The Information Architecture for Public Financial Management

The Information Architecture for Public Financial Management

9. Figure 1 shows a summarized generic representation of the information architecture for Public Financial Management.⁵ The detailed analysis on which this diagram is based is given in Annex III. This schematic representation shows nine well defined business process groupings and information areas applicable to the management of public finance. The types of information contained in each of these areas include:

(i) Macro-Fiscal Planning Fiscal Policy and Medium-Term Expenditure Plans (MTEP). This area contains information generated by the business processes associated with the preparation of the medium-term expenditure plan. This includes information on the MTEP, the macro-economic targets (such as GNP, inflation rates, interest rates, Central Bank deficits, etc.), the Public Sector Investment Program (PSIP), and the fiscal plans.

(ii) Budget Preparation, Monitoring and Control Budget and Cash. This area contains information related to the preparation, implementation, monitoring, and evaluation phases of the budgetary process maintained by the core agencies (Ministry of Finance [MOF], Planning, etc.). This includes information on:

(a) budget guidelines; ceilings and sectoral allocations; budgeted allocations capital and recurrent, and sources of financing for programs and projects; data on virements (budget transfers) and supplementary allocations; data on warrants actual fund releases against budgeted allocations over the course of the year; summaries of commitments and expenditures against budgeted figures by program and project; and overall cash flow forecasts based on program and project expenditure plans and schedules;

(b) periodic reviews of the aggregate position as contained in the fiscal reports and budget reviews prepared during the course of the fiscal year; and Normally there are several levels in the hierarchy of government, including the central government, provincial or state governments and local governments. This paper restricts itself to a discussion of the functional processes associated with PFM at the Center. The concepts presented here would. however, also apply to operations at subordinate levels to the extent the functional processes discussed here are relevant to these levels.

(c) information on the liquidity position of the government, based on information on cash balances in various government accounts, data on government bonds, treasury bills and cash deposit maturities, cash flow forecasts, fiscal reports and debt reports, information on issues, and redemptions of government securities generated on the basis of the liquidity position.

(iii) Management of the Public Sector Work Program Public Sector Work Program (PSWP). This area includes information on:

(a) detailed descriptions of programs and projects to be undertaken by the various line agencies, broken down by fiscal year, including project plans, schedules, milestones, performance indicators, and project and program status/progress reviews;

(b) expenditure plans for the programs and projects based on schedules and progress to date;

(c) summaries of commitments and expenditures against budgeted figures; and

(d) procurement tracking and contract monitoring information.

This information area includes detailed information on programs and projects to be executed by line agencies over the fiscal year. Summaries of this information are provided by the line agencies to the core agencies during the budget formulation and implementation phases. The summarized information is part of the budget information area described above. On the other hand, information on budget allocations (and adjustments to these allocations) for programs and projects maintained as part of the budget information area, is provided by the core agencies to the line agencies.

(iv) Debt Management Debt. This area contains information on public domestic and external borrowings. This includes information contained in loan documents and loan transactions generated against these loans, forecasts of drawdown and debt-servicing liabilities, and debt implications of different fiscal and deficit financing policies.

(v) Foreign Aid Management Foreign Aid. This is a subset of the public debt databases. Data with respect to external borrowings, grants, and grants-in-aid is usually maintained separately and includes, in addition, program and project-specific information for which the loan has been granted and information on loan disbursements related to project performance.

(vi) Revenue Administration Revenues. This area contains information on all tax and non-tax revenues, including data on tariff rates and rates for services which generate non-tax  revenues, data on actual collections for each category of tax and non-tax revenue, and historical data on collections.

(vii) Human Resource Management Human Resources (HR). This area contains information on the business processes associated with Human Resource Management. This includes government HR strategies and policies, authorized civil service complements for various agencies, data on civil servants on roll and personnel actions related to these civil servants, and data on compensation and benefits paid to civil servants and retirees.

(viii) Government Accounting Government Accounts. This area contains information related to the operation of the government's payment and receipt systems, and maintenance of government accounts. This includes information on payments, expenditure authorizations, receipts and other financial transactions related to the public sector work program, external and domestic borrowings, revenue receipts, payments to and receipts from civil servants and retirees, inventory, fixed assets and cost accounting, etc.

(ix) Auditing Audit. This information area contains information on audit observations and queries relating to government business processes and associated transactions and the follow-up actions taken or pending, relating to these observations.