Intergrated Financial Manangement Information Systems

BUSINESS CASE

GOVERNMENT OF ZIMBABWE

JUDITH MADZORERA

ACCOUNTANT GENERAL

Windsor Golf & Country Club Resort, Nairobi, Kenya, November 8-12, 2004

Government of Zimbabwe IFMIS

2

Agenda

Change Drivers/Challenges

Reform initiatives

Effect of challenges

Solution to the problem

Requirements

Benefits

Lessons learnt

3

Finance management and Reporting problems

Regular overspending against budget

Parliamentary Public Accounts Committee and other stakeholders. (Failure, late submission of financial reports).

Change drivers/challenges

4

Change drivers/challenges

Persistent carry over of expenditures

Increased financial related frauds

Failure to pay suppliers on time

5

Change drivers/challenges

Cash management

Bank reconciliations not up to date

No action/follow up on dishonoured cheques

Foreign payments not charged to the Government expenditures

Charges and penalties on outstanding payments

6

Change drivers/challenges

System

Centralised Bureaux Based Data Processing Unit

Centralised programming support and services systems based on WAN or MAN none existent

Delays due to old generation language and outdated IT infrastructure

7

Reform initiatives

Economic Reform Programmes, ESAP and ZIMPREST

Parliamentary Reform

Public Service Reforms

8

Reform initiatives

Governance issues

Transparency and Accountability

Value for money

Decentralisation and empowerment

9

Effect of challenges

No real time reports and overview of budget and expenditure

Payment for services not rendered/increased fraud

Integrity of government accounts were being questioned

Stakeholder losing confidence in Government’s ability to manage public funds

10

Effect of challenges

Lack of information to make informed and timely decisions

Following year budgets being committed before hand

Suppliers refusing to provide to Government on credit/being charged high premiums.

11

Solution to the problem

Re- engineer the way Government carried out its business:

Introduce a computerised accounting and financial management system which is :

Efficient

Effective

Economic

12

Solution to the problem

Easy to use

Quality information to make informed decisions

Connecting Treasury with all Line Ministries for

Monitoring

Supervision

Control expenditures

Real time financial and management information.

13

Requirement by GOZ

To design and introduce a Public Financial Management System

The system was to be implemented on modern accounting package software that has been tried and tested in the global market place.

Government was seeking a genuine partnership with the selected solution provider to ensure that the solution is implemented effectively.

Own funding.

14

Public Financial Management System

Approved the introduction of SAP Enterprise Resource Planning (ERP) system

Adopted modified accrual accounting

Need to decentralise

15

ZIMBABWE IFMIS GENERAL INFORMATION

Population: 13.2 million

Ministries : 22

Ministries rolled out: 22 including

provincial sites

Districts to be

covered

year beginning

2005

Orgn of Accounting: Each ministry

own a budget with central

control of monthly usage

16

BULAWAYO

GWERU

HARARE

BINDURACHINHOYI

MASVINGO

MARONDERA

MUTARE

GWANDA

KWEKWE

CHEGUTU

ZIMBABWE IFMIS BACKBONE INFRASTRUCTURE

KeyTX Link

2M Connectivity

64K Connectivity

17

Public Financial Management System

Modules selected

Material Management

Procurement

Inventory Management

Revenue/Sales and Distribution

Cash Management

18

Public financial management system

Financial Accounting

Accounts payable

Accounts Receivable

General ledger

Assets Management

Funds Management /Planning and Budget

19

Benefits accruing from PFMS

Elimination of non value adding activities such as data entry duplication/data captured at source

Information sharing and access

Reduction in administrative overheads/ elimination of paper returns and payments

Allowing focus on analysis rather than transactional issues

20

Benefits accruing from PFMS

Improved service delivery and payment to suppliers/cutting on bureaucratic processes of approval

Simple and easy to use integrated modules/value for money

Better management of inventories

21

Benefits

Confidence in the Government financial accounting and management system /improved GOZ image

Development of ICT infrastructure

Real time/on line information for decision making purposes

Improved productivity and better planning (Catalyst for Development)

Improved communication within Government – use of internet, e-mail etc.

22

Lessons learnt

Need for High Level Commitment- strong political and administrative leadership

Need for a credible institutional and legal infrastructure – tendency to operate outside system

Human Resources Needs

Key skills, knowledge and attitude to drive the change

Continuous training

Strategies for retention

23

Lessons learnt

Clarity of business processes critical for system modification – Development of the appropriate classification

Involvement of Internal and External Audit in project preparation

System security issues and back up arrangements

User Ownership

Transformation of existing culture

Appropriate Infrastructural Support Telecoms Technical Support

24

THANK YOU