The African Capacity Building Foundation (ACBF), the African Union’s specialized agency for capacity building on the continent is implementing three new programs (a) the International Public Sector Accounting Standards (IPSAS); (b) Microsoft Dynamics 365 Finance and Operations ERP system; and (c) Digital Capacity Upgrading Project. The implementation of three new Programs is expected to enhance organizational efficiency and to improve the way the Foundation does business.
ACBF has been applying the International Financial Reporting Standards (IFRS) as a basis for preparing its annual statutory financial statements. The IFRS, though global and of international best practice, are not fully applicable to ACBF, because it is a not-for-profit international organization.
Moreover, recent updates of the IFRS 9, 15 and 16 have posed application challenges to the nature of business and the environment in which the ACBF operates. Because of this, the ACBF Executive Board, at its 70th regular meeting, requested the Foundation’s management to explore the possibility of migrating to the IPSAS as a way of addressing some of the challenges emanating from the IFRS.
With the clear mandate from the Executive Board, ACBF decided to move from the IFRS to the IPSAS in the elaboration of its financial statements.
The IPSAS are a set of accounting standards issued by the IPSAS Board for use by public sector entities. Internationally recognized, the IPSAS are primarily based on the IFRS, which are issued by the International Accounting Standards Board (IASB).
There is, therefore, a close relationship between the IFRS and IPSAS, the major distinction being that the IPSAS are written for public sector entities that provide services to enhance and maintain the wellbeing of the citizens of a state.
As an enhancement of the IFRS, the IPSAS improves financial management and increases transparency, resulting in a more comprehensive and accurate view of an entity’s financial position. Thus, the IPSAS is deemed to be the ultimate set of accrual-based international accounting standards for the public sector.
For organizations in the non-profit sector such as ACBF, the IPSAS’s notable benefits include, among others, best practices in private sector financial reporting, while unique features and concepts of the public sector are addressed.
The IPSAS also encourages comparability and consistency through accrual accounting. As such reporting remains consistent and comparable between periods and with similar organizations.
The IPSAS also encourages improved senior management decision-making when allocating scarce resources among competing priorities as the accrual accounting provides a clear picture of an organization’s obligations. Thus, assets and liabilities are better managed by the management as the IPSAS provides a clearer indication of how financial resources have been used in a given period, thereby assisting in assessing management and effective use of resources.
It is, therefore, expected that with the implementation of the IPSAS, ACBF will enjoy the following key benefits:
- Strengthened accountability towards all stakeholders.
- Strengthened support for results-based management through the provision of comprehensive information on costs.
- Improved management and planning due to better accounting practices for income and expenditure.
- Better understanding of revenue and expenses and improved management of commitments, risks and uncertainties.
- Increased transparency and internal controls.
- Enhanced prediction of future asset and cash-flow needs.
- Adherence to the highest international standards of financial reporting - aligned with best practices - that allows for improved consistency and comparability.
Enterprise Resource Planning (ERP)
In tandem with the implementation of the IPSAS, ACBF is also implementing an Enterprise Resource Planning (ERP) system to better serve the Foundation’s evolving business and operational needs and to improve its overall responsiveness, operational efficiency, and cost effectiveness.
The goal of the ERP is to acquire new organizational capabilities to improve the Foundation’s overall performance and results-achievement. Therefore, the project aims to simplify, integrate, and standardize ACBF’s business processing and information management, by using the industry-standard, tested and proven ERP system.
ACBF is currently using a number of assorted on-premise ICT systems. Though robust, these mostly standalone systems, which are generally stable and reliable, are not well-integrated, thus are short of meeting the Foundation’s growing business and operational needs.
They also lack the depth of functionality, data aggregation, reporting, and accessibility to be fully utilized by ACBF staff members operating from other stations.
Accordingly, the Foundation is migrating to an integrated “off the shelf” business processing system to meet its evolving business requirements and operational modalities.
This fully integrated and cloud-based business-enabling and processing system will automate the Foundation’s key business functions, such as financial accounting and management, human resource, benefits and payroll administration, inventory and assets, procurement, travel, and grants management.
It will also ensure, among other things, a lean and agile operational environment that is efficient and adaptive to changes; achieve speedy turnaround times to carry out the organizational functions; improve coordination, synergy and flow of information among functional units within ACBF, partners and beneficiaries; reduce redundant data entry and processing; ensure capability to access real-time data in the form of reports, views and visualized data; enable well informed, timely and accurate decision making; and attain cost optimization through simplification of processes, workloads and routine administrative functions.
Digital Capacity Upgrading Project
With this project, ACBF aims to enhance its digital capacity and improve the communication, collaboration, and knowledge-sharing capabilities of its staff members and its grantees/sub-awardees.
The project has five mains goals, namely:
- To enhance customer experience and engagement through improved client-oriented digital solutions.
- To improve the digital skills and capacity of ACBF and its beneficiaries for enhanced end-to-end operations and utilization of digital systems.
- To strengthen the capacity of ACBF staff through advanced computing, connectivity, and productivity tools to ensure optimal individual and group productivity and coordination.
- To enhance the availability, accessibility, and performance of digital infrastructure systems at the ACBF headquarters and regional offices.
- To boost the overall project management and delivery capacities.
With the implementation of the above three projects, ACBF is expected to vastly improve its organizational efficiency for the good of not only the Foundation, but all its clients, stakeholders, donors and grantees.