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• brief discussionPublic Financial Management

Control and Security in the Age of

Transparency

SEGURINFO Uruguay 2011

trust

3

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transparency

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strategic openness

55

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trust but verify

Strengthening Public Financial Management through

Transparency in Timor-Leste

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Version 7 sectionFreeBalance is a global provider of Government Resource Planning (GRP) software for public financial management (PFM)

• Canadian software company ISO-9001/2008 certified

• For Profit Social Enterprise

• 100% focus on government

• Global presence, implemented in 19 countries in North America, Latin America, Caribbean, Africa, Middle East, and Asia/Pacific

• From post-conflict through G8

Who is FreeBalance?

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FORCES

99

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globalization

1010

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transparency

1111

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citizen services

1212

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international assessment

1313

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governance

1414

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corruption

1515

Government Expenditures as a % of GDP 2006: Non OECD Countries

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Democratic

Republic of

Timor-Leste

(RDTL)

Objectives

build civil society

build infrastructure

build capacity

build citizen involvement in government

GDP Per Capita (PPP, logs)

UGANDA

PAPUA NEW GUINEA

AU

ST

RA

LIA

-3

-2

-1

0

1

2

3

209 Countries

Norm

alized Government Effectiveness Index

HIGH

LOW

Benefits of Transparency Government Effectiveness and GDP*

* At purchasing power parity

Source: The World

Bank

Higher the government effectiveness

= higher the country GDP Per Capita

GDP Per Capita (PPP, logs)

UGANDA

PAPUA NEW GUINEA

AUSTRALIA

-3

-2

-1

0

1

2

3

207 Countries

Norm

alized Voice and Accountability Index

.

HIGH

LOW

Benefits of Transparency Voice and Accountability and GDP*

* At purchasing power parity

Source: The World

Bank

Higher the government

accountability = higher the country

GDP Per Capita

GDP Per Capita (PPP, logs)

UG

AN

DA

PA

PU

A N

EW

GU

INE

A

AU

ST

RA

LIA

-3

-2

-1

0

1

2

3

204 Countries

Norm

alized Control of Corruption Index

HIGH

LOW

Benefits of TransparencyControl of Corruption and GDP*

* At purchasing power parity

Source: The World

Bank

Higher the control of corruption

= higher the country GDP Per

Capita

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= stability

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= investor confidence

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• brief discussionavoid the

resource curse

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problem

2828

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transparency - corruption

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controls - corruption

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transparency

3131

controls

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1. Strategic Transparency

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1.1. International Standards

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• brief discussionIPSAS

International Public Sector Accounting

Standards

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EITI

Extractive Industries Transparency

Initiative

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GFS

Government Financial Statistics

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MTEF

Medium Term

Expenditure

Frameworks

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1.2 e-Procurement Portal

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review

39

government

tenders

published

vendor

alerts

tender

results

published

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1.3. Transparency Portal

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review

41

10 years of

budget &

financial datadrill down

through the

chart of

accountsoutput in

RTF, Word,

Excel, PDF,

Text, XML,

HTML

http://www.transparency.gov.tl

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2. Internal Controls

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• Chart of Accounts (COA) is key

within governments. Key control

needs include:

•Hierarchical – organizational,

functional, project, budgetary

•Multi-dimensional data access

2.1 Hierarchical Controls

4343

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• Sophisticated reporting

• Pro-active monitoring

• Administrative and compliance

needs

2.2 Reporting

4444

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Version 7 section2.3 Multiple Controls

Multiple controls for the same activity

or function

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3. Audit

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• Same activity can vary within

government ministries, departments

and agencies (MDAs)

• Audit workflow based rules and

procedures for conformity

3.1 Activity

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• Roles and responsibilities

•Separation of duties

3.2 Roles

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• Non-

repudiation

of data

3.3 Traceability

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4. System Security

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�Physical Security- Lock and Key

� Authentication – Wax Seals and

Stamp

Paper

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Mainframes

�Physical Security- Lock and Key

� Authentication – User ID and Password

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Network Security

�Identity Management

�Encryption

�High Availability

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Version 7 sectionInternet

�Internal and External Site

�Firewalls

�Virtual Private Network (VPN)

�Secure Socket Layer

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Version 7 sectionCloud

�Data Access Security

�Identity Management

�Regulatory Compliance

�Data Segregation

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Security Details

5656

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Data Security

• Protect vital Government Data

• Multiple layers of Encryption

– Data

– Traffic

– Access

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Data Access Security• Data-based filtering system

• Configurable

• Standalone

• Non-intrusive

• Works jointly with Functional Classes

Data Access Security

• Resides between the Business Logic Layer and the Client Side.

DB DAL BLL

DASUser

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Security Dimension Types• Chart of Accounts Restriction

• Hierarchical Domain

• Domain Restriction

• Literal Restriction

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Secure Scripting

– Support for server and client-side validation.

– Strong access control.

– Obfuscation of JavaScript enhances client-side

security

– Stripping of comments and whitespace

– Industry standard SSL technology

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5. Security Advantages of Open

Source Middleware

6262

Open Source Middleware

• Who are the most vocal proponents of open

source middleware software in the American

government?

• Answer: Department of Defense and Central

Intelligence Agency

• Why?

• Answer: Because they can examine the source

code of the middleware.

• FreeBalance software is not open source so no

one can examine your source code.

• You can’t stop transparency

• Can have transparency and security together

• Public Financial Management and Governance focus

• Electronic funds transfers reduces corruption opportunity

Conclusions