In countries emerging from conflict, the lack of an effective Government Resource Planning (GRP) system can lead to a range of problems, including the mismanagement of public funds and corruption which exacerbates poverty and civil unrest. A well-functioning GRP system is essential for any country looking to secure a sustainable future.
FreeBalance offers the most comprehensive Government Resource Planning system available today – the FreeBalance Accountability Suite™. Our software has been used in a number of post-conflict countries around the world and has helped secure billions of in public funds.
The Public Expenditure and Financial Accountability Secretariat (PEFA) recently released PEFA Assessments of two of our customers, Kosovo and Sierra Leone. The reports clearly demonstrate the progress these countries have made.
What is GRP?
Government Resource Planning (GRP) software is Commercial-off-the-Shelf (COTS) software designed exclusively for governments. GRP software differs from traditional enterprise resource planning (ERP) software by having no unnecessary private sector functionality that impinges on government success rates.
The FreeBalance Accountability Suite™ is a configurable and scalable GRP solution for all levels of central, regional and local government. The software can be easily localized to varying international deployment needs. FreeBalance’s GRP automates the entire government budget cycle including policy-based budgeting, medium-term expenditure frameworks (MTEF), budget transfers, spending priorities, external resource management, special project accounts and fiscal decentralization.
The Benefits of Government Resource Planning in Post-Conflict Countries
Ease of Use
GRP systems drive scalability and flexibility at every level. There’s no need for additional customization, so these systems can be implemented rapidly and without interruption to government services, helping to rebuild the country’s infrastructure and economy. Additionally, government resource planning systems provide a common platform for all government Ministries, Departments and Agencies (MDAs), which helps to ensure coordination and cooperation.
Effective Resource Management
Systems such as the FreeBalance Accountability Suite™ provide a framework for managing resources efficiently and fairly. A well-functioning GRP system can help to ensure that critical resources are allocated in a way that meets the needs of the population, whilst promoting economic growth and development. By tying budgets directly to national development objectives, governments – and citizens – can clearly see where progress is or isn’t being made.
Rebuilding Trust in Government
By ensuring effective budget management, GRP systems help to ensure that the rebuilding of these often devastated countries is as efficient as possible. In addition, GRP systems can help to build trust between the government and its citizens through the use of Transparency Portals. By providing transparency into how the government is allocating resources, citizens can be assured that funds are not being wasted, which builds trust between the government and the people – essential for post-conflict countries.
Global Competitiveness
Over an above donor incentives to implement PFM reforms, globalization has created its own incentives for good governance. Government leaders understand that businesses have choices of where to do business and having a sound public financial management system with good governance, accountability and transparency is a must for a country to be globally competitive.
How to Approach a GRP Implementation in Post-Conflict Countries
Sequence PFM Reform with Capacity Building
There is ample evidence in the studies to support the notion that countries should implement a financial management system first and sequence reforms as capacity is built.
A World Bank report concludes that “reforms of organic budget laws tend to happen over a period of time rather than early in the process, so rushing adoption of new laws too early is not necessary in many cases.” Long reform cycles prior to the adoption of Public Financial Management (PFM) software does not seem to be a good practice. The report concludes that “while capacity can be short-circuited through substitution (such as donor-funded staff in line positions), developing sustainable capacity remains a challenge and needs greater and more sustained attention.”
FreeBalance has seen some excellent examples of capacity building in Timor-Leste and Kosovo. The key lesson here is to progressively activate financial software functionality as capacity is built. Systems can be first installed with basic controls and progressively modernized to support the entire government financial lifecycle with more complex accounting functions and decentralization.
And, capacity is not associated with progress according to the report. It notes that Sierra Leone, despite having both very low per capita income and human development indicators, has “progressed further and faster than Cambodia or Tajikistan with relatively higher per capital incomes as well as human development indices.”
Focus on Budget Preparation AND Budget Execution
Budget execution was found to be the PFM area of greatest improvement. The report concluded that “budget execution reforms tend to be more successful, while some rethinking of reform approaches targeting budget planning on the one hand, and control and accountability on the other hand, may be needed.”
It really should come as as no surprise that budget preparation lags behind budget execution progress. This is similar in developed countries where multi-year budgeting, program and performance measures are also not adequately used.
Conclusion
In countries emerging from conflict, the lack of an effective GRP system can seriously hamper efforts to rebuild the economy. The FreeBalance Accountability Suite™ has been used in a number of post-conflict countries around the world and can be implemented quickly. If you are interested in learning more about how our software can help your country achieve sustainability, please get in touch.
