The government has decided to universalise the use of Public Financial Management System (PFMS) to cover all transactions / payments under the central sector schemes.
Announcing this on Friday, Prime Minister Narendra Modi emphasised the need for improved financial management for implementation of central Plan schemes so as to facilitate just-in-time release and monitoring of the usage of funds, including information on its ultimate utilisation.
The complete monitoring of these schemes will require mandatory registration of all implementing agencies (IAs) on PFMS and mandatory use of expenditure, advance and transfer (EAT) module of the PFMS by all implementing agencies (IAs).
The department of expenditure is administering the Public Financial Management System, which is an end-to-end solution for processing payments, tracking, monitoring, accounting, reconciliation and reporting. It provides the scheme managers a unified platform for tracking releases and monitoring their last mile utilisation.
The implementation plan covers the complete universe of central sector schemes, which inter-alia requires certain steps to be taken by each ministry / department like bringing the central sector schemes on the PFMS platform, mandatory registration of implementing agencies receiving and utilising funds on PFMS, mandatory usage of PFMS modules by all registered agencies, including grantee institutions, for making payments, advances and transfers etc.
The department of expenditure on Friday issued detailed instructions to the ministries to integrate their systems / applications with the PFMS.
The central project monitoring unit of PFMS will assist the ministries in registration of implementing agencies for the central sector schemes. Central ministries/departments have been directed to complete the full roll-out of PFMS in respect of the ministry/department and attached/ subordinate offices by 31 October 2016, and for all grantee institutions by 31 March 2017.