Ensuring transparent oversight of cash flows

A Treasury Single Account (TSA) system reflects more robust internal controls over cash flows into and out of a government account. Among other things, it enables the government to exercise oversight of its cash flows and optimises domestic borrowing and related interest costs. The Constitution sets out a broad framework for managing public money from this perspective. Article 78 stipulates that all revenue received by the federal government, all loans raised, and all money received by it in repayment of any loan shall form part of one consolidated fund, known as the Federal Consolidated Fund (FCF). Other types of money representing government payment obligations shall be kept in the Public Account. Article 79 stipulates that the federal government shall formulate laws to elaborate on the processes to handle public money regarding the FCF and the Public Account. However, it was only in June 2019 that the federal government enacted a Public Financial Management (PFM) Act 2019 to comply with this requirement.