Real-Time Information Helps Budget Formulation and Disbursement
Jakarta, November 11, 2015 -- A comprehensive centralized database of all central government financial transactions that tracks spending in real time is helping the government manage the budget and improve accountability, says the Ministry of Finance.
Launched earlier in April 2015 by President Joko Widodo, the real-time reporting and accounting provided by SPAN, or Sistem Perbendaharaan dan Anggaran Negara, is enabling the Ministry to watch spending limits, deliver on commitments, and better prepare expenditure planning.
“The main feature of SPAN is automation, which supports the audit trail to enhance transparency in the management of state finances and integration of several sub-modules for state financial management. With SPAN as a model, we’ll continue to improve on the management of budgeting, treasury, taxation, and customs and excise,” said Bambang Brodjonegoro, Minister of Finance for Indonesia, who opened the conference.
SPAN is a vital component of a project called the Government Financial Management and Revenue Administration Project (GFMRAP), supported by many donors, including the World Bank, the Government of Canada, the European Union, and the Government of Switzerland.
At an international conference hosted today by the Ministry of Finance, development partners reiterated their continued support the reform and modernization of Indonesia’s public financial management systems.
“By enabling the sharing of information, SPAN contributes towards making financial management systems more accountable. The next step is to use SPAN for improving policy planning and monitoring for more effective public spending. By spending better, the government can allocate more funds to programs that help reduce poverty and share prosperity more widely across Indonesia,” said Rodrigo Chaves, World Bank Country Director for Indonesia.
“The European Union has been part of the Government of Indonesia’s public financial management reform efforts for almost a decade. This through the two phases of the Public Financial Management Multi Donor Trust Fund project,” said Ambassador-designate of the European Union to Indonesia and Brunei Darussalam, Vincent Guérend.
"In this context, SPAN is one of the most important results of our cooperation as SPAN promotes further accountability, transparency of public finance management and allows a good and swift budget execution. The potential of SPAN is enormous. The European Union congratulates the government’s efforts and look forward to continuing our fruitful partnership,” added Ambassador Guérend.
The Government of Switzerland agreed that improved information systems will lead to improved overall governance. By enabling online real-time data capture at source, SPAN reduces the potential for human error and fraud. These real-time reports on government financial operations are also available to key stakeholders, including the Central Bank and line ministries.
“We look forward to supporting the next phase of Indonesia’s public financial management and fiscal decentralization reforms,” said Yvonne Baumann, Ambassador of Switzerland to Indonesia.
SPAN is now being used by Ministry of Finance at DG Budget and DG Treasury headquarters, including 182 Treasury services offices (KPPNs), and 33 Treasury Kanwil offices (Kanwils) all over Indonesia with more than 3,600 users, serving 24,000 spending units.
FACT SHEET: Sistem Perbendaharaan and Anggaran Negara (SPAN)
What is SPAN?
- SPAN is the acronym for Sistem Perbendaharaan dan Anggaran Negara, a Financial Management Information System (FMIS) using Oracle-EBS as the basis platform of applications. These applications include Accounts Payable, Accounts Receivable, Cash Management, Government Receipts, Accounting, General Ledger, and Commitment Control.
- SPAN is a core component of the government’s public financial management reform program. SPAN was envisaged to specifically support the modernized preparation of the budget, and of state treasury operations, with the following three main objectives:
a. To facilitate the preparation of the unified state budget;
b. To control budget execution, including related to the assets and liabilities of the central government;
c. To provide comprehensive and timely information on the government’s financial position.
How did SPAN develop?
- SPAN was developed, piloted and rolled out during the last months of 2014 and the first months of 2015.
- By the end of February 2015, 181 treasury branch offices or KPPN (Kantor Pusat Perbendaharaan Negara) had implemented SPAN as the sole system to manage financial transactions in over 24,000 spending units across Indonesia.
- The development of SPAN has been supported by many donors, including the World Bank, the Government of the Netherlands, the European Union, the Government of Switzerland, USAID, and Canada’s Department for Trade and Foreign Affairs. The umbrella program which incorporates SPAN is the Government Financial Management and Revenue Administration Project (GFMRAP).
- The donors provided grants for SPAN and GFMRAP through the Public Financial Management Multi Donor Trust Fund (PFM-MDTF), managed by the World Bank.
What are the expected benefits of SPAN?
- Improved treasury business processes with fully automated operations, in order 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 error and potential fraud, 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 an international standard classification structure that enables progressive transitioning into an 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 a 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.
What are the functions provided by SPAN?
- It covers the budget preparation and management.
- The budget allotments (DIPA) to be uploaded in SPAN.
- Commitments can be recorded in the system before expenditures are incurred.
- All revenues can be recorded in the system.
- All transactions are posted as they occur.
- The system can be connected to the central bank for effecting electronic payments.
- Allows cash management.
For more information, please see: http://www.kemenkeu.go.id/SP/peluncuran-sistem-perbendaharaan-dan-anggaran-negara-span-dan-pencanangan-tahun-pembinaan-wajib