1. Implementation Methodology of the Integrated Public Financial Management Systems in Europe and Central Asia Cem Dener Washington, DC May 2007 Implementation Methodology of the Integrated Public Financial Management Systems in Europe and Central Asia Cem Dener Washington, DC May 2007

2. ECA Treasury / PFMS Projects1 Presentation Approach PFMS Implementation Methodology Integrated PFMS Development Phases ECA Treasury/PFMS Projects (updated) Treasury/PFMS Maturity Framework Challenges PFMS Implementation Methodology

3. May 2007ECA Treasury / PFMS Projects2 PFMS Implementation Methodology Approach 1.Identify PFM reform needs ( What? Why? ) Assess Readiness + Define Strategy  Conceptual Design 2.Develop necessary solutions ( How? Where? When? ) Functionality + Tech Architecture + Specs  System Design 3.Project management ( Who? ) Implement + Monitor + Evaluate + Manage  Integrated PFMS

4. May 2007ECA Treasury / PFMS Projects3 PFMS Implementation Methodology 1. Identify PFM reform needs ( What? Why? )  Assess existing capacity and practices (PEFA, PFM questionnaire …)  Development of the PFM Reform Strategy (if not available)  Development of the “Conceptual Design” functional review of PFM organizations recommendations for improving the institutional capacity definition of PFMS functional modules (processes + info flows) necessary procedural and organizational changes  Advisory support on specific PFM issues  Coordination with donors and other sector projects  Assistance in PFM capacity building (review docs+share knowledge)

5. May 2007ECA Treasury / PFMS Projects4 PFMS Implementation Methodology 2. Develop necessary solutions ( How? Where? When? )  Assessment of existing ICT capacity (skills, resources, CobiT* …)  Development of ICT/e-Gov Strategy (if not available)  Development of “System Design” PFMS functional requirements (incl. records management) technology architecture (web-based systems) implementation methodology ( hybrid**: COTS + CDSW )  Development of “Technical Specifications” (ICB tech requirements)  Coordination with e-Gov initiatives and other ICT projects  Assistance in technical capacity building and evaluation of design * CobiT … Control objectives for information and related Technology ** Hybrid … COTS : customized Commercial Off-The-Shelf software) + CDSW (Custom Developed Software)

6. May 2007ECA Treasury / PFMS Projects5 PFMS Implementation Methodology 3. Project Management ( Who? )  Form a Project Management Group (PMG) within client org (MoF)  Assistance in funding preparation activities (Trust Funds …)  Promoting “Country Systems” administration & coordination of investment projects financial management [ FM ], accounting, reporting, auditing procurement [ PRC ] (if country standards are acceptable)  Assistance in capacity building for FM and PRC, and in the preparation / review of ToRs, ICB documents, RFPs.  Monitoring and Evaluation tools (surveys, maturity framework …)  Focus on Capacity Building and Change Management (NLP*) * NLP : Neuro Linguistic Programming

7. May 2007ECA Treasury / PFMS Projects6 Integrated PFMS Development Phases Integrated PFMS Development : years 0 1 2 3 4 5 6 7 8 9 10 Advisory support for PFM reforms Assess existing ICT skills and resources 1. Identify PFM reform needs Assess existing capacity & practices Assistance in PFM capacity building Technical Specifications [ ICB docs ] Develop ICT/e-Gov Strategy (if N/A) System Design 2. Develop necessary solutions Develop PFM Reform Strategy (if N/A) Conceptual Design 3. Project management Project Management Group (PMG) Coordination with donors / other projects Preparation Assistance in technical capacity building Coordination with e-Gov / other ICT prj Administration of Trust Funds (if any) Procurement of ICT solutions [ ICB ] System implementation, test, acceptance Monitoring & Evaluation Capacity building & Change Management Warranty Establishment of a countrywide network Implementation PFMS take off Approval Fly Solo Support and Maintenance

8. May 2007ECA Treasury / PFMS Projects7 ECA Treasury / PFMS Projects 1995 2000 2005 2010 2015 AlbaniaP069939 PARP (TS)1993 AzerbaijanP066100 TIMS (TS)1998 May’07 HungaryP043446 PFMP (TS)1996 KazakhstanP037960 TMP (TS)1994 Slovak Rep**P069864 PFMP (TS)1992 GeorgiaP063081 FMIS (PFMS)1998 Kyrgyz RepP071063 TMIS (TS)1994 MoldovaP082916 PFMP (PFMS)1993 RussiaP064508 TDP (TS)1992 Türkiye*P035759 say2000i (TS+)1927 UkraineP049174 TSP (TS)1996 UkraineP090389 PFMP (PFMS)1996 TajikistanP099840 PFMP (PFMS)1997 UzbekistanP070084 PFMRP (TS)1999 TurkmenistanP034092 IBTA (TS)1992 CroatiaP050718 PFMP (TS)1992 Armenia**P081668 IDF (GFMIS)1996 Extension Implementation Prep.>Appr.>Effect. Treasury established  Preparation Dropped AH DR CD AH, CD CD DR CDDR AH DR CD AH Ali Hashim DR Dominique de Roquefeuil CD Cem Dener AH * The Bank funded the ICT consultant/prj coord only. ** The Bank funded the TA activities only. eGov starts eGov projects stall  World Wide Web Browsers Java  Web TV  Google  Wireless  Skype eGov recovery eEurope  Blogs  YouTube Completed In Progress Avg. completion time 7.1 yrs Avg. implementation 5.7 yrs Avg. compl. 7.2 yrs Avg. impl. 5.1 yrs Avg. compl. 5.5 yrs Avg. implem. 4.1 yrs

9. May 2007ECA Treasury / PFMS Projects8 Monitoring and Evaluation Tools Monitoring and Evaluation of Treasury/PFMS Projects  Updates on key project data and sharing progress/issues with borrowers [ ECA_Treasury+PFMS_data.xls ]  Summary of Treasury/PFMS project implementation in ECA [ ECA_Treasury+PFMS_projects.xls ]  The Maturity Framework (MF) for Treasury / PFMS development process [ www.worldbank.org/pempal ] link to Treasury MF Tool and user guide [ www.pempal.org/pfmstool ] location of MF tool  PEM-PAL Discussion Groups [ www.pempal.org/discussions ] > Treasury/MoF  PEM-PAL Blog [ www.pempal.org/blogs ] > External  Logbook of Treasury/PFMS projects (internal) Other useful information  Budget Classification and Chart of Accounts structures in selected countries  Summary of Treasury Single Account operations in selected countries

10. May 2007ECA Treasury / PFMS Projects9 Maturity Framework for Treasury/PFMS Development Maturity Framework for Treasury/PFMS projects  A Community of Practice for Treasury Managers was established in June 2006 as part of the Public Expenditure Management-Peer Assisted Learning (PEM- PAL) program ( www.worldbank.org/pempal ) activities.  The Maturity Framework (MF) for the Treasury / PFMS development process was developed during the "PEM-PAL workshop for Treasury Officials" held in Ljubljana, Slovenia from June 26-27, 2006.  The Maturity Framework was designed to enhance learning and knowledge sharing among Heads of Treasury and related key officials in public expenditure management from 14 ECA countries.  The Bank prepared a web site to publish the results and to facilitate interactive monitoring and management of proposed indicators ( www.pempal.org/pfmstool ).

11. May 2007ECA Treasury / PFMS Projects10 Treasury/PFMS Maturity Framework Readiness  PFM reform strategy  Institutional capacity  Countrywide network infrastructure 1 Preparation  Legal and institutional frameworks  Budget coverage  Treasury Single Account (TSA) 2 PFMS Design  Definition of system functionality  Detailed technical requirements 3 Procurement  Large scale ICT systems  Technical Assistance and Training 4  System development & integration  Full scale testing and rollout  Training and change management Implementation 5 Maintenance and Support  Budget funds  Technical capacity  System administration  Maintenance 7 9 – 18 months 9 – 18 months 18 – 36 months Resources Effectiveness Time Monitoring & Evaluation  Monitoring mechanisms  Project mgmt capacity 6 Maturity Framework for Treasury/PFMS projects www.pempal.org/pfmstool interactive monitoring and management of MF indicators

12. May 2007ECA Treasury / PFMS Projects11 ECA Treasury/PFMS Development Indicators

13. May 2007ECA Treasury / PFMS Projects12 ECA Treasury/PFMS Development Status ECA - Treasury / PFMS Implementation – Feb 2007 ALB ARM AZE BIH GEO KAZ KOS KYR MOL RUS SER MON TAJ TUR UKR UZB 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0%10%20%30%40%50%60%70%80%90%100% Estimation Evaluation Started Completed In progress

14. May 2007ECA Treasury / PFMS Projects13 Challenges in Treasury/PFMS Projects PFM Challenges  Existence of a committed leader and a dedicated team  Allow enough time for the assessment of readiness, the PFM Strategy and the development of conceptual design during preparation phase  Coordinate with donors and other sector projects

15. May 2007ECA Treasury / PFMS Projects14 Challenges in Treasury/PFMS Projects ICT Challenges  Recruitment and sustainability of IT specialists in public sector  Existence of a reliable countrywide network infrastructure  Realistic ICT cost estimates to reduce procurement risks  Web based applications & open systems to reduce cost and duration of implementation  Proper requirements for Records Management, Information/System Security and Digital Signature in design  Coordination with e-Gov activities (interoperability & resource sharing)

16. May 2007ECA Treasury / PFMS Projects15 Challenges in Treasury/PFMS Projects PRJ Challenges  Establish the Project Management Group at early stages  Promote country systems  Reduce the number of procurement packages (ideally 2 separate independent ICB packages for all ICT solutions)  Focus on capacity building and change management activities (NLP)

17. Implementation Methodology of the Integrated Public Financial Management Systems in Europe and Central Asia Thank You Washington, DC May 2007 Implementation Methodology of the Integrated Public Financial Management Systems in Europe and Central Asia Thank You Washington, DC May 2007