What’s the good government pandemic response news? Effective use of Public Financial Management processes and Government Resource Planning software.
Our mission: We fundamentally believe that governments are at the nexus of providing improved citizen quality of life, and for solving global wicked problems. This is why FreeBalance is a government-only Business to Government (B2G) provider and a for-profit social enterprise focused on PFM.
Trends demonstrate that the pandemic is but one of many wicked problems facing government:
- Achieve sustainable growth and country Sustainable Development Goals (SDGs)
- Improve citizen wellbeing, equity, social protection, and social cohesion
- Adapt to the Fourth Industrial Revolution, digital disruption, and the digital divide
Takeaways from the pandemic include:
- Validation that governments are at the nexus of solving wicked problems
- Adaptable systems leveraging robust GRP technologies support needed spending changes even in an uncertain environment
- Interoperable systems empower decision-making and automate fiscal transparency
- Reveal trends to forecast scenarios to adjust spending priorities
- Support near real-time transaction audits to reduce corruption and improve value-for-money
How can governments leverage GRP systems to improve disaster response?
- Track COVID-19 funds, programs, budgets, commitments, expenditures, inventory, assets, and outcomes
- Adjust controls and automate processes for more rapid spending spending while maintaining segregation of duties
- Manage liquidity and debt to maximize needed social spending
- Identify needed technical and financial support from International Financial Institutions
Example: good design in budget eceuction includes leveraging scenario planning/what-if analysis during budget formulation
Reality check is that effective GRP has always helped in disaster response for:
- Natural disasters like hurricanes, earthquakes, and tsunamis
- Health crises like pandemics, drought, and food scarcity
- Fragility like rebellion, revolution, and regime change
- Economic shocks like financial crises, trade disputes, and resource price volatility
Background
- GRP systems, developed specifically for government, differ significantly from ERP systems originally designed for the private sector
- Public sector commitment accounting differs from business accounting because government budgets are the legal embodiment of government policy
- GRP systems are primarily configured to support reform changes and adapting to economic shocks
- Economic crises encourage governance and PFM reform, supported by GRP configuration or “progressive activation“
- Sustainable Development Goals (SDGs) and other national development plans can be tracked with good GRP configurations
Why it matters for government? In the midst of crises is that citizen trust, empowered by transparency, is critical:
- Citizens can assume that the crisis is used for corruption increasing the change of protests
- Citizens distrust government health and behaviour advice leading to poor outcomes
- Citizens become reluctant to pay taxes when it’s unclear how governments are helping
Lessons learned for good governance: update and upgrade PFM procedures and GRP configurations to be resilient for the next wicked problem.
Look for upcoming blog entries that dive into PFM and GRP subjects of:
- Budget cycles and PFM resilience
- Power of program budgeting for PFM resilience
- Why full interoperability supports PFM resilience
- Need for budget and performance classification integration for PFM resilience
- Analysis of PFM for Covid-19 response papers
