Signing of Cheques by two delegated Officers dt 10.10.2013
OFFICE MEMORANDUM
Subject: Signing of Cheques
Kindly refer to your letters No. TM-I/H.3-9(A)/2011-12/2070-74, dated 15.07.2013 & TM-I/H.3-9/2011-12/245, dated 02.09.2013 on the subject cited above, addressed to the District Accounts Officers in the Punjab / Treasury Officer, Lahore directing them that cheques and Credit Advice to Banks (CABs) be signed by two delegated officers with respect to the threshold amounts mentioned in the letters ibid. These directions are based on the provisions of para 4.2.8.6 of the Accounting Policies & Procedure Manual (APPM).
- The matter has been examined in the Finance Department. Strong exception is taken to the fact that your office should have taken this step with prior consultation of this department. Nevertheless, it is pointed out that these instructions suffer from inherent legal & technical infirmities, in that treasury and accounting functions which have distinctly different aspects, have been grossly overlooked. Treasury functions are the executive functions enumerated in Article 119 of the Constitution of the Islamic Republic of Pakistan, 1973 and the rules framed thereunder. In brief, treasury functions can be defined to include functions of receiving or disbursing or authorizing the State Bank of Pakistan to receive or disburse moneys on behalf of the Provincial Government and matters ancillary thereto. On the contrary, accounting is a function which is performed after completion of treasury functions.
- It may please be appreciated that the executive authority of the province vests in the Provincial Government consisting of the Chief Minister and the Ministers which shall act through the Chief Minister as defined under Article 129 of the Constitution. This executive authority extends to the matters with respect to which the Provincial Assembly has powers to make laws (Article 137). Moreover, the Provincial Assembly is competent to authorize expenditures from the Provincial Consolidated Fund (PCF) and Public Account of the province and all matters connected therewith and ancillary thereto. (Articles 118 to 126 of the Constitution refer). The Punjab Budget Manual, the Punjab Treasury / Subsidiary Treasury Rules, the Punjab Financial Rules, the Punjab Departmental Rules and the Punjab Delegation of Financial Powers Rules contain the procedures and processes envisaged in Article 119 of the Constitution. Rule 4 (5) of the Punjab Treasury Rules further elucidates the matter:
“No portion of the responsibility for the proper management and working of Treasuries shall devolve upon the officers of the Pakistan Audit Department.”
- It is further stated that the subject matter and the issues dealt with in Articles 118 to 126 and 170 (1) of the Constitution are mutually exclusive. Accounting arrangements are necessarily required to be in such a form and manner that these are able to comprehensively capture and truly depict all treasury transactions of monetary nature envisaged in the rules framed under Article 119 ibid and not be in conflict with Articles 118 to 126 and other relevant Articles of the Constitution; thus, accounting arrangements prescribed in the APPM, by the Auditor General of Pakistan under Article 170 (1), are subservient to financial arrangements made under Articles 118 to 126 ibid and other relevant articles of the Constitution and not vice versa. Accounting arrangements/procedures made under Article 170 (1) are beyond the mandate of the said Article if these are inconsistent with or are in clash with financial arrangements made under Article 118 to 126 ibid. In case of clash between provisions of rules framed under Article 119 of the Constitution and those of the manuals issued under Article 170 (1) of the Constitution, the provisions of the rules shall prevail if the subject matter pertains to treasury functions and those of the manuals if the issues covered relate to accounting functions.
- Moreover, clause 2 of the ‘Agreement’ between Governor of the Punjab and the State bank of Pakistan provides that “the general banking business of the Government of Punjab (hereinafter referred to as “the Government”) including the payment, receipt, collection and remittance of money on behalf of the Government, shall be carried on and transacted by the Bank in accordance with and subject to the provisions of this agreement and of the Act and such orders and directions as may, from time to time, be given to the Bank by the Government through any Government officer or officers authorized by the Government in that behalf and at any of the offices, branches or agencies of the Bank for the time being in existence as may, from time to time, be so directed…”. In the instant case, signing of payment instruments is a function which exclusively falls within the purview of treasury functions. The rules framed under Article 119 of the Constitution do not require signing of a payment instrument by more than one Treasury Officers / District Accounts Officers and if arrangements if so prescribed, in terms of clause 2 of the agreement, should be communicated by the authorized officer of the Government of the Punjab. Hence, the instructions on the subject contained in the letters under reference are without lawful authority and jurisdiction and therefore, not liable to be implemented, especially given the fact that these militate against the spirit of Article 119 of the Constitution and the rules framed thereunder.
