WHEN AND HOW INTO ACCRUAL ACCOUNTING IN PUBLIC FINANCE

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WHEN AND HOW INTO ACCRUAL ACCOUNTING IN PUBLIC
FINANCE

• Ljubljana, 16.-17.02.2006

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1. STRATEGY OF DEVELOPMENT OF INTERNAL CONTROL OF
PUBLIC FINANCE

• Accepted by the government in June 2005
• Relating on period of 2005 2008
• One of the goals was creating efficient system of
  finance operations
• Finance operations include implementing and
  performing accounting and reporting renovation
  of accounting

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2. RENOVATION OF ACCOUNTING

• Implementing changes of contents introduction
  of accrual accounting
• Composing of total property balancesheet
  statement (statement of state assets and
  liabilities) and establishing a net value
• Improving structure of accuntants
• Defining authorized accountant

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3. CURRENT SYSTEM

• Indirect budget users accrual accounting
• Direct budget users cash accounting
• Budget reporting on business events when
  executing budget
• Accounting reporting on business events when
  executing budget
• Benefits of current system
• Weaknesses of current system

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4. INTRODUCTION OF UNIFIED ACCOUNTING FOR BUDGET
AND ALL BUDGET USERS

• Basic conditions
• Connecting accounting and budget preparation
• Understanding of accounting rules
• Political obligation and stability
• More stress on controling results over inputs
• More education and training for all accounting
  workers
• Adapting IT

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4. INTRODUCTION OF UNIFIED ACCOUNTING FOR BUDGET
AND ALL BUDGET USERS

• Fulfiling conditions in Slovenia
• Connecting accounting and budget preparation
  wider analysis of all public revenues is needed
• Understanding of accounting rules moving towards
  goals too slow
• Political obligation and stability moving
  towards goals too slow
• More stress on controling results over inputs
  moving from traditional towards results
  orientated budget
• More education and training for all accounting
  workers acquring certificate of certified
  accountants for public sector
• Adapting IT adapting of current software and
  expansion of current software to local level

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4. INTRODUCTION OF UNIFIED ACCOUNTING FOR BUDGET
AND ALL BUDGET USERS

• Development and modernization of accounting
  system in Slovenia
• Passing over to accrual accounting can be done at
  once or gradually
• Three optinons
• Accrual accounting implemented for state budget,
  local budgets and all budget users total
  implementation
• Accrual accounting implemented for all budget
  users, but not for state and local budgets
• Accrual accounting implemented for all budget
  users, except for four state treasuries of public
  finance (state budget, local budgets, pension and
  disability fund, health fund)

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4. INTRODUCTION OF UNIFIED ACCOUNTING FOR BUDGET
AND ALL BUDGET USERS

• Development and modernization of accounting
  system in Slovenia (continued)
• Benefits and weaknesses of each of three options
• Fulfiling basic conditions in Slovenia is optimal
  when
• Method of slow steps is taken
• Through introduction of third proposed option
  gradually moving to implementation of full
  accrual accounting