Enhancing and streamlining of regular expenditure payment processes at the state treasury

	Very frugal in recurrent expenditures, Ministry of Finance
	The State Treasury promotes digitalization of expenditure control

Operational Activities at the State Treasury in Lao Cai Province

Effective service enhancement

Pursuant to Government Resolution No. 17/NQ-CP dated March 7, 2019, concerning several tasks and key solutions for developing an Electronic Government for 2019-2020, with a vision extending to 2025, by the end of 2020, the State Treasury essentially achieved its objective of evolving into an Electronic Treasury. In this context, the Budget and Treasury Management Information System (TABMIS) assumes a pivotal role, handling all state budget revenue and expenditure transactions. Presently, all public services offered by the State Treasury are completely online, with full participation from 100% of Budget-Utilizing Units.

The State Treasury, aspiring to transition from an Electronic Treasury to a Digital Treasury, continues to explore and implement innovations and improvements to further amplify the efficiency of its services. A prime example of these initiatives is the automated processing of regular expenditures for Budget-Utilizing Units.

This initiative is deployed as follows: The State Treasury established a connection between its information technology system and service providers, as well as commercial banks. Periodically, service providers submit invoices directly or indirectly via commercial banks to the State Treasury. Based on these invoices, the State Treasury autonomously debits the accounts of Budget-Utilizing Units to make payments to the providers and dispatches debt notices to Budget-Utilizing Units. This automatic account debiting is facilitated through an authorization agreement between Budget-Utilizing Units and the State Treasury, clearly defining customer codes, services, and the respective accounts for debiting.

The State Treasury observes that after a period of implementation and monitoring of this initiative, certain types of expenditure documents are identified as uncomplicated, wholly reliant on invoices from service providers, numerous, and recurrent monthly, such as payments for electricity, water, and telecommunications. Minimizing control procedures for these could enable Budget-Utilizing Units and State Treasury staff to allocate more time to scrutinize more significant documents.

Reducing the payment process to 2-3 hours

After over a year of developing the application and six months of pilot operations, by May 2023, the automated payment procedure for electricity, water, and telecommunications expenses was officially launched nationwide. By October 2023, more than 38,000 Budget-Utilizing Units had engaged in automated payments, authorizing over 167,000 customer codes for automated transactions, covering over 1.033 trillion VND in electricity and water services and 121 billion VND in telecommunications services.

As the State Treasury and various local State Treasury offices note, these advancements and modernizations have markedly reduced the time and operational costs for Budget-Utilizing Units due to the elimination of the need to prepare payment documents for the State Treasury; the automated payment system significantly shortens transaction times from one day per expenditure file with extensive personnel involvement (in manual procedures) to roughly 2-3 hours for all expenditure documents.

Additionally, this reduction considerably decreases the volume of transaction documents, freeing up Treasury officials to focus on more complex payment files; it redirects human resources from execution to supervision, inspection, and reconciliation, enhancing the shift from "pre-audit" to "post-audit". Automated payments also contribute to the efficacy of cash flow forecasting.

However, practical implementation has revealed certain limitations due to the diverse nature of payment needs. Specifically, at any moment, a customer code of a Budget-Utilizing Unit's service can only authorize debit from a single account. Addressing this, numerous units have suggested the State Treasury explore options to permit debiting from various accounts.

Furthermore, the automated payment process does not apply to pre-paid charges for over two years (such as pre-paying for six months or a year for the subsequent year) for Internet services, since Government Decree No. 163/2016/NĐ-CP dated December 21, 2016, implementing certain provisions of the State Budget Law, does not encompass this scenario. Consequently, the State Treasury is considering proposals and potentially needs to recommend adjustments to the Government and National Assembly for amending the Decree, if necessary.

Despite these ongoing challenges, the State Treasury intends to continue its research, upgrades, and refinements of the process to more comprehensively meet user needs, thereby collaborating with the Ministry of Finance and the Government to realize the ambition of establishing a Digital Government.