Sustainable Public Financial Management

Case Study describes sequence of successful PFM reforms and capacity building in Afghanistan since 2002

Ottawa, Canada (April 28, 2011) – FreeBalance, a For Profit Social Enterprise (FOPSE) software company that helps governments around the world to leverage robust Government Resource Planning (GRP) technology to accelerate country growth, today released a Case Study that details the Government of the Islamic Republic of Afghanistan’s success at improving governance through PFM reform. The Islamic Republic of Afghanistan PFM Case Study covers the sequence of PFM reform from 2002 to the present day. PFM reform is critical to improving good governance. Good governance is critical to economic development. This Case Study is the second in a series to assist governments around the world achieve country growth. The first was the Government of Kosovo PFM Case Study.

Read the PFM Case Study: Islamic Republic of Afghanistan >>

The Afghanistan Financial Management Information System (AFMIS) is based on the FreeBalance Accountability Suite. The AFMIS has supported the Government of Afghanistan agenda of reform and modernization. More than 99% of the government’s budget execution is captured in AFMIS on a real-time basis. In 2009, regular training on AFMIS resulted in 262 government employees being added to the AFMIS skilled workforce.

The PFM Case Study analyzes Public Expenditure and Financial Accountability (PEFA) assessments. From 2005 to 2007, the Government of Afghanistan improved governance as demonstrated by two PEFA assessments. Less than 10 countries have completed two PEFA assessments. The Government of Afghanistan improved 17 of 31 PFM measurements. The largest improvement was seen in the ‘Predictability and Control in Budget Execution’ assessment. The PFM Case Study describes the Government of Afghanistan goals of improved governance and transparency and provides a GRP modernization scorecard.

“Afghanistan has made remarkable progress in achieving good governance through Public Financial Management reform,” said Manuel Pietra, President & CEO of FreeBalance. “The Afghanistan case study illustrates how the Government of Afghanistan has built capacity and effectively decentralized budget execution.”

Achievements by the Government of Afghanistan include:

• Improved governance as demonstrated by PEFA assessments
• Effective implementation of PFM reform in Treasury
• Increased capacity in budget execution, cash management and procurement
• Decentralization of budget execution to line Ministries and Mustofiats

FreeBalance is active in 19 countries, including Antigua & Barbuda, Afghanistan, Canada, Iraq, Kosovo, Liberia, Mongolia, Namibia, Pakistan, Sierra Leone, Southern Sudan, Timor-Leste, and Uganda among others. FreeBalance software manages more than a quarter trillion ($US) annual budgets worldwide. More than 70,000 users around the world use FreeBalance software to manage a global civil service workforce of 1,500,000.

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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2011-04-25 Afghanistan PFM Case Study

World Bank Economic Premise Note concludes that FreeBalance Government Resource Planning (GRP) customers Afghanistan, Kosovo, Sierra Leone Demonstrate Most Substantial PFM Progress  

Ottawa, Canada (April 16, 2011) – FreeBalance, a For Profit Social Enterprise (FOPSE) software company that helps governments around the world to leverage robust Government Resource Planning (GRP) technology to accelerate country growth, is pleased to announce that the governments of Afghanistan, Kosovo, and Sierra Leone recently received a rating of “substantial” for public financial management (PFM) rebuilding and reform progress. For more details, please refer to the April 2011 World Bank Economic Premise note titled “Strengthening Public Financial Management in Postconflict Countries.”

The authors, Verena Fritz, Edward Hedger, and Ana Paula Fialho Lopes from the World Bank and the Overseas Development Institute, analyzed eight post-conflict countries. Only those governments that have implemented the FreeBalance Accountability Suite achieved the rating of “substantial”. The Government of Liberia is currently in the pilot phase of implementing the FreeBalance Accountability Suite. The report found that “The three countries showing most substantial overall PFM progress—Afghanistan, Kosovo, and Sierra Leone—are also those where automation of PFM systems moved most quickly.” The FreeBalance Accountability Suite is distinguished by the ability to implement quickly and progressively activate. 

“Congratulations to the governments of Afghanistan, Kosovo, and Sierra Leone on progress achieved in public financial management progress and reform,” said Manuel Pietra, President & CEO at FreeBalance. “FreeBalance is pleased to be working with these governments as they demonstrate leadership in modernising public financial management systems. FreeBalance helps these governments achieve public financial objectives by listening to customers and focusing exclusively on the GRP domain.”

FreeBalance uniquely supports PFM reforms in emerging and post-conflict countries. According to the report, “strengthening PFM in fragile states is possible and can progress quite quickly. Achievements in Afghanistan, Kosovo, and Sierra Leone have been relatively rapid and substantial. These cases show that reform progress can be made under difficult circumstances—including high levels of continuing insecurity (Afghanistan), absence of any prehistory of independent statehood (Kosovo), and acute levels of underdevelopment (Sierra Leone).” 

FreeBalance has successfully assisted governments to implement modern PFM systems in challenging circumstances. The FreeBalance Accountability Suite has been implemented in emerging nation governments where there has been limited connectivity, low bandwidth, lack of electrical power, and low human capacity. FreeBalance has developed a methodology to improve implementation success that includes project governance, change management and progressive activation of system features.

FreeBalance Accountability Suite Version 7 offers a pure web-based platform that has been optimized for rapid government deployment, operational effectiveness. It is ideal for the needs and requirements of emerging and post-conflict governments. The FreeBalance Accountability Suite covers the entire budget cycle including financial and human resources transparency to improve governance and trust. The FreeBalance Accountability Suite is distinguished by strong and flexible budget control. Recent innovations from FreeBalance include Transparency and Procurement portals to improve government accountability. 

FreeBalance is active in 19 countries, including Antigua & Barbuda, Afghanistan, Panama, Canada, Iraq, Kosovo, Liberia, Mongolia, Namibia, Pakistan, Sierra Leone, Southern Sudan, Timor-Leste, and Uganda among others. FreeBalance software manages more than a quarter trillion ($US) annual budgets worldwide. More than 70,000 users around the world use FreeBalance software to manage a global civil service workforce of 1,500,000.

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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Short acceptance speech by FreeBalance President and CEO on receiving “Next Generation Executive Award” by the Ottawa Centre for Research and Innovation (OCRI). OCRI explained that the Next Generation Executive Award was given to Pietra in recognition of the dynamic change he has led at FreeBalance. This change has resulted in a new corporate culture that includes Corporate Social Responsibility as the core to company mission. FreeBalance financial results continue to improve thanks to a growing international client roster.

It was the worst of times…

Doug Hadden, VP Products

Credible budgets. Developing nation governments are often criticized for passing budgets that are not credible. Failure to provide effective cost estimates. Lack of a multiple-year perspective. Not accounting for recurrent costs for current programs. Poor budget transparency.

Yet here we are, with budget theatre in two G7 countries: Canada and the United States. In Canada, the opposition parties announced, within minutes of budget release, that they could not support the budget. No debate. The government fell three days later on a confidence motion. Perhaps the budget was designed by the governing party to generate an election: an election budget.

Meanwhile, south of the border, after a full year of deliberations and almost 200 days of continuing resolutions, the American government avoided a shut down by minutes.

What lessons for Developing Countries?

Developing country governments are evaluated against the Public Expenditure and Financial Accountability Framework. This framework is an effective benchmark and helps government modernization. How would Canada and the United States measure on the following high level PEFA measurements?

1. Credibility of the budget – The budget is realistic and is implemented as intended
2. Comprehensiveness and transparency – The budget and the fiscal risk oversight are comprehensive, and fiscal and budget information is accessible to the public.

Budget Credibility

Canada: the Parliamentary Budget Officer reports that estimates for F-35 fighters are not credible, appear to be lower than the cost paid by the US forces.

United States: economists continue to debate whether tax cuts create economic growth while the IMF suggests that the US has no credible strategy to handle the debt

Comprehensiveness and Transparency

Canada: the Federal Accountability Act brought in by the Harper government created the Parliamentary Budget Officer yet appears to be underfunding the office that was created to improve transparency

United States: the actual US debt is far higher than reported because of the lack of showing the impact of recurrent expenditures for entitlement programs. As congress bickers, the funding for the data.gov transparency portal is slashed by 75%.

Worst of Times?

The lessons for developing nations from Canada and the United States seem to be:

• Transparency brings reason and facts to budget debates. It’s best to avoid being transparent. After all, the value of government programs messes up debate and causes compromise.
• Credibility of budgets is far less important than the politics of budgets. The notion of the budget as the legal embodiment of government policy is just a subtle concept.
• Debt is something for the next set of politicians to deal with. Recurrent expenses from capital programs and entitlements must be on the books for the private sector, but accrual accounting should really be avoided for governments.

It’s high time for politicians in Canada and the United States to give their collective heads a shake. The budget fiasco doesn’t make these countries look like banana republics. That’s because many so-called banana republics have more effective budget processes!

Recognized for international country development, active participation in the global community, and corporate social responsibility (CSR) 

Timor-Leste

Ottawa, Canada (April 8, 2011) – FreeBalance, a For Profit Social Enterprise (FOPSE) software company that helps governments around the world to leverage robust Government Resource Planning (GRP) technology to accelerate country growth, is pleased to announce that FreeBalance President & CEO, Manuel Pietra, won the Next Generation Executive Award at the Ottawa Centre for Research and Innovation (OCRI) Awards Gala last night.

OCRI explains that the Next Generation Executive Award was given to Pietra in recognition of the dynamic change he has led at FreeBalance. This change has resulted in a new corporate culture that includes Corporate Social Responsibility as the core to company mission. FreeBalance financial results continue to improve thanks to a growing international client roster.

“This honour is very much a recognition of the positive change that people at FreeBalance are helping make around the world,” said Manuel Pietra, President & CEO at FreeBalance. “Corporate social responsibility is core to decision-making at FreeBalance. As a for profit social enterprise, our mission is to help governments leverage our government resource planning technology to improve development outcomes for country growth.”

In mid-2006 following his appointment as FreeBalance President & CEO, Mr. Pietra initiated a new business strategy. This new business plan better addressed the global government market. Strategic goals were changed. The company re-organized. The new FreeBalance business model and planning process was based on the premise of earning “customers for life”.

Social responsibility at FreeBalance extends beyond providing tools for country growth and government transparency. FreeBalance is committed to supporting children’s programs in the developing world. FreeBalance has established partnerships with organizations such as SOS Children’s Villages to directly impact the lives of thousands of children.

Refining processes to be more customer-centric has resulted in improvements in FreeBalance sales execution and operational efficiency. The company is growing at a rate of 18-20% per year thanks to operationalizing and adapting the strategy originally developed in 2006. FreeBalance is active in 19 countries, including Antigua & Barbuda, Panama, Canada, Iraq, Kosovo, Liberia, Mongolia, Namibia, Pakistan, Sierra Leone, Southern Sudan, Timor-Leste, and Uganda among others.

FreeBalance software manages more than a quarter trillion ($US) annual budgets worldwide. More than 70,000 users around the world use FreeBalance software to manage a global civil service workforce of 1,500,000.

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. 

About Manuel Pietra, FreeBalance President and CEO
Manuel Pietra is a global executive with more than 20 years of successful management experience from companies in the United States, Canada, Europe, South Africa, and Latin America. As President and CEO of FreeBalance, Mr. Pietra leads global growth strategies, organizational restructuring and customer engagement. Manuel Pietra has held executive positions on the boards of several international companies and actively participated in the venture capital arena. He holds a degree in Business Management from the South African Institute of Management and is a board member for the International Consortium on Government Financial Management (ICGFM). Mr. Pietra is multilingual and often speaks at high profile investment seminars and technology conferences across the world in English, Portuguese, Spanish, and French. 

About Ottawa Centre for Research and Innovation (OCRI)
Leading the way for Ottawa, OCRI is the city’s economic development agency. OCRI is the rallying point to bring business, education, research and talent together to create the winning economic conditions that allow Ottawa’s knowledge-based companies to thrive locally and compete globally. At OCRI we promote sustainable economic development to maintain our high quality of life. For more information on OCRI visit our website at www.ocri.ca and for more information on the Ottawa Region please visit www.ottawaregion.com. In 2010, Ottawa was named one of the world’s top seven intelligent communities by the Intelligent Community Forum (ICF). 

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Global customer-centric strategy and corporate social responsibility recognized by leading research and innovation organization

Ottawa, Canada (April 7, 2011) – FreeBalance, a For Profit Social Enterprise (FOPSE) software company that helps governments around the world to leverage robust Government Resource Planning (GRP) technology to accelerate country growth, today announced that FreeBalance President & CEO, Manuel Pietra, has been nominated for the Ottawa Centre for Research and Innovation (OCRI) Next Generation Executive Award. This “award recognizes an individual who has had a significant impact on the success and/or transformation of their organization as a direct result of their leadership.”

Winners will be announced at the OCRI Awards Gala on Thursday April 7, 2011 at the Hilton Lac-Leamy. The OCRI Awards Gala is the premier awards event for the region’s business, research and academic community. The annual event recognizes the achievements of successful entrepreneurs and in National Capital region.

“This award validates the positive changes that people at FreeBalance are helping make around the world,” said Manuel Pietra, President & CEO of FreeBalance. “Global citizenship commits FreeBalance to international country development, active participation in the global community, and corporate social responsibility.”

In mid-2006 following his appointment as FreeBalance President & CEO, Mr. Pietra initiated a new business strategy. This new business plan better addressed the global government market. Strategic goals were changed. The company re-organized. The new FreeBalance business model and planning process was based on the premise of “customers for life” The company added new customers in Canada, Pakistan, Panama, Palestine, Uganda, Kyrgyzstan, Namibia, and Liberia. FreeBalance is committed to supporting children’s programs in the developing world. FreeBalance has established partnerships with organizations such as SOS Children’s Villages to directly impact the lives of thousands of children.

Mr. Pietra spearheaded a transition to a FOPSE software company where Corporate Social Responsibility is core to decision-making. FreeBalance solutions for Public Financial Management (PFM) help developing nation government improve governance and improve development outcomes.

Refining processes to be more customer-centric has resulted in improvements in FreeBalance sales execution and operational efficiency. The company is growing at a rate of 18-20% per year thanks to operationalizing and adapting the strategy originally developed in 2006. FreeBalance customers span the globe and the user community includes public financial management professionals in 19 countries, including Liberia, Namibia, Sierra Leone, Uganda, and Southern Sudan. FreeBalance operates in 15 customer time zones. FreeBalance has more than 70,000 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 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. 

About Manuel Pietra, FreeBalance President and CEO
Manuel Pietra is a global executive with more than 20 years of successful management experience from companies in the United States, Canada, Europe, South Africa, and Latin America. As President and CEO of FreeBalance, Mr. Pietra leads global growth strategies, organizational restructuring and customer engagement. Manuel Pietra has held executive positions on the boards of several international companies and actively participated in the venture capital arena. He holds a degree in Business Management from the South African Institute of Management and is a board member for the International Consortium on Government Financial Management (ICGFM). Mr. Pietra is multilingual and often speaks at high profile investment seminars and technology conferences across the world in English, Portuguese, Spanish, and French. 

About Ottawa Centre for Research and Innovation (OCRI)
Leading the way for Ottawa, OCRI is the city’s economic development agency. OCRI is the rallying point to bring business, education, research and talent together to create the winning economic conditions that allow Ottawa’s knowledge-based companies to thrive locally and compete globally. At OCRI we promote sustainable economic development to maintain our high quality of life. For more information on OCRI visit our website at www.ocri.ca and for more information on the Ottawa Region please visit www.ottawaregion.com. In 2010, Ottawa was named one of the world’s top seven intelligent communities by the Intelligent Community Forum (ICF).

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