This presentation by Keith Hayes was made at the 14th Annual OECD Public Sector Accruals Symposium, Paris 3-4 March 2014. Find out more at http://www.oecd.org/gov/budgeting/14thannualoecdpublicsectoraccrualssymposiumparis3-4march2014.htm

1. 14th Annual OECD Public Sector Accruals Symposium
Paris, 3-4 March 2014
EPSAS - Update
Keith Hayes
Task Force EPSAS, Eurostat
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2. EPSAS
1.
2.
3.
4.
5.
Retrospective
The EPSAS project
Current state of play
EPSAS governance
Key challenges ahead
2/26
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3. 1.1
Retrospective, to mid-2013
Budgetary
Frameworks
Directive
 "… the Commission
shall assess the
suitability of the
International Public
Sector Accounting
Standards for the
Member States"
QIV 2011
Public
consultation on
IPSAS
Report on
suitability of
IPSAS
 IPSAS cannot easily
be implemented in EU
Member States as it
stands currently
Task Force
IPSAS
Study on public
sector
accounting and
auditing
practices
QI 2012 - QIV 2012
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EPSAS
Conference
 IPSAS would be a
suitable starting
point for the future
development of a set
of European Public
Sector Accounting
Standards
QI 2013
QII 2013 3/26

4. 1.2
EPSAS conference, May 2013
Conclusions
• Political support growing
• Necessary tool for further fiscal and budgetary
integration in EU
• Ambitious project with medium-term scope
• Envisaged: Commission Communication, Framework
Regulation
• Governance is a priority to follow up
4/26
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5. 2.1
EPSAS – what is it?
• A suite of accruals-based European standards for
public sector accounting and GPFR
• Grounded and legislated on the basis of the EU
Treaties
• Common to all public entities belonging to General
Government for all EU Member States
• Based on strong EU governance, subject to internal
control and independent audit
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6. 2.2
EPSAS aims - 1
• Improve the comparability of the reporting of the
economic, financial position and performance in the
EU MS
• Improve the efficiency, effectiveness and
accountability of public sector management, in
particular where accruals accounting is not yet in place
• Produce reliable and timely financial and fiscal data
6/26
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7. 2.3
EPSAS aims - 2
• Increase fiscal transparency, necessary for
macroeconomic stability and for coordination,
surveillance and policy advice
• Reduce the incoherencies between the micro level
primary public-sector accounting and reporting
framework and the ESA macro level reporting framework
• Facilitate the securing of liquidity in global financial
markets
• Improve the efficiency and effectiveness of public audit
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8. 2.4
EPSAS implementation
• Gradual, possibly phased, in all MS in the medium
term (by 2020)
• Strong EU governance
• Taking into account the need for:
•
•
•
•
Accruals-based accounting
Double entry book-keeping
Harmonised financial reporting
Consistency with ESA principles
8/26
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9. 2.5
The "E" in EPSAS
• Proposal by the Commission (legal basis: primary law,
e.g. 338 TFEU)
• Council and Parliament adopt EPSAS Framework
Regulation
• Framework Regulation defines governance and key
principles
• Confers standard-setting powers on to Commission
• Commission consults Member States, and
• Adopts EPSASs as binding acts
9/26
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10. 3.1
Current state of play - outline
Taking forward the EPSAS project
• Stage 1 (mid-2013–mid-2014): Commission Communication
• Stage 2 (mid-2014 – end-2015): Framework Regulation:
• Governance structures and procedures
• Impact Assessment
• Mid-term Work Programme
• Stage 3 (end-2015 – 2020): endorsement and stepwise
implementation
10/26
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11. 3.2
Current state of play – main activities
- TF EPSAS Governance
Commission
Communication
- TF EPSAS Standards
- Public consultation on
EPSAS governance
Framework
Regulation
- External study (PwC)
11/26
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12. 3.3
Current state of play - Governance
Public consultation on future EPSAS governance
principles and structures
• Closed 17/02/2014
• Questionnaire and consultation document
Task Force EPSAS Governance
• Possible future governance arrangements
• Underlying key principles
12/26
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13. 3.4
Current state of play - Standards
TF EPSAS Standards
Technical aspects of the accounting standards
• MSs’ perspectives and experiences on the IPSAS
standards
• Standards for smaller and less risky government
entities
• Staged approach to EPSAS standard-setting
• EPSAS core framework (principles), first EPSAS
standards
13/26
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14. 3.5
Current state of play – External study
External study (Oct 2013 – Jul 2014)
• Potential costs and benefits of implementing accruals
accounting in the public sector in the EU MSs
• Further evaluation of IPSAS standards and analysis of
their application in the EU MSs
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15. 4.1
EPSAS Governance – principles
EPSAS governance
EPSAS standards
• Professional independence
• Impartiality
• Legitimacy
• Transparency
• Competence and capacity
• Cost effectiveness
• Accountability
• Reliability
• Relevance
• Coherence and comparability
• Accessibility and clarity
15/26
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16. 4.2
EPSAS Governance – possible structure
16/26
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17. 4.3
Public consultation: preliminary overview
of responses (28 Feb 2014)
• Provisional results based on online questionnaire, email,
mail and fax and some responses may still to be added
• Raw results, inconsistencies to be fixed
• Only statistical tables and graphs
17/26
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18. Country
Austria
Belgium
Bulgaria
Croatia
Czech Republic
Denmark
Finland
Germany
France
Hungary
Italy
Ireland
Latvia
Malta
Netherlands
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
Sweden
United Kingdom
Brazil
Other
Total
Number
2
3
2
1
3
1
4
142
6
1
3
1
1
1
2
5
2
3
1
1
2
4
6
1
5
203
Percentage
1.0%
1.5%
1.0%
0.5%
1.5%
0.5%
2.0%
70.0%
3.0%
0.5%
1.5%
0.5%
0.5%
0.5%
1.0%
2.5%
1.0%
1.5%
0.5%
0.5%
1.0%
2.0%
3.0%
0.5%
2.5%
100%
4.4
Responses by
country
*Provisional results as of 28 February 2014
18/26
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19. 4.5
Responses by type of respondent
Type of respondent
Public accounting authority/standard setter
Public audit authority
National Statistical Institute
Other national public institution
Private financial (accounting/audit/consulting)
company
Private other
International institution or organisation
Academic
Individual
Other
Total
*Provisional results as of 28 February 2014
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Number
40
13
5
95
Percentage
19.7%
6.4%
2.5%
46.8%
3
2
6
4
18
17
203
1.5%
1.0%
3.0%
2.0%
8.9%
8.4%
100%
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20. 4.6
Relevance of principles
100
90
80
Answers
70
60
50
40
30
20
10
0
Germany Local
No
97
Partly
6
Yes
8
Others
11
39
35
*Provisional results as of 28 February 2014
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21. 4.7
Oversight function - Governance Advisory Board
100
Answers
90
80
70
60
50
40
30
20
10
0
Germany Local
No
96
Yes
2
Others
54
32
*Provisional results as of 28 February 2014
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22. 4.8
Formal representation of stakeholders –
Technical Advisory Group
120
Answers
100
80
60
40
20
0
Germany Local
No
6
Yes
102
Others
27
58
*Provisional results as of 28 February 2014
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23. 4.9
Governance and advisory roles in a single group?
100
Answers
80
60
40
20
0
Germany Local
No
89
Yes
5
Others
53
27
*Provisional results as of 28 February 2014
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24. Answers
4.10
Interpretation function
100
90
80
70
60
50
40
30
20
10
0
9a. Do you consider that this
interpretation function should be kept
separate from the standard setting
function?
Germany Local
No
7
Yes
91
Others
26
Yes, 68
57%
No, 52
43%
59
*Provisional results as of 28 February 2014
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25. 5
•
•
•
•
•
•
Key challenges ahead
Role of IPSAS in EPSAS
Do we really need EPSAS?
Governance - Legal basis for EPSAS
Governance - Roles of stakeholders
Governance - Standard-setting powers in practice
Standard-setting and implementation costs
25/26
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26. Useful links
Assessment Report, Staff Working Document and Inventory of MS
accounting and auditing practices:
http://epp.eurostat.ec.europa.eu/portal/page/portal/government_finance_statistic
s/government_accounting
Conference webpage:
http://epp.eurostat.ec.europa.eu/portal/page/portal/conferences/introduction/201
3/epsas
Public Consultation on future EPSAS governance:
http://epp.eurostat.ec.europa.eu/portal/page/portal/public_consultations/consult
ations/epsas
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