Cost/Performance Accounting

Transcription

1 Cost/Performance Accounting 12 th Annual WCO Picard Conference Hammamet, September 2017 Robert Lüssi, Vice Director FCA

2 What gets measured gets managed Peter F. Drucker (Economist, ) 2

3 Switzerland and its neighbours 3

4 Swiss Customs Department of Finance Federal Customs Administration (FCA) Directorate General of Customs Regions Border Guard Posts 4 Districts 7 BGC Customs regions offices 4

5 Key figures 2016 Revenues: USD 22 billion Customs declarations: 36 million FTA: 30 Exports: USD 300 billion Imports: USD 265 billion Border: 1935 km A day at the Swiss Border: million people million cars and 24,000 trucks cases of illegal residence 5

6 USD 22 billion taxes and incentive fees

7 New Federal Management Model Introduced: 1 January 2017 General Tasks - Improving budget management - Further development of results-based public management - Improve efficiency and effectiveness New Instruments - Legislative period financial plan (4 years) with 1 to 5 Performance Groups / administrative units and integrated tasks - Service level agreements with annual objectives - Cost accounting 7

8 New Federal Management Model 7 Departments 57 Administrative Units 140 Performance Groups ~ 500 Cost objects ~ 3000 Cost centres Federal Customs Administration 4 Performance Groups 45 Cost objects 118 Cost centres 8

9 FCA 4 Performance Groups Collection of taxes and duties Support for international trade Security and migration Protection of the environment and health 9

10 FCA: 4 Performance Groups fiscal economic security others 10

11 Performance Group 1 fiscal Cost objects - Mineral Oil Tax - Tobacco Tax - VAT - Beer Tax - etc. 11

12 Different types of cost accounting The Federal Administration envisages three possible types of cost accounting: Basic type (minimum standard) Simple cost accounting Extended cost accounting On , the FCA switched from the basic type to simple cost accounting With simple cost accounting, performance items are now accounted for in addition to cost centres 12

13 What questions can be answered with simple cost accounting? 1. What types of costs are incurred? 2. Where are these costs incurred (who causes them)? 3. For what are these costs incurred (what services are provided, what proceeds are earned)? To answer these questions, the costs are allocated to the organisational units, i.e. in the case of each organisational unit, all types of costs it causes are visible. Likewise, it is possible to see for a given cost type which organisational units cause those costs. 13

14 How is the allocation from cost centres to cost objects carried out? The allocation is carried out by means of keys. These were set during a two-week survey of the cost centres. The keys were calculated based on the employee time involved for a certain cost object noted during the survey. Internal orders (IO) exist for special cases, e.g. IT expenses. Individual keys were defined for these. Normally, however, they also go through the cost centres and thus go to the cost objects (but see initial experience). 14

15 Input: Booking of proceeds and expenses from creditor workflow, cash books, various invoices Output: Financial data for budget with ITFP or SLA, DB FS CPM and laboratory, analyses and reporting FCA cost accounting value flow Cost centre accounting Cost object accounting Support CC IO proceeds ICT IO Building IO IO Location CC Location CC Location CC Location CC... IO proceeds IO proceeds IO proceeds... CO 1.1 CO 1.2 CO CO 2.1 CO 2.2 PG 1 PG 1 PG 1 PG 2 PG 2 Support CC Org. CC 1 Org. CC 2 SLA 1 SLA 2 SLA 3 CO 2.3 CO 3.1 CO 3.2 CO 3.3 PG 2 PG 3 PG 3 PG 3... SLA 4 CO 4.1 PG

16 Example: The Mineral Oil Tax 16

17 Receipts of the Confederation (in mn CHF) Total Receipts Confederation 67,580 Total FCA 21, % Import duties 1, % Value Added Tax (at the border) 10, % Mineral Oil Tax 4, % Tobacco Tax 2, % Beer Tax % Automobile Tax % Motorway Charge % Heavy Vehicle Charge 1, % Environmental incentive fees (PG 4) 1, % 17

18 Receipts of the FCA (in mn CHF) Total FCA 21,880 Import duties 1, % Value Added Tax (at the border) 10, % Mineral Oil Tax 4, % Tobacco Tax 2, % Beer Tax % Automobile Tax % Motorway Charge % Heavy vehicle Charge 1, % Environmental incentive fees (PG 4) 1, % 18

19 Collection costs of the FCA 2016 (in mn CHF) Total FCA 1,517 Import duties % Value Added Tax (at the border) % Mineral Oil Tax 6 0.4% Tobacco Tax 8 0.5% Beer Tax % Automobile Tax % Motorway Charge % Heavy Vehicle Charge % Total Performance Group % 19

20 Mineral Oil Tax; Cost centre accounting Accounting Cost centre accounting Cost object accounting Primary costs: Personnel costs (incl. training) Various other invoices Secondary costs (derived cost): App Mineral Oil Tax 42.9 % App TSR 50.0 % IT jobs 0.84 % Rental expenditure 5.76 % Amortisation etc. 4 others ( %) Org. CC Division Value Added Tax, Mineral Oil Tax, Incentive Taxes SLA 1 Collection of taxes and duties SLA 4 Protection of the environment and health CO 1.1 Mineral Oil Tax 51.3 % CO 1.2 Value Added tax 25.6 % CO 1.3 Automobile tax 1.6 % CO 4.1 CO 2 tax 11.7 % CO 4.2 VOC fee 9.8 % PG 1 PG 1 PG 1 PG 4 PG 4 20

21 Mineral Oil Tax; Cost object accounting (%) Accounting Cost object accounting Org CC District 1 12 CC 0.4 % each Internal Audit 0.7 % Logistics 1.4 % Customs Laboratory 5 % Org CC District 2 9 CC 1 % each Resources 2 CC 0.7 % each Mgn Support Procedures 1.5 % Personnel & Training 3 CC 0.7 % each Org CC District 3 8 CC 0.4 % each Finances 1 % Organisation and Enforcement 2.1 % HR Centre (I-IV) 1.1 % Staff Main Division 3 CC 0.7 % each Real Estate 0.3 % Criminal Matters and Appeals 5 % Mgn Support Revenue 15 % Division Value Added Tax, Mineral Oil Tax, Incentive Taxes 51.3 % Mineral Oil Tax Proceeds CHF 4,688 mn Cost object Mineral Oil Tax CHF 6 mn 21

22 Mineral Oil Tax; Cost object accounting (FTE) Accounting Cost object accounting Org CC District 1 12 CC 2.84 FTEs Internal Audit 0.04 FTE Logistics 0.61 FTE Customs Laboratory 0.68 FTE Org CC District 2 9 CC 4.91 FTEs Resources 2 CC 0.64 FTE Mgn Support Procedures 0.08 FTE Personnel & Training 3 CC 0.53 FTE Org CC District 3 8 CC 0.78 FTE Finances 0.25 FTE Organisation and Enforcement 0.76 FTE HR Centre (I-IV) 0.18 FTE Staff Main Division 4 CC 0.16 FTE Real Estate 0.06 FTE Criminal Matters and Appeals 1.40 FTE Mgn Support Revenue 0.60 FTE Division Value Added Tax, Mineral Oil Tax, Incentive Taxes 16.2 FTEs Mineral Oil Tax Proceeds 100 % Cost object Mineral Oil Tax FTEs 22

23 Mineral Oil Tax; System view user 23

24 Initial experience I 2016 and 2017 were learning years. The initial experience should provide information on any adjustments needed. The consistent allocation of costs via cost centres had to be revised for some cost objects. Reason: some high individual costs like flat-rate expense compensation or comparatively high losses on receivables for individual cost objects, etc. Solution: new internal orders that are assigned directly to the relevant cost object. Adjustments were made partly retroactively as at with adjustment postings. Aspiration: cost accounting will deliver meaningful data from

25 Initial experience II The initial provisional figures for 2016 were sometimes surprising. Simple cost accounting is not precise accounting, but it is based on this data. This leads to misunderstandings. Knowledge of the cost accounting recording basis, the operation or features of the cost objects (taxes and duties) and their statutory basis is still essential for understanding. 25

26 Government Revenue Ministry/Department/Service/Office/Administration Customs Excise Tax Revenue 26

27 Proportion of customs duties of Swiss government receipts 1916 duties 2016 duties 27

28 Study Cross-Border Research Association (2014/2015) Parameters Possibility of harmonisation Benefits for the Swiss Customs new costperformance accounting? 28

29 Advantages of a shared database Increase transparency Improve legal certainty Reduction of costs of IT projects More efficient project work Exchange of information Benchmarking Cooperation between authorities Harmonisation (long-term objective) 29

30 Feasibility Study on Customs Revenue Benchmarking Database Costa Rica, Finland, Latvia, The Netherlands, New Zealand, Norway, South Africa, Switzerland, Vietnam Presented at the PICARD-Conference 2015 Baku Follow-up at the PICARD-Conference 2016 Manila Outcome: - Produce transparent, easy to read statistics on tax revenues collected - Enhance the knowledge on total cost of collection - Learn actively from the experiences and best practices Finalisation of the Report of the WG (September 2017) Presentation at WCO (2017/2018) Link to the Demo Version: 30

31 Questions? 31

32 Glossary Abbreviation or term Proceeds FA FTE Support CC Explanation Consideration for goods and services (cost accounting) Financial accounting Full-time equivalent Support cost centre ITFP Integrated task and financial plan Internal order, costs for products, certain tasks, projects or contributions ICT IO / Gen. IO / IO / IO regulated by law (advisory services, proceeds, contributions, etc.) or for proceeds proceeds; grouped by ICT, gen., proceeds Imputed costs are not actual costs that stand against effective expenses. Imputed costs Instead, they serve internal calculation purposes, e.g. to calculate prices, and Cost accounting Cost accounting objects or CO objects CT Costs are thus purely arithmetical. Internal accounting that takes the relevant expense and revenue accounts from financial accounting and thus ensures the recognition of all operating costs and proceeds generated Account assignment object or addition (IO, CC, IO proceeds and materials) Cost types show the proceeds and costs incurred Factor consumption / consumption of fixed capital for producing operational performance items 32

33 Glossary Abbreviation or term CC CO Indic. PG SLA NMM Org. CC Primary costs and proceeds Secondary costs Location CC Explanation Cost centre; shows where costs are incurred for the organisation of a unit (personnel, building rent, other operating expenses, etc.) Cost object; FCA performance item Indicator Performance group Service level agreement New federal management model Organisation cost centre Costs and proceeds recognised in the statement of financial performance and the statement of investments and that go into cost accounting. Aside from primary costs, the second types of costs are secondary costs. While primary costs arise due to external charging, e.g. rental costs or energy costs, secondary costs are costs that are passed on. Rental costs are an example of secondary costs. We pay rent for an operating building = primary costs. These rental costs are apportioned to the Org. CC = secondary costs, or derived costs. Location CC 33