Public Sector Governance and Accountability Series: Budgeting and ...

308 Daniel Tommasi
BOX 9.5
Where Are the Arrears?
An arrearage may be found at several stages of the budget execution cycle:
When the expenditure is not invoiced. The supplier may agree with the
spending unit not to submit the bill. For example, if the expenditure cannot
be financed from an unused appropriation, the supplier and the
spending unit may decide to await a budget revision or the next budget.
In francophone systems, such expenditures are often not regularly committed
(because the commitment must be submitted for the visa of the
financial controller).
Before the payment order is issued at the line-ministry level. The official at
the spending unit who sanctioned the expenditure can put the bill in a
drawer. In anglophone systems, this sometimes occurs because no money
is available under a monthly cash limit. In both anglophone and francophone
systems, it happens because the expenditure was not regularly
committed (no appropriation available for the moment).
Before the payment order is issued at the ministry of finance level. In several
francophone systems, the ministry of finance department responsible for
issuing payment orders may delay this issuance for various reasons.
Before the payment is made at the treasury or accountant level. The
payment order has been passed to the treasury or to the line ministry’s
accounting department responsible for payment, but it is not paid. In francophone
budget systems, such unpaid payment orders are accounted for;
however, they are not necessarily accounted for in other budget systems.
After the “payment” is said to be made. In some countries, checks are issued
and not sent to the bank. In the past, in some francophone budget systems,
the supplier was “paid” with treasury checks or to an account with
the treasury, but the cash was not available.
Source: Adapted in part from Potter and Diamond 1999.
a fine-tuning of the budget to accommodate any revisions in revenue
forecasts and any urgent and unavoidable new or additional expenditure
priorities. This midyear budget review, covering the enumerated issues,
should be provided to the legislature, along with the supplementary
budget for approval.
Cash Management
This section presents the treasury function and the objectives of cash
management. It reviews the payment systems, including the treasury
single account, which is a key instrument for efficient cash management,
and discusses procedures for in-year financial planning.