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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 http://www.oecd.org/gov/budgeting/14thannualoecdpublicsectoraccrualssymposiumparis3-4march2014.htm

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OECD Public Sector Accruals Symposium - Keith Hayes

  1. 1. 14th Annual OECD Public Sector Accruals Symposium Paris, 3-4 March 2014 EPSAS - Update Keith Hayes Task Force EPSAS, Eurostat eurostat
  2. 2. EPSAS 1. 2. 3. 4. 5. Retrospective The EPSAS project Current state of play EPSAS governance Key challenges ahead 2/26 eurostat
  3. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 16. 4.2 EPSAS Governance – possible structure 16/26 eurostat
  17. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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

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