Pourquoi introduire la carte d’achat en Italie ... · spécificités italiennes et leçons...
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[email protected] Pourquoi introduire la carte d’achat en Italie: spécificités italiennes et leçons internationales Edwin Morley-Fletcher Lynkeus, Rome 1ère Conférence annuelle APECA
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Transcript of Pourquoi introduire la carte d’achat en Italie ... · spécificités italiennes et leçons...
Pourquoi introduire la carte d’achat en Italie: spécificités italiennes et leçons internationales
Edwin Morley-Fletcher
Lynkeus, Rome
1ère Conférence annuelle APECA
Edwin Morley-Fletcher
• Professor of Administration Science, Faculty of Politics, University of Rome “La Sapienza”
• President of the Policy Advice and Strategic Consultancy company Lynkeus in Rome, Italy
• His teaching and research interests are in public policy and public budgeting, e-government, (especially e-procurement and e-health), and technological applications in these areas
• Lynkeus was the initiator, and is now the Project manager, of Health-e-Child, a European Integrated Project 2006-2009, funded by the EU Commision with almost 13 million � within the FP6
• Lynkeus has been advocating the introduction of a Government PurchasingCard in Italy since 2001, and has been working on this issue together withVISA International (2001), the Ministry of Economy and Finance and CONSIP (2002), Citigroup (2005-2006), ISAE and VISA (2006)
What shall we focus on
• DPEF Report for 2006-09 pointed out that “Experience has shown that a lasting reduction of deficits is only achieved by cutting expenditure. An increase in revenues alone will be followed by renewed growth of expenditure and deficits after a period of apparent improvement”
• Taking effective action in tis direction is not an operation to be regarded simplistically as a question of massive cuts in public expenditure
• What is required are reforms of a structural character capable of ensuring a more efficient use of financial resources.
• The analysis developed here focuses on the nexus between control over expenditure, rationalisation of procurement, administrative costsand innovation in payment systems
• It pursues the objective of demonstrating that introducing a Government Procurement Card constitutes an excellent example of a “no-cost reform” capable of generating substantial savings for the government sector.
The need for budgeting and accounting reforms in Italy: a problem of governance
The traditional bottom-up approach to budget definition in Italy is based on a series of negotiations between the Treasury and individual centres of expenditure.
The requests of the latter are assumed as starting point, and this gives rise to constant distortions leading to:
– increase in expenditure,– lack of reallocation between ministries,– difficulty for political priorities to emerge
The need for budgeting and accounting reforms in Italy: a problem of knowledge and control
There is a vital need to:– establish an accounting system really capable of exhaustively
combining cash budget and accrual accounting – ensure that all financial movements, today scattered over the
different levels of government, are fully traceable – establish control over invoices to be received and those
received but not paid.
Together with residues for latent commitments and appropriationresidues of previous years, both types of debt account for a
substantial part of the “submerged debt” estimated as amounting tobetween 10 and 15 percent of GDP
A signicant innovation: SIOPE
• The newly launched SIOPE information system for the transactions of public bodies is the result of collaboration between the General Accounting Department (RagioneriaGenerale dello Stato), the Bank of Italy, ISTAT and the CNIPA.
• SIOPE pursues the goal of improved knowledge of trends in public accounts as regards both the amount of information available and its quality and prompt delivery.
• The decree implementing SIOPE requires banks, post offices, and treasurers/cashiers of local authorities, to reject orders of payment or collection not bearing a code.
• The purpose of this coding mechanism is to create a daily flowof information to fuel the database of public finances managedby the Bank of Italy.
UK Reforms: the Comprehensive Spending Review of 1998 and the Government Resources and Accounts Act of 2000
Based on the criteria of outcome-focused management and cost effectiveness/value for money, in line with the National Performance Review introduced in the United States by the Clinton administration in 1992The Comprehensive Spending Review of 1998 and theGovernment Resources and Accounts Act of 2000 have enabled the British government to obtain more realistic assessments of the effects of action to cut public expenditure and to ensure compatibility of trends as regards production costs for services and demand for goods and services with the financial targets set in the budget process.
UK Reforms: the Government Procurement Card
The complex process of restructuring Britain’s public finances with a view torigorous control over expenditure and assessment of results is characterised byfour fundamental elements:
– top-down definition of budgetary constraints of Total ManagedExpenditure,
– complete freedom of government departments as regards expenditurewithin the set limits,
– parallel increase in autonomy of territorial structures within the processof devolution,
– close attention focused on internal transaction costs.
The latter element is the factor most responsible for the decision to accept the advice of the National Office Audit and increase the efficiency of the public procurement of routine goods through the introduction of a GovernmentProcurement Card for items costing smaller amounts.
The reform process initiated in France: the LOLF
• The law of 2001, often described as the nouvelle constitution financière, abandoned the old structure of budget approval by sections, and based it on “missions” upon which parliament is called to express its views.
• Each mission constitutes a priority of the state and comprises a set of programmes contributing to the definition of a public policy.
• Members of parliament can present amendments to increase the appropriations of one or more programmes included in a mission on condition that there is no increase in the overall appropriation of the mission as a whole
• The budget has been gradually whittled down from the initial 850 programmes to the 133 programs divided into 34 missions presented for 2006.
• The law combines the two macro-divisions of missions and programmes with a third consisting of “actions”, which constitute the detailed elements of programmes. These too must be associated with precise targets and indicators of performance.
• The cost of each action must be calculated in global terms in accordance with the criterion of zero budgeting, which means starting from a zero euro base.
La Carte d’Achat
The modernisation of payment systems, the dematerialisation of transactions, and the radical renewal of methods of monitoring expenditure so as to ensure both prompter and more effective control and greater flexibility of procedures combined with greater fluidity of payment mechanisms are the guiding principles that led, after a phase of extensive experimentation at a variety of administrative and territorial levels, to the adoption in October 2004 of the Carte d’Achat as the French Government Procurement Card.
The introduction of the Carte d’Achat as a tool for the ordering and payment of purchases involving modest amounts (de faible enjeu), thus came to be regarded also as an integral part of the broaderoverall process of reforming and computerising public accounting.
Disposizioni per la formazione del bilancio annuale e pluriennale dello Stato (legge finanziaria 2007)
SENATO DELLA REPUBBLICA, XV LEGISLATURA, DISEGNO DI LEGGE N. 1183
Art. 18 (Disposizioni finanziarie e interventi in settori diversi)
Comma 158Il Ministero dell’economia e delle finanze è autorizzato, anche in deroga alla normativa vigente, a sperimentare l’introduzione della carta di acquisto elettronica per i pagamenti di limitato importo relativi agli acquisti di beni e servizi. Successivamente, con regole tecniche da emanare ai sensi degli articoli 38 e 71 del codice dell’amministrazione digitale, di cui al decreto legislativo 7 marzo 2005, n. 82, e successive modificazioni, è disciplinata l’introduzione dei predetti sistemi di pagamento per la pubblica amministrazione.
What is the Purchasing Card
The problem of the high administrative costs associated with procurement has already been solved in many privately owned companies and government bodies both in Europe and in the United States with no decrease but rather an increase in overall control.
The solution adopted is a purchasing card to be used for the modest payments that in actual fact account for over 70 percent of total government transactions but only a small proportion of expenditure for the purchasing of goods and services (less the 10 percent in general).
The savings obtained through use of the purchasing card can amount to as much as 70-80 percent of the administrative costs of the procurement transactions carried out through traditional channels.
The further savings to be obtained include, first and foremost, price reductions to be negotiated with suppliers in return for prompt payment.
Potential Savings for over �2,2 Billion in ItalyThe procurement cards can be regarded as a “technological lever” for the modernisation of government itself, capable of introducing radical innovations into procurement processes with savings in terms of time and costs and with an increase both in the transparency of transactions and in efficiency, thus obtaining considerable repercussions throughout the economic system.
A large proportion of the savings to be obtained on processing costs derives from the substantial decrease in the proportion of personnel assigned to administrative activities of authorization and control.
Human resources are thus freed from self-administration tasks in government bodies and can be assigned duties more directly connected with the institutional mission pursued. This also means cutting costs over time through a reduction in personnel turnover.
All in all, the introduction of a government purchasing card (CAPA - Carta di Acquisto per le Amministrazioni Pubbliche) through procedures that have been tried and tested in the United States and are perfectly reproducible in Italy would offer potential savings of over �2,2 billion a year.
Electronic Payment Orders and the SIOPE informationsystem
The electronic payment order (MPI - Mandato di Pagamento Informatico) was adopted in Italy in 1994.
As demonstrated by a Lynkeus study in 2002 at the Ministry of the Economy and Finance, payment times can in some cases prove longer with this system than with cashier-based procedures due to the preventive checks to which each individual MPI is subjected.
This confirms that the CAPA is the most suitable tool for repetitive procurement involving small amounts.
The system of detailed financial reporting characteristic of the CAPA could be integrated with the SIOPE system of control over expenditure in that all the codes required by the latter could be incorporated into CAPA cards or added during the processing of the associated statement
The CAPA Government Procurement Card
The Italian Government Procurement Card should perform all the typical key functions of company purchasing cards, which have led to marked reductions in the costs of the procurement cycle:
•Limitations on expenditure (individual or within a specific budgetary unit) and types of goods •Automatic financial reporting (in digital and paper form) to a range of parties at different levels of itemization •Possibility of replacing invoices (where this is permitted by VAT regulations)•Broader monitoring and control over the course of the operations and activities carried out for the procurement of goods and services•Prevention of fraud and protection of both personal and institutional data •Interoperability and integration with other procedures of e-procurement(electronic catalogues and marketplaces, CONSIP agreements, etc.)
International Examples: USA
The Purchase Card was introduced in the United States by the General Services Administration (GSA) in the late 1980s.
In 1994 the Federal Acquisition Streamlining Act (FASA) had encouraged the use of purchase cards by removing certain restrictions and shifting micro-purchase authority to personnel other than government procurement professionals.
In January 1999 it became obligatory to carry out all public payments through electronic transfer (EFT), and the Smartpay Card is one of the channels recognized for this purposes. The purchase card has been indicated as the preferential tool for micro-purchases, defined as transactions involving amounts up to $ 2,500.
The growth in purchasing card purchases by the Federal government agencies has been huge, $56 million in 1990 to over $17.4 billion in 2005.
Overall public and private sector purchasing card spending in North America is estimated to have grown from less than $1 billion to $110 billion per year over the same period of time. Similarly the number of purchasing card transactions grew from 271,000 in 1990 to 25.9 million in 2005.
US Problems and Savings Incurred Using the PurchasingCard
By 2000, almost 600,000 Federal Government employees held purchasing cards. But since then, the number of cardholders has dropped steadily to 395,000 in 2005. The reduction in cards is almost entirely attributable to the changes made by the MOD after the problems that were highlighted in their GAO audits. Despite the reduction in the overall number of cards, overall purchasing card expenditure has continued to grow. The percentage of the U.S. budget that was placed on purchasing cards increased from .01 percent in 1990 to .74 percent in 2000. Since 2002, purchasing card spending as a percentage of the budget has slowly declined, falling to its present level of .70 percent of U.S. Federal spending (with about 12 percent of Federal employees holding a purchasing card). In 2005 alone, it is estimated that the Federal government saved about $70 in administrative costs for ever one of its 25.9 million transactions using the purchasing card, or $1.8 billion overall.
Further Potential Savings in US Budget Placed On Purchasing Cards
If all Federal agencies used purchasing cards in a manner similar to the Veteran’s Administration (which pays about 8 percent of budgetedspending by purchase card) then total U.S. government spending on the purchase card would increase from the current $17.4 billion to $198 billion per year. Assuming an average purchasing card transaction amount of $672 (the 2005 norm), this would equate to 294 million transactions shifted to the purchase card and $20.6 billion in transaction cost savings per year. Even if agencies uniformly shifted a modest 3% of budgeted spending to purchasing cards (a standard already attained by several agencies), administrative cost savings would increase by about $6 billion per year. Thus it appears that the slow down in the growth of the purchasing card spending by Federal agencies is negatively affecting governmental efficiency, resulting in the loss of a significant cost saving opportunity.
International Examples: United Kingdom
The Government Procurement Card (GPC) was introduced in the United Kingdom in 1997 as a tool for the purchasing and payment of goods and services of minor value with a view to improving efficiency and reducing procurement costs.
By the end of 2005 there were a total of 70,078 cards, approximately 8.7 million transactions to date (over 240,000 a month), and total expenditure to date of £1.7 billion (a monthly level of expenditure of £47.4 million in December 2005)
Savings on costs obtained in 2005 amounted to nearly £80 million.
The National Audit Office estimated in 1997 that about £28 or �50 could be saved on each transaction by using the GPC rather than traditional procedures.
The expenditure carried out via GPC was 50 % greater in 2005 than the total for the seven previous years and is expected to triple over the next three years.
International Examples: FranceThe Carte d’Achat for government bodies was introduced in October 2004 after a two-years pilot project involving 15 different entities (including small and medium-sized cities), for which the legislative provisions then in force were suspended.
496 cards were being used by December 2005, with a total expenditure of �1.362.000.
A study by the Ministry of Finance revealed that in France orders involving amounts below �1,500 account for a good two thirds of the procurement transactions of public bodies at the central and local level but only 4% of their total expenditure. The average processing cost per transaction, from order to payment, was calculated as �80. The pilot project was carried out with a view to replacing paper invoices with an e-invoicing system and included the accreditation of Carte d ‘Achat statements for VAT purposes.
The ceilings of expenditure on cards are set by the individual public bodies concerned and the use of cards is recommended in particular for the procurement of “simple and recurrent” goods and services.
A parallel between Italy and the USA:purchases via CAPA accounting for 0.7 % of public expenditure
On the basis of the figures for the USA, it can be estimated that a mature program of CAPA circulation would involve 0.7 percent of public expenditure for a total of nearly �5.05 billion.
With the ceiling for micro-purchases set at �5,000, which is more than double the American limit of $2,500, the handling of �5.05 billion via CAPA would mean approximately 7 million transactions. Given the average administrative cost of �300 per “traditional” transaction estimated by the Lynkeus survey of 2002, this would mean a total cost of approximately �2.2 billion.
An average saving of 70 percent would be equivalent to nearly �1.6 billion. If the saving were instead 36 percent (in line with the findings of the Lynkeus 2002 survey at the MEF and assuming introduction of the CAPA with no change in existing legislation), the amount involved would still be equivalent to nearly �800 million.
Savings to be obtained through price cuts and more effective management of liquidity
In a situation of guaranteed immediate payment, suppliers would no longer need to apply an implicit surcharge or mark-up on the initial prices charged.
The more accessible conditions of entry to the public procurement market would also mean a substantial increase in the range of potential suppliers, especially smaller firms, with obvious benefits in terms of increased supply-side competition.
Further savings would derive from a reduction in the average cost of the management and financing of stocks of public material made possible by the fact that all card holders know they can make purchases whenrequired, within the set ceilings on expenditure, in a perspective of greater flexibility and hence more effective management of public liquidity.
X-Efficiency and Reduction of the Submerged Debt
Another factor of saving can be identified in the large-scale empowerment, transparency, and more effective reporting of purchases carried out by CAPA holders.
The prompter and more precise reporting of the CAPA makes it possible to pinpoint each purchase made, the debt incurred, and its duration (and hence the cost in terms of interest). With the CAPA, purchases below the assumed ceiling of � 5,000 would finally all be made exclusively within the set budget.
If particular circumstances were to necessitate procurement transactions devoid of financial backing, this would be transparently highlighted even when falling within the holder’s margin of flexibility, thereby eliminating at the root the insidious growth of the submerged public debt deriving from delay in entering purchases into the accounts.
Greater Bargaining Power and Issuing Rebate
Further savings would derive from increased bargaining power with respect to suppliers operating within the framework of CONSIP agreements.
The immediate digital registering of every transaction carried out via CAPA would ensure the availability in real time also at the central level of precise information on effective purchasing and hence make itpossible to obtain “bulk discounts”, as happens in the United States with the Smartpay Card.
One last form of cost reduction in proportion to the volumes involved is usually practiced in the form of an “issuing rebate”, i.e. a percentage reduction (related to the volume of transactions effected and any grace period allowed) granted by the issuing bank on the amount due at the annual settlement for transactions made via purchase card.
Potential Savings for the Italian PAReduction of procurement costs deriving from CAPA, calculated on an expenditure of �5.045 billion, i.e. 0.7% of the Italian public expenditure (Million of �) 70% reduction of administrative costs (international average) 1,557
36% reduction of administrative costs (Lynkeus estimate, within the current regulatory framework)
801 Savings on purchase prices (7% mark-up by suppliers) 353 353
Savings on Working Capital Management 30 30
X-efficiency (3%) 151 151 Supplier Rebates 76 76 Issuing Rebates 15 15
Total 2,183 1,427
Source: Lynkeus
Triggering innovation within the PA
The problem of avoiding massive government failures in the use of IT has been described as the hidden threat of e-government, as often occurs when budgets are exceeded, deadlines are over-run and often the quality of the new system is far below the standard agreed when the project was undertaken.
While centralised applications of ICT usually give rise, even in the most successful cases, to slow and comparatively modest improvements in efficiency and transparency, accelerated bottom-up change could instead be generated by issuing a potentially growing number of officials responsible for the purchases of their operative units with a procurement card and gradually defining the parameters required in order to interact both with suppliers and with the necessary administrative checks.
Administrative bodies proving incapable of implementing access for their officials would be clearly identified and subject to specific inspections to gauge their efficiency.
Empowering action for reform
If administrative information, authenticated and authorised from theoutset in the procurement card, becomes the operative prerequisite for the personal autonomy of the individual official, this eliminates the bureaucratic conditions that today engender situations of insufficient transparency and insufficiently prompt information.
As a result of this process, the action of reform would no longer be driven solely from above by isolated political power, but would receive everyday support from the broad-based power of officials endowed with the responsibility and capacity for making the most effective choices in terms of the tools required for the performance of their duties within a precise context of set limits and prompt, penetrating, effective and inescapable control.
