PTI govt approves treasury account rules

Move aimed at meeting govt needs by placing cash in single account

ISLAMABAD:

The government has approved the Treasury Single Account Rules 2020 aimed at meeting its capital needs by placing all the public money of ministries, divisions and their attached departments into a single account to ensure availability of cash.

The Finance Division will frame separate rules for autonomous, regulatory or other bodies, established by and directly or indirectly controlled by the federal government, at a later stage.

The fundamental principles and objectives of the rules are to anticipate cash needs of the government, manage cash balance in government bank accounts effectively and ensure availability of cash, when required.

Moreover, the rules paved the way for institutional and administrative arrangements for an effective cash management system, including placement of public money into a treasury single account.

The Finance Division informed the cabinet in a meeting that the Public Finance Management Act (PFMA) 2019 was promulgated on July 1, 2019 to comply with provisions of Article 79 of the Constitution of Pakistan.

It stipulates that the custody of Federal Consolidated Fund, payment of money into that fund, withdrawal of money therefrom, custody of other money received by or on behalf of the federal government, their payment into and withdrawal from the public account of the Federation and all matters connected with or ancillary to the matters aforesaid shall be regulated by an Act of parliament, or until provision in that behalf is so made by rules made by the president.

The provisions contained in the PFMA 2019 regulated the above functions and encapsulated a number of financial reforms.

Under Section 22 of the Act, the operation of the Federal Consolidated Fund and public account of the Federation vested in the Finance Division under the overall supervision of the federal government.

According to provisions of Sections 30 of the Act, the Finance Division should, with the approval of the federal government, notify rules to prescribe an effective cash management system for all public entities and special purpose funds, leading to a treasury single account.

Section 31 of the Act provides that the Federal Consolidated Fund account should be maintained in the State Bank of Pakistan and any other such bank accounts may be opened, as required by the Finance Division from time to time, in accordance with the SBP Act 1956.

It was informed to the cabinet that in compliance with Section 30 of the PFMA 2019, the Finance Division had framed the Cash Management and Treasury Single Account Rules 2020, in consultation with the relevant stakeholders.

The Ministry of Law and Justice has vetted the draft rules.

The draft Cash Management and Treasury Single Account Rules 2020 will be sent to government offices ie ministries, divisions and executive departments, including the attached departments and subordinate offices.

It was mentioned that the Finance Division would frame separate rules for autonomous, regulatory or other bodies, established by and directly or indirectly controlled by the federal government, at a later stage.

Sources told The Express Tribune that the Finance Division had solicited approval of the cabinet in a recent meeting for the Cash Management and Treasury Single Account Rules 2020.

The cabinet considered the summary titled Treasury Single Account Rules 2020 dated July 15, 2020, submitted by the Finance Division, and approved the proposal.

Published in The Express Tribune, August 6^th, 2020.

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