(unfortunately only in Portuguese)
Posted by Mario Pessoa
If you are interested in understanding how the public accounting system in Brazil works and what are the concepts behind the government financial information system (SIAFI), you have a good guide through the book Public Accounting in Brazilian Central Government (“Contabilidade Publica no Governo Federal” in Portuguese). (Click the link to access the book and the spreadsheet exercises.)
This book, written by Domingos Poubel and Leice Garcia,* presents the reform in public financial system in Brazil from 1985 to 2001 and how the SIAFI system was structured using the chart of accounts as the basis of the financial system. It also shows how the chart of accounts encompasses the budget classification (same codes for the economic classification) and the methodology that enables the automatic registry of the double entry modified-accrual accounting system used in Brazil.
The key characteristic of the SIAFI system is the automation of the accounting process based in the structuring of the information in the budget execution process. When the officials from the government prepare, for example, a check to pay for an acquisition of goods or services, the SIAFI registers, at the same time, the budget execution (revenue and expenditure), the financial transaction (cash disbursement of the treasury single account), and the registries in the general ledger (credit and debit related to the assets and liabilities financial statements). Depending on the transaction (for example, transfers to local governments) other information is also registered automatically as complementary information. It is also produces the fiscal information regarding primary and general results.
This approach used by the SIAFI system guarantees that the budget and accounting information are permanently matched, only one document is generated, the financial statement is automatically generated, and all financial transactions be accessed by the Executive, legislature, internal audit, external audit, and the society (a summary of every payment can be assessed through the internet).
The book shows in a very friendly manner (using charts and figures transaction by transaction) how the registries in the accounting and budgetary books are done. It is also explain, using a simple spreadsheet, how the accounting registry is automatically generated by the SIAFI system. It is possible to download some accounting exercises using the website of the author as a way to practice the methodology.
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* Domingos Poubel, economist and accountant, was the former accountant general of the Brazilian federal government, and head of the internal audit department of the federal government. He also teaches public accounting in various universities in Brazil. Leice Garcia, master in production engineering, is an control analyst in the internal audit department of the federal government.
