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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 Officials Ljubljana, Slovenia 26-27 June 2006. An Overview of Treasury/PFM Systems in ECA. Presentation The “Big Picture” Public Financial Management Cycle

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

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  1. An Overview of Treasury / Public Financial Management Systems in ECA Cem Dener PEM-PAL Workshop for Treasury Officials Ljubljana, Slovenia 26-27 June 2006

  2. An Overview of Treasury/PFM Systems in ECA • 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. Development Results Long-term Holistic Vision Country Ownership Partnership Indicative National Plan – Country Strategy CDF Plans Gov Program (PRSP in LICs) Budget PFMS Budget Investment Plans Assistance UNDAF Programs CAS Standby (PRGF in LICs) CSP Indicative Prog Implementation / Supervision / Evaluation The “Big Picture” Comprehensive Development Framework An Overview of Treasury/PFM Systems in ECA

  4. PFMS DB Public Financial Management Cycle Policy Development and Review Budget Preparation Budget Execution 0 1 Audit and Evaluation Mgmt of Budget Authorizations 8 2 Budget Review & Fiscal Rep. Commitment of Funds 3 7 F M I S Web Publishing Procurement/ Purchasing Debt and Aid Management Payments and Receipts Mgmt 6 4 Asset / Inventory Mgmt 5 Payroll Calcs HR Mgmt Cash Management

  5. 2 4 5 7 3 4 1 1 6 4 8 7 7 Integrated PFMS Components • 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 • Operational support for Spending Units • 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

  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 ] An Overview of Treasury/PFM Systems in ECA

  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. An Overview of Treasury/PFM Systems in ECA

  8. B C C 2 1 M S C 3 Technological Architecture A typical 3-tier web-based implementation and [ ICT ] components [ 0 ] Wide Area Network [ 2 ] Central Servers [ 1 ] PFMS Application Software Application Servers Database Server(s) Internet Web Server Firewall PFMS DB MoF / Treasury District Offices [ 3 ] Field Hardware On-demand lines for towns Collection Point (city center) Dedicated line Virtual Private Network Encryption Local Server Tunnelling [ 4 ] Network Equipment District Offices PCs / Thin Clients District Offices Spending Units Spending Units MSC : Main System Center BCC : Business Continuity Center

  9. Web-based PFMS Model Application Servers 3 1 2 User Terminals Database Server Web Server Users System Center PFMS COTS Internal Access Budget Preparation • Core Treasury System • General Ledger • Purch./Commit. • Accts Pay/Rec • Cash/Fund Mgmt • Fin. Reports VPN COTS DB MoF, TDOs, Central Line Ministries and Gov Agencies Asset/Invent Mgmt PFMS DB Org/Workflow Mgm External Access LDSW Opr sup for locals Internet Web Portal HR Mgmt/Pers DB Local finance directorates, local public authorities, municipalities LDSW DB Payroll Calcs. Internal Audit Interfaces Internal + External LDSW : Locally Developed Software COTS : Commercial Off-The-Shelf SW

  10. ECA Treasury/PFMS Projects (WB funded) • Completed [1994-2004] • Hungary Treasury [1995-2002] • Türkiye* PFMS [1999-2002] • Kazakhstan Treasury [1994-2003] • Ukraine Treasury [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] An Overview of Treasury/PFM Systems in ECA

  11. Maintenance and Support 7 Implementation 5 • Budget support • Technical support cap • System admin & Maint • System development & integration • Full scale testing and rollout • Training and change management Procurement 4 • Large scale ICT systems • Technical Assistance and Training 18 – 36 months PFMS Design 3 9 – 18 months • Definition of system functionality • Detailed technical requirements Monitoring & Evaluation 6 Preparation • Monitoring mechanisms • Project mgmt capacity • PEFA 2 • Legal and institutional frameworks • Budget coverage • Treasury Single Account (TSA) 9 – 18 months Readiness 1 • PFM reform strategy • Institutional capacity • Countrywide network infrastructure Treasury/PFMS Development Phases Effectiveness Time Resources

  12. ECA Treasury/PFMS Development Indicators An Overview of Treasury/PFM Systems in ECA

  13. ECA Treasury/PFMS Development Status An Overview of Treasury/PFM Systems in ECA

  14. PFMS PFMS and e-Government initiatives U.S.A. 2005 - 2010 target ? Europe Effectiveness Türkiye 4 December 2005 Integration 3 • Electronic government (e-Gov) • Common use of public resources for all public services • Restructuring common interactive operation platforms Transaction 2 • All business processes performed electronically (e-Agency) • Web based solutions and electronic voting • (e-Election) • Electronic procurement (e-Procurement) • All services performed on-line Interaction 1 • Electronic forms (e-Form) • Electronic services (e-Service) • Interactive query • 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 Publish • Organizational info • Laws and regulations • Info on services • Publications, documents, stats Investment An Overview of Treasury/PFM Systems in ECA

  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 requirescapacity 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. An Overview of Treasury/PFM Systems in ECA

  16. An Overview of Treasury / Public Financial Management Systems in ECA Thank You PEM-PAL Workshop for Treasury Officials Ljubljana, Slovenia 26-27 June 2006

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