IPSAS implementation in ESAAG Region: Tanzania Experience Dr. Kalugendo, E.J

2. IPSAS implementation in ESAAG Region: Tanzania ExperienceDr. Kalugendo, E.J

3. Presentation Outline Introduction IPSAS implementation in ESAAG Region Rationale for adopting IPSAS Accrual Key Factors for successful IPSAS implementation Experience from Tanzania in adoption of IPSAS IPSAS implementation process in Tanzania Post achievements Challenges on IPSAS implementation Way forward Conclusion

4. Introduction • The Government of Tanzania through NBAA (T) adopted International Accounting standards (IFRS in 2004 andIPSAS in 2006). • Migration to IPSAS Accrual for LGAs & CG was 2008/09 and 2012/13 respectively. • Section 25 of the PFA, 2001 (revised 2004) was amended to recognise IPSAS as the reporting framework for PSE.

5. IPSAS Implementation in ESAAG Region

6. Rationale for adopting IPSAS Accrual • IPSAS guarantees reliable information for decision making • IPSAS provide greater clarity on financial position and financial performance of PSEs across the world to enhance accountability and transparency • IPSAS has become essential in improving efficiency and effectiveness in financial reporting and auditing processes across the PSE • IPSAS assures standardisation & consistency in reporting processes • IPSAS provides avenue for data analysis due to reliable data and hence improved decision making

7. Rationale for adopting IPSAS Accrual, Cont… • IPSAS has enhanced improved financial management practices in PSE by providing a robust platform for stronger financial reporting • IPSAS facilitate International comparability between PSE • IPSAS financial statements enrich investors confidence in investment decision in PSE. • IPSAS minimises additional reporting requirements from donors • IPSAS enhanced ‘professionalism’ of finance and accounting function across the PS

8. Key Factors for Successful IPSAS Implementation • Government Commitment- Budget is allocated to ensure roadmap was comprehended • Legal Regime Review • Establish IPSAS Steering Committee • Implement IPSAS in a project perspective • Resources and competent human personnel • Stakeholder & User Involvement • Communication and Training • Technological usage • Commitment and devotion among implementers.

9. Experience from Tanzania in IPSAS adoption • Establishment of the IPSAS task force which spear head the whole process • Launch of IPSAS Implementation roadmap which highlights phases and action to be accomplished regarding to milestones • Discuss and agreeing the roadmap with the CAG • Preparation of accounting manual for procedural guidance • Annual closure instructions to PSE • Capacity building to the task force on adoption of IPSAS related issues and other stakeholders. • Obtaining political will and support through sensitization

10. Experience from Tanzania in IPSAS adoption, cont… • Capacity building to Parliamentary Oversight Bodies (i.e. PAC and LAAC) • Training to Accounting Officers on the whole process of migration to IPSAS Accrual basis of accounting. • Preparation of asset register for all MDAs • Training to Accountants and other stakeholders (Including: Auditors, planners, procurements specialists, financial analysts, extra).

11. Experience from Tanzania in IPSAS adoption, cont… • Preparation of the opening balances for the statement of financial position, which were submitted to the AG for verification before they were entered in the IFIMS. • Developing the accounting policies to be used by all the entities. • Preparation and updating of Asset Guideline

12. Implementation processes Discuss and agree Roadmap with Auditor General Prepare CFS which comply with IPSAS Prepare Opening Balance Sheet Implementation Process Update Fixed Asset Register Develop Accounting Policies Upgrade IFMIS (Version 7.35 to 9.05) Amend Laws governing Public Finance Upgrade Chart of Accounts

13. Post Achievements • Accounting policies were developed based on IPSAS and GAAPs • Upgraded IFMIS 7.3.5 to Version 9.05 which is more capable for accrual transactions • IPSAS is integrated with GFSM2014 in accrual reporting (Includes GG and PC) • Preparation and published CFS with IPSAS Accrual compliant for FY 2016/17 • CFS with IPSAS Accrual compliant is now used to make decision (Budget preparation and other forecast) • Tanzania has become the learning point in the region for IPSAS compliant • NBAA(T) has launched IPSAS Diploma and conducts workshops related to IPSAS applications

14. Challenges in IPSAS Implementation Use of different Computerized Accounting package for some of Government entities. Timely completion of audits of entities to be used in preparation of CFS Different accounting period for some PSEs and Ass and JV that require adjustment on CFS Using different accounting Framework (IPSAS VS IFRS) Different GFS codes accross Public Sector entities.

15. Way forward • The Government is taking initiative to align all controlled entities to use the same accounting package • Capacitating AG to accomplish Audit exercise for individual FS timely • Discussion with Public Financial Corporations (Banks and Insurance) to adjust their reporting period. • Mapping and adjusting data from PSCEs financial reports in preparation of CFS • The GVT has published the harmonized GFS codes as per GFSM2014 which to be used by all PSEs during budget preparation and financial reporting

16. Conclusion • Prepare a clear IPSAS implementation roadmap and adhered to. • Ensure that IPSAS is included in PFMA • Issue accounting circular and guidance to the prepare of FS which communicate with IPSAS • Make sure the IFMIS is aligned with IPSAS • Establish quality data during IPSAS adoption to avoid restatement of FS • Consider application of Iceberg success theory on the significant relationship between listed construct and success • Determination • Hardworking • obedient

18. Thank you very much for your attention