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Budget Management Systems a core requirement for most jurisdictions

by Sam Murphy •
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The number of jurisdictions which are either actively or potentially in the market for replacements to dated budget management systems now stands at three, according to Intermedium analysis. 

As the result of The Australian Capital Territory (ACT) Government’s request for industry feedback on a replacement for its Budget Development Application (BDA), it now joins Tasmania in the market, leaving only South Australia and Queensland with no stated intent to replace their systems. 

Since 2011, budget management system replacement projects have been initiated (but not yet implemented) by the Federal Government, NSW and Tasmania, with Tasmania appearing to remain an addressable opportunity.

The ACT Government has invited industry feedback on a draft Statement of Requirements (SOR) to replace its Budget Development Application (BDA), which has been in use since 1997.

The BDA is a custom built application, developed on a Microsoft Access platform. According to the draft SOR, “[it] is the key application used by Treasury and agencies to record budget adjustments to support the annual budget process, supplementary appropriations and budget reviews”. The system generates files which are then able to be imported into other key systems within the Department of Treasury’s Oracle E-Business Suite of applications.

The SOR states the new system, to be hosted internally by shared services ICT, will be required to:

  • Automatically update the budget round to reflect the roll-over into a new financial year;
  • Enable the automatic generation of adjustments to create forward year estimates; and
  • Capture budget estimates for the current year, the budget year and a minimum of three years forward.

In line with what is being implemented in other jurisdictions and unlike the existing system, its replacement is intended to be a Commercial-off-the-shelf (COTS) product with minimal customisation.

Tasmania

In May 2011, Tasmania’s Department of Treasury and Finance (DTF) received a report from Croger Associates which concluded that the current Budget Information Management System (BIMS) could not be sustained for any more than another five years.

In October 2012, DTF signed a $178,000 contract with Quill Australia to develop a business case for the replacement of its current budget management system. This was followed in August 2013 by a Request for Information (RFI) on COTS “software packages and potential solutions, costs and existing capabilities”. The RFI has closed although it has not yet been awarded.

BIMS was flagged as a potential project to be funded through Tasmania’s $28 million project fund in the 2013-14 State Budget, however, no funding has been allocated at this point.

According to Intermedium’s annual analysis of ICT Budgets, Tasmania and the ACT spend similar amounts per annum on the procurement of ICT goods and services, suggesting the scope and likely project costs of their replacement budget management systems are also likely to be similar. 

Federal

The Department of Finance (Finance) is in the final stages of the redevelopment of its Central Budget Management System (CBMS)

The redevelopment of the CBMS was first flagged in the 2010-11 Budget, however no funding was allocated. Instead, budget papers stated that it would be funded through the ICT Business as Usual Reinvestment Fund. It also noted, “For commercial confidentiality reasons, the financial impact of this measure is not for publication.”

According to Finance’s website, “The key driver for the Project was the Governments need to be more responsive with fiscal policy to meet challenges in a changing economic environment.”

In April 2011, Finance signed a $24.4 million contract with SAP for the provision of COTS software for the CBMS. This was followed in November 2011 by a $31.2 million deal with CSC Australia for application implementation services. The contract is due to expire in June 2015 after it was amended from its original date of December 2013.  

Finance’s annual report indicates that it expects the system to be operational by the end of 2013-14. In December 2013, the Department signed a $420,000contract with Hewlett Packard for performance testing of the system, suggesting it is on schedule for implementation.

NSW

Released in February 2012, Kerry Schott’s Interim Report of the Commission of Audit into Public Sector Management identified “systemic weaknesses” in the way Treasury tracks agency expenditure as a result of manual processing and a lack of accountability.

Treasury currently uses three systems to cover Government revenue and expenditure: the Treasury Online Entry System (TOES), the Capital Treasury Online Entry System (CAPTOES) and the Financial Information System (FIS).

However, a change to these systems appears imminent. The 2013-14 NSW Budget allocated $8 million to be spent in 2013-14 to progress “the financial management transformation program focussing on a new framework and financial information system as recommended by the Commission of Audit”.

No contracts have been published on NSW tender relating to the project, and NSW Treasury did not respond to Intermedium’s queries as to whether any elements of the project were yet to be put to the market.

Treasury’s 2012-13 Annual Report stated that “Next year [ie 2013-14] the project will draw on specific funds for the development of the financial framework and system.”  It is not unreasonable to expect that the scope of the NSW system when completed will equal that of the Federal CBMS, and entail similar costs.

Other Jurisdictions

Three jurisdictions have replaced their budget management systems since 2008 and are therefore unlikely to be in the market for replacements in the immediate future.

In November 2008, The Victorian Department of Treasury and Finance (DTF) approached the market to replace its budget management system with the State Resource Information Management System (SRIMS). The Department of Parliamentary Services’ 2010-11 Annual Reported stated that the old Budget Management System had been replaced successfully replaced by SRIMS.

In October 2012, Western Australia completed the in-house development of the Strategic Information Management System (SIMS) to replace the Treasury Information Management System (TIMS). According to the Department of Treasury’s 2011-12 Annual Report, “The legacy system [was] approximately 11 years old and [was] based on an obsolete technology platform.”

The Northern Territory Department of Business indicated in its 2011-12 Annual Report that it had successfully designed and trialled a prototype of a new Budget Management System in-house for the 2012-13 budget development cycle.

This leaves Queensland and South Australia as the two jurisdictions who have not yet approached the market for replacement or upgraded budget management systems. 

Queensland currently uses a TriData Financial Management system as its primary budgeting and reporting system. The 2012 Queensland ICT Audit ruled that the system was in good technical condition. At the time, Queensland Treasury and Trade (QTT) were planning a review of TriData to redesign the framework of the reporting system. QTT is yet to advise the status of the review.

With a change of government likely in South Australia, it is unlikely that a budget management system would be announced as an initiative in the 2014-15 Budget, but it may well become an opportunity in a subsequent budget year.  

Related Articles:

NSW Budget System overhaul is tomorrow’s big news

DMO to act on disparate project management systems

Schott Report: NSW needs a new Budget Management System

For more information, please contact the Editor (02) 9955 9896.

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Jurisdiction
  • ACT
  • Federal
  • NSW
  • NT
  • QLD
  • SA
  • TAS
  • VIC
Category
  • IT Services
  • Software
Sector
  • Finance & Services
Tags
  • Budget Development Application (BDA)
  • Budget Information Management System
  • Capital Treasury Online Entry System (CAPTOES)
  • Central Budget Management System
  • COTS
  • SAP
  • TAS ICT Project Fund
  • The Financial Information System (FIS)
  • the Treasury Online Entry System (TOES)