Integrating Aid ManagementwithGovernment Financial ManagementGerhard PohlSenior DirectorDevelopment Gateway FoundationInternational Consortium for Government Financial ManagementAnnual Conference Miami, May 25, 2007
Corporate financial management is simple:revenues and expenditures are for traded goods
Government financial management is much harder:public goods are usually not traded • Revenues are not market-based (taxes!) • Goods and services are not “sold” • Only “costs of revenue” are market-based • Establishing the “value” of services is difficult • Government accounting has no “bottom line” • Performance cannot be expressed in $$$ • Performance evaluation is hard, ….but very important !
Government financial management remains work in progress: Only basic issues have been resolved: • Accounting tracks only costs, not values • It can detect outright fraud and management • But does not provide measures of performance • Governments have a myriad of performance evaluation mechanisms: • elections, separation of powers, parliamentary debates, watchdog agencies, publication requirements, reviews, “audits”, M&E requirements, “impact” evaluation, etc, etc...
Government financial management requires open systems that can talk to others
Aid is large for many countries All developing countries (150): • 1% of gross national income (GNI) • 8% of government revenue Poor and small countries (50): • >10% of GNI • >50% of government revenue
Ownership Partner sets the agenda Alignment Alignment with partner’s agenda Reliance on partner’s systems Harmonization Common agreements Simplification of procedures Sharing of information …replaced by the New Millennium “Aid Compact” • …with strong emphasis on better, common systems for: • financial management, procurement, and M&E
“Old” aid: Dominica “New” aid: Rwanda Aid has shifted from infrastructure to basic government services
…these require new aid management tools …that are more than accounting systems
Web-based tool that allows a government to view, plan, and report on its entire development ‘portfolio’ for the country; AMP Overview • Integrates the most common development and management tools into one secure, team-based workspace; • Encourages broad use by multiple government Ministries, specialised agencies, donors and aid effectiveness experts.
Aid Information - Summary view of all development activities in the team’s portfolio • Advanced Reporting - Create periodic and customised reports on financial and physical progress AMP Key Features (Modules) • Document Management - Store frequently used project documents and web-sites directly in each activity file • Planning Calendar - View key events and missions in one common calendar accessible to government and donors • Monitoring and Evaluation (M&E) - Track project indicators against financial and physical goals and assess activity risk
OECD DAC (Chair) UNDP World Bank Steering Committee: AMP was developed in response to the 2003 Rome Declaration on Aid Effectiveness, with Ethiopia as the test country AMP Background
Open-Source - AMP is provided under a royalty-free and source-available license to government partners AMP Competitive Advantage Capacity Building - AMP is wholly transferred to the partner government, who can utilise and modify it as necessary Universal Architecture - AMP can integrate with a country’s existing systems, databases and standards Technical Assistance - AMP is not just software, but technical assistance to a partner government’s human process
Bilateral lines of financing: Pre-negotiated grants to provide financing for a number of AMP implementations in priority countries: AMP Funding Swiss Agency for Development and Cooperation (SDC) Belgian Development Agency European Commission Luxembourg UNDP Soon: African Development Bank (AfDB) Inter-American Development Bank (IADB)
implementations: • Ethiopia • Bolivia AMP Implementation - Status • about to commence: • Albania • Montenegro coming: Burundi,Congo, Ghana, Mali, Mauritania
Integration with National Budgeting System • Bring together national budgets with aid management for more effective, efficient, and transparent aid management (i.e. FreeBalance, Oracle, SAP) • With the union of the two systems, AMP’s “managing for results” function - the capacity to monitor and evaluate impact on multiple levels - will enable governments to track the impact of projects in the national budget Coming Up - New Functionality • Integration with UNICEF DevInfo and GIS • Link national statistical data with international data on development metrics (DevInfo) in a Geographical Information System, mapping progress visually across the country and from national to local levels • Provide Monitoring and Evaluation data to policy-makers for analysis against national planning, and Millennium Development Goals
dgMarket The Online Solution for Government Procurement Information in Developing Countries Development Gateway Foundation April 2007
Aid Management Platform (AMP) Questions?