The office of the Accountant-General of the Federation (AGF) has commenced sensitization training on the Bottom-Up Cash Management Policy.
The training which commenced on Tuesday, is aimed at creating awareness in preparation for the Go-Live or flag off of the Bottom-Up cash Planning which 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.
In his opening remark, Mr. Sylva Okolieaboh, the Acting Accountant-General of the Federation explained that 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.
He however noted that unfortunately, that process has witnessed many unforeseen delays over ten years of hiatus; but fortunately today, we are witnessing its actualization.
“Bottom-up cash planning, as the name suggests, is the collection and aggregation of government cash needs through the individual spending units. As part of the overall government cash management arrangement, it facilitates the optimal allocation and utilization of government cash resources.
“According to Mike Williams (2009), 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.
“Other objectives are: minimising 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 acting AGF asserted.
He further stated 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 Honourable Minister of Finance, Budget and National Planning on June 1, 2020. The formal approval of its implementation by Mr. President on the 24th of August, 2022 sets the stage for its roll out.
“As a follow-up to the approval, a Treasury Circular was issued on 2nd February, 2023, notifying MDAs of the Go Live date of 10th February, 2023. Today’s event is the first in a series of pre-go-live activities.”
Mr Okolieaboh said the sensitization event is 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.
“We can only succeed if everyone of us does his own part. Indeed, 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 your respective Accounting Officers, your specific roles include: constitution of in-house Cash Management Committees; sending details of your focal persons to the Office of the Accountant-General of the Federation; submission of your role players to be profiled on the GIFMIS platform; and using the full GIFMIS functionality from procurement to payment.”
The acting AGF advised participants at the training to familiarize themselves with relevant Financial Rules and Regulations. “Most importantly, let me call your attention the Guidelines and Treasury Circular on Bottom-Up Cash Planning. Together, these resources equip you to play your role in this process”.
He stressed that at the Sensitization Training participants will be receiving lectures on various topics that will prepare them to play their part.
For him, the training is also significant at a personal level.
“As you know, I have spent the past 20 years of my career and life working on the Federal Government PFM reforms of which the Cash Management is an important component.
“In fact, the TSA which we all familiar with is the very foundation of Cash Management. At the start my tenure as the Head of the Treasury, I made it clear that deepening the PFM reforms is top priority. So it is my fervent expectation that this event will produce positive outcomes that will contribute to the success of this project.
“Today’s event is a defining moment for all of us gathered here. We are on the verge of history: the journey of over two decades is coming to completion in a few days.
“Certainly, this would not have been possible without the supportive leadership of the Honourable Minister of Finance, Budget and National Planning. More importantly, the reform friendliness of Mr. President since the early years this administration has not received the credit it deserves. It is on record that although TSA was in place before May 29, 2015, the Presidential directive of August 7, 2015 breathed life into it leading to its whole-of-government implementation. Furthermore, the Presidential assent to the Bottom-up Cash Planning Policy on 24th August 2022 cleared a major hurdle on the path to actualizing the policy,” he enunciated.