SISTEM PERBENDAHARAAN & ANGGARAN NEGARA (SPAN/ e-Budgeting )

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)

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

4. S P A N PENYUSUNAN ANGGARAN PELAPORAN MANAJEMEN DIPA GL MANAJEMEN MANAJEMEN KOMITMEN KAS PROSES PENERIMAAN MANAJEMEN PEMBAYARAN SPAN CONTEXT LINE MINISTRIES EXTERNAL LINKS • RKA-KL • DIPA BANK INDONESIA • RTGS • BIG-eB • SSSS-TERMINAL SISTEM AKUNTANSI INSTANSI SISTEM PERBANKAN • KOMITMEN • SPM MAIN USERS DATA PROYEKSI: • PENERIMAAN • PENGELUARAN DJPBN: • PUSAT • KANWIL • KPPN SISTEM AKUNTANSI BARANG MILIK NEGARA DJA OTHER USERS MOF UNIT ESELON 1 DEPKEU SISTEM PENGELOLAAN & AKUNTANSI UTANG DEP. TEKNIS SISTEM PENGELOLAAN & AKUNTANSI INVESTASI BAPPENAS AUDITOR: • IRJEN • BPK • BPKP MODUL PENERIMAAN NEGARA (MPN)‏ DATA PROYEKSI: • PENERIMAAN • PENGELUARAN

5. 3. Treasury 8. Treasury 11. Treasury produces enters initial 10. Treasury produces receives Budget execution consolidated budget appropriations, information on reports allotments, cash limits fiscal Deposits for other stake holders and in year reports from in TSA ( e.g. transfer data to the Treasury system tax and Revenue Treasury system Receipts, broken down by individual transactions Directorate Directorate Suppli Tax via RTGS Other Stake 1. Budget payers ers General of General of Holders Appropriations Budget Treasury Banking Network C DIEA 9. DIEA O accesses M 2. DG- Treasury Treasury Central M approves system to Budget allotments Produce reports E Bank and cash limits for SPAN R subordinate units (TSA) C Line I Ministry A L line ministry reconciles B 7. Treasury information Accounting Reports system A from Treasury from Treasury Treasury Units passes N and SUs to payment prepare K transaction to (KPPN) departmental S the accounts Accounting Interbank reports clearing from system-RTGS Spending Unit 6. KPPN processes 4. Spending SU Unit forwards payment Kanwil/KPPN Access to Spending payment requests zero balance Units request to KPPN accounts in Commercial banks for cash disbursements/deposits Internal audit section 5. Internal audit performs on line and concurrent verification of sample transactions as they are processed by the KPPN CORE FUNCTIONAL PROCESSES & INFORMATION FLOWS

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.

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.

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.

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.

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

11. RKA-KL DIPA SP2D Reporting Current Systems • 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 11

12. SPAN AS THE FOUNDATION OF IFMIS Reporting Financial Statements, Annual Reports, Management Reports, Stakeholder Reports Debt Management System Core Accounting System General Ledger Accounting Financial Reporting Treasury/Cash ManagementBank Reconciliation Central/Commercial Bank Payroll Audit Human Resources Budget Cycle BUDGET PREPARATION ENHANCEMENT Macro-economic Forecasts MTEF Preparation Performance-based Budgeting Budget Preparation Budget Allocation Budget Commitment Budget Execution Pensions Fixed Asset Management Stores and Inventory Management Accounts Payable Government Receipts Customs and Tax Revenue Procurement Purchasing Revenue Management Audit

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

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 Budget Planning to Budget Execution Satker RKA-KL DIPA SP2D Reporting Standardising User Interfaces and Application Interfaces will allow faster, better integration of processes across business functions.

15. SPAN INFRASTRUCTURE

16. SPAN TIMELINE • 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 Improvement of Business Process & Financial Management Assess-ment & Planning COTS Configuration COTS Fit-Gap Analysis COTS CRP COTS Pilot COTS Roll-Out Change Management & Communications