IFMIS Systems - Capacity Development · Ledger Facilitates Framework for System: •Organisation...

P Murphy, Washington, IFMIS Conference, Nov 2007 1

IFMIS Systems -Capacity Development

Peter Murphy, B.Sc (Hons), M.Sc, CPFA

P Murphy, IFMS Conference, Nov 2007 2

MacroEconomicPlanning &

Policy AnalysisSectoral

Planning &Policy Analysis

BudgetFormulation &

Cash FlowForecasting

Revenue Policy,Mobilisation,Collection &Financing

Funds Release,ProcurementAuthorisation,

Control,Disbursementt

ReceiptsPayments,Payroll &

Accounting

BudgetMonitoring/

ManagementAccounting

BudgetReview &Revision

Final Accounts &Public Sector

Accounts

ExternalAuditing

PerformanceReview

Evaluation &ResultsAnalysis

What are the key challenges in development of Public Financial Management ?

PFM Cycle

Challenges

Limited Macro Modelling.

Limited Revenue Forecasting and Management

Unrealistic ,inadequately Poverty/ Policy/Performance MTEF & Budgets

Weak Stakeholder Participation

Inadequate Analytical Frameworks for Resource Allocation/Control/Management

High Levels of Centralised Control

Inadequate Commitment and Cash Control/TSA/Reconciliation

Corruption & Fraud.

Limited Transparency - Monthly and annual Public Accounts

Weak Internal & External Audit

ICT Based Systems

3

PFM

Improved OversightSystems

-Parliament, PAC, External Audit

Macro Policy Analysis & Advice,Capacity Building,Interfaces

- Macro Units

Rev Policy Analysis& Advice,Capacity Building,Systems, Structures-Rev Agencies, -AidMU, Debt Man

MTEF, Sector Strategies, Bud Policy Analysis & AdviceBudgeting Systems- Bud Div, LM, LGs

ProcurementReform, Payroll/Personnel Reform, Asset/LiabilityManagement, Internal Audit Systems etc-MOF, LM., LGs, PS/HR

Typical Ongoing PFM Reforms

Capacity/Systems/SkillsCash & Bank ManagementCommitment ControlManagement ReportingPoverty TrackingAccounting StandardsAccounting SystemsFinancial Reporting- AGD, MDA’s, LGs

Approval, Oversight &

Accountability

AggregateControl

ResourceMobilisation

ResourceAllocation

ResourceManagement

Financial Control, Management & Reporting

- Strategy/Policy- Skills Transfer- Systems/Technology- Structural Change- Management Development - Limited HRM

Formal

- Culture- Politics/Power- Leadership

Informal

Need for alignment with Environmental (PETS) Forces e.g. : -- Political: Democratic Transition Process & Policy Debate- Social: Civil Society Pressure Groups, Participation.- Economic: Poverty Reduction, Efficiency, Effectiveness- Rapid Technical Change- International Standards etc

4

Typical IFMIS System Components

PurchaseOrder

Budget/PlanningTools

CashManagement

TenderManagement

RequisitionManager

AccountsPayable

CommitmentControl Accounts

Receivable

Imprests/Loans

Claims on DonorsExpense

Order

Revenues

HRM/SalariesSystem

CashControl General

LedgerGL Journals

CashManager

BankReconciliation Reporting

Asset Manger

Inventory EquipmentManager

CS DRMS

CoA

Macro/REFF Systems

P Murphy, Washington, IFMS Conference, November 2007

P Murphy, Washington, IFMS Conference, November 2007 5

Conceptual FrameworkPolitical(Turbulent someIncreased demand

for Accountability)

Economic(Demand for Improved PEM & Financial Management)

Social (Participation/transparency/Service Delivery)

Technical(New ICT technology, deregulation)

Change Dimensions

Public Financial ManagementTask Environment

Outputs

Accountability

Transparency

Economy

Efficiency

Effectiveness

Service Delivery

Implementation Strategies

New ICT(IFMIS)

New Processes & Procedures

Transition Management

New Structures, Skills & Attitudes

New Legislation & Improved

PFM IFMIS SoftwareImplementation

Inputs

Software

ICT (IT/WAN)

Training/Workshops

Legislation

Consultancy

-Change Man

-Budget/ Financial Man

-Training


Capacity Development Context

Recognition & Willingness– Task Environment Demands

7P Murphy, Washington, IFMS Conference, November 2007


Recognition & Willingness - Forces for Change

Weaken

Strengthen

Recognition/Willingness - Vision, Gap Analysis & Design


Feasibilityy Study – Fiscal Management Processes, Organisational Issues, ICT Architecture, & Financial Implications

P Murphy, Washington, IFMS Conference, November 200710

Treasury/Acc Gen (Regulation)

Ministry of Finance (Policy)

Line Ministry Accounting

Officers (Execution)

Budget

Plan/Budget

Other

Chief Acc

Procure-ment Int Aud

Ex Audit

CashMan

Fin Rep

Fin Man

Payroll

Liabilities/Assets

Budget Managers

.

Other External

Consensus Desirable – Possible – A few willing to go where no man has been before? - Evolution versus revolution!


Capacity Development Dimensions

Client/Consultant/Contractor Mix




Accounts Ledgers

Cash Book

Requisitions Procurement

Budgeting & Releases

Payments Public Debt& Tax HR/Payroll

General Journals

Summary Budget Reports

Detailed Budget Reports

Statutory Financial Reports

• Often Centralized.• Lack of Integration.• Inefficient (Duplicate Data Entry & Functionality)• Managed Independently• Different Analytical Basis (Classification/ Valuation)• Inconsistent & Incomplete Reporting• Lack of Integrity, Timeliness, Comprehensiveness Mechanize the

Horse and Cart?


Budget Module

GoL IFMIS General Ledger

Ministry Management InformationSystem

Sector & Ministry ObjectivesOutputsTargets & Progress

CoAFinancial- Actual-Commitments

MDALG Budget Framework Papers

MoFDPMacroModel

MTFF

MTEF Ceilings

Detailed MDALG Estimates

MoFDPChallenge & Policy Discussions

MDALGRevision

Activity Plans &Costing

Budget Policy Analysis

Consolidated Budget

BudgetPresentations

Tax Revenue,Debt Budgets


General Ledger Module

Cash Book/TSAModule

Accounts ReceivableModule

AccountsPayableModule

Budget Module

RequisitionPurchase OrderModule

Commitment/Cash ManagementModule

InterfacesPublic DebtTax etc

InterfacesHR/Payroll

General Journals

MTFFData

Summary Budget Reports

Detailed Budget Reports

Statutory Financial Reports


Budget Module

Supports MTEF Dialogue including MDA Strategic Budgeting Dialogue & Scenario. Analysis, Enable multi-year budget preparation, at MOF & MDA level.Make available in-year Budget Execution information.Stores values for estimate calculation etcFacilities forecasting of baseline Cash Flow.Budget Analysis, Consolidation, Presentation and Authorisation.Budget Release & Variation. Supplementary Budgets

Users (Transactional Users/Analysts//Information Users)

Managers (Decision Making)

Support (In-house)

MoF Macro Unit Users -MTFF/MTEF MoF Budget Officers (Sector/Frame)MoF Finance Officers (Debt/Investment)MoF (Revenue Policy Unit)MoF External FinanceLM Budget/Planning OfficersLM PS/Accounting Officer/Dept Heads

Public/DPs/Investors/Creditors etc

Macro/MTEF ManagersBudget DirectorSenior Budget/Macro Analysts

Budget ApplicationSupport Group-Classification-Access/Training-Budget Constraints-Principles/StandardsDirector Budget Techniques(ICT Support Group)


General Ledger

Facilitates Framework for System:• Organisation parameters, Accounting Concepts • Chart of Accounts/Classification • Capture Budgets and non-financial data, Bank account details, Fiscal years • Journals and postings (from source systems)• Database for all transactions, Financial Reporting, Audit Trail

Users (Transactional Users/Analysts/Authorisation/Reports)

Managers (Decision Making/ Information Users)

Support (In-house)

MDALG PS/Accounting Officers/Dept Heads. MDALG Accountants/Internal Auditors.AccGen FR Users – Consolidation & Financial ReportingAccGen Users - (Aid Accounting, Payroll, CF Revenue, Financing etc)MoF users

Chief AccountantsChief Internal AuditorsDirector (FR Unit)AAG (FR)

AccGen ApplicationSupport Group-CoA/Data Integrity-Concepts/Training-Controls/Reporting -Principles/StandardsDirector FSU(ICT Support Group)


End UsersPrimary• Manage & Operate

Business Processes• Data entry• Validation• Authorization• Analysis• Reporting

• Use System Outputs• Planning• Analysis• Decision Making• Reporting

Secondary• Internal/External AuditExternal• Public , DPs PAC, EFC

etc

Application ManagersProcess Owners• Manage users &

permissions• Ensure availability for

appropriate use• Manage central functions –

setup, chart of accounts, report customization

• Ensure reliability• Problem resolution• Routine Maintenance• Upgrades / updates• Security

• Ensure systematic expansion

• Ensure functionality of interfaces to external systems

ICT Facilities Management

• Mange Architecture• Ensure availability for

appropriate use• Ensure reliability

• Technical Problem resolution

• Routine Maintenance

• Upgrades / updates

• Security• Data backups

• Ensure systematic expansion

• Ensure functionality of interfaces to external systems

Defined Users Financial Systems Unit(s)

Data Centre/ICTPersonnel/Contractors


• In-house Configuration (Application Support, ICT Unit, Training Unit)

• Partially Outsource ( Consultants/Advisors, Contract ICT Maintenance, Training Aspects)

• Substantially Outsource ( Management, Communications, ICT Provider, Enterprise Application Provider)



Preparation & Acquisition

Design, Testing & Setup

Pilot Implementation

Rollout Implementation

1. Create a Learning Organization2. View whole process as a Learning opportunity.3. Require Client, Consultants, Contractors to Engage at each stage of the process.



Application (20-100’s)Mangers/Champions/Local Consultants• Concepts – In depth• Module Operation• 1st Line ICT Support• Training Skills• Consultant Skills

Key Users (50-100’s)• PFM Concepts• Module Concepts• Module Operation• Ist Line ICT

Users (1000’s) – Need to know

Local Consultants/Trainers (20-50)• Concepts – In depth• Module Operation• Training Skills• Training Material Development

Specialists (100’s)• Audit• Central Function

ICT (10-100’s)•Data/DR Centre•WAN•LAN•Communications•Database




ó Stated in 1995 in an atmosphere of systemic collapse by July 1998- all MDAs (50+)in DAR were on the IFMS base package (in less than 3 years) using GOT wireless based networks, citrix server, thin clients , SQL Database.

ó Gov’t chart of accounts on GFS compliant basis, mapping can further enhance ó Real-time time budget allocation, disbursement, commitment control, budget & financial

reporting. TSA implemented. Dramatic improvement in PEFA scores.ó 2001/2002 all Regional Sub treasuries on stand alone IFMSó Extensive Agencies and Projects implemented. (Accrual and Cash) Multiple DPs.ó Budget module/Active planner rolled out to MDAsó 2002/2003 all regional MDAs on IFMS duly networked to the Sub treasury D-Baseó 50+ Local Authorities implemented and many more under implementation.ó TRA implemented in 60+ sites with full accrual.ó 2000 + trained since inceptionó Fully sustained locally since 2000.ó Introduction of data warehouse for Budget/Macro Analysisó Now migrating to other countries Gambia, Malawi, Lesotho.ó In Malawi – Tanzania Accountant General Dept is acting as Consultant and is providing

capacity building opportunities.

Tanzania Experience


IFMS Management Team

Application Capacity Development ICT Architecture

Dept Heads, Project Component Managers, Consultants & Contractors, Other LMs/Departments

PFM Steering Committee

Contract Management

Audit/Controls


Project Management Mechanism Expectation

Reality Result

Steering Group – Strategic Direction, Co-ordination Approval & Problem Resolution.

Meets only infrequently, ineffective, appears to make little impact.

Lack of strategic direction undermines commitment, coordination and project management authority.

Quarterly Internal Stakeholders – Reporting, Planning & Coordination.

Poorly attended, lack of engagement by some Dept Heads.

Lack of detailed integrated planning, follow-up and accountability.

Weekly Project Management Meetings – Follow-up & Problem Solving.

Weak stakeholder involvement outside AccGen/IT & Contractors Weak Follow-up.

No awareness/commitment from some stakeholders. Low levels of accountability. Limited problem solving authority.

Project Manager /FMIS Consultant. Day to day management

Located under AccGen responsibility not matched by authority

Difficulty in securing engagement and resolving problems.

Support Groups –Application, ICT, Training

Inadequate Participation, Inadequately Resourced

Limited Capacity Developed, Solution Inadequate, Capacity Development Weak.



Steering Group (Stakeholders)

TrainingGroup

Application Group

Project/ContractManagement Group

ICTGroup

AccGen/Budget

LM/Agency/LGUnits

Application Support

Unit

AccGen DeptICT

Support

Project In-house OrganisationPost Project In-house Organisation (AccGen/ICT)

AccGen/Budget Dept

Sections

MDAUnits ICT

4. Transition Management (Illustration)


• Effective Management/Leadership/Team Building/Engagement

• Appropriate market related pay (Application Support, ICT Support, Key Users) and Career Opportunities

• Create Structures (Agency for ICT Staff), adopt more flexible forms of Employment (Contracts), Contract out Functions (Non Core).

• Provide extensive Education and Training Opportunities. Expect losses, keep training. (Labor Market saturation will occur)

• Enhanced Salary Schemes (Performance, Market, Reform Based)



Activity Investment RecurrentFeasibility Study Consultants, Client Participation Workshops, Study Tours &

ConferencesSupport Capcity Medium Term Advisors

Local Contract StaffClient Groups – Support Groups, Capacity Development

Procurement ConsultantsClient Participation

Workshops, Training, Specialists (Legal)

Design, Configuration, Testing, Setup, Training

Contractor - Application/ICT Infrastructure/Training /Site Works; DP Specialists, Quality Control, Client Participation

Training of Trainers, Workshops, Training, Data Collection and Verification, Motivational Elements

Pilot Implementation( Problem Resolution,

Acceptance) – Core Functions

Contractor, Client ParticipationQA, Other consultant/specialists

Licensing Running CostsWAN Costs

Rollout Training, Infrastructure Expansion, Functionality Expansion, Upgrades

Training, Licensing Running Costs,WAN CostsMaintenance & Renewal

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