FINANCE AND REPORTING SYSTEMS

Transcription

1 FINANCE AND REPORTING SYSTEMS This Annual Report is intended for reporting on the Federation's Annual Appeals only. Appeal No /2001 Appeal Target: CHF 1,090,000 May 2002 Operational Developments This global programme has focused on internal development of the Federation s financial control and reporting systems. This has involved both the technical development of financial tools as well as skills enhancement of Federation finance staff. The development of the Regional Finance Unit (RFU) structure was the cornerstone for this process, and has entailed, inter alia, identifying and developing RFU staff from within the regions and then forming the skills of country delegation finance staff. The continued development of the Business Objects product, a Federation financial reporting tool, has required technical input during the reporting period to develop financial report formats, to install the necessary software and to enhance user skills to access the reports. On the reporting side, there has also been a focus on the Pledge Management Note system, with reviews to refine it so as to respond better to Federation and donor needs. Objectives, Achievements and Objective 1 To upgrade the communication software and support hardware and assess the communication needs of the Federation and delegations. A number of software products were purchased to enhance the suite of applications that the Federation requires to deliver strong accounting solutions. PC Anywhere was installed in all relevant delegations to enable the Secretariat to assist with computer support services across the Internet. The Federation has also obtained a limited number of CODA e-finance licenses at favourable rates as part of a long term upgrade to operating across the Internet. We have also conducted one-off quality tests of the software (Q-check) after the initial implementation in 1999 by PricewaterhouseCoopers. The CODA Assets module was also configured for the Federation which will allow a planned roll out of this product with the first application on the vehicle Fleet business unit. At same time we took the opportunity to upgrade software for the EURO currency. At the beginning of the year, the replication technology that is unique to the Federation continually hampered progress in receiving financial data from country delegations to Geneva. Significant efforts were made to debug the existing systems and enhance their functionality which has led to a far more stable process. However, a review of the software was carried out by the vendors of the CODA system, to ascertain whether a more rigorous

2 2 approach could be pursued to support the Federation s operations. By year s end, some of the recommendations made were under consideration by the Federation s management. The Federation also developed the CODA financial system on a laptop version primarily as a first response solution to sudden onset disasters. This new operating version of CODA will be field tested in Limited understanding of the long-term requirements of the Federation s financial management solutions has delayed progress in developing and enhancing current applications. A lack of connectivity between delegations and the Secretariat resulted in a bottleneck on all operations. Efforts continued to resolve the issue of connectivity, and a recent decision by the Federation s Steering Committee has provided a basis for consolidating the applications that we have been developing under this programme. Objective 2 To organize and carry out training in financial management and reporting in order to achieve an advanced level of professionalism in the delivery of financial control in all finance activities and to promote standard good practices while increasing the effectiveness and efficiency of delegations. A number of evaluation missions were undertaken in the regions where RFUs have been set up. At the beginning of 2001, three units were operational in Kuala Lumpur, Yaoundé and Abidjan. In the first six months of 2001 additional units were established in Guatemala, Nairobi, Budapest and Amman, heads of units were appointed and local staff employed. These units will work within comprehensive, operational terms of reference, which will be refined as more delegations are brought under each RFU and the capacity of the units is developed. The RFUs first role was to focus on financial quality control and the timeliness of financial reporting. This role has necessitated a number of missions to each of the country delegations covered to ensure that procedures and capacities were in place. With a view to building a global team, two meetings were conducted in Geneva with the heads of these units. These sessions were very constructive and led to a number of procedural and operational changes that taken singly might not appear significant, but as a whole have leveraged our service level to delegations, and consequently to national societies and to our donor partners. There were significantly fewer delays in monthly financial reports from delegations. As a consequence, the timeliness of reporting on global operational figures from the centralized Geneva financial database also improved. We have also begun to see a higher standard of accounting and financial control, which was partly a result of the development of financial procedures in Work continued over the year to develop more precise operational procedures for finance staff. It has proved difficult to monitor the content and progress of training missions undertaken by RFU staff or to get feedback on where weaknesses might lie. We have therefore initiated two projects: a review of all current, locally recruited finance staff, as a means of identifying existing skills and training needs; and an exercise to map the various roles within the Federation and identify the modules and tools required for each position. This will form the basis for assessing the resources required to train both finance and non-finance staff in the future. Objective 3 To continue to maintain the existing systems that support the Minimum Reporting Standards (MRS) and Pledge Management System (PMS) and develop these systems based on donor and delegation feedback.

3 3 A review of the Pledge Management Note (PMN) system was conducted, within the context of its function as an income accruals module in the wider financial system. This review identified the steps needed in order for the system to become auditable financial information and to allow the Federation to compile external financial statements based on this accrued income record. The review is being studied by management in order to plan the transition to accruing pledged income. The participating national society (PNS) reporting officer undertook the redesign of the Pledge Management Form both within the secretariat and with PNSs. Work focused on a more donor friendly PMN system, and on improved integration of standard programme support costs into the PMN. The final results of this work will be presented at a special donor reporting meeting in the Hague in February At present, the current pledge system is robust and well maintained and has enabled country delegations to record income received directly in the field and then link it to data held in Geneva. The PMN financial information was used primarily for internal project management and this change will allow the system to be used more widely. An internal review was also conducted on the system of calculating and recording Programme Support Recovery (PSR) against individual pledges. This has led to refinements in the pledge system, which will better incorporate the information required to make the PSR calculation. Achieving the Federation s minimum reporting standards Donor feedback on the quality of appeals and reports was highly positive with regard to the web-based reporting system and the move towards the logical framework approach. This success was, however, undermined by consistently late reporting at all levels. Ideas on how to resolve this problem will be presented at the Hague PNS reporting meeting. The focus of reporting development work during the second half of 2002 was dedicated to pledge based (individual) reporting, rather than appeal level reporting. While minimum reporting standards were applied to official and public appeal level reports, not enough attention was paid to individual PNS reports, which did not go through the usual control mechanisms. Compliance with reporting deadlines on these reports was generally considered to be far higher than with appeal level reporting. In close cooperation with the finance department, the PC division and the IT department, a wide package of standards, process and procedures was mapped and implemented to achieve web based reporting control with standardized archive and document management. The full project will be presented at the Hague PNS meeting for comment before endorsement at the Washington ICG meeting. It is expected that the significant work done on improving this area will have a major impact on pledge based reporting during 2002, with even greater reporting compliance expected in As mentioned under objective 1, not having a clear understanding of the strategic direction of the Federation s system requirements has delayed the implementation of some of the review recommendations. This was effectively resolved with the Steering committee decision. Objective 4 To ensure that the reporting software is fully functional and enhanced for Federation and donor requirements. Throughout 2001 there was a significant development in the reports set up under the Business Objects (BO) product, with most of the existing automated reports used by finance personnel revised and replaced. External consultants were employed to transfer the bulk of the reports but we have now established strong internal skills to manage this product. The BO reports will be used by cost centre and programme managers, with continuing refinements required to ensure that appropriate financial

4 4 information is available to all managers. The web based product has also been released to country delegations, allowing them, where they have connectivity via the web, to have direct access to the information in the Geneva database. We have also provided delegations with the basic BO product that will allow them to run reports on the financial data held in each delegation. The ease of developing reports in BO has led to the construction of specific control and exception reports, which allows the Secretariat to address the specific weaknesses in the many balance sheets that make up the Federation s operating assets. We have also moved towards data warehousing by installing a specific computer for the reports database which will lead to more responsive access times for users. The underlying structure of the BO report writer software is of a high technical specification, even for reports with relatively unsophisticated user input. The level of knowledge required to develop the base structure is higher than was expected and has required a dedicated in-house resource to work on building and testing financial reports to avoid reliance on external consultants. Conclusions It is clear that the organization needs to have a clear strategy with regard to technology in order to ensure an efficient use of limited resources. Recent management decisions relating to the future structure of IFRC technology have established a stable platform from which the programme can continue. An inter divisional approach to any project that has cross-divisional implications is essential. The formalized creation of the cross-divisional Reporting Action Team which assisted with this project could be applied to similar projects. The general cutbacks in secretariat funding during 2000 and 2001 has resulted in a queue for development work, especially in the IT area; many technical developments in the reporting project were therefore delayed. It had been hoped the entire package of a new Pledge Management Note, and new procedures and formats, would have been achieved before January , but owing to various delays the full implementation of the project will not be completed before June To ensure Secretariat buy-in to the project, the new concepts were factored into the work of the newly created Reporting Action Team, which coordinates and sets priorities for the three main departments concerned. For further details please contact: Ric Martin, Phone: ; Fax: ; martin@ifrc.org All International Federation Operations seek to adhere to the Code of Conduct and are committed to the Humanitarian Charter and Minimum Standards in Disaster Response (SPHERE Project) in delivering assistance to the most vulnerable. For further information concerning Federation operations in this or other countries, please access the Federation website at John Horekens Head Relationship Management Department Stephen Ingles Head Finance and Budget Department

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6 INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES Interim report Annual report Final report X Appeal No & title: 01.80/2001 Finance and Reporting Systems Period: year 2001 Project(s): G82001, 38000, 38100, 38200, 38300, 38400, 38410, 38420, 38430, Currency: CHF I - CONSOLIDATED INCOME 2001, CASH, KIND, SERVICES CASH KIND & SERVICES TOTAL FUNDING Contributions Reallocations Goods/Services Personnel INCOME Appeal budget 1,089,795 less Cash brought foward 46,435 TOTAL ASSISTANCE SOUGHT 1,043,360 Contributions from Donors Danish Red Cross (DNDK) 37,514 37,514 DFID - British Government (DFID) -270, ,000 DFID - British Government (DFID) 546, ,108 Swedish Govt.via Swedish Red Cross (DGNSE) 172, ,606 Swedish Red Cross (DNSE) 260, ,733 TOTAL 746, ,961 II - Balance of funds Opening balance 46,435 CASH INCOME Rcv'd 746,961 CASH EXPENDITURE -791, CASH BALANCE 1,704

7 Appeal No & title: 01.80/2001 Finance and Reporting Systems Period: year 2001 Project(s): G82001, 38000, 38100, 38200, 38300, 38400, 38410, 38420, 38430, Currency: CHF III - Budget analysis / Breakdown of expenditures Appeal CASH KIND & SERVICES TOTAL Description Budget Expenditures Goods/services Personnel Expenditures Variance SUPPLIES Shelter & Construction Clothing & Textiles Food/Seeds Water Medical & First Aid Teaching materials Utensils & Tools Other relief supplies Sub-Total CAPITAL EXPENSES Land & Buildings Vehicles Computers & Telecom equip. 100, , ,499-27,499 Medical equipment Other capital expenditures Sub-Total 100, , ,499-27,499 TRANSPORT & STORAGE Sub-Total PERSONNEL Personnel (delegates) 288, , ,977-72,977 Personnel (local staff) 24,277 24,277-24,277 Training Sub-Total 288, , ,253-97,253 GENERAL & ADMINISTRATION Assessment/Monitoring/experts 220,000 93,176 93, ,824 Travel & related expenses 92,892 92,892-92,892 Information expenses Administrative expenses 10,000 1,193 1,193 8,807 External workshops & Seminars 352, ,122 Sub-Total 582, , , ,670 PROGRAMME SUPPORT Programme management 73,429 55,536 55,536 17,893 Technical services 21,922 16,628 16,628 5,294 Professional services 24,444 18,445 18,445 5,999 Sub-Total 119,795 90,610 90,610 29,185 Operational provisions Transfers to National Societies TOTAL BUDGET 1,089, , , ,103 Consumption rate: Expenditures versus income 106% Expenditures versus budget 73%