The Public Financial Management System (PFMS) Project officially started during the year 1996. This is when the Ministry of Finance engaged Ernst & Young formerly Coopers & Lybrand auditing firm to assist in the development of the statement of user requirements (SOURS). The SOURS document was the basis on which the tender documents were floated to both international and local bidders. Three international companies namely ORACLE, People Soft and SAP bided and one (SAP) was finally chosen after confirmation visits were carried out to a number of countries.
Before then, Government ministries were regularly overspending on their appropriated resources and in most cases expenditure would be carried forward into the next fiscal year thus automatically reducing future financial operational budget. Qualifications were the order of the day by internal and external auditors. Queries were being raise from all corners including stakeholders as there were untimely compilation and production of various statutory reports. Due to payment voucher mixtures of different fiscal year, such vouchers made haven for fraud at various government institutions.
This meant that Government Ministries were persistently requesting for additional financial resources to cover un-budgeted necessary expenditures. Thus, stakeholders were questioning ability to control and manage public resources which perpetuity of financial resources. In ensuring that all suppliers are paid, government had to borrow mostly on the local market. This led to crowding out the private sector in local financial resources for their daily operations. In a bid to correct this private sector crowding, government could not pay in time causing private sector to cushion themselves by charging premiums on goods and services procured by government institutions.
The prevailing manual system could not avail all necessary information for government managers to exercise accounting and financial management control on all facets of their daily activities. They could not afford to collect and collate scattered information for decision making. Some information was being left out due to the time and effort in gathering and processing which led and availed opportunities for scandalous activities to take place. The prevailing semi-automated scattered computer system at the then Central Processing Office and the Central Computing System was another inhibiting factor in the collation of information.
The SOURS documents detailed the prevailing government manual processes of procuring goods and services up to the payment process. Government wanted a solution that will link the procurement and payment processes seamlessly. This entailed that the solution to be provided would re-engineer Government business processes whilst maintaining current or enhanced internal controls. The automated system should be efficient, effective and easy to use and provide relevant information for decision making covering accounting and financial management issues. The solution should also enable Treasury to view consolidated information and be able to monitoring, supervise and control government financial position on a real time financial and management accounting information.
The PFMS integrates all subscribed modules current namely financial accounting and controlling, materials and inventory and public sector management seamlessly. It avails online real-time transactional processing with budget availability control check and comprehensive reporting.
This system facilitated the elimination of non-value adding activities and provided information sharing and access. Management now focuses on analytical work rather than transactional issues. Inventory management has improved immensely. Since the PFMS system is decentralised, it may act as a backbone for E-Government initiatives. Issues of governance are now being addressed. Stakeholders and management are now confident and safe in populating information and using it for decision making.