business management system

Business Management System

Outline of Scope

BMS

Budget Development & Production

Budget Formulation

Advice

Portfolio Performance

Review

Financial Reporting &

Control

Cash Management

BMS

Key Elements

Business Management System

Benefits of the BMS system

One system to support theIntegrated Management Cycle

Incorporating:Budget Development & Production

Budget Formulation Advice Portfolio Performance Review Financial Reporting & Control

Cash Management Analysis & Reporting

Analytical & Reporting Engine – to support informed, quality decisions Output data consistent and integrated with financials Actuals integrated with budget Graphical analysis and trend data readily available Flexible reporting to support analysisImproved Integrity – one version of the truth Automated data validation Departmental ownership of relevant data Improved reconciliation within and between databasesEnhanced Efficiency – better use of resources Reduced time spent on non-value adding tasks Status tracking and semi-automated workflows Streamlined reporting between departments and DTF

Benefits

•To co-ordinate the ERC process

•To plan the position of government in terms of financial and performance objectives, output delivery, and asset investment

•To produce the strategic priorities and projected financial statements for government and departments (the Budget Papers)

Budget Development & Production

Supports the production of

BDP

•The Budget Papers

•Annual Budget –

•Whole-of-Government (WOG) financial statements and strategic policy directions (BP2)

•Financial statements and output statements by department (BP3)

•Regional Budget Paper(s)

•Annual Appropriation Acts

•Asset Investment Program (BP1)

•Budget Update –

•Updated Whole- of-Government (WOG) financial statements and strategic policy directions

BMS will automatically capture in pre-defined formats, the critical financial and performance information that enables the production of the Budget Papers

PURPOSE

Budget Development & ProductionThe initial building block is last year’s Budget and agreed policy

Last year's Budget is rolled over to create a new baseline

Baseline financials are reviewed

Financials and strategic policy directions are revised to reflect policy and non-policy variations…

Departments prepare ERC (1 & 2) submissions based on revised

departmental business plans and government strategic priorities.

Submissions are analysed and DTF makes recommendations to ERC

DTF recommendations are taken to ERC in the form of briefing papers

ERC submissions are submitted to DTF via a standard template

ERC evaluates recommendations

The impacts of ERC decisions are reflected in budget financial statements,

performance measures, objectives, outputs, investments and POBOS

ERC makes decisions

The impact of non policy variations such as parameter changes (including CPI and productivity) is incorporated in

projections

DTF produces the Budget Papers

BDP

Scoresheets are prepared by DTF to assist in analysing the effects of

proposed submissions & ERC decisions on the projections

PROCESS

•To provide advice to government pertaining to departmental submissions to ERC and Ministers.

•To liaise with departments

Budget Formulation Advice

BFA


•DTF Briefing Papers to ERC and Ministers

PURPOSE

Budget Formulation Advice Financials are revised to reflect policy variations…

BFA

Departments prepare ERC submissions based on revised departmental

business plans or government strategic priorities.

DTF recommendations are taken to ERC in the form of briefing papers

ERC (1 & 2) submissions are submitted to DTF via a standard template

ERC evaluates recommendations

The impacts of ERC decisions are reflected in financial statements,

performance measures, objectives, outputs, investments and POBOS

ERC makes decisions

PROCESS

Submissions are analysed by DTF using analytical tools. DTF makes

recommendations to ERC

•To review departments’ Quarterly Performance Report relating to:

•strategic issues and

•performance in terms of asset and output delivery, using the performance indicators of quality, quantity and timeliness

•To recommend to:

•the Minister for Finance the appropriate level of revenue to be certified

•ERC appropriate actions relating to strategic issues

Portfolio Performance Review

PPR


•The Quarterly Performance Report (Evaluation of departmental strategic Output Performance against quarterly targets & certification of revenue)

•The Output Pricing Review process

PURPOSE

Portfolio Performance Review

DTF & departments agree annual performance targets, which are published in Budget Paper 3

Departments submit quarterly phasing of targets

Each department submits quarterly performance reports

DTF assesses strategic issues and analyses departmental performance against targets, in terms of asset and output delivery, to evaluate the degree to which revenue should be

certified

DTF prepares a report on

1. Strategic issues and recommended appropriate actions

2. Performance against performance indicators for the Minister for Finance (summary statements of financial performance and financial position by department and at a consolidated level)

3. Revenue approval

The Treasurer disperses funds

The Minister for Finance signs off revenue recommendations and notifies DTF

DTF reports to the Treasurer via the report noted above incorporating the Minister for Finance’s sign off

DTF notifies departments of revenue to be recognised

DTF reports to ERC on strategic issues and recommends appropriate actions

PPRDTF agrees quarterly phasing of targets

Each quarter, departmental revenue is recognised by DTF for the delivery of outputs…

PROCESS

Portfolio Performance Review (cont.)

Output costs information is prepared by departments

Departments submit output costs information

DTF prepares a report for ERC on output prices

DTF reports annually and quarterly to Commonwealth / National Accounts / ABS (GFS).

PPRData is analysed to support pricing and output reviews

Annually, each department submits actual output costs to DTF…

PROCESS

•To review and report the financial performance of:

•General Government on a monthly and quarterly basis

•Whole-of-Government on mid year and annual basis.

•To provide stewardship and monitoring on behalf of Victorians to ensure integrity, performance and compliance

•To provide sound financial management and investment of the state’s resources including cash

•To report annually and quarterly for Commonwealth / National Accounts / ABS (GFS)

Financial Reporting & Control

FRC


•Monthly - General Government Sector reports

•Quarterly - GFS and AAS Financial Statements for General Government Sector

•Annual and half yearly - Whole-of-Government (WOG) reports

PURPOSE

Financial Reporting & Control

Budgets

collected and reported…

Actuals

collected and reported…

FRC

Monthly, departmental actuals are reviewed and accepted

DTF reviews and analyses actuals against budget and reconciles inter-entity balances, using a standard set of business rules

DTF consolidates and produces monthly reports for the Financial Reporting Committee Meeting and the Balance Sheet Management Committee, which report to the Treasurer

Quarterly, mid year and annual reports are tabled in parliament

Quarterly, mid year and annual, WOG reports are produced

DTF & departments agree annual financial estimates, which are published

in Budget Paper 3

Twice annually, departments phase their budgets to months

DTF agrees monthly phasings

Budget phasings are accepted

Half yearly and annually, departmental and agency actuals are reviewed and

accepted

PROCESS

•To manage the state’s cash, including to disburse, collect, invest and optimise in pursuit of maximised returns to government and minimise borrowing costs to the state

•To provide an intergrated management of the Public Account, including investments, trust accounts and advances plus the public bank account

Cash Management

CM


•Daily CMS transaction reports and trust balancing reports

•Monthly balance reports comprising inter-entity balances, revenue for outputs, revenue allocated to SAU, and the Public Ledger update report

•Forecasting of the cash position

•Compliance to warrants

PURPOSE

Cash Management

Account balances are downloaded from Desk Bank CM

Departments provide initial current day expenditure advice

DTF makes a Short Term Money Market cash decision

Departments provide further advice regarding expenditure and receipts

DTF compares known receipts against forecasts

DTF makes a further cash decision

DTF uses a mismatch report to reconcile prior day balances to prior day

estimates

Monthly decisions…

DTF uses a mismatch report to reconcile the monthly SAU account

balance to the daily aggregation of bank movements

DTF uses a mismatch report to reconcile between departmental inter-entity SAU accounts and the central

DTF SAU account

Daily decisions and reconciliations…

PROCESS

Journals are received by departments

DTF monitors cash drawdown against warrant amounts

Departments provide monthly cash transactions to the public ledger

BMS will provide one version of the truth to inform Stakeholders

BDP

BFA

PPR

FRC

CM

BMS

DTF

Departments

ERC

ERC

ERC

Departments

DTF

Departments

Treasurer

Departments

DTF

DTF

Portfolio Ministers

DepartmentsParliament

ABS

Minister for Finance

Auditor

Treasurer


Treasurer

Treasurer


DTF

Treasurer

Auditor


Implementation phase 1

Budget Development & Production October 2002

Budget Formulation Advice October 2002


Portfolio Performance Review January 2003

Financial Reporting & Control (Existing actuals)

January 2003


(Fully integrated BMS)

Portfolio Performance Review June 2003

Financial Reporting & Control June 2003

Communication, Training and Support Ongoing

Implementation Plan