Project to Improve Financial Reporting and Auditing (PIFRA)
The Govt. of Pakistan took an initiative to address the shortcomings of the financial reporting system and to ensure good governance. The IMF carried out a survey in Government Accounting in early 1990s, followed by a diagnostic study sponsored by the World Bank. As a result, the Project to Improve Financial Reporting and Auditing (PIFRA) was introduced by the Auditor General of Pakistan in 1994.
The main objective of this project is to computerize the whole accounting and auditing system of the country. The idea behind computerizing the whole system is to generate timely, accurate and reliable financial statements; to monitor fiscal deficit; to forecast flow of cash; to manage public debt and to achieve effective financial controls.
The accounting system of Pakistan was inherited from the century old accounting system of the Indian govt. The old accounting system lacks timeliness, accuracy and most importantly transparency. Accounts of any organization, large or small, are the most important tool for curbing the corruption by keeping an eye on ins and outs of the money and more importantly they give the overall inner picture of the organization to the stakeholders which helps them take better financial decisions.
While talking about the country as an organization the importance of the accounts becomes much more vital. The stakeholders are everyone, be that any foreign aid entity, any govt. department, govt. employees, provincial or district govt., any bank, any foreign govt. etc. You name it and they are there. So the importance of these accounts increases manifolds.
Furthermore, the old manual system was like a haunting monster also for a common government employee. There are three main things which a common govt. employee comes to an accounts office for, viz. salary, general provident fund and pension. Our experience shows that in the old system a common man had a series of unlimited problems and hurdles to face in order to get his financial claims. His fever started a week before he had to visit the accounts office for any of the financial claims.
But, unfortunately, till the recent past our governments did not pay proper attention to overcome these problems. Due to which the exact and clear picture of the economy of the country is still not visible to virtually anybody and on the other hand common man face enormous difficulties in receiving his financial claims.
After the introduction of PIFRA this ultimate goal would be achieved soon. That is why this project was introduced. The main objectives are to achieve timely, accurate and complete accounts with transparency and most importantly to facilitate the common govt. employee regarding their financial claims. But, there is a lot more to be done to achieve this goal.
" FABS (Financial Accounting & Budgeting System
Change Management (HRM)<"br />
In order to achieve the targets of PIFRA, New Accounting Model (NAM) was introduced to replace the old accounting practices. This system is mainly bases on the modified cash basis accounting. The bases of the Modified Cash basis accounting are:
" Double Entry Bookkeeping system
Recording of Commitments
Fixed Assets Recording"
The Salient features of NAM are:
" Integration of Budget & Expenditure Flow
Accurate and Timely Reporting
Assets will be recorded
Commitments will be Recorded
What PIFRA means to us?
" Integration of Budget & Expenditure information flow
Accuracy and timeliness in Reporting
Transparency in Accounting system
Elimination of fraudulent activities
" Integration of Salary Network
Pension / Commutation Calculation through system
Consolidated Personal Information
Updated GP Fund Accounts
GP Fund calculation through the system
Automation Solution (SAP)
In order to keep the uniformity a common automation solution has been chosen for the whole country under this project. The world-renowned state-of-the-art integrated software SAP is the Enterprise Resource Plan (ERP) which is being implemented at all the accounting entities overall the country. There are number of functionalities available in this ERP, which are highly flexible in nature and can be modified according to the requirements of the particular organization. Keeping in view the requirements at the country level, the Govt. of Pakistan has purchased three most essential modules of SAP. They are:
Basis (System Administration) Module
This module covers the overall system administration. The user authorization, the working of the main servers, the roles of particular users, the connectivity between all the sites in the country and various server-related issues are covered in this module.
This module covers the financial side of the system. The generation of various financial reports, like monthly, quarterly and annual accounts, etc.; the budget preparation and maintenance and expenditure booking into the system, project & commitment accounting are some of the tasks which are performed using this module.
Human Resource (HR) Module
In HR module, the update record of the employee, the updated GP Fund account, its calculation and payment; the pension/commutation calculation and payment; and salaries of the govt. employees are operated through the system.
PIFRA in Sindh
This project is being carried out in phases throughout the country. There are number of steps in which the project is implemented in the provinces. The first and most important phase is to computerize the accounting offices and then implement various prescribed modules.
There are 23 District in Sindh province. PIFRA is being implemented District wise. The implementation was divided in phases. Initially, Two Districts were selected as Pilot Sites viz. Karachi and Hyderabad. After the successful start of the PIFRA on these sites, three more sites were selected as Rollout Sites, namely, Sukkur, Nawabshah & Larkana. The system here was also started with success.
In these sites, initially, the salaries of the govt. employees were computerized through HR Module and then other financial claims from various offices were entered into the computerized system through FI Module. Before starting the project at rest of the Replication sites, the system of Workflow (Electronically Generated Cheque System) was implemented at the already productive (online) sites, at the initiative of the Accountant General Sindh.
The target was to make all the sites productive by the end of January 2008, but due to province wide riots after the sudden death of Ms. Benazir Bhutto, some of the District Accounts Offices were severely damaged and the plan was revised.
The Accountant General Sindh succeeded to bring one site i.e. Ghotki, online in December 2007 and on site i.e. Thatta in January 2008. According to the revised plan four sites viz. Tando M. Khan, Matiari and Sanghar were made productive in the month of February 2008. Moreover, Shikarpur, Jacobabad, Khairpur, Tando Allah Yar, Mirpurkhas, Umarkot, Mithhi and Badin were inaugurated by the Accountant General Sindh in March 2008. This was one of the greatest achievements of the Accountant General Sindh and PIFRA.
Pension and GP Fund Functionalities (HR Module)
HR Module covers Salary, Pension and GP Fund Functionalities or govt. employees. It has been mentioned above that when the site (District Accounts Office) is made productive/online the salary of the employees of that district is paid through the system. As for the Pension and GP Fund Modules, they are being currently in the implementation phase. These functionalities are started after a reasonable time is elapsed after the productivity of district, so that the users become more acclimatize with the system. The pension and GPF Functionalities have been successfully started at AG Sindh and District Accounts Office Hyderabad, so far. Currently these functionalities are being extended in DAOs Sukkur, Nawabshah and Larkana. As soon as they are successfully implemented in these sites, the rest of the sites will also be brought on the same system.
In these functionalities one of the most important tasks is to update the past information regarding their Provident Fund deduction of the employees who are in the service well before the system was introduced. This updating will ultimately facilitate the employee at the time of their retirement.
Budget Availability Check (FI Module)
There are numerous functionalities in FI Module. So far, several functionalities have been implemented in AG Sindh and its DAOs, e.g. Civil Accounts, Workflow, etc. But there are still some which are in the implementation phase.
One of the most important functionalities is Budget Availability Check. In fact, this functionality shows the beauty of the system. The idea is that no financial claim is entertained through the system if the budget in the relevant head of account is not available. This prevents any wrong payment, intentionally or unintentionally. Moreover, it also keeps the accounts updated and error-free.
This system has been successfully implemented in the AG Sindh office, being the pilot site. The next target is to implement this functionality at all the productive sites.
PIFRA revolutionized the accounting system by introducing the New Accounting Model and computerized environment in the govt. accounting offices throughout the country. The most difficult task in the implementation of the project was to change the behavior and mindset of the working staff. The staff was highly expert in the current accounting system and well versed with the relevant regulations. But, most of them were not knowledgeable about the computers and its working. So, implementing such an advanced computerized solution in these offices was a gigantic task and a great challenge. The only way to achieve the desired goal was to impart proper training in the existing staff.
PIFRA organized exhaustive training programs throughout the country and trained hundreds of employees of not only the accounting offices but also the DDOs (Drawing and Disbursing Officers) of all the departments.
In AG Sindh, initially, PIFRA trained 25 staff members, who then extended their expertise and trained more than 500 officers/officials of the office, and the practice is still going on. Currently, the trainings from PIFRA are also being carried out and a number of officers/officials of various District Accounts Offices are being trained for the successful implementation of the project.
Its important to mention that the AG Sindh, himself, took initiative to organize various capacity building programs for not only its own officers/officials but also the Nazims, District Coordination Officers and Executive District Officers (Finance & Planning).
The AG office organized a series of workshop regarding District Budgeting and Expenditure Authorization. In the first two phases the EDOs of all the Districts were given comprehensive training regarding preparation of District Govt. Budget. As a result all the District Governments of Sindh prepared their own budget for the first time in FY 2005-06. In the third and final phase a grand workshop was organized in which the Nazims, DCOs and EDOs of all Districts were given the overview of the District Budgeting, the Schedule of Authorized Expenditure and PIFRA.
Moreover, two very important workshops were organized by the AG Sindh for the staff of the District Accounts Offices vis-à-vis Monthly Civil Accounts through SAP System. The workshops were arranged at two remotest sites of Sindh i.e. Mithhi and Ghotki. The Accountant General Sindh himself attended the meeting which depicts the seriousness and importance of the events.
Furthermore, five District Accounts Officers Conferences have been organized in the last four years. The purpose of these conferences is to discuss the problems and issues regarding the implementation of the project and to find the solutions then and there. Besides, the DAOs, themselves, are also given brief training on diverse activities.
As a result, the PIFRA has been so far a successful project in Sindh regarding the FABS component. The World Bank has paid number of visits to the AG Sindh and always applauded the efforts of this office and appreciated the outcomes.
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