Cash Management Workshop: Organization and Communication

Gail Ostler of the US Treasury, Office of Technical Assistance, recommended how cash management should be organized in governments. She described the responsibilities of the cash management unit:

• Forecasts, monitors and tracks cash flows
• Prepares cash flow reports and identifies and reports on variances
• Provides leadership and direction to all ministries / departments on cash management issues
• Develops and maintains cash management policies and procedures
• Recommends improvements in all aspects of cash management to strengthen internal controls and enhance available cash balances
• Prepares risk and cost benefit analysis
  
• Maintains banking relationships
  

Ms. Ostler pointed out that leadership is the most critical responsibility for cash management units. She suggested that many government cash management units do not proactively recommend improvements. She described the qualifications needed to be an effective cash manager. The ability to communicate is critical to be effective, according to Ms. Ostler.

A slide showing the flow of information needed in cash management was presented by Ms. Ostler. It is important to know when there will be large pieces of revenue coming to the government. Information sources include:

• Banking System (Commercial and / or Central Bank)
• Accounting System
• Budget Spending Quotas, Plans and Amendments
• Reports Monitoring Budget Execution
• Macro-Economic Forecasts
• Major Budget Institutions (Exception Reporting)
• Revenue Institutions (Exception Reporting)
• Debt Unit

Ms. Ostler stressed that information from big spending units is critical to cash management. She described the use and purpose of cash management committees.