GOU Treasury Single Account and Decentralization of payment

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

Discussion Areas � TSA Implementation � Decentralization of payment of Salaries � � IFMS Other Issues of concern 2

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 3

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. 4

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 5

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 6

Decentralization of payment of salaries � Mo. FPED and Mo. PS are in the final stages of decentralizing payment of salaries for votes on the IFMS 7

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. 8

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 9

Benefits under STP � Non diversion of wage budget � Faster � Minimised collusion � Easy traceability � A/O involvement (Preliminary payroll) 10

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 11

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 12

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) 13

Proposed Business Process Monthly � Mo. PS generates Payroll information from IPPS (extract details of IPPS No. Gross pay, deductions, net pay)- Process can start early on vote by vote basis � Mo. PS forwards to Treasury � Based on the extract Treasury issues a” virtual release” to enable A/O commit for salaries 14

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 15

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 16

IFMS Upgrade IFMS was shutdown from 8 th to 21 st October 2013 Upgrade from Oracle 11 i to R 12 was completed successfully Gou plans to roll-out the IFMS under Tier 2 to other LGs esp. Municipal Councils Regular reconciliation of bank Accounts 17

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) 18

Other Issues of Concern • Validation of General Fund Accounts at the beginning of every FY • Monthly Reconciliation of Salary Account (customer_inquiries@bou. or. ug) • Payment of unapplied EFTs • Receipting of transfers from Treasury to avoid Audit queries 19

Other Issues of Concern • Unapplied EFTs (Write to Mo. PS after correcting the Account details then Mops sends a file to Treasury to effect repayment 20

�Thank you 21