Wed | Dec 7, 2016

New cash management system for Accountant General’s Department

Published:Wednesday | January 21, 2015 | 12:00 AMMcPherse Thompson
File The Ministry of Finance offices at National Heroes Circle, Kingston.

A NEW cash management unit will be established in the Accountant General's Department (AGD) and the cash management function currently handled by Fiscal Policy Management Unit in the Ministry of Finance transferred to it by June 2015, according to the latest report submitted to the International Monetary Fund (IMF).

The creation of the new unit is a proposed structural benchmark under the economic support programme and will be undertaken with the help of IMF technical assistance, funded by the Canadian Department of Foreign Affairs, Trade and Development.

Furthermore, a new cash forecasting model is expected to be developed by June 2015, and is expected to become operational by September 2015.

The AGD is the treasurer of the single-treasury account and the process for transitioning it into a modern Treasury department by March 2016 begun in April 2013.

The Government informed the IMF executive board that by December 2014, it was expected to develop a modernisation plan for the AGD.

As part of its action plan for public financial management reform, the Government said the adjusted chart of accounts - used to organise its finances and to segregate expenditures, revenue, assets and liabilities - was first prepared in April 2014 and is undergoing further revisions with a view to its implementation by June 2015.

It said it would also strengthen the efficiency and quality of the Government's procurement process, thereby improving the ease of doing business and reducing costs.

The next steps, it said, include the implementation of the electronic tendering system in four pilot entities during the current financial year.

It also includes adoption and effectiveness of the Procurement Act tabled last year, with a view to its passing and efficacy by January 2015, as well as a new procurement manual to be prepared by March 2015, with the assistance of the Inter-American Development Bank.

The Government has reiterated its commitment to sharply reducing public debt, which it said is expected to decline to 96 per cent of gross domestic product by March 2020.

"This is expected to be achieved by sustained fiscal efforts, policies to bolster growth, as well as additional market-friendly measures. In designing and implementing these transactions, the Government will seek to ensure sound public sector governance," the report to the IMF said.

For the purpose of the IMF-supported reform programme, reporting on public debt include government-guaranteed debt and PetroCaribe debt, net of its financing to central government and its holdings of guaranteed debt.

The Government said the efficiency of the Debt Management Branch will be further strengthened through increased staffing of the middle office, skills training and effecting improvements to securities operations.

By January 2015, it said, the Bank of Jamaica and the Ministry of Finance and Planning will finalise a fiscal agency agreement on debt management operations and the debt issuance process.

The Central Treasury Management System, being implemented in phases, will allow the Government, through the AGD, to centralise its cash management function, resulting in significant cost savings and improved customer service.

mcpherse.thompson@gleanerjm.com