Cash Flow Forecasting and Warrant Systems
Budgetary control ensures that actual spending aligns with legislative appropriations and available cash reserves. Even if parliament approves a large annual budget, the actual cash inflows from taxes flow into the treasury unevenly throughout the year. To prevent cash crunches, the Treasury uses cash flow forecasting to manage liquidity. It issues Exchequer Warrants or fund releases that give MDAs permission to spend specific portions of their budget during a given period (e.g., monthly or quarterly).
The Commitment Accounting Control Cycle
Commitment accounting blocks overspending before it happens by recording financial obligations as soon as a contract is signed or a purchase order is issued, long before an invoice arrives or cash changes hands.
[ Step 1: Requisition ] ----> Checks budget availability in PFMIS
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[ Step 2: Commitment ]  ----> Encumbers (blocks) budget funds; cannot be spent elsewhere
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[ Step 3: Obligation ]  ----> Goods/Services delivered; invoice received
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[ Step 4: Cash Payment ] ---> Cash leaves bank; commitment clears; expenditure finalized

Virement and Budget Reallocations
A virement is the administrative transfer of funds from one budget line item to another within the same ministry during the fiscal year. To prevent ministries from altering legislative intent, virements face strict legal limits. Typically, financial regulations forbid transferring funds from development budgets to recurrent budgets (e.g., canceling a road project to pay for office travel), and limit transfers between separate votes to a small percentage (e.g., under 10%).
 
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