The Union Government has asked the State Government to complete the process of integration of the State treasury with Public Fund Management System (PFMS) soon so that release of Central funds and their utilisation can be monitored in a better way.
Union Finance Secretary Ashok lavasa on Friday, in a letter, asked the State Government to set up a State advisory group for PFMS, which is run by the Controller General of Accounts (CGA) under the Finance Ministry.
lavasa mentioned that the Prime Minister has emphasised on improving financial management processes in implementation of Central Assistance to State Plans (CASP) schemes so as to facilitate in-time release of funds and complete monitoring of fund utilisation.
Meanwhile, the CGA has drawn up an implementation strategy for scaling up the PFMS which would used by Central Ministries for release of funds to the State’s Consolidated Fund.
Funds are transferred to the State Implementing Agencies (SIA) from the State treasury. The expenditure and utilization of these funds can be monitored by the PFMS provided the SIAs are registered with PFMS. Hence, lavasa has urged the State Government to implement PFMS on a mission mode.
Besides integrating State treasury with PFMS, the State has also been advised to register all SIAs and configure all schemes with PFMS.
There would be State Project Management Units (SPMU) and District Project Management Units in the State. While PFMS will provide manpower for SPMU, the DPMUs would be manned by the State Governments, said lavasa.
Once PFMS-State treasury integration is ready, there would be hardly any scope for blaming each other on funds release and their utilisation as everything would go in a transparent manner, said sources.
However, diversion of funds from Central sector to State schemes would now be difficult as the CGA monitored PFMs would not allow such an action, according to officials.