Repayment of contributions exceeding 2% of the allocated budget.

At the end of each month, the entity must return to the state treasury any bank account balances exceeding 2% of its total annual appropriation. Appropriations refer to the amounts approved by the Althingi (Parliament) in the annual budget law or supplementary budget laws each year. 

Custody accounts must, however, be kept separate from other bank accounts. A government entity must notify the Financial Management Authority of all bank accounts and payment cards it holds and must provide the Financial Management Authority with electronic access to view account balances and transactions. 

This regulation clarifies responsibilities related to cash management, bank account administration, and account transactions of government entities. The purpose of the regulation is to ensure professional management of working capital and to minimize interest and administrative costs of government entities in accordance with the Public Finance Act. 

The Financial Management Authority sends an email to the relevant government entity each month after account balances have been reconciled and closed for that month. In May of this year, 19 emails were sent to government entities regarding a total amount of ISK 4.3 billion, where the appropriation balance exceeded 2% of the total annual appropriation.