4.4 FreeBalance Accountability Suite Design Benefits
FreeBalance Accountability Suite
Fiscal Transparency in Public Finance
Governments across the world are modernizing or reforming public financial management (PFM) systems. Public financial management reform is a complex process enabled by integrated information technology. Government financial reform is essential for economic growth and successful competition in the global economy. The government budget is a key mechanism for government financial management.
The FreeBalance Government Accountability Suite is a web-based commercial off-the-shelf Integrated Financial Management Information Systems (IFMIS). The suite automates all public finance transactions related to the budget, including budget preparation, expenditure controls, government audit, procurement, monitoring, reporting, civil service and external audit. By integrating government revenue and expenditure, information systems provide better expenditure controls and improved transparency in the budget cycle.
Programmed for Government
No customization required. FreeBalance software is optimized for public finance, with fiscal controls and government financial management rules built into the main code of the software.
Key for government self-reliance. FreeBalance solutions can be scaled from basic capability for fast initial implementation and then gradually scaled up.
Robust technology. More than 20 years of successful implementations, from difficult conditions in post-conflict countries to the most widely used financial software across the Government of Canada.
FreeBalance Supports Public Financial Management
FreeBalance applications support the complete lifecycle of budget management, including:
- Budget Preparation and Planning: Plan for multiple year budgets including scenarios, assumptions, budget proposals and multiple drafts to create a credible and realistic government budget.
- Budget Execution: Control all expenditures based on appropriations and business rules. Budgets can be transferred, supplemented budgets provided and controls tightened or loosened.
- Budget and Cash Forecasting: Forecast based on commitments, obligations and transactions tracked against budget with anticipated variance to enable governments to adjust controls. Leverage budget assumptions and “what-if” scenarios to improve decision-making.
- Civil Service Integration: Integrate salary budgeting. Unlike Human Resources software designed for the private sector, the FreeBalance Accountability Suite supports salary management, forecasting and budget integration.
- Budget Reporting: Analyze budgets and actuals across many years and produce standardized financial reports.
FreeBalance Commitment Accounting and Expenditure Controls
Unlike private sector financial accounting, government commitment accounting is budget driven rather than profit driven. Commitment accounting requires numerous control mechanisms between the initial budget approval and the completion of fiscal transactions. The FreeBalance Government Accountability Suite supports all commitment controls. The commitment controls provided by FreeBalance are:
- Budgetary Control: The initial approved budgetary funds are mapped to the Chart of Accounts (COA) at a pre-determined COA hierarchy level for aggregate fiscal control.
- Multiple Levels of Allotment Controls: Supports approved appropriations, warrants or allocations, mapped to summary or detailed levels within the COA and to fiscal periods.
- Commitment Control: A soft commitment or intention to spend.
- Obligation Control: A hard commitment or contractual obligation.
- Multi-Funds and Project Controls: FreeBalance links Projects and Programs with fund sources, including linking budgets, projects or programs to specific revenue sources and donors.
- Tolerances: Set tolerances for controls to ensure fiscal discipline and compliance to the budget law while enabling appropriate discretion.
- Segregation of duties: Ensure compliance with government regulations through separation of duties and approval controls
FreeBalance Supports International Finance Standards
- The World Bank Treasury Reference Model: A development tool for fiscal managers and system developers, intended to help implement good practices in fiscal accounting and expenditure control.
- International Monetary Fund Code of Good Practices on Fiscal Transparency: Method to assess government fiscal transparency with practical advice for improvement.
- United Nations Common Functions of Government (COFOG): Functional classification to report government statistics to the International Monetary Fund (IMF) and the United Nations.
- The International Monetary Fund Government Finance Statistics (GFS): Provides a comprehensive conceptual and accounting framework suitable for analyzing and evaluating fiscal policy and performance of the general government sector and broader public sector of any country.
- International Federation of Accountants International Public Sector Accounting Standards Board International Public Sector Accounting Standards (IPSASs): Reporting requirements for government and public sector organizations
- Medium Term Expenditure Frameworks (MTEF): Multiple year rational planning and budget formulation processes enabling the government to establish credible and transparent criteria for allocating public resources to strategic priorities while ensuring overall fiscal discipline
- Generally Accepted Accounting Principles (GAAP): A collection of rules, procedures and conventions that define accepted accounting practices. This includes broad guidelines and detailed procedures applied to both the public and private sectors.
FreeBalance Accountability Platform
The FreeBalance Accountability Platform is the enabling technology used by FreeBalance and FreeBalance partners for developing web-based public financial management solutions. These solutions deliver applications on web browsers using Java application servers.
Technology for the FreeBalance Accountability Platform was designed exclusively for government operations. The use of proven open-source components reduces costs to governments and provides more choice.
The FreeBalance Accountability Platform has been developed exclusively in Java Enterprise Edition where business logic, data entities, and the rendering of user interfaces are accomplished using technology that leverages open application and web servers. The Accountability Platform supports integration with current FreeBalance applications to enable customers to easily transition to a pure web-based environment.