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July 23, 2013

Now You See It, Now You Don’t...

Posted by Cem Dener and Saw Young (Sandy) Min [1]

Cem dener
The World Bank Study “Financial Management Information Systems and Open Budget Data: Do governments report on where the money goes?” (completed in June 2013) and new data set are now publicly available from the FMIS Community of Practice or the World Bank PRMPS Public Finance web site.

Within the last decade, FMIS has become a critical part of improving budget transparency. Disclosure of public finance information to citizens through FMIS platforms can improve transparency, if the published budget data are accurate, easily accessible and meaningful. Fiscal transparency can in turn improve trust in government, if the public interpret the motives for publishing the information positively, and an open budget data policy is sustained for long periods. Despite all efforts, designing robust FMIS solutions to capture all financial activities and publish open budget data, and measuring the effects of FMIS on budget transparency continue to be major challenges.

In order to ensure the reliability of public finance information published on the government web sites, relevant budget data should ideally be obtained from dependable Financial Management Information System (FMIS) platforms and comply with open data standards.

Currently, guidance on publishing reliable open budget data from underlying FMIS is scarce. This study is the first systematic attempt to address the following questions about the role and impact of FMIS on the publication of open budget data:

  1. What are the important characteristics of current government web publishing platforms designed for the disclosure of budget data?
  2. Is there any evidence on the reliability of open budget data published from FMIS?
  3. Are there good practices demonstrating the effects of open budget data from FMIS in improving budget transparency?
  4. Why is a “single version of the truth” difficult to achieve in the budget domain?
  5. What guidelines can be developed to improve the practices in publishing reliable open budget data from FMIS?

The conceptual framework used in the study is based on the following:

  • „experience gained in the development of FMIS solutions in all regions for several decades;
  • evidence that the reliability and accuracy of government budget data depends on the capabilities and integrity of underlying FMIS platforms;
  • existence of proven industry standards for publishing open government data;
  • growing demand from citizens for improved budget transparency, accountability and participation; and
  • widespread use of the Internet and web technologies for transforming the public sector management.

The study is designed to draw the attention of governments to possible improvements in the accuracy, timeliness, and reliability of budget reporting, simply by publishing open budget data on public finance web sites from underlying FMIS platforms.

The findings of the study are based on an extensive data set which comprises 20 key and 20 informative indicators and the characteristics of FMIS solutions, to measure the current status of a country's web platforms for publishing open budget data from FMIS. Data and relevant evidence (web links/URLs) were collected by visiting the government PF web sites (mainly Finance Ministries or Departments) in 198 economies, and collecting evidence on the use of 176 FMIS solutions in publishing open budget data.

The findings of this study indicate that good practices in presenting open budget data from reliable FMIS solutions are highly visible in only 24 countries (12%), despite the widespread availability of 176 FMIS platforms used by 198 governments around the world.

Benefiting from the FMIS and the open budget data set, about 100 cases from various government web sites in 53 countries were summarized in this study, to highlight some of the good practices in different areas of publishing open budget data from FMIS. Based on the observations of this study, the lessons learned from good practice cases and the experiences gained in the development of FMIS solutions and open budget data portals, the following guiding principles were developed to encourage governments to improve their practices in publishing budget data (these guidelines are described in detail in the study):

  • „Availability of timely and comprehensive budget information;
  • Disclosure of details about underlying information systems;
  • Availability of user defined (dynamic) query and reporting capabilities;
  • Publishing reliable and interlinked open budget data;
  • Authentication of the sources of public finance data;
  • Improving the quality of presentation; and  
  • Promoting the effective use of open budget data.

The study shows that, as of today, only a small number of governments provide opportunities to the citizens, civil society groups or oversight agencies for access to reliable, accurate, and meaningful open budget data from underlying FMIS solutions. 

Selected cases demonstrate that the innovative solutions to publish open budget data and improve budget transparency can be developed rapidly with a modest investment even in difficult settings, if there is a commitment from the government and a strong interest from the public.

While many governments publish substantial information on their public finance web sites, the contents are frequently insufficient to provide adequate answers to the question “where does the money go?” Therefore, the main conclusion of the study is “What You See Is (Not Always) What You Get” in government web sites. Additional efforts are needed in many economies to build confidence in the source, reliability, quality and timeliness of the budget data disclosed by the governments.

The outputs of this study are expected to provide a comprehensive view of the current status of government practices for publishing budget data around the world, and promote debates about how to improve these practices. Several important issues which could be explored in future studies (for example, capturing additional data on the  financial activities of governments, and learning more about the perceptions of the users of these data) are also discussed in the study.

[1] Cem Dener (Sr. Public Sector Specialist) and Saw Young (Sandy) Min (Jr. Professional Officer) are staff members of the Governance and Public Sector Management (PRMPS) practice of the Poverty Reduction and Economic Management (PREM) network of the World Bank.

Note: The posts on the IMF PFM Blog should not be reported as representing the views of the IMF. The views expressed are those of the authors and do not necessarily represent those of the IMF or IMF policy. 


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