Finance Minister Haseeb Drabu o Wednesday proposed a reform in Government’s payment system by replacing the present Treasury System by a functionally aligned Pay and Accounts Office (PAO) System.
"For all receipts and disbursements of the Government, the Pay and Accounts Offices would be departmentally aligned. They would deal with those heads of accounts which are related to the function of their concerned departments.
Instead of receiving the receipts and disbursing the payments of numerous departments in the treasury system, the PAO would deal with just one department. This will ensure better understanding of the department resulting in better forecasting, budgeting, accounting and reporting," he said, in his budget speech.
The new PAO system will be able to monitor and control the purpose and objective of payments, budgetary sanctions and ceilings, proper classification, and excess payment issues.
For budget control mechanism of audit and invoice checking at the department level, now bills / challans and invoices would not be physically carried to treasuries. Instead, a computerized Integrated Financial Management System (IFMS) will process all those functions online.
The new system will be in vogue from October 1, 2017 and complete the transition by March 31, next year.