ifmis in korea - pbbconference.irpbbconference.ir/downloads/78.pdf · ifmis in korea: background,...
TRANSCRIPT
IFMIS IN KOREA:IFMIS IN KOREA:BACKGROUND, OVERVIEW AND ACHIEVEMENTS
NOWOOK PARKNOWOOK PARK
CENTER FOR PERFORMANCE EVALUATION & MANAGEMENT
KOREA INSTITUTE OF PUBLIC FINANCE
1
CONTENTSCONTENTS
BackgroundBackground
Overview of IFMIS and Its development
Achievements and Key Success FactorsAchievements and Key Success Factors
2
CONTENTSCONTENTS
BackgroundBackground
Overview of IFMIS and Its development
Achievements and Key Success FactorsAchievements and Key Success Factors
3
GENERAL ISSUE OF
FMIS DEVELOPMENTFMIS DEVELOPMENT
Technical issuesTechnical issues
• Design, implementation and maintenance of centralized computerized system
• Financial support• Financial supportStreamlining budget system
• Computerizing a process requires exact and precise formalization of concepts and proceduresformalization of concepts and procedures
• Streamlining the chart of accounts• Budget classification• Accounting standards• Reporting: integration of central and sub-national governments• Scope of government and public sector reporting entity• Implementing TSA
Change Management Change Management
4
IFMIS AS A FOUNDATION
FOR PFM REFORMS
IFMIS AS A FOUNDATION
FOR PFM REFORMS
3 + 1 PFM reforms were pursued3 + 1 PFM reforms were pursued
3 reform elements
• MTEF• MTEF• Top-down budgeting• Performance budgeting
1 infrastructure1 infrastructure
• Digital budget and accounting system• Program budget classification• Accrual accounting• IFMIS
5
EXISTING FMIS IN
THE GOVERNMENTTHE GOVERNMENT
Fiscal Information Management System ( FIMSys) in the Fiscal Information Management System ( FIMSys) in the Ministry of Planning and Budget
National Financial Information System (NaFIS) in th e Ministry of Finance and Economyof Finance and Economy
• Other relevant systems: E-procurement system, The National Tax Revenue System
Local Financial Information System in the Ministry of Public Administration
Local Education Financial Information System in the Ministry Local Education Financial Information System in the Ministry of Education
Defense Financial Information System in the Ministr y of DefenseDefense
6
FRAGMENTED
EXISTING FMISEXISTING FMIS
Each system addresses the need of handling existing Each system addresses the need of handling existing business process in each sector without connection with other systems.
• For example, FIMSys did not have connection with • For example, FIMSys did not have connection with information of budget execution and settlements produced by NaFIS, which is essential information for budgeting purpose.
• Even FiMSys was not integrated with FMIS system in each • Even FiMSys was not integrated with FMIS system in each ministry and National Tax office, and e-procurement system.
Lack of real time on-demand information
7
NEED FOR IFMIS
DEVELOPMENTDEVELOPMENT
Need for system integration of existing various sys temsNeed for system integration of existing various sys tems
Need for accommodating PFM reforms, especially prog ram budgeting
8
SEQUENCE OF PFM REFORMS IN
KOREAKOREA
PB pilot
Top Down
Program Budget
Accrual Accountingpilot
2000Down 2004
Budget2006
Accounting2010
2003MTEF &
2005MTEF
2007FMISMTEF &
Top Down pilot
MTEF&
PB
FMIS
9
CONTENTSCONTENTS
BackgroundBackground
Overview of IFMIS and Its development
Achievements and Key Success FactorsAchievements and Key Success Factors
10
DEVELOPMENT OF FMISDEVELOPMENT OF FMIS
Brief History of FMIS Development
• Establishment of integrated Fiscal Management Information System (IFMIS) was set in the National Agenda Meeting
2004~2005• System development (Cost: $60M)
2006
• System launch
2007
• 67,895 users
364,431 cases daily
2014. 4
BSP, BPR/ISP
National Agenda Meeting• Launched a joint study project named “Path
toward Successful Introduction of Program Budgeting in Korea” with WB
• To establish IFMIS, consecutively drew up
• Open test 5.7 trillion won daily
($5.5 billion)
BSP, BPR/ISP
DetailsDetails
BSP(Business Strategy Planning)
• With analysis of policy environments, demonstrates the objective and major strategy of fiscal innovation
BPR(Business Process Reengineering)
• Optimize and streamline the existing procedure in accordance with the information system to maximize the adoption effect(Business Process Reengineering) information system to maximize the adoption effect
ISP(Information Strategy Planning)
• Computerization of given work process
CHALLENGES IN IFMIS DEVELOPMENT
Three Major Obstacles Solutions
Allowed to maintain own
Opposition
• Local governments and the Ministry of Education were against the idea of disclosing and integrating their financial information – Concerns over possible undermining of their autonomy
Allowed to maintain own systems but required to submit financial information to be consolidated
Placed FMIS under control of MPB while letting MOFE to be in charge of certain parts1)
Competition
• Two ministries competed fiercely to have control of the FMIS– Competition between MOFE and MPB as these two ministries
were formerly in charge of existing FMIS (each ministry
• Users of newly adopted FMIS were reluctant to adapt themselves to the new system
Provided effective user trainingthroughout the
certain parts1)were formerly in charge of existing FMIS (each ministry controlled NaFIS and FIMsys, respectively)
Resistance– In the early 2000’s, users already went through the process
when the Korean government first introduced NaFIS and FIMSys
• Strict internal control process built in the new FMIS made it even harder for users to become familiarized with the system
trainingthroughout the years
even harder for users to become familiarized with the system
1) The competition eventually waned when those two ministries merged into one in 2008
Brief Brief Overview of FMIS MechanismOverview of FMIS Mechanism
Integrated Fiscal InformationIntegrated Fiscal InformationIntegrated Fiscal InformationIntegrated Fiscal InformationIntegrated Fiscal InformationIntegrated Fiscal InformationIntegrated Fiscal InformationIntegrated Fiscal InformationWork Support Work Support Work Support Work Support Work Support Work Support Work Support Work Support
SystemSystemSystemSystemSystemSystemSystemSystem Fiscal Statistics Analysis Fiscal Statistics Analysis Fiscal Statistics Analysis Fiscal Statistics Analysis Fiscal Statistics Analysis Fiscal Statistics Analysis Fiscal Statistics Analysis Fiscal Statistics Analysis SystemSystemSystemSystemSystemSystemSystemSystem
Unit Business Management SystemUnit Business Management SystemUnit Business Management SystemUnit Business Management SystemUnit Business Management SystemUnit Business Management SystemUnit Business Management SystemUnit Business Management System
OLAPOLAPOLAPOLAPOLAPOLAPOLAPOLAP EISEISEISEISEISEISEISEIS
DBAS DBAS DBAS DBAS DBAS DBAS DBAS DBAS
SystemSystemSystemSystemSystemSystemSystemSystem Fiscal Statistics Analysis Fiscal Statistics Analysis Fiscal Statistics Analysis Fiscal Statistics Analysis Fiscal Statistics Analysis Fiscal Statistics Analysis Fiscal Statistics Analysis Fiscal Statistics Analysis SystemSystemSystemSystemSystemSystemSystemSystem
Treasury MgtTreasury MgtTreasury MgtTreasury MgtTreasury MgtTreasury MgtTreasury MgtTreasury Mgt
Budget MgtBudget MgtBudget MgtBudget MgtBudget MgtBudget MgtBudget MgtBudget Mgt
Performance-based Budget
Budget Formulation
Project MgtProject MgtProject MgtProject MgtProject MgtProject MgtProject MgtProject Mgt
Monitoring
Execution
Data MartData MartData MartData Mart
BudgetBudgetBudgetBudget
Data Data Data Data WarehouseWarehouseWarehouseWarehouse
LiabilityLiabilityLiabilityLiability
DBAS DBAS DBAS DBAS DBAS DBAS DBAS DBAS
Budget
Accounting
ProgramAsset & Credit, Debt MgtAsset & Credit, Debt MgtAsset & Credit, Debt MgtAsset & Credit, Debt MgtAsset & Credit, Debt MgtAsset & Credit, Debt MgtAsset & Credit, Debt MgtAsset & Credit, Debt Mgt
Treasury MgtTreasury MgtTreasury MgtTreasury MgtTreasury MgtTreasury MgtTreasury MgtTreasury MgtElectronic Bill & Electronic Bill & Electronic Bill & Electronic Bill & Electronic Bill & Electronic Bill & Electronic Bill & Electronic Bill &
PaymentPaymentPaymentPaymentPaymentPaymentPaymentPayment
EBPP
Expenditure
Revenue
Treasury
Monitoring
TreasuryTreasuryTreasuryTreasury
AssetAssetAssetAsset
AccountingAccountingAccountingAccounting Program
data
GFSGFSGFSGFSGFS
Asset & Credit, Debt MgtAsset & Credit, Debt MgtAsset & Credit, Debt MgtAsset & Credit, Debt MgtAsset & Credit, Debt MgtAsset & Credit, Debt MgtAsset & Credit, Debt MgtAsset & Credit, Debt Mgt
Accounting MgtAccounting MgtAccounting MgtAccounting MgtAccounting MgtAccounting MgtAccounting MgtAccounting Mgt
Inventory
Cash
Credit(bond)
Property
Government Government Government Government Government Government Government Government Finance StatisticsFinance StatisticsFinance StatisticsFinance StatisticsFinance StatisticsFinance StatisticsFinance StatisticsFinance Statistics
Fiscal I/F SystemFiscal I/F SystemFiscal I/F SystemFiscal I/F SystemFiscal I/F SystemFiscal I/F SystemFiscal I/F SystemFiscal I/F System
Accounting MgtAccounting MgtAccounting MgtAccounting MgtAccounting MgtAccounting MgtAccounting MgtAccounting Mgt
CostSettlement DataDataDataDataDataDataDataDataGFSM ‘01
GFSM ‘86
Board of Audit & Board of Audit & Board of Audit & Board of Audit & InspectionInspectionInspectionInspection
Local education Local education Local education Local education financefinancefinancefinance
Public enterprises/ Public enterprises/ Public enterprises/ Public enterprises/ Gov’tGov’tGov’tGov’t----Affiliated Affiliated Affiliated Affiliated
agenciesagenciesagenciesagenciesFinancial institutionsFinancial institutionsFinancial institutionsFinancial institutions Local Gov’t financeLocal Gov’t financeLocal Gov’t financeLocal Gov’t finance
FMIS’s Interface with External Fiscal Systems
Housing Fund
Agencies w/ Their Own SystemsAgencies w/ Their Own SystemsAgencies w/ Their Own SystemsAgencies w/ Their Own Systems
Housing Fund
Pension Fund
Credit Guarantee Fund
Employment Insurance
Ministry of Defense
Defense Fiscal Mgmt. Information System
Ministry of Knowledge Economy
Mgmt. Information System
Bulk Collection AgenciesBulk Collection AgenciesBulk Collection AgenciesBulk Collection Agencies
Bank of Korea
Financial NetworkFinancial NetworkFinancial NetworkFinancial Network
Ntl. Tax Service Central Fiscal Mgmt. Information Central Fiscal Mgmt. Information Central Fiscal Mgmt. Information Central Fiscal Mgmt. Information SystemSystemSystemSystem
Bank of Korea
Banks
Financial Telecommunications &
Clearings
Customs Service
Police Agency
Central Fiscal Mgmt. Information Central Fiscal Mgmt. Information Central Fiscal Mgmt. Information Central Fiscal Mgmt. Information SystemSystemSystemSystem
Ntl. PropertyNtl. PropertyNtl. PropertyNtl. Property
Korea Asset Mng. Corporation
Public Public Public Public ProcurementProcurementProcurementProcurement
Board of Audit & Board of Audit & Board of Audit & Board of Audit & InspectionInspectionInspectionInspection
Local Gov’t SystemLocal Gov’t SystemLocal Gov’t SystemLocal Gov’t System
Local Gov’t Finance
G2B E-Inspection Local Gov’ EducationKorea Forest Service
EBPP SYSTEM ENHANCES CONVENIENCE AND TRANSPARENCY OF
PAYMENTS
<Work Flow of National Tax Collection>
National Tax Service
1 Notice information
Service
1 Notice
4 Payment Results(batch/daily)
5 Payment Results
FMIS PayerBank of Korea
(batch/daily)
Commercial
1 Notice information3 Payment Results
Commercial Banks 2 Payment3 Cash (batch/daily)
• EBPP(Electronic Bill Presentment and Payment) allows payers to choose among various means of payment including:• EBPP(Electronic Bill Presentment and Payment) allows payers to choose among various means of payment including:
– E-banking, ATM(Automated Teller Machine)– Money is automatically transferred from commercial banks to the treasury account, eliminating potential threat of fraud
Status of FMIS
Status of As of 2014
• Status of Users : 67,895 users
(including 53 central offices, several local governments, public institutes)
FMIS
Status of User
Linked
As of 2014
governments, public institutes)
• Interface: 45 institutes, 63 systems with 14,543 daily users,
364,431 cases/day
Linked Institutes
e-Transactions364,431 cases/day
• e-Transactions: 5.7 trillion won per day ($5.5 billion)
Educ. & Training
International PR
e-Transactions
• Education & Training Program : on-site education, regular training, online training
CONTENTSCONTENTS
BackgroundBackground
Overview of IFMIS and Its development
Achievements and Key Success FactorsAchievements and Key Success Factors
17
Flow Charts of National Closing Statement (as enforced under National Accounting Act since Jan. 0̀9)
National Finance Law National Accounts LawNational Accounting Act
(as enforced under National Accounting Act since Jan. 0̀9)
General Accountin
g
Settlement of Revenue and Expenditure
Account (Cash-based)Financial Report
(Accrual-based)
Overview of Closing Accounts
Settlement of Revenue and
Expenditure Account
Special Accountin
gPerformance Report
( Since 2008)
(Accrual-based) (In a case of funds, including
revenue, expenditure and settlement)
Financial Statements
Settlement of Funds Account
(Cash & Accrual based)
Statement of Financial
Position
Statement of Financial Mgmt.
Financial Report
Funds
Performance Reports
Statement of Changes in Net
Asset
Performance Report
Financial Report
(Accrual-based)
( Since 2008)
Implementation of Performance-Based System
Improved Budget Execution & Performance Monitoring
Before AfterBefore After�Limited evaluation of budget execution outcomes
�Only central government offices monitored and evaluated for performance
� Project-level performance-based budgeting
�Local governments, quasi-government organizations, and public funds all linked to dBrain
evaluated for performance
�Fiscal execution monitoring results only reviewed at year-end and applied to next year’s budget planning
� Scope (# projects): 23 (2013)→ 2196 (2014)
� Convenient, easy budget execution monitoring in real-time through Performance Information (PI) Board
� necessary corrective adjustments can be made within the fiscal year
�Yearly Budget Execution Plan
within the fiscal year
�Budget execution schedule broken down monthly� up-to-date execution realization rate (expressed as % of scheduled amount) �Yearly Budget Execution Plan
�Prone to inefficient project management practices, wasteful spending and poor project results
scheduled amount)
� execution realization rate
+ realization rates for pre-determined performance indicators
= overall performance score for a project= overall performance score for a project
�prevents inefficient project management (project execution appropriately spaced out throughout the year)
Enhanced Transparency
User Convenience with Transparency
�Interactive Open System
User Convenience with Transparency
Before After
�Interactive Open System
�Single input
�On-line Bidding and Payment System for
�Closed & One-way System
�Unavoidable double input �On-line Bidding and Payment System for Procurement
�Reduced number of accounting fraud
�Face-to-face submission of Document for Procurement
�Subsidy and payment fraud�All-out Open Policy: the system helps boost transparency of national financial management.
�Subsidy and payment fraud
�Limited open data with no feedback
� Providing financial information to the National Assembly & BAI
Improved User Experience
User Satisfaction
� Most users express greater satisfaction in working through FMIS
� Users had appealed inconvenience in using separated systems of each organization.
Before After
satisfaction in working through FMIS
e.g) Reduction of working time
� FMIS helps secure more work
organization.
� Too much time consumed in order to complete work by following work process. � FMIS helps secure more work
efficiency.
� User satisfaction has been enhanced.
process.
Service Quality Index
User Satisfaction Rate1)(%)User Satisfaction Rate
52.655.9
62.464.5
67.7
(%)
1) User Satisfaction Rate is the result of surveyconducted by the Korea Institute of PublicAdministration (KIPA).:This survey includes the items such as Frequency ofAccess (gaining 3.93 points out of a possible 5
2008 2009 2010 2011 2013
52.6 Access (gaining 3.93 points out of a possible 5points), Recognition of Work Range via FMIS (3.73points), Processing Most of Works only via FMIS(3.14 points), Reduction of Work Burden (3.25points), Systemization of Work Process (3.56 points)and Reduction of Expenditure (3.41 points), etc.
KEY SUCCESS
FACTORSFACTORS
Strong commitment form high -level decision makers Strong commitment form high -level decision makers
The reform team’s adaptive capacity to overcome cha llenges
Strategic communications with stakeholdersStrategic communications with stakeholders
Capacity building among stakeholders
Compromise between all-inclusive ambitious reform a genda and actual implementation and actual implementation
22