In the backdrop of Rajasthan contemplating to do away with the existing treasury system of accounting, the Comptroller and Auditor General (CAG) has warned the state that creation of a new mechanism would disrupt compilation, preparation and reporting of government accounts in the near term. In a strongly-worded letter to the Rajasthan government, the CAG office said "any change in the existing scheme as per the Constitution and the Parliamentary enactment in this regard will require prior approval of the President and consultation with the C&AG of India."
The letter, written by Deputy CAG K R Sriram, added that it is "highly desirable" for the state government to re-evaluate the change in the treasury system and hold it till further consultation with the central government." "Any creation of PAO (Pay and Accounts Office) by one State will derail the time tested treasury system where huge human and digital resources have evolved along with corresponding treasury rules and with its inherent system of checks and balances and the linkage of entire IT infrastructure...", said the letter to the Chief Secretary, Rajasthan government.
Citing media reports, it noted that Rajasthan is contemplating to dispense with the current treasury system and introduce a Pay and Accounts Office independently. It quoted Constitutional provisions, which mandate that the CAG will be responsible for compiling the accounts of each state from the initial and subsidiary accounts rendered to audit and account offices. "...it is highly desirable to re-evaluate this entire gamut of change in the treasury system and associated activities of accounts in the State of Rajasthan before embarking on such drastic changes and hold it till further consultation with this (CAG) office," the letter said.