KHAJANE :A Computerized Treasury Management System

With an annual budget of Rs 27,000 crore, the government of Karnataka wields
considerable purchasing power. The state's expenditure covers the budgets for
more than 100 departments, salaries for hundreds of thousands of employees, and
pensions for millions of residents. The sheer scale of Karnataka's operations
and its responsibility to serve the public trust calls for high levels of
accountability, transparency, and control. 

The job of disbursing the state's funds falls on Karnataka's Department of
Treasuries, which makes payments through a network of 31 treasury offices and
185 'sub treasuries' located throughout the state. It's a vast complex operation
involving millions of daily transactions and approvals, and requiring constant
monitoring of budget allocations to avoid overspending. 

In an effort to improve the speed and efficiency of its operations, the
directorate embarked on an ambitious project in late 2000 to build a fully
automated payment and budget management system based on Oracle technology.
Officials called the project Khajane after the Sanskrit word for 'treasure'.

“The efficiency of the treasuries is crucial to maintain the growth momentum
in any state,” said Dr Bore Gowda, Director of Treasuries, State of Karnataka.
“At the same time it has to plug the loopholes in the system leading to fraud
and misappropriation. The network of the treasuries is so huge that only a
robust and extremely stable technology can ensure accountability and
transparency at each level.”

High efficiency Oracle platform 

The directorate chose Oracle database and application which different
development technology as the basis for the new automated system, which has led
to faster processing of payments, increased financial visibility and
transparency, and higher staff productivity and cost savings. The directorate
worked closely with CMC Ltd, an Oracle Certified Partner, to design and
implement the system. Deve­lopers used Oracle Developer Suite, an integrated
application development platform with built-in tools for automating complex
processes. 

The Khajane project covered all the activities that take place in treasury
units, from capturing expenditures and validating fund allocations to recording
payment details on behalf of the state government. The new system has boosted
efficiencies across a range of treasury operations; eliminating duplication of
data entry and enabling uniform financial reporting.



Faster invoice payments and better budget visibility 

The finance department sets Karnataka's budget at the beginning of year, based
on departments release funds generally every quarter. When nearly 100
departments purchase goods and services, they submit the bills to the treasury
for payment. Under the old system, it took up to 45 days for the consolidated
information to reach the treasury, leading to serious delays in updating the
budget and issuing payments.  

By contrast, the Oracle-based Khajane system is fully automated and
integrated with the finance department's budget operations. Now it takes hardly
two days for information to reach the finance department and when a bill arrives
at the treasury, the system gives it an electronic tracking 'stamp' and quickly
routes the bill to the appropriate managers for approval. 

Before approving payments, managers can check the online system to view
up-to-date budget allocations and how the payment will impact the balances. Such
real-time budget visibility has helped the directorate completely avoid
overspending while shortening the payment approval process from two to three
days before to about 10 minutes today.

Efficient salary and pension payments

Millions of citizens depend on the Directorate of Treasuries for regular
salary and pension payments. Every year, the agency disburses salaries to
3,00,000 state employees and issues pension payments to more than one million
widows, disabled people and retirees. The treasury offices also serve as bankers
to the state's 4,500 village administrators known as 'panchayats'. 

Disbursements typically spike at the beginning and end of the month. In the
past, the uneven cash flow would create bottlenecks and delay payments, but
after putting the Oracle-based treasury-automation system in place, the finance
department has managed all these financial transactions smoothly and without any
delay.

Source: Oracle e-Governance News & Views