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  • IPSAS is a large project which will introduce change to the Organization. One of the critical factors for the success of the Project will be the degree of Senior Management support that we have. Nick has already addressed the SMM on the importance of Senior Management support so today I welcome the opportunity to give you in xx a better understanding of IPSAS and its benefits and why you have an important role in the Project. I am going to be brief - no more than 15/20 minutes - so as to leave plenty of time for questions. Agenda Explain what IPSAS is What an IPSAS Project means in the FAO Why we are doing this project How the project is organized Your role in the project
  • Explain Accounting standards: rules which govern how the financial position of an organization is presented in its audited financial accounts financial disclosure requirements. Current accounting standards are United Nations Accounting Standards IPSAS (accrual accounting): best practice for public sector and not for profit organizations. international independent OECD, NATO, EC
  • Mandated by UN All UN orgs to adopt Already adopted by WFP Foundation/stepping stone for UN Business Harmonization – One UN
  • Priority IPA Project Governing bodies have recognized the importance to make the change Transition: Major change – changing accounting standards will have a impact throughout the Organization.
  • Key areas where IPSAS will introduce change External Financial Statements: more extensive financial statements – incremental/additional does not change budget/donor reporting now, will in future Accounting policies and rules and revision of the Manual Section Financial Reporting: so much more financial and disclosure information, it requires an expanded financial reporting process Change to business processes New or significantly updated processes since current process do not support IPSAS. Give examples Changes to these process have an impact through out the Organization Impact on Budget holders and admin staff throughout the Organization But opportunity to meet other Org requirements beyond accounting. Project has mandate to streamline/automate where possible .We are addressing their needs. Payment Authorization: The info captured as part of the receiving process, leads to opportunities to simplify and streamline the payment authorization process – scope expanded FAS Impacts Field not just HQ Key dependency for IPSAS compliance is FAS. Therefore, FAS replacement has been integrated. Again we focus on org needs, not just accounting. Why is this such a Big Project – much more than just accounting. Because there is an enormous gap between where we are and where we need to be . Financial Reporting Processes and Systems Decision making So why is FAO taking on such a big project? Dissatisfactions related to Confidence, credibility Does not meet international best practice Poor quality – not transparent, comparable, consistent (Oil for Food) Not complete picture of assets and liabilities of the Org Competitive disadvantage when competing for funding (WFP) Dissatisfactions related to Efficient, effective Current processes are piecemeal, built up over the years Not integrated - shadow systems to fill the gap (esp Field: Field Commitments, FDRs) Paper based processes (PRF, assets transfers and disposals) Do not support well current business requirements Slow to respond to new business requirements Dissatisfactions related to Better decisions Lack timely and comprehensive financial information Limited monitoring capability of field operations Incomplete financial information makes budgeting difficult and increase the risk of expense overruns Finance function is limited in its ability to effectively support the business
  • Transparent and reliable financial reporting leads to increased confidence and credibility Benefits Corporate benefits Transparent and reliable financial reporting Complete, comparable and readily understood In line with best practise international standards Same playing field as other orgs who have already adopted (WFP) Competitive advantage over those who have not Trust/confidence in the Orgs finances from member nations and donors Results in increased funding opportunities from Member Nations (IEE) and Donors (GEF) GEF has put as condition for funding Stay relevant
  • Better processes to respond to business requirements Benefits More efficient and effective business processes Streamlined processes and clearer procedures Greater level of integration esp Field (Field commitments, FDRs) Automation (PRF, assets transfers and disposals) Support and respond to business requirements Org to function as one – HQ/Field, Silo mentality – each dept resolves process problems in different ways
  • Foundation for better decision making and use of resources Benefits More financial information is available to managers and BHs – assets, inventory, field commitments, procurement BHs will have the information to be able to monitor field operations much more effectively More efficient use of resources Finance will better support the business – partner Better decisions, better management of the business
  • 19/11/08 Transition: Based on our understanding of past efforts and what we learned during planning, these are key factors for project success: Senior Management Support Identified at WFP as the single most important factor for a successful adoption of IPSAS Leading practices Business analysts are experienced in their area and supplemented by external experts PRINCE2 project management methodology Project governance established Broad and extensive user involvement (engage, collaborate) Project is structured to ensure participation of S&U from through out the Org Solutions don’t work if no buy in from users Project Board well represented – AFF, AFS, KCT, TC, OCD, PBE 50 planning workshops __ requirements workshops (list people from the Dept who have participated to date) To continue involving thru requirements, documentation, testing, implementation, training $2 million budgeted for resource requirements Realistic time, budget and quality Extensive planning and analysis of impacts Project funded - $13.9 million Resources mobilized Leading UN agency in recognizing feasibility of adoption Integration of FAS – realistic and feasible solution in the field – Recent analysis and conclusion of Oracle standard functionality in the field Quality – solutions for the Org that work: esp Field Communication Resource dedicated to communication and training Communication strategy and plan IPSAS intranet site Impact of changes already being discussed today Synergies with other projects. Examples of synergies: Baseline Consolidation project – sharing Requirements/testing tool and may coordinate testing COIN/FPMIS – requirements for procurement and delivery Results-based management – communication and training Culture Change – sharing communication strategy IPA communication – participate in FAO Renewal communication Business Intelligence tool – mobilization of resources and reporting tools Manage risks Addressing key risks Resource constraints Ownership of major processes – Receiving and PP&E Consolidation Oracle standard functionality in the field
  • Now we will talk about Project Activities 1. 1st year of compliance is 2012 2. Implementation of system and procedural solutions in Q4 2011 3. Based on detailed planning with wide user participation 4. Main user participation: UR Testing Training 5. Focus is now on user requirements 6. Reporting via IPSAS Project Board Finance Committee Audit Committee
  • Involvement – Because this project is much wider than accounting our team will work closely with some of you or your staff throughout the life of the project We will always give you advance warning Some of your staff have already been involved in our workshops. Thanks for that participation Next week ADG will be receiving a questionnaire on consolidation – key decisions to take early on: decide which entities we control and must consolidate. Knowledge and contacts that Project does not have – need to work together User requirements Document Procedures Testing Implementation Support Change – provide us with honest feedback, raise issues Project will introduce a lot of change We provide training and procedures Need your help to manage this transformation Keep open mind Training Change the way we do things Organizational change (business process owners) Communicate Two way exchange Issues Initiatives 3. Questions Role Conclusion: Due to magnitude of change involved and the significant input required from users, the role of Senior Management is crucial. Ensuring key staff are made available to the Project Communicate the issues, initiatives we need to be aware of Help us manage this period of business transformation. Key success factor at WFP – “IPSAS implementation has been made possible with strong support from: Executive Board, External Audit, Senior Management and Business and Operations Departments” Conclusion: What is IPSAS What the Project means for FAO Why we are doing it How we are doing it Your role in the process
  • Suggested conclusion: In summary, I provided you with a brief overview of the IPSAS project, its benefits, the main project activities and how your support will be key to the success of the project, in particular the areas of prioritizing staff availability and field capacity. I would like to finish by showing you a quote from a recent letter from Mr. Philippe Séguin, Chair of the Panel of External Auditors, to Mr. Ban Ki-moon, Secretary-General of UN, where the importance of IPSAS implementation is emphasized. In particular he states "The Panel considers that the implementation of IPSAS is the single most important aspect of the United Nations management reform..." As this shows, IPSAS is vitally important to the UN and FAO. To ensure it is successfully implemented, we need your help and support. At this point, I am happy to answer any of your questions?


  • 1. IPSAS Project presentation to AG Department 09 September 2009 FAO I nternational P ublic S ector A ccounting S tandards
  • 2. What is IPSAS? International Public Sector Accounting Standards
  • 3. What is IPSAS? UN mandate Finance Division - AFF
  • 4. What is IPSAS? Priority IPA project Finance Division - AFF
  • 5. What is the IPSAS project at FAO? New Field Accounting System Inventory Financial Reporting External Financial Statements Accounting Policies & Rules Property and Equipment Receiving Payment Authorization Chart of Accounts
  • 6. What will IPSAS bring? confidence credibility Finance Division - AFF
  • 7. efficient Finance Division - AFF What will IPSAS bring? effective
  • 8. better decisions Finance Division - AFF What will IPSAS bring?
  • 9. IPSAS Adoption Leading Practices Stakeholder & User Involvement Realistic Time, Budget and Quality Communication Risk Management Senior Management Support Key Factors for Project Success
  • 10. Timeline 2008 2009 2010 2011 2012 User Requirements Testing Training, Deployment and Post-implementation Design, Development and Documentation Implementation First IPSAS-compliant Financial Reports
  • 11. AG’s role in IPSAS Involve Change Communicate
  • 12.
    • “ ...IPSAS is the single most important aspect of the United Nations management reform...”
      • letter to Mr. Ban Ki-moon
      • from Mr. Philippe Séguin, Chair of the Panel of External Auditors
    IPSAS Implementation Thank You find out more about IPSAS on the web: or send us an email: [email_address]