June 2006PFMS1 Integrated Public Financial Management Systems (PFMS) Cem Dener ECSPE Definitions ...
-
Upload
lillian-davidson -
Category
Documents
-
view
216 -
download
3
Transcript of June 2006PFMS1 Integrated Public Financial Management Systems (PFMS) Cem Dener ECSPE Definitions ...
June 2006 PFMS 1
Integrated Public Financial Management Systems(PFMS)
Cem DenerECSPE
Definitions Evolution of Treasury Systems Design and Implementation Information & Communication
Technology PFMS Projects in ECA Recommendations
June 2006 PFMS 2
Public Financial Management System (PFMS) is designed to
support all financial operations,
collect accurate, timely, complete, reliable and consistent
information on all public financial events,
provide adequate management reporting,
support government-wide and agency policy decisions,
produce auditable financial statements.
Definitions
June 2006 PFMS 3
Public Financial Management Cycle
Asset / Inventory
Mgmt
Procurement/Purchasing
Mgmt of Budget
Authorizations
Commitment of Funds
Payments and Receipts
Mgmt
CashManagement
Debt and Aid Management
Budget Review &
Fiscal Rep.
Audit and Evaluation
Budget Preparation
1
2
3
4
5
6
7
8
Policy Development and
Review0
Budget Execution
Payroll CalcsHR Mgmt
F M I SWeb
Publishing
June 2006 PFMS 4
Core Treasury System includes the following components: Budget Execution and Monitoring Accounting (general ledger, management of payments and receipts) Cash Management Financial Reporting Purchasing / Commitment Asset / Inventory Management
Components
Other Public Financial Management System components: Macro Economic Forecasting Budget Preparation and Approval Debt and Aid Management HR Management /Payroll Calculations Support for Financial Control and Auditing Web publishing Financial Management Information System
The combination of above components is referred to as integrated PFMS
Operational support for Spending Units
1
6
8
1
4
7
7
2
8
4
5
7
4
June 2006 PFMS 5
Evolution of Treasury Systems
Treasury development process: (Treasury Reference Model)
1. Establishment of legal and institutional frameworks
2. Definition of coverage
3. Definition of system functionality
4. Design and implementation of Information Systems
June 2006 PFMS 6
Evolution of Treasury Systems
1. Establishment of legal and institutional frameworks
Legal : Approval and implementation of the organic budget law
Organization : Establishment of a countrywide MoF / Treasury
organization
Personnel : Allocation of adequate qualified staff for MoF /
Treasury management and operations
June 2006 PFMS 7
Evolution of Treasury Systems
2. Definition of coverage
Treasury control over government financial resources
(Treasury Single Account)
Coverage of central budget (all
government transactions are routed through treasury)
Coverage of extra budgetary funds and off-budget funds
Coverage of local (sub-national) governments
June 2006 PFMS 8
3. Definition of System FunctionalityPFMS Module Common Implementation Options
Macroeconomic Forecasting Existing Models / LDSW Budget Preparation LDSW / COTS Core Treasury System COTS + General Ledger + Management of payments Interface with banking system
(TSA) + Management of receipts Interface with revenue collection + Purchasing / Commitment Interface with procurement
agency + Cash / Fund Management Interface with banking system
(TSA) + Financial reports + Asset / Inventory Management Operational support for SUs Interface for spending units
(LDSW) Internal Debt management LDSW / Interface with Debt Mgmt
System External Debt and Aid mgmt. Interface with Debt Mgmt
System Personnel database (HR mgmt) LDSW / COTS Payroll calculations LDSW / COTS Support for Auditing Locally developed reports Management Information System COTS
[ COTS : Commercial Off-The-Shelf Software LDSW : Locally Developed Software ]
June 2006 PFMS 9
Evolution of Treasury Systems
4. Design and implementation of information systems
Secure countrywide network infrastructure
Development of web-based application software
Central servers and data storage/backup units
Standard field hardware
System and network management tools
Technical maintenance and support systems
System safety / security and business continuity solutions
Web publishing (web portal)
June 2006 PFMS 10
Treasury System Project Lifecycle
A. Design phase (9-18 months) High Level Functional Design: Legal and institutional framework Detailed Functional Design: Coverage, functionality, scope, budget
execution, budget classification, chart of accounts, reporting Technical System Design: Technical architecture, software,
hardware and networking requirements, implementation plan Component sizing and preparation of procurement specifications
B. Procurement phase (9-18 months) International Competitive Bidding (ICB) for the development of
application software (usually two-stage) ICB for the installation of hardware and network equipment
C. System integration and implementation (18-36 months)
Design and Implementation
June 2006 PFMS 11
C. System integration and implementation (18-36 months) Application Software (SW) design to meet functional requirements SW customization and parameterization + locally developed SW Communication infrastructure Network (NW) equipment, and cabling Hardware (HW) installations – central and field offices Security solutions (incl. support for digital signature) Pilot implementation Training Countrywide implementation (replication) Data entry and migration Backup and recovery solutions Business continuity solution Technical support and maintenance Call Center / Help Desk operations Documentation and manuals + web publishing
Design and Implementation
June 2006 PFMS 12
Technical Assistance (TA) requirements vary depending on the existing institutional capacity
Development of the legal, regulatory and operational framework
Review/revision of existing budget classification and chart of accounts
Development of GFS / IPSAS compliant financial reports
Development of PFMS functional requirements
Design of technological architecture
Preparation of the technical specifications and bidding documents
Technical support during the implementation of Treasury/PFM system
Data conversion and interfaces with other systems
Training
Project management
Design and Implementation (contd.)
June 2006 PFMS 13
Information and Communication Technology
Modern integrated PFM systems are designed and implemented as
web-based applications
Implementation of the PFMS includes the following ICT components:
[0] Establishment of countrywide network connections (communications
lines) as Government contribution
[1] Development of web-based Application Software (ASW) as a
combination of customized package + locally developed software
[2] Installation of central servers (database & application servers) and data
storage units (fiber disk arrays) at the main system center & business
continuity center
[3] Installation of standard field hardware (domain servers, user
workstations and peripherals) in central and field offices
[4] Installation of network equipment, system and user management and
engineering support solutions
Completion of countrywide network (physical) connections [0] by the
Government is a precondition for signing the contracts with
suppliers.
June 2006 PFMS 14
Technology Architecture3-Tier Web-Based
B C
C 1 2M
S
C
Local Server
Firewall
Database Server(s)
MoF / Treasury
District Offices
District Offices
Spending Units
Application Servers
WebServer
Collection Point
(city center)FR line
FRline
Spending Units
Internet
Virtual Private Network
Tunnelling
Encryption
Special DU lines for towns
PCs / Thin Clients
[ 2 ]Central Servers
[ 3 ]Field
Hardware
[ 0 ]Wide Area Network
District Offices
3
[ 4 ]Network Equipment
[ 1 ] PFMS
Application Software
PFMS DB
MSC : Main System Center BCC : Business Continuity Center
June 2006 PFMS 15
Web Based PFMS Model
User Terminals
System Center
Database Server
Application Servers
UsersWeb Server
Internal Audit
Payroll Calcs.
Asset/Invent Mgmt
Budget Preparation
Core Treasury System
• General Ledger• Purch./Commit.• Accts Pay/Rec• Cash/Fund Mgmt• Fin. Reports
HR Mgmt/Pers DB
Org/Workflow Mgm
We
b P
ort
al
COTS
LDSW
Internal + External
PFMS
Opr sup for locals
COTS DB
MoF, TDOs, Central Line Ministries
and Gov Agencies
Local finance directorates, local public
authorities, municipalities
Internal Access
External Access
LDSW DB
LDSW : Locally Developed Software
COTS : Commercial Off-The-Shelf SW
VPN
Internet
1 2 3
Interfaces
PFMS DB
June 2006 PFMS 16
PFMS Functional Modules and BeneficiariesIntegrated PFMS model proposed for Ukraine
T TransactionsP PlansC ContractsA AccountsR ReportsI InterfaceTSA Treasury Single Acct
Spending Units
Local finance directorates, public authorities,
municipalities, public institutions[ ~50,000 ]
Integrated PFMS
Ministry of Finance
Treasury IT Dept
FMIS + Business Continuity Center
MoF IT Dept
I
I
IState Property
Fund
MoE - Public Procurement Dept
Internet & Intranet
PFMSWeb Portal
External Users
Reports
Reports
T, P
T, C
T,P,C,A
Main Civil Service Department
Internal Audit I P, R
Payroll Calcs.
Asset/Invent Mgmt
Line Ministries &
Departments P, R
K R U Reports
Reports
Debt Mgmt
Budget Formul.
PFMS Mgmt. Center I
State Customs ServiceT, P
IState Tax
AdministrationT, P
Core Treasury System
• General Ledger• Purch./Commit.• Accts Pay/Rec• Cash/Fund Mgmt• Fin. Reports• Acct for localities
Macro Econ Forec
Treasury / PFMSBCC + Data Warehouse
Statistics InstituteI P, RHR Mgmt/Pers DB
National Bank of Ukraine
TSA
27 Oblast Treasury Dept
640 Rayon Treasury Div
AS Kazna
I
Other Gov Agencies/Depts
T
Financial Reports
June 2006 PFMS 17
Typical PFMS Network Infrastructure
District #n
District #2
IP Network
Countrywide VPN
Regional / DistrictTreasury Office
PoP
PoP
PoP
MoF
PSTN
TC
TC
TC
TC
Dedicated line
Backup line
F/O conn.
BackupISDN-PA
District #1
District #2
District #n
District # 1
Dedicated lines(online connections)[e.g. Frame Relay]
On demand lines (online/offline)[e.g. Dial-Up or
ADSL]
All regional offices
Internet access
Line Ministries and Gov Agencies in KievInternet
PoP
FMIS+
BusinessContinuity
Center
PoP
Treasury
PoP
Backup
Internet
F/O conn.
F/O conn.
PFMS SystemCenter
RegionalTreasury Office
MAN
KievMetropolitan Area Network
State Property Fund
MoE - Public Procurement Dept
Main Civil Service Department
State Customs Service
State Tax Administration
Statistics Institute
Line Ministries & Departments
K R U (Internal Audit)
Other Related Gov Agencies
HRMIS
BudgetProcess
Revenues
Pro
cure
-Payro
ll-IA
Data
Exc
FMIS+
BusinessContinuity
Center
PFMS SystemCenter
Treasury / PFMSFMIS / Data
Warehouse + BCC
June 2006 PFMS 18
Central Servers and Field Hardware
Central servers (database and application servers) and main networking
equipment located at System Center (SC).
A disaster recovery solution is highly recommended. Treasury head office
(system center) can be connected to the Business Continuity Center (BCC)
through a separate fiber optic line.
BCC servers can be used to host the Data Warehouse (FMIS) to avoid
overloading of operational servers at system center.
Central network and system management tools.
Workstations, servers and peripherals for treasury district offices.
Information and Communication Technology
June 2006 PFMS 19
Information and Communication Technology
ApplicationServers
Treasury Head Office
TapeBackup
BusinessContinuity
Center
Cluster
Sys MgmtSys Admin
10/100/1000Switch
VPNRouter
Support
Call Center
Router
IP network
10/100/1000Switch
TapeBackup
FDA
Sys Mgmt Security Admin
Router
S D H
1000 Mbps
100 Mbps
100Mbps
Load Director
S D H
F/O Ring
F/ORing
LAN Backbone
WAN Backbone
F
F
F
Firewall
S D H
DBServer DBAS
S D H
FiberDiskArray
Load director
Typical System Centers and Central Servers
June 2006 PFMS 20
Treasury/PFM System Network Infrastructure Network solution for a web-based system [on-line operation]
All Treasury District Offices (TDOs) are connected to the central Treasury office
located at the center (usually within the MoF). A Virtual Private Network (VPN) is established to form a secure intranet in which all
public financial data can be transmitted in encrypted format. This VPN is also used as the main communication platform of the Treasury/MoF
offices by providing e-mail services, internet access and other utilities. Voice over IP (VoIP) services can be utilized to reduce internal telecommunication
costs of the Treasury/MoF offices.
Solution for the spending units of line ministries and local gov [off-line / on-demand]
Selected spending units and local gov units can be connected to nearest TDO through off-line or on-demand [e.g. Dial-Up (DU) or Asymmetric Digital Subscriber Line (ADSL)] connections to enter transactions and to get their financial reports.
ICT - Network
June 2006 PFMS 21
Information and Communication Technology
THO
IP Network
InternetRouterFirewall
Web & security serverWWW, FTP, Mail
DB and Application Servers
100 Mbps
S D H
S D H
Router
Router
AAAServer
10/100/1000Switch
Gatekeeper(VoIP)
Router
PSTN
Dial BackupServer
Router
VPNRouter
BCC
F/O Ring
PBX
Fax
Tel2 x PRI
H.323
Router
Digital Voice Router
LAN Backbone
WAN Backbone
NW management system
Network Security
VoIP System
HS Modem
MoF HO internal users
BusinessContinuity
Center
S D HS D H
Typical Central Network Equipment
June 2006 PFMS 22
Observations
Development of the core treasury system is an important milestone for the
implementation of a countrywide Public Financial Management System
(PFMS), which enables integration and exchange of information available in
various systems (e.g. Treasury, Tax, Customs, Central Bank) developed by
different agencies.
The Financial Management Information System (FMIS), as the main decision
support and monitoring system for public finance, is based on centrally available
information gathered from all important components of the PFMS.
Development time for a fully functional treasury system in some transition
economies and developing countries varies between 3 to 5 years. Large scale
implementations of the treasury systems may take even longer.
Total cost of ownership of treasury system implementation depends on a
number of factors, such as institutional capacity, scope, desired functionality,
number of users and implementation method.
June 2006 PFMS 23
PFMS Projects in ECA
June 2006 PFMS 24
PFMS Projects in ECA
June 2006 PFMS 25
PFMS Projects in ECA
June 2006 PFMS 26
Recommendations
Development of modern integrated PFMS according to the best practices is a
complex task, which should be designed as a separate project.
Implementation of such wide spread changes would require:
Government commitment and management support at the highest levels to
ensure that the change process is completed smoothly
Inter-agency coordination and user involvement in system design
Building institutional capacity and technical skills starting from the
preparation phase
Development of project management and technical support units within the
MoF/Treasury for implementation and sustainability of new systems