2012 04-19 governance valuation
DESCRIPTION
description of the FreeBalance process for aligning government needs and objectives with public financial management reform and government resource planning technology (or integrated financial management information systems)TRANSCRIPT
Version 7 section
• brief discussion Public Financial Management
Governance Valuation Methodology
2012-03-19
Doug Hadden
VP Products
Version 7 section
• brief discussion
Where’s the Software?
not talking software today, it’s process that drives our success in
PFM and drives the product
Typical Software Vendor Viewpoint
Software
Technology
Public Financial Management
Government Modernization
Government Objectives
Reality
Government Objectives
Government Modernization
Public Financial Management
Technology
Software
Version 7 section
• brief discussion
Governance Valuation
FreeBalance i3+qM Process
5 5
Country Research
A. Public Financial
Management
B. Budget 2.0
C. Performance Management
Solution Blueprint
Implementation
Product Development
Domain Research
Steering Committee
Customer Sustainability
Version 7 section
• brief discussion
success
6 6
PEFA scores A. PFM-OUT-TURNS: Credibility of the budget
B. KEY CROSS-CUTTING ISSUES: Comprehensiveness andTransparency
C(i) Policy-Based Budgeting
C(ii) Predictability and Control in Budget Execution
C(iii) Accounting, Recording and Reporting
C(iv) External Scrutiny and Audit
Latest PEFA Average
ODI 2008 PEFA Study
Latest from FreeBalance Customers
Prior to Using FreeBalance
PEFA scores 1)Governments that were using FreeBalance software [in green] have
above average “accounting, recording and reporting” when compared to the latest public PEFA scores, recognizing that many countries with unfavourable assessments have not made assessments public. This average is also higher than the average calculated by the Oversees Development Institute in 2008 that included unpublished assessments
2)This reporting, enabled by FreeBalance software also has helped improve external scrutiny
3)There are 3 areas that need improved controls and process to enable our customers to exceed the average
4)Policy-based budgeting seem to be below average as well, although the prior to using FreeBalance software, is close to the current average.
In Context
Public PEFA Average PEFA Score
Average HDI Nearest HDI HDI Category
Nearest PEFA
FreeBalance Customers
2.47 0.482 Cameroon Low HDI Indonesia
*Countries do not use FreeBalance
2.35 0.569 Cape Verde Medium HDI Ghana
*Latest PEFA from countries, only national governments, not including countries that acquired FreeBalance after the last assessment. Shows that average (using ODI method) FreeBalance assessment greater than average even with low HDI – averages Cameroon while the rest averages as Cape Verde. The closest PEFA average to 2.47 is Indonesia, closest to 2.35 in Ghana
Version 7 section
• brief discussion
Version 7 section COTS Market
Version 7 section
• brief discussion
Governance Formula?
It is generally accepted that there
is no formula for sequencing public
financial management reform
Version 7 section
• brief discussion
Current diagnostics are
not “prescriptive”
Version 7 section
• brief discussion PDM diagnostics rarely provide
technology
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Version 7 section
• brief discussion
Evaluation Methods Evaluation Method Scope Back-Office Technology Front-Office Technology
Public Expenditure and Financial Accountability (PEFA)
Comprehensive PFM assessment
No technology guidance although PEFA assessments attribute some achievements to the use of technology
Commonwealth Public Financial Management Self-Assessment Toolkit (CPFM-SAT)
Comprehensive PFM assessment
A3: Use of IFMIS B2: Use of Debt Management
software No technology guidance for publishing
information The Chartered Institute of Public Finance & Accountancy (CIPFA) Whole Systems Approach
Comprehensive PFM assessment
O7: Financial management information systems
Revenue Watch Institute Index Extractive Industries
transparency
Paris Declaration and Accra Agenda for Action Aid effectiveness Use of country systems for PFM and procurement does not specify use of
technology
International Budget Partnership Open Budget Index (OBI)
Budget preparation and reporting transparency
Internet publishing of budget documents gains higher rating for many categories
Gartner Group Open Government Maturity Model
Open government Provides open government technology
insight
Institute for Electronic Government e-Democracy Model
E-Democracy Use of e-mail systems
Use of web technology Andersen & Henriksen E-Government Maturity E-Government
Layne and Lee Framework of E-Government E-Government Horizontal and vertical integration
within government
World Bank World Governance Indicators Meta collection of 3rd party
indicators No technology guidance
Global Integrity Report Governance and anti-
corruption
PFM Component Map
Public Financial Management
Component Map
Performance & Commitment Management
Government Performance Management
Budget & Commitment Management
Core Government Financial Management
Public Financials Management
Government Treasury Management
Expenditure and Revenue Management
Public Expenditure Management
Government Receipts Management
Civil Service Management
Civil Service Management
Governance and Service Delivery
Transparency & Accountability
Service Delivery
Version 7 section
• brief discussion
What’s changed?
Transparency, access to more information makes diagnostics
more prescriptive
Version 7 section
• brief discussion
Country PFM Context
A. Public Financial
Management
Version 7 section
• brief discussion
Government Performance Management
Data from Government Operations
Expenditures Revenue
Budget
formulation
Budget
execution Human
Treasury Resources
Data from Government Operations
Government Performance Management
PFM Domain
A. Public Financial
Management
Version 7 section
• brief discussion
Core Government Financial Management
Government Performance Management
Data from Government Operations
Expenditures Revenue
Budget
formulation
Budget
execution Human
Treasury Resources
Data from Government Operations
Government Performance Management
A. Public Financial
Management
Version 7 section
• brief discussion
Expenditures & Procurement Government Performance Management
Data from Government Operations
Expenditures Revenue
Budget
formulation
Budget
execution Human
Treasury Resources
Data from Government Operations
Government Performance Management
A. Public Financial
Management
Version 7 section
• brief discussion
Revenue Management Government Performance Management
Data from Government Operations
Expenditures Revenue
Budget
formulation
Budget
execution Human
Treasury Resources
Data from Government Operations
Government Performance Management
A. Public Financial
Management
Version 7 section
• brief discussion
Human Resources
Government Performance Management
Data from Government Operations
Expenditures Revenue
Budget
formulation
Budget
execution Human
Treasury Resources
Data from Government Operations
Government Performance Management
A. Public Financial
Management
Version 7 section
• brief discussion
Treasury Government Performance Management
Data from Government Operations
Expenditures Revenue
Budget
formulation
Budget
execution Human
Treasury Resources
Data from Government Operations
Government Performance Management
A. Public Financial
Management
Version 7 section
• brief discussion
Transparency Government Performance Management
Data from Government Operations
Expenditures Revenue
Budget
formulation
Budget
execution Human
Treasury Resources
Data from Government Operations
Government Performance Management
A. Public Financial
Management
Version 7 section
• brief discussion
Performance Government Performance Management
Data from Government Operations
Expenditures Revenue
Budget
formulation
Budget
execution Human
Treasury Resources
Data from Government Operations
Government Performance Management
A. Public Financial
Management
Version 7 section
• brief discussion
What do we mean by Budget 2.0?
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Budget 1.0 Transitional Budget 2.0
Back-office centric functions and
technology
Back-office centric functions deployed on
the web – “e-government”
Network-centric functions for citizen
interaction – “government 2.0”
B. Budget 2.0
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• brief discussion
What do we mean by Budget 2.0?
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Government Performance Management
Data from Government Operations
Expenditures Revenue
Budget
formulation
Budget
execution Human
Treasury Resources
Data from Government Operations
Government Performance Management
B. Budget 2.0
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• brief discussion
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
Budget execution
Budgetcomprehensiveness
Timeliness
International standards
Budget formulation
Policy management
Oversight
Transparencymechansism
Budget 1.0
Transition
Budget 2.0
“Budget 2.0”
B. Budget 2.0
Budget 1.0 Transitional Budget 2.0
Published Documents Web Publishing
Open Data Narrative Centric Visualization Centric
Citizen Centric
Interactive Data
Budget 1.0 Transitional Budget 2.0
Audit
Parliamentary Oversight
Citizen Oversight
Audio Visual
Performance Audit
Press & NGO
Access to Information
Cooperative Planning Expert Networks
Transparency Mechanisms
Oversight
B. Budget 2.0
Budget 1.0 Transitional Budget 2.0
Macro-Fiscal Frameworks Performance
Management Participatory Policy Policy-Budget Linkages
Policy Outreach
Budget 1.0 Transitional Budget 2.0
Budget as Ceremony Budget Books
Performance Management
Participatory Budgeting
Budget & Commitment Controls
Accrual Budgeting Program Budgeting
Policy Management
Budget Formulation
B. Budget 2.0
Budget 1.0 Transitional Budget 2.0
National Standards IPSAS Cash IPSAS Accrual
IMF GFS XML-based IATI, EITI, XBRL
MTEF
Budget 1.0 Transitional Budget 2.0
Annual Reports Unaudited Reports
Open Data
In-Year Execution
Audit Reports
Pre-Budget Statement
Interactive Data
Standards
Timeliness
B. Budget 2.0
Budget 1.0 Transitional Budget 2.0
National Government Sub-National
Parastatal
Accrual Extensions
Information Completeness
Budget 1.0 Transitional Budget 2.0
Cash Modified
Cash Modified Accrual Full Accrual
Budget & Commitment Controls
Performance Discipline Cash & Liquidity
Management
Budget Forecasting
Budget Comprehensiveness
Budget Execution & Accounting Methods
B. Budget 2.0
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• brief discussion
Government Performance Management
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Government Performance Management
Data from Government Operations
Expenditures Revenue
Budget
formulation
Budget
execution Human
Treasury Resources
Data from Government Operations
Government Performance Management
C. Performance Management
C. Performance Management
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• brief discussion
Politics C. Performance Management
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• brief discussion
Policy C. Performance Management
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• brief discussion
Platform C. Performance Management
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• brief discussion
planning: budget – controls - monitoring
C. Performance Management
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• brief discussion
public service performance
C. Performance Management
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• brief discussion
public: transparency drives accountability
C. Performance Management
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• brief discussion
private sector: value for money and development
C. Performance Management
PEFA/PFM Alignment
Version 7 section
• brief discussion
Version 7 section • Resource dependency – revenue management & revenue transparency
• Government employment as %, size – civil service management
• Debt and deficits – expenditure management and procurement
• Population, regional disparities, ethnic issues – decentralization
• Democracy, freedom, stability, income disparity – budget and performance transparency
Sample Factors
Version 7 section
• brief discussion
Calculates?
Technology Priorities
PFM Priorities
Country Conditions
Version 7 section
• brief discussion
Anchor
Technology Priorities
PFM Priorities
Country Conditions
Benchmark Priority
Gaps Sequencing
Version 7 section
• brief discussion
Sequenced
Technology Priorities
PFM Priorities
Country Conditions
Benchmark Priority
Gaps Sequencing
capacity
Governance Valuation
4 visualization examples from different countries follow
Visualized Governance Opportunity
Leapfrog and good practice opportunities at a glance
High Level Blueprint
Platform approach to sequencing customized to government needs
Government Objectives Alignment 1. Build Capacity
2. Improve Budget
Execution
3. Improve
Transparency
4. Improve
Performance
National
Plan
1.Public safety
Improved civil
service capacity =
improves ability to
achieve objectives
Executing on
budget plan =
spending on
objective
Improves stability Improved
performance =
improves
effectiveness of
government
programs
2. Youth programs
3. Social Inclusion
Demonstrates
improvement
4. Employment
Improvements
5. Service Delivery Key deliverable
6. Anti-corruption Key deliverable
State Reform
1. Civil Service Reform Key deliverable
Improves
accountability,
reduces corruption
Key deliverable
2. Financial Management
Controls Key deliverable
3. Devolution Key deliverable
4. Fiscal Transparency Key deliverable
Aligned with government objectives
Performance Schedule Private sector
Change Manage-
ment program
Revenue Integration
Purchasing & Procurement
e-Procurement Open Data
Particpatory Budgeting
Public Budget
Transparency
Audit
Social Media integration
Planning Financial
Dashboards Program
Budgeting Sector Dashboards Balanced Scorecard
People Human
Resources Consolidation
Capacity Building & Training
Performance Appraisal
Talent & Succession
E-Recruitment Employee Self-Service
Foundation Infrastructure
upgrade Improved Controls
Process re-engineering
Change management Progressive Activation
For more advanced countries, sequenced use of “performance” technology
Version 7 section
• brief discussion
FreeBalance i3+qM Process
52 52
Country Research
A. Public Financial
Management
B. Budget 2.0
C. Performance Management
Solution Blueprint
Implementation
Product Development
Domain Research
Steering Committee
Customer Sustainability
Key additional advantage of process: Customer implementation experience goes into product & there is an emphasis on sustainability
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• brief discussion
Is “time on my side”?
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Process requires 2-4 weeks depending
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• brief discussion
The process is an excellent anchor, but not foolproof
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• brief discussion
Who is FreeBalance? FreeBalance is a global provider of government resource
planning software (GRP) for public financial management (PFM) – Canadian software company ISO-9001/2008 certified
– Strong domain expertise in government financial management, 100% focus on government
– Integrated technology for budget formulation and public expenditure management: entire budget cycle
– De facto standard for fast implementations
– Global presence, 18 countries, in every World Bank region