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OECD Public Sector Accruals Symposium - Keith Hayes

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This presentation by Keith Hayes was made at the 14th Annual OECD Public Sector Accruals Symposium, Paris 3-4 March 2014. Find out more at …

This presentation by Keith Hayes 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

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  • 1. 14th Annual OECD Public Sector Accruals Symposium Paris, 3-4 March 2014 EPSAS - Update Keith Hayes Task Force EPSAS, Eurostat eurostat
  • 2. EPSAS 1. 2. 3. 4. 5. Retrospective The EPSAS project Current state of play EPSAS governance Key challenges ahead 2/26 eurostat
  • 3. 1.1 Retrospective, to mid-2013 Budgetary Frameworks Directive  "… the Commission shall assess the suitability of the International Public Sector Accounting Standards for the Member States" QIV 2011 Public consultation on IPSAS Report on suitability of IPSAS  IPSAS cannot easily be implemented in EU Member States as it stands currently Task Force IPSAS Study on public sector accounting and auditing practices QI 2012 - QIV 2012 eurostat EPSAS Conference  IPSAS would be a suitable starting point for the future development of a set of European Public Sector Accounting Standards QI 2013 QII 2013 3/26
  • 4. 1.2 EPSAS conference, May 2013 Conclusions • Political support growing • Necessary tool for further fiscal and budgetary integration in EU • Ambitious project with medium-term scope • Envisaged: Commission Communication, Framework Regulation • Governance is a priority to follow up 4/26 eurostat
  • 5. 2.1 EPSAS – what is it? • A suite of accruals-based European standards for public sector accounting and GPFR • Grounded and legislated on the basis of the EU Treaties • Common to all public entities belonging to General Government for all EU Member States • Based on strong EU governance, subject to internal control and independent audit 5/26 eurostat
  • 6. 2.2 EPSAS aims - 1 • Improve the comparability of the reporting of the economic, financial position and performance in the EU MS • Improve the efficiency, effectiveness and accountability of public sector management, in particular where accruals accounting is not yet in place • Produce reliable and timely financial and fiscal data 6/26 eurostat
  • 7. 2.3 EPSAS aims - 2 • Increase fiscal transparency, necessary for macroeconomic stability and for coordination, surveillance and policy advice • Reduce the incoherencies between the micro level primary public-sector accounting and reporting framework and the ESA macro level reporting framework • Facilitate the securing of liquidity in global financial markets • Improve the efficiency and effectiveness of public audit 7/26 eurostat
  • 8. 2.4 EPSAS implementation • Gradual, possibly phased, in all MS in the medium term (by 2020) • Strong EU governance • Taking into account the need for: • • • • Accruals-based accounting Double entry book-keeping Harmonised financial reporting Consistency with ESA principles 8/26 eurostat
  • 9. 2.5 The "E" in EPSAS • Proposal by the Commission (legal basis: primary law, e.g. 338 TFEU) • Council and Parliament adopt EPSAS Framework Regulation • Framework Regulation defines governance and key principles • Confers standard-setting powers on to Commission • Commission consults Member States, and • Adopts EPSASs as binding acts 9/26 eurostat
  • 10. 3.1 Current state of play - outline Taking forward the EPSAS project • Stage 1 (mid-2013–mid-2014): Commission Communication • Stage 2 (mid-2014 – end-2015): Framework Regulation: • Governance structures and procedures • Impact Assessment • Mid-term Work Programme • Stage 3 (end-2015 – 2020): endorsement and stepwise implementation 10/26 eurostat
  • 11. 3.2 Current state of play – main activities - TF EPSAS Governance Commission Communication - TF EPSAS Standards - Public consultation on EPSAS governance Framework Regulation - External study (PwC) 11/26 eurostat
  • 12. 3.3 Current state of play - Governance Public consultation on future EPSAS governance principles and structures • Closed 17/02/2014 • Questionnaire and consultation document Task Force EPSAS Governance • Possible future governance arrangements • Underlying key principles 12/26 eurostat
  • 13. 3.4 Current state of play - Standards TF EPSAS Standards Technical aspects of the accounting standards • MSs’ perspectives and experiences on the IPSAS standards • Standards for smaller and less risky government entities • Staged approach to EPSAS standard-setting • EPSAS core framework (principles), first EPSAS standards 13/26 eurostat
  • 14. 3.5 Current state of play – External study External study (Oct 2013 – Jul 2014) • Potential costs and benefits of implementing accruals accounting in the public sector in the EU MSs • Further evaluation of IPSAS standards and analysis of their application in the EU MSs 14/26 eurostat
  • 15. 4.1 EPSAS Governance – principles EPSAS governance EPSAS standards • Professional independence • Impartiality • Legitimacy • Transparency • Competence and capacity • Cost effectiveness • Accountability • Reliability • Relevance • Coherence and comparability • Accessibility and clarity 15/26 eurostat
  • 16. 4.2 EPSAS Governance – possible structure 16/26 eurostat
  • 17. 4.3 Public consultation: preliminary overview of responses (28 Feb 2014) • Provisional results based on online questionnaire, email, mail and fax and some responses may still to be added • Raw results, inconsistencies to be fixed • Only statistical tables and graphs 17/26 eurostat
  • 18. Country Austria Belgium Bulgaria Croatia Czech Republic Denmark Finland Germany France Hungary Italy Ireland Latvia Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden United Kingdom Brazil Other Total Number 2 3 2 1 3 1 4 142 6 1 3 1 1 1 2 5 2 3 1 1 2 4 6 1 5 203 Percentage 1.0% 1.5% 1.0% 0.5% 1.5% 0.5% 2.0% 70.0% 3.0% 0.5% 1.5% 0.5% 0.5% 0.5% 1.0% 2.5% 1.0% 1.5% 0.5% 0.5% 1.0% 2.0% 3.0% 0.5% 2.5% 100% 4.4 Responses by country *Provisional results as of 28 February 2014 18/26 eurostat
  • 19. 4.5 Responses by type of respondent Type of respondent Public accounting authority/standard setter Public audit authority National Statistical Institute Other national public institution Private financial (accounting/audit/consulting) company Private other International institution or organisation Academic Individual Other Total *Provisional results as of 28 February 2014 eurostat Number 40 13 5 95 Percentage 19.7% 6.4% 2.5% 46.8% 3 2 6 4 18 17 203 1.5% 1.0% 3.0% 2.0% 8.9% 8.4% 100% 19/26
  • 20. 4.6 Relevance of principles 100 90 80 Answers 70 60 50 40 30 20 10 0 Germany Local No 97 Partly 6 Yes 8 Others 11 39 35 *Provisional results as of 28 February 2014 eurostat 20/26
  • 21. 4.7 Oversight function - Governance Advisory Board 100 Answers 90 80 70 60 50 40 30 20 10 0 Germany Local No 96 Yes 2 Others 54 32 *Provisional results as of 28 February 2014 eurostat 21/26
  • 22. 4.8 Formal representation of stakeholders – Technical Advisory Group 120 Answers 100 80 60 40 20 0 Germany Local No 6 Yes 102 Others 27 58 *Provisional results as of 28 February 2014 eurostat 22/26
  • 23. 4.9 Governance and advisory roles in a single group? 100 Answers 80 60 40 20 0 Germany Local No 89 Yes 5 Others 53 27 *Provisional results as of 28 February 2014 eurostat 23/26
  • 24. Answers 4.10 Interpretation function 100 90 80 70 60 50 40 30 20 10 0 9a. Do you consider that this interpretation function should be kept separate from the standard setting function? Germany Local No 7 Yes 91 Others 26 Yes, 68 57% No, 52 43% 59 *Provisional results as of 28 February 2014 eurostat 24/26
  • 25. 5 • • • • • • Key challenges ahead Role of IPSAS in EPSAS Do we really need EPSAS? Governance - Legal basis for EPSAS Governance - Roles of stakeholders Governance - Standard-setting powers in practice Standard-setting and implementation costs 25/26 eurostat
  • 26. Useful links Assessment Report, Staff Working Document and Inventory of MS accounting and auditing practices: http://epp.eurostat.ec.europa.eu/portal/page/portal/government_finance_statistic s/government_accounting Conference webpage: http://epp.eurostat.ec.europa.eu/portal/page/portal/conferences/introduction/201 3/epsas Public Consultation on future EPSAS governance: http://epp.eurostat.ec.europa.eu/portal/page/portal/public_consultations/consult ations/epsas eurostat