ABO – the CNB’s internal accounting and payment system

Since the 1980s, the ABO system has been providing payment services to state organisational units (accepting their instructions and providing account statements), transmitting to the Ministry of Finance daily information on Treasury accounts and on all movements on these accounts, and creating accounting statements for state organisational units as needed.

For the purposes of managing liquidity on the Single Treasury Account (STA), the ABO system is connected to the Ministry of Finance’s State Debt Management System and provides this system with aggregate information on movements on the STA, which is maintained by the CNB pursuant to Article 33 of Act No. 218/2000 Coll., on Budgetary Rules. This aggregate information consists mainly of information on the balance of the STA and of aggregate information on Treasury payments (incoming payments and recorded and planned outgoing payments).

The aggregation of the individual Treasury accounts under the STA enables state funds to be managed as efficiently as possible, i.e. short-term surpluses are minimised by investment in the market and funds are available to cover any temporary mismatches between revenues and expenditures. Although the daily turnovers on Treasury accounts amount to several billion koruna, the final daily balance on the STA is around CZK 5 million.

Daily information on the accounts and the movements thereon has been transmitted to the Ministry of Finance since February 1995. Regulation of revenue and expenditure accounts and their incorporation into the STA was also introduced at that time. Electronic transmission of client orders (secured by electronic signatures) and electronic transmission of statements to clients were expanded significantly at the end of the 1990s.

August 2006 saw the launch of the “ABO-K Internet Banking” system. It includes an application interface for automated transmission of data between the client’s system and the ABO system. In October 2006 the “ABO-K Budget Limits” system went live. This enabled budget chapter administrators to transmit instructions to set budget limits interactively via the Internet and provided them with online information on budget limits on the accounts belonging to their chapters.

The “Budget Limits” system was terminated when the state budget started to be administered via the Integrated Treasury Information System (IISSP), which was put into operation by the Ministry of Finance in January 2013. The ABO system is connected online with the IISSP system. State organisational units administer their budgets via the IISSP, in which they make reservations for all state expenditure. Payment orders made by state organisational units to be debited from state budget expenditure accounts are verified against the reservations in the IISSP before they are executed.

In addition to providing services to the state, the ABO system serves other clients and the CNB’s internal needs.

The ABO system processes 420,000 payments a day on average. Roughly one-third of these are Treasury revenue payments and more than one-half are Treasury expenditure payments. Most of the expenditure payments consist of pensions and other social security payments.