STRATEGIC ROADMAP OF CASH MANAGEMENT TURKISH TREASURY Cash

STRATEGIC ROADMAP OF CASH MANAGEMENT TURKISH TREASURY Cash Management Department

Contents 1 Our Vision & Mission 2 Strategic Pillars & Targets 3 Gaps & Challenges 4 Strategic Plan

1 OUR VISION AND MISSION

Vision and Mission Providing cash needs of the public institutions in a rapid and foreseeable manner, under an effective coordination by maximizing stakeholder satisfaction and minimizing bureaucratic obstacles. Utilization of the appropriate remuneration channels for the Treasury resources in to maximize gains under tolerable risk conditions. Developing an internationally-competitive expertise capacity, technologic infrastructure, institutional management, knowledge and control systems.

2 STRATEGIC PILLARS & TARGETS

Strategic Pillars and Targets Cash Planning and Management • Cash Planning &Management Structure • Operational Quality and Risks • Forecasting Capabilities Utilization of Public Sector Financial Resourses Institutional Capacity • Remuneration of Treasury Resources • Expertise (HR) Capacity • Minimization of the Redundant Cash • Operational Structure • Effective Utilization of Other Public Resources • Internal Control System • Institutional Knowledge • Performance Management

Pillar I-Cash Planning and Management Developing a cash planning and management infrastructure fully compatible with central government budget structure Improving operational quality and speed and minimizing the risks of the cash planning and management processes 3 Improving revenue and expenditure forecasting capabilities 1 2 3

Pillar II-Utilization of Public Sector Financial Resources Remunerating Treasury’s reserves in order to gain maximum return under tolerable risk constraints 1 2 Minimizing redundant public cash 3 Guiding public institutions in order to utilize their financial resources in an effective manner 3

Pillar III - Institutional Capacity Developing an internationallycompetitive expertise (HR) capacity 1 4 Institutionalizing knowledge 2 5 Developing an ideal division of capacity 3 6 Developing a lean operational structure Developing a performance-focused management structure Improving internal control system

3 GAPS & CHALLENGES

Pillar I-Cash Planning and Management Developing a cash planning and management infrastructure fully compatible with central government budget structure - Revenue and expenditure classifications of the budget are not compatible with the cash inflow-outflow series. - A better input-output relationship could be established between budgetary and cash –based data Improving operational quality and speed and minimizing the risks of the cash planning and management processes - Ms. Excel plays an important role in the planning and execution process - Manual controls and decisions should be evolved to more automotized controls and decision support systems Improving revenue and expenditure forecasting capabilities - Cash request system should be modified in order to make it more user-friendly - An effective econometric-modelling capacity should be developed

Pillar II-Utilization of Public Sector Financial Resources Remunerating Treasury’s reserves in order to gain maximum return under tolerable risk constraints -There is only a single channel for the remuneration of the Treasury’s cash. - Lacking an offical cash management policy statement which envisages daily reserve targets, remuneration channels , benchmark portfolio, foreign exchange policy etc. Minimizing redundant public cash - Need to expand the coverage of TSA Need to establish institutional TSAs Need to establish a more flexible planning schedule - Guiding public institutions in order to utilize their financial resources in an effective manner Need to establish a framework for portfolio management model strategy for public funds Need to increase the variability of the instruments and improve consultancy function for the institutions in order to utilize their resources with higher return -

Pillar III-Institutional Capacity Need to develop an expertise model and capacity which extends beyond proficiency in cash management processes yet encompasses knowledge about budget, debt, risk and IT management as well as the businesses of the cash recipient institutions. A room for improvement regarding institutionalization of knowledge and business continuity management Utiliziation of diverse IT technologies and inter-linked processes requires a lean and more integrated operational structure Current key performance indicators are not sufficient to monitor unit’s performance Internal control system contains areas to be improved.

4 STRATEGIC PLAN

Pillar I-Cash Planning and Management - Developing econometric modelling expertise - Establishing data participation structure compatible with budget revenue and expenditure classification - Developing a cash management IT system containing cash management database, automated controls, decision support systems and flexible planning infrastructure and ability to manage integrated business processes.

Pillar II-Utilization of Public Sector Financial Resources - Expanding the coverage of TSA at least to comprise whole CG. - Establishing institutional TSAs at least for CG institutions - Establishing alternative channels for remunerating Treasury’s cash - Overnight remuneration structrure for reserves at CB - Establishing Treasury Cash Management Policy Statement - Developing a portfolio management model and framework for public funds

Pillar III-Institutional Capacity - Reorganizing process guidelines for basic cash mangement processes -Establishing a performancebased management mechanism - Developing a subject-based expertise model - Delegating decisional authority to lower managerial levels with a formal and clear delegation mechanism - Reorganizing CRS in a more user-friendly manner and with an on-line communication platform

Thank You! TURKISH TREASURY Cash Management Department