Accountability Systems and Compliance

• This outcome recognises that accounting and reporting standards are adequate, but that there is a continued drive towards international and regional frameworks that require higher standards of accounting. Professional training of accounting cadres therefore supports Government’s commitment in the Accounts Act for all heads of accounts and finance units to be qualified accountants. Progress has been made towards this target already and is expected to be completed during the timeline of the strategy. This also facilitates compliance with the current required reporting and accounting standards. Automation of reporting is required to ensure that data generated by reporting systems is presented in a manner that supports effective decision-making.

• Accrual accounting and enhanced accounting systems will help address the need to report more comprehensively on government operations, specifically externally financed projects, and public enterprises among others. While accrual accounting is considered a more advanced PFM reform, a long-term goal, the strategy focuses on initial planning of a road map for transitioning towards accrual accounting. An updated capacity needs assessment will ensure that there is capacity to absorb and sustain the planned reforms. As mentioned previously, large-scale professional training programmes will be developed in response to the capacity needs assessment and options for more sustainable delivery methods will be explored to ensure GoU takes up of this recurrent activity following initial support under the reforms.

 

KRA 4.1 : Effectiveness and Accuracy of the Payroll and Pension Management Systems Increased.

Achieving this outcome will mainly involve addressing the functional and technical challenges associated with current pension and payroll system, by supporting replacement of the underlying application with a fully automated Human Capital Management (HCM) system

Rollout the Human Capital Management Module to MDALGs and integrated with key Government systems (IFMS, PBS, NSIS, and EDMS). Includes capacity building of stakeholders/MDALGs in decentralised payroll and pension management; skills development in pension and payroll audits;  and comprehensive Impact assessment of Pension and Payroll Reforms

KRA 4.2 : Comprehensiveness and Quality of Financial Reporting

• Key interventions (outputs) include:
  1. Enhance professionalization of accounting, procurement & IT cadre in MDALGs. Includes development of a comprehensive professional training programmes in audit and procurement for local governments and MDAs;
  2. Improve compliance to accounting standards and guidelines. Includes issuance of a revised financial reporting framework, guidelines and templates in MDAs and Local governments
  3. Plan for transition to accrual accounting developed. Includes configuration of current systems for activation of accrual accounting; and, development of financial reporting policies and guidelines to support accrual accounting.
  4. Enhance financial accounting capacity in LGs (LLGs). Includes design and rollout of simplified spreadsheet for LLGs to standardize financial (including revenue) accounting and reporting based on the simplified accounting guidelines
  5. Enhance automation for reporting and analysis of financial data. Includes implementation of PFM Business intelligence and dashboards software to support enhanced reporting.

KRA 4.3 : Effectiveness and Integrity of Accountability Systems Strengthened

• Key interventions include:
  1. Roll out the integrated E-GP. Includes change management and capacity building for the e-GP implementation;
  2. Enhance and integrate Core PFM accountability systems. Includes strengthening of PFM systems establishment of the IT governance committee and develop guidelines for acquisition of PFM systems by MDAs and LGs; and, integration of ICT-based accountability systems (IFMS, HCM, PBS, e-Tax, e-GP, e-Payment Gateway, DFMAS, AMP, PIM Systems;
  3. Roll out IFMS (Oracle and FMSFM) & e-Payment Gateway to all remaining MDALGs. Includes ssetting-up Treasury Service Centers to support optimal use of PFM systems by users; and, upgrade of IFMS (Oracle and FMSFM) databases and applications in line with recommended software lifecycles;
  4. Strengthen of IT Governance and Security of financial accountability systems. Includes implementation of zero-day protection for PFM systems and design and implementation PFM Data archiving system.

KRA 4.4: Strengthened effectiveness of commitment controls and cash management

• The aim of this outcome is to address the problem of accumulation of new expenditure arrears by strengthening commitment controls. This will be coordinated closely with activities under Objective 2 relating to monitoring and reporting of commitments and improving multi-year budgeting. The challenge of operationalising the integration of cash and debt management is also tackled by providing support to both functions to improve cash forecasting, and enhancing the roll out of the TSA.

  Part of the strategy to control expenditure arrears is to improve the sustainability of the public pension scheme, which is a source of spending pressure. This will involve a review and actuarial study of public pensions and improved fund management.

   

4.5 Enhanced Assurance (governance, risk and control) by the internal audit function for Compliance of PFM systems

• • Key interventions (outputs) include:
    1. Expand automation of internal audit processes (using, Teammate, IDEA, CAATs) to LGs not currently covered. Includes rollout and training MDAs Audit recommendations tracking system; and, provision of computer assisted audit tools (CAATS) for LGs;
    2. Roll out Risk Management strategy. Includes capacity enhancement for audit of high value investments enhanced; as well as for oil and gas specialized auditing and related tools
    3. Strengthen timeliness and quality of internal audit reporting. Includes building expertise in IT forensic audit for the PFM Systems; Audit of Oil, Revenue Management;
    4. Improve treasury inspection arrangements to enhance compliance and capacity building. Includes establishment of a harmonized Treasury inspection framework for foreign missions as well as capacity enhancement for PFM systems inspection and emerging treasury functions.