Treasury Single Account System in Georgia Joni Babilodze Pem-Pal, Istanbul Feb 24-28, 2008

TSA System - Georgia Basic Features of the system Central Treasury (CT) has one GEL denominated account – Treasury Single Account (TSA) held at the National Bank of Georgia. Special Resources no more exist in Georgia. The Budget System Law, from January 2004, abolished them. Social Insurance State Fund and Road State Fund are integrated in the State Budget. Regional Treasury offices have no account, but execute all transactions trough the TSA Treasury Service of Georgia do not issue cash checks. According to the new regulations, public employees keep personal checking account in commercial banks, to which wages, travel expenses or petty cash are transferred.

TSA System -Georgia since 2006

. Payments Processing 1.1 The budget organization (BO) prepares payment request (PR) based on the previously registered commitment and submit it to the Regional Treasury (RT), (or the Operations Department within the Central Treasury (CT), which serves the BOs located in Tbilisi). 1.2 RT processes PR, enters the data in the Treasury Information system (TIS) and sends electronic payment requests in batches to the Settlements Center (SC) of the CT in an encrypted file.

Payments Processing (cont-d) 1.3 The SC decrypts the file and enters the data into the TSA system, after which the Treasury Information System (TIS) generates respective payment orders (PO) for each payment requests. 1.4 The SC sends POs to the National Bank of Georgia (NBG) electronically in batches (Optimum size of the batch payment orders). The file is encrypted. Accounting entries are first input into the TGL once the SC has validated the electronic payments data and before the SC sends the POs to the NBG for payment. The TIS carry out this input automatically.

Payments Processing (cont-d) 1.5 The NBG executes the POs through RTGS and transfer funds to the commercial bank accounts of Suppliers and individual beneficiaries 1.6 After receipt of advice from the NBG, in substance bank statements, as to the POs that have been settled, the TIS debits the TSA and generates the corresponding accounting entries in the TGL.

Payments Processing (cont-d) 1.7 Afterwards the SC prepares statements for each RT and inputs this data in RTs information container, which is then uploaded in the RT information system. 1.8 For internal transactions, whereby one BI pays tax to the budget, the POs are processed as if they were regular POs except that they will not be sent by the SC to the NBG for payment. 1.9 The Settlement Center reconciles expenditure transactions against the NBG statements on a daily basis. RTs reconcile statements against BOs expenditure statements on monthly bases.

Receipts Processing 2.1 Taxpayers and other Government debtors currently make deposits of funds in commercial banks. These deposits are coded by the debtor. “Treasury Code” have nine digits and contain information on Tax/receipt administering agency, district, tax/receipt type. 2.2 The PO details are inputted by the commercial banks into their electronic transaction processing systems. The commercial banks transfer the funds to the TSA at the NBG via the inter-bank settlement system.

Receipts Processing (cont-d) 2.3 The NBG s the encrypted bank statement of the TSA to the Treasury Settlement Center late in the day payments are made. The Settlements Center decrypts the file and checks it for any obvious errors. 2.4 After the record of the transfer of receipts in the TSA is imported into the CT database, the TIS automatically processes it into accounting entries posted into a double- entry ledger system for revenue.

Receipts Processing (cont-d) 2.5 The Treasury Settlements Center then runs the PO data through its revenue-sharing program. This program allocates the revenues among the 71 budgets (the central government budget and the 70 local government budgets). The TIS generates the POs for each owners, the Settlement Center processes these POs and send them to the NBG for wire transfers to the local budgets bank accounts. 2.6 The Settlements Center sends to the MOF’s Revenue Service a file of the PO data with respective tax payments. This file is not encrypted, but is unreadable to an unauthorized person.

Receipts Processing (cont-d) 2.7 Files of POs in respect of non-tax revenues are sent by the Settlements Center to BIs. 2.8 Files of POs in respect of local budget receipts are sent by the Settlements Center to RTs. 2.9 Files of POs in respect of local budget receipts are sent by the RTs to Local Authorities.

Receipts Processing (cont-d) 2.10 Files of POs in respect of Tax and Customs revenues are sent by the RTs to Local Tax and Customs offices The NBG statement on receipts is reconciled by the Settlements Center against the data in the CT’s database using reconciliation program the next day after the payment is done.