By: Joseph Inokotong – Abuja
The Federal Government, will this week, activate another Public Finance Management process to track public spending, 14 years after the idea was conceived.
The idea which is known as the Bottom-Up Cash Planning Policy, the process will take the format of the Government Integrated Financial Management Information System (GIFMIS) and the Treasury Single Account (TSA).
Already, the Office of the Accountant General of the Federation (OAGF) has issued a Treasury Circular notifying Ministries Departments and Agencies (MDAs) of the “Go Live date” of 10th February, 2023.
This was disclosed by Mr. Sylva Okolieaboh, Acting Accountant-General of the Federation at the Sensitisation Training on Bottom-Up Cash Management Policy on Tuesday in Abuja.
Okolieaboh stated that Bottom-up Cash planning “is the collection and aggregation of government cash needs through the individual spending units”.
As part of the overall government cash management arrangement, Okolieaboh said Bottom-up Cash Planning “facilitates the optimal allocation and utilization of government cash resources.
“The overriding objective of cash management is to ensure that the government is able to fund its expenditures in a timely manner and meet its obligations as they fall due”.
According to him, other objectives are: “minimizing the costs of holding cash balances; reducing risk (operational, credit and market risk); adding flexibility to the ways in which the timing of government cash inflows and outflows can be matched, and supporting other financial policies”.
The flag-off of the Bottom-Up Cash Planning has been in the making since 2009 when the Federal Government initiated a feasibility study to determine the best strategies to address its cash management challenges as part of its Public Financial Management (PFM) reforms.
Shortly after the pilot roll-out of the Government Integrated Financial Management Information System (GIFMIS) alongside the Treasury Single Account in April 2012, the process of implementing an efficient cash management system commenced.
“Unfortunately, that process has witnessed many unforeseen delays over ten years of hiatus; but fortunately, today, we are witnessing its actualization,” Okolieaboh said.
He noted that the implementation of Bottom-up Cash Planning will bring more certainty to budget execution; and engender fiscal discipline.
The Bottom-up Cash Management Policy Guidelines was approved by the Minister of Finance, Budget and National Planning on June 1, 2020 while the formal approval of its implementation was granted by President Muhammadu Buhari on the 24th August, 2022.
Meanwhile, Tuesday’s sensitisation event was meant to “rally all Directors and Heads of Finance and Accounts towards ensuring the success of the policy because of their critical roles in the implementation of this important project”, Okolieaboh stated.
He stressed that “the success of the Bottom-up Cash planning policy will rely heavily on your ability and willingness to play your own part. Being bottom-up, the process starts effectively with you”.
Under the direction of respective Accounting Officers, Directors and Heads of Finance and Accounts will: constitute in-house Cash Management Committees; send details of their focal persons to the Office of the Accountant-General of the Federation; submit their role players to be profiled on the GIFMIS platform; and using the full GIFMIS functionality from procurement to payment.
The Acting AGF urged Directors and Heads of Finance and Accounts to familiarize themselves “with relevant Financial Rules and Regulations”, and drew the attention of the attendees to the Guidelines and Treasury Circular on Bottom-Up Cash Planning so that these resources can equip them to play their roles in this process.
Okolieaboh said he has “spent the past 20 years of my career and life working on the Federal Government Public Finance Management (PFM) reforms of which the Cash Management is an important component.
“In fact, the TSA which we are all familiar with is the very foundation of Cash Management. At the start of my tenure as the Head of the Treasury, I made it clear that deepening the PFM reforms is top priority.
“We are on the verge of history: the journey of over two decades is coming to completion in a few days”.
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