SPAN IFMIS Project in Indonesia

SPANIFMIS Project in Indonesia

December 5 - 7, 2011Washington, DC

Ministry of FinanceRepublic of Indonesia

ICGFMWinter 2011 Conference

PFM in the 21st Century

THE WORLD BANK

Agenda

Indonesia Roadmap of PFM Reform and SPAN Governance and Implementation Design of SPAN Plans for SPAN and IT Integration

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SPAN

Indonesia

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SPAN

Area 1.9 m sq kmPopulation 240m

GDP / Growth 2010 $700b / 6.1%Annual Budget $112bTotal civil servants 4.7mTreasury offices 200 Spending units 29,000Treasury employees 11,000Spending unit employees 96,000

Roadmap of PFM Reform

1999-2004 2005-2009 2009-2011 and beyond

New Laws: •1999: Decentralization law•2003: State Finance Law•2004: State Treasury Law •2004: Audit of the management and accountability of the state finance

Creation of new Directorate Generals :•DG Budget (budget formulation and preparation)•DG Treasury (budget execution and treasury mgt - 2005)•DG Fiscal Balance (management of transfer funds to the local governments - 2006)•DG Debt Management (management of foreign and domestic loans)•DGSAM (management of state assets and receivables - 2006)

World Bank Supports PFM in Indonesia:•22 Dec 2004 to 2014: Government Financial Management and Revenue Administration Program (GFMRAP), $60 million investment loan for implementing IFMIS (SPAN); •12 Oct 2006 to 2017: PFM MDTF Part I ($24 m) and Part II ($10 m) grants to complement the WB GFMRAP and also to to support a broad range of PFM reform initiatives.

Procedural improvements to support PFM reforms: •Unified budget system: combined recurrent and development budget• Introduction of performance based budgeting and Medium Term Expenditure Framework (MTEF)• Issuing Budget execution documents (DIPA) on time•Reforming business processes in the Treasury payment offices (KPPN) through the establishment of pilot showcase offices that reduce payment processing time from 2 days to sometimes 1 hour.•Establishing Government accounting standard and reorienting the chart of accounts•Reforming the government procurement process (Keppres 80/2003)•MOF as one of the selected ministry to implement bureaucratic reform (BR) program

Continuous improvements to support PFM reforms: •New program structure aligns Government programs with organization structures and establishes clearer lines of accountability of the line ministries (budget users)•The new simplified budget document which focus on performance rather than detailed line item.•Performance information (including its formulated target and indicators)•Definition of the baseline and new initiatives•Calculating output based standard cost (SBU/ SBK)• Integration database between budget appropriation data (DG Budget) and allotment data (DG Treasury)•Full implementation and expanded coverage of the Treasury Single Account•Deepening and stabilizing cash plan and forecasting •Faster and evenly spread budget disbursement

Contracts for implementing SPAN • IVV (Independent Validation and Verification) consultant to assist project preparation and procurement•COTS and Systems Integrator (Turnkey) to deliver COTS Solution; Infrastructure, DC & DRC; Telecom links; Cabling•BPI (Business Process Improvement) consultant (2007-2011)•CMC (Change Management and Communication)•PMQA (Project Management and Quality Assurance)•SAKTI (Spending Unit Application developer)

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SPAN

Roadmap of SPAN

Standalone and disparate systems

with no integration but

centrally developed and

managed

SPANImplementing

Core Accounting as part of IFMIS integrating the processes of Budget and

Treasury and taking feeds from

others

Enhanced systems for performance

based budgeting, medium term expenditure framework

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SPAN

• 27 systems• 14 belong to DG Budget

and DG Treasury• 13 belong to Spending

units, Revenue, Debt, etc

Current• 14 replaced by SPAN• Many additional

processes automated• 7 integrated to SPAN

SPAN• More integration• More automation

Post SPAN

Governance & Implementation

Project Organization

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Ensuring a greater chance of success in implementing SPAN• Project governance• Augmenting resources through consultants (IVV, PMQA, CMC) and help from

World Bank Page │06

SPAN

Design of SPAN - Requirements

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SPAN

SPAN Scope

COTS Solutio

n

Collaboration

Environment

Hardware

Systems Software

LAN & Cabling WAN

Data Centre

COTS Functionality

Budget Preparation

Commitment

Management

Management of

Spending Authority

Payments Manageme

nt

Processing of

Government Receipts

GL & Chart of Accounts

Cash Planning Reporting

Maintenance of

Reference Information

DATA CHARACTERISTICS

•Data Model•Common Definitions•Single Collection Point

•Universal Application

•Consistent Naming Conventions for Data Elements

•Common Data Dictionary

APPLICATION CHARACTERISTICS

•Derived Values Transfer Between Modules

•Minimum Reconciliation Required to Ensure Data Integrity

•Consistent Customisation Tools and Techniques

•Code Shared Among Modules

•Shared Business Rules

PRESENTATION CHARACTERISTICS

•Consistent Headings on Screens and Reports

•Consistent Navigation

•Consistent Look and Feel for Screens and Reports

•Single Authentication

OPERATIONAL CHARACTERISTICS

•Single Security and Rights Administration

•Consistent Interface to External Environment

• Implementation of New Releases of Components Handled Consistently

•Common Job Scheduling

•Common Set of Hardware/Software/ Communications Platforms/Protocols

Design of SPAN – Big picture

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SPAN

Sample plans for SPANProject Organization

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Empowering and effectively using available resources• Detailed plans • Communicated well in time

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SPAN

Future plan for IT Integration at MOF

• Ministry of Finance is implementing IT Shared Services• Business process of individual departments would be retained at the

department level while common services would be managed by the MOF Shared Services

Objective1. Optimise investments in

infrastructure at MOF – both technological and operational

2. Achieve economies of scale by implementing among others, virtualization technologies

3. Consolidate scarce resources

4. Increase integration between departments

5. Focus towards IT Controls and Governance and Enterprise Risk Management

MOF Shared Services will manage SPAN infrastructure in the newly consolidated data centre

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SPAN

Take away

PFM Reform is a long drawn process comprising of multiple change initiatives affecting regulation, process, systems and people

IFMIS systems accelerate reform and must be chosen and designed well

IT and program governance coupled with proper planning ensures a greater chance of success

Resources need to be augmented IFMIS system creates an opportunity for further

integration

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SPAN

Robert [email protected] Robert [email protected] Suresh [email protected]

THANK YOU