From: Proceedings of: Eleventh Annual International Conference
on New Developments in Govermental Financial Management. April 7-9, 1997, Miami, Florida
This presentation was transcribed and contains a number of errors made in transcription)
Implementation of Integrated
Financial Management Systems
James P. Wesberry, Jr., Principal Advisor, The World
First, I would like to give you a warm and cordial welcome to the
third millennium. Some centuries after the birth of
Christ, a calendar was established based on the year of His birth. Unfortunately,
that measurement of time was rather deficient. The experts now say they made a mistake
by four or five years, and that we are probably already in the third millennium, but no one
is really sure.
We have another problem with time. For example, what time
do you have? I have 9:18, but I was supposed to begin
my presentation at 9:00. We're already late in the program. We had a time
change on Saturday. Here in the United States we moved our clock forward one hour. Surely some
of you got to Miami thinking that it was one time, and you found out that it was another time.
We have problems in measuring time in conferences like
this. We have problems determining the days in months,
because sometimes February has an extra day and, therefore, we have problems
measuring days in a year, and we also have problems measuring the centuries.
I do not know exactly what time it is, and we all have
watches with different minutes at this moment. If we're
not sure what day it is, and we're not sure what month, what year or what century
it is, and we don't even know what millennium we're in, how are we going to solve the financial
problems that the different governments have?
It is relatively easy to count to 2000 for any of us who
are controllers. However, only the accountants know
the technique of counting with their fingers and their toes 100 times to reach 2000.
The situation is such that we have problems with measuring 2000 years. How are we going to
measure thousands and thousands and thousands and thousands of millions of dollars, pesos, escudos
and all the different types of currency, if we have problems measuring days, hours, minutes
and 2000 years? Well, that is a task that is quite difficult.
I am an accountant. I know that there are three kinds
of accountants. Please listen to this, it's quite complicated.
There are three different types of accountants: Those who know how to count and
those who don't. Think about that.
We do have officials from different countries of many
different disciplines other than accounting, and many
of you are tasked with carrying out the administration of finance in the third
millennium, which apparently we are already living in. These days, at least we have integrated
systems for administration and financial management in almost all of the countries of the
Western hemisphere, as well as in many other parts of the world, some of which are represented
here with us. We'll be talking about the other hemisphere this afternoon. I hope we have
a chance to discuss and exchange experiences concerning the implementation of such systems at
this conference. This is the topic that I have been given to discuss with you this morning.
There are nine basic principles for the development and
implementation of an integrated financial management
First, a radical change must take place for the administrators
of financial management systems. There must be a reinvention
of the mechanisms and of the processes of handling public
finances, taking advantage of the latest technology to improve the quality
of management decision making.
The second principle is political will. An integrated
system requires the support of the different sectors
of the government, the community and the different professional associations within
that country. That is why, when we introduce a system such as this, we have meetings with the
different organizations together or separately. For example, in Guatemala, we had seminars separately
with the two political parties in order to be sure that both parties were in agreement with
the idea, because the worst thing that can happen is that you start implementing this under one
government, and then another government comes along and says, "This is theirs, you have to
start all over." Therefore, one has to have the political will for a number of years.
The third principle is to realize this is a long-term
commitment. You need political will and the financial
resources for support. It has to be available in a consistent manner through several decades
and several different governments.
The fourth principle is leadership, and this is perhaps
the most important. The leadership has to be able to
implement and to institute. It requires a leader, a charismatic motivator, with a vision that
can create a sense of enthusiasm for change. It also requires technical leadership with a wide range
of experience in the different concepts and in the practical application of the system, as well as
a knowledge of experiences in different countries. One example of this was presented to us at last
year's conference by the Comptroller of Bolivia, a charismatic leader for the project. We will listen
this year about the experiences of Argentina, when the ex-Secretary of Finance, Ricardo Gutierrez
speaks on Wednesday about his vision for the integrated mission.
The fifth principle is to break down the barriers. One
serious problem we have is the conflicts or barriers
between the different territories--i.e., between groups of officials within the Finance Ministry.
A multi-disciplinary group of people in accounting and computers is required to eliminate
problems that could occur from segregation, such as duplicative systems and functional unit
specialization. There must be a means, at the highest level, to solve the differences of opinion that
cannot be solved by the officials of the technical departments.
Sixth is autonomy in administration. The managers
of each entity must obtain a greater autonomy in their
operations, and be able to make decisions simply within the parameters that have
Seventh is personnel. It is important to have the right
personnel. The technical advisors and experts must know
about financial systems in different countries to adopt the best practices and avoid
mistakes that have already been made in other countries. The local personnel must also have professional
preparation as well as appropriate knowledge and experience to get the system going and
to maintain it.
Eight is improvement and continuous training. Once started,
the system must be improved in a consistent manner,
and this includes a program of training for personnel.
Finally, the ninth principle is the interchange of ideas,
experiences and requirements. One has to share new ideas
and experiences across borders, both nationally and internationally, and share the
programming of the different computer systems. Obviously, this last point is why we are here today
in Miami, the State of Florida, in the United States of America, and why we have carried out
eleven of these conferences. It is why the International Consortium exists today and tries to carry
out the objectives that Jim Hamilton, the President, mentioned in his opening statement.
There are four points that I wish to discuss with you
in the rest of my presentation. These are points that
are indispensable in understanding the implementation of the system. Number one is to
pursue accountability relentlessly. Number two is to get a feel for the objective and control the technology.
Number three is to adopt a systemic focus that is practical and integrated to the reforms
of the administration. Number four is to take advantage of the integration of the technology
that is available to strengthen the faith of the citizens in each government. We are going
to discuss each of these four points and I'm going to repeat them several times during the rest
of my presentation.
First, to pursue accountability, I will use the present
Administration here in the United States as an example.
They talk a lot about reinventing government. Reinventing government is more than
the reinventing or the reengineering of the government, the interrelationships and operations of
the different entities that compose the public sector. The cornerstone of reinvention of any activity
of any type, whether social or economic, is the reinvention or reengineering of the people.
We must review, reinvent and reengineer the people who
are administering these systems. It doesn't matter what
technology, it doesn't matter how much money, it doesn't matter how much support,
it doesn't matter how much leadership we may have, because the cornerstone is the people.
We have to reinvent our personal integrity, our character, our spirit, our life and our attitudes
as part of the effort of reinvention. In other words, we have to reinvent our accountability
for our new President, the duty to respond before a superior authority and, therefore,
resources that we are in charge of.
Financial accountability is very simple to understand.
Those who handle an amount of money or other resource
have to present a report, usually in writing, that can be audited. How was that resource
utilized, and what balance is left? But the term accountability goes farther than that in today's
world. Inevitably, the search for the reinvention culminates in the determination of a better
way to act and to respond.
The World Bank, on the first page of its Accounting and
Auditing Manual, defines accountability as follows:
"accountability effectively responsibility with the investors
as well as the credibility of the countries that the
loaning companies toward the Bank and with its own internal
groups that may be interested. By accountability, we understand that every act
or action should be transparent, subject to the law, its rules and regulations and all
of the participants are responsible for their own actions, and all acts or actions are
subject to revisions and impartial auditing, and the results should be available to
all interested parties."
This is how we see accountability in the World Bank. It
is difficult to define accountability, especially if
you do not recognize that it should be applied to you yourself. The persons who do not
understand, or do not want to understand, have great difficulty in understanding their accountability
before the people, the government, the employer or their own neighbor.
Again, the first point of this talk is to pursue accountability
relentlessly. My favorite definition of accountability
is one that I have shared with you before at one of these conferences, but I like it
so much that I'm going to repeat it. In Charleston, South Carolina here in the United States, there
is a Black, Jewish gentleman named Reuben M. Greenberg who said, "Accountability is not difficult
to define. It consists of the concept that each individual is responsible for his own actions. He
has to answer for his consequences, and he has to give an accounting to someone if his actions cause
damage to others. The values that are sewn into the fabric of civilization are honesty, kindness,
elasticity, generosity and virtue. I really, truly believe that accountability could be perhaps
the value that is most important. Without it, one cannot exist with respect and confidence. Without
it, society cannot exist."
Mr. Greenberg said, "My job as a police officer is to
impose accountability over the people who reject it,
or who have never learned to impose it upon themselves. We try to give strength to
those outside of the law by motivating them to agree with the law. But how does any policeman,
financial officer, auditor or whatever, change the behavior of the people? The external controls
are less effective than internal controls such as culpability, dishonor, the fear of punishment
and the reticence to face the public wrath or the ostracism. The sense of culpability or
remorse has disappeared. At one time it was associated with the commission of a felony or crime.
We exonerate the guilty party even partially of the right of responding, of being accountable.
We will become a society of eternal excuses in which no one is willing to accept responsibility
for anything." During the years that Greenberg has been Chief of Police in Charleston,
crime has dropped enormously, and he has become a legend in his area. Many times he
has been called to be an advisor to other governments.
Point number two of this talk is to feel for the objective.
In this conference we're going to talk about integrated
systems for financial management that must have the support of the state. In this century,
great changes in government have occurred but a few times. These changes have been motivated
or pushed by wars, vast changes in technology or serious economic and social crises such
that those of you from Latin America know very well.
As financial managers from different governments, we have to strengthen the integrity and credibility of the state
by guaranteeing accountability and giving information
that is truthful, transparent and opportune to support the informed
decisions made by the public servants.
Also, as we discussed in a conference last week, the technology
has advanced faster than the technicians. Each general
manager has to know computers. The day is close when there will be a
computer expert in each financial office. Every auditor, manager, accountant and officer must have
a working knowledge of computers, and must keep current in the field.
Point number two is
to look at the technique and to control the technology.
The third point is that a framework exists whereby we
do not trust our governments. Every so often, throughout
history, the people lose faith in their leaders and their forms of government. This
is a phenomenon that is very normal. How do we overcome this? Number one, to those who govern,
I say that enemy number one is the credibility of the government. Enemy number two is
the political party, the kleptocratic party, the groups of corrupt parties. Enemy number three is
a lack of accountability, or rejecting the duty to be accountable. Enemy number four is not making
informed decisions, allowing disinformation, ignoring information, not having any information
or having wrong or false information. This enemy number four is what I wish to discuss
in the short time that I have left.
Financial information is the most important thing for
a company or a government. In companies, financial information
is the highest priority and they dedicate great effort
and resources to obtain the best information for finances and accountability. Governments,
though, do not care anything about this. We have to change the priority in government.
The last point is to take advantage of integration of
the available technology in order to strengthen the
faith of the citizens and its government. The following words are attributed to the ex-Attorney
General of the United States, Robert F. Kennedy, who was murdered two decades ago,
but whose words can guide us, "Some people see the world as it is and ask, why? Others see the
world as it should be and ask, why not?" The reinvention consists of seeing our world as it should
be. We can accomplish that and then say, "why not?"
Twenty-eight centuries before Kennedy the Prophet
Isaiah said, "Some day there will be national leaders
who will govern with justice. Each one of them will be a refuge in the storm. He will be like
streams in the desert and will have his eyes and ears wide open in order to listen to the needs of
the people, and will not act hastily, but will act with conviction and will speak with clarity and will
not trick people. The swindler will no longer dominate. The corrupt will not be called honest.
Everyone will know who is bad, and the hypocritical politician
will not fool anyone. Their lies will be in the open
for all to see. They will discover inequities, the tricks of the wicked as well as
the lies of those who are oppressed, the poor, and those in the government, and in the courts. Even
in justice, the person who is honest, the person who acts in rectitude and maintains himself firm
in what is correct, and justice will reign all over our nation. There will be peace and security always because the entire world will do the correct thing."
To sum up the four points: pursue accountability, look
for the objective and dominate the technology,
adopt a systemic focus that is practical and integrated for financial management and take
care of the integration of technology that is now available to strengthen the faith of the citizens
and its government.
At the beginning of this talk I said that we had to reinvent
our personal integrity, our character, our spirit, our
lives and our attitudes as part of the effort to reinvent. We have to remember
what the master of the reinventors said, to paraphrase, "No one can see a perfect government
unless he or she herself is being reinvented or has been reinvented. That way you reinvent
the government and that way we improve public administration."
God bless all of you and all of your countries.