Treasury / Public Financial Management Systems in ECA An Overview of Treasury / Public Financial Management Systems in ECA Cem Dener PEM-PAL Workshop for Treasury Officials Ljubljana, Slovenia 26-27 June 2006

An Overview of Treasury/PFM Systems in ECA Presentation The “Big Picture” Public Financial Management Cycle PFMS components and functionality Technological architecture ECA Treasury/PFMS Projects Treasury/PFMS Development Indicators PFMS and e-Gov initiatives Conclusions 26-27 June 2006 An Overview of Treasury/PFM Systems in ECA

Comprehensive Development Framework The “Big Picture” Comprehensive Development Framework Long-term Holistic Vision Country Ownership Partnership Development Results Indicative National Plan – Country Strategy CDF Plans Budget Investment Plans Assistance UNDAF Programs CAS Standby (PRGF in LICs) CSP Indicative Prog Gov Program (PRSP in LICs) Implementation / Supervision / Evaluation PFMS 26-27 June 2006 An Overview of Treasury/PFM Systems in ECA

PFMS DB Public Financial Management Cycle 1 8 2 7 3 6 4 5 Policy Development and Review Budget Preparation Budget Execution 1 Audit and Evaluation Mgmt of Budget Authorizations 8 2 PFMS DB Budget Review & Fiscal Rep. Commitment of Funds 7 3 F M I S Web Publishing Procurement/ Purchasing Debt and Aid Management Payments and Receipts Mgmt 6 4 Asset / Inventory Mgmt 5 Cash Management Payroll Calcs HR Mgmt

The combination of above components is referred to as integrated PFMS Integrated PFMS Components Core Treasury System includes the following components: Budget Execution and Monitoring Accounting (general ledger, accounts payable and receivable) Cash Management Financial Reporting Commitment of Funds / Procurement / Purchasing Asset / Inventory Management 2 3 4 5 7 Operational support for Spending Units Other Public Financial Management System components: Macro Economic Forecasting Budget Preparation and Approval Debt and Aid Management HR Management /Payroll Calculations Support for Financial Control and Auditing Web publishing Financial Management Information System 1 6 8 4 7 The combination of above components is referred to as integrated PFMS

An Overview of Treasury/PFM Systems in ECA PFMS Functionality PFMS Module Common Implementation Options Macroeconomic Forecasting Existing Models / LDSW Budget Preparation LDSW / COTS Core Treasury System COTS + General Ledger + Accounts Payable Interface with banking system (TSA) + Accounts Receivable Interface with revenue collection + Purchasing / Commitment Interface with procurement agency + Cash / Fund Management Interface with banking system (TSA) + Financial reports + Asset / Inventory Management Operational support for SUs Interface for spending units (LDSW) Internal Debt management LDSW / Interface with Debt Mgmt System External Debt and Aid mgmt. Interface with Debt Mgmt System Personnel database (HR mgmt) LDSW / COTS Payroll calculations LDSW / COTS Support for Auditing Locally developed reports Management Information System COTS [ COTS : Commercial Off-The-Shelf Software LDSW : Locally Developed Software ] 26-27 June 2006 An Overview of Treasury/PFM Systems in ECA

web-based applications Information & Communication Technology Modern integrated PFM systems are designed and implemented as web-based applications Implementation of the PFMS includes the following ICT components: [0] Establishment of countrywide network connections (communications lines) as Government contribution [1] Development of web-based Application Software (ASW) as a combination of customized package + locally developed software [2] Installation of central servers (database & application servers) and data storage units (fiber disk arrays) at the main system center & business continuity center [3] Installation of standard field hardware (domain servers, user workstations and peripherals) in central and field offices [4] Installation of network equipment, system and user management and engineering support solutions Completion of countrywide network (physical) connections [0] by the Government is a precondition for signing the contracts with suppliers. 26-27 June 2006 An Overview of Treasury/PFM Systems in ECA

1 2 3 Technological Architecture A typical 3-tier web-based implementation and [ ICT ] components B C C 1 2 M S C [ 0 ] Wide Area Network [ 2 ] Central Servers [ 1 ] PFMS Application Software Database Server(s) Application Servers Internet Web Server PFMS DB Firewall MoF / Treasury District Offices [ 3 ] Field Hardware 3 On-demand lines for towns Collection Point (city center) Dedicated line Virtual Private Network Local Server Encryption Tunnelling [ 4 ] Network Equipment District Offices PCs / Thin Clients District Offices Spending Units MSC : Main System Center BCC : Business Continuity Center Spending Units

1 2 3 Web-based PFMS Model Application Servers Database Server User Terminals Web Server System Center Users PFMS COTS Budget Preparation Internal Access Core Treasury System General Ledger Purch./Commit. Accts Pay/Rec Cash/Fund Mgmt Fin. Reports COTS DB VPN MoF, TDOs, Central Line Ministries and Gov Agencies Asset/Invent Mgmt PFMS DB Org/Workflow Mgm External Access LDSW Opr sup for locals Web Portal Internet HR Mgmt/Pers DB Local finance directorates, local public authorities, municipalities LDSW DB Payroll Calcs. Internal Audit Interfaces Internal + External LDSW : Locally Developed Software COTS : Commercial Off-The-Shelf SW

An Overview of Treasury/PFM Systems in ECA ECA Treasury/PFMS Projects (WB funded) Completed [1994-2004] Hungary Treasury [1995-2002] Türkiye* PFMS [1999-2002] Kazakhstan Treasury [1994-2003] Ukraine Treasury [1997-2004] Implementation [1999-2009] Albania HR + Treasury [2000-2006] Slovak Republic Treasury [2003-2007] Azerbaijan Treasury [1999-2007] Kyrgyz Republic HR + Treasury [2002-2008] Russian Federation Treasury [1999-2009] Moldova PFMS [2004-2009] Georgia PFMS [2005-2009] Preparation [2006-2010] Ukraine PFMS [2005-2010] Tajikistan PFMS [2006-2010] 26-27 June 2006 An Overview of Treasury/PFM Systems in ECA

Implementation Procurement PFMS Design Preparation Readiness Treasury/PFMS Development Phases Effectiveness Maintenance and Support Budget support Technical support cap System admin & Maint 7 System development & integration Full scale testing and rollout Training and change management Implementation 5 9 – 18 months Procurement Large scale ICT systems Technical Assistance and Training 4 18 – 36 months Time 9 – 18 months PFMS Design Definition of system functionality Detailed technical requirements 3 Monitoring & Evaluation Monitoring mechanisms Project mgmt capacity PEFA 6 Preparation Legal and institutional frameworks Budget coverage Treasury Single Account (TSA) 2 Readiness PFM reform strategy Institutional capacity Countrywide network infrastructure 1 Resources

An Overview of Treasury/PFM Systems in ECA ECA Treasury/PFMS Development Indicators 26-27 June 2006 An Overview of Treasury/PFM Systems in ECA

An Overview of Treasury/PFM Systems in ECA ECA Treasury/PFMS Development Status 26-27 June 2006 An Overview of Treasury/PFM Systems in ECA

An Overview of Treasury/PFM Systems in ECA PFMS and e-Government initiatives U.S.A. 2005 - 2010 target ? Europe Effectiveness Türkiye 4 December 2005 PFMS Integration 3 Electronic government (e-Gov) Common use of public resources for all public services Restructuring common interactive operation platforms Transaction 2 All business processes performed electronically (e-Agency) Web based solutions and electronic voting (e-Election) Electronic procurement (e-Procurement) All services performed on-line Interaction 1 Electronic forms (e-Form) Electronic services (e-Service) Interactive query Benefits of developing online services (e-Service) in e-Gov applications: Proper and timely delivery of public services to citizens and businesses Rapid reduction in public expenditures Increased processing speed and information security Imptoved transparency and reliability Publish Organizational info Laws and regulations Info on services Publications, documents, stats Investment 26-27 June 2006 An Overview of Treasury/PFM Systems in ECA

An Overview of Treasury/PFM Systems in ECA Conclusions From Treasury to Integrated PFMS: Within the last decade, emphasis has been given to the development of integrated PFMS solutions after the initial Treasury development projects, based on the developments in Internet and secure web-based applications. Capacity building: Implementation of integrated PFMS solutions requires capacity building, proper training and professional technical assistance. PFMS vs e-Government: Integrated PFMS technical solutions should be designed and implemented as a part of e-Government strategy, if exist. Commitment and support: High level commitment and proper budgetary support is essential for the successful completion of PFMS implementations. Financial Management Information System: Integrated PFMS is not only a tool to increase operational efficiency, but also a key decision support tool for public financial managers. 26-27 June 2006 An Overview of Treasury/PFM Systems in ECA

Thank You An Overview of Treasury / Public Financial Management Systems in ECA Thank You PEM-PAL Workshop for Treasury Officials Ljubljana, Slovenia 26-27 June 2006