this is a presentation prepared for participants at C-TARA, Indian Railways, Secunderabad. By M.Nageswara Rao, Senior Section Officer(Accounts), South Central Railway, Secunderabad.

1. Venue: C-TARA/Secunderabad
Date: 26th February, 2013
Workshop
Accounts
Presented by
M.Nageswara Rao
Sr.SO(A)/S.C.Rly
1

2. INDEX – Workshop Accounts
Introduction
Attendance in Workshops
On Cost Charges
WMS A/c
2
Incentive scheme & RSP

3. Introduction – Need of Workshops
“for keeping the Rolling stock (i.e., Locos, Coaches &
Wagons) in good repair and efficient maintenance of the
Railway Equipment”
Doing the above activity, the use of spare parts and fittings in
replacement of worn out ones are required. Manufacture of
such duplicates was also undertaken in Workshops as a regular
arrangement to the extent Workshop capacity was available.
3

4. Organization - Different
types of Workshops
Locos
Mechanical Repair
Workshops
Carriages &
Wagons
Electrical sections
attached to Mech.
Workshops
Repair Workshops
Signal and
Telecommunication
Workshops
Civil Engineering
Workshops
4

5. Hierarchy
Head of CME - Chief
Mechanical Dept.
controlling all
Mechanical Engineer
Mechanical Repair
Workshops
Direct control of affairs
of all the Workshops in
CWE - Chief zone & responsibility of
Workshop Engineer budget in workshops
CWM – Chief
(in charge of
the respective
Workshop Manager or
workshop) Dy.CME – Dy.Chief
Mechanical Engineer 5

6. Introduction – Departmentalization of Workshops
Workshops (in Zonal Rlys)
Process Job shops (Repair shops)
shops(Manufacturing
shops)
Electrical
Mill-wright Tool room
Rolling repair
Foundries Saw Mill
Smithy
6

7. Introduction – individual shops
The ultimate unit of workshop
organisation - “ THE SHOP”
(where it is not further divided into 'sections')
Shop in charge - Foreman/Shop
Supdt./Sr.Section Engineer
Each shop - allotted the
distinguishing number
7

8. Introduction – P C O (Production
Control Organization)
Main Object: To see
the production is
“ ON “ at all times
In charge: Production
and at all stages.
Engineer (PE)
8

9. Introduction – P C O (Production
Control Organization)
Work is
synchronized
Economy at all Supplies are
stages obtained in time
So that hold-ups
are prevented and
the production is
PCO All activities are
arranged & co
kept at optimum
capacity
Ensures ordinate
9

10. Introduction – P C O (Production
Control Organization)
PCO
1.Production
2.Progress 3. Inspection
control
B. Rate C. Watch the progress of
A. Pre- fixing products from process Inspection of
planning Process shops to Machine quality as well
shops and to Stores as Quantity
Depot
10

11. Introduction – P C O (Production
Control Organization)
B.Rate C.
A. Pre planning
fixing Process
maintenance of
synthetic data for preparation of
fixing rates (time) scroll process
ii) Preparation of
for each operation sheets indicating
i) study of drawings cost and details 3. Material
& indicating sequence of
and specifications, books for each requirements etc
allowed time in the operation, quantity
component
process sheet for of material to be
each of the used
operation involved
11

12. Attendance in Workshops – provisions of the Factories
Act, 1948
Hours of work: The hours of work in Railway Workshop
which come within the definition of "Factories" given in the
Factories Act, 1948
Weekly Hours: No adult worker shall be required or allowed
to work in a factory for more than forty eight hours in any
week
Weekly Holidays.�No adult worker shall be required or
allowed to work in factory on a Sunday unless he has or will
have a holiday for a whole day on one of the three days
immediately before or after that Sunday.
12

13. Attendance in Workshops – provisions of the Factories Act, 1948
Daily hours.�No adult worker shall be required or
allowed to work in a factory for more than 9 hours in
any day.
Intervals for Rest.�The periods of work of adult workers
in a factory shall be so fixed that no period shall exceed 5
hours and that no worker shall work for more than 5
hours before he has had an interval for rest of at least half
an hour.
The normal working hours of labour in Railway
Workshops are eight and a half hours of week days and
five and a half hours on Saturday making a total working
week of 48 hours equivalent to an 8-hour day.
13

14. Attendance in Workshops – Opening and closing of Workshop
Gates
The 'Time Office‘ - responsible for In charge - HTK -'The Head Time-
maintaining the initial record of Keeper' (under the administrative
Attendance. The same are treat as the control of the local Workshop
records of payment. Accounts Officer)
14

15. Attendance in Workshops
Late attendance
Entry into Workshop & loss of wages-
Late by First period Second period
Up to 3 minutes (Grace Allowed and no loss of Allowed and no loss of
time) wages wages
3 minutes to 30 Allowed and loss of Not allowed and loss
minutes half an hour wages of half a day wages
Beyond 30 minutes Not allowed and loss Not allowed and loss
of half a day wages of half a day wages
15

16. ON COST CHARGES
Meaning - Certain items of expenditure (in addition to the Direct
expenditure i.e., Labour and Stores) in the Workshop as a whole cannot be
booked directly to the work done.
These are known as “ON COST CHARGES”
Example: Salaries of Accounts Office, Electricity charges etc.
16

17. ON COST CHARGES
ON COST CHARGES
General on Cost - Shop on Cost - SOC Pro forma on Cost -
GOC • Expenses within POC
• Expenses within individual shop and • Known as Indirect
Workshop and common with all the Charges.
common with all activities in that shop
Expenses mostly
shops in Workshop incurred outside the
Workshop
These would be so
included in the cost of
items as per commercial
costing principles. Levied
17
for Deposit works

18. General On Cost - GOC ( common to all shops and
incurred within the Workshop)
1. Wages of apprentice, expenses on
apprentices school & hostel
2. Electrical power, water charges which
are not possible to shops
Wages of staff in yards
Freight charges, sanitary arrangements,
consumable stores, Canteen expenses
18

19. Shop on Cost - SOC - common to all works within the
Shop
1. Stationery & forms used in shops
2. Consumable stores. Examples are
sponge, cloth, oil for lubrication etc.
3. Wages of shop messengers & operators
employed in transport, small tools,
4. Wages of supervisors, chargemen,
maistries
19

20. Pro forma On Cost –POC - expenses incurred Outside
the workshop
1. Share of expenses of Accounts,
Personnel, Stores, Security depts etc
2. P.F/Pension contribution payable
by Government
3. Interest on total costs of
buildings, plant & machinery etc
4. Depreciation of Plants and
buildings 20

21. Annual On Cost Budget
For GOC & SOC are prepared for fixing a % for levying the same on various jobs undertaken
during a year. They are based on actual for the previous 12 months i.e., from January to
December
Percentages are worked separately for Labour and Stores and are leviable on the direct
labour of each job.
For POC, also prepared annually and % fixed separately under i) supervision ii) pension/PF
contribution iii) Repairs & maintenance v) New minor works vi) interest & depreciation.
These are worked on the basis of actual figures under these heads during the previous 12
months (January to December)
21

22. Necessity of WMS
Railways are a commercial concern. Costs incurred in
Workshops affect maintenance costs of running the
Railways. Any extravagance in workshops is likely to tell
upon the operating costs resulting in erosion of profits.
It is therefore, necessary to have proper cost control over
expenses incurred in a Workshop. For this purpose, a Suspense
Head of account i.e., WMS is needed under which all expenses
in a Workshop are accumulated and analyzed so as to pinpoint
sources of waste and efficiency.
22

23. Workshop Manufacturing Suspense
– Plan Head 7200
- is a Capital Suspense Head of account.
Entire process of Collecting, valuating, analyzing
and booking of charges for doing the job or work
and watching the settlement of all accounts is
collectively known as WMS A/C.
23

24. Workshop Manufacturing Suspense
– Plan Head 7200
IN PUTS (Debits) OUT PUTS
(Credits)
1.Labour
2.Material 1. POH of Rolling stock
of Home Railway and
3.Contractual Foreign Rlys.
payments
2. Works executed for
4. Direct Purchases other Depts.
5. Overhead costs 3.Other Manufacturing
activities (captive
consumption)
24

25. Work order
As a rule any work undertaken in Shops
can only be started after an issue of
formal Work Order on the concerned
shop by P.C.O of the Workshop.
Each work order is the
basis for collecting
charges, allocating it to
the proper head of
account concerned and
watching clearance of
debits.
25

26. Workshop General Register
WGR
Is a Subsidiary - To collect the
register of WMS expenditure on It shows the
Account is account of charges incurred
maintained in Labour, Stores on each work
Workshop and on cost order whether in
Accounts Office. charges on hand or
various jobs completed, shop
undertaken wise.
during the month.
26

27. Out turn Statement
Adjustments to be
Part - I carried in the same
month of accounts
Out turn statement
Works in progress and
Part - II completed works
awaiting adjustments
27

28. Workshop Account Current
Debit Side Credit Side
To Opening Balance
Current year Debits Current year Credits
1. To Labour 1. By Debits to Works
2. To Stores from Stock 2. By Debits to Cap. Suspense-Stores
3. To Stores - Direct Purchases 3. By Debits to Revenue
4. To Contractual payments 4. By Debits to F.Rlys.
5. To Misc. payments
Total Debits Total Credits
By Closing Balance
28

29. Closing Balance represents
1. Works done pending acceptance of Bills
2. Stores stock credits awaiting adjustment
3. Under/Over charges – A) Due to Average hourly rates B ) Due to on cost
rates C) Due to manufacturing costs
4. Miscellaneous Debits
5. Misc. Items needing clearance due to want of details
29

30. Reconciliation
Reconciliation of WMS balances with General
Books and Workshop Account Current .
30

31. Review of WMS Balances
1. All items are current and authorised .
2. Details consist of nothing else except unfinished
jobs and finished jobs awaiting acceptance.
3. No Credit Items.
4. For Deposit works – Advance payment is
received and extra charges, if any accepted by the
party.
5. No inefficient balances & under/over charges are
timely cleared and no long out standing dues
31

32. Development Suspense Account
In the initial stages of production partly due to lack of sufficient experience in the field of
manufacture and partly -due to gestation period to reach the ‘rated capacity' high cost of
manufacture was considered inevitable and it was considered to fix the transfer price at par
with landed cost of similar products.
The difference between the transfer price and the actual cost - kept under "Development
Sus-pense Account" - in the books of Production Units.
The balance under Development Suspense Account - to be wiped off in due course when the
time of production is stabilized.
32

33. History of incentive system
1. Decision taken by Railway Board in 1949
2. Introduced in CLW in 1954
3. Extended to ICF/Chennai in 1960
4. Later to Repair Workshops.

34. Incentive Scheme – Salient features
Basic wages are guaranteed
Time is the yardstick.
Workers classified into DW,EIW & IW.
Over Time Allowance is not applicable.

35. FIXATION OF ALLOWED
TIME
ACTUAL TIME x
OBSERVED RATING
TIME STUDY BY RATE NORMAL WORKER IMPROVES TO 80 UNITS
---------------------------------
FIXERS OF PCO RATING – 60 UNITS i.e., 33.33%
----
80 (INCENTIVE RATING)

36. ALLOWED TIME
Actual time – Limited No. of observations
RATING – Same job by different workers.
Fatigue, Contingency & Bonus - % added.
Preparatory time added.
Extra time can be allowed.

37. For Direct workers
Time
saved
Time
Time Taken
Allowed

38. For Direct workers
Incentive Net time
paid saved Rate

39. For Direct workers
Limit is 33 1/3 %
to 50 %

40. SUPERVISOR & EIW

41. PITFALLS
Inoperative Time Recorder
Clocks
Job Cards kept with
Worker/Supervisor and not
in Time Booth.
GA card & Job card
reconciliation.

42. PITFALLS
Revision of allowed
time.
Revision of
sanctioned strength.
Review of % of EIW to
DW (Maximum 15 %)

43. ANNUAL ROLLING STOCK PROGRAMME
Annual rolling stock programme is a follow
up of the Five Year Plans
The five Year Plan - implemented -through
action oriented annual plan after a meeting
with the Planning Commission & Finance
Ministry
for Locos – 3 years in advance
For Carriages and wagons – 2 years in
advance
43

44. ANNUAL ROLLING STOCK PROGRAMME- ZONAL RLYS
Then approved by
GM before
Prepared by COPS
submitting the same
to Railway Board
After it is seen and Vetted by FA &CAO
supplemented by in regard to
CME allocation and
financial justification
44

45. ANNUAL ROLLING STOCK PROGRAMME- ZONAL RLYS
Points to be considered
1. Items of Rolling stock already
condemned and not replaced till end of
last year
2. Arrears of renewal on life basis to end
of last year (excludes i) already
condemned ii) already included in RSP
3. The renewal falling due on life basis
each of the next 3 years
45

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