1 Government Integrated Financial Management Information System Dr. Jesse Hughes, CPA, CIA, CGFM Professor Emeritus of Accounting Old Dominion University

2 INTRODUCTION Stages for System Development Best Practices Assessments Government Operations Economic Enterprises Whole-of-Government Coding Structure Information Technology Training Action Plan Strategies

3 STAGES FOR SYSTEM DEVELOPMENT Assessment Design Procurement Implementation

4 BEST PRACTICES International Public Sector Accounting Standards (IFAC) Government Finance Statistics Manual (IMF) Other Country Experiences

SPECTRUM FOR ACCOUNTING SYSTEM DEVELOPMENT

7 GOVERNMENT OPERATIONS Cash Based System for Budgetary Control Accrual Based System for Financial Statements Links to Other Systems Procurement Personnel Pensioners

8 GOVERNMENT OPERATIONS Standard Chart of Accounts Statement of Financial Position Statement of Financial Performance Statement of Changes in Net Assets Statement of Cash Flows Eliminate Intra-Group Transactions to Prevent Double-Counting during Consolidation

9 ECONOMIC ENTERPRISES Standard Chart of Accounts Balance Sheet Income Statement Statement of Changes in Equity Statement of Cash Flows Eliminate Intra-Group Transactions to Prevent Double-Counting during Consolidation

10 WHOLE-OF-GOVERNMENT Standard Chart of Accounts Consolidated Statement of Financial Position Consolidated Statement of Financial Performance Consolidated Statement of Changes in Net Assets Consolidated Statement of Cash Flows Eliminate Intra-Group Transactions to Prevent Double-Counting during Consolidation

11 CODING STRUCTURE Transaction Code Fiscal Year Fund Organization Program or Function Geographic Chart of Accounts

P ROPOSED F UND S TRUCTURE Consolidated Whole-of-Government Consolidated Governmental Consolidated Proprietary Fiduciary Capital Projects Debt Service General/ Special Revenue (Full Accrual Accounting) Non-Current Liabilities Non-Current Assets Internal Services Economic Enterprises Agencies Trusts Governmental ProprietaryFiduciary (Partial Accrual Accounting)

13 CHART OF ACCOUNTS Budgetary Accounts Expenditures Economic (8 major classes) Compensation of Employees Use of Goods and Services Consumption of Fixed Capital Interest Subsidies Grants Social Benefits All Others

14 CHART OF ACCOUNTS (CONTINUED) Expenditures (continued) Functional (10 major classes) General Public Services Defense Public Order and Safety Economic Affairs Environmental Protection Housing and Community Amenities Health Recreation, culture, and religion Education Social Protection

15 CHART OF ACCOUNTS (CONTINUED) Revenues (4 major classes) Taxes Social Contribution Grants All Others Assets Liabilities Net Assets

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17 NETWORK INFRA- STRUCTURE STRATEGY Servers (backbone of the infra-structure) Software (glue that holds all the pieces together) Storage (groups storage systems on their own high-speed networks)

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19 TRAINING Develop Core Group of Trainers Acquire additional computers for training room Expand financial library to include accounting standards desired by international accounting oversight bodies

20 TRAINING (CONTINUED) Accrual Accounting International Public Sector Accounting Standards International Accounting Standards Government Finance Statistics Manual IFMIS Coding Structure Network Architecture Links to Other Systems

21 ACTION PLAN Steps to Implementation Short-Term (1-2 Years) Continue Design Phase to develop detailed specifications Revise applicable laws to permit use of accounting standards desired by international accounting oversight bodies Modify existing software to implement double-entry cash accounting system Mid-Term (3-5 Years) Acquire additional software and hardware to implement double-entry partial accrual accounting system for financial assets and liabilities

22 ACTION PLAN (CONTINUED) Steps to Implementation (continued) Long-Term (Over 5 Years) Implement double-entry full accrual accounting system for non-financial assets and long-term debt Packaged Software Technical Architecture

23 PACKAGED SOFTWARE CONSIDERATIONS Goodness of Fit System Scalability Size Speed Workload Transaction Cost Outside Consulting Support

24 STRATEGIES FOR IMPLEMENTATION Appoint Steering Committee (for policy) and full- time Project Team (for procedures) Identify specific software and hardware needs during design phase Prepare Users’ Manuals Conduct training programs Pilot test programs Implement throughout MOF Roll out to other ministries

25 POST-IMPLEMENTATION REVIEW Accuracy of Time, Cost, and Benefit Estimates Adequacy of System Design Accountable Controllable Transparent Sustainable

27 GLOBAL IMPLICATIONS