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

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328 Stephen B. Peterson Integrated Financial Management Information System • Standard classification • Common processes • Controls over data entry and processing • Real-time transaction recording • Accounts (general ledger, payables, receivables) • Budget • Reports • Tracking • Control • Cost management • Adjustment (policy, operational) • Performance • Summary of information • Ex ante (budget) • Ex post (audit, financial statements) • Operational • Software, hardware, people, procedures, data High level of IT infrastructure Linked to chart of accounts and budget structure • Timeliness • Comprehensiveness Source: Penrose 2005. Note: Core IFMIS functions are in italics. FIGURE 10.1 Features of a Typical IFMIS Core modules Noncore modules Functional modules Accounts Budget Disbursements Revenue Debt Human Resources Payroll Technical platform Security and user directory User interface Data warehouse Web distribution Reporting Auditing Internationalization Migration tools Stand-alone BIS and BDA IBEX Source: Abate and Chijioke 2006. Note: BIS (Budget Information System) and BDA (Budget Disbursement and Accounts) are the legacy financial systems. The IBEX (Integrated Budget and Expenditure) system is the Ethiopian custom IFMIS. FIGURE 10.2 An Example of the Platforms of an IFMIS: Ethiopia’s IBEX System
Automating Public Financial Management in Developing Countries 329 therefore will increase risk. The limited comprehensiveness of the conventional core functions of an IFMIS stems in large part from the private sector origins of IFMIS technology. In short, IFMISs do not get the basics right for public sector financial management. This failure raises the question of how they can constitute best practice. At a minimum, in addition to accounting, a proper core of financial functions should include budget, commitments, cash management, and disbursement. Many IFMISs lack a core cash management function that ensures adequate cash to disburse against the commitment. The absence of a commitment module is a serious omission. Strong financial control requires a linked set of core modules, as follows: A budget module that sets ceilings. Budgetary control requires that an adjusted budget be maintained at all times and that it be available at the end of the fiscal year for the prompt closure of accounts. (Although the inclusion of a budget module is ideal, the commonly accepted definition of a core IFMIS does not include a budget module for preparation and adjustments.) A commitment control module that controls balances incurred but not disbursed. Commitment control is critical for avoiding arrears (again, not conventionally specified as a core module). A cash management module that shows cash available to pay commitments (again, not specified as a core module). A disbursement module that records disbursements. An accounts module that records expenditures when goods and services are received. 10 Even if IFMISs do include the five listed financial components that are needed for effective control (budget, commitment, cash management, disbursements, accounts), that comprehensiveness would not prevent their disuse or misuse, nor would it make up for a lack of financial discipline. For example, weak commitment control is a problem in many anglophone African countries, resulting in the accumulation of arrears. Commitments could be controlled through manual procedures (warrant withdrawal), but this is “rarely done”and “reflects the generalized lack of financial discipline,” according to Lienert (2002: 22). Integrated function of an IFMIS IFMISs are designed to manage financial data efficiently so that, once entered, data are securely stored and shared with different financial functions
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PUBLIC SECTOR GOVERNANCE AND ACCOUN
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Introduction to the Public Sector G
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©2007 The International Bank for R
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vi Contents Conclusions 48 Notes 49
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viii Contents A Simple Way to Under
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x Contents Reform Priorities and Se
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xii Contents 9.4 Transfers between
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xiv Contents 10.2 Pros and Cons of
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xvi Foreword highlights frameworks
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xviii Preface This volume represent
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xx Acknowledgments The editor is gr
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xxii Contributors Work, Activity-Ba
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xxiv Contributors published by the
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xxvi Abbreviations and Acronyms EU
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Overview anwar shah B udgetary inst
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Overview 3 Chapter 2 by Salvatore S
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Overview 5 governments still are on
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Overview 7 Since the 1970s, the cos
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Overview 9 helpful in improving bud
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Overview 11 not need it. But the pr
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Overview 13 For efficient implement
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Overview 15 a difficult environment
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Overview 17 is asked to perform. To
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Overview 19 set up a special aid ma
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Overview 21 allocations, low budget
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Overview 23 specifies who is respon
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1 Budgeting Institutions for Better
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Budgeting Institutions for Better F
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information from the executive and
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54 Salvatore Schiavo-Campo Good Gov
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56 Salvatore Schiavo-Campo In such
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58 Salvatore Schiavo-Campo country
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60 Salvatore Schiavo-Campo Principl
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62 Salvatore Schiavo-Campo some cas
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64 Salvatore Schiavo-Campo transact
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66 Salvatore Schiavo-Campo pay off
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68 Salvatore Schiavo-Campo BOX 2.1
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72 Salvatore Schiavo-Campo studies
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74 Salvatore Schiavo-Campo TABLE 2.
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76 Salvatore Schiavo-Campo Loan Gua
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80 Salvatore Schiavo-Campo when the
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84 Salvatore Schiavo-Campo Division
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86 Salvatore Schiavo-Campo Article
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88 Salvatore Schiavo-Campo Polackov
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90 A. Premchand performance. It is
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92 A. Premchand 1970s. It found tha
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94 A. Premchand TABLE 3.1 Receipts
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96 A. Premchand To arrive at such d
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98 A. Premchand TABLE 3.2 (continue
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100 A. Premchand affecting construc
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102 A. Premchand by most developing
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104 A. Premchand TABLE 3.3 Position
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106 A. Premchand TABLE 3.4 (continu
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108 A. Premchand defense) as some c
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110 Alta Fölscher money by spendin
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112 Alta Fölscher “satisficing.
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114 Alta Fölscher inputs. It is on
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116 Alta Fölscher them in a better
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118 Alta Fölscher political proces
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120 Alta Fölscher BOX 4.1 A Confus
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122 Alta Fölscher Three years late
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124 Alta Fölscher budgeting are lo
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126 Alta Fölscher TABLE 4.2 A New
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128 Alta Fölscher the 1980s, when
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130 Alta Fölscher classification a
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132 Alta Fölscher ministries to li
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134 Alta Fölscher Conclusion The i
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5 A Primer on Performance Budgeting
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A Primer on Performance Budgeting 1
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155 China Line-item budgeting Line-
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TABLE 5.6 Performance Budgeting Ref
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C. Is it common that politicians us
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6 Accrual Accounting in the Public
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Accrual Accounting in the Public Se
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Deficit Elimination Rules Accrual A
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204 Gary Cokins practices and their
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206 Gary Cokins An Excessive Focus
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208 Gary Cokins The ABC/M view is a
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210 Gary Cokins processes involved.
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212 Gary Cokins while the other ave
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214 Gary Cokins elimination. Genera
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216 Gary Cokins imposed? As mention
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218 Gary Cokins resources they draw
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220 Gary Cokins Despite the similar
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222 Gary Cokins to be intangible. B
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224 Gary Cokins idea of the types o
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226 Gary Cokins these activities su
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228 Gary Cokins Without visible, re
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230 Gary Cokins the organization ma
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232 TABLE 7A.1 An Example of “Uni
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8 Budget Preparation and Approval s
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Budget Preparation and Approval 237
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are doubtful and unclear. At budget
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Page 307 and 308: Budget Preparation and Approval 277
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Page 311 and 312: Budget Execution 281 in budget mana
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What Would an Ideal Public Finance
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12 Strengthening Public Expenditure
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Strengthening Public Expenditure Ma
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should be conducted largely on the
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436 Salvatore Schiavo-Campo period.
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438 Salvatore Schiavo-Campo going b
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440 Salvatore Schiavo-Campo strateg
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442 Salvatore Schiavo-Campo No com
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444 Salvatore Schiavo-Campo donors.
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446 Salvatore Schiavo-Campo 2. Is t
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448 Salvatore Schiavo-Campo serious
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450 Salvatore Schiavo-Campo assets,
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452 Salvatore Schiavo-Campo and pla
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454 Salvatore Schiavo-Campo corrupt
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456 Salvatore Schiavo-Campo The mai
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458 Salvatore Schiavo-Campo Moreove
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460 Salvatore Schiavo-Campo Schiavo
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462 Alta Fölscher development budg
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464 Alta Fölscher the quality of i
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466 Alta Fölscher between policy a
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468 Alta Fölscher Public Policy Re
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470 Alta Fölscher Allocating Scarc
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472 Alta Fölscher a guide to the m
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474 Alta Fölscher The MPERs are ta
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476 Alta Fölscher BOX 14.1 Kenyan
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478 Alta Fölscher BOX 14.2 The IP-
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480 Alta Fölscher the IP-ERS objec
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482 Alta Fölscher MTEF, these ceil
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484 Alta Fölscher macroeconomic ou
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486 Alta Fölscher Across and withi
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488 Alta Fölscher phases and instr
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490 Alta Fölscher decisions, rathe
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492 Alta Fölscher Realizing the co
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494 Alta Fölscher against prioriti
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496 Alta Fölscher selected across
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498 Alta Fölscher be sequenced and
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15 Country Case Study: South Africa
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health, social services, and housin
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Country Case Study: South Africa 50
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A Credible Budget Process Country C
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Index Boxes, figures, notes, and ta
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Index 537 defined, 327, 328f, 354n8
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Index 539 delegation approach to, 3
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Index 541 reporting requirements, 3
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Index 543 Indianapolis, IN case stu
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Index 545 change factors influencin
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Index 547 reasons for adopting, 138
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Index 549 Public Expenditure and Fi
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Index 551 HIPC debt relief, budgeta
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ECO-AUDIT Environmental Benefits St
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