Disbursement System Design
Some governments have a centralized disbursement system while others
have a decentralized system. A main advantage of a centralized disbursement
system is that bill paying can be matched to cash inflows. This payment is
particularly important if governments have large expenditures and seasonal
cash flows. A centralized disbursement system also allows a government to
streamline the number of checking accounts that must be maintained,
reduces the number of transactions and checks issued, and limits the
amount of oversight needed to monitor account activity.
In some cases, a decentralized process may be necessary for satellite
locations and for emergency purposes. If some decentralization is needed,
finance officials should require frequent reporting to the main office where
the staff should monitor the outlying location’s cash requirements and
reconcile its bank accounts.