UNIVERSITY OF LAGOS 

SCHOOL OF POSTGRADUATE STUDIES 

DEPARTMENT OF ACCOUNTING (M.Sc. P/T) 
ACC 803 – AUDITING THEORY & PRACTICE  

GROUP 12 ASSIGNMENT 

TOPIC: THE AUDITING PERSPECTIVE TO TRAESURY

SINGLE ACCOUNT (TSA) PROGRAMME

S/N Name Matric No. % Of   Signature

1  AJAYI, Olubunmi Bolanle
2  MOSANYA, Babajide Abayomi
3  AJIDE, Olalekan O
4  BADERINWA, Akeem Adeyemi
5  ULUMENFOH, Kennedy
6  OJO, Kehinde
Contribution
151001286 17%
199021079  17%
199021095  17%
199021001  17%
199021116  16%
199021059  16%
AUDITING PERSPECTIVE TO TREASURY SINGLE ACCOUNT PROGRAMME

INTRODUCTION

The treasury single account (TSA), according to the International Monetary Fund (IMF)
Working Paper, is a unified structure of government bank accounts that gives a consolidated
view of government cash resources. The principle of unity follows from the fungibility of all
cash irrespective of its end use.

A TSA can be defined as a unified structure of government bank accounts enabling

consolidation and optimum utilization of government cash resources. It separates transaction
level control from overall cash management. In other words, a TSA is a bank account or a set
of linked bank accounts through which the government transacts all its receipts and payments
and gets a consolidated view of its cash position at the end of each day.

The treasury single account is a public accounting system whereby government receipt,
revenue and income are collected into one single account. In Nigeria, the Central bank of
Nigeria is responsible for the maintenance and management of such account.   

Treasury Single Account (TSA) is a financial policy in use in several countries all over the
world. It was proposed by the federal government of Nigeria in 2012 under the Jonathan
Administration and was fully implemented by the Buhari Administration to consolidate all
inflows from all agencies of government into a single account at the Central Bank of Nigeria.

PRINCIPLE OF AN EFFECTIVE TSA SYSTEM

1. The government banking arrangement should be unified, to enable ministry of

finance/treasury oversight of government cash flows in and out of these bank accounts
and allow complete fungibility of all cash resources, including on a real-time basis if
electronic banking is in place. Although a TSA structure can contain ledger sub-
accounts in a single banking institution (not necessarily a central bank), and can
accommodate external zero-balance accounts (ZBAs) in a number of commercial
banks,3 these separate accounts should be integrated with a top account (called the
TSA main account) usually at the central bank for netting off their balances (usually
at the end of each day) to get the consolidated cash position.
 2. No other government agency should operate bank accounts outside the oversight of
the treasury. Institutional structures and transaction processing arrangements
determine how a TSA is accessed and operated. The treasury, as the chief financial
agent of the government, should manage the government’s cash (and debt) positions
to ensure that sufficient funds are available to meet financial obligations, idle cash is
efficiently invested, and debt is optimally issued according to the appropriate statutes.
In some cases, debt management including issuance of debt is done by a Debt
Management Office (DMO).
3. The TSA should have comprehensive coverage, i.e., it should ideally include cash
balances of all government entities, both budgetary and extrabudgetary, to ensure full
consolidation of government’s cash resources.

HOW IT WAS DESIGNED TO WORK IN NIGERIA

• Firstly, Government account must be unified, to enable the ministry of finance to

maintain oversight of government cash-flow in and out of this account.
• The TSA account structure can contain ledger-sub account in a single banking
institution, which is the Central bank in this case. However, it can accommodate
external zero account in a number of commercial banks underlining exclusion of some
sectors.
• No government agency is saddled with   the oversight of the account except, the
treasury
• The consolidation of government cash resources should be comprehensive such that it
contains all government cash resources, both budgetary and extra-budgetary. This
means that all public revenues irrespective of whether the corresponding cash flows
are subject to budgetary control.

BACKGROUND

Efficient management and control of government's cash resources rely on government

banking arrangements. Nigeria, like many middle-income countries, employed fragmented
systems in handling government receipts and payments. Establishing a unified structure as
recommended by the IMF, where all government funds are collected in one account would
reduce borrowing costs, extend credit and improve government's fiscal policy among other
benefits to government. The IMF also recommends the establishment of a legal basis to
ensure its robustness and stability. The introduction of the Treasury Single Account policy
therefore was vital in reducing the proliferation of bank accounts operated by ministries,
departments and agencies (MDAs) towards promoting financial accountability among
governmental organs. The compliance of the policy in Nigeria created challenges for majority
of the MDAs. Commercial banks in Nigeria remitted over 2 trillion Naira worth of idle and
active governments deposits with full implementation of this policy in 2016. Meanwhile, the
bankers committee of the country declared their support for the policy. Through Remita, the
integrated electronic payments and collections platform developed for the purpose, the TSA
initiative enabled the Federal Government of Nigeria to take full control of over 3 trillion
Naira ($15 billion) of its cash assets as at the end of the first quarter of 2016

IMPLICATIONS OF ADOPTING TSA

• The presence of a single treasury account enhances the management of cash flow

• The presence of an established chain of command reduces room for leakages

• It improves electronic penetration in public finances,

• The establishment of treasury single account reduces volatility in cash through the
Treasury, thus allowing for relatively lower cash reserve buffer

• Reconciliation in government balance sheet is easier due to the ZBA.

• It help at appraising the budget execution 

LIMITATIONS OF THE TSA

• Evidently the treasury single improves fiscal house keeping but it also provides room for
warehousing cash
•The TSA is similar to sterilization; it does starve the system of liquidity
•The inherent bureaucracy is a negation to effective and timely payment.     
 PROBLEM ANALYSIS

There is need for an effective audit of the treasury single account in Nigeria, to ensure that all
revenues prescribed for lodgement into the federation account would be treated as such and to
ensure that a strict compliance with all relevant laws on accounting, allocation and
disbursement are strictly adhered to.

The implementation of TSA has gone a long way to monitor and check financial leakages
even with the overall achievements; TSA provides a number of other problems and despite
the fact that, it enhances the overall effectiveness of a financial management system. The
establishment of a TSA should, therefore, receive priority in any Government reform agenda.
The measure is specifically to promote transparency and facilitate compliance with sections
80 and 162 of the 1999 Constitution.

The creation of TSA has ended the previous public accounting situation of several
fragmented accounts for government revenues, incomes and receipts, which in the recent past
has meant the loss or leakages of legitimate income meant for the federation account.
 LITERATURE REVIEW

2.0 CONCEPTUAL FRAMEWORK

Concept of Treasury Single Account

Oyedele (2015) defined a Treasury Single Account as a unified structure of government bank
accounts that gives a consolidated view of government cash resources. Based on the principle
of unity of cash and the unity of treasury, a Treasury Single Account is a bank account or a
set of linked accounts through which the government transacts all its receipts and payments.
The principle of unity follows from the fusion of all cash irrespective of its end use. While it
is necessary to distinguish individual cash transactions for control and reporting purposes,
this purpose is achieved through the accounting system and not by holding or depositing cash
in transaction specific bank accounts. This enables the treasury to delink management of cash
from control at a transaction level. A government like Nigeria lacking effective control over
its cash resources has over the years paid for institutional deficiencies in multiple ways.

a) First, idle cash balances in bank accounts often fail to earn market-related remuneration.

b) Second, the government, being unaware of its resources incurs unnecessary borrowing cost
on raising funds to cover a perceived cash shortage.

c) Third, idle government cash balances in the commercial banking sector are not idle for the
banks themselves, and can be used to extend credit. Draining this extra liquidity through open
market operations also imposes costs on the central bank. This research work is hereby
carried out to determine whether the establishment of a unified structure of government bank
accounts via a Treasury Single Account (TSA) will solve the problem of frivolous and
unscrupulous spending of Government fund and hence eradicate loss and enhance cash
management and control.

A Treasury Single Account (TSA) is a unified structure of government bank accounts that
gives a consolidated view of government cash resources. Based on the principle of unity of
cash and the unity of treasury, a TSA is a bank account or a set of linked accounts through
which the government transacts all its receipts and payments. The principle of unity follows
from the fungibility of all cash irrespective of its end use. While it is necessary to distinguish
individual cash transactions for control and reporting purposes, this purpose is achieved
through the accounting system and not by holding/depositing cash in transaction specific
bank accounts. TSA is a system of Aggregative Financial inclusion, being a nationally
organized and particular way of connecting all and divergent federating units on 3-by-3
matrix, Federal–State–Local governments and their respective Ministries, Departments and
Agencies (MDAs), to account for all their incomes and revenues via TSA Designated bank
accounts with Deposit Money Banks (DMBs) and channelling and consolidating same to
Consolidating Single Account with Central Bank of Nigeria.

It is globally recommended that no other government agency should operate bank accounts
outside the oversight of the treasury. Institutional structures and transaction processing
arrangements determine how a TSA is accessed and operated. The treasury, as the chief
financial agent of the government, should manage the government’s cash (and debt) positions
to ensure that sufficient funds are available to meet financial obligations, idle cash is
efficiently invested, and debt is optimally issued according to the appropriate statutes. In
some cases, debt management including issuance of debt is done by a Debt Management
Office (DMO). Judging by the provisions of the Financial Regulations (FR) and the 1999
Constitution of the Federal Republic of Nigeria, some Ministries/Extra-Ministerial Offices,
Agencies and other arms of Government collect revenue (such as Value Added Tax (VAT),
Withholding Tax (WHT), fees, fines and interest) are expected to remit same into the
Consolidated Revenue Fund (CRF). In line with Section 16 of the Finance (Control and
Management) Act, LFN, 1990 and the Financial Regulation N0. 413 (i), all unexpended
recurrent votes for a financial year shall lapse at the expiration of the year. Consequently, all
unspent balances in the Recurrent Expenditure Cash Books at the end of every financial year
must be paid back to the Consolidated Revenue Fund Account with CBN by issuing mandate
in favour of “Sub-Treasure of the Federation (Yusuf & Chiejina, 2015).

3.0 ACCOUNTS UNDER TREASURY SINGLE ACCOUNT SYSTEM

a) TSA Main Account

This is the treasury’s account with the central bank, which consolidates the government’s
cash position. It is the main TSA account when the TSA arrangement in a particular country
consists of a set of linked accounts. Cash balances in all other linked accounts are swept into
this account. In other words, all government receipts finally flow into, and all disbursements
are met from, the central TSA account.

b) TSA Subsidiary Accounts or Sub-accounts

These are not separate bank accounts per se (in the sense of holding individual cash
balances), but are special subaccounts within the main TSA account. This is basically an
accounting arrangement to group together a set of transactions and allows the government to
maintain the distinct accounting identity or ledger of its budget organizations (line
ministries/agencies) effectively. A cash disbursement ceiling for each entity can be enforced
against these ledgers. Balances in these accounts are netted off with the TSA main account
for cash management purposes.

c) Transaction accounts

Sometimes government bank accounts that are justified for retail transaction banking
operations are opened separately and structured as transaction accounts. These separate
transaction accounts could be opened for government entities that need transaction banking
services, but do not have a direct access to the TSA main account or a subsidiary account,
and/or specific category of operations (e.g., special funds). A transaction account could take
the form of a zero-balance account or an imprest account.

d) Zero-balance accounts (ZBAs)

Where transactional accounts are necessary, these are generally opened on a zero-balance
basis, i.e., end-of the day cash balances in these accounts are swept back into the TSA main
account periodically (preferably daily). Such accounts opened in commercial banks are used
for disbursements or for collection of government revenues (particularly nontax revenues). At
the end of the day, all revenues collected would be deposited in the TSA. The commercial
bank would honour payments of the respective agency, and would be reimbursed by the TSA
overnight. ZBAs have many similarities with special credit line arrangements, where budget
agencies are provided spending credits towards the amount of payments they can make
within a specified period, to be reimbursed by the TSA in the central bank. A ZBA also has
the benefit that it bypasses the normal interbank settlement process for each individual
transaction, which is often time consuming in developing countries, and ensures same-day
settlement on a net basis for all receipts and payments passing through the accounts.

e) Imprest accounts
These transaction accounts can hold cash up to a maximum authorized amount and are
recouped from time to time. Such accounts might be necessary in some cases, particularly
when there is only limited availability of interbank settlement facilities. However, the number
of imprest accounts should be kept to a minimum and the strategy should be to progressively
transform these accounts into zero.

f) Transit accounts

These accounts are not meant for day-to-day transaction banking operations of government
units. A transit account simply serves as a transit for eventual flow of cash into the TSA main
account. Transit accounts might be necessary for major revenue streams to monitor their
collection and remittance by the banking system and to facilitate revenue sharing (formula-
based sharing from a common pool of resources) between tiers of government in a federal
system in line with constitutional provisions.

g) Correspondent accounts

A separate ledger account is opened for each correspondent. The correspondent entity has
real-time information on the balances it maintains in the TSA. There should be safeguards to
ensure that each correspondent government is provided with the funds needed to implement
its own budget in a timely manner. The central bank (which maintains the accounts in the
TSA) has the obligation to make payments to the extent of the balances available in a
correspondent’s account. (Including the required ex ante control for authorizing payments).

How TSA works

For TSA to work effectively there must be daily clearing of and consolidation of cash
balances into the central account even where the MDA's accounts are already held at the
CBN such as the FIRS. Some may argue that it is necessary to separate the cash transactions
of each MDA for control and reporting purposes; however this objective can be achieved
through proper accounting rather than by holding cash in separate bank accounts. In any case,
the various bank accounts held by MDAs in commercial banks do not necessarily have to be
closed, but they must be operated as Zero-Balance Accounts where any closing balance must
be swept to TSA at the Central Bank of Nigeria (CBN) on a daily basis to give government a
consolidated cash position. TSA can therefore cover all funds including earmark and extra-
budgetary accounts or even funds held in trust by government. To make this work,
accounting systems must be robust and capable of accurately distinguishing trust assets in the
TSA. This is not different from what a private company operating in many states or even
internationally will do to consolidate its funds rather than fragment them by divisions or sub-
entities. Hence, a company will only borrow externally if and only if its overall cash position
is negative rather than when a division has a deficit even though others may have surpluses.
TSA is not a new concept; it has been adopted for decades in many countries both in the
developed world such as the United States, UK, France and developing economies like India
and Indonesia.

TSA implementation and cash management

The main purpose of TSA implementation is to maximize the use of cash resources through
concentration and reduction in float costs. The TSA solutions are designed to capture detailed
information about the government’s cash resources and spending on a daily basis. However,
it is not enough to simply capture timely information on cash balances and flows, if balances
are not immediately available to the Treasury (because of a lack of formal authority, or due to
lengthy accounting and transfers/payment processes). Also, the ability to forecast cash
inflows and outflows and resultant balances on the TSA is essential in improving cash
management. It should be noted that the FMIS platforms can provide reliable information
through properly designed TSA interfaces on most of these key aspects. There are a number
of ways to implement the TSA depending on country specific conditions (regulations,
banking system, electronic payment system (EPS) arrangements, etc.). In many countries,
“centralized TSA operation” is preferred to monitor the daily collections and spending
promptly and cost effectively. In order to achieve this, a reliable TSA infrastructure needs to
be established before the implementation of FMIS solutions (it is usually more difficult and
costly to introduce TSA after the development of FMIS), based on a mutually agreed TSA
Protocol (between the CT and the CB).

4.0 THEORETICAL FRAMEWORK

A number of different theories of socioeconomic accounting were borrowed to form sound

foundation to substantiate Treasury Single Account adoption and implementation. Examples
are:

Stakeholder Theory: It assumed that adoption of Treasury Single Account by the federal
government is as a result of the pressure from stakeholders/citizens majorly against
corruption. It suggested that the government will responds to the concerns and expectations
of powerful stakeholders/citizens and some of the responses will be in the form of strategic
opinions. Stakeholders’ theory provides rich insights into the factors that motivate
government in relation to the adoption and implementation of Treasury Single Account.

Management Theory: This theory assumed that all aspects of financial resources –
mobilization and expenditure should be well managed by government for the benefits of the
citizenry. It includes resources mobilization, prioritization of programmes, the budgetary
process, efficient management of resources and exercising control to guide against threats.
Treasury Single Account (TSA) primarily is to avoid misapplication of public funds.

Modern Money Theory (MMT): This theory examines how monetarily sovereign
governments operate and their impacts on the economy. It shows that it is relevant to
aggregate the central bank and the treasury into a government sector that finances itself
through monetary creation such that financial position of the treasury and the central bank are
so intertwined that both of them are constantly in contact in order to make fiscal and
monetary policy run smoothly.

Unity of Cash Principles: it is based on theory of the frugality of money, the theory states
that any unity of currency (money) is a substitute for another for instance, in the analysis of
consumer choice, frugality implies that consumption decision are based on consumer’s total
wealth, while the composition of the wealth is irrelevant (Grunberg and Modigliani (1954). It
follows therefore, that government banking arrangement should be structured and unified to
ensure the frugality of the government’s cash resources. It has to mention this position is
taken by most economists.

Unity of Treasury Principle: this principle states that the treasury has consolidated control
of all funds available to DMBs for efficient management and accountability (World Bank
2009) in other words, no other government agency should be allowed to operate bank account
without the overnight of the Treasury (Pattannayak and Fainboim 2010) Conceptually, a TSA
serves as a pool of government cash resources in one account or number of accounts which
are linked into a main account. Its objectives are the same in all jurisdictions. The primary
objectives are to ensure effective aggregate control over government cash balances.
According to {CBN Occasional Paper2017} consolidation of cash resources through a TSA
arrangement facilitates government cash management by minimizing borrowing costs. Other
objectives include: minimizing banking transaction costs, expediting remittance of revenue
collected through DMBs to the treasury ; prompt payment for approved government
procurement, facilitating reconciliation between banking and accounting data‟; efficient
control and monitoring of funds allocated to various government agencies, and facilitating
better coordination of fiscal programs with monetary policy which eliminates sudden fiscal
surprises for the monetary authority (Patternayak and fainbaim 2010).(Chijioke, Promise,
Queeneth 2018) noted three Theoretical Framework.

5.0 BENEFIT OF TSA

1. Allows complete and timely information on government cash resources. In countries with
advanced payment and settlement systems and an Integrated Financial Management
Information System (IFMIS) with adequate interfaces with the banking system, this
information will be available in real time. As a minimum, complete updated balances should
be available daily.

2. Improves appropriation control. The TSA ensures that the Ministry of Finance has full
control over budget allocations, and strengthens the authority of the budget appropriation.
When separate bank accounts are maintained, the result is often a fragmented system, where
funds provided for budgetary appropriations are augmented by additional cash resources that
become available through various creative, often extra-budgetary, measures.

3. Improves operational control during budget execution. When the treasury has full
information about cash resources, it can plan and implement budget execution in an efficient,
transparent, and reliable manner. The existence of uncertainty regarding whether the treasury
will have sufficient funds to finance programmed expenditures may lead to sub-optimal
behaviour by budget entities, such as exaggerating their estimates for cash needs or
channelling expenditures through off-budget arrangements.

4. Enables efficient cash management. A TSA facilitates regular monitoring of government

cash balances. It also enables higher quality cash outturn analysis to be undertaken (e.g.,
identifying causal factors of variances and distinguishing causal factors from random
variations in cash balances).

5. Reduces bank fees and transaction costs. Reducing the number of bank accounts results in
lower administrative cost for the government for maintaining these accounts, including the
cost associated with bank reconciliation, and reduced banking fees.

6. facilitates efficient payment mechanisms. A TSA ensures that there is no ambiguity

regarding the volume or the location of the government funds, and makes it possible to
monitor payment mechanisms precisely. It can result in substantially lower transaction costs
because of economies of scale in processing payments. The establishment of a TSA is usually
combined with elimination of the “float” in the banking and the payment systems, and the
introduction of transparent fee and penalty structures for payment services. Many
governments have achieved substantial reductions in their real cost of banking services by
introducing a TSA.

7. Improves bank reconciliation and quality of fiscal data. A TSA allows for effective
reconciliation between the government accounting systems and cash flow statements from the
banking system. This reduces the risk of errors in reconciliation processes, and improves the
timeliness and quality of the fiscal accounts.

8. Lowers liquidity reserve needs. A TSA reduces the volatility of cash flows through the
treasury, thus allowing it to maintain a lower cash reserve/buffer to meet unexpected fiscal
volatility.

6.0 CHALLENGES AND PROBLEMS OF TSA

The TSA provides a number of other problems and despite the fact that, it enhances the
overall effectiveness of a financial management system. The establishment of a TSA should,
therefore, receive priority in the Government reform agenda as they have been scepticism that
trailed the scheme. According to the directive, this measure is specifically to promote
transparency and facilitate compliance with sections 80 and 162 of the 1999 Constitution.
However, this is plagued by the inability to redistribute the income from the single treasury
back into the economy by ways of fiscal and expansionary monetary of government. Treasury
single account TSA has a lot of prospects and challenges for developing economy. In
practice, the government banking arrangements may consist of several bank accounts which
can be at both the central bank and commercial banks. Consolidating this might take serious
effort and genuine commitment on the part of the Central Bank of Nigeria. However, the
balances in commercial banks should be cleared every day and all government cash balances
should be consolidated in one central account—the TSA main account—of the treasury at the
central bank. This posed a huge challenge at the onset of the implementation of the treasury
single account. However, Issues related to cash management have arisen and should be
properly dealt with by regulatory authority. TSA is a good idea but it is not free of pitfalls
anyway. Several questions have been raised such as what happens when you do not have a
trusted leader like Buhari? What will the system abuse look like? Salary and pension
biometrics is a reference point. Corrupt Nigerians will develop a way out like the 1% so
called commission, Cash for hand & refund through contract inflation etc. What we need is
strong and transparent institutional financial framework supported by cashlite practicable
limits in real term not just on paper. Strong money laundering laws against cash based
transaction limits is needed too.

7.0 EMPIRICAL FRAMEWORK

Ekubiat and Ime (2016) studied the Adoption of Treasury Single Account (TSA) by State
Governments of Nigeria: Benefits, Challenges and Prospects. According to the study,
Nigeria’s Public Funds at all levels have been wrongly accounted-for by previous
administrations. But to avert this threat coupled with the present country’s dwindling
economy, Federal Government of Nigeria has implemented Treasury Single Account (TSA)
to properly manage the scare financial resources but State Governments of Nigeria have been
left-out. The aim of this study was to examine the benefits, challenges and prospects of
adoption of Treasury Single Account (TSA) by State Governments of Nigeria. Descriptive
cross-sectional survey design was adopted for the study. The population for the study
consisted of 200 Professional Accountants in Akwa Ibom State. Taro Yamane’s statistical
formula was used to select sample size of 133. Purposive sampling technique was used to
select the 133 respondents/samples. The data obtained from questionnaire administration
were analysed using descriptive statistics and t-test statistics. The finding reveals that, TSA
adoption and full implementation by the state governments will be of greatest benefit as
showed in the weighted means scores of 4.20 and tcal of 24.87; there will be challenges in a
short-run but the benefits at a long-run will definitely out-weight the challenges. It is the
conclusion in this study that, State Governments of Nigeria should adopt and fully implement
TSA for successful control and accountability of public funds so as to avoid bailout funds
always from any source. State governments should enlighten all stakeholders on the benefits
of TSA adoption as well as professional and regulatory bodies (ICAN, CBN, IMF, etc.)
should help in designing, conceptualizing and road-mapping of TSA for the states.

Ahmed (2016) studied the Treasury Single Account (TSA) as an Instrument of Financial
Prudence and Management: Prospects and Problems. According to the study, the Treasury
Single Account (TSA) was recently implemented fully in the Nigerian economy by the
present government in order to ensure prudence and probity in the management of financial
resources. With the TSA government expects to block all loopholes and leakages of financial
resources of the government and also ensure a robust financial management system. The
paper therefore provides the conceptual meaning of the TSA and also gives its expected
benefits to the economy of Nigeria such as enhance system of financial management and
control, unification of various Accounts of government, reduction of the costs of government
borrowing and ensuring of optimum utilization of government financial resources. The paper
also analyses the objectives of the TSA systems and its various Accounts such as TSA main
account, Subsidiary Account, ZBAs, Transit and Imprest Account among others. The paper
finally discusses the prospects of the TSA system and its challenges and concludes that the
system requires political will, honesty and determination so as to overcome the various
challenges identified in the paper in order to achieve the expected benefits of the system.

Oguntodu & Alalade, Adekunle and Adegbie (2015) carried out an Assessment of Treasury
Single Account and Nigeria’s Economy Between 1999 and 2015. According to the study, a
treasury single account is a pool in which all government revenue is collected and controlled
by the Central Bank of Nigeria, with the view to boost the economy and reduce corruption.
CBN statistical bulletin (1999- 2015) was analysed using the OLS estimator. To this effect,
an empirical analysis of the relationship between Treasury Single Account and economic
performance in Nigeria was carried out. The result shows that the Treasury Single Account
has a positive significant impact on the country’s economic growth but this impact is limited
by various factors, one of them being the recent implementation of the policy in Nigeria
which made the discovery of historical data difficult. The recommendation of this study is
that the federal government of Nigeria should initiate policies and various means to make
sure that there are proper accountings of the funds entering into the Treasury Single Account,
and that such fund should follows due process. Also that any subsequent foul play by any
agencies, or even the CBN is duly prosecuted.
 METHODOLOGY
The procedures and methods used for this research work was secondary data method. This is
a method where countries that have adopted treasury single account and several books,
journals, cases on treasury single account were collected, reviewed and analysed to form or
come up with the required information.

TREASURY SINGLE ACCOUNT PRACTICE IN NIGERIA

State Governments continue to face intense pressure on their cash flows in the face of
dwindling revenues and the need to meet increasing statutory and social responsibilities. To
address this issue, State Governments are undertaking financial and treasury management
reforms of which the Treasury Single Account (TSA) scheme is a major component. This is
consistent with the strategic public sector transformation initiatives and also in line with the
provision of Section 120 of the 1999 Constitution. The Central Bank of Nigeria (CBN), in
exercise of its powers, as provided in the CBN Act, 2007, Section 47, sub section 2(2d),
hereby issues the following guidelines on the management and operation of the Treasury
Single Account (TSA), hosted with the CBN, by State Governments

GOALS OF THE GUIDELINES

The objective of this Guideline is to provide State Governments with a clear framework to
support their successful implementation of the TSA initiative, based on standardized banking
arrangements, operational processes and IT infrastructure.

TSA OBJECTIVES

The TSA is primarily designed to bring ALL Government funds in bank accounts within the
effective control and operational purview of the Treasury, in order to: Enthrone centralized,
transparent and accountable revenue management; Facilitate effective cash management;
Ensure cash availability; Promote efficient management of domestic borrowing at minimal
cost; Allow optimal investment of idle cash; Block loopholes in revenue management;
Establish an efficient disbursement and collection mechanism for Government funds;
Improve liquidity reserve; and Eliminate operational inefficiency and costs associated with
maintaining multiple accounts across multiple financial institutions.
 FINDINGS

In Nigeria, it is the case that the implementation of TSA has helped to tame the tide of
corruption of financial leakages and embezzlement. The implementation of Single Treasury
Account (TSA) has blocked revenue leakages within the government parastatals as the
Ministry of Finance will be able to monitor the in-flows and outflows, hence, augment the
reduction in oil revenue due to falling oil prices.

TSA has helped to block most if not all the leakages that have been the bane of the growth of
the economy. The adoption and implementation of TSA has been a strategic move by the
Federal Government of Nigeria that has improved efficiency, transparency and accountability
in the management of the nation's financial resources.

The implementation of TSA policy has helped to eliminate leakages and wastages, instilled
fiscal discipline and prudence, enhanced accountability, transparency and effective budget
execution and reduce corruption in the Nigerian public sector. Onyekpere (2015) noted that
TSA is a process and tool for effective management of government's finances, banking and
cash position. In accordance with the name, it pools and unifies all government accounts
through a single treasury account. This has been achieved and we have moved on from the
fractured system where every single MDA operated its own Bank Account.

The underlying purpose of the TSA was to enable the government to consolidate all its cash
into one account, or a set of linked accounts instead of holding multiple disconnected bank
balances across its Ministries, Departments and Agencies (MDAs). This has enabled
Treasury to operate efficient cash management and controls, by taking custody of all revenue
as soon as it is received and controlling the payment of all approved expenditure claims. This
in turn has reduced waste.

Furthermore, the recent efforts to fight corruption in Nigeria through the TSA have be
applauded considering the exchange-rate volatility experienced in the country and fallen
global oil prices that has critically impacted public-sector spending, TSA is a part of the on-
going economic reforms of the FGN aimed at fostering transparency and accountability in the
revenues and expenditures of MDAs. It is seen as one of the very good measures adopted by
the current administration in its fight against corruption in Nigeria. It is expected that with the
TSA the leakages would be blocked and openness and accountability enhanced in the running
of government businesses.Auditor-General for the Federation (AGF) engaged Price water
house Cooper to investigate crude oil revenues generated by the Nigerian National Petroleum
Corporation (NNPC) that was withheld or unremitted between 1 January 2012 and 31 July
2013 as noted by Sanusi (2015) NNPC had lifted $65bn worth of crude on behalf of the FGN
but remitted only $15.2bn into the Federation Accounts, with $49.8bn outstanding. In
addition, the Revenue Mobilization and Fiscal Commission (RMAFC) said in addition to the
N3.235 trillion, the AGF noted that the NNPC owed the Federation Account in 2014 from
domestic crude sale, the Commission's records further revealed another debt of N1.99 trillion
for the same year for the same purpose. It was observed that between 2012 and November
2015, $1.615 billion was transferred to the various accounts.

As the Federal Government intensifies efforts to recover unremitted operating surpluses by

Agencies and increase Independent Revenue, an additional sum of N793 million has been
recovered from three Federal Government Agencies by the Recovery Committee.

The revelation by a Federal Government audit report that 33 revenue generating agencies
failed to remit N450 billion to the Federation Account is a clear indication of lack of
accountability and transparency in the indicted agencies which incidentally had not been
subjected to TSA. It is however clear that an end has come to the era of gross financial
malfeasance with the introduction and implementation of Treasury Single Account.

Recommendations

The Office of the Auditor-General of the Federation has asked Price Waterhouse Coopers and
EY to audit the Treasury Single Account (TSA). Mr. Alexander Oyeyemi, a director in the
OAGF’s office disclosed this recently. Mr. Oyeyemi also revealed that over N5 trillion has
been paid into government coffers since the policy began, while N300 billion that has been
unclaimed by MDA’s will be invested in treasury bills.
MORE FACTS ABOUT THE AUDIT
The Federal Government wants to confirm that funds remitted by the Ministries, Departments
and Agencies (MDAs) are equal to the amount paid into the bank accounts. The FG had
recently taken 7 banks to court for allegedly hiding money meant for the TSA, then withdrew
the case citing public interest. The scope of the audit covers MDA balances before and after
the implementation of the policy. Minister of Finance, Kemi Adeosun had in February this
year stated that the government had recovered some funds from banks that were not remitted
into the TSA account.

The Treasury Single Account (TSA) was introduced by the Goodluck Jonathan
administration, but implemented by the Buhari administration in November 2015. While the
government has witnessed an increase in its revenue the policy has led to a huge drop in
government deposits with banks. PWC was formed in 1198 from the merger of
Pricewaterhouse and Coopers and Lybrand. The company has roots dating to the 18th
Century. EY (formerly known as Ernest and Young) was founded in 1989 and is one of the 4
biggest accounting firms in the world.

In view of the benefits, we call for strict compliance with the directive on TSA by the
relevant government organisations. The implementation of the order will, however, require
the cooperation of the National Assembly with the Executive arm to ensure strict compliance
by the MDAs to make enforcement possible. Again, The MDAs, in collaboration with the
Executive, will also need to be diligent in drawing up their budgets and presenting them for
consideration and passage by the legislature. The financial regulators, including the CBN,
should also be proactive and institute measures to correct any lapses or negative impact of the
policy, as no law or measure is fool proof. The fear that it will negatively affect commercial
banks, and possibly lead to massive job losses, should be addressed. Furthermore, total
commitment and sincerity of purpose are required of those who are to implement this policy.
The agencies of government that are affected by the measure are thus enjoined to ensure that
it succeeds. They must subsume their personal interests under the greater need of the country.
Altogether, what Nigeria requires at this time is the political will to push this reform measure
through. We suggest that all stakeholders play the roles expected of them to ensure a
successful implementation of the new policy.
 Conclusion

We hope that the policy will greatly improve the management of government revenue. If it is
implemented, it will pave way for the timely payment and capturing of all revenues going
into the government treasury, without the intermediation of multiple banking arrangements.
Besides, the system will likely reduce the mismanagement of public funds by revenue-
generating agencies. It is also expected to help check excess liquidity, inflation, high interest
rates, round-tripping of government deposits, and the sliding value of the naira. In view of
these benefits, we call for strict compliance with the directive on TSA by the
Arabian Journal of Business and Management Review (OMAN Chapter) Vol. 5, No.4;
November. 201538relevant government organisations.

The implementation of the order will, however, require the cooperation of the National
Assembly with the Executive arm to ensure strict compliance by the MDAs. The fears that
have been raised about the implications of the new measure are hardly necessary. The
benefits of the TSA for the economy and good governance far outweigh its seeming
disadvantages. The consolidation of federal revenues in a single account will allow for easier
and better tracking of funds, thereby enthroning a better regime of accountability, in line with
global best practice. For an administration that has unwritten social contract signed with
Nigerians in terms of service delivery, it has the obligation to aggregating states’ resources to
provide services and amenities promised to the people. Any step taking in the direction aimed
at plugging leakages in revenue generating agencies should be seen as a step in the right
direction
REFERENCES

Sailendra Pattanayak and Israel Fainboim – August 201,

Proshare research January 2018

Eme, Okechukwu Innocent and Chukwurah, Daniel C, November 2015

Adeolu, I. A. (2015). Business and Economy; Market Development - Understanding the

Treasury Single Account (TSA) System. Ibadan, Oyo State, Nigeria: John Archers.

Imperial Journal of Interdisciplinary Research (IJIR), Vol-3, Issue-5, 2017

International Journal of Research and Innovation in Social Science (IJRISS) |Volume IV,
Issue XII, December 2020