The OAS used different accounting methods for operating, voluntary, special reserve, fiduciary and internal service funds. Ms. Alsopp pointed out that the adoption of IPSAS typically happens in the context of wider management reforms. She suggested that the move to a common language through IPSAS enables improved transparency, accountability and manage for results.
The OAS project was primarily funded by a grant from the Canadian International Development Agency (CIDA).
The OAS experienced some challenges when adopting IPSAS including:
- Difficulty of moving to accrual accounting
- Resistance to change
- Competition for IPSAS experts
Ms. Alsopp suggested that the benefits of accrual accounting need to be articulated rather than the theoretic differences between cash and accrual. One major lesson learned is having dedicated qualified expertise to move to accrual accounting.
Ms. Alsopp described how IPSAS impacted:
- Consolidation of controlled entities
- Revenue recognition
- Expense recognition
- Employee benefits
- Property plant and equipment
She said that there is a lot of qualitative and legal assessments required for accrual based IPSAS. Ms. Alsopp pointed out that there was a concern that the move to accrual accounting loses important information. She recommended that budget variance reports based on cash basis can provide this information.
Although the move to accrual accounting and support of IPSAS has been a major project, Ms. Alsopp believes that the benefits in transparency and accountability will help improve decision making.