Public Finance Management System (PFMS)

Public Finance Management System (PFMS)

• The PFMS is an end-to- end solution for processing payments, tracking, monitoring, accounting, reconciliation and reporting.
• It is administered by the Department of Expenditure.
• It is implemented by the Controller General of Accounts.

• It provides a financial management platform for all plan schemes

• The PFMS, also known as Central Plan Scheme Monitoring System (CPSMS), tracks fund disbursement and ensures that state treasuries are integrated with the Centre to ensure money is send as and when required.

• To link the financial networks of Central+State Governments+agencies of State Governments.

• Mandatory use of PFMS will help monitor the flow of funds to beneficiaries of different government welfare schemes.

• PFMS, administered by the Department of Expenditure

• functions under the Controller General of Accounts in the Ministry of Finance

• The scheme was included in 12th Planning Commission and Ministry of Finance. 

Advantages:

• The actual status of utilization of funds by the multiple implementing agencies can be known.
• Not be much paper work.
• Minimizes the cases of delay and pending payments to a large extent.
• Progress towards a Government wide Integrated Financial Management System (GIFMIS) – as a comprehensive Payment, Receipt and Accounting System.
• Capability of providing real time information on resource availability, flows and actual utilization has tremendous potential to improve programme/financial management, reduce the float in the financial systems by enabling ‘just in time’ releases.

Home Ministry directed to open Account

Context: The home ministry has directed all NGOs, business entities and individuals who receive funds from abroad to open accounts in any of the 32 designated banks, including one foreign, within a month for higher level of transparency.

Foreign contribution accounts in banks, which are integrated with the central government’s PFMS, came for providing a higher level of transparency and hassle-free reporting compliance.

IT systems of 7 north eastern states integrated with PFMS

Aim -To provide the Centre and State governments with a real time, reliable and meaningful management information system, the IT systems of all North Eastern States’ treasuries (namely, Arunachal Pradesh, Manipur, Mizoram, Assam, Meghalaya, Sikkim, and Tripura) except Nagaland, have been integrated with PFMS.

Link of bank accounts of farmers with the PFMS portal

• Context: Under pressure from the Centre, the Punjab Food and Civil Supplies Department has directed all government procurement agencies to link the bank accounts of farmers with the PFMS portal before the procurement of paddy begins. This has angered the arhatiyas (commission agents), a large number of whom want the government to roll back its decision.