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Effectiveness of ifms (integrated finance management system) in the public sector of Abu Dhabi Essay Example

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8PROPOSAL: EFFECTIVENESS OF IFMS IN PUBLIC SECTOR

Effectiveness of ifms (integrated finance management system) in the public sector of Abu Dhabi

Effectiveness of IFMS in the public sector of Abu Dhabi

Contents

1.0 Introduction / research background 2

2.0 Research methodology & limitations 4

2.1 Literature reviews 4

3.0 Research findings and content analysis 6

4.0 Conclusion and recommendation 8

References 10

Effectiveness of IFMS in the public sector of Abu Dhabi

1.0 Introduction / research background

In many high countries globally, accounting and budget execution process were initially either supported by inadequately maintained software’s or early software applications (Ajayi &Omirin, 2007). By so doing, this has impacted negatively on the day to day functioning of the general public expenditure management systems (PEM) which are in one way or the other not very much recognized (Bartel, 2009). Most governments in high emerging nations are exploring methods, techniques, and systems to improve and modernize their public financial management (Bartel, 2009). Additionally, to implement and reduce these deficiencies, most public sectors in Abu Dhabi have gone ahead to install stand-alone computerized systems in some Government Ministries, local Governments and Government Agencies (Collins & Frankle 2008).

Recent years have witnessed a reformation within the public sector of Abu Dhabi especially when it comes to the restructuring of the country’s financial management systems primarily at the national level. In other words, the government of Abu Dhabi has turned to a massive project to improve and modernize its government operations (Asselin &Srivastava, 2009). Owing to this effort, an Integrated Financial Management System got implemented with the primary aim of helping effectiveness, efficiency, accountability, effectiveness, transparency, comprehensive financial reporting and security of data management. Additionally, this financial management system was established in three central government departments: Finance Department, Department of National Planning and Monitoring Department, and the Treasury Department. However, the Integrated Financial Management system has proved to be more complex than what Abu Dhabi had envisaged initially. It has proved complex such that the misalignment between Human Resource Management product procurement as well as the payroll product development caused challenges regarding duplicate capturing of data on the Integrated Finance Management System as well as problems of insufficient capacity in the respective departments to adapt IFMS modules.

However, as of present, there has been no known research work that has tried to analyze and evaluate the effect of IFMS in Abu Dhabi Public sector. By so saying, it means that this the foundation for conducting a comparative research study on some IFMS projects in Abu Dhabi. Moreover, the study also examined the significance and relevance of IFMS program delivery and design in the public sector context. In other words, this research works aimed at determining the extent and level of effectiveness to which Integrated Financial Management System has got anchored since it got initiated in Abu Dhabi. Furthermore, the findings and results of the research work can help government stakeholders and officials in the process of further financial and management decision making process.

2.0 Research Methodology & limitations

This research work employed a mixed approach technique. By so saying, it means that descriptive survey design got used in this research study. Additionally, the target population of this research work was seventy government staff workers as well as top management from the Ministry of Finance of Abu Dhabi. Moreover, questionnaires were emailed to the government staff workers with questions that revolved around the challenges and benefits of using IFMS. In simple terms, questionnaires were chosen in this research work because they are cheap and east to administer. Furthermore, interviews were also carried out on the top management team in the finance department so as to analyze the impact of IFMS on the implementers and the Stakeholders. Interviews were a better choice in this aspect because they gave room for verification and validation of data. Consequently, descriptive statistics in percentage form, standard deviation, frequencies, and means were used to analyze data. Similarly, both regression and correlation analyzes were used to test the relationship that exists between the variables.

However, one of the limiting factors of this research work was that, due to the complexity of the bureaucracy involved in the public sector, accessing some top management workers was a tall order. Some questionnaires got emailed to the senior management team and followed up by reminder questionnaires.

2.1 Literature reviews

By definition, IFMS can be defined as a set of subsystems that
can plan report and process financial resources regarding budgeting, cash management debt management as well as related core treasury financial systems. However, the resulting lack of timely and useful expenditure and revenue data for budget monitoring, planning, reporting, and expenses control has affected budget management negatively most especially in public sectors (Archer, 2006). Additionally, this has resulted in a poorly controlled usage of public resources which in most cases causes an enormous debt burden or rather a huge build-up of arrears. This burden is regarding excessive borrowing, crowding out of investment in the private sector, rising interest rates, resource misallocation, and above all undermining the efficiency and effectiveness of government’s service delivery (Asselin & Srivastava, 2009).Therefore, as of recent, there have been increased employment of IFMS in public sectors due to its influence on finance related issues and as such, implementation of IFMS follows a step by step implementation processes shown in the figure below.

Effectiveness of ifms (integrated finance management system) in the public sector of Abu Dhabi

Figure 1:Implementation framework of IFMS(Source: Diamond and Khemani, 2006)

3.0 Research findings and content analysis

The figure 2 below represents a clear summary of data that got collected on the impact of IFMS to the job responsibilities of implementers regarding budget preparation and use. In other words, the system was found highly effective by the staff and officers in accomplishing their tasks along execution and preparation of the budget. The findings can get interpreted as that, the design of the IFMS met the requirements and the needs of the users as well as the stakeholders in Abu Dhabi most especially in summarizing financial information and tracking economic events.

IFMS’ effect on budget preparation (Overall mean=3.87, high)

Effectiveness of ifms (integrated finance management system) in the public sector of Abu Dhabi 1

Legend: 4.505.00-very high; 3.50-4.49 high; 2.50-3.49-Neutral; 1.50-2.49-low; 1.00-1.49-very low

Figure 2: effect of IFMS on budget preparation and execution

On accounting and reporting, the figure 3 below shows the results of the data that got collected as far as the effect of IFMS on accounting and reporting is concerned. Additionally, from the results, it can be clearly noted that most of the indicators that got provided along the financial management reporting and accounting aspect showed significant improvement by registering a mean of 3.96 which is a very high score. One of the primary significance of IFMS revolves around the fact that, it offers a variety of financial and non-financial matters. By so saying, it is expected that the accounting and reporting of finance management could get done in a very timely manner.

Accounting and reporting

Effectiveness of ifms (integrated finance management system) in the public sector of Abu Dhabi 2

Legend: 4.505.00-very high; 3.50-4.49 high; 2.50-3.49-Neutral; 1.50-2.49-low;1.00-1.49-very low

Figure 3: Effect of IFMS on Accounting and Reporting

From the figure above, it is clear that IFMS fostered effective management as far as the management of the internal and external controls are concerned (4.27) followed by real-time information retrieval with 4.07.

When the staff members got asked questions are revolving around the role and effectiveness of IFMS on monitoring and evaluation, the results and data collected were as shown in the graph below. Looking at the various segments or rather descriptors, data availability, and transaction leveled to the manager being in a better position to report the transactions level outright. By so doing, it enables the process of processing payments and budgeting to be done efficiently and effectively. As a result, they can end up streamlining government’s financial management and fiscal’s management as well.

Monitoring and evaluation

Effectiveness of ifms (integrated finance management system) in the public sector of Abu Dhabi 3

4.0 Conclusion and recommendation

From the research results, it can be noted that the implementation of IFMS in the public sector of Abu Dhabi in the three departments impacted the job responsibilities of the implementers as well as stakeholders of the departments involved (Archer, 2006). Additionally, there was no primary relationship between efficiency, effectiveness economy as well security as far as IFMS viability and implementation to be rolled out with other local governments as well as regions within Abu Dhabi. Moreover, implementation of IFMs also caused some challenges for its users but its overall efficiency and effectiveness proved primary to Abu Dhabi’s financial management (Ajayi &Omirin, 2007).

Based on the conclusions as well as the results of the research work above, it can be wise to recommend that, the Abu Dhabi’s IFMs implementers should focus and adhere to the best possible practices doable and practical in the given circumstances (Archer, 2006). Additionally, such a decision should go along with a capacity –building Programme, establishment of a legal framework, obtaining of commitment of all IFMSD role players and a well-defined IFMS implementation project.

References

Ajayi, C.M. &Omirin, S. P. (2007). Key Issues in Information Systems Management.

Archer, S.H. (2006). A model for the determination of firm cash balances. Journal of Financial and Quantitative Analysis. 1:1, 1-11.

Asselin, L. and Srivastava, (2009), “Integrated Financial Management Systems: Experiences in Latin America”, World Bank (mimeo), Washington DC.

Bartel, M., (2009). Integrated Financial Management Systems: A Guide to Implementation Based on The Experience in Latin America. Washington, DC: Institute for Democratic Strategies, LAMPS Occasional Paper Series.

Collins, M.J. and A.W. Frankle (2008). International cash management practices of large U.S. Firms. Journal of Cash Management. 5:4, 42-46.