LV thạc sỹ_Apply ERP solution for public financial management

UNIVERSITE LIBRE DE BRUXELLES NATIONAL ECONOMICS UNIVERSITY Vietnam – French Community of Belgium Master Programmes MASTERS IN PUBLIC MANAGEMENT AND ECONOMICS THESIS APPLY ERP SOLUTION FOR PUBLIC FINANCIAL MANAGEMENT CASE STUDY: PAYABLE RESPONSIBILITY IN BUDGET MANAGEMENT INFORMATION SYSTEM (TABMIS) PROJECT Prepared by: Instructors: Hanoi, November 2010 Acknowledgment To complete the graduate program and thesis writing, I have received guidance, help and suggestions enthusiastically teachers in “Vietnam – French Community of Belgium Master Programmes” department in NATIONAL ECONOMICS UNIVERSITY-Hanoi The First, my sincere thanks to teachers at Vietnam – "French Community of Belgium Master Programmes” department, especially those dedicated teachers who have taught me the whole time studying in Department I would like to express my deepest sense of gratitude to my supervisor Dr … for her patient guidance, encouragement and excellent advice throughout this study I would like to express my gratitude to the leaders and experts of the ministries of finance, the central state treasury, project management TABMIS who spent time to interview, get survey to collected information for my thesis Finally, I take this opportunity to express my profound gratitude to my beloved parent, parent in law, my wife and children for their moral support and patience during my study Although I have tried to complete the thesis with all the enthusiasm and my capacity, however inevitable shortcomings, I hope to receive your comment for my thesis Executive summary The thesis concentrates on application of ERP in public finance management, that detail in budget management, through Treasury And Budget Management Information System (TABMIS) The TABMIS is one component of public finance reform project in Vietnam However, the research concentrates on State budget expenditure management To understand clearly on the above issue, the theory will research the general background of State Budget and State Budget Management including: structure, functions, tasks, role, organization and real situation of State Management in Vietnam Besides, the theory researches on ERP model, detailed eBS production of Oracle Co-operation, concentrate on expenditure subsystem and related subsystems The thesis will answer those questions: Characters of State Budget Management in Vietnam? The strong and weak points of State Budget Management system? How is information system to State Budget Management? What are restrictions of information system in State Budget Management and resolving trends? Is ERP system suitable to apply in State Budget Management in Vietnam? How are resolutions of application ERP in State Budget Management with eBS production? How is project management arrangement? To answer the above questions, the research uses the methodology of logic system approach to solve problem, abstract and model the main subjects of the research The result of the research will be “to be process” at level This is a logistic diagram that defines subjects and interactive information between subjects in ERP model of TABMIS project on budget management in Vietnam Table of content INTRODUCTION CHAPTER I: THEORY OF STATE BUDGET MANAGEMENT, ERP MODEL I.1 GENERAL THEORY OF STATE BUDGET MANAGEMENT I.1.1 State budget Overview .7 I.1.2 Budget Management 14 I.2 INTRODUCTION TO ERP MODEL 17 I.2.1 ERP Model .17 I.2.1 ERP Components 18 I.3 EBS-OVERVIEW 19 I.3.1 Technical architecture 20 I.3.2 Business architecture .22 I.3.3 Oracle Payable Module 27 CHAPTER II: ACTUAL SITUATION OF BUDGET MANAGEMENT IN VIETNAM .37 II.1 CHARACTERISTICS BUDGET EXPENDITURE MANAGEMENT IN VIETNAM 37 II.1.1 The Budget plan 37 II.1.2 Allocate budget expenditure in Vietnam .37 II.1.3 Accounting posting and settlement of state budget: .38 II.2 STATE BUDGET EXPENDITURE CONTENTS: 38 II.2.1 Contents and structures of state budget expenditure 38 II.2.2 Management tools for state budget expenditures: 40 II.3 CURRENT PUBLIC EXPENDITURE STATUS FOR INDUSTRIES IN VIETNAM: 40 II.3.1 Actual situation of the state budget: .40 II.3.2 Current of information systems in budget management in Vietnam .46 II.3.3 Problems in budget management 47 CHAPTER III: AN ERP FOR BUDGET MANAGEMENT IMPROVEMENT IN VIETNAM 50 III.1 TABMIS PROJECT 50 III.1.1 Introduction to TABMIS project 50 III.1.2 Organization chart of TABMIS Implementation Unit 53 III.2 ERP SOLUTION OF TABMIS PROJECT -EBS 54 III.2.1 eBS Selected to TABMIS: 54 III.2.2 Oracle E-Business Suite - eBS- Model 55 III.3 TABMIS- TO BE PROCESS AP 55 III.3.1 General AP to be process 56 III.3.2 Order Handling process flow of payments 58 REFERENCES OR BIBLIOGRAPHY 61 TABLE OF ABBREVIATION ADI: Asynchronous Data Interchange ASNs: Advance Shipping Notices COGs: Cost Of Goods Sold DTKB: Treasury Estimate budget eBS: Electric Business System EDI: Electronic Data Interchange ERP: Enterprise resource planning GDB: General department of Budget GDC: General Department of Customs GDP: Gross Domestic Product GDT: General department of taxation IAS: International accounting system IBPS: Inter banking payment system IFSAS: International Financial System Accounting Standards IMF: International Monetary Fund Inter-Treasury: Payment inter-treasury system JSPs: Java Server Pages KTKB: Treasury account MOF: Ministry of finances PDA: Personal Digital Assistant PFMRP: Public Financial Management Reform Project PL/SQL: Package language/ Sequence query language RFQs: REQUEST FOR QUOTATION SQL: Sequence query language TRM: Treasury Reference Model TSA: Treasury Single Account TSA: Treasury Single Account TTTT-TAB: Payment system-related treasury USD: United state dollar WB: World Bank WTO: World trade organization INTRODUCTION Reason to choose topic Computerization in budget management has been implementing right from the time when computers were applied in civil activities (from the 1970s) By the end of 1990s of the past century, these applications were mainly developed directly from base technologies (such as database, programming languages etc.) However, most of the programs were developed based on decentralized model or centralized model but small scope of business and geography as well From the end of this 1990s, a new trend had been implemented by many countries, in which the ERP solution was deployed in management of state budget Especially, the World Bank (WB) and the International Monetary Fund (IMF) had introduced the Treasury Reference Model (TRM), specifying basic model in budget management – which best fits the ERP solution In Viet Nam, in April 21, 2003, the decision No 432/QĐ- TTg was approved by the prime minister in order to implement the Public Financial Management Reform Project (PFMRP) to sustain the economic growth, and simultaneously change the public financial management mechanism in order to meet the strict management requirements of the world finance when Vietnam gain access to WTO The public financial management reform project was funded by the World Bank with total contract value of 71,45 millions USD, and split into key components: First component: Treasury and Budget Management Information System Second component: Technical support to enable planning for medium-term finance and expenditure capability Third component: Technical support to strengthen domestic debt management capability and debt risk management of state owned enterprises TABMIS is the biggest component out of the three components Its key objectives are to develop and implement the integrated Treasury and Budget Management Information System (TABMIS), including deployment of software, integration, technology transfer and technical support in order to reform the budget management mechanisms, renew business processes etc Total value of this component is 61,42 millions USD out of the total contract value of PFMRP of 71.45 millions USD TABMIS is designed, built based on Oracle applications kit, integrated with the world best practices and standards Budget is a key concept in a financial system and there by the most of big ERP systems such as Oracle, SAP have budget allocation and budget transfer functionality Budget is allocated based on budget funds, based on parent child and decentralization of operating units, which are authorized for allocation of state budget In each fiscal year, a spending unit is allocated with a certain budget amount (detailed by group) This unit will spend upon approved budget Therefore, each spending unit has a fund source from the state budget with payment obligation (recurrent expenditure, capital expenditure) and also fixed assets shall be managed These operating units are required to manage, track payables for providers and suppliers of goods and services Budget allocation items and expenditure items are designated and based on the state budget classification, which is promulgated by the Ministry of Finance This is to ensure expenditure items spent by spending units are complying and following the right objectives and as planned In Vietnam, these expenditure items are managed and controlled by the state treasury pursuant to regulations by the law of Vietnam in the use of state budget For example, payment for suppliers are done via state treasury’s accounts by the state treasury after spending units have completed their procurement procedures and sent all supporting documents to the state treasury However, the process of budget allocation and payment management are distributed and sometimes erroneous since the information is not in sync between allocating units and expenditure management units at spending units This blocks disbursement of budget especially for investment and development projects The concept of the Chart of Accounts and its segments in ERP model in general and Oracle-eBS in particular are useful in state budget allocation and spending It enables to manage budget levels, decentralization of administrative frontiers, programs and projects, various types of budget sources, budget classification, fiscal years etc Spending at spending units and spending for capital projects can be done following “From procurement to payment” process- basic ERP process Management of planned expenditures per regulations items and per approved quota and management for procurement of fixed assets at spending units are also easily managed via accounts payable module and related modules of ERP system Moreover, the Cash Management functionality of ERP also supports the state treasuries at various level very well in balancing expenditures by spending units against state budget For spending units having revenue collection such as hospitals, notary public’s offices etc, ERP solution with Sales, Services, Inventory, Accounts Payable module are also applied to serve management work of such units In the “From procurement to payment” process, the “payment” is the end process, which reflects expenditure related transactions of state budget and other transactions recording the cash flow out of the state treasury The process for management of payment transaction for beneficiaries as well as payments with commitment in the forms of capital expenditure, recurrent expenditure contacts - Payment Process are packaged in the Accounts Payable module of Oracle-ERP In Accounts Payable, payment requests or invoices are created for payment processing and interfaced with bank to transfer budget to beneficiaries Application of ERP in practice is very complicated In order to successfully apply ERP, standard processes of ERP project should be studied carefully, here is the OracleeBS and the actual requirements in order to convert these requirements to standard processes of the applications system Budget expenditure is a key requirement because it reflects all state budget expenditures for beneficiaries and capital projects under the state’s management Therefore, studying Accounts Payable Module of Oracle-eBS and current state budget expenditure requirements is one of the most important requirement for successfully applying ERP in public financial management This is the reason why I have chosen the topic “APPLY ERP SOLUTION FOR PUBLIC FINANCIAL MANAGEMENT CASE STUDY: PAYABLE RESPONSIBILITY IN BUDGET MANAGEMENT INFORMATION SYSTEM (TABMIS) PROJECT” Objectives and content research In order to have an in-depth understanding ERP system in general and Oralce-eBS in particular, it is required to have a general understanding of the structure of data arrangement and collection, processing and storage of data of the system This is the basis for understanding processes as well as business transactions of ERP system For each ERP system, here is Oracle-eBS, which is a resource planning system This comprises of many single modules, these modules are used to manage various business transactions by organization However, they are correlated in overall picture In order to understand mechanisms and operation of Oracle-eBS applications, it is required to understand information management model and relationship between modules within ERP system Payment management is the management of budget expenditure related transactions and other transactions which record cash flows out of the state treasury Good processing of business transactions allows better management of payment transactions for beneficiaries as well as payments with commitment in the forms of capital expenditure, recurrent expenditure contracts Accounts Payable Module of Oracle-eBS is used to manage payment related transactions and record outgoing cash flows Accounts Payable is one of the key modules of Oracle-eBS solution in Vietnam Therefore, studying standard processes of AP module and payment management transaction of the state treasury helps to work out the standard “To Be processes” at level is a perquisite for applying Oracle –eBS, aiming to manage state budget expenditures in a proper, correct, timely manner and align with the project goal Range of researching Thesis research focuses on the concepts, functions, role and structure of state budget management; find understand, analyze the current status of state budget management present; Research ERP model and Oracle's eBS product to find out the “to be process at level 1” for the future ERP system However, the study of state budget management, ERP and product models eEBS very large and complex in terms of management, accounting and business knowledge, structure of state budget, include knowledge of software technology, so the thesis will focused research concepts, functions, roles, the basic structure of state budget Find out the current status of the current budget management, to answer the question why to reform the system of budget management information Besides thesis study process management, process of implementation of budget management is now, focused on expenditure state budget Thesis researches model of ERP products and the Oracle eBS, ERP's Product of Oracle cooperation Through studies about, thesis looks out to be process for state budget expenditures This is a base to be process for budget expenditure management of the state budget expenditure Methodological To use method logic system approach to problem solving with information system Thesis also use modeling processes method to abstract objects and an overview about the processes and management systems in general state budget and management of state budget expenditures particular The management and operating budget needs to be supplemented and improved in line with the ERP model The findings and proposed solution was culled from the gathering, survey and synthesis of information and data, which compare with theoretical basis to clarify the content of research Research process be objective, comprehensive, systematic and integrated Significance of thesis ERP model applied to the state budget management in a Treasury requirements set out for Vietnam to improve budget management system, with the study of state budget expenditure provides the following benefits:  Staff (accounting and finance professionals) of the Treasury accurate accounting entries arising on transactions involving funds from Treasury  Support for creating financial reports of state budget and management reports in a variety of criteria  Provide information quickly and accurately on the situation of the state budget at all times and at all different budget levels  Ensure data synchronization - between the state treasury budget and finance agencies tax and customs administration  Reduce duplication in the payment information on the state treasury and finance agencies  Ensure solvency at all times, forecasting cash flows Thesis structure Thesis structure outside the preamble and the conclusion includes three chapters: Chapter I: Theory of state budget management, ERP Model This chapter introduces background of State Budget, ERP model and OracleeBS product of Oracle Cooperation Chapter II: Actual situation of budget management in Vietnam This chapter describes actual situation of budget management and information system for budget management in Vietnam Based on those, we define the resolution Chapter III: An ERP for budget management improvement in Vietnam This chapter states application ERP through eBS product into public finance management in Vietnam  Provide fast, accurate information about execution of state budget expenditure at points of time  Ensure comprehensive revenue – expenditure data between state treasury and financial agencies, tax agencies and custom agencies  Minimize duplicated inbound payment information between state treasury and financial agencies  Ensure payment capability at any points of time, cash forecast For financial agencies at all levels:  Financial agencies can exploit state budget revenue and expenditure directly from the system; increase transparency and effectiveness of state budget management  Manage budget at all levels TABMIS will support budget allocation, update budget, disburse budget funds and prepare budget for next years For the ministry of finance, governing sector:  TABMIS supports state budget allocation, aiming to integrate the state accounting in order to manage the financial resources effectively and closely III.1.2 Organization chart of TABMIS Implementation Unit Application software in an organization is very difficult and complex, especially with huge implementation and affected scope TABMIS is one big project It is implemented for financial agencies, treasury as well as interact with tax agencies, customs in over whole country, so it need arrange a organization to control and manage project equivalent to its big scope and importance 53 MOF PFMR PROJECT STEERING COMMITTEE TIU PUBLIC FINANCIAL MANAGEMENT REFORM PROJECT MANAGEMENT UNIT LEADERS PROJECT MANAGER PMO BUSINESS SULOTION GROUP TECHNICAL SOLUTION GROUP EXAMINATION AND TEST GROUP CM AND TRAINING GROUP IMPLEMENTATION GROUP Executive Agency is Ministry of Finance -> Public Financial Management Reform Project Management Unit: steer all project’s activities Leader of TABMIS implementation board, the General Director of the State Treasury is assigned to be the chairman The TABMIS effects the most significant to information system of State Treasury -> Professional responsibility office -> implementation groups III.2 ERP solution of TABMIS project -eBS III.2.1 eBS Selected to TABMIS: Current Budget management system in Vietnam is computerized Receipts and expenditure management is implemented through computer software Each system undertakes a task in receipt, distribution, expenditure particularly Software’s are designed and installed for LAN system This is also a reason cause ineffective of information management in budget management system in general and in budget expenditure in peculiarly To repair it, we need The first is the tendency to centralize; the specialized information system is gradually upgraded model at the central, end-user transactions with online business database at the center The second that is linked to share information between systems in the state budget management system: GDT, GDC, GDB and State treasury and link with external system e.g bank system The third, that is to promote public finance services online The fourth , outsourcing some information technology services 54 Oracle-eBS is software for ERP -model which is build by Oracle co-operation Financial Module is a module highlights of eBS have been tested on ERP software market eBS software is designed to central data model; Users interact with the system via web interface eBS has an open system that is the Interface and the ADI program used to connect to other systems eBS is fully met fourth trend in order to improve efficiency in the state budget management because of its design is focused and data integration capabilities and there are the eBS consultant market Besides, PO module of eBS is used to manage order of suppliers According to standard procedure of eBS, PO is one of the input information flow to AP sub-sector – which record additional expenditure of eRP AP and BA can connect each other through registered account system So PO is used to manage Expenditure commitment for financial agencies III.2.2 Oracle E-Business Suite - eBS- Model Business process TABMIS solution be designed and implemented on Oracle products – eBS TABMIS use most of the modules in the package of financial management of EBS It is the most successful package of EBS, has been implemented in many enterprises, and in the organizations in the world Specifically, TABMIS following deployment modules: 1-General Ledger (GL), 2Budget Allocation (BA), 3-Account Receivable (AR), Procurement Order (PO), 5Account Payable (AP), 6-Cash Management (CM) General Ledger (GL): This is the central module of the system, make notes and accounting of all revenues and expenditures under the State Budget Index system based on accounts by 11 segments has been built ensure fully reflected in the information management requirements vary Therefore, GL will contain all the information is general; other modules are connected to GL module, which functions to provide the information in the GL module TABMIS not have (the tissue other modules act sub- Ledger of GL) Chart of account (COA) is very importance not for GL, but also for all others modules The COA has 12 segments Fund type: Used for accounting of business revenues and expenditures within each fund, ensure the balance of each fund independent Natural Account: Used to reflect the object of an accounting unit of accounting Economic code: Used for detailed accounting of revenues and expenditures of state economic content, service request management, allocation and settlement of state budget Budget level: Budget Level used for accounting of revenues and expenditures for each budget level prescribed by the State Budget Law, including the central budget, provincial budget, the district budget and the communed budget 55 Organization: Used for accounting of revenues and expenditures arising from the use of budget units and the investment project construction Location: Purpose of use for the accounting of revenues and expenditures incurred in an area Chapter: Classification of chapter code organizational system of agencies and organizations directly under a government grant, It held its own budget managers to identify management responsibilities of agencies and organizations for the state budget Function code: Used to record revenues and expenditures on the nature of economic activity (sectors of national economy) in order to meet the budget estimates, allocation, management, accounting and settlement of state budget; simultaneously, providing statistical information of the Government expenditure by economic sector and the functioning of international organizations Target program/Project: Used for accounting of each expenditure target programs and projects as well as the tasks of the central budget spending (by central decision), local budgets (local decision), including all the programs of international donors 10 Treasury code: Used to synthesize data reported by the Treasury and State treasury system Each treasury transactions are prescribed a Treasury code 11 Source: The source code used to account expenditures by source of state budget expenditures, for the estimation, allocation, management, accounting and settlement of state budget 12 Space segment: Here's the code redundant and is now worth 00 to Budget Allocation (BA): Used to manage the allocation process, adjustment and transfer estimates Due to budget Vietnam divided into different levels, so budget estimates are divided into levels corresponding follow the budget law Each set of book will have a separate code by each of budget estimates When budget estimates be approved by the financial institutions authorized to annual (out side the system) then each budget estimates should be open for that year The Budget estimates will control the system to comply with these modules: management commitment to expenditure (PO), expenditure management and general ledger module, with the aim to not exceed the expenditure budget estimates are allocated Account Receivable (AR): This module directly receive and record revenues according to budget classification and budget level; simultaneously, it can record some detailed information on revenue transactions before transferring the general journal into General Ledger 56 Procurement Order (PO): This module will record commitments base on allocated budget according to each spending unit in order to ensure sufficient budget for expenditure before procurement and this will increase debt payable, including basic steps: Step 1: Spending units will sign contracts and send documents to State Treasury accountants ;Step 2: After entering PO, the system will examine budget of the unit; Step 3: After the examination, the approval of PO will be done in the system if the budget is sufficient; Step 4: After the approval of PO, the system will automatically keep the budget (deduct budget) Account payable (AP): This module manages, controls budget and organizes payment; keeps track of the execution of budget of each budget level, ministry, unit, including basic steps: Step 1: Accountants enter invoice and then the invoice will be passed to chief State Treasury chief accountant and director for approval: Step 2: After the invoice has been approved, accountants transfer for payment Cash Management (CM): Cash flow forecast Budget transfer between various state treasury levels, Record fee interest and reconcile payment figures There have been powerful reforms on cash management in more effective and safe orientation in most of developed and developing countries 57 58 Function diagram 54 These modules are combined in the system GL is the most important modules, all data, information from these modules will be dumped on the side general ledger to general purpose and extract reports On the Budget estimates, from data entered in the budget allocation will be used to enter the PO will also interface to DTKB Package Management expenditure commitment is converted from part-Purchasing Order-PO- a standard package in the product finance of EBS PO is the purpose of managing the purchase orders for suppliers in the business model That is the payment that businesses commit pay to supplier, in the future, in the model of public finance management The purchasing order of the vendors is moving into more commitment between agencies to manage budgets to budget expenditure objects With Each PO be associated with a specific budget estimate Currently, divide level in budget management so Creating committed and managed by the management of budget Office implement AP modules make payments based on expenditure commitments-PO- Or budget estimates in case payment without expenditure commitment AP's data will be transferred to the GL module Here, the data are aggregated to report on the budget expenditure and it also transfers its data to the CM module to manage Cash Streamwork follow AP has interfaced with external system to import/export data with payment purpose AR: use to manage process receipt of Budget revenue AR’s data is input data of CM to estimate Money stream Exclude CM module, others module have relationship with GL Module, that mean all their data will be transfer to GL module GL collect its data and data come from others module to accounting it III.3 TABMIS- to be process AP Module AP management operations related to budget and other operations have reported cash flow from Treasury The treatment of business expenditures on AP allows better management of business information on beneficiaries, better management of expenditures under the expenditure commitment in the form of investment contracts more often trans 55 III.3.1 General AP to be process Compliance process cost the state budget by the budget law of Vietnam Management Budget agencies will implement the budget setting and allocation of accounting data in their hierarchy, this process is performed on modules BA After that this, agencies create expenditure commitment (PO) through by TABMIS-PO module The commitment to be created based on the contract, the lease between the agency and the financial management and suppliers based on supply estimates So, PO essentially committed to spending estimates for expenditures in future When PO was approved, the accountant of treasury to pay with expenditure objects This process was previously done manually with paper; spend so much time and errors When the expenditure Object comes to treasury to take their payment, financial expert create an invoice which mapping with PO Processing of mapping data between PO an invoice by automatically Therefore, the data is synchronized between management budget agencies and treasury When the information on the PO and Invoice match the Treasury's accountant made the payment to the expenditure object by process posting to GL Module This process provides data of cash to CM module CM module implement the reception of data transferred to the AP and also make the cash flow forecast AP Module has three interfaces with external system: SU accounting system, Bank and TTTT-TAB SU-accounting system provide information on budget allocations which have not committed expenditure This expenditure is the state budget expenditures in the budget estimate for the regular expenses e.g wages, electricity and water State Treasury pay a payment to suppliers through their banking, this way use system interfaces with Bank system Bank system is information which collects to 56 external bank Payment in the inter-treasury system is also supported through its interface with the payment system-related treasury - TTTT-TAB Create budget allocation, PO's financial institutions is done on the payment of the treasury, creating the continuous data flow uninterrupted from the budget allocated to the payment stage, This process minimizes the time of the transmission of information about spending from financial agencies to treasury Set the shared list of providers for financial agencies to state treasury and only a PO is generated by financial institutions make information on the system to ensure the integrity, free from excess The inspection information on invoices with suppliers or units using state budget fully automated budget process mapping on the system This process reduces the processing time for payment of Treasury with the supplier or units using state budget AP support for Treasury's payments to suppliers and units using state budget to use the banking system, and using inter-treasury system which make r the payment process to be convenient In summary, when applied to the ERP model to increase management efficiency budget because the data is homogeneous, continuous data stream from the budget allocation for payment to suppliers or units using budget The system allows payments to supplier or unit using state budget through the inter-treasury system and the banking system which will be makes payment more convenient, safer and more accurate than the old not support In the system EBS set of security for user who login to system which be created user logon through responsibility of application functions and modules or a combination of both This enables the user access authorization system in accordance with their work easily and ensures information security This method of security is easy for the separation of powers horizontally and vertically in the model budget management in Vietnam For example, a user of the Treasury for payment responsibility can access only to the AP module are not in the BA and PO modules or other modules Users of a state Treasury have granted his permission under that State Treasury permission: eg user of state treasury A, can login to Responsibility of state treasury A, he can not login to other state treasury B In summary, EBS models meet general budget management and budget management in Vietnam 57 III.3.2 Order Handling process flow of payments PO: Expenditure commitment Enter invoice Check with allocation budget Yes Payment Director/ Chief account approved Not Agreement invoice Clear Invoice Submit invoice for approve Accountant of treasury receipt Invoice and check Approved invoice Finance agencies to enter payment requests-invoice- in the system, There are contain all general information and details A/ General information: Invoice type: • Have PO: Supplier information, total amount of PO will be transfer to invoice information Validate budget allocation of invoice is base on PO • Don’t have PO: Finance agencies to select suppliers who have been approved budget estimates Therefore, validate budget allocation will be base on budget of supplier which was granted by Finance agencies before Accounting date: Date of invoice accounting Supplier: Who use budget expenditure? Invoice Number: Code of invoice Total amount: Total amount of invoice, summary of amount detail Currency: Type of current, in case is Foreign Currency, then rate wil be taken from system Payment method: Czech-payment cash; Telegraph: Payment by bank transfer 58 manually, Electronic payment by electronic transfer; Clearing: Billing Contact Treasury B/ Information detail: Listing details of payment Payment type: Cost, investment … Amount: Amount of payment COA: input full 12 segments of COA Validate budget allocation for this invoice Treasury Accountant receive invoice, checking and confirm information -> send for approve Director / Chief Accountant of the Treasury shall approve, create the account and transfer payment request to the GL module Payment at this time was made on the system CM module record cash flows arising from the implementation of the accounting change required payment When creating an invoice or PO users must comply with the security of systems and rules that required by the COA This is standard for all users on the system; therefore it makes processes common to all users This standard helps the training users more easily which create efficiency in budget management in general and budget management expenditure in particular In summary, application management using EBS into the state general budget and expenditure management in particular the state budget provides highly effective because it has overcome the shortcomings of the old system Ensuring for Four trends to complete budget management system that is: collection of data to at a central system, links and share information between others system, online services and open the outsourcing To ensure decentralized management model, assigned responsibility for budget management in general and budget expenditure in particular It is also consistent with the provisions of law and gradually situation with the standards of the world 59 CONCLUSIONS AND RECOMMENDATIONS When deploying an application or system software, especially a system as complex as ERP is a difficult and complex work The difficulty increases as the scope and large number of users, the ability to fail is not small Consultation of the main contractor (IBM) and subcontractor FPT are two leading international companies and Vietnam in the implementation of ERP applications with extensive experience, along with the consultation advice of leading experts on the professional management of public finances and the financial state treasury Vietnam and Monitoring of the World Bank ensuring a process and architecture, technology and business process of TABMIS appropriate conditions Vietnam This is crucial to the success or failure of TABMIS Project The government, the finance minister and experts of finance, accounting of treasury, tax and customs agencies determinist when TABMIS implemented But there are many issues to overcome, it is also proposed thesis when TABMIS project execute with effectiveness A/ With finances agencies: Standardize the process of creating, and distributing cost estimates Information on budget expenditure allocations should be clear Set list is shared with the treasury full, accurate and timely implementation of development projects Improve professional skills and use of information technology in the management of budget Complete the detailed process of creation, budget allocation and expenditure of their commitment to meet with business requirements when implementing ERP application models operational budget management and general management budget management in particular B/ With Treasury: Complete the processing of payment requests to be transferred from agency financial management Complete the processing of payment orders in detail, as well as processes related to the model of ERP application is an easy way out of budget management C/ Law: There should be rules and guidelines for certification of electronic signatures in the management of the state budget Save resources by topic and content should range dissertation inevitable shortcomings We hope to receive the comments of the teacher, she and colleagues to help me gain experience, if any conditions will be studied more closely in the future 60 REFERENCES OR BIBLIOGRAPHY Law on State Budget 1996, 2002 Decree No 60/2003 / ND - CP dated 06/06/2003 of the Government detailing and guiding the Law on State Budget Curriculum theory finance - money - Statistical Publisher, 2005, Associate Editor - Dr Le Van Te - Dr Nguyen Van Ha Books Theory of Finance - Money - Statistical Publisher, 2004, co-editor of PGS - PTS Duong Thi Binh Minh - TS Using Family Members Public Finance curriculum - Publisher 2006 Vietnam National University, Prof Dr Nguyen Thi Canh editor Management policy Public Finance Management - Labour Publishing, 2003, Dr Tran Dinh Ty editor Fundamental policy issues of state and administrative management of state government - the Ministry of the Interior-2004, Associate Professor - Doctor Nguyen Trong 11 Application of the method books budgeting by outputs in the public expenditure management in Vietnam - Finance Publishing House, 2005, TS-editor Using Family Members 12 Strategic Finance - Currency Vietnam for the period 2001 to 2010 13 Strategy document TABMIS- internal document 14 Oracle-EBS system architecture - Document E-Book version of the Oracle-10g 15 User Guide documentation module AP-E-Book version of Oracle 10g 61 Annex State budget expenditure final accounts Bill dongs 2000 2001 2002 2003 2004 2005 2006 2007 2008 108961 129773 148208 181183 214176 262697 308058 399402 494600 Expenditure on development investment 29624 40236 45218 59629 66115 79199 88341 112160 135911 Of which: Capital expenditure 26211 36139 40740 54430 61746 72842 81078 107440 124664 Expenditure on social and economic services 61823 71562 78039 95608 107979 132327 161852 211940 258493 12677 15432 17844 22881 25343 28611 37332 53774 63547 3453 4211 4656 5372 6009 7608 11528 16426 19918 Expenditure on population and family planning 559 434 841 666 397 483 489 612 1072 Exp on science, technology and environment 1243 1625 1852 1853 2362 2584 2540 7604 7744 Expenditure on culture and information 919 921 1066 1258 1584 2099 1874 2346 2713 Expenditure on broadcasting and television 717 838 681 1056 1325 1464 1184 1410 1550 Expenditure on sports 387 483 586 648 883 879 956 1005 1126 10739 13425 13221 16451 17282 17747 22157 36597 50265 Expenditure on economic services 5796 6288 7987 8164 10301 11801 14212 16145 21538 Expenditure on general public administration 8089 8734 8599 11359 15901 18761 18515 29214 32855 846 849 535 111 78 69 135 185 1522 TOTAL EXPENDITURE Of which: Of which: Expenditure on education and training Expenditure on health care Pension and social relief Addition to financial reserve fund General statistics office of Vietnam 62 ... important requirement for successfully applying ERP in public financial management This is the reason why I have chosen the topic “APPLY ERP SOLUTION FOR PUBLIC FINANCIAL MANAGEMENT CASE STUDY:... actual situation of budget management and information system for budget management in Vietnam Based on those, we define the resolution Chapter III: An ERP for budget management improvement in... comment for my thesis Executive summary The thesis concentrates on application of ERP in public finance management, that detail in budget management, through Treasury And Budget Management Information