This presentation by Veikko Kapsta was made at the 14th Annual OECD Public Sector Accruals Symposium, Paris 3-4 March 2014. Find out more at http://www.oecd.org/gov/budgeting/14thannualoecdpublicsectoraccrualssymposiumparis3-4march2014.htm

1. Improvements in Estonian
budgeting reform
03 March 2014
Veikko Kapsta
State Budget Department

2. Where we are today?
• New State Budget Act
• Step by step accrual budgeting
• Preparation perfomance based budgeting
(cost accounting)

3. Budget position/ Strategy 2014-17

4. History of public finance reforms before the crisis
2008
2005
2004
Accrual
Accounting
(IPSAS)
2002
4 years State
Budget
Strategy
Framework for
Strategic
Planning
Big plans Performance/
Accrual
Budgeting (big
bang)

5. Lessons learned from the crises - lack of
data and knowledge
• Lack of accrual-basis budget information
• Need for performance information
• Lack of skills and knowledge:
–how to use available accrual-basis financial reports
–how is possible and reasonable to link non-financial
performance objectives with funds

6. History of public finance reforms
- Mapping shortages in
current system,
simplifications
- Centralizing support
services
- Building capacity to work
out and implement changes
(networks, pilot projects,
methodology)
2009
2012
2011
2010
- Centralizing
support services
- pilots in accrual
budgeting
- Standardizing
financial data
- Regular networks
- Harmonization of
budgeting and
accounting
-Centralizing
support services
- pilots in accrual
budgeting
- trainings to rise the
competence about
basics of financial
management (220)
- need for new IT
systems for strategic
planning and
budgeting
- Centralizing
support services
preparing standard
SAP system for all
central government
agencies
- Trainings to
change the budget
systems in agencies
- Training plans for
2013 cooperation
with university how
to make budget in
accrual basis (300)

7. Public finance reforms on the way
- accrual basis
budgeting step by step
-new IT system for
budgeting
- centralizing support
services
- trainings for accrual
basis budgeting and
perfomance based
budgeting
- trainings to change the
budget systems in
agencies
2014
2016+
2016
2015
- accrual basis
budgeting step by
step
-centralizing support
services
- trainings to change
the budget systems in
agencies
-trainings for accrual
basis budgeting
- accrual basis
budgeting step by
step (100%)
- centralizing support
services (100%)
- start of
perfomance based
budgeting step by
step
- accrual basis
state budget
- perfomance
based budgeting
step by step

8. Challenges to the future
• to integrate strategic planning indicators,
performance based budget, cost accounting
and accrual budget (budget strategy +
annual budget) information;
• to have integrated IT systems for strategic
planning, budget and accounting;
• to have good reports for management.

9. Thank You!
www.fin.ee
veikko.kapsta@fin.ee