The response will need to be country-context specific, within the legal framework and based on maturity of the institutions. This approach requires open and new ways of thinking, ranging from making cash available to pay for public services, to processing and disbursing payments with minimal bureaucratic layers, to reporting in a timely and accurate manner to ensure transparency.
The World Bank paper on Governance COVID19 Response: Agile Treasury Operations during COVID-19 provides guidance on agile practices and lessons that treasuries can adopt, or adapt, as they respond to the pandemic. These include the following:
1. Cash flow is critical, manage it well: Cash will be limited and will need to be managed effectively. Solutions could include sweeping public sector funds to a single treasury account, considering use of blanket authorizations, and disbursing directly to service delivery units.
2. Take a tiered response: Payments can be reprioritized by categorizing them as fast-tracked, normal, or suspended.
3. Go virtual to ensure business continuity: home-based work processes, financial management information systems / treasury systems, and banking systems remotely accessible is crucial in ensuring continuity of treasury activities.Making
4. Speed is essential so replace some ex-ante controls with ex-post controls:
5. Innovate and work around, but always track expenditure: Exclusive budget and accounting codes can be used to capture, monitor, and report COVID-19 expenditure with ease. It is also possible to innovate with workarounds, creating a mechanism to isolate, monitor, and report COVID-19 expenditure exclusively to ensure that it is tracked. For example, add a small inconsequential fraction (say, 0.0324) to the amount ($100 records as $100.0324) and later extract all amounts that have the fraction.
6. Never lose the audit trail: Risks of wastage, inefficiencies, fraud, and corruption increase when standard public financial management controls are modified.Protocols can be put in place to track red flags. Real-time internal audits could help partly mitigate the risks created by limitations in ex-ante controls and challenges in the audit trail. By performing timely external audits and presenting reports to parliaments, supreme auditing institutions can enhance trust in the system and the credibility of the response.
7. Coordinate and communicate: Silos within the treasury function can be avoided by using crisis management committees and “war rooms” where officials can convene and strategize. Treasuries should ensure internal coordination as well as alignment with national Emergency Response Committees and the parliament, as well as maintain good communication channels across the government.
8. Use technology during and after the crisis: In many countries, payments are made only when paper invoices are submitted, since legal procedural requirements do not recognize digital documents.This can cost governments precious time. During the COVID-19 response, treasuries can consider GovTech innovations, accept digital documents provisionally to make payments, use mobile money and ATM cards where possible, and produce paper documents for reconfirmation later. Treasuries should also further expand G2G (government to government), G2P (government to person), and G2B (government to business) digital payments post-crisis.
9. Publish Budget Execution Reports frequently:
10. Learn from experience and emerge stronger: The crisis provides enormous learning to strengthen Business Recovery Plans, Disaster Recovery Plans, and emergency finance strategies. This will help treasuries and countries respond better in future emergencies.