fmis_awareness (1)

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INSIDE FMIS



Objective of Briefing Objective of this briefing is two fold:

1. Provide awareness/understanding of the FMR,its major components and the key changesassociated with it; and

2. To get yourselves prepared to take on theimplementation of FMR/FMIS



Outline of PresentationFinancial Management and its key elementsProblems with current Financial ManagementFMR Focus & Components

� W hy FMIS for Whole of Government?� B

enefits of FMIS� K ey Issues in FMIS



What Is Financial Management?Definition:

Financial Management is management of finances of an organisation in order toachieve its objectives.



K ey E lements of F inancialM anagement:

Planning

AllocatingResources

ManagingPerformance &

Resources

ReportingManagement

Cycle



Problems in the CurrentF inancial M anagement forGovernmentPoor planning

La ck of performan ce focusInput based

Poor d istr ibut ion of limited resour ces Un clear linkages of outputs to nat iona l po licyobje ct ives



Cont¶«dInadequate financial controls

Poor b udg etary controls & financial manag ementp ractices

� U ntimely and inaccurate rep ortsPoor recording of commitmentRep orts lack useful dataCentralized control vs. CEO accountab ility



W hat D oes FM R Bring About?

FinancialManagement

Act 2004

FinanceManual

Consequential amendments to:y Audit Acty Public Service Acty statutory authority Acts

FinanceInstructions

2004

FinanceManual

FinanceManual

FinanceRegulations

2004

(apply to budget sector agencies) (apply to other

state entities)

N ew Legislation



Cont¶«d� A move from cash accounting and gradual

transition (shift) to accrual accounting



Cont¶«d� A move from traditional line item budgeting to

performance/output budgeting

Ou tcomesGoods or Services

Used

Indicator effect or

benefit onthe u ser

l l

Ou tp u tsGoods or ServicesS u pplied

Inp u ts

Activities/Processes

Bu dget Entity



Link between

FMR and

FMIS

A new Financial Management InformationSystem will support the changes in the FMR



W hat is

FMIS?

The Financial Management Information System

(FMIS) is an integrated database system and willbe used to support the government¶s purchasing,accounting, payment, sales and receiptingfunctions.



W hy an

FMISfor the

W OG?

FMIS provides public sector decision makersand managers a set of tools to:E nsure a ccountability

e .g . The CEO will be held a ccountable for any over spending in his /her ministry .



Cont¶«dSupp or ts de ce ntrali z a ti on of a ccou nti ng pr ocesses

e .g . LPOs woul d be issue d fr om Cos t Ce ntres all over the cou ntry bu t the hea d offi ce woul d s till have contr ols over

expe ndi ture .



Cont¶«dImpr ove effe ctive ness a nd effi cie ncy

e .g . FMIS will e nable fas ter pr ocessi ng of payme nts as well as re ceip ts .



W hy move?

Major problems in the manual system are:

Slow processing of paymentsSlow processing of transaction

Inaccurate & untimely financial information andreports i.e. information is not recorded on realtime



Benefits ofFMIS

Processes large number of transactions inlimited periods of time across a country widenetwork of offices



Cont¶«dEasy retrieval of financial information for decision making e.g. financial information can beviewed where transactions are generated



Cont¶«d Availability of basic data required for economicmanagement in a timely manner



Components ofFMIS

New Chart of Accounts for WOGGeneral Ledger Accounts PayablePurchasing A

ccounts Receivable & Sales AssetsOther modules



More on

FMIS«

FMIS has to be tailor made to suit the newlegislation which includes a new FinancialManagement Act, Finance Instructions andFinance Manuals



Cont¶«dContinued job securitywith the automated environment



Key

Issues

Training

Capacity building within governmente.g. Change in wor k practices,f rom manual and paper bas ed to

an automated environment e.g. ex penditure ledger will not bemaintained in an automated environment.

Brief ings will be done on a progress ive bas is as we proceed



Cont¶«dOwnershipUnderstanding the reform and the key changes in it.

The accounting heads will need to drive the new FMISimplementation in order to succeed. And they will need

nominate a person who can work closely with the FMISteam to assist in the training and implementation



Status of

FMIS

Tendered for a new FMIS in April 2004

Currently in the evaluation process

Selection to be finalized by end of September 2004

Commence implementation on a pilot basis early 2005



Desk Officers

For your assistance we have set up a helpdeskfacility should you have any queries regardingFMIS.

� E- mail:[email protected]: 3222 144



QUESTIONS

THANK YOU

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