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Tuesday, May 18, 2010

Using XBRL to Improve Transparency in Brazilian Government

Ana Cristina Bittar de Oliveira, IT Department, National Treasury Secretariat, Ministry of Finance, Brazil described how new technologies are bringing greater access to public information. She described how information technology can be used to bring transparency and reform to governments. She described the Financial Data Collection System (SICOF) Project in Brazil.

States and Municipalities in Brazil had different standards making it difficult to compare across governments. Transparency and standard reports were difficult to prepare. She described the Fiscal Responsibility Law for transparency in government entities. Government entities need to be transparent to receive transfer payments. Brazil has developed accounting standards through a common chart of accounts. These standards are being rolled out to all levels of government.

The data collection system in use, called SISTN, was developed quickly. The system is difficult to maintain because it uses an Excel-type manual data entry. The reporting process is complex. The output in PDF format is not user friendly, according to Ms. de Oliveira. It does not support re-use of data. The system is high maintenance.

The government of Brazil decided to create a more effective standard and automate the system. The motivation was to reduce administrative costs, make data more flexible and ensure that all data is consistent across the government, according to Ms. Oliviera.

Ms. Oliveira described the integration approach using XBRL. The eXtensible Business Reporting Language (XBRL) is a language for the electronic communication of business and financial data which is revolutionising business reporting around the world. It provides major benefits in the preparation, analysis and communication of business information. It offers cost savings, greater efficiency and improved accuracy and reliability to all those involved in supplying or using financial data.

Ms. Oliveira described how XBRL supportse the Common Chart of Accounts in a very convenient format. The Chart of Account is the basis for the definition of the Reports data dictionary or taxonomy. And, the taxonomy can be extended to support other government needs. She said that part reporting burden is managed the taxonomy. This reduces the cost and burden of the reporting process in local and regional governments. She said that the Government of Brazil has not encountered a better approach than XBRL.

Governments in Australia, New Zealand, Singapore and the Netherlands are leveraging XBRL. The Government of Mexico is also considering XBRL. Ms. Oliveira emphasized that the use of open standards enables more cooperation on good practices across governments.

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