Handling Government Fund as the Medical Officer

Every government owned and run hospital in India gets funds in various routes. It could be the income from out-patient department, funds from Government through National Health Mission, donations and sponsorships and the list goes on. Even a small primary health centre (PHC) will have to deal with 10 to 20 lakhs! and do you know who handles it?

If your answer is the Medical Officer, then I’ll assume that you’re here to know more about how these huge funds should be handled! After all, it’s the people’s money and we are not supposed to spend it bullishly. So, here in this article I’ll try to explain how the money should be dealt with properly. This article is for those doctors who just took charge of a PHC or CHC or any other government hospital and is new to the office procedures.

NOTE: The details given in this article is based on the Kerala Government’s Financial Code and may be used in other states of India as a reference only. This information can be used by other government offices too and is not confined to just hospitals.

Disclaimer: This is not a comprehensive guide on the Kerala Financial Code or Store Purchase Rules. The rules are liable to changes and amendments.

Sources of Money at a Government Hospital

• Collection from Out-Patient Department can vary from as low as 1 rupee to 10 rupees. The rates of each OP ticket is decided by the hospital development committee.
• Collection from the laboratory for different blood and other investigations done. Though the cost of these tests are comparatively lower to private labs, the quality of results often exceeds the expected standards.
• National Health Mission provides fund periodically for various activities. National health programmes like pulse polio programme, measles rubella vaccination programme, mission indradanush, non-communicable disease control programme are always funded by NHM. Other health programmes like national vector borne disease control programme, cleaning campaigns, and the 10000 for every ward health sanitation committee are also provided annually. ASHA incentives, mobilisation charges for immunisation, vaccine delivery and training expenses are also included. The recent programme to improve the quality of government hospitals, named as the Kayakalpa is distributed to every government hospital annually.
• Government’s plan funds are usually distributed through the district medical office as treasury allotments and such funds needs to utilised in a time bound manner.
• Wages and salary bills are processed through an online repository and the bills thus generated are sent to treasury which now transfers the salary to the employee’s linked bank account.
• Funds from local self government are usually for planning projects like the pain & palliative home care, purchase of medicines, ashraya etc. This is also one with online applications like saankhya, sulekha etc. LSGD also provided the fun to meet the utility expenses of the hospital and if you’re in good terms, you can request funds for various health programmes too.
• Donations from the rich is yet another source!

Management of In-house Funds

By in-house funds, I’m referring to all the money that is generated within the hospital. This is usually from the OPD, laboratory, scans, procedures etc.

It is easy if the OPD registration counter or reception at the hospital is computerised. However, such facilities doesn’t exist in small PHC and even taluk hospitals! In such hospitals, the money is collected when issuing an OP ticket after keeping a counter-foil. A register is also maintained with the required details of the patient and the amount collected.

For patients belonging to the below poverty line category, no fee is levied and the same is marked in the OP ticket as well as the register.

For teenagers and children (below the age of 18), no fee is levied and the same is marked with a seal (RBSK-AK) on the OP ticket and in the register. Funds from the NHM for RBSK- Arogya Kiranam can be utilised to recoup the total amount to the OPD fund at the end of the month.

At the end of the day’s OPD hours, the collected amount is handed over to the office clerk who checks the register and then enter the details in a OP collection cash book. Revenue from laboratory, other investigations like scan should also be handed over on a daily basis. As a medical officer, you are supposed to cross-check all the revenue details and affix your official signature against each day’s cashbook entry. Money thus collected should be deposited every week in a joint bank account where the joint holders are the medical officer and the panchayat president. In higher hospitals like taluk and district hospitals, the drawing and disbursing officer (might not be the medical officer or superintendent) should verify the cashbook every day. While entering details in the cashbook, the clerk has to be very careful and no corrections are allowed. If any such corrections are made, the medical officer should be informed and done only with their consent.

OP ticket counterfoils and lab receipt duplicates should be audited periodically.

Now, coming to the expenditure part of in-house funds, the following points should be noted:

1. Purchase of any item for use in hospital can be done after getting approval from the hospital development committee. Take a note of the decision number in the meeting’s minutes. If the members of the committee are in good terms with the health staff, and if you can convince them the need of an emergency purchase, this step can be done even after the purchase is completed.
2. A request for the purchase or repair should be made available from the concerned staff. For example, if a new nebulizer is needed, get a written request letter for the purchase of the same from the staff nurse.
3. Make the decision for the mode of purchase in the local purchase committee
4. Follow the sore purchase rules for any kind of purchase. (For a quick look at the new rules, click here)
5. Get original bill, quotation papers, receipt and make a separate file for the purchase related documents. Numbering the vouchers will be easier for the auditors in the future!
6. Pay in cash for small amounts (less than 1000) and prefer cheques for transactions more than 1000. Keep a copy of the cheque in the file or at least note it’s number.
7. Cancel all the vouchers after the payment has been made and affix the medical officer’s signature in each one of them.
8. Try to get a non availability certificate for the purchase of medicines, furnitures, electronic instruments etc. Ask the hospital pharmacist to get it, preferably before making the purchase.

Management of Alloted Funds

These are funds received from NHM, plan funds, treasury allotments, LSGD bills etc (Refer the sources of funds mentioned above, where all the funds except the first and second are examples of allowed funds)

Store purchase rules should be referred to while making any kind of purchase. For instance, in case of NHM fund, any purchase above 15000 INR should be done in the form of Quotations. Any purchase or work done for an amount more than 100,000 should be done as an open tender. These rules are lengthy and is beyond the scope of this article, however, if you’re interested, you can find the latest rules here. I’ve mentioned below, only the key points that an in-charge medical officer or head of the office should keep in mind while dealing with the allotted funds.

NOTE: LSGD purchase rules are often different from the store purchase rules. Kindly consult the LSGD secretary or accountant for the rules before making any kind of purchase or doing any kind of work using the LSGD fund.

For all major works and purchases, get product specification and/or work estimate from the concerned government engineer (PWD). This should be done after getting approval from the hospital development committee. While doing the purchase, stick to the specifications provided and while doing construction work, keep an eye on the work estimate. In case of NHM funds, work estimate can be requested (by letter( from the NHM engineer itself. They’ll prepare the estimate and usually charges 500 INR for a single estimate preparation. The engineer’s fee can be met from the same fund provided that you get a receipt.

After completing the purchase or civil work, get a completion certificate from the same engineer who initially provided the specification/estimate.

Payment should be made only as cheques or demand drafts. If the purchase if made from government owned institutions, tenders and quotations can be avoided (only in certain circumstances which are mentioned in government orders).

Supply order, advertisements, quotation notice, agreements and EMD should be prepared where applicable. Income tax, GST, should be levied before making the payment.

For all vehicle related expenses, get a trip sheet duly filled from the driver along with the money received voucher. Log book entries of government owned vehicles should be cross checked periodically.

Wages of temporary staff appointed by the hospital development committee should be dispensed only after getting their receipts and that too in the form of cheques. In the case of temporary employees appointed by the LSGD, requisition for the release of fund may be sent to the LSGD secretary after calculating the wages.

Ensure that LSGD fund and NHM cash books are maintained properly. Allowed funds and their expenditure should be clearly marked in respective cashbooks. Each entry should be signed by the medical officer.

Some Final Tips

I’ve been a government employee since 2012 and I’ve had some good as well as unforgettable experiences as the head of my office. Here are some tips for the new entrants:

1. Make a habit of singing the cashbook every day before leaving the hospital. Simply check the last day’s closing balance and add the day’s revenue and use your phone calculator app if required. Clerks are human and they’ll make mistakes!
2. Ask for the bank account passbook while auditing the cashbook. Compare the deposits and withdrawals in the passbook with the entries in the cashbook. This is an effective way of simple auditing!
3. Whenever you have to take money from your pocket for emergency purchase or a quick electrical maintenance work, make a note of it in your phone’s reminder or notes app. Recoup the money when the actual cheque is encased. Note that in such cases, you’ll have to draw the cheque in your name itself!
4. Take a copy of all the vouchers and documents related to major works and purchases and keep one for yourself. It might be handy in the future if the office copy is missing during an internal audit!
5. Ask your friends or seniors for help when you’re in doubt. They’ll be more than happy to help!

Government’s money is like fire. If you handle it with care, you’ll be safe and otherwise, it’ll burn your fingers! Any disprecancies in handling public fund will be severely punished and that day will probably come late as the audits are often 5 to 10 years late.

I’m still learning how to manage the people’s money and this article was my humble attempt to share my knowledge with the new officers. You don’t have to fear it because if you know how to handle it properly, you’ll utilise it for improving your hospital, your office and the people will benefit from it. If you don’t use it, you’re doing the wrong thing. If you found this article helpful, share it with your friends too.