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Jan, 2018

FMIS Phase II by Ministry of Economy shall Commence in Early 2018

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[Koh Santepheap Daily-Phnom Penh]: Nowadays, regardless the private or public institution, technological innovation is one of the core elements for the competitiveness of each institution according to the trend of the regional integration and globalization as well as the rapid growth of the economic sector. In fact, almost all of the business, especially in the financial institution such as security companies, banks and micro finance almost entirely rely on the use of technology to manage their business in order to provide a reliable quality goods service to respond to the needs of the customers and efficient management over their daily financial operation.

According to the evolution of technology and reinforcement to process of Public Financial Management Reform Program (PFM) which is a key reform program of the Royal Government of Cambodia (RGC) starting from January 2, 2018 ahead at Ministry of Economic and Finance (MEF) has officially lunched FMIS Phase II to expand usages of FMIS system to 10 line Ministries after successfully implementing FMIS phase I.

FMIS is Financial Management Information System, which is initiated by the Royal Government of Cambodia (RGC) that has Ministry of Economy and Finance as secretary in managing and implementing the project beginning a full project in 2014 in order to strengthen transparency, accountability, and effectiveness in Public Financial Management. This is a reference taken from Ministry of Economy and Finance.

The main objective of FMIS implementation is to support and accelerate general actions of Public Financial Management Reform Program (PFMRP) in every phase to improve accountability, effectiveness, efficiency and to modernize Public Financial Management (PFM) in Cambodia through doing financial transaction through information technology system, and in every aspect of managing revenue and expense information on time.

In the future, FMIS will be providing automation on budget planning, budget implementation, procurement, investment and contract project management, managing state property, and managing state inventories, which will help PFM in every aspects and be effective in reducing on using paper-based in the financial transactions.

According to FMIS website, this information technological system gets tremendously successful in implementing FMIS phase I that has been used at key general departments of Ministry of Economy and Finance, General Department of National Treasury and 25 Capital-provincial Treasuries.

The same website stating in Phase I of FMIS implementation at key general departments of Ministry of Economy and Finance, and 25 Capital-Provincial Treasuries showed that Ministry of Economy and Finance is able to greatly control and monitor information from national revenue and expense movement and financial information from Line Ministries and sub-national line ministries. Importantly, information about cash flow has been remarked at the starting point and it is easy for verifying cash in the public accounting list and cash in bank account.

FMIS Phase II, gone live at 10 line Ministries, includes 1. Ministry of Economy and Finance, 2. Ministry of Health, 3. Ministry of Education Youth and Sport, 4. Ministry of Labor and Vocational Training, 5. Ministry of Agriculture Forestry and Fisheries, 6. Ministry of Environment, 7. Ministry of Industry and Handicraft, 8. Ministry of Women’s Affairs, 9. Ministry of Posts and telecommunications, 10. Ministry of Civil Service, and 13 Authorized Budget Entities of Ministry of Economy and Finance, and Ministry of Environment.

The reasons of prioritizing FMIS implementation at 10 line Ministries due to the followings:

  1. Budget scope of 10 Line Ministries calculated is greater than 70% of entire national budget.
  2. Collaborating from every related supporters, especially General Department of Budget, General Department of National Treasury, General Department of Procurement of Ministry of Economy and Finance and the support from development partners; including European Union, Asia Development Bank, World Bank, and International Monetary Fund (IMF).
  3. Collaboration and requests of using FMIS system from 10 Line Ministries

FMIS website also stated that when FMIS is used in Cambodia, Cambodia will benefit as the followings:

Strengthen winning success for Cambodia with other countries in the region and in the globe through building a strong Financial Management System and effectiveness of strengthening principle of good governance through reinforcing accountability of expenditure and national budget collection, transparency of national budget revenue/expenses, predictability of short-term and long-term national budget, evaluation of performance and effectiveness of national budget expenditure, openness of Financial Management and budget implementation to publicity.

In this context, citizens as well as investors, who participate in paying tax, could view precisely value of money and effectiveness of utilizing banks in building and developing the country of Royal Government of Cambodia.

In addition, advantages of Line Ministries getting from using public budget management are:

  • Summit Financial transaction (National revenue and expense) by itself (strengthen accountability).
  • Monitor condition of its financial transaction in both internal line ministry and transaction sent to Ministry of Economy and Finance ( increase transparency)
  • Manage, monitor, and check budget movement and its budget implementation through FMIS system which is easier and faster (increase transparency and effectiveness).
  • Increase responsibility for its financial transaction (strengthen accountability)
  • Accelerate payment to suppliers timely, which is stated in the supplying contract and actual requirement and accelerate payment in order to response timely. (Increase effectiveness).
  • Scrutinize clearly on procedures and obstacles that slow down budget implementation leading to the reduction of procedures that do not provide value added. (Increase effectiveness)
  • In the future, line ministries do not need to send paper-based documents to Ministry of Economy and Finance anymore ( Increase effectiveness)

Even though the technological system also has some problems due to the facts that the system is created according to working procedures of paper-based process and follow the principle of best practice, those major problems do not affect the cease of using the system or obstacles to financial transaction in the system because there are teams working on the problems and make sure that it will no arise again when the system is permanently put into use.

According to monthly bulletins in the FMIS website, they have shown that infrastructure team work have solved technical work for users. One more thing, problems occurred are not because of the system but the problems are from users who have not understood about using the system. In general, the problems can be solved through building users ‘capacities providing more training with supporting from technical officials.