1 GOU Treasury Single Account and Decentralization of payment of Salaries By Accountant 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 Treasury  Based 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 Upgrade IFMS was shutdown from 8 th to 21 st 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 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