Federal government is actively upgrading the "Financial Accounting and Budgeting System" (FABS) with the financial assistance of World Bank to achieve full government financial accountability and transparency in the new automated environment era.
Official source said, the Controller General of Accounts (CGA) wanted to implement the FABS component in three phases over a five-year period with the assistance of $48.739 million.
The first priority would be accorded to extend the financial accounting and budgeting system designed under the Project for Improvement in Financial Reporting and Auditing (PIFRA) and being implemented at 52 sites. The remaining 81 district accounts offices (DAOs) will follow, thereby bringing the total systems deployment to 133 sites.
This would extend the PIFRA systems to the entire accounting network, currently under the Controller General of Accounts.
Some of the departments are currently responsible for their own accounting (departmentalised accounts), like Pakistan Public Works Department (Pak PWD), Foreign Office, Geological Survey of Pakistan and the Post-office. Under this activity, the accounts prepared at the individual account offices in the branches of each of these departments will be processed at their respective headquarters. These will be merged with federal government's main accounts produced by the Controller General of Accounts (CGA).
In Azad Jammu & Kashmir (AJK), the accounting function has the same pattern as the GOP. Under this activity, Project for Improvement in Financial Reporting and Auditing systems would be implemented at the ten district accounts offices that perform the accounting function in AJK.
Second phase would include a further extension of the PIFRA systems to about 140 links between federal ministries and provincial departments. Implementation of the PIFRA systems at the federal line ministries and provincial line departments would assist them during the budget preparation cycle.
The systems would enable them to consolidate the budget requests received from their subordinate departments and pass the consolidated budget request electronically to the MOF or the provincial finance departments, respectively, during the budget preparation process.
Furthermore 105 district finance offices (DFOs) will connect them with the respective provincial finance departments and assist them in the budget preparation, execution and reporting phases.
The second phase would also include designing a simpler solution for Tehsil functionality and implementing it on a pilot basis at 15 tehsil accounts offices, and then extend to the remaining 90 district headquarter tehsil accounts offices.
Commenting on the parallel supporting activities of third phase, official sources stated that the FABS component would also provide a comprehensive training programme for staff in the central, provincial, district, some tehsils and AJK government.
This will include training of finance managers in the MOF, the central planning division, and provincial finance departments; building accounting capacity of provincial AGs, DAOs, DDOs in central, provincial and district governments, some Tehsils and AJK.
Additional funding has been provisioned in the project management component for periodic releases to the respective finance departments in accordance with the defined funds flow arrangement.
The source said a financial management application software competency center would also be established for the proper functioning of a mission's critical application.
The operation of the system also requires some very technical tasks such as operation and maintenance (O&M) of all devices on the network, including servers, work stations printers and communications equipment, database administration, operating systems administration (UNIW Windows), DBMS administration, SAP system administration, capacity for doing simple enhancements, etc.
For this purpose the government will need to hire technical IT staff to perform these tasks. The project will provide for the salaries (at Pakistan private sector levels) of about 60-80 contract professionals of various specialities required to man the IT and technical support function.
The project will also finance training opportunities (both local and foreign) for staff responsible for operating and maintaining these systems. The CGA shall recruit staff from within the accounting cadre in a phased manner over a five-year period to support the outreach activities of the contract professionals of the Financial Management Applications Software.
The staff should be qualified in IT or accounting at least at first degree level and be provided adequate professional training in SAP and related applications in order to take over the role of the contracted professionals and thus assure full in-house competency in system operation and management.
At a later stage when the capacity of the Office of the Controller General of Accounts (CGA) is adequately enhanced, the management of the activity shall be shifted to that office.
The sources said that designing a programme for the PIFRA systems should enable them to interface with the National and the Central Banks and the Central Board of Revenue; the State Bank and the National Bank of Pakistan are intimately involved with processing government payments and receipts.
The State Bank holds the government's consolidated fund accounts and the National Bank serves as its fiscal agent and processes government payments and receipts. Individual payments and receipts are recorded in the NBP/SBP systems.
It is proposed to develop electronic interfaces between the NBP/SBP systems and PIFRA systems so that this can lead to quicker and more accurate reconciliation of DAO accounts with the banks. A similar interface is planned to reconcile revenue receipts collected by the CBR, source disclosed.
Under the proposed plan, the Planning commission is responsible for preparing and monitoring the development budget. The project proposes to provide facilities to the planning commission to assist it in this process and to integrate the budget preparation and budget monitoring operations for the revenue and the development budgets.
Under the Medium Term Budget Framework (MTBF) provisions, the government is planning to move to a multiyear budgeting under an MTBF programme. This would entail enhancement of PIFRA systems to be able to incorporate these features.
Development of a data warehouse capability is an important plan. At present reports produced by the office of the CGA are restricted to statutory mandated structured reports such as the appropriation accounts, and the finance accounts.
With the implementation of PIFRA, FABS systems transaction data pertaining to expenditures and receipts will be readily available and could be used for Management Information System (MIS) reporting and decision-making purposes.
With the implementation of interfaces with other GOP systems as mentioned above it would in principle be possible to provide GOP finance managers with a variety of information that they require. For this purpose PIFRA systems functionality will need to be enhanced by the acquisition and implementation of additional tools such as a data warehouse and report writing tools, developing an overall systems and data architecture and capacity to ensure compatible information flows and summarisation between accounting systems operated by the federal, provincial, district governments and seamless interfaces between PIFRA and non-PIFRA systems.
The physical infrastructure at many DAO sites is in need of repair and refurbishment. For the state-of-the-art computer based accounting systems being installed under the PIFRA programme to be used effectively, it is imperative that physical infrastructure upgrades be carried out along with the installation of the systems.