The Defence Accounts Department (DAD) which has lived through more than two and half centuries is one of  the oldest departments under the Government of India.  Its origin can be traced to the Military  Pay Masters under the East India Company.In January 1750, the First Pay Master was appointed for paying the Garrison at Fort Williams, Calcutta.  Payments to the troops in the field were made by a Commissary.  In 1776 a Commissary General was appointed for regulating the accounts. In 1788, the designation of the Commissary General was changed to Military Auditor General who exercised his control over all Military Disbursements. When the British Crown started administering India in 1858, there were Military Accountants General in the Presidencies of Bengal, Madras and Bombay.

The office of the Accountant General, Military Department, was created in April 1864. In 1865, the Government recognized this position as the Head of the Military Accounts Department. In 1922, office of Military Accountant General was reorginised post-war and 1 MAG, 2 Dy.MAGs, 2 Asstt. MAGs and 100 Accountants and clerks were sanctioned. Office of MAG then comprised of 8 sections viz. Record, AN, Audit, Accounts, Estimate, Pay, Foreign Claims and Inspection.

The Department was re-named as Defence Accounts Department (DAD) on October 1st, 1951 and the Departmental Head designated as Controller General of Defence Accounts (CGDA).  For more than three decades after independence, the DAD functioned under the administrative control of the Ministry of Finance.  With the introduction of the Integrated  Financial Advisor scheme in the Ministry of Defence from August 1983, the Department came under the administrative control of the Ministry of Defence.

History of Principal Controller of Accounts (Ordnance Factories)

Production of military hardware in India commenced with the establishment of Gun Carriage Agency factory (presently known as Gun and Shell factory, Cossipore) in the outskirts of Kolkata by the East India Company in the year 1801. Subsequently more such production entities (i.e. Ordnance and Ordnance equipment factories) were set up, totaling 39 in number, brought under the umbrella of Directorate General of Ordnance Factories and Ordnance Factory Board of Ministry of Defence, Government of India.

The Military Accounts Department, as it was then called had been looking after the payment and accounting functions of East India Company, to start with, and the British Indian Army later on. It also assumed the role of Cost Accountant within the ambit of the Ordnance Factories.

The Defence Accounts Department is the pioneer of the 'Costs and Works Accountancy' in India. In later years some of the officers of the Indian Defence Accounts Services had also served as the Chairmen of the Institute of Cost and Works Accountants of India.

The factory accounts organization has all along functioned at the factory, the primary role of cost accounting was discharged by the branch accounts offices attached to each ordnance factory, the overall function of laying down the policy frame work, its monitoring, control and review was carried out besides various day to day payment, accounting and administrative function by the Controller of Army Factory Accounts under Controller General of Military Accounts. The office of Principal Controller of Accounts (Ordnance Factories) has taken shape in early 1920's  and has been functioning at Kolkata ever since.  In 1988 the Controller of Accounts Factories was upgraded to Chief Controller of Accounts (Factories) and in April 2000 the office has been re-designated as the Office of the Principal Controller of Accounts (Factories). The Director General Ordnance Factories has been re-organized in 1979 as the Ordnance Factory Board for better management and financial control along corporate lines.  The OFB is headed by a Chairman and DGOF with 9 Members including the Member, Finance. The Member Finance (Ordnance factory Board) is functionally assisted by Principal Controller of Accounts (Factories) and under the Controller General of Defence Accounts administratively.