Single Treasury, Single Management System: Centralized Holding, Management and Payment of Public Money
On 1 June, the State Treasury System for centralized holding, management and payment of public money will start operating. Accounts in the State Treasury will be opened gradually, all budgetary and public institutions will switch to the latest system by 2028.
"This system will allow for a more rational and efficient management of public money – to use temporarily free liquidity, to reduce short-term borrowing and borrowing costs, and to invest available funds, and credit risk will also be eliminated. According to preliminary calculations, it was estimated that due to the reduction in the volume and costs of the government borrowing, payment orders of budgetary institutions and account servicing costs, about EUR 2.6 million would be saved annually," says Minister of Finance Gintarė Skaistė.
The Consolidated Account Management System (VIKSVA) developed by the Ministry of Finance will create conditions for managing accounts, performing payment transactions, currency exchange and providing other services common in electronic banking. Institutions will be guaranteed the opportunity to freely dispose of their funds and have the required number of accounts. The scope of provided financial services will be continuously developed, for example, instant payments and other functionalities will be introduced.
In June-July, the funds of those institutions whose accounting is centrally managed by the National Shared Functions Centre (NSFC), such as the Ministry of Finance, Customs Department, State Tax Inspectorate, Government Office, Central Project Management Agency, etc., will be transferred to VIKSVA. – a total of 154 institutions. Full list of institutions and the order of their transfer is available here.
In the following stages, the VIKSVA will be developed including institutions with specific needs and making large volumes of payments.
In total, the new system will be used by almost 480 currently operating budgetary, public institutions and funds. Municipalities and higher education institutions will also have the opportunity to hold funds in the State Treasury, but this will not be an obligation.
The VIKSVA system was created in order to centralize services, unify processes, reduce the administrative burden and service costs, and improve the quality of services provided by the State Treasury.
Currently, budgetary institutions use the services of commercial banks - working with different banks requires significant human and monetary resources, and funds divided into different accounts limit the efficiency of their management.
Additional information:
- From November 2020, the State Treasury Department of the Ministry of Finance has been implementing the project "Creation of the Consolidated Account Management System of the State Treasury", which is co-financed from the funds of the European Union Structural Funds, worth EUR 3.3 million (of which EUR 2.178 million are planned to be used for the system installation);
- The principle of a Single Treasury Account is one of the most widely used methods of advanced states in the field of public finance management to increase the efficiency of public monetary resources management – to consolidate the collection and disposal of the state funds in a unified system;
- This principle is applied by almost all member states of the Organization for Economic Co-operation and Development (OECD), which are the most advanced in the world in public finance management.
- In order to adopt good practices and apply them to the management of the public monetary resources in Lithuania, the treasury management examples of the European Union countries, such as France and Sweden, were analysed.
Last updated: 01-06-2023
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