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Sierra LeoneIFMIS Project Overview

Presented by:

WINSTON COLEHead, PFM Reform Unit

Venue: Nairobi, Kenya11th November 2004

Government of Sierra Leone

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Objective

Overview of the design, procurement process and change strategy for the SL IFMIS Project within the context of an overall PFM reform agenda.

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TopicsBroadly, we will cover the following

issues.

Change triggers Functional design Procurement process Implementation approach Change management Challenges

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PFM - Budget CyclePreparation

Execution

Accounting

Reporting

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Project Goal

Implementation of a new Integrated Financial Management Information System (IFMIS) in 2005 using the newly developed Chart of Accounts (COA) Other reforms

- Government Budgeting & Accounting Act(Revision of Financial Administration Regulation)

- Procurement Act- Audit Service Act- Anti-Corruption Act - Local Government Act- Civil Service Reform - Pay & grading review

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Situation Analysis Weaknesses identifiedThe current FMAS: - exhibits poor system design and lacks

critical functionality, controls, automated bank rec., audit trails and system documentation;

- lack of system data checks and controls; - poor response time; - limited ability to generate reports; - weak access security and - is inaccessible to MDAs- supervision of consultants by MOF & EU

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Functional DesignSOUR- for core/non-core modulesIntegral or Integrated Operational requirements– mandatory (avoids customisation)

– desirableTechnical requirements hardware & network (scalability), operating system and relational database (SQL)

Reporting requirementsStatutory, Donors, IFAC, IMF-GFSM 2001, management/exception reports – report writing tool

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How do we achieve the deliverables?

Project management methodology PRINCE2 adopted(Projects IN Controlled Environment)

QAs deployed in large MDAs and Treasury (by EU Project) to build capacity and assist to prepare monthly Management Accounts and clear backlog Annual Statement of Public AccountsTeam/Resources

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Team/ResourcesPFM Reform Unit – specialist team funded by IDA

Technical support to MOF from donors

- project assurance (DfID)- Institutional Strengthening (EU) MOF-AGD – accounting & internal audit staffEstablishment Secretary’s OfficeAuditor General’s Department - AfDB

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Technology & StandardsIntegrated, single treasury account Based on World Bank Treasury reference

model Benefits: Windows based skills , user

friendly, seamless interface with other packages (Bank of S. Leone)

Standards being adopted IFAC (Cash accounting) IMF-GFSM 2001 PRINCE2 project management methodology

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IFMIS Organisational Structure

Corporate Programme Management

Minister of Finance

Project Steering Committee

Senior UsersAccountant GeneralBudget DirectorEstablishment Secretary

ExecutiveFinancial Secretary

Senior Supplier FreeBalance

PFM Reform Unit

Project Assurance1. Independent firm

2. Ministry of Health

Project Management

Head PFM Reform Unit

Team Managers

IT SpecialistsFM Specialists

Project Support

IT Programmers

Configuration Librarian

Independent OversightThe Auditor General

Project Sponsor

World Bank

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Procurement ProcessSingle Stage – LIB- based on SOUR (tier two vendors)SBD prepared in stages and shared for commentsInclude all modules needed – current and future requirementsRequest quote for license/maintenance fee for at least five years (+ % inflation)

Turnkey solution, BUT- local sub-contractors for support (Service Level Agreement)

Evaluation methodology agreed with sponsors- 80% technical & 20% cost- demos against test scripts- end-users evaluation (it is their system)

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Phasing of acquisition of modules – think BIG, start small

Phase 1Phase 1- Budget execution and accounting system to replace present FMAS operating in MoF for whole of government

- New HR/Payroll system to replace present FMAS module with input in Ministry of Finance/ Establishment Secretary’s Office during 2005

- Budget preparation system to replace current spreadsheet system for 2006 FY budget

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Acquisitions cont.Phase 2 Rollout IFMIS with data input and on-line information access to other central government Ministries – SL Police Force, Health, Educ., Agric., Works & Auditor General’s Department

Phase 3 Roll out to all other MDAs and Local Councils(Fixed Assets, Stores/ Inventory Management)

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IFMIS ScheduleMilestones

Dec…….

Bid submission & EvaluationBid submission & Evaluation

No objection & ContractNo objection & Contract

ImplementationImplementation

Jun Oct Nov

2005

IFMISIFMIS

“Go-live” in Treasury date will be determined during planning with IFMIS vendor

Preparatory WorkPreparatory Work Internal Review – Mar 03FMAS ext. review – Nov 03COA – Nov 03SOUR – Feb 04SBD – June 04Workshops for stakeholders

Internal Review – Mar 03FMAS ext. review – Nov 03COA – Nov 03SOUR – Feb 04SBD – June 04Workshops for stakeholders

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IFMIS Progress ReportOverview of progress against schedule:

Bids issued 24th June, submitted 11th August Evaluation report submitted 21st September No objection received 4th October Contract signed 28th October FreeBalance implementation team expected to start by 22nd

NovemberIn progress:

New COA training (bridge table) Validation of Payroll: August onwards

Personnel records - DOB, designation, address etc. Pay Details – grade/scale, allowance/deduction, location, bank details Advances reconciliation

- General Ledger: COA codes mapping Bank Reconciliation Closure of 2004 accounts

2005-2007 budget prepared using the COA bridge tablesThe Project Steering Committee is regularly informed of any project issues needing urgent ad hoc direction

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Change management

Scale of change – modular, incremental adjustmentsChange leadership – change agentCommunication – workshopsUsers Participation in evaluation & involvement in implementationTraining – hands-on & overseasRe-deployment Release Motivation & Sanctions

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Change – stakeholder analysisGerald Egan (1994) identifies typical categories of stakeholder: Your partners, who support your agenda; Your allies, who will support you, given

encouragement; Your fellow travellers, passive supporters, committed

to the agenda, but not to you; The Fence-sitters, whose allegiances are not clear; Loose cannons, dangerous because they can vote

against agendas in which they have no direct interest; Your opponents, players who oppose you and your

agenda; Bedfellows, who support the agenda, but may not

trust you; The voiceless, who will be affected, but have little

power to promote or oppose, and who lacks advocates.

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IFMIS Benefits Improved information – timely,

accurate and customised reportsImproved transparency &

accountability – availability of reports will make budget officials answerable for the use (mis) of funds – there could be no accountability without transparency (reports)

Better expenditure controls – reduced diversion of funds (requires discipline - collusion)

Savings will be allocated to improve service deliverySavings will be allocated to improve service delivery

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NEW CHART OF ACCOUNTSFifteen-digits code structure

1st digit - Type of transaction (Economic Classification )

1 Revenue2 Recurrent Expenses3 Development Expenses4 Financing Inflow5 Financing Outflow6 Assets (Current & Fixed)7 Liabilities9 Cross Entries (Journals)

2nd, 3rd & 4th digits - represent the Department code number

5th, 6th & 7th digits - represent the Activity/Project code number(formerly programme code)

8th and 9th digits - Source of Funds00 Consolidated Fund01 Department Revenue03 Road Fund54 IDA20 AfDB30 EU40 DfID

(it is possible to code receipts/payments in kind)

10th, 11th & 12th digits - represent the Objects of Expenditure/Revenue

111 Basic Salaries112 Grants211 Local Travelling241 Office and General Expenses

100-599 Recurrent Expenditure600-699 Capital Exp. on Physical Assets700-799 Capital Transfers800-999 Financing Items

(See detailed bridging table)

13th, 14th & 15th digits - represents the Geographical location

HQO HeadquarterSBO BoNBO BombaliEKO KenemaWOO Western Area

(See detailed geographical codes table)

New COA

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ChallengesMultiple donor management – timing of funding and procurement procedures

Technical Infrastructure - ICT Strategy - Telecoms (NWAN)- PPI or Govt. owned

(Security, reliability/availability)

- Power SupplyChange management – selling the vision – reform fatigueCapacity Building – establishment of an Accounting and ICT cadre – trained staff retention

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We hope that Sierra Leone will be a model for a successful IFMIS implementation in Africa and walk the globe

www.sl-ircbp.org