Treasury Rules of the Federal Government — Volume I (Revised Edition 2019)

Treasury Rules of the Federal Government Volume I is the principal procedural compilation governing the receipt, custody, payment, withdrawal, transfer and accounting of public money within the Federal Government treasury system. The supplied document is the Revised Edition 2019, issued by the Ministry of Finance. Its Preface is dated 20 June 2019 and explains that the revision incorporates important orders, clarifications and amendments issued since the previous compilation in January 1972, while deleting obsolete orders.

Issuing Authority, Edition and Purpose

The booklet is titled Treasury Rules of the Federal Government, Volume I — Revised Edition 2019 and is issued by the Ministry of Finance. The Preface, signed by the Secretary to the Government of Pakistan, Ministry of Finance, is dated 20 June 2019. It explains that the compilation incorporates orders relating to procedures followed in treasuries, offices and agencies of the State Bank of Pakistan conducting treasury cash business, and by Government officers generally when dealing with treasuries and the Bank.

The Preface further explains that, for receipt, custody and disbursement of money in offices other than treasuries and banks, the rules provide important principles and safeguards of general applicability. The earlier compilation was prepared in January 1972; the 2019 revision incorporates later clarifications and amendments and removes orders that had become obsolete.

Volume I contains the main Treasury Rules, subsidiary rules and executive instructions. It sets out the framework for handling Federal Government public money, treasury administration, receipts and payments, claims, personal bills, pensions, contingent charges, deposits, loans and advances, remittances, public debt and special procedures for specified departments.

Scope and Applicability

These rules are titled the Treasury Rules of the Federal Government. Rule 2 defines the Government for purposes of the rules as the Federal Government, and defines public money by reference to the Federal Consolidated Fund and the Public Account of the Federation. The booklet therefore provides a Federal Government treasury framework; it should not automatically be treated as the treasury code of every Provincial Government, local authority, autonomous body or other public-sector organization unless the relevant rules have been adopted, extended or made applicable.

The rules should be read with applicable constitutional and statutory provisions, the current accounting and audit framework, financial rules, departmental regulations, delegations of financial powers and later Government instructions. The 2019 revised compilation is a reference to the text and amendments incorporated up to its preparation; it is not a guarantee that no subsequent amendment or replacement instruction has been issued.

Treasury Rules of the Federal Government Volume I: Contents and Organization

The contents divide the volume into the main rules, subsidiary rules and executive instructions. The principal organization is summarized below, following the source table of contents.

Part I — General Principles and Rules

Part I establishes the basic legal and administrative framework. It addresses the location of public money, control over Federal treasuries, payment of Federal Government revenue into the Federal Consolidated Fund, custody and withdrawal of public money, transfers, responsibility for money withdrawn, inter-Government transactions and receipts and disbursements in the United Kingdom.

Rule 2 provides key definitions used throughout the compilation. Among them are Accountant General, Audit Officer, Auditor-General, Bank, competent authority, Federal Consolidated Fund, Public Account of the Federation, public money and Federal treasury. The Federal Consolidated Fund includes Federal Government revenues, loans raised by the Federal Government and money received in repayment of loans. The Public Account of the Federation covers other money received by or on behalf of the Federal Government that is not part of the Federal Consolidated Fund, as described in the rule.

Rule 3 provides that Federal Government public money is to be held in a Federal treasury or in the Bank, subject to the stated exceptions. Rule 7 generally requires Federal Government revenue received by Government officers to be paid without undue delay into a treasury or the Bank and included in the Federal Consolidated Fund. The rule also sets out specified exceptions and special arrangements. These provisions support centralized recording and control of public receipts.

The rules also establish that withdrawals from the Federal Consolidated Fund or Public Account must be made through the authorized procedures. They identify the competent treasury or accounts authority, the purposes for which withdrawals may be permitted and the conditions under which claims must be presented and checked. Officers handling public money remain responsible for the money entrusted to them and for compliance with the prescribed procedures.

Part II — General Organisation and Working of Federal Treasuries

Part II deals with the administration and day-to-day operation of Federal treasuries. Its sections cover management, the Collector, Treasury Officer, relationship with the Accountant General and the Bank, the Treasurer and Accountant, treasury records, accounting books, sub-treasury accounts, daily and monthly closing, monthly accounts and returns, inspection, and the deposit of cash and valuables belonging to other departments.

The contents distinguish the responsibilities of treasury management and accounting personnel. The rules provide for maintenance and checking of treasury records, reconciliation and closing procedures, and submission of returns to the relevant authorities. Treasury inspection is an additional control; it does not remove the responsibilities assigned to the officers managing the treasury.

For departmental officers, this Part is relevant when understanding how transactions submitted to a treasury are received, recorded, checked and brought into the treasury accounts. For treasury staff, it is a procedural reference for the custody of records, account books, daily balances and monthly reporting.

Part III — Receipt and Payment of Public Money

Part III contains general rules for handling cash and the procedures for receiving money and making payments. It addresses receipt of coin and notes, cheques tendered in payment of Government dues, granting receipts to payers, the form and custody of receipt books, duplicate receipts, departmental regulations, payment of money, memoranda or challans, and procedures at district treasuries, sub-treasuries and bank treasuries.

Rule 76 states that money tendered as Government dues or for deposit in Government custody should not pass unnecessarily through a departmental officer’s hands. Where practicable, the person tendering the money should pay it directly into the treasury or the Bank.

Rule 77 sets out safeguards for officers required to receive and handle cash. These include maintaining the prescribed cash book, entering monetary transactions promptly, having entries checked and attested, regularly closing and checking the cash book, and verifying and certifying the cash balance at the end of each month. When money is remitted to the treasury or Bank, the officer responsible is to compare the official receipt or pass-book entry with the cash-book entry and satisfy himself that the money has actually been credited.

The Part also describes treasury checks when money is received, the issue of receipts, the use of challans and the handling of remittances by departmental officers. The detailed procedure differs according to whether the transaction is handled by a district treasury, sub-treasury or bank treasury and whether a special departmental procedure applies.

Part IV — Custody of Public Money

Part IV concerns the physical security and verification of public money. It covers cash held in departmental chests, cash balances in Federal treasuries, security of strong-rooms, custody of padlocks and keys, storage of treasure, precautions against substitution of good coins by uncurrent or counterfeit coins, treasury balances, cash-balance verification and small-coin depots.

Rule 108 sets out safeguards for departmental treasure chests, including the use of two locks of different patterns and separate custody of keys wherever practicable. The chest is not to be opened unless the custodians of both keys are present. The rule also provides for specified circumstances in which a Head of Department may authorize a different arrangement without impairing the safety of Government money.

The rules for treasury strong-rooms and balances provide further controls over access, storage and verification. The purpose is to maintain a reliable record of the public money physically held, establish responsibility for custody and identify discrepancies through prescribed checks and reports.

Part V — Withdrawal of Public Money

Part V is the most extensive part of the main rules. It sets out how claims against the Government are presented, checked, paid and recorded. It covers general withdrawal procedures, personal claims of Government servants, bills of gazetted and non-gazetted establishments, contingent charges, pension payments, purchase of stores, works expenditure and miscellaneous payments.

Claims, Bills and Treasury Payments

Chapter I addresses the mode of withdrawal, presentation of claims, arrear claims, preparation and form of bills, signatures and countersignatures, duplicate bills, receipt stamps, cheques, letters of credit and other payment orders. It also deals with the checks applied at the treasury, disbursement records, vouchers, overcharges, audit objections and recoveries.

Rule 130 provides that, unless the rules specifically provide otherwise, money is withdrawn from the Federal Consolidated Fund or Public Account by presentation of bills. The rules define a bill as a statement of a claim against the Government specifying the nature and amount of the claim. Bills and cheques are subject to the applicable presentation, receipt and treasury-check requirements.

Personal Claims of Government Servants

Chapter II addresses personal claims of Government servants. The listed subjects include due dates, preparation of bills, deductions from pay, fund deductions, income tax, house rent, recoveries ordered by an Accountant General, attachment of pay and allowances for debt, first payment of pay, payment on leaving service, death of a payee, place of payment of pay and allowances, leave salary, payment to officers absent from Pakistan, and payment through agents subject to the stated safeguards.

Bills of Gazetted and Non-Gazetted Establishments

Chapters III and IV provide procedures for bills of gazetted Government servants and non-gazetted establishments. Subjects include pay and fixed allowances, travelling allowance, medical-treatment costs, changes in pay, advances, monthly establishment bills, absentee statements, increment certificates, overtime, arrears, passages and acquittance rolls for disbursement of pay and allowances.

Contingent Charges

Chapter V deals with contingent expenditure. It covers classification of charges, permanent advances, general limitations, responsibilities of Drawing Officers and controlling authorities, cancellation and destruction of sub-vouchers, contingent registers and the preparation and countersignature of contingent bills. It distinguishes fully vouched charges, contract contingencies, charges regulated by scales and special contingencies, and abstract and detailed bills for countersigned contingencies.

The rules place responsibility on the Drawing Officer and controlling authority for ensuring that contingent expenditure is properly supported, recorded and dealt with under the applicable procedure. Officers should consult the relevant rule and departmental instructions for the type of expenditure rather than assume that all contingent items follow the same bill or countersignature route.

Pension Payments

Chapter VI covers pension payment procedures. The contents include the place of payment, Pension Payment Orders, payment at sub-treasuries, registers of Pension Payment Orders, due dates, pension bills and certificates, checks by disbursing officers, records of payment, payment by postal money order, political pensions, commutation money, gratuities, periodical identification of pensioners, undrawn pensions, arrears, death of a pensioner and special rules for military pensions.

Purchase of Stores, Works and Miscellaneous Payments

Chapter VII covers payments for purchase of stores, including purchases in Pakistan and specified overseas purchasing arrangements. Chapter VIII addresses works expenditure, including obtaining cash, cheque payments, payments to labourers, work-charged establishments, suppliers and contractors, works carried out through local bodies, advances to contractors, bills and vouchers.

Chapter IX addresses miscellaneous payments such as refunds of revenue, grants-in-aid and contributions, interest on Government debt, compensation for land, discounts on stamps, commissions, treaty payments, payments to the State Bank of Pakistan, special political missions, commissions and committees, expenditure against specified grants and payments on behalf of Defence Services.

Part VI — Special Rules for Bank Treasuries

Part VI sets out special procedures where the cash business of a treasury is conducted by the Bank. Its sections cover general matters, payments into the Bank, remittances by departmental officers, deposit and local-fund receipts, withdrawals for civil charges and pensions, departmental payments, refunds, stamp-sale discounts, public-debt transactions, deposits, local funds, remittances, currency of payment orders, daily accounts and returns, and miscellaneous registers and certificates.

These provisions supplement the general rules by describing the accounting and operational procedures relevant to Bank treasuries and the Bank’s role in receiving and paying public money. The relevant section should be consulted for the transaction type and the treasury arrangement in use.

Part VII — Special Rules Applicable to Particular Departments

Part VII contains department-specific procedures. The contents include chapters for the Defence Department, Railway Department, Pakistan Post Office and Pakistan Telegraph and Telephone Departments, Public Works Department, Forest Department and other Federal departments.

The provisions address matters such as departmental remittances to treasuries, deposits, drawings, subordinate officers, payments at sub-treasuries, letters of credit, supplementary telegraphic credits, money orders, departmental pass books, monthly settlements, forest officers on leave and procedures for specified Federal departments. The chapter structure reflects that some departments have specialized receipt, remittance, disbursement and accounting arrangements.

Officers should identify the chapter applicable to their department and read it with the general rules. A special departmental provision should not be assumed to apply to another department merely because the transaction appears similar.

Part VIII — Public Debt

Part VIII deals with public debt and related obligations. The sections cover permanent and temporary loans, floating debt, Treasury Bills, Ways and Means Advances, Post Office Savings Certificates, Post Office Savings Bank deposits, provident and other funds, recovery of subscriptions and withdrawals from specified funds.

This Part provides the treasury procedures and accounting treatment for the public-debt instruments and obligations listed in the contents. For the legal terms, rates, current products or current debt-management arrangements, the applicable later notifications and legislation must also be consulted.

Part IX — Deposits

Part IX sets out general rules and limitations for deposits and then deals with specific classes. These include revenue deposits, civil and criminal court deposits, personal deposits, deposits for works done for public bodies or individuals, deposits of fees, local-fund deposits and other deposit accounts.

The contents identify procedures for receipts, repayments, repayment orders and vouchers, payments at sub-treasuries, lapsed deposits, agreements with treasuries, verification of balances and receipts and payments of local funds. The Part is relevant to officers responsible for recording, safeguarding, reconciling and repaying money held by Government in a deposit capacity.

Part X — Loans and Advances

Part X covers the general procedure for drawing and repaying loans and advances, followed by special rules for different classes. The contents include loans to States which had acceded to Pakistan, municipalities and port trusts, revenue advances, advances under special laws, advances for departmental purposes, advances to Government servants on personal account, and other loans and advances.

These provisions concern the treasury procedure for disbursement, accounting and repayment. The substantive eligibility, amount, terms and recovery conditions for a particular loan or advance must be determined from the relevant law, scheme, sanction and current departmental instructions.

Part XI — Transfer of Public Money

Part XI addresses transfers of public money and remittances of coin and notes. It covers kinds of transfers, transfers through currency in Bank and non-Bank treasuries, dispatch and receipt of remittances, remittances of coin and notes, escort officers’ duties, potdars and shroffs accompanying remittances, deficiencies or excesses found on receipt, and additional procedures for remittances by Railway or steamer. It also includes rules for transfers between Pakistan and the United Kingdom.

The provisions establish procedural controls over the dispatch, transport, receipt and reconciliation of public money in transit. They include responsibilities for the officers accompanying or receiving remittances and procedures for dealing with a difference between the amount dispatched and the amount received.

Part XII — Other Remittances through Government

Part XII covers remittances through the State Bank of Pakistan, including telegraphic transfers and drafts, their issue and encashment, advice of remittances drawn, signature checks, doubtful drawings, receipts, records, duplicate drafts, cancellation and refund, exchange of drafts, unpaid and lapsed drafts, and supply of forms. It also contains special rules for remittances of sepoys and policemen, military treasure remittances and remittances through the Post Office.

Part XIII — Miscellaneous Subjects

Part XIII collects miscellaneous subjects, including transactions relating to States which had acceded to Pakistan and foreign Governments, specified light dues, matters concerning deceased, distressed and discharged seamen, and elimination of fractions of paisa from Government accounts. These are specialized provisions and should be consulted only where the relevant transaction or subject arises.

Part XIV — Executive Instructions

The final Part contains executive instructions rather than the numbered main and subsidiary Treasury Rules. It covers provision of funds at treasuries and sub-treasuries, cash balances of Government, distribution and supply of funds, currency chests, their location, funding, custody, verification, remittances and accounts, coin, legal tender, receipt and exchange of coin, counterfeit and defaced coin, currency and bank notes, and the State Bank of Pakistan.

The contents show that the executive instructions extend from page 254 and include detailed chapters on treasury funding, currency chests, coin and currency and bank notes. They supplement the main rules with operational directions for treasury cash and currency arrangements.

Practical Reference for Drawing and Disbursing Officers and Accounts Staff

Treasury Rules Volume I is relevant to officers who prepare, check, receive, disburse, record or account for public money. In practical use, the officer should:

• Identify the nature of the transaction: determine whether it is a receipt, deposit, withdrawal, personal claim, contingent charge, pension, store purchase, works payment, loan, advance or remittance.
• Locate the applicable Part and rule: use the table of contents and index to find the relevant procedure and any special departmental chapter.
• Confirm authority and budget provision: ensure that the expenditure or payment has the required sanction and is covered by the applicable financial delegation and budget provision.
• Use the prescribed bill, receipt, challan or voucher: follow the form and certification requirements applicable to the claim or receipt.
• Maintain cash and accounting records: make timely entries, reconcile balances, retain supporting documents and complete required certifications and returns.
• Protect public money: observe custody, key-control, strong-room and verification safeguards applicable to departmental cash and treasury balances.
• Check current instructions: verify subsequent amendments, notifications and departmental rules before relying on a procedure or historical provision in a current transaction.

For officers preparing bills and managing departmental payments, these rules are particularly useful when read alongside the Handbook for Drawing and Disbursing Officers (DDO Code) and the General Financial Rules Volume I. For related supplementary financial appendices, consult General Financial Rules Volume II.

Important Note on the 2019 Revised Edition

This resource describes the Ministry of Finance’s Revised Edition 2019 supplied for this post. Its Preface is dated 20 June 2019. The preface explains that the compilation incorporates orders and clarifications issued since January 1972, but the date of the edition does not establish that no later changes have been made.

Some provisions refer to historic institutions, departmental names, forms, methods of payment and procedures. Before using a rule to authorize a current payment, receipt, treasury operation, claim, pension, deposit, loan, advance or remittance, officers should verify the latest applicable legislation, Finance Division instructions, accounting and audit directions, departmental regulations and current treasury or banking procedures. This article is an explanatory guide to the supplied compilation and does not replace the official rules or a competent authority’s current directions.

For the complete source, consult the original Treasury Rules of the Federal Government, Volume I (Revised Edition 2019) PDF.