1 GOU Treasury Single Account and Decentralization of payment of Salaries By Accountant General’s Office.

1

GOU Treasury Single Account and Decentralization of payment of Salaries

ByAccountant General’s Office

2

TSA Implementation

Decentralization of payment of Salaries

IFMS

Other Issues of concern

Discussion Areas

3

GOU TSA

Gou has introduced a Treasury Single Account in central

Government which will be rolled to Local Governments

The modalities of its implementation in LGs will be communicated

in future.

Handling of Salaries and Pension, Transfers to Local

Governments will not change in the medium term

4

TREASURY SINGLE ACCOUNT(TSA) CONCEPT

A unified structure of government bank accounts through

which government transacts all its receipts and payments

giving a consolidated view of government cash resources.

5

Challenges of the current Banking Arrangements

– The large number of active bank accounts. – Monitoring and reconciliation – The lack of focus on the aggregate cash position– Lack of active cash management – Dormant Accounts– Bank charges

6

Consequences:

– Reliance on cash rationing for budget/cash releases

– Borrowing costs incurred whilst substantial unremunerated balances of public cash

– Dormant Accounts pose a risk of fraud

7

MoFPED and MoPS are in the final stages of decentralizing payment of salaries for votes on the IFMS

Decentralization of payment of salaries

8

Back ground of payment of salaries

Gou moved from cash payments to cheques (Bank

schedules)

Challenges

-Ghost payments (same schedule to different banks)

-Overprovision, diversions, arbitrary deductions, “teeming

and lading”, collusion with banks and issues related with

cheques.

9

STP ARRANGEMENT

Introduction of EFT Centralised payrolls to ease transfer Opened bank account at BOU for each vote Changed the release process Created a review process by the A/O

10

Benefits under STP

Non diversion of wage budget Faster Minimised collusion Easy traceability A/O involvement (Preliminary payroll)

11

Challenges under STP

Largely out side IFMS ( the main payments system)

Neglect of ownership by votes (lack of payroll processing follow up, no bank reconciliations, deduction follow up)

Bounced EFTs and follow up Too many transactions (Batch processing) Slow feed back response

12

Need for change of current process

Synchronise the salary bank account structure with TSA concept

Need to trace payments to individual under one payment system

Need to fully hold accountable the A/O of a vote Opportunity to clean up the payroll Address file transmission risks under UCS Decommissioning of UCS Address transmission file volume challenges under BOU

13

Proposed Business Process

Utilise the output under IPPS Votes generate a table mapping Employee

IFMS number to IPPS/Computer number forward to Treasury format and upload (One off) for the current employees (New employees fill the required form with IPPS/ computer number at set up)

Set up deduction recipients (URA, NSSF, etc)

14

Proposed Business Process

Monthly

MoPS generates Payroll information from IPPS (extract details of IPPS No. Gross pay, deductions, net pay)- Process can start early on vote by vote basis

MoPS forwards to TreasuryBased on the extract Treasury issues a” virtual release” to enable A/O commit for salaries

15

Proposed Business Process

Treasury runs a program pick the details, generate interface file to match IPPS/Computer No. to Supplier No., net pay, charge Account details

Upload the file into IFMS Votes run a program to pick up information

and create invoices in their votes Invoices are approved and paid through the

IFMS links

16

Challenges envisaged

Incomplete migration to IPPS for IFMS votes Process applies to IFMS votes (agree

arrangement for the LG votes) Need to budget for salaries under one

program for the time being as IPPS reports are being realigned to departments

Different pay dates

17

IFMS UpgradeIFMS was shutdown from 8th to 21st October 2013

Upgrade from Oracle11i to R12 was completed successfully

Gou plans to roll-out the IFMS under Tier 2 to other LGs esp. Municipal Councils

Regular reconciliation of bank Accounts

18

IFMS Upgrade

•Need to post all transactions to GL on a daily basis to enable timely closure of periods (Non closure of periods was a challange during the Upgrade)

19

Other Issues of Concern

•Validation of General Fund Accounts at the beginning of every FY•Monthly Reconciliation of Salary Account ([email protected])

•Payment of unapplied EFTs•Receipting of transfers from Treasury to avoid Audit queries

20

Other Issues of Concern

•Unapplied EFTs (Write to MoPS after correcting the Account details then Mops sends a file to Treasury to effect repayment

21

Thank you