Posted by Suhas Joshi and Minh Van Nguyen[1]
A recent study by the Public Expenditure Network in Asia (PEMNA)—“FMIS: A Study of selected PEMNA Members: Lessons for Other Countries”—compares the experiences of FMIS implementation in four countries of the region. A copy of this report can be downloaded here. The lessons drawn from the study should be helpful for other countries embarking on similar projects.
Many countries in the PEMNA region have implemented, or are in the process of acquiring and implementing, Financial Management Information Systems together with other PFM reforms. Since FMIS systems are complex, it is not possible for countries to switch from one system to another quickly or without considerable cost. It is therefore essential that FMIS implementation is undertaken after very careful examination of the system’s needs, functionalities, benefits, costs, and sustainability.
Since PEMNA lays emphasis on peer learning, its Treasury Community of Practice (T-COP) initiated a comparative study of the implementation of FMIS in the region. The countries included in this study were Indonesia, Mongolia, Timor-Leste, and Vietnam. In some of these countries the FMIS serves both central, provincial as well as local governments, whereas in others its use is limited to the central government. The study focused on how FMIS projects were conceptualized, implemented and monitored, and draws relevant lessons for other countries. It took account of differences in the PFM practices, institutional settings, IT infrastructure and capacity, and computer literacy levels among the countries studied. It also attempted to identify the views of both the user community and other stakeholders regarding the success or otherwise of the project.
The study focused on the following main issues:
- The present status of PFM reforms in the four countries, and the relationship of these reforms to the FMIS projects.
- The reasons for implementing FMIS in the countries studied, and the key political, institutional, and technical drivers.
- The extent to which politicians and senior managers in the government provided leadership to the FMIS projects.
- Details of the formal arrangements put in place to manage the projects.
- Whether commercial off-the-shelf (COTS) or country-specific solutions were adopted, and the reasons for their adoption.
- The extent to which the business processes for treasury and other functions provided by FMIS aligned with “good international practice”, if at all.
- Steps taken to enhance the capacity of the finance ministry and line ministries to oversee the implementation of the FMIS, and to operate and sustain the system.
- Identification of the costs associated with the ongoing maintenance and operations of the systems.
- Specific challenges faced during implementation of the FMIS projects, how these issues were resolved, and the lessons learned.
- What further steps are planned by the four countries to increase the usage and functionalities of their FMIS.
[1] Suhas Joshi is the IMF’s Regional PFM Advisor for South and SE Asia and was earlier the facilitator for PEMNA’s Treasury Community of Practice. Minh Van Nguyen is a Senior Economist of the World Bank with extensive experience in the design and implementation of FMIS.
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