1 Government Integrated Financial Management Information System Dr. Jesse Hughes, CPA, CIA, CGFM Professor Emeritus of Accounting Old Dominion University Email—jhughes@odu. edu
Dec 22, 2015
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Government Integrated Financial Management
Information System
Dr. Jesse Hughes, CPA, CIA, CGFM
Professor Emeritus of Accounting
Old Dominion University
Email—[email protected]
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INTRODUCTIONStages for System DevelopmentBest PracticesAssessments
Government OperationsEconomic EnterprisesWhole-of-GovernmentCoding StructureInformation TechnologyTraining
Action PlanStrategies
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STAGES FOR SYSTEM DEVELOPMENT
Assessment
Design
Procurement
Implementation
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BEST PRACTICES
International Public Sector Accounting Standards (IFAC)
Government Finance Statistics Manual (IMF)
Other Country Experiences
SPECTRUM FOR ACCOUNTING SYSTEM DEVELOPMENT
•Single Entry
• Cash System
•Budget Only
•Double-Entry
•Enhanced Cash System
•Cash and Budgetary
Control
•Double-Entry
•Partial Accrual System
•Financial Resources
•Double-Entry
•Full Accrual System
•Economic Resources
CURRENT TRANSITION PHASE INTERNATIONAL BEST PRACTICES
1 - 2 Years 3 - 5 Years Over 5 Years
Accounting System Needs Accounting System Needs AnalysisAnalysis
Government Business
Enterprises
Government Operations
Whole of Government+ =
IASs(IASC - London)
IPSAS(IFAC - NY)
GFS(IMF - DC)
CommonCommonDatabaseDatabase
CommonCommonDatabaseDatabase
ConsolidatedConsolidatedStatementStatement
+ =
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GOVERNMENT OPERATIONS
Cash Based System for Budgetary Control
Accrual Based System for Financial Statements
Links to Other SystemsProcurement
Personnel
Pensioners
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GOVERNMENT OPERATIONS
Standard Chart of AccountsStatement of Financial PositionStatement of Financial PerformanceStatement of Changes in Net AssetsStatement of Cash FlowsEliminate Intra-Group Transactions to Prevent Double-Counting during Consolidation
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ECONOMIC ENTERPRISES
Standard Chart of AccountsBalance SheetIncome StatementStatement of Changes in EquityStatement of Cash FlowsEliminate Intra-Group Transactions to Prevent Double-Counting during Consolidation
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WHOLE-OF-GOVERNMENT
Standard Chart of Accounts
Consolidated Statement of Financial Position
Consolidated Statement of Financial Performance
Consolidated Statement of Changes in Net Assets
Consolidated Statement of Cash Flows
Eliminate Intra-Group Transactions to Prevent Double-Counting during Consolidation
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CODING STRUCTURE
Transaction Code
Fiscal Year
Fund
Organization
Program or Function
Geographic
Chart of Accounts
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PROPOSED FUND STRUCTURE
ConsolidatedWhole-of-Government
Consolidated Governmental Consolidated Proprietary
Fiduciary
Capital Projects
Debt Service
General/ SpecialRevenue
(Full Accrual Accounting) (Full Accrual Accounting)
(Full Accrual Accounting)
Non-Current Liabilities
Non-Current Assets
Internal Services
Economic Enterprises
Agencies Trusts
Governmental Proprietary Fiduciary
(Partial Accrual Accounting)
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CHART OF ACCOUNTSBudgetary AccountsExpenditures
Economic (8 major classes)• Compensation of Employees• Use of Goods and Services• Consumption of Fixed Capital• Interest• Subsidies• Grants• Social Benefits• All Others
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CHART OF ACCOUNTS (CONTINUED)
Expenditures (continued)Functional (10 major classes)
• General Public Services• Defense• Public Order and Safety• Economic Affairs• Environmental Protection• Housing and Community Amenities• Health• Recreation, culture, and religion• Education• Social Protection
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CHART OF ACCOUNTS (CONTINUED)
Revenues (4 major classes)TaxesSocial ContributionGrantsAll Others
AssetsLiabilitiesNet Assets
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IFMISIFMIS
OTHERMINISTRIES/ COST CENTERS
IFMISIFMIS
MINISTRY OF FINANCE
Integrated Financial Management Information System (IFMIS)
Other Government Information Systems
Human Resource Management
Cash/ DebtManagement
Accounts PayablePhysical Resource Management
Revenue ManagementAccountsReceivable
Tax Collection and Management
Asset Management
Inventory Management
Project Accounting
Personnel Payroll
Government Business EnterprisesGovernment Business EnterprisesInformation SystemsInformation Systems
ManufacturingCompanies
OtherEnterprises
Financial Institutions
Financial Management Information
(Consolidated Reporting)
BudgetControl
FinancialManagement Information
Budget Preparation
BudgetPreparation
LEGEND
System Interfaces/Full Integration with IFMISIFMIS Module Full Integration
IFMIS On-line Access
Purchasing Purchasing
General Ledger and
Budget Control
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NETWORK INFRA-STRUCTURE STRATEGY
Servers (backbone of the infra-structure)
Software (glue that holds all the pieces together)
Storage (groups storage systems on their own high-speed networks)
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Other Ministries/Cost Centers
MoF (Central)
MoF (Other Provinces)
Technical Architecture
GIFMIS Application(Internet based applications)
FallbackServer
Centralizedand Unified Databases
Virtual PrivateVirtual PrivateNetworkNetwork
(VPN)(VPN)
Other GovernmentInformation Systems
LEGEND
On-Line Connection
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TRAINING
Develop Core Group of Trainers
Acquire additional computers for training room
Expand financial library to include accounting standards desired by international accounting oversight bodies
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TRAINING (CONTINUED)
Accrual Accounting
International Public Sector Accounting Standards
International Accounting Standards
Government Finance Statistics Manual
IFMIS Coding Structure
Network Architecture
Links to Other Systems
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ACTION PLAN
Steps to ImplementationShort-Term (1-2 Years)
• Continue Design Phase to develop detailed specifications
• Revise applicable laws to permit use of accounting standards desired by international accounting oversight bodies
• Modify existing software to implement double-entry cash accounting system
Mid-Term (3-5 Years)• Acquire additional software and hardware to implement
double-entry partial accrual accounting system for financial assets and liabilities
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ACTION PLAN (CONTINUED)
Steps to Implementation (continued)Long-Term (Over 5 Years)
• Implement double-entry full accrual accounting system for non-financial assets and long-term debt
Packaged Software
Technical Architecture
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PACKAGED SOFTWARE CONSIDERATIONS
Goodness of Fit
System ScalabilitySize
Speed
Workload
Transaction Cost
Outside Consulting Support
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STRATEGIES FOR IMPLEMENTATION
Appoint Steering Committee (for policy) and full-time Project Team (for procedures)Identify specific software and hardware needs during design phasePrepare Users’ ManualsConduct training programsPilot test programsImplement throughout MOFRoll out to other ministries
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POST-IMPLEMENTATION REVIEW
Accuracy of Time, Cost, and Benefit Estimates
Adequacy of System DesignAccountable
Controllable
Transparent
Sustainable
C PA FA C PA FA A B P HR FR LG OM PEDecision Maker(Scope)
User(Requirements)
Designer(Specifications)
Builder(Components)
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INTEGRATED FINANCIAL MANAGEMENT INFORMATION SYSTEM FRAMEWORK
WHERE DOES YOUR COUNTRY FIT?Data Process Interfaces Geography
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GLOBAL IMPLICATIONS