Public Sector Governance and Accountability Series: Budgeting and ...

Automating Public Financial Management in Developing Countries 327
system] projects in developing countries take the opposite approach, partly
because of short donor time scales and attention spans. Where design comes
as this single whole, “big bang” implementation, opportunities for local
improvisation are reduced and risks of failure correspondingly increase. (Heeks
2002: 110)
The conventional OTS IFMIS approach may be characterized as a “big
bang”reform that usually imposes standardized procedures (from industrial
countries and often from commercial—not public—applications). The
rigidity, limited capacity, and high customization cost of such systems mean
that public bureaucracies must adapt to the system rather than evolve the
system to fit their needs. Indeed, some specialists are emphatic that a decision
to procure an OTS application must be a decision not to customize.
Customizing an OTS application, they contend, “is no cheaper and no less
risky than building a system from scratch” (Dorsey 2000: 9).
What Is an IFMIS?
An IFMIS provides governments with a tool that can support financial
control, management, and planning. By managing a core set of financial data
and translating these data into information for management, these three
financial functions are supported.
More narrowly defined, an IFMIS is a computer application that
integrates key financial functions (for example, accounts or budgets) and
promotes efficiency and security of data management and comprehensive
financial reporting. An IFMIS is one way of addressing the problem of stovepiped
financial systems that do not talk to each other and do not produce a
timely and comprehensive picture of a country’s financial position. Figure
10.1 presents what an IFMIS is, and figure 10.2 presents how it works. A
detailed discussion of the IFMIS functions shown in figure 10.1 follows.
Financial function of an IFMIS
IFMISs are usually considered in terms of core and noncore financial functions.
8 Although public financial management is a broad field with multiple
systems, the commonly cited specification of the core functions of an IFMIS
is strikingly limited. The conventional specification of the IFMIS core is
accounting and reporting functions, while noncore functions include budgeting,
commitment control, cash management, and disbursement functions.
9 The common specification of the core functions does not include all
of the components needed for effective financial control and, by definition,