Professional Documents
Culture Documents
Cash management
Objectives:
Assure fund availability for meeting government obligations (liquidity) Cash conservation Minimize borrowing, borrowing cost Maximize returns from idle cash Risk management
Tools:
Treasury consolidated fund (single account) Financial plans Warrants (allowable draws on TCF) Invoice payment/cash rationing Debt issuance Supplemental budgets
Financial plans
Important link between budget, agency programs and activity, cash flow
Links commitments and cash
Used for cash flow forecasting when combined with revenue forecast
Allows planned, orderly debt issuance
Cash rationing
(misnomer cash budgeting)
Last resort liquidity management Disruptive to programs, vendors High corruption potential
Need transparent ex ante rules Public procedure
Debt management
Debts and liabilities need to be recognized and inventoried Debt can include: Bills, notes and bonds Budgetary arrears Accounts payable Unfunded pension liabilities Accrued but unpaid employee benefits, to name a few Debt can also include certain obligations of sub-national governments
Contingent liabilities
Government acts as a guarantor of debt repayment in the event that the borrower cannot make repayment, or of payment under certain conditions
Loan, pension benefit, bank deposit, agricultural price
Contingent debt must be managed with the same detail as direct debt. As with direct debt these contingent debts must be inventoried and monitored in a central location Active identification, monitoring, management of risk important