JAKARTA, April 29, 2015 – Indonesia’s Ministry of Finance today launched SPAN, a financial management information system (FMIS), designed to improve transparency, efficiency, and accountability of the government’s financial transactions.
SPAN (short for Sistem Perbendaharaan dan Anggaran Negara) will provide centralized databases of all government financial transactions, which, through real-time reporting and accounting, will help the government manage budget allocation, expenditure commitments, and spending limits. With the introduction of a reliable cash management system, SPAN is also expected to improve cash flow forecasts and planning.
“SPAN is one of the major reforms the Finance Ministry is undertaking. It is the core of the government’s public financial management reform program, and we are committed to delivering its success,” said Minister of Finance Bambang Brodjonegoro at the launch event, inaugurated by President Joko Widodo.
SPAN can help facilitate preparation of the unified national budget, control budget execution, as well as provide comprehensive and timely information on the government’s financial position, Minister Brodjonegoro explained.
The government hopes that SPAN will resolve the problem of slow and uneven budget disbursement, as well as under-spending on capital expenditure.
“We congratulate the Government for adopting this innovative program that helps them better manage public spending. The World Bank fully supports these reforms, “said World Bank Country Director for Indonesia, Rodrigo Chaves.
SPAN is the core of a World Bank-financed Government Financial Management and Revenue Administration Project (GFMRAP). Other donors, including the Government of Netherlands, European Union, the Government of Switzerland, USAID, and Canadian Department for Trade and Foreign Affairs, provided grants to support this effort through the Public Financial Management Multi Donor Trust Fund (PFM-MDTF).
SPAN is currently operating in 222 locations comprising of 181 treasury branch offices or KPPN (Kantor Pusat Perbendaharaan Negara), 33 provincial treasury offices, and 8 treasury directorate units across Indonesia. SPAN is fully operational since February 2015 managing 100 percent of all financial transactions of over 24,000 spending units in Indonesia.
What is SPAN?
· SPAN (Sistem Perbendaharaan dan Anggaran Negara) is a Financial Management Information System (FMIS) based on a packaged software as the platform for financial application modules such as Accounts Payable, Accounts Receivable, Cash Management, Government Receipts, Accounting and General Ledger, and Commitment Control.
· SPAN is a core element of the government’s Public Financial Management (PFM) reform program. It is key to the Ministry of Finance’s efforts to modernize the state treasury and budget systems, and has three main objectives:
a. To facilitate the preparation of a unified state budget;
b. To control budget execution, including the assets and liabilities of the central government; and
c. To provide comprehensive and timely information on the government’s financial position
What are the expected benefits of SPAN?
· Improved treasury business processes with fully automated operations to effectively control budget allocation, expenditure commitments, and spending limits through real-time reporting and accounting.
· Availability of centralized databases of comprehensive government financial transactions covering the full range of financial processes from budget preparation, allocation, commitment, spending, and accounting.
· Reduced human errors and potential frauds through online real-time data capture at source.
· Enhanced management of public finances through real-time reports on government financial operations that are available to all stakeholders.
· Advanced the implementation of the State Treasury Law through the introduction of international standard classification structure that enables progressive transitioning into accrual based accounting system.
· Improved cash flow forecasts and planning with a reliable cash management system.
· Maximized use of the Indonesian banking infrastructure in revenue collection and payment service delivery through the linked financial management information system accessible by the Central Bank and commercial banks.
· Enhanced audit functions through the linked and comprehensive databases.
· More efficient submission and access of public finance information by line ministries and other government agencies.
How is the process of SPAN Development?
· Development of SPAN started in 2009 and was piloted in 2014. SPAN was then gradually rolled out to all 181 treasury branch offices or KPPN (Kantor Pusat Perbendaharaan Negara) over a twelve-month period. The roll-out completed in February 2015 and SPAN now manages 100 percent of all financial transactions of over 24,000 spending units across Indonesia.
· SPAN is integral to a World Bank-financed Government Financial Management and Revenue Administration Project (GFMRAP). Additional grants to support the government’s efforts were provided through the Public Financial Management Multi Donor Trust Fund (PFM-MDTF) by the Government of Netherlands, European Union, the Government of Switzerland, USAID, and the Canadian Department for Trade and Foreign Affairs.