Implementing Financial and Accounting Systems for - PFM blog

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9 Νοε 2013 (πριν από 3 χρόνια και 5 μήνες)

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IMPLEMENTING FINANCIAL AND
ACCOUNTING SYSTEMS

FOR GOVERNMENT

CHRISTIAN T. SOTTIE

THE CONTROLLER AND ACCOUNTANT
-
GENERAL
GHANA

INTRODUCTION


Today, strong financial management in
the public sector is not a luxury but a
necessity.


We are in an era of increased demand
for accountability and transparency


the "stakeholders" of the public sector
are demanding more effective and
efficient use of public resources

introduction


Accountability


the ability of public officials (politicians and
technocrats)


to

answer for their actions and inactions

and


to

show evidence that
public funds were utilised for public Interest


Transparency
-

ready access to reliable, comprehensive,
timely, understandable, and internationally comparable
information on government activities


Predictability


procedures laid down by laws, regulations and
administrative instructions that are:



clear and known in advance (documented),


uniformly and effectively enforced.


Participation

decentralization and allowing participation in
decision making all levels of govt through representation, voting etc



Definition


Integrated

Financial

mgt

System

(IFMS)

aims

at

improving

accountability

by

enhancing

transparency

and

oversight

in

govt

operations
.



IFMS

applies

high

technology

to

enhance

financial

mgt

and

reduce

mismanagement

and

corruption
.



It

is

widely

acknowledged

that

fully

functioning

IFMS

contributes

to

improved

governance,

by

providing

real
-
time

financial

information

that

financial

and

other

managers

can

utilize

to

effectively

administer

programs,

develop

budgets

and

manage

resources
.



During

the

past

decade,

IFMS

has

been

implemented

in

Africa

with

varying

degrees

of

success
.


Where

IFMS

has

been

introduced

successfully,

it

has

increased

public

sector

legitimacy,

produced

timely

and

efficient

accounting

of

public

resources,

increased

government

accountability

and

transparency

and

made

it

possible

to

audit

public

accounts

and

strengthen

internal

control

in

government

units

DEFINITION

Public Financial Management System (PFMS)
is designed to


support all financial operations,


collect accurate, timely, complete, reliable and consistent
information on all public financial events,


provide adequate management reporting,


support government
-
wide and agency policy decisions,


produce auditable financial statements





6

Core Treasury System

includes the following components:


Budget Execution and Monitoring


Accounting (general ledger, management of payments and receipts)


Cash Management


Financial Reporting


Purchasing / Commitment


Asset / Inventory Management

INTEGRATED PUBLIC FINANCIAL MANAGEMENT

Other
Public Financial Management System

components:


Macro Economic Forecasting


Budget Preparation and Approval


Debt and Aid Management


HR Management /Payroll Calculations


Support for Financial Control and Auditing


Web publishing


Financial Management Information System

The combination of above components is referred to as
integrated PFMS


Operational support for Spending Units



7

Cycle for Public Fin Mgt

Asset /
Inventory Mgt

Purchasing


Budget
Authorizations

Implementation
Commitment of
Funds

Payments and
Receipts Mgt

Cash Mgt

Debt and Aid
Mgt

Budget Review
& Accounting

Audit and
Evaluation

Budget
Preparation

2

3

4

5

6

7

8

9

Policy Formulation
and Review

1

Budget Execution

Payroll/

HR Mgt

implementation of information
systems



Put up a system implementation team (user driven project)



Secure network infrastructure (countrywide if necessary)


Develop application software based on user requirement


Choose servers , data storage and backup units depending on software


System and network management tools


Technical maintenance and support systems


System safety / security and business sustainability/continuity solutions


Ensure user involvement in system design, configuration, testing and
accepatance


Important points to note


Development of the
core treasury system

is an important milestone for the implementation
of a countrywide
Public Financial Management System

(
PFMS
), which enables integration
and exchange of information available in various systems (e.g. IRS, CEPS, Central Bank)
developed by different agencies.


The
Financial Management Information System

(
FMIS
), as the main decision support and
monitoring system for public finance, is based on centrally available information gathered
from all important components of the PFMS.


Development time

for a fully functional treasury system in some transition economies and
developing countries varies
between 3 to 5 years
. Large scale implementations of the
treasury systems may take even longer. Eg Ghana started since 1996


Total cost of ownership
of treasury system implementation depends on a number of factors,
such as institutional capacity, scope, desired functionality, number of users and
implementation method.

Lessons learnt

Development of modern integrated PFMS according to the best practices is a
complex task
, which should
be designed as
a separate project
.


Implementation of such wide spread changes would require:


Government
commitment
and

management support

at the highest levels to ensure that the change
process is completed smoothly


Inter
-
agency
coordination
and
user involvement

in system design


Building
institutional capacity
and
technical skills

starting from the preparation phase


Development of
project management
and

technical support units

within the Treasury for
implementation and sustainability of new systems


Donors support usually turns to dictate the passé beyond the capability of the user or set standards
that are not achievable


Dream big but start small. The “big bang “ approach may take forever to complete.
Eg

Ghana started
with 76 sites and 10 years later, the pilot sites were reduced to 8 sites


Incentive schemes should accompany the implementation since such project demand more efforts
and commitment than the regular job requirement of the
public servant.