the ibas in bangladesh

7/30/2019 The iBAS in Bangladesh

1/23

December 12, 2012

E-governance for Enhanced Accountabilityand Transparency in

Public Expenditure ManagementGood Public Financial Management Practices During a Period of Global Adjustment

Ranjit Kumar Chakraborty

Additional Secretary, Finance Division, Ministry of Finance

Bangladesh


2/23

Governments bailing out banks at the

expense of higher taxes

Higher fiscal deficit

Subprime and weakened financial systems

Collapse of banking systems on tax

payers safety nets

Countries in debt

2


3/23

The global financial crisis (GFC) has heightened the importance ofaccountability in public expenditure management

Globally, lapses in governments capacity to manage fiscal discipline duringthe GFC has pointed to the need for improved comprehensiveness andtransparency with fiscal data

The role of Integrated Financial Management Systems (IFMIS) hastherefore become more important for budgeting, accounting,authenticating and facilitating public funds

GLOBAL ROLE OF IFMIS IN PUBLIC

FINANCIAL MANAGEMENT

3


4/23

IFMIS has been promoted as a core component of public financial reforms in manydeveloping countries since early 1980s.

IFMIS can help boost fiscal discipline by (Anticorruption resource centerhttp://www.u4.no/publications/the-implementation-of-integrated-financial-management-systems-ifmis/IFMISprojects tend to):

o providing a robust tool to improve budget planning and execution through timelyand accurate data

o seeking to enhance credibility of the budget through greater comprehensivenessand transparency of information

o minimizingexposure to corruption by increasing the risks of detection

o help detect excessive payments, fraud and theft by matching asset inventories withequipment purchase, identification of ghost workers, payment authentication,automated payment reducing human interference etc.

IMPORTANCE OF IFMIS IN PUBLIC

EXPENDITURE MANAGEMENT

4


5/23

Globally there were 94 IFMISprojects with 55 completed onesspanning over 1984-2010 as of 2010.

The World Bank alone, being the leaddevelopment partner for IFMISglobally, has invested over US $2.2billion.

Latin America and the Caribbean hadthe largest number of IFMIS projectsglobally whilst the Middle East andNorth Africa had the lowest in 2010.

GLOBAL POPULARITY OF IFMIS

25

13

7

53 2

Number of completed IFMIS Projects

Latin Americaand theCaribbean

Africa

Europe andCentral Asia

South Asia

East Asia andthe Pacific

Middle Eastand NorthAfrica

Financial Management Information Systems: 25 Years of World Bank Experience onWhat Works And What Doesnt, 2012;http://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/04/20/000

356161_20120420013749/Rendered/PDF/616400REPLACEM00505020110Box361495B.pdf 5
http://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/04/20/000356161_20120420013749/Rendered/PDF/616400REPLACEM00505020110Box361495B.pdfhttp://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/04/20/000356161_20120420013749/Rendered/PDF/616400REPLACEM00505020110Box361495B.pdfhttp://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/04/20/000356161_20120420013749/Rendered/PDF/616400REPLACEM00505020110Box361495B.pdfhttp://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/04/20/000356161_20120420013749/Rendered/PDF/616400REPLACEM00505020110Box361495B.pdfhttp://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/04/20/000356161_20120420013749/Rendered/PDF/616400REPLACEM00505020110Box361495B.pdfhttp://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/04/20/000356161_20120420013749/Rendered/PDF/616400REPLACEM00505020110Box361495B.pdf


6/23

The case of Bangladesh

INTEGRATED BUDGET ANDACCOUNTING SYSTEM (IBAS)

6


7/23

Strategic improvements

Consolidation and deepening

Technical improvements

MILESTONES OF 17 YEARS OF PEM

REFORM IN BANGLADESH19932002: Reforms in Budgeting and Expenditure Control (RIBEC)

20032008: Financial Management

Reform Project (FMRP)

20092014: Strengthening Public

Expenditure Management Program

(SPEMP)

Consolidation of financial data; Streamlined budget administration; Effectiveness of external audit etc.

Macro modelling & Debt management; Strengthening the linkage between policy,planning and budgeting throughintroduction of MTBF;

Devolution of responsibility for planningand budgeting to the line ministries; Increased focus on monitoring andevaluation; Comprehensive training program on PFMetc.

Long term strategic planning and policy development; Institutionalization and deepening of the MTBF approach; Improvement of the linkages between procurement, planning and budgeting; Integration of budgeting, accounting, and monitoring of functions at the LMlevel;

Consolidation of iBAS towards a modern integrated budget and accountingsystem etc. 7


8/23

REFORMS ON AUDIT AND

LEGISLATIVE OVERSIGHT ON PEMEnhancement of mechanisms to tighten Ex-post

accountability

Separation of Accounts and Audit function Accounts under MOF, not the Auditor

General

Establishment of Financial ManagementAcademy (FIMA)

Formal Comptroller and Auditor General(C&AG) system for supporting PublicAccounts Committee (PAC) functions

PAC chaired by a Member of Parliament,not by Minister

Audit review backlog reduced by above 90%

88


9/23

Computerized accounts consolidation

Computerization of the budgeting system

in the Finance Division.

Financial Management Information

System (iBAS):

facilitating faster transfer of information

and data for greater accuracy and

timeliness

ROLE OF IBAS IN THE PEM REFORM

AGENDA

Introduction of new classification

structure

In support of PEM reforms for greater accountability,System for budgeting and accounting was developedand is being enhanced

9


10/23

EVOLUTION OF THE USE OF ICT IN

PUBLIC SECTOR BUDGET AND ACCOUNTS

IN BANGLADESH

1995:Introduction

of IT ingovernment

budgeting andaccounting

1996:

first ITbased

budget waspreparedusing MSExcel in

1996

Late 1996:

home-madestandalonebudgeting

andaccountingsoftware

developed

usingFoxPro.

1997:

LANestablishedto connect

FinanceDivision

andController

General ofAccounts

1998:

All regionalAccountingOffices werecomputerized

and someministries

wereconnected

2005:TransactionAccounting

Systemintroduced

2006:

WANestablishedand iBASdeveloped

2012:Electronic

Fund Transferand Electronic

ReceiptVoucher

verificationdeveloped.iBAS++ i.e.

IFMIS beingdeveloped

Committee onReforms inBudgeting

(CORBEC)

Reforms inBudgeting andExpenditure

Control (RIBEC)Project

Financial Management Reform Project (FMRP

10


11/23

The Integrated Budget and Accounting System (iBAS):

has been developed by local engineers and customized with localrequirements

is the official public sector budgeting and accounting system in Bangladesh

is a bilingual system that provides reports in Bangla and English

Connects Finance Division, 35 line ministries under the budget moduleand the Controller General of Accounts (CGA), 49 Chief AccountsOffices (CAO), 6 Divisional Controller of Accounts Offices (DCA) 58District Accounting Offices (DAO), and 13 Upazila Accounting Offices(UAO) under the accounting module using the largest WAN in Bangladesh

INTEGRATED BUDGET AND

ACCOUNTING SYSTEM IN BANGLADESH

11


12/23

The iBAS:

conveys budget ceilings to line ministries, allows online budget estimatessubmission from them

allows preparation of budget under MTBF allows Budget VarianceAnalysis at Various Levels and with a wide range of parameters

facilitates Bill Processing Workflow Capturing through Electronic Tokensand recording of all bill and cheque payments down to district levels

has a new add on module: Electronic Fund Transfer

has Extensions for Treasury Banks for capturing government chequepayments and receipt vouchers

contains optional facility for fund checking

USE OF IBAS IN BUDGET PREPARATION

AND EXECUTION

12


13/23

The iBAS:

has interface with banking systems for electronic import of debit scrollsand credit scrolls

has automated bank reconciliation

allows generation of:

o Finance Reports

o Appropriation Reports

o Management Reports

USE OF IBAS IN ACCOUNTING AND

FINANCIAL REPORTING

13


14/23

iBAS for Electronic ReceiptVoucher Verification and

Electronic funds transfer forenhanced e-Governance

14


15/23

System for online receipt voucher verification ready for implementation in Dhaka Cityand is soon to begin

Through this, an additional module of iBAS will help verify whether a particular receiptconfirming payment to government through a bank by a citizen or vendor is valid

Given a large number of government contracting and fees to government for variousservices, all currently based on manual receipts and no verification, this feature is likelyto add significant value in preventing pilferage or public resources resulting in:

o Concerned departments will be able to verify receipt vouchers in the next workingday through Internet

o Improved fiscal management

o Improved cash management

o Reduced gap in single treasury cash management

o Help avoid unnecessary borrowing

ELECTRONIC RECEIPT VOUCHER VERIFICATION

15


16/23

E-RECEIPT VOUCHER

NationalizedCommercialBank (NCB)receiving

governmentpayment

WebPortal for e-

Payment

BangladeshBank

Counter

NCBCounter

CitizenPay

sGovernment

Web Portal

Verificationby

Citizen

BangladeshBank (Central

Bank)

Verificationby

Government

Departments

WebService

Smart Cards FinanceDivision(CGA)

Eventually with smart cards, the e-receipt voucher verification system is envisagedto be like this:

16


17/23

Electronic Fund Transfer (eFT) successfully piloted in 16 CAOs allowingelectronic transfer of civil servant salaries of the pilot ministries

All CAOs will come under eFT by end of 2012, covering salary payment

of all civil servants eFT is expected to include:

o pensions in 2013

o Government subvention for private school teachers salaries, socialsafety-net beneficiaries etc. at a future stage

eFT is expected to benefit about 10 million citizens at a future stage

ELECTRONIC FUNDS TRANSFER

17


18/23

EFT

AccountingOffice

CitizensSubm

itBillstoAccounting

Offices

Clients

Bank

CitizensRece

ivePaymentin

Their

Ban

kAccounts

CGA Bangladesh Bank

iBASAccounting

Office

AccountingOffice

Clients

Bank

Clients

Bank

Clients

Bank

eFT

Eventually with smart cards, the eFT system is envisaged to be like this:

18


19/23

eFT is expected to lead to:

Improved, timely service for beneficiariesno stress or time required forcheque collection and deposit

Timely monthly salary preventing demotivation due to lack of basicfacilities such as being paid on time

Reduced human intervention

Beneficiaries notified through SMS and can view payment details online

Staff time saved through elimination of printing, writing and distributingcheques can used for improving quality of accounts

Improved fiscal and cash managementno outstanding cheques

EFT

19


20/23


21/23

Features of the iBAS++ include the following:

Centralized server/databases

Web-based with access to all

At par with international Government Financial Management InformationSystem (GFMIS)

General Ledger with Drill-Down Capability

Treasury Accounting System for Self Accounting Entities

Appropriations, re-appropriations, revisions, supplementary grants, (at

various authority levels Full Integration between Budget and Accounts

IPSAS, cash based financial statements, including disclosures

Automated reconciliation of departmental cheques and receipt vouchers

IBAS++

21


22/23

Cash Management and Forecasting

Access by Foreign Aid project accountants from various projectimplementation units to enter data (DPA and RPA)

Interface input from Debt Management Financial Accounting System(DMFAS) for disbursement projections on foreign aid

Based on Chart of Accounts structured in accordance with budgetclassification, COFOG and GFS requirements

IBAS++

22


23/23

Thank you

23

the ibas in bangladesh

Documents