Sustainable Public Financial Management

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.

 FreeBalance to deploy fully integrated web-based treasury and human resource information management system

 Ottawa, Canada (December 22, 2009) – 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, has been selected to provide an integrated Treasury Management Information System (TMIS) and Human Resource Management Information System (HRMIS) to the Government of Kyrgyz Republic.

The implementation will be undertaken in five phases. On completion, the FreeBalance Accountability Suite will be implemented in over 100 sites, including all central government ministries, agencies, departments, line ministries and regional treasury offices. FreeBalance software will also be implemented in 3,000 state agencies/budget organizations. The payroll system will manage a civil service workforce of 76,000 employees. The integrated TMIS and HRMIS project is a turnkey implementation of FreeBalance commercial off-the-shelf software and includes hardware and services. FreeBalance is partnered with Telecommunications Consultants India Ltd. (TCIL) and Unique Technologies on the delivery of this project.

 “The Government of the Kyrgyz Republic is committed public expenditure reform that will establish a more strategic and transparent budget formulation and budget execution process,” said Mr. Zulpuev, Director of the Central Treasury and Deputy Minister of Finance of the Government of the Kyrgyz Republic. “The introduction of integrated planning solutions as part of the reform process positions our Government to affect change and provide new levels of accountability and value to our citizens.”

The Kyrgyz Republic is actively undertaking a wide-ranging reform process aimed at raising the government’s potential for economic improvement. The integrated TMIS and HRMIS project is seen as a critical step in this process. Public sector reform programs in the Kyrgyz Republic are supported by Governance Structural Adjustment Credit (GSAC) from the World Bank’s International Development Association (IDA). The GSAC designed to enhance the transparency, openness and accountability of the public sector to external stakeholders and to improve government effectiveness and efficiency.

 “The Government of the Kyrgyz Republic recognizes that transparency, openness and accountability can improve citizen, development partner and business confidence,” said Manuel Pietra, President & CEO of FreeBalance. “The integrated global economy rewards countries who improve transparency.”

 The Treasury Management Information System (TMIS) will improve government efficiency, decision-making, cash management and budget execution. Integrated budget management will ensure that all government budgets are executed based on government priorities. Faster reporting of budget execution at all levels of the government will ensure better use of cash. It will provide civil servants with accurate information to improve development results. The Human Resources Management Information Systems (HRMIS) will enable civil service reform and increase human capacity within the government. Effective human resource management systems will assist in the improved professionalization of the civil service through setting standards, training programs for personnel development and assessing progress.

 The fully web-based FreeBalance Accountability Suite was designed specifically for Government Resource Planning. The configuration for the Government of the Kyrgyz Republic will manage the entire budget cycle. The FreeBalance Accountability Suite enables rapid localization and will support the Russian language. The FreeBalance system can also support the Kyrgyz language. The configuration approach used in the Suite enables the Government of the Kyrgyz Republic to progressively activate advanced functions. This enables the FreeBalance Accountability Suite to support on-going reform and modernization.

 About the Kyrgyz Republic

 Kyrgyz Republic achieved independence on August 31, 1991 following the breakup of the Soviet Union. Kyrgyz Republic has an estimated population of 5,431,747. Kyrgyz Republic is the first Commonwealth of Independent States country to be accepted into the World Trade Organization. Kyrgyz Republic produces approximately 11.6 billion USD of GDP at purchasing power parity exchange rates growing at a rate of 7.6%. GDP is supported by exports of tobacco, cotton, electricity, natural gas, gold, mercury and uranium. The Government of the Kyrgyz Republic has demonstrated positive results from anticorruption and domestic industry restructuring programs. The Government of the Kyrgyz Republic has successfully raised foreign investment to sustain future growth.

About FreeBalance

Founded in 1984, FreeBalance is 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. 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.

FreeBalance is headquartered in Ottawa, Canada, with sales and support offices in Washington, DC (United States), Lima (Peru), Lisbon (Portugal), London (Great Britain), Pristina (Kosovo) and St. John (Antigua and Barbuda). FreeBalance solutions have been implemented in countries across the globe, including Canada, United States, Sierra Leone, Guyana, Pakistan, Mongolia, Afghanistan, Antigua & Barbuda, Palestine, Timor-Leste, Republic of Kosovo and Panama.

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Media Contact:

Matthew Olivier

Director, Global Marketing & Alliances

FreeBalance

Tel: +1 (613) 236-5150 ext.129

molivier@FreeBalance.com

www.FreeBalance.com