current status, challenges and future agenda of ifmis in...
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2013/SFOM11/018 Session: 5.3
Current Status and Future Agenda of the Treasury and Budget Reform in Asia Pacific Region
Purpose: Information
Submitted by: Indonesia
11th Senior Finance Officials’ MeetingManado, Indonesia
22-23 May 2013
APEC Senior Finance Official Meeting
Current Status and Future Agenda
of the Treasury dan Budget Reform
in Asia Pacific Region
Agendas
• The IFMIS and Current Progress Status
• The Cash and Debt Management
• The Spending Review
• The Proposed Actions
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Jawa Island
Sumatera Island
Sulawesi Island
Bali & Nusa Tenggara Islands
Papua
Ambon & Ternate
Kalimantan Island
524 Provincies/
Regencies/Cities
84Ministries/Agencies
GDP 2011Rp7.226,9 T
(USD 822 Bn)
Growth Rate 2011 6.5%
177 Local
Treasury Offices
(#8,500)
30 Regional Treasury Offices
(#1,000)
Headquarter- 7 Directorates- 1 Secretariate
(#900)
DG TREASURY
CurrencyRupiah (Rp)
1USD=Rp9,000
Landmass 1,9 Million mile square
With 17.508 islands London
Ankara
Population240 million
Inflation Rate Feb 2012
3.56%
Public Debt to GDP25%
Item Initial Revision Proposal
Revenue Rp1,311 T Rp1,344 T
Expenditure Rp1,435 T Rp1,534 T
Financing Rp124 T Rp190 T
Deficit to GDP 1.53% 2.23%
State Budget 2012
Ankara
Investment Grade:Fitch: BBB-
Sovereign Debt: Moody’s: BAA3
Where we are?
84 Line Ministries and 23.000 Spending Units
Roadmap of PFM Reform in Indonesia
1999-2004 2005-2009 2009-2011 and beyond
New Laws: •1999: Decentralization law •2003: White Paper of PFM reform •2003: State Finance Law •2004: State Treasury Law •2004: Audit of the management
and accountability of the state finance
Creation of new Directorate Generals : •DG Budget (budget formulation
and preparation) •DG Treasury (budget execution
and treasury mgt - 2005) •DG Fiscal Balance (management
of transfer funds to the local governments - 2006) •DG Debt Management
(management of foreign and domestic loans) •DGSAM (management of state
assets and receivables - 2006)
Establishing IFMIS Project in Indonesia: •22 Dec 2004 to 2014: Government Financial Management
and Revenue Administration Program (GFMRAP), $60 million WB investment loan for implementing IFMIS (SPAN); •12 Oct 2006 to 2017: PFM MDTF Part I ($24 m) and Part II
($10 m) grants to complement the WB GFMRAP and also to support a broad range of PFM reform initiatives.
Procedural improvements to support PFM reforms: •Unified budget system: combined recurrent and
development budget, and the introduction of PBB and MTEF •Reforming business processes in the Local Treasury Offices
(KPPN) through the establishment of pilot showcase offices that reduce payment processing time from 2 days to sometimes 1 hour. • Introduction of cash management reform, starting with the
first implementation of Treasury Single Account (TSA) in 2009 •Establishing government accounting standard and
reorienting the chart of accounts •Reforming the government procurement process •MOF as one of the selected ministries to implement
bureaucratic reform (BR) program
Continuous improvements to support PFM reforms: • Implementation of PBB (2011) •The new simplified budget document which focus on
performance rather than detailed line item. •Performance information (including its formulated target
and indicators) •Full implementation and expanded coverage of the
Treasury Single Account •Continuing improvement on cash management, including
deepening and stabilizing of TSA, cash plan, idle cash management, better coordination with debt and monetary management •Deepening bureaucratic reforms within MoF •Full integration of all information technology within MoF • Implementation of accrual accounting
Contracts for implementing SPAN • IVV (Independent Validation and Verification) consultant to
assist project preparation and procurement •COTS and Systems Integrator (Turnkey) to deliver COTS
Solution; Infrastructure, DC & DRC; Telecom links; Cabling •BPI (Business Process Improvement) consultant (2007-2011) •CMC (Change Management and Communication) •PMQA (Project Management and Quality Assurance) •SAKTI (Spending Unit Application developer)
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The Significance of IFMIS Development
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The Significance of IFMIS Development
• IFMIS is the core of treasury and budget system, enabling the well-functioning of the financial management, better transparency and accountability, and easing any policy decision making
• The development of IFMIS creates opportunities to further reform, within the treasury and budget areas such as cash and debt management, budget process, or on much wider aspect of reform such as bureaucratic reform
• IFMIS which mostly developed based on best practices, in many occasions, has set up common standard of financial management practices, and proven facilitating easier standardized reporting and information exchange among APEC economies
• The last recent years, the common interest on IFMIS development has strengthened the cooperation among APEC economies and international organization as shown by many seminars, joint researches and trainings involving staff from many APEC economies
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PFM is very complex systems, and an IFMIS is very fundamental to make them function efficiently
The Significance of IFMIS Development
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O
B
O
T
Asset /
Inventory Mgmt
Procurement/
Purchasing
Mgmt of Budget
Authorizations(DG Treasury)
Commitment of
Funds(DG Treasury)
Payments and
Receipts Mgmt(DG Treasury)
Cash
Management(DG Treasury)
Debt and Aid
Management(DG Debt)
Audit and
Evaluation(Supreme Audit)
Budget
Preparation (DG Budget)
Payroll Calcs
HR Mgmt
Publishing, EIS,
DW, Web Portal,etc
Tax and
Customs
SPAN= B + T
Treasury System
(Budget Execution)
Accounting
Daily
operations
Market Operation
System & Tools
17
Fiscal Reports &
Budget Review(Dg Treasury)
Policy Development
and ReviewDG Budget & Fiscal
Policy Office
Debt and Aid Mgt
(DG Debt)
Market Operation System & Tools (Treasury Dealing Room)
DG Treasury
Cash Management (DG Treasury)
Some Facts about IFMIS Projects in Indonesia
Some Facts about IFMIS Projects (World Bank Study, 2011)
IFMIS implementation is an art, not a science‟ -- emblematic of complex systems which constantly evolve and expand in parallel to changes in PFM needs and advances in technology.
As with the design and implementation of any complex system, leadership, collaboration and innovation are important to the process.
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The Significance of Cash and Debt Management Improvement
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Objectives: 1. Minimizing Cost of Fund 2. Managing Government Account 3. Achieving Ideal Cash Liquidity 4. Optimizing Excess Liquidity
Goals: 1. Harmonizing Fiscal and Monetary
Policies 2. Enhancing Fiscal Transparency and
Fiscal Control 3. Resource Generation
Minimizing Risks: 1. Forex Risk 2. Maturity Risk 3. Liquidity Risk 4. Market Risk 5. Hedging Risk
IFMIS: 1. Automated Transactions 2. Standardized Rules 3. Integrated Database
TSA and TNP
TDR
Cash Forecasting
Revenue Centralization
ALM
ICT –IFMIS Tools
The Cash and Debt Management
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The Significance of Spending Review
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SPENDING REVIEW
PROGRAMS
ORGANIZATION
POLICY FUNCTIONAL
REVIEW
STRATEGIC REVIEW
1. Improvement in the quality of spending
2. Better allocation of budget limited resources
3. Increase the effectiveness of the government programs and their outcomes
Expected Outcome
The Spending Review
1. Enlarging Fiscal Space to finance Compulsory Expenditure, Infrastructure and increasing Saving
2. Improve inefficiency of Budget Execution
Immediate Output
IFMIS Environment
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The Proposed Real Actions
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The Proposed Real Actions
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Thank You