The finance department of Andhra Pradesh is using a comprehensive public finance management system from SAP, to get financial information on a real-time basis for proactive decision making
By Mohd Ujaley
Virtually everything the state governments undertake involves the finance department at some point in time and it will not be an exaggeration to say that the finance department represents the financial backbone of the government’s operations. It not only sets the financial goals of the state, does the budgetary planning, releases and monitors the funds to various departments but overall, it plays a defining role in ensuring the overall prosperity of the state. Therefore, it is critical for any state government to have a mechanism in place which can facilitate collation, presentation and utilisation of financial information on a real time basis for pro-active decision making.
No wonder, a number of state governments are adopting IT for effective public finance management. The AP government, which has always been on the forefront of using ICT for governance, is no different. It is implementing an enterprise-wide comprehensive public finance management system (CFMS), from German enterprise software maker SAP, for bringing efficiency in financial transactions, transparency in operations, accountability, while also being sustainable in the long run.
With the success of e-governance programmes like Mee Seva, which are already touching the lives of millions of people in AP, the finance department is now hopeful of repeating the same success story with CMFS. “In the existing system, the department lacked the ability to offer a single source of truth for facilitating collation, presentation and utilisation of financial information on a real time basis for pro-active decision making,” says Dr PV Ramesh, principal secretary, finance, government of AP. Under the existing system, the large-scale requirements for reconciliation were leading to wastage of substantial time and efforts. The archaic processes that had to be adopted due to limited process re-engineering in the government only served to add further complexity to the entire process.
To address these challenges, the AP government decided to implement an IT application for effective public finance management. The finance department studied the products of many companies, and finally said that the SAP-based platform for CFMS was the most appropriate for meeting the department’s needs. “We needed a seamless and dynamic interface for facilitating real-time financial management,” says Dr Ramesh. “All this was possible through the CFMS solution.”
Basically, CFMS uses the SAP platform for developing seamless integration between all the components of public financial management like budget, expenditure, HRMS, revenue, accounts, and debt management. The project was eventually named e-Nidhi.
For first phase of the rollout, the state government selected the three modules —human resource management, budget distribution and control and expenditure management. All the heads of departments including the district collectors collaborated in the constitution of a dedicated team, which would deal with the implementation issues. A district level team was also formed by each department for overseeing project implementation within the district.
Although the project was supposed to be implemented across the state by July 1, 2015, but due to some technical delays large-scale roll-out could not happen.
“Through CFMS we have been able to modernise our public finance systems and streamline the processes including better human resources management. The solution has helped to increase transparency in the system and enhance the efficiency of our resources.” says Dr Ramesh. Once CMFS will be fully rolled out it will function as the “single source of truth” and provide all the stakeholders with a seamless interface for sharing electronic information.