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Commonwealth Budget Process
Central Budget Management System (CBMS)
Redevelopment Project
Financial Management Group
Department of Finance and Deregulation
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The CBMS Redevelopment Project
• The Government announced in the 2010-11 Budget that it
will comprehensively redevelop the CBMS.
• The cost to redevelop the CBMS will be met from the ICT
Business As Usual Reinvestment Fund, established as part
of the Review of the Australian Government’s Use of
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What is the CBMS?
• The CBMS is the core whole-of-government ICT system
underpinning the budget and financial management of the Australian Government
• The CBMS system supports the Government in the management of:
• Recording of Government decisions; • Budget Estimates updates;
• Monthly Estimates Profiles;
• Appropriation and Cash Management; and • Monthly and Annual Reporting.
• The CBMS is not an internal budget or financial management
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Why is the CBMS being Redeveloped?
• Current system is reaching the end of its useful life
• Improved access to information to guide economic and fiscal management
• Support the identification of opportunities for re-allocation of funding to other priority areas and allow better monitoring and forecasting of fiscal performance
• Provide Government with more responsive and flexible policy analysis of program performance
• Deliver new initiatives such as Operation Sunlight in a more cost effective and timely manner
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Market Approach
It is the intention of Finance to separately procure:
1. COTS software products
2. A systems integration (SI) provider to implement the COTS solution
3. Ancillary services, such as legal, probity, strategic business advisory services and assurance services have been or are being sourced through panel arrangements
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Market Approach
COTS Solution
Implementation
of CBMS
Open RFT for software products that will deliver functions to
support the CBMS Expression of Capability to provide implementation services Select RFT implementation services To include “Proof of Concept” of proposed COTS Selection based on assessment of EOC response Related Services Selected provider will be fully accountable for delivering the CBMS
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Participation
• No restriction on participation in
either market approach
Information provided byrespondents to one process which is relevant to the other
process may be shared and evaluated in both processes.
A description of the type of information that may be shared will be given in the
relevant market documentation.
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Q1 FY10/11 Q2 FY10/11 Q3 FY10/11 Q4 FY10/11
Implementer EOC COTS RFT Shortlist COTS Preferred COTS Issue EOC Implementer RFT Contract signed Responses to EOC Commence evaluation Responses to RFT Response Evaluate Response POC / Negotiation / Due Diligence Response Evaluate Response Response Evaluate Response Finalise Contract Requirements released and budget processes
Info
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Tender Reminders
• The Request for Tender (RFT) will contain rules of
lodgement.
• Please read and understand the rules for lodgement.
- Timeframes
- Minimum content and format
• Please note Finance share John Gorton Building with
another Government Department
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Purpose of today’s presentation
• Briefing on Budget Processes:
― To ensure that respondents to any of the market approaches have a good understanding of the Budget processes
• Please note
― Finance reserves the right to vary the draft requirements or adopt different requirements in any subsequent procurement process which may follow ― Prospective tenderers are to rely only on the requirements as published any
subsequent RFT
• Discussion will not cover procedural aspects of the procurement process.
• www.finance.gov.au – information pertaining to the CBMS and its
redevelopment is available on Finance’s web site
• Any comments on the draft requirements should be provided in writing to:
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Overview
PART 1
• CBMS Requirements
• The Financial Management Framework
• Organisation of Government Activities
• Key Stakeholders and Participants
• The Australian Government Budget Process
• Including Major Publications and Reports
• Reference Data Set
PART 2
• Illustrative Fiscal Example
12 Functional Requirements
Budget Management
-Financial consolidation Cash Management - Cash receipt & drawdown
- Cash monitoring & forecasting
Decision Making
- Budget priority setting - Government budget strategies & decisions
Reporting & Analysis
- Statutory reporting - User-defined reporting - Scenario modelling & analysis
Application Administration
- User access - Reference data set & chart of accounts - Business rules
Non-Functional requirements
Australian Government Budget and Financial Management Requiremen ts – Functional & Non -functional
User Interface
Application, Integration & Data management Infrastructure Management A rch ite cture -Estimates Adjustment -Baseline Update G ov erna nc e -Actuals Management Security Management
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The Financial Management Framework
• Commonwealth of Australia Constitution Act 1901
• Appropriation Acts
• Charter of Budget Honesty Act 1998
• Financial Management and Accountability Act 1997 (FMA Act)
• Commonwealth Authorities and Companies Act 1997 (CAC Act)
• Plus additional guidance / conventions as determined by the
Government of the day.
Organisation of Government Activities
Structure of Public Sector
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Total public sector
Public financial corporations (PFCs) Total non-financial public sector General government sector Public non-financial corporations
(Government departments and agencies that provide non -market public services and are funded mainly through taxes)
(Provide goods and services to consumers on a commercial basis, are funded largely by the sale of these goods and services and are generally legally distinguishable from the governments that own them) (Includes the Reserve Bank of
Australia and other borrowing authorities)
Key Stakeholders and Participants
• Central Agencies
• Agencies in the
General Government
Sector
• Public Corporations
• Reserve Bank of
Australia
• Parliament and the
General Public
• Australian Bureau of
Statistics
• Audit Bodies
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The specifics of the budgeting
cycle are determined by the
government of the day.
Three Phases:
• Prioritising
• Delivery
• Reporting/Reviewing
Budget Cycle and Major Publications
Budget Cycle and Major Publications
Budget Cycle and Major Publications
Budget Cycle and Major Publications
Budget Cycle and Major Publications
Budget Cycle and Major Publications
Budget Cycle and Major Publications
Budget Cycle and Major Publications
Budget Cycle and Major Publications
Budget Cycle and Major Publications
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•The Budget Process is an iterative process that occurs continually throughout the year.
•Additional updates/appropriation bills can be produced throughout the cycle. Examples:
PEFO 2007 (Pre-Election Economic and Fiscal Outlook) UEFO 2009 (Updated Economic and Fiscal Outlook)
Appropriation (Tsunami Financial Assistance) Bill 2004-2005
Appropriation (Drought and Equine Influenza Assistance) Bill (No.1) 2007-2008
•It is expected that the CBMS solution will be flexible to cater for any
changes to the budget process and timetable
including the frequency and timing of estimates updates.
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The Australian Government Budget Cycle &
Major Publications
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Questions?
30Budget Cycle and Major Publications
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Flow of information between functions
33An Illustrative Fiscal Update
Activities 2-6 Budget Update & Approp Bills
2.4 Finance Consolidation 4 Reporting and
Analysis NPP Measure
Annual Budget Appropriation limit adjustment
Cash transfers to/from OPA reporting
Appropriation limit adjustment
New policy
Parameter update
Activity 7 Set Profile
2.4 Finance Consolidation 4 Reporting and
Analysis
Activity 8 Set Approp Units 2.4 Finance Consolidation 4 Reporting and Analysis Activities 12-13 Mid-Year Budget Update
4 Reporting and Analysis Activity 14 Profile Update 2.4 Finance Consolidation 4 Reporting and Analysis Activity 15 Additional Estimates Bills 2.4 Finance Consolidation 4 Reporting and Analysis Activities 17-18 Annual Reporting Budget comparison Annual budget
Budget comparison Cash transfers to/from OPA reporting Budget variation
Activity 16 Ongoing Cash Management & Monthly
Reporting Annual rollover Activities 10-11 Actuals Reports 2.3 Actuals Management 2.4 Finance Consolidation 4 Reporting and Analysis Annual rollover 2.1 Annual Estimates 2.2 Monthly Profile 3 Cash Management 3 Cash Management
Activity 9 Daily Cash Management 4 Reporting and Analysis 2.4 Finance Consolidation 2.1 Annual Estimates
2.2 Monthly Profile 3 Cash Management
3 Cash Management 2.3 Actuals Management 2.4 Finance Consolidation 4 Reporting and Analysis 2.3 Actuals Management 2.4 Finance Consolidation 4 Reporting and Analysis Activity 1 NPP 1 Decision Making
Illustrative fiscal example
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Government agrees to a new policy proposal (NPP) to fund
a new drug under the Pharmaceutical Benefits Scheme.
The policy is a multi-year funding arrangement scheduled to
commence in the next year (2011-12) and is the
responsibility of the Department of Health and Ageing.
Illustrative fiscal example
• The following set of activities follows the development of a
new program through a full budget cycle.
• It is not in reference to any specific new program
occurrence, rather it is a hypothetical to illustrate the
process.
• In a normal budget estimates update, this example would be
one of hundreds of decisions and thousands of adjustments
entered by agencies which build on existing budget
estimates.
• The sample tables in this example are for illustrative
purposes to demonstrate data-flows. They do not indicate
any preference for what data-entry should look like.
• This example is not exhaustive. Decisions will not always
follow this exact path.
Activity 1: New Policy Proposal
Activity 1: NPP
– Measure created
• A Measure code and a Measure description are assigned:
Measure Code: MC0001
Measure Description: A new drug under the Pharmaceutical Benefits
Scheme (PBS).
• The financial impact of our example decision:
Activities 2-6: Budget Update: Estimates and
Appropriations
Activity 2: Preparation for Budget Update
• The CBMS Reference Data Set is updated to create a new program
for the Department of Health and Ageing and its associated mappings.
Activity 3: Budget Update - Estimates data entry
• The Department of Health and Ageing will enter their budget
variations to reflect the new policy proposal.
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Activity 4: Consolidation & Reporting
• The program’s financial results will be aggregated with all other
general government sector agency programs and any related-entity amounts eliminated to produce Sector-level financial statements. These will become the budget tables in the various Budget Papers.
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Activity 4: Consolidation & Reporting
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Activity 4: Consolidation & Reporting
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Activity 5: Appropriations
• The validated budget estimates (per Activity Three) are also used to
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Activity 6: Budget Completion
Once approved, the budget papers and appropriation bills are sent to the printers. The Budget Update is closed and archived.
Activities 7-8: Monthly Profile and Appropriation
Cash Limits
Activity 7: Monthly Profile
• At the conclusion of the Budget Updates the Department of Health
and Ageing is to phase their budget estimates for 2011/12 by month (on a YTD basis).
Activity 8: Appropriation Cash Limits
• The appropriations included in the appropriation bills become the
initial appropriation limits against which the Department of Health and Ageing can drawdown funds. The Department's spending on the new pharmaceutical benefits scheme program will be limited to the amount given in the measure and passed in the appropriation bill.
Activity 9: Daily Cash Management
Activity 9: Daily Cash Management
• Once the appropriation is available, the Department of Health and
Ageing is entitled to drawdown funds from the Official Public Account (OPA) in order to make payments under the
pharmaceutical benefits scheme program.
Activities 10-11: Annual Actuals and Monthly Actuals
Reporting
Activity 10:
Previous Year’s Actuals Reporting
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• The financial results for 2010-11 are published.
• As the new policy initiative for funding of a new drug does not
commence until 2011-12, there will be no reporting of actual results for this program yet. However the audited statements will be rolled over into the estimates and all estimates rolled forward one year.
• The annual reporting and rollover process is described in more detail in Activities 17 & 18.
Activity 11: Monthly Reporting
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• Each month, the Department of Health and Ageing are required to
Activities 12-13: MYEFO
Activity 12: MYEFO data entry
56 • At certain points during the budget year, the Department of Health
and Ageing is required to update its multi-year budget estimates including the pharmaceutical benefits scheme program.
Activity 13: Mid-year budget update - Consolidation and
reporting
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Activities 14-15: Profile Variances and Additional
Estimates
Activity 14: Update Monthly Profile
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• Prior to entering its revised budget profile, the three initial months
are pre-populated with actual results. This is done by CBMS. The Department of Health and Ageing must then profile the remainder of the year, based on the updated budget estimate at MYEFO
Activity 15: Additional Estimates
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• The Mid-year update may also include an update to the
Activity 16: Ongoing Cash Management & Reporting
Activity 16: Ongoing Cash Management & Reporting
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• Monthly reporting of actual continues throughout the year.
The budget estimates may also be updated a number of
times (generally but not necessarily limited to Pre-ERC and
before any election (PEFO) prior to the next budget update.
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Activities 17-18: Annual Reporting and Rollover into
Budget Estimates
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An Illustrative Fiscal Update
Activities 2-6 Budget Update & Approp Bills
2.4 Finance Consolidation 4 Reporting and
Analysis
NPP Measure
Annual Budget Appropriation limit adjustment
Cash transfers to/from OPA reporting
Appropriation limit adjustment
New policy
Parameter update
Activity 7 Set Profile
2.4 Finance Consolidation 4 Reporting and
Analysis
Activity 8 Set Approp Units 2.4 Finance Consolidation 4 Reporting and Analysis Activities 12-13 Mid-Year Budget Update 4 Reporting and Analysis Activity 14 Profile Update 2.4 Finance Consolidation 4 Reporting and Analysis Activity 15 Additional Estimates Bills 2.4 Finance Consolidation 4 Reporting and Analysis Activities 17-18 Annual Reporting Budget comparison Annual budget
Budget comparison Cash transfers to/from
OPA reporting Budget variation
Activity 16 Ongoing Cash Management & Monthly
Reporting Annual rollover Activities 10-11 Actuals Reports 2.3 Actuals Management 2.4 Finance Consolidation 4 Reporting and Analysis Annual rollover 2.1 Annual Estimates 2.2 Monthly Profile 3 Cash Management 3 Cash Management Activity 9 Daily Cash
Management 4 Reporting and Analysis 2.4 Finance Consolidation 2.1 Annual Estimates
2.2 Monthly Profile 3 Cash Management
3 Cash Management 2.3 Actuals Management 2.4 Finance Consolidation 4 Reporting and Analysis 2.3 Actuals Management 2.4 Finance Consolidation 4 Reporting and Analysis Activity 1 NPP 1 Decision Making
Activity 17: Annual Actuals reporting
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• At the conclusion of the financial year, the Department of Health
and Ageing must submit preliminary and then audit cleared financial statements for inclusion in the Final Budget Outcome and
Activity 17: Annual Actuals reporting
Activity 17: Annual Actuals reporting
Activity 18: Rollover into Budget Estimates
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At the completion of the audited financial statement process, the actual program results are rolled into the budget estimates and the estimates rolled forward one year.
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