August 18, 2019 16:56

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Developing a digital treasury based on digital technology

11:15 | 11/08/2019

VCN - In the current development trend of the Fourth Industrial Revolution, the State Treasury is making efforts to modernise the management of state budget funds, towards the "digital treasury" model according to the strategic direction for development of the State Treasury from 2021 to 2030.

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Operations at Phu Tho State Treasury. Photo: Thuy Linh.

Streamlined - Effective – Efficient

Understanding its role and position, the State Treasury has actively reformed and modernised both policies and operational processes; streamlined the organizational structure and enhanced IT application in accordance with the strategic direction for development of the State Treasury by 2020 approved by the Prime Minister.

According to State Treasury’s statistics, in 2007, the number of customers of the State Treasury was just under 95,000 people, in 2018, the State Treasury served nearly 120,000 customers. The budget collection has been improved by connecting and exchanging electronic state budget data between Taxation/Customs, State Treasury and commercial banks. The State Treasury also expanded the collection account, deployed electronic payment forms (Internet Banking, ATM, POS). Notably, the State Treasury also aims to create maximum advantages for taxpayers, reducing transaction time to only 5 minutes each. Up to now, 98% of the state budget revenue has been paid through banks, thereby mobilising revenues quickly and saving collection costs.

Regarding spending, the recurrent expenditure through the State Treasury is increasing. In 2017, it was VND150,000 billion, in 2018, it was more than VND850,000 billion. The State budget spending at the State Treasury was controlled and in line with regulations. The expenditure which was refused for the period 2007-2018 was VND149 billion per year on average. The State Treasury has simplified procedures for controlling spending and shortening the control time (time for investment reduced from seven to three days, for recurrent expenditures to one day). So far, the State Treasury has gradually changed from control before payment into payment before control.

“The State Treasury made positive contributions to reforming public financial management, improving effectiveness, efficiency, transparency and capacity of inspection and control of state budget and State financial activities, accountability and quality of macro financial management of the National Assembly, the Government and the Ministry of Finance,” said Director General of State Treasury Ta Anh Tuan

Establishing a centralized database

The 2019-2020 period has significance in looking back on ten years of social – economic development for the period 2011-2020 as well as identifying the vision and orientation for the next ten years. The achievements of the State Treasury is an important premise to further implement the strategic direction for development of the State Treasury from 2021 to 2030.

Ta Anh Tuan said the State Treasury’s vision by 2030 is to build a modern, streamlined, effective and efficient treasury and organize the apparatus consistent with the three key pillars of following the regional treasury model or two-level treasury model; improving the quality of treasury’s services; contributing to building a service administration and moving towards a digital treasury.

To this end, the State Treasury continues to connect stages of allocation and settlement of state budget based on connecting e-data, improving the regime of spending control to consolidate state budget spending, raising the efficiency of budget and financial management while raising disciplines of national finance.

The State Treasury also set the goal of improving the efficiency in the management of state funds and capital mobilisation; thereby using costs related to issuance and loans of the Government. Developing a general ledger for the Government to improve the transparency of information and data and to shorten the making of State budget settlement reports and State financial reports.

Notably, the State Treasury will form a centralized database to connect and share information with ministries, sectors and relevant units; develop a digital treasury platform which meets requirements on improving operational effectiveness and efficiency and service quality of the State Treasury; develop a digital treasury based on digital technology; and ensure information security. The State Treasury will improve its functions, tasks and modernise the apparatus following the regional treasury model or the two-level treasury model and develop professional contingents of cadres that meet the requirements of reform.

Commenting on the State Treasury Development Strategy for the period 2021-2030, IMF’s consultant Mike Williams said that the State Treasury must be a comprehensive e-treasury by 2030. In particular, the Treasury And Budget Management Information System (TABMIS) is developed into a unique database that includes financial information of the Government and is integrated with other modules. All budget users are allowed to access this system. In addition, the State Treasury also needs to build a Treasury Single Account (TSA) at the State Bank to gather all sources to manage state funds, especially developing an effective state budget collection process that is easy and convenient for state budget payers and the state revenues are gathered into the TSA in the same day.

Ta Anh Tuan said that the State Treasury of Vietnam will fulfil the objectives and direction of development of public finance in general and State Treasury in particular for the next period in accordance with international practices and Vietnam’s actual status and the development trend of the Fourth Industrial Revolution.

Deputy Director of Finance-Planning Department of the Ministry of Agriculture and Rural Development Vu Duc Hung:

“Over recent years, the State Treasury system has always improved its functions and tasks, and reformed policies and operational processes. Of which, focusing on reforming administrative procedures for state budget spending towards simplification, transparency to reduce time, procedures and costs for the state budget users, people and enterprises in working with the State Treasury.

“As a unit in charge of allocating state budget as well as managing projects using public investment, the Ministry of Agriculture and Rural Development has closely coordinated with the State Treasuries at all levels to allocate and approve the state budget estimates on TABMIS, thereby preventing overspending and misallocated spending. At the same time, ensuring state budget expenditures according to the Law on State Budget and current law, meeting the demands of the state budget users to assign tasks, programs and projects to serve people and modernise agriculture.”

Sandeep Saxena, an expert from IMF:

“I am impressed with the achievements of the State Treasury in the implementation of the State Treasury Development Strategy by 2020. In 2019, the State Treasury completed the state budget collection and spending in a timely fashion; unified the state budget balance; provided information on management of State fund in real time; effectively used technology; and designed a powerful transaction processing system.

“Based on the achievements in the implementation of the State Treasury Development Strategy by 2020, the State Treasury has made a draft State Treasury Development Strategy for 2021-2030. Especially, with recommendations at the survey and meeting with units under the State Treasury in March of the IMF treasury’s fields such as State fund management, capital mobilisation; state accounting, internal audit, apparatus organization and personnel development and IT are included in the draft to fulfil the objectives and direction for the development of public finance in general and State Treasury in particular for the next period in accordance with the international practices and Vietnam’s actual status and the development trend of the Fourth Industrial Revolution.”

By Thuy Linh/ Huyen Trang