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PIFRA1
PIFRAproject to improve financial reporting and auditing
PIFRAPIFRAproject to improve financial project to improve financial reporting and auditingreporting and auditing
Khuram Farooq, PMPKhuram Farooq, PMPnn Director PIFRADirector PIFRA
khuramf@pifra.gov.pkkhuramf@pifra.gov.pkDecember 2, 2007December 2, 2007
PIFRA2
1 Context
2 Vision
3 NAM- New Accounting Model
4 Technology
AgendaAgendaAgenda
5 Progress
6 Next Challenges
7 Lessons
PIFRA3
1 Context
2 Vision
3 NAM
4 Technology
AgendaAgendaAgenda
5 Progress
6 Next Challenges
7 Lessons
PIFRA4
Good Governance-A new ParadigmGood GovernanceGood Governance--A new ParadigmA new Paradigm
Good Governance
Civil Services Reforms•Professionalism•Pay and remuneration•Executive Development
Legal,Judicial Order•Action for Justice•Judicial Independence•Judicial Strengthening
Financial Management Reforms•Accurate,Timely reporting, Improvedaudit systems, Strengthened controls•MTBF•Devolution Support Program
Economic Policy•Deregulation•Tax Admn Reforms•Liberalization
PIFRA5
1 Context
2 Vision
3 NAM
4 Technology
AgendaAgendaAgenda
5 Progress
6 Next Challenges
7 Lessons
PIFRA6
MODIFIED CASH BASISACCOUNTING
CASH BASED ACCOUNTING
ACCRUAL ACCOUNTING
International Public Sector Accounting Standard (IPSAS II) Compliance
IPSAS IICASH BASIS ACCOUNTING
PIFRA7
ObjectivesObjectivesObjectives
Strengthened internal controls- Increased trust and confidence
Audit: risk-based approach, better quality- Improved support for legislative oversight through PAC- Strengthened accountability framework- Increased confidence in audit process
R/3 other
nnFinancial informationFinancial information--Accurate,TimelyAccurate,Timely--Efficient resource management/Efficient resource management/Timely input for policy makersTimely input for policy makers
----Improved fiscal spaceImproved fiscal space--Increased international credibilityIncreased international credibility--Improved Investor ConfidenceImproved Investor Confidence
International Standards ComplianceInternational Standards Compliance•• IPSAS II and GAAPIPSAS II and GAAP••IASIAS••GFSGFS
‘‘Compliance to international Compliance to international standards reduces corruptionstandards reduces corruption’’
John Hopkins University Research John Hopkins University Research 20072007
PIFRA8
PIFRA II: DesignPIFRA II: DesignPIFRA II: Design
PIFRA II
$ 94 m
FABS
(Financial Accounting and
Budgeting System)
NAM
Capacity Building
Of
OAG
(Office of the Auditor General)
FAM
Capacity Building of
CGA
Controller General
Of Accounts
Project Management
Support
AGP/CGA/MOF
PIFRA9
Process- New Accounting/Auditing Model/Internal Audit
ImplementationImplementation-- Technology and Capacity BuildingTechnology and Capacity Building
RestructuringRestructuring
Separation of Audit and Accounts
Basic ConceptBasic ConceptBasic Concept
CGA and AGP Ordinance 2001
PIFRA10
Financial Accountability Cycle and PIFRAFinancial Accountability Cycle and PIFRA
Fundsauthorization
AuditReport
AG
P Line D
epartments
MOF/Legislature
CGAFinancial Reporting
Execution
Process Technology PoliciesPeople
PIFRA11
Vision- Financial Reporting by CGAIntegrated, On-line, Real-Time, Govt-wide, multi-tieredVisionVision-- Financial Reporting by CGAFinancial Reporting by CGAIntegrated, OnIntegrated, On--line, Realline, Real--Time, Time, GovtGovt--wide, multiwide, multi--tieredtiered
DAO/TMAs
DAO/TMAs
DAO/ TMAs
District/Sub District/Sub districtdistrict
ProvincialProvincial
FederalFederal
DAOsDAOsDAOs
AG
AGPR
CGA
Roll up
and
Roll up
and
aggr
egati
on
aggr
egati
on110
4
PIFRA13
Vision and System Landscape-Financial ReportingVision and System LandscapeVision and System Landscape--Financial ReportingFinancial Reporting
Finance Department, Punjab
Ministry of Finance Islamabad
CGA
AG Punjab
DAO’s
PIFRA14
Vision- Online reports (PSDP)VisionVision-- Online reports (PSDP)Online reports (PSDP)
130
286
127
154
94
18 90
20
40
60
80
100
120
140
Sites
OB Exp Release OB Exp
KPP
Tax
Ref
orm
s Pr
ojec
t
PIFR
A
PIFRA15
EAD
NBP/SBP
DefenseDistrict Government
Accounts
CBR
Self Accounting
Entities
Planning
Line Ministries
•Finance (Budget)•DAO/AG/CGA
Scope and ContextScope and ContextScope and Context
Railways
•District Government Accounts
District Finance Offices
PIFRA16
Vision – Govt. wide IFMISVision Vision –– Govt. wide IFMISGovt. wide IFMIS
CBR
Public Administration
Justice
PublicUtilities
EAD
Education
Interior
Public Security
BANK
PIFRA FABSSystem
Health
PC
SAE
Public Broadcasting
140 Line Ministries
PIFRA17
Volumetric ChallengeVolumetric ChallengeVolumetric Challenge
140 Line Ministries
5000 SAP users
2.5 Million Payroll
110 DAO
110 EDO Finance
600 plus Banks
29000 DDOs
4 Interfaces(SBP, CBR, PC, EAD)
IT Support Centers- 5SAP CC
Rs. 1.8 trillionTo track
PIFRA18
1 Context
2 Vision
3 NAM
4 Technology
AgendaAgendaAgenda
5 Progress
6 Next Challenges
7 Lessons
PIFRA19
2 Receipts
3 General Ledger Adjustments
4 Budgeting
5 Aggregation and Reporting
6 Fixed Assets
8 Cash Forecasting
1 Commitments and Payments
Business Process-FinancialBusiness ProcessBusiness Process--FinancialFinancial
9 Development Projects
7 Banking
PIFRA20
10 Payroll
11 General Provident Fund
12 Pension
13 Staff Expenses
Business Process-HRBusiness ProcessBusiness Process--HRHR
PIFRA21
DG HealthDG HealthPurchase of Medicine 100,000Purchase of Medicine 100,000
Entity
Object
Fund (Grant)
Function
Five Dimensional Chart of Accounts
Program
GFS Compliant GFS Compliant Reports through mapping
Constitution
PIFRA22
Single Entry System
2 Commitments No Commitments
3 Fixed Asset No fixed Asset
No liabilities
1 Double Entry System
New Accounting ModelNew Accounting ModelNew Accounting Model
4 Liabilities
New Accounting Model
5 New Chart of Account Old Chart of Account
6 Integrated System Isolated Systems
Old System (Legacy)
PIFRA23
1 Context
2 Vision
3 NAM
4 Technology
AgendaAgendaAgenda
5 Progress
6 Next Challenges
7 Lessons
PIFRA24
Technology to Support the NAMTechnology to Support the NAMTechnology to Support the NAM
nn ERP TechnologyERP Technologynn SAP R/3SAP R/3nn Functional specifications, Technology architectureFunctional specifications, Technology architecture-- Evaluation Evaluation
CriteriaCriteriann International Competitive BiddingInternational Competitive Bidding-- Two stage bidTwo stage bidnn Technically compliant, lowest Technically compliant, lowest
nn ERPERP-- WhatWhatnn Enterprise Resource PlanningEnterprise Resource Planningnn Integrated Functional EnvironmentIntegrated Functional Environment
PIFRA25
Payments
HR/Pay Roll
Integrated Information SystemIntegrated Information SystemIntegrated Information System
Special and TechnicalInformation (incl. Data Fusion)
MangementInformation
Accounts
Fiscal Reporting
Finance
Management-relevantInformation
PIFRA26
1 Context
2 Vision
3 NAM
4 Technology
AgendaAgendaAgenda
5 Progress
6 Next Challenges
7 Lessons
PIFRA27
Rapid Implementation to cover delaysRapid Implementation to cover delaysRapid Implementation to cover delays****
Jan Jan 0202
May May 0505
Num
ber o
f N
umbe
r of
Pro
duct
ive
Site
sP
rodu
ctiv
e S
ites
Jul Jul 0303
0
3030
7070
SepSep0606
470470......
PIFRA28
Productive Sites- Province WiseProductive SitesProductive Sites-- Province WiseProvince Wise
28 28
39
20
37
9
30
50
5
10
15
20
25
30
35
40
Sites
NWFP Punjab Sindh Baluchistan
NW
FP
Punj
ab Sind
h
Bal
uchi
stan
PIFRA29
PIFRA Pilot SitesPIFRA Pilot SitesPIFRA Pilot SitesA
A
B
C
C
BAC
A
B
B
BE
A
CB
CGAMoFAGPR
AG PeshawarFD PeshawarAGPR-SO PeshawarDAO AbbottabadAAO GhalanaiDAO SwatDAO Gilgit
AG PunjabFD PunjabDAO Faisalabad
AG BalochistanFD Balochistan
AG SindhFD SindhDAO HyderabadDAO Uthal
D
D
E
PIFRA30
Rollout and Replication SitesRollout and Replication SitesRollout and Replication Sites
B
C
B
C
A
A
B
C
C
BAC
A
B
B
BE
A
CB
B
BBB
B
B
B
B
B
B
C
CC
C
C C
C
C
CC
C
C
C
C
C
C
C
C
D
DDD
D
D
D
D
D
D
D
D
D
DD
D
D
DD D
D
D
D
D
DD
D
D
D
D
D
D
D D
D
DDD
D
D
D
E
E
EE
EEE
E EE
E
EE
EE
E E EE
E
E
E E
E E
E
E
E
E
D
E
E
E
E
Missing:
D Bunair / DaggarE Tank
E
PIFRA31
Outcome Indicators FABS-Roadmap Outcome Indicators FABSOutcome Indicators FABS--Roadmap Roadmap
May 2005PIFRA I
30 Sites
25 sites
Aug 06 Nov 06 Dec 07
All NWFP +30 % Punjab)
All Punjab/Sindh
Baluchistan….
Dec 08?
PIFRA32
Resource Person/Cou
nterpart
End Users Site 1
PIFRA/Consultants
Sustainability, Ownership, Support Sustainability, Ownership, Support Sustainability, Ownership, Support
End Users Site 2….n
Knowledge transfer of consultants through our own qualified personnel to field offices
PIFRA33
Training Training Training
nn Over 80 Master TrainersOver 80 Master Trainersnn Training on New Chart, NAMTraining on New Chart, NAMnn Over 29,000 Over 29,000 DDOsDDOs TrainedTrainednn Training labs at provincial HQ for system trainingTraining labs at provincial HQ for system trainingnn Training NAM/SAP for SitesTraining NAM/SAP for Sites--2000 SAP Users2000 SAP Usersnn Roll Out Training continuing through master trainersRoll Out Training continuing through master trainers
PIFRA34
1 Context
2 Vision
3 NAM
4 Technology
AgendaAgendaAgenda
5 Progress
6 Next Challenges
7 Lessons
PIFRA
SAP IntroductionSAP IntroductionCreative Usage
Creative Usage
ResistanceResistanceBoycottBoycottR
esul
ts /
Suc
cess
/ P
erfo
rman
ceR
esul
ts /
Suc
cess
/ P
erfo
rman
ce
q Organizational Structureq Workflowq Cooperation / Communicationq Qualification / Competencies
Old SystemsOld Systems
Stagnation IntegrationChange
Management
Goal: Creative Usage via constant Change ManagementGoal: Creative Usage Goal: Creative Usage via constant Change Managementvia constant Change Management
Conservative UsageConservative Usage
PIFRA36
Domains of ChangeDomains of ChangeDomains of Change
Technology
Business Process Change (adopt
new processes)
Re-structuring
Coverage
Capacity Building
The human dimension
PIFRA II
PIFRA37
Next Challenges: Leverage IT InvestmentsNext Challenges: Leverage IT InvestmentsNext Challenges: Leverage IT Investments
Data Data
Adopt New ProcessesAdopt New Processes
Use the system Use the system –– Continuous TrainingContinuous Training
PIFRA38
Next Challenges: DataNext Challenges: DataNext Challenges: Data
Budgeting data at spending levelBudgeting data at spending level
Project wise dataProject wise data
GP Fund RecordsGP Fund Records
Pensioner DataPensioner Data
Debt wise detailed dataDebt wise detailed data
PIFRA39
Next Challenges: Adoption of new processessNext Challenges: Adoption of new Next Challenges: Adoption of new processessprocessess
Project Accounting Project Accounting RsRs. 520 B (370+150). 520 B (370+150)
Debt Accounting Debt Accounting RsRs. 1186 un. 1186 un--reconciled! reconciled!
CBR Treasuries and receipt accounting CBR Treasuries and receipt accounting RsRs. 1 trillion. 1 trillion
Commitment AccountingCommitment Accounting
MTBFMTBF
Bank reconciliationBank reconciliation
BER (Budget Execution Report)BER (Budget Execution Report)
PIFRA40
Monitoring and Evaluation:Business BenefitsMonitoring and Evaluation:Business BenefitsMonitoring and Evaluation:Business Benefits
Defined Benefits TargetDefined Benefits Target-- BenchmarksBenchmarks
Benchmarks linked to specific strategic objectivesBenchmarks linked to specific strategic objectives
Measured baseline in key PFM areasMeasured baseline in key PFM areas
Assigned Benefits owner to major benefit areaAssigned Benefits owner to major benefit area
Tracking benefits through constant updatesTracking benefits through constant updates
Defined strategic objectivesDefined strategic objectives
M & E Framework: Consistent FrameworkM & E Framework: Consistent Framework
PIFRA41
1 Context
2 Vision
3 NAM
4 Technology
AgendaAgendaAgenda
5 Progress
6 Next Challenges
7 Lessons
PIFRA42
Lessons LearntLessons LearntLessons LearntProject Culture vs Bureaucracy
Change ManagementChange Management-- Executive Led/Executive SponsorExecutive Led/Executive Sponsor
Buy-in of power users and stakeholders- involvement
Measure BaselineMeasure Baseline
Project Management teamProject Management team--Professional, PM mindsetProfessional, PM mindset
Align HRM policies (career, rewards) with ProjectAlign HRM policies (career, rewards) with Project
Continuous support without getting into political debateContinuous support without getting into political debate
Governance Structure to monitor business benefits
PIFRA43
SummarySummarySummary
70 FABS sites productive through ERP solution
2000 End Users trained on SAP R/32000 End Users trained on SAP R/3
Federal, provincial, district Federal, provincial, district govtsgovts on new COAon new COA
29000 DDOs trained on New Chart of Accounts
All NWFP onAll NWFP on--lineline
Separation of Audit and Accounts
Development of New Accounting/Auditing Model
Plan for onPlan for on--line reporting of all Punjab, line reporting of all Punjab, SindhSindh Dec 07Dec 07
PIFRA46
PIFRA IIPIFRA IIPIFRA II
FABS, 48.742OAG, 19.345
CGA, 18.471PM, 6.446
Total $ 94 m (WB $ 84; GOP $ 10 m)
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