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FG saves N500bn through implementation of Single Treasury Account

The federal government saved  about N500 billion in unutilized funds last year through the implementation of the Single Treasury Account (TSA).

TSA is a unified structure of government bank accounts that gives a consolidated view of government cash resources. It is a system, whereby all monies belonging to the government are domiciled in one account with the Central Bank of Nigeria, with payments out and collection into the account done via an electronic payment platform.

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The TSA became operational in 2012 with focus on payments, with a pilot phase involving 217 ministries, department and agencies (MDAs) in Abuja. Last year, the implementation was extended to all MDAs outside Abuja, hence all federal government related payments were executed via an electronic payment platform, Remita, an indegineous software developed by Systemspecs, a Nigerian software development company.

Vanguard investigation reveals that the extension of the epayment for government services under the TSA resulted into about N500 billion savings for the federal government in the form of unutilized funds under the 2014 budget. A source close to the TSA project confirmed this development to Vanguard. Speaking on condition of anonymity, he said that the N500 billion asegfqwould have been spent by the MDAs but they could not do so last year because of the use of electronic payment under the TSA. “You know with the e-payment, you cannot just collect money from the treasury, you have to go through the e-payment platform. The process requires you state who is collecting the money and why the money is being collected, and other information which would later be used to trace the money during audit. This helped curtailed misappropriation of funds and embezzlement which are conducted under various guises,” he said.

According to Alhaji Salawu Adeku Zubairu, Director (Fiscal Account & Cash Mgt.) Funds Dept; Office of the Accountant-General of the Federation, one of the objectives of implementing the TSA, is to “iincrease internal controls to prevent and detect potential and actual fraud.”

Speaking on the implementation of the TSA, in a paper delivered at an e-payment conference, he said, “While this started with lots of resistance, many MDAs have come to appreciate the positive impact on their payment process. MDAs are now able to process transactions on their own taking responsibility and accountable for budget spending. The TSA has resulted into major reduction in Way and Means from CBN with funds saved used for other projects. It has also enhanced prompt disbursement of funds and payment to beneficiaries; and timely reporting of transactions, account balance and financial statement making it easy to monitor budget performance for decision making”.

Meanwhile, the Federal government will this week release a circular and enlightenment booklet on the implementation of the electronic collection of revenue (e-Revenue) aspect of the TSA. Though the e-Revenue was scheduled to commence second quarter of last year, the implementation started in December with a pilot phase involving selected MDAs. Following the success of the pilot phase the federal government commenced full implementation on January 1st this year, with a directive to all MDAs to close all revenue accounts with banks by February 28. The circular and a booklet of Frequently Asked Questions on   the new electronic revenue collection regime, which would be will be available at the registration desks of all Ministries, Departments and Agencies (MDAs) and project members’ banks, are aimed at    enlightening the public and all interested stakeholders on the usage of electronic revenue collection platform aimed at checking theft, diversion of collected revenue and all sorts of corrupt practices associated with revenue collection.

Speaking last week at   a workshop designed to sensitize MDAs to the commencement of the electronic revenue collection project.  Accountant-General of the Federation, Mr. Jonah Otunla said that the implementation of the project which kicked-off  on January 1, would enthrone a new regime of centralized, transparent and accountable internally generated revenue management system.  As such, he asked that the balances in the revenue accounts should be transferred to the Consolidated Revenue Fund of the Federal Government, stating further that any MDA that failed to comply with the directive by the end of February would be sanctioned.

Otunla said the new platform would improve the availability of funds for financing of developmental projects and budgets as well as plugging loopholes in government revenue collection and management.

The commencement of the e-collection platform, he informed, was a product of series of treasury reforms that began in 2012 and aimed at ensuring transparency and accountability in the management of the nation’s resources.

According to him, the reforms have led to the introduction of the Government Integrated Financial Management Information System and the Treasury Single Account. “We have rolled out the GIFMIS and TSA implementation. At inception, a total of 93 agencies were enrolled and as of today, we have about 551, which is about three quarter of the total budget of the federation.

”We have yet to realise the full potential of the reforms. Some big budget MDAs to with the National Assembly, National Judicial Council, the armed forces and some other autonomous agencies have been reluctant to be brought into the GIFMIS and TSA process.

”The implication of this is that substantial cash resources of the government are still lying idle at a time when our cash flow is facing a lot of challenges. In the face of the cash flow problem, we need to be more creative. We can enhance the performance of the budget by either improving revenue or reducing costs.”

 


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