1. State Treasury System Peter Bulla director of the Department of State Treasury System management Ministry of finance SR 6th september 2005

2. Content  Role of the State Treasury in the system of public finance  Implemantion of the State Treasury and its operation  Functions of the State Treasury  Subjects of the State Treasury and the system of its management  Technical support  Conclusions

3. The role of State Treasury is the centralization of the financial and information flows for the area of public finance. The role of State Treasury in the system of public finance The establishment of State Treasury is one of the fundamental subjects of the public finance reform

4.  Support of Maastricht convergence criteria fullfilment by managment of public debt,  Control of budget discipline,  Optimalization of costs related to debt service,  Securing of the smooth financing of public services by the minimization of costs,  Centralization of financial flows of the public sector. The role of State Treasury in the system of public finance

5. State Treasury is a system Note. STS – State Treasury System The role of State Treasury in the system of public finance State Treasury is the instrument of MF SR for the optimalization of public finance management.

6.  system of activities, which are assigning the concentration of public finance management functions and  system of relations between subjects participated in the public finance management in the scope of this system. State Treasury System is defined as The role of State Treasury in the system of public finance

7. The time requirement on the implementation was influenced mostly by the changes in definition of STS, as also by the lengthy decision process related to its implementation. Implementation of the state treasury and its operation 1 2 3 1

8. Principal questions solved in the scope of assignment were definition of STS functions, setting of the extent of the centralization and of the relations to the clients The assigment as also the implementation of tasks necessary for establishment of STS was executed in the areas:  definition of functions of the state treasury system,  definition of processes for the realization of particular functions,  legislation,  organizational, personal and technical area. Implementation of the state treasury and its operation

9. The extent of STS functions is broad and varied. However the particular functions of STS are closely related and are creating one functional complex. Functions of the State Treasury Account administration and market operations State budget control disbursement State accounting and reporting  Payment operations  Valorization of the disposible financial resources  Money and capital market dealing  Issue of the state treasuries and bonds  Budget discipline  Stable trend of disbursement  Centralization of the accounting information  Daily survey over state budget trend  Reporting Financial risks management  Market risk (currency risk, interest rate risk, risk of value change of the financial instruments, refinancial risk)  Liquidity risk  Operational risks  Other risks Management of deficit and debt  Planning  Deficit and debt coverage

10. STS is from the organizational aspect created by MF SR, State treasury and Debt and Liquidity management Agency. From the financial and evaluation aspects, the system is extended by the client State debt Subjects of the State Treasury and the system of management State Treasury ARDAL DaLmA Clients Financial market Liquidity Debt, Deficit Positions Payment operations, Budget disbursement control Information Money market operations MF SR State debt MF SR (as the managing body) Processing area Supporting area Datacentrum

11.  MF SR has in STS strategic, conceptional, methodical, evaluating and control function, MF SR carries out the above mentioned areas in cooperation with organizations State Treasury, DaLmA and DataCentrum Subjects of the State Treasury and the system of its management  It specifies and applies the strategy and concept of STS, coordinates the further development of STS,  Assigns the development of the information system,  Specifies the methodology for the evaluation of effectivity of STS and performs its evaluation,  Informs parliament, government and public about the results of the STS,  In the area of management of liquidity, deficit, debt and financial risks participates actively on the management process

12.  State treasury realizes the tasks in relation to clients,  DaLmA realizes tasks in relation to financial markets,  realization of budget of public finance subjects,  management and administration of the clients accounts,  realization of the payments,  centralization of the state reporting   liquidity realization,  risk management,  management of the deficit and debt coverage. Subjects of the State Treasury and the system of its management

13. Subsystem III Subsystem II RIS Financial market Clients Portal ReutersTelerate Budget Spendings mgmt. Fin.planning Clients account management Accounting Reporting Payment processing Management L/D (Trading system) NBSBanks Assets mgmt. MF State debt STS is equiped by the integrated information system ensuring basicaly the electronic processing of its functions. TECHNICAL SUPPORT – BASIC SCHEME Subsystem I

14.  Quantitative contributions Already in the first year of operation in y.2004 STS achieved the significant values of savings of the public finance. In the years 2005 and 2006 is assumed the continuation of this trend.  by centralization of the public finance were reached the direct savings in the area of deficit and debt coverage (using the part of spare financial resources of State Treasury clients for deficit and debt coverage),  another savings in the area of deficit and debt coverage were achieved thanks to the decrease of price (interest rate), for which the market is willing to accept to purchase the issued state treasuries and bonds (the increase of expertise by acting on the financial market),  the decrease of costs on the financial services (payment process, account administration,... is further not realized through commercial banks), Conclusions

15.  Qualitative contributions The contributions of STS have the positive impact not only on the area of public finance management, but also on the increase of stability of the whole financial and monetary system and rating of SR.  creation of conditions for improval and quality increase of the management of budget realization by control ex ante,  synergy effect from liqudity and risk management,  centralization of the public finance positive balance on the single account, where these resources can be further used for the liquidity and debt coverage,  increase of transparency of the whole management of public finance system, Conclusions

16. STS meats its functions, STS brings the expected contributions, STS represents one of the last pillar in the scope of the public finance reform, As a part of public finance system it is assumed its further development. Conclusions