Presentation made by Delphine Moretti, OECD, at the 16th Annual OECD Accruals Symposium held at the OECD Conference Centre, Paris, on 21-22 March 2016.

1. OECD 2016 ACCRUALS SURVEY
March 21-22, 2016
OECD Conference Center
Delphine Moretti
Budgeting and Public Expenditures Division
Public Governance and Territorial Development
Directorate, OECD

2. Introduction
• Objective of the 2016 OECD Accruals Survey:
– Update of previous results on accrual accounting and
budgeting practices, and the treatment of specific transactions;
– Overview of the accounting framework (consolidation,
standard-setting and audit);
– Stock-taking on past accruals reforms: objectives,
implementation challenges, and associated benefits.
• Answers received from 34 member countries.
• Amendments possible until March 31.
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3. ACCRUAL ACCOUNTING
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4. Accounting Basis for Annual Financial
Reports
• In less than 15 years, from
24% to 84% of OECD
Countries using accrual
accounting.
• “Cash”
 Supplementary accrual data.
 Accrual accounting outside of
budgetary entities.
• “Cash transitioning to
Accrual”
 Close to cash accounting
 Accrued expenditures main
difference.
• “Accrual”
 Uneven progress in populating
balance sheets.
 Different practices with regards to
consolidation, standards, etc.
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Accrual
Cash and Accrual
Cash
Accounting basis (OECD Countries, 2016)

5. Annual Financial Statements:
Presentation and Content
• Balance sheet, income statement,
and disclosures considered necessary
statements.
• Some countries establish either a
CFS or comparison of budget and
actuals.
• Management commentary still a
limited practice.
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• Financial assets and liabilities, accrued
expenses are core information for
Governments.
• Fixed assets more reported than
contingent liabilities and provisions.
Presentation of Financial Statements
(Percent of OECD countries on accrual basis)
Content of Financial Statements
(Percent of OECD countries on accrual basis)

6. Annual Financial Statements:
Reporting Method for Selected Transactions
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• Notable progress
in reporting of
fixed assets, tax
receivables, and
derivatives.
• Other assets and
liabilities
underreported:
 Lack of reference
accounting
treatment.
 National
specificities.
 Possible
reluctance to
report liabilities.
Reporting Method for Selected Transactions
(Percent of OECD countries on accrual basis, 2016)

7. ACCRUAL BUDGETING
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8. Accrual Budgeting: Foreword
• Categorization of budgeting practices using accounting
concepts creates difficulties (e.g., cash and commitment
budgeting framework).
• Need to differentiate between ‘forecasts’ and
‘appropriations’ for some countries.
• Sources of graphs: 2016 OECD Accruals Survey and
case study exercise.
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9. Preparation Basis for Budgets
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• 31% of OECD
Countries
implementing accrual
budgeting.
• Accrual forecasts differ
in terms of statements
and elements
presented in the
budget.
• Commitments and
some accrual elements
often reported in cash
budgeting frameworks.
Accrual
Cash and Accrual
Cash
Preparation Basis for Budgets
(OECD Countries, 2016)

10. Appropriations
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• 78% of OECD Countries use
cash and/or commitment
appropriations.
• A variety of practices, not
fitting always in the cash vs.
accrual categories:
 Modified cash appropriations (e.g.,
Canada)
 Commitments appropriations (e.g.
Germany)
 Cash and commitments appropriations
(e.g. France)
 Cash appropriations with annual
expenditures and expenses ceilings (e.g.
Austria);
 Accrual appropriations with cash
allocations (e.g., UK)
 Accrual appropriations with exceptions
(e.g., Australia)
Accrual
Cash and Accrual
Cash
Accounting Basis for Appropriations
(OECD Countries, 2016)

11. COVERAGE, STANDARDS,
AND AUDIT
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12. Institutional Coverage
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• 32% of countries
cover only the
budgetary entities
in their financial
statements.
• Full overview of
public finances in
only 15% of
countries.
Budgetary Entities
or No Consolidation
Central Government
Institutional Coverage
(OECD Countries, 2016)
Public Sector
Federal Gov (CG+SOEs)
General Government

13. Accounting Standard-Setting
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• MoF is the standard-setting
authority in about a half of
countries.
• Advisory Boards and Standard
Setting Boards in one third of
countries: technical expertise
needed.
• National standards used by
87% of countries, to
accommodate local
circumstances/deviations.
• IFRS, IPSAS used as
references in most cases.
Standard Setting Authority
(Percent of OECD countries)
Nature of Standards
(Percent of OECD countries)

14. External Audit
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• All but one countries have
external auditors.
• In 59 % of countries, the
external auditor provide an
opinion on whether the
financial statements present a
true and fair view.
• Usefulness of external audit
highlighted by the respondents.
• Qualifications do not reflect gaps
identified in balance sheets.
Nature of Audit Opinion
(Percent of OECD countries)
Nature of Qualifications

15. ACCRUAL REFORMS
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16. Status of Accrual Reforms
in OECD Countries
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• Reform program
completed in a
majority of countries,
despite variations in
current accrual
frameworks.
• Accrual
implementation often
part of wider PFM
reforms.
• Great variety in
durations, and costs.
• Explicit or implicit
sequenced transition
in most cases.
Completed
On-going
Planned
Not Comtemplated
Status of Accruals Reforms
(OECD Countries, 2016)

17. Preparation and Implementation Challenges
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• Similarities in challenges pointed out by countries.
• Most countries underline the importance of :
– Allowing sufficient time to preparers (ministries/departments and agencies) and providing
guidance/assistance.
– Human resources management (training and/or recruitment).
– Collaboration with external auditor.
Preparation Phase Implementation Phase

18. Achievement of Reforms Objectives
• Large range of objectives in
all cases.
• Better accountability and
transparency achieved in a
majority of cases.
• Lack of interest/use of
accrual information is a
concern.
On-going initiatives to meet objectives : analysis of the performance in
managing the balance sheet; fiscal ratios ; shortening delays for establishing
the financial statements; "Citizen Accounts”…
What did accrual reforms achieved ?

19. THANK YOU
FOR YOUR ATTENTION
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