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Virement in public sector accounting means the reallocation of funds within the budget of a covered entity, from one budget line to another budget line.


Virement is the process of moving money from one bank account to another, or from one section of a budget (a plan for how money will be spent) to another.

When one department underspends and another need additional funding, virement can be utilized to get funds within the government.


Virement is a recognized technique in various budgetary management systems that allows funds to be transferred from one budget segment to another within the fiscal year.

For example, a projected surplus in one budget could be used to cover a deficit in another.

They elected to use virement to fund the construction of a new hospital because the road repair budget for the fiscal year 2018-2019 was underspent.


“Virement” refers to the practice of moving an approved budgetary provision from one operating cost item or capital project to another within or across votes within a municipal fiscal year owing to altered circumstances since the preceding budget was adopted.


  1. Assisting the Accounting Officer in ensuring that proper policies and processes are in place.

are in place to ensure that a sound financial management system is in place.

  1. In order for the Chief Financial Officer to be able to advise and help the Accounting Officer,

top managers in carrying out the authorities and responsibilities that have been delegated to them under the terms of their contracts.

Section 78 or Section 79 of the Act have been delegated to them.

  1. To offer accounting officers and senior management with guidance on how to use virements as a tool for managing their budget votes on a day-to-day basis.
  2. To provide an effective financial system for the Accounting Officer and top managers.

The budgeting mechanism to guarantee the best service delivery possible within the present budgetary constraints

The Act’s legal framework and the system of delegations used by the municipality.


  1. The Accounting Officer must approve the transfer of monies from one cost to another.

Within or across a vote, one cost item or capital project is compared against another cost item or capital project.

(Directorate); within the financial constraints, a saving must be identified. inside the approved cost item or capital project in a similar funding category budgetary allocations (operational and capital).


  1. Any budgetary modification has a net effect on the entire

authorized annual budget allocation, as well as any other changes not addressed in this document

An adjustments budget will be used to consider policy for budgetary adoption.

(The Act’s Section 28.)

  1. A municipality’s budget is divided into two parts by Section 17 of the Act.

As a result, no virements are authorized in the operating or capital budgets.

between the budgets for operations and capital.

  1. Where the proposed amendment allows it, virements between votes (departments) shall be permitted.

Changes in funding make it easier to manage risks and money.

  1. Virements on the revenue side of the business are not permitted.

Unless the Policy clearly allows for such variances, the budget will remain unchanged.

  1. Virements are not allowed on the operational expense side.

Unless the Policy clearly allows for such variances, the budget will remain unchanged.

  1. Virements on the capital budget’s spending side are not permitted.

Unless the Policy expressly permits such deviations.


Reporting Framework The reporting framework is based on the necessity to realign a budgetary vote by transferring a cost element from one vote to another during a fiscal year.

  1. The virement is a flexible tool for affecting budgetary modifications within a municipal financial year, and it is the primary mechanism for aligning and taking remedial (financial / budgetary) action within a Directorate (Vote) during that year.
  2. A saving must be established within the monetary constraints of the approved “giving” cost element or capital project allocations on the relevant budgets for a Directorate (Vote) to transfer funds from one cost element or capital project to another cost element or capital project. To give effect to the budgetary transfer, sufficient (non-committed) budgetary allocation should be available within the cost element or capital project involved with the “giving” vote (virement). Furthermore, the transferring function must specify which cost element or capital project the budget provision will be transferred to, as well as provide a clear justification for the transfer.
  1. The initial report documenting such an incident is generated by the Directorate (Vote) within which the virement is to be raised. The virement report must be signed by the HOD/Director immediately in charge of that specific function and approved by the applicable Executive Director in charge of that Vote, all in accordance with the system of delegated thresholds. All virements must be approved in accordance with the Council’s delegations system. The report must be written in the format specified by the Budget Office (template attached as Appendix A);
  1. Prior to completing the virement request, the Director: Financial Management & Budgets would review the report and advise on the financial consequences (if any) before submitting it to the CFO. Any budgetary modification with a net impact on the total approved yearly budget allocation and Virement Policy, as well as any other revisions not covered by this policy, must be evaluated for budgetary adoption through an Adjustments Budget (per MFMA Section 28).
  1. Virements that result in adjustments to the authorized SDBIP by the user Directorate must be submitted to the Council for approval with an Adjustments Budget that includes the altered outputs and metrics. No virement may be undertaken outside of the MFMA MSCOA Regulations, since this will be considered a budget adjustment and will necessitate adherence to the MFMA 28 and 29 prescriptions, as well as the MBRR.
  1. Without the Council’s previous permission, no virement may commit the Municipality to raise recurring expenditure, which commits the Council’s resources in the following financial year. This includes expenses such as signing multi-year lease or rental agreements for vehicles, photo copiers, or fax machines, among other things;
  1. No virement may be made to cover/allow for illegal, irregular, or wasteful and ineffective expenditure (MFMA Section 32);
  2. No virements are permitted during the first three months or the last month of the fiscal year without the CFO’s consent and suggestion, as well as the Accounting Officer’s approval;
  3. Any virement involving an unfunded vacant post must be approved by the Municipal Manager. Only employee-related costs can be used to fund such a position’s budget.
  1. Virement amounts may not be carried over to successive years or used to set budget expectations (MFMA Section 30);
  2. A Municipality’s budget is separated into an operating and a capital budget under Section 17 of the MFMA, and no virements between the operating and capital budgets are authorized unless through an Adjustments Budget;
  3. Virements across or between votes are not permitted without the consent of both vote’s Executive Directors and the CFO’s advice. Before being processed, all virements of monies between votes (Clusters) must be approved by the Municipal Manager and reported to the Executive Mayor on a monthly basis.
  1. The CFO must inform the Municipal Manager, who is responsible for forwarding the Budget Department’s prepared submission to the Executive Mayor.
  2. The Executive Mayor will draft the necessary suggestion or disclaimer for submission to General Council following thorough review;
  3. Such a mayoral report shall be considered by the General Council for final approval or a recommendation for further action.


Virement is the reallocation of funds within the budget of a covered entity. It allows funds to be transferred from one budget segment to another within the fiscal year. For example, a projected surplus in one budget could be used to cover a deficit in another.


The public sector accounting post or guides or articles are not limited to these 10 countries alone:

  1. Ghana
  2. Nigeria
  3. United States
  4. Uganda
  5. India
  6. Kenya
  7. Philippines
  8. Malaysia
  9. Tanzania
  10. South Africa

But instead targeted all the countries in the world since public sector accounting is being practice in every country in the world, so wherever country you are in the world can read public sector guides here since public sector accounting applications are similar.

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Eric Adjei

Eric Adjei

A professional with six (8) years’ experience in finance and accounting. Demonstrating expertise in accounting procedures, computerized accounting system management and financial operations. Financially astute with excellent analytical, problem solving, management, people supervision, organizational, business administration, operation and commercial management and teaching skills.

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