EAC goes live with new integrated financial management system / System to make EAC Organs and LVBC more efficient, effective, and transparent
ARUSHA, Tanzania, June 28, 2011/African Press Organization (APO)/ — The Organs of the East African Community and the Kisumu-based Lake Victoria Basin Commission (LVBC) are to start implementing a series of new systems change in their Financial Management Framework with effect from 1 July 2011.
Announcing the new development this morning, the EAC Deputy Secretary General in charge of Finance and Administration, Dr. Julius Tangus Rotich through his Director of Finance, Mrs. Ghaniya Khadu disclosed that the EAC with financial and technical support from Trademark East Africa will start implementing the new systems change and it will bring major changes.
A new chart of accounts based on Government Financial Statistics (GFS) 2001 of the International Monetary Fund (IMF) and new financial management system based on single business units for each of the Organs (Secretariat, EALA and EACJ) are expected to be introduced. Others include new transaction analysis structure; new functional/cost centre classification; revised business processes and Forms; accrual based accounting that have been updated to comply with International Public Sector Accounting Standards (IPSAS).
According to the Director of Finance, Mrs. Khadu, the major implications of the switch-over include among others; the processing of transactions from one/single business unit for easy consolidation purposes; the use of a new detailed transaction analysis structure and codes for comprehensive and instant financial management reporting; the use of new GFS account codes replacing the old ones; and the use of new business process forms replacing the old ones.
According to the EAC Capacity Building Coordinator, Mrs. Algresia Akwi Ogojo, the expected systems change will make the EAC Organs and Lake Victoria Basin Commission more efficient, effective, transparent and accountable in use of its resources.
Mrs. Ogojo adds the EAC Secretariat is streamlining its internal operations in line with internationally accepted standards and benchmarks to manage the expanded mandate required of the Common Market and Monetary Union.
“The systems will meet the internationally accepted public sector accounting standards and World Bank recommended government financial statistics.
“This will put the EAC among organizations operating at the top end applying best practices in international public sector management” affirmed the Capacity Building Coordinator.
“Once we put these systems in place and they are institutionalized, we will be truly accountable to our funders i.e. the Partner States and the Development Partners. The most exciting thing about the new systems is that we now have an integrated financial management system and some processes are now automated,” she said.
The new systems mean the future EAC Secretariat will have a significant reduction of manual processes and is slowly on its way to becoming a paperless work place or at least one with significantly reduced paper trail.
Several trainings on the new systems changes are currently on going at the EAC Headquarters involving both Finance and non-finance staff especially, Procurement, Audit, Human Resource and budget holders.
Background Information
As part of the process of designing their support towards the EAC Regional Integration agenda, the UK Department for International Development (DFID) and the European Commission (EC), carried out several assessments of the EAC Secretariat’s Financial and Human Resources Management Systems to assess whether the EAC’s rules and procedures apply standards which offer guarantees equivalent to internationally accepted standards, using established benchmarks and a Fiduciary Risk Assessment (the measure of uncertainty as to whether the requirements of use for intended purpose, the achievement of value for money and proper accounting are met), including; the Institutional and Functional Review (2010), Fiduciary Risk Assessment (2008), an assessment for Joint Management with International Organization (2008) and Auditors Institutional Assessment (2006) from which a lot of gaps were identified ranging from shortcomings in Corporate Governance, staff capacity, policies and procedures to systems and processes.
Arising from these Institutional Assessments that were carried out by DFID and EC, gaps were identified in the institutional framework of the EAC (principally within the Secretariat), which needed immediate attention.
The EAC and the Core Group of Development Partners (within the Friends of the EAC) entered a Memorandum of Understanding (MoU) and jointly agreed on a Capacity Development Action Plan (CDAP) which aims to ensure that the EAC Secretariat’s Fiduciary Regulations and Procedures meet internationally accepted standards (using established benchmarks).
Overall Goal of the CDAP Intervention
To improve the efficiency, effectiveness and accountability of the EAC Secretariat to deliver its core mandate and expanded programs by strengthening its institutional capacity in managing its resources in the identified functional areas specified in the Capacity Development Action Plan (CDAP) to address identified gaps/weaknesses in the two EC institutional Diagnostic Assessments (2006,2008) and the Fiduciary Risk Assessment carried out by DFID (2008) by defining, developing and/or updating the relevant policy and procedural management instruments, establishing the required systems and training EAC Staff in the said functional areas namely; Internal Audit, Procurement, Financial Management framework and Systems including Sun Systems, Human Resources Management, Planning and Institutional/Functional Review.
The Capacity Development Action Plan (CDAP) was collaboratively developed by the EAC Secretariat and Development Partners in June 2009 with a target start date of July 2009 but was later re-scheduled to start on 5th July 2010.
The CDAP sets out key functional areas, sets out the expected outputs, indicators for success and defines the commitments and responsibilities of the EAC Secretariat and various Development Partners. The Functional areas include Internal Audit; Financial systems; Procurement, Human Resource Management; Planning; Corporate Governance and Functional /Institutional Review.
The EAC and Core Development Partners are in the process and advanced stages of implementing and delivering upon their commitments under the CDAP. Under the CDAP, DFID undertook to provide 8 technical Advisors (Consultants) as part of a package of rapid technical assistance support to the EAC Secretariat under its broader framework of support to Eastern and Southern Africa regional integration programme- Trademark East Africa (TMEA) and has provided further technical assistance for short term non-established EAC staff positions to expedite the much needed technical capacity in Internal Audit, Financial Management, Procurement, Planning, Human Resource Management and Institutional Review.
This short term programme of assistance that is expected to come to an end in July 2011 is also supported by the EC and GIZ as members of the Core Group of Development Partners.
Progress So Far
To date various Policies and Procedural Manuals have been developed and tabled before the 20th Council of Ministers on 26th March 2010 and are now awaiting effective operationalisation.
The said manuals include:
1. The Financial Policies and Procedures Manual
2. The Financial rules and regulations including Procurement Regulations
3. The Procurement Policies and Procedures Manual
4. The Internal Audit Charter
5. The Internal Audit Manual
6. The EAC Audit and Risk Committee Charter
7. The EAC Governance Code, which includes; the Governance Charter, confidential reporting (whistle blowing) Policy, Anti Corruption and Anti Fraud policy, and Code of Conduct
8. The EAC Transport management policy
9. The EAC Records and Archives management policy
Only the Human Resources Policies and Procedures Manual and the Risk Management Framework, Policy and Strategy remain to be concluded.
Progress has significantly been notable since the arrival of the team of Technical Advisors in July 2010. The TAs were engaged to strengthen Internal Audit, Procurement, Financial Management systems including Sun Systems and Corporate Governance.
Notably, the Technical Advisors have:
• developed a new Chart of Accounts(COA),
• revised the business flow processes and forms based on the new COA
• Built and re-configured the Sun System 5.4.1. to enable users to access and make use of its many modules and functions that had hitherto been underutilized.
• Prepared, Reviewed and updated the various EAC management instruments including the Procurement Manual, the Financial Policies and Procedures Manual, the Financial and Procurement Rules and Regulations, the Internal Audit Manual, Charter, Risk Management Framework, Policy and Strategy
• Converted the 2011/2012 MTEF/Budget into new GFS codes/cost centre codes
• Converted the Payroll GL account codes into new GFS codes/cost centres
• Finalized reclassification/and mapping into GFS codes and cleaning up of fixed assets
• Mapped the old Chart of Accounts to the new GFS based Chart of Accounts for purposes of GL take on
• Cleaned up the old system static data
• Redesigned (made changes) of business process forms
• Finalized analysis codes
• Configured the payroll system Inspiro into the Sun System
• Configured some Finance, Procurement, Ticketing and Stores processes to be automated through the Sun Systems, e.g. the LPOs are now generated from the system and bank reconciliations are now carried out through Sun System etc.
• Final system performance review/compliance testing (especially on single business unit and transaction analysis) and support the adjustment process to ensure the system is fully ready for migration
• Prepared the system migration plan in readiness for migration to the new Integrated Financial Management System by the 1st July 2011.
The next phase of the TMEA supported Technical Assistance will be a 2 – 3 months skills transfer period. The TAs have developed an intensive training plan running from June-September to train the different categories of the EAC staff on all or some modules in the CDAP components that are relevant to improve their performance.
SOURCE
East African Community (EAC)
