Integrated Financial Management Information Systems (IFMIS)

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Integrated Financial Management Information
Systems (IFMIS)
Presentation of Zambian IFMIS

• Chitundu N Mwango
• Accountant General
• Ministry of Finance and National Planning
• Lusaka, Zambia
• Telephone [phone]
• Email cnmwango_at_zamtel.zm

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Background

• The Government has been implementing the Public
  Service Reform Programme (PSRP) from 1993.
• The aim of the PSRP is to improve the quality,
  efficiency and effectiveness of Public Service
  delivery.
• In 1999 a concern arose as to whether the
  measures taken under the PSRP framework had
  resulted in improved performance.
• It was acknowledged then that these measures had
  not led to tangible improvements in the delivery
  of public services.
• Therefore, Public Service Capacity Building
  Project (PSCAP) was designed to support the
  implementation of the Public Service Reform
  Programme.
• PSCAP is financed by the World Bank and managed
  at Cabinet Office
• One of the PSCAP component was the Financial
  Management, Accountability and Transparency
• IFMIS is a project within the Financial
  Management, Accountability and Transparency
  component

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Background

• In 2000 a local consulting firm was engaged for 6
  months and produced the IFMIS roadmap
• In 2001 a local short term consultant was
  recruited to initiate the implementation of IFMIS
• Assisted in recruiting Project Manager, Manager
  IT and Manager Accounting.
• Other Managers (Budget, Audit, Debt, Training)
  identified by roadmap were not recruited due to
  lack of funds
• Initiated the process of engaging a consulting
  firm to analyse and design IFMIS
• Government seconded one principal accountant and
  three principal analysts to the Project team but
  did not stay because of lack of incentives

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IFMIS Design

• In 2002 Government issued a tender for a long
  term consultant to analyze and design IFMIS
• However the tender for the long term consultant
  was annulled (cancelled) because of disagreement
  between the Government and Bank on the
  procurement process
• An IFMIS advisor was recruited through Bank but
  was based in Washington and Government terminated
  the contract
• Government decided to use the local IFMIS Project
  team to analyze and design IFMIS
• This saved Government about 1million
• The Project team undertook a comprehensive
  assessment of user requirements and conducted
  IFMIS sensitization workshops

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IFMIS Design

• The local team designed the IFMIS chart of
  accounts which took into consideration the GFS
  and IPSAS
• Produced the IFMIS assessment report,
  Requirements Specification, and Chart of Accounts
  as part of IFMIS design
• Undertook study tours of IFMIS implementation in
  Tanzania and Uganda
• Initiated a tender for installation and
  implementation of IFMIS using the World Bank
  procurement guidelines

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Implementation Plan

• Zambian IFMIS will be implemented in three phases
• Phase 1 (Pilot Implementation 8 months)
• A total of 3 Ministries and 2 Provinces will be
  hooked to the Data Centre (Accountant General).
• Interface with Bank of Zambia and Zambia Revenue
  Authority for the Treasury Operations.
• The pilot sites are
• Ministry of Finance and National Planning, Lusaka
• Ministry of Education, Lusaka.
• Ministry of Works and Supply, Lusaka
• North-Western Province, Solwezi
• Eastern Province, Chipata
• Phase 2 (Rollout Implementation 20 months)
• 41 Ministries, Provinces and Spending Agencies
  will be hooked to Data Centre
• Phase 3 (Interface Implementation 6 months)
• Local authorities, parastatals will interface
  with Data Centre

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Status on IFMIS tender

• Prepared two bidding documents (pre-qualification
  and IFMIS main bid)
• Pre-qualification bid documents were issued in
  Jul 2003 and (19) applicants were received.
• Initially 4 firms were pre-qualified but later
  increased to 7 firms and main bid documents were
  issued to 7 firm in Dec 2004
• Only 3 bids were received and after evaluation
  undertook post-qualification assessment of the
  lowest evaluated bidder in Jun 2004
• Pre-contract negotiation held in Aug/Sep 2004 and
  requested for no objection from the World Bank to
  sign contract

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Progress/Achievements Systems and Infrastructure

• Developed the Activity Based Budgeting (ABB)
  software and MTEF in 2003 and implemented in 2004
• Parts of the IFMIS chart of accounts adopted in
  the ABB and FMS
• Upgraded the FMS and commitment control system
  using the local team (the system was appreciated
  by IMF and IDA)
• Implemented the Payroll Management and
  Establishment Control (PMEC) system using SAP to
  efficiently manage and control public service
  payroll
• Currently piloting CAATS in two ministries

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Progress/Achievements Systems and Infrastructure

• Developed and implemented a Static Arrears
  database in June 2003 (saved 90,000)
• Developed and implemented an Asset register for
  moveable assets in line ministries which will be
  an input to the IFMIS assets module
• Currently upgrading the LAN at MOFNP compatible
  to IFMIS
• Currently completing the preparation of the five
  (5) IFMIS pilot sites

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Progress/Achievements Training Change mgt

• 400 Accountants trained in FMS and CCS
• 50 Procurement Officers trained in Commitment
  Control System
• 12 Persons trained in Prince2 project management
• 120 internal auditors and Auditor General staff
  trained in Computer Aided Audit Techniques
  (CAATs)
• Sensitized members of Parliament (Public Accounts
  Committee and Estimates Committee), Permanent
  Secretaries, Directors in Ministries, accountants
  and auditors in IFMIS
• Salary officers in all line ministries trained in
  PMEC systems
• Developed an in-service syllabus (including
  IFMIS) in Government accounts for accountants,
  auditors and non-accounting staff

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Progress/Achievements Other initiatives

• Revised the Finance Act (currently being debated
  by parliament)
• Constituted the PEMFAR steering committee to
  provide policy guidance to the IFMIS project
  (with representation from Zambia National Tender
  Board, Auditor General, Bank of Zambia, Revenue
  Authority, Clerk of National Assembly)
• Formed six (6) IFMIS implementation working
  groups to facilitate stakeholder involvement in
  IFMIS implementation and ensure sustainability
  after the project ends
• Internet Connection to commercial banks to
  download the bank statements

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Benefits of interim measures

• Improved cash monitoring through internet
  connection to the banks
• Bank reconciliation on time due interface with
  banks
• Timely production of financial reports (the 2003
  financial report is being printed)
• Production of monthly expenditure returns by
  Ministries, Provinces and Spending Agencies
  within 15 days
• Eliminate ghost workers and other irregularities
  by linking (matching) establishment to the payroll

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Way Forward - PEMFA Programme

• In 2003 Government and the World Bank completed
  the Public Expenditure Management and Financial
  Accountability Review (PEMFAR) which is a
  diagnostics tool
• Comprehensive Integrated Reform
• Focus on inter-linkages ensures appropriate
  sequencing and timing
• Entire public expenditure management procedure
  chains reformed
• Table on next slide summarises the 12 components
  identified within the Government Strategy
  Document.

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Way Forward - PEMFA Programme
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Way Forward - PEMFA Programme
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Challenges/Lesson Learnt Procurement issues

• The IFMIS procurement procedures are too long,
  for example it has taken about 20 months to
  procure the IFMIS system
• Delays in obtaining no objections and approvals
  from stakeholders
• Pressure from strong stakeholders causes delays
  and selection of suppliers who may not deliver,
  eg increasing the pre-qualified firms
• Conflict between procurement procedures and
  standard Information Systems development
  procedures
• For example, procurement procedure did not allow
  all pre-qualified firms to demonstrate their
  solution to Government before making final
  selection

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Challenges/Lesson Learnt HIPC Benchmark

• IFMIS as a HIPC Benchmark helped to sensitizes
  stakeholders on importance of IFMIS and secured
  political will
• Puts pressure on Governments to rush the
  implementation of IFMIS

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Challenges/Lesson Learnt Financing issues

• Shortage of equipment and lack of connectivity
  (LAN) delayed the pace of implementing the
  retooled FMS and CCS
• IFMIS costs are huge (US24million) and difficult
  to find partners who are willing to finance
• Financing arrangement of IFMIS project through
  third party delayed implementation
• Justification of IFMIS in view of competing
  social needs such as education, health and
  development projects
• Continued support by cooperating partners is not
  easy to maintain

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Challenges/Lesson Learnt Human issues

• User resistance and other important stakeholders
  not participating
• Change management issues
• Power and politics as to who is the IFMIS
  Champion
• Retention of core team to implement the IFMIS and
  the issue of incentives for civil servants

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Conclusion

• Although the IFMIS main contract has not yet been
  signed with the Supplier due to lengthy
  procurement procedures, Government has made a
  number of significant achievement in public
  financial management and preparing for full
  implementation of IFMIS
• Experience acquired from development and
  implementation of ABB, FMS and CCS as well as
  study tours will help Government in the
  implementation of IFMIS

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Conclusion

• Thank You

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Development of FMS
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Development of FMS Major Reports