Governmental Financial Reporting Public Sector Accounting Reform in Slovakia

1
Governmental Financial ReportingPublic Sector
Accounting Reform in Slovakia

• Peter Ivánek
• Ministry of Finance of the Slovak Republic
• PEMPAL Treasury CoP Workshop
• Istanbul, February 2008

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Agenda

• Why Slovakia introduced public sector accounting
  reform
• What are main components of reform and their
  status of realization
• What we have learned and what we need to solve in
  forthcoming years

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Public Finance Management Reform

• To strengthen the institutional capacity for
  budgeting, expenditure management and the
  financial management of government operations
• Program budgeting
• Multi-annual budgeting
• State Treasury
• Agency for Debt and Liquidity Management

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Public Sector Accounting ReformObjective

• Public Sector Accounting is the information
  system that records, analyses, classifies,
  summarizes and communicates public sector entity
  financial and economic events, and their impacts,
  in terms of both
• The provision of information required by
  management and senior executives for planning,
  organizing and control, and
• The preparation and provision of financial
  statements and fiscal reports under specific
  accounting and reporting standards for external
  users

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Public Sector Accounting ReformComponents

• New accounting and reporting standards
• MoF must produce, in line with new definition of
  public finance accounting, specific formats and
  content for several public finance accounting and
  reporting methodologies, consistent with the
  standards and trend in other countries.
• Implementation of IPSAS into national accounting
  standards
• Introduction of consolidation procedures
• Introduction of conversion procedures

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Public Sector Accounting ReformComponents

• System support to implementation
• MoF must re-specify the basic operability
  criteria of, and its access to, public finance
  accounting systems to promote functionality of
  public finance accounting and reporting and to be
  consistent with the standards and trend in other
  countries.
• System of the State Treasury
• New module for consolidation
• Financial and administration centers for local
  government

7
Public Sector Accounting ReformComponents

• Training of accountants
• MoF should develop a clear and comprehensive
  vision and strategy how public finance
  accountants will be able to obtain appropriate
  levels of training and experience to meet the
  needs of users of public finance accounting
  information.
• Series of trainings for 6,500 public accountants
• Cooperation with universities and professional
  associations
• Communication

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Public Sector Accounting ReformTimetable
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Lessons learnedPreconditions for success

• Recognition that accrual accounting is part of
  reform process
• Adoption/development of accounting standards
• Participation of accountancy profession
• Existence of robust audit process
• Accrual budgeting

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Current status

• New accounting and reporting standards for
  preparation of individual statements in use since
  January 2008
• Approximately 6,500 public accountants were
  trained
• New consolidation legislation and metodology will
  be published during the year 2008
• Preparation of consolidation information system

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Information and contacts

• Ministry of Finance of the Slovak Republic
• tefanovicova 5
• P.O.Box 82
• 817 82 Bratislava 15
• Slovak Republic
• www.finance.gov.sk