IPSAS Implementation at the OAS

Heather Alsopp of the Organization of American States presented a case showing how the OAS adopted IPSAS standards. suggested that the move to IPSAS was somewhat of a baptism of fire.

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.

Alsopp ipsas a case for accounting reform at the oas

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Alsopp ipsas ipsas un cas pour la réforme comptable à l'oea

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Alsopp ipsas ipsas en favor de una reforma contable en la oea

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Supporting IPSAS in the Government of Honduras

Carlos Castejon, Deputy Minister of Finance, Jose Romero, Accountant General and Angel Moncada, Deputy Accountant General of the Government of Honduras described the implementation of cash-based IPSAS (International Public Sector Accounting Standards) planned by the Government of Honduras. Legal reform was required in order to adopt IPSAS into national standards. The IPSAS cash standard for reporting will be adopted on January 1, 2011.

The Government of Honduras faced serious macroeconomic challenges because of the financial crisis. Minister Castejon pointed out that the financial management system was not able to report effectively on the financial situation of the government.

Sr. Romero described legal reform in Honduras and the move towards supporting international standards. Sr. Moncado described the plan of action to implement IPSAS. Lessons learned included:

• Legislation enabling support of international standards
• Training is critical to the successful implementation of IPSAS
• Numerous changes in reports are necessary to support IPSAS

The application of international standards and a move towards accrual accounting leads to a deeper analysis and makes accounting more accurate in order for government accounting reports to be reliable according to Sr. Moncado. Identifying assets and liabilities of the government has lead theGovernment of Honduras to have better control over the state heritage.
The Government of Honduras plans to adopt the IPSAS accrual accounting standards by January 2014. The Government of Honduras is is currently cataloging all government assets. Sr. Moncado believes that the challanges for the future include rolling out to municipal governments, consolidating financial statements and supporting information in a single accounting system.

Honduras implementing cash ipsas and preparing for the accrual ipsas

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Honduras presentacion sobre la preparacion para implementacion de normas internacionales de contabilidad para el sector publico en

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Honduras mise en œuvre de la norme ipsas relative à la comptabilité de caisse et préparation à la norme ipsas relative à la comptabilité d’exercice

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Volume 2 of International Journal on Governmental Financial Management Available

Volume 2 in now available. Articles in the Journal include:

• The State of Budget Transparency Worldwide, Vivek Ramkumar
• International Public Sector Accounting Standards Board Review the Cash Basis IPSAS: An Opportunity to Influence Developments, Paul Sutcliffe
• The Cash Basis IPSAS – An Alternative View, Michael Parry and Andy Wynne
• Using Periodic Audits to Prevent Catastrophic Project Failure, Paul Dorsey
• Framework for Evaluating Internal Controls over Financial Reporting in Sovereign Governments, Jawahar Thakur and Nalin Kumar Srivastava
• Short-Comings of Government Financial Management: A Generational Accounting Critique, Liyan Tang and Paul J M Klumpes
• Investigating the Governmental Accounting Reform of Greek National Health System: Some Preliminary Evidence, Filippos Stamatiadis
• Nigeria’s Economic Competitiveness in the African Context, John C Anyanwu and Andrew E O Erhijakpor
• Literature Review

2009 Vol 2 IJGFM

Progress in Public Financial Management Reform

Lack of Trained Professionals Greatest Obstacle to Reform
Liela Aridi Afas and Steve Clyburn from Grant Thonton presented the results of the 2009 ICGFM Survey of Global Financial Management Leaders. This study was recently completed and published. The survey found that the top reason for implementing Public Financial Management (PFM) reforms is to increase transparency.

An informal conference poll was compared to the survey:

Reason for Reform ----------------------------------Survey --Poll

Increase transparency of government &

involvement/participation of citizens ------------------41 -------13

Improve effectiveness of budget expenditures --------29 -------40

Improve accountability to government &

business stakeholders --------------------------------20 -------23

Meet donor community requirements ----------------10 ------ 23

Recommendations were provided to help overcome obstacles to PFM reform. The lack of trained professionals was cited as the greatest barrier to PFM reform. The ICGFM Survey found that technical assistance is the most important resource needed for reform to succeed. Mr. Clyburn pointed out that the challenges faced by public finance managers around the world are similar. Many of the challenges are faced in developed and developing countries.

Top Resources Required -----------------------------Survey --Poll

Technical Assistance ---------------------------------70 -------- 33

Legal Frameworks -----------------------------------17 -------- 30

Automated FMIS -------------------------------------9 -------- 24

Funding ----------------------------------------------4 -------- 12

Many countries lack human capacity and the infrastructure for training, according to Mr. Clyburn. And, the public financial profession is trying to catch up with technology and change.

A poll of participants found that 69% believed that the financial crisis has had an influence on PFM reform. Ms. Afas pointed out that many financial managers thought that the financial crisis has exposed inefficiencies in PFM systems. Transparency is a major theme in the survey.

4.45 5.15pm Icgfm Survey Presentation (Afas And Clyburn) Spanish

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4.45 5.15pm Icgfm Survey Presentation (Afas And Clyburn) French

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4.45 5.15pm Icgfm Survey Presentation (Afas And Clyburn) English

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2010 Grant Thornton ICGFM Progress in Public Financial Management Reform

2010 Grant Thornton ICGFM Avancées réalisées dans la réforme de la gestion des finances publiques

Public Financial Management Key to Overcoming the Financial Crisis

ICGFM surveys delegates at conferences to determine the state of public financial management. The surveys at the 23rd Annual ICGFM Conference presented interesting evidence of a renewed focus on public financial management reform because of the financial crisis. PFM professionals from over 40 countries participated in the Miami conference. The largest contingent of delegates came from Africa.

Most of the participants are public servants from emerging countries. These participants believe that public financial management reform has become more critical because of the crisis. The surveys suggest that many countries are facing similar challenges and can learn from each other. Most use the ICGFM and other PFM conferences to learn and execute good practices (63%). The lack of political will was noted in numerous polls as the first or second most important barrier for reform. Nevertheless, the majority of delegates come from countries with formal PFM reform programs (68%).

Icgfm Conference Polls

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Important Role of Public Financial Management Reform in the Financial Crisis
ICGFM delegates believe that government financial experts have an important role in identifying financial issues (92%). The delegates believe that the G20 can do more to overcome the financial crisis (70%).

The majority of countries represented at the conference have formal PFM reform programs (68%). Increased transparency (30%), improved budget expenditure (26%) and improved accountability (24%) were cited as major factors encouraging reform.

The most important resources needed by countries for PFM reform include employee training (32%) and automated financial management systems (24%). When asked to determine the most important type of technical assistance required, the implementation of an Integrated Financial Management Information System received twice as many votes (33%) as the number two choice, from 10 choices.

PEFA assessments have been carried out in many of the countries represented at the conference. Most respondents (72%) believe that PEFA assessments can improve PFM reform.

International Changes Required
The emphasis should be on green growth (70%) according to the majority of delegates at the conference. Somewhat more than half believe that the IMF and World Bank need to undergo reform as well as countries (57%). Many believe that there should be an international regulator (56%), but most believe that national governments will be reluctant to allow this (70%).

Common Problems and Solutions
ICGFM delegates believe that the financial crisis will continue for two years or more (77%). Most indicated that their country faces similar challenges as the United States (72%). Most have a local banking crisis (59%) that is reducing domestic financing for infrastructure (68%). Most countries represented (60%) have developed a stimulus program.

Public Private Partnerships were discussed as a solution to find more financing (40%), although many (23%) thought that PPPs are created for political reasons.

Some countries are seeing a reduction in donor funds since the financial crisis (39%). Most agree that there is poor aid coordination (68%).

Country legislative branches require more budget expertise (60%) according to delegates.

Transparency and Accountability
Transparency and accountability issues were discussed. Most delegates believe that their government does not adequately communicate with the local media (67%). More believe that the local media does not adequately report local economic events (74%).

More than half of delegates say that governments do not effectively inform the public about public spending (55%). This lack of effectiveness is attributed, most often, to a lack of political will (62%). Yet, transparency and accountability represents 2 of the 3 leading motivators for PFM reform, according to delegates.

ICGFM Announces Student Membership Program

Many students want to make a difference in the world after graduating. 

ICGFM is a forum of ideas, practical knowledge and opportunity. The International Consortium on Governmental Financial Management is pleased to extend learning opportunities to college and university students.

Icgfm Student Membership

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Students can interact with expert practitioners from around the world. ICGFM conferences, publications, forums and social network include thought leaders from International Financial Institutions, governments, consulting and software firms. An opportunity to learn. An opportunity to tap into career aspirations.