GEORGIA’S PFMS MODEL AND STRUCTURE OF THE TREASURY GENERAL

LEDGER

Lela KurashviliFebruary, 2012

THE NATIONAL TREASURY PFMS MODEL

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THE STATE TREASURY A BUDGET ORGANIZATION

THE GENERAL LEDGER

REPORTING

THE FUNCTIONAL PROCESS

THE INITIAL DOCUMENTS

THE FUNCTIONAL PROCESS

CONFIRMATION OF AGREEMENTS /

LIABILITIES

CONFIRMATION OF INVOICES /PAYMENT

ORDERS

RECORDING OF REVENUES/ PAYMENTS /

REFUNDS

PROCUREMENT / OBLIGATIONS

DEBTORS / CREDITORS / PAYMENTS

NON-MONETARY OPERATIONS, EXCEPT

ASSETS AND INVENTORY

ASSET AND INVENTORY

MANAGEMENT MODULE

HR MANAGEMENT PERSONNEL PAYROLL

BUDGET/ALLOCATIO

NS

THE ELECTRONIC

TENDER SYSTEM

AGREEMENT

GROUNDS FOR LIABILITIES, OTHER

DOCUMENTS

INVOICE

NON-MONETARY EVENTS

REPORTING

DEBT

TAXES

THE GENERAL LEDGER

$

$

$

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THE PROCUREMENT / OBLIGATION LEDGER

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• INFORMATION ABOUT AGREEMENTS WILL BE RECORDED IN COMPLIANCE WITH CPV CODES;

• MODULES FROM WHICH THIS INFORMATION WILL BE TRANSFERRED:

REMUNERATION OF EMPLOYEES“ „INTERNAL DEBT“ „FOREIGN DEBT“ „HR MANAGEMENT“

PROCUREMENT/ OBLIGATIONS

HR MANAGEMENT PERSONNEL PAYROLL

DEBT

BUDGET /DISBURSE

MENT AGREEMENT

GROUNDS FOR LIABILITIES, OTHER

DOCUMENTS$

THE ELECTRONIC

TENDER SYSTEM

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THE GENERAL LEDGER

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THE INITIAL DOCUMENTS

THE FUNCTIONAL PROCESS CI

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THE PROCUREMENT / OBLIGATION LEDGER

• A record made in the Procurement/Obligations Ledger is a source of double entries in accounting books.

• An organization selects the type of operation using the Directory of Operations;

• The Directory ensures that the budget classification clause is selected from the Uniform System of Accounts;

• The Directory ensures that the accounting reports are made based on debit entries.

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THE OPERATIONS DIRECTORY

THE OPERATION TYPE

THE BUDGET CLASSIFICATION

CLAUSE

THE ACCOUNTING REPORT THE DEBIT ENTRY

THE PROCUREMENT / OBLIGATIONS LEDGER

5HR MANAGEMENT PERSONNEL PAYROLL

DEBT

BUDGET /DISBURSEMENT AGREEMENT

GROUNDS FOR LIABILITIES, OTHER

DOCUMENTS$

THE ELECTRONIC TENDER SYSTEMPROCUREMENT/

OBLIGATIONS

• THE SYSTEM AUTOMATICALLY REGISTERS INFORMATION IN THE PROCUREMENT / OBLIGATIONS LEDGER;

• ANY CHANGE MADE IN THE LEDGER IS AUTOMATICALLY REFLECTED IN THE ELECTRONIC DATA BASE OF THE TREASURY.

• THE OPERATIONS DIRECTORY HAS A “TREE STRUCTURE”.

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THE STATE TREASURY A BUDGET ORGANIZATION

THE GENERAL LEDGER

REPORTING

THE FUNCTIONAL PROCESS

THE INITIAL DOCUMENTS

THE FUNCTIONAL PROCESS CI

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THE PROCUREMENT / OBLIGATION LEDGER

• A Typical Directory of Operations– A budget classification clause; – An Accounting Report; – A cash based or accrual operation;– Functional classification etc.

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11112121 31121 2121

Clause DebitPurchase of a transport vehicleby means of cash transfer to the supplier

Example:

THE DEBIT/CREDIT PAYMENT LEDGER

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THE ELECTRONIC TENDER SYSTEM

HR MANAGEMENT PERSONNEL PAYROLL

DEBT

BUDGET /ALLOCATIO

NSTHE

AGREEMENT

GROUNDS FOR LIABILITIES, OTHER

DOCUMENTS$

INVOICE

DEBTOR / CREDITOR PAYMENTS

INVOICE

PROCUREMENT / OBLIGATIONS

• INFORMATION ABOUT THE TYPE OF OPERATION;

• INVOICE/AGREEMENT CONDITIONS;• THE OPERATION SUB-TYPE, DEFINED

ACCORDING TO THE OPERATION SUBJECT.

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THE GENERAL LEDGER

REPORTING

THE FUNCTIONAL PROCESS

THE INITIAL DOCUMENTS

THE FUNCTIONAL PROCESS CI

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PROCUREMENT/OBLIGATIONS LEDGER

8HR MANAGEMENT PERSONNEL PAYROLL

DEBT

BUDGET /ALLOCATIO

NSTHE

AGREEMENT

GROUNDS FOR LIABILITIES, OTHER

DOCUMENTS$

THE ELECTRONIC TENDER SYSTEM

INVOICE

DEBTORS/CREDITORS PAYMENTS

INVOICE

PROCUREMENT / OBLIGATIONS

CONFIRMATION OF INVOICES /

PAYMENT ORDERS

RTGS

THE GENERAL LEDGER

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• AN ACCOUNTING ENTRY MADE BY SELECTING THE OPERATION;• ACTIVATED ONLY IF THE AMOUNT IS SPECIFIED;• IN PARALLEL, A PAYMENT ORDER IS FORMED.

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THE STATE TREASURY A BUDGET ORGANIZATION

THE GENERAL LEDGER

REPORTING

THE FUNCTIONAL PROCESS

THE INITIAL DOCUMENTS

THE FUNCTIONAL PROCESS CI

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PROCUREMENT/OBLIGATIONS LEDGER

9HR MANAGEMENT PERSONNEL PAYROLL

DEBT

BUDGET /ALLOCATIO

NSTHE

AGREEMENT

GROUNDS FOR LIABILITIES, OTHER

DOCUMENTS$

THE ELECTRONIC TENDER SYSTEM

INVOICE

DEBTORS/CREDITORS PAYMENTS

INVOICE

PROCUREMENT / OBLIGATIONS

CONFIRMATION OF INVOICES /

PAYMENT ORDERS

RTGS

THE GENERAL LEDGER

• A PAYMENT ORDER IS CONFIRMED BY A BUDGET ORGANIZATION BASED ON DETAILED CPV CODES;

• THE PAYMENT ORDER CONFIRMED BY THE TREASURY IS AUTOMATICALLY SENT TO RTGS.

• ACCOUNTING RECORDS MADE BASED ON THE DOUBLE ENTRY PRINCIPLE ARE AUTOMATICALLY REFLECTED IN THE GENERAL LEDGER OF THE TREASURY“

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THE GENERAL LEDGER

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THE INITIAL DOCUMENTS

THE FUNCTIONAL PROCESS CI

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ASSETS AND INVENTORY

10

$

DEBT

THE ASSET AND INVENTORY

MANAGEMENT MODULE

THE GENERAL LEDGER

NON-MONETARY EVENT

• Example: Transport vehicle: Mercedes, “C” class, manufactured in 2000“ - Code 0001;

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THE STATE TREASURY A BUDGET ORGANIZATION

THE GENERAL LEDGER

REPORTING

THE FUNCTIONAL PROCESS

THE INITIAL DOCUMENTS

THE FUNCTIONAL PROCESS CI

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ENCY• ASSETS ARE RECORDED ACCORDING TO THE IDENTIFICATION

CODES OF ANALYTICAL RECORDING (REPORT);• EACH OPERATION PERFORMED WITH ASSETS IS AUTOMATICALLY

REFLECTED IN THE MAIN LEDGER BY MEANS OF BACK LINK. • ACCEPTANCE OPERATION• ACCRUAL OF

AMORTIZATION• DEPRECIATION• MATERIAL IMPROVEMENT• CHANGE OF TYRES• REPAIR COSTS

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DEBT

$

THE GENERAL LEDGER

NON-MONETARY EVENT

NON-MONETARY OPERATIONS,

EXCEPT ASSETS AND INVENTORY

NON-MONETARY EVENT

THE GENERAL LEDGER

OTHER NON-MONETARY OPERATIONS, EXCEPT ASSETS AND INVENTORY

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THE GENERAL LEDGER

REPORTING

THE FUNCTIONAL PROCESS

THE INITIAL DOCUMENTS

THE FUNCTIONAL PROCESS CI

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• NON-MONETARY OPERATIONS• INTERNAL OPERATIONS• OTHER ECONOMIC FLOWS

ACCOUNTING OF AGGREGATED PARAMETERS

• Once at the end of each reporting period, aggregated parameters are recorded in the General Treasury Ledger as one operation: Expenses funded from income received from economic

activity of legal entities of public law; Common public payments; Direct payments made bypassing the Common Treasury

Account.

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GEORGIA’S PFMS MODEL AND STRUCTURE OF THE TREASURY GENERAL LEDGER

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Thank You for Attention!

www.mof.gewww.treasury.gov.ge

Lela KurashviliFebruary 2012