Integrated Financial

Management
Information Systems
(IFMIS)
Integrated Financial Management Information Systems (IFMIS)
Part 1: An introduction to IFMIS, and its Role
in Public Finance Management Reform

Public Finance Management (PFM) Reform

PFM reform is a process that different countries will
As African countries continue their journey of growth and
conduct in different ways, depending on their varying
development, pressure on governments to deliver basic services
levels of maturity. PFM reform may start with ensuring
and improve living conditions for their people is steadily mounting.
the production of a regular and accurate set of national
One of the factors often touted as being imperative to improving
accounts, and range to the implementation of a
overall governance and the lives of citizens in general is Public
comprehensive Integrated Financial Management
Finance Management (PFM) reform.
Information System (IFMS) covering all tiers of
government.
In the past, PFM reform in Africa has often been driven by the
need to comply with the requirements of international donors and
development partners. Increasingly, though, African governments
are seeing the broader value in improving the management of
their public finances.

The key elements for PFM reform need to work in a collaborative way. This
collaborative governance underpins the development of an Integrated Financial
Management Information System (IFMS), which in turn supports better
governance and decision-making…

Develop Develop Review or

Review of institutional or reform reform financial
PFM Act framework for regulations to reporting
PFM govern PFM processes

Design a Develop Review or

new chart of processes to reform the Implement
accounts for achieve clean budgeting IFMIS
government audits process

...and to Sustain the Reform, the Government needs to ensure Commitment,

Capacity and Change

1 Political commitment/will 2 Capacity Building 3 Change Management

1
Without the basic PFM reform building blocks highlighted above,
an effective implementation of an IFMIS is unlikely. These reforms
are required to ensure that the data recorded by the IFMIS is
reliable and useful to the government.
What is an IFMIS?
An IFMIS is a standardised monitoring and reporting system,
which consolidates all the information needs of a government into
one information database. It facilitates consistent recording and
reporting of information, to enable a government to take macro
decisions that affect the country as a whole.
IFMIS would integrate across several disciplines. This could include
budget, payroll and HR management, procurement, financial
reporting and performance information (non-financial reporting
on key performance indicators). The level of integration would
depend on the needs and maturity of the individual government’s
PFM system.
Monitoring the financial performance of individual government
institutions by National Government is a challenge as many
intuitions may have their own legacy finance functions and
systems in place.
In the government realm, IFMIS systems must be designed
to support distinctly public sector functions. They must
be able to handle and communicate all the financial
movements for the complex structure of budget
organizations. Moreover, they must be designed to ensure
compliance with budget laws and public finance rules and
restrictions.
Integration is critical to the operation of an IFMIS.
Integration, using a common “data warehouse”, ensures
that every unit and every user adhere to common
standards, rules, and procedures and helps safeguard
against unauthorized or imprudent uses of budget funds.
It also allows users anywhere within the IFMIS network
to access the system and extract the specific information
they need. A variety of reports can be generated to
address different budgeting, funding, treasury, cash flow,
accounting, audit, and day-to-day management concerns.
“Best Practices in Fiscal Reform and Economic
Governance”: USAID

IFMIS systems are the automation solutions that enable governments to plan, execute, and monitor the budget. Modern FMIS
platforms help governments comply with financial regulations and reporting standards, and support decentralized budget
operations through centralized web-based information and communication technology (ICT) solutions. IFMIS platforms also
facilitate the disclosure of Public Finance information to citizens to improve budget transparency, government accountability, and
participation.

Whenever FMIS and other PFM information systems (for example, e-Procurement, payroll, debt management) are linked with a
central data warehouse (DW) to record and report all daily financial transactions, offering reliable consolidated results for budget
analysis, decision support, performance monitoring, and web publishing, these platforms can be referred to as integrated FMIS
(or IFMIS). Next-generation IFMIS solutions combine PFM operational systems for online transaction processing (OLTP) with
powerful DW capabilities for multidimensional online analytical processing (OLAP) to assist in effective forecasting, planning,
performance monitoring, and decision support
-World Bank

The integrated information will allow governments to be more Part 2: Developing a Sustainable IFMIS
transparent about their processes and increase accountability.
Strategy as part of PFM reform
An integrated system would also facilitate effective “whole of
government” reporting and preparation of consolidated financial
Due to the complexity behind the design and implementation of an
statements
IFMIS, one of the key considerations should be the sustainability of
the proposed system. This includes the flexibility of the system to
The standardisation of information across government institutions
respond to changes in legislation, requirements, technology, and
can also contribute to fighting corruption, by incorporating both
system maintenance.
preventive and detective controls, including exception reporting
and trend and data analyses.
Furthermore, to ensure the sustainability and success of the
system in the long-term, all relevant stakeholders should be
In summary, an IFMIS provides government with reliable
involved at the design phase of the IFMIS. Their input will ensure
management information to assist with decision-making. The
that the proposed system responds to their needs and adds value
information is also easily accessible, as the information is
to the PFM environment. Strong political leadership is also a
centralised into one database.
cornerstone to the successful implementation and sustainability of
the IFMIS.
The more integrated the IFMIS the more valuable and useful the
information and reports generated from the system would be.

2
Governments should also invest substantially in building capacity
and expertise with regards to the operation and maintenance
of the IFMIS to ensure the benefits of the system continue to be
realised long after the implementation has been completed.
The success of an IFMIS is therefore dependent on a detailed
strategy established through effective planning which should
include the following steps:
• Evaluate the maturity of the government / organisation
against a benchmarking tool such as EY’s Maturity Model
• Establish process frameworks based on good practice
• Identify and procure a robust and scalable technology
platform (IT environment)

In general, “FMIS implementation is an art, not a science”—emblematic of complex

systems that constantly evolve and expand, paralleling changes in PFM needs and
advances in technology. As with the design and implementation of any complex
system, leadership, collaboration and innovation are important to the process
- World Bank Report

It is imperative for governments to assess their maturity

in the journey. This is followed by Process, Controls and
Reporting framework, and finally leveraging a leading and Sustainable IFMIS Strategy
integrated technology platform to deliver

Assess against Maturity Model

Establish Leading Process Frameworks

Robust and Scalable Technology Platform

3
Typical Maturity Model – A Journey towards adopting
Leading PFM Practices
To ensure resources are used effectively during the development expected at each level. The IFMIS would be the overarching reform
of the IFMIS strategy, it is important to identify the maturity level aligning all these practices to deliver consistent consolidated
of the relevant government. The figure below provides an example information to government.
of a typical maturity model specifying the leading PFM practices

Basic Developing Established Advanced Leading

• B
 asic Cash • B asic Modified • B
 asic Modified Cash • L
 eading Practices • O
 pen Government
Accounting System Cash Accounting Accounting System in Management and (Transparent and
• CoA in place System • R
 eal Time Accounting systems Online information
• M
 anual and • CoA in Place Integrated Systems • S
 ingle Treasury repository)
spreadsheet based • Lack of Real for functions Account • T
 ransparent
process Time process and • L
 imited Treasury • R
 eal Time Service Delivery
system integration Function Integrated Value Model
• E xistence of • L
 imited IPSAS Chain • L
 eading Practices
Manual processes Compliance • R
 eadiness for in Management
Accrual Accounting and Accounting
System systems
• IPSAS Compliant • S
 ingle Treasury
Account
• R
 eal Time
Integrated Value
Chain
• A
 ccrual Accounting
System
• IPSAS Compliant

Any Technology Platform, adopted by government, towards

automating their financial and associated processed need to
address all the functions (as demonstrated in the adjoining
diagram), in an integrated manner.

Most established Global ERP/Technology Platforms (e.g. SAP

and Oracle) help address these areas effectively and in a scalable
manner.

• Real-time Integration within Core Functions

Criteria of a Mature IFMIS
Technology Platform
• Single Database
• Integrated Planning and Budgeting Capabilities (Top down and Bottom Up)
• Analytics (what if analysis, scenario planning etc.)
• Workflows
• Multi-tier architecture
• Role based authorizations
• Treasury and Fund management functionality
• Robust Integration frameworks to connect legacy and third party systems
• Portal and Mobile capabilities for Internal and external stakeholders ease of use

4
A snap shot of IFMIS in Sub-Saharan Africa
The following table provides a snapshot of the IT platforms
adopted by several countries in Sub-Saharan Africa. The choice of
platform would be dependent on the maturity of the environment
and the complexity of the IFMIS implemented.
SAP ORACLE
Zambia Uganda
Africa Experience
Zimbabwe Ghana
Kenya
Ethiopia
The impact of the IFMIS reform is dependent on the selection
of an appropriate platform. The more complex systems such as
SAP and ORACLE provide the user with more functionality and
customisability, however, these systems are often expensive to
set up and maintain in the long-term. The additional functionality
offered by these systems may not always be needed – it is
therefore important to conduct careful needs and cost-vs-benefits
analyses before committing to a particular solution.
Conclusion:
It is clear from the discussions above that the successful
implementation of an IFMIS is a major component, if not one of
the goals, of PFM reform. Although it may not fully prevent fraud
and corruption in government institutions, the standardised
information that management receives should assist in identifying
and investigating unusual transactions or activities, which may
increase Government’s ability to root out corruption.
5
EPICOR Others
Tanzania South Africa
Gambia Nigeria
Malawi
Swaziland
Lesotho
The success and sustainability of the IFMIS is dependent on a an
effective sustainable strategy and the effective implementation
of other PFM reforms such as a review of the country’s PFM
Act, review of budgeting process, development of a Standard
Chart of Accounts etc. These aspects should be supported with
clear political leadership and commitment and the appropriate
resources, capacity building and change management strategies.
The IFMIS is considered to be the over-arching reform which aligns
all other PFM processes. It gives effect to the overall objective of
PFM and is a valuable tool for decision-making in the public sector.
However, it is important for governments to realise that there
is no “one-size-fits-all” solution where IFMIS is concerned. Each
country is unique and consequently a tailored solution is required
to address the specific system requirements, information needs
and users.
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