Treasury Single Account: Implementation and Challenges

Treasury Single Account: Implementation and
Challenges
Sylva Okolieaboh, FCA
Deputy Director and Coordinator, TSA/e-Collection
Office of the Accountant General of the Federation
Abuja.
Abuja, May 2016

 Presentation Objective
 What is TSA?
 Why TSA?
 TSA Objectives
 Categorization of MDAs for TSA
 Implementation Strategy
 TSA implementation tools
 Implementation Status
 TSA: Benefits so far
 Challenges
 Way forward
 Conclusion
Outline

Presentation Objective
To discuss TSA implementation status,
benefits so far and challenges . More
importantly, to receive feedback from
bursars who are key stakeholders.
TSA is an enabler not a disruptor

“what has changed under the TSA regime is that our funds are now
domiciled at the Central Bank, unlike in the past when such funds are
concentrated in commercial banks” ... Professor Yahuza

Treasury Single Account (TSA) is a unified structure of government
bank accounts that gives a consolidated view of government cash
resources.
TSA is simply a banking arrangement

Why TSA: cash management before TSA
 Multiple bank accounts (over 10,000)
 Countless dormant accounts with huge balances
 Inability to determine consolidated cash position of government
 Borrowing and incurring charges when there are idle balances in MDA
Accounts
 Lack of coordination among key fiscal agencies
 Loss of cash to armed robbers
 Poor cash planning
 Inability to fund government budget
 Non/delayed remittance of revenue/collections
 Over N70 billion of FG MDA funds lost to failed banks
Observed deficiencies in FG cash management system necessitated a
new policy which gave rise to TSA

Objectives of TSA
 Ensure availability of cash to meet commitments of
government
 Control aggregate cash flows within fiscal and monetary
legal limits
 Improve management of government’s domestic borrowing
 Enhance operating efficiency through the provision of high
quality services at minimal costs
 Enable investment of excess or idle cash
 Achieve greater accountability of public expenditure
 Timely and complete remittance of revenue/collections
The primary objective of TSA is to facilitate the implementation of the
FG Cash Management Policy

MDAs categorized into 8 according to their peculiarities
Categorization of MDAs

Categorization of MDAs
Note: Profit oriented public corporations are no longer exempted

TSA : implementation strategy
A phased implementation approach was adopted starting with Capital
Accounts of MDAs in 2009 (Central Capital Account)

Fully funded MDAs access their funds using GIFMIS while extra-
budgetary budgetary agencies access their funds using REMITA
Tools and technologies supporting TSA

TSA : Key Milestones
 May 2011: HMF approved FG Cash Management Policy/TSA
 April 2 2012: GIFMIS go live, enabling STP of payments from TSA
 State House (TSA-MDA) made first payment from TSAAccount on 5th
April, 2012
 January 2015: e-Collection introduced
 August 7 2015: TSA extended to all FG MDAs
 TSA linked Sub Accounts at CBN introduced
 Dedicated TSA/e-Collection support team established
TSA implementation has come a long way: 2009 - 2016

TSA : Key Statistics
TSA implementation has come a long way: 2009 - 2016
1 Number of TSA Sub Accounts opened at CBN 2,063
2 Number of MDAs registered / enrolled 1,045
3 Number of MDAs verified and have access to CBN
accounts/ funds
949
4 Total transfers/collections into TSA (GROSS) N3,052
Trillion

A lot has been achieved through the implementation of TSA
TSA: benefits so far
 Ability to determine consolidated FG cash position
 Reduction in Ways & Means charges from
N3.7B/month to zero
 Significant improvement in FG liquidity position
 Better control and oversight over MDA operations
 Improved revenue collection mechanism through
e-collection

TSA has been particularly beneficial to tertiary institutions
TSA: specific benefits to Universities
 Elimination of costly collection and exploitative PPPs
 No more bullion vans
 Elimination of cheque books
 Hijacking of cash in transit and breaking into cash
rooms no longer possible
 Streamlining of bank accounts
 Reduction in cash handling costs and pilfering
 24/7 access to bank account
 Online, realtime bank statements
 Wider scope/channel for receipts: any bank, anywhere
plus e-channels at no cost
 Flexibility/mobility in payments, free of charge

TSA implementation is not without challenges...
TSA: general challenges
Insufficient public awareness leading to wrong
perception
Continued attempt by some MDAs to circumvent the
TSA in collusion with commercial banks
Delay in opening of TSA Sub Accounts due to large
number of requests within a tight deadline
Delay in making refunds to qualifying MDAs
Lack of clarity in foreign exchange transactions process
Access to bank statements/balances
Management of endowment funds/investments
Insufficient manpower, capacity and tools for effective
monitoring of all MDAs on TSA and their transactions
Lack of funds to drive TSA

TSA: reported infraction by varsities
 Continued collection in cash
 Making payments in cash
 Operation of commercial bank accounts
 Use of PPPs without following the guidelines
 Use of non-approved payment gateway
 Diversion of funds to surrogate accounts
Some universities are circumventing the TSA guidelines

Way forward
 Sustained high level political support
 Awareness creation/change management to reduce
resistance
 Capacity building at all levels
 Introduction of budget control to extra budgetary
MDAs/funds
 With aid of appropriate technology, distribute TSA
accounts to Deposit Money Banks in order to strengthen
the stability of the banking system [long term goal]
 Establishment of strong inter-MDA monitoring and
enforcement framework
 Continued revision of the guidelines
Nigerian universities can sponsor research into TSA and PFM
generally

Conclusion: the major thing that changed is the bank in which your
account is domiciled. All else remains the same.
Before… &
…After

We have almost done it…
Grateful for your attention…

Treasury Single Account: Implementation and Challenges

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