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Free Balance WP-Towards Budget 2.0

Free Balance WP-Towards Budget 2.0

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Published by FreeBalanceGRP
This paper proposes a budget-centric and technology-focused framework to assess the government transparency and public financial maturity. Governments leverage technology to manage public finances and enable transparency. Most assessments of Public Financial Management (PFM) tend to be technology - neutral by providing little or no guidance about the use of Integrated Financial Management Information Systems (IFMIS), also known as Government Resource Planning (GRP). These assessments focus primarily on procedures and practices because no GRP can improve PFM quality when procedures or practices are ineffective.
This paper proposes a budget-centric and technology-focused framework to assess the government transparency and public financial maturity. Governments leverage technology to manage public finances and enable transparency. Most assessments of Public Financial Management (PFM) tend to be technology - neutral by providing little or no guidance about the use of Integrated Financial Management Information Systems (IFMIS), also known as Government Resource Planning (GRP). These assessments focus primarily on procedures and practices because no GRP can improve PFM quality when procedures or practices are ineffective.

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Published by: FreeBalanceGRP on Oct 14, 2011
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FreeBalance
®
 
Government “Budget 2.0”
 
Government Budget 2.0 Framework:
a framework for evaluating technology for government transparency and Public Financial Management reform
 
Doug Hadden, VP Products, FreeBalance
 
 
FreeBalance
 ® 
 
2
Introduction
 
This paper proposes a budget-centric and technology-focused framework to assess the government transparency and publicfinancial maturity. Governments leverage technology to manage public finances and enable transparency. Most assessments of Public Financial Management (PFM) tend to be technology - neutral by providing little or no guidance about the use of IntegratedFinancial Management Information Systems
i
(IFMIS), also known as Government Resource Planning (GRP) [Figure 2]. Theseassessments focus primarily on procedures and practices because no GRP can improve PFM quality when procedures or practicesare ineffective.E-government and open government technology is increasingly being leveraged by governments to enable transparency,
accountability, citizen services and citizen engagement.
ii
.” E
-government and open government frameworks tend to combinetechnology methods with procedure and practices but have little PFM guidance with the exception of managing transactions[Figure 2].
Budget Centric Approach to GovernmentTransparency
 
Budget management is the core to public financial management. Often called
the “organic budget law” or the “vote”, it is 
iii
of government policy. Budget formulation and execution traditionally 
iv
” is maturing
v
” or government performance. New tools coupled with citizen
demand have created a demand for more open and transparent participatory
 budgeting
vi
" democratic processes. This trend for opengovernment, open data and Government 2.0 affects the core of governmentmanagement: the budget.Open government often includes budgetary and transactional information suchas budget plans, e-procurement opportunities and financial reports. Opengovernment can also include what might seem as non-budgetary informationsuch as census statistics, economic data or health advice. The collection and publication of this information requires funding viabudgets. Budget management is core to open government [Figure 1]. And, budgets are tied to this government outputs andoutcomes. Therefore, budget management is core to government performance management, unlike in the private sector.
From Government 1.0 to Government 2.0
Tim O’Reilly of O’Reilly media coined the term “Web 2.0”
viii
in 2005 to describe a technological evolution where the web had
 become a platform for software. This differs from “Web 1.0” where data generated by client/server software was deployed through
the Internet. Other characteristics of Web 2.0 included harnessing collective intelligence, focusing on data, supporting multipletechnology platforms and deploying rich user experiences. M.I.T. Sloan and Harvard professor Andrew McAfee extended theseconcepts to the business domain by describing Enterprise 2.0
ix
in 2006.This technology transition enabled observers to describe Government 2.0, Aid 2.0, Civil Society 2.0, etc. The concept of 
Government 2.0 includes what Tim O’Reilly calls “government as platform
x
 Governments build physical infrastructure like
highways and communications satellites that generate economic growth according to O’Reilly. Economic growth can also begenerated through technology by making government open. O’Reilly sees an intersection be
tween technology open standards and
open government:
xi
.”
 
This “openness” intersection is critical to understanding how open technology enables governm
ent openness in the Government2.0 world. For the purposes of this paper, the following definitions are used:
 
Figure 1: Budget-Centric View ofOpen Government
Government Performance ManagementData from Government OperationsExpenditures RevenueBudgetformulationBudgetexecution HumanTreasury ResourcesData from Government OperationsGovernment Performance Management
 
 
FreeBalance
 ® 
 
3
 
 Budget 1.0
: Traditional mechanisms of budget management that are primarily internally-
focused (often called “back 
-
office”), where control and comp
liance are major concerns
 
Transitional 
: Increase of externally focused or “front
-
office” budget management where transparency, web transactionsand government reporting are important characteristics but do not achieve “Web 2.0” characteristics
 
 
 Budget 2.0
: Social and Web 2.0 mechanisms that attempt to leverage the network effect to improve governmentperformance and service delivery while leveraging the integration of front and back office systems
Figure 2: Survey of Common PFM and E-Government Assessment Methods
Evaluation Method ScopeBudgetImplicationBack-OfficeTechnologyFront-Office Technology
Public Expenditure and FinancialAccountability (PEFA) Comprehensive PFMassessmentYesNo technology guidance although PEFA assessmentsattribute some achievements to the use of technologyCommonwealth Public FinancialManagement Self-AssessmentToolkit (CPFM-SAT) Comprehensive PFMassessmentYesA3: Use of IFMISB2: Use of DebtManagement softwareNo technology guidance forpublishing informationThe Chartered Institute of PublicFinance & Accountancy (CIPFA)Whole Systems Approach Comprehensive PFMassessmentYesO7: Financialmanagementinformation systemsRevenue Watch Institute Index Extractive IndustriestransparencyYesParis Declaration and AccraAgenda for Action Aid effectiveness YesUse of country systems for PFM and procurementdoes not specify use of technologyInternational Budget PartnershipOpen Budget Index (OBI) Budget preparationand reportingtransparencyYesInternet publishing of budget documents gainshigher rating for manycategoriesGartner Group OpenGovernment Maturity Model Open government NoProvides open governmenttechnology insightInstitute for ElectronicGovernment e-Democracy Model E-Democracy No Use of e-mail systemsUse of web technologyAndersen & Henriksen E-Government Maturity E-Government NoLayne and Lee Framework of E-Government E-Government NoHorizontal and verticalintegration withingovernmentWorld Bank World GovernanceIndicators Meta collection of 3
rd
 party indicatorsNoNo technology guidanceGlobal Integrity Report Governance and anti-corruptionNo
Technology-Enabled Transparency
The Internet supports government transparency initiatives like open data, procurement, recruitment and grants portals.
Transparency mechanisms have evolved from “freedom of information” processes to proactive publication of machine
- readabledata sites. Data that was once packaged by governments to generate revenue are being offered at no cost to enhance businessopportunities. Information timeliness has also become more critical with governments releasing information without lengthy

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