SISTEM PERBENDAHARAAN ANGGARAN NEGARA SPAN

1. SISTEM PERBENDAHARAAN & ANGGARAN NEGARA(SPAN/e-Budgeting) Bobby Nazief Staf Khusus MENKEU bid. Teknologi Informasi

2. PUBLIC FINANCIAL MANAGEMENT (PFM) REFORMS IN INDONESIA Key financial management reform objectives Improve institutional image through adopting principles of Good Governance Strengthen fiscal control ensure effective implementation of the budget allocations greater transparency in government financial management. The DPR enacted several laws to support the reform objectives State Finance (Law 17/2003) State Treasury (Law 1/2004) State Audit (Law 15/2004) An Integrated Financial Management Information System (IFMIS) is essential to introduce and sustain these reforms IFMIS will be implemented through Sistem Perbendaharaan dan Anggaran Negara (SPAN) 1

3. SPAN AS THE FOUNDATION FOR PFM REFORMS Accounting and Budgetary Reforms: Integrates budget execution across ministries, as required for MTEF and Performance Based Budgeting reforms Provides the ability to maintain a centralised General Ledger (GL) system for all Government agencies Provides the data integrity, flexibility and consistency required for modernization of accounting, budgeting and reporting Provides a “single window” electronic interface for other systems such as payroll, debt management, procurement, and audit. Organizational Reforms: Operationalizes the business process reforms underway in KPPNs Executes processes and applies controls with minimal manual intervention, allowing personnel to focus on analysis and strategy Banking and Cash Management Reforms: Enhances the benefits of TSA reform. Automates bank reconciliation and enables electronic interfaces between banks and treasury offices. Enables Treasury participation in BI’s payment system reforms and provides real time information to BI for monetary policy and debt management 2

4. SPAN CONTEXT 3 SPAN is the tool that will enable the key transformation of DG Treasury business operations through integration and automation of its business processes and realignment of the overall organisation structure to improve productivity, efficiency and reliability of outputs. SPAN will provide: A reliable cash management system which will enable the preparation of cash flow forecasts and plans Delivery of efficient financial services to all sectors of government, to suppliers and to the banking network through the Central Bank Maximization of the use of the developing banking infrastructure in Indonesia in collecting revenues and delivering services Effective control budget allocation, expenditure commitments, and spending limits Capture of payment data at source, with data being entered once only, and online transfer to centralized and consolidated databases Maintenance of comprehensive and reliable centralized databases of all government financial transactions, covering the full range of financial processes from budget preparation, allocation, commitment, spending, accounting etc; provide an associated budget rules database A comprehensive reporting system that enables reliable management reports on government financial operations to be generated in real time enabled by modern information systems and made available to all stakeholders Readily accessible and complete data records of all financial operations to enable full and comprehensive audits to be conducted using electronic audit tools Comprehensive online capabilities to Line Ministries and other agencies to enable them to submit information electronically and interrogate online centralized databases to access their information Progressive transition to accrual based accounting systems, as mandated by the State Treasury Law Fully automated treasury operations, reporting and accountingSPAN is the tool that will enable the key transformation of DG Treasury business operations through integration and automation of its business processes and realignment of the overall organisation structure to improve productivity, efficiency and reliability of outputs. SPAN will provide: A reliable cash management system which will enable the preparation of cash flow forecasts and plans Delivery of efficient financial services to all sectors of government, to suppliers and to the banking network through the Central Bank Maximization of the use of the developing banking infrastructure in Indonesia in collecting revenues and delivering services Effective control budget allocation, expenditure commitments, and spending limits Capture of payment data at source, with data being entered once only, and online transfer to centralized and consolidated databases Maintenance of comprehensive and reliable centralized databases of all government financial transactions, covering the full range of financial processes from budget preparation, allocation, commitment, spending, accounting etc; provide an associated budget rules database A comprehensive reporting system that enables reliable management reports on government financial operations to be generated in real time enabled by modern information systems and made available to all stakeholders Readily accessible and complete data records of all financial operations to enable full and comprehensive audits to be conducted using electronic audit tools Comprehensive online capabilities to Line Ministries and other agencies to enable them to submit information electronically and interrogate online centralized databases to access their information Progressive transition to accrual based accounting systems, as mandated by the State Treasury Law Fully automated treasury operations, reporting and accounting

5. CORE FUNCTIONAL PROCESSES & INFORMATION FLOWS 4

6. BENEFITS TO KEY STAKEHOLDERS The Directorate General of Treasury in the Ministry of Finance, and its regional offices to undertake budget implementation, including payment processing, and perform associated accounting functions, including reporting in a near real-time manner; The Directorate General of Budget and Fiscal Balance of the MOF to obtain the status of actual expenditures to enable budget monitoring and assist in budget preparation for out years; The Cash Management Department of the Directorate General of Treasury to provide the information it requires for cash management; Line ministries and agencies, to access financial information and reports pertaining to their organization; By the Government auditing organizations (BPKP and BPK) to access financial transaction data for auditing purposes. 5

7. KEY BENEFITS OF SPAN - SUPPORTING BUDGET & TREASURY OBJECTIVES (1) SPAN is the tool that will enable the key transformation of DG Treasury business operations by providing: A reliable cash management system which will enable the preparation of cash flow forecasts and plans. Effective control budget allocation, expenditure commitments, and spending limits. Capture of payment data at source, with data being entered once only, and online transfer to centralized and consolidated databases. Maintenance of comprehensive and reliable centralized databases of all government financial transactions, covering the full range of financial processes from budget preparation, allocation, commitment, spending, accounting etc; provide an associated budget rules database. A comprehensive reporting system that enables reliable management reports on government financial operations to be generated in real time enabled by modern information systems and made available to all stakeholders. 6

8. KEY BENEFITS OF SPAN - SUPPORTING BUDGET & TREASURY OBJECTIVES (2) Readily accessible and complete data records of all financial operations to enable full and comprehensive audits to be conducted using electronic audit tools. Comprehensive online capabilities to Line Ministries and other agencies to enable them to submit information electronically and interrogate online centralized databases to access their information. Progressive transition to accrual based accounting systems, as mandated by the State Treasury Law. Fully automated treasury operations, reporting and accounting. 7

9. BASIC OBJECTIVES OF SPAN Control: over the Government’s budget and the assets and liabilities of government; and Reporting: comprehensive, reliable and timely information on the financial position of the Government so as to facilitate government financial management. 8

10. SPAN FUNCTIONS Budget Preparation Management of Spending Authority Commitment Management Payment Management Processing of Government Receipts Cash Management General Ledger & Chart of Accounts (CoA) Reporting Maintenance of Reference Information 9

11. Systems are aligned according to business functions (e.g. RKA-KL for Budget Planning and SP2D for Budget Execution) Data is owned by applications and requires manual re-entry People specialise in use of a single application There is lack of integrated reporting It is difficult to reconcile information from different systems for an accurate and reliable view Current Systems

12. 11

13. Core Elements of SPAN Additional Subsidiary Ledgers or Modules Feeder Systems Audit Ledger Data and Information Flows Budget Data and Information Flows LEGENDS 12

14. The SPAN solution will be aligned according to business processes The SPAN solution will encompass and cut across organisational functions SPAN will allow many features to be accessed by different people Boundaries between applications will become blurred through automated integration with systems like MPN, Debt Management, Investment Management, Asset Management SPAN WILL ALLOW INTEGRATION AND STANDARDISATION OF BUSINESS PROCESSES

15. SPAN INFRASTRUCTURE 14

16. SPAN TIMELINE 15 Funded by World Bank 2-Stage Bidding Procurement: 1st Stage: October ’05 (IFB-01/GFMRAP/2005) 2nd Stage: April ’08 (IFB-02/GFMRAP/2007) 2nd Stage (re-do): October ‘08