Closing 61,000 sub banking accounts of the State administrative body within the TSA and connecting it with the public finance system
All public employees' payroll payment and suppliers' transactions to be executed via E-payment system
Optimizing E-payment system for Tax and Customs Authorities and disseminating it across all public entities
Getting the State general budget automated and connecting it with the TSA cuts expenditure by 10%
The Ministry of Finance held a meeting lately addressing E-payment and GFMIS initiative, with the attendance of Dr. Mohamed Maait, Vice Minister of Finance for Treasury Affairs; Eng. Khaled Nassif, Deputy Minister of Finance for IT; E-Finance representatives; heads of sectors and revenue authorities affiliated to the Ministry of Finance; along with work groups in charge of following up the implementation of the budget automation project across Egypt.
Finance Minister, Mr. Amr Al-Garhy, announced that the Ministry embarked on applying the initiative of public fiscal management through spreading E-payment, ATM and GFMIS systems across the nation. Such move comes within the Ministry of Finance's plans to boost fiscal and accountancy reform, to upgrade the performance of the public administrative units, and to enhance transparency, accountability, efficiency and cost-efficiency of public services.
He added that the initiative comes within the new strategy adopted by the government to optimize the State's financial resources via the automation of all programs of the State general budget in all stages of its preparation and application. This aims at rationalizing public expenditure, intensifyingcontrol over it, as well as enhancing financial transparency to boost economic growth rates.
E-Payment and GFMIS Initiative is based primarily on two significant axes. Firstly, E-payment and ATM systems are to be automated and integrated with the Treasury Single Account (TSA) banking system at the Central Bank of Egypt. This aims atcancelling all paper checks and closing multiple banking accounts of the different administrative bodies, indicated Mr. Al-Gahry.
Thanks to the new E-payment system, payroll and the different payment orders executed by the various accounting units within the State's administrative body can be followed up and directly transferred to the employees' bank accounts -opened in advance by the Ministry of Finance –so as to be then cached by ATM cards issued by the Ministry for all employees. Similarly, payable dues of the suppliers and contractors dealing with the Ministry of Finance shall be deposited directly in their banking accounts after being deducted from the TSA, Mr. Al-Garhy noted.
The new State budget automation system shall help in activating the electronic payment of all public transactions (e.g. expenses and revenues) executed on the State general budget, which in turn shall cut expenditure by 10% and optimize the State's revenues, indicated by Al-Garhy. By the end of 2017, all transactions executed with the public entities via paper checks will be canceled and consequently substituted with e-payment orders to the TSA at the CBE, reiterated Mr. Al-Garhy.
To ensure control over financial payments and guarantee their electronic execution, the Ministry of Finance has signed a cooperation protocol with the CBE. Under the said protocol, sub-accounts related to the different administrative bodies at the CBE, reaching almost 60 thousands in number, shall be closed and substituted by the TSA at the Central Accounting Unit at the Ministry of Finance whereby all financial transactions shall be limited thereto, added Mr. Garhy.
E-Payment and GFMIS Initiative comes under the Presidential decree No. 89/2017 mandating the establishment of the National Council for Payments, and pursuant to Prime Minister's Eng. Sherif Ismail decision No. 123/2017 ordering that public employees' payroll payments be executed via ATM cards, and hence, boosting financial and economic reform.
The minister said that the accounting units dealings, subject to the cooperation protocol between the Ministry of Finance and the Central Bank of Egypt, will cancel paper checks and shall execute transactions by electronic payment orders; thus, reducing cash circulation and preventing the risks of the old cash money systems such as: abstraction of funds or thefts; besides, such transformation will save the costs of printing checks across the state’s administrative entities.
In addition, this will optimize the E-Collection System of Tax and Customs, disseminating it in all government entities to electronically collect all the government dues through the Center of Electronic Payment and Collection in Ministry of Finance
He added that the second axe of such initiative is about applying the GFMIS which aims to establish electronic accountancy system to implement the State’s General Budget, to control the government spending, to realize the optimal use of financial resources according to the approved account rules, as well as to send immediate alert in cases of non-compliance with payment limits or cases of irregularities across all the State’s Sectors, and to accurately follow-up the financial flows which helps in efficiently managing public debt as major countries.
He said that the advantages of such system are represented in the speedy and accurate preparation and issuance of the State’s Budget Final Accounts, the provision of accurate financial information on different public spending programs, and transparency achievement which copes with international and global systems.
He confirmed that by implementing GFMIS, the Ministry of Finance and other administrative entities shall be able to achieve other objectives, such as:
-The ability to realize efficient planning, to continue performance follow-up, to complete financial information of national and major programs and projects and delivering reports thereon.
-Providing full support for the financial administration through issuing automatic e-financial reports, helping the decision-makers to develop a strategic scheme for each Budget Authority and across the country.
-Providing the opportunities for the optimal use of resources and public expenditure.
-The ability to determine responsibility and evaluate performance, leading to improve the overall performance of the government administrative entities and the accountability criteria.
The Minister mentioned that the Ministry of Finance seeks to achieve integrity between GFMIS and TSA&ATM through adopting a set of procedures to connect both systems; whereas the Accounting Units in which both systems are completed, can issue any payment order only after passing through the electronic documentary cycle in GFMIS, in order to tighten electronic control over the Accounting Units.
This shall also help in rationalizing the public spending, which will have a direct impact on reducing budget deficit, decreasing public debt expenditures, as well as preventing any attempts of fraud or errors which may occur in old book and paper systems, in addition to supporting exchange of information between the government entities in a safe manner that ensures not to be penetrated.