Africa is changing. Emerging fast growing countries are leading the way. Their sustained growth and progress show that even on a continent with many fragile states, public sector reform and private sector growth can quickly accelerate development. Better public finance in developing countries is essential for sustainable growth and poverty reduction.
Changing global market dynamics provide new opportunities for African countries to develop their private sectors. With the help of the international community, governments are reforming budget and expenditure management and implementing standard financial management systems as the foundation stone for growth, change in the 21st century.
The Sierra Leone Story
The civil war in Sierra Leone (1991-2002) was devastating and put the country at the bottom of UNDP Human Development Index. Facing enormous reconstruction challenges, the government of Sierra Leone adopted a strategy of Devolution and Empowerment to rebuild the country. Reconstruction governance reform priorities focused on inclusion, trust, legitimacy.
To achieve success in implementing the political reforms and fiscal decentralization, the government needed to replace its bespoke accounting system (FMAS) with a modern integrated financial management system (IFMIS) based on international standards. Mandatory requirement for the new system: avoid customization. FreeBalance was contracted by the World Bank to provide the new system.
The FreeBalance Accountability Suite roll-out followed a modular approach, one small project at a time. The implementation process was sequenced in 3 phases and adopted the government PRINCE2 (Projects IN Controlled Environment) methodology for sequencing change and technology introduction.
Phase I focused on budget execution and expenditure management – configuring the IFMIS embedded commitment controls, aid management rules, payroll, and a uniform Chart of Accounts (COA) to capture receipts, expenditures and commitments, IFAC-compliant cash accounting, reporting and auditing. Phase II focused on extending access to the IFMIS to central government ministries and police.
The project was launched in November 2004, the core FreeBalance system went live in June 2005 at the Accountant General’s Department and the first Cheque was printed. In January 2006 the additional Revenue, Purchasing, Assets, Inventory went live and the IFMIS Accountability solution was switched completely to the Ministry of Finance and the Police. The Performance Budgeting was added in April 2006. The Human Capital module was implemented at Accountant General’s Department and the Establishment Secretary’s Office. By the end of 2006 the IFMIS was rolled out to the Ministries of Health, Education, Agriculture, Works and Auditor General’s Department.
Phase III will connect all central government Ministries with the 19 Local Councils at remote locations to support devolution budget transfers.
Sustainability of the IFMIS is based on the legal framework (Government Budgeting and Accountability Act 2005, Local Government Act 2004, Procurement Act 2004), a local sub-contractor, training for all staff in the public sector, a Help Desk, as well as incremental adjustments of the system and gradual activation of functionality – an integrated approach that involves changes in structure, culture and leadership.
The IFMIS is an entry point to a sound Public Finance Management (PFM) system. Visibility of fiscal flows and reporting down to ward level facilitates effective Public Expenditure Tracking Survey (PETS). Effective budgetary and expenditure controls enable the government to make better use of public resources. The increased transparency and ‘Public Value’ of information provide a foundation of fiscal stability and fighting poverty.
Additional Project Information:
- The IFMIS Project and its implementation in Sierra Leone (PDF)
- IFMIS Update for Ministry of Finance: Overview of FreeBalance Solution (PDF)
- Challenges in Financial Management with Decentralization (PDF)
- Introducing Reforms & Improving Processes: The Sierra Leone Experience (PDF)
- Sequencing ICT in Countries Undergoing Decentralization (PDF)