Government accounting Government accounting

The sovereign debt crisis has underlined the need for more rigorous, transparent and comparable reporting of fiscal data. Council Directive 2011/85/EU (the Budgetary Frameworks Directive) sets out the rules on Member State budgetary frameworks necessary to ensure compliance with the Treaty obligation to avoid excessive government deficits. In this context it requested the Commission to assess the suitability of the International Public Sector Accounting Standards (IPSAS) for the Member States.

Report

The European Commission has forwarded its assessment to the Council and European Parliament. The report, which is accompanied by a staff working document, is based on information received through consultations with Commission services, international organisations, Member States' experts and other interested parties. It concludes that, even if IPSAS cannot be implemented in EU Member States as it stands currently, the IPSAS standards represent an indisputable reference for potential development of European Public Sector Accounting Standards (EPSAS), based on a strong EU governance system.

For the full text of the report, the staff working document and the supporting study see:

COM (2013) 114 - "Report from the Commission to the Council and the European Parliament – Towards implementing harmonised public sector accounting standards in the Member States"

SWD (2013) 57 - Commission staff working document

In order to support the assessment a survey was carried out of the public sector accounting and auditing practices in the Member States.

Conference

A Conference was held on 29-30 May 2013 in Brussels at which Mr Algirdas Šemeta, Commissioner for Taxation, Customs, Statistics, Audit and Anti-fraud, brought together high-level stakeholders and decision makers from public sector accounting, auditing and statistics to discuss the future development of harmonised government accounting standards in Europe.

Following the keynote speech of Herman Van Rompuy, President of the European Council. the conference discussed the importance of developing economic governance in the context of the current economic situation and the need for transparent and comparable fiscal data and underlying public accounts. It also covered key issues for accounting harmonisation in the EU and examples of the experience of some countries in modernising their public sector accounting and financial reporting. The conference concluded with a roundtable on lessons learned, best practices and the next steps to be taken.

Further information on the Conference

Supply of statistical services in the field of public sector accounting

On 15 September 2015 Eurostat issued a call for tender for the supply of services:

  • Support for the development of harmonised European public sector accounting standards, and general purpose financial reporting standards.
  • Collect further and updated information related to the potential impact of implementing accrual accounting in the public sector.

You can find more information and the tender documents under the following link: https://etendering.ted.europa.eu/cft/cft-display.html?cftId=1049

Preparatory work for the modernisation of public sector accounting systems on an accrual basis

The primary objective of implementing harmonised European Public Sector Accounting Standards (EPSAS) is to increase fiscal transparency and achieve comparability of public sector accounting and reporting systems within and across MS.

In line with these objectives and in particular to increase fiscal transparency in the short term, Eurostat aims at providing financial support for MS to carry out preparatory analyses on the modernisation of their public sector accounting systems on an accruals basis, also with a view to the eventual implementation of EPSAS.

In this context grant agreements were signed with 7 beneficiaries. You can find the list with the awarded grants under the following link:  Grants awarded

Working Group EPSAS

Working Group on EPSAS was launched in September 2015, to build on the work of the Task Forces and to establish a more permanent forum concerned with the development, introduction and operation of EPSAS in the mid-to-longer term.

The Working Group is a technical experts group. Discussion will inform the Commission's work concerning EPSAS and should focus on wrapping up the discussions on unresolved issues. In particular, the Working Group should identify the key issues for EPSAS governance and standards, and discuss how to develop and introduce suitable EPSAS structures and requirements.

Academic modules on accrual-based public sector accounting in the EU, 29 March 2016

Academic research on accruals-based public sector accounting in the EU, 25 April 2016

EPSAS update to the Working Group members and observers, 2 March 2016

EPSAS update to the Working Group members and observers, 21 December 2015.

Collection of information on potential impacts of EPSAS and technical assessment of the suitability of the current suite of IPSAS

With a view to taking forward the EPSAS project, aimed at creating and implementing harmonised public sector accounting standards in the EU Member States, it is necessary to assess and duly consider the economic and social impacts of the proposed reform.

As a means of informing those considerations on EPSAS, in 2013 Eurostat contracted a study to analyse the potential costs and benefits, taking IPSAS as a proxy for future EPSAS, of implementing harmonized accrual accounting in the EU Member States. The study further analyses from a technical point of view the existing suite of IPSAS standards and their application in the EU Member States. The final report from that study is available here:

While acknowledging the care taken by the contractor to ensure the highest possible quality of the report, the limitations inherent in particular in the analysis and extrapolation of costs data should be borne in mind when interpreting the results.

Find our contacts at the bottom of the page.

Public Consultations launched by Eurostat on IPSAS and EPSAS

To ensure that all stakeholders might express views, Eurostat has launched two public consultation exercises:

  • Assessment of the suitability of the International Public Sector Accounting Standards for the Member States - Public consultation

Period of consultation: From 17/02/2012 to 11/05/2012 (closed).

The European Commission carried out an assessment on the suitability of IPSAS for EU Member States during 2012 and Eurostat took the lead on the assessment and launched a public consultation exercise open to all those would like to contribute to the assessment. The assessment of the suitability of IPSAS for EU Member States has its origin in the context of the need to strengthen budgetary and fiscal framework for EU Member States. It is called for in the Council Directive 2011/85/EU on requirements for budgetary frameworks of the Member States, as adopted by the Council on 8 November 2011.

The document put to public consultation, the results of the consultation and the individual replies received from stakeholders, can be found here.

  • Towards implementing European Public Sector Accounting Standards (EPSAS) for EU Member States - Public consultation on future EPSAS governance principles and structures

Period of consultation: From 25/11/2013 to 17/02/2014 (closed).

The issue of the governance for a future EPSAS was identified as a priority for follow-up after the conference held to discuss the development of EPSAS in Brussels in May 2013. The conference was itself organised to take forward the Commission's report to the Council and the Parliament "Towards implementing harmonised public sector accounting standards in the Member States: The suitability of International Public Sector accounting Standards (IPSAS) for the Member States", issued in March 2013.

The public consultation document and questions can be found here.

Task Force EPSAS Governance

Task Force EPSAS Governance was created to exchange views with the Member States' authorities on possible future governance arrangements and underlying key principles of EPSAS. The Task Force should assist Eurostat to identify the key issues for EPSAS governance; discuss how to balance those issues, and thereby assist Eurostat to develop a model for the EPSAS governance structure.

Task Force EPSAS Standards

Task Force EPSAS Standards was created to exchange views with the Member States' authorities on technical aspects of the standards. The Task Force should assist Eurostat to: 1) analyse the most contentious IPSASs and address the concrete difficulties encountered with some of the IPSASs in practice, and ways to overcome them; 2) analyse the possibility to reduce burden, and complexity of the standards for small public entities; 3) discuss the implementation of standards via a progressive batched approach.

Documentation for Task Force EPSAS Governance and Task Force EPSAS Standards is available in our Circabc website:

https://circabc.europa.eu/w/browse/18db61bc-6649-44b3-af14-17fcd1c1216c

Contacts

ESTAT-EPSAScontact@ec.europa.eu

Task Force EPSAS - European Public Sector Accounting Standards
European Commission - Eurostat
BECH B4/401
5, rue Alphonse Weicker
L - 2721 Luxembourg