The Ministry of Finance has clarified the recent misinformation regarding the $18.5 million balance in MPAiSA and MyCASH account at the end of July 2022.
Permanent Secretary, Shiri Gounder says for Government to execute the annual budget and meet daily payment requirements, funds have to be held in different commercial banks at any point in time.
He says for example, as of today, Government holds $79.6 million in all six commercial banks to manage its daily payment commitments.
Gounder says digital payments through M-PAiSA and MyCash has become a key feature of their payment platform with Government paying over $322 million through these platforms since 2020.
According to the PS some of the major payments disbursed through M-PAiSA and MyCash include the unemployment benefits during the COVID pandemic, $180 inflation mitigation payout, the 10 percent bus fare subsidy, the $200 back to school payment and now the option available for payment of Government wages and salaries and social welfare.
Gounder says given that M-PAiSA and MyCash has become a key feature of the government’s payment platform, and they need to ensure that sufficient balances are maintained to meet their payment needs similar to how they maintain funds at the commercial banks.
In simple terms, Gounder says M-PAiSA and MyCash, serves a similar purpose as a bank account for digital payments.
He adds similar to banks, minimal interest rate is paid on all of Government’s operating bank accounts, including M-PAiSA and MyCash, since the funds are only held temporarily for operational purposes.
Since the end of July 2022, the Government has the M-PAiSA and MyCash funds for payment of bus fare subsidy and direct salary deductions for a number of civil servants with a current balance of around $8.1 million.
Gounder says the $45 million that has been budgeted for the $200 back to school payment for the 2024 school year will also be paid out through these platforms.
He further states that to execute this, Government will have to further top up its M-PAiSA and MyCash accounts to meet the payment requirements.
The PS stresses that in line with Government’s financial rules and regulations, proper internal controls and reconciliation processes are maintained to ensure taxpayer funds are used effectively as appropriated by Parliament.
Gounder says records are well maintained and easily available for reconciliation and audit verification and a standard operating procedure exists as to how digital wallet funds will be utilised and captured in the Government accounts.
The PS says that the Ministry had clarified this issues with the Office of the Auditor-General during the audit exit meeting, however, it seems that this was not captured appropriately in the audit report and has thus caused unwarranted confusion and speculations.