A Computerized Pacific

Three countries, the Cook Islands, Tuvalu, and Vanuatu, requested IMF Pacific technical assistance center (PFTAC) to assess, analyze and audit their existing financial management information systems (FMISs). In all three countries, the host nation governments were operating relatively sophisticated off-the-shelf financial software products which had been in successful operation for over 5 years. The purpose of the mission, conducted by PFM regional advisor Suhas Joshi and a consultant, John Moore, was to determine what enhancements or changes might be needed in order to develop and implement an Integrated Financial Management Information System in each of these countries.

The World Bank (1) describes an "Integrated" FMIS, with the emphasis on "Integrated", as having four essential characteristics:

1. A standard data classification for recording events,

2. Common processes for similar transactions,

3. Internal controls over data entry, transaction processing, and reporting applied consistently, and

4. A design that eliminates unnecessary duplication of transaction entry.

These four general characteristics listed above were identified as hallmarks of an IFMIS and the three countries studied were assessed against these.

The mission assessed the maturity levels of the systems to be good. All three systems have some degree of regular backup with off-site backup storage, potential recoverability from routine failures is good, and the systems are being maintained at current release levels, including current vendor licenses and maintenance agreements. Sustainability is well demonstrated for all three systems.

But several of the government systems in the region have developed along a path where different line ministries have their own Financial Management Information Systems (FMISs) with the attendant problems of the inability of these different systems to communicate with each other. And, in two of the three countries examined, the systems were functioning with limited capacity and only as basic accounting systems. The systems will require significant changes before they can function as full fledged IFMIS. Therefore, the mission developed time tables for each of the three countries to move towards a full IFMIS.

The Cook Islands government is planning to standardize the accounting system and to integrate information from all ministries so that one single financial information system can comprehensively track the activities of all Government Departments and Ministries. Issues include the remoteness of the Outer Islands, secure electronic consolidation of financial information, and the expansion of the accounting function in MFEM to manage greater volumes of data.

In Tuvalu, the Government has used a COTS package, ACCPAC as its financial management information system for over ten years, but the full capabilities of the system are not exploited at present.  The mission therefore examined the capabilities of the system against the Government’s needs, identified appropriate upgrades where required, and assessed reporting and training requirements so that the full capabilities of the system can be utilized. The need for other, more modern and capable systems, if required, was also assessed. An important observation was the need to improve existing systems, rather than devote resources to installing ever new and more sophisticated systems, which could drain resources without significant improvement in PFM.

In Vanuatu, an IFMIS has been in place since 2002 and further developments are underway. The system is reported to have helped move Vanuatu from cash to a quasi-accrual accounting system capturing all transactions across Government and to have contributed to improving and promoting accountability and transparency. Recent enhancements in the form of the Vanuatu Budget Management System (VBMS) have taken place. The VBMS is an integrated component of the FMIS, which enables government departments and Ministries to prepare and submit their respective annual budgets on-line.

PFTAC has also identified several common issues across the Pacific Island Countries (PICs) in this area. These include IT/ICT infrastructure capacities and staff availability for training in remote islands. More work is being planned to examine whether a common regional strategy and a lessons learnt document can be developed which could help countries plan IFMIS introduction and expansion