Posts Tagged ‘David Nummy’

Towards a Scorecard for Public Financial Management Technology Maturity

Thursday, July 29th, 2010

Doug Hadden, VP Products

Phasing of Public Financial Management (PFM) “reform, through achieving gradual manageable steps (DFID 2005)” is considered a good practice. In fact, if any thing in PFM is considered a best practice – it’s the phased implementation of PFM reform and supporting information systems as we’ve pointed out before and validated at numerous conferences.

The sequence of reform depends on the country context. “Implementing public finance reforms of any kind requires an understanding of the entire public finance system in place in that country. It requires an understanding of the institutional arrangements (Rodin-Brown 2008).” As a vendor specializing in the government domain, Government Resource Planning (GRP), FreeBalance has developed a methodology called progressive activation that enables governments to modernize over time. That’s because, unlike the private sector, technology solutions like GRP need to follow reform. A company can easily change a chart of accounts to improve performance tracking or adopt secure electronic cheques with electronic signatures. Governments often need to change the law to support these “business process” improvements.

There is no established sequence of reform (Allen 2009) except at a fairly high level. David Nummy from Grant Thornton provided a good PFM framework at our FreeBalance International Steering Committee meeting in 2008.

It is rather frustrating to government PFM practitioners to determine the sequence of technology adoption to follow reform. Some technology adoption does not require legal reform. As I discovered in the Kyrgyz Republic, there is an appetite to understand the benefits of financial, budget and civil service automation to help determine priorities for legal reform. We have always identifed the three dimensions of sequencing GRP technology:

  1. Modules or functionality that is implemented by governments. We’ve created a PFM component map that provides an overview of general modules used in government GRP.
  2. Decentralization or the rolling out of functionality to other government entities.
  3. Modernization or reconfiguration of existing modules to support reform.

We have our first draft of a simplied scorecard to help identify the level of maturity of a government financial management software system. I’d very much like input and ideas. This will help all PFM practitioners regardless of software technology used.  The items in the “modernization” column may imply the acquisition of additional modules or it could be activating functionality that already exists. Governments can utlize the scorecard to show what is current implementd and what could be implemented in the future.

 

FUNCTIONALITY

DECENTRALIZATION

MODERNIZATION

PUBLIC FINANCIALS MANAGEMENT

  • Budget controls
  • Assets
  • Audit
  • Line ministries
  • Regions
  • Municipalities
  • Segregation of duties
  • IPSAS & GFS
  • Accrual accounting

GOVERNMENT TREASURY MANAGEMENT

  • Cash management
  • Cash controls
  • Debt management
  •  Investment management
  • Delegated treasury
  • Bank reconciliation
  • EFT
  • Treasury Single Account
  • Cash forecasting

PUBLIC EXPENDITURE MANAGEMENT

  • Expenditure Controls
  • Purchasing
  • Delegated purchasing
  •  Procurement
  •  e-Procurement
  •  Procurement transparency
  •  Grant management

GOVERNMENT RECEIPTS MANAGEMENT

  • Non-tax revenue
  • Income tax
  • Customs
  • Local tax collection
  •  Case management

CIVIL SERVICE MANAGEMENT

  • Payroll
  • Pensions
  • Workforce management
  • Civil service planning

 

  •  Recruitment
  •  Talent management
  •  Capacity building
  •  Performance appraisal
  •  Succession planning
  •  Self-Service

GOVERNMENT PERFORMANCE MANAGEMENT

  • Budget classifications
  • Management reporting
  • Budget preparation
  • Budget circular

 

  • Budget delegation
  • Bottom-up Budgets
  • Local PEFA assessments
  • Citizen services
  •  PEFA assessments
  •  Program budgeting
  •  MTEF
  •  Budget transparency
  •  Macro-fiscal framework
  •  Scenario planning
  • Performance budgets
  • Outcome measures