Assisting Treasury Department to Define Software Requirements for Cash and Liquidity Management Strategy

Project Description:

PMCG, as part of the consortium led by Tetra Tech ARD, and within the USAID-funded program “Good Governance Initiative (GGI)”, is providing support to the Cash Management and Projection Department (CMPD) of the State Treasury to identify points in the cash management process where steps can be automated and/or interactions are required with other information technology (IT) systems (systems both internal to the Treasury Information System (TIS) and systems external to it). 

The mission of the State Treasury is to ensure comprehensive, effective and transparent public financial management and to ensure efficient and safe investment of public funds. Among the required tasks needed to carry out its mission is to develop reliable and appropriate mechanisms and instruments for public cash management. 

In line with the reform agenda of public funds management (PFM), legal entities of public law (LEPLs), non-commercial NGOs, autonomous republics, and local authorities have opened their budget accounts within a treasury single account (TSA) to be managed by a common system. As a result of the reform, funds accumulated in the TSA have increased significantly. 

In order to manage these funds effectively, a new department was created within the Treasury Service: the “Cash Management and Projection Department” (CMPD). This department is divided into two divisions. The first is responsible for, among other things, projections of cash flow of the TSA; identifying and assessing financial instruments in the Georgian financial sector, where money can be allocated effectively; and identifying and assessing financial risks and relevant mitigation measures. The second division is responsible for organizing, managing and executing loans from funds drawn from the TSA with commercial banks under the direction of the CMPD; issuing sell orders to the National Bank of Georgia; tracking repayment including interest on these loans; and ensuring that all transactions are reflected appropriately in the TSA ledger system.

In this effort, PMCG is assisting the CMPD to establish requirements, including nature and cost, for a software system to implement tracking of those transactions by the CMPD within the TSA ledger system. 

As part of its effort to strengthen public finance management the Treasury is, with the assistance of a separate consultant hired by the EU, designing a cash and liquidity management strategy for the CMPD and preparing technical and functional requirements for cash planning, liquidity management and accounting software. A consultant from PMCG is working with the EU consultant to identify specific actions (transactions) within the CMPD’s cash management process where these actions must be reflected in the TSA ledger system or with other systems external to the TIS (e.g. National Bank of Georgia).

In addition, PMCG’s team is carrying out the following activities:

• Working with Treasury personnel to develop a description (i.e. a software requirements specification (SRS)) of the technical methods and requirements necessary to post these transactions within the TSA or other systems
• Working with Treasury personnel to develop an interface control document (ICD) detailing the interface with which the new software system will interact
• Examining the Treasury’s existing software systems to establish whether existing components of that software could practically and economically be adapted or extended for the purpose of posting transactions to the TSA ledger and other systems
• Surveying commercially available financial management systems in an effort to identify commercial off-the-shelf (COTS) solutions which would address the CMPD’s requirements, for both local (Georgian) and international markets
• Providing an estimate of the scope of the effort to implement the required software functionality
• Making recommendations as to whether this software system should be procured through a third party or developed internally by the Treasury, taking into account the total cost of ownership (i.e. including the cost of integration with the existing TIS and long-term maintenance and licensing, if purchased off-the-shelf)

Background information:

USAID has awarded Tetra Tech ARD with a 5-year contract under the Office of Democracy and Governance, whose purpose is to support the Government of Georgia in strengthening overall transparency, accountability and effectiveness of selected governance and service delivery systems. GGI’s work targets the legislative and executive branches at both the central and local government levels. To ensure greater government accountability, GGI works with government and civil society representatives to enhance public participation and disseminate public information about key reforms. This activity addresses the Governing Justly and Democratically Objective of U.S. Government Foreign Assistance, and especially the promotion of well-governed states and civil society areas.

The objectives of GGI are to improve administrative and financial management of public institutions at all levels, to increase civic engagement and improved access to independent, reliable and balanced information relevant to Georgia’s good governance, to strengthen policy development and lawmaking processes and to strengthen institutional oversight of government.

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