COSTS THE BRAZILIAN EXPERIENCE THE #IPSASB20. Rosilene Souza. Cost Evaluation Coordinator National Treasury Public Accounting Office

Transcription

1 COSTS THE BRAZILIAN EXPERIENCE THE Rosilene Souza Cost Evaluation Coordinator National Treasury Public Accounting Office #IPSASB20

2 INDEX 1. Costs Measurement in the Federal Government 2. Model Types 2.1 Legal Model 2.2 Conceptual Model 2.3 Systemic Model 2.4 Management Model 3. Lessons Learned #IPSASB20

3 Costs measurement in the Federal Government Measuring costs in public sector means to determine how many resources were consumed by one government organization to offer a specific good or service to the public. Costs management enables to improve governmental planning and budget practices spending the public resources with: Efficiency Efficacy Economicity Effectiveness 3

4 Costs measurement in the Federal Government Cost information can be used to relate the budget to results in order to improve technical efficiency and/or resource allocation. Frequently, costing has several functions: Planning process Budget process Cost control Performance assessment Evaluation of programs Setting prices, fees and inter-unit reimbursements Decision making process Source: IMF - International Monetary Fund, Outubro de 2013 Israel Fainboim 4

5 Model Types Legal Model Conceptual Model Systemic Model Management Model 5

6 Legal Model Finance Law (1964) The industrial public services, even if not organized as public companies, shall keep special accounting in order to evaluate costs, revenues and results, notwithstanding the regular bookkeeping of financial and non-financial assets. Administrative Regulation (1967) The accounting system shall evaluate services costs in order to demonstrate the results of management. Fiscal Responsibility Law (2000) The Public Administration shall have a cost information system for evaluation and monitoring of budgetary, financial and assets management. 6

7 Conceptual Model Methodology accrual basis accounting for cost information BRAZILIAN ACCOUNTING STANDARD THE CONCEPTUAL FRAMEWORK Qualitative Characteristics of Information Relevance Timeliness Faithful representation Understandability Comparability Verifiability Constraints on Information 7

8 Conceptual Model Development of the conceptual methodology (since 2010) In order to generate cost information from an essentially budgetary and financial accounting information system Budgetary Accounting BUDGETARY EXPENDITURE Budgetary Adjustements Assets and Liabilities Adjustements COST INFORMATION 8

9 Conceptual Model Evolution of the conceptual methodology (since 2016) Cost information generated by an accrual basis accounting system Accrual basis Accounting EXPENDITURE Events Expenditure accounts (equity decreases to generate goods and services) COST INFORMATION 9

10 Systemic Model Secretary of the Treasury Act 157 (2011) Creates de Cost Information System (CIS) in the Federal Government CIS aims to demonstrate costs of governmental units and programs within the Federal Public Administration CIS organization and management: Treasury as the central unit, with sector units within the ministries 10

11 Systemic Model Development of an integrated information system In order to extract, combine and process data from several other governmental systems Planning system (Ministry of Planning) Physical variable Cost Information System Data Warehouse (Microstrategy) Personnel Management Information System Physical variable Financia l variable Unit Cost Evaluation Reports Program Cost Evaluation Reports Financia l variable 11

12 Management Model Federal Government Costs Experience 12

13 Governance Joint Normative Instruction 1, 10 May 2016 (Federal Comptroller Office e Ministry of Planning) Art. 2º For the purposes of this normative instruction, it means: IX public sector governance: essentially the leadership, strategy, and control mechanisms put into practice to direct, evaluate and monitoring the management of public policies and provision of society's interest services. Costs: a tool for good governance 13

14 Management Model Federal Government Cost Model Overall Cost Standardized Cost Customized Cost Governmental Programs Cost Organs and Entities Cost 14

15 Management Model Governmental Programs Cost OBJECTIVE Provide cost information for external and social control, with an emphasis on accountability. COST OBJECTS Governmental Programs Users Assigning costs Valuation method Costing system Reporting periods External (Auditing bodies and civil society) Direct Cost Historical Cost Job Order Annually 15

16 Management Model Thematic Programmes Program and Objective Cost Report Program, Objective and Expenditure Object Class Cost Report Program, Objective and Budgetary Action with Physical Data Cost Report Program, Objective and Budgetary Action Accomplished Unit Cost Report Reports on Efficacy Reports on Efficiency Reports on Economicity

17 Management Model Budget Unit 33101: Social Security Ministry Program = 2061 SOCIAL SECURITY YEARS = 2012 e 2013 Action Year Product 2587 Ombudsman Service Users attendeted Users attendeted Measurement Unit Expected Quantity Performed Quantity % Performed Total Annual Cost (R$) Unit Cost unit % ,17 R$18,61 unit % ,31 R$20,83 Action Year Nature of Expenditure Total Annual Cost (R$) 2587 Ombudsman Service SUBSISTENCE ALLOWANCE (PER DIEMS) , TICKET , ADMNISTRATIVE, TECHNICAL AND OPERATIONAL SUPPORT , COMMISSION 996, SUBSISTENCE ALLOWANCE (PER DIEMS) , TICKET , ADMNISTRATIVE, TECHNICAL AND OPERATIONAL SUPPORT , COMMISSION 2.002,90 17

18 Management Model Cost of Governmental Units OBJECTIVE Provide cost information for control and decision making process, with emphasis on comparability over time between similar governmental units. COST OBJECTS Federal Government Organs and Entities. Users Assigning costs Valuation method Costing system Reporting periods External and Internal Direct and Absorption Cost Historical and Estimated Cost Process Costing Monthly 18

19 Management Model 19

20 Management Model Customized Cost OBJECTIVE Provide cost information for control and decision-making process, with emphasis on the unit's managerial strategy. COST OBJECTS Whatever governmental unit capable of measuring and evaluating cost information. Users Assigning costs Valuation method Costing system Reporting periods Internal Depends upon units specific model Depends upon units specific model Depends upon units specific model Depends upon units specific model 20

21 Management Model 21

22 Management Model 1 Upper Management 2 Organization Chart 3 Cost Object 4 Information Support and participation of Administration Knowledge of how it works Person in charge identification Decision about what to MEASURE, CONTROL and EVALUATE. Viability analysis Production Reporting Cost Central Office Managers /Technica l team (Units) Sectorial / Sectional Group Systems Modeling Senior Managers 1 Planning 2 Structuring 3 Implementation 4 Management Auditing and Control Entities Localization Formal Constitution Specify the team costs profile Internal partnership among related sectors Introductory presentation to S I C Benchmarking Processes' knowledge SIC 's structuring systems Units own system Identification of elementary cost data set. Mapping Segregation Costing system Valuation method Assigning costs Model implementation Implementation plan Disclosure Staff Training Execution monitoring Compliance Information management Decision making process Feedback 22

23 Lessons Learned The gradual approach strategy was well succeeded; The method of accrual basis accounting is fundamental for information integrity; Lições Aprendidas cost The flexibility of the Data Warehouse allowed a tool compatible with the heterogeneity of the Executive, Legislative, and Judiciary branches; The methodological improvement is a continuous process; A change in the management is necessary, from bureaucratic to managerial model; It's a key question to achieve improvements in accounting procedures for assets and liabilities; How to deal with managers' discomfort by the performance evaluation results; The quality of structural systems input data is fundamental to the integrity of cost information; Cultural barrier is a challenge to be solved. 23

24 Contacts Coordination for Costs Evaluation National Treasury Public Accounting Office 24

25 SRS-CSPCP