Case Study Implementation of Uniform System of Accounts in Bulgaria

Transcription

1 Promotion hi d r o ener get i kasi Project i nvest i c(hipp) i ebi s xel Sewyo bi s pr o eqt i Case Study Implementation of Uniform System of Accounts in Bulgaria October 2012

2 Contents Bulgarian energy sector overview Historical review in application of USOA in Bulgaria Legislative framework for implementation of USOA Development of regulatory accounting standards and procedures for electricity sector Major characteristics of the USOA implemented in Bulgaria Implementation of USOA in Bulgaria Achievements of USOA

3 Bulgarian energy sector overview Development of Bulgarian energy sector in past 10 years is a mix of a number of success stories and achievements; Middle term energy strategy 2001 till 2005; Electricity sector privatization, deregulation, quality standards; Natural gas sector development of gas distribution regions; District heating modernization, quality standards, privatization; Renewable energy sources development and incentives for investors; Energy efficiency legislation, regulations and supporting schemes development; Long term energy strategy till 2020.

4 Historical review in application of USOA in Bulgaria In 2002 COM adopted the National Accounting Standards (NAS); NAS governed the organization of the accounting activities until December 31 st 2004; The application of International Accounting Standards started at January ; There are 37 national standards and general provisions.

5 Legislative framework for implementation of USOA European Union Directives 2003/54EC and Regulation EC1228/2003 obliges the MS to take necessary measures to implement unbundled accounts for the energy enterprises; Directive 2003/54EC obliges the energy companies to keep separate accounts for each they transmission and distribution activities; The companies shall also keep accounts

6 Major Characteristics of the USOA Implemented in Bulgaria Chart of accounts; Regulatory accounting manual; Instructions; Auditing manual.

7 Implementation of USOA in Bulgaria The Energy Law of Bulgaria provides in part as follows: Energy companies shall keep separate accounts of: Each activity, subject to licensing under this Law; Activities, subject to licensing under this Law and other activities; Each industrial branch or company; d) Activities in the cases of regulated and freely negotiated prices; The rules for keeping separate accounts by energy companies, including assets for the purposes of pricing by groups of consumers, as well as the form and content of the financial statement for regulatory purposes. The Uniform System of Accounts developed by State Energy and Water Regulatory Commission (SEWRC) for the EDC provides the framework for the rules for keeping separate accounts by the EDC, including assets, equity, liability, revenues and expenses for the purposes of pricing by groups of consumers. Applicability of USoA The system of accounts prescribed in the USoA shall be applicable to all EDC Licensees subject to the Commission's regulatory accounting requirements under the Energy Law

8 Accounting Period Each EDC shall keep its books on a monthly basis so that for each month all transactions applicable thereto, as nearly as may be ascertained, shall be entered in the books of the EDC. Amounts applicable or assignable to specific EDC functions shall be so segregated monthly. Each EDC shall close its regulatory books at the end of each calendar year unless otherwise authorized by the Commission.

9 Accounting Records Each EDC shall keep its accounting books, and all other source documents, records and memoranda, which support the entries in the accounting books so as to be able to furnish readily full information about any item included in any account. Each entry shall be supported by detailed information to permit easy identification, analysis, and verification of all facts regarding any transaction. The EDC shall maintain its accounting books or records for a period of min. 10 years. Each EDC may keep in addition to the accounts prescribed in the USOA clearing and temporary accounts, as well as subdivisions of any prescribed account, provided the integrity of the prescribed accounts is not impaired. The arrangement of the accounts in the USOA shall not be controlling as to the arrangement of items in the regulatory reporting forms, prescribed by the Commission.

10 The USOA greatly reduces Corruption through specific rule making on accounting and tariff setting and through monitoring and auditing of individual energy companies; Inadvertent cross-subsidization of customer classes and energy sector companies; Expenses for non-regulated activities being included in pricing of regulated services; Political and social pressure on pricing and monitoring of energy sector companies; Unfair and inconsistent treatment of private investors; and Therefore, the risks of business operations and investment in Bulgaria.

11 Achievements of the USOA Consistence; Fairness; Transparency; Best international practice; Automation of the process of accounting; Supporting the reforms in electricity sector; Quality of information; Monitoring; Tariff setting process; International integration; Control system.

12 Contact: Sukru Bogut, COTR, Energy Advisor, USAID Michael Jake Delphia, Chief of Party, HIPP Giorgi Chikovani, Deputy Chief of Party, HIPP Valeriy Vlatchkov, Power Market Advisor, HIPP