Towards Effective and Modern Public Finance

11:32:09 AM | 9/15/2014

“A reliable and accessible financial database is a key element to conduct administrative reform; support decisions on macroeconomic policy, monetary policy and fiscal policy; ensuring transparency and accountability as well as reflecting the effective performance of government operations in the provision of public financial services”. This is information given at the Conference – Exhibition Vietnam Finance 2014 themed “Reinforcing government financial management information system (GFMIS) towards effective and modern public finance”.
This annual event was co-organised by Vietnam Ministry of Finance and International Data Group (IDG Vietnam) on September 12, 2014,.
World economic situation continues to face many difficulties with global economic growth predicted to decline from 3.2 percent in January to 2.8 percent in 2014 (World Bank, 2014). In Vietnam, macroeconomic situation has started to stabilize and shown some positive changes; however, there still remain several difficulties in production and sales. These put heavy pressures on management, budget planning and national finance. Moreover, among 10 groups of financial - government budget tasks in 2014 of the financial sector, it can be seen that management, financial controlling and reporting are becoming increasingly urgent.
However, the volume and complexity of public financial information in daily activities have increased rapidly. This situation requires the Government to develop a comprehensive, efficient and modern financial management information system.
In Vietnam, financial strategy to 2020 was approved by Prime Minister according to Decision No. 450 / QD - TTg dated 18/4/2012, in which building a healthy national finance; ensuring financial security, macroeconomic and financial-monetary stability; ensuring the efficiency and effectiveness of management, financial monitoring are important tasks that the financial sector need to continue developing and perfecting in the coming period. To accomplish these goals and missions, Minister of Finance issued Decision No. 224 / QD-BTC dated 30/01/2013 regarding the approval of the Action plan of the finance industry to implement financial strategy until 2020, including the deployment plan of the Government Financial Management Information System (GFMIS).
Since 2003, the Ministry of Finance has begun to build and implement the Public Financial Management Reform Project (PFMRP), in which the Treasury and Budget Management Information System (TABMIS) is an important component. It has received attention since the beginning to ensure close control of Government Budget’s income and expenditure at financial management agencies, State Treasury and other ministry and department-level agencies. After 10 years of deployment, TABMIS was officially put into operation in late 2013.
Some initial results have been observed: Since 2013, 37 ministries and agencies have directly involved in the distribution of the unit’s estimates on the system and synchronization to the local level; 32 ministries and agencies have allocated the remaining indirect distribution (Off-line) on the system through the specialized management of financial departments under the Ministry of Finance. On a national scale, TABMIS has been successfully deployed in 1,500 departments with over 10,000 employees trained to operate the system.
Overall assessment of the project results, Ms Victoria Kwakwa, Country Director, World Bank in Vietnam, said: "The project has significantly enhanced fiscal transparency internally between central and local government, supported timely decision-making and improved the efficiency of budget management, cash and payable accounts. This project also facilitates budget audit process and payment transactions, promote accountability, enhance the confidence of suppliers and development partners." Successful deployment of this project can be considered a major step in the modernization of the financial sector, paving the way for the upcoming projects of the Ministry of Finance, aiming to develop a complete Government Financial Management Information System (GFMIS) in the future.
Government Financial Management Information System (GFMIS) is a strategic financial management system, supporting the Government to access accurate and timely financial information, which assists the Government in managing macroeconomic policy, financial - monetary policy as well as ensuring transparency and accountability of the Government.
GFMIS components include a combination of the treasury information system (T), budget management (B) and other government financial management information systems (O). Accordingly, GFMIS in Vietnam is expected to include a number of “core” management information system as follows: (i) Treasury And Budget Management Information System (TABMIS); (ii) Budget Estimation System; (iii) Investment Spending Management System; (iv) Debt Management Information System (include public debt portfolio management, public debt risk management, DMFAS,…); (v) Tax Management System (TMS); (vi) VNACCS/VCIS System; (vii) State Accounting System; (viii) Public Assets Management System; (ix) Management and Price Database System; (x) Financial Management System at Spending Units; (xi) Comprehensive Stock Management Information System; (xii) State Reservation Information System; (xiii) Synthesis, Integration of GFMIS and Data Warehouse System.
During the past years, being clearly aware of the importance of public finance reform which aims to build GFMIS, Ministry of Finance has been conducting researches to apply IT in government financial management activities in order to manage public finance closely and effectively, bringing in tremendous benefits in improving financial indicators as well as producing fiscal space to support economic - social development strategies and policies for the Government. In particular, restructuring business processes based on information technology (IT) with the aim of reforming public financial management activities through IT applications is considered the key to improve staff performance.
Featuring the theme "Reinforcing government financial management information system (GFMIS) towards effective and modern public finance", the 11th Conference - Exhibition Vietnam Finance 2014 provided information on the basis of the public finance reform, status of financial operations, operational capacity as well as management and deployment experience of GFMIS.
Thu Ha