Treasury Single Account (TSA) policy, which was officially adopted by the federal government for all the ministries, departments and agencies (MDAs) since August, is a public accounting system under which all government revenue, receipts and income are collected into one single account, usually maintained by the CBN and all payments done through this account as well.
Good and desirable as the policy is, there is need to guide against some pitfalls occasioned by the dearth of manpower in the CBN, and also beef up the capacity and capability of the Office of the Account General of the Federation to carry out the complex cash-flow management operations that come with this centralisation. In other words, the TSA has its downsides which we must recognise and do something to hedge against.
Understandably, the purpose of the policy is primarily to ensure accountability of government revenue, enhance transparency and avoid misapplication of public funds. The maintenance of a TSA will help to ensure proper cash management by eliminating idle funds usually left with different commercial banks and in a way enhance reconciliation of revenue collection and payment.
The implication is that since the commencement of the policy, CBN has opened a Consolidated Revenue Account to receive all government revenue and effect payments through this account. The MDAs are expected to remit their revenue collections to this account through the individual commercial banks who act as collection agents. This means that the deposit money banks will continue to maintain revenue collection accounts for MDAs but all monies collected by these banks will have to be remitted to the Consolidated Revenue Account with the CBN at the end of each banking day.
It will enable the government aggregate its cash in one account or set of accounts in the CBN so that at each point, the accountant-general, as the national treasurer, will know how much cash the nation has; it will prevent having government funds sitting in one account while it goes to borrow money with another account, and hopefully prevent revenue-generating agencies from tampering with the government revenue or delaying it before remitting it. If all things go well, this policy should result in more efficient revenue and cash-flow management by the government and help to limit corruption often connected with government revenue cycle.
However, the question is how the government will diligently implement this good policy while at the same time minimising the downsides. Though the policy has become effective, it will still be necessary to undertake a holistic study to help make adjustments early to assure long-term success of the policy. This is because a high level of technological innovation is required to manage the TSA policy to sequence disbursement in a timely manner and avoid the bottleneck that may develop soon.
There can never be a perfect policy. Every policy must have its downsides, but there is the tendency for government to ignore or deny these possible downsides simply to ward off opposition to the policies. There is need, therefore, for political will to admit possible mistakes and, consequently, be proactive for the full benefits of the policy to be harnessed, without which there are bound to be adverse reactions, leading to policy reversals or policy abandonment.
Unless some proactive measures are taken by government and CBN, TSA implementation could lead to over-centralisation, giving the accountant-general and his staff undue leverage, which may lead to the corrupt practices. It will create the possibility of lobbying at the AGF’s office for preferential allocation of cash – the sort that happens when you centralise and create monopoly in dispensing scarce commodity.
Culled from Bussinessday Nigeria
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