Public Financial Management Responses to an Economically Challenging World

Jason Levergood, Senior Manager at Grant Thornton LLP, provided an overview of the ICGFM Worldwide Survey, Public Financial Management Responses to an Economically Challenging World on December 7th. at the ICGFM Winter Conference. Public financial managements from over 50 countries were surveyed in 2010.

The survey found that the financial crisis and stimulus packages have had significant impact on public financial managers. Yet, in this environment of doing more with less, governments have accelerated reforms including support for international standards and improvements in transparency.

Mr. Levergood described the survey results for stimulus programs, use of public private partnerships (PPPs), infrastructure investment and increasing transparency. 76% of respondents said that their countries have made or renewed a strong commitment to public fianncial management transparency. 80% of respondents said that their countries are adopting international standards. The survey found that the use of the eXtensible Business Reporting Language (XBRL) is gaining interest but has not been widely adopted in government.

The survey concludes with the observation that "public financial managers face some of the most challenging times in decades in meeting their responsibilities, but they have faced them no only with a variety of policy measures but with an unprecedented commitment to transparency".

Grant thornton global financial management leaders responses to an economically challenging world

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Grant thornton leaders internationaux de la gestion financière réponses à un monde de défis économiques.pptx

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Public Financial Management Responses to an Economically Challenging World 2011 ICGFM Survey

The Transparency Portal of Brazil

Mário Vinícius Claussen Spinelli, Secretary of Corruption Prevention and Strategic Information, Brazilian Office of the Comptroller General described the “Transparency Portal” in Brazil, He began his presentation by describing the institutional framework and audit and anti-corruption mandate of the CGU unit. The CGU unit has been able to investigate and dismiss over 2,000 public servants changed with fraud and corruption.

Mr. Spinelli described the preventative actions taken by the CGU unit including:

• Increased Transparency


• Incentive to Social Control


• Management Strengthening


• Implementation of International Conventions


• Improved Legal Framework


• Studies and research on corruption


• Education for Ethics and Citizenship

The CGU unit has developed on-line games that teach the advantage of ethics to children. Mr. Spinelli pointed out that transparency and "right to know" goes beyond publicity, because it involves the delivery of understandable information and public access to official documents.

Mr. Spinelli described the timeline for the creation of the Brazil Transparency Portal. Procurement and budget execution information is available on the portal. Companies found to have engaged in corrupt practices are listed on the portal. Brazil is now moving to support IFRS and IPSAS standards. Full information about public servants are provided on the portal. Full information on the 2014 World Cup and 2016 Olympic games contracts and expenditures are provided.

Mr. Spinelli described how the transparency portal provides easy access without passwords and accessible information. He emphasized that the information and navigation needs to be simple.

The Brazil Transparency Portal has disclosed $4.4T in total amounts since 2005, with over 1 Billion in registered payments with almost 250,000 monthly accesses and over 30,000 paid subscribers to push services.

The Brazil Transparency Portal has won numerous international awards. It takes approximately 4 1/2 hours for daily document updates.

The Transparency Portal in Brazil is compliant with many international standards:

• International Public Sector Accounting Standards


• XBRL


• IMF Good Practices on Fiscal Transparency Code


• OECD Best Transparency Budget Practices


• Open Government;

Mr. Spinelli described the Three Laws of Open Government Data

1. If it can’t be spidered or indexed, it doesn’t exist


2. If it isn’t available in open and machine readable format, it can’t
   engage


3. If a legal framework doesn’t allow it to be repurposed, it doesn’t empower

Surveys at the conference agreed with Mr. Spinelli

• 95% agree that transparency required for social participation and preventing transparency


• 67% agree that citizens have interest in social control and transparency


• 86% agree that citizens can be encouraged to participate in social control transparency


• 74% agree that Transparency portal best way for public sector transparency

According to the web site:

“The Transparency Portal was created in November 2004 for the purpose of making it possible for public managers and citizens at large to follow up on the financial execution of all programs and actions of the Federal Government more easily. The information available in it includes: funds transferred by the Federal Government to states, municipalities and the Federal District; funds directly transferred to citizens; direct spending of the Federal Government with procurement or contracts for projects and services, including the spending of each agency with per diems, office supplies, equipment, projects and services; as well as spending through Payment Cards of the Federal Government.

The Portal shows all data on the SIAFI's (Federal Government Integrated System for Financial Management) financial execution, as well as data provided by the National Health Fund, by Caixa Econômica Federal ( Brazil 's federal savings bank), by the National Treasury Secretariat and by Banco do Brasil . Apart from publishing all these data and information, the Transparency Portal makes a communication channel available: the Talk to Us link. Through this channel, users of the Portal can clear any doubts regarding accessibility or its contents, as well as post congratulations or suggestions.”

Spinelli transparencia para los ciudadanos la experiencia brasileña del portal de la transparencia

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Spinelli transparence pour les citoyens l'expérience brésilienne du portail de transparence

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Spinelli transparency for citizens the brazilian experience of transparency portal

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Last Day of 24th Annual ICGFM Conference

Conference Co-Chair David Nummy introduced the final day of the 24th Annual Conference with additional surveys about public financial management. An ICGFM attendee survey found the following:

• 92% of attendees say their countries have embarked on improving transparency
• 82% of attendees say that their countries have adopted international public sector standards to improve transparency
• IPSAS and GFS are the 2 most adopted international standards for #transparency
• 14% of countries represented have adopted XBRL
• Of those from countries that have not adopted XBRL 21% expect to adopt it, 2/3 interested

The International Consortium on Governmental Financial Management conducts numerous surveys to identify the state of public financial management and transparency around the world.

Main Session of ICGFM PFM Conference Comes to an End

The main session of the 24th. ICGFM International Conference: Public Financial Management in the Era of the "New Normal" came to an end this afternoon in Miami Florida. ICGFM President, James Ebbitt closed the main session. Detailed workshop sessions begin on Thursday.

Conference co-chair, David Nummy reflected on the changes because of the financial crisis. He observed that many countries that were considered the most stable have been more adversely affected by the crisis. Transparency and accountability demand has increased thanks to the crisis as the public questions how countries got into the crisis and how stimulus money is being spent.

Public financial managers are becoming more important. PFM managers are increasing their role in government. It is a robust and important profession according to Mr. Nummy.

Mr. Nummy suggested that XBRL adoption is reaching critical mass. XBRL promises to improve efficiencies and transparency.

XBRL Work Shop at ICGFM Conference

Liv Watson managed an XBRL workshop at the 24th Annual Conference on Public Financial Management. This is a follow-up from her presentation XBRL: The Language of Government 2.0. Attendees to the conference were very interested in the use of XBRL in government. Ms. Watson encouraged attendees to read XBRL documents on-line.

Many countries do not mandate the use of XBRL. XBRL often becomes widely adopted according to Ms. Watson. Regulation sometimes follows adoption.

Global adoption drivers according to Ms. Watson include:

• Economics to reduce administrative burden, support multiple languages easily
  
• Support global standards and pressure from large international organizations
• IFRS adoption and GAAP alignment
  
• Support for capital market transparency
• Alignment in regulatory consistency
• Basel II banking supervision
  
• Integrate with multiple standards such as ISO, W3C, Swift, OECD

The workshops identified many drivers for XBRL adoption in their countries:

• Support frequent legislative changes, particularly for changes to reporting standards
• Legislature or Ministry of Finance may drive adoption
  
• Pressure from funding agencies for proper tracking
• Improved budget planning
• Support of decentralized reporting such as from municipalities to the central government
  
• Improved data collection through standards in areas such as taxation, land registration
• Integration of tax information with procurement processes
• Ease of audit through supreme audit institutions
• Encouragement from international organizations and development partners
• Improved statistical information for regulators
• Trade facilitation for regional and global trading organizations
• Ease of business registration
• Media and civil society may put pressure on governments
• Globalization affect where countries that are more transparent will be seen as more stable for business
• Demands for government transparency
• Faster closing of government accounts and production of reports
  

XBRL—A Language of the Government 2.0 World

Liv Apneseth Watson, Senior Executive, IRIS Business Services described XBRL. She explained how XBRL is changing financial reporting in the public sector. XBRL is not about technology, according to Ms. Watson, it is about solving major data problems. XBRL is, fundamentally, an electronic language that helps both the private and public sector effectively and efficiently bridge the current gap between business systems by crossing artificial boundaries. She challenged the audience to consider the amount of re-keying of financial data done today and the difficulty in finding business information on the Internet.

Ms. Watson said that XBRL is like universal bar codes but for financial reporting. Compelling reasons for XBRL:

• Making financial and business information exchange better, faster, and cheaper
• Making financial reporting more transparent and discoverable
• Explicitly articulating business meaning and thus enabling the exchange of that meaning between humans or between business systems
• Improving data integrity
• Integrating business systems
• Saving government agencies money and making them more efficient

She described the problem in the SEC in the United States to find financial information. Businesses provide this information, but the SEC cannot find the appropriate information. The FDIC in the United States was able to increase the accuracy of data from 64% to over 90% by using XBRL.

XBRL is tagged data that is machine readable. It is a standard way to communicate business and financial information. XBRL is an open source international standard operated by a non-profit consortium. It is more than financial reporting. It provides a global business reporting supply chain. Machine readable makes data re-usable.

Ms. Watson described how XBRL provides more functionality than previous methods. XBRL uses" hyperlinks on steroids," according to Ms. Watson. She described the taxonomy of an XBRL item. The presentation element of XBRL enables translating labels to multiple languages. This reduces the cost to report in multiple languages.

The methods for calculating business and statistical information can be linked to the XBRL item. This means that the information will be presented based on national or international standards. XBRL can also help identify mathematical errors in financial reports. She also described XBRL in context to spreadsheet applications. XBRL has the intelligence to label, identify context and show formulas eliminating "Excel hell". Anyone with data locked with proprietary systems will be at a disadvantage compared to those with open discoverable data, according to Ms. Watson.

Many governments have adopted XBRL. Her presentation described:

• Macedonia reporting portal
• International Accounting Standards Board
• Securities and Exchange Commission - USA
  
• Federal Deposit Insurance Organization - USA
• Committee for European Securities Regulators
• State of Nevada
  

Ms. Watson showed a live demonstration of a sample XBRL database. She switched languages to French and Chinese. Therefore, organizations that adopt XBRL are fully compliant with international standards. Ms. Watson believes that XBRL can make countries more competitive.

XBRL will enable the semantic web and linked data, according to Ms. Watson.

Liv A. Watson heads Global Business Development for IRIS Business Services Private Limited. She is one of the founders of the XBRL Intentional Consortium. She is the co‐author and contributor author to several of books including “XBRL for Dummies” and Governance, Risk, and Compliance Handbook published by Wiley.

Liv watson icgfm xbrl a language of the government world english

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Ms. Watson suggested the following links for more information:

• XBRL International
• US Securities Exchange Commission
• XBRL EU
• XBRL at IASB

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.

Ana cristina bittar de oliveira icgfm xbrl in brazil government espanol

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XBRL - A Language for the Government 2.0 World

Featuring Liv Apneseth Watson, Senior Executive, IRIS Business Services

• Discover how Governments are using XBRL
• Discover how XBRL will be instrumental in enhanced transparency of the public sector
• Discover how XBRL will help bridge the information gap between diverse information

Governments around the world are adopting the Extensible Business Reporting Language (XBRL). XBRL reduces the regulatory burden on companies that must provide large amounts of information to government. XBRL enhances interoperability of information sharing. XBRL is a language for the electronic communication of financial and non-financial data which is revolutionizing reporting around the world. It provides major benefits in the preparation, analysis and communication of information. It offers cost savings, greater efficiency and improved accuracy and reliability to all those involved in supplying or using data.

In this session, we will examine how XBRL supports the movement to more openness and transparency in all activities of government and present best practices from around the world with XBRL implementations.

Our speaker, Liv Apneseth Watson, is a senior executive at IRIS Business Services and serves on the board of directors of IRIS, MediaTenor, and the Institute of Management Accountants. She is one of the founding members of XBRL International, a member of the XBRL International Steering Committee, Vice President of XBRL International Membership Working Group and served XBRL International in several different capacities over the years.



WHEN
Wednesday, April 7, 2010 11:30 AM - 1:30 PM

WHERE
The Carnegie Endowment for International Peace
1779 Massachusetts Avenue, NW
Washington, DC 20036

RSVP


Registration and view Fees
Friday, April 2, 2010





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