Government to tighten control of its finances
Published:Tuesday | January 12, 2016 | 12:47 PMMcPherse Thompson
The government is moving to tighten control of its financial arrangements by further consolidating its funds into one account and closing those currently used by ministries, departments, and agencies to deposit funds earmarked as Appropriations in Aid.
Responsibility for manag-ement of Government's banking arrangements will be transferred from the Ministry of Finance and Planning to the Accountant General's Department (AGD) by the end of January 2016, the Government said in its December 2015 updated report to the International Monetary Fund (IMF).
The ministry, in conjunction with the AGD will, by March 2016, prepare an updated inventory of all bank accounts in the public sector as at October 31, 2015.
The inventory will be comprehensive and cover the Ministry of Finance, the AGD, other ministries, departments, and agencies and their constituent parts such as schools and hospitals, as well as extra-budgetary funds, executive agencies, and non-commercial public bodies.
It will detail the present authority over each bank account; purpose and usage in the past year, including the number and volume of transactions; as well as balances held in those accounts as at October 31, 2015, the Government said.
By the end of April 2016, a strategy will be finalised to close most of those accounts and to convert the remaining to zero balance accounts.
A zero balance account is a chequing account in which a balance of zero is maintained by automatically transferring funds from a master account in an amount only large enough to cover cheques presented. It is used to eliminate excess balances in separate accounts and maintain greater control over disbursements.
The Government said it would further increase direct payments through the treasury single account using the Central Treasury Management System (CTMS).
By the end of March 2016, salaries of all civil servants in the central government, including teachers, will be paid directly from the treasury single account. Most imprest accounts - petty cash system - will also be closed, and payments will be made directly by the AGD.
Coverage and functionality of the CTMS will continue to be expanded in line with the plan developed for 2015 to 2017. The first phase of CTMS enhancements will be concluded by the end of June 2016.
By end January 2016, responsibility for further development and management of the CTMS will be transferred from the Ministry of Finance to the AGD. Necessary financial and human resources will be made available to perform those functions effectively, said the report to the IMF.
By April 2016, all funds under the direct control of the AGD will be managed through the general ledger of the CTMS.
By May 2016, a ledger accounting system will be introduced into the CTMS with subledgers for all bank accounts maintaining a cash balance.
All revenues, including earmarked revenues, will be paid into the Consolidated Fund. Consequently, warrants for each entity will cover all resources, including Appropriations in Aid, that is, revenue that a department collects in the ordinary course of business, which has been approved by Parliament to be used by the department.
By March 2016, relevant legal provisions will be reviewed, consultations will be held with stakeholders and a plan drawn up to realise those objectives.
The plan will aim to combine the Consolidated Fund and the treasury single account; close all accounts currently being used by ministries, departments, and agencies to deposit funds earmarked as Appropriations in Aid; and enable deposit of funds currently earmarked as Appro-priations in Aid directly into the Consolidated Fund.
The Accountant General's Department is implementing changes to modernise its systems, processes, and operations over the next three years, with key reforms in the next 18 months.