PRUDENT FINANCIAL MANAGEMENT IN THE CONTEXT OF ORGANIZATIONAL

PRUDENT FINANCIAL MANAGEMENT IN THE CONTEXT OF ORGANIZATIONAL EFFICIENCY AND GROWTH THROUGH A CORPORATE CULTURE BASED ON A SENSE OF BELONGING

KANDUNGANOF TAKLIMAT OUTLINE PRESENTATION 1. Strategic Effectiveness 2. Operational Efficiency 3. Best Practices 4. Organizational Growth 5. Way Forward

STRATEGIC EFFECTIVENESS

KANDUNGAN TAKLIMAT 1. 1 STRATEGIC FOCUS • Corporate Strategy (VBM) • SBU Strategy (VBM) • Functional Strategy (VM) Ø Financial Ø Human Resource Ø Technology (ILT)

KANDUNGAN TAKLIMAT FEATURES CORPORATE STRATEGY Vision Key Performance Indicator (KPI) Mission Strategic Plan Stakeholder Management

Scope Of Public Finance Management & Role Of Ministries Of Finance General Government & Rest of Public Sector Crisis … Macroeconomy Real exchange rates Real wages Interest rates Price Levels External Audit Budget constraint & absorptive capacity Appropriation Deficit Political economy Legislature Structural & Regulatory Budget Preparation & Execution Allocation Decentralization Financing Borrowing Expenditure Control Revenue Accounts Systems Grants Expenditure Control Natural Resources Expenditure Planning Budget Formats Allocation Techniques Laws & regulations relating to finance Regulations of financial sector Insurance ‘Non-budget’ Expenditures Banking Treasury System Debt management Revenue Structure Taxation & tax structure Investment Income Non-tax Costing Cash management Financial Reporting Multi-year plans Extra. Tax budgetary Expenditures expenditures Quasi Fiscal Activities User Charges Rest of the world Integration Harmonization Capital flows Rights & other treaties Output Program Performance Contingent liabilities Capital markets/ supervision/ securities regulation Budget Law Audit Law Other laws Allocation formulae Indicators & Targets Performance Structure Accrual Double Entry Budget Structure Charts of Accounts Everything is related to everything else nue & expenditure determinants: fiscal architecture

KANDUNGAN TAKLIMAT STAKEHOLDER MANAGEMENT (i) Stakeholder. Portfolio Identify and Develop Stakeholder Portfolio in the Context of the Organization External Stakeholders comprise of Intermediate Beneficiaries and Direct Clients Internal Stakeholders comprise of the Leaders and the Employees entrusted to achieve the Organizational Goals

KANDUNGAN TAKLIMAT STAKEHOLDER MANAGEMENT ii) Stakeholder Relationship Planning Relationship with the Stakeholders need to be identified Establish the Relationship Structure and the Mechanism for twoway communication Ensure Quality Feedback on Agency Performance is obtained from the Stakeholders Stakeholder Engagement in the Management of the Oganization

KANDUNGAN TAKLIMAT BALANCE SCORECARD Business Process Financial Customer Focus Learning Organization

KANDUNGAN TAKLIMAT STRATEGIC KPI (PDRM) Sub-KRA Reduce overall reported index crime with a focus on street crime Improve public perception of safety, especially through volunteerism Improve performance of enforcement agencies KPIs 2010 target 1. 1 Percentage reduction in overall reported index crime ▪ 5% reduction 1. 2 Percentage reduction in reported snatch theft and robberies ▪ 20% reduction 2. 1 Percentage of people who fear becoming a victim of crime ▪ Work in progress 3. 1 Total violent crime offenders successfully brought to justice (i. e. , convicted and sentenced) ▪ Additional 1, 000 convictions 3. 2 Public satisfaction on police "customer service" elements (e. g waiting time, response time) ▪ Work in progress

KANDUNGAN TAKLIMAT FUNCTIONAL STRATEGY : HRM Prof. Ulrich Strategic Partner Change Agent Administration Expert Employee Champion

FUNCTIONAL STRATEGY: FINANCIAL KANDUNGAN TAKLIMAT ENTERPRISE RESOURCE PLANNING Strategi dan Petunjuk Prestasi KPI JPA STRATEGIC OBJECTIVES KPI ØKPI 1 ØKPI 2 Prudent Expenditure Obtimum Resource Utilization ØKPI 3 ØKPI 4 Ø KPI 5 Ø KPI 6 Ø KPI 7 Ø PR 8 Enhance Quality of Work Processes : Performance of Operating Budget : Performance of Development Budget : Reduction of Overtime Claims : Reduction in Travelling Claim : Reduction in Utilities Expenditure : Reduction in Maintenance Cost : Performnce of 1 % Emolment for Staff Training : Reduction in the quantum of OE Virement SUPERVISORY LEVEL KPPA (CEO) Director of Admin Services Ø KPI 9 : Reduction in Payment Voucher Preparation (9 days) Ø KPI 10 : Reduction in Bill Payment (14 days) Director of Admin Services

FUNCTIONAL STRATEGY: TECHNOLOGY (ICT) KANDUNGAN TAKLIMAT (e-ENHANCEMENT OF FINANCIAL PROCESS) · ROI of ICT Investments · Reduce Manpower · Increased Efficiency (cost and time) e-Government e. Services (JPJ) e-Procurement e-Payment e-Bidding Telemedicine e-Applications

KANDUNGAN TAKLIMAT THE JAPANESE CORPORATE STRATEGY Elec tric National Level Low Ro. I Company Level Long term welfare of employees Robotic ness Busi work net bile tomo Au ic Ele c n tro t– men t i u r Rec ptitude A e ye sal o l p ai Em Appr

OPERATIONAL EFFICIENCY

KANDUNGAN TAKLIMAT 2. 1 BUDGET (IRBM) Input Process Output Result Based Planning Framework Result Based Budgeting Result Based M & E Result Based MIS Outcomes

KANDUNGAN TAKLIMAT 2. 2 OBA CHART Integrated Development Planning Result Based Budgeting IRBM Personnel Performance Monitoring & Evaluation Management Information System 1 Systematic & structured approach to dev’t planning with full vertical-horizontal integration & focus on program outcomes & impact 2 Provides an integrated Outcome-Based Program Budgeting system for planning & management of financial resources to turn policies into reality 3 Ensures personnel performance at every level is linked systematically with substantive program performance 4 Mandates structured monitoring and evaluation to support systematic program performance management 5 Provides critical information to support informed decision making for program improvement and adjustments to strategies & policies

KANDUNGAN 2. 3 VALUE TAKLIMAT DRIVERS HRM (Productivity) Development Expenditure (Projects) Operating Expenditure (Procurement) ROI of ICT Projects ROI of R&D Projects

KANDUNGAN 2. 4 VALUE TAKLIMAT MANAGEMENT Program Appropriateness Program economy VALUE MANAGEMENT Program Effectiveness Program Efficiency

2. 4. 1 PROGRAM APPROPRIATENESS (Do It the KANDUNGAN TAKLIMAT Right Way) · Reflect the Client Groups need/problem? · Are program objectives still relevant? · How is the exhibiting program meeting the objectives? · Example : Doble Cropping Program (Infrastructure/Mechanisation)

2. 4. 2 PROGRAM EFFICIENCY (Doing the Thing KANDUNGAN TAKLIMAT Right) · What is the cost of an output unit? · Cost – Benefit Ratio Status · How efficient is the program delivery? Any complaints? Why? What? · Are there better and cheaper way of doing things? · Example : Online Renewal of Road Tax

2. 4. 3 PROGRAM EFFECTIVENESS (achievement KANDUNGAN TAKLIMAT of Objectives) · Did program achieving stated objectives and desired results? · What are the programs unintended consequences? · Example : University education and Employability of Graduates

KANDUNGAN TAKLIMAT 2. 4. 4 PROGRAM ECONOMY (Value For Money) · Is there any wastage of resource? · Where is the wastage? · Are the resources optimized? · How can the wastage be minimized? · Does the wastage have any effect on the activity results? · Example : The Case of Building Prison (Value Engineering)

BEST PRACTICES IN FINANCIAL MANAGEMENT

KANDUNGAN TAKLIMAT BEST PRACTICES Internal Control Internal Audit Risk Management Dashboard & Alert System with drill down capabilities

KANDUNGAN TAKLIMAT INTERNAL AUDIT Internal Audit Strategy Internal Audit Risk-Based Annual Plan Internal Audit Engagement Plan Follow up Internal Audit Engagement Report Executing The Audit Head of Internal Audit Report

KANDUNGAN TAKLIMAT INTERNAL CONTROL

KANDUNGAN TAKLIMAT RISK MANAGEMENT

ORGANISATIONAL GROWTH

KANDUNGAN TAKLIMAT ORGANISATIONAL GROWTH · 10 – 30% new blood · 30% unrelated activity · Tacit K-Management · Employer of Choice · Creating Employability · Voluntary Separation Scheme · Context Management (Jack Welch) · Engage the Young Workforce 2010 Government Mantra - Year of Creativity and Innovation - Execution Speed of Decision Making and

KANDUNGAN TAKLIMAT HR PERFORMANCE APPRAISAL • Fair and equitable evaluation • Linking evaluation to program performance • Reward and Punishment System <95% 93% – 94% 90% – 92% 87% – 89% 84% – 85% 80% - 83%

KANDUNGAN TAKLIMAT CONCLUSION Change Management I-Worker and Learning Organization Stakeholder Management Delighting the Employee Engagement (Take care of the employee and the will take care of the customer) Inculcating Value Creating Mindset ‘Individual’ Corporation Pride in work and organization

KANDUNGAN TAKLIMAT TERIMA KASIH