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| The Optimal Design of Government Cash Management System: The Gap and Direction of Efforts |
| WANG Yongjun
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| Institute of Finance and Economics, Central University of Finance and Economics |
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Abstract The loopholes and shortcomings of China's current government cash management system has become an important hidden-peril which threatens the safety and performance of public money. It is in urgent need of locking the standard TSA(Treasury single account) and two nonstop payments –the direct payment to the TSA and the direct payment by the TSA to beneficiary, to further optimize the system in four key aspects: the framework of accountability, the daily centralization of cash balance and transaction records, the arrangement of bank and the structure of account, the supporting mechanism. The agenda of the reform should focus on the four priorities: to completely abolish and strictly limit such transitional accounts as special financial accounts, to replace the advances-liquidation mode with the direct payment by the TSA, to establish the internal control process of monitoring the real-time cash flow cycle, one-by-one and through the whole course, to construct the information disclosure mechanism of the cash management performance. These efforts should be taken as the core of public budget reform, which aims at eliminating the basic fragility, and be combined with the efforts of strengthening the financial regulation of central bank and improving the monetary policy.
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Received: 30 June 2015
Published: 01 January 1900
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