How to Design a Financial Management Information System: A Modular Approach
How-To Notes, May 15, 2019
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- How to Design a Financial Management Information System: A Modular Approach
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Bibliographic details
- Authors: Gerardo Uña, Richard I Allen, Nicolas M Botton
- Published: May 15, 2019
- Series: How-To Notes
- DOI: https://doi.org/10.5089/9781498311120.061
Overview and purpose
- A well-functioning financial management information system (FMIS) provides timely, reliable, and comprehensive reports that support:
- implementation of the government’s fiscal policies and fiscal rules,
- the formulating, controlling, monitoring, and executing of the budget.
- The How‑To Note examines how to design and transform FMISs to be effective tools of fiscal governance.
Evolution of FMIS architecture
- FMIS architectures have undergone a transformation since these systems were first developed in the 1980s.
- Many modern FMISs now focus on a few core functions rather than attempting to cover all or most public financial management (PFM) functions; core functions include:
- accounting and reporting,
- budget execution,
- cash management.
Key findings from cross-country survey
- A survey of 46 countries shows many face severe challenges in transforming their FMIS into an effective tool of fiscal governance.
- Identified challenges relate to:
- weaknesses in the system’s core functions,
- limited institutional coverage,
- limitations of the information technology platforms used,
- difficulties in the ease of sharing data with other IT systems.
Modular approach recommendation
- Replacing an FMIS with an entirely new system may not be an optimal strategy.
- A better approach may be to update or replace one or more core modules of the system—the so‑called modular approach—by utilizing the latest technology.
Preconditions for successful FMIS implementation
- Implementation of an effective FMIS depends on two critical preconditions:
- strong political motivation and commitment,
- the system’s ability to meet ongoing and anticipated PFM needs.
Content in this bundle
- How to Design a Financial Management Information System: A Modular Approach; IMF How To Notes 19/03