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SCMP Reporter

The government has moved to revamp its ageing financial management and information system, with a recent award to IBM of a contract worth almost $350 million to set up and maintain a web-based infrastructure covering all departments.

'This represents one of the largest and most ambitious e-government projects to be initiated in Greater China,' said Garry Willinge, director of IBM Global Services in Hong Kong.

The system will replace the Treasury's ledger accounting and financial information system, which has been used since 1983.

This change is expected to strengthen government adoption of a new financial reporting regime that aims to better reflect Hong Kong's financial performance.

For $194.5 million, IBM will help the Treasury design, build and implement a financial management and information system connecting about 5,400 users across all bureaus and departments.

The infrastructure, designed with Oracle as its database, will be rolled out in two phases: in April 2005 and April 2006.

After the project's completion in 2007, IBM will host, support and maintain the system for five years for $152.43 million.

'Under IBM's 'on-demand' model, the Treasury can provide the system to all bureaus  and departments without having to own the hardware and data centre - enjoying the flexibility to accommodate usage fluctuations,' Mr Willinge said.

According to the Treasury, this system is to include the central ledger. This will provide financial information for the budgetary control of expenditure and revenue, and for the production of government accounts reports.

As the first web-based financial management system within the government, the system will support all core financial management processes, cash accounting and payment processing, and such new functions as accrual accounting, costing, management reporting and automated vote control.

'With the adoption of open system architecture and standards, the new system will have the capability to interface efficiently with other government systems and facilitate e-business across [these] systems,' said Stephen Mak Hung-sung, the deputy director of information technology services, in a speech last November.

The South China Morning Post has reported that the government looks set to give a clearer picture of the budget deficit problem by releasing a comprehensive report on public finances by publishing figures based on the new accrual-based accounting method.

The Financial Services and Treasury Bureau is expected to complete the balance sheet for the 2002-03 financial year in October, providing figures under the existing  and more modern  methods.

Under the cash-based method, the government has forecast a deficit of $67.9 billion this financial year. Taking the deficit in 2001-02 of $63.3 billion as an example, a study carried out by the independent think-tank Civic Exchange in February argued the true deficit would be $38 billion if the accrual-based method had been adopted.



IBM contracted to overhaul government financial system