AUTOMATED FINANCIAL MANAGEMENT

INFORMATION SYSTEMS IN FINANCE DEPARTMENT

KABALE UNIVERSITY.

HIGIRO DAVIDSON
08 / M / KAB / DIT / 218 / F

A Research Project Proposal in partial fulfillment of

The award of a Diploma in Information
Technology of Kabale University.

July 2009
 DECLARATION

I, Higiro Davidson, declare that the content in this publication is truly my

work and that no other person has ever made a similar project within Kabale
University or any other institution of higher learning.

……………..………..
HIGIRO DAVIDSON
Date:…………………….
 TABLE OF CONTENTS

i. List of abbreviations
ii. Definitions of some key words

CHAPTER ONE:

1. Introduction and background……………………………………….…………..1

1.1 . Problem Statement……………………………………………...………………3
1.2 . Study Objectives…………………………………………………………….….3
1.3 . General Objectives……………………………………………………...………3
1.4 . Specific Objectives……………………………………………….……………3
1.5 . Study site and Scope of study……………………………………..……………3
1.6 . Justification………………………………………………………………...……4

CHAPTER TWO:

2.0. Literature review……………………………………………………………..……..5

CHAPTER THREE:
 LIST OF ABBREVIATIONS

PFM -Public Finance Management

IFMIS -Integrated Financial Management Information System
CSU -California State University
FMIS -Financial Management Information System
AFMIS -Automated Financial Management Information System
 DEFINITIONS OF SOME KEY WORDS

System- refers to a set of integrated components, working together for a common

purpose.

Information system- means the organized collection, processing, transmission, and

dissemination of information in accordance with defined procedures, whether automated
or manual. Information systems include non- financial, financial, and mixed systems.

A financial management information system- or integrated financial management

information system (IFMIS) is an information system that tracks financial events and
summarizes financial information. In its basic form, an IFMIS is little more than an
accounting system configured to operate according to the needs and specifications of the
environment in which it is installed.

Office Automation- refers to a series of interrelated electronic office technologies in

word and data processing; voice processing and image processing used with procedures
and integrated to increase user productivity, efficiency, and control in working with
information. (Joyce, 1987)
 CHARPTER ONE.

INTODUCTION.

This project will design and implement a financial information management system for
the finance department of Kabale university which is situated at about one and a half Km
on the left of Kabale – Katuna high way. The university started in October 2002; it
started with forty-two students all from the neighborhood. Currently the enrolment is
about 900 Students from all over the region, country, and neighboring countries.

The finance department at Kabale University has no automated financial record keeping
system but relies on paper records and human memory. Human may forget hence losing
most of the important data. Also incase of change in staff with in the department, some
records may be lost for good, which could lead to loss of financial equipment. The
records kept in the financial department are therefore unreliable and hence need to make
them so.

Although automating the Financial Management Information System has been an area of
concern, no study has been carried out on the need for one at Kabale University.

Ever since, paper file system has been and is still the major method used as the means in
information collecting, processing, storing and retrieving in the Finance department and
other department that deal in data entry, processing and retrieving like the student
registration department among others. Whereas the cases of inefficiency and poor
performance by the same system (file based databases) like; duplication of data items in
multiple files, duplication can affect input, maintenance, storage and possibly data
integrity problems have been discovered in other organizations that use the same system,
Kabale University has not carried out any study to improve on the system.

Over the past decade, developing, transition and post-conflict countries have increasingly
embarked on efforts to computerize their governmental, nongovernmental organizational
and the institutions of higher learning’s operations, particularly with respect to public
financial management (PFM). Most common among these have been efforts to introduce
Integrated Financial Management Information Systems (IFMIS) that computerize and
automate key aspects of budget execution and accounting operations across all the
institutions. IFMIS can enable prompt and efficient access to reliable financial data and
help strengthen organizational financial controls, improving the provision of
organizational services, raising the budget process to higher levels of transparency and
accountability, and expediting organizational operations. (Joyce, 1987)

“IFMIS is little more than an accounting system configured to operate according to the
needs and specifications of the environment in which it is installed “(Leon, 1993).

Its mission is to maintain the University's fiscal integrity through accurate record keeping
and adherence to State, CSU, and University procedures; to provide financial reports and
analysis as required; to safeguard the assets of the University; and to deliver fiscal
information and support services in a courteous and efficient manner to faculty, staff,
students, and visitors. (California State University)

According to experts, the quantity of scientific and technical knowledge is now doubling
every five and a half years. That rate is expected to jump appreciably so that information
doubles in half the time, that and other reasons have led to the growth of office
automation. (Joyce, 1987)

With this background, the researcher being an information technology student got the
impetus and ability to design, develop and implement a financial management
information system for Kabale University finance department that will overcome the
possible problems, inefficiencies and bottle necks that the finance department has been
meeting with the current system in use “file based database system’.

1.1.0. PROBLEM STATEMENT:

There is need for Financial Management Information System at Kabale University.

The recent literature on IFMIS has addressed various aspects of IFMIS design, systems
development, implementation and sustainability, but no one study has effectively
synthesized all of these elements with actual organizational experiences to identify the
most appropriate strategies with respect to IFMIS project design, management,
monitoring and evaluation. This study shall employ a number of programs that will aid in
the design, development, and implementation of organizational IFMIS, drawing on the
relevant literature and practical examples of organizational experiences with introducing
IFMIS.

1.2.0. OBJECTIVES OF THE STUDY:

1.2.1. GENERAL OBJECTIVES:

The major objective of this project will be to design, implement and test a Financial
Information Management System that will help Kabale University to keep, maintain and
records of accomplishment about finance with the aim of minimizing loss of this data,
minimizing training costs for employees who will newly come in the finance department.

1.2.2. SPECIFIC OBJECTIVES:

The project is also meant to facilitate fast easy decision making in relation to financial
record keeping and other related necessities because it will provide a quick report
generation. The coding will be well made so as the user to access relevant command
buttons to generate the report.

• To review the literature concerning the Financial Management Information

System of Kabale University,
• To design a system that will cater/overcome the bottlenecks of FMIS at Kabale
University,
• To develop a system that will, keep all the financial records, ensure security for
the financial data, ease entry, retrieval of data, and make periodic reporting easy.
 • To test and validate the new system for its compatibility with the office
requirements, i.e. whether it conforms to the financial system requirement of
Kabale University.

1.2.3. SCOPE:

The study shall be focused on managing information in the area of finance for Kabale
University. The study shall aim at improving on the general system for financial
information system at kabale university, due to some of the limitations like; duplication
of data, data insecurity, had time during retrieval of data when need arises.
Particularly the study will be carried out in the Department of Finance – Kabale
University that is found in the extreme southern Uganda – Kabale District.

1.2.4. SIGNIFICANCE OF THE STUDY:

The university finance department has no existing computerized financial management

information system and therefore with the successful conduction of this study, I hope this
financial management information system will solve the problems are due to lack of an
automated financial record keeping system. The system will be designed in a way that the
data access is not limited to one computer but all other authorized users in the network.

Once the project output is implemented and put to use, then the finance department will
manage its data, reduce on the processing time and generally reduce on its operational
costs.

If this system is put in place, there will be proper book keeping of financial records,
which will help new staff to note where to start from, therefore training costs, and errors
made will be minimal.
The researcher will in the end come up with a system that will enable Kabale University
and the finance department in particular to keep track of the financial records and enable
easy reporting.

The system development will constitute entirely of the information gathered from the
research that is underway, and this shall be inline with the system requirements according
to the department of finance.

This research shall in one way or the other widen the research base for the future scholars
who would wish to undertake the same or similar study.
 CHAPTER TWO.

LITERATURE RIVIEW:

Kabale University financial department, uses the paper work to take records of financial
data, which data is later arranged and stored in files of paper, and when need arises, these
files are revisited one by one in search of the required information. This system is not
only tiresome but also renders the information stored in this format vulnerable to loss or
data duplication.

There are six key characteristics of the financially healthy university; Short-term
solvency, Retention of reserves, the effective management of long-term debt, the
effective management of the estate, the ability to generate non-state funding, Consistency
of budgetary strategy with mission. (Michael, 2004)

The recent literature on IFMIS has addressed various aspects of IFMIS design, systems
development, implementation and sustainability, but no one study has effectively
synthesized all of these elements with actual organizational experiences to identify the
most appropriate strategies with respect to IFMIS project design, management,
monitoring and evaluation.

Generally, the term “IFMIS” refers to the use of information and communications
technology in financial operations (automating FMIS) to support management and budget
decisions, fiduciary responsibilities, and the preparation of financial reports and
statements. In the government realm, IFMIS refers more specifically to the
computerization of public financial management (PFM) processes, from budget
preparation and execution to accounting and reporting, with the help of an integrated
system for financial management of line ministries/departments, spending agencies and
other public/private sector operations.

The principal element that “integrates” an IFMIS is a common, single, reliable platform
database (or a series of interconnected databases) to and from which all data expressed in
financial terms flow.1 Integration is the key to any successful IFMIS. In a nutshell,
integration implies that the system has the following basic features:

• Standard data classification for recording financial events;

• Internal controls over data entry, transaction processing, and reporting; and
• Common processes for similar transactions and a system design that eliminates
unnecessary duplication of data entry.

Integration oftentimes applies only to the core financial management functions that an
IFMIS supports, but in an ideal world, it would also cover other information systems with
which the core systems communicate, such as human resources, payroll, and revenue (tax
and customs). At a minimum, the IFMIS should be designed to interface with these
systems. (USAID,)

Financial Management Information Systems (FMIS) is responsible for the

implementation/upgrade and production support of automated systems, including
PeopleSoft Financials, which are used within the Financial Management Division,
namely the offices of the Bursar, Controller and Procurement and Support Services.
FMIS is also responsible for the distribution of financial reports to the campus
community and technical support to end users of the Departmental Copier Program.
 CHAPTER THREE

3.0. METHODOLOGY

INTERVIEWS

These are planed meetings during which information will be obtained from the users of
the existing system orally; the interviews will be in a structured form consisting of well-
defined questions to guide the interviewee. Interviews are essential for the most
important and sensitive parts of the project to enable the interviewer get full details about
the required information. The questions that will be asked include; how do you find the
current system? What would you like changed in the current system? What would you
want the new system to do if it was put in place?

OBSERVATION

Observation will be made on how employees who handle different duties carry them out.
Among the interests of observation is the time users take to accomplish a given task, the
easiness with which the user gets information and records it and the way records would
be kept. The interviewer is therefore able to know about the operation of the current
system.

REVIEW OF THE EXISTING SYSTEM

This involves the reading of documents or literature regarding the current system in the
department. This documentation includes financial books of records, forms, files, and
regulation sheets. In addition, it includes reading any information regarding the keeping
of financial records in the financial record files that is where most of the records will be
got.
TOOLS TO USE

Microsoft Access/Mysql and Visual Basic/FrontPage were selected as appropriate

languages to be used because they are easy to use since they are high-level languages,
resource saving in terms of memory space and can be embedded with HTML and
therefore easy to create interfaces for the end users. They link together with minimal
coding required. Access/Mysql helps to create and edit the databases while Visual
Basic/FrontPage will help to link the database with the interface designed.
 REFERENCES

1. David Hoyle – ISO 9000 quality systems handbook (2006)

2. Executive Office of the President of United States of America – Office of

Management and budgeting, Circular No. 127 Revised – July 23, 1993.

3. Executive Office of the president of United States of America – Office of

Management and budgeting, Washington DC. 20503 – M – 05 – 02, Circular No.
(www.whitehouse.gov/omb/circulrs ).

4. A 127 revised Transmittal Memorandum No. 3 – Dec 2002.

5. George M. Piskurich – The AMA Handbook of E-learning – Effective Design and

implementation (2003).

6. Jerome B. McKinney - Effective financial management in public and non-profit

agencies (2004)

7. L. Joyce Arntson. - Word / Information processing 2nd Edition (1987)

8. Michael Shattock, financial management in universities, Higher education

systems vary in the amount of financial data which they publish.

9. Ping Zhang and Dennis - Human – computer interaction and management

information systems. (2008)

10. Patricia W. Ingraham, Philip G. Joyce, Any Kneedler Donahue – Government

performance, why management matters (2003)
11. Robert. Kaplan and Robin cooper - Cost and effective using integrated cost
systems to drive profitability (2003).

12. Reference and research book news 9788170005025 – Role management

information system for university administration.

13. University of Hawaii - Financial Management Information Systems (FMIS) on –

line quick reference guide (April 2002).

14. USAID from the American people – Integrated financial management systems –
A practical guide (Jan 2008).
(p.d.fusaid.gov/pdf_doc/PNADK595.pdf)