Dr. Nabeel Alsohybe: Budget reports will be timely and transparent [Archives:2008/1161/Business & Economy]

May 5 2008

For almost a year the ministry of finance has been working on a devising a system that will ensure more efficient, transparent, and timely financial management within the ministry in managing government and public finances. The ministry has put together the Accounting Financial Management Information System Project (AFMIS) in order to serve this particular purpose. The project started implementation in January 2008, and achieved praiseworthy progress so far. YemenTimes interviewed the executive manager of the project Dr. Nabeel Al-Sohybe, and asked him a few questions about the project.

1) Can you start by providing us with a brief overview of your project

and its objectives?

The government of Yemen is conducting a Civil Service Modernization Project (CSMP), which comprises, among other components, the computerization of a Financial and Accounting Management Information System (AFMIS), supervised by the Ministry of Finance (MOF) and funded by the government and the World Bank. AFMIS is considered as the basis for public finance management reform. It is designed to address budgetary activities; budget preparation, budget execution, and final accounts and the system should provide decision makers with meaningful reports of such activities. The system would also support capacity building in the area of financial administration in the Ministry of Finance, line ministries (all other ministries), budgetary units, governorates and districts. The system should provide greater fiscal transparency by posting approved budgets, allocations and monthly, quarterly, annually budget execution reports on the web of Ministry of Finance. Fiscal transparency will increase as the system incorporates a medium term budgetary framework and commitment accounting procedure. Initially, the implementation of the system was divided into three stages:

– First Stage: to implement the system in the largest 4 ministries, which covers about 80% of the total budget. These ministries are: Ministry of Finance, Ministry of Education, Ministry of Health and Population, Ministry of Public Works and Roads. Besides connecting these ministries electronically, and electronic communication between the main center in the Ministry of Finance and the Central Bank of Yemen will be established.

– Second Stage: to deploy the system to all other ministries within the Capital of Yemen, Sana'a.

– Third Stage: to deploy the system to all governorates and districts.

The project faced some serious issues in the past that led both government and World Bank to sit around the table and discuss project available options that included the closure of the project. Ministry of Finance made it clear that AFMIS is a strategic reform and eventually government and World Bank have agreed on a set of actions that warrant its success. The past two years have witnessed the implementation of these actions and AFMIS has achieved important milestones. The 2008 budget was fully prepared using the AFMIS system, and the results have been encouraging and the feedback from pilot ministries has been overwhelmingly positive. In addition, the budget execution module is being implemented in the four mentioned ministries since January 1st, 2008, and these ministries are working live with the system. The project team is working with the contracting company along with independent international testing company to address and resolve all technical comments and/or needs raised by the super end-users, end-users. Once the contracting company finishes all fixes raised, the testing company will come to Yemen to test the system one final time and issue certificate to that regards before Ministry of Finance final acceptance.

2) How will this project help improve the government's management of

public funds and allocations to different government agencies?

Automating budget processes will definitely improve the government 's management of public funds. By using the system from start (budget preparation) to finish (budget execution). Each agency or ministry cannot reallocate, transfer or exceed any amount that is not assigned in its budget. Real-Time reports will be issued automatically through the chain of command in the ministry of finance for every transaction in any agency or ministry connected in the system, which will help officials take sound decisions based on these real reports.

3) How will the computerization of the government's financial system

revolutionize the government's effectiveness in financial management?

We all know that Data processing of any activity will revolutionize all aspects of such activity. We are talking about time saving, cost, efficiency, tc. When it comes to financial activities these seen advantages are far-reaching and important. Not only will it improve operations and save agencies cost, but it will have spillover effects on all people and organizations who are involved in public finance. Computerization should result in the efficient and swift delivery Ministry of Finance and other government agencies services to employees, citizens, and businesses. To citizens and businesses, would mean the simplification of procedures and streamlining of the approval process and hence speedy payment system. This should result in lower costs on all parties involved and would hopefully lead to lower costs of goods and services provided to the government. Computerization would mean ensure appropriate and timely decision-making, appropriate execution of budgets, to the lowest level of desegregation.

4) The ministry have legislated several reforms in the accounting and

auditing systems within government agencies as a step towards

computerization, how do you see progress in this regards?

Since 1995, the date of economic reform inception,Ministry of Finance has played a key role in the reform processes. Economic and financial reform package includes amendments of several financial laws and introducing several new others. Ministry of Finance has introduced a new budget classification system; a new government chart of accounts and Ministry of Finance has played a key role in introducing the new government procurement law. Ministry of Finance believes that reform is a continuous process and right now is in the process of implementing Financial Management Reform Strategy that was developed in a partnership between Ministry of Finance and donor community. The strategy involves amendments of several financial laws and regulations that includes the Financial Law itself and a comprehensive training program of Ministry of Finance people as well other agencies cadre on how to adopt to recent changes in the legal framework of the government financial system.

5) What are the tangible benefits of these reforms?

The goals of any reform basically are to improve business environment. In the finance environment this should lead to efficiency and prioritization and better allocation of public funds. It should mean lower cost of goods and services and hence more services and higher coverage of these services. It should mean enhanced transparency and accountability.

6) When do you expect to complete this project?

As I mentioned, we are approaching the end of the first phase of this project (in the largest four ministries and the Central Bank of Yemen). Hopefully, the system will be rolled out to the rest of the ministries with the capital, Sana'a, by the end of next year (2009), and will start implementing the system in the governorates and districts as soon as we are done in the capital. By then the system will cover both central and local government.

7) Any last words?

Any implementation of an automated processes will face a resistance from employees because they fear that technology will put them out of jobs and they think the demand will be only for the IT professionals and in some cases IT means elimination of vested interest in the manual system. As a result,Ministry of Finance as well as other government agencies will have a major task to train their employees about IT related material from the basic level to the level needed to perform their jobs once any automated system is implemented. Employees need necessary skills that include an understanding of information society, information management, and IT literacy to accept such systems and we need to work hard to achieve that.