With effect from April 2, 2018, payment to (Third Parties) Contractors, Consultants and Suppliers who transact business with state institutions operating the Ghana Integrated Financial Management System (GIFMIS) which generate funds internally would be paid through Electronic Fund Transfers (EFT).
No manual cheque would be issued by Ministries, Departments and Agencies to Contractors and Suppliers as moneys would be paid electronically into the Accounts of the owed entities.
The Finance Minister, Mr. Ken Ofori-Atta, disclosed this in an address read for him by Nana Agyei Mensah, Technical Advisor to the Minister of Finance on the Ghana Integrated Public Financial Management Information System (GIFMIS) in Accra at a sensitization seminar for Heads of Account and Treasury Officers of Ministries, Departments and Agencies (MDAs) of IGF institutions.
He said for the smooth implementation of the policy, the Controller and Accountant General’s Department (CAGD) and the Ghana Integrated Financial Management Information System under the auspices of the Ministry of Finance have embarked on a hands-on training on the Electronic Funds Transfer. and that all stakeholders and in particular IGF institutions would be expected to collect System Cheque Books from the Controller and Accountant General’s Department for internal use before the rollout of the policy.
The Minister explained that the Electronic Funds Transfer is the electronic exchange and transfer of money either within a single financial institution or across multiple institutions, through computer-based systems without manual or human intervention.
The Project Director of the Public Financial Management Reform Project (PFMRP), Dr. Sani Abdulai stated that benefits of the implementation of the EFT include prudence and efficiency as the direct deposits will help to eliminate the current practice involving manual and labour intensive processes and disbursement of cheques as well as the avoidance of the payment of Bank Charges.
He said the electronic system is user-friendly, involves less accounting works, makes it easier for Bank reconciliation, conserves time and will also eliminate the incidence of the issuance of dud cheques.
Madam Paddy Dzodzomenyo, Director of Banking of the Bank of Ghana said the Electronic fund transfer happens when digital instructions are sent to the Bank of Ghana to move funds between two accounts with the instruction given through a computer-based system of the Payer (GIFMIS) which is interfaced with the Bank of Ghana. She assured the participants of the readiness of the Central Bank for the success of the initiative.
In a presentation, the GIFMIS Component Lead of the Public Financial Management Reform Project (PFMRP), Alhaji Siraj Tanko disclosed that Third Party firms which transact businesses with the 54 IGF Agencies would be required to submit their Bank Account details on Letter Heads to the various agencies they provide services to for onward transmission to the GIFMIS Secretariat.
He said under the EFT, Contractors and Suppliers are encouraged to sign-on to their Banker’s Transaction Alert scheme to get notification on the EFT from the GIFMIS Secretariat and that Cheque stationery for internal use for the exercise have been procured for the Treasuries.
The GIFMIS is an integrated computerized financial management system being deployed to enhance transparent public financial management in line with the Public Financial Management Act (PFM ACT 921- 2016) in supporting Budget preparation and approval, Budget execution, Accounting and Reporting, Revenue generation and expenditure administration among others.