In a bid to strengthen public financial management by way of consolidating government’s receipts and payments through the banking system, government through the Ministry of Finance and Economic Development, is on the final leg of implementing a Treasury Single Account (TSA) and Consultant Experts say it will be up and running in the next 6-8 weeks.
The Accountant General in Sierra Leone currently maintains a number of bank accounts to support government’s receipts and payments. A total of sixty-one treasury accounts are being held at the Bank of Sierra Leone that are aggregated to ascertain the available cash balance to government. However, inasmuch as these accounts together with departmental accounts and some commercial bank balances are included in the annual public accounts, “a significant amount of donor-funded projects accounts held in various commercial banks are not captured,” according to a recent study conducted by the Accountant General’s Department.
“This fragmented system of handling government receipts and payments greatly hampers the preparation of comprehensive public accounts that will include all government operations. The current system lacks a unified view and a centralized control over government’s cash resources; the Treasury Single Account will address these challenges,” Dr. Kaifala Marah, Minister of Finance and Economic Development has stated.
A Treasury Single Account is a structure that links all government bank accounts held in several commercial banks. The new system will enable consolidation and optimum utilization of government cash resources. It separates transaction-level control from overall cash management. Simply put, it is a bank account or a set of linked bank accounts through which the government transacts all its receipts and payments and gets a consolidated view of its cash position at the end of each day. The TSA is a government initiative supported by the IMF.
According to Minister Marah, the TSA has a myriad of benefits including: complete and timely information on government cash resources, improves appropriation and operational controls during budget execution, enables efficient cash management, reduces bank fees and transaction costs, facilitates efficient payment mechanism, improves bank reconciliation and quality of fiscal data, and lowers liquidity reserve needs.
Short and medium term implementation steps have been agreed that will take into consideration the technical and operational aspects of the TSA implementation, which is heavily dependent on ICT.
The process has already commenced as an inventory of all government bank accounts held in various commercial banks classified according to their controlling entities has been conducted. A database has been set up to maintain records of all bank accounts authorized for opening by the Minister of Finance and Economic Development and the signatories to those accounts, and political support at the highest level sought from the Presidency.
At the operational level, commercial banks have been directed by the Governor of the Bank of Sierra Leone to submit on a daily basis, balances on bank accounts so far classified as government accounts for inclusion in the TSA until technology and other legal issues are dealt with. This technology will be live within the next 6-8 weeks. The banks are now reporting on these balances and efforts are underway to computerize the reporting aspect of the banks to eliminate all manual processes involved in collecting and analyzing transactions and balances of government accounts.
With a TSA system, the Financial Secretary, Edmund Koroma maintains, “It will improve the quality of government’s fiscal information and significantly reduce government’s debt servicing costs, lower liquidity reserve needs and help maximize the return on investments of surplus cash.”
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Newspaper in Freetown, Sierra Leone.