Posted by Ross Smith, John Stanford, and Sagé de Clerckٞ[1]
During 2014, the International Public Sector Accounting Standards Board (IPSASB) launched their first-ever Strategy and Work Plan consultation. That, together with the completion of the Conceptual Framework for public sector accounting in the second half of 2014 were landmark achievements that attracted wide public interest. Since 2014, the IPSASB has also established a new governance structure that includes the Public Interest Committee (PIC) and a Consultative Advisory Group (CAG).
To ensure that the proposed direction and priorities of IPSASB will continue to serve the public interest, the Board in January 2018 launched the IPSASB’s strategy consultation process, together with its Proposed Strategy and Work Plan 2019-2023. Written comments on these proposals were requested by June, 2018, but IPSASB went beyond that by hosting during the first half of the year four Regional Roundtables designed to promote awareness of, and receive feedback on the proposed strategy.
The Regional Roundtables were hosted in Addis Ababa by the African Union, in Manila by the Asian Development Bank, in Brasilia by the Ministry of Finance of Brazil, and in Brussels by Accountancy Europe. The feedback from constituents was overwhelmingly positive. In total, 384 people from 108 countries participated, representing more than 300 organizations. Constituents appreciated the face-to-face discussions with IPSASB members and staff, and the opportunity to share their views on IPSASB’s future priorities.
IPSASB’s overarching Strategic Objective set out in the Workplan is: “Strengthening Public Financial Management (PFM) globally through increasing adoption of accrual-based IPSAS. Delivered through two main areas of activity, both of which have a public interest focus: developing IPSAS and other high-quality financial reporting guidance for the public sector; and raising awareness of IPSAS and the benefits of accrual adoption.” This strategy firmly positions the IPSASB’s activities in the broader PFM landscape.
To deliver the strategy, IPSASB further defined five broad themes on which to base its future development and work program. These themes are as follows:
- Set standards on public sector specific issues, based on the Conceptual Framework, while continuing to reduce unnecessary differences between IPSAS and the IMF’s framework of Government Finance Statistics (GFS);
- Maintain convergence with International Financial Reporting Standards (IFRS), thereby acknowledging that, in many instances, government activities are like those of business corporations and require a common approach to global financial reporting;
- Develop guidance to meet users’ broader financial reporting needs, in recognition that not all needs can be satisfied by financial statements alone—this will lead to the issuance of further recommended Practice Guidelines where specific public interest needs have been identified.
To address the need to raise awareness of IPSAS and promote their adoption IPSASB will also:
- Promote and encourage the adoption and implementation of IPSAS globally in the public interest—through an active approach to global outreach. IPSASB wants to persuade the broader community that adopting accrual accounting will enhance transparency and provide better information for decision-making and accountability; and
- Working with other professional groups and sponsoring organizations, advocate the benefits of accrual reporting for strengthening PFM, fiscal transparency, accountability, and decision making.
The feedback received at the Roundtables complements the written submissions that IPSASB has received on the proposals. Overall, 94 percent of respondents approved IPSASB’s proposed Strategic Objective, while 80 percent supported the Board’s continued focus on public sector specific projects. These projects will consume most of the Board’s and staff resources in the 2019-2023 period. The strong support for the proposals, combined with the broad level of engagement with constituents, gives real legitimacy to IPSASB’s new Strategy and Work Plan.
The Board is exploring how to embed regular regional engagements into its future outreach program, building on the success of the Roundtables and the evidently strong appetite for such activities. The consultation process has also enabled IPSASB to strengthen its relations with regional organizations. The African Union, for example, has accepted an invitation to be an official IPSASB Observer at future meetings of the Board. The Asian Development Bank already has Observer status. [2]
The feedback received from the consultation process should enable the Strategy and Work Plan 2019-2023 to be approved at the December 2018 meeting of the Board. Over the next few months, the IPSASB will analyze the feedback received, consult with the IPSASB Consultative Advisory Group, and discuss the results of the consultations with its oversight body, the Public Interest Committee. For those interested, the proposals in the consultation document and the comments received are available here.
Overall, the IPSASB found the Roundtables very valuable in enabling them to engage directly with a broad group of constituents, in regions where IPSAS adoption and implementation is growing, and to hear directly about regional priorities and challenges. The Board is looking for future strategic opportunities to work with regional hosts and engage with constituents. Stay tuned for upcoming Board deliberations on the Strategy and Workplan at the September and December 2018 IPSASB meetings!
[1] Ross Smith and John Stanford are members of the IPSASB Secretariat; Sagé de Clerckٞ is a Senior Economist in the IMF’s Fiscal Affairs Department.
[2] Organizations such as the IMF, the World Bank, the United Nations, the European Commission, Eurostat, and the OECD are also observers.
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