Preparation of the system functional and technical design document took about two years before the selection of the relevant system. The gap between the generic and real system requirements was considerably large. Live demonstrations of the proposed systems by vendors increased the skepticism within the MoF regarding the use of commercial packages. Based on further analysis supported by the World Bank, the MoF cancelled the procurement process and launched a local development process for PFMS.
By that time, the Treasury was already implementing web-based application for the Budget Organizations (BOs) to send payment requests electronically to the Treasury. Shortly, software developers redesigned the old information system on a new technological platform and integrated Client interface (BOs Financial Management System excluding accounting) into it.
The Treasury information system was assessed against the World Bank/IMF Treasury Reference Model and existing, in-construction, and missing modules and interfaces were identified. Based on this assessment, the PFMS – Georgia Model was developed. Its main components are presented in the following chart. Download Chart
The shaded area represents the core treasury system and the outside boxes are modules that remain to be integrated with the core treasury system. Presently PFMS fully covers budget payments and receipts performed via the Treasury Single Account (fully functional since 2006). It also involves contract/procurement/commitment procedures. PFMS also covers the main payroll components and all the information is shared electronically in real time. The debt and aid management module is also implemented and will shortly be integrated with the PFMS.
Key characteristics of the PFMS include:
- PFMS is integrated with the Budget Planning and Appropriation Management System, which means that budget appropriation is authorized for spending once the budget department approves the amount.
- PFMS uses procurement/contract information from the Public Procurement Agency (PPA) database. Budget organizations do not input contract information in the PFMS, but simply download it from the PPA database.
- PFMS exchanges data with the Revenue Service via electronic service, which gives a real- time access to the Revenue Service on the data on taxes deposited in the Treasury Single Account.
- PFMS is linked with the Public Registry and Civil Registry databases, which enables users to validate the information on individuals (Civil Registry) or legal entities (Public Registry) involved in the budget process;
- PFMS is linked with the National Bank of Georgia through Real Time Gross Settlement System (RTGS) for the GEL transactions and through SWIFT for the Foreign Exchange operations. Payment documents and bank statements are exchanged electronically in real time.
While all the cash transactions are handled within the PFMS and captured in the Treasury General Ledger, accrual entries are not stored in the current system and stocks information is not available. The biggest challenge now is to capture all the assets and liabilities information from the central government entities and reflect accrual accounting transactions in the system. The MoF and the Treasury are currently developing the Unified Chart of Accounts and a list of standard operations, which will be used in assigning accrual operation code to the transaction. The accrual accounting CoA and budget classification are both GFSM 2001 compliant.
After the UCOA is finalized and accrual entries processed through the PFMS, the next step will be to implement assets/inventories and other non-monetary operations modules. Once all the accrual and cash transactions are reflected in the system, the Treasury General Ledger will present the broad picture on government total assets and liabilities.
The fully functioning integrated PFMS for the central government is expected to be up and running in 2014.
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