1. Punjab Resource Management
Program;
Interventions in Finance Department
Jean-Marc Lepain, Public Finance Specialist
Crown Agents
DFID – TAMA
September 2010

2. Overall Strategy
• To build on Phase 1 achievements
• To build on the Strategic Vision already developed
• To take a medium term view of what need to be
achieved and to move forward that goal;
• To aim at the maximum level of integration all the
project components and deliverables
• To consider systematically and in an integrated
manner information flows, processes, systems
and organization

3. Activities that need to be carried over
• Implementation of SAP templates
• Further developments and fine-tuning of the
Revenue Forecasting Model;
• Implementation of measures for the
reduction of the number of supplementary
grants;
• SAP/R3 training
Issues: How much technical assistance is needed
for these activities?

4. Reformulating Project Components
and Areas of Intervention
• Fiscal Sustainability and Resource
Management
• Budget Execution and Reporting
• Organizational strengthening and capacity
building

5. I.
Fiscal Sustainability and
Debt Management

6. Objectives
• To move in 3 to 5 years to a completely
integrated suite of system and processes from
MTBF to Debt Management
• To move from fire fighting mode to proactive
management of cash resources,
• To improve budget credibility

7. Business Processes and Information Flows
Fiscal Policy Revenue Forecasting
Cash
Management
Cash Management
Cash Management
/ Borrowing
Policy
Debt
Management Debt Management
Strategy

8. Revenue Forecasting
• Must be disaggregated by month
• Must integrate provincial revenues
• Must be in line with the MTBF

9. Why Cash Management ?
• To use cash management as the integrating factor
of resource management;
• To move from cash balance management to cash
flow management to add predictability to budget
execution;
• To use cash management as a linking factor
between fiscal policy and debt management
through the borrowing policy;
• To contribute to the smooth implementation of
fiscal policy

10. Strategy
Cash Management must be developed in two
phases:
• Cash flow management based on budget,
historical trends and data available from SAP/R3
• Cash planning based on cash-plans prepared by
line-departments (could be done on a pilot basis,
or outside the project scope)

11. Deliverables
• Annual cash plan prepared in advance of the fiscal year,
setting out projected cash inflows and cash outflows
month by month;
• Three-month rolling projection revised month by
month;
• One month projection revised on a weekly basis
including daily projection for the week.
• Clear set of rules for prioritizing daily expenditures;
• Linkage with commitment management.

12. Debt Management
• Debt Management Strategy including strategy
for managing overdraft;
• System requirements
• System implementation
• Training

13. II.
Internalization of the MTBF
Budget Execution and Reporting

14. Two aspects of internalization
• Downstream (after consolidation
of sector MTBF)
• Upstream (before consolidation
of sector MTBF)

15. Down Stream
Mainly the responsibility of PGEIP
• Introduction of sector ceilings
• Fiscal Policy Paper
• One single budget call circular
• Porting the MTBF on SAP/R3 for reporting
purpose

16. Upstream
• Budget Execution Review Report (mid-year and end-of-the year) to
detect misalignments and bottlenecks in previous budget;
• Strengthening sector policy analysis including the development of
‘Sector Profile’ and ‘Sector Policy Review’ for benchmarking the
sector MTBS and covering non-MTBF departments;
• Checking credibility of sector MTBFs against Medium Term
Development Plans and sector policies;
• Using consolidation process of sector MTBFs for adjustments;
• Using the MTBF for projecting different fiscal envelopes for new
development schemes.
• Drawing consequences of the introduction of new functions on the
organizational structure and workflows.

17. Extension of SAP/R3 Reporting
Capacity and internalization
• A systematic gap analysis must be conducted
to identify reporting limitations and
negotiations must be started with PIFRA for
customization;
• Phase 1 templates must be implemented;
• A clear IT strategy is required (SAP/R3 is not a
budget preparation tool).

18. Commitment Management
• Revision of the process for commitment
management and commitment control
appears necessary;
• Role of SAP/R3 in commitment management
must be expended;
• Linkage with cash management must be
established.

19. Disbursement Management
• Introducing predictability
• Streamlining control process while making
them more efficient by integrating all stages of
expenditure control;
• Improving linkage with accounting, reporting,
cash management through a better use of
SAP/R3.

20. THANKS