Sustainable Public Financial Management

Doug Hadden, VP Products

It’s that time of year. FreeBalance International Steering Committee (FISC) planning. Most software companies have user groups. Perhaps this is a cynical point of view – user groups seem to be forums where vendors tell customers what they are going to get, when they are going to get it and when they will be forced to upgrade.

It’s all about the software company.

The steering committee is a different approach. It’s all about the government customers. FISC is an opportunity for public financial managers to share lessons learned. To discuss emerging trends. And, to set company direction.

That’s right – FISC is where customers tell us what they want and when they want it and whether they will upgrade or not. We think that this is necessary for a customer-centric approach. And making solutions sustainable and adaptable to reform and modernization.

The FISC agenda is almost complete. We have two international experts in PFM keynoting. Four workshops. Four lessons learned sessions led by customers. Key topics this year are revenue, transparency, capacity building and government performance.

The FreeBalance product roadmap is a key deliverable at FISC. We present the working roadmap showing product deliverables for the next 2 years. Some of the deliverables are commitments made to customers. FISC members discuss and vote on each roadmap item. This changes our roadmap – product feature schedules are adjusted based on customer needs. Features committed to other customers are often accelerated.

Doug Hadden, VP Products

That’s the interesting conclusion from the 2010 International Consortium on Governmental Financial Management (ICGFM) and Grant Thornton annual survey: Public Financial Management Responses to an Economically Challenging World.  This appetite for reform was confirmed at the recent ICGFM Winter Conference [blog].

While developed country governments descend into melancholy, 76% of respondents indicated a commitment for Public Financial Management reform. 80% of governments are adopting international standards.

The financial crisis was cited as a motivation for reform. Transparency and PFM reform were part of many stimulus packages. Transparency was considered infrastructure by many.

The report concludes:

Public financial managers face some of the most challenging times in decades in meeting their responsibilties, but they have faced them not only with a variety of policy measures but with an unprecedented commitment to transparency.

Why is there such an appetite for reform?

• Good public financial management lessons learned in previous crisis have made many developing countries more resilient to the current crisis
• Aid dependent countries recognize that standard assessments such as Public Expenditure and Financial Accountability, World Bank Governance Indicators and Millennium Challenge Corporation measurements are being used for donor fund decisions – PFM represents a key element of these assessments
•  Globalization and trade liberalization gives business choices. Businesses would rather set up in countries that represent low risk.
• Transparency increases public participation in government and creates more stable countries.
• Governments recognize that good governance, enabled by PFM reform, improves development results.

Public Financial Management Responses to an Economically Challenging World 2011 ICGFM Survey

 Doug Hadden, VP Products

Another busy conference at the International Consortium on Governmental Financial Management in Washington this week. Lots of content uploaded to the ICGFM Blog – as my “second job” as VP Communications for the organization. International accounting standards in the public sector might not be top of mind for everyone. Yet, I wonder whether using the International Public Sector Accounting Standards (IPSAS) could provide the context we need to understand the debt crisis in Greece, Ireland or the United States. For one thing, government transparency is opaque if everyone is using different standards.

IPSAS was a major focus on the conference and the International Journal on Governmental Financial Management Volume 2 issue:

Many of the attendees at the conference came from developing countries. Many are adopting the cash-based IPSAS. Those from aid-dependent countries were vocal about the need for aid transparency and aid harmonization. There was some very interesting discussion from the presentation on the International Aid Transparency Initiative with takeaways from Malawi and Rwanda. Aid remains inefficient because of the lack of harmonization to country needs, high transaction costs and duplication. Panelists agreed that getting timely data was more important than full accuracy in data. Otherwise, budget planning and budget execution are interrupted.

The ability to provide transparent data via the web was selected in the ICGFM poll as having the greatest impact. This is reflective of the appetite for transparency in developing countries.

Developing country governments are seeing economic and stability benefits to transparency. And, many are leaping ahead of developed countries through the use of E-Government technology, budget/procurement/human resources transparency and adoption of international standards. (This is the crux of my argument from my article in the November Cutter IT Journal, E-Government Development and Public Sector Transparency Trends in Emerging and Developing Countries ) 

As one participant pointed out, many governments in developed countries do not want to change national standards for sovereignty reasons or because they feel their standards are superior. This makes it difficult to compare national debt across multiple countries. We may see a leap forward as countries like Georgia and Honduras move ahead of the G7 in support of standards – then move ahead in accural accounting and performance management.

We’re seeing this trend with many of our customers. The sophistication of the Chart of Accounts in Sierra Leone remains a wonder – in my opinion, much better than the COA used by most donors. Timor-Leste continues to advance transparency with a portal from FreeBalance and is forging ahead with performance management functionality for managers and ministers. Kosovo has rapidly adopted International and European standards.

Case Study describes sequence of successful PFM reforms in Kosovo from 1999

Ottawa, Canada (December 08, 2010) – FreeBalance, a Government Resource Planning (GRP) software company, today announced that the Kosovo Public Financial Management (PFM) Case Study written by FreeBalance has been included in the International Journal on Governmental Financial Management (IJGFM) publication. The IJGFM is a bi-annual publication by the International Consortium on Governmental Financial Management (ICGFM). For more information on the consortium and its publications, visit www.icgfm.org. Download the Kosovo PFM case study on Scribd free of charge. 

Hadden Public Financial Management in Government of Kosovo

The Kosovo PFM Case Study details the Government of Kosovo’s success at improving governance through PFM reform. It covers the sequence of PFM reform in Kosovo from 1999 to the present day. PFM reform is critical to improving good governance. Good governance is critical to economic development. The Kosovo Financial Management Information System (KFMIS) is based on the FreeBalance Accountability Suite. The KFMIS has supported the Government of Kosovo agenda of reform and modernization.

The PFM Case Study analyzes Public Expenditure and Financial Accountability (PEFA) assessments. The Government of Kosovo has achieved excellent results (B and higher) for over half of the assessment criteria. The country context of economic, capacity and sustainability challenges are described. The PFM Case Study describes the Government of Kosovo goals of improved governance and transparency, and provides a GRP modernization scorecard.

“The IJGFM is an important publication for people involved in the public financial management and government financial management areas,” said Manuel Pietra, President & CEO of FreeBalance. “Readers of the IJGFM will get a more thorough understanding of how the Government of Kosovo strengthened governance and the resulting economic benefit it has brought to its people.”

Achievements by the Government of Kosovo described in the Case Study include:

• Improved governance as demonstrated by the 2007 and 2009 PEFA assessments
• Effective sequencing of PFM reform
• Capacity built for budget execution, cash management and procurement government-wide
• Decentralization of budget execution reflecting successful capacity building
• Achieving International and European standards
• International Monetary Fund (IMF) member admittance

FreeBalance customers span the globe. This user community includes public financial management professionals in 18 countries, including Panama, Guyana, Antigua & Barbuda, Jamaica, Uganda, Timor-Leste, Afghanistan, Kosovo, Mongolia, and Canada. FreeBalance operates in 15 customer time zones. FreeBalance has more than 60,000 users around the world. FreeBalance software manages a global civil service workforce of 1,500,000, and also manages a quarter trillion ($US) annual budgets worldwide.

About ICGFM
Working globally with governments, organizations, and individuals, the International Consortium on Governmental Financial Management is dedicated to improving financial management by providing opportunities for professional development and information exchange. The International Consortium on Government Financial Management (ICGFM) was established over two decades ago to serve as an international forum for public sector financial managers.

ICGFM is a non-profit organization dedicated to improving public financial management so that governments may better server their citizens. The ICGFM provides knowledge transfer for good practices through conferences, forums and the publication of the International Journal on Government Financial Management. More at www.icgfm.org.

About FreeBalance
FreeBalance helps governments around the world leverage robust Government Resource Planning (GRP) technology to accelerate country growth. FreeBalance software solutions for public financial and human resource management support reform and modernization to improve governance, transparency and accountability. Good governance is required to improve development results. For more information, visit www.freebalance.com.

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This morning we announced an important partnership with AuthenWare that will help strengthen security for FreeBalance Accountability Suite users around the world. The following post is from Wayne Snell, Vice President of Marketing at AuthenWare, who explains the benefits that this new technology will provide you, our reader.

From Wayne Snell, AuthenWare VP of Marketing.

First let me thank FreeBalance for selecting AuthenWare as the strong security provider technology for its GRP customers! We are excited to be part of the solution focused on delivering the unique and evolving security requirements of governments around the world.

AuthenWare adds an additional layer of protection to ensure that the credentials of public financial management and other FreeBalance government agency users cannot be used maliciously.

So what is AuthenWare and how will it strengthen security for FreeBalance Users?

AuthenWare is second-factor authentication software that stops identity theft by rendering stolen information completely useless. It does this by using an innovative behavioural biometric technology called keystroke dynamics. Simply put, the software verifies that a person typing a set of credentials (such as a user ID and password) is the actual owner of those credentials. No person types exactly the same.  If the user’s typing pattern matches then he or she is granted access to whatever they are authorized to do. If it doesn’t match, then they can be asked to try authenticating again, denied access, or re-routed to a fraud prevention team, etc. The software is intelligent and can determine if a person is injured or tired. It even knows when it is a computer robot (e.g., replay attack) trying to mimic the person’s typing sign-on.

While obviously a big benefit to FreeBalance users, the technology is also “zero-footprint software,” meaning it is requires no tokens or additional end-user hardware, making it virtually undetectable to end-users.

The addition of AuthenWare creates a nearly impenetrable line of defense for the FreeBalance Accountability Suite by providing an additional layer of strong security that stops identity theft, web fraud and system vulnerability. It helps make user authentication and validation easy, cost-effective and most importantly – reliable – which are critical aspects to sustaining security within any government organization. You can read more about AuthenWare at www.authenware.com.

Read the press release >>

Conference to explore new standards to enhance transparency and program performance 

Ottawa, Canada (December 6, 2010) – FreeBalance, a Government Resource Planning (GRP) software company, today announced it is participating in the International Consortium on Governmental Financial Management (ICGFM) Winter Conference. The event runs from December 6-8, 2010 in Washington, DC. The ICGFM conference provides opportunities to discuss ideas and policies with government financial managers from around the world. Representatives from Africa, Asia, Europe, Latin America, the Caribbean, and North America will share practical experiences in adopting and implementing new standards in the public financial world (PFM) world. For more information, visit www.icgfm.org.

The 2010 Winter Conference is focused on the global demand for greater transparency in public finances. Conference topics to include: international accounting and reporting standards adoption, and what technical standards to use when delivering content on the Internet. Valuable information on how countries are implementing these new standards as well as the newest techniques to meet the demand for transparency will be discussed. For those unable to attend, event details and presentations will be posted via social media and web 2.0 tools.

“The ICGFM Winter Conference theme aligns well with the FreeBalance vision for improving transparency and accountability of public funds,” said Doug Hadden, VP Products at FreeBalance. “The ICGFM provides the global public financial management community with the opportunity to exchange ideas, good practices, and lessons learned. We fully support this collaborative approach and to enhancing the management of public resources to improve service delivery to citizens.”

During the ICGFM conference, presentations, blog posts, and other web 2.0 social networking tools will be available, including:

• Event blog: http://icgfm.blogspot.com/
• Picture gallery: http://www.flickr.com/photos/icgfm/
• Videos: http://www.youtube.com/user/icgfmconference
• Presentations: http://www.youtube.com/user/icgfmconference
• Documents and Journal Articles: http://www.scribd.com/icgfmconference
• Social Networking: http://www.linkedin.com/groups?gid=1677477
• Twitter: http://twitter.com/freebalance

FreeBalance customers span the globe and the user community includes public financial management professionals in 18 countries, including Afghanistan, Iraq, Kosovo, Liberia, Mongolia, Namibia, Pakistan, Panama, Sierra Leone, Southern Sudan, Timor-Leste, and Uganda among others. FreeBalance operates in 15 customer time zones. FreeBalance has more than 60,000 users around the world. FreeBalance software manages a global civil service workforce of 1,500,000, and also manages a quarter trillion ($US) annual budgets worldwide. 

About ICGFM
Working globally with governments, organizations, and individuals, the International Consortium on Governmental Financial Management is dedicated to improving financial management by providing opportunities for professional development and information exchange. The International Consortium on Government Financial Management (ICGFM) was established over two decades ago to serve as an international forum for public sector financial managers.

ICGFM is a non-profit organization dedicated to improving public financial management so that governments may better server their citizens. The ICGFM provides knowledge transfer for good practices through conferences, forums and the publication of the International Journal on Government Financial Management. More at www.icgfm.org. 

About FreeBalance
FreeBalance helps governments around the world leverage robust Government Resource Planning (GRP) technology to accelerate country growth. FreeBalance software solutions for public financial and human resource management support reform and modernization to improve governance, transparency and accountability. Good governance is required to improve development results. For more information, visit www.freebalance.com.

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FreeBalance joins Canadian Council on Africa, a corporate social responsibility (CSR) organisation

Ottawa, Canada (December 1, 2010) – FreeBalance, a global Government Resource Planning (GRP) software company and For Profit Social Enterprise (FOPSE), today announced it has joined the Canadian Council on Africa (CCAfrica), the only pan-Canadian organization dedicated to the economic development of Africa. With over 150 members active in every sector of the economy, CCAfrica is at the forefront of Canada’s economic relationship with Africa. CCAfrica is also concerned by diplomatic relations & social development of Africa. Please visit www.ccafrica.ca for more information.

FreeBalance helps governments across the world leverage robust government financial management technology to accelerate country growth. The company is uniquely positioned to support public financial management reforms in Africa. FreeBalance has successfully rolled out modern public financial management systems in challenging circumstances: limited connectivity, low bandwidth, lack of electrical power, and low capacity. FreeBalance recently announced agreements with the Governments of Liberia, Uganda, and MCA Namibia. FreeBalance is also working in Sierra Leone and Southern Sudan. The Government of Sierra Leone is a member of the FreeBalance International Steering Committee (FISC).

“FreeBalance looks forward to working with the Canadian Council on Africa to help promote greater economic activity in Africa,” said Manuel Pietra, President & CEO at FreeBalance. “FreeBalance has successfully worked with several African nations to modernise and reform their public financial management systems. This in turn has led to better governance, greater economic activity and increased investment, which benefits the people of those nations.”

The FreeBalance Accountability Suite is a Government Resource Planning (GRP) solution designed for the unique requirements of public financial management. FreeBalance covers the entire government budget cycle, including Budget Preparation and Budget Execution. The FreeBalance Accountability Suite supports the unique and evolving requirements of government, including the support of modern Government Resource Planning (GRP), Government Performance Management, Government 2.0, Shared Services and Service Oriented Architecture (SOA).

FreeBalance customers span the globe and the user community includes public financial management professionals in 18 countries, including Liberia, Namibia, Sierra Leone, Uganda, Southern Sudan, Timor-Leste, Afghanistan, Kosovo, and Iraq. FreeBalance operates in 15 customer time zones. FreeBalance has more than 60,000 users around the world. FreeBalance software manages a global civil service workforce of 1,500,000, and also manages a quarter trillion ($US) annual budgets worldwide.

About the Canadian Council on Africa
The Canadian Council on Africa (CCAfrica) is the only pan-Canadian organization dedicated to the economic development of Africa. With over 150 members active in every sector of the economy – including education, engineering, infrastructure, natural resources, energy, finance, legal, consulting, communications, information technology, manufacture, agri-food, environment, sustainable development and health, CCAfrica is at the forefront of Canada’s economic relationship with Africa. CCAfrica is also concerned by diplomatic relations & social development of Africa. Please visit www.ccafrica.ca for more information.

About FreeBalance
FreeBalance helps governments around the world leverage robust Government Resource Planning (GRP) technology to accelerate country growth. FreeBalance software solutions for public financial and human resource management support reform and modernization to improve governance, transparency and accountability. Good governance is required to improve development results. For more information, visit www.freebalance.com.

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