Treasury is the basic unit for recording financial transactions of the State Government through which the cash transactions of the Government are carried out. All receipts due to the Government and all payments on behalf of the State Government are routed through Treasuries. The Treasuries render the Monthly Accounts to the office of Principal Accountant General (A&E) for compilation based on which the Annual Accounts of the State Government are prepared. Therefore, Treasury is an important unit of the State Government in financial control.

In order to ensure regulate functioning of the Treasuries, the Government of Himachal Pradesh has prescribed Codes, Manuals and administrative procedures. Any deviation from these rules and procedures on the part of Treasuries adversely affects the financial accountability. Treasuries, thus, play a very important role in providing necessary information to the office of Principal Accountant General in preparation/ compilation of accounts which reflect financial status of the State.

It is, therefore, imperative to derive assurance that the Treasuries are organised and functioning in an appropriate manner, exercising essential controls with necessary checks and balances in place and have the requisite internal control structure to ensure that the accounts are free from material misstatement to enable the maintenance of financial discipline. Inspection of Treasuries and review of vouchers is a mechanism through which this assurance is derived. A review of the working of Treasuries is conducted annually to highlight the system weaknesses, irregularities/ deficiencies in the functioning of the Treasuries and deviation from the rules and procedures which adversely affects the entire process of financial reporting, management and accountability.