PIFRAPIFRA

IntroductionIntroductionThe Govt. of Pakistan took an initiative to The Govt. of Pakistan took an initiative to address the shortcomings of the financial address the shortcomings of the financial reporting system and to ensure good reporting system and to ensure good governance.governance.The IMF carried out a survey in The IMF carried out a survey in Government Accounting in early 1990s, Government Accounting in early 1990s, followed by a diagnostic study sponsored followed by a diagnostic study sponsored by the World Bank.by the World Bank.As a result, the Project to Improve As a result, the Project to Improve Financial Reporting and Auditing (PIFRA) Financial Reporting and Auditing (PIFRA) was introduced by the Auditor General of was introduced by the Auditor General of Pakistan in 1994.Pakistan in 1994.

Main ObjectivesMain Objectives

The main objective of this project is to The main objective of this project is to computerizecomputerize the whole accounting and the whole accounting and auditing system.auditing system.

Improve public sector Improve public sector accounting and accounting and financial systemsfinancial systems

Provide basis for enhancing public sector Provide basis for enhancing public sector accountabilityaccountability

Support improved Support improved institutional capacityinstitutional capacity for for economic policy-making and management economic policy-making and management country.country.

There are three main things which a There are three main things which a common govt. employee comes to common govt. employee comes to an accounts office for, viz. salary, an accounts office for, viz. salary, general provident fund and pension. general provident fund and pension. Our experience shows that in the old Our experience shows that in the old system a common man had a series system a common man had a series of unlimited problems and hurdles to of unlimited problems and hurdles to face in order to get his financial face in order to get his financial claim. but with help of PIFRA it is claim. but with help of PIFRA it is easy to fulfill the financial claim. easy to fulfill the financial claim.

PIFRA ComponentsPIFRA ComponentsGovernment Accounting and Government Accounting and

Financial Reporting:Financial Reporting:

Development of accounting standards, Development of accounting standards, reporting systems and financial reporting systems and financial procedures conforming to procedures conforming to international accepted principles and international accepted principles and computer based financial system computer based financial system based on complacent to based on complacent to internationally recognized standards.internationally recognized standards.

Government AuditingGovernment Auditing: : Focus on audit systems improvement and systems Focus on audit systems improvement and systems

development including development including

Audit Standards and Techniques Audit Standards and Techniques ::1.1. Prepare guidelines for the introduction of Prepare guidelines for the introduction of

international auditing standards. international auditing standards. 2.2. Introduce modern auditing techniques and Introduce modern auditing techniques and

concepts. concepts. 3.3. Review PAD’s audit policies, processes and Review PAD’s audit policies, processes and

procedures, output, workload, efficiency and procedures, output, workload, efficiency and quality assurance for the audit functions. quality assurance for the audit functions.

4.4. Advise on methodology to enhance PAD’s Advise on methodology to enhance PAD’s communication with stakeholders, for internal communication with stakeholders, for internal audit of PAD’s systems under development. audit of PAD’s systems under development.

Administrative tool:Administrative tool: Provision of hardware and audit software for audit Provision of hardware and audit software for audit

planning, sampling and documentation as well as planning, sampling and documentation as well as for audit of automated accounting systems. for audit of automated accounting systems.

Capacity Development : Capacity Development : consultancy to support revised human resource consultancy to support revised human resource

management procedures through international management procedures through international training in a modern financial system environment training in a modern financial system environment and through arranging attachments with other and through arranging attachments with other Supreme Audit Institutions. Supreme Audit Institutions.

Use of Private Sector FirmsUse of Private Sector Firms:: Assistance with developing modality for utilizing Assistance with developing modality for utilizing

private sector firms and finance for private audit private sector firms and finance for private audit firm’s fees. firm’s fees.

Human Resource ManagementHuman Resource Management1.1. Involves organization and systems Involves organization and systems

development. development. 2.2. To reflects needs for increased To reflects needs for increased

professionalism and specialization. professionalism and specialization. 3.3. Consultant Assistance. Consultant Assistance. 4.4. Managing the process for change.. Managing the process for change.. 5.5. Preparation of job descriptions and Preparation of job descriptions and

performance standards. performance standards. 6.6. Installing an MIS system for HRM Installing an MIS system for HRM

planning and monitoring. planning and monitoring.

ImplementationImplementation There are number of functionalities There are number of functionalities

available in this ERP, which are available in this ERP, which are highly flexible in nature and can be highly flexible in nature and can be modified according to the modified according to the requirements of the particular requirements of the particular organization. Keeping in view the organization. Keeping in view the requirements at the country level, requirements at the country level, the Govt. of Pakistan has purchased the Govt. of Pakistan has purchased three most essential modules of SAP. three most essential modules of SAP.

Basis (System Administration) ModuleBasis (System Administration) ModuleThis module covers the overall system This module covers the overall system

administration. The user authorization, the administration. The user authorization, the working of the main servers, the roles of working of the main servers, the roles of particular users, the connectivity between all particular users, the connectivity between all the sites in the country and various server-the sites in the country and various server-related issues are covered in this module. related issues are covered in this module.

Financial ModuleFinancial Module This module covers the financial side of the This module covers the financial side of the

system. The generation of various financial system. The generation of various financial reports, like monthly, quarterly and annual reports, like monthly, quarterly and annual accounts, etc.; the budget preparation and accounts, etc.; the budget preparation and maintenance and expenditure booking into the maintenance and expenditure booking into the system, project & commitment accounting are system, project & commitment accounting are some of the tasks which are performed using some of the tasks which are performed using this module.this module.

Human Resource (HR) ModuleHuman Resource (HR) Module

In HR module, the update record of In HR module, the update record of the employee, the updated GP Fund the employee, the updated GP Fund account, its calculation and payment; account, its calculation and payment; the pension/commutation calculation the pension/commutation calculation and payment; and salaries of the and payment; and salaries of the govt. employees are operated govt. employees are operated through the system. through the system.

Targets AchievedTargets Achieved In order to achieve the targets of PIFRA, In order to achieve the targets of PIFRA,

New Accounting Model (NAM) was New Accounting Model (NAM) was introduced to replace the old accounting introduced to replace the old accounting practices.practices.

The Salient features of NAM are:The Salient features of NAM are: Integration of Budget & Expenditure Flow Integration of Budget & Expenditure Flow Accurate and Timely Reporting Accurate and Timely Reporting Cash Forecasting Cash Forecasting International Credibility International Credibility Assets will be recorded Assets will be recorded Commitments will be Recorded Commitments will be Recorded

Future prospectsFuture prospectsThe idea behind computerizing the The idea behind computerizing the

whole system is to generate timely whole system is to generate timely accurate and reliable financial accurate and reliable financial statementsstatements

to monitor fiscal deficit;to monitor fiscal deficit; to forecast flow of cash;to forecast flow of cash; to manage public debt and to to manage public debt and to

achieve effective financial controls. achieve effective financial controls.