Financial Management Transformation Program

Financial Management
Transformation Program
Quarterly Highlight Report
Quarter 2, 2013-14
NOTE FROM THE PROGRAM SPONSOR
INSIDE THIS ISSUE
Welcome to the second edition of the Financial Management
Transformation (FMT) Quarterly Highlight Report. This edition
provides an update on some of the key activities within the program
over the past three months, in which the focus has been on
developing a fully costed business case which is scheduled for
Gateway review in February 2014.
Upcoming Activities ............... 2
We have also reached a major milestone with the preparation,
release to the market, and evaluation of an RFx for the FMT
program’s core software selection to inform the business case
costing from an ICT perspective.
Stakeholder consultation ....... 4
This work has also included scoping the options for a multiyear
implementation strategy, taking into account sector readiness and
other reforms being undertaken, and developing and costing an
effective change strategy to ensure successful change outcomes.
Business Case update .......... 2
RFx update ............................ 2
New Executive Director ......... 2
OBI Project ............................ 3
Keystone reform areas .......... 3
Expert Advisory Committee .. 4
Plans for Implementation ...... 5
New FMT website ................. 5
Contacting the FMT Team .... 5
Through this process we have worked closely with Cluster CFOs
and other SMEs to identify and verify the key policy reform areas to
be covered in the scope of the FMT program, and to discuss
challenges and impacts on the Sector.
As always, we look forward to continuing to work with you all over
the coming months and welcome any feedback you may have
regarding the program.
Maryanne Mrakovcic
Program Sponsor / Treasury Associate Secretary
Financial Management Transformation Program. Quarterly Highlight Report. Quarter 2: 2013-14
1
FINANCIAL MANAGEMENT TRANSFORMATION BUSINESS CASE FOR
2014-15 BUDGET
The Financial Management Transformation
team, in consultation with KPMG, have
developed a business case for submission into
the 2014-15 Budget process. The key elements
of the program include a contemporary financial
framework and a modern IT system.
There are a number of benefits to the NSW
Public Sector of the proposed reforms.
Primarily agencies will benefit from improved
RFX UPDATE
support tools for financial management and
greater confidence in the financial information
presented by Treasury.
The business case submission will mark the
completion of the ‘baseline phase’ of the FMT.
The team is now working with stakeholders
planning for mobilising implementation of the
business case solution.
NEW FMT EXECUTIVE DIRECTOR
JOINS THE TEAM
The FMT program has conducted an
‘RFx’ as a part of its ICT procurement
strategy to collect information on both
Software and Service components of the
ICT solution.
The RFx is a hybrid mechanism that has
provided the FMT program with the ability to collect information for business
case purposes which included: the solution architecture, services estimates,
overall plans and pricing.
The RFx closed on 14 November, and
received a total of 15 responses. The
FMT team are currently in the process of
evaluating responses which have included vendor software demonstrations.
No contracts are to be awarded or preferred goods and services announced as
a direct result of this process. The overall
intent is to provide information for the
business case.
The process has been undertaken under
the NSW Government’s ICT Procurement Scheme operated by the Department of Finance and Services.
NSW Treasury has appointed George Sotiropoulos as
the new Financial Management Transformation Executive Director. George started
with the FMT Program on
Wednesday 27 November
2013.
George was most recently
with the Commonwealth Department of Finance in Canberra, where he
worked in a senior role in the Commonwealth
Financial Accountability Reform (CFAR).
George holds both a Bachelor of Laws and a
Bachelor of Economics and has worked extensively across the Australian Tax Office and the
Australian National Audit Office.
He joined the Department of Finance and Deregulation over ten years ago and has extensive experience with significant Commonwealth
reforms.
Paul Ventura who has been Acting Executive Director will remain with the program and will return
to his role as Director of the FMT Solutions
Team.
UPCOMING ACTIVITIES
Activity
Who’s involved
Date
Steering Committee - Fourth meeting
Committee members
30 January 2014
Business Case is submitted to 2014/15 Budget
FMT Team
March 2014
Financial Management Transformation Program. Quarterly Highlight Report. Quarter 2: 2013-14
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OUTPUT BASED INFORMATION PROJECT
One of the key reforms within Financial
Management Transformation (FMT) is the move
towards program/service budgeting to increase
transparency of expenditure and improve
alignment of resources with Government
priorities.
In July 2013 the Output
Based Information
(OBI) project was
established and
worked in partnership
with agencies across
the sector to gather
output based
information as a first
step in developing a
more detailed view of
the goods and services
provided by agencies.
be of reasonable estimates.
The project provided Government with more
granular information than previously available to
help inform the 2014-15 Budget process. It also
informed the development of seven design
principles for program/service budgeting.
In particular, as the nature
of the goods and services
provided by government is
diverse, it is considered
unlikely that there will be a
‘one size fits all’ concept of
a program.
The OBI project also
confirmed that there will
need to be significant
enhancements to sectorwide systems and
processes to further
develop this information and
provide it on a systematic basis.
The OBI report was
presented and endorsed by ERC on 3
December 2013. It included analysis on levels
of granularity and program maturity as well as
Further project work to develop program /
high-level expenditure analysis and commentary service budgeting is proposed as part of the
on challenges the project posed to agencies.
FMT Business Case.
The data provided in this report is considered to
PROGRAM BASED
REPORTING – DESIGN
PRINCIPLES
The proposed seven principles
are:
1.
A proposed keystone reform of
FMT is to move to program reporting. This will have significant
implications for both the budget
management framework and IT
systems design.
2.
The development of these principles has been informed by the
current project to provide ERC
with output-based information
(OBI). In particular, as the nature of the goods and services
3.
provided by government is diverse, it is considered unlikely
that there will be a ‘one size fits
all” concept of a program.
4.
Program detail will be at a
sufficient level for ERC to
5.
make value for money assessments, including alignment with government priorities and efficiency of service delivery.
6.
Program structures for each
agency will be developed by
the agency in consultation
with Treasury and approved
by ERC, for budget man7.
agement purposes.
Programs will include both
financial (e.g. expenses)
and non-financial (e.g. output quantity, quality) performance measures.
Financial Management Transformation Program. Quarterly Highlight Report. Quarter 2: 2013-14
Program information will be
developed by agencies for
the Budget Year and forward estimates.
Program information will be
provided both for general
government sector agencies and non-commercial
PTEs.
Program reporting will be at
the agency level or, if the
principal department controls the cluster entities, at
the cluster level.
Agencies will provide program based information
semi-annually for Budget
and forward estimates and
quarterly for within year
monitoring.
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STAKEHOLDER
CONSULTATION
UPDATE
Whilst the FMT Program is
managed within NSW
Treasury, it is a whole of
Government initiative. The
program is committed to
continually improving the
quality of our collaboration
across the public sector and
broadening the level of
engagement with key
stakeholders.
The program has undertaken
consultation with clusters and
agencies, with additional
input from other jurisdictions
and external experts. Further
information has been
obtained through the Output
Based Information (OBI)
Project. This has informed
further development of the
proposed policy reform
agenda.
Consultation with key
stakeholder will continue
throughout the programs
lifecycle. These stakeholders
include the Audit Office,
Directors- General and key
agency staff, cluster and
agency CFOs, the
Treasurer’s office, and the
Program’s Expert Advisory
Committee and Steering
Committee, as well as key
internal Treasury
stakeholders.
A detailed Change,
Engagement and
Communications Strategy for
the implementation phase of
the program is currently
being developed.
FIRST EXPERT ADVISORY COMMITTEE
MEETING
The first meeting of the
Financial Management
Transformation’s
Expert Advisory
Committee took place
on Thursday 10
October 2013. The
committee includes
independent financial
management and
transformation experts from both the private and public
sectors.
The committee has been established to provide advice to both
the Steering Committee and the program team, from an
external expert perspective, drawing on lessons learned from
similar programs across the public and private sectors. The
Expert Advisory Committee provides a quality assurance
function and ensures the proposed solution is feasible,
realistic, and in line with program objectives.
The committee is chaired by Program Sponsor Maryanne
Mrakovcic and comprises private and public sector finance
experts including Michael Ihlein and Alexandria Holcomb
(private sector representatives), Dr Stein Helgeby
(Commonwealth representative), Sue Eddy (Victoria State
Representative) and Nick Baker (Program Strategic Partner
from KPMG).
The intention of the committee is to draw upon the experience
and judgement of the members to support the FMT program
on its journey with particular focus on the ‘crunch issues’ it
faces in terms of getting the policy reform, IT platform and
implementation strategy right.
This first meeting provided the opportunity to share and gain
insight from committee members on the current program
plans, key challenges surrounding the need for change across
the sector and advice on how to bring agencies along the
journey to meet the aspirations of Government. Senior Policy
Director, Mark Pellowe, also provided members with an
overview of the Policy Reform agenda and opened up the floor
for questions and advice.
Committee members provided valuable information and
guidance on the FMTs end state to help inform the program as
it moves towards finalising and implementing a fully costed
business case. The program has continued to work with
committee members since the first meeting, with a second
meeting scheduled for 20January 2014.
The FMT Steering Committee met at GMT on 30 January
2014. The Committee provided valuable feedback on the draft
Business Case. We would like to thank the Committee for their
engagement with the Program to date.
Financial Management Transformation Program. Quarterly Highlight Report. Quarter 2: 2013-14
4
FINANCIAL MANAGEMENT TRANSFORMATION TEAM PLANS FOR
IMPLEMENTATION
To realise the benefits of the
FMT program, the approach
taken to implementation is
based on a number of guiding
principles which combine
lessons learned, expert
advice, leading practice
and the practical realities that
Treasury and NSW
government Agencies operate
within.
The guiding principles for FMT
implementation are:
1. Delivering Business As
Usual – A key part of planning
is to recognise and take into
account peak cycles for
budget preparation and midyear review, the NSW
government election cycle and
other significant events.
2. Collaboration – Effective
engagement and involvement
with stakeholders at all levels
inside Treasury and across
the NSW Public sector is
paramount to deliver
sustainable change and
realise the benefits from the
FMT Program.
information, policy redesign,
new ways of working and the
behavioural change required
to transform financial
management in NSW – ICT is
an enabler to this.
3. Governance and project
discipline – Roles and
responsibilities are clearly
defined and accountability
mechanisms, such as
gateways, monitoring and
reporting, have been
established and will be
enforced.
5. Listening, learning and
using expert advice –
Leading practice for
government focussed delivery
highlights the need for
planning to include lessons
learned reviews at key points
during the program lifecycle
and using this to inform the
next stage of work.
4. Transformation focused,
not IT focused – Lessons
learned reveals how
transformation programs can
easily revert to becoming ITled projects which are
delivered without the
organisational ability to sustain
the change. FMT will give
focus to the desired outcomes
such as improved quality of
6. Sustaining the change –
Measures are in place to track
and measure the effectiveness
of the change and leadership
responsibility for benefits
realisation will be clearly
defined.
Stakeholders have been identified during the baseline phase of FMT. If you have not
been consulted with by a FMT team member and you consider yourself a stakeholder to
FMT we encourage you to contact the team. Please see our contact details below.
NEW FMT WEBSITE
Information regarding the Financial Management Transformation program
can now be found on the Treasury website at:
www.treasury.nsw.gov.au/financial_management_transformation
Please visit this page for regular updates as the FMT program progresses.
CONTACTING THE FMT TEAM
Website: www.treasury.nsw.gov.au/
Do not hesitate to tell us what you would like to know
more about in the Financial Management Transformation Program. We are also open to your feedback
via the following:
Phone: 02 9228 4960
Email: [email protected]
financial_management_transformation
Mail: Level 25, Governor Macquarie Tower
1 Farrer Place, Sydney, NSW, 2000
Financial Management Transformation Program. Quarterly Highlight Report. Quarter 2: 2013-14
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