This document discusses challenges in public financial management capacity development and outlines Peter Murphy's conceptual framework for implementing integrated financial management information systems (IFMIS). It identifies key challenges such as limited macroeconomic modelling, budgeting, and transparency. It then describes typical ongoing public financial management reforms and components of an IFMIS system. The document provides examples of capacity development dimensions and implementation strategies to consider for successful IFMIS projects.

1. IFMIS Systems -
Capacity Development
Peter Murphy, B.Sc (Hons), M.Sc, CPFA
P Murphy, Washington, IFMIS Conference, Nov 2007 1

2. What are the key challenges in development of Public Financial
Management ? Challenges
Limited Macro Modelling.
Macro
Economic
Limited Revenue Forecasting and
Planning &
Evaluation & Sectoral
Policy Analysis
Results Planning &
Management
Analysis Policy Analysis
Unrealistic ,inadequately Poverty/
Budget
Performance Formulation &
Policy/Performance MTEF &
Review Cash Flow
Budgets
Forecasting
PFM Cycle Revenue Policy,
Weak Stakeholder Participation
External Mobilisation,
Auditing Collection &
Inadequate Analytical Frameworks
Financing
for Resource
Funds Release,
Final Accounts & Procurement
Allocation/Control/Management
Public Sector Authorisation,
Accounts Control,
High Levels of Centralised Control
Disbursementt
Inadequate Commitment and Cash
Receipts
Budget
Budget
Payments,
Control/TSA/Reconciliation
Monitoring/
Review &
Payroll &
Management
Revision
Accounting
Accounting
Corruption & Fraud.
Limited Transparency - Monthly
and annual Public Accounts
ICT Based Systems
Weak Internal & External Audit
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3. 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,
PFM - Strategy/Policy
Management
- Skills Transfer
Informal
& Reporting
- Systems/Technology
- Culture - Structural Change
- Politics/Power - Management Development
Capacity/Systems/Skills
- Leadership - Limited HRM
Cash & Bank Management
Commitment Control
Need for alignment with Environmental (PETS) Forces e.g. : -
Management Reporting
- Political: Democratic Transition Process & Policy Debate
Poverty Tracking
- Social: Civil Society Pressure Groups, Participation.
Accounting Standards
- Economic: Poverty Reduction, Efficiency, Effectiveness
Accounting Systems
- Rapid Technical Change
Financial Reporting
- International Standards etc
- AGD, MDA’s, LGs
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4. Typical IFMIS System Components
Macro/REFF Systems
Inventory Equipment
Manager Budget/Planning
Asset Tools
Manger
CoA
Tender
Management
Cash
CS DRMS
Requisition Management
Manager Imprests/
Revenues Loans
Purchase
Order
Claims on
Commitment
Donors
Expense Control
Accounts
Order
Accounts Receivable
Payable
Cash
HRM/Salaries GL Journals
General
Control
System
Ledger
Bank Cash
Reporting
Reconciliation Manager
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5. Conceptual Framework
Political Social
(Turbulent some
(Participation/tran
Change Dimensions
Increased demand
sparency/Service
for Accountability)
Delivery)
Inputs
New Legislation
Software Outputs
& Improved
PFM
ICT Accountability
(IT/WAN) IFMIS Software
Implementation Transparency
Implementation
Strategies
Training/Wor
Transition Economy
kshops
Management Efficiency
New
Legislation New
Processes & Effectiveness
ICT(IFMIS)
Consultancy Procedures
Service
New Structures,
-Change Man
Delivery
Skills & Attitudes
-Budget/
Financial
Man Economic Technical
Public Financial Management
(Demand for Improved
-Training (New ICT technology,
PEM & Financial
Task Environment deregulation)
Management)
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6. Capacity Development Context
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7. Recognition & Willingness– Task Environment
Demands
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8. Recognition & Willingness - Forces for Change
Strengthen
Weaken
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9. Recognition/Willingness - Vision, Gap Analysis & Design
Feasibilityy Study – Fiscal Management Processes, Organisational Issues,
ICT Architecture, & Financial Implications
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10. Line Ministry
Ministry of Finance Treasury/
Accounting
(Policy) Acc Gen (Regulation)
Officers (Execution)
Budget
Budget Other Managers Cash
Fin Man
. Man
Plan/ Chief
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!
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11. Capacity Development Dimensions
Client/Consultant/Contractor Mix
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14. Public Debt
Requisitions Procurement Payments HR/Payroll
& Tax
General
Journals
Budgeting &
Accounts Cash
Releases
Ledgers Book
Summary Detailed Statutory
• Often Centralized.
Budget Budget Financial
• Lack of Integration.
Reports Reports Reports
• Inefficient (Duplicate Data Entry & Functionality)
• Managed Independently
• Different Analytical Basis (Classification/ Valuation)
• Inconsistent & Incomplete Reporting
Mechanize the
• Lack of Integrity, Timeliness, Comprehensiveness
Horse and Cart?
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15. MDALG
Budget
Activity Plans Framework Papers
MoFDP &
MTFF
Macro Costing
Model
MoFDP
Challenge &
Budget Policy
Sector Policy Discussions
Analysis
Ministry & Ministry
Management Objectives
Information Outputs MTEF
Budget
System Targets Ceilings
Module
& Progress
Detailed MDALG
MDALG
GoL IFMIS Tax Revenue, Revision
CoA
Estimates
Debt Budgets
General Financial
Ledger - Actual
-Commitments
Budget
Consolidated Presentations
Budget
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16. Requisition Accounts Accounts Interfaces
Interfaces
Purchase Order Payable Receivable Public Debt
HR/Payroll
Module Module Module Tax etc
Commitment/
Cash
Cash
Book/TSA
Management
Module
Module General Ledger
Module
Budget
Module
Summary Detailed Statutory
General MTFF
Budget Budget Financial
Journals Data
Reports Reports Reports
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17. Supports MTEF Dialogue including MDA Strategic Budgeting Dialogue & Scenario.
Budget
Analysis, Enable multi-year budget preparation, at MOF & MDA level.
Module
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
Managers
MoF Budget Officers (Sector/Frame) Support Group
Budget Director
MoF Finance Officers (Debt/Investment) -Classification
Senior Budget/Macro
MoF (Revenue Policy Unit) -Access/Training
Analysts
MoF External Finance -Budget Constraints
LM Budget/Planning Officers -Principles/Standards
LM PS/Accounting Officer/Dept Heads Director Budget
Techniques
(ICT Support Group)
Public/DPs/Investors/Creditors etc
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18. 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,
-Principles/Standards
CF Revenue, Financing etc)
Director FSU
MoF users
(ICT Support Group)
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19. Application Managers
End Users ICT Facilities
Process Owners
Primary Management
• Manage users &
• Manage & Operate • Mange Architecture
permissions
Business Processes • Ensure availability for
• Ensure availability for
• Data entry appropriate use
appropriate use
• Validation • Ensure reliability
• Manage central functions –
• Authorization • Technical Problem
setup, chart of accounts,
• Analysis resolution
report customization
• Reporting • Routine
• Ensure reliability
• Use System Outputs Maintenance
• Problem resolution
• Planning • Upgrades /
• Routine Maintenance
• Analysis updates
• Upgrades / updates
• Decision Making • Security
• Security
• Reporting • Data backups
• Ensure systematic • Ensure systematic
expansion
Secondary expansion
• Ensure functionality of
• Internal/External Audit • Ensure functionality of
interfaces to external
External interfaces to external
systems
• Public , DPs PAC, EFC systems
etc
Defined Users Financial Systems Data Centre/ICT
Unit(s) Personnel/Contractors
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20. • 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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22. 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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24. Application (20-100’s) Local Consultants/Trainers (20-50)
• Concepts – In depth
Mangers/Champions/Local
• Module Operation
Consultants
• 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
•Database
Users (1000’s) – Need to know
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27. 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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28. 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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29. 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.
Follow-up.
Project Manager /FMIS 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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31. 4. Transition Management (Illustration)
Post Project In-house Organisation
Project In-house Organisation
(AccGen/ICT)
Steering
AccGen/Budget
Group (Stakeholders)
Project/Contract
AccGen/Budget Application
Management Group
Dept Support
Sections Unit
Application
Group ICT
Training
Group
Group
LM/Agency/LG
Units
ICT
MDA Support
AccGen Dept ICT
Units
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32. • 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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34. 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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