An Overview of Treasury / Public Financial Management Systems in ECA Cem Dener

An Overview of Treasury / Public Financial Management Systems

in ECA

Cem Dener

PEM-PAL Workshop for Treasury OfficialsLjubljana, Slovenia 26-27 June 2006


in ECA

Cem Dener


26-27 June 2006 An Overview of Treasury/PFM Systems in ECA

2

Presentation• The “Big Picture”

• Public Financial Management

Cycle

• PFMS components and

functionality

• Technological architecture

• ECA Treasury/PFMS Projects

• Treasury/PFMS Development

Indicators

• PFMS and e-Gov initiatives

• Conclusions

An Overview of Treasury/PFM Systems in ECA


3

The “Big Picture”

Long-term Holistic Vision Country Ownership Partnership Development Results

Indicative National Plan – Country Strategy

Comprehensive Development Framework

CDF Plans

Budget

Budget

Investment

Plans

Assistance

UNDAF

Programs

CAS

Standby(PRGF in LICs)

CSPIndicative Prog

Gov Program(PRSP in LICs)

Implementation / Supervision / Evaluation

PFMS

Asset / Inventory

Mgmt

Procurement/Purchasing

Mgmt of Budget

Authorizations

Commitment of Funds

Payments and Receipts

Mgmt

CashManagement

Debt and Aid Management

Budget Review &

Fiscal Rep.

Audit and Evaluation

Budget Preparation

1

2

3

4

5

6

7

8

Policy Development and

Review0

Public Financial Management Cycle

Budget Execution

Payroll CalcsHR Mgmt

F M I SWeb

Publishing

Core Treasury System includes the following components: Budget Execution and Monitoring Accounting (general ledger, accounts payable and receivable) Cash Management Financial Reporting Commitment of Funds / Procurement / Purchasing Asset / Inventory Management

Other Public Financial Management System components: Macro Economic Forecasting Budget Preparation and Approval Debt and Aid Management HR Management /Payroll Calculations Support for Financial Control and Auditing Web publishing Financial Management Information System

The combination of above components is referred to as integrated PFMS

Operational support for Spending Units

1

6

8

1

4

7

7

2

3

4

5

7

4

Integrated PFMS Components


6

PFMS Functionality

PFMS Module Common Implementation Options

Macroeconomic Forecasting Existing Models / LDSW Budget Preparation LDSW / COTS Core Treasury System COTS + General Ledger + Accounts Payable Interface with banking system

(TSA) + Accounts Receivable Interface with revenue collection + Purchasing / Commitment Interface with procurement

agency + Cash / Fund Management Interface with banking system

(TSA) + Financial reports + Asset / Inventory Management Operational support for SUs Interface for spending units

(LDSW) Internal Debt management LDSW / Interface with Debt Mgmt

System External Debt and Aid mgmt. Interface with Debt Mgmt

System Personnel database (HR mgmt) LDSW / COTS Payroll calculations LDSW / COTS Support for Auditing Locally developed reports Management Information System COTS

[ COTS : Commercial Off-The-Shelf Software LDSW : Locally Developed Software ]


7

Information & Communication Technology

Modern integrated PFM systems are designed and

implemented as

web-based applications

Implementation of the PFMS includes the following ICT

components:

[0]Establishment of countrywide network connections

(communications lines) as Government contribution

[1]Development of web-based Application Software (ASW) as a

combination of customized package + locally developed software

[2]Installation of central servers (database & application servers) and

data storage units (fiber disk arrays) at the main system center &

business continuity center

[3]Installation of standard field hardware (domain servers, user

workstations and peripherals) in central and field offices

[4]Installation of network equipment, system and user management

and engineering support solutions

Completion of countrywide network (physical) connections [0]

by the Government is a precondition for signing the contracts

with suppliers.

8

B C

C 1 2M

S

C

Local Server

Firewall

Database Server(s)

MoF / Treasury

District Offices

District Offices

Spending Units

Application Servers

WebServer

Collection Point

(city center)

Dedicatedline

Spending Units

Internet

Virtual Private Network

Tunnelling

Encryption

On-demand lines for towns

PCs / Thin Clients

[ 2 ]Central Servers

[ 3 ]Field

Hardware

[ 0 ]Wide Area Network

District Offices

3

A typical 3-tier web-based implementation and [ ICT ] components

Technological Architecture

[ 4 ]Network Equipment

[ 1 ] PFMS

Application Software

PFMS DB

MSC : Main System Center BCC : Business Continuity Center

9

User Terminals

System Center

Database Server

Application Servers

UsersWeb Server

Internal Audit

Payroll Calcs.

Asset/Invent Mgmt

Budget Preparation

Core Treasury System

• General Ledger• Purch./Commit.• Accts Pay/Rec• Cash/Fund Mgmt• Fin. Reports

HR Mgmt/Pers DB

Org/Workflow Mgm

We

b P

ort

al

COTS

LDSW

Internal + External

PFMS

Opr sup for locals

COTS DB

MoF, TDOs, Central Line Ministries

and Gov Agencies

Local finance directorates, local public

authorities, municipalities

Internal Access

External Access

LDSW DB

LDSW : Locally Developed Software

COTS : Commercial Off-The-Shelf SW

VPN

Internet

1 2 3

Interfaces

Web-based PFMS Model

PFMS DB


10

ECA Treasury/PFMS Projects (WB funded)

• Completed [1994-2004]

Hungary Treasury [1995-2002]

Türkiye* PFMS [1999-2002]

KazakhstanTreasury [1994-2003]

UkraineTreasury [1997-2004]

• Implementation [1999-2009] Albania

HR + Treasury [2000-2006] Slovak Republic

Treasury [2003-2007] Azerbaijan

Treasury [1999-2007] Kyrgyz Republic

HR + Treasury [2002-2008] Russian Federation

Treasury [1999-2009] Moldova

PFMS [2004-2009] Georgia

PFMS [2005-2009]

• Preparation [2006-2010] Ukraine

PFMS [2005-2010] Tajikistan

PFMS [2006-2010]

Treasury/PFMS Development Phases

Readiness PFM reform strategy Institutional capacity Countrywide network infrastructure

1

Preparation Legal and institutional frameworks Budget coverage Treasury Single Account (TSA)

2

PFMS Design Definition of system functionality Detailed technical requirements

3

Procurement Large scale ICT systems Technical Assistance and Training

4

System development & integration Full scale testing and rollout Training and change management

Implementation

5

Maintenanceand Support

Budget support Technical support cap System admin & Maint

7

9 – 18month

s

9 – 18month

s

18 – 36

months

Resources

Effectiveness

Time

Monitoring & Evaluation

Monitoring mechanisms Project mgmt capacity PEFA

6


12

ECA Treasury/PFMS Development Indicators

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

ALB ARM AZE BIH GEO KAZ KOS KYR MOL RUS SER MON TAJ TUR UKR UZB

ECA - Treasury/PFMS Development Indicators - Estimates

Maintenance and Support

Monitoring & Evaluation

Implementation

Procurement

PFMS Design

Preparation

Readiness


13

ECA Treasury/PFMS Development Status

ECA - Treasury / PFMS Implementation

ALB

ARM

AZE

BIH

GEO

KAZ

KOS

KYR

MOL

RUS

SERMON

TAJ

TUR

UKRUZB

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Estimation

Ev

alu

ati

on

Started

Completed

In progress


14

PFMS and e-Government initiativesEff

ecti

ven

es s

Investment

Publish

Interaction

Transaction

Integration

• Organizational info• Laws and regulations• Info on services • Publications, documents, stats

• Electronic forms (e-Form)• Electronic services (e-Service) • Interactive query

• All business processes performed electronically (e-Agency)

• Web based solutions and electronic voting (e-Election)• Electronic procurement (e-Procurement)• All services performed on-line

• Electronic government (e-Gov)• Common use of public resources for all public services • Restructuring common interactive operation platforms

Türkiye

U.S.A.

Europe

December 2005

2005 - 2010 target ?

Benefits of developing online services (e-Service) in e-Gov applications:

• Proper and timely delivery of public services to citizens and businesses

• Rapid reduction in public expenditures• Increased processing speed and information security• Imptoved transparency and reliability

1

2

3

4

PFMS


15

Conclusions

From Treasury to Integrated PFMS: Within the last decade,

emphasis has been given to the development of integrated PFMS

solutions after the initial Treasury development projects, based on

the developments in Internet and secure web-based applications.

Capacity building: Implementation of integrated PFMS solutions

requires capacity building, proper training and professional technical

assistance.

PFMS vs e-Government: Integrated PFMS technical solutions

should be designed and implemented as a part of e-Government

strategy, if exist.

Commitment and support: High level commitment and proper

budgetary support is essential for the successful completion of PFMS

implementations.

Financial Management Information System: Integrated PFMS is

not only a tool to increase operational efficiency, but also a key

decision support tool for public financial managers.


in ECA

Thank You



in ECA

Thank You


Documents

An Overview of Treasury / Public Financial Management Systems in ECA Cem Dener