Govt tightens financial management

The federal government has announced stringent financial rules for all government entities, including ministries, divisions, departments, and agencies, to tighten control over cash through “sweeping arrangements” allowing the finance ministry to take over idle public funds in bank accounts. The major change introduced through the “Cash Management and Treasury Single Account Rules 2024” came with the support of international lenders, particularly the International Monetary Fund (IMF) and the Asian Development Bank, to contain fiscal deficit through consolidation of public funds lying unutilized in various accounts. The government had promised the IMF a couple of months ago to make swift progress on the treasury single account to refine forecasting and cash management tools. Under the sweeping arrangements, funds lying in bank accounts are swept out and made part of non-food account No.1 at the close of each banking day, and swept back to bank accounts at the start of banking hours.