IFMIS Systems Capacity Development by liaoqinmei

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									  IFMIS Systems -
  Capacity Development
  Peter Murphy, B.Sc (Hons), M.Sc, CPFA




P Murphy, Washington, IFMIS Conference, Nov 2007   1
 What are the key challenges in development of Public Financial
 Management ?                             Challenges
                                    Macro
                                 Economic
                                                                                     Limited Macro Modelling.
                                                                                     Limited Revenue Forecasting and
               Evaluation &     Planning &          Sectoral
                 Results       Policy Analysis    Planning &
                Analysis                         Policy Analysis                     Management
                                                               Budget                Unrealistic ,inadequately Poverty/
     Performance                                            Formulation &
       Review                                                Cash Flow               Policy/Performance MTEF &
                                                             Forecasting
                                                                                     Budgets
                              PFM Cycle                            Revenue Policy,
  External                                                          Mobilisation,    Weak Stakeholder Participation
  Auditing                                                          Collection &
                                                                     Financing
                                                                                     Inadequate Analytical Frameworks
  Final Accounts &
                                                            Funds Release,
                                                             Procurement
                                                                                     for Resource
    Public Sector                                            Authorisation,          Allocation/Control/Management
      Accounts                                                 Control,
                                                            Disbursementt
                                                                                     High Levels of Centralised Control
                 Budget          Budget
                                                   Receipts
                                                  Payments,
                                                                                     Inadequate Commitment and Cash
                Review &
                Revision
                                Monitoring/
                               Management
                                                   Payroll &                         Control/TSA/Reconciliation
                                                  Accounting
                               Accounting
                                                                                     Corruption & Fraud.
                                                                                     Limited Transparency - Monthly
                     ICT Based Systems                                               and annual Public Accounts
                                                                                     Weak Internal & External Audit
P Murphy, IFMS Conference, Nov 2007                                                                                   2
Typical Ongoing PFM Reforms

                        Macro Policy         Rev Policy Analysis     MTEF, Sector           Procurement
Improved
                        Analysis             & Advice,               Strategies, Bud        Reform, Payroll/
Oversight
                        & Advice,            Capacity Building,      Policy Analysis        Personnel
Systems
                        Capacity Building,   Systems,                & Advice               Reform, Asset/Liability
                        Interfaces           Structures              Budgeting              Management, Internal
-Parliament, PAC,
                                             -Rev Agencies,          Systems                Audit Systems etc
  External Audit
                        - Macro Units        -AidMU, Debt Man        - Bud Div, LM, LGs     -MOF, LM., LGs, PS/HR



    Approval,
                           Aggregate             Resource             Resource                  Resource
   Oversight &
                            Control             Mobilisation          Allocation               Management
  Accountability




                                                                                       Formal
   Financial Control,
      Management                                   PFM                                   - Strategy/Policy
      & Reporting                                                         Informal       - Skills Transfer
                                                                                         - Systems/Technology
                                                                       - Culture         - Structural Change
                                                                       - Politics/Power - Management Development
 Capacity/Systems/Skills
                                                                       - Leadership      - Limited HRM
 Cash & Bank Management
 Commitment Control
 Management Reporting                   Need for alignment with Environmental (PETS) Forces e.g. : -
 Poverty Tracking                       - Political: Democratic Transition Process & Policy Debate
 Accounting Standards                   - Social: Civil Society Pressure Groups, Participation.
 Accounting Systems                     - Economic: Poverty Reduction, Efficiency, Effectiveness
 Financial Reporting                    - Rapid Technical Change
 - AGD, MDA’s, LGs                      - International Standards etc


                                                                                                              3
                Typical IFMIS System Components
    Inventory                                                         Macro/REFF Systems
                 Equipment
                  Manager                 Budget/Planning
   Asset                                      Tools
   Manger
                 Tender                                     CoA
                Management
                                            Cash
Requisition                                                                                   CS DRMS
                                         Management
 Manager                                                                     Imprests/
                 Purchase                                       Revenues      Loans
                  Order
                                    Commitment                                              Claims on
    Expense                           Control                                                Donors
     Order                                                                  Accounts
                      Accounts                                             Receivable
                       Payable

HRM/Salaries                           Cash
                                      Control               General                     GL Journals
  System
                                                            Ledger


                       Bank           Cash
                   Reconciliation    Manager                                  Reporting


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                               Conceptual Framework
         Political                                                                  Social
         (Turbulent some
                                                                                    (Participation/tran
          Increased demand              Change Dimensions                           sparency/Service
         for Accountability)
                                                                                    Delivery)
Inputs
                                              New Legislation
Software                                                                                 Outputs
                                               & Improved
ICT                                               PFM                                    Accountability
(IT/WAN)                   Implementation                         IFMIS Software
                                                                                         Transparency
                             Strategies                           Implementation
Training/Wor
                                                Transition                               Economy
kshops
                                               Management                                Efficiency
Legislation                       New                                  New
                               ICT(IFMIS)                           Processes &          Effectiveness
Consultancy                                                         Procedures
                                              New Structures,                            Service
-Change Man
                                             Skills & Attitudes                          Delivery
-Budget/
Financial
Man         Economic
                                    Public Financial Management                    Technical
-Training   (Demand for Improved
            PEM & Financial                                                        (New ICT technology,
            Management)
                                         Task Environment                          deregulation)


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  Capacity Development Context




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   Recognition & Willingness– Task Environment
   Demands




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  Recognition & Willingness - Forces for Change

                                                       Strengthen




           Weaken


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Recognition/Willingness - Vision, Gap Analysis & Design
    Feasibilityy Study – Fiscal Management Processes, Organisational Issues,
    ICT Architecture, & Financial Implications




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                                            Line Ministry
Ministry of Finance                           Accounting                   Treasury/
      (Policy)                            Officers (Execution)        Acc Gen (Regulation)


                                                 Budget
 Budget           Other                         Managers                                  Cash
                                                    .                Fin Man
                                       Plan/               Chief                          Man
                                      Budget                Acc
        Ex Audit
                                                                     Fin Rep          Payroll
                                     Procure-
                                                           Int Aud
                                      ment                                 Liabilities/
     Other External
                                                                             Assets


     Consensus Desirable – Possible – A few willing to go where no man has been
     before? - Evolution versus revolution!
                                                                                          10
P Murphy, Washington, IFMS Conference, November 2007
     Capacity Development Dimensions




                                     Client/Consultant/Contractor Mix


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                                                              Public Debt
           Requisitions     Procurement        Payments                        HR/Payroll
                                                                & Tax




                                                                    General
                                                                    Journals

      Budgeting &
                           Accounts                    Cash
        Releases
                            Ledgers                    Book




   • Often Centralized.                                            Summary     Detailed     Statutory
   • Lack of Integration.                                           Budget     Budget       Financial
   • Inefficient (Duplicate Data Entry & Functionality)             Reports    Reports       Reports
   • Managed Independently
   • Different Analytical Basis (Classification/ Valuation)
   • Inconsistent & Incomplete Reporting
   • Lack of Integrity, Timeliness, Comprehensiveness                   Mechanize the
                                                                        Horse and Cart?
                                                                                                        14
P Murphy, Washington, IFMS Conference, November 2007
                                                                                             MDALG
                                                                                             Budget
                                                                Activity Plans               Framework Papers
        MoFDP                                                   &
        Macro                MTFF                               Costing
        Model
                                                                                             MoFDP
                                                                        Budget Policy        Challenge &
                             Sector                                                          Policy Discussions
                                                                        Analysis
        Ministry             & Ministry
        Management           Objectives
        Information          Outputs                                                                 MTEF
        System               Targets                   Budget
                                                                                                     Ceilings
                                                       Module
                             & Progress

                                                                                 Detailed         MDALG
        GoL IFMIS                                      Tax Revenue,              MDALG
                             CoA                                                                  Revision
        General                                        Debt Budgets              Estimates
                             Financial
        Ledger               - Actual
                             -Commitments
                                                                                               Budget
                                                                  Consolidated                 Presentations
                                                                  Budget
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      Requisition                 Accounts             Accounts     Interfaces
                                                                                      Interfaces
      Purchase Order              Payable              Receivable   Public Debt
                                                                                      HR/Payroll
      Module                      Module               Module       Tax etc


        Commitment/
        Cash                                                             Cash
        Management                                                       Book/TSA
        Module                        General Ledger                     Module
                                      Module
           Budget
           Module

                              General                               Summary       Detailed   Statutory
                                                            MTFF
                                                                    Budget        Budget     Financial
                              Journals                      Data
                                                                    Reports       Reports    Reports


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

    Users (Transactional                               Managers (Decision      Support (In-house)
    Users/Analysts//Information Users)                 Making)
    MoF Macro Unit Users -MTFF/MTEF                    Macro/MTEF              Budget Application
    MoF Budget Officers (Sector/Frame)                 Managers                Support Group
    MoF Finance Officers (Debt/Investment)             Budget Director         -Classification
    MoF (Revenue Policy Unit)                          Senior Budget/Macro     -Access/Training
    MoF External Finance                               Analysts                -Budget Constraints
    LM Budget/Planning Officers                                                -Principles/Standards
    LM PS/Accounting Officer/Dept Heads                                        Director Budget
                                                                               Techniques
    Public/DPs/Investors/Creditors etc                                         (ICT Support Group)



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    General         Facilitates Framework for System:
    Ledger          • 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                               Managers             Support (In-house)
    Users/Analysts/Authorisation/Reports)              (Decision Making/
                                                       Information Users)


    MDALG PS/Accounting Officers/Dept                  Chief Accountants    AccGen Application
    Heads. MDALG Accountants/Internal                  Chief Internal       Support Group
    Auditors.                                          Auditors             -CoA/Data Integrity
    AccGen FR Users – Consolidation &                  Director (FR Unit)   -Concepts/Training
    Financial Reporting                                AAG (FR)             -Controls/Reporting
    AccGen Users - (Aid Accounting, Payroll,
    CF Revenue, Financing etc)                                              -Principles/Standards
    MoF users                                                               Director FSU
                                                                            (ICT Support Group)

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          End Users                       Application Managers        ICT Facilities
 Primary                               Process Owners                   Management
 • Manage & Operate                    • Manage users &               • Mange Architecture
    Business Processes                    permissions                 • Ensure availability for
     • Data entry                      • Ensure availability for        appropriate use
     • Validation                         appropriate use             • Ensure reliability
     • Authorization                   • Manage central functions –        • Technical Problem
     • Analysis                           setup, chart of accounts,          resolution
     • Reporting                          report customization             • Routine
 • Use System Outputs                  • Ensure reliability                  Maintenance
     • Planning                             • Problem resolution           • Upgrades /
     • Analysis                             • Routine Maintenance            updates
     • Decision Making                      • Upgrades / updates           • Security
     • Reporting                            • Security                     • Data backups
                                       • Ensure systematic            • Ensure systematic
 Secondary                                expansion                     expansion
 • Internal/External Audit             • Ensure functionality of      • Ensure functionality of
 External                                 interfaces to external        interfaces to external
 • Public , DPs PAC, EFC                  systems                       systems
   etc


      Defined Users                      Financial Systems            Data Centre/ICT
                                         Unit(s)                      Personnel/Contractors
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  • 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)

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                                                                 Rollout
                                                                 Implementation
                                              Pilot
                                              Implementation


                     Design, Testing
                     & Setup



   Preparation &
                                                               1. Create a Learning
   Acquisition
                                                               Organization
                                                               2. View whole process as a
                                                               Learning opportunity.
                                                               3. Require Client, Consultants,
                                                               Contractors to Engage at each
                                                               stage of the process.

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      Application (20-100’s)                           Local Consultants/Trainers (20-50)
      Mangers/Champions/Local                          • Concepts – In depth
      Consultants                                      • Module Operation
      • Concepts – In depth                            • Training Skills
      • Module Operation                               • Training Material Development
      • 1st Line ICT Support
      • Training Skills                                Specialists (100’s)
      • Consultant Skills                              • Audit
                                                       • Central Function
       Key Users (50-100’s)
      • PFM Concepts                                   ICT (10-100’s)
      • Module Concepts                                •Data/DR Centre
      • Module Operation                               •WAN
      • Ist Line ICT                                   •LAN
                                                       •Communications
      Users (1000’s) – Need to know                    •Database


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       Tanzania Experience
   — 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.
   —   Gov’t chart of accounts on GFS compliant basis, mapping can further enhance
   —   Real-time time budget allocation, disbursement, commitment control, budget & financial
       reporting. TSA implemented. Dramatic improvement in PEFA scores.
   —   2001/2002 all Regional Sub treasuries on stand alone IFMS
   —   Extensive Agencies and Projects implemented. (Accrual and Cash) Multiple DPs.
   —   Budget module/Active planner rolled out to MDAs
   —   2002/2003 all regional MDAs on IFMS duly networked to the Sub treasury D-Base
   —   50+ Local Authorities implemented and many more under implementation.
   —   TRA implemented in 60+ sites with full accrual.
   —   2000 + trained since inception
   —   Fully sustained locally since 2000.
   —   Introduction of data warehouse for Budget/Macro Analysis
   —   Now migrating to other countries Gambia, Malawi, Lesotho.
   —   In Malawi – Tanzania Accountant General Dept is acting as Consultant and is providing
       capacity building opportunities.

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                                         PFM Steering Committee

                                              IFMS Management Team
           Contract                                                               Audit/Controls
           Management




             Application                        Capacity Development         ICT Architecture




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



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      Project Management                  Reality                     Result
      Mechanism Expectation
      Steering Group – Strategic          Meets only infrequently,    Lack of strategic direction
      Direction, Co-ordination            ineffective, appears to     undermines commitment,
      Approval & Problem                  make little impact.         coordination and project
      Resolution.                                                     management authority.
      Quarterly Internal                  Poorly attended, lack of Lack of detailed integrated
      Stakeholders – Reporting,           engagement by some Dept planning, follow-up and
      Planning & Coordination.            Heads.                   accountability.
      Weekly Project Management Weak stakeholder                      No awareness/commitment
      Meetings – Follow-up &    involvement outside                   from some stakeholders. Low
      Problem Solving.          AccGen/IT &                           levels of accountability. Limited
                                Contractors Weak                      problem solving authority.
      Project Manager /FMIS     Follow-up.
                                Located under AccGen                  Difficulty in securing
      Consultant. Day to day              responsibility not          engagement and resolving
      management                          matched by authority        problems.
      Support Groups –                    Inadequate Participation,   Limited Capacity Developed,
      Application, ICT, Training          Inadequately Resourced      Solution Inadequate, Capacity
                                                                      Development Weak.


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  4. Transition Management (Illustration)
                                                       Post Project In-house Organisation
          Project In-house Organisation
                                                       (AccGen/ICT)

                    Steering
               Group (Stakeholders)                              AccGen/Budget



                 Project/Contract
                Management Group                       AccGen/Budget          Application
                                                            Dept               Support
                                                          Sections               Unit
                      Application
       Training         Group              ICT
        Group                             Group
                                                       LM/Agency/LG
                                                          Units
                                                                                  ICT
  AccGen Dept               MDA                                                 Support
                                                 ICT
                            Units

P Murphy, Washington, IFMS Conference, November 2007                                      31
      •     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)




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   Activity                          Investment                             Recurrent
   Feasibility Study                 Consultants, Client Participation      Workshops, Study Tours &
                                                                            Conferences
   Support Capcity                   Medium Term Advisors                   Client Groups – Support
                                     Local Contract Staff                   Groups, Capacity
                                                                            Development
   Procurement                       Consultants                            Workshops, Training,
                                     Client Participation                   Specialists (Legal)
   Design, Configuration,            Contractor - Application/ICT           Training of Trainers,
   Testing, Setup, Training          Infrastructure/Training /Site Works;   Workshops, Training, Data
                                     DP Specialists, Quality Control,       Collection and Verification,
                                     Client Participation                   Motivational Elements
   Pilot Implementation              Contractor,                            Licensing
   ( Problem Resolution,             Client Participation                   Running Costs
   Acceptance) – Core                QA, Other consultant/specialists       WAN Costs
   Functions
   Rollout                           Training, Infrastructure               Training, Licensing
                                     Expansion, Functionality               Running Costs,
                                     Expansion, Upgrades                    WAN Costs
                                                                            Maintenance & Renewal
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