New norms for accounting to make EPFO Sahib-proof

NEW DELHI: Future labour ministers may find it extremely tough to access the contingency reserve fund in order to pay interest — whether it’s called a bonus or ex-gratia or anything else — as easily as Sahib Singh Verma.
Once the Employees Provident Fund Organisation has completed the business process re-engineering programme that is currently underway, the organisation will be switching to a double entry or mercantile maintenance of accounts as opposed to the single entry style now followed, mimicking the government. That, according to sources, will make it mandatory for the EPFO to maintain its funds in a “scientifically managed� style, with funds transparently listed under separate heads such as contingency reserves, surplus reserves, interest suspense account, accretions through penalties paid by defaulters, total contributions received, interest accumulated through delayed payments besides the actual liabilities, or the total payout to subscribers yearly.
The re-engineering of business process is expected to be completed by early year.
EPFO sources admit double-entry will make it that much easier to construe the exact returns on investment and the exact surplus available under different heads including contingency reserves. That fund has “never been used to shore up interest rates� since the inception of the EPFO in 1951.