December 2012

Integrated Financial Management System

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Integrated Financial Management System is an e-Governance initiative of Rajasthan government for effective, accountable and transparent Public Finance Management,writes Rajasthan Finance Department Principal Secretary Dr Govind Sharma

Govind Sharma

With the view of computerising and automating key aspects of budget execution and accounting operations across all the Departments, State  government decided to adopt Integrated Financial Management System (IFMS). The system brings transparency in the public finance management. It enables controlled and efficient access to all the financial data of Government, and thereby improves the efficacy of the overall financial system.

Under IFMS, the major initiatives taken by State Government include Electronic Payment System, e-Government Receipt Accounting System, State Public Procurement Portal, Integrated Human Resource Management system and few others.

A comprehensive web based system
The Integrated Financial Management System (IFMS) is completely web based; it hasbeen conceptualised to address the shortcomings of earlier offline computerisation pertaining to budget processes and treasury functions. The main objective of IFMS is to achieve computerization of state wide financial transactions and efficient monitoring and facilitate a Single Window interface across various functions.

The major accounting process in Government is the budget process, which includes receipts and expenditure of whole State. The receipts and expenditure are made through treasuries and a periodic account of these is sent to the AG.

The basic principle of budgeting is that one cannot incur expenditure more than the funds allotted to it. Before implementation of IFMS all the checks on budget were manual, including budget availability checking at the treasury level, reconciliation of revenue receipts between departments and treasury etc. But since the advent of IFMS, the treasury and in turn Finance Department are having a far more clearer picture of total budget expenditure compared to allotted budget on day-to-day basis.

Today a bill is passed by the system only when sufficient budget is available to the department. The concerned accountant does not to check the budget from the printed budget volume. Any change in budget allocation by FD is instantly reflected in the system. Similarly information of com- plete revenue receipts is also available on this system. After implementation of e-GRAS, this information of revenue receipts is also being available on real time basis. Today FD is in a better position when it comes to financial planning and revising of budget allocation with respect to the availability and expenditure status that is available on IFMS. So the IFMS is a sum total of activities like planning, estimates preparations, distribution/ allocation of Budget, fund management, Treasury functions, e-Government Receipt Accounting System and interfacing with external users like citizens, banks and AG.

Electronic Payments
As a paradigm shift in Government payment system, electronic payment has also been introduced. State Government has shifted all payments including salary payments on electronic mode. As per the instructions of Government of India, the State Government of Rajasthan is making e-payments in case of all Government transactions. The payments are being credited in relevant accounts of the beneficiaries through NEFT/EFT by all agency banks State Government has initiated the process of e-payment for salary of around 5.50 lakh Government employees. This process has been started from the month of April, 2012. This process is being successfully implemented with the cooperation of 298 bank branches, 39 Treasuries, 221 Sub Treasuries and 7 agency banks – SBBJ, SBI, Bank of Baroda, Punjab National Bank, Bank of Maharashtra, Central Bank of India and UCO bank.


In this process text file and control file attached with digital signature generated from Treasury officers are being uploaded on the site of IFMS-Pay Manager. All Banks have provided access on this site through digital signatures. Banks are downloading the files through this site and making payments electronically in the bank accounts of Government employees. Two types of files are being generated – EFT files for core banking solutions and NEFT files for accounts having in other banks.

The system for e-payment of for all Government transactions, which include third party payments, has also been initiated. All Agency Banks have been provided electronic interface with secured access. They can enter in the Finance Department website through digital signatures, and can download e-payment files uploaded by Treasuries for making e-payments through EFT and NEFT mode.

All third parties including service providers have provided access in the IFMS site to view their payment details. Similarly all employees have access to view their salary status.

E-Treasury and e-Government Receipt Accounting System
The concept of e-treasury is based on the idea of hassle free tax collection and paperless accounting /reconciliation at a single point for State Government. The e-treasury aims to provide e-payment facility as well as the e-reconciliation facility for all tax revenue of state Government at single point. The e-treasury gets digitally signed e-scrolls and related e-challans, major head wise on day to day basis or transaction wise as decided by authorised banks and state Government.

One of the core function of e-treasury is to tally the gross monthly e-receipts with the gross amount shown (Head wise) in the DMS of e-receipts sent by the banks. This reconciled e-account is to be submitted to AG electronically from e-treasury. The e-treasury functions under the supervision of FD . e-Treasury caters the facility for online e-receipts. Manual payments are being handled by respective treasuries and Sub Treasuries.

 

  • In Rajasthan all the Government accounting i.e. allocation and expenditure of budget is being done by a web based system.
  • Through the system all the Departments and Treasuries are aware of the budget allotted to the departments and as soon as expenditure is   incurred the remaining budget is displayed in a system.
  • System enables the State Government to monitor the expenditure of all departments on real time basis.
  • Financial data is being exchanged between Treasury, Banks and Accountant General Office through a system.
  • All the employees get their salary credited to their bank accounts on 1st day of every month through a system.
  • A taxpayer can deposit tax from anywhere and at anytime.
  • All the third party payments are being credited in the bank accounts of vendors/suppliers etc through a system.
  • Social security pensioners are getting pension through e-money orders generated by a system.
  • All the tender related information is being provided to the bidders and other stakeholders through one system.

The system behind all these initiatives is Integrated Financial Management System (IFMS)

The main objective of e-GRAS is to enable taxpayers to make tax payments on an anywhere any time basis. There is the facility of extended timings, and the users also enjoy the benefit of having lot of banks to choose from. It is also a place where all proper electronic accounting and reconciliation processes can be maintained on real time basis. In the e-payment of taxes there would be no direct customer interaction at bank counter and hence no paper challan from the taxpayer will be required. The internet banking system captures the challan details for all e-receipts in the prescribed Templates. Since the challan details are being electronically captured, the e-challan data is being provided by bank to the e-treasury for faster remittance of revenues to Government Account. This would also facilitate reconciliation with the banks/ Department/Treasury because detailed accounting can be done based on the classifications appearing in the e-challans. AG is also developing systems for accepting e-challans in place of hard copy of challans.

State Public Procurement Portal
Another major e-Governance imitative of the State Government is the State Public Procurement Portal. Thisis being developed by IFMS under the provisions laid down in Rajasthan Transparency in Public Procurement Act, 2012. All Departments and their offices, ZilaPar-ishads, PanchayatSamities, Gram Panchayats, Municipal Corporations, Municipalities, Autonomous Bodies and Boards will be covered under this portal.

This portal will be accessible to the public for posting matters relating to public procurement. Later on this Portal will be integrated with e-Procurement Portal. This portal aims to put transparency in the process of public procurement. Every bit of information pertaining to the bidding process will be available in public domain. Decisions pertaining to appeals as per transparency act are also available.

Objectives of IFMS

  • Improved treasury system and budget control
  • Eliminate redundancies and integrate data to ensure better financial control and information systems
  • Improve efficiency and reduce cost of operations
  • Improve strategic and day-to-day decision making
  • Quick availability of the data/MIS, effective control
  • Allow better cash flow management and budget control
  • Ensure adequate controls to minimize risk of fraud and malpractices
  • Provide better interface with RBI, Agency Banks and Accountant General
  • Debt as well as Grant tracking from various agencies to the State Government
  • Provide better interface to external stakeholders: Employees, Pensioners, Tax-payers, Contractors and suppliers
  • Provide citizens better access to information and increase public accountability
  • Ensure that issues related to data and transaction security are properly addressed

 

e-Procurement (eproc.rajasthan.gov.in) : Comprehensive IT enabled procurement system to bring about greater level of transparency in Government procurement.
•     Procurement for value more than Rs 50 lakh (Rs 25 for PWD) made mandatory
•     Published 6417 successful e-Tenders for 56 departments of Rs 23375.30 crore
•     Trained 2400 Government officials and 1000 bidders

Procurement Portal captures following information

  • Pre-qualification documents, bidder registration documents, bidding documents and any amendments, clarifications including those pursuant to pre bid conference and corrigenda thereto.
  • List of bidders that presented bids including during prequalification or bidder registration as the case may be.
  • List of prequalified and registered bidders.
  • List of bidders excluded under section 25 with reasons.
  • Decisions pertaining to appeals
  • Details of successful bids, their prices and bidders.
  • Particulars of bidders who have been debarred.

Integrated Human Resource Management System (IHRMS)
The IHRMS has been planned in such a manner that each employee, pensioner, family pensioner can be allotted a unique ID and account. All relevant demographic, financial and service data and information will be entered, maintained and updated only in this account through a secured system of access control, supervision and maintenance. In this process a centralised database of employees, pensioners, family pensioners along with a central MIS Data Management System is being set up that can be integrated with a Payroll and Pension Payment system to facilitate error – free and real – time data updates. The IHRMS uses sophisticated methodology for creating its database.

Overcoming Challenges
There is no doubt that many challenges lie in the path ofbringing a full-fledged IFMS in the State of Rajasthan. Indeed implementation of financial reforms requires an understanding of the entire financial system. It needs an understanding of the institutional arrangements and how these arrangements are carried out across departments. All these practices need business process reengineering which has taken up on top priority by the Government. Budget Manual and Treasury Rules are being amended accordingly. It is expected that successful implementation of IFMS will bring Rajasthan at a place where Government Financial Accounting will become its recognition and will make it primus inter pares among the States and other States will follow our experience.

 

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