• Sunday, March 03, 2024
businessday logo

BusinessDay

Treasury Single Account will bring about transparency, efficiency and accountability

businessday-icon

The Accountant General of the Federation, Mr Jonah Otunla, on Monday said that the implementation of the Treasury Single Account (TSA) would bring about transparency, efficiently and accountability.

Otunla made this known at a dialogue he held with the chief executive officers of Ministries, Departments and Agencies (MDAs) in Lagos.

“TSA is a unified structure of government bank accounts that gives a consolidated view of government cash,” he said.

He explained that TSA would encompass all receipts and payments of the government handled by MDAs, partially funded by the Federal Government and all government controlled Trust Funds and Social Security Funds.

According to him, TSA is part of the Public Financial Management reforms which falls under pillar 3 of the National Strategy for Public Service Reforms towards vision 20:2020.

He saidd that the public financial management reforms were designed to address impediments to effective and efficient cash management.

According to the Accountant General, prior to TSA, Nigeria has fragmented banking arrangements for revenue and payment transactions.

“ There were more than 10,000 bank accounts in multiple banks, which made it impossible to establish government consolidated cash position at any point in time.

“It led to pockets of idle cash balances held in MDAs’ accounts when government was out borrowing money,” he said.

Otunla said that fragmented banking also affected the government’s ability to undertake efficient cash planning and management as required by the Fiscal Responsibility Act.

He said that the government was also unable to track its expenditure in a timely manner and that the N70 billion lost in failed banks could be blamed on this.

He said that the TSA resolution would also allow flexibility, “currently everyone is a slave to the system, people need to be at their desk to effect transactions”.

Otunla explained that TSA was online and in real time, meaning that it could be done from anywhere in the world.

“Once fully operational, transactions can be completed within 30 minutes, even if the individuals responsible are scattered across the globe,” he said.

“The cardinal objective of TSA is to facilitate implementation of the Federal government’s Cash Management Policy, and to achieve greater accountability for public expenditure,” he said.

Otunla said this would ensure that sufficient cash was available as and when needed to meet commitments.

“It would control aggregate cash flow, improve the management of government domestic borrowing programme, enhance efficiency and enable investment of idle or excess cash.’’

Otunla said that so far the reform had instilled fiscal discipline and prudence as well as closed over 1,000 dormant or idle accounts.

“Currently with only 93 MDAs on TSA, average monthly overdrafts with the CBN fell from the overdrawn amount of N102 billion in December 2011 to N4.461 billion credit in Sept. 2012,” he said.

He said that on a recent visit, a group from the World Bank commended the system for its impact in reducing inflation.

The accountant general, however, acknowledged that TSA was not without challenges.

“MDAs and commercial banks are resisting, some due to ignorance, others because previously they have been able to manipulate the system to their benefit which will not work under TSA.

“Some fear it will threaten the autonomy of certain agencies and give the accountant general power over them, this is not true.

“Other challenges include inadequate capacity in the form of access and ability to use the internet to do transactions,” he said.

According to him, for the system to succeed everyone has to get on board.

“The benefits of TSA implementation far outweigh the cost; all efforts should be harnessed to ensure full implementation.

“The government is saying that we should do this, but I am insisting that we must do this for our combined benefits and for the good of the nation,” he said.

The meeting was designed to prepare the CEOs for the imminent implementation of the Government Integrated Financial Management Information System (GIFMIS)

The Project Manager of GIFMIS, Mr Desteo Mugabi, said that GIFMIS was the technology behind the TSA.

Mugabi said GIFMIS was not developed over night, but after extensive research and application in Abuja.

“It is live in 217 Abuja based MDAs and works very well, now the rest of the country must be added,” he said.

He said that the adoption of the system should be straightforward and the MDAs would not require anything greater than basic internet and computer skills to implement.

Mugabi warned the MDAs not to send the wrong people for training, but to choose the people who would be responsible for operating the system and their alternates otherwise problems would occur.

He also urged all of them to ensure proper data migration in order to avoid problems when GIFMIS would come alive by the end of 2014 for all MDAs.