Case Study: Automation of
Treasury Department In Karnataka Government
Presented To:
Mr. A.T. M. JakariaKhan
Lecturer, Institute of Business Administration
University of Dhaka
Presented By:
Md. Ariful Haque, Roll- 18, Batch -52D
Md. SohanHaidearSiraji, Roll- 19, Batch -52D
Government established in 1964
216 treasuries functioning across the state
31 treasury offices and 185 sub-treasury offices
Annual Budget over Rs27,000 crores
STATE GOVERNMENT
FINANCE DEPARTMENT
DIRECTORATE OF TREASURIES
DIST TREASURY 1
SUB TRY 1
D T 2 D T 31- - - - - - - - -
SUB TRY 2 - - - - - - SUB TRY 185
State government transactions
Salary Payment to 3,00,000 state employees
Pension payments to 1M+ widows, disabled people and retirees.
Transaction services to 4500 village administrators (panchayats)
Lack of accountability, transparency and responsibility
Long delays in payment
Inefficiency in Information system management
Lost trust among service takers for Fraud
Manual operations required huge paper records
Huge delay in updating budget and issuing payments
Required large human resources (around 300) only for budget allocation and financial calculations.
Involves expenses classification errors
Suffers data redundancy and inconsistency
Basic Information:
An integrated financial management system
Developed by CMC, a TATAenterprise
Became fully operational in 2003
Technical Specification:
Software: Oracle 8i as the Relational DBMS
Disaster management: Oracle standby database technology
Security: Password-based and role-based access
Architecture: Consists of satellite segment, hub and remote VSAT terminals
Centralized Database
Real Time Data update
Eliminate data redundancy and inconsistency
High efficiency, transparency and accountability
Facilitates electronic tracking stamp for bills
Maintenance of Bill Process Log for transactions
Eliminate payment processing delay
Online transactions, balance checking
Automated customer service hotline and IVR
Has Category at the Ninth National Conference on e-Governance at Kochi on February 2, 2006
Q-1: Why was it so difficult for the departments of treasury to manage its operations?
Millions of transactions and approvals daily
Constant monitoring of budget allocations to avoid overspending
Lack of proper control and transparency
Mountains of paper records during year end financial audit makes employees overburden
With nearly 100 departments sent their bills to treasury, it involves huge delays in consolidating information, updating the budget and payments
What kind of challenges did the department encounter when implementing Project Khajane? What management, organization and technology issues had to be addressed?
2000 Employees had to be trained most of whom were never exposed to using Information Systems before
A core team of 25 officers was trained thoroughly by CMC team regarding the use of the application software, preparation of accounts, system administration, etc.
At least one experienced officer was included in this core team from each district. They acted as nodal officers for training at the districts
About 1400 staff members were trained in the basics of computerization, mainly data entry and 600 officials on use of application software
About 75 officials were imparted with system administrator training
Refresher courses were provided for better retention
Elaborate study of the existing system and deficiencies in it by a committee headed by the secretary (Resources) had to be done
Defining the best practices: A Team of officers from finance and treasury studied the Andhra Pradesh, Maharashtra, Tamil Nadu, and West Bengal treasury practices
Finding and eliminating Redundant Processes
The number of drawing officers was brought down to around 21,000 from 40,000 as redundant processes were cut
The nightmare of updating the software versions in an application containing 630 forms, 800 tables and nearly 300 reports without the support of an efficient network could become a nightmare
The pilot testing of the application software was carried out in 5 sites, which covered all types of treasuries
The feedback from the pilot run carried out for 6 months was used to modify the software suitably.
Networking of all the treasuries were great boon as hundreds of minor and major modifications, bug fixings and enhancements were carried out centrally, immediately all other fields would get updated
How did Project Khajaneimprove Decision making and operations for the department? Are there benefits to vendors, employees and pensioners?
Managers can use the online system to check budgets and expenditures
So decision can be made about releasing funds
System controlled budget check ensures that managers can focus less on control and have more time for Decision making
Reports from all treasuries are now accurate, uniform and easy to consolidate- so decisions made are also reliable
It generates state-wise/district -wise MIS reports from the central server
Bottleneck and Delay Payments have been removed
Before,100% reconciliation of expenses to the
accurate
Overdrawing never takes place anymore
Freed up most of the 300 employees who used to handle classification and consolidation of budget allocation tasks and make related financial calculation; now they are working on other tasks
From 45 days, now it takes 2 days for bill receiving at the Finance Department
Directorate can prioritize bill payments based on a first-in, first -out rule
No more bottleneck and delay payment for customers and pensioners
Occurrences of Fraud dropped substantially
automatically performs audit on entries
No of complaints has reduced, both from vendors & other departments
Vendors can now check their payments by using their unique tracking numberand talking to Interactive Voice Response
As a result, there is no longer a queue of vendors in front of office
Cost Item System Stat Drawing
Disbursement
Officer
Payee
Number of
Trips
Manual Mean 2.706 2.115Computerized Mean 1.624 1.216
Waiting Time
(Minutes)
Manual Mean 63.157 60.058Computerized Mean 21.759 24.667
Amount of Bribe
Paid (Indian Rs.)
Manual Mean - 233Computerized Mean - 0
Other Amount
Paid to
Intermediaries
Manual Mean - 332.857Computerized Mean - 0
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