRM, keeping in view the codal provision in para 2314 of Stores code. These items should be disposed of on as “as is where is basis”. These scrap lots valued up to Rs.100000 can be disposed of by Sr.DMM/DMM by calling for bids tenders from the list of likely buyers. Similarly, a list of such low value scraps should be finalized by each CWM in the Workshop and such low value scrap items should be disposed by the respective CWMs from the workshop itself. The workshop may have a separate space for storing these low/nil value items within the workshop premises.

(ii) Time for Delivery and depositing Payment:- As per SAG recommendations, the system may be modified as under :-

• Free delivery time shall be maximum 50 days from the date of auction. This time can be extended upto 65 days by COS/CMM at the time of auction depending of complexity of lot or even after auction in case Railway Administration is responsible for delay. However, beyond 65 days, delivery can be given only after imposing ground rent. In exceptional circumstances when delay is purely duet to fault of Railway Administration, delivery time can be extended without ground rent with personal approval of GM/AGM. 
• If the purchaser fails to deposit balance sale value for a sold lot within the allowed period of 20 days from the date of auction and request for an extension of this period, the Railway Administration, may at its discretion, on the merits of the case, allow further time not beyond 40 days from the date of auction, subject to the levy of interest charges. However, the Earnest Money shall stand forfeited, if the balance sale value is not deposited by the purchaser within the said period of 40 or 20 days as the case may be. 

Ans.

(b) The nominated DMS/CDMS, purchaser, nominated representative from Accounts (normally a Stock Verifier) and nominated representative from RPF are associated with the delivery of scrap materials in the depot. When the balance sale value has been paid by the purchaser in full and he has fulfilled all the other conditions of sale, a Delivery order is issued to him by the Depot Officer. Delivery order is an authority for the purchaser to take delivery from the Scrap Yard. The purchaser approaches DMS incharge of Scrap Yard/ with delivery order for taking delivery. Delivery is given by the nominated which is witnessed by

• A representative from Accounts (normally a Stock Verifier) and
•  A representative from RPF At the time of delivery it is to be ensured that ; 

(a) The delivery is given from the lot actually purchased by the purchaser ;

(b) Delivery is given from one side and no picking and choosing is allowed.

(c) Fresh arisings of similar material are neither dumped on the sold lot nor delivery of these is given at the time of delivery.

(d) The purchaser does not have access to other lots. (e) Proper record of weighment is maintained.  (f) Normally delivery of ferrous items is given by weighment on a Electronic weigh-bridge but delivery of a non-ferrous items is given by weighing on Electronic Weighing Scale.

After the delivery is completed a Sale Issue Note is prepared, and the details of progress of delivery are also maintained on the back of the Sale Issue Note. When the Sale Issue note is signed by the gazetted officer, a Gate Pass is issued and it is the duty of the Delivery Witnessing Officials to escort the lorry up to the gate so that there is no possibility of mixing any other material within the depot.

Q.282.Write short note on following :

a. Tender sale

b. Auction sale

c. Stock Verification Sheet

d. Bid Sheet.

Ans. (a) Tender Sale : The means of disposal of scrap by inviting tenders offering to sell is called tender sale. The tender sale is governed by terms & conditions of sale by tender, which are published in the tender documents. The prospective bidders are required to submit their bid along with the required Earnest Money Deposit, failing which the offers are summarily rejected. The tenders are opened at the date & time given in the tender documents. The offers received are evaluated and the offer of the highest bidder which meets the tender conditions is accepted by the competent authority. The sale contract is issued after receipt of security deposit from the successful bidder.

(b) Auction Sale : The means of disposal of scrap through public auction is called auction sale. The terms & conditions governing sale of scrap through auction are drawn up before sale and published in the auction catalogue. The auction sale notice containing date & venue of the auction is advertised in leading newspapers giving reasonable time for intending bidders to collect auction catalogues and visit scrap yards to examine the relevant scrap lots. On the date & venue of the auction advertised, the auction conduction officer conducts the auction sale as per the governing terms & conditions. Bids are obtained on the spot and the highest bid above reserve price is accepted. Bidder whose bid has been accepted is required to submit Earnest Money immediately after acceptance of his bid. Bid sheet is issued thereafter.

(c) Stock Verification Sheet :-  The object of verification by the Accounts Department of Stores in the custody of the Depot and other Departmental Officers and Subordinate is to ensure that the materials accord with the description and specification shown in the balances appearing in the books and that excess or deficiencies, if any, noticed on such verification are properly investigated and accounted for. After Stock Verification is over, the Stock Verifier should prepare the sheets in triplicate (by carbon process) is called Stock Verification Sheet in Form (S. 1260) for all items of stores, the verification of which has been completed that day. The stock sheets should be prepared from the date in the field book. The stock sheet so prepared will contain only the ground balance. A Stock Verification Report has to be prepared at the time of posting the priced ledger, in form S. 1260, showing the book balance, the ground balance as per the stock sheet and the excess shortage, if any. After the actual stock figures of an item of stores have been ascertained and accepted by the Ward Keeper, the physical stock verified by the Stock Verifier should be shown in his field book, as well as in the stock sheet prepared by him. The differences, if any, between the physical stock and the priced ledger will be brought to account by Stores Accounts Officer at the time of posting the priced ledger. He should prepare stock sheet as follows :—

(i) If there is no difference, the remark 'Stock verified correct' will be printed on the stock sheet prepared.

(ii) If the difference be an excess, i.e. the actual stock figures are greater than book balance, the difference will be struck and posted as receipt in the ledgers duly giving the date of posting. The difference arrived at should be shown, together with the physical balance and the actual book balance in the stock verification sheets.

 (iii) The same procedure will be adopted while recording shortages, except that figures will be taken as minus receipt and shown as 'Shortage in Stock' in the printed stock sheets. Each stock sheet should be signed by the Stock Verifier and by the subordinate incharge of the stores verified.

 (d) Bid Sheet :- At the time of auction when the lot has been sold to the purchaser, a sheet is prepared as authority of sale is called Bid Sheet. A Bid Sheet contains

• Details of lot No.
• Brief description of the lot, 
• Quantity sold, 
• The rate at which sold, 
• The earnest money realized and 
• The total value payable and 
• Special conditions, if any. Bid sheet is signed by the Auction Conducting Officer, Accounts Representative, Custodian DMS of scrap yard and the purchaser. 

Q.283. (a). What is survey Committee and what are the functions of Survey Committee?

(b). What is Reserve Price? Name the factors which should be taken into account while fixing ‘Reserve Price’ for sale of scrap?

Ans. (a) Survey committee is the Committee of Senior scale or JA Grade officers of the Consuming Departments with Stores Depot Officer as convener member and major workshop officer as Secretary for survey of the Scrap items. This committee is a standing committee appointed by General Manager for the purpose of inspecting critically the condition of all Stores:

(a) That have deteriorated in value, for any reason,

(b) Broken or damaged in transit, or while in stock,

(c) Lying in the custody of the Stores Department for a long time and considered by Controller of Stores as having become unserviceable owing to obsolescence or other causes and

(d) Received as scrap from the line. After critical and careful examination of lots, survey committee submits its recommendations on the above line to COS office.

Survey sheets on the prescribed proforma are prepared in which recommendations against each item are recorded by the Secretary of the Committee and signed by all members of the survey committee. Recommendations can be accepted by Dy. CMM/CMM/COS.

Ans. (b) The decision to sell or not to sell a particular lot during the auction is taken by the Depot Officer. For taking this decision, he fixes a Price of each lot in advance called Reserve Price. Bids lower than the reserve prices may, however, be accepted by the Depot Officer where found expedient provided the Depot Officer doing so records his reasons in writing. This reserve price should be fixed by keeping following

factors in mind :  - last sold rates in previous auctions - price obtained in auctions in the adjoining depots - market trends - condition of the lot - Lot Size and Location of Lot - Road Approachability

Q. 284.(a). Describe typical layout of a scrap yard in a General Stores Depot.

(b). What are accepted SAG committee recommendations for Auction Sale to counteract the influence of organised gangs/mafia?

Ans. (a) The Stores Department should arrange for regular collection of all items of Scrap from the consuming departments. In case of despatches of Scrap from out stations, it should be ensured that double handling is avoided and the scrap is sent as far as possible, direct to the depot, where the scrap is collected and scrap sales are conducted as each Railway has created a Scrap Depot or Scrap Yard within a depot on the consideration of freight charges, space availability and proximity to the market for disposal of scrap. Suitable arrangement should be made in the depot to ensure that the scrap ready for sales is not mixed with the scrap which is being receieved. For facilitating expeditious disposal of scrap, system of twin yards should be followed where the receipt and delivery of scrap lots is regulated from different work areas and the chance of sold lots getting mixed up with fresh receipts is also eliminated to large extent. An extension of this may be `Three yards' in which one yards is used for receiving scrap (say first four months), second yard for making lots and third yard for disposal of surveyed lots, as per classification in Scrap schedule. The lay out of a Scrap Yard may provide the following :

 i) Central Sorting Yard : It is required for receipt of mixed scrap and sorting them to make separate lots for ultimate disposal. When scrap is returned to the stores depot, the Officer or subordinate returning it, should see that it is sorted out according to the correct nomenclature of the Price List before it is actually despatched. On receipt in the stores depot, the scrap should be further sorted out, if found necessary in the Central Sorting Yard.

 ii) Reclamation Section : Reclamation Section should be set up for salvaging such items of scrap that may be modified into other useful items. While delivery of sold Rolling Stocks, the excluded components as per list of returnable items are to deposited to the Reclamation Section

iii) Yards (twin yard) : It is required for Storage and Disposals, Bins in each of the twin yards for `Lot' formation and storage of each particular item of scrap. There should be kept two sets of scrap bins or dumps for each kind of scrap, so that the QuestionPaper.Org scrap accumulated in one set of bins or dumps could be set apart at any time for the purpose of auction sale and pending such sale, the other set of bins will be used for accumulating further scrap for the next auction.

 iv) Godowns : For Valuable scrap Materials, with bins & proper security arrangements for storage of non-ferrous metals, alloy sheet etc.

v) Facilities : Office having Computers, Internet, MMIS etc., parking place for trucks, roads, adequate yard lighting, basic security (like boundary wall etc.), RPF Security, Electronic Weigh Bridge, Electronic Weighing Machine.

Ans. (b) The accepted SAG committee recommendations for Auction Sale to counteract the influence of organised gangs/mafia are as under:

 (i) The depot officer who normally conducts auctions in the Stores depot for the sale of scrap lying in that depot as also scrap lying in the Divisions serviced by it, may be asked to conduct auction at other venues, say other Stores depot, where similar auctions are being conducted by the other Depot Officers. Presence of different sets of buyers during auctions at new locations is expected to neutralize the undesirable influence of gang/mafia at the traditional venues.

(ii) There are instances where mafia operates in a manner which leads to removal/lifting of excess quantity of scrap, particularly the P-way scrap. If the step suggested at

(i) above does not result in sale of scrap to competitive bidders, (i.e. bidders other than the mafia), further accumulation of P-way scrap at such locations should be discontinued immediately. Fresh arising may be moved to suitable points which are expected to be free from the influence of mafia. In addition, efforts be made to shift out the accumulated scrap from the locations where mafia has a strong influence to other locations where Railways interests can be fully safeguarded. This is subject to that the scrap arisings should be shifted to the locations within the geographical jurisdiction of the same stockholder to facilitate smooth accountal. For this purpose, the division should finalise suitable contracts for movement of material.

(iii) If prospective buyers feel reluctant to participate in auctions at certain places, on account of threats from gangs/mafia, the auction supervising officer, apart from arranging the presence of the local police on the day of auction, may provide similar support at the time of delivery of the sold lots. For this purpose, the depot officer may also seek assistance from the DSC/Sr.DSC of the concerned Division and COS/CSC. This would instil greater confidence in the minds of the buyers.

(iv) Scrap rails measuring 1 meter or over, be sold on nominal weight basis, without applying the factor of wear and tear.

(v) Scrap Unbroken sleepers be sold on the basis of numbers.

(i) What is the object of Stock Verification of stores in the custody of the depot and other departmental officers & subordinates by the Accounts deptt ?

(ii) What is the prescribed frequency of verification for various items held in stock?

Ans: (i) Object of the Stock Verification:- The object of verification by the Accounts Department of Stores in the custody of the Depot and other Departmental Officers and Subordinate is to ensure that the materials accord with the description and specification shown in the balances appearing in the books and that excess or deficiencies, if any, noticed on such verification are properly investigated and accounted for. [ S-3201]

(ii) Frequency of Verification:- The Stores, whether in a Stores Depot or with a department should be verified by Stock Verifiers of the Accounts Department. The programme of inspection should be so arranged that all materials are verified as shown below:

1. Materials-at-site-works: Ordinarily verified once a year.

2. Stores with Imprest holders: Once in two years.

3. All tools and plant: Once in 3 years.

4. All materials in a Depot as Under:

4.1 A Category items- Once in 6 months.

4.2 B Category items: Once in a year.

4.3 C Category items: Once in two years.

4.4D Category items: Once in a year.

4.5 Miscellaneous items (Stores under the custody of Inspectors entrustedwith tools, instruments, etc.: Once in 3 years.

4.6 Verification of in-process-inventory in all work-shops and Production Uniots especially in respect of costly and pilferable items: Once in 3 years as per

4.7 Machinery and plant:Once in 3 years. (S-3202)

 Q.286. List any four items which need not to be verified by the stock verifiers

 Ans: (i) Dead Stock, Tools and Plant of low value.

(ii) Small Tools and Hand Tools with certain staff.

 (iii) Petty Consumable Stores.

(iv) Dunnage. (S-3225, S-3226, 3227, 3228)

 Q.287.In what circumstances the measurement or average weighment should be resorted to arrive at the total approximate weight of stocks of an article in Stores. How it is done?

 Ans: Measurement or average weighment to arrive at the total approximate weight of stocks of an article should be resorted to only if there are heavy balances in hand. To arrive at average weighment, at least 2 percent in the case of steel and 10 percent in the case of other material of stores, should be weighed, such should then be measured by length, area or cubic contents. The measurements of the entire stock should them be taken and then reduced to weight by the data furnished by the sample quantity measured and weighed. If the weight thus arrived at is approximately the same as the depot book balance, the latter should be accepted as correct, if however, a heavy difference is disclosed thereby, all figures for measurements and weighments should be carefully rechecked and an additional 2 percent or 10 percent (as the case may be) weighed and measured. (S-3238)

Q.288. (i) What do you understand by “Stock Verification Sheet? What does it show? In how many copies it is prepared?

(ii) Please explain the procedure involved in disposal of Stock Sheets having discrepancies.

 Ans: (i) Stock Verification Sheet is the sheet on which the results of stock verification are entered by the stock verifier. It is prepared by the stock verifier in triplicate (by carbon process) in Form no. S-1260 for all items of stores, the verification of which has been completed that day. The stock sheets should be prepared from the data in the field book. The stock sheet so prepared will contain only the ground balance. A Stock Verification Report has to be prepared at the time of posting the priced ledger in form S. 1260, showing the book balance, the ground balance as per the stock sheet and the excess shortage, if any. (S-3256)

 (ii) Procedure involved in the disposal of Stock sheet having discrepancies:-

(i) Scrutiny of explanations of discrepancies:- The Stock sheets on return to the Stores Accounts Office, after explanation by the Depot Offices, should be carefully scrutinized by the authorized Inspector to see that every discrepancy has been explained. Further explanation should be called for in regard to QuestionPaper.Org remarks that are unsatisfactory. Accounts Notes will be issued in such cases. (S-3262)

 (ii) Important points for scrutiny: While scrutinizing the stock sheets, the authorized Inspector should see: a. That explanations recorded against discrepancies represents facts;

b. That they are clear, intelligible and definite;

c. That independent explanations are furnished against individual discrepancies and that excesses under some items are not adjusted against shortages in dissimilar items. In case of analogous items (where sizes only differ) such adjustments may be passed upto 2% of the transaction since the date of last verification, but any bigger differences must be taken up.

d. That in case of items accounted for in numbers large differences do not arise:-

e. That where shortages found as a result of stock verification are attributed to the neglect of the subordinate holding charge of stores, the cost of the missing articles is invariably recovered from the parties at fault. The amount so recovered should be noted in a manuscript register of recoveries (S. 3263) maintained in the following form: (

i) Date

(ii) Name of Division.

(iii) Name of person debited.

 (iv) Amount recovered.

(v) Authority.

(vi) Initials of stock verification clerk.

 f. At the close of the financial year, the amounts should be totaled up and incorporated in the statement showing the activities of the Stock Verification Section prepared for the purposes of the annual statement of Stores Transactions (S. 3001); and

g. That in case of discrepancies arising as a result of improper classification/grouping and excess posted under items. (S-3263)

Q.289. What is departmental stock verification? Explain in detail.

Ans: As an important back check on the correct receipt, issue and balance of stores by the wards, it is necessary to have a departmental verification of stock by the Depot Officer to see whether the up to date balance of an item in the ledger agrees with the actual physical stock balance. This is called departmental stock verification. Such departmental verification arranged by the Depot Officer is in addition to the stock verification arranged by the Accounts Department. The departmental verification need only cover selected items such as items of large annual consumption having regular and frequent issues, items of high value like non-ferrous items, tool steel, etc., and items of a pilferable nature. The verification of physical balances should be done by an official other than the Ward-keeper-in-charge of the item of Stores. The depot officer may postpone the verification if the balances in stock are so heavy that a verification would involve large shifting of stock and the verification could be carried out conveniently at a later date when stocks are at a low level. The Depot Officer may waive verification in the following circumstances

a. Where the item has been verified by the Accounts Department within the last three months.

b. Where the Accounts Verification of the particular class of stores is in progress and the item is likely to be verified within the next two months.

c. Where the item has heavy balances the verification of which involves much labour and handling charges. If there is an excess of stock or deficiency in stock, the official should prepare a Departmental Stock Verification sheet and dispose it as per procedure.

Q.290. Describe various types of inventories that can be held by a organization?

Ans: In any organization, there may be following four types of inventory:

a. Raw materials & parts: These may include all raw materials, components and assemblies used in the manufacture of a product;

 b. Consumables & Spares : These may include materials required for maintenance and day-to-day operation; c. Work in progress: These are items under various stages of production not yet converted as finished goods;

d. Finished Products: Finished goods not yet sold or put into use.