2012-09-10 FMIS Training at Crown Agents

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0. IFMIS ~ GRP Training &
Introduction to Good Practices
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Agenda
1. Intro to FreeBalance
15 minutes
2. FMIS/GRP Introduction
90 minutes
3. Technology Leapfrog
45 minutes
4. Performance Management in
PFM
60 minutes
5. Sequencing PFM technology -
Governance Valuations
90 minutes
6. Financially sustainable GRP,
governance structures, lessons
learned
45 minutes
7. GRP and Anti-Corruption
30 minutes
8. Future of PFM technology
30 Minutes
9. Parking Lot

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1. Valuable learning experience
2. Contrast public and private sector
accounting & management
3. Training course, not a
demonstration
4. Breadth of financial management
in government
5. Strategic, tactical, futures
6. Vendor-neutral good practices
7. Share lessons among group
8. Voice lasts until end of day
9. Address specific ideas, concerns
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4 4
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1. Introduction to FreeBalance
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Agenda
15 minutes
90 minutes
45 minutes
PFM
60 minutes
90 minutes
learned
45 minutes
30 minutes
30 Minutes
9. Parking Lot

free balance
+ Budget
- Commitments
- Obligations
- Actuals
= Free Balance
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for public financial management support
reform and modernization to improve
governance, transparency and accountability.
FreeBalance solutions
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FreeBalance in a Nutshell
How
For Profit Social Enterprise focused on
governance
Customer-centric to ensure customer
sustainability
Laser focus on the public sector in products and
processes
Configuration approach rather than
customization
Why
Help governments around the accelerate country
growth, improve stability and reduce poverty through
improved governance
What
Comprehensive Government Resource Planning software
Implementation participation to improve success
Capacity building to achieve government self-sufficiency
Steering Committee to ensure alignment with customers
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FreeBalance Offices and Regional Support Centres
services & support
sales, business development & marketing
product management & development
corporate services
Dili
Ulaanbaatar
Bishkek
Ottawa
Guatemala City
Washington
St. Johns
Lisbon
Monrovia
Freetown
Kampala
Pristina
Ramallah
Kolkata
Kabul
Bangalore
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PLEASE EXCUSE THE ANY BIAS
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BIAS 1:
GRP
VS
ERP
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BIAS 2:
INTEGRATIVE APPROACH
VS
SYSTEMS INTEGRATION
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BIAS 3:
PHASED APPROACH
VS
BIG BANG
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BIAS 5:
PERSPECTIVE ON CORRUPTION AND
DEVELOPMENT ~ GOOD PRACTICES
VS
BEST PRACTICES
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First
Generation
ERP Era to
2007
Strategic
Inflection
Point 2007-
2010
Second
Generation
GRP Era
2010+
BIAS 5: MARKET IS CHANGING VS
STAYING SAME
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Global
PFM
Provider
Canadian
Company
GRP
Leader
100%
Government
Focus
ISO-
9001/2008
Covers
Budget
Cycle
Modern
Web
Technology
High
Success
Rate
Company Summary
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Agenda
15 minutes
90 minutes
45 minutes
PFM
60 minutes
90 minutes
learned
45 minutes
30 minutes
30 Minutes
9. Parking Lot

What's special in Government?
Reality Check
Stakeholders
Shareholders
Citizens
h
u
n
d
r
e
d
s

millions
Reality Check
Ownership?
1
By definition, [public sector organizations] do not 'own
themselves' in the way that commercial organisations do,
and so cannot, for example, switch from producing widgets
to making jam if they so choose. Indeed, the concept of
'successful' public sector organisations is itself elusive, for
this reason. The common currency of profit and
shareholder value that defines the private sector
clearly does not apply to public organisations, and
attainment of other goals gives no guarantees for their
future. As the requirements of public service and political
imperatives change, public sector organisations are often
reorganised, reformed or even eliminated, regardless of
their past level of achievement or recognition
1.
Better Management.com
Lines of Business?
One of the most
successful and
largest business
conglomerates
across many lines of
business
Lines of Business?
Agriculture and Agri-Food Canada , Atlantic Canada Opportunities Agency , Atlantic Pilotage Authority Canada , Atomic Energy of Canada Limited , Auditor General of Canada, Office of the , Bank of
Canada , Business Development Bank of Canada , Cadets Canada , Canada Border Services Agency (CBSA) , Canada Business Network , Canada Council for the Arts , Canada Deposit Insurance
Corporation , Canada Economic Development for Quebec Regions , Canada Firearms Centre , Canada Industrial Relations Board , Canada Lands Company Limited, Canada Mortgage and Housing
Corporation , Canada Pension Plan Investment Board , Canada Post Corporation , Canada Revenue Agency (CRA), Canada School of Public Service , Canada Science and Technology Museum
Corporation , Canada Transportation Act Review , Canada-Nova Scotia Offshore Petroleum Board , Canadian Air Transport Security Authority (CATSA) , Canadian Artists and Producers Professional
Relations Tribunal , Canadian Broadcasting Corporation , Canadian Centre for Occupational Health and Safety , Canadian Centre on Substance Abuse , Canadian Coast Guard , Canadian Commercial
Corporation , Canadian Dairy Commission , Canadian Environmental Assessment Agency , Canadian Food Inspection Agency , Canadi an Forces Grievance Board , Canadian Grain Commission ,
Canadian Heritage , Canadian Human Rights Commission , Canadian Human Rights Tribunal , Canadian Institutes of Health Research , Canadian Intellectual Property Office (CIPO) , Canadian
Intergovernmental Conference Secretariat , Canadian International Development Agency , Canadian International Trade Tribunal , Canadian Judicial Council , Canadian Museum of Civilization Corporation
, Canadian Museum of Nature , Canadian Nuclear Safety Commission , Canadian Pari -Mutuel Agency , Canadian Polar Commission , Canadian Police College , Canadian Race Relations Foundation ,
Canadian Radio-television and Telecommunications Commission , Canadian Space Agency , Canadian Tourism Commission , Canadian Transportation Agency , Canadian Wheat Board , Cape Breton
Development Corporation , Cape Breton Growth Fund (CBGF) , Citizenship and Immigration Canada , Climate Change (Government of Canada) , Commissioner for Federal Judicial Affairs, Office of the ,
Commissioner of Official Languages, Office of the , Commissioner of Review Tribunals CPP/OAS, Office of the , Commissioner of the Environment and Sustainable Development , Communications
Security Establishment , Communications Security Establishment Commissioner, Office of the , Competition Bureau , Competition Tribunal , Copyright Board Canada , Correctional Service Canada (CSC)
, Courts Administration Service , Defence Construction Canada , Defence Research and Development Canada (Defence R&D Canada) , Elections Canada , Employment Insurance Board of Referees,
Enterprise Cape Breton Corporation , Environment Canada , Environmental Protection Review Canada , Ethics Commissioner, Office of the , Export Development Canada , Farm Credit Canada , Federal
Bridge Corporation Limited , Federal Court , Federal Court of Appeal , Federal Labour Standards Review , Finance Canada, Department of , Financial Consumer Agency of Canada (FCAC) , Financial
Transaction and Reports Analysis Centre of Canada (FINTRAC) , Fisheries and Oceans Canada , Foreign Affairs Canada (FAC) , Fr eshwater Fish Marketing Corporation , Functional Communities of the
Government of Canada , Governor General of Canada , Great Lakes Pilotage Authority Canada , Hazardous Materials Information Review Commission, Health Canada , House of Commons , Human
Resources and Skills Development Canada (HRSDC), Immigration and Refugee Board of Canada , Indian and Northern Affairs Canada , Indian Claims Commission , Indian Residential Schools Resolution
Canada , Industry Canada , Information Commissioner of Canada, Office of the , Infrastructure Canada , Inspector General of t he Canadian Security Intelligence Service , Interagency Advisory Panel on
Research Ethics , International Centre for Human Rights and Democratic Development , International Development Research Centr e , International Joint Commission , International Trade Canada (ITCan),
Justice Canada, Department of , Law Commission of Canada , Leadership Network, The , Library and Archives Canada, Marine Atlantic , Military Police Complaints Commission , NAFTA Secretariat -
Canadian Section , National Advisory Council on Aging , National Arts Centre , National Battlefields Commission , National Capital Commission (NCC) , National Crime Prevention Strategy , National
Defence, National Energy Board , National Farm Products Council , National Film Board of Canada , National Gallery of Canada , National Joint Council , National Literacy Secretariat , National Research
Council Canada , National Round Table on the Environment and the Economy , National Search and Rescue Secretariat , Natural Resources Canada , Natural Sciences and Engineering Research Council
of Canada , Networks of Centres of Excellence, Office of the Secretary to the Governor General , Pacific Pilotage Authority Canada , Parks Canada , Parliament of Canada , Passport Canada , Patented
Medicine Prices Review Board , Pension Appeals Board , Policy Research Initiative , Prime Minister of Canada, Office of the , Privacy Commissioner of Canada , Privy Council Office, Public Health Agency
of Canada , Public Safety and Emergency Preparedness Canada, Public Sector Pension Investment Board , Public Service Commissi on of Canada , Public Service Human Resources Management Agency,
of Canada , Public Service Integrity Office , Public Service Labour Relations Board , Public Service Staffing Tribunal , Publ ic Works and Government Services Canada , Queens Quay West Land
Corporation , Rebuilding Afghanistan , Receiver General for Canada , Review Tribunal (Agriculture and Agri -food) , Royal Canadian Mint , Royal Canadian Mounted Police (RCMP), Security Intelligence
Review Committee , Senate of Canada , Service Canada , Social Development Canada (SD), Social Sciences and Humanities Researc h Council of Canada , Species at Risk Act Public Registry , Standards
Council of Canada , Statistics Canada , Status of Women Canada , Superintendent of Financial Institutions, Office of the , Supreme Court of Canada , Tax Court of Canada , Team Canada inc , Technology
Partnerships Canada , Telefilm Canada , Transport Canada, Transportation Appeal Tribunal of Canada , Transportation Safety Board of Canada , Treasury Board of Canada Secretariat, Veterans Affairs
Canada , Veterans Review and Appeal Board Canada , VIA Rail Canada Inc. , Voluntary Sector Initiative , Western Economic Dive rsification Canada.
Defence
Agriculture
Research
Health
Transportation
Legal
Post Office
Environment
Industry
Banking Export
Taxation
Legislature
Commissions
Granting
Foreign Affairs
Welfare
Broadcasting
Museums
Regulatory Boards
Natural Resources
Police and Security
Insurance
Mint
Prisons
Comparing Strategy
1
1.
Arvenson
Best Management Practices
Sameness
Standardized Technology
Growth Rate, Earnings,
Market Share, Uniqueness,
Advanced Technology
Key success factors
National Security Protection of intellectual
capital, Proprietary
Knowledge
Justification for secrecy:
Leadership, Legislators,
Planners
Customer Demand Budget priorities set by:
Taxpayers, Inspectors,
Legislators
Stockholders, Owners,
Market
Stakeholders
Customer satisfaction Customer satisfaction Desired Outcome
Accountability to public,
Integrity, Fairness
Innovation, Creativity,
Goodwill, Recognition
Values
Cost Reduction, Efficiency Profit, Growth, Market Share General Financial Goal
Mission effectiveness Competitiveness General Strategic Goal
Public Sector Private Sector Strategic Feature
Citizen
& protection of
citizen rights
Government Financial Management
Goals
1
1.
Parry
To implement best international
standards of fiscal transparency and
accountability.
4. Best Practice in Transparency and
Accountability
Timely and relevant information to better
manage allocated resources to achieve
efficiency, economy, effectiveness and
value for money.
3. Management of Resources to Achieve
Value for Money
To ensure that Government priorities are
identified and articulated as budgetary
objectives, and at all levels of
government reflected in the allocation of
resources.
2. Allocation of Resources In
Accordance with Government Priorities
Management of fiscal flows, balances
and risk
1. Effective Fiscal Management
Explanation Goal
The objective of implementing
a computerized IGFMIS system:
Increase the effectiveness and efficiency of state
financial management and facilitate the adoption
of modern public expenditure management
practices in keeping with international standards
and benchmarks
1
.
1.
Points
Definitions
Integrated Financial Management System (IFMS)
or
Integrated Public Financial Management System (IPFMS)
or
Integrated Financial Management Information System (IFMIS)

IFMS is a common information and communication technology (ICT) platform which
integrates core public financial management (PFM) functions (e.g. budgeting, treasury
operations, accounting, cash/debt management, auditing/reporting) to ensure
efficient management of public resources.
IFMS is usually a centralized system which supports distributed (countrywide)
operations of PFM organizations on a unique central database containing all financial
information.
Reliable databases, enhanced business processes and consistent information flows
between various PFM modules increase overall operational efficiency, improves
planning and decision making process, and enhances transparency.
1.
Dener
Technology in Context
Technology
IFMIS
Public Financial Management
Modernization and Reform
Government Objectives
Technology Vendor Viewpoint
Technology
I F M I S
P u b l i c F i n a n c i a l M a n a g e m e n t
M o d e r n i z a t i o n a n d R e f o r m
G o v e r n m e n t O b j e c t i v e s
Typical term: Integrated Financial Management
Information System (IFMIS)
Our term: Government Resource Planning
(GRP)
IFMIS in context of PFM
Technology foundation for implementing PFM reform
through political reform
IFMIS implementations must be sequenced to the
unique country context
IFMIS systems must be flexible to adapt to changes
and budget reform evolution
IFMIS implementations must be sustainable
Reality
Reform comes first
An IFMIS must support on-going PFM
modernization
Technology enables the GRP
Technology is not government
modernization
Public Sector requires different
approach
Several governmental agencies in the US,
Germany, Australia, and Malaysia have
reported that the integration of agencies
and systems in the public sector can be
quite different from the private sector,
requiring the use of a different approach
and model.
1.
Wagner, Antonucci
Profit
(Loss)
Private Sector
The key financial concept is:
Public Sector
The key financial concept is:
Budget
Profit
(Loss)
Private Sector
The key control is:
Public Sector
The key control is:
Budget
Bottom Line?
Private
Sector
Public
Sector
profit free balance
Reality check:
Governments are more concerned
about whether money was spent
where it was planned to be spent
rather than whether it did any good.
The Budget is THE LAW
Approved by legislature and executive
often described as the organic budget
law
In many countries, the budget is the
expression of parliamentary
confidence
Commercial Financial Management
1
Input decision driven by need to
maximize profit
Clear concept of business entity
Funding directly linked to business
process
Legal requirement to value entitys assets
and liabilities

1.
Parry
Inputs
(measured in $)
Business
Process
Outputs
(measured in $)
Difference = Profit
Key Private Sector Reports and
Concepts
Profit and Loss
Statement
Earnings before
depreciation, interest, taxes
Shareholders Equity
Balance Sheet
Goodwill
Weighted Average Cost
Shareholders Equity
Statement of Cash Flow
Equity Investments
Borrowing
Working Capital
Debt to Equity Ratio
Return on equity
Return on sales
Return on equity
Earnings per share
Net days outstanding
Price earnings ratio
Net present value
Future value
Weighted average cost of
Capital
Gross Profit Margin
Reality check:
How many of these concepts
are important in government?
Process
1
1.
Parry
Planning
Resource
ceiling
Policy
objectives
Programs & projects
Budgeting
Reporting &
Monitoring
Accounting
Budget Execution
Feedback for monitoring & control
Medium
term budget
Annual
budgets
Budgeted performance
targets
Fund release
Cash& Debt
Management
General
ledger
Performance
recording
Asset
management
HRM &
Payroll
Financial & performance
reports to managers
Financial statements
1.
Rodin-Brown
1.
Rodin-Brown
Asset /
Inventory Mgmt
Procurement/
Purchasing
Mgmt of Budget
Authorizations
Commitment of
Funds
Payments and
Receipts Mgmt
Cash
Management
Debt and Aid
Management
Fiscal Reports &
Budget Review
Audit and
Evaluation
Budget
Preparation
Policy Development
and Review
Definitions
Budget Execution
[ Treasury System ]
Payroll Calcs
HR Mgmt
F M I S
Web Portal
Public Financial
Management Cycle
1.
Dener
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Government Resource Planning (GRP)
Appropriations
Expenditures
Procurement
Treasury
Materials
Civil Service
Receipts
Payroll
Social Programs
Budget Controls
Planning
Analysis
Budget Law
Policy
Forecasting
Budget Books
1
Input decisions driven by budget as the legal
embodiment of public policy
Definition of government entity difficult,
boundaries different for fiscal and business
management
Funding not linked to business process
No legal requirement to identify assets and
liabilities

1.
Parry
Inputs
(measured in $)
Business
Process
Outputs
(service delivery)
Comparison = Value for Money
Inputs = Appropriations
Seeing change in the
last 2 points.
Software
1
Features required for government financial
management software
System driven by budget as legal authority to raise taxes
and spend money
Manage multi level fund release against budget
authorisation warranting and commitment accounting
Able to provide complex expenditure analysis to meet
internal and international requirements = complex chart
of accounts structure
Accounting systems typically still cash based so must be
able to record transactions initiated by cash
If accrual accounting used must also be able to provide
cash flow information
Comply with IPSAS and IMF requirements
1.
Parry
Example of the Public Sector
Difference
1
Commercial Entity Perspective
Excess revenue = sales success
Excess costs = necessary costs
Results = success
Government Perspective
Surplus to Consolidated
Fund
Excess spending =
budget overrun
Result = problem
1.
Parry
Financial Statement
Budget
for 2005
Actual
for 2005
Difference
Revenue $500 $800 +$300
Cost $300 $480 +$180
Surplus $200 $320 +$120
What are governments trying to
achieve?
General: efficiency and effectiveness
through automation
Reduced fraud and corruption through
controls & audit
Improved cash management, decision-
making, value for money through
reporting & analysis
Improved decision-making through
decentralization
Simplified World Bank Treasury
Reference Model: Organization
Ministry of
Finance
Spending
Agencies
Revenue
Agencies
Central Bank Audit
Organization
Planning /
Budget
Budget
Preparation
Ledgers,
Controls
Financial
Reports
Procurement Purchasing ,
Procurement
Treasury Cash, Debt,
Bank
Foreign
Exchange
Public Service Payroll,
Pensions
Ministry of
Finance
Spending
Agencies
Revenue
Agencies
Central Bank Audit
Organization
Planning /
Budget
Budget
Preparation
Ledgers,
Controls
Financial
Reports
Procurement
Bank
Foreign
Exchange
Pensions
Accounting 101
Assets, Liabilities, Equity
Debit, Credits
Journals and Ledgers
Financial Reports
Commitment Accounting is...
where spending controls
are enacted that ensure
that no budget executor
can exceed their annual
appropriations .
Four Types of Accounting
Financial Accounting: reporting results to
external stakeholders consistent with G.A.A.P.
Tax Accounting: reporting results to
government consistent with the laws of that
nation.
Cost or Managerial Accounting: providing
actionable information
Fund or Commitment Accounting: accounting
method used for not for profits, educational
institutions and governments
Budgetary Control
Keeping track of in-progress expenditures

Key Advantages
of Commitment Accounting
Ensures sufficient funds will be reserved
against a budget to meet contractual
obligations.
Guarantees that budget funds will not be
spent inadvertently on unauthorized
costs.
Helps in planning for anticipated and
future costs.
What is a commitment?
It is the stage between the establishment of
an agreement between parties (whether that
be signing a contract or passing legislation)
and the fulfillment of the requirements of the
agreement by one or more parties.
The reservation of funds for a specific
purpose and its formal entry into agency's
accounting system so recording the
reservation.

Types of Commitments
Planned/Intended Expenditures or Travel
Plans
Soft Commitments/Pre-encumbrances
Requisitions For Goods or Services
Purchase Orders or Contractual
Obligations
Hard Commitments/Obligations/
Encumberances

Commitment Accounting
Practices
Requirement to commit funds for
anticipated or contracted future
spending
Delegation of authority to commit funds
(commitment thresholds)
Monthly review of commitments
(monitory discharge and de-commitment
of committed funds)

Financial Accountability -
Commitments in the System
Commitments indicate what budget
funds are required to pay for future
purchases & labour costs.
When commitments are paid they
become actual expenditures
actuals
Above and Below
Above the line Budget
Below the line Actual
Fiscal space
Accounting
Ledgers
Accruals
Financial Statements
Legal obligations
Who and how much due
Control arrears
Budget execution
Budget control
Management and forecasting
Reality check:
Private sector applications
focus below the line
Simplified Example
Budget:
100
Commitment:
25
Available:
100
free balance:
75
Approve
General
Ledger:
25
Commitment:
0
free balance:
75
Obligation:
25
General
Ledger:
25
Budget:
100
free balance:
75
Accounts Payable, Liabilities, Expenses, etc.
Obligation:
0
General
Ledger:
0
General
Ledger:
0
Commitment Accounting benefits
1. Track actual expenditures
2. Predict future expenditures based on
commitments
3. Ensure that the budget is not overspent
4. Ensure that the budget meets the law
Ministry of
Finance
Spending
Agencies
Revenue
Agencies
Central Bank Audit
Organization
Planning /
Budget
Budget
Preparation
Ledgers,
Controls
Financial
Reports
Procurement
Bank
Foreign
Exchange
Pensions
Transaction Data
Flow
Journal V. G. Ledger
AP
Budgets
Allotment 2
Allotment 1
C
Commit
Requisition
Purchase O.
GRN/GRTN
Payment Expense V.
Sales Invoice
Cash Sale Cash Receipt
B
B
AR
B
balance - integrity
adjustment
A
A
A
Transaction Data
Flow
Journal V. G. Ledger
AP
AR
Budgets
Allotment 2
Allotment 1
C
Commit
Requisition
Purchase O.
GRN/GRTN
Payment Expense V.
Cash Receipt
Sales Invoice
Cash Sale
B
B
B
A
A
A
What is the Chart of Accounts?
Defines how accounting information is:
Categorized
Collected
Reported
COA issues include:
Best way to roll up granular information to
summary
Best way to enable security
Best way to manage controls
Appropriate level of granularity required
Chart of Accounts

Fund

Organization

Program

Location

Object

Project

Chart of Account Groups (Example)
This is a SAMPLE
Object Code is the only mandatory
element for FreeBalance.
COA Purpose
Organization
Location
Approve
Responsibility
Tier
Fund
Objective
Performance
Report
GFS
MDG
Program
Project
Activities
Economic Code
Accounting
Code
COA Arrangement
Fund
Organization
Location
Approve
Responsibility
Tier
Objective
Performance
Report
GFS
MDG
Economic Code
Program
Project
Activities
Accounting
Code
Sample Chart of Accounts
Organization Fund Program/ Project Location Object
Organization
Organization Type
(1)
Councils
(3)
Sector
(1)
Reporting Groups
(2)
Divisions
(5)
Cost Centres
(7)
Fund
All Fund
(1)
General Gov.
(1)
Source Type
(1)
Donor Type
(1)
Fund Table
(1)
Fund Source
(3)
Donor Table
(3)
Source Group
(3)
Project/Program
Project
(3)
Component
(4)
Sub Group
(1)
GFS Function 2
(4)
Sub Component
(6)
Activities
(8)
GFS Function 3
(5)
Activity Group
(3)
Project Type
(1)
GFS Function 1
(3)
Pillars
(1)
Objectives
(1)
MDG
(2)
Themes
(2)
Priority
(1)
Location
Province
(1)
Districts
(3)
Divisions
(4)
Ward
(5)
Object
Account Type
(1)
Main Category
(1)
Sub Category
(2)
Item Group
(2)
Object Group
(3)
Object Code
(4)
Expenditure Type
(1)
Sub Type
(2)
GFS L1
(1)
GFS L2
(2)
GFS L3
(3)
GFS L4
(2)
GFS L5
(5)
Typical Scenario Government
Guideline amounts selected
At the detail level: general ledger coding block
Typically no controls at the financial budget
Too granular to be material:
Restricts managers from making decisions
they are authorized to make
Financial Budget
It is all about the chart of accounts
Amount approved by legislature or Ministry of Finance
Is at a summary level
May represent money to be released for the entire year
to a high level of authority (lots of scenarios possible)
Act as budget control
Often called Allotment
Financial Budget
Appropriation
Amount released for use
Controls, but typically not at the granular level
Often represents money to be spent during a fiscal
period
Usually at the decision manager level
Financial Budget
Appropriation
Warrant
Version 7 section
brief discussion
different
organizational
configurations
MULTIPLE
CONTROLS
aggregate
detailed
MULTIPLE
CONTROL
LEVELS
configured
CONTROLS
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COMMITMENTCYCLE
segregationof
duties&workflow
monthly
PERIOD
yearly
TOLERANCE
LEVELS
flexible
strict
Financial Controls
COA Example
Fund Organization Locations Object Fund Type Project
Fund
(1)
Ministry/Agency
(4)
Ministry/Agency
(4)
Ministry/Agency
(4)
Atoll
(3)
Location
(3)
Indicator
Economic Type
(2)
Economic Type
(2)
Economic Item
(5)
Economic Item
(5)
Economic Item
(5)
Economic Item
(5)
Fund Source
(2)
Project
Status
(1)
Cash Indicator
(1)
Allotment 2
Allotment 1
Budget
Commit/
Obligation
Fund
(1)
Fund
(1)
Fund
(1)
Fund
(1)
Fund
(1)
Ministry/Agency
(4)
Ministry/Agency
(4)
Ministry/Agency
(4)
Location
(3)
Location
(3)
Location
(3)
Fund Source
(2)
Fund Source
(2)
Fund Source
(2)
Project ID
(4)
Project ID
(4)
Project ID
(4)
Project ID
(4)
Cash Indicator
(1)
Economic Group
(2)
Economic Type
(2)
Category (1)
Main Category
(1)
Account Type
(1)
Asset/ Liability / Revenue / Expenses / Retained Earnings
Asset / Liability / Revenue / Expenses / Equity
Income Statement / Balance Sheet
Financial / Statistical
EXP. CS, SI, SV,
CR, DN, CN
General Ledger
G/L Offset Code
Journal Voucher
GFS Code
(5)
Allow to Exceed:
[Y/N]: Yes,No,
[W]: With Warning
[T]: Tolerance Allowed
[M]: Message if Overspent
T
Y/N, W, T
Y/N, W
M
Coding Block
1. May be up to 50 characters
in length
2. May consist up to 10
segments
3. Can be up to 12 characters
long
4. Each segment can have an
unlimited number of roll
up tables
GoM Functions
(2)
COFOG1 Sector (3)
COFOG2 Sector (4)
COFOG3 Sector (5)
Cash Indicator
(1)
Cash Indicator
(1)
Two levels of commitments:
Soft commitment or commitment
Hard commitment or obligation
Not all governments utilize two levels
Is a best practice
Provides a better view for the status of the
commitment
In our experience, customers who implement
purchasing or procurement have two levels
Obligations vs. Commitments
Commitment or Soft Commit
Obligation or Hard Commit
What is accrual?
Transaction and events are recognized
when they occur rather than when cash
is paid or received
Cash accounting is not always
representative of what is really going on
Assets, liabilities, net assets, revenues
and expenses recognized
All assets and liabilities are measured on
the historical cost basis, sometimes with
the re-measurement to the fair
value of certain assets and liabilities
Why is this a problem in
government?
Corporations with shareholders and auditors
must operate on an accrual basis
Accrual determines the real value of a company
There is no real value of a government entity
Accrual accounting is an order of magnitude
more difficult than cash bookkeeping
Accounting capacity issues in Developing
Nations
Hence, the notion of a hybrid approach
Good-bye Accrual World
1
?
Cash accounting reports cash transactions
when received or paid. Consequently, financial
statement items such as amounts owed to or
by the government or other non cash items are
not recorded.
Modified cash accounting follows cash
accounting principles, but at year-end
adjustments are made recognizing some non-
cash items such as AR and AP
Modified accrual follows full accrual principles
with one significant departure not
recognizing capital assets on the statement of
financial position. Instead they are recognized
fully as expenditures when bought.

1.
CA Magazine
Modified
Cash
Cash
Modified
Accrual
Methods of
modified accrual
differ among
governments.
State of the Art
Most governments in hybrid state.
Canada is modified accrual (mostly).
New Zealand in accrual.
Developing Nations tend to be cash or
modified cash.
Slow move towards accrual.
Private Sector is almost always accrual.
Presents challenges for
private sector financial
software.
Ministry of
Finance
Spending
Agencies
Revenue
Agencies
Central Bank Audit
Organization
Planning /
Budget
Budget
Preparation
Ledgers,
Controls
Financial
Reports
Procurement
Bank
Foreign
Exchange
Pensions
Version
Version
Version
Government What If Scenarios,
Iterative Versions and Approvals
Approve
Budget Book
Budget Law
Budgetary Controls
PFM
International
Financial
Standards
Government Fiscal
Regulations
Budget Office
Government Objectives
Legislature and Executive
Historical
Information
10%
10%
10%
10%
10%
10%
10%
10%
10%
10%
Budget
Circular
Cost Assumptions
Revenue
Assumptions
Previous Plans
100%
90%
80%
Macro-Economic Analysis
International Organizations
O
O
O
O
O
O
O
O
O
OO
OO
OO
OO
OO
OO
OO
OO
OO
OO
Version
Version
Version
Version
Version
Version
Divisional What If Scenarios, Iterative
Versions and Approvals
Ministry What If Scenarios, Iterative
Versions and Approvals
Approve
Approve
Line Ministry
OO
OO
Across fiscal periods
Budget Transfers
Budget transfer (virements) depend on authority and are different from one
government to another
Often legal constraints on transfers
Can tighten or loosen controls during the fiscal year
Can move money to sub-nationals or other departments
Account
Account
from one account to another
from one type segment to another
Budget
from budget to allotment
Some comments
Adoption of proper MTEF limited
success
MTMF (macroeconomic framework)
MTFF (fiscal framework)
MTBF (budget framework)
MTSS (sectoral strategies)
MTPF (performance framework)
Program Budgeting preceded
Performance Budgeting [typically]
Budget Ceremony
+/- %
View that budget = outcomes
Lack of zero-based budgeting concepts
Few tools that enable end-to-end budget
preparation for government
Ministry of
Finance
Spending
Agencies
Revenue
Agencies
Central Bank Audit
Organization
Planning /
Budget
Budget
Preparation
Ledgers,
Controls
Financial
Reports
Procurement
Bank
Foreign
Exchange
Pensions
Treasury Function
Debt
Management
Predict Cash
Requirements
Optimize Bank
Accounts
Investment
Management
Treasury Single
Account
Why TSA?
Corruption
Liquidity
Predictability
Ministry of
Finance
Spending
Agencies
Revenue
Agencies
Central Bank Audit
Organization
Planning /
Budget
Budget
Preparation
Ledgers,
Controls
Financial
Reports
Procurement
Bank
Foreign
Exchange
Pensions
0 10 20 30 40 50 60 70 80 90 100
1. Iraq
9. Hungary
17. Qatar
25. Austria
33. Yemen
41. Germany
49. Ghana
57. Namibia
65. West Bank/Gaza
73. Burundi
81. Rwanda
89. South Africa
97. Senegal
105. Morocco
113. Burkina Faso
121. Honduras
129. Congo, Dem. Rep. of
137. Taiwan
145. Cameroon
153. Costa Rica
Government Spending as % of GDP
http://anepigone.blogspot.com/2008/03/government-spending-as-
percentage-of.html
0 10 20 30 40 50 60
Czech Republic
Armenia
Slovak Republic
Angola
Hungary
Congo, Republic of
Ukraine
Slovenia
Australia
Mongolia
Ireland
Argentina
Malta
Afghanistan
St. Kitts and Nevis
Thailand
Jordan
Bahrain, Kingdom of
Government Wage Bill as % of Expenditures
World Bank 2000-2008 Average
Payroll and PFM
Wage bill is material to government
expenditures
Corruption opportunity
Variability in payroll
Seasonal, emergency employment
Training, travel & other costs
Significant cash management implication
Requires planning, forecasting and
controls
Ministry of
Finance
Spending
Agencies
Revenue
Agencies
Central Bank Audit
Organization
Planning /
Budget
Budget
Preparation
Ledgers,
Controls
Financial
Reports
Procurement
Bank
Foreign
Exchange
Pensions
Audit
Internal Audit
External Audit Supreme Audit
Organization
Maturing
Compliance
Risk Management
Performance
CAAT
International Standards
World Bank Treasury Reference Model
International Monetary Fund Code of Good Practice on
Fiscal Transparency
International Monetary Fund Government Finance
Statistics (GFS)
International Federation of Accountants International
Public Sector Accounting Standards Board International
Public Sector Accounting Standards (IPSASs)
UN Common Functions of Government
Medium Term Expenditure Frameworks (MTEF)
Generally Accepted Accounting Principles (GAAP)
International Aid Transparency Initiative (IATI)
eXtensible Business Reporting Language (XBRL)

World Bank Treasury Reference
Model
Purpose
Development tool for fiscal managers and system
developers, intended to help implement good
practices in fiscal accounting and expenditure control
Key Principles
Facilitating the process of designing a treasury
system project and preparing technical specifications
for a tender document that will meet World Bank
procurement standards.
Improved analytical standards for fiscal reporting
Implications
Guidelines to identify completeness

http://devportal/files/Additional%20Treasury%20Reference%20Model.ppt
IMF Code of Good Practice on
Fiscal Transparency
Purpose
Method to assess government fiscal transparency with
practical advice for improvement
Key principles:
Roles and responsibilities of and within government
should be clear
Comprehensive reliable information of fiscal activities
should be available to the public
The processes of budget preparation, execution, and
reporting should be open
Integrity of information should be assured
implications:
Controls and transparency
IMF Government Finance
Statistics Manual
Purpose:
Provide a comprehensive conceptual and accounting
framework suitable for analyzing and evaluating fiscal policy
and performance of the general government sector and
broader public sector of any country.
Key Drivers:
Improve government accounting and transparency in
operations
Need for ways to assess the effectiveness of spending on
government and/or donor funded programs (e.g. poverty
reduction, sustainability of fiscal policies etc.)
Implications:
Chart Of Accounts design that incorporates both
GFS classifications and countries specific needs
General capabilities and GFS based reporting
http://devportal/files/Additional%20GFS.pdf
IFAC IPSASs
Purpose
Report requirements for government and public sector
organizations
Key principles:
Transition from cash-basis to accrual accounting
21 Reporting Standards
Sets preliminary benchmarks
Product implications:
Ability to transition customers from cash to full accrual
Support specific reports
http://devportal/files/Additional%20IPSAS.ppt
Medium Term Expenditure
Frameworks
Purpose
Rational planning and budget formulation process
within which the government establishes a credible
and transparent criteria for allocating public
resources to strategic priorities while ensuring
overall fiscal discipline
Key principles:
3 Year planning.
Sector Effectiveness and Efficiency Review process.
Performance Indicator Framework for measuring
agency performance against committed
deliverables
Implications:
Budget management software operates with 3+ years
cycle, need for a strong fiscal framework, performance
planning and performance reporting

http://devportal/files/Additional%20MTEF.ppt
UN Classification of the Functions
of Government
Purpose
Functional classification to report government
statistics to the IMF
"Functional" classifications identify the "functions"
-- in the sense of "purposes" or "objectives" -- for
which groups of transactors engage in certain
transactions
Key principles:
"Functional" classifications identify the "functions"
-- in the sense of "purposes" or "objectives" -- for
which groups of transactors engage in certain
transactions
COA Set Up
Generally Accepted Accounting
Practices (GAAP)
Purpose
A collection of rules and procedures and conventions
that define accepted accounting practice; includes
broad guidelines as well as detailed procedures.
Somewhat different among countries.
Focused on financial accounting not managerial or
fund accounting
Key principles:
Many accounting practices that cover public and private
sector.
implications:
Support standard accounting principles, support
auditable data. Much of GAAP does not apply to the
public sector.
US GAAP burdensome, International Financial
Reporting Standards (IFRS) may be more applicable.

International Aid Transparency
Initiative (IATI)
Purpose
IATI aims to make information about aid spending easier
to access, use and understand.
Its purpose is to help implement the transparency
commitments made at the Accra Agenda for Action in
the most consistent and coherent ways. The Accra
Agenda for Action arose from the March 2005 Paris
Declaration on Aid Effectiveness.
Key principles:
Aid transparency & move to using country systems.
Reporting and integration standard.

eXtensible Business Reporting
Language (XBRL)
Purpose
Global standard for reporting and exchanging business
information.
Simplifies by providing 1 type of output for all
stakeholders
Primarily method for business to report to government,
but being considered in government
Key principles:
metadata set out in XBRL taxonomies, which capture
the definition of individual reporting concepts as well as
the relationships between concepts and
other semantic meaning. Information being
communicated or exchanged is provided within an
XBRL instance.
Reporting and integration standard, XML support

Typical Challenges
1
Lack of Engagement and Political/ Management
Support.
Inadequate Preparation (Vision, Policies,
Capacity)
Weak Governance Arrangements.
Over Complicated Expensive Systems
Inadequate acquisition and contract
management.
Unrealistic action plans.
Non participation, lack of dedicated teams.
Inadequate training
Weak, contractor with technical/commercial
focus
1
Murphy

Also lack of knowledge
transfer from consultants.
Developing Nation Issues
No luxury for massive technology footprint The
Complexity Trap
Functional and technical capacity challenges The
Capacity Trap
Cost and upkeep of commercial infrastructures and
vendor lock-in
Bandwidth and digital divide limitations
Sustainability and knowledge transfer
However: little technical and
functional baggage holding back
change

GRP Practices
Best?
Double Entry Bookkeeping
Treasury Single Account
Maybe
Modified Cash

Good
2 Phased Commit
Aggregate Controls
Decentralization
Program Budgeting
Multiple Year COA
Maybe
Accrual Accounting
Performance Management

Version 7 section
brief discussion
3. Technology & Transparency
Leapfrog
& Case Study
Version 7 section
brief discussion
Agenda
15 minutes
90 minutes
45 minutes
PFM
60 minutes
90 minutes
learned
45 minutes
30 minutes
30 Minutes
9. Parking Lot

Confusion?
3
Congress cuts transparency funding
How can Timor-Leste afford
government transparency?
5
Timor-Leste United States Comparison
Independence 2002 1776 3.4%
GDP Per Capita $2,600 $47,400 5.5%
GDP Growth 8% 2.7% 338%
Unemployment 20% 9.7% 206%
Below poverty line 42% 12% 350%
Life Expectancy 67.95 78.92 86%
Literacy 58.6% 99% 59%
globalization
= competition
choice
citizens are watching
empowered
Democratic
Republic of
Timor-Leste
(RDTL)
Transparency
Objectives
build civil society
build infrastructure
build capacity
build citizen involvement
in government
improve government performance
?
GDPPerCapita(PPP,logs)
U
G
A
N
D
A
P
A
P
U
A
N
E
W
G
U
I
N
E
A
A
U
S
T
R
A
L
I
A

-3
-2
-1
0
1
2
3
209Countries
N
o
r
m
a
l
i
z
e
d
G
o
v
e
r
n
m
e
n
t
E
f
f
e
c
t
i
v
e
n
e
s
s
I
n
d
e
x
HIGH
LOW
Benefits of Transparency
Government Effectiveness and GDP*
*Atpurchasing powerparity
Source:TheWorld
Bank
Higherthegovernment
effectiveness=higherthe
countryGDPPerCapita
Strengthening Public Financial Management
in Timor-Leste
U
G
A
N
D
A
P
A
P
U
A
N
E
W
G
U
I
N
E
A
A
U
S
T
R
A
L
I
A
-3
-2
-1
0
1
2
3
207Countries
N
o
r
m
a
l
i
z
e
d
V
o
i
c
e
a
n
d
A
c
c
o
u
n
t
a
b
i
l
i
t
y
I
n
d
e
x
.
HIGH
LOW
Voice and Accountability and GDP*
Source:TheWorld
Bank
Higherthegovernment
accountability=higherthe
countryGDPPerCapita
in Timor-Leste
U
G
A
N
D
A

P
A
P
U
A

N
E
W

G
U
I
N
E
A

A
U
S
T
R
A
L
I
A

-3
-2
-1
0
1
2
3
204Countries
N
o
r
m
a
l
i
z
e
d
C
o
n
t
r
o
l
o
f
C
o
r
r
u
p
t
i
o
n
I
n
d
e
x
HIGH
LOW
Control of Corruption and GDP*
Source:TheWorld
Bank
Higherthecontrolof
corruption=higherthe
countryGDPPerCapita
in Timor-Leste
= stability
= investor confidence
avoid the
resource curse

technology leapfrog
Version 7 section
brief discussion
leapfrog theory
Version 7 section
brief discussion
entrenched technology
26 26
use what works
skip what
doesnt work
skip stages
modernize
rapidly
review
Transparency and Accountability
The next generation of public financial
management technology will allow the public to
track the budget live, to see where every dollar is
being spent, and to gain renewed confidence in
the process

Democratic Republic of Timor-Leste Vision
sequenced
Foundation for Country Growth
FMIS
(software and
hardware)
Human
Resource
Development
Capacity
Building
(Training)
GoTL LAWS
Procurement
Commission
Autonomous
Agencies
Ministries
Decentralization
PFM in
Overdrive?
1. International Standards
IPSAS
International Public Sector Accounting
Standards
in Timor-Leste
EITI
Extractive
Industries
Transparency
Initiative
GFS
Government Financial Statistics
MTEF
Medium Term
Expenditure Frameworks
IATI
International Aid
Transparency Initiative
2. Document Management
manages
correspondence with
senior managers
repository for freedom of information
3. e-Procurement
review
Strengthening Public Financial Management in Timor-Leste 45
integrated with back-office
procurement & commitment
accounting within IFMIS
vendor alerts
tender results published
government tenders published
Version 7 section
brief discussion
front/back office integration
4. Transparency Portal
review
www.transparency.gov.tl
subscribe
drill down
articles
Expenditures, Transparency Portal
10 years of data
drill through the chart of accounts
Expenditures, Transparency Portal
export to xls, doc, pdf, html, xml
track commitments
5. Performance Management
review

integration with
macro-economic data
examines budget execution data
integrated with back-office
procurement & commitment
accounting within IFMIS

in Timor-Leste
56
simple classifications
transparent presentation of public investment programs
physical & financial progress
drill down
narrative
progress
proof
Lessons Learned
in Timor-Leste
61
1.
Transparency
is not an
Option
0
20
40
60
80
100
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Mobile cellular telephone subscribers
Per 100 inhabitants
YouTube
Facebook
Twitter
SMS
citizen
auditors
2. Transparency =
Performance > Embarrassment
Role of Civil Society
NGOs can help organise literacy groups and provide
materials. They can provide private education and
education for the blind. They can provide school
materials for students, and assist with school equipment
chairs and books
NGOs can help us organise and run technical training
courses in our villages

Timor-Leste National Vision

3. Sequenced Holistic Multiple-
Year PFM Strategy
Improve
budget
execution
Improve
government
capacity
Improve
transparency
&
accountability
Improve
government
performance
review
Foundation for Country Growth
4. Build Capacity
review
Training beyond
software
IT capacity
Project management
Government accounting
Beyond training
Adaptable help
E-Learning
Knowledge management
Intuitive systems
Translation including
terminology
Simple & goal-oriented
interfaces
Mentoring

PFM Modernization
Alignment with Capacity Building
5. Require Sustainability in Partner
Performance
6. Leverage Open Systems
Transition to Open Environment:
Transparency
Domain Closed Transition Open
Transparency
Access to
Information
Document Machine Readable
Data Availability Data for Sale Publish as Exception
Do not Publish as
Exception
Mode
Publish, Audited &
Vetted
Mixed
Near Real-Time
Publishing
ROI Reason Revenue Generation
What are they going to
do with the data?
Government as
Platform
Target Business Community Civil Society & Press
Citizens

Transition to Open Systems:
Technology
Domain Closed Transition Open
Integration
Proprietary within
Suite
Support for Industry
Standards
Service Oriented
Architecture
Middleware
Proprietary =
Customer Lock
Proprietary/Open
Tactical approach
Open Standards =
Customer Choice
Viewpoint
Open Systems
reduce system
performance
Open Systems extend
value
Open Systems =
Extensibility
Extensibility High Costs
Need for vendor
Ecosystem
Low Cost Application
Assembly
Leapfrog is possible
Timor-Leste United States Comparison
1. Standards
GFS, IPSAS, EITI, IATI,
MTEF
EITI, OGP Leaped
2. Document
Management
Manager Document
Management
Various Records &
Correspondence
Catching Up
3. Performance
Management
Managers
Dashboards, Results
Portal
Various tools across
government
Leaping
4. Transparency Transparency Portal
Data.gov & others -
underfunding
Leaping
5. e-Procurement August 15 FedBizOpps To leap
www.revenuewatch.org
How?
Timor-Leste United States
Strategic Vision Holistic
1 Year Budgets, complex
election cycles
Government Structure Unitary Federal
Civil Society & Media Seen as Improving Results Seen as Special Interests
Government Intervention Seen as Good Seen Suspiciously
1. Standards
Ease to Move to
Long History of Entrenched
National Standards
2. Document Management
Single system data source
Multiple entrenched
systems
3. Performance
Management
4. Transparency
5. e-Procurement
Version 7 section
brief discussion
Lessons Learned
Technology
Re-purpose open systems
rapidly to support portal
functionality
Optimal product footprint
Rapid implementation
Broad choice in middleware
Transparency
Good practices in budget
classifications
Holistic whole-of-country
Ministry of Finance and
Planning leadership
Civil society enablement
Goodbye Conflict, Welcome
Development
Version 7 section
brief discussion
PFM
Version 7 section
brief discussion
Agenda
15 minutes
90 minutes
45 minutes
PFM
60 minutes
90 minutes
learned
45 minutes
30 minutes
30 Minutes
9. Parking Lot

military
intelligence military
business
ethics business
British
cuisine British
Government
performance Government
What is Corporate Performance
Management?
Reporting
OLAP Data Mining
Scorecarding
Budget
Planning
Drivers for Corporate Performance
Management
Too much information
Business Intelligence tools such as
reporting are not prescriptive
Not all indicators are relevant
Financial information is after the fact you
cannot change the past
Many non-integrated Business
Intelligence (BI) tools

Corporate Performance Objectives
Key Performance Indicators (KPIs) and
scorecards are simple to understand
KPIs measure in progress
Aggregates measurements from many
sources
Utilizes capabilities of many tools
Provides clarity for what is important

Government Performance Management
Business
Bottom Line is clear:
profitability
Measured on quarterly
profitability
Bottom Line is
financial
Budget is a guideline
Simple financial
measurements:
revenue, expenditures,
cost centres

Government
Government mandates
require many objectives
Measured on long-term
outcomes
Bottom Line is
outcomes
Budget is the law
Difficult financial
measurements:
objectives, funds,
projects
Performance and Budget
Budget
Execution
Budget
Planning
Government
Objectives
Scenario
Planning
Budget
Forecasting
Performance
Monitoring
Budget
Review
Inputs, Outputs, Outcomes
Objective
Government development goal
Input
The money in the budget
Outturn
The money spent
The items purchased
Output
Number of citizens reached, kms of road built
etc.
Outcomes
Non-financial measurements of results

Remember?
MBA Harvard, 1973
Presidents
Management Agenda
Program Assessment
Rating Tool (PART)
Current Situation
Mixed
Capacity issues
Improvements in MTEF
Remains output focused
Better results in projects yet
Commercial performance management
software not budget centric
Corporate Performance Management
input
outturn
output
outcome
profit
input
outturn
output
mandate
budget
outcome
Maturing of Government Performance
Budget is executed based on budget law
Was the money spent where it was
intended?
Were all fiscal discipline processes
followed?
budget
compliance
Budget is tied to objectives
Was the budget developed based on
government objectives?
Were the results from one year used in
budget preparation?
budget
compliance
managing for
results
Budget is tied to results
Can results be tied to outputs and
outcomes? (cost per unit of outcome)
Are processes improved to improve
value for money?
budget
compliance
managing for
results
valuefor
money
Unintended consequences
False positive:
Measurements
show success, but
impact is negative
False negative:
Measurements
show failure, but
impact is positive
Why?
No objective
measurement like
profit
Measured
Outcomes
Outcomes
not
measured
Version 7 section
brief discussion
We can Measure Lots of Things
Version 7 section
brief discussion
Information Overload
Version 7 section
brief discussion
Important?
Version 7 section
brief discussion
Hidden?
Version 7 section
brief discussion
Performance
Version 7 section
brief discussion
Key Performance Indicators (KPIs)
Version 7 section
brief discussion
Version 7 section
brief discussion
Scorecard
Version 7 section
brief discussion
Traffic Lights
Version 7 section
brief discussion
Version 7 section
brief discussion
Balanced Scorecard
Version 7 section
brief discussion
Version 7 section
1. Citizens
How do we look to citizens?
Government: Citizens
Private Sector: Customers
Version 7 section
brief discussion
Version 7 section
2. Financial
How effective are we planning and
executing our budget?
Government: Budget
Private Sector: Profit

Version 7 section
brief discussion
Version 7 section
3. Internal Processes
What must we excel at?
Version 7 section
brief discussion
Version 7 section
4. Learning and Growth
What do we need to do to continuously
improve?
Government: Capacity Building
Version 7 section
brief discussion
Complexity in Government
Version 7 section
brief discussion
1. No bottom line ~ Profit
Objective
Government
development goal
Input
The money in the
budget
Outturn
The money spent
The items
purchased

Inputs, Outputs, Outcomes
Output
Number of citizens
reached, kms of
road built etc.
Outcomes
Non-financial
measurements of
results

Version 7 section
brief discussion
Government: Financial (budget)
leads to Outcomes
Version 7 section
brief discussion
Private Sector: Outcomes Lead to
Financial (profit and loss)
Version 7 section
brief discussion
2. Aligned to the Budget
Version 7 section
brief discussion
Count
Strong Alignment
Strategy Financial
Customer
Learning &
Growth
Internal
Process
Mission
Strategy Map
Government Strategy Map
C
i
t
i
z
e
n

F
i
n
a
n
c
i
a
l

I
n
t
e
r
n
a
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1 2 3 4
1 2 3 4
1 2 3 4
1 2 3 4
Measurement
Measurement
Measurement
FreeBalance Example
C
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r

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1 2 3 4
1 2 3 4
1 2 3
1 2 3 4
P3 Customer-Centric
Development
C3 Improve Support
Case Metrics
C2 Improve Customer
Satisfaction
Some priorities
1.
Smooth government
payment processing
Complete accountability &
reporting on gov. finances
Minimized cost of debt
service & banking fees
Improve governance and
administrative capacity
Reduce
corruption
2.
Achieve liquidity (cash
management)
Avoid fiscal
deficits
Improve efficiency Promote transparency
Promote good
governance
3.
Economic
growth
Social Cohesion
(inter-ethnic)
Good
governance
Promoting private
sector development
Creating strong, transparent
public institutions
Strengthen
Infrastructure
4.
Reduce corruption
perception
Real-time financial
reporting
Reduction in labour costs, increase in
efficiency
Create a professional
public service
5.
Build strong stage
institutions
Poverty
reduction
Improve peace and
security
Facilitate pro-poor
growth
Rehabilitate infrastructure
6.
improve fiscal sustainability
in a mineral-based economy
protect poor and
vulnerable
encourage transparent and
prudent mining investments
competitive and stable medium-
term business investment climate
7. Achieve stability
Institutional
coordination
Improve transparency Improve citizen services
Promote business
sector
8.
Agricultural
growth
Good governance
Transportation
infrastructure
Improved healthcare
Energy
growth
Prudent use of
natural resources
9.
Sustainable national
capacity
Short term
stabilization
Transparent and effective
public financial management
Improve
security
Develop non-oil sustainable
development
10.
Eliminate wage bill
overruns, controls
Improve
governance
On-time payments
Accurate payroll
records
Eliminate quiet corruption
C
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t
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s
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t
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Infrastructure Development
Private Sector Development
Good Governance Service Delivery
Poverty Reduction
Health
Education
Agriculture
Energy
Fiscal Sustainability
Capital Projects Investment
Revenue Collection
Transparency
Audit & Oversight
Anti-Corruption Decentralization
Procurement Processes
Sustainable National
Capacity
Professional Skills
Development
Version 7 section
brief discussion
Version 7 section
Lesson Learned
Performance Management harder in government than
private sector
All objectives must be aligned to budget
Balanced Scorecard is good tool to develop
performance management
Opportunity to leapfrog more developed countries
Technology, alone, wont provide performance metrics
53 53
Version 7 section
brief discussion
5. Governance Valuation:
Sequencing PFM Reforms (& GRP)
Version 7 section
brief discussion
Agenda
15 minutes
90 minutes
45 minutes
PFM
60 minutes
90 minutes
learned
45 minutes
30 minutes
30 Minutes
9. Parking Lot

Version 7 section
brief discussion
Governance Formula?
Version 7 section
brief discussion
Not prescriptive
Version 7 section
brief discussion
Technology
5 5
Version 7 section
brief discussion
Evaluation Methods
Evaluation Method Scope Back-Office Technology Front-Office Technology
Public Expenditure and Financial Accountability
(PEFA)
Comprehensive PFM
assessment
No technology guidance although PEFA assessments attribute some
achievements to the use of technology
Commonwealth Public Financial Management
Self-Assessment Toolkit (CPFM-SAT)
Comprehensive PFM
assessment
A3: Use of IFMIS
B2: Use of Debt Management
software
No technology guidance for publishing
information
The Chartered Institute of Public Finance &
Accountancy (CIPFA) Whole Systems Approach
Comprehensive PFM
assessment
O7: Financial management
information systems
Revenue Watch Institute Index
Extractive Industries
transparency

Paris Declaration and Accra Agenda for Action Aid effectiveness
Use of country systems for PFM and procurement does not specify use of
technology
International Budget Partnership Open Budget
Index (OBI)
Budget preparation and
reporting transparency

Internet publishing of budget documents
gains higher rating for many categories
Gartner Group Open Government Maturity
Model
Open government
Provides open government technology
insight
Institute for Electronic Government e-
Democracy Model
E-Democracy Use of e-mail systems
Use of web technology Andersen & Henriksen E-Government Maturity E-Government
Layne and Lee Framework of E-Government E-Government
Horizontal and vertical integration
within government
World Bank World Governance Indicators
Meta collection of 3
rd
party
indicators
No technology guidance
Global Integrity Report
Governance and anti-
corruption
PFM Component Map
Public Financial
Management
Component Map
Performance &
Commitment
Management
Government
Performance
Management
Budget & Commitment
Management
Core Government
Financial Management
Public Financials
Management
Government Treasury
Management
Expenditure and
Revenue Management
Public Expenditure
Management
Government Receipts
Management
Civil Service
Management
Civil Service
Management
Governance and
Service Delivery
Transparency &
Accountability
Service Delivery
Version 7 section
brief discussion
Whats changed?
Version 7 section
brief discussion
Country PFM Context
Version 7 section
brief discussion

Data from Government Operations

Expenditures
Revenue

Budget
formulation

Budget
execution
Human
Treasury Resources
PFM Domain
Version 7 section
brief discussion
Core Government Financial Management


Expenditures
Revenue

Budget
formulation

Budget
execution
Human
Treasury Resources
Version 7 section
brief discussion
Expenditures & Procurement


Expenditures
Revenue

Budget
formulation

Budget
execution
Human
Treasury Resources
Version 7 section
brief discussion
Revenue Management


Expenditures
Revenue

Budget
formulation

Budget
execution
Human
Treasury Resources
Version 7 section
brief discussion
Human Resources


Expenditures
Revenue

Budget
formulation

Budget
execution
Human
Treasury Resources
Version 7 section
brief discussion
Treasury


Expenditures
Revenue

Budget
formulation

Budget
execution
Human
Treasury Resources
Version 7 section
brief discussion
Transparency


Expenditures
Revenue

Budget
formulation

Budget
execution
Human
Treasury Resources
Version 7 section
brief discussion
Performance


Expenditures
Revenue

Budget
formulation

Budget
execution
Human
Treasury Resources
Version 7 section
brief discussion
What do we mean by Budget 2.0?
18 18
Budget 1.0 Transitional Budget 2.0
Back-office centric
functions and
technology
Back-office centric
functions deployed on
the web e-
government
Network-centric
functions for citizen
interaction
government 2.0
Version 7 section
brief discussion
What do we mean by Budget 2.0?
19 19


Expenditures
Revenue

Budget
formulation

Budget
execution
Human
Treasury Resources
Version 7 section
brief discussion
0
0. 2
0. 4
0. 6
0. 8
1
1. 2
1. 4
1. 6
1. 8
2
Budget execution
Budget
comprehensiveness
Timeliness
International standards
Budget formulation
Policy management
Oversight
Transparency
mechansism
Budget 1.0
Transition
Budget 2.0
Budget 2.0
Published Documents Web Publishing
Open Data Narrative Centric Visualization Centric
Citizen Centric
Interactive Data
Audit
Parliamentary Oversight
Citizen Oversight
Audio Visual
Performance Audit
Press & NGO
Access to Information
Cooperative Planning Expert Networks
Transparency Mechanisms
Oversight
Macro-Fiscal
Frameworks
Performance
Management
Participatory Policy
Policy-Budget
Linkages
Policy Outreach
Budget as Ceremony
Budget
Books
Performance
Management
Participatory Budgeting
Budget & Commitment Controls
Accrual Budgeting
Program Budgeting
Policy Management
Budget Formulation
National Standards
IPSAS Cash IPSAS Accrual
IMF GFS
XML-based IATI, EITI, XBRL
MTEF
Annual Reports
Unaudited
Reports
Open Data
In-Year Execution
Audit Reports
Pre-Budget Statement
Interactive Data
Standards
Timeliness
National Government Sub-National
Parastatal
Accrual Extensions
Information Completeness
Cash
Modified
Cash
Modified Accrual Full Accrual
Budget & Commitment
Controls
Performance Discipline
Cash & Liquidity
Management
Budget Forecasting
Budget Comprehensiveness
Budget Execution & Accounting Methods
Version 7 section
brief discussion


Expenditures
Revenue

Budget
formulation

Budget
execution
Human
Treasury Resources
Version 7 section
brief discussion
Politics
Version 7 section
brief discussion
Policy
Version 7 section
brief discussion
Platform
Version 7 section
brief discussion
planning:
budget controls - monitoring
Version 7 section
brief discussion
public service performance
Version 7 section
brief discussion
public: transparency drives
accountability
Version 7 section
brief discussion
private sector: value for money and
development
PEFA/PFM Alignment
Version 7 section
brief discussion
Base Data Sources
World Governance Indicators
PEFA Assessments
Open Budget Index
Revenue Watch
Corruption Perception Index
Human Development Index
Leger Global Happiness Index
Gini Coeficient
Debt Ratings (multiple)
Doing Business Index
Government Spending data
Remittances data
Government employment data
OECD ODA
Legatum Prosperity Index
Earth Institute World Happiness
Report
Global Integrity Report

35 35
Version 7 section
brief discussion
Version 7 section
Resource dependency revenue management & revenue
transparency
Government employment as %, size civil service
management
Debt and deficits expenditure management and
procurement
Population, regional disparities, ethnic issues
decentralization
Democracy, freedom, stability, income disparity budget
and performance transparency

Sample Factors
Version 7 section
brief discussion
Calculates?
Technology
Priorities
PFM
Priorities
Country
Conditions
Version 7 section
brief discussion
Anchor
Technology
Priorities
PFM
Priorities
Country
Conditions
Benchmark
Priority
Gaps
Sequencing
Version 7 section
brief discussion
Sequenced
Technology
Priorities
PFM
Priorities
Country
Conditions
Benchmark
Priority
Gaps
Sequencing
capacity
Version 7 section
brief discussion
40 40
Version 7 section
brief discussion
Test
41 41
Version 7 section
brief discussion
6. Financially Sustainable GRP
Version 7 section
brief discussion
Agenda
15 minutes
90 minutes
45 minutes
PFM
60 minutes
90 minutes
learned
45 minutes
30 minutes
30 Minutes
9. Parking Lot

The Sad Truth
Majority of government financial
management information systems
implementations in developing
countries do not meet expectations
over-budget
4
late
5
unsustainable
minimal improvement
yet FreeBalance has a very high success
rate
Version 7 section
brief discussion
Version 7 section
1. Perfection is the enemy of Good
2. Sustainability = adapting to reform and capacity
growth
3. Traditional software model is not working in
emerging economies

Lessons Learned
Version 7 section
brief discussion
What is Success?
1. On budget
2. On time
3. Addresses local capacity
4. Is financially sustainable
5. Is sustained by the government organization
6. Requires a minimum of foreign consultants
7. Modernizes with the government
1. Perfection is the Enemy of
Good
Make it as simple as possible.
But no Simpler
Albert Einstein
Overwhelming Feature list
Featuritis
Benefits incorrectly tied to features
Increasing the capacity gap everywhere
More features, the better?
Unconsumed features
Infrastructure bloat
ITC-generated costs
Software Capacity Gap
Time
Usability
Feature Gap
Version 7 section
Typical Project Management methodologies
Lack of focus on whats important in the context
Focus on best-practices
Focus on what is theoretically best vs. what is
important now
Extends the capacity gap
Whats Wrong?
15
whos on first?
Capacity Balance
Capacity
SimpleFinancial
Management
ICTSolution
Financial
Management
ICTSolution
MatchesCapacity
TypicalCommercial
Financial
ManagementICT
Solution
Cash-basis
Pragmatic
Limited budgetary controls
National standards
Specialized
Personal-class tools and
middleware
Underwhelming

Accrual basis
Best practices
Complex budgetary controls
International standards
Comprehensive
Enterprise-class tools and
middleware
Overwhelming
SimpleFinancial
Management
ICTSolution
TypicalCommercial
Financial
ManagementSolution
Capacity Foundations
Capacity
Food Health Education IT
Capacity
Accounting
Capacity
Rule of
Law
Energy
Availability
Capital
Availability
Security ICT
Infrastructure
Transport Power
In Context
Capacity
Build
Capacity
the plan was foolproof
project management
Project Management 101
Integration
Management
Cost
Management
Scope
Management
Quality
Management
Time
Management
HR Management
Risk
Management
Communications
Management
1) Human resources & capacity more thought
and more risk
2) Communications is highly political, cross-
cultural
3) Scope creep directly related to reputation
4) Flexibility in change management needed
known knowns, known unknowns, unknown
unknowns
Beyond Project Management
101
Version 7 section
brief discussion
Weakness of typical Project Approaches
Business Process
Reengineering
Train the trainer as key
capacity building approach
Focus on the politicians
Long implementation cycles:
curb enthusiasm
Macroeconomic planning
and budget preparation

Many process changes
require legal reform
Train the cadre, give them
tools
Politicians change
Builds opposition
momentum
What budget?
24 24
Governance Underbelly
Software manufacturers at arms length
Consulting firms incentives for over-budget
Software manufacturers consulting firms as
make stakeholder
Manufacturer commitment?
Version 7 section
brief discussion
1.Perfection is Enemy of the Good
Need to focus on the
country context
Civil service capacity
Ease of use is critical
Needs for improved
governance: quick wins
Holistic project
management
IT, software & PFM capacity
Good practices, not best
practices
Vendor governance is critical
(pig and the hen)

26 26
2. Sustainability
27
the operation was a success
28
however, the patient died
29
Example Implementation
$23.6M IFMIS ERP implementation
Consultancy
36%
Capacity Building
4%
Recurrent
10%
Software
13%
LAN/WAN
12%
Hardware
25%
Concerns about Sustainability
the complexity of the system, structure and vocabulary
alienates and further hampers participation.
concern has been that the system itself might be too
advanced and complex,
will become underutilized and that the costs involved
wont pay off.
concerns that budget experts of the consultant implementing
the system may not fully have understood the
procedures in place

Version 7 section
Often have an IT definition of success
Measure now and assume everything will be fine
Unknown unknowns
Changes to country context
Rapid and almost unprecedented in public financial
management reform
Whats Wrong?
32
Significant internal
resistance to
massive change
Customization costs
Political will
dissipates
Civil service and
consultant turnover
More opportunity for
opposition to kill
project

Capacity Balance
Laws need to be modernized
to accommodate software
(accrual, electronic cheques,
automated budgets)
Infrastructure upgrade
Significant functional and
technical training

Capacity
Years
Customization
Whats Needed
A realistic start point
Configuration
ICT follows reform
Small wins through
phases
Rapid return on
investment
Grows to support best
practices and international
standards

Capacity
Systems
Follow
Capacity
Progressive Activation
Functions Modernization
Financials
Treasury
PropertyTax
Purchasing
Water&Sewage
Purchasing
Payroll
Utilities
Inventory
AssetsandFleet
Cash-based
CashManagement
ModifiedCash
BudgetaryControls
MTEF
AggregateControls
ModifiedAccrual
CivilServiceReform
PerformanceMgmt
Accrual
Modernization
Expenditure
Controls
Compliance
Capacity
LegalReform
Multi-Fund
Controls
Procurement
Controls
Version 7 section
brief discussion
Version 7 section Enterprise Software Costs by Category
Averages from Multiple Sources
22%
20%
36%
22%
software
computer hardware &
networking
consulting for
implementation
internal costs
Does not
include many
long-term
costs
Version 7 section
brief discussion
38 38
Actual Use of Requested Features
Successful Endeavours
7%
13%
16%
19%
45%
Always
Often
Sometimes
Rarely
Never
Version 7 section
brief discussion
Total Cost of Ownership (TCO)
Easy to Calculate
Software Licenses
Computer Hardware
Implementation Services
Training (software)
Software Maintenance
Hidden, Partially Hidden
Network, bandwidth
Costs for additional customization
Foreign consultants after
implementation
Upgrade (and forced upgrades)
cost for application software and
middleware
Continuous training and
certification (including IT and PFM)
Employee retention
Electricity

Version 7 section
brief discussion
Version 7 section
Financial sustainability is about TCO
PFM sustainability is about government self-
reliance
Capacity
Reduce need for foreign consultants
Sustainability is about reform and modernization
IFMIS as a foundation for adaptation
2. Sustainability
3. The traditional software model
is not working
for developing nation
governments
PFM casino?
Product
Management
Sales&
Marketing
User
Trainer
Consultant
Customer
Support
Product
Development
Typical Approach
Product
Management
Sales&
Marketing
User
Trainer
Consultant
Customer
Support
Product
Development
Productoftendesigned
withdifferent
customersinmind
Productdevelopers
havenoexpertisein
governmentfinancials
Salespeoplewantto
selltoeverypossible
market.
Consultantshelp
customersto
customizecode.
Governmentneeds
maynotgointo
upgrades
Consultingfirms
generaterevenuefrom
customization.
Governmentisoneof
manyverticals
Typical
Version 7 section
brief discussion
Version 7 section
When all you have a nail.
Specialization across the value chain
Loss of holistic understanding of customer needs
Incentives for making solutions not sustainable
Focus on technology rather than customer
Ability to blame the victim
Whats Wrong?
Version 7 section
brief discussion
Blaming the Victim?
Customer didnt articulate
business processes properly
Customer had unrealistic
expectations for delivery
Customer changed requirements
after the first phase
Customer did not dedicate enough
staff to manage project
Customer did not train enough
staff

Vendor should understand the
government domain.
Product should be designed for
rapid implementation.
Product should be designed for
progressive activation.
Product should not place a
significant burden on the
government.
Vendor should know how to build
capacity
Version 7 section
brief discussion
Version 7 section

3.Technology Lessons Learned
Software design, implementation and support
methodology critical to ensuring success
Fully open systems are less expensive to
implement and sustain: future proofing
Adaptable systems inexpensively conform to
reform
Version 7 section
brief discussion
Version 7 section
brief discussion
Agenda
15 minutes
90 minutes
45 minutes
PFM
60 minutes
90 minutes
learned
45 minutes
30 minutes
30 Minutes
9. Parking Lot

Version 7 section
brief discussion
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
0.000 0.100 0.200 0.300 0.400 0.500 0.600 0.700 0.800 0.900 1.000
Corruption Linkage with Human Development
Human Development Index compared to Corruption Perception
Human Development Index: UNDP
Corruption Perception:
Transparency International
Version 7 section
brief discussion
-2.5
-2
-1.5
-1
-0.5
0
0.5
1
1.5
2
2.5
0 20 40 60 80 100 120
Corruption Linkage with Prosperity
Low Control of Corruption reduces Country Prosperity
World Governance Indicators:
Control of Corruption
Legatum Prosperity Index
Version 7 section
brief discussion
Version 7 section

GRP IS NOT A CORRUPTION CURE-ALL
Version 7 section
brief discussion
Version 7 section
COUNTRIES WITH BETTER-PERFORMING PFM SYSTEMS HAVE LOWER
CORRUPTION PERCEPTION INDEXES BECAUSE ROBUST PFM SYSTEMS RAISE
THE RISK OF DETECTION AND THE COST FOR BAD BEHAVIOR

Version 7 section
brief discussion
38%
30%
12%
8%
6%
5%
1%
Executive
Police
Financial institutions
Legilslature
Foreign and Domestic Investors
Judiciary
Foreign Donors
Corruption Sources in Developing Countries
World Bank Study, 2000
significant
impact of GRP
on anti-
corruption
GRP as a tool to reduce
corruption
Version 7 section
brief discussion
Version 7 section
Governance: the manner in which the acquires
and exercises its authority to provide public
goods & services
Corruption: the use of public office for private
gain and is an outcome a consequence of the
failure of accountability relationships in the
governance system
8 8
Version 7 section
brief discussion
Version 7 section
PFM Exposures
Budget Preparation Lower Budget priority manipulation
Budget Execution High Largest opportunity for corruption including:
Extra-Budgetary High Off-budget, cash fungibility
Payments Medium Withholding of payments
Procurement High Bid rigging, collusion, bribery
Public Investment Projects High Significant political manipulation
Payroll Medium Ghost employees, bribes for pay
Tax Administration High Tax avoidance
Treasury Medium Bank account manipulation
Version 7 section
brief discussion
Version 7 section
GRP as Anti-Corruption
Prevents certain types of corruption
Automation
Behaviour Change
Detects corruption though reporting and audit
Requires other factors for enforcement,
comprehensiveness and proper configuration
10 10
Version 7 section
brief discussion
Version 7 section
different
organizational
configurations
MULTIPLE
CONTROLS
aggregate
detailed
MULTIPLE
CONTROL
LEVELS
configured
CONTROLS
b
u
d
g
e
t
a
p
p
r
o
p
r
i
a
t
i
o
n
s
t
r
a
n
s
f
e
r
s
c
o
m
m
i
t
m
e
n
t
s
o
b
l
i
g
a
t
i
o
n
s
r
e
c
e
i
v
i
n
g
e
x
p
e
n
d
i
t
u
r
e
s
COMMITMENTCYCLE
segregationof
duties&workflow
monthly
PERIOD
yearly
TOLERANCE
LEVELS
flexible
strict
Automated controls including segregation of duties,
follow government laws
Version 7 section
brief discussion
Version 7 section
Other control factors
Electronic payments removes cash fungibility
Decentralization reduces opportunity for
centralized corruption
Behaviour knowing that under the microscope
Asset Management tracking assets
Human Resources ghost employees
12 12
Version 7 section
brief discussion
Version 7 section
Audit
All transactions + approvals logged, date, time,
user n audit trail
All vendor, employee, taxpayer information for
cross reference
Fraud detection patterns
Payments, addresses, under limits, procurement to
tax, civil service financial disclosure
On-line reporting
Version 7 section
brief discussion
Version 7 section

USING COUNTRY SYSTEMS -
DISCUSSION
Version 7 section
brief discussion
Version 7 section
Food for Thought
The corruption narrative
Quality of donor financial management systems?
Donor incentives?
Historical perspective on corruption
Contribution of Western Companies
Lack of enforcement by Western Governments
Institutionalized corruption: earmarks, Super PACs
15 15
Version 7 section
brief discussion
8. Future of GRP/IFMIS
Version 7 section
brief discussion
Agenda
15 minutes
90 minutes
45 minutes
PFM
60 minutes
90 minutes
learned
45 minutes
30 minutes
30 Minutes
9. Parking Lot

Government Resource Planning Systems
of Tomorrow
How computer technology trends
today are defining
Agenda
Market and technology forces affecting
Public Financial Management (PFM)
Technology and PFM reform
The role of the Integrated Financial
Management Information System
(IFMIS)
10 key market trends
Conclusions: What will the
government IFMIS of 2010
look like?

Government IFMIS of tomorrow
The four market technology forces
of today that are defining
1. Consolidation
2. Disintegration
3. Innovation
4. Integration
10 Market Trends
Consolidation
1. Enterprise software consolidation
2. Open source software
Disintegration
3. Decentralization
4. Sequencing implementation
5. Software as a service (SaaS) and shared services
Innovation
6. Government as Platform: Government 2.0
7. Mobile government
8. Usability
Integration
9. Corporate Performance Management (&
Government Performance Management)
10. Service Oriented Architectures (SOA)

with government and development trends
Not all technology and market
trends are consistent
ERP systems have become bloated
understructures that have become
too expensive to maintain.
Bruce Richardson, AMR
Research August 2006
1. Market consolidation
What is Enterprise Software?
Many acronyms:
ERP (Enterprise Resource Planning)
SCM (Supply Chain Management)
CRM (Customer Relationship
Management)
CM (Content Management)
CPM (Corporate Performance
Management)
BPM (Business Process Management)
and many others

Microsoft
SAP
Infor
Oracle
Sage
Lawson
Epicor
Chinadotcom
Siebel
Retek
PeopleSoft
JDEdwards
Vantive

Triversity

SSAGlobal
Baan
Marcam
E-piphany
Ironside
Mapics
Lilly
Geac
JDA
Extensity
Comshare
Datastream
FRX
GreatPlains
Navision
Damgaard
Axapta
Soloman

Scala

Intentia

Ross
Pivotal

Accpac
Best
Mas 90/200
Peachtree
Timerline
Siebel
Retek
PeopleSoft
JDEdwards
Vantive

Triversity

SSAGlobal
Baan
Marcam
E-piphany
Ironside
Mapics
Lilly
Geac
JDA
Extensity
Comshare
Datastream
FRX
GreatPlains
Navision
Damgaard
Axapta
Soloman

Scala

Intentia

Ross
Pivotal

Accpac
Best
Mas 90/200
Peachtree
Timerline
Drivers for Consolidation
Lack of organic growth
Shareholders want companies to invest in
more growth
free markets monopolies
Perception that big = winning
Maintenance business model
Buy customers
Own customers: barriers to entry
Lack of value for upgrading
Current Situation
Survival of the fittest?
Pressure to enter new horizontal and
vertical markets
New technology stack wars
SME market
Emerging markets interest
Overlapping technology portfolio
Consolidators attempting economies of
scale
Customer satisfaction?
The growth of free, open-source software
presents developing countries with an
opportunity to escape from technological
dependence on developed
countries, but also a challenge to
build up local expertise
Dr. Mike Reed, UNU International
Institute for Software
Technology March 2006
2. Open Source Software
Drivers for Open Source
Software commoditization - lack of
incremental benefits in commercial
infrastructure software
Government self-reliance reduce
national technological dependence
Cost and choice - cost for license
compliance
Future proofing

Current Situation
Rapid uptake in emerging countries
New procurement regulations
Proven performance and reliability
Infrastructure middleware success
Java EE, Apache, MySQL, Linux, JBoss,
Tomcat, OpenOffice
Some assembly required
Usability issues
Market volatility
Not established in business applications

including political devolution,
de-concentration,
delegation, and transfer
to non-governmental organizations,
promotes democracy and
good governance by providing an
institutional framework to bring
decision-making closer to the people

Shabir Cheema United Nations Global Forum
for Reinventing Government November 2006
3. De-centralization,
Devolution
Delegation
De-concentration
Divestment
Budgets
Ministry 1
Municipal
Govt
Municipal
Govt
Virements
Information
Virements
Information
Virements
Information
Municipal
Govt
Provincial
Govt
National
Government
National
Government
Provincial
Govt
Ministry 1
Municipal
Govt
Municipal
Govt
Municipal
Govt
Reporting
Outturn Expenditure
Information
Outturn Expenditure
Information
Outturn Expenditure
Information
Drivers for De-centralization
Administrative Decentralization
Improve government efficiency and
effectiveness = improve outcomes
Large % of government budgets deployed
locally
Local and cultural autonomy
Fiscal Decentralization
Improves participation = more stable
countries
Reduce waste and corruption
Current Situation
Conflicts with computing trend to
integration (centralization)
Clear trend: devolution on every
continent
Local capacity and sustainability issues
Difficulties in extending governance with
existing solutions
Start with the implementation of foundation
infrastructure and undertaken at a pace
that will ensure that users effectively cope
with new technologies, methods and processes
Ron Points December 2007
4. Sequencing Implementation
Why Sequencing?
Small wins overcome internal resistance
to change
Results influence politicians and donors
Sequence in any country differs based on
country priorities
Transition plan and change management
Capacity building in steps improves
sustainability of solution by the
government
Current Situation
Some countries trying more at once:
creating long implementation cycles
Functional experts want phases
IT experts want elegant technology
Irony: more success in post-conflict:
Need for quick implementations
Focus on capacity

SaaS benefits are crystallizing,
but chaos still abounds
Robert Bois,Aberdeen Group
June 2006
5. Software as a Service (SaaS) &
Cloud Computing
What is Software as a
Service (SaaS)?
Applications are hosted externally: e.g.
Salesforce
Also called Cloud Computing
Typically priced on a subscription basis
Typically provides some customization
Also:
IaaS
PaaS
Drivers for SaaS
High cost to maintain complex software and
infrastructure [Death of IT]
Licenses
Upgrades
Networks
Databases
SaaS supports fast growth
Current Situation
Significant increase in market penetration
Uneven adoption: high in customer
relationship management, HR
Exposes limitations in legacy technology
Caused more consolidation as ERP
companies acquire
Rarely used in government back-office
applications why?
Similar technology used for shared
services, yet

No matter how you brand the hype,
get ready for a quantum leap in the way
the Web works and
more importantly
how it works for you and your business.
Wayne Gomes, Rich Internet
Group November 2005
6. The Web as a Platform - Gov 2.0
What is Web 2.0?
An umbrella term for second wave of internet
innovation
Web as platform + diversity of platforms
Mash-ups + syndication
Social software + community +
crowdsourcing
Open source + rapid development
Rich web interfaces
Distributed documentation & data
YouTube + Facebook + Flickr + Twitter +
Blogging
Drivers for Government 2.0
Government as Platform open data to
spurn economic activity
Drive for Transparency
Increased expectation of participation:
crowdsource or be croudsourced [Arab
Spring]
Infrastructure is available
The Network Effect
The Long Tail
Current Situation
OGP rapid expansion of Gov 2.0 and
open data sets
Emergence of standards
Recognition of citizen force multiplier
Citizen tools like Ushahidi
Barriers: cost and culture
Culture change is in progress

New wireless technology is resulting in
innovative business models
and holds the promise of connecting poor users,
extending competition to all market segments,
and accelerating development of broadband
infrastructure and access.
World Bank April 2006
7. Mobile Government
What is mGovernment?
Light e-government using mobile telephone
technology
Mobile telephone as kiosk
Citizens and Businesses
Finding government services
Notifications and alerts
Civil Service
Requisitions and receiving
Approvals
Time & Attendance
Drivers for mGovernment
Proven voice and text technologies
Mobile telephone is the tool of choice for
small transactions
Growth in emerging countries theme of
ICT4D
Introduction of new products aimed to
overcome the digital divide
Citizen and civil servant usable and
inexpensive
Current Situation
Early adoption in government
Exposing GRP capabilities via tablets
ideal, less so on small form factors
Remains differences among devices
Most e-government needs computers
and the Internet
Practical for life events

Agencies are addressing goals of decreasing
administrative burdens, lowering costs, enabling
better informed decision making, and ensuring
tmeliness in responding to sector needs.
Aberdeen Group March 2004
8. Corporate Performance and
Current Situation
Mixed
Capacity issues
Improvements in MTEF
Remains output focused
Better results in projects yet
66% of all IT projects either fail
outright or take much longer to install
than expected because of their complexity.
9. Usability UX
The Economist October 2004
Features
Featuritis
Benefits incorrectly tied to features
Increasing the capacity gap everywhere
More features, the better?
Unconsumed features
Infrastructure bloat
ITC-generated costs
Featurities
Time
Usability
Feature Gap
The Secret of Success
Realistic view of capacity and infrastructure
Focus on what is important
Vehicle for your road
Why complexity?
Engineers and not people too
Apologists
Usability & Simplicity
Capacity enhancement
Not personnel reduction
Sustainable
Current Situation
Re-thinking windows
Recognition of usability as a problem for
everyone regardless of capacity
Movement from functional design to
user-centric design
Leverage of some Web 2.0 user-interface
concepts in commercial software
SOA will make todays ERP systems
look like yesterdays mainframe apps.
Bruce Richardson, AMR
Research August 2006
10. Service-Oriented Architecture (SOA)
SOA Drivers
Many applications in use
Promise of re-use: write once, use many
times
Component-based architectures
promise of assembling applications from
parts
Mix programming language, operating
system and middleware
Pick best-of-breed applications
Web Services
register
discover
bind
Current Situation
Proven practical in Web 2.0
Enterprise software momentum
Difficulties with monolithic / monopoly
approach
Technology plumbing has been mostly
resolved
Revolutionizing enterprise software
Therefore

Conclusions:
GRP of the Future
Modular
and Modular
modular, de-centralized & integrated
non-monolithic & multiple vendors
wired & wireless
commodity & innovative
The Government IFMIS/GRP of
tomorrow will be:
core
IFMIS
decentralize
extend
measure
Citizen Centric
citizen
Version 7 section
brief discussion
9. Parking Lot
Version 7 section
brief discussion
Agenda
15 minutes
90 minutes
45 minutes
PFM
60 minutes
90 minutes
learned
45 minutes
30 minutes
30 Minutes
9. Parking Lot

Version 7 section
brief discussion
Version 7 section
1. Valuable learning experience
2. Contrast public and private sector
accounting & management
3. Training course, not a
demonstration
4. Breadth of financial management
in government
5. Strategic, tactical, futures
6. Vendor-neutral good practices
7. Share lessons among group
8. Voice lasts until end of day
9. Address specific ideas, concerns

2012-09-10 FMIS Training at Crown Agents

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