Presentation by Ron Salole, Deputy Chair, IPSASB, at an Asian Development Bank Regional Workshop on Public Sector Accounting, in Jakarta, Indonesia, September 30, 2014

1. Implementing Accrual IPSASs
Lessons Learnt
Ron Salole,
Deputy Chair, IPSASB
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2. • Jurisdictions in the process of adopting accrual IPSASs
that have documented their adoption experiences
– Costa Rica
– Guatemala
– Malta
– Malaysia
– Panama
– Switzerland
Note: The IPSASB Web site has documents taking a closer look at the
implementation of accrual IPSASs in these jurisdictions.
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Closer looks

3. Costa Rica
• Initiated its governmental financial management
modernization in 2001
– Law 8131 - Law of Financial Administration and Public Budget of
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the Republic.
– Formally agreed to adopt IPSAS under the “Public Accounts
Accountability Program”.
• Timetable pushed twice to 2016
• Benefits include
– Positive response by the World Trade Organization
– Belief that result will be improved decision making, transparency
and accountability

4. • Passed the Organic Budget Law (Decree Number 101-97)
was passed by Congress in 1997 which requires a move
to accrual accounting.
• Discussion about adoption of IPSASs started in 2005, but
not a priority until 2011. Timetable agreed and modified –
completion now slated for Central government by 2020.
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Guatemala

5. • Process begun in 1999. Initially cash accounting reports
were supplemented by accrual accounting information.
Not considered robust and not used.
• In 2013, greater political buy-in saw development of a plan
to have financial reports that are IPSAS compliant by
2019.
• Political engagement vital.
• Scoping study by CIPFA instrumental and beneficial.
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Malta

6. • Adopted Cash Basis IPSASs in 2005. Useful as it
introduced a disciplined approach to accounting and
considered it was a positive transitional move to full
accrual.
• Government announced a move to develop Malaysian
Public Sector Accounting Standards (MPSAS) based on
IPSASs. Adoption to MPSAS slated for 2015 for the
federal government and 2016 for state governments.
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Malaysia

7. Panama
• Commenced in 2009 when the Government agreed to
develop a new Government Financial Administration which
included implementation of IPSASs as well as the IMF
Statistical Manual of Public Finance.
• Assisted by IMF and an accounting firm.
• Projected timeline and strategic implementation plan being
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developed and not finanzlized (May 2014)

8. • In 2001, the Swiss Federal Finance Administration
decided to overhaul the Swiss Confederation accounting
system and to issue IPSAS compliant statements by 2007.
• The main goal was to increase cost transparency at the
level of ministries and administrative units and to provide
them with an adequate accounting framework when using
performance budgeting. Another driving force was the
need for restructuring and developing the existing IT
landscape within the federal administration.
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Switzerland

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10. Challenges
• Need to make cultural and mind-set changes – from using
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cash basis to accrual basis
• Overcome resistance to change
• Integration of information technology systems
• Integration of departmental and accounting records
• Developing asset registers – property, plant and
equipment including infrastructure assets
• Consolidations

11. Critical Success Factors
• Strong political support at the highest level of elected
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officials
• Commitment to implementation from senior appointed
officials
• Staff open to training and to move to accept an accural
accounting perspective
• Recognition that reform is for enhanced financial
management not merely a book-keeping exercise

12. Lessons
• IPSAS adoption and implementation should be taken as
an integrated whole and as a country priority
• Development of comprehensive implementation plan with
realistic times and flexibility and permission to modify it
• Active support from senior appointment from across
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government
• Effective project manager and project team
• Effective use of limited resources
• Effective “learn-do” theory and practical

13. Lessons (cont)
• Effective training on meaning and use of accrual
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information
• Information technology systems reform an integrated part
from beginning
• Need to move away from day-to-day activities – retreat
and workshops
• Tackle asset inventory early – don’t leave it to the end.
• Plan should cover leadership changes and need to have
an IPSAS champion
• Effective communication strategy
• May not be necessary to go to IPSAS cash first

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Questions and Discussion
• Visit the IPSASB webpage
http://www.ifac.org/PublicSector/