CHAPTER
ONE
1.1 INTRODUCTION
Treasury
single account is a public accounting system under which all government revenue,
receipts and income are collected into single account, usually maintained by
the country’s Central Bank and all payments done through this account as well.
Also
treasury single account come into existence in Nigeria on 15th of
September 2015 by the new elected government president Muhammed Buhari in other
to utilize public fund and maximize corruption in the country. Although Treasury
Single Account has been in existence in some countries before now, such as United
Kingdom, France and some part of the United State of American (U.S.A.). The
purpose is primarily to ensure accountability of government revenue, enhance
transparency and avoid misapplication of public funds. The maintenance of Treasury
Single Account will help to ensure proper cash management by eliminating the funds
usually left with different deposit money banks and in a way of enhancing
reconciliation of revenue collection and payment.
Section
80(1) of the 1999 constitution as amended states “ All revenue or other money
raised or received by the federation (not being revenue or other money raised
or payable under this constitution or any act of the National assembly into any
other public fund of the federation established for a specific purpose) shall
be paid into and form one consolidated revenue fund of the federation”.
Successive governments have continued to operate multiple accounts for the
collection and spending of government revenue in flagrant disregard to the
provision of the constitution which required that all government revenues
should be remitted into a single account. It was not until 2012 that government
ran a pilot scheme for a single account using 217 ministries, department and
agencies as a test case.
The
pilot scheme saved Nigeria about N500
billion in frivolous spending. The success of the pilot scheme motivated the
government to fully implement Treasury Single Account (TSA), leading to the
directives to banks to implement the technology platform that will help
accommodate the Treasury Single Account (TSA) scheme. The recent directive by
President Muhammed Buhari that all government revenues should be remitted to a
treasury single account is in consonance with this programme and in compliance
with the provisions of the 1999 constitution Central Bank of Nigerian, 2015
(CBN 2015).
The
central bank has opened a Consolidated Revenue Account to receive all
government revenue and effect payments through this account. This is the
treasury single account. All Ministries, Departments and Agencies are expected
to remit their revenue collections to this account through the individual
Deposit Money Banks who act has collection agents. This means that the money
deposit banks will continue to maintain
revenue collection accounts for Ministries, Department and Agencies but all
money collected by these banks will have be remitted into the Consolidated
Revenue Accounts with the (CBN) Central Banks of Nigeria at the end of each
banking day.
Different
types of accounts could be maintained under a Treasury Single Account main
accounts, subsidiary or sub-accounts and Zero balance account. Other types of
accounts that could be operated include imprest
accounts, transit account and
correspondence accounts. These accounts are maintained for transaction purposes
for funds flowing in and out of the Treasury Single Account.
Before
the adoption of Treasury Single Account by the Buhari Administration, Nigeria
public accounting system was in fragmented accounts operated by government
agencies for government revenues, inccomes and receipts, which in the recent
past facilities leakages of legitimate income meant for the federation account.
Treasury Single Account is an initiative of the International Monetary Fund
(IMF) / World Bank in June 2010. It is a key component of the economy reform
programme. Treasury Single Account is an essential tool for emerging market and
low income countries like Nigeria with fragmented systems for handling
government receipts and payments.
The
federal government Treasury Single Account (TSA) protect, which seeks to
establish a unified structure of government bank accounts, could be the single
most effective mechanism for dealing with corruption in cash management in
Ministries and Agencies, business day has learnt.
The
initiative is being championed by the federal Ministry of Finance with the
office of the Accountant General of the federation serving as the implementing
agency in active collaboration with the Central Bank of Nigerian (CBN). The
project is inspired by global best practices long established by countries
across the world and has a proven record of enhancing oversight and control of
government cash resources.
According
to a review document seen by business day, the new initiative should help to
reverse the situation where idle cash balances in bank account for Ministries,
Departments and Agencies (MDA’s) often fail to earn market related
renumeration.
1.2 STATEMENT
OF THE PROBLEM
- The
implementation of the TSA has not being fully implemented by all the states in
the country; this might be attributed to the state inability to understand the
benefit of the scheme, by understanding the benefit of TSA which is one of the
focal point this study is centered on; it is believed will allow states to
implement the scheme.
- The
conventional accounting system deployed by MDA’s is susceptible to leakages,
having a consolidation account which is what TSA is all about will allow all
these leakages to be blocked.
- The
economy of the country (Nigeria) is in a very challenging and dire state. This
might be attributed to exponencial drop in crude oil and the level corruption
entrenched in MDA’s this corruption is encouraged by the conventional
accounting system which makes it nearly impossible for government to trace
their revenue. Implementation of the TSA will enable the government to fight
corruption to a logical state and consequently improve the economy.
1.3 RESEARCH
QUESTION
- What
are the challenges of Treasury Single Account on the banking sector in Nigeria?
- What
are the benefits of Treasury Single Account?
- Is
joint account help in recovering stolen money?
- Do
employees given the responsibilities of maintaining Treasury Single Account
happy or not?
- How
often do auditors manage to audit account in a year?
- What
are the constituents of Treasury Single Account?
1.4 OBJECTIVES
OF THE STUDY
The
following are the objectives of the study
- To
examine the benefits of Treasury Single
Account in Nigeria.
- To
examine the implementation of Treasury Single Account in Nigeria.
- To
identify the roles of Deposit Money Banks (DMB’s) in the operation of (TSA)
Treasury Single Account.
- To
identify the challenges of Treasury Single Account.
1.5 RESEARCH
HYPOTHESIS
Ho
– Treasury Single Account cannot be use to curb corruption in Nigeria.
Hi
– Treasury Single Account can be use to curb corruption in Nigeria.
The
statement of hypothesis listed above; thus:
Ho
represent negative reply or answer while,
WHILE
Hi represent positive reply or answer.
1.6 SIGNIFICANCE OF THE STUDY
THE IMPACT OF TREASURY SINGLE ACCOUNT ON THE BANKING SECTOR IN NIGERIA
