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PFM Knowledge Sharing, Part 3: Benefits of IFMIS


March 2, 2009

This is part 3 of the 9 part series on PFM knowledge sharing.

Benefits of Integrated Financial Management Information Systems (IFMIS) for Governments

FreeBalance provides a Commercial Off-the-Shelf (COTS) IFMIS suite that is used in many countries around the world. We hope that the following is sufficiently objective to be of value to you.

Speakers from PFM conferences almost universally support the notion that governments should have an automated financial management system. The IFMIS is an enabler for public financial management.  “PFM is the core of the core for governance (Brumby)”. PFM includes legal reform and processes that can be executed with the financial management system.

The need for good governance is recognized by PFM experts.  Over 2.6 billion people or 40% of the world lives on less than 1$ day. “Should we be sorry? “It is more about the lack of  opportunities (Petkovski)”

Effectiveness and improved outcomes are important goals for any IFMIS acquisition. “The objective of implementing a computerized IFMIS system is to increase the effectiveness and efficiency of state financial management and facilitate the adoption of modern public expenditure management practices in keeping with international standards and benchmarks. (Points)”

Numerous benefits were cited by conference speakers.  “The benefits of an FMIS include: better fiscal management, more optimal resource allocation, improved management of resources (value for money), reduced fraud and corruption, improved transparency and accountability, lower transaction costs. (Parry)”

In the long run, a good PFM strategy and a good implementation of the IFMIS “enables political stability. (Prasueth)”


Enable Government Reform

Government institutions are restructuring to: (Points)

  • Improve services to citizens
  • Improve strategic and day-to-day decision making
  • Reduces bureaucracy and improve efficiency
  • Reduce cost of operations
  • Increase public accountability
  • Ensure adequate controls to minimize fraud and corruptions
  • Provide citizens with better access to information.

Improve Efficiency and Controls

  • Better control over budget (Osler) through full integration of budget and budget execution data. (Myers)
  • Enhanced efficiency (Osler)
  • Ability to decentralize functions and processes yet maintain overall control by Ministry of Finance (Osler)
  • Forces financial discipline (Osler)
  • Reduction of operating costs by reducing administrative tasks. (Acosta)
  • More available resources to facilitate management control and the development of new activities that add value. (Acosta)
  • Strengthen the monitoring and evaluation capacity. (Kamaray)
  • Improve service delivery. (Kamaray)
  • Facilitates improvement of customer service. (Van der Linde)
  • Control over fraud and corruption. (Van der Linde)
  • Internal controls are critical for the safeguarding of public money (Woods)

Improve Confidence through Transparency

  • Credibility of the budget. (Osler)
  • Transparency of information (Osler)
  • Comprehensiveness and transparency. (Osler)
  • Predictability and control in budget execution. (Osler)
  • External Scrutiny and Audit (Osler)
  • Foundation of performance-based budgeting (PBB) and Monitoring & Evaluation (M&E) and broader reform on corruption, transparency and e-government. (Myers)
  • These include problems in the lack of credible budgets and transparency. Growing globalization has drawn governments to modernize in order to support economic growth. This helps to converge economic development with public finances. (Kovács)
  • IFMIS is no longer a luxury (Sottie)

Increase Government Revenue

  • This is a frequent theme for sub-national governments.
  • Improved revenue collection. (Prasueth)

Reduce Costs

  • Expenditure control – mentioned by many speakers.
  • Debt cancellation. (Minthambala)
  • Sourcing of goods and services from pre-qualified suppliers eliminates “brief-case” suppliers [not real companies]. (Minthambala)
  • Use of the Treasury Single Account to reduce borrowing. (Minthambala)
  • Reduces costs to report to donors. (Symansky)

Improve Budgets, Planning and Decision-Making

  •  Credibility of the budget. (Osler)
  • Policy-based budgeting. (Osler)
  • More realistic ands standardized budget formulation. (Van der Linde)
  • Close monitoring of outstanding bills, cash in bank accounts and improved cash planning. (Myers)
  • Provision of timely and accurate data for management and budget decision making. (Myers)
  • Access to reliable and timely information to support decision making. (Van der Linde)
  • Accounting, Recording and Reporting. (Osler)
  • Critical for decision-making (Osler)
  • Forces financial discipline (Osler)


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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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