Cash Management Framework and Cash Management Framework and its Integration with Debt its Integration with Debt

ManagementManagement

Professional Development Seminar on Debt Management

December 10, 2008

Sailendra

Pattanayak

and Brian Olden, FAD

Ove

rvie

wO

verv

iew

Def

initi

ons o

f Cas

h M

anag

emen

t D

efin

ition

s of C

ash

Man

agem

ent

Out

line

of a

mod

ern

cash

man

agem

ent f

ram

ewor

kO

utlin

e of

a m

oder

n ca

sh m

anag

emen

t fra

mew

ork

Cash

ratio

ning

vs.

cash

man

agem

ent

Cash

ratio

ning

vs.

cash

man

agem

ent

Bene

fits o

f an

effic

ient c

ash

man

agem

ent s

yste

m

Bene

fits o

f an

effic

ient c

ash

man

agem

ent s

yste

m

Prer

equi

sites

for e

ffect

ive

cash

man

agem

ent

Prer

equi

sites

for e

ffect

ive

cash

man

agem

ent

Bank

ing

and

paym

ent a

rran

gem

ents

Ba

nkin

g an

d pa

ymen

t arr

ange

men

ts

Cash

fore

cast

ing

Cash

fore

cast

ing

Inst

itutio

nal f

ram

ewor

kIn

stitu

tiona

l fra

mew

ork

Man

agin

g ca

sh b

alanc

esM

anag

ing

cash

bala

nces

-- the

basic

requ

irem

ents

the

basic

requ

irem

ents

Issu

es su

rrou

ndin

g in

tegr

atio

n of

cas

h an

d de

bt m

anag

emen

t Is

sues

surr

ound

ing

inte

grat

ion

of c

ash

and

debt

man

agem

ent

Disc

ussio

n on

app

ropr

iate

inst

itutio

nal f

ram

ewor

kD

iscus

sion

on a

ppro

priat

e in

stitu

tiona

l fra

mew

ork

Som

e d

efin

itio

ns

of c

ash

So

me

def

init

ion

s of

cas

h

man

agem

ent

man

agem

ent

The

stra

tegy

and

ass

ociat

ed p

roce

sses

for m

anag

ing

The

stra

tegy

and

ass

ociat

ed p

roce

sses

for m

anag

ing

cost

cost

-- effe

ctiv

ely th

e go

vern

men

tef

fect

ively

the

gove

rnm

ent ’’ s

shor

ts s

hort

-- term

cas

h flo

ws

term

cas

h flo

ws

and

cash

bala

nces

, bot

h w

ithin

gov

ernm

ent,

and

and

cash

bala

nces

, bot

h w

ithin

gov

ernm

ent,

and

betw

een

gove

rnm

ent a

nd o

ther

sect

ors.

betw

een

gove

rnm

ent a

nd o

ther

sect

ors.

(Will

iams 2

004)

(Will

iams 2

004)

Hav

ing

the

Hav

ing

the

righ

tri

ght

mon

ey in

the

mon

ey in

the

righ

tri

ght

plac

e at

the

plac

e at

the

righ

tri

ght

time

to m

eet t

he g

over

nmen

ttim

e to

mee

t the

gov

ernm

ent ’’ s

obl

igat

ions

in th

e m

ost

s obl

igat

ions

in th

e m

ost

cost

cost

-- effe

ctiv

e w

ay.

effe

ctiv

e w

ay.

(Sto

rkey

200

1)(S

tork

ey 2

001)

Cas

h m

anag

emen

t fr

amew

ork

Cas

h m

anag

emen

t fr

amew

ork D

eb

t m

an

ag

em

en

t

Reven

ues

Pay

men

ts

Cash

m

an

ag

er

Mo

neta

ry

po

licy

Sp

en

din

g

un

its

Sh

ort

-term

In

vest

men

tsS

ho

rt-t

erm

Bo

rro

win

gs

Trea

sury

sys

tem Cen

tral b

ank

Fin

an

cial

mark

ets

dev.

Ban

ks

Mai

n b

uild

ing

blo

cks

for

cash

M

ain

bu

ildin

g b

lock

s fo

r ca

sh

man

agem

ent

man

agem

ent

Cont

rol o

ver r

ecei

pts a

nd e

xpen

ditu

res.

Cont

rol o

ver r

ecei

pts a

nd e

xpen

ditu

res.

Fore

cast

ing

cash

requ

irem

ents

.Fo

reca

stin

g ca

sh re

quire

men

ts.

Man

agin

g go

vern

men

t cas

h ba

lance

s M

anag

ing

gove

rnm

ent c

ash

balan

ces

––su

rplu

ses/

defic

its.

surp

luse

s/de

ficits

.

Cas

h r

atio

nin

gC

ash

rat

ion

ing

(m

isn

omer

cas

h b

ud

geti

ng)

(mis

nom

er c

ash

bu

dge

tin

g)

Last

reso

rt liq

uidi

ty m

anag

emen

tLa

st re

sort

liqui

dity

man

agem

ent

Lim

its a

bilit

y to

com

mit

until

suff

icie

nt fu

nds a

re a

vaila

ble

Lim

its a

bilit

y to

com

mit

until

suff

icie

nt fu

nds a

re a

vaila

ble

(dela

ys im

plem

enta

tion)

(dela

ys im

plem

enta

tion)

No

forw

ard

cash

plan

ning

No

forw

ard

cash

plan

ning

Disr

uptiv

e to

pro

gram

s, ve

ndor

sD

isrup

tive

to p

rogr

ams,

vend

ors

Hig

h co

rrup

tion

pote

ntial

Hig

h co

rrup

tion

pote

ntial

Nee

d tra

nspa

rent

ex

ante

rule

sN

eed

trans

pare

nt e

x an

te ru

les

Publ

ic pr

oced

ure

Publ

ic pr

oced

ure

Like

ly to

und

erm

ine

budg

et p

riorit

iesLi

kely

to u

nder

min

e bu

dget

prio

rities

Ben

efit

s of

eff

icie

nt

cash

B

enef

its

of e

ffic

ien

t ca

sh

man

agem

ent

man

agem

ent

Ens

ure

oblig

atio

ns c

an b

e m

et a

s the

y fa

ll du

eE

nsur

e ob

ligat

ions

can

be

met

as t

hey

fall

due

Min

imiz

e id

le ba

lance

s and

ass

ociat

ed c

osts

Min

imiz

e id

le ba

lance

s and

ass

ociat

ed c

osts

Cond

uct c

ost

Cond

uct c

ost -- e

ffect

ive

borr

owin

g op

erat

ions

effe

ctiv

e bo

rrow

ing

oper

atio

ns

Cont

ribut

es to

dev

elopm

ent o

f sho

rtCo

ntrib

utes

to d

evelo

pmen

t of s

hort

-- term

mon

ey

term

mon

ey

mar

kets

mar

kets

Redu

ce li

quid

ity im

pact

from

bud

get

Redu

ce li

quid

ity im

pact

from

bud

get

defic

its/s

urpl

uses

defic

its/s

urpl

uses

Sepa

ratio

n of

cas

h m

anag

emen

t fro

m m

onet

ary

polic

ySe

para

tion

of c

ash

man

agem

ent f

rom

mon

etar

y po

licy

Enh

ance

d tra

nspa

renc

y of

gov

ernm

ent f

low

sE

nhan

ced

trans

pare

ncy

of g

over

nmen

t flo

ws

Com

mon

issu

es in

tra

nsi

tion

an

d

Com

mon

issu

es in

tra

nsi

tion

an

d

dev

elop

ing

cou

ntr

ies/

dev

elop

ing

cou

ntr

ies/

LIC

sL

ICs

Budg

et e

xecu

tion

focu

sed

on c

ompl

iance

with

ann

ual b

udge

t Bu

dget

exe

cutio

n fo

cuse

d on

com

plian

ce w

ith a

nnua

l bud

get

law ra

ther

than

eff

icie

ncy

of re

sour

ces.

law ra

ther

than

eff

icie

ncy

of re

sour

ces.

Frag

men

ted

treas

ury

syst

em w

ith m

any

sepa

rate

ban

k Fr

agm

ente

d tre

asur

y sy

stem

with

man

y se

para

te b

ank

acco

unts

acco

unts

-- bot

h in

com

mer

cial b

anks

and

CB.

both

in c

omm

ercia

l ban

ks a

nd C

B.Ca

sh ra

tioni

ng is

the

main

exp

endi

ture

con

trol s

yste

mCa

sh ra

tioni

ng is

the

main

exp

endi

ture

con

trol s

yste

m-- c

reat

es

crea

tes

unce

rtain

ty o

f res

ourc

e av

ailab

ility

for

unce

rtain

ty o

f res

ourc

e av

ailab

ility

for B

IBI

’’ ss . .

Spen

ding

uni

ts n

ot c

once

rned

with

bor

row

ing

cost

s.Sp

endi

ng u

nits

not

con

cern

ed w

ith b

orro

win

g co

sts.

Dail

y ca

sh n

eeds

met

by

the

cent

ral b

ank

Dail

y ca

sh n

eeds

met

by

the

cent

ral b

ank --

less o

f an

issue

with

les

s of a

n iss

ue w

ith

EU

EU

appl

icant

cou

ntrie

s due

to p

rohi

bitio

n on

CB

borr

owin

g.ap

plica

nt c

ount

ries d

ue to

pro

hibi

tion

on C

B bo

rrow

ing.

Liqu

idity

man

aged

for m

onet

ary

polic

y pu

rpos

es.

Liqu

idity

man

aged

for m

onet

ary

polic

y pu

rpos

es.

Pre

req

uis

ites

for

cas

h m

anag

emen

tP

rere

qu

isit

es f

or c

ash

man

agem

ent

Aw

aren

ess w

ithin

the

gove

rnm

ent o

f the

opp

ortu

nity

A

war

enes

s with

in th

e go

vern

men

t of t

he o

ppor

tuni

ty

cost

of m

oney

cost

of m

oney

Cons

olid

atio

n of

gov

ernm

ent c

ash

balan

ces i

n a

Cons

olid

atio

n of

gov

ernm

ent c

ash

balan

ces i

n a

TSA

TSA

Fund

and

acc

ount

ing

cont

rols

thro

ugh

treas

ury

ledge

r sys

tem

Fund

and

acc

ount

ing

cont

rols

thro

ugh

treas

ury

ledge

r sys

tem

Dev

elope

d ex

pend

iture

and

com

mitm

ent c

ontro

lsD

evelo

ped

expe

nditu

re a

nd c

omm

itmen

t con

trols

Well

dev

elope

d ca

sh p

lanni

ng a

nd fo

reca

stin

g fu

nctio

nW

ell d

evelo

ped

cash

plan

ning

and

fore

cast

ing

func

tion

Effi

cient

pay

men

t sys

tem

to su

stain

cas

h ba

lance

s at

Effi

cient

pay

men

t sys

tem

to su

stain

cas

h ba

lance

s at

optim

um le

vel

optim

um le

vel

Such

as c

entra

lized

pay

men

ts p

roce

ssin

gSu

ch a

s cen

traliz

ed p

aym

ents

pro

cess

ing

Pre

req

uis

ites

for

cas

h m

anag

emen

t P

rere

qu

isit

es f

or c

ash

man

agem

ent

––

con

td.

con

td.

Reali

stic

budg

et

Reali

stic

budg

et

Ade

quat

e ac

coun

ting

fram

ewor

kA

dequ

ate

acco

untin

g fr

amew

ork

Tailo

rTa

ilor --

mad

e ca

sh fo

reca

stin

g m

odul

es c

an b

e pa

rt of

m

ade

cash

fore

cast

ing

mod

ules

can

be

part

of IF

MIS

IFM

IS, ,

who

se a

ccou

ntin

g m

odul

e ca

n pr

ovid

e da

ily d

ata

on in

flow

s w

hose

acc

ount

ing

mod

ule

can

prov

ide

daily

dat

a on

inflo

ws

and

outfl

ows.

and

outfl

ows.

Acc

ess t

o fin

ancia

l mar

kets

and

Acc

ess t

o fin

ancia

l mar

kets

and

use

of m

oder

n us

e of

mod

ern

inst

rum

ents

for c

ash

man

agem

ent

inst

rum

ents

for c

ash

man

agem

ent

Cash

man

agem

ent s

epar

ated

from

, but

link

ed to

, Ca

sh m

anag

emen

t sep

arat

ed fr

om, b

ut li

nked

to,

mon

etar

y po

licy

mon

etar

y po

licy

Inte

grat

ion

of c

ash

and

debt

man

agem

ent

Inte

grat

ion

of c

ash

and

debt

man

agem

ent

Sin

gle

Tre

asu

ry A

ccou

nt

Sin

gle

Tre

asu

ry A

ccou

nt

All

reve

nues

and

exp

endi

ture

s go

thro

ugh

All

reve

nues

and

exp

endi

ture

s go

thro

ugh

TSA

TSA

The

cons

olid

atio

n of

gov

ernm

ent c

ash

reso

urce

s thr

ough

a

The

cons

olid

atio

n of

gov

ernm

ent c

ash

reso

urce

s thr

ough

a

TSA

TSA

shou

ld b

e co

mpr

ehen

sive

shou

ld b

e co

mpr

ehen

sive

Budg

et in

stitu

tions

(Bu

dget

inst

itutio

ns ( B

IBI

’’ ss ) d

o no

t hav

e se

para

te b

ank

) do

not h

ave

sepa

rate

ban

k ac

coun

ts.

acco

unts

.BIBI

’’ sstra

nsac

tions

man

aged

thro

ugh

the

treas

ury

ledge

r sys

tem

trans

actio

ns m

anag

ed th

roug

h th

e tre

asur

y led

ger s

yste

mW

here

tran

sact

iona

l acc

ount

s are

nec

essa

ry, b

alanc

es a

re

Whe

re tr

ansa

ctio

nal a

ccou

nts a

re n

eces

sary

, bala

nces

are

sw

ept u

p in

to T

SA p

erio

dica

lly (p

refe

rabl

y da

ily)

swep

t up

into

TSA

per

iodi

cally

(pre

fera

bly

daily

) A

ll m

onies

seen

as f

ungi

ble

to p

reve

nt in

effic

ient u

se o

f A

ll m

onies

seen

as f

ungi

ble

to p

reve

nt in

effic

ient u

se o

f pu

blic

cash

reso

urce

s.pu

blic

cash

reso

urce

s.Th

e ca

sh b

alanc

e in

the

The

cash

bala

nce

in th

e TS

ATS

Ais

main

tain

ed a

t a le

vel

is m

ainta

ined

at a

leve

l su

fficie

nt to

mee

t dail

y op

erat

iona

l req

uire

men

ts o

f the

su

fficie

nt to

mee

t dail

y op

erat

iona

l req

uire

men

ts o

f the

go

vern

men

tgo

vern

men

t

Ad

van

tage

s of

a T

SAA

dva

nta

ges

of a

TSA

Prov

ides

com

plet

e, re

al tim

e, in

form

atio

n ab

out g

over

nmen

t Pr

ovid

es c

ompl

ete,

real

time,

info

rmat

ion

abou

t gov

ernm

ent

fund

sfu

nds

Help

s pre

para

tion

of a

ccur

ate

and

relia

ble

cash

flow

fore

cast

sH

elps p

repa

ratio

n of

acc

urat

e an

d re

liabl

e ca

sh fl

ow fo

reca

sts

Facil

itate

s effe

ctiv

e re

conc

iliat

ion

betw

een

the

gove

rnm

ent

Facil

itate

s effe

ctiv

e re

conc

iliat

ion

betw

een

the

gove

rnm

ent

acco

untin

g sy

stem

s and

cas

h flo

w st

atem

ents

acco

untin

g sy

stem

s and

cas

h flo

w st

atem

ents

Serv

es to

ens

ure

trans

pare

ncy

and

redu

ce n

eed

for e

xtra

Se

rves

to e

nsur

e tra

nspa

renc

y an

d re

duce

nee

d fo

r ext

ra

budg

etar

y fu

nds

budg

etar

y fu

nds

Impr

oves

ope

ratio

nal a

nd a

ppro

priat

ion

cont

rol d

urin

g bu

dget

Im

prov

es o

pera

tiona

l and

app

ropr

iatio

n co

ntro

l dur

ing

budg

et

exec

utio

nex

ecut

ion

Redu

ces t

he u

ncer

tain

ty a

bout

the

cash

rese

rves

for l

iqui

dity

Re

duce

s the

unc

erta

inty

abo

ut th

e ca

sh re

serv

es fo

r liq

uidi

ty

man

agem

ent p

urpo

ses,

and

the

volat

ility

of t

he c

ash

flow

s m

anag

emen

t pur

pose

s, an

d th

e vo

latili

ty o

f the

cas

h flo

ws

Facil

itate

s effi

cient

pay

men

t mec

hani

sms

Facil

itate

s effi

cient

pay

men

t mec

hani

sms

Req

uir

emen

ts f

or a

n e

ffic

ien

t R

equ

irem

ents

for

an

eff

icie

nt

TSA

TSA

Polit

ical

supp

ort i

s ess

entia

l (su

ch a

s for

clo

sure

of a

genc

y Po

litic

al su

ppor

t is e

ssen

tial (

such

as f

or c

losu

re o

f age

ncy

a/a/cscs

))Le

gal a

nd re

gulat

ory

requ

irem

ents

Lega

l and

regu

lator

y re

quire

men

tsE

.g. a

utho

rity

to o

pen

bank

acc

ount

s sho

uld

vest

with

the

E.g

. aut

horit

y to

ope

n ba

nk a

ccou

nts s

houl

d ve

st w

ith th

e M

oFM

oF/T

reas

ury

/Tre

asur

y

Tech

nolo

gica

l req

uire

men

tsTe

chno

logi

cal r

equi

rem

ents

Ade

quat

e tra

nsac

tion

clear

ing

and

inte

rA

dequ

ate

trans

actio

n cle

arin

g an

d in

ter --

bank

settl

emen

t sys

tem

sba

nk se

ttlem

ent s

yste

ms

Dev

elopm

ent o

f an

Dev

elopm

ent o

f an

RTG

SRT

GS

at th

e CB

for h

igh

valu

e tra

nsac

tions

at th

e CB

for h

igh

valu

e tra

nsac

tions

Majo

r com

mer

cial b

anks

and

trea

sury

con

nect

ed to

the

Majo

r com

mer

cial b

anks

and

trea

sury

con

nect

ed to

the

RTG

SRT

GS

Fram

ewor

k ag

reem

ents

bet

wee

n th

e Tr

easu

ry,

Fram

ewor

k ag

reem

ents

bet

wee

n th

e Tr

easu

ry, T

SATS

ABa

nk

Bank

(C

B) a

nd B

anks

pro

vidi

ng re

tail

bank

ing

serv

ices

(CB)

and

Ban

ks p

rovi

ding

reta

il ba

nkin

g se

rvic

esRe

visit

ing

the

char

t of a

ccou

nts f

or c

over

age

of n

onRe

visit

ing

the

char

t of a

ccou

nts f

or c

over

age

of n

on-- b

ank

bank

ex

pend

iture

tran

sact

ions

expe

nditu

re tr

ansa

ctio

nsCa

paci

ty d

evel

opm

ent o

f Ca

paci

ty d

evel

opm

ent o

f TSA

TSA

user

sus

ers

Safe

hav

en fo

r gov

ernm

ent c

ash

depo

sit.

Safe

hav

en fo

r gov

ernm

ent c

ash

depo

sit.

Aid

s the

eff

icie

nt m

anag

emen

t of l

iqui

dity

in th

e A

ids t

he e

ffic

ient

man

agem

ent o

f liq

uidi

ty in

the

econ

omy.

econ

omy.

Cost

eff

ectiv

e ba

nkin

g ar

rang

emen

ts.

Cost

eff

ectiv

e ba

nkin

g ar

rang

emen

ts.

No

bette

r alte

rnat

ive

for e

cono

mie

s in

trans

ition

No

bette

r alte

rnat

ive

for e

cono

mie

s in

trans

ition

Alth

ough

not

con

fined

to d

evelo

ping

or t

rans

ition

A

lthou

gh n

ot c

onfin

ed to

dev

elopi

ng o

r tra

nsiti

on

econ

omies

econ

omies

Rea

son

s F

or T

SA T

o R

esid

e A

t R

easo

ns

For

TSA

To

Res

ide

At

Cen

tral

Ban

kC

entr

al B

ank

Dif

fere

nt

Mod

els

for

TSA

Op

erat

ion

sD

iffe

ren

t M

odel

s fo

r T

SA O

per

atio

ns

Ther

e ar

e a

num

ber o

f mod

els:

Ther

e ar

e a

num

ber o

f mod

els:

Use

com

mer

cial

bank

bra

nch

netw

orks

to c

hann

el fu

nds

Use

com

mer

cial

bank

bra

nch

netw

orks

to c

hann

el fu

nds

to/f

rom

regi

onal

treas

ury

offic

es to

the

TSA

at C

Bto

/fro

m re

gion

al tre

asur

y of

fices

to th

e TS

A a

t CB

Use

regi

onal

bran

ches

of t

he C

B w

here

a re

liabl

e co

mm

erci

al U

se re

gion

al br

anch

es o

f the

CB

whe

re a

relia

ble

com

mer

cial

bran

ch n

etw

ork

is no

t ava

ilabl

e br

anch

net

wor

k is

not a

vaila

ble

Regi

onal

treas

ury

offic

es a

ct a

s ban

ks (o

nly

reco

mm

ende

d Re

gion

al tre

asur

y of

fices

act

as b

anks

(onl

y re

com

men

ded

whe

re th

e co

mm

ercia

l ban

king

sect

or is

rega

rded

as t

oo

whe

re th

e co

mm

ercia

l ban

king

sect

or is

rega

rded

as t

oo

unst

able

)un

stab

le)

Use

com

mer

cial b

anks

bra

nch

netw

ork

to c

lear f

unds

dire

ctly

Use

com

mer

cial b

anks

bra

nch

netw

ork

to c

lear f

unds

dire

ctly

betw

een

TSA

and

taxp

ayer

s/su

pplie

rsbe

twee

n TS

A a

nd ta

xpay

ers/

supp

liers

TSA

TSA

Stru

ctur

e St

ruct

ure

–– Opt

ion

1O

ptio

n 1

Stat

e Tr

easu

ry

Hea

d O

ffic

e

Stat

e Tr

easu

ry

Regi

onal

off

ice

Stat

e Tr

easu

ry

Loca

l off

ice

Cent

ral B

ank

Cent

ral B

ank

Regi

onal

bra

nch

Budg

et u

nit

Paym

ent

orde

r

Paym

ent

orde

r

Rec

onc

.

Sett

lem

ent

Sett

lem

ent

Lim

ited

Trea

sury

co

mm

unic

atio

n an

d in

form

atio

n sy

stem

s

TSA

TSA

Stru

ctur

e St

ruct

ure

–– Opt

ion

2O

ptio

n 2

Stat

e Tr

easu

ry

Hea

d O

ffic

e

Stat

e Tr

easu

ry

Regi

onal

off

ice

Stat

e Tr

easu

ry

Loca

l off

ice

Cent

ral B

ank

Paym

ent

orde

r

Rec

onc.

Sett

lem

ent

Budg

et u

nit

Adva

nced

Tr

easu

ry

com

mun

icat

ion

and

info

rmat

ion

syst

ems

(2a)

TSA

TSA

Stru

ctur

e St

ruct

ure

–– Opt

ion

3O

ptio

n 3 Bu

dget

Uni

t

Com

mer

cial

Ban

kRe

gion

al B

ranc

h

Com

mer

cial

Ban

kH

ead

Off

ice

Paym

ent

Ord

er

Very

Rel

iabl

e an

dAd

vanc

edCo

mm

erci

al B

ank

Sect

or

Cent

ral B

ank

Reco

nc.

Sett

lem

ent

Stat

e Tr

easu

ry

Hea

d O

ffic

e

Man

agem

ent

of C

ash

Bal

ance

s of

M

anag

emen

t of

Cas

h B

alan

ces

of

TSA

T

SA

Def

ine

sepa

rate

poo

ls of

fund

s with

in T

SA sy

stem

, for

D

efin

e se

para

te p

ools

of fu

nds w

ithin

TSA

syst

em, f

or

inst

ance

:in

stan

ce:

Liqu

idity

Liqu

idity

Dep

osit

Dep

osit

Inve

stm

ent

Inve

stm

ent

Diff

eren

tiatio

n ba

sed

on li

quid

ity n

eeds

, lev

el of

D

iffer

entia

tion

base

d on

liqu

idity

nee

ds, l

evel

of

unce

rtain

ty, c

osts

of a

ltern

ativ

e so

urce

s, et

c.un

certa

inty

, cos

ts o

f alte

rnat

ive

sour

ces,

etc.

Selec

t ins

trum

ents

that

mat

ch e

xpec

ted

cash

nee

dsSe

lect i

nstru

men

ts th

at m

atch

exp

ecte

d ca

sh n

eeds

Inte

grat

ed m

anag

emen

t of a

sset

s and

liab

ilitie

s.In

tegr

ated

man

agem

ent o

f ass

ets a

nd li

abili

ties.

Tran

spar

ent a

nd e

fficie

nt p

ricin

g of

ass

ets,

liabi

lities

Tr

ansp

aren

t and

effi

cient

pric

ing

of a

sset

s, lia

bilit

ies

and

serv

ices!

and

serv

ices!

Key

ele

men

ts o

f a

Cas

h M

anag

emen

t K

ey e

lem

ents

of

a C

ash

Man

agem

ent

Fra

mew

ork

Fra

mew

ork

Ann

ual p

lan, 3

Ann

ual p

lan, 3

-- mon

th ro

lling

pro

ject

ions

, m

onth

rolli

ng p

roje

ctio

ns,

mon

thly

ope

ratio

nal p

lan, a

nd fr

eque

nt fo

reca

sts

mon

thly

ope

ratio

nal p

lan, a

nd fr

eque

nt fo

reca

sts

A g

ood

cash

fore

cast

ing

syst

em sh

ould

pro

vide

for

A g

ood

cash

fore

cast

ing

syst

em sh

ould

pro

vide

for

daily

fore

cast

s tha

t are

upd

ated

freq

uent

lyda

ily fo

reca

sts t

hat a

re u

pdat

ed fr

eque

ntly

A te

am le

d by

off

icial

with

aut

horit

y to

col

lect

A

team

led

by o

ffic

ial w

ith a

utho

rity

to c

olle

ct

info

rmat

ion

from

var

ious

dep

artm

ents

info

rmat

ion

from

var

ious

dep

artm

ents

Plan

pre

pare

d by

com

pete

nt st

aff a

nd b

ased

on

Plan

pre

pare

d by

com

pete

nt st

aff a

nd b

ased

on

a re

alist

ic b

udge

t, fo

llow

ing

clea

r fun

ds re

leas

e a

reali

stic

bud

get,

follo

win

g cl

ear f

unds

rele

ase

proc

edur

es a

nd b

udge

t exe

cutio

n ru

les

proc

edur

es a

nd b

udge

t exe

cutio

n ru

les

Key

Rel

atio

nsh

ips

Key

Rel

atio

nsh

ips

Min

istr

y of

Fin

ance

Ove

rsee

ing

tax

and

spen

ding

Fore

cast

ing

fisca

l pos

ition

and

da

ily c

ash

flow

s

Set

s de

bt a

nd c

ash

man

agem

ent p

olic

y

Deb

t and

cas

h m

anag

er

Man

agin

g da

ily c

ash

flow

s

Bor

row

ing

to m

eet s

hort/

med

ium

te

rm n

eeds

Inve

stin

g su

rplu

s as

sets

Enc

oura

ging

stro

ng s

econ

dary

m

arke

t in

gove

rnm

ent s

ecur

ities

Cen

tral

Ban

k

Gov

ernm

ent’s

ban

ker

Man

ages

mon

etar

y po

licy

Cas

h M

anag

emen

t U

nit

C

ash

Man

agem

ent

Un

it --

F

un

ctio

ns

Fu

nct

ion

s

Coor

dina

te su

bmiss

ion

of m

onth

ly c

ash

flow

pro

ject

ions

by

Coor

dina

te su

bmiss

ion

of m

onth

ly c

ash

flow

pro

ject

ions

by

budg

et in

stitu

tions

(spe

ndin

g un

its a

nd re

venu

e ag

enci

es)

budg

et in

stitu

tions

(spe

ndin

g un

its a

nd re

venu

e ag

enci

es)

Prep

are

(con

solid

ated

) cas

h flo

w p

roje

ctio

ns o

n a

rolli

ng

Prep

are

(con

solid

ated

) cas

h flo

w p

roje

ctio

ns o

n a

rolli

ng

basis

basis

Mon

itor c

ash

inflo

w/

outfl

ow o

uttu

rns a

nd id

entif

y M

onito

r cas

h in

flow

/ ou

tflow

out

turn

s and

iden

tify

seas

onal/

mon

thly

pat

tern

sse

ason

al/m

onth

ly p

atte

rns

Mon

itor m

ajor r

ecei

pts a

nd p

aym

ents

and

the

daily

cas

h M

onito

r majo

r rec

eipt

s and

pay

men

ts a

nd th

e da

ily c

ash

posit

ion,

incl

udin

g go

vern

men

t ban

k ba

lance

spo

sitio

n, in

clud

ing

gove

rnm

ent b

ank

balan

ces

Prep

are

and

analy

se re

venu

e /

expe

nditu

re re

ports

and

Pr

epar

e an

d an

alyse

reve

nue

/ ex

pend

iture

repo

rts a

nd

upda

te c

ash

proj

ectio

ns a

s app

ropr

iate

upda

te c

ash

proj

ectio

ns a

s app

ropr

iate

Mak

e pr

opos

als to

Exc

hequ

er /

Liq

uidi

ty C

omm

ittee

for

Mak

e pr

opos

als to

Exc

hequ

er /

Liq

uidi

ty C

omm

ittee

for

adju

stin

g ca

sh fl

ows a

s the

nee

d ar

ises

adju

stin

g ca

sh fl

ows a

s the

nee

d ar

ises

Kee

p th

e ce

ntra

l ban

k fu

lly in

form

ed o

f pro

ject

ed c

ash

Kee

p th

e ce

ntra

l ban

k fu

lly in

form

ed o

f pro

ject

ed c

ash

flow

sflo

ws

Cor

e el

emen

ts o

f ca

sh p

lan

nin

gC

ore

elem

ents

of

cash

pla

nn

ing

Com

preh

ensiv

e in

form

atio

n ne

twor

kCo

mpr

ehen

sive

info

rmat

ion

netw

ork

Regu

lar, r

eliab

le es

timat

es o

f fut

ure

cash

flow

sRe

gular

, reli

able

estim

ates

of f

utur

e ca

sh fl

ows

Det

erm

ine

and

impl

emen

t stra

tegy

for m

atch

ing

cash

D

eter

min

e an

d im

plem

ent s

trate

gy fo

r mat

chin

g ca

sh

flow

s with

fisc

al op

erat

ions

plan

, e.g

.flo

ws w

ith fi

scal

oper

atio

ns p

lan, e

.g.

delay

com

mitm

ents

delay

com

mitm

ents

spee

d up

reve

nue

mob

iliza

tion

spee

d up

reve

nue

mob

iliza

tion

borr

ow fr

om th

e m

arke

t (sh

ort o

r lon

gbo

rrow

from

the

mar

ket (

shor

t or l

ong --

term

)te

rm)

inve

st su

rplu

s bala

nces

opt

imall

y (s

hort

or lo

ngin

vest

surp

lus b

alanc

es o

ptim

ally

(sho

rt or

long

-- term

)te

rm)

Revi

ew a

nd u

pdat

e fin

ancia

l plan

sRe

view

and

upd

ate

finan

cial p

lans

refin

e fo

reca

stin

g te

chni

ques

/set

per

form

ance

targ

ets

refin

e fo

reca

stin

g te

chni

ques

/set

per

form

ance

targ

ets

Cas

h F

orec

ast

and

Bal

ance

sC

ash

For

ecas

t an

d B

alan

ces

Rev

enue

s

1 2

3

4

5 6

7

8

9 1

0 1

1 1

2

Spen

ding

Cen

tral F

orec

asts

Age

ncy

Fina

ncia

l Pla

ns/A

llotm

ents

Bal

ance

Seas

onal

reve

nue

fluct

uatio

n,

spen

ding

pa

ttern

s

Stru

ctur

alre

venu

eflu

ctua

tion,

sp

endi

ng

patte

rns

Arr

ears

Ove

r-

co

mm

mitm

ent

Ran

dom

re

venu

e sh

ocks

Ann

ual

pred

icta

ble

patte

rn

Cor

rect

ive

Mea

sure

s:C

orre

ctiv

e M

easu

res:

Sm

ooth

ing

cash

flo

ws

Smoo

thin

g ca

sh f

low

s

Cas

h B

alan

ce

Seasonal

:1.

Kee

p al

lotm

ents

or

com

mitm

ents

bel

ow

reve

nue,

bui

ld b

alan

ces

2.

Shor

t-ter

m d

ebt

3.

Lim

it ca

sh p

aym

ents

to

cash

bal

ance

s (ar

rear

s)4.

Acc

eler

ate

rece

ivab

les

colle

ctio

n

Structural

:1.

Bud

get r

etre

nchm

ent

2.

Long

-term

deb

t3.

Allo

w c

omm

itmen

t/spe

ndin

g on

ly if

reve

nues

act

ually

re

ceiv

ed4.

Con

tinge

nt li

abili

ty

man

agem

ent

5.

Com

preh

ensi

vene

ss6.

Com

mitm

ent c

ontro

ls

Man

agin

g C

ash

Bal

ance

s M

anag

ing

Cas

h B

alan

ces

Nee

d to

dev

elop

inst

rum

ents

to m

anag

e ca

sh su

rplu

ses a

nd

Nee

d to

dev

elop

inst

rum

ents

to m

anag

e ca

sh su

rplu

ses a

nd

defic

its.

defic

its.

Main

fina

ncial

inst

rum

ents

Main

fina

ncial

inst

rum

ents

TT-- B

ills

Bills

Repo

Repo

’’ ss /re

vers

e /r

ever

se re

pore

po’’ ss

Shor

tSh

ort --

term

faci

litie

s with

com

mer

cial

bank

ste

rm fa

cilit

ies w

ith c

omm

erci

al ba

nks

Dep

osits

Dep

osits

-- ter

m a

nd o

vern

ight

term

and

ove

rnig

htW

ith C

B an

d w

ith c

omm

ercia

l ban

ksW

ith C

B an

d w

ith c

omm

ercia

l ban

ks

Acc

ess t

o Li

quid

ity a

t sho

rt no

tice

for u

nant

icipa

ted

cash

call

sA

cces

s to

Liqu

idity

at s

hort

notic

e fo

r una

ntici

pate

d ca

sh c

alls

Impa

ct o

n do

mes

tic fi

nanc

ial m

arke

ts w

ill b

e re

leva

nt (l

arge

Im

pact

on

dom

estic

fina

ncial

mar

kets

will

be

rele

vant

(lar

ge

stoc

ks o

r flo

ws)

stoc

ks o

r flo

ws)

Coor

dina

tion

with

mon

etar

y au

thor

ities

ess

entia

lCo

ordi

natio

n w

ith m

onet

ary

auth

oriti

es e

ssen

tial

Ob

stac

les

to M

anag

ing

Cas

h

Ob

stac

les

to M

anag

ing

Cas

h

Bal

ance

s B

alan

ces

Und

erde

velo

ped

dom

estic

fina

ncial

mar

kets

Und

erde

velo

ped

dom

estic

fina

ncial

mar

kets

-- par

ticul

arly

mon

ey

parti

cular

ly m

oney

m

arke

ts

mar

kets

La

ck o

f con

fiden

ce in

dom

estic

ban

king

syst

em

Lack

of c

onfid

ence

in d

omes

tic b

anki

ng sy

stem

A

bsen

ce o

f sou

nd, e

fficie

nt c

learin

g an

d se

ttlem

ent s

yste

ms

Abs

ence

of s

ound

, effi

cient

clea

ring

and

settl

emen

t sys

tem

s

Hug

ely

impr

oved

in m

ost t

rans

ition

cou

ntrie

s ove

r las

t 5 y

ears

Hug

ely

impr

oved

in m

ost t

rans

ition

cou

ntrie

s ove

r las

t 5 y

ears

Und

erde

velo

ped

legal,

judi

cial a

nd re

gulat

ory

infr

astru

ctur

esU

nder

deve

lope

d leg

al, ju

dicia

l and

regu

lator

y in

fras

truct

ures

Unt

este

d st

anda

rdiz

ed m

aste

r rep

urch

ase

agre

emen

ts a

nd o

ther

U

ntes

ted

stan

dard

ized

mas

ter r

epur

chas

e ag

reem

ents

and

oth

er

colla

tera

lizat

ion

cont

ract

sco

llate

raliz

atio

n co

ntra

cts

Alth

ough

in p

lace

in m

any

coun

tries

may

not

hav

e be

en fu

lly te

stA

lthou

gh in

plac

e in

man

y co

untri

es m

ay n

ot h

ave

been

fully

test

ed u

nder

nat

iona

l ed

und

er n

atio

nal

legal

fram

ewor

k leg

al fr

amew

ork

Inte

grat

ion

of

Cas

h

Inte

grat

ion

of

Cas

h

and

Deb

t M

anag

emen

t an

d D

ebt

Man

agem

ent

Def

init

ion

of

Pu

blic

Deb

t D

efin

itio

n o

f P

ub

lic D

ebt

Man

agem

ent

Man

agem

ent

The

proc

ess o

f est

ablis

hing

and

exe

cutin

g a

stra

tegy

for

The

proc

ess o

f est

ablis

hing

and

exe

cutin

g a

stra

tegy

for

man

agin

g th

e go

vern

men

tm

anag

ing

the

gove

rnm

ent ’’ s

deb

t in

orde

r to

raise

the

s deb

t in

orde

r to

raise

the

requ

ired

amou

nt o

f fun

ding

, mee

t its

cos

t and

risk

re

quire

d am

ount

of f

undi

ng, m

eet i

ts c

ost a

nd ri

sk

objec

tives

, and

to m

eet a

ny o

ther

deb

t man

agem

ent g

oals

objec

tives

, and

to m

eet a

ny o

ther

deb

t man

agem

ent g

oals

the

gove

rnm

ent m

ay h

ave

set,

such

as d

evelo

ping

and

th

e go

vern

men

t may

hav

e se

t, su

ch a

s dev

elopi

ng a

nd

main

tain

ing

an e

fficie

nt a

nd li

quid

mar

ket f

or g

over

nmen

t m

ainta

inin

g an

effi

cient

and

liqu

id m

arke

t for

gov

ernm

ent

secu

rities

.*se

curit

ies.*

* So

urce

: WB/

IMF

Deb

t Man

agem

ent G

uide

lines

*

Sour

ce: W

B/IM

F D

ebt M

anag

emen

t Gui

delin

es

Issu

es s

urr

oun

din

g d

ebt

and

cas

h

Issu

es s

urr

oun

din

g d

ebt

and

cas

h

man

agem

ent

man

agem

ent

Deb

t man

agem

ent o

ften

rega

rded

as a

stan

d alo

ne fu

nctio

n.D

ebt m

anag

emen

t ofte

n re

gard

ed a

s a st

and

alone

func

tion.

Goa

ls an

d ob

ject

ives

of d

ebt m

anag

emen

t for

mul

ated

on

the

basis

G

oals

and

obje

ctiv

es o

f deb

t man

agem

ent f

orm

ulat

ed o

n th

e ba

sis o

f the

of

the

debt

por

tfolio

.de

bt p

ortfo

lio.

Littl

e em

phas

is on

impa

ct o

f deb

t man

agem

ent d

ecisi

ons o

n ot

her

Littl

e em

phas

is on

impa

ct o

f deb

t man

agem

ent d

ecisi

ons o

n ot

her a

spec

ts

aspe

cts

of P

FM a

nd in

par

ticul

ar c

ash

man

agem

ent.

of P

FM a

nd in

par

ticul

ar c

ash

man

agem

ent.

Frag

men

tatio

n of

resp

onsib

ility

for d

ebt i

ssua

nce

and

cash

Fr

agm

enta

tion

of re

spon

sibili

ty fo

r deb

t iss

uanc

e an

d ca

sh

man

agem

ent.

man

agem

ent.

Inst

itutio

nal s

truct

ure

can

lead

to a

situ

atio

n w

here

deb

t and

cIn

stitu

tiona

l stru

ctur

e ca

n le

ad to

a si

tuat

ion

whe

re d

ebt a

nd c

ash

ash

man

agem

ent u

nits

com

petin

g w

ith e

ach

othe

r for

mar

ket a

cces

s.m

anag

emen

t uni

ts c

ompe

ting

with

eac

h ot

her f

or m

arke

t acc

ess.

Lack

of i

nteg

ratio

n of

deb

t man

agem

ent s

yste

ms w

ith o

ther

La

ck o

f int

egra

tion

of d

ebt m

anag

emen

t sys

tem

s with

oth

er

PFM

and

cas

h m

anag

emen

t rela

ted

syst

ems.

PFM

and

cas

h m

anag

emen

t rela

ted

syst

ems.

Issu

es s

urr

oun

din

g d

ebt

and

cas

h

Issu

es s

urr

oun

din

g d

ebt

and

cas

h

man

agem

ent

man

agem

ent

Incr

ease

d op

erat

iona

l and

liqu

idity

risk

s if c

ash

and

debt

In

crea

sed

oper

atio

nal a

nd li

quid

ity ri

sks i

f cas

h an

d de

bt

man

agem

ent n

ot in

tegr

ated

.m

anag

emen

t not

inte

grat

ed.

Inte

grat

ion

of c

ash

and

debt

man

agem

ent u

nder

a se

para

te

Inte

grat

ion

of c

ash

and

debt

man

agem

ent u

nder

a se

para

te

inst

itutio

nal f

ram

ewor

k ca

n cr

eate

pro

blem

s as w

ell:

inst

itutio

nal f

ram

ewor

k ca

n cr

eate

pro

blem

s as w

ell:

Can

lead

to se

para

tion

of c

ash

man

agem

ent f

rom

bud

get e

xecu

tion.

Can

lead

to se

para

tion

of c

ash

man

agem

ent f

rom

bud

get e

xecu

tion.

Can

ham

per c

oCa

n ha

mpe

r co --

ordi

natio

n w

ith m

onet

ary

and

fisca

l pol

icy.

ordi

natio

n w

ith m

onet

ary

and

fisca

l pol

icy.

Alth

ough

impo

rtant

to c

onsid

er th

ese

issue

s int

egra

tion

bene

fits

Alth

ough

impo

rtant

to c

onsid

er th

ese

issue

s int

egra

tion

bene

fits

outw

eigh

the

pote

ntial

risk

s.ou

tweig

h th

e po

tent

ial ri

sks.

Inte

grat

ion

foc

use

s ac

tivi

ties

on

In

tegr

atio

n f

ocu

ses

acti

viti

es o

n

com

mon

ob

ject

ives

com

mon

ob

ject

ives

Inte

grat

ed c

ash

and

debt

man

agem

ent s

houl

d en

sure

com

mon

obj

ecti

Inte

grat

ed c

ash

and

debt

man

agem

ent s

houl

d en

sure

com

mon

obj

ecti v

es in

ve

s in

relat

ion

to e

ffic

ient

man

agem

ent o

f ass

et a

nd li

abili

ty p

ositi

onre

latio

n to

eff

icie

nt m

anag

emen

t of a

sset

and

liab

ility

pos

ition

s s

Hav

e be

en si

tuat

ions

in so

me

coun

tries

whe

re la

ck o

f com

mun

icat

iH

ave

been

situ

atio

ns in

som

e co

untri

es w

here

lack

of c

omm

unic

ati o

n on

betw

een

cash

and

deb

t uni

ts h

as le

d to

ove

r/un

der i

ssua

nce

in ti

betw

een

cash

and

deb

t uni

ts h

as le

d to

ove

r/un

der i

ssua

nce

in ti

mes

of

mes

of

surp

lus/

defic

it.

surp

lus/

defic

it.

Risk

man

agem

ent c

arrie

d ou

t on

an fi

nanc

ial a

sset

and

liab

ility

Ri

sk m

anag

emen

t car

ried

out o

n an

fina

ncial

ass

et a

nd li

abili

ty b

asis

rath

er

basis

rath

er

than

focu

sing

sole

ly o

n de

bt p

ortfo

lio.

than

focu

sing

sole

ly o

n de

bt p

ortfo

lio.

Also

ens

ures

that

mos

t cos

t eff

ectiv

e in

stru

men

ts u

sed

to fu

nd s

Also

ens

ures

that

mos

t cos

t eff

ectiv

e in

stru

men

ts u

sed

to fu

nd s

hort

hort

-- and

an

d lo

nglo

ng–– t

erm

issu

ance

obj

ectiv

es.

term

issu

ance

obj

ectiv

es.

Op

erat

ion

al a

dva

nta

ges

of

Op

erat

ion

al a

dva

nta

ges

of

inte

grat

ion

inte

grat

ion

Scar

ce re

sour

ces i

n go

vern

men

t sec

tor a

rgue

for t

he c

reat

ion

of

Scar

ce re

sour

ces i

n go

vern

men

t sec

tor a

rgue

for t

he c

reat

ion

of a

sing

le

a sin

gle

finan

cial

man

ager

for g

over

nmen

t. fin

anci

al m

anag

er fo

r gov

ernm

ent.

Typi

cally

staf

f with

exp

erie

nce

of fi

nanc

ial m

arke

ts n

ot e

asy

toTy

pica

lly st

aff w

ith e

xper

ienc

e of

fina

ncial

mar

kets

not

eas

y to

attra

ct a

nd

attra

ct a

nd

reta

in in

the

publ

ic se

ctor

.re

tain

in th

e pu

blic

sect

or.

Ther

efor

e ad

vant

age

of m

ainta

inin

g a

singl

e w

ellTh

eref

ore

adva

ntag

e of

main

tain

ing

a sin

gle

well

-- train

ed p

rofe

ssio

nal s

taff

for

train

ed p

rofe

ssio

nal s

taff

for

both

cas

h an

d de

bt m

anag

emen

t.bo

th c

ash

and

debt

man

agem

ent.

Impo

rtant

in e

very

asp

ect i

nclu

ding

staf

f dea

ling

with

mar

ket t

rIm

porta

nt in

eve

ry a

spec

t inc

ludi

ng st

aff d

ealin

g w

ith m

arke

t tr a

nsac

tions

, ana

lysis

an

sact

ions

, ana

lysis

an

d tra

nsac

tion

proc

essin

g.

and

trans

actio

n pr

oces

sing.

Man

y of

the

oper

atio

nal a

nd tr

ansa

ctio

n pr

oces

ses a

re si

mila

rM

any

of th

e op

erat

iona

l and

tran

sact

ion

proc

esse

s are

sim

ilar --

nece

ssita

tes

nece

ssita

tes

only

one

pro

cess

ing

cent

er.

only

one

pro

cess

ing

cent

er.

Gre

ater

inte

grat

ion

lead

s to

bette

r int

egra

tion

of IT

syst

ems a

nG

reat

er in

tegr

atio

n le

ads t

o be

tter i

nteg

ratio

n of

IT sy

stem

s an d

dat

a on

cas

h d

data

on

cash

an

d de

bt p

ositi

ons.

and

debt

pos

ition

s.

Wh

at is

mea

nt

by

inte

grat

ion

of

deb

t W

hat

is m

ean

t b

y in

tegr

atio

n o

f d

ebt

and

cas

h m

anag

emen

t an

d c

ash

man

agem

ent

Wha

t is t

he a

ppro

priat

e in

stitu

tiona

l fra

mew

ork?

Wha

t is t

he a

ppro

priat

e in

stitu

tiona

l fra

mew

ork?

Shou

ld

Shou

ld c

ashf

low

cash

flow

fore

cast

ing

be c

arrie

d ou

t by

a fo

reca

stin

g be

car

ried

out b

y a

DM

OD

MO

??In

som

e co

untri

es th

e In

som

e co

untri

es th

e D

MO

DM

Opr

oduc

es c

ash

fore

cast

s or f

urth

er re

fines

pr

oduc

es c

ash

fore

cast

s or f

urth

er re

fines

fo

reca

sts r

ecei

ved

from

oth

er in

stitu

tiona

l uni

ts su

ch a

s the

Tr

fore

cast

s rec

eive

d fr

om o

ther

inst

itutio

nal u

nits

such

as t

he T

r eas

ury.

ea

sury

. In

oth

er c

ount

ries i

t is l

eft t

o th

e M

OF

to p

rodu

ce a

nd c

omm

unic

In o

ther

cou

ntrie

s it i

s lef

t to

the

MO

F to

pro

duce

and

com

mun

icat

e w

ith

ate

with

Tr

easu

ry.

Trea

sury

.

Who

is re

spon

sible

for d

eter

min

ing

the

borr

owin

g re

quire

men

t?W

ho is

resp

onsib

le fo

r det

erm

inin

g th

e bo

rrow

ing

requ

irem

ent?

Alth

ough

the

defic

it le

vel i

s a p

olic

y de

cisio

n th

e A

lthou

gh th

e de

ficit

leve

l is a

pol

icy

deci

sion

the

DM

OD

MO

is us

ually

gra

nted

is

usua

lly g

rant

ed

flexi

bilit

y to

fund

this

defic

it as

it se

es fi

t.fle

xibi

lity

to fu

nd th

is de

ficit

as it

sees

fit.

Wh

at is

mea

nt

by

inte

grat

ion

of

deb

t W

hat

is m

ean

t b

y in

tegr

atio

n o

f d

ebt

and

cas

h m

anag

emen

tan

d c

ash

man

agem

ent

Who

is re

spon

sible

for f

inan

cing

decis

ions

?W

ho is

resp

onsib

le fo

r fin

ancin

g de

cisio

ns?

Dep

ends

on

the

leve

l of a

uton

omy

of th

e D

epen

ds o

n th

e le

vel o

f aut

onom

y of

the

DM

OD

MO

. D

eleg

ated

aut

horit

y .

Del

egat

ed a

utho

rity

usua

lly a

ppro

priat

e fo

r fas

t dec

ision

mak

ing.

us

ually

app

ropr

iate

for f

ast d

ecisi

on m

akin

g.

In c

ount

ries w

ith d

evel

oped

cas

h an

d de

bt m

anag

emen

t cap

acity

In

cou

ntrie

s with

dev

elop

ed c

ash

and

debt

man

agem

ent c

apac

ity

dele

gate

d au

thor

ity is

a n

eces

sity

to p

erm

it m

anag

emen

t to

acce

sde

lega

ted

auth

ority

is a

nec

essit

y to

per

mit

man

agem

ent t

o ac

ces s

mar

ket

s mar

ket

oppo

rtuni

ties a

t sho

rtop

portu

nitie

s at s

hort

-- not

ice

with

out h

avin

g to

refe

r to

cabi

net t

o th

e no

tice

with

out h

avin

g to

refe

r to

cabi

net t

o th

e m

inist

er fo

r eve

ry d

ecisi

on.

min

ister

for e

very

dec

ision

.

How

to e

nsur

e lin

kage

s bet

wee

n ca

sh m

anag

emen

t and

H

ow to

ens

ure

linka

ges b

etw

een

cash

man

agem

ent a

nd

budg

et e

xecu

tion

budg

et e

xecu

tion

Impo

rtant

to e

nsur

e go

od c

omm

unic

atio

n lin

ks w

ith b

udge

t par

tici

Impo

rtant

to e

nsur

e go

od c

omm

unic

atio

n lin

ks w

ith b

udge

t par

tici p

ants

pa

nts

and

reve

nue

fore

cast

ers p

artic

ular

ly if

a se

para

te

and

reve

nue

fore

cast

ers p

artic

ular

ly if

a se

para

te D

MO

DM

Obe

ing

cons

ider

ed.

bein

g co

nsid

ered

.

Inst

itu

tion

al A

rran

gem

ents

In

stit

uti

onal

Arr

ange

men

ts

Issu

es t

o C

onsi

der

Issu

es t

o C

onsi

der

DM

OD

MO

’’ ssin

crea

singl

y ad

ding

cas

h an

d as

set

incr

easin

gly

addi

ng c

ash

and

asse

t m

anag

emen

t fun

ctio

ns

man

agem

ent f

unct

ions

––D

MO

DM

Ono

t the

onl

y m

odel.

not t

he o

nly

mod

el.

Who

shou

ld b

e re

spon

sible

for t

he d

iffer

ent e

lemen

ts

Who

shou

ld b

e re

spon

sible

for t

he d

iffer

ent e

lemen

ts

of c

ash

plan

ning

and

man

agem

ent

of c

ash

plan

ning

and

man

agem

ent -- s

houl

d on

e sh

ould

one

in

stitu

tion

be re

spon

sible

or sh

ould

it b

e sh

ared

in

stitu

tion

be re

spon

sible

or sh

ould

it b

e sh

ared

ac

ross

diff

eren

t ins

titut

ions

or u

nits

? ac

ross

diff

eren

t ins

titut

ions

or u

nits

?

Doe

s the

nee

d to

inte

grat

e ca

sh a

nd d

ebt

Doe

s the

nee

d to

inte

grat

e ca

sh a

nd d

ebt

man

agem

ent i

n a

sepa

rate

Inst

itutio

nal m

odel

man

agem

ent i

n a

sepa

rate

Inst

itutio

nal m

odel

outw

eigh

need

for i

nteg

ratio

n w

ith o

ther

ou

tweig

h ne

ed fo

r int

egra

tion

with

oth

er P

FMPFM

func

tions

?fu

nctio

ns?

Inst

itu

tion

al A

rran

gem

ents

In

stit

uti

onal

Arr

ange

men

ts

Issu

es t

o C

onsi

der

Issu

es t

o C

onsi

der

Inst

itutio

nal m

odel

is c

ount

ry sp

ecifi

c.In

stitu

tiona

l mod

el is

cou

ntry

spec

ific.

Goo

d lia

ison

and

shar

ing

data

/inf

orm

atio

n G

ood

liaiso

n an

d sh

arin

g da

ta/i

nfor

mat

ion

acro

ss o

rgan

izat

ion

boun

darie

s is c

ritic

al.

acro

ss o

rgan

izat

ion

boun

darie

s is c

ritic

al.

Cash

fore

cast

ing:

Ca

sh fo

reca

stin

g: M

oFM

oF, , B

IsBI

s , re

venu

e ag

ency

, tre

asur

y , r

even

ue a

genc

y, tre

asur

y et

cet

cA

ctiv

e D

ebt a

nd C

ash

Man

agem

ent

Act

ive

Deb

t and

Cas

h M

anag

emen

t --M

onet

ary

Mon

etar

y ag

ency

, pos

sibly

sub

agen

cy, p

ossib

ly su

b --na

tiona

l gov

ernm

ent

natio

nal g

over

nmen

t