Financial Management Information Systems - …

1 25 YEARS OF WORLD BANK EXPERIENCE ONWHAT WORKS AND WHAT DOESN TFinancial Management Information SystemsA WORLD BANK STUDYCem DenerJoanna Alexandra WatkinsWilliam Leslie 14/11/11 12:08:14 PMWORLD BANK STUDYF inancial ManagementInformation Systems25 Years of World Bank Experience on What Works and What Doesn i4/8/11 12:32 PM 2011 The International Bank for Reconstruction and Development / The World Bank1818 H Street NWWashington DC 20433 Telephone: 202-473-1000 Internet: rights reserved1 2 3 4 13 12 11 10 World Bank Studies are published to communicate the results of the Bank s work to the development community with the least possible delay. The manuscript of this paper therefore has not been prepared in accordance with the procedures appropriate to formally-edited texts. This volume is a product of the sta of the International Bank for Reconstruction and Development / The World Bank.

2 The ndings, interpre-tations, and conclusions expressed in this volume do not necessarily re ect the views of the Executive Directors of The World Bank or the governments they World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other Information shown on any map in this work do not imply any judg-ment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such and PermissionsThe material in this publication is copyrighted. Copying and/or transmi ing portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruc-tion and Development / The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work permission to photocopy or reprint any part of this work, please send a request with complete Information to the Copyright Clearance Center Inc.

3 , 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: other queries on rights and licenses, including subsidiary rights, should be addressed to the Of- ce of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: 978-0-8213-8750-4eISBN: 978-0-8213-8753-5 DOI: of Congress Cataloging-in-Publication Data has been ii4/8/11 12:32 PMiiiContentsAbbreviations .. viiAcknowledgments ..ixPreface ..xiExecutive Summary .. xiii1. Introduction .. 1De nitions .. 3 Methodology .. 42. Descriptive Data Analysis .. 7 Duration .. 7 Regional Distribution ..9 Project Characteristics .. 10 Objectives .. 12 Scope .. 13 Project Funding .. 14 Lending Instruments .. 16 Cost of FMIS ICT Solutions .. 18 Information and Communication Technology Solutions .. 21 Procurement Packages and Contracts Signed .. 23 Implementation Resources.

4 25 Disbursement 26 Regional Variation in Design and Implementation .. 293. Project Performance .. 31 ICR Ratings .. 31 IEG Ratings .. 33 Operational Status ..35 Preparation Approaches .. 36 Success Factors .. 39 Failure Factors .. 42Pa erns .. 42 Comparisons to the Private Sector .. 474. Case Studies .. 51 Mongolia .. 52 Turkey .. 55 Albania .. iii4/8/11 12:32 PMivContentsGuatemala .. 61 Pakistan .. 635. Conclusions .. 67 Findings .. 67 Prerequisites .. 70 Recommendations .. 72 Concluding Remarks .. 79 Appendixes .. 83 Appendix A. References .. 85 Appendix B. Checklist for the Teams Involved in FMIS Project Design .. 87 Appendix C. Use of Electronic Payment Systems and Digital Signature in FMIS Projects .. 95 Appendix D. Procurement Options for the Implementation of FMIS Solutions .. 103 Appendix E. Progressive Development of FMIS in Guatemala and Nicaragua .. 107 Appendix F. Projects in IDA Countries.

5 115 Appendix G. Project Disbursement Pro les by Region .. 117 Appendix H. Good Practice FMIS Indicators for Project Teams .. 131 Appendix I. FMIS Project Timelines (1984 2010) .. 135 Appendix J. Treasury/FMIS Projects in ECA 139 Appendix K. Operational Status of FMIS Projects in 51 141 Appendix L. Implementation Status of All Projects Included in the FMIS Database (August 2010) .. 143 Appendix M. FMIS Data Mapper .. 153 TablesTable Coding of FMIS Project Components .. 5 Table Funding and ICT Costs of FMIS Projects .. 15 Table Regional Distribution of Completed FMIS Project Funding and ICT Costs .. 15 Table Regional Distribution of the Type of T/F ASW Solutions .. 23 Table Regional Variations in Restructuring and Extension of Completed Projects .. 28 Table Regional Variation of FMIS Implementation Approach .. 29 Table De nitions of ICR Ratings .. 32 Table FMIS Project Preparation Approach in 55 Completed Projects.

6 37 Table FMIS Project Preparation Approach in 32 Active Projects .. 40 Table Success Factors Observed in Completed FMIS Projects .. 42 Table Failure Factors Observed in Completed FMIS Projects .. 43 Table ICR and IEG Ratings of the FMIS Project in Mongolia .. 52 Table ICR and IEG Ratings of the PFMP Project in Turkey .. 56 Table ICR and IEG Ratings of the Treasury Project in Albania .. iv4/8/11 2:59 PMvContentsTable ICR and IEG Ratings of the FMIS Projects in Guatemala .. 61 Table ICR and IEG Ratings of the Treasury Project in Pakistan .. 64 Table Regional Distribution of FMIS Projects in IDA Countries .. 115 Table Total Funding for FMIS Projects in IDA Countries .. 115 Table PEFA Performance Indicators Used in Active FMIS Projects .. 131 Table Sample FMIS Project Outcome and Results Indicators .. 132 FiguresFigure A Modular Approach for Building FMIS .. 2 Figure Total Duration of Completed Projects.

7 7 Figure Preparation Period in Completed+Active Projects .. 8 Figure E ectiveness Period in Completed+Active Projects .. 9 Figure Extension Period in Completed Projects .. 9 Figure Regional Distribution of Completed Projects .. 10 Figure Regional Distribution of Completed+Active Projects .. 10 Figure Type of Completed and Active FMIS Projects .. 11 Figure FMIS as Core Activity in Completed and Active Projects .. 11 Figure Treasury vs. FMIS Focus in Completed and Active Projects .. 13 Figure Scope of FMIS in Completed and Active Projects .. 14 Figure Lending Instruments in FMIS Projects .. 17 Figure Cost of FMIS ICT Solutions .. 18 Figure Actual vs. Estimated Costs of FMIS Projects .. 19 Figure Trend Lines for COTS and LDSW Solutions in FMIS Projects .. 20 Figure FMIS ICT Cost per User for COTS and LDSW Solutions .. 21 Figure Application So ware Solutions in FMIS Projects.

8 22 Figure The Number of Procurement Packages Processed in Completed Projects .. 24 Figure The Number of Contracts Signed in Completed Projects .. 24 Figure Distribution of Sta Weeks Devoted to Completed Projects .. 25 Figure Distribution of the Total Bank Budget Allocated to Completed Projects .. 26 Figure The Bank Budget/Year Allocated to Completed Projects .. 27 Figure Typical Disbursement Pro le of FMIS Projects .. 27 Figure Regional Distribution of ICR Project Outcome Ratings .. 33 Figure Regional Distribution of ICR Development Impact Ratings .. 33 Figure Regional Distribution of IEG Project Outcome Ratings .. 34 Figure Regional Distribution of IEG Development Impact Ratings .. 35 Figure Operational Status of Treasury/FMIS Projects .. 36 Figure Performance Pa erns in Unsuccessful FMIS Projects .. 43 Figure Performance Pa erns in Completed FMIS Projects (Types 1 and 2).

9 45 Figure Performance Pa erns in Active FMIS Projects (Types 1 and 2) .. 46 Figure FMIS Design and Implementation Approach .. v4/8/11 2:59 PMviContentsFigure Typical FMIS Design Documents Developed During Project Preparation .. 75 Figure Linking Project Activities with Procurement Packages .. 76 Figure Project Design Stages Mapped on Treasury/FMIS Maturity Framework .. 87 Figure Centralized Electronic Payment system Operations .. 97 Figure Description of How a Simple Digital Signature Is Applied and Then Veri ed .. 99 Figure Electronic vs. Digital Signature .. 100 Figure PKI Process to Issue Digital Certi cates .. 100 Figure Procurement Options for the Implementation of FMIS ICT Solutions .. vi4/8/11 12:32 PMviiAbbreviationsAAA Analytic and Advisory ServicesAFR Africa RegionBC Budget Classi cationCFAA Country Financial Accountability AssessmentCoA Chart of AccountsCOBIT Control Objectives for Information and related TechnologyCOTS Commercial o -the-shelf So wareEAP East Asia and Paci c RegionECA Europe and Central Asia Regione-Gov Electronic Government (e-Government)

10 FLOSS Free/Libre Open-Source So wareFMIS Financial Management Information SystemHR Human ResourcesIBRD International Bank for Reconstruction and DevelopmentICR Implementation Completion Report ICT Information and Communication TechnologyIDA International Development AssociationIDB Inter-American Development BankIEG Independent Evaluation GroupIPSAS International Public Sector Accounting StandardsISR Implementation Status ReportIT Information TechnologyITIL Information Technology Infrastructure LibraryLCR Latin America and Caribbean RegionLDSW Locally Developed So wareMEF Macro Economic ForecastingMoE Ministry of EconomyMoF Ministry of FinanceMTBF Medium Term Budgeting FrameworkMTEF Medium Term Expenditure FrameworkMTFF Medium Term Fiscal FrameworkOSS Open Source So warePAD Project Appraisal DocumentPBB Program Based BudgetingPEFA Public Expenditure and Financial AccountabilityPEM Public Expenditure ManagementPFIC Public Financial Internal ControlPFM Public Financial ManagementPIB Performance Informed vii4/8/11 12:32 PMviiiAbbreviations PIM Public Investment ManagementPREM Poverty Reduction and Economic Management NetworkPSG PREM Public Sector and Governance GroupSAR South Asia RegionTS Treasury SystemTSA Treasury Single viii4/8/11 12:32 PMixAcknowledgmentsThis paper was prepared by the Public Sector and Governance Group of the World Bank Poverty Reduction and Economic Management Network.