The Government of Papua New Guinea (GoPNG) decided in 1999 to initiate an Integrated Financial Management System (IFMS) project with the aim to improve public financial management and implement a single uniform budgeting and accounting platform nationwide covering both, National and Sub-National, tiers of government.
Accordingly, the IFMS is the designated GoPNG accounting and finance system and has been mandated to replace the incumbent, standalone and outdated financial and accounting system, PNG Government Accounting System (PGAS), with a modern, real time, centrally controlled accounting system. The use of IFMS is compulsory for all National Departments, Statutory Authorities and Provincial and Local Level Governments.
The product chosen for this was the IFMS software suite from an Australian vendor, Technology One. The IFMS is an IT-based financial management, budgeting and accounting system that budgets and accounts for revenue, grants, expenditure, payment processing, facilitating budgeting and reporting for governments and other entities. The IFMS bundles many essential financial management functions into one software suite.
As IFMS is a real time system it requires internet connectivity with adequate bandwidth to allow data transfer at acceptable speed and with minimal downtimes, enabling users to post and view real time accounting and financial data. Internet connectivity in PNG is still susceptible to frequent interruptions and slow internet speeds, particularly outside Port Moresby. This is a major concern as internet disruptions will make IFMS unusable and inevitably cause reputational damage to the IFMS brand, as users are unaware of the technical causes in regards of outages or slow connectivity and are unable to do distinguish between the internet provider and the system. It is expected that internet connectivity will rapidly improve over the coming years with advances in technology.
The IFMS provides the GoPNG with more accurate information, better quality and timely reporting and real time financial information to support better decision making, resulting in strengthened accountability and transparency. A centralised IFMS with real time access allows much faster and transparent financial auditing and reporting. IFMS enables National Departments and Agencies to take ownership and have responsibility and accountability for their financial management decisions.
The aim is to maximise the benefit of IFMS usage for the whole of government and provide a framework that more suitably meets the accounting and financial reporting requirements of National Departments and Agencies and Sub-National Government. To this end, the Government made a decision for the IFMS financial suite to be rolled out to all Statutory and District Development Authorities, National, Provincial and Local Level Governments.
The implementation of IFMS is a major and highly complex undertaking spanning multiple years. GoPNG IFMS project progress had up to 2015 been fairly slow. As the roll out of IFMS was central to the highest priority PFM reforms for the Department of Finance, additional resources were allocated to the IFMS implementation. In 2016 GoPNG set the following targets / parameters for the IFMS roll-out.
- Completion of the roll-out of IFMS (National Departments and Provincial Pilots in 2017 and IFMS implementation in all provinces by end of 2019);
- Replacement of the GoPNG legacy accounting system (known as PGAS) (to coincide with the roll-out of IFMS, fully retired by late 2019 on completion of Sub-National roll-out);
- Development of checks and controls to ensure a high level of data quality, integrity and coherence;
- Strengthening of accounting and internal controls (general ledger integrity, trust accounts, financial reporting,);
- Timely accounts reconciliations and improved cash management;
- Move to electronic funds transfer.
To help achieve these reforms, in early 2016 the IFMS project was infused with renewed dynamism by the Department Secretary Dr. Ken Ngangan with development support from Australia through the Financial Management Improvement Programme (FMIP), as well as technical assistance from other donors, including the EU.
To ensure National, Sub-National and Statutory Authority financial transactions and operations did not interfere with and were kept entirely separate from each other, separate processing environments and new workplaces were designed, set up and configured within IFMS to accommodate each of them.
The GoPNG legacy accounting system PGAS along with its Chart of Accounts structure were converted to using the IFMS Chart of accounts and the PNG program budgeting methodology.
By the end of 2017, all 43 National Agencies and 7 Statutory Authorities had been implemented in IFMS, accounting for approximately 85 percent of the National Budget. In addition, suitable operating environments had been designed and configured in IFMS to cater for Statutory Authorities, Provincial and Local Level Governments, District Development Authorities and Provincial Health Authorities.
During 2017 the province of East New Britain (ENB) was rolled out as the initial sub-national pilot implementation for IFMS due to it having a well-run and functioning financial administration and a general enthusiasm to introduce IFMS. The IFMS implementation for ENB was successfully completed in late 2017.
During 2018 the IFMS rollout to Central Province an Oro Province was completed, utilizing the previously developed configuration for Provincial Government as per the ENB pilot project.
During 2018 the IFMS sub-national roll-out to the Provincial Finance Offices (PFOs) and District Finance Offices (DFOs) was also completed. The IFMS project team rolled out IFMS to all 20 PFOs and all 83 DFOs (103 sites in 20 Provinces, as NCDC and Bougainville are not part of the IFMS roll out).
Despite the many challenges experienced, which have impacted the IFMS project, including remoteness of localities, making completion of site assessments and procurement and installation of necessary ITC infrastructure time consuming and costly, and unexpected events such as the earthquake in the highlands and disturbances in Madang, the 2018 IFMS sub-national roll-out has been delivered on time and on budget.
To enable the IFMS project to meet the PFM Reform timeframes, the focus of the IFMS project team during 2019 is on the IFMS roll out to the remaining 17 Provincial and Local Level Governments, District Development Authorities and 14 Provincial Health Authorities (PHAs) currently in existence. The IFMS Project team plans to implement up to 3 to 4 Provinces concurrently during 2019, with an expected completion date for all Provincial and Local Level Governments, District Development Authorities and PHAs by the end of 2019.
This will conclude the main phase of the IFMS roll-out project by the end of 2019 with all level of Governments utilizing the system.
Post 2019 IFMS roll out activities will be in respect of the remaining public entities at the national and sub-national level, utilizing PGAS or other accounting systems and requiring an IFMS solution.