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Abu Dhabi’s Department Of Finance Continues Upgrade Of Digital Government Finance Systems
(19 March 2018)

 The Department of Finance, DoF, has announced that the percentage of all local government entities who have implemented the ‘Abu Dhabi ERP System’ amounted to 93% by the end of January 2018. DoF has also integrated the VAT scheme onto the system, to unify VAT processes across federal entities.

As part of the announcement, DoF revealed further details regarding the updates and developments it has introduced to the ADERP system, such as Performance-based Budgeting system, the Project Planning and Budgeting System, and Position Based Budgeting & Control. Since its launch, the smart ADERP system has helped transform the ability of the Department and other government entities to meet the requirements of the Emirate’s financial policy commitments.

The ADERP system works to build an integrated financial system and a unified financial framework both preparing and implementing the general budget. It also provides the entities using it with 22 systems whose functions range from managing internal and public accounts, to preparing consolidated financial statements and reports with full integration of subsystems such as budgeting, accounts, cash management, human resources, government assets, payroll and procurement, as well as tenders management.

Riyad Abdulrahman Al Mubarak, Chairman of DoF, said, "The ADERP system has been a pioneering project for the Department which has enhanced its ability to assess assets, liabilities, costs and set expenditure controls, as well as support accountability processes and ensure transparency in public spending. Since its implementation, the system has helped us switch from a cash based to accrual based accounting, in line with global best practice, and in the formulation of the Treasury Single Account (TSA), which plays a key role in enhancing the efficiency of government financial operations."

Al Mubarak continued, "The System contributes to raising the efficiency of government work, consolidating the financial systems of government entities, enabling the Department to better implement budget controls on government spending. It also reduces the cost of investment in the various electronic financial systems previously employed by various bodies within the government by taking advantage of a common structure."

The Performance-based Budgeting system is based on the distribution of the entity's budget to its internal and operational outputs through performance indicators associated with these outputs. This allows the expected cost of services to be forecast and then compared with the actual cost provided by the general ledger accounts. It also links financial performance to the operational performance of government entities by including performance information as part of the balance sheet. This helps contribute to improved performance and raises the level of control, transparency and accountability in government spending.

In this regard, he said, "DoF relies on the best international standards. As such, government entities are required to prepare their budgets for 2018 by reviewing and updating their outputs, outcomes and performance indicators, in light of their objectives and competencies as defined by the law, which in turn enables them to deliver and achieve their results transparently and efficiently."

The Performance Based Budgeting, and the Position Based Budgeting & Control System enable government entities to prepare and forecast the budget for job openings for the coming years. The system assures compliance to the allocated labour budget, and grants government entities the possibility of modifying job posts’ funding during the year, through a system of approvals and according to the powers granted.

The performance-based budgeting system, and the Position Based Budgeting & Control System work to support government entities by enabling them to improve the efficiency of operations, and improve the management and utilisation of financial and human resources. The systems also improve the efficiency of public spending, helping to identify and eliminate duplicated programmes, reducing operational funding by raising service efficiency, increasing the productivity of human resources, and reducing the cost of government services while improving their quality.

The project planning and budgeting system enables government entities to prepare and plan budgets for capital and operational projects for the coming years and include their required amendments. The system will then monitor the implementation of the project budget according to the allocated budget, while granting government entities the possibility of modifying the projects’ funding during the year, through a system of approvals and according to the permissions granted to their local administrator. The project planning and budgeting system for senior management and decision-makers also provides comprehensive reports and data on budgets and spending for capital projects of government entities.

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