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• Developing XBRL taxonomies in the Spanish Public
  Sector
• How IGAE (public sector accounting coordinators)
  see the advantages of XBRL with public sector
  financial information at local governments.
• Bonsón-Ponte, Enrique -- Escobar-Rodríguez, Tomás
  -- Flores-Muñoz, Francisco
• AECA, XBRL Spain, University of Huelva, Spain

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• Index
• Importance of the public sector accounting
  information.
• Final users and its decisions.
• Special characteristics of the Spanish public
  sector.
• Rules and regulators.
• XBRL in this context.
• Local government in Spain.
• IGAE
• Local government XBRL taxonomies, now.

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Importance of public sector accounting
information.
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The importance of the public sector in the
Spanish economy. Spanish public sector
represents around a 40 of the national
production. According to that weight, is
necessary to consider what is the level of
transparency and quality of the information
provided by public organisms. Goals of the
public sector, such as redistribution of
resources, equality, high quality services in
education and health, investment in RD and
public infrastructures, are additional reasons
for that necessity of transparency and quality.
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Public information necessity. Citizens are not
very much involved in the daily management of
public sector activities, so, as it occurs in the
private sector, a reporting system is needed to
inform final users about the activity of the
public sector. In different countries, the
redefinition of the role played by public sector
in the economy is perceived as a incentive to
apply different reforms on regulations and
systems. New mechanisms of management and new
objectives (as a more balanced result between
income and expense, and efficiency) are the new
topics to work with.
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Functions of public accounting Traditionally in
Spain, public sector accounting had a legal
function and the main users were the control
organism within the public sector. Today,
public accounting information is considered as
one of the most important inputs in the decision
making process of all modern economies,
considering the importance of the public sector
weight in the economy. So, the traditional
set of budget information, referred only to one
fiscal year, is not enough to the modern users.
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Objectives of the public sector accounting
information Modern public sector accounting is
now more than budget controls referred to one
year. To support the decision making process,
users need information about the economic and
financial position of the public organism, about
the result and the efficiency that these entities
obtain. The main objective is to provide
information for the users decisions, at it occurs
with the business areas. So, if the objective is
next, the financial statements to be provided
could be similar in both public and private
sector (balance sheets, income statements,
budgets, cash flows, )
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Objectives of the public sector accounting
information And finally, as users, we can think
in the tax contributors, clients, suppliers,
regulators, really, all the citizens. Of
course, not only control organisms.
Theoretically, users can decide about a broad
set of issues using that information.
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One sector, two accounting rules. Public sector
is not only public administration. It includes
different foundations, autonomous agencies and
companies owned by the State, providing different
services. Some groups of entities are involved in
the economy in that way that they have to provide
accounting information following the private
sector rules. So, sometimes, consolidation is
not clear within a public framework if we have
public and private accounting information. For
us, in this presentation, we consider only the
entities that have to provide accounting
information according to the public sector rules.

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We need information, but really we need
good information.
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• Concepts of quality
• Important aspects of quality in public sector
  accounting information could be (not necessarily
  ordered by importance)
• Timeliness
• Frequency
• Free of frauds
• Respect for GAAPs.
• Fair view of situation and operations

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• Concepts of quality
• The technical support can improve the quality of
  the information, making possible to ensure the
  timeliness and frequency of the information, and
  validating aspects about legal rules introduced
  in the artificial systems.
• So, if the society incorporates more quality
  requirements in the public sector accounting, it
  will have two consecuences
• Users will have a best tool to support the
  decision making process
• Technical complexity will be aided by new
  languages and tools.

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• Characteristics of good
• public accounting information
• According to modern international principles,
  the public accounting information must be
• Relevant it must influence decision making
  processes and cover necessities of users.
• Reliable giving a accurate and exact
  information.
• Complete including all aspects according to a
  certain level of materiality.

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• Characteristics of good
• public accounting information
• Identifiable clearly defining the entity it
  refers to, and the concepts included in the
  financial reports.
• Clear ensuring users using that information in
  the correct way, without ambiguity.
• Comparable supporting decisions in which
  election between public entities is a key factor.

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• Characteristics of good
• public accounting information
• Substance over form containing relevant concepts
  more than a certain visual format.
• Relative importance considering only aspects
  according to materiality criteria.
• Of Fair view giving an exact image of the
  situation of the entity, which is the final
  objective of the information if it follows all
  these principles.

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Fair, relevant, reliable, frequent, on
time A lot of things! Technical tools could
help. XBRL? We will sayyes
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Final users and its decisions.
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• Users of public sector
• accounting information
• Analyzing interrelationship between the public
  sector and different types of users, is possible
  to identify the following user decisions
• Users of the services given by the State they
  are interested in determine the capacity of the
  public sector of produce high quality services.
• Politic organisms they need financial
  information to support the political decisions.

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• Users of public sector
• accounting information
• Control organisms they must monitor the
  information provided by the public sector
  activities, to ensure the quality of that
  information.
• Creditors of the State they need information
  about the capacity of the State to pay the debts
  and interests, about the solvency of the public
  sector.
• Financial agents they need information to
  qualify the financial assets related with public
  sector activities (bonds, notes).

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• Users of public sector
• accounting information
• Analysts they must consider public sector
  performance to judge and preview the markets
  reactions.
• Employees they need information about the entity
  they work for, to organize the actions that
  ensure the labor rights.
• Other national and international entities within
  the public sector framework to manage the
  coordination between them.
• Citizen and mass media to monitor the politic
  and administrative performance and take
  democratic and economic decisions.

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Special characteristics of the Spanish public
sector
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Spanish public sector structure Since 1975,
the democratic development in Spain has promoted
decentralization in the public administration,
recognizing different autonomous regions and
improving the politic and administrative
competences of different levels of the
State. The modern structure is approximately
divided in national, social security and tax,
autonomous region, province, and local government
levels.
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Spanish public sector structure National Level
Tax Administration Level Autonomous
Regions Level Local Level
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• Special characteristics,
• an approximated view.
• The public activities have not the goal to
  produce a monetary profit. The final objective is
  to produce a set of high quality services for
  citizens.
• The public sector has income not directly
  connected with the services it produces, because
  the expenses are established by means of a
  democratic process (political programs)
• To measure the efficiency of the public sector,
  is necessary to use a set of indicators, not only
  the profit or result, because, as it is said
  before, this profit is not really significant.

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• Special characteristics,
• an approximated view.
• Spain have different providers of public sector
  accounting information, one Public GAAP (1994)
  and the IGAE rules (Intervención General de la
  Administración del Estado or General Auditors of
  the State), and 17 Tribunales de Cuentas (or
  Accounting Courts, one for each autonomous
  region).
• Public entities generate the public sector
  accounting information, according to IGAE rules
  and supporting services, and later, the
  Accounting Courts receive and analyze that
  information.

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Rules and regulators.
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The main rule The main rule in public sector
accounting in Spain is the Plan General de
Contabilidad Pública (or Public Plan of GAAP) of
1994. The main objective of that rule is to
homogenize and standardize the accounting between
the different Public Administrations, and, at the
same time, it tries to homogenize its contents
and presentation, as far as possible. Other
important objective is to provide an accounting
model more similar to the private sector model.
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Other rules We have other minor rules dedicated
to different aspects of the public sector
accounting. Specially, we can mention the IGAE
rules, called Instructions. Instructions make
possible to provide public information from local
governments, in a detailed way, and provide the
model of financial statements, and so, we have a
reference to create de XBRL Taxonomies.
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XBRL in this context.
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Accounting in the public sector and digital
information XBRL can play an important role
with the public sector, supporting both financial
and not financial information. The standard
implies a certain level of agreement between
different users, regulators and technical agents,
and it owns different technical advantages.
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• Advantages of using XBRL
• in the public sector
• Regulators can offer a validated XBRLTaxonomy as
  an Annex of the legal rules. It is a very high
  quality way to offer regulations (regulation
  which will be technically tested).
• If the public sector contains a broad range of
  entity sizes and characteristics, XBRL can play a
  vital role, giving the technical support to the
  communication flows between these entities and
  aiding small entities to easily provide high
  quality digital information about their
  activities.
• The need for an agreement between users,
  technical people and regulators to create the
  Taxonomy makes regulations more democratic and it
  makes the changes less dramatic.

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• Advantages of using XBRL
• in the public sector
• XBRL will increase the nowadays low digital
  transparency and degree of detail of the Spanish
  public sector accounting information.
• XBRL will allow the use of different ratios and
  indicators to improve the public management and
  application of different policies with a better
  information.
• If the users need a more detailed and validated
  information, XBRL can show how this goal is
  technically possible.

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• Stages in XBRL implementation
• for the public sector.
• The Spanish public sector could prepare a set of
  stages to implement the XBRL standard, according
  to the public sector structure.
• Local Government (IGAE XBRL Taxonomy) in process.
  
• National Level
• Tax Administration Level
• Autonomous Regional Level

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National Level Tax Administration It is
possible to generate a XBRL Taxonomy which will
support the main document which emanates from the
national level The General Budget of the
State. It is also possible to generate
different Taxonomies to support the disclosure of
the financial and non financial information of
the State at the national level, including the
tax income, and connecting it with the tax
administration.
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Autonomous Regions Level The need for
compatibility is clear when we think about the 17
different autonomous regions existing within
Spain. XBRL can help to maintain compatibility
and connection between different administrations,
as it occurs along Europe between different
countries. Depending on agreements in the next
future, is possible to implement autonomous
regions taxonomies coming from national level
taxonomies by extension, depending on the
national level experiences.
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The local government in Spain.
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Local entities At the local level, we can find
the same degree of diversity. Municipalities,
Metropolitan Areas, Companies, exist at this
level. This group of entities have a more direct
contact with citizens. They are, for example,
responsible for urbanism, water provision,
security in the cities, and a broad set of
activities, depending on the population size and
other factors. Sometimes, due to the lack of
a optimal size, public local entities has not the
organizational capacity to generate public
accounting information in a efficient and high
quality way.
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IGAE
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IGAE goals within Spanish public sector The
Intervención General de la Administración del
Estado, assigned to the General Secretariat of
State for Tax and Budgets, has functions of
internal control, by means of the exercise of the
financial control, the direction and management
of the public accounting, the formation of the
economic accounts of the public sector and the
planning, design and execution of the digital
policy of the General Secretariat. Since 1997
IGAE runs a publicly available portal web
providing an ample range of information and
services, that is extended day to day in order to
approach the budgetary Administration to the
citizens and the rest of Organisms of the public
Administrations.
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• IGAE and digital world
• So, IGAE, as a high level supporter of digital
  and administrative services for public organisms
  and citizens, is very involved in digital
  developments within the public sector, leading
  the XBRL developments.
• One example of the implication of IGAE with
  digital world is the implementation of BASICAL, a
  system that support the elaboration and
  transmission of accounting information in small
  local entities.
• IGAE BASICAL developments consist not only of the
  creation of that system, but its implementation
  and usage, and the technical and business
  supporting for the small local entities through
  the process of implantation and updating.

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Local government XBRL taxonomies, now.
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• XBRL-IGAE developments
• until today
• IGAE development of XBRL taxonomy for the local
  government started at the beginning of 2006.
• Today, the Working Group is improving a first
  draft of the taxonomy, and have considered a set
  of strategic decisions about the global design of
  the modules of the future taxonomy.
• As usual in XBRL developments, all the materials
  are publicly accessible (with a pre-admission
  process) in the XBRL-ES-SECTOR PÚBLICO Yahoo
  Groups for comments.

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• IGAE-XBRL Working Group
• A Working Group have been created within XBRL
  Spain to support the IGAE implementation of a
  taxonomy for the local public accounting models.
• In this context, different entities are deeply
  participating in the tasks, as accounting
  courts, audit firms, analysts, computer vendors,
  regulators and the university.

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• IGAE rules and XBRL modules
• Local accounting is structured in three models,
  depending on size criteria. Each rule generates a
  XBRL modular taxonomy
• Model IGAE rule XBRL modular taxonomy
• Normal Model Instruction 4041/2004 igae-n
• Simplified Model Instruction 4042/2004 igae-s
• Basic Model Instruction 4040/2004 igae-b
• The models are different in the number of
  financial statements they contains, but the
  Normal Model could be considered as an extension
  of the Simplified one. Basic is special, and
  BASICAL system helps small local entities with
  it. So, at the level of the basic model, is being
  implemented a system of bidirectional mapping
  XBRL BASICAL.

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A few details about the design IGAE accounting
models are based on this kind of tables, for
which the group have decided to use tuples. Using
tuples, users will reply each line of data they
must to provide. Accounting courts are preparing
a set of detailed linear calculations to validate
de information reported with the new taxonomy.
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• A few details about the design
• The simplicity of the model has been considered
  by the XBRL Spain technical coordinators and so,
  the recommendation is not using dimensions here.
• The tuple structure is a good option for this
  kind of reporting model, so it ensure the same
  number of lines in each column.
• Now, the priority is the definition of the
  calculation rules needed. This definition of
  rules is based on the regulation, and will allow
  to improve the quality of quantitative
  information provided by local entities.

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• Final considerations
• XBRL will support a high level of validation in
  the information provided by the local entities,
  aiding the implementation of high quality digital
  processes in not very developed contexts (as
  small local entities).
• XBRL will show its capacity of adaptation with
  pre-existing systems, as BASICAL, and the
  technical advantages will allow a best public
  resources management.
• The local experience will be the starting point
  for the implementation of more advanced and
  technically complex XBRL projects within the
  public sector.

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Thanks for your attention.
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• References
• AECA (Spanish Accounting and Business
  Administration Association). Public Sector
  Accounting Conceptual Framework
  http//personales.ya.com/aeca/comisiones/comisions
  ectorpub.htm
• IGAE http//www.igae.pap.meh.es/
• XBRL Spain http//www.xbrl.org.es
• IGAE XBRL Taxonomy Yahoo Group XBRL-ES-SECTOR
  PÚBLICO
• IFAC (International Federation of Accountants).
  Handbook of International Public Sector
  Accounting Pronouncements

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