IPSAS Compilation and Certification Program for Developing Countries

Dr. Jesse Hughes, CPA, COA, CGFM Chair, ICGFM Accounting Standards Committee

Components of Compilation Program

IPSAS Compilation Guide for Developing Countries Roadmap on path from cash based reporting to accrual-based IPSAS Certificate of Conformance for various stages of IPSAS implementation

Categories of Government Controlled Entities

Central Governmentprimarily budgetary entities at the national level General Government
Central Government State Government Local Government

Government Business Enterprises Categories Correspond to Those Used in the GFS Implementing Guide for Developing Countries issued by IMF

Six Stages in the Path from Cash to Accrual-Based IPSAS

1. Current reporting by select entities 2. Central GovernmentCash Basis IPSAS (Part 1) 3. Central Governmentmodified accrual to include financial assets and liabilities 4. General Governmentfull accrual IPSASs to include all assets and liabilities
a. Central Government b. State Government c. Local Government

5. Government Business EnterprisesIAS/IFRS 6. Consolidated Whole of Governmentfull accrual IPSAS

Which Stage Applies to You?

Government entities may enter at any stage depending on jurisdictional circumstances. The Compilation Guide, along with the applicable IPSAS, will be used as the criteria to identify the stage in which to enter. The Compilation Guide will be revised as necessary in response to experience in field testing.

Stage 1. Current Reporting by Select Controlled Entities (Year 1)

Statement of Cash Position Budget to Actual Comparative Statement

Stage 2. Central Government Cash Basis IPSAS (Years 2-3)

Opinion of Supreme Audit Institution* Financial Statement Discussion and Analysis* Statement of Cash Receipts and Payments to include Payments by Third Parties Comparative Statement of Budget to Actual Amounts Footnote Disclosures

Stage 3. Central Government Modified Cash Basis Reporting (Years 3-5)

Opinion of Supreme Audit Institution* Financial Statement Discussion and Analysis* Statement of Cash Receipts and Payments to include Payments by Third Parties Comparative Statement of Budget to Actual Amounts Intermediate Statement of Financial Position Intermediate Statement of Financial Performance Intermediate Statement of Changes in Net Assets Footnote Disclosures

Stage 4. General Government Accrual IPSAS (Years 5-8)

Opinion of Supreme Audit Institution* Financial Statement Discussion and Analysis* Statement of Cash Flows Comparative Statement of Budget to Actual Amounts Statement of Financial Position Statement of Financial Performance Statement of Changes in Net Assets Footnote Disclosures

Stage 5. Government Business EnterprisesIAS/IFRS (Years 3-5)

Opinion of Supreme Audit Institution Financial Statement Discussion and Analysis Statement of Cash Flows Statement of Financial Position Comprehensive Statement of Income Statement of Changes in Equity Footnote Disclosures

Stage 6. Consolidated Whole of GovernmentAccrual IPSAS (Year 10+)

Opinion of Supreme Audit Institution* Financial Statement Discussion and Analysis* Statement of Cash Flows Comparative Statement of Budget to Actual Amounts Statement of Financial Position Statement of Financial Performance Statement of Changes in Net Assets/Equity Footnote Disclosures

Roadmap to Implementing Compilation Guide

Adopt IPSAS Establish Steering Committee and Working Group Build Capacity (train at all levels) Progressively Implement each Stage Apply for Certificate of Conformance at Conclusion of each Stage

Certificate of Conformance
Recognizes Achievement at each Stage along Path to Implementing Accrual IPSAS Independent Evaluation of Accomplishments Certificate of Conformance Attached to Financial Statements to Advise Readers of Level of Achievement

Volunteers Needed
Countries to field test Compliance Guide for practicality. Countries to field test Certificate of Conformance program for applicability. Members on ICGFM Accounting Standards Committee to assist in developing IPSAS Compilation and Certification Program. If interested, contact Dr. Hughes (jhughes@odu.edu)