Latin America & Caribbean
Latin America and the Caribbean have been growing at an accelerated rate in the changing world economy. Global conditions favoured four years of economic expansion, with strong activity in Brazil, Mexico, Colombia and Peru. Growth is higher than at any other time in the past 25 years.
State modernization, from public sector reform to government reform and decentralization, is the foundation for sustained economic growth and reducing inequalities. Successful public finance reforms automated financial management at the central government level and strengthened budget execution. Governments are now engaging in a second wave of improving financial systems to deal weaknesses in governance such as extensive extra-budgetary activities, weak budget constraints at the sub-national level.
The Guyana Story
Guyana, the land of many waters, is a small state in transition. Post-independence politics in Guyana created a very open economy with more than 80% exports to gross domestic product (GDP) ratio. Sugar, rice, bauxite and gold exports account for 80% of export earnings. As preferential trading markets open to global competition, Guyana is looking for ways to diversify both its public and private sectors. The Government faces the challenge of creating competitive business environment and shifting the economy from natural resources to human capital and innovation.
The Government is modernizing the public sector and investing in technology and fiscal reforms. The Poverty Reduction Strategy Credit (PRSC) program focuses on improving the accountability and transparency of the public sector and public services delivery. To improve budget management and fiscal transparency, the Government replaced its outdated systems with an integrated financial management system (IFMS) in 2004. The Fiscal Management and Accountability Act became law the same year.
The IFMS project was funded by the Canadian International Development Agency (CIDA), the World Bank, the Inter-American Development Bank (IDB) and the International Monetary Fund (IMF).
The old financial system was paper-based supported by a small database and spreadsheets applications. Only payroll was automated, although cheques were printed manually. Each ministry, department and region had separate bank accounts. Collected revenues were deposited into one of the many bank accounts transferred later to a Consolidated Account. Account reconciliation was difficult, and very few reports were performed due to the cumbersome manual process.
Within only 9 months, FreeBalance fully implemented the core of the FreeBalance Accountability Suite. The core IFMS module, Financial Accountability, provided a Treasury Single Account (TSA) integrating 300 different bank accounts in accordance with World Bank standards. The IFMS system was configured to reflect the unique needs of Guyana without any custom coding. Standard system configuration activated a new Chart of Accounts (COA) divided into funds, organizations, programs, projects, locations, and objects
During the initial implementation, the IFMS connected 46 government entities, 10 regions, and 300 users, and interfaced with the payroll system to automate cheques processing and secure printing. Over the next 2 years, the IFMS system was expanded with two more modules – Purchasing Accountability for procurement and Assets Accountability for managing inventory. The IFMS was also integrated with ASYCUDA, the Automated System for Customs Data, distributed by UNCTAD.
Capacity building included a comprehensive two-month training program for Government staff, including system management and training for end-users, financial analysts and management. FreeBalance provides ongoing support for configuration adjustments as the IFMS changes to reflect progress.
The IFMS project played a key role in positioning Guyana for growth and prosperity, and restoring fiscal balance. Budget expenditures are now tied to economic growth and poverty reduction goals. The Chart of Accounts (COA) incorporates project and program components that measure expenditures against pre-set goals and enable ex-post analysis of the budget.
When a mysterious fire destroyed the building of the Guyana Elections Commission Secretariat in September 2006, the Government was able to quickly recover the lost data from electronic copies of the financial records stored in the IFMS system at the Ministry of Finance.
Additional Regional Information:
- Antigua & Barbuda Minister of Finance & Economy delivers a keynote address at the 2007 ICGFM conference in Miami (PDF)
- Government of Guyana Integrated Financial Management and Accounting System FreeBalance Case Study (PDF)
- Gobierno de Guyana Sistema Integrado de Contabilidad y Administración Financiera Estudio de caso de FreeBalance (PDF)
- New York audience hails Roadshow on Antigua and Barbuda Treasury Securities as a success