Economy

Expenditure Dept gets direct control over Public Financial Management System

Shishir Sinha New Delhi | Updated on April 15, 2021

The PFMS is a web-based online software application developed and implemented by the Controller General of Accounts   -  Blue Planet Studio

Division will be under the administrative control of CGA, but will get full autonomy

With the Expenditure Department of Ministry of Finance now deciding to directly control Public Financial Management System (PFMS), the cash management system of the government has undergone a major change after almost four-and-a-half decades.

Set up in 2009, the PFMS is a web-based online software application developed and implemented by the Controller General of Accounts (CGA). It was set up with an objective to track funds released under all Plan schemes of the Centre, and for real-time reporting of expenditure at all levels of programme implementation. Subsequently, its scope was enlarged to cover direct payment to beneficiaries under all schemes.

The latest order issued by the Expenditure Department said that it has been decided to create a dedicated PFMS Division within the CGA to exclusively look after the work of design, development and implementation of the system.

Dedicated division

“The Division will be under the administrative control of the CGA. However, it will be given functional autonomy backed by adequate administrative and financial powers,” it said.

Further, it said that an Additional CGA rank officer will head the division. Though the officer will report to the CGA administratively, for PFMS related matters, the officer will report functionally to the Expenditure Secretary, it added.

The order highlighted that the PMFS was being revamped to enable it to reach its full potential. “There is need to streamline processes, improve cash management, reduce float, operationalise ‘just in time’ release of funds and use PFMS as an effective decision support system. Public/agency interface of PFMS needs transformation and compliance burden of users need to be reduced. The Department of Expenditure, which has considerable interface with the Central Ministries and State Governments, also needs to play a more active role,” it said.

A senior government official told BusinessLine that the carefully drafted order clearly talked about the change. “It appears that Expenditure Department is not very happy with the functioning of CGA and which is why there is change,” the official said. In fact, the Department has already issued an order for appointment of 28 officers (including one additional CGA rank officer along with five joint CGA rank, four Deputy CGA rank and 18 Assistant CGA rank officers) for the new Division.

The officer said that this is one major development after 1976, when the Comptroller & Auditor General of Accounts (C&AG) was removed as the Central Authority for compilation of accounts for various Central Government Ministries and Departments. Since then, the CGA and a dedicated civil service cadre, the Indian Civil Account Service (ICAS) officers, have been entrusted with the task of taking care of expenditure and account of various Ministries and Departments except Defence and Railways. ICAS officers are appointed in various ministries and departments as Controller of Account. These officers also man PFMS under the CGA.

One more change

There is one more change. Under the new system, all States and UTs have been clubbed into three Regional Directorate, each one headed by a Deputy CGA. Presently, each of State/UT is under one ICAS officer.

Published on April 15, 2021

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