Treasury Single Account (TSA)
Financial Comptroller General Office

A. Problem Analysis

 1. What was the problem before the implementation of the initiative?
Before the implementation of TSA initiative, every spending unit used to have their own bank accounts and the number of bank accounts reached more than 14,000. Large number of bank accounts created problems in reconciling them, delay in preparing financial statements, high cost of maintain these bank accounts and high dependency on central bank for real treasury position. Furthermore, it had led to poor fund management, unnecessary holding of money in various bank accounts, unnecessary bank overdraft/domestic borrowing and interest payment on them. Ultimately, these factors contributed to inefficiency in financial control, large number of virements, high fiduciary risk, and the dearth of real-time and credible information to the policy makers, stakeholders and to the public leading low transparency, governance and accountability condition.

B. Strategic Approach

 2. What was the solution?
Treasury Single Account (TSA) initiative – an integrated financial management system which channelized all the receipts and payments of the government via centrally managed bank accounts for effective fund management. The Government of Nepal has designed an online-based centralized system to put the TSA concept into practice which was first introduced in 2009 on pilot basis. By employing this system, the government has been able to reduce the cost of fund management (reducing the level of overdraft/borrowing, commission for the large number of individual spending units’ bank accounts etc.), avail the disaggregated level of comprehensive dataset for analysis, report and produce credible information to the policy makers, and promote transparency, internal control and good governance through the acquisition of the real time electronic data.

 3. How did the initiative solve the problem and improve people’s lives?
The main objective of the TSA initiative is to promote transparency, accountability and efficiency of public financial management via an integrated treasury operation system. In order to achieve this objective, GoN has adopted single district-single bank account policy (zero balance bank account and to be operated by District Treasury Controller Office-DTCO and settled on daily basis with the central bank) and developed online-based TSA system. Furthermore, a Financial Management Information System (FMIS) has also been developed to acquire, consolidate, analyze and disseminate information from TSA system to the stakeholders. This initiative has addressed the problems mainly in two ways. First, this initiative solved the problems of fund management by bringing down more than 14,000 thousands bank accounts to around 500 bank accounts. This helped the government to reduce the high cost of maintaining those bank accounts and resolve the problem of interest and commission payment on unnecessary overdraft/domestic borrowing only due to inefficient fund management. Second, transparency and accountability has also been improved due to high availability of comprehensive, disaggregated and real-time electronic data. Policy makers, stakeholders and the public are better informed and provided with the credible and real-time information. This, in turn, not only helped the government to devise better financial policy, but also strengthen the public to hold the government accountable. This initiative is helpful in bringing ultimate improvement in the lives of public in many ways. Mainly, it helped the government toward the optimum utilization of public money. Now, the government as well as the general public can better see how the public money is being utilized, where are the lacking areas, what is the financial progress of individual development projects, how efficiently the scare funds are beaning managed and so on. Also, it has laid the foundation for future improvements in the area of e-Governance/Good Governance concept. For example, recently GoN has started e-payment system sample basis which has become possible only due to centrally managed treasury system. Further, GoN has initiated the study of IFMIS (Integrated FMIS) concept in which TSA system is one of the key component.

C. Execution and Implementation

 4. In which ways is the initiative creative and innovative?
As per the available information, TSA has not been adopted by many countries. With the rapid development of ICT in early 20’s, TSA concept also gained popularity and several countries started to implement the system. Recently, in 2009, Nepal embraced this concept and successfully completed its pilot testing in two district. Then up-to 2012 the coverage expanded to all the districts. This initiative is creative and innovative in itself as the GoN has made many homemade customizations to the system to suit the country’s need and preferences. First, available planning systems (Budget Management Information System and Line Ministry Budget Management Information System) are linked to the TSA system for better budget execution and analysis. Second, TSA system is designed to record disaggregated level of data. For example, the disaggregation categories include project, COFOG, gender friendly, climate adaptive, GFS code, ministry, source of fund level financial transaction information. Third, many new modules are being designed and embedded into the current TSA system such as e-payment, CGAS (Customized Government Account System), commitment recording and so on.

 5. Who implemented the initiative and what is the size of the population affected by this initiative?
Financial Comptroller General Office has initiated the implementation of TSA system with due consultation and coordination with concerned stakeholders. In this process, MoF - the parent organization of FCGO - provided guiding direction and assistance in developing and implementing TSA system with necessary resources and policy framework while the World Bank and other development partners provided both financial and technical assistance through MDTF (multi-donor trust fund) under SPFM-I (strengthening public financial management – I) project. The TSA system has the nationwide coverage as it has been implemented in all 75 districts. A large number of population is being benefited (both direct and indirect way) thorough the full-fledge implementation and continuous improvement of the system.
 6. How was the strategy implemented and what resources were mobilized?
Firstly, the online based TSA system was developed and linked with existing DECS (District Expenditure Control System) of FCGO. For its implementation FCGO has developed a rollout plan and started to implement from two of the adjourning districts of capital city (Kathmandu Valley). The District Treasury Comptroller Offices (DTCO's) of these two districts; Lalitpur and Bhaktapur, has been piloted the TSA system in F/Y 2009/10. With the successful piloting in these two districts, FCGO has expanded this system in additional 20 districts in F/Y 2010/11, in additional 16 districts in F/Y 2011/12 and remaining districts in F/Y 2012/13. To implement the TSA effectively SPFM-I project has been designed and implemented with the support of World Bank, which coordinated the support of seven multiple donors of Nepal in a single platform in the name of MDTF Trust Fund.

 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
The following stakeholders were involved in the various stages of the TSA system design and implementation phase. Still these institutions and persons are being involved directly or indirectly; • Ministry of Finance • FCGO and its field offices (DTCO's) • Line ministries, Departments and other spending offices • Central Bank and other commercial banks • PFM Specialists • IT experts.

 8. What were the most successful outputs and why was the initiative effective?
Implementation of TSA contributed significantly for the overall management of government's expenditure and revenue. It has provided the prominent solution of the problems being faced before its implementation. The most successful output it has provided, regarding government financial transaction is the effective treasury management system in the country. Improved accuracy and reliability of financial information, real time data availability on budget expenditures and revenue receipt, availability of treasury position and informed decision making and policy design has been possible through its implementation. This initiative becomes effective for governments treasury management due to its completeness and execution throughout the country in a unified, single and simple way. The associated cost for treasury management has significantly decreased and cash management become easier for the decision maker. The government's commitment for effective fiscal governance has been possible through this system. The concerned departments could monitor the budget release, expenditure, revenue collection and other fiscal transactions through this system.

 9. What were the main obstacles encountered and how were they overcome?
Firstly, the unavailability of PFM and ICT experts to develop the system was faced. When the system has developed and the government decides for its implementation, then to convince the concerned authorities and stakeholder was another challenge. Furthermore, the weak web connectivity, network problem, power shortage, availability of IT equipment, institutional and personal capacity constraints and motivational factor to PFM staffs were main constraints. To overcome these constraints, SPFM project has been developed, in which TSA implementation was one of the major component. This project contributed to supply the required PFM and ICT expert, IT equipments, web connectivity strengthening, train the concerned PFM staffs and provisioned for power backups as required. To incentivize the PFM staffs directly involved in TSA implementation, the government has provisioned performance based incentive system (PBIS).

D. Impact and Sustainability

 10. What were the key benefits resulting from this initiative?
The main achievement of this system is the effective and efficient treasury management of the government. Other achievemnts made by this system are as follows; • Availability of real time data of expenditure and revenue, • Proper cash planning for the treasury operations, • Consolidated financial statement preparations on time, • Facilitation and Control in budget implementation, • Effective public financial management by the massive use of IT system, • Significant contribution on PFM staffs and institutions capacity development, • Contributed to established FMIS in FCGO and way forwards to IFMIS • Provided access to financial information to the concerned stakeholders and general public, contributing transparency and accountability of the governments public funds operations, and • Open up regular PFM reforms.

 11. Did the initiative improve integrity and/or accountability in public service? (If applicable)
Certainly, the system has contributed to improve government's transparency and accountability of the uses of the public fund. It has established the proper basis for the integration of the PFM systems. To reduce the fiduciary risk at the operational level it has provided a good level of financial information to the scrutiny agencies. It has also contributed to plan for the effective service delivery through performance based programming and budgeting practices.

 12. Were special measures put in place to ensure that the initiative benefits women and girls and improves the situation of the poorest and most vulnerable? (If applicable)
Some policy reform regarding the programming and budgeting for the grassroots levels citizen has been possible to introduce through this system. However, it has not provisioned the direct measures for women/girls, poorest and vulnerable people.

Contact Information

Institution Name:   Financial Comptroller General Office
Institution Type:   Government Department  
Contact Person:   Kewal Prasad Bhandari
Title:   Financial Administration  
Telephone/ Fax:   9774770706
Institution's / Project's Website:  
E-mail:   kewalp.bhandari@fcgo.gov.np  
Address:   Anamnagar
Postal Code:   44600
City:   Kathmandu
State/Province:  
Country:  

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