SISTEM PERBENDAHARAAN & ANGGARAN NEGARA (SPAN/e-Budgeting) Bobby Nazief Staf Khusus MENKEU bid. Teknologi Informasi

PUBLIC FINANCIAL MANAGEMENT (PFM) REFORMS IN INDONESIA Key financial management reform objectives Improve institutional image through adopting principles of Good Governance Strengthen fiscal control ensure effective implementation of the budget allocations greater transparency in government financial management. The DPR enacted several laws to support the reform objectives State Finance (Law 17/2003) State Treasury (Law 1/2004) State Audit (Law 15/2004) An Integrated Financial Management Information System (IFMIS) is essential to introduce and sustain these reforms IFMIS will be implemented through Sistem Perbendaharaan dan Anggaran Negara (SPAN)

SPAN AS THE FOUNDATION FOR PFM REFORMS Accounting and Budgetary Reforms: Integrates budget execution across ministries, as required for MTEF and Performance Based Budgeting reforms Provides the ability to maintain a centralised General Ledger (GL) system for all Government agencies Provides the data integrity, flexibility and consistency required for modernization of accounting, budgeting and reporting Provides a “single window” electronic interface for other systems such as payroll, debt management, procurement, and audit. Organizational Reforms: Operationalizes the business process reforms underway in KPPNs Executes processes and applies controls with minimal manual intervention, allowing personnel to focus on analysis and strategy Banking and Cash Management Reforms: Enhances the benefits of TSA reform. Automates bank reconciliation and enables electronic interfaces between banks and treasury offices. Enables Treasury participation in BI’s payment system reforms and provides real time information to BI for monetary policy and debt management

MANAJEMEN DIPA PEMBAYARAN PROSES PENERIMAAN PENYUSUNAN ANGGARAN SPAN CONTEXT LINE MINISTRIES EXTERNAL LINKS RKA-KL DIPA BANK INDONESIA RTGS BIG-eB SSSS-TERMINAL GL MANAJEMEN DIPA PEMBAYARAN PROSES PENERIMAAN PENYUSUNAN ANGGARAN PELAPORAN KOMITMEN S P A N KAS SISTEM AKUNTANSI INSTANSI SISTEM PERBANKAN KOMITMEN SPM MAIN USERS DATA PROYEKSI: PENERIMAAN PENGELUARAN DJPBN: PUSAT KANWIL KPPN SISTEM AKUNTANSI BARANG MILIK NEGARA DJA SPAN is the tool that will enable the key transformation of DG Treasury business operations through integration and automation of its business processes and realignment of the overall organisation structure to improve productivity, efficiency and reliability of outputs. SPAN will provide: A reliable cash management system which will enable the preparation of cash flow forecasts and plans Delivery of efficient financial services to all sectors of government, to suppliers and to the banking network through the Central Bank Maximization of the use of the developing banking infrastructure in Indonesia in collecting revenues and delivering services Effective control budget allocation, expenditure commitments, and spending limits Capture of payment data at source, with data being entered once only, and online transfer to centralized and consolidated databases Maintenance of comprehensive and reliable centralized databases of all government financial transactions, covering the full range of financial processes from budget preparation, allocation, commitment, spending, accounting etc; provide an associated budget rules database A comprehensive reporting system that enables reliable management reports on government financial operations to be generated in real time enabled by modern information systems and made available to all stakeholders Readily accessible and complete data records of all financial operations to enable full and comprehensive audits to be conducted using electronic audit tools Comprehensive online capabilities to Line Ministries and other agencies to enable them to submit information electronically and interrogate online centralized databases to access their information Progressive transition to accrual based accounting systems, as mandated by the State Treasury Law Fully automated treasury operations, reporting and accounting MOF OTHER USERS SISTEM PENGELOLAAN & AKUNTANSI UTANG UNIT ESELON 1 DEPKEU SISTEM PENGELOLAAN & AKUNTANSI INVESTASI DEP. TEKNIS BAPPENAS AUDITOR: IRJEN BPK BPKP MODUL PENERIMAAN NEGARA (MPN)‏ DATA PROYEKSI: PENERIMAAN PENGELUARAN

CORE FUNCTIONAL PROCESSES & INFORMATION FLOWS Directorate General of Budget Line Ministry line ministry reconciles information from Treasury and SUs to prepare departmental accounts Spending Units Central Bank (TSA) Treasury Treasury Units (KPPN) C O M E R I A L B N K S 4. Spending Unit forwards payment request to KPPN 6. KPPN processes SU requests 3. Treasury enters initial budget appropriations, allotments, cash limits and in year transfer data to Treasury system 5. Internal audit performs on line and concurrent verification of sample transactions as they are processed by the KPPN 9. DIEA accesses system to Produce reports Accounting Reports Accounting reports from Unit 7. Treasury system passes transaction to the Interbank clearing system-RTGS 10. Treasury produces consolidated fiscal reports from the Treasury system Other Stake Holders 11. Treasury produces Budget execution for other stake holders 1. Budget Appropriations Banking Network DIEA 2. DG- Treasury approves Budget allotments and cash limits for subordinate units Internal audit section 8. Treasury receives information on Deposits in TSA ( e.g. tax and Revenue Receipts, broken down by individual transactions via RTGS Tax payers Suppli ers Kanwil/KPPN Access to zero balance accounts in Commercial banks for cash disbursements/deposits SPAN

BENEFITS TO KEY STAKEHOLDERS The Directorate General of Treasury in the Ministry of Finance, and its regional offices to undertake budget implementation, including payment processing, and perform associated accounting functions, including reporting in a near real-time manner; The Directorate General of Budget and Fiscal Balance of the MOF to obtain the status of actual expenditures to enable budget monitoring and assist in budget preparation for out years; The Cash Management Department of the Directorate General of Treasury to provide the information it requires for cash management; Line ministries and agencies, to access financial information and reports pertaining to their organization; By the Government auditing organizations (BPKP and BPK) to access financial transaction data for auditing purposes.

KEY BENEFITS OF SPAN - SUPPORTING BUDGET & TREASURY OBJECTIVES (1) SPAN is the tool that will enable the key transformation of DG Treasury business operations by providing: A reliable cash management system which will enable the preparation of cash flow forecasts and plans. Effective control budget allocation, expenditure commitments, and spending limits. Capture of payment data at source, with data being entered once only, and online transfer to centralized and consolidated databases. Maintenance of comprehensive and reliable centralized databases of all government financial transactions, covering the full range of financial processes from budget preparation, allocation, commitment, spending, accounting etc; provide an associated budget rules database. A comprehensive reporting system that enables reliable management reports on government financial operations to be generated in real time enabled by modern information systems and made available to all stakeholders.

KEY BENEFITS OF SPAN - SUPPORTING BUDGET & TREASURY OBJECTIVES (2) Readily accessible and complete data records of all financial operations to enable full and comprehensive audits to be conducted using electronic audit tools. Comprehensive online capabilities to Line Ministries and other agencies to enable them to submit information electronically and interrogate online centralized databases to access their information. Progressive transition to accrual based accounting systems, as mandated by the State Treasury Law. Fully automated treasury operations, reporting and accounting.

BASIC OBJECTIVES OF SPAN Control: over the Government’s budget and the assets and liabilities of government; and Reporting: comprehensive, reliable and timely information on the financial position of the Government so as to facilitate government financial management.

SPAN FUNCTIONS Budget Preparation Management of Spending Authority Commitment Management Payment Management Processing of Government Receipts Cash Management General Ledger & Chart of Accounts (CoA) Reporting Maintenance of Reference Information

Current Systems RKA-KL DIPA SP2D Reporting Systems are aligned according to business functions (e.g. RKA-KL for Budget Planning and SP2D for Budget Execution) Data is owned by applications and requires manual re-entry People specialise in use of a single application There is lack of integrated reporting It is difficult to reconcile information from different systems for an accurate and reliable view 11

SPAN AS THE FOUNDATION OF IFMIS Reporting Financial Statements, Annual Reports, Management Reports, Stakeholder Reports Debt Management System Core Accounting System General Ledger Accounting Financial Reporting Treasury/Cash Management Bank Reconciliation Central/Commercial Bank Payroll Audit Human Resources BUDGET PREPARATION ENHANCEMENT Macro-economic Forecasts MTEF Preparation Performance-based Budgeting Budget Cycle Budget Preparation Budget Allocation Budget Commitment Budget Execution Pensions Fixed Asset Management Stores and Inventory Management Accounts Payable Government Receipts Customs and Tax Revenue Procurement Purchasing Revenue Management Audit

LEGENDS Core Elements of SPAN Additional Subsidiary Ledgers or Modules Feeder Systems Audit Ledger Data and Information Flows Budget Data and Information Flows

SPAN WILL ALLOW INTEGRATION AND STANDARDISATION OF BUSINESS PROCESSES Budget Planning to Budget Execution Satker RKA-KL DIPA SP2D Reporting The SPAN solution will be aligned according to business processes The SPAN solution will encompass and cut across organisational functions SPAN will allow many features to be accessed by different people Boundaries between applications will become blurred through automated integration with systems like MPN, Debt Management, Investment Management, Asset Management Standardising User Interfaces and Application Interfaces will allow faster, better integration of processes across business functions.

SPAN INFRASTRUCTURE

SPAN TIMELINE Funded by World Bank 2-Stage Bidding Procurement: Q3 Q4 Q1 Q2 2008 2009 2010 2011 2012 2013 Funded by World Bank 2-Stage Bidding Procurement: 1st Stage: October ’05 (IFB-01/GFMRAP/2005) 2nd Stage: April ’08 (IFB-02/GFMRAP/2007) 2nd Stage (re-do): October ‘08 Improvement of Business Process & Financial Management Assess-ment & Planning COTS Fit-Gap Analysis COTS Configuration COTS CRP COTS Pilot COTS Roll-Out Change Management & Communications