IFMIS as a driver of change

Gert van der Linde

AFTFM
IFMIS as a driver of change
Agenda
l Driver of what change?
l Financial Management Performance
l Linking Financial Management with Program
Delivery
l Key Financial Management Business Processes
l Role of Financial Management Systems
l Critical issues for IFMIS to be a change enabler
l Frequent failures
l Implications for PFM capacity development
IFMIS - Driver of what change?
l Service delivery?
l Financial management performance?
l Audit, oversight, evaluation?
l Governance and accountability?
May contribute to all of the above, but it is
l Merely a means to an improved end status
l Critically dependent on other factors, such as political
demand for improvements, legal framework, standards,
processes, staffing, incentives and sanctions
l Often key for improved FM performance
Financial Management Performance
defined
l Financial management = the financial
policies, processes, organizations,
applications and services that facilitate
stewardship
fiscal integrity
provide accountability of public funds at multiple
levels of management
l Scope = Revenue, Expenditure, Assets,
Liabilities
Financial Management Performance
Goals
l Account for and support control program execution
capture all transactions;
ensure budgetary integrity by establishing financial control
over funds, obligations, assets, and liabilities;
safeguard and control resources to prevent fraud, waste
and mismanagement;
establish financial control over obligations and costs; and
produce accurate, consistent and complete financial data to
support reliable financial reporting
l Ensure the reliability of the governments reported
financial performance and condition
l Ensure public confidence through effective financial
management, stewardship and accountability,
governance
Linking Financial Management with
Program Delivery
l Provide management information that links
financial and program performance
l Disclose the cost and performance of
programs and activities
l Assure the integrity of information for
decision-making
l Measure performance and facilitate
stewardship and accountability
Key Financial Management Business
Processes
l Budgeting
l Payments and Accounts Payable
l Collections and Receivables
l Cash Management and Financing
l Liability Management
l Asset Management
l Accounting and Reporting
Role of Financial Management
Systems
l Financial management systems must
ensure accountability and control of resources
produce accurate, consistent, timely, and useful financial
and program information to measure performance and
inform decision makers at all levels
l To achieve this requires
standardized financial management applications that
support integrated business processes operating efficiently
on common data
technology that must link financial applications, data and
information processes across the enterprise to make
financial information readily available for decision support
Critical issues for IFMIS to be a change
enabler
l Get the basics right
Clear definition of the reporting entity manage conflicts between
legal, IPSAS, GFS requirements
Government-wide standard chart of accounts compliance to
standards (IPSAS, GFS); donor reporting; management reporting
Control over bank accounts
Basic accounting controls staffing, segregation of duties,
security, timely and accurate processing, reconciliations, control
over source documents, audit trails
One-time data entry to support integration, interfacing and
reporting requirements
Incentives and sanctions
l Scaleable and interoperable
l Evolve to meet changing business needs, policy, and
technology.
l Ownership, political support and quick wins
Frequent failures
l IFMIS often oversold as a solution understand and communicate
how it will help realize PFM objectives
l Weak government ownership and capacity to lead set-up and
implementation
l The ability to show quick wins is lacking, perhaps because of a
over complex implementation strategies
l Accountants must get the basic accounting framework, processes
and controls conceptually right before set-up and implementation
l Dont complicate the procurement cycle, especially when packaged
solutions are bought
l Accountants does not set up an IFMIS to support both cash and
accrual reporting from accrual data lost benefits of improved
stewardship over assets
l Lack of understanding of applicable accounting standards
Implications for PFM capacity
development
l IFMIS as a change enabler - only when there is a clear
business case with strong political support and government
ownership
l Government must have in-house capacity to lead set-up and
implementation project management, accounting, IT
l Qualified accountants to get the basic accounting framework,
processes and controls conceptually right before set-up and
implementation, including attention to benefits from accrual
processes and data
l Disseminate standards to which governments need to comply
l Plan for quick wins in all project cycles, especially procurement,
set-up and initial implementation phases
l Plans to attract and retain qualified / experienced accountants
l Change management incentives and sanctions
l Improved supervision / quality assurance role for the Bank
Thank you for your time!
Questions?