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federal bookkeeping agency
Federal Ministry of Finance, Austria
Austria

The Problem

The accounting system of the entire Austrian federal government is supported by automated systems.
The introduction of the standard software SAP R/3, which has been used by all federal bodies responsible for their relevant budgets and by their assisting bodies since April 2004, supplied the essential basic technology for various reform projects. The Government programme of the Federal Government (second term of Schüssel) included the decision to consolidate the federal bookkeeping systems and to outsource them to a private law organisation (Agency).
Some time before, i.e. on the occasion of the Council of Ministers Meeting of 6 November 2001, the decision had been taken to reform the bookkeeping and accounting systems at several stages (cluster solution). During the first stage, the payroll services were transferred from the bookkeeping systems to the staff divisions. This stage has been completed. The objective of the second stage was to reduce the former 79 bookkeeping systems by establishing so-called bookkeeping clusters. It was the intention to establish three to four centralized bookkeeping systems (bodies with budget responsibility) in Vienna and nine regional bookkeeping systems (assisting bodies) located in the Federal Provinces. The third stage foresaw the completion of the reorganisation process by integrating the tasks of payment systems into the regional bookkeeping systems.

Due to organisational and technical concerns and because of objections and competence issues a successful implementation could no longer be expected under the given conditions. For this reason the second stage of reorganisation (i.e. establishment of centralized and regional clusters) could be implemented only partially.

Solution and Key Benefits

 What is the initiative about? (the solution)
The targets of this project are the provision of full-scale bookkeeping services with a minimum strain on resources and unchanged service level, a high quality standard with regard to the services offered and quality checks on the basis of pre-defined services as well as the provision of additional services outside the scope of pre-defined core services.
The establishment of the Bookkeeping Agency also provided the opportunity to examine processes and to optimize such processes for purposes of enhancing the Agency’s efficiency with a view to its customers.
During the optimisation process, processes and procedures underwent a redesign. The result was a slim organisational structure which could achieve the pre-defined objectives and processes.
Previously all bookkeeping services were rendered without accounting for services. The outsourcing of services into a Bookkeeping Agency should ensure cost transparency. For this purpose a cost accounting system was introduced at the Agency so that today it is possible to charge corresponding fees on the basis of pre-defined rate schedules. The customers must be charged transparent and comprehensible rates.
The establishment of the Bookkeeping Agency created conditions for optimal staffing. Free or freed capacities are successively utilized by chargeable additional services.

Actors and Stakeholders

 Who proposed the solution, who implemented it and who were the stakeholders?
The Government programme of the Federal Government (second term of Schüssel) included the decision to consolidate the federal bookkeeping systems and to outsource them to a private law organisation (Agency).
In a second step the Council of Ministers Meeting decided that the Minister of Finance (in fact the Statessecretary Dr. Finz) has to be responsible for that target.
Within the Ministry of Finance, the IT Directorate General V (Head: Dr. Winter) got the order to realise that project.
The project team consisted of:
Mr. Christian Ihle, MoF, Division V/3 (Head of Division V/3 and Projectmanager)
Mr. Erwin Antl, MoF, Division V/3
Mr. Michael Koling, MoF, Division V/1
Managing Director Ms. Johanna Moder, Federal Bookkeeping Agency
Dr. Wilhelm Schachel, MoF, Division V/5
Mr. Gerald Ziniel, MoF, Division V/3
The project team was relatively small, consisting of 6 key players, however it was extremely efficient.

(a) Strategies

 Describe how and when the initiative was implemented by answering these questions
 a.      What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
The Federal Bookkeeping Agency is operated as a public law body and its sole responsibility is to take over the bookkeeping services of federal bodies.
The Agency has its head office with management, support and service staff in Vienna. The management, support and services are performed by staff functions at the headquarters (in particular staff accounting, accounting, controlling, marketing, staff management including further education and training, purchase, IT coordination).
The three field offices were designed as branch offices (Graz, Linz and Innsbruck) and are headed by a branch manager/director.
For at least each Ministry so-called key accounts were created. These are the contact persons for the Agency’s “customers“ and the link to the staff persons who are responsible for the tasks of the respective Ministries.
A more detailed hierarchical and functional structure was established by the management when the Agency became operational.

(b) Implementation

 b.      What were the key development and implementation steps and the chronology? No more than 500 words
After creating the solution-concept, the legal framework had to be prepared and realised by the parliament. (The Bookkeeping Agency Act and the amendment of the Federal Budget Act formed the necessary legal basis)
All the other activities happened within one and a half year in almost parallel sessions:
To find and prepare the necessary five locations and infrastructure for agency
To organize the transfer for the (right) 600 bookkeepers out of 12 ministries
To bild up the management and the staff for the agency
To inform all the concerned and affected people (rodshow, newsletters, …)
To build up the business, the organisational structure and the strategic lines for a working agency

(c) Overcoming Obstacles

 c.      What were the main obstacles encountered? How were they overcome? No more than 500 words
What should be particularly emphasized is the persuasiveness which was necessary to convince the Directorates General for Corporate Operations and Services and their heads of divisions that the necessary staff resources and skills should be transferred to the Bookkeeping Agency in order to be able to provide quality and quantity in the traditional manner, i.e. bookkeeping at its best.

(d) Use of Resources

 d.      What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
The procect-costs were 2,7 million Euro exclusive the human resources of about 6 personal-years. The public-bookkeeping-system stayed as it was used before, special work-flows were implemented to speed up the processes.

Sustainability and Transferability

  Is the initiative sustainable and transferable?
The optimal reorganisation of the accounting system achieved as a result of this project by the establishment of the Bookkeeping Agency outside the scope of federal administration has led to significant increase in efficiency and significant cost savings. In this way it was possible to make a significant, sustainable and short-term contribution to the administrative reform and to budget savings. By reducing the number of administrative levels from originally 70 to subsequently more than 30 bookkeeping systems, by concentrating administrative resources, by more efficient control of staff resources and by the nationwide use of SAP R/3 it was possible to establish an optimal bookkeeping structure which enables to achieve significant synergetic effects and, consequently, considerable cost savings. From 2005 the measurable potential for cost savings is 29.7 million Euro per year on the basis of a comparison of total operating expenses.
Actual and Furthermore, it can be safely assumed that staff expenses will continuously decrease in the long term. With a better using of troughgoing processes, technical support and a better handling it will be possible to increase the output up to 150 to 200 percent without recruiting personal.
The actual solution should be easily replicateable in every public administration with an historical grown up administration and more than 5 bookkeeping-offices which are working for the government and its depending public (federal) offices.

Lessons Learned

 What are the impact of your initiative and the lessons learned?
First it was necessary to get a clear political decision, then to build up a slim but efficient project-staff with the right skills, to start an information-campaign as soon as possible, to convince the existing bookkeepers not to abscond but to follow into the new organisation and to organize the personal-transfer within a secure framework.
Last but not least to build up the agency-management as soon as possible to involve it in the project – even before the agency starts to exist.

Contact Information

Institution Name:   Federal Ministry of Finance, Austria
Institution Type:   Government Department  
Contact Person:   Christian Ihle
Title:   Head of department  
Telephone/ Fax:   +43151433 505200
Institution's / Project's Website:   +43151433 507075
E-mail:   christian.ihle@bmf.gv.at  
Address:   Hintere Zollamtsstraße 2b
Postal Code:   1030
City:   Vienna
State/Province:  
Country:   Austria

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