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

2. 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

3. 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

4. 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

5. Public Sector Accounting ReformComponents New accounting and reporting standards “MoFmust 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

6. Public Sector Accounting ReformComponents System support to implementation “MoFmust 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 “MoFshould 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 6,500public accountants • Cooperation with universities and professional associations • Communication

8. Public Sector Accounting ReformTimetable

9. 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

10. 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

11. Information and contacts Ministry of Finance of the Slovak Republic Štefanovičova 5 P.O.Box 82 817 82 Bratislava 15 Slovak Republic www.finance.gov.sk