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OUTLINE

Annex 10 Integrated Financial Management System under the Program Approach ‘FORM FOLLOWS FUNCTION’ Consultancy Group PQF Monrovia March 2010. OUTLINE. Objective Methodology Findings and Recommendations Characteristics – Barriers - Solutions JD and structure Competencies

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OUTLINE

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  1. Annex 10Integrated Financial Management Systemunder the Program Approach‘FORM FOLLOWS FUNCTION’Consultancy GroupPQF Monrovia March 2010

  2. OUTLINE • Objective • Methodology • Findings and Recommendations • Characteristics – Barriers - Solutions • JD and structure • Competencies • Accounting Dimensions • Structure

  3. OBJECTIVE Propose a program management system for CARE Liberia (’s FISP) that integrates program and program support functions Note: emphasis was put on CO level

  4. METHODOLOGY • References: • WA Finance Group Discussions • Program Characteristics • CARE Competency Guide • Interviews (2 partner staff, 3 CARE Liberia staff, 1 CI, 1 RMU, 2 other CO program staff) • Desk review of CARE Liberia JD (6) and Organograms (CO, UPA, ReCCA)

  5. CHARACTERISTICS - West Africa Finance Group • Based on collective vision and goal • Reflects CARE values • Collective accountability • Beyond spreadsheets, reports and deadlines • Reconciling compliance and quality • Provides direction for strategic investment of limited resources: • Functions & Accountabilities • Systems and Tools • Staff capacities

  6. CHARACTERISTICS – Program Approach 1 Ch1: long term objective for change in the lives of an impact population • Defining financial resources needed for a long term program • Monitor and analyze funding pipeline with regards to mid and long term coverage of program structure, program development, shared costs … Ch2: analysis of underlying causes of poverty • Analyze cost efficiency of approaches addressing different underlying causes of poverty Ch3: theory of change • Tracking financial resource use at different levels of program implementation: from global (CARE USA strategic plan and strategies of change) to program initiatives • Tracking costs related to different program elements: program initiatives, strategies of change, M&E and impact measurement …

  7. CHARACTERISTICS – Program Approach 2 Ch4: coherent set of initiatives • Allow for financial analysis at different levels / in different dimensions of a program • Ensure flexible use of financial resources within a program while maintaining transparency and compliance • Support the integration of financial management functions into the program structure Ch5: Learning • Reconciling the diversity of funding sources • Financial Management capacity building: Develop competencies, skills, and behaviors needed for analytical financial management • Influence donors with regards to the need for change in the financial reporting requirements

  8. CHARACTERISTICS – Program Approach 3 Ch6: social movement • Facilitate transfer of resources to partners • Ensure compliance in the use of resources by partners • Respect of local policies, rules and regulations as well as donor requirements • Ensure transparency of resource use by CARE Ch7: efficiency • The analysis of resource needs and use to achieve impact Ch8: Accountability • To donors (financial reporting) • To local program stakeholders (participation) • To the public (transparency) • To agreed responsibilities (performance) • To participants (cost benefits / aid efficiency)

  9. CHARACTERISTICS (findings from interviews) • Program and program support working together as a team that allows stakeholders to exercise ownership., commitment and build relationships • Minimal overlapping / duplication of tasks • All users are connected and have access to the system simultaneously and in real time • Program managers / Budget holders are able to working directly and independently with the financial management system (reading reports or do analysis on their reports) • Integrate all program information to produce a report on the program activities beyond budget vs expenditure (eg cost analysis by components or sectors) • A system that reflects the CO performance management triangle of UBORA: Impact – Quality – Support • Clear performance standards and indicators of success • Capable, committed and competent people

  10. CHARACTERISTICS – CARE Liberia structure and JDs FINDINGS • There seems to be some policy and some structural arrangements where admin and finance functions are integrated into the project/program. • The JDs of project/program managers clearly mention that they have finance and administration management responsibilities. • Some functions are not clearly assigned or assignments are not consistent • Required skills and competencies do not always match financial management functions assigned to a particular position • Contacts/Key Relations are not always clearly stipulated or purpose is not clear (e.g. Finance Controller) especially as far as integrate financial management is concerned • JDs have many different formats and do not specifically provide clearly identifiable performance standards for financial management, especially for non-finance positions

  11. CHARACTERISTICS – CARE Liberia structure and JDs Recommendations: • JD should clarify levels of integration: CO (e.g; CD, ACD, Finance Controller), Program (Program Manger, Admin/Finance Officers/ Assistants, Accountant, partners), sub office level; • In JD specifically identify peers, relations and functions for integrated financial management • TOP: Team Operation Plan for key staff responsible for integrated financial management at different level (CO, Program, Sub office)

  12. BARRIERS (findings from interviews) • Current financial management system does not have the ability to handle the change/shift • Lack of proper communication between program and program support • People not accepting the change and the implication of the new shift • Lack of capacity and competences to handle an integrated system, to generate and manage new tools • Bureaucratic nature of the system that may not allow speedy actions or decisions on urgent matters • Lack of integration of financial management in program design stages • Cost implication of the change • Inadequate training in donors rules and regulations in order to properly support the programs • Lack of Flexibility: Rigid procurement rules and regulation that do not reflect volatile business environment (inflation, unexpected price rises) • finding the balance between compliance and programme quality • Imposed rules and regulations: on CARE, on local partners - perceived as contractors

  13. SOLUTIONS (findings from interviews) • Revision of some of the existing systems, policies and procedures and adapt them to the current needs • Influence support and commitment at higher levels including allocation of resources to support change and integration • Set clear roles and responsibilities for program and finance in program design, implementation and monitoring • Educate and develop the understanding of people about the change • Encourage team work • Influencing and changing the mindset of all stakeholders to reduce resistance • Improve communication between program and finance so as to have the same level of understanding • Build staff capacities to be able to function within the new program approach • Hire competent, committed people who are willing to accept the new approach • Involvement of finance at program design stage • Regular field visits by finance staff • Change in peoples language (instead of your program we should say our program)

  14. COMPETENCIES Care’s Competency Self-Assessment Guide provides at least 90% firm basis for attaining the corporate objectives through an integrated program management approach. Thus it provides a good basis for defining key competencies for an integrated financial management. Examples: • Developing teams • Building partnerships • Operational Decision Making • Delegating Responsibilities In addition, for the application of the proposed solutions it will be essential for financial managers and leaders to be able to • Faciltate change

  15. ACCOUNTING SYSTEM Findings: • SCALA is limited as far as dimensions for tracking expenses and costs is concerned • Thus it is not adapted to serve in an integrated financial management system that support the program approach Recommendations: • Need for a financial systems that allows for additional accounting dimensions as needed in a program • Dimensions for tracking expenses should be set in advance / standardized as much as possible • Budget holders remain responsible for providing information about dimensions to be tracked • Any financial transaction should be initiated by the budget holder with the information about all the relevant dimensions

  16. ACCOUNTING DIMENSIONS

  17. ACCOUNTING DIMENSIONS

  18. INTEGRATED STRUCTURE CD CO performance Policy compliance FIN CONT ACD-PQ Pipeline / Viability INT AUDIT Contractual Accountability Capacity Building Cost/Benfits Accountability PROG MGR IMPACT M Budget Management FIN COORD Techn. STAFF Transparency PARTICIPANTS

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