Hungarian State Treasury

1996

The Hungarian State Treasury started its operation on 1 January 1996. At that time, the registered office of the Treasury Centre was the building under the address of Váci utca 1., which was designed by Ignác Alpári and is on UNESCO’s World Heritage List. Interestingly, the 100-year-old neoclassical palace once also served as the headquarters of the former First National Savings Bank Association of Pest (Pesti Hazai Első Takarékpénztári Egyesület). In the beginning, the central body of the Treasury consisted of the departments and divisions under the control of the president, and five directorates, which performed their tasks with a staff of 300 people. On 1 April 1996, the Hungarian State Debt Management Agency (Államadósság Kezelő Központ, ‘ÁKK’) was integrated into the organisation of the Treasury as a partially independent budgetary institution with legal personality and partial powers, which was supervised by the president of the Treasury. The branch network of the Treasury was established in 18 counties on 1 July 1996.

1997

On 1 January 1997, the Treasury took over the entire branch network of the Hungarian Central Bank (Magyar Nemzeti Bank, ‘MNB’) together with its staff, and on this base, the performance of the tasks related to the management of Treasury clients’ accounts, securities distribution and cash desk services began. At that time, the number of employees increased to 950. This was the year when the institution of the treasury commissioner was introduced, which position provides assistance to budgetary institutions in eliminating accumulated debt stocks and preventing the creation of further debts.

1998

As of 1998, the Treasury manages foreign currency accounts for the Hungarian State and the clients of the Treasury to receive foreign currencies based on international agreements, and performs the financial processing thereof.

1999

On 1 April 1999, based on the decision of the Minister for Finance, the independent Support and Annuity Management Organisation (Támogatásokat és Járadékokat Kezelő Szervezet, ‘TJKSZ’) was integrated into the Treasury as a partially independent budgetary institution. In the same year, the organisation for the implementation of the European Union's PHARE programme was created within the organisation of the Treasury.

2000

At the beginning of 2000, the government decided to further develop the public financial system for the transparent and efficient use of public funds. As a result of the profile cleanup, the Treasury received the tasks and activities which were integral parts of budget management but had been spread across different organisations.

2001

Pursuant to the decision of the Hungarian Parliament, the organisation of the Treasury was transformed in several steps into three independent organisations:

On 1 March 2001, Államadósság Kezelő Központ Rt. was established as a single-member joint stock company permanently owned by the state. The organisation, which later became a limited company, deals with the financing of the central subsystem and the management of state debt.

The Public Finance Office (Államháztartási Hivatal, ‘ÁHH’) started its operation and activities on 1 October 2001 as a central budgetary institution with independent legal personality, national competence, and autonomous management. Essentially, the ÁHH dealt with the implementation of the budget, the registration of appropriations and commitments, certain control tasks and payroll accounting. As a result of the government decision made in the previous year, the unit of the IT and Tax Accounts Institute of the Tax and Financial Control Administration (Adó- és Pénzügyi Ellenőrzési Hivatal Számítástechnikai és Adóelszámolási Intézete, ‘APEH-SZTADI’) dealing with budget and tax information processing tasks was transferred to the Treasury, which further strengthened its budgetary and IT domains. In the same year, the Treasury had its responsibilities expanded also by the takeover of the tasks related to the support to families provided by the National Health Insurance Fund and/or the National Pension Payment Directorate, which was managed by the County Offices of Family Support until 2015, then the government offices took over this activity. The number of staff in the institutions of the Treasury increased by 4 000 people, and the control of regional financing was reinforced.

2002

From 1 January 2002, the Public Finance Office performed its tasks through the national network. The former Territorial Public Finance and Public Administration Information Services (Területi Államháztartási és Közigazgatási Információs Szolgálatok), which were under the supervision of the Ministry of Interior, and later of the Ministry of Finance, became the county organisations of the ÁHH, thus – after the profile cleanup – they performed financial and budgetary tasks. On 1 January 2002, the treasury organisation remaining after the withdrawal of ÁKK Rt. and the ÁHH became a joint stock company. The company named Magyar Államkincstár Rt. thus created continued operating as a single-member joint stock company owned by the Hungarian State. Relying on the county units of the Hungarian Central Bank dealing with account management and tenders, its tasks primarily focused on account management, payments, and the fulfilment of the liquidity conditions of budget implementation. Another priority task it had was the retail distribution of government securities. In 2002, the activity of the ÁHH was expanded with a new group of tasks. The ÁHH received the task of reviewing the application and accounting for the budgetary support of local governments and non-state human service organisations, which was later supplemented with on-site inspection. The task was transferred – through central coordination – to the Public Finance Offices of the county directorates. The national introduction of the centralised payroll accounting system (‘KIRA’) was also realised in the same year.

2003

As a result of the decision of the Hungarian Parliament, Magyar Államkincstár Rt. dissolved without a legal successor on 30 June 2003. Its tasks and employees were taken over by the Public Finance Office, and at the same time, the name of the institution changed again to Hungarian State Treasury. The reunification made the Hungarian State Treasury and its county network unavoidable factors. The payment of the majority of budgetary resources became the responsibility of the Treasury, which entailed an enormous concentration of powers and responsibility. In agreement with the Minister for Finance and the Hungarian Central Bank, the Government designated one of the most beautiful Art Nouveau buildings in Budapest, designed by Ödön Lechner, located under Hold utca 4. in Budapest District V, as the seat of the unified Hungarian State Treasury. An interesting fact about the location of the new Centre is that the building used to be the headquarters of the Hungarian Royal Postal Savings Bank, which can be considered partly as the predecessor of the Treasury, and then of the Hungarian Central Bank.

2005

In the context of further rationalisation, the territorial directorates of Budapest and Pest County were merged.

2007

As a result of the further rationalisation of the performance of the treasury tasks, the territorial directorates, which had previously been divided into counties, were concentrated at a regional level, and on 1 April, regional directorates were established.

2008

In the field of government securities distribution, the Treasury introduced the WebTreasury (WebKincstár) and the TeleTreasury (TeleKincstár) services for electronic administration.

2009

From 1 January, the tasks of the Public Finance Offices related to the financing of non-state human service parent agencies were carried out by the regional centres, while the control tasks were still carried out by the counties.

2010

After the change of government in 2010, emphasis was put on decentralised task organisation at county and district level, therefore, the review and reorganisation of the task performance of the Treasury was again brought into focus.

In 2010, the institution of budgetary supervision was introduced, which was created by combining two former systems: the treasury commissioners primarily focused on the debt of budgetary institutions, while the treasurers assigned to chapters watched over the efficient spending of public funds and regular management. The operation of the system and the exercise of employer’s rights are tasks directly delegated to the President of the Hungarian State Treasury, and pursuant to legislation, the minister responsible for public finances exercises professional control over it. In addition to asserting public interest at all times, the aim of the budgetary supervisors is to support the implementation of the economic policy and fiscal policy of the Government, as well as economical, regular management in line with budgetary policy. Said supervisors also play an important role in the flow of information between the entities operating under the budgetary principles and the government. The task of the budgetary supervisors is to provide preliminary opinion on internal regulations, management-related measures, and commitment procedures. In addition, they may make objections and may suspend commitments deemed unjustified. The Hungarian system was based on the decades-old French model. Our experience confirms that the assignment of budgetary supervisors to the budgetary institutions in itself promotes the regular management of the institutions. During their 11 years of operation, supervisors were assigned to more than 100 budgetary institutions and non-profit companies, exercising control over thousands of billions of Hungarian forints’ worth of public funds. It is a major professional success that supervisors also work at the three large middle management bodies: the Klebelsberg Centre, the National Directorate-General for Hospitals, and the Directorate-General for Social Affairs and Child Protection. In 2019, the supervisory system was expanded to include the supervisory tasks of two ministries. The budgetary supervisors seconded to the Ministry of Interior and the Ministry of Defence perform their tasks under the direct professional control of the Ministry of Finance.

2011

As of 1 January, the territorial bodies of the Treasury once again perform their tasks at county level instead of the previous regional level.

2012

In April, the company named KINCSINFO Kincstári Informatikai Nonprofit Korlátolt Felelősségű Társaság (‘KINCSINFO’) was established by the Treasury as a non-profit single-member private limited liability company with non-gainful activity for the performance of tasks related to the operation and development of the information technology system of the Treasury. The aim of the establishment of KINCSINFO was to implement the developments within the government sector cost-effectively and at a high professional level, and to provide competitive knowledge and ‘service’ at an appropriate price level for the government and the Treasury, thereby facilitating the efficient performance of the tasks of the Treasury. The EU-funded integrated family support scheme, TÉBA, was launched. As a receiving party, the Treasury successfully joined the intraday multiple clearing turnover system called InterGiro2 (IG2), which is operated by GIRO Zrt., therefore, since 2 July 2012, it receives and processes all transactions received from the IG2 system with the extended data content received from the payment service providers. From October 2012, one can only open a Start securities account with the Treasury. The system for government securities distribution through a smartphone application (MobileTreasury/MobilKincstár) was launched.

2013

The Treasury's government securities distribution network further expanded. The first government securities sales point, which was ceremoniously opened on Erzsébet square in Budapest, was followed by more than fifty more across the country. In connection with the Treasury’s Start securities account, the government issued the first Baby Bond (Babakötvény), the exclusive distributor of which is the Treasury.

2014

On 8 September 2014, the Treasury successfully joined the euro transfer initiative called Single Euro Payment Area, i.e. SEPA (‘SEPA SCT’). From the date of accession, the Treasury is able to send and receive – through the Hungarian Central Bank – payments in euros within the territory of the European Economic Area submitted by its clients in accordance with the standard of the common European payment system, which processes payments using uniform standards and rules, called SEPA SCT.

2015

With effect form 1 January, in addition to the narrowing tasks and powers of KINCSINFO, the Information Technology Directorate was once again established. The responsibilities of the Information Technology Directorate include the IT strategy, the annual application development, and the preparation of the application and infrastructure operation plan, the management of system organisation, software development, maintenance and operation activities, as well as the professional supervision of KINCSINFO's activities. KINCSINFO's tasks and powers significantly narrowed, primarily to the performance of project management tasks for projects financed by EU support and priority domestic resources. With effect from 1 January 2015, the government defined a new task to be carried out by the Treasury, namely that it would have to perform financial compliance audits set out in legislation. This power covered the examination of the accounting obligations as per the accounting rules of local governments, nationality self-governments, associations, regional development councils and the budgetary institutions they control, and the examination of the proper fulfilment of reporting obligations and the reliable, real overall picture of the annual budget implementation report. The Treasury performed this task through the county directorates. On 1 April 2015, the Department for the Support of Municipality ASP Applications was established, and its task was to operate the ASP system. Between 2015 and 2019, the Department supported the tasks related to scheduled joining by local governments to the ASP system. By 1 January 2019, a total of 3 196 local governments and 67 institutions had joined the Municipality ASP. The proprietary centralised payroll accounting system named KIRA, financed under an EU project, was fully implemented, and it performs the payroll accounting of about 1 million employees with the participation of 15 000 users.

2016

The Office for Agriculture and Rural Development ceased to exist by merger by separation on 31 December 2016, and its general legal successor is the Hungarian State Treasury since 1 January 2017. The decision regarding the preliminary accreditation of the new institutional framework as a European Union paying agency was made on 27 December 2016, which ensured the continuous and uninterrupted payment of direct support and rural development support to farmers within the framework of the common agricultural policy. For this, it was necessary that all elements and all participants of the organisational structure to be created meet the accreditation criteria, part of which was the creation of the regulatory environment related to the restructuring. The document on obtaining the final accreditation was issued by the competent authority on 16 October 2017, on the basis of which it can be stated that, since 1 January 2017, the application management and payment tasks related to agricultural and rural development resources have been performed seamlessly. The ASP IT system was realised as a result of years of development carried out under the project called the ‘Establishment of a Municipality ASP Centre’, to which local governments could join on a multi-year schedule starting from the first half of 2015. The ASP Centre is a technologically and economically favourable solution for those municipalities which, due to high investment and operation costs, cannot access applications that widely support their tasks in the traditional way. The aim of the introduction of these services (tax, accounting, real estate registry and additional frameworks) is to help and standardise the performance of local government tasks, and to ensure the efficiency and effectiveness of resources. As of 1 January 2016, in phase III of joining the ASP Centre, the Framework and the Specialised Management System (ASP.GAZD) are introduced, and after this, it would be possible to use the other specialised systems in stages scheduled in advance by the Treasury. The proprietary centralised payroll accounting system named KIRA, financed under an EU project, was fully implemented, and it performs the payroll accounting of about 1 million employees with the participation of 15 000 users.

2017

The National Directorate-General for Pension Insurance (‘ONYF’) merged into the Hungarian State Treasury on 1 November. The Treasury is the general legal successor of the ONYF. Unlike the ONYF, the Treasury is not part of the Pension Insurance Fund, but is in the budgetary chapter of the Ministry of National Economy. However, the costs of the Treasury related to the Fund and pension insurance tasks are still financed by the Fund. In the new organisational structure, the former National Directorate-General for Pension Insurance (‘ONYF’) continued its operation under the control of the Vice-President for Social Security and Family Support as part of the Hungarian State Treasury.

2018

On 1 January 2018, the Treasury joined the intraday multiple clearing turnover system of GIRO Zrt. as a sending party as well. From this date, individual HUF transfer orders for parties outside the Treasury circle are initiated by the Treasury at the same time as the accounts are debited – several times a day – via GIRO’s IG2 system. The amendment of the Act on Public Finances enabled the Treasury to manage accounts for local governments, local nationality self-governments, associations, and companies that are not classified as account holders, are outside the Treasury circle, and the State has direct or indirect majority ownership in them, to receive the support granted through European Union resources. As a result, the number of Treasury clients increased significantly in the fourth quarter of 2018. In connection with the Act on Electronic Administration, the e-payroll was introduced, which made their own wage data publicly available to all employees with Client Gate registration. More efficient and faster administration is ensured for citizens through the use of additional electronic administration channels, e.g. the forms suitable for administration on the government electronic portal named SZÜF.

2019

On 3 June 2019, the Treasury introduced the service of account opening through Client Gate, which provided the opportunity to everyone to open a securities account managed by the Treasury online at any time, from the comfort of one’s home. Based on a government decision, in June 2019, the Treasury further expanded its sales network connected to its dematerialised government securities distribution by involving two dependent agents, the Fundamenta Housing Fund (Fundamenta Lakáskassza) Group and Magyar Posta Zrt. In October 2019, the Treasury became the sole distributor of government securities produced by printing, which activity is carried out through its authorised agent, Magyar Posta Zrt. The virtual unification of the separate networks of the integrated organisations was achieved, so the entire organisation now uses a uniform identification and correspondence system. Based on a government decision, the Treasury successfully issued the Utility Voucher (Rezsiutalvány) at the end of August 2019, the voluntary liquidation of which happened in June of the next year. On 1 July 2019, the Treasury received the tasks of registering and accounting for the Baby Shower (Babaváró) subsidy.

2020

As a receiving party, the Treasury successfully participated in the launch of the Instant Payment System on 2 March 2020. In February 2020, the Local Government Repository was established for the analysis at the national level of data generated in the Municipality ASP system supporting the work of local governments. 21 cities and 18 Budapest districts upload data from their own local specialised systems on a daily basis, so it receives data from 162 resource systems. The volume of depersonalised data stored in the Repository has already exceeded 200 TB.

2021

The authorisation and control of the home renovation grant was given to the Treasury as a new task. On 1 June 2021, the Treasury successfully renewed its payment account management system for its payment clients outside the scope of the central subsystem. The new system enables Treasury clients to use the most modern payment services. Thus, the Instant Payment System became available to clients on both the receiving and the sending side. The new system is multi-currency, and the most modern international payment methods are also available through it. The mobileFARMER (mobilGAZDA) application was launched, through which farmers can be informed in real time through a new, direct and fast communication channel about the opportunities and obligations related to the support granted under the common agricultural policy. Due to the remarkable digitisation developments, the Treasury became the most significant online distributor of government securities. From 1 January 2021, the Government Customer Line (Kormányzati Ügyfélvonal), operated by NISZ Zrt., participates in the performance of customer service tasks related to the operation of the ASP system, which responds to citizens’ inquiries.

2022

On 1 January 2022, the Hungarian State Treasury successfully renewed its payment and budget management IT systems, namely, it introduced the multi-currency Account Management System and the Central Budget Implementation Support System (Központi Költségvetés Végrehajtását Támogató Rendszer, ‘KKVTR’) with integrated operation together with several internal system elements.

The new integrated infrastructure is a more flexible service-based system, which is more modern than the previous system and is separated on the basis of tasks, and is suitable for – e.g. in the case of batch transfers – replacing the previous T+1 day payment with an intraday transfer and allowing the Treasury to join the Instant Payment System both as a receiving and a sending party. The new system has a free, electronic client interface and secure identification, clients can query payment transactions online, and remote administration is ensured.  The development lays the foundation for the introduction of additional online services.

With the launch of the KKVTR, the relevant decision-support information is available as quickly as possible and in near real time, and the optimal financing need can be determined more precisely. Through the KKVTR and the public finance repository called Kincs-TÁR, entities operating under the budgetary principles can submit their certificates in a paperless way and can monitor their budgetary situation online.

After 2021, the Treasury was awarded ‘Retail Distributor of the Year’ in 2022 as well, according to the ranking of the State Debt Management Agency, and – at the same time – became the market leader in the retail government securities market. By the end of 2022, the value of the government securities portfolio of clients who placed their savings in the Treasury exceeded HUF 5 000 billion. It is considered a record achievement that the clientele increased by 130 000 people and the total value of government securities sold at the Treasury increased by HUF 1 200 billion.

The assessment and payment of the home renovation grant for families raising a child/children has been the most important task of the Treasury in the past two years. Under the home renovation grant programme launched by the Government in 2021, families could receive HUF 3 million in state support for the modernisation of their homes.

The system of travel reimbursements related to the use of health care services has undergone a significant transformation. The possibility of electronic administration of applications has opened up, in which decision-making is automatic, printed forms are not required, and customers no longer need to attach the transport ticket to the application.

The year 2022 also delivered an outstanding result in terms of the payment of support for agricultural and rural development; the Treasury, which performs the tasks of the domestic paying agency, disbursed agricultural subsidies exceeding HUF 1 000 billion to eligible farmers, which was the largest payment ever made.