J.11_-_Integrated_System.pdf

Annex B: Integrated Financial Management System

USAID’s Regional Afghan Municipalities Program for Urban Populations (RAMP-UP) established the

Integrated Financial Management System (IFMS) in several of Afghanistan’s provincial municipalities.

IFMS builds on existing municipal structures to streamline and automate a municipality’s revenue collection, budgeting, accounting, and payroll/human resources (HR) systems to improve municipal financial management, accountability, and transparency. IFMS computerizes municipal financial management systems, but it is not dependent on internet access, making it reliable and sustainable in an insecure environment. The current IFMS is made up of six integrated modules:

1. Payroll/HR – The payroll/HR module integrates all human resource functions for the municipality into one database and automates the distribution of payroll within the municipalities.

2. Revenue Collection – The revenue collection module processes and tracks a total of 55 revenue types in a computerized database, including Safayi taxes, business licensing fees, tax penalties, loans, grants, income taxes, and a variety of other revenue streams.

3. Budgeting – The budgeting module establishes a digitized budgeting template to assist the municipalities in preparing their budgets and making accurate projections on future municipal expenditures. As a result, municipalities are able to formulate more timely and realistic budgets and enhance revenue collection by more accurately identifying revenue streams and expenditures.

4. Accounting – As expenses are entered into IFMS, the primary purpose of the accounting module is to provide transparency and efficiency by enabling the municipality and GDMA to more effectively monitor the use of resources by generating easily accessible trial balances, balance sheets, income statements, and ledger reports.

5. Parcel Registration – The parcel registration module—a core component of IFMS’ revenue functionality—is used to generate and collect bills for Safayi tax. The module tracks total parcels registered, the value of parcels registered, the revenue generated from parcels registered, the number of parcels by district and block, and the total Safayi notebook distribution.

6. Business License – The business license module, another core component of IFMS’ revenue functionality, is used to generate and collect bills for business licenses. The module enables the municipality to track total businesses, the types of businesses, and the status of business license payments.

RAMP-UP’s IFMS has three primary objectives:

1. Architect a scalable engine that integrates the six financial modules, regardless of the category and size of the municipalities;

2. Build the IFMS engine on a platform that can be maintained and managed by municipal staff and scalable across all categories of municipalities; and

3. Empower fiscal effectiveness, transparency, anti-corruption, and accountability.

IFMS is an effective tool for fiscal management, transparency, anti-corruption, and accountability.

Tracking the full life cycle of the Safay’i tax and business licensing (from billing to accounts receivable), empowers municipalities to tap into new revenue streams by registering new businesses, tracking unpaid bills, quantifying billing, as well as drastically improving the revenue collection cycle within the fiscal period. This leads to effective financial management and improved fiscal responsibility. In addition, the improved transparency in the municipal financial system, by receiving official government documents

(Safay’i notebook and business licenses) and paying associated taxes through the bank, builds trust between citizens and their local government.

IFMS provides an electronic paper trail of transactions to show how money and other resources have been handled, thereby deterring corruption. Double entry bookkeeping, which is very difficult and time consuming to maintain on a manual basis, is made easier through IFMS. Additionally, with data entered into the system, users can quickly produce reports that show how resources have been spent over any specified period. The reports can be rearranged quickly so that management can look at operations from many different viewpoints with minimum effort.

IFMS also empowers GDMA to access municipalities systems via internet at any given time. Daily transactions (debit/credits) that are entered by municipalities into IFMS are available via different reports such as trial balance, balance sheet, and income statements. The ability to review reports in real-time, such as expenditure and revenue reports, establishes transparent governance and accountability.

IFMS Overview:

Parcel Registration Safai Tax Business

Registration Other Revenue

Sources

Revenue Expenditure

Payroll Accounting/ Purchasing

Budgeting

IFMS

MS SQL Database

Parcel Registration Reports

· Total Parcels

· Total Value of

Parcels

· Total Revenue

Generated from Parcels

· Number of parcels by district/guzer/ block

· Total Safai Note book distributed

· Delinquent Reports

· Critical information about distribution of Residential/ Business/Industrials

Integrated Financial Management System

IFMS

Profile

Business License Registration Reports

(JAVAZ)

· Total businesses in the city

· Type of business in city

· Status of Javaz fee payments

· Delinquent reports

· Type of business by districts

Safai Tax Reports

· Total Number of

Parcels Owners Paid

· Total Revenue Generated from the Registered Parcels

· Total Revenue is remaining to be collect

· Delinquent Report

· What areas are paying and what areas are behind in Payments

Reports from all other Major Sources of Revenue 111 Fixed Taxes 112 Income Taxes 113 Property Taxes 114 Sales Taxes 116 Other Taxes 117 Tax Penalties and Fines 120 Customs Duty and Fees 130 Non-Tax Revenue 140 Miscellaneous Revenue 150 Sale of Non-Current Assets 170 Social Contributions 180 Loans 190 Grants

Implemented in 6 cities

Implemented in 6 cities

40% Completed

Payroll Reports

· M16

· M41

· Twaheed Report

· Total Salaries by

Month, by Year by Rank

· Type of Salaries

Human Resources

HR Reports

· Total Employees

· Benefits

· Employee types

· Form B4 (Tashkil)

Budget Reports

· B1

· B3

· B6

· B10

· B12

· B13

Accounting Reports

· Balanced Sheet

· Trial balance

· Income Statement

· Ledger reports

· M20—Allotment

· M7—Receipt

· M2—Petty cash order

· M12—Advances acquittal

· M16--purchases

· M23—Expenditure

Report

· M29-Revenue

Collection Report

· M30—Payment

Ledger

· M33—Journal

· M37—Petty cash ledger Implemented in all

6 Cities Implemented in all

6 Cities Implemented in Qalat

Work in Progress in NILI

Implemented in Qalat Work in Progress in NILI

Intellectual Property of GDMA Powered by the IFMS Engine

GDMA

currently able to connect to Qalat from Kabul others are in Progress

· Digitized Map’s Library

· District Maps

· Guzer Maps

· Blocks

· SWM Skips

GIS

ArcGIS v10

Implemented All 6 cities

Linked

Implemented in Qalat, Kandahar, Nili – others

In Progress

MUNICIPALITY Users

IFMS Engine Based on .Net

Platform X6

CloudCloud Sync

Data WarehousingData Warehousing