Overview of the project, as at September 2013

Transcription

1 EUROPEAN COMMISSION EUROSTAT Directorate D: Government Finance Statistics (GFS) Unit D.4: GFS Quality Management and Government Accounting TF EPSASG 13/02 Luxembourg, 19 September 2013 Task Force "EPSAS Governance to be held in Luxembourg on 2 October 2013 room Ampere, BECH Building Draft - Item 2 of the Agenda Outcome of the Conference Towards implementing EPSAS Overview of the project, as at September 2013 Paper by Eurostat - for information -

2 OUTCOME OF THE CONFERENCE TOWARDS IMPLEMENTING EPSAS Overview of the project, as at September 2013 Introduction EPSAS is a substantial, ambitious, medium to long term project. Following the conference held in Brussels on May 2013, at which Commissioner Šemeta and President Van Rompuy expressed their strong support for the project, the present note outlines Eurostat s strategy, including key elements of the work programme, for the development and implementation of EPSAS in three stages. The first stage covers the next 12 months (up to mid-2014), and includes the preparation of a Commission Communication which will officially launch the project and the collection of information that will be needed for an impact assessment, culminating in the adoption of the Commission Communication. The second stage, which should run from mid-2014 to end-2015, includes the preparation of a Framework Regulation and the setting-up of the governance structures for EPSAS. The third stage, which will cover a longer period ( ), will correspond to the effective implementation of EPSAS by the Member States. Background The "Report on the suitability of IPSAS for the EU Member States" - COM(2013) was released by the Commission on 6 March It presented a twofold conclusion. On the one hand, IPSAS as it stands currently cannot be simply implemented in EU Member States. On the other hand, the IPSAS standards represent a starting reference for potential EU harmonised public sector accounts. Following the publication of the report, Eurostat organised a conference on May 2013 in Brussels. The conference was attended by more than 200 participants, mostly representing public sector accounting authorities and experts in accounting. It was opened by President Van Rompuy and Commissioner Šemeta, who both sent strong messages in favour of the future project. At the conference President Van Rompuy explained that inaccurate accounting contributes to ill-founded policy decisions, insufficient consolidation efforts when deficits and debts are underestimated, and eventually to a total collapse of confidence leading to refinancing problems. This unfortunately is what we experienced in Europe. Europe has had its day of reckoning for inaccurate reporting of government accounts, and we have learnt the lesson. Harmonising public sector accounts, moving towards harmonised public sector accounting standards in European member states: no doubt this is easier said than done. Today my message is: we need harmonised public sector accounts in Europe. I have no doubt that you will contribute to defining best public sector accounting standards for Europe looking forward. The Commissioner noted that EPSAS needs a realistic and detailed road map, setting out the medium-term plan for implementation of EPSAS across the Member States. And this should be done as soon as possible via a Commission Communication to the European Council and the Parliament. With their political support the envisaged public sector accounting reform can have a greater impetus. This objective was confirmed by the Commissioner to Eurostat following the conference. The high level support from President Van Rompuy, Commissioner Šemeta and others 2

3 made clear to Eurostat and to the many other stakeholders that the project was building momentum. Since the conference, it has received the formal support of the French authorities. Overview of the project As of September 2013, the future of the project is seen in three stages 1 : Stage 1: covers the period from mid-2013 to mid-2014 and consists in the continuing building up of the support from the college of Commissioners and Member States, culminating in a Commission Communication (including many elements of an impact assessment) for mid Stage 2: should run to end-2015, and includes the preparation and adoption of a Framework Regulation and the setting-up of the necessary governance structures and standard setting procedures for EPSAS, and describes the core principles of EPSAS. Following on from the Communication, this stage ends with the actual implementation of the necessary structures and procedures, involving the creation of an EU governance body, based on networks of public sector accounting authorities of Member States, and the setting of key principles of accruals accounting for EU public entities. This body would oversee the development of EPSAS, and be responsible for providing opinions and interpretation on the specific EPSAS to be endorsed by the European Commission. In the same context Eurostat will need to put in place the necessary mechanisms to monitor compliance with the standards and their enforcement where necessary. Stage 3: once the Framework Regulation is in place, this stage marks the start of the concrete development and implementation of EPSAS, a continuous EPSAS process, with an initial medium-term work programme presumably into the year Stage 1 (mid-2013 mid-2014): Commission Communication The objective of this stage is for the Commission to adopt a Communication in mid-2014 which would make out the case for and announce in public the support of the Commission for EPSAS. The Communication will stress that EPSAS will be developed for the purposes of micro financial reporting, as well as being adapted for the needs of macro financial and fiscal monitoring and for the coordination of public entities in the EU. The preparation of the Commission Communication will comprise following initiatives: a. A formal "impact assessment" procedure. Subject to confirmation by the Secretariat General, a complete impact assessment will be provided in 2015, alongside with the first draft of a Framework EPSAS Regulation, taking into account the heavy processes involved. It should be borne in mind, however, that the bulk of the substance of the impact assessment can be incorporated in the Commission Communication by mid The IPSAS report published in March 2013 already included substantial elements of the necessary impact assessment. b. A task force with Member States experts devoted to the future governance of EPSAS. The issue of EPSAS governance has been a fundamental issue since the outset 1 Naturally this outline will need to be reviewed and updated as the project develops. 3

4 of the project. The first meeting of this task force will be organised in early October Following its outcome, a public consultation will be launched, the results of which should be available by March 2014 for inclusion in the Commission Communication. c. A sub-contracted study to gather further information on the potential costs of the move to harmonised accrual accounting for a sample of Member States. d. As part of the same call for tenders mentioned in c. above, a sub-contracted study to research the main potential difficulties that Member States have with some IPSASs. e. A task force with Member States experts, to be launched in January 2014, devoted to important technical issues: (i) defining the main characteristics of a subset of simplified standards for small entities; (ii) defining the core principles of EPSAS (iii) how to separate the standards into two or three "batches" in order to implement them progressively. f. Appropriate communication actions and web-based communication platforms to be put in place in December 2013 or January 2014 in order to communicate effectively the case for the project and disseminate further the key messages of the Commission Communication together with the achievements and the challenges it will face. Stage 2 (mid-2014 end-2015): Governance structures and procedures The objective of this stage is twofold: to prepare and put in place the necessary EPSAS governance structures and standards setting procedures and prepare the mid-term work programme for the actual adoption and implementation of EPSASs as from Consequently this will involve the following initiatives: a. Preparation and adoption of a Framework Regulation, the design and setting-up of the necessary governance structures and standard setting procedures for EPSAS, which in Eurostat`s view should be based on a network of public sector accounting standards setters. b. In the same context, Eurostat, in order to fulfil its mandate as the guardian of the Treaties, will need to design and put in place the necessary mechanisms to monitor actual observance of the future EPSAS standards and their enforcement where necessary. c. In order to develop and adopt EPSAS following a principled approach, Eurostat will need to develop a view and reach the broadest possible consensus on accepted core accounting principles for public sector accounting in the EU, which will be embedded in the planned Framework Regulation. This is to inform and drive the standards setting process. d. The sub-contracted activities noted above not only serve the purposes of the Commission Communication but moreover are meant to provide valuable input into preparing the ground for and reaching the widest possible consensus on the concrete EPSAS standards to be endorsed through the standards setting process. Thereby particular focus will be put on those IPSAS standards which are considered as insufficiently developed for EU purposes and may need to be discussed anew. At this stage it will be necessary to elaborate on the applicability of the existing IPSASs, including for the treatment of small and medium public entities. 4

5 The drafting of the Framework Regulation will necessitate the creation of the announced EPSAS working group that is foreseen to become operational from March As announced at the EPSAS conference, and already noted above, Eurostat will launch by early 2014 a second TF on technical standards comprising experts from public sector standards setters and government accounting authorities, in order to support the work plan outlined above. The second stage ends with the adoption of the EPSAS Framework Regulation and the setting-up of the necessary governance structures and standard setting procedures. Stage 3 (end ): EPSAS endorsement and stepwise implementation Based on the EPSAS governance and standards setting structures put in place by means of the EPSAS Framework Regulation and the mid-term work programme developed in stage 2, the objective of stage 3 is to adopt the necessary legislative acts in order to implement the EPSAS standards. The endorsement of the first EPSAS standards and the implementing measures by the government accounting authorities will trigger the launch of the interpretation process of EPSASs within the set structures and procedures and with due respect to the core principles for public sector accounting. Once the Framework Regulation is in place the EPSAS programme will have evolved into a process of standards setting, interpretation and monitoring the EPSASs. 5