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

Strengthening Public Expenditure Management in Africa 417
BOX 12.5 Features of a Financial Management
Information System
A well-designed financial management information system should yield consistent
and reliable information on government financial operations and their
interaction, in real time and on a continuous basis, to allow policy makers and
budget managers to reach informed decisions, keep track of actual expenditures,
make required adjustments on a timely basis, and stay on top of emerging fiscal
trends so that they can anticipate probable fiscal outcomes. For these purposes,
the system should meet the following criteria:
Be developed on a modular basis to permit progressive upgrading, and
include dedicated modules to handle short- and medium-term forecasts
of revenues and expenditures by each spending agency
Offer a common platform and user interface to the different agencies
responsible for financial management, to preclude the temptation for the
agencies to develop their own information systems, incompatible with
one another
Maintain a historical base of budget data and transactions at the highest
level of details
Incorporate tools to analyze fiscal trends and permit a forward-oriented
perspective on fiscal outcomes
Compile the needed government accounts from its database of budgetary
appropriations and cash allocations
Enable real-time reconciliation of transactions, checks issued, bank statements,
and so forth
Provide all information defined by budget managers and other users, in
the desired level of aggregation or detail.
Each of the listed characteristics entails specific prerequisites in terms of
prior definition of user needs, data availability, informatics, administrative
capacity, and targeted training—which illustrates the vastness and difficulty
of the challenge of building a good financial management information system
in any developing country, including in Africa.
Source: Adapted from Diamond and Khemani 2005: 5.
enthusiasm as the potential benefits, and the time required for effective
introduction of an IFMIS and its reliable operation has been consistently
and badly underestimated. In light of the severely limited statistical and
administrative capacity in developing countries, the generally very poor
record of success of attempts to introduce IFMISs should not be surprising.
Diamond and Khemani (2005) found the same poor record of success
in Africa as well (the interested reader is encouraged to refer to their