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OECD Review of Financial reporting in Ireland - Delphine Moretti, OECD Secretariat


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This presentation was made by Delphine Moretti, OECD Secretariat, at the 19th OECD Senior Financial Management and Reporting Officials Symposium held at the OECD Conference Centre, Paris, on 4-5 March 2019

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OECD Review of Financial reporting in Ireland - Delphine Moretti, OECD Secretariat

  1. 1. FINANCIAL REPORTING IN IRELAND Delphine Moretti Paris, 4 March 2019 OECD Secretariat Budgeting and Public Expenditure Division Public Governance Directorate
  2. 2. 2 Ireland’s budget framework was significantly modernised during the last decade…
  3. 3. 3 … but financial reporting has evolved very little. • Appropriation Accounts are a Budget Outturn on cash basis, presented by “Vote” (i.e. budget chapter). • Finance Accounts are a statement of cash flows for the main treasury account (the Central Fund), with detailed information on financial debt. • Accrual information provided in the notes to Appropriation Accounts for each Vote. • Publication of the two sets of accounts 9 months after the end of the year.
  4. 4. 4 Ireland’s financial reporting practices are not aligned with those of other OECD countries. Note: reading from left to right, accrual basis, cash transitioning to accruals and cash. Note: reading from left to right, public sector; national or federal government; central and local government (general government); central government; and budgetary central government. Note: reading from left to right, 1-5 months; 5-7 months; and 7-12 months. Sources: Accruals Survey (2016) and Budget Practices and Procedures Survey (2018).
  5. 5. • Limited usefulness for financial scrutiny: – A large share of public spending is outside of “core” year-end reports; – Accounts are published (too) late. • Difficulties for oversight of management performance: – Accounts do not align with departmental responsibilities; – Financial and performance information are not integrated. • Lack of clarity and user-friendliness: – Presentation and coverage differ depending on accounts considered; – Accounts are (too) lengthy. 5 Three main concerns expressed by stakeholders.
  6. 6. 6 Making the case for accrual accounting in Ireland. Harmonising accounting practices Managing assets and liabilities Understanding risks to public finances Improving the preparation of statistics
  7. 7. 7 The proposed new financial reporting framework.
  8. 8. Proposed roadmap for implementing accrual accounting. 2019 Inception and setup • Blueprint • Governance arrangements • Gaps assessment 2019-… Definition of the new framework • Standards setting • Pilots • Training • … 2021-2022 First wave • New format for F/S • Assets and liabilities already reported consistent with IPSASs 2023 Project assessment • Take stock • Discuss way forward 2024-2025 Second wave • Other assets and liabilities • Consolidation
  9. 9. 9 Key recommendations for the implementation of accrual accounting. • Creation of a “Government Accounting Directorate” • Coordination with IT project 1. Strong Governance • “Adopt, Adapt or Develop” • Advisory Body 2. High Quality Standards Setting • Chart of Accounts • Manuals (methodologies, internal control,…) 3. Developing an Accounting Framework
  10. 10. 10