## 1blzea2023003 ## Source details **Canonical URL:** [1blzea2023003](https://www.imf.org/-/media/files/publications/cr/2023/english/1blzea2023003.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2023/english/1blzea2023003.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2023/english/1blzea2023003.pdf.json) --- ### Mission context and composition - Mission requested by the Minister of Finance (MOF) of Belize; visited Belmopan and Belize City during the period March 7-20, 2023. - Team: led by Lesley Fisher (FAD) and comprised Sophia Whyte-Givans (CARTAC), Joe Cavanagh and Anand Heeraman (FAD short-term experts). - Funding: mission funded by the Caribbean Regional Assistance Center (CARTAC). - Key interlocutors included: Financial Secretary Joseph Waight; Accountant General Teresita Miranda; Assistant Accountant Generals Theresa Bradley and Carlos Contreras; Business Analyst Alberto Tzib; Budget Director Ms. Zita Magana and Budget Unit staff; meetings with Auditor General’s Department, Belize Tax Service (BTS), Central Bank of Belize (CBB), Central Information Technology Office (CITO), e-Governance and Digitalization Unit, Department of Local Government, Ministry of Economic Development, Ministry of Public Service, Joint Public Accounts Committee (JPAC) Chair, Statistical Institute of Belize, and Inter-American Development Bank representatives. ### Reform objective and context - Belize is planning to transition to accrual accounting over the medium term. - Transition considered an advanced practice on the public financial management (PFM) spectrum; regionally attempted by few comparators (Barbados, Bermuda, Cayman Islands and Curacao). - Reform objectives: - improve transparency and accountability; - shift focus from payments and reconciliations to modern Treasury functions (financial management, cash management, financial reporting). - Full accrual practices may not be achieved in the short term; reform presents opportunities for more efficient procedures, greater cross-cutting collaboration, improved transparency, lower borrowing costs, and potential regional leadership. ### Preconditions and main challenges - Completion of adoption and application of cash based International Public Sector Accounting Standards (IPSAS). - Some progress on IPSAS cash financial statements; disclosure notes yet to be assembled. - Chart of Accounts (CoA) reform needs to be more comprehensive. - Work underway but further work needed to support reporting to IPSAS and Government Finance Statistics Manual 2014 (GFSM 2014) standards. - Financial Management Information System (FMIS) — SmartStream (SS) — requires accruals functionality. - FMIS upgrade should be based on CoA reform and include simple accruals and a fixed asset solution, with others to follow. - A comprehensive architecture should be developed for future enhancements and better integration with other systems. - A 10-year backlog in annual financial statements needs to be cleared. - Need to eradicate backlog of revenue postings affecting recent years. - Asset and liability balances in Below The Line (BTL) accounts must be cleaned up to avoid contaminating the first Balance Sheet under accruals. - Incomplete bank reconciliations must be prioritized. - Several unresolved errors and missing information from counterparts; unclear whether financial statements reflect actual bank balances and transactions. - A roadmap to transition to accruals should be prepared. - Draft cabinet paper from 2021 recommended transition but was not adopted; no plan with realistic timelines and capacity constraints prepared. ### Organizational capacity and resourcing - Treasury structure and staffing: - Treasury establishment: 155 positions, including staff from six district offices, largely responsible for revenue reconciliation. - Current vacancies: 21. - Functional deployment example counts: Payroll (22), Paying-in Section (11), accounts (3), Cash Management (1). - Important functions not performed at scale: cash management, CoA development, in-year reporting, financial management, recording of assets and liabilities. - No unit to prepare financial accounts, maintain legal framework, exercise internal control, provide training, implement risk management, or oversee accounting standards; no manuals and guidelines that are comprehensive. - Recommendation: conduct a strategic review to identify skills gaps, IT requirements and financial resources; develop manuals, operating procedures and a training plan; focus on missing functions and resources needed rather than only tracking vacancies. ### Legal and process environment - Legal framework: fragmented and outdated; some orders/regulations date back to 1965 and refer to British Honduras. - Draft PFM Bill 2021 contains many modernization elements but has not been tabled in Parliament. - Opportunity to review and update draft PFM Bill, strengthen Treasury role and repeal outdated provisions. - Treasury processes are manual and not fully integrated with SS; manual journal entries and postings required. - Oversight and control resourcing gaps: - Internal auditor appointed in MOF but function not devolved to other agencies. - External Audit institution understaffed and requires resources and training to audit backlog and prepare for accrual audits. - JPAC needs staff for briefing and administrative support. ### Change management and coordination - Accounting reforms require change management processes; Treasury lacks a change management culture. - Recommendation: - Create a unit to oversee change management, strategic planning, performance management, risk management, and monitoring and evaluation (M&E). - Establish a PFM coordinating committee chaired by the Financial Secretary to strengthen planning and internal collaboration. ### Table of Recommendations (summary with exact timelines preserved) - Consult on the proposed CoA, with Treasury and others, to meet fiscal and financial reporting needs — Budget Unit and others — ST - Assume leadership and ownership of the CoA when capacity permits — Treasury — MT - Elaborate a strategy for moving SS to accruals — Treasury and CITO — LT - Resolve the issues which hold up closure and issue of past accounts — Treasury — ST - Clean up balances on Below The Line (BTL) accounts — Treasury — MT - Conduct a full internal controls assessment and act on the results. — Treasury — ST - Review all outstanding reconciliations, conduct an age analysis, and determine what is recoverable — Treasury — ST - Develop a systematic approach to follow up on reconciliation issues — Treasury — ST - Prepare an initial roadmap for a transition to accruals, recognizing capacity constraints — Treasury — MT - Undertake a legislative reform project to review and rationalize all PFM legislation and regulations — MOF & Att. General — MT - Repeal older laws and regulations and replace with modern PFM legislation — MOF & Att. General — LT - Provide human, financial and technological resources to the Treasury so it can fulfill all its functions — MOF & MPS — MT → LT - Develop a Government Accounting Manual informed by modern PFM legislation and policy frameworks — Treasury — MT → LT - Develop a CoA Manual — MOF & Treasury — MT - Lead efforts to integrate SS with other systems, to ensure that the FMIS is fit-for-purpose — Treasury — MT - Develop the cash management function as recommended by earlier missions — Treasury — MT - Explore options for extending the TSA to cover more of government’s bank accounts — Treasury, Central Bank — MT - Capture all project bank balances within SS and the financial statements — Treasury, MED — MT - Develop a comprehensive plan to capture, monitor, record, and report on all assets and liabilities — Treasury — MT - Allocate resources in the budget to enhance the efficacy of internal and external audits, and the JPAC. — MOF — ST - Create a unit to oversee change management, strategic planning, performance, risk management and M&E — Treasury, MOF — MT - Establish a PFM committee, chaired by the Financial Secretary, to plan, communicate and collaborate more effectively — MOF — ST - ST = 1-2 YEARS; MT 2-5 YEARS LT MORE THAN 5 YEARS --- ### Transition to accruals: conceptual framework and benefits - Conceptual shift: - Move focus from cash to the wider view of government’s finances; accrue revenues and expenses when earned or incurred; include all material assets and liabilities. - Key differences (preserved wording): - “PURE” CASH - Cash is the only asset accounted for - Receipts and payments included when received or paid - No balance sheet required - Focus is on cash and how it is used - “FULL” ACCRUALS - All material assets and liabilities included - Revenue and expense included when earned or incurred - A balance sheet shows all assets and liabilities, and net worth - Focus on net worth and how it changes, in addition to the focus on cash - Benefits (Box 1 summary): - A comprehensive view of what government earns, spends, owns and owes. - A truer picture of government’s financial performance and position through “net worth”. - Better information for management of assets, liabilities and service costs. - Greater financial discipline and lower fiscal risk. - Greater transparency for Parliament, public and other stakeholders. - Better reputation with donors, lenders and rating agencies, and lower financing costs. ### Stages, timing and typical sequencing - Typical progression: - Start with simple accruals (accrued revenues and expenses, payables and receivables) before moving to more advanced accruals stages. - Very few countries used “big bang”; most transition in stages. - Timeframe guidance: - Even in advanced countries, reforms take 5-10 years. - Phases 1 and 2 can be relatively short – perhaps a year in total. - Phase 3 is the most difficult to predict; phase 4 completes inclusion of all material assets and liabilities. - Recommended initial focus: - Start with simple payables and receivables, and fixed assets (use SS Accounts Payable and Accounts Receivable modules; IDB assisting with SS fixed asset module). ### Key prerequisites to transition (Table 4 preserved content) - ESSENTIAL PREPARATIONS - IT system and accompanying manual procedures: - SS is an accruals-ready system but has been configured for cash accounting; activating accruals in SS requires new procedures to capture accruals transactions. - Chart of Accounts (CoA): - CoA must be accruals-ready, ideally to support IPSAS and Government Finance Statistics (GFS). - RECOMMENDED ADDITIONAL PREPARATIONS - Compliance with the Cash IPSAS. - No backlog of accounts. - A clean-up of accounting data (notably BTL accounts). - Internal control systems, especially bank reconciliations. - A roadmap and detailed plans. - Commitment and capacity (including a dedicated specialist team within the Treasury). ### Readiness: Chart of Accounts (CoA) - Current CoA (introduced in 2000 with SS) has many flaws and is not well suited to accruals: - Segments do not match good practice; used for mixed classifications; designed for cash accounting and does not allow for the full range of assets and liabilities. - Budget Unit is drafting a new CoA; economic segment follows GFSM 2014 structure: - New economic segment is a 7-digit code using the first 3 digits that mimic GFS, with the other 4 digits for local use. - Consultation recommendations: - Treasury, Statistical Institute of Belize (SIB), Ministry of Economic Development (MED), and the Department of Local Government in MLLGRD should be consulted to align central and sub-national CoAs and facilitate consolidation. - CoA could consider capturing spending on gender and climate change. - Box 2: Key Questions to Ask About a CoA (selected): - Can the CoA support budgetary reporting on a cash basis (if the budgetary basis is cash)? - Can the CoA distinguish budgetary receipts/payments from non-budgetary cash flows (e.g., flows affecting BTL accounts)? - Can the CoA readily provide data to support IPSAS-style reporting formats? - Does the CoA accommodate the use of accounting provisions? - Does the CoA include features to support eventual consolidation of other entities? ### Readiness: FMIS (SS) and required system changes - Current SS configuration and gaps: - SS is central for payment, budget execution, accounting and financial reports but configured for cash accounting. - Receipts and payments are classified to differentiate current and capital items, but capital payments/receipts do not create capital items on the balance sheet. - SS uses BTL accounts to record some financial assets and liabilities (advances, deposits, public debt). - No integration between receipts/payments data and financial assets/liabilities (except bank balances). - Required FMIS changes for accruals: - Reconfigure SS with an accruals-ready CoA to capture revenue and expense data by generating requisite postings at correct business process points (Accounts Payable and Accounts Receivable). - Include fixed asset functionality (IDB is providing support for implementation of this SS module). - Continue budget execution controls operating on a cash basis after the switch to accruals. - Longer-term expansions: inventory accounting, closer integration with banking, revenue management, public debt, HR, project accounting systems, and consolidation facilities. ### Clearing the backlog and cleaning the balance sheet - Status of missing years’ accounts (Table 5 preserved) - 2015-16 to 2018-19 — Statements ready? Y; All journals posted? Y; Fully reconciled to bank? N; Disclosure notes ready? N - 2019-20 to 2021-22 — Statements ready? N; All journals posted? N - Revenue journals backlog: - Backlog affects years 2019-20 onwards; Treasury plans to eliminate backlog and close the accounts for these years during 2023; a team has been assembled. - Bank reconciliations: - Accounts prepared without 100 percent bank reconciliations; reconciliation problems at CBB and Ministries/institutions reconciling commercial bank accounts. - BTL accounts problems and exact example balances (from most recent draft statements 2018-19, based on trial balances 2013-14 to 2018-19): - “To Track Debt Services” balance of BZD2.4 billion (38 percent of GDP) - “Payroll Clearing Accounts” balance of BZD144 million (2 percent of GDP) - Suspense balance of BZD361 million (5.7 percent of GDP) - Reported balances of BZD60 million in banks which no longer exist - Balance around BZD80 millions of advances to cities and towns unchanged for five years - 2018-19 BTL accounts include BZD41 million for “Accounts Payable” and BZD60 million for “Accounts Payable Vendors” - Note: Belize GDP in 2023 estimated at BZD6.3bn (IMF dataset). (BZD2 = USD1). - Recommendation: clean up BTL accounts before moving to accruals; review and correct BTL balances, write off or write down unreliable balances, and redesign procedures to prevent recurrence. ### System of Internal Control — observations and actions - COSO components summarized: Control Environment; Risk assessment; Control activities; Information and Communication; Monitoring. - Observed weaknesses (Table 7 summary): - Control Environment: “Soft” controls and tone at the top need stronger communication; MOF units operate in silos; KPIs exist but are not assessed at least semi-annually; performance assessment process is not being done. - Risk Assessment: No formal risk register or documented risk management evident. - Control Activities: Need formalized and integrated documentation of accounting procedures and guidance; revenue arrears not monitored/reported/controlled; no centralized asset register. - Information & Communication: Cross-functional communications (e.g., between Treasury and BTS) not initiated to address challenges such as incomplete bank reconciliations. - Monitoring Activities: Need formalized meetings between Treasury and Sub-Treasuries; no self-assessment mechanisms in place. - Recommendation: review and strengthen internal controls; institute risk registers, SOPs, asset registers, monitoring/self-assessment, and improved training and oversight. ### Incomplete bank reconciliations — exact figures and issues - Backlog and unreconciled amounts: - Dishonored cheques totaling an average of BZD5 million (0.39 percent of actual outturn for 2020-21) annually. - A Payroll Clearing Account with an unreconciled amount of BZD27.7 million. - Unreconciled revenue bank reconciliations from BTS and banks that receive payments on behalf of government. - Issues affecting reconciliations: - Taxpayer deposits lacking unique identifier codes; bank statements not showing breakdown by revenue type. - Failed payments returned to Government’s accounts at the CBB; dishonored cheques can cause reconciliation mismatches that cannot be resolved if the period is closed. - BTS prepares reconciliation and submits journals; Treasury reviews and may return incorrect data to BTS for correction when summaries do not match detailed statements. - Recommendation: eliminate key backlogs; review all outstanding reconciliations, conduct an age analysis, determine recoverable vs unrecoverable amounts, write off unrecoverable amounts; develop SOPs including flow charts/process mapping and escalation paths. ### Cash management, TSA and project accounts - 2020 mission findings reiterated: - Cash management was weak, leading to reliance on expensive short-term borrowings; no cash forecasting, no commitment ceilings, and no procedures or structure for managing cash flows. - TSA limited to some accounts at the CBB; many project accounts in commercial banks were outside Treasury’s scrutiny or control. - Follow-up status: - Some efforts towards cash forecasting were made but not continued; team not operational; only one individual assigned to cash management; no functioning Cash Management Committee. - Treasury monitors a set of around 60 accounts but MOF/MOF could not provide any data or estimates of the number of bank accounts. - Project account Modes (three identified): - Mode 1: Project uses a bank account linked to SS and processes transactions through SS. Preferred option. - Mode 2: Project uses its own account in a commercial bank and provides a monthly accounting return; account balances not captured in SS or government financial statements. - Mode 3: Project uses a bank account entirely outside government’s control (likely in donor’s jurisdiction); SS supplied only summary information. - Recommendation: develop a cash management function, explore extending TSA coverage, capture all project bank balances within SS and the financial statements, and establish a Cash Management Committee (chaired by the Financial Secretary) meeting at least monthly. ### Reporting on assets, liabilities, pensions and fiscal risks - Reporting gaps: - Statement of assets and liabilities submitted for audit is incomplete and limited to cash-based BTL accounts. - Important assets and liabilities not recorded or monitored: fixed assets, payables, receivables including revenue arrears, and public pension liabilities. - Pension liabilities: - Net present value of deficits for the Pension Plan for Public Officials (PPPO) is estimated at 77.1 percent of GDP (concluding statement of the 2023 Article IV Consultation with Belize). - IPSAS requires recognition of accrued liabilities from unfunded staff benefits and disclosure of actuarial valuation in notes. - Revenue arrears: - Section 89 of the Financial Orders (1965) requires Accounting Officers to furnish to the Treasury a return of revenue arrears every six months. - Auditor General’s report of 2014-15 indicated departments had not presented returns of revenue arrears; visits found departments with over BZD320 million in arrears. - Recommendation: prioritize procedures and systems to record all assets and liabilities; develop a comprehensive plan to capture, monitor, record, and report on all assets and liabilities. ### Oversight, audits and parliamentary scrutiny - Weaknesses: - Internal audit: Only one person recently appointed to the Internal Audit Department to support the whole of government. - External audits: Infrequent due to capacity constraints of the Supreme Audit institutions. - JPAC: not fully functional and lacks sufficient technical support. - Recommendation: allocate resources in the budget to enhance the efficacy of internal and external audits, and the JPAC; strengthen capacity and training for audit institutions. ### Capacity development, training and knowledge management (exact figures preserved) - Treasury budget and staffing indicators: - Treasury’s budget has been, on average, approximately 2.9 percent of the MOF’s budget (excluding debt and pension payments) for the last five fiscal years and is projected to be the same in the FY 2024-25. - The Treasury has around 20 per cent of the MOF workforce. - Treasury establishment: 155 staff; currently operates with 21 vacancies. - Training budget (Table 8: Training Budget (BZD) preserved) - FY 19-20: 48,428 - FY 20-21: 28,358 - FY 21-22: 8,225 - FY 22-23: 31,191 - FY 23-24: 89,373 - FY 24-25: 89,373 - 1 - Course Costs: 2,000; 5,044; 38,230; 38,230 - 5 - Miscellaneous: 48,428; 26,358; 8,225; 26,147; 51,143; 51,143 - Observations: - Training budget has accounted for, on average, less than one percent of the Treasury’s total budget for the past five fiscal years. - Forward estimates for FY 2024-25 indicate 1.4 percent of the total Treasury budget is allocated to training. - Most resources allocated to “Miscellaneous” rather than Course Costs. - Recommendation: develop a Training Program to prepare staff to implement more Treasury functions and greater use of technology; develop a Government Accounting Manual and a CoA Manual; establish a Government Accounting Service model to build a cadre of accounting expertise. ### Documentation, processes and systems integration - Documentation needs: - Treasury needs a comprehensive Finance and Accounting Manual (high priority), a CoA manual, SOPs and centralized knowledge management. - Many existing desk-level manuals and user guides exist but require consolidation and updating. - Systems and automation: - Treasury processes are heavily manual; better use of SS functionalities would support cash management, bank reconciliation and financial planning. - Integration opportunities: SS General Ledger could be integrated with RMS, GICS, or CBB's APSSS to enable real-time automated data transfers and reduce manual journal entries. - Recommendation: Treasury should lead systems integration efforts; elaborate a strategy for financial IT systems covering which systems to implement centrally, rules for development in Ministries, priorities and indicative timescales. ### Roadmap, sequencing and implementation team - The Treasury should produce a roadmap to guide transition, probably with external help. - Accruals transition usually requires a small, dedicated team of specialists, often supported with external expertise. - Roadmap action areas: - Build technical capacity in Treasury and Ministries. - Develop accounting system and manual processes with CITO and SS provider. - Decide on mechanism to create accounting standards. - Develop legal framework and documentation (accounting and financial reporting manuals). - Training and awareness raising. - Change management and stakeholder buy-in. - Liaise with the external auditor. ### Donor coordination and technical assistance - Current support: - Treasury receives technical assistance and projects from multiple international development partners (IDPs); IDB providing SS fixed asset module and Projects module support. - Need for coordinated support: - Start with a gap analysis; IDPs should coordinate to avoid duplication and overwhelming the Treasury. - CARTAC can provide tailored support including gap analysis, development of manuals and SOPs, development of a Training Plan, establishment of a change management/risk/M&E unit, strategic planning, and Cash-basis IPSAS training. ### Key recommendations (sections 4.1–4.3 preserved) - 4.1 Legislative Reform - Undertake a comprehensive legislative reform project to review and rationalize all PFM legislation and regulations (MOF & Attorney General’s Ministry, MT) - Repeal older laws and regulations and replace with modern PFM legislation (MOF & Attorney General’s Ministry, LT) - 4.2 Capacity Development - Develop a Government Accounting Manual informed by modern PFM legislation and policy frameworks (Treasury, MT) - Develop a CoA Manual (MOF and the Treasury MT) - Develop the cash management function, following recommendations from earlier missions (Treasury, MT) - Explore options for extending the TSA to cover more of government’s bank accounts (Treasury and CBB, MT) - Capture all project bank balances within SS and the financial statements (Treasury, MED, MT) - Develop a comprehensive plan to capture, monitor, record, and report on all assets and liabilities (Treasury, MT) - 4.3 Change/Reform Management - Provide human, financial and technological resources to the Treasury so it can fulfill all its functions (MOF & Ministry of Public Service, MT → LT) - Allocate resources for staff and training in the budget to enhance the efficacy of internal and external audits, and the JPAC (MOF, ST) - Lead efforts to integrate SS with other systems, to ensure that the FMIS is fit-for-purpose (Treasury, MT) - Create a unit to oversee change management, strategic planning, performance, risk management and M&E (Treasury, Ministry of the Public Service and MOF, MT) - Establish a PFM committee, chaired by the FS, to plan, communicate and collaborate more effectively internally and coordinate donor support (MOF, ST) *Source: IMF mission report (Content unit 1blzea2023003).* ### PREFACE ________________________________________________________________________________________ 6 ### PREFACE ### Mission context and composition - Mission requested by the Minister of Finance (MOF) of Belize; visited Belmopan and Belize City during the period March 7-20, 2023. - Team: led by Lesley Fisher (FAD) and comprised Sophia Whyte-Givans (CARTAC), Joe Cavanagh and Anand Heeraman (FAD short-term experts). - Funding: mission funded by the Caribbean Regional Assistance Center (CARTAC). - Key interlocutors: Financial Secretary Joseph Waight; Accountant General Teresita Miranda; Assistant Accountant Generals Theresa Bradley and Carlos Contreras; Business Analyst Alberto Tzib; Budget Director Ms. Zita Magana and Budget Unit staff; meetings with Auditor General’s Department, Belize Tax Service (BTS), Central Bank of Belize (CBB), Central Information Technology Office (CITO), e-Governance and Digitalization Unit, Department of Local Government, Ministry of Economic Development, Ministry of Public Service, Joint Public Accounts Committee (JPAC) Chair, Statistical Institute of Belize, and Inter-American Development Bank representatives (Ms. Monica Calijuri and Mr. Broderick Watson). ### Mission acknowledgements - Expressed gratitude to Belizean authorities for cooperation and hospitality; special thanks to Accountant General Teresita Miranda, and Assistant Accountant Generals Theresa Bradley and Carlos Contreras for organizing and facilitating access to information. --- ### EXECUTIVE SUMMARY ### Reform objective and context - Belize is planning to transition to accrual accounting over the medium term. - Transition considered an advanced practice on the public financial management (PFM) spectrum; regionally attempted by few comparators (Barbados, Bermuda, Cayman Islands and Curacao). - Strong commitment and enthusiasm for reform from the Treasury’s new leadership. - Reform objectives: improve transparency and accountability; shift focus from payments and reconciliations to modern Treasury functions (financial management, cash management, financial reporting). - Full accrual practices may not be achieved in the short term; reform presents opportunities for more efficient procedures, greater cross-cutting collaboration, improved transparency, lower borrowing costs, and potential regional leadership. ### Preconditions and main challenges (enumerated) - Completion of adoption and application of cash based International Public Sector Accounting Standards (IPSAS). - Some progress on IPSAS cash financial statements; disclosure notes yet to be assembled. - Chart of Accounts (CoA) reform needs to be more comprehensive. - Work underway but further work needed to support reporting to IPSAS and Government Finance Statistics Manual 2014 (GFSM 2014) standards. - Financial Management Information System (FMIS) — SmartStream (SS) — requires accruals functionality. - FMIS upgrade should be based on CoA reform and include simple accruals and a fixed asset solution, with others to follow. - A comprehensive architecture should be developed for future enhancements and better integration with other systems. - A 10-year backlog in annual financial statements needs to be cleared. - Need to eradicate backlog of revenue postings affecting recent years. - Asset and liability balances in Below The Line (BTL) accounts must be cleaned up to avoid contaminating the first Balance Sheet under accruals. - Incomplete bank reconciliations must be prioritized. - Several unresolved errors and missing information from counterparts; unclear whether financial statements reflect actual bank balances and transactions. - A roadmap to transition to accruals should be prepared. - Draft cabinet paper from 2021 recommended transition but was not adopted; no plan with realistic timelines and capacity constraints prepared. ### Organizational capacity and resourcing - Treasury structure: 155 positions, including staff from six district offices, largely responsible for revenue reconciliation. - Current vacancies: 21. - Important functions not performed: cash management, CoA development, in-year reporting, financial management, recording of assets and liabilities. - No unit to prepare financial accounts, maintain legal framework, exercise internal control, provide training, implement risk management, or oversee accounting standards; no manuals and guidelines. - Recommendation to focus on missing functions and resources needed rather than only tracking vacancies. - Treasury should conduct a strategic review to identify skills gaps, IT requirements and financial resources; develop manuals, operating procedures and a training plan. ### Legal and process environment - Legal framework: fragmented and outdated; some orders/regulations date back to 1965 and refer to British Honduras. - Draft PFM Bill 2021 contains many modernization elements but has not been tabled in Parliament. - Opportunity to review and update draft PFM Bill, strengthen Treasury role and repeal outdated provisions. - Treasury processes are manual and not fully integrated with SS; manual journal entries and postings required. - Internal control, external scrutiny, and legislative oversight under-resourced: - Internal auditor appointed in MOF but function not devolved to other agencies. - External Audit institution understaffed and requires resources and training to audit backlog and prepare for accrual audits. - JPAC needs staff for briefing and administrative support. ### Change management - Accounting reforms require change management processes; Treasury lacks a change management culture. - Recommendation to create a unit to oversee change management, strategic planning, performance management, risk management, and monitoring and evaluation (M&E). - Establish a PFM coordinating committee chaired by the Financial Secretary to strengthen planning and internal collaboration. ### Table 1: Table of Recommendations (summary bullets preserving exact timelines) - Consult on the proposed CoA, with Treasury and others, to meet fiscal and financial reporting needs — Budget Unit and others — ST - Assume leadership and ownership of the CoA when capacity permits — Treasury — MT - Elaborate a strategy for moving SS to accruals — Treasury and CITO — LT - Resolve the issues which hold up closure and issue of past accounts — Treasury — ST - Clean up balances on Below The Line (BTL) accounts — Treasury — MT - Conduct a full internal controls assessment and act on the results. — Treasury — ST - Review all outstanding reconciliations, conduct an age analysis, and determine what is recoverable — Treasury — ST - Develop a systematic approach to follow up on reconciliation issues — Treasury — ST - Prepare an initial roadmap for a transition to accruals, recognizing capacity constraints — Treasury — MT - Undertake a legislative reform project to review and rationalize all PFM legislation and regulations — MOF & Att. General — MT - Repeal older laws and regulations and replace with modern PFM legislation — MOF & Att. General — LT - Provide human, financial and technological resources to the Treasury so it can fulfill all its functions — MOF & MPS — MT → LT - Develop a Government Accounting Manual informed by modern PFM legislation and policy frameworks — Treasury — MT → LT - Develop a CoA Manual — MOF & Treasury — MT - Lead efforts to integrate SS with other systems, to ensure that the FMIS is fit-for-purpose — Treasury — MT - Develop the cash management function as recommended by earlier missions — Treasury — MT - Explore options for extending the TSA to cover more of government’s bank accounts — Treasury, Central Bank — MT - Capture all project bank balances within SS and the financial statements — Treasury, MED — MT - Develop a comprehensive plan to capture, monitor, record, and report on all assets and liabilities — Treasury — MT - Allocate resources in the budget to enhance the efficacy of internal and external audits, and the JPAC. — MOF — ST - Create a unit to oversee change management, strategic planning, performance, risk management and M&E — Treasury, MOF — MT - Establish a PFM committee, chaired by the Financial Secretary, to plan, communicate and collaborate more effectively — MOF — ST - ST = 1-2 YEARS; MT 2-5 YEARS LT MORE THAN 5 YEARS --- ### I. INTRODUCTION ### Background points (paragraph-level facts preserved) - A draft Cabinet Memorandum of March 2021 called for the adoption of accrual accounting by the Government of Belize (GoB). - The memorandum suggested preparatory work was needed and claimed that all preconditions for moving to accruals had been met; it called on the Fund for support. - Strengths supporting transition: new Treasury leadership with energy, commitment and enthusiasm for reforms; awareness of key challenges in accounting and proposals to address them; desire to increase transparency and accountability; objective to enhance efficiency through automation and improved internal coordination. - Report structure: Part II describes what transition involves; Part III discusses readiness for transition; Part IV identifies key reforms needed to support accrual accounting. --- ### II. TRANSITION TO ACCRUALS ### Conceptual shift - Transition to accruals moves focus from cash to the wider view of government’s finances. - Accruals accounting seeks to capture all material assets and liabilities, rather than focusing only on cash. ### Table 2: Key Differences between Cash and Accruals Accounting (preserved wording) - “PURE” CASH - Cash is the only asset accounted for - Receipts and payments included when received or paid - No balance sheet required - Focus is on cash and how it is used - “FULL” ACCRUALS - All material assets and liabilities included - Revenue and expense included when earned or incurred - A balance sheet shows all assets and liabilities, and net worth - Focus on net worth and how it changes, in addition to the focus on cash - Note: Between “Pure Cash” and “Full Accruals” there is a variety of approaches best described as “Partial accruals” or “Transition to accruals”. *Source: IMF mission report (PREFACE and EXECUTIVE SUMMARY content).* ### 5. Transition involves the expansion of accounting in several ways. Globally, the switch ### 5. Transition involves the expansion of accounting in several ways. Globally, the switch ### Scope of expansion under accruals - Accruals adoption is often accompanied by the adoption (or adaptation) of International Public Sector Accounting Standards (IPSAS). - Countries moving to accruals must expand accounting in several dimensions: - adding new financial statements; - disclosing additional information in the notes to the accounts; - including more assets and liabilities; - using additional valuation methods; - consolidating all controlled entities. - Table 3: Additional Requirements Under Accruals - Financial Statements: - CASH: Two statements plus disclosure notes - ACCRUALS: Five statements plus disclosure notes - Disclosures: - CASH: The single Cash IPSAS requires and encourages disclosure notes - ACCRUALS: The 44 accruals IPSAS standards require and encourage additional disclosures - Assets and Liabilities: - CASH: Only cash - ACCRUALS: All material assets and liabilities should be included - Valuation methods: - CASH: Only measurement/valuation basis is cash (face value) - ACCRUALS: A variety of methods – cash plus other measures of economic value - Entities included: - CASH: Accounts preparers can decide on the accounting boundary - ACCRUALS: All entities that are owned and controlled by the reporting entity ### Stages and timeline of transition - Very few countries have used a “big bang” approach; most transition in stages. - Typical progression: start with simple accruals (accrued revenues and expenses, payables and receivables) before moving to more advanced accruals stages. - Many countries remain in transition; few advanced countries apply the full requirements of international standards. - The gradualist approach follows the Fund’s 2016 guidance (IMF Technical Note 6 of 2016, “Implementing Accrual Accounting”). - Timeframe expectations: - Even in advanced countries, reforms take 5-10 years. - Longer durations are common in countries without a tradition of accruals and without a cadre of qualified accountants in the public service. ### Benefits and costs of accruals - Transition and accruals bring benefits but require significant effort and cost: new IT systems, new procedures, additional accounting expertise, and strong implementation commitment. - Upfront costs can be significant and should be weighed against long-term benefits. - Box 1: The Benefits of Accruals - A comprehensive view of what government earns, spends, owns and owes: - A full accruals account provides information on all revenues, expenditures, assets and liabilities of the reporting entity. - A truer picture of government’s financial performance and position: - Accruals are less affected by timing of receipts and payments; “net worth” (assets less liabilities) gives a truer picture than cash balances alone. - Better information for management of assets, liabilities and service costs: - Accruals provide monetized information on assets and liabilities and better measures of revenue and cost of services. - Greater financial discipline and lower fiscal risk: - Accruals require systems for tracking assets and liabilities and provide better information on payables, receivables, and significant liabilities such as unfunded pensions. - Greater transparency for Parliament, public and other stakeholders: - Accruals enable publication of annual financial statements using international standards, facilitating comparability and public accessibility. - Better reputation with donors, lenders and rating agencies, and lower financing costs: - Use of international standards and accruals accounts can improve government standing and potentially lower borrowing costs. ### Key prerequisites to transition - Even simple accruals transition requires preparatory work and certain elements in place. Table 4 summarizes prerequisites. - Table 4: Prerequisites to Accruals Transition - ESSENTIAL PREPARATIONS - IT system and accompanying manual procedures: - The accounting system must be capable of handling accruals. In GoB, SS is an accruals-ready system but has been configured for cash accounting. In addition to activating accruals in SS, new procedures will be needed to capture accruals transactions. - Chart of Accounts (CoA): - The CoA must be accruals-ready, ideally to support IPSAS and Government Finance Statistics (GFS). - RECOMMENDED ADDITIONAL PREPARATIONS - Compliance with the Cash IPSAS: - Switching traditional government accounts to a format and presentation which meets the Cash Basis IPSAS provides a solid foundation for transition. - No backlog of accounts: - Prior years’ accounts, under the cash basis, should be finalized to establish the opening balances for the first accruals-based account. - A clean-up of accounting data: - Cash systems are usually better at recording receipts and payments than assets and liabilities. In GoB, SS uses Below The Line (BTL) accounts to record assets and liabilities. Clean up of BTL accounts is important so they record only true assets and liabilities with reliable values. - Internal control systems, especially bank reconciliations: - Reliable internal controls are necessary; otherwise accrual accounts risk being unreliable (“Garbage In, Garbage Out”). - A roadmap and detailed plans: - Complex reforms need careful, rolling planning to align interacting elements, adjust to delays, and engage stakeholders. - Commitment and capacity: - Political and management commitment and suitable capacity are required, usually including a dedicated specialist team, preferably within the Treasury. ### Readiness: Chart of Accounts (CoA) - Current CoA (introduced in 2000 with SS) has many flaws and is not well suited to accruals: - Segments do not match good practice; segments have been used for mixed classifications; CoA was designed for cash accounting and does not allow for the full range of assets and liabilities. - A Budget Unit team is drafting a new CoA; the economic segment follows GFSM 2014 structure: - The new economic segment is a 7-digit code using the first 3 digits that mimic GFS, with the other 4 digits for local use. - Consultation recommendations: - Treasury, Statistical Institute of Belize (SIB), Ministry of Economic Development (MED), and the Department of Local Government in MLLGRD should be consulted to align central and sub-national CoAs and facilitate consolidation. - CoA could consider capturing spending on gender and climate change. - Box 2: Key Questions to Ask About a CoA (selected) - Can the CoA support budgetary reporting on a cash basis (if the budgetary basis is cash)? - Can the CoA distinguish budgetary receipts/payments from non-budgetary cash flows (e.g., flows affecting BTL accounts)? - Can the CoA readily provide data to support IPSAS-style reporting formats (Cash Flow Statement using IPSAS 2 format; Operating Statement; Statement of Changes in Net Assets; Balance Sheet)? - Does the CoA accommodate the use of accounting provisions? - Does the CoA include features to support eventual consolidation of other entities, including elimination adjustments? - Will the CoA work with your accounting system? ### Readiness: FMIS (SS) and required system changes - GoB uses SS as its main financial system with links to other systems; SS is central for payment, budget execution, accounting and financial reports. - SS is currently configured for cash accounting: - Receipts and payments are classified to differentiate current and capital items, but capital payments/receipts do not create capital items on the balance sheet. - SS uses BTL accounts to record some financial assets and liabilities (advances, deposits, public debt). - No integration exists between receipts/payments data and financial assets/liabilities (except for bank balances). - A switch to accruals would require SS suppliers to reconfigure SS with an accruals-ready CoA to: - Capture revenue and expense data by generating requisite postings at correct business process points (Accounts Payable and Accounts Receivable functions to provide simple accruals). - Include fixed asset functionality (fixed asset data and depreciation). IDB is providing support for implementation of this SS module (project at initial stages). - Continue to incorporate budget execution controls operating on a cash basis after the switch to accruals. - Procedural changes: - New user procedures and instructions will be needed (e.g., record invoices when received; periodic inspections of fixed assets to update ledgers for losses and impairments). - Longer-term FMIS expansion for full accruals: - Add modules and integrations for inventory accounting; closer integration with banking, revenue management, public debt, HR, and project accounting systems; and a module/facility to allow consolidation of other entities’ accounts. - IDB supporting use of Projects module in SS for MED and donor/lender reporting needs under the Public Sector Investment Program (PSIP). - Treasury involvement is required in all developments. *Source: mission.* ### 17. GoB needs to elaborate a strategy for financial IT systems. GoB does not have a ### 17. GoB needs to elaborate a strategy for financial IT systems. GoB does not have a ### Strategy for financial IT systems - Finding: GoB does not have a formal strategy for IT systems, or a strategy specifically for financial IT systems. - Current initiatives: IDB program includes some financial system developments based on additional modules in SS; the e-Governance and Digitalization Unit (EGDU) has begun to look at potential for new systems in the digital economy. - Gap: Existing initiatives do not provide a strategic view of how IT systems should develop and interact. - Two key matters a strategy should address: - Which financial systems should be developed and implemented centrally, with priorities and indicative timescales? - The rules which should govern the development of financial systems in the various Ministries and sectors, or government-wide through the e-Governance program, and how these should interact and integrate with central systems to avoid duplication or ensure integration. - Institutional implication: Such a strategy would be one of the principal concerns of any PFM co-ordination committee. ### Complying with the Cash IPSAS - Finding: FTRR requires government accounts to comply with the Cash Basis IPSAS by 2015; no accounts have been submitted since that date. - Status: Treasury is still working on accounts from 2015-16 onwards. - Recent support: A Fund mission in January 2023 focused on design of new financial statements to meet Cash Basis IPSAS; Treasury has been working to apply the new IPSAS-compliant format to the backlog of accounts. - Disclosure notes: Work has focused on main financial statements and additional schedules required by Section 15 of the Finance and Audit (Reform) Act 2011 (FAA), but Treasury still needs to develop a template set of disclosure notes in line with IPSAS and populate them for the backlog of accounts. (Annex 1 referenced for additional guidance.) - Gap analysis: Treasury has not yet carried out a systematic gap analysis of compliance with IPSAS; the mission prepared a simple gap analysis tool (Annex 2) for Treasury use. ### Clearing the Backlog of Accounts - Finding: A backlog of accounts resulted from lack of staff with capacity and responsibility for financial reporting; by 2015 work on financial statements had largely stopped. - Recent action: Treasury assigned responsibility for financial reporting to an Assistant Accountant General and began allocating more resources; CARTAC assisted to develop and adopt an IPSAS-style format and to generate main statements and supporting schedules from trial balances for some missing years. - Table 5: Status of Missing Years’ Accounts - 2015-16 to 2018-19 — Statements ready? Y; All journals posted? Y; Fully reconciled to bank? N; Disclosure notes ready? N - 2019-20 to 2021-22 — Statements ready? N; All journals posted? N - Source: mission. - Revenue journals backlog: - Finding: Backlog of revenue journals accumulated; affects years 2019-20 onwards (very few outstanding journals predate this). - Action: Treasury plans to eliminate the backlog and close the accounts for these years during 2023; Treasury has assembled a team to make a concerted effort to clear the backlog of revenue journals. - Bank reconciliations: - Finding: Accounts have been prepared without the benefit of 100 percent bank reconciliations; Treasury has had problems reconciling accounts at the CBB and Ministries/institutions reconciling commercial bank accounts. - Consequence: Impossible to estimate significance without more systematic study of unvouched sums or size of reconciliation errors (see section G). - Disclosure notes requirement: - Finding: Backlog cannot be cleared until data for disclosure notes is assembled and put into a template (yet to be developed). - Recommendation: Treasury could issue accounts (submit to external auditor) even if not 100 percent complete, accompanied by a prefatory report by the Accountant General acknowledging weaknesses and describing improvement efforts to minimize risk and reputational damage. ### Cleaning up the Balance Sheet - Finding: Statement of Assets and Liabilities is based on BTL accounts within SS; FAA requires such a Statement but it is restricted to some cash-based financial assets and liabilities: - Cash and bank balances - Public debt - Advances (to staff, institutions) - Deposits (by institutions), including Savings Bank client moneys - Special Funds (third party funds and project funds) - Problems with BTL accounts (Box 3): - Contra and control accounts: Incorrect postings can leave asset or liability balances that are accounting artefacts. Example balances in most recent available draft statements (2018-19): - “To Track Debt Services” balance of BZD2.4 billion (38 percent of GDP) - “Payroll Clearing Accounts” balance of BZD144 million (2 percent of GDP) - Suspense and transit accounts: 2018-19 draft statements show a suspense balance of BZD361 million (5.7 percent of GDP), a value little changed over five years. - Unrealistic balances: Reported balances of BZD 60 million in banks which no longer exist; balance around BZD80 millions of advances to cities and towns unchanged for five years. - Internal reconciliation problems: Trial balances showed it was not possible to reconcile movements in reported BTL balances with cash receipts and payments elsewhere in the General Ledger, other than for cash/bank balances. - Items inconsistent with financial rules: 2018-19 BTL accounts include BZD41 million for “Accounts Payable” and BZD60 million for “Accounts Payable Vendors” (payments authorized/requested but not paid by year-end), suggesting Treasury is not following rules to ensure valid payments are made by year-end. - Note: Belize GDP in 2023 estimated at BZD6.3bn (IMF dataset). (BZD2 = USD1). - Source: mission based on trial balances 2013-14 to 2018-19. - Recommendation: - Treasury should clean up BTL accounts as soon as possible and certainly before moving to accruals. - Review and correct BTL balances, write off or write down balances that cannot be deemed real or reliable, and redesign procedures to prevent recurrence. - Ensure transition to accruals begins with an initial balance sheet that is correct. ### System of Internal Control - Definition: Internal control comprises policies, procedures, and systems to safeguard assets, ensure accuracy of financial information, promote efficiency, mitigate fraud and comply with laws and regulations. COSO Internal Control Framework includes five components (Table 6): - Control Environment: An organization's culture and tone that influences employees' control consciousness and behaviors. - Risk assessment: Identifying and analyzing risks that may affect achievement of objectives. - Control activities: Policies and procedures designed to mitigate risks; include segregation of duties, access controls, physical controls, reconciliations, and authorization and approval procedures. - Information and Communication: Identifying, capturing, and communicating relevant information to support decision-making. - Monitoring: Assessing effectiveness of internal control over time and making improvements. - Source: mission, based on the COSO Framework. - Responsibility: Treasury is responsible for maintaining an adequate system of internal control and should oversee and implement an effective internal control framework, both for Treasury processes and in setting government-wide standards. - Observed weaknesses (Table 7 summary): - Control Environment: “Soft” controls and tone at the top are evident but need stronger communication; MOF units operate in silos; KPIs exist but are not assessed at least semi-annually; performance assessment process is not being done. - Risk Assessment: Formal risk register or documented risk management not evident. - Control Activities: Need for formalized and integrated documentation of accounting procedures and guidance; revenue arrears not monitored/reported/controlled; no centralized asset register. - Information & Communication: Cross-functional communications (e.g., between Treasury and Belize Tax Service (BTS)) not initiated to address challenges such as incomplete bank reconciliations. - Monitoring Activities: Need for formalized meetings between Treasury and Sub-Treasuries; no self-assessment mechanisms in place. - Source: mission. - Recommendation: Treasury needs to review and strengthen internal controls to reduce risks of fraud, corruption, and mismanagement; improve training, resources, oversight and enforcement; institute risk registers, SOPs, asset registers, and monitoring/self-assessment mechanisms. ### Incomplete Bank Reconciliations - Definition: Bank reconciliation compares bank account records with accounting records; helps detect errors, fraud, and maintain accurate bank balance information; typically monthly. - Backlog and unreconciled amounts (section 34): - Dishonored cheques totaling an average of BZD5 million (0.39 percent of actual outturn for 2020-21) annually. - A Payroll Clearing Account with an unreconciled amount of BZD 27.7 million. - Unreconciled revenue bank reconciliations from BTS and banks that receive payments on behalf of government. - Issues affecting reconciliations (Box 4): - BTS prepares reconciliation and submits a journal to Treasury; Treasury reviews and may return incorrect data to BTS for correction when summaries do not match detailed statements. - Some taxpayer deposits lack a unique identifier code, making classification and posting to appropriate revenue codes difficult; bank statements do not show breakdown by revenue type. - Failed payments returned to Government’s accounts at the CBB (e.g., amounts sent to non-existent accounts revert to Government’s accounts); dishonored cheques can cause reconciliation mismatches that cannot be resolved if Treasury has closed the relevant period. - Consideration: In time Treasury could consider phasing out cheque payments. - Source: mission. - Recommendation: - Treasury should eliminate key backlogs and develop a systematic approach to reconciliation issues: review all outstanding reconciliations, conduct an age analysis, determine recoverable vs unrecoverable amounts, write off unrecoverable amounts. - Develop Standard Operating Procedures (SOPs) with risk and controls assessment mechanisms, including flow charts/process mapping, identification of missing information types, course of action for omissions, escalation paths, and time to resolution. *Source: mission report content provided.* ### 36. Transition to accruals is a long and complex process; it needs careful planning. The ### 36. Transition to accruals is a long and complex process; it needs careful planning. The ### Overview of transition and main phases - The process of transition, within one organization or within one sector such as budgetary central government, will comprise a number of steps. Figure 2 provides an overview. - At the end of phase 2, the financial statements will already be consistent with IPSAS accruals but will only contain a subset of assets and liabilities. At this stage too, there may not be a Statement of Changes in Net Equity. - During phase 3, the Statement of Changes in Net Equity will be needed. During this phase, new classes of asset and liability will be brought into the account, and related additions will be made to the Operating Statement. - By phase 4, the financial statements will be complete and include all material assets and liabilities. - Timing guidance: - Phases 1 and 2 can be relatively short – perhaps a year in total. - Phase 3 is the most difficult to predict at the outset because it depends on what needs to be brought within the accounts, the accounting policies adopted by the government, and the capacity to undertake the reform. - These questions become clearer at the end of phase 1 and even clearer at the end of phase 2. ### Roadmap, sequencing, and implementation team - The Treasury will need to produce a roadmap to guide the transition project, probably with external help. - Accruals transition usually requires a small, dedicated team of specialists, often supported with external expertise. - The roadmap should set out what is to be achieved and how it is to be achieved, making choices about: - Sequencing of the reform. - Decisions about which standards will apply at each stage and how long each stage might take. - One way to think about sequencing is by considering how the financial statements will develop at each point in transition (see phases above). ### Action areas the roadmap must address - Building or acquiring technical capacity in Treasury and in Ministries. - Developing the accounting system and corresponding manual processes – this will need to involve the Treasury’s IT provider – the Central Information Technology Office (CITO). - Deciding on a mechanism to create accounting standards. - Developing the legal framework. - Producing documentation (accounting and financial reporting manuals). - Training and awareness raising for various types of users. - Instilling change management and other efforts to obtain “buy-in” from MOF and Ministries. - Liaising with the external auditor. ### Initial focus for transition (recommended sequencing) - Subject to detailed planning, GoB should aim to start with simple payables and receivables, and fixed assets. - Rationale: - The full range of assets and liabilities vary in materiality and difficulty (technical or practical difficulty in obtaining accounting data). - Good rule: focus on the most material and simplest first; leave less material or more complex items until later. - Payables and receivables usually require using the Accounts Payable and Accounts Receivable modules built into the SS. - Fixed assets are material, and SS already has a module for fixed asset accounting, which the IDB is helping to activate. - A related challenge is the effort needed to obtain data on legacy assets. - The mission suggests testing this initial transition path during phase 1 to ensure no major obstacles to inclusion in the initial accruals account. ### Recommendations (I. Recommendations) - 3.1 Chart of accounts - Consult on proposals for a revised CoA, with Treasury and others, to ensure it meets fiscal and financial reporting needs (Budget Unit and others, ST) - Assume leadership and ownership of the CoA as soon as capacity permits (Treasury, MT) - 3.2 Financial Management Information Systems - Elaborate a strategy for moving SS to accruals (Treasury, CITO, LT) - 3.3 Reconciliations and cleaning of accounts - Resolve the issues which hold up closure and issue of past accounts (Treasury, ST) - Clean up the balances on Below The Line (BTL) accounts (Treasury, MT) - Conduct a full internal controls assessment and act on the results (Treasury, ST) - Review all outstanding reconciliations, conduct an age analysis, and determine what is recoverable. (Treasury, ST) - Develop a systematic approach to follow up on reconciliation issues. (Treasury, ST) - 3.4 Strategy for transitioning to accruals - Prepare an initial roadmap for a transition to accruals, recognizing capacity constraints (Treasury, MT) ### Moving towards a modern Treasury — PFM legal framework - The PFM legal framework is incomplete and does not adequately reflect Treasury responsibilities. - There is no comprehensive suite of legislation and regulations governing Treasury functions or operations; the current legal framework is outdated and inadequate. - Example of legacy law: British Honduras Stores Orders of 1968 still requires records to be written in ink and on prescribed paper and for the Accountant General to specify the type size and make of the binders that the paper is to be held in. - The PFM Bill 2021 has been in draft stage for a number of years and needs finalization. The draft needs to be updated to reflect the emerging roles of a modern treasury. - Provisions from five laws and regulations form the backbone of the PFM system and should be incorporated in a new PFM law; enactment should be informed by a comprehensive review and rationalization of fragmented PFM legislation and regulations, subject to public consultation and sensitization. - New PFM legislation should: - Empower the Treasury to issue accounting standards and instructions. - Be enabling, not detailed, and refer to international accounting standards in broad terms. - Empower the Treasury to issue accounting standards for central government and, ideally, local government in line with international standards. - Allow standards to be phased over time as capacity and practices develop to limit adverse audit opinions on non-compliance with international standards. - The PFM Bill 2021 should capture all responsibilities of a modern Treasury proposed in Figure 3. ### Capacity constraints — budget, staffing and training - The Treasury appears underfunded. - For the past five years, budgetary allocations to the Treasury have declined relative to the total allocation to the MOF: Treasury’s budget has been, on average, approximately 2.9 percent of the MOF’s budget (excluding debt and pension payments) for the last five fiscal years and is projected to be the same in the FY 2024-25. - The Treasury has around 20 per cent of the MOF workforce. - The trend has been a decline in the absolute value of spending; there may be room for reallocation from underutilized categories to Treasury operations. - Staffing and organization: - The annual budget allocates the number of staff that the Treasury should have in any given fiscal year. - The Treasury’s staff represents a declining percentage of the MOF workforce, although absolute staff numbers have shown some growth. - The Treasury needs to re-organize to undertake tasks it is currently unable to perform and review required skill sets, considering savings from increased automation over time. - The Treasury’s role in maintaining the CoA and cash management is limited due to capacity issues and understaffing. - The Treasury needs human, financial and technological resources to implement more core functions. - Establishment and vacancies: - The Treasury is operating below its establishment of 155 staff. - At no time over the past five years has the Treasury operated at full capacity due to staff turnover, delays in recruitment policies and insufficient skills. - It currently operates with 21 vacancies from this target. - Functional deployment: Payroll (22), Paying-in Section (11), accounts (3), Cash Management (1) (see Annex 4). - Need for a Government Accounting Service: - A cadre of accounting expertise and experience needs to be established across central government. - A Government Accounting Service model, whereby all accountants or finance officers are exposed to Treasury before moving to other positions, could address skills and staffing issues; Barbados is cited as an example. - Treasury should lead training once it has developed capacity. ### Training budget and adequacy - The budget for training has been increasing but remains inadequate to address learning and capacity gaps. - Training budget metrics: - Training budget has accounted for, on average, less than one percent of the Treasury’s total budget for the past five fiscal years. - Forward spending estimates for FY 2024-25 indicate that 1.4 percent of the total Treasury budget is allocated to training. - The allocation masks that most resources are allocated to “Miscellaneous” instead of Course Costs. - Table 8: Training Budget (BZD) - FY 19-20: 48,428 - FY 20-21: 28,358 - FY 21-22: 8,225 - FY 22-23: 31,191 - FY 23-24: 89,373 - FY 24-25: 89,373 - 1 - Course Costs: 2,000; 5,044; 38,230; 38,230 - 5 - Miscellaneous: 48,428; 26,358; 8,225; 26,147; 51,143; 51,143 - A Training Program aimed at preparing staff to implement more treasury functions and greater use of technology is essential. ### Resource requirements for a modern treasury - A move towards a modern treasury requires financial, human and technological resources. - Without adequate financial resources, more staff with requisite expertise cannot be hired. - The transition to accruals usually requires a small, dedicated team of specialists, assisted by occasional outside expertise. - The Financial Management wing of the Treasury should include a function for business analysis and performance monitoring to review efficiency and effectiveness, streamline IT use, and provide M&E on Treasury and government financial systems. ### Knowledge management and documentation - SOPs, manuals and guidelines reflect the governance framework and provide internal control. - Documentation of treasury functions needs to be streamlined and centralized as part of knowledge management. - The Treasury needs both operational and strategic documentation: - Majority of current documentation is operational with limited linkage to policy or legislative framework. - The Treasury needs a comprehensive Finance and Accounting Manual to cover all processes, scenarios, and means of resolution — preparation of such a manual is a high priority. - The manual must be updated periodically and ideally be online. - A CoA manual should accompany the new CoA once ready to be deployed, informed by the legislative framework. - Box 5: Documentation for Treasury Processes (selected items) - Various documents on cash management and Excel spreadsheet and guidance on cash forecasting - Debt Management Desk Manual - Check Printing Desk Instructions - GICS Reversal of Receipts Manual 2019 - Guidelines for the Preparation of Personnel files before submission to the Treasury Department 2021 - Payables Manual - Pay Advance Process - Payroll Computation Process - Pension Payment Procedures - Policy on Dishonored Cheques 2017 - Purchasing Operations Manual 2002 - Reconciliations Manual - Step-By-Step Instructions for the Printing of Cheques for Transaction in Smart Stream Payables. - Steps for Creating a Purchasing Order in SmartStream - User Manual for Cheque Processing 2016 - Users’ Manual for Payment Processing: SmartStream to APSS (Oct 2018 version) - Vendor Accounts User Manual 2014: Step-By-Steps Instructions for the Creation ### Efficiency of Treasury processes and systems integration - Processes in the Treasury are heavily manual. - The Treasury relies on other departments, such as BTS, for information to perform reconciliations. - BTS submits a summary sheet and supporting documentation in large bundles; officers review stacks of documents and check back each summary sheet. - Errors create delays in obtaining supporting information and coordination challenges. - Better use of SS functionalities would bring benefits: - SS can support cash management, bank reconciliation, and financial planning. - Automation facilitates timely decision-making, helps identify discrepancies, reduces errors, and frees up time for other financial management functions. - Greater integration with other systems would reduce workload and errors: - SS General Ledger could be integrated with RMS, GICS, or CBB's APSSS to enable real-time automated data transfers, minimize differences between cash account and bank balances, and reduce manual journal entries. - Integration can provide real-time access to information, streamline workflows, reduce delays, automatically validate and reconcile data, and reduce discrepancies. - Treasury should lead the process for systems integration. *Source: mission; Government of Belize documents as cited in the text.* ### 56. A 2020 Fund mission ### 56. A 2020 Fund mission ### Cash management weaknesses and Treasury capacity - 2020 mission findings: - Cash management was weak, leading to reliance on expensive short-term borrowings. - No cash forecasting, no commitment ceilings, and no procedures or structure for managing cash flows. - Treasury Single Account (TSA) was limited to some accounts at the CBB (for the Consolidated Fund and special project funds). - Many project accounts in commercial banks were outside Treasury’s scrutiny or control. - Recommendations made for a cash management framework and system, and for greater scrutiny of project accounts in commercial banks. - Follow-up status: - Treasury made some efforts towards cash forecasting, but these were not continued, and the team is still not operational. - There has been little progress since 2020 in building cash management capacity. - Only one individual in the Treasury is assigned to cash management; the function has not progressed or become active. - There is no functioning Cash Management Committee. - No survey of banking or accounts outside the TSA; unclear whether there is an active TSA—Treasury monitors a set of around 60 accounts. - Treasury and MOF could not provide any data or estimates of the number of bank accounts. - No progress on using SS modules to assist cash management as previously identified. ### Importance of a TSA and cash management system - Key impacts: - An effective TSA and cash management system pool liquidity and manage cash flows, reducing the need for borrowing and recourse to short-term financing. - Recommendation reiterated: - The recommendations from the 2020 mission remain relevant. - Institutional requirement: - Establishment of a Cash Management Committee is essential; MOF needs to institute such a committee meeting at least monthly to receive Treasury’s cash forecasts and decide responses to cash shortages or surpluses. - Typical composition: chaired by the Financial Secretary, with representatives from Treasury, Budget, Revenue Departments, MED and CBB. ### Project accounts outside TSA — three identified Modes - Mode 1: - The project uses a bank account linked to SS and processes transactions through SS. Preferred option; brings project finances within government systems. - Mode 2: - The project uses its own account in a commercial bank and provides a monthly accounting return summarizing expenditures; records matching revenue. No account balance information is shared with SS despite being government accounts. - Mode 2 poses a problem: these account balances are not captured in SS and in the government’s financial statements (as required by the Cash Basis IPSAS). - Mode 3: - The project uses a bank account entirely outside government’s control (likely in the donor’s jurisdiction); SS is supplied only with summary information on expenditures and matching revenues. - Consequences: - Modes 2 and 3 create reconciliation challenges and prevent detailed analysis of expenditures by type. - Cash balances reported in government annual financial statements exclude an unknown number of project accounts in commercial banks. ### Reporting on assets and liabilities - Current practice and gaps: - Treasury submits a statement of assets and liabilities at end of financial year for audit, but the information is incomplete. - Treasury reports assets and liabilities linked to cash accounting approach (BTL accounts) only. - Important assets and liabilities are not recorded or monitored: fixed assets, payables, receivables including revenue arrears, and public pension liabilities. - Fixed assets and asset register: - No government-wide or centralized process to identify, record, and safeguard government's assets. - Lack of a fixed asset register limits oversight and increases risk of inefficient usage, theft, loss, or disposal without proper recording. - Pension liabilities: - Government's unfunded pension liability is not included in the statement of assets and liabilities. - Net present value of deficits for the Pension Plan for Public Officials (PPPO) is estimated at 77.1 percent of GDP (concluding statement of the 2023 Article IV Consultation with Belize). - IPSAS requires recognition of accrued liabilities from unfunded staff benefits and disclosure of actuarial valuation in notes. - Revenue arrears: - Section 89 of the Financial Orders (1965) requires Accounting Officers to furnish to the Treasury a return of revenue arrears every six months. - The Auditor General’s report of 2014-15 indicated departments had not presented returns of revenue arrears; visits found departments with over BZD320 million in arrears, while others did not submit returns. - Fiscal risk: - Underreporting of assets, unfunded pension liabilities, and revenue arrears present fiscal risks. - Treasury should prioritize procedures and systems to record all assets and liabilities to enable prompt resolution and accurate financial reporting. ### Support for accountability and oversight - Observed weaknesses: - Internal audit: Only one person recently appointed to the Internal Audit Department to support the whole of government. - External audits: Infrequent due to capacity constraints of the Supreme Audit institutions, reducing audit coverage and increasing risk of waste, errors, omissions, financial irregularities, and corruption. - Parliamentary oversight: The Joint Public Accounts Committee (JPAC) is not fully functional and lacks sufficient technical support to probe audited financial statements and other reports. - Needs: - Internal Audit, Auditor General, and JPAC require resources and training. ### Change management and institutional coordination - Change management imperatives: - Introduce and institutionalize a culture of change management, risk management, and monitoring and evaluation. - Implement strategic planning to develop a compelling vision and mission to motivate staff and improve performance. - Transformation will require more staff or more efficient staff to assume expanded treasury functions. - Organizational structure and staffing: - Existing organizational structure is not prepared for transformation into a modern treasury. - Treasury plans to request 11 new positions from the Ministry of the Public Service's Job Classification and Compensation Unit. - The 11 new positions do not include strategic and emerging functions or responsibilities for core functions currently administered by MOF. - The revised staff establishment should consider key vacancies and skills gaps. - Institutional assessment and talent management: - An organizational review or institutional assessment should inform a talent management framework covering the employee life cycle from recruitment to separation. - Human capital development is essential for Treasury transformation and gradual expansion of core functions. - Change Management Unit: - Create a small dedicated unit for reform implementation, strategic planning, performance and risk management, monitoring and evaluation, and training plan development. - Institutional coordination: - Strengthen communication and institutionalize coordination mechanisms between Treasury and counterparts (e.g., BTS, CBB) through regular meetings and documented procedures on escalation. - Define Treasury’s main relationships as operational (staffing and IT), transactional (account management, expenditure processing, payroll, revenue, debt), and accountability (MOF, external Auditor, Assembly, and IDPs). - Establish a PFM Reform Committee at senior levels of government, chaired by the Financial Secretary, to plan, communicate, collaborate, and implement PFM reform more effectively. ### Technical assistance and donor coordination - Current support: - Treasury is receiving technical assistance and benefiting from projects financed by a number of international development partners (IDPs). - Main IT benefits expected: proposed cash management software and a proposed fixed asset management module in SS. - Need for coordinated support: - Many stakeholders and priority reforms require effective donor coordination. - A gap analysis should be the starting point; IDPs working in the PFM sphere should collaborate and share information to avoid duplication and overwhelming the Treasury. - CARTAC can provide technical assistance in a number of capacity-building areas. - Box 6: Proposed tailored support that CARTAC can provide: - Gap analysis of the Treasury needs - Development of manuals, Standard Operating Procedures (SOPs) and/or guidelines - Development of a Training Plan - Support for the establishment of a unit to include change management, risk management, M&E, strategic planning - Strategic planning, risk management and performance management - Cash-basis IPSAS Training ### Key recommendations (sections 4.1–4.3) - 4.1 Legislative Reform - Undertake a comprehensive legislative reform project to review and rationalize all PFM legislation and regulations (MOF & Attorney General’s Ministry, MT) - Repeal older laws and regulations and replace with modern PFM legislation (MOF & Attorney General’s Ministry, LT) - 4.2 Capacity Development - Develop a Government Accounting Manual informed by modern PFM legislation and policy frameworks (Treasury, MT) - Develop a CoA Manual (MOF and the Treasury MT) - Develop the cash management function, following recommendations from earlier missions (Treasury, MT) - Explore options for extending the TSA to cover more of government’s bank accounts (Treasury and CBB, MT) - Capture all project bank balances within SS and the financial statements (Treasury, MED, MT) - Develop a comprehensive plan to capture, monitor, record, and report on all assets and liabilities (Treasury, MT) - 4.3 Change/Reform Management - Provide human, financial and technological resources to the Treasury so it can fulfill all its functions (MOF & Ministry of Public Service, MT → LT) - Allocate resources for staff and training in the budget to enhance the efficacy of internal and external audits, and the JPAC (MOF, ST) - Lead efforts to integrate SS with other systems, to ensure that the FMIS is fit-for-purpose (Treasury, MT) - Create a unit to oversee change management, strategic planning, performance, risk management and M&E (Treasury, Ministry of the Public Service and MOF, MT) - Establish a PFM committee, chaired by the FS, to plan, communicate and collaborate more effectively internally and coordinate donor support (MOF, ST) *Source: 56. A 2020 Fund mission — Belize: Technical assistance report— Public Investment Management Assessment – March 2020 (extracted chapter content).* ### Annex 2: A Gap Analysis Tool for the 2017 Cash Basis IPSAS ### Annex 2: A Gap Analysis Tool for the 2017 Cash Basis IPSAS ### Mandatory requirements (Part 1 of the Standard) — compliance checklist - Statement of Compliance (1.1.6) - Key question: Are the notes and other material accompanying the financial statements clear about the degree of compliance with IPSAS, and any significant departures? - Accounting basis (1.2.2 and 1.3.5) - Key question: Are the main financial statements prepared on a cash basis? If not, is this explained in the notes to the financial statements? - Cash and Cash Equivalents (1.2.3) - Key question: Do the main financial statements include cash and cash equivalents, as defined in the standard? Are any deviations or omissions explained in the notes to the accounts? - Overdrafts (1.2.4) - Key question: Are overdrafts included as part of cash balances? If so, are any of such a size and permanence that they should be considered as borrowing rather than a cash balance? - Controlled Cash (1.2.6 and 1.3.4 and 1.3.6) - Key question: Does the statement of cash receipts and payments include all the receipts, payments and balances of cash which are controlled by the entity? - Financial Statements (1.3.4) - Key question: Do the accounts include the two principal statements required by the cash IPSAS: a statement of cash receipts and payments, and a comparison of budget and actual amounts? - Notes to the Financial Statements (1.3.8) - Key question: Are the notes to the account consistent with the type of material envisaged by the Standard? - Additional Statements (1.3.9) - Key question: Are any additional principal statements restricted to cash-based statements – i.e., on the same basis as the two main statements above? - Non-cash disclosures (1.3.10) - Key question: Are any non-cash (i.e. accruals-type) disclosures restricted to the notes and separate from the main financial statements? - Minimal content of Statement of Cash Receipts and Payments (1.3.12) - Key question: Does this statement include total cash receipts and cash payments, using an appropriate sub-classification, as well as the beginning and closing cash balances? - Gross, not Net, Accounting (1.3.13 and 1.3.20) - Key question: Are all cash flows reported on a gross basis, except in the few circumstances where net reporting can be justified? - Fair Presentation (1.3.14) - Key question: Are line items, headings and subheadings presented in a way so as to fairly present the entity’s cash receipts, payments and balances? - Classification (1.3.17) - Key question: Is the classification system both useful and intelligible to the general user? Does it tell users what they need to know about the entity’s finances? - External and Other Assistance (1.3.18 and 2.1.90 et seq) - Key question: Although full disclosure on external assistance is recommended (see Part 2), is there at least some minimal useful disclosure about external assistance received? - Structure of the Notes (1.3.25) - Key question: Do the disclosure notes include both accounting policies and additional information in support of the main financial statements? - Systematic Presentation (1.3.26) - Key question: Are disclosure notes presented in a systematic manner, cross-referenced to the relevant items in the main financial statements? - Accounting policies (1.3.27–1.3.32) - Key question: Is there sufficient description of accounting policies in the disclosure notes? - Reporting period (1.4.1) - Key question: Is the accounting period made clear, and is it also clear if there has been any variation from the annual reporting cycle or date? - Timeliness (1.4.4) - Key question: Are the accounts published within 6 months of the end of period? - Authorization Date (1.4.5) - Key question: Do the accounts disclose the date when they were authorized for issue and who authorized their issue? - Information about the entity (1.4.7) - Key question: Do the disclosure notes provide sufficient information about the reporting entity and its functions? - Restrictions on Cash Balances (1.4.9) - Key question: Do the disclosure notes provide information about any restrictions on the entity’s access to cash balances or borrowings? - Consistency of Presentation (1.4.13) - Key question: Is the presentation of financial statements consistent from year to year, except where improvements are made in response to new standards or a review of reporting? - Comparative Information (1.4.16) - Key question: Is comparable prior year data provided for all numerical data in both the main financial statements and accompanying disclosure notes? - Need for Restatement (1.4.19) - Key question: If there has been a reclassification or new presentation in year, have the prior year’s numbers been reclassified as well to assist comparability? If not, are the reasons explained? - Identification of Financial Statements (1.4.21–1.4.23) - Key question: Are the financial statements (including disclosure notes) clearly identified and distinguished from other information in the same published document? Is the nature and amount of such errors disclosed in the notes to the accounts? - Restatement and Correction of Errors (1.5.1–1.5.2) - Key question: If there are any corrections to prior year errors have these been made through amending the opening cash balance and restating prior year figures? - Foreign Currency (1.6.2 et seq) - Key question: Have any cash payments and receipts in foreign currency been recorded using the spot exchange rate for the day of transaction? Are closing cash balances in foreign currency recorded using the closing rate? And are any reconciliation differences recorded as exchange gains or losses? - Budget Information (1.7.1 et seq) - Key question: Does the comparison of budget and actual amounts include (a) original and final budget amounts (b) actual amounts on a comparable basis and (c) in a disclosure note, explanations for material differences between budget and actual amounts? - Budget changes (1.7.23) - Key question: Do the disclosure notes include an explanation for material differences between original and final budget amounts? - Budgetary basis, period and scope (1.7.33–1.7.40) - Key question: Do the disclosure notes explain the budgetary basis, especially where this may differ from a pure cash basis or where the budget uses a different classification system; the period of the budget; and the entities covered by the budget? - Reconciliation of budgetary basis to cash basis (1.7.41) - Key question: Where the budget has a different basis or coverage than the statement of cash receipts and payments, has any difference between total payments and receipts in the two presentations been reconciled and explained on the face of the Statement of budget comparison or in the disclosure notes? - Budget and Actuals do not need prior year (1.7.45) - Key question: The Statement of Budget and Actual Amounts – does it include prior year data? (It should not) ### Encouraged or recommended disclosures (Part 2 of the Standard) - Going Concern (2.1.3) - Key question: Has going concern been considered, and if it is a possibility, has this been disclosed? - Administered Transactions outside entity accounts (2.1.7) - Key question: Does the entity administer transactions on behalf of others, using accounts outside its control? If so, do the disclosure notes provide information on the amount and nature of these transactions? - Administered Transactions using entity accounts (2.1.8) - Key question: Does the entity administer transactions on behalf of others, using its own accounts? If so, are these included in the statement of cash receipts and payments? Would net accounting be appropriate? Are there accompanying disclosures in the notes? - Major Classes of Cash Flow (2.1.14) - Key question: Do the financial statements and/or disclosure notes provide sufficient and appropriate information on major classes of cash flow, including borrowings? - Related Party Disclosures (2.1.22) - Key question: Do the disclosure notes provide sufficient and appropriate information on transactions with Related Parties, as recommended by IPSAS 20, including information on the aggregate remuneration of key management personnel? - Assets, Liabilities and Budget Comparisons (2.1.25–2.1.27) - Key question: Do the disclosure notes provide additional accruals-type disclosures about assets, liabilities, revenues and expenses of the entity? Do these disclosures meet the qualitative characteristics of financial information, are they clearly described, and readily understood? - Budget Comparisons (2.1.28–2.1.32) - Key question: If relevant, is there a cross-reference to other documents with information on service achievements or multi-year budget performance? - Consolidated Financial Statements (2.1.37 et seq) - Key question: Is the scope of consolidation made clear, including a list of entities included and excluded, reasons for not consolidating, as well as acquisitions and disposals of controlled entities? - Joint Arrangements (2.1.62) - Key question: Are there disclosures about any joint arrangements which are necessary for a fair presentation of the cash receipts and payments of the entity during the period? - Hyperinflationary Economies (2.1.66) - Key question: If there is hyperinflation (typically 100 percent or more over 3 years), are financial results restated using inflation-adjusted data? - Payments by Third Parties (2.1.77) - Key question: If the entity has been advised, or otherwise verified, that there were any payments or settlements made directly on behalf of the entity by third parties, have these been reported in a disclosure note? - External Assistance — official assistance under a binding agreement (2.1.90) - Key question: Has the entity made the recommended disclosures about external assistance received during the period, including the balance of undrawn assistance? - Other Assistance — voluntary by NGOs, individuals etc. (2.1.91) - Key question: Has the entity made the recommended disclosures about other assistance received during the period, including the balance of undrawn assistance? - Goods and Services Received in kind (2.1.100) - Key question: Has the entity made the recommended disclosures about assistance received directly in the form of goods and services, and the basis on which this has been valued? - Transition to Accruals (2.2.1 et seq) - Key question: If the entity is considering transition to IPSAS accrual, has it adopted the IPSAS 2 format for the Statement of cash receipts and payments? Started to expand the consolidation boundary to include more government bodies? Or expand its accruals-type disclosures? ### Annex 5: The Treasury Single Account and Cash Management — core points - Definition and purpose of a TSA - A TSA is a set of government bank accounts that have been linked to provide a consolidated view of government cash resources. - A TSA can be a single account or a set of linked accounts through which the government transacts all its receipts and payments; the TSA acts in the background to create a virtual “super-account”. - Pooling and control - A TSA allows government funds in many accounts to be pooled, bringing together government cash resources and enabling use irrespective of end use. - Under a TSA, tracking of individual cash transactions for control and reporting is achieved through the accounting system, not by holding cash in transaction-specific or institution-specific bank accounts. - TSA coverage requirements and considerations - Minimum coverage: all central government entities and their transactions, including accounts managed by social security funds and other trust funds, extra-budgetary funds (EBFs), and autonomous government entities. - Ideal/extended coverage: accounts handling loans from multilateral institutions and donor aid resources (subject to negotiation and donor/lender agreement). - Possible extension: subnational levels of government and other public institutions through correspondent accounts. - Important qualifications: - Pooling may need legislative authority, especially where funds are held in trust. - Operation depends on banking-system functionality; Real-Time Gross Settlement (RTGS) systems for bank clearance and settlement have made it easier to implement TSAs. - Ability to sweep all TSA accounts at the end of the day is crucial. - There is no point in bringing accounts into the TSA if the balances cannot be pooled. - Cash management objectives - To ensure that adequate cash is available to pay for expenditures when they are due. - To borrow only when needed and to minimize government borrowing costs. - To maximize returns on idle cash and avoid accumulation of unremunerated or low yielding government deposits. - To manage risks by investing temporary surpluses productively, against adequate collateral. - Cash management features and institutional arrangements - A Cash Management Unit, usually within the Treasury, to support the cash management function. - A TSA is not a precondition for cash management, but pooling reduces short-term borrowing needs and heightens the importance of cash management. - Regular cash flow forecasts produced by the Cash Management Unit based on updated projections from revenue departments and budget execution analysis. - A Cash Management Committee (usually chaired by the Financial Secretary) with representatives from Treasury, Budget, revenue departments, the Central Bank and donor/lender coordination units to decide responses to cash shortfalls or surpluses. - Availability of short-term financing options (temporary overdraft, Treasury Bills, and other short-term instruments) and instruments to capitalize on surplus cash balances. - Liaison with the Central Bank for government banking, issuance of government securities, and managing the relationship with the banking sector affected by TSA implementation. ### Selected exact numeric and temporal references from the text - Timeliness requirement: accounts published within 6 months of the end of period (1.4.4). - Hyperinflation definition note: typically 100 percent or more over 3 years (2.1.66). - References to specific Standard paragraphs and ranges: 1.1.6; 1.2.2; 1.3.5; 1.2.3; 1.2.4; 1.2.6; 1.3.4; 1.3.8; 1.3.9; 1.3.10; 1.3.12; 1.3.13; 1.3.20; 1.3.14; 1.3.17; 1.3.18; 1.3.25; 1.3.26; 1.3.27–1.3.32; 1.4.1; 1.4.5; 1.4.7; 1.4.9; 1.4.13; 1.4.16; 1.4.19; 1.4.21–1.4.23; 1.5.1–1.5.2; 1.6.2 et seq; 1.7.1 et seq; 1.7.23; 1.7.33–1.7.40; 1.7.41; 1.7.45; 2.1.3; 2.1.7; 2.1.8; 2.1.14; 2.1.22; 2.1.25–2.1.27; 2.1.28–2.1.32; 2.1.37 et seq; 2.1.62; 2.1.66; 2.1.77; 2.1.90; 2.1.91; 2.1.100; 2.2.1 et seq. *Annex 2: A Gap Analysis Tool for the 2017 Cash Basis IPSAS — IMF content unit 1blzea2023003* --- _Source: https://www.imf.org/-/media/files/publications/cr/2023/english/1blzea2023003.pdf_