0. 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 June 2006

1. 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

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. An Overview of Treasury/PFM Systems in ECA
ECA Treasury/PFMS Projects (WB funded)
Completed [ ]
Hungary Treasury [ ]
Türkiye* PFMS [ ]
Kazakhstan Treasury [ ]
Ukraine Treasury [ ]
Implementation [ ]
Albania HR + Treasury [ ]
Slovak Republic Treasury [ ]
Azerbaijan Treasury [ ]
Kyrgyz Republic HR + Treasury [ ]
Russian Federation Treasury [ ]
Moldova PFMS [ ]
Georgia PFMS [ ]
Preparation [ ]
Ukraine PFMS [ ]
Tajikistan PFMS [ ]
26-27 June 2006
An Overview of Treasury/PFM Systems in ECA

10. 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

11. 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

12. 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

13. An Overview of Treasury/PFM Systems in ECA
PFMS and e-Government initiatives
U.S.A.
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

14. 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

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