Punjab resource management programme; intervention in finance department
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Transcript of Punjab resource management programme; intervention in finance department
Punjab Resource Management Program;
Interventions in Finance Department
Jean-Marc Lepain, Public Finance Specialist Crown Agents DFID – TAMA
September 2010
Overall Strategy
• To build on Phase 1 achievements
• To build on the Strategic Vision already developed
• To take a medium term view of what need to be achieved and to move forward that goal;
• To aim at the maximum level of integration all the project components and deliverables
• To consider systematically and in an integrated manner information flows, processes, systems and organization
Activities that need to be carried over
• Implementation of SAP templates
• Further developments and fine-tuning of the Revenue Forecasting Model;
• Implementation of measures for the reduction of the number of supplementary grants;
• SAP/R3 training
Issues: How much technical assistance is needed for these activities?
Reformulating Project Components and Areas of Intervention
• Fiscal Sustainability and Resource Management
• Budget Execution and Reporting
• Organizational strengthening and capacity building
I. Fiscal Sustainability and
Debt Management
Objectives
• To move in 3 to 5 years to a completely integrated suite of system and processes from MTBF to Debt Management
• To move from fire fighting mode to proactive management of cash resources,
• To improve budget credibility
Revenue Forecasting Fiscal Policy
Cash Management Cash Management
Debt Management
Strategy Debt Management
Cash Management / Borrowing
Policy
Business Processes and Information Flows
Revenue Forecasting
• Must be disaggregated by month
• Must integrate provincial revenues
• Must be in line with the MTBF
Why Cash Management ?
• To use cash management as the integrating factor of resource management;
• To move from cash balance management to cash flow management to add predictability to budget execution;
• To use cash management as a linking factor between fiscal policy and debt management through the borrowing policy;
• To contribute to the smooth implementation of fiscal policy
Strategy
Cash Management must be developed in two phases:
• Cash flow management based on budget,
historical trends and data available from SAP/R3
• Cash planning based on cash-plans prepared by
line-departments (could be done on a pilot basis,
or outside the project scope)
Deliverables
• Annual cash plan prepared in advance of the fiscal year, setting out projected cash inflows and cash outflows month by month;
• Three-month rolling projection revised month by month;
• One month projection revised on a weekly basis including daily projection for the week.
• Clear set of rules for prioritizing daily expenditures;
• Linkage with commitment management.
Debt Management
• Debt Management Strategy including strategy for managing overdraft;
• System requirements
• System implementation
• Training
II. Internalization of the MTBF
Budget Execution and Reporting
Two aspects of internalization
• Downstream (after consolidation of sector MTBF)
• Upstream (before consolidation of sector MTBF)
Down Stream
Mainly the responsibility of PGEIP
• Introduction of sector ceilings
• Fiscal Policy Paper
• One single budget call circular
• Porting the MTBF on SAP/R3 for reporting purpose
Upstream • Budget Execution Review Report (mid-year and end-of-the year) to
detect misalignments and bottlenecks in previous budget;
• Strengthening sector policy analysis including the development of ‘Sector Profile’ and ‘Sector Policy Review’ for benchmarking the sector MTBS and covering non-MTBF departments;
• Checking credibility of sector MTBFs against Medium Term Development Plans and sector policies;
• Using consolidation process of sector MTBFs for adjustments;
• Using the MTBF for projecting different fiscal envelopes for new development schemes.
• Drawing consequences of the introduction of new functions on the organizational structure and workflows.
Extension of SAP/R3 Reporting Capacity and internalization
• A systematic gap analysis must be conducted to identify reporting limitations and negotiations must be started with PIFRA for customization;
• Phase 1 templates must be implemented;
• A clear IT strategy is required (SAP/R3 is not a budget preparation tool).
Commitment Management
• Revision of the process for commitment management and commitment control appears necessary;
• Role of SAP/R3 in commitment management must be expended;
• Linkage with cash management must be established.
Disbursement Management
• Introducing predictability
• Streamlining control process while making them more efficient by integrating all stages of expenditure control;
• Improving linkage with accounting, reporting, cash management through a better use of SAP/R3.
THANKS