All educational institutes under the central government and those that get grants or approvals from central education regulators will be directed by the government to publish a balance sheet every year, starting 2013, to bring in more transparency to the sector. The educational institutes will follow a uniform accounting norm and disclose income and expenditure in a standard format similar to that of companies.
The standards and guidelines have been prepared by the Institute of Chartered Accountants of India (ICAI), which has been accepted by the Ministry of Human Resource Development.
To evolve consensus, recommendations would be put before the Central Advisory Board of Education, a panel comprising experts, academicians and state education ministers. The ministry would be organizing consultations with higher educational institutions and schools on the recommendations of ICAI Committee.
The accounting standards would be made applicable to all Central educational institutions, universities under the regulatory ambit of UGC or receiving grants from UGC, technical institutions under regulatory ambit of AICTE, teacher education institutions under the regulatory ambit of NCTE and schools affiliated to CBSE.
ICAI has recommended that fund-based accounting may be introduced for earmarked/designated funds, all educational institutions should follow a common format for presentation of its general purpose financial statements to ensure proper accountability, financial discipline, end-use of funds and to meet the needs of stakeholders.
These recommendations would make accounting in educational standards more transparent and accountable. It is suggested that accounting standards should enable the society, student and citizen to define transparently the revenue earned through various sources – tuition fees and other charges, income from consultancy or from intellectual property owned by the institution (for higher educational institutions).