Section 3.2: Receipts, Payments, and Treasury Single Account (TSA)

Control of Government Revenue and Receipts

All public moneys received by government officers must be dealt with in accordance with the Financial Regulations. Under FR 301, any officer who is appointed a Collector of Revenue is personally responsible for the prompt collection, custody, and accounting of all revenue under their control. Officers must issue official receipts for all public moneys collected.

The primary accounting document used by revenue collectors is the Treasury Book 6 (Receipt Book). Under FR 302, collectors are required to write receipts in duplicate, using carbon paper to produce the copy, and ensuring that each sheet is signed and date-stamped. All collections must be classified under the correct Revenue Head and Sub-head. Collectors must keep a Revenue Cash Book and pay all collections into the Treasury Single Account (TSA) or designated bank account daily or at specified intervals, depending on the volume of receipts (FR 304).

Payment Vouchers and Payment Procedures

No disbursement of public funds can be made unless it is supported by a formally authorized Payment Voucher (FR 601). A payment voucher is a financial document that details the nature of the transaction, the amount, the payee, and the budget head to be debited.

Key rules governing payment vouchers under FR 602 to FR 607 include:

• Completeness of Details: Vouchers must contain full details of the transaction, including dates, quantities, rates, and references to supporting documents (e.g., invoices, local purchase orders (LPOs), contract agreements, store receipt vouchers).
• No Alterations: Vouchers must not contain erasings, crossings-out, or alterations. Any minor corrections must be initialed by the preparing officer (FR 603).
• Amount in Words and Figures: The amount must be written in both words and figures to prevent alteration.
• Required Signatures: Every voucher must be prepared by a designated officer, checked by a second officer (usually a checker in the internal audit), and authorized by the Accounting Officer or an officer holding delegated authority. The voucher must also be signed by the payee as an acknowledgment of receipt of funds (except where e-payment is used, in which case the bank payment schedule replaces the payee's signature).

Under FR 613, a payment voucher that has been paid must be stamped "PAID" with the date, and the payment schedule must be securely attached to prevent double payment.

The Treasury Single Account (TSA) Mechanism

The Treasury Single Account (TSA) is a unified structure of government bank accounts that gives a consolidated view of government cash resources. Prior to the TSA implementation, government ministries, departments, and agencies (MDAs) operated thousands of separate bank accounts in commercial banks, leading to fragmentation, idle cash, and high borrowing costs.

Under the TSA reform, which is backed by Section 80 and 162 of the 1999 Constitution and implemented via Treasury Circulars, all MDAs are required to close their accounts in commercial banks and consolidate them into a single account at the Central Bank of Nigeria (CBN). The TSA operates as a consolidated pool: all revenues collected by MDAs flow into the Sub-Treasury Account, while payments are authorized electronically and debited from the same account. The TSA has eliminated the practice of MDAs holding public funds in commercial banks to yield unauthorized interest, and has significantly improved cash management and treasury oversight.

Electronic Payment (e-Payment) Rules

In line with modern public financial management reforms, the Federal Government of Nigeria implemented a mandatory e-Payment policy (FR and Treasury Circulars). E-payment is the direct transfer of funds from the government’s account to the bank accounts of the beneficiaries (contractors, suppliers, and staff).

Key rules of the e-Payment system include:

1. No Check Payments: The use of cheques for payments of public funds is abolished, except in highly specialized, pre-approved circumstances.
2. Direct Credit: All payments must be made electronically via platforms like Remita, directly to the bank account of the beneficiary.
3. Payment Mandate: Payments require an electronic payment mandate signed by the authorized co-signatories (e.g., the Accounting Officer and the Director of Finance and Accounts) and sent to the Central Bank or paying bank.
4. Audit Trail: Every e-payment transaction must generate a digital audit trail, including a transaction ID, bank payment confirmation sheet, and electronic schedule containing the bank name, account number, BVN (Bank Verification Number), name of payee, and purpose of payment.
5. Timelines: Under treasury rules, all payments must be processed within 24 hours of approval to avoid unnecessary delays.