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Government Technology Implications: PFM Functional Components


March 5, 2009

This is section 2.1 of a series of blog entries creating a Government IFMIS Technology Evaluation Guide. This includes information to assist in evaluating IFMIS options and the technology requirements for FreeBalance IFMIS implementations. These series will be combined with feedback to produce a comprehensive Technology Evaluation Guide to be published on our web site.

Financial management differs between the private and public sectors. The practice of acquiring an Integrated Financial Management Information Systems (IFMIS) often begins with the context of private sector accounting or existing software in use. These approaches can often mislead prioritization.

FreeBalance has developed a PFM Component Map that enables governments to effectively determine functional needs and priorities. The FreeBalance PFM Component Map provides a high level view to government financial functions. It is a target for determining the characteristics of an IFMIS. Governments can identify which components are needed and the level of importance. Government can map current systems against the component map to determine gaps. It enables determining the needed portfolio for automation, reform and improvement. No one vendor can provide a comprehensive PFM solution for the broad range of needs in government and the variability in country contexts.

A component is a defined piece of functionality that could operate stand-alone. The FreeBalance PFM Component Map enables drilling into more levels of detail to identify rich functional requirements.It also provides components for transparency and citizen service. The arrangement and definition of components is government centric. The main functional components for the FreeBalance PFM Component Map are:

  1.   Government Performance Management
    •    Budget Planning/Formulation
    •    Policy Management
    •     Public Accounting and Budgetary Classification
    •     Performance Management
    •     Aid Management and Harmonization
  2.   Commitment and Budget Accounting
    •    Budget and Appropriation Control
    •    Commitment and Obligation Control
    •    Budget Execution and Funds Release
  3.   Government Financial Management
    •    Reform and Modernization Activation
    •    (Treasury) General Ledger
    •    Project Accounting and Management
    •    Asset and Inventory Management assets and inventory management
  4.   Treasury Management
    •    Cash Management
    •    Debt and Investment Management
    •    Foreign Exchange
  5.   Public Expenditure Management
    •  Procurement
    •  Grants Management and Intergovernmental Transfers
    •  Social Benefits
    •   Payment Management
  6.   Government Receipts Management and Revenue Administration
    •  Non Tax Government Revenue
    •  Taxation
  7. Civil Service Management
    •  Civil Service Reform
    •  Payroll and Pensions
    •  Civil Service Workforce Management
    •  Movement life
    •  Capacity Management
    •  Benefits Management

The use of component maps to identify priorities has become a good practice, particularly in today’s age of Service-Oriented Architectures (SOA). The New Language of Business is an excellent guide to this technique.

The detailed  PFM Component Map is available on a non-disclosure basis by contacting FreeBalance:

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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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