ICGFM

Winter 2011 Conference

PFM in the 21st Century

SPAN IFMIS Project in Indonesia
December 5 - 7, 2011 Washington, DC

THE WORLD BANK

Ministry of Finance Republic of Indonesia

SPAN

Indonesia Roadmap of PFM Reform and SPAN Governance and Implementation Design of SPAN Plans for SPAN and IT Integration

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Area Population GDP / Growth 2010 Annual Budget Total civil servants Treasury offices Spending units Treasury employees Spending unit employees

1.9 m sq km 240m $700b / 6.1% $112b 4.7m

200 29,000 11,000 96,000

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New Laws: 1999: Decentralization law 2003: State Finance Law 2004: State Treasury Law 2004: Audit of the management and accountability of the state finance

World Bank Supports PFM in Indonesia: 22 Dec 2004 to 2014: Government Financial Management and Revenue Administration Program (GFMRAP), $60 million investment loan for implementing IFMIS (SPAN); 12 Oct 2006 to 2017: PFM MDTF Part I ($24 m) and Part II ($10 m) grants to complement the WB GFMRAP and also to to support a broad range of PFM reform initiatives.

Contracts for implementing SPAN IVV (Independent Validation and Verification) consultant to assist project preparation and procurement COTS and Systems Integrator (Turnkey) to deliver COTS Solution; Infrastructure, DC & DRC; Telecom links; Cabling BPI (Business Process Improvement) consultant (2007-2011) CMC (Change Management and Communication) PMQA (Project Management and Quality Assurance) SAKTI (Spending Unit Application developer)

1999-2004
Creation of new Directorate Generals : DG Budget (budget formulation and preparation) DG Treasury (budget execution and treasury mgt - 2005) DG Fiscal Balance (management of transfer funds to the local governments - 2006) DG Debt Management (management of foreign and domestic loans) DGSAM (management of state assets and receivables - 2006)

2005-2009
Procedural improvements to support PFM reforms: Unified budget system: combined recurrent and development budget Introduction of performance based budgeting and Medium Term Expenditure Framework (MTEF) Issuing Budget execution documents (DIPA) on time Reforming business processes in the Treasury payment offices (KPPN) through the establishment of pilot showcase offices that reduce payment processing time from 2 days to sometimes 1 hour. Establishing Government accounting standard and reorienting the chart of accounts Reforming the government procurement process (Keppres 80/2003) MOF as one of the selected ministry to implement bureaucratic reform (BR) program

2009-2011 and beyond

Continuous improvements to support PFM reforms: New program structure aligns Government programs with organization structures and establishes clearer lines of accountability of the line ministries (budget users) The new simplified budget document which focus on performance rather than detailed line item. Performance information (including its formulated target and indicators) Definition of the baseline and new initiatives Calculating output based standard cost (SBU/ SBK) Integration database between budget appropriation data (DG Budget) and allotment data (DG Treasury) Full implementation and expanded coverage of the Treasury Single Account Deepening and stabilizing cash plan and forecasting Faster and evenly spread budget disbursement

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SPAN

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Project Organization

SPAN

OVERALL PROGRAM GOVERNANCE STRUCTURE

Ensuring a greater chance of success in implementing SPAN Project governance Augmenting resources through consultants (IVV, PMQA, CMC) and help from World Bank
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TRAINING MANAGEMENT

QUALITY MANAGEMENT

CHANGE MANAGEMENT

SPAN

SPAN Scope

COTS Functionality

COTS Solution
Systems Software

Collaboration Environment

Hardware

Budget Preparation

Commitment Management Processing of Government Receipts

Management of Spending Authority GL & Chart of Accounts Maintenance of Reference Information

LAN & Cabling

WAN

Payments Management

Data Centre

Cash Planning

Reporting

DATA CHARACTERISTICS

PRESENTATION CHARACTERISTICS

Data Model Common Definitions Single Collection Point Universal Application Consistent Naming Conventions for Data Elements Common Data Dictionary

Derived Values Transfer Between Modules Minimum Reconciliation Required to Ensure Data Integrity Consistent Customisation Tools and Techniques Code Shared Among Modules Shared Business Rules

OPERATIONAL CHARACTERISTICS

APPLICATION CHARACTERISTICS

Consistent Headings on Screens and Reports Consistent Navigation Consistent Look and Feel for Screens and Reports Single Authentication

Single Security and Rights Administration Consistent Interface to External Environment Implementation of New Releases of Components Handled Consistently Common Job Scheduling Common Set of Hardware/Software/ Communications Platforms/Protocols

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SPAN

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Project Organization

SPAN

Empowering and effectively using available resources Detailed plans Communicated well in time

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TRAINING PLAN

TESTING PLAN

COMMUNICATIONS PLAN

ROLLOUT PLAN

SPAN

Ministry of Finance is implementing IT Shared Services Business process of individual departments would be retained at the department level while common services would be managed by the MOF Shared Services

Objective 1. Optimise investments in infrastructure at MOF both technological and operational 2. Achieve economies of scale by implementing among others, virtualization technologies 3. Consolidate scarce resources 4. Increase integration between departments 5. Focus towards IT Controls and Governance and Enterprise Risk Management

MOF Shared Services will manage SPAN infrastructure in the newly consolidated data centre
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SPAN

PFM Reform is a long drawn process comprising of multiple change initiatives affecting regulation, process, systems and people
IFMIS systems accelerate reform and must be chosen and designed well IT and program governance coupled with proper planning ensures a greater chance of success

Resources need to be augmented

IFMIS system creates an opportunity for further integration
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THANK YOU