“The adoption and implementation of the International Public Sector Accounting Standards (IPSAS), which will revolutionise the current Government accounting system from a cash-based one, supplemented by accrual accounting templates, to an accrual based public sector accounting system, will enhance accountability, credibility and transparency, apart from improving overall decision making within the public service. Furhermore, they will strengthen public finance management and will have a positive impact on the nation’s reputation with credit rating agencies,” said Minister for Finance, Prof. Edward Scicluna, on Thursday morning.
PRESS RELEASE ISSUED BY THE MINISTRY OF FINANCE
Opening a conference organised by the IPSAS Project Board within the Ministry for Finance on the benefits of the transition to accrual accounting and IPSAS, Minister Scicluna remarked that the move to IPSAS will also include a change in the current cash-based accounting software. This will be replaced by a corporate financial management solution – a full accrual accounting package to be implemented across all central Government. The new system will be more responsive to business change and will create much improved and coherent financial reporting.
The Minister mentioned the great deal of work that has been carried out over the past two years to ensure that the proper administrative and project management structures are set in place for this transition. He pointed out that representation in the project teams is wide and cuts across many government departments. Eurostat is also contributing through a grant.
A shift to accruals has been on the agenda of the Maltese authorities for many years, the Minister recalled. However, in the past, this very important project unfortunately did not gather the desired momentum until the present administration got its act together to steer the project to success. On a European and international level, there is a growing movement to improve the quality of financial reporting in the public sector. This has resulted in an ever-increasing number of countries on cash based accounting to move to a more sophisticated accrual basis and to adopt and implement accrual based IPSAS.
“The implementation of IPSAS will obviously pose various challenges,” Minister Scicluna pointed out. “It will involve the re-engineering of business processes, revision of financial policies, the development of new skills and possibly, and the reorganisation of the finance function in the public service. Regarding the latter, it is pertinent to point out the acute lack of qualified accountants or qualified accounting staff within Government departments.”
The conference was also addressed by Maltese and international guest speakers. The speaker line-up comprised Mr Ian Carruthers, International Public Sector Accounting Standards Board (IPSASB) Member, who spoke about the benefits of IPSAS; Ms Katarina Kaszasovà, Director General at the Slovak Ministry of Finance, and Mr Bernhard Schatz, Deputy Head of the Austrian Ministry of Finance’s Budget Unit, who shared the implementation experience in their respective countries; Mr Alexandre Makaronidis, Head of Unit for the European Public Sector Accounting Standards (EPSAS) Task Force within the European Commission’s DG Eurostat, who focused on EPSAS; Mr Thomas Müller-Marqués Berger, Head of International Public Sector Accounting at Ernst & Young, who addressed the issue of first time adoption of IPSAS; and Mr Michael Zammit Munro, Director Government Accounts, who delivered a speech on the past, present and future of accrual accounting in Malta.
Sep 17, 2015