QUICK ASSESSMENT OF THE INTEGRATED FINANCIAL MANAGEMENT INFORMATION SYSTEM

GOVERNMENT OF THE REPUBLIC OF MALAWI

‘Office of The President and Cabinet’

QUICK ASSESSMENT OF THE INTEGRATED FINANCIAL MANAGEMENT INFORMATION SYSTEM


‘Summary of Key Findings and Recommendations’

Version: 2.0
Date: 18th November, 2009
Author(s): McCarthy Phiri B.ACC MSc CIMA ACMA IARFC
Richard Chisala Jnr. BSc MSc SCP SCE MIEEE


Confidentiality: Sensitive but unclassified


Summary Report on the Assessment of Government of Malawi's IFMIS Implementation (Quick Impacts Program) – UltiNetS 2009




1.0 BACKGROUND

The Malawi Government through a Memorandum of Under standing with the Government of Tanzania started implementing part of the Financials suite of the EPICOR version 7.2 based IFMIS in November 2005.

This system was implemented by Soft-Tech Consultants Ltd , a Tanzania-based authorized dealer of EPICOR 1 ERP solutions in Africa. The system is currently upgraded to version 7.2.3.

The system was entirely customised based on the Tanzania implementation model with no changes to the system base functionality and reporting expect terminologies specific to the Malawi Government operational context. The Malawi Government procured
the following modules of the EPICOR Financials suite:


•General Ledger
•Accounts Payables
•Accounts Receivable
•Cash Management
•Commitments Planning and Control
•Electronic Funds Transfer
•Inventory Control
•Purchasing
•Reporting


Despite Government paying for all key mentioned above modules of the upgraded EPICOR 7.2.3 Financials suite , the MoF through AGD is currently using only four which include; General Ledger, Accounts Payable, Purchasing and Cash Management from the Core accounting, and Active Planner (Budget module) mainly for budget formulation and
management processes. This module is used by the Budget division of the Treasury department within the ministry (MoF).


As part of the continuous PFM reform processes in a bid to further enhance public expenditure management, the Malawi Government through the PSRMU of the OPC engaged the author through UltiNetS 2 to undertake a quick impact assessment of the EPICOR based IFMIS implementation with a core objective to identify any system operational or
functionality challenges and make appropriate recommendations for improvements.


This summary report provides key findings, observations and recommendations for improvements and further review of the quick assessment of the Malawi Government EPICOR 7.2.3 based IFMIS implementation and impact.



1.1 Key objectives, scope and limitations of the assessment

The core objective of the assessment was to identify any system design, architectural and operational or functionality deficiencies and other challenges and make appropriate recommendations for improvements.


This assessment was more limited to the EPICOR based IFMIS system architecture, functionality, alert system, procurement, contractual and engagement process, project charter and implementation, system design, architectural and operational framework, system business process controls, system security posture, reporting capability, management, knowledge and capacity, project and change management, system interface capability, expectations, GWAN capability to support IFMIS and audit and risk management capacity.


This assessment was meant to provide a snap short of the EPICOR based IFMIS implementation and functionality situation to identify any issues requiring urgent attention before system functional expansion drive and further comprehensive review. Due to limited time-frame and scope, this assessment did not further extend to other key Government resource management systems meant to be part of the IFMIS architectural and operational framework or outside the framework as secondary data
repository or sources for government financial and other transactions, in terms of their functionality and interface compatibility and capability.


These subsystems include HRMS and Payroll, Revenue Collection and Management systems such as ASYCUDA used by MRA and those used by Road Traffic Directorate, Immigration and Civil Aviation departments to mention a few.


1.2 Overview on assessment methodology

The Consultant mostly used qualitative technique for data collection that involved one to one interviews and questionnaires in some cases. This approach ensured that adequate and accurate data and information was gathered to form a realistic basis of reporting.

Four main approaches to the assignment were employed that mainly included; preliminary
meetings with key stake holders, one to one interviews with key participants, system diagnosis and questionnaires to selected participants.


1.3 Summary of system implementation progress

Despite all the challenges surrounding the IFMIS system functionality, architectural incompleteness and short of some key expected benefits, the overall implementation of EPICOR based IFMIS has been quite a remarkable and impressive achievement for the Malawi Government, more particularly considering the time-frame of under five years against the minimum of seven years for implementing such complex systems in IFMIS particularly ‘Appropriation Accounts’ so as to ensure accurate and timely submission to NAO and National Assembly.


The AGD should redefine the system user report access rights to ensure that users within the MDAs easily access key reports from their core modules without the support and involvement of the core support team.


The AGD should also in the long term consider developing the report writing capacity within IT departments of MD.

As to reduce support time and workload for the core support team:

.The AGD should immediately explore the possibility of a direct electronic interface with RBM system to ensure cheque listing data is also instantly transmitted as soon as the payment process is completed to mitigate the risk of data loss and ensure and maintain the credibility of Government cheques.


.The AGD should consider an immediate review of the RBM’s MIDAS payments/banking software to determine its current interface compatibility and capability with EPICOR
based IFMIS and ensure that this linkage is immediately established and also that any future versions of the RBM’s payments/banking system should be designed to allow easy electronic interface with the existing Government IFMIS applications

.The AGD should immediately engage Soft-Tech Consultants to urgently establish an electronic interface between EPICOR based IFMIS and HRMS and Payroll systems to ensure accurate and instant data transfer and reduce the risks of data loss and
manipulation mostly arising from current manual interventions and above all enhance instant reporting between the two systems.


•The Government through OPC should immediately consider a comprehensive review of the system design, architectural and functionality of the HRMS and Payroll system in ord
er to identify any design and operational deficiencies and establish main causes
of numerous data inaccuracies from the system in order to ably devise strategic solutions to the problem


•The AGD should ensure comprehensive checks and verifications are done before capturing for processing payroll data from DHRMD for payments to ensure only accurate and appropriate payments are made.

.The Government should engage the dealer/provider of Global HRMS and Payroll to explore the possibility of including a pensions and gratuity sub-module within the current suite or implement a standalone module for managing and processing all Government pensions and gratuities.

•The AGD should also immediately consider a review of the functionality of the current MALSWITCH link/connectivity between the CPS and RBM to identify a more secure and viable solution to this problem of frequent system outage


•The AGD should urgently establish a fall back mechanism in case of the MALSWITCH connectivity failure so that cheques are not bounced at the commercial banks due to lack of documentation for confirmation so as to avoid losing the already regained credibility of Government cheques.


•The Government (OPC) should immediately explore means of restoring and ensuring reliable performance of the GWAN services as the only and prime transport path for IFMIS to improve the negative perceptions of MDAs about IFMIS performance failure



ACRONYMS AND ABBREVIATIONS

AG Accountant General

DAG Deputy Accountant General

AGD Accountant General’s Department
AUDG Auditor General

CMD Cash Management Division

CPO Central Payment Office

CPS Central Payment System

CCA Credit Ceiling Authority

COA Chart of Accounts

CS-DRMS Commonwealth Secretariat’s Debt and Reserve
Management System

DA District Assembly

DRS Disaster Recovery Site

DISTMS Department of Information Systems and Technology Management Services


DAMD Debt and Aid Management Department


DHRMD Department of Human Resource Management and Development


ERP Enterprise Resource Planning


EFT Electronic Funds Transfer


EPICOR IFMIS software GWAN Government Wide Area Network

GFS Government Finance Statistics

GOM Government of the Republic of Malawi

HRMIS Human Resource Management Information System

HIPC Heavily Indebted Poor Countries

ICT Information and Communications Technology

IFMIS Integrated Financial Management Information System

IMF International Monitory Fund