Implementation Methodology of the
Integrated Public Financial Management Systems
in
Europe and Central Asia
Cem Dener
Washington, DC
May 2007
PFMS Implementation Methodology
Presentation
• Approach
• PFMS Implementation Methodology
• Integrated PFMS Development Phases
• ECA Treasury/PFMS Projects (updated)
• Treasury/PFMS Maturity Framework
• Challenges
May 2007 ECA Treasury / PFMS Projects 1
PFMS Implementation Methodology
Approach
1. Identify PFM reform needs ( What? Why? )
Assess Readiness + Define Strategy Conceptual Design
2. Develop necessary solutions ( How? Where? When? )
Functionality + Tech Architecture + Specs System Design
3. Project management ( Who? )
Implement + Monitor + Evaluate + Manage Integrated PFMS
May 2007 ECA Treasury / PFMS Projects 2
PFMS Implementation Methodology
1. Identify PFM reform needs ( What? Why? )
Assess existing capacity and practices (PEFA, PFM questionnaire …)
Development of the PFM Reform Strategy (if not available)
Development of the “Conceptual Design”
• functional review of PFM organizations
• recommendations for improving the institutional capacity
• definition of PFMS functional modules (processes + info flows)
• necessary procedural and organizational changes
Advisory support on specific PFM issues
Coordination with donors and other sector projects
Assistance in PFM capacity building (review docs+share knowledge)
May 2007 ECA Treasury / PFMS Projects 3
PFMS Implementation Methodology
2. Develop necessary solutions ( How? Where? When? )
Assessment of existing ICT capacity (skills, resources, CobiT* …)
Development of ICT/e-Gov Strategy (if not available)
Development of “System Design”
• PFMS functional requirements (incl. records management)
• technology architecture (web-based systems)
• implementation methodology ( hybrid**: COTS + CDSW )
Development of “Technical Specifications” (ICB tech requirements)
Coordination with e-Gov initiatives and other ICT projects
Assistance in technical capacity building and evaluation of design
* CobiT … Control objectives for information and related Technology
** Hybrid … COTS : customized Commercial Off-The-Shelf software) + CDSW (Custom Developed Software)
May 2007 ECA Treasury / PFMS Projects 4
PFMS Implementation Methodology
3. Project Management ( Who? )
Form a Project Management Group (PMG) within client org (MoF)
Assistance in funding preparation activities (Trust Funds …)
Promoting “Country Systems”
• administration & coordination of investment projects
• financial management [ FM ], accounting, reporting, auditing
• procurement [ PRC ] (if country standards are acceptable)
Assistance in capacity building for FM and PRC, and in the
preparation / review of ToRs, ICB documents, RFPs.
Monitoring and Evaluation tools (surveys, maturity framework …)
Focus on Capacity Building and Change Management (NLP*)
* NLP : Neuro Linguistic Programming
May 2007 ECA Treasury / PFMS Projects 5
Integrated PFMS Development Phases
Integrated PFMS Development : years 0 1 2 3 4 5 6 7 8 9 10
1. Identify PFM reform needs
Assess existing capacity & practices
Develop PFM Reform Strategy (if N/A)
Advisory support for PFM reforms
Conceptual Design
Coordination with donors / other projects
Assistance in PFM capacity building
2. Develop necessary solutions Preparation
Assess existing ICT skills and resources
Develop ICT/e-Gov Strategy (if N/A)
System Design
Technical Specifications [ ICB docs ]
Coordination with e-Gov / other ICT prj
Assistance in technical capacity building
3. Project management Approval
Project Management Group (PMG)
Administration of Trust Funds (if any) Implementation
Procurement of ICT solutions [ ICB ] PFMS take off
Fly
Establishment of a countrywide network
Warranty Solo
System implementation, test, acceptance
Support
Monitoring & Evaluation
and
Capacity building & Change Management Maintenance
May 2007 ECA Treasury / PFMS Projects 6
ECA Treasury/PFMS Projects
ECA Treasury / PFMS Projects 1995 2000 2005 May’07 2010 2015
AH Avg. completion time 7.1 yrs
Hungary P043446 PFMP (TS) 1996 Avg. implementation 5.7 yrs
Kazakhstan P037960 TMP (TS) 1994 AH
Türkiye* P035759 say2000i (TS+) 1927 CD AH
Ukraine P049174 TSP (TS) 1996 AH
Albania P069939 PARP (TS) 1993 DR CD
Armenia** P081668 IDF (GFMIS) 1996 CD
Completed
Slovak Rep** P069864 PFMP (TS) 1992 DR
Russia P064508 TDP (TS) 1992 AH AH, CD
AH CD Avg. compl. 7.2 yrs
Azerbaijan P066100 TIMS (TS) 1998 Avg. impl. 5.1 yrs
Kyrgyz Rep P071063 TMIS (TS) 1994 DR CD
Moldova P082916 PFMP (PFMS) 1993 CD
In Progress
Georgia P063081 FMIS (PFMS) 1998 CD
Ukraine P090389 PFMP (PFMS) 1996 Avg. compl. 5.5 yrs CD
Avg. implem. 4.1 yrs Preparation
Tajikistan P099840 PFMP (PFMS) 1997 CD
Turkmenistan P034092 IBTA (TS) 1992 DR
Croatia P050718 PFMP (TS) 1992 AH
Dropped
Uzbekistan P070084 PFMRP (TS) 1999 DR CD
Treasury established Google Blogs Skype YouTube
Prep.>Appr.>Effect.
Web TV Wireless
AH Ali Hashim eGov
Implementation World Wide Web eGov recovery
DR Dominique de Roquefeuil projects stall
Browsers
Extension CD Cem Dener Java
eEurope
* The Bank funded the ICT consultant/prj coord only.
** The Bank funded the TA activities only. eGov starts
May 2007 ECA Treasury / PFMS Projects 7
Monitoring and Evaluation Tools
Monitoring and Evaluation of Treasury/PFMS Projects
Updates on key project data and sharing progress/issues with borrowers
[ ECA_Treasury+PFMS_data.xls ]
Summary of Treasury/PFMS project implementation in ECA
[ ECA_Treasury+PFMS_projects.xls ]
The Maturity Framework (MF) for Treasury / PFMS development process
[ www.worldbank.org/pempal ] link to Treasury MF Tool and user guide
[ www.pempal.org/pfmstool ] location of MF tool
PEM-PAL Discussion Groups [ www.pempal.org/discussions ] > Treasury/MoF
PEM-PAL Blog [ www.pempal.org/blogs ] > External
Logbook of Treasury/PFMS projects (internal)
Other useful information
Budget Classification and Chart of Accounts structures in selected countries
Summary of Treasury Single Account operations in selected countries
May 2007 ECA Treasury / PFMS Projects 8
Maturity Framework for Treasury/PFMS Development
Maturity Framework for Treasury/PFMS projects
A Community of Practice for Treasury Managers was established in June 2006
as part of the Public Expenditure Management-Peer Assisted Learning (PEM-
PAL) program ( www.worldbank.org/pempal ) activities.
The Maturity Framework (MF) for the Treasury / PFMS development process
was developed during the "PEM-PAL workshop for Treasury Officials" held in
Ljubljana, Slovenia from June 26-27, 2006.
The Maturity Framework was designed to enhance learning and knowledge
sharing among Heads of Treasury and related key officials in public
expenditure management from 14 ECA countries.
The Bank prepared a web site to publish the results and to facilitate
interactive monitoring and management of proposed indicators
( www.pempal.org/pfmstool ).
May 2007 ECA Treasury / PFMS Projects 9
Treasury/PFMS Maturity Framework
Effectiveness
Maintenance
7 and Support
5 Implementation
Budget funds
System development & integration Technical capacity
Full scale testing and rollout System administration
Training and change management Maintenance
4 Procurement
Large scale ICT systems 18 – 36 Time
Technical Assistance and Training
months
PFMS Design 3 9 – 18
months
Definition of system functionality
Detailed technical requirements Monitoring &
Evaluation
6
Preparation 2
Monitoring mechanisms
Project mgmt capacity
Legal and institutional frameworks
Budget coverage
Treasury Single Account (TSA) 9 – 18
months Maturity Framework
for Treasury/PFMS projects
Readiness 1 www.pempal.org/pfmstool
interactive monitoring and management of MF indicators
PFM reform strategy
Institutional capacity
Countrywide network infrastructure
Resources
May 2007 ECA Treasury / PFMS Projects 10
ECA Treasury/PFMS Development Indicators
ECA - Treasury/PFMS Development Indicators - Estimates
100.0%
90.0%
80.0%
70.0% Maintenance and Support
Monitoring & Evaluation
60.0%
Implementation
50.0% Procurement
40.0% PFMS Design
Preparation
30.0%
Readiness
20.0%
10.0%
0.0%
ALB ARM AZE BIH GEO KAZ KOS KYR MOL RUS SER MON TAJ TUR UKR UZB
May 2007 ECA Treasury / PFMS Projects 11
ECA Treasury/PFMS Development Status
ECA - Treasury / PFMS Implementation – Feb 2007
100%
Completed
90% TUR
KAZ
ALB
80%
In progress
RUS
70% AZE
MOL
SER
KYR
MON
60% UZB
Evaluation
UKR
BIH
GEO
50%
Started ARM
TAJ
40% KOS
30%
20%
10%
0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Estimation
May 2007 ECA Treasury / PFMS Projects 12
Challenges in Treasury/PFMS Projects
PFM Challenges
Existence of a committed leader and a dedicated team
Allow enough time for the assessment of readiness, the PFM Strategy
and the development of conceptual design during preparation phase
Coordinate with donors and other sector projects
May 2007 ECA Treasury / PFMS Projects 13
Challenges in Treasury/PFMS Projects
ICT Challenges
Recruitment and sustainability of IT specialists in public sector
Existence of a reliable countrywide network infrastructure
Realistic ICT cost estimates to reduce procurement risks
Web based applications & open systems to reduce cost and duration of
implementation
Proper requirements for Records Management, Information/System
Security and Digital Signature in design
Coordination with e-Gov activities (interoperability & resource sharing)
May 2007 ECA Treasury / PFMS Projects 14
Challenges in Treasury/PFMS Projects
PRJ Challenges
Establish the Project Management Group at early stages
Promote country systems
Reduce the number of procurement packages
(ideally 2 separate independent ICB packages for all ICT solutions)
Focus on capacity building and change management activities (NLP)
May 2007 ECA Treasury / PFMS Projects 15
Implementation Methodology of the
Integrated Public Financial Management Systems
in
Europe and Central Asia
Thank You
Washington, DC
May 2007