Treasury of Serbia

Management
perspectives
Strategic management

Where do we want to go?

Change managemet

How to bring the people

there?

Project management

How to stay within budget

and time framework ?

Knowledge management

How to create, maintain and

distribute knowledge?

Treasury of Serbia

PRINCIPAL MILESTONES OF BUDGET

EXECUTION ACCOUNTING REFORM
2004

2008

New Budget
System Law
adopted

Introduction of
Interim General
Ledger System

New FMIS in
production

Treasury
department
established in
Ministry of
finance

Treasury single
account

2002

Commitment
Phase

All Direct
Budget
Beneficiaries
ON LINE

Treasury
Department
evolved to Tresury
Administration
Treasury of Serbia

2009

201

Implementation
of International
Public Sector
Accounting
Standards

MAIN CHARACTERISTICS OF INHERETED

BUDGET - ACCOUNTING SYSTEM
All the budget beneficiaries had their own gyro accounts in
Public Payment Agency
One Accounting law for public and private sector, similar
chart of accounts and accounting procedures
Expences and liabilities recorded during the year on the
accrual base, amortization calculated for fixed assets
Spending units authorised to incure liabilities according to
the annual budget, no effective reconciliation with actual
budget income
The surplus of expenses over incomes on the reporting
date deferred to the next year if it was due to not sufficient
funds transferred from the budget
RESULT: Significant arrears
Treasury of Serbia

INTERIM TREASURY GENERAL LEDGER

SYSTEM - ITLS

Accounts of Direct Budget Beneficiaries closed

Introduced a Consolidated Tresury Account (CTA) - integrated

account of the Central Government, Local Governments and
Social Funds

Budgets of DBB executed only through Treasury Single Account

(part of CTA)

Ex ante control of documentation by Treasury prior to entering

into the system

Commitment phase introduced, controlling expenditures

against the appropriations, monthly allocations (quotas) and
commitments

Cash based accounting introduced,

centralised General Ledger
Treasury of Serbia
for DBB as part of Budget Execution application

FINANCIAL MANAGEMENT INFORMATION

SYSTEM FMIS (ENVISAGED)
Overall Objective
To establish an efficient, modern financial management process that
allows resources to be allocated more effectively and contribute
towards achieving the public policy goals and priorities, and to be
used more efficiently in the implementation of public programmes

All DBB conected to the system ON LINE in the first phase, IBB in
the next phase

PIFC replacing centralised control

Separate applications for Budget Execution, General Ledger and

Debt Management

General Ledger fully integrated with subsidiary modules, postings

automatically reflected in the General Ledger and allow drill down
from high level accounting information to the source tranasaction

GL fully compliant with International Accounting Standards and

ESA 95 ( posibilty to operate under cash or accrual base required)
Treasury of Serbia

FMIS (REALISED SO FAR WORK IN

PROGRESS)

Started with one year delay 2008

Difficulties during assessment phase the most experienced staff

occupied by daily obligation - resulting in change requests during
implementation

Significant resistance toward new system the old one was better

Training for Central Office users conducted during 2006, integrated

with software testing, too early in respect to system start, especially for
the staff in Budget Acconting Department

Training for Budget Beneficiary users 5 days duration performed by in

house prepared trainers

Help desk staffed with trainers, telephone support, remote access, on

site help

Data consistency problems between applications

CONCLUSION: The system provided only the technical preconditions

for budget accounting reform
Treasury of Serbia

The future steps considerations

The financial crisis and budget deficit added a sense of urgency in

undertaking reforms in public finance
Accounting is still not recognized as integral part of management
Introduction of International Accounting Standards is obvious
perspective, but the steps are not fully agreed
The introduction of accrual accounting is probably the smallest
problem for budget accountants the question is weather the
decision makers are ready to interprete and use accrual information
The staff in financial services of budget organisations performs
much wider scope of activities than accounting
The requirements of New Public Management impose new
requirements toward accountants financial managers in budget
organisations

Treasury of Serbia

Corporate Governance in the

Public Sector - IFAC
Financial managers in the public sector need to be competent
and proficient in the following areas to discharge their
responsibilities effectively:
Strategic management
Performance measurement
Management Accounting
Financial Accounting
Operational Planning and Design
Budgeting
Internal Control
Audit
Corporate Governance

Information systems
Economy
Presentation
Analysis
Negotiating
Writing
Counseling
Facilitation
Conflict management

Treasury of Serbia

Strategy
To create a sustainable system which can support
budget accountants in their activities regardless of
accounting framework and adjust a pace of
introduction of International Public Sector
Accounting Standards to the country specific
conditions
To establish an intensive cooperation, especially
with countries with similar accounting tradition,
in order to foster experience and best practice
exchange and implementation
Treasury of Serbia

Change management
A

Awereness of
the need for
change

Management communication
Environment changes
Access to inforamtion

Desire to
participate and
support the
change

Fear of job loss enhenced job seccurity

Discontent with current state
Affiliation and sense of belonging
Incentives or compenstaions

Knowledge on
how to change

Training and education

Information access
Exmples and role models

Ability to
implement
required skills
and behaviors

Practice applying nee skilles

Coaching
Mentoring
Removal of barriers

Reinforcement to
sustain the
change

Compensation changes
Celebrations
Personal recognition
Treasury of Serbia

Knowledge management

Success factors for knowledge management (Skyrme and Amidon

(1997):

(1) the need to have a strategic link between KM and business objectives;
(2) developing a compelling vision for KM;
(3) the existence of KM leadership;
(4) possessing a knowledge creating and sharing culture;
(5) having a well-developed technology infrastructure; and
(6) putting systematic organizational knowledge processes in place.

Other factors reported in the literature include:

(7) the need for measurement of KM activities and outcomes;
(8) adequate control and coordination of KM activities
(9) provision of enabling resources and training
(10) possessing a KM ontology and repository;
(11) introducing new structures, roles and responsibilities; and
(11)providing motivational incentives

(Davenport et al. 1998, Holsapple and Joshi 2000, Hasanali 2002).

Treasury of Serbia

Community of practice

Treasury of Serbia

Thank you for your attention

Treasury of Serbia