when and how into accrual accounting in public finance ljubljana, 16.-17.02.2006
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WHEN AND HOW INTO ACCRUAL ACCOUNTING IN PUBLIC
FINANCE
Ljubljana, 16.-17.02.2006
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1. STRATEGY OF DEVELOPMENT OF INTERNAL CONTROL OF PUBLIC FINANCE
- Accepted by the government in June 2005
- Relating on period of 2005 – 2008
- One of the goals was creating efficient system of finance operations
- Finance operations include implementing and performing accounting and reporting – renovation of accounting
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2. RENOVATION OF ACCOUNTING
- Implementing changes of contents – introduction of accrual accounting
- Composing of total property balancesheet statement (statement of state assets and liabilities) and establishing a net value
- Improving structure of accuntants
- Defining authorized accountant
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3. CURRENT SYSTEM
- Indirect budget users – accrual accounting
- Direct budget users – cash accounting
- Budget reporting on business events when executing budget
- Accounting reporting on business events when executing budget
- Benefits of current system
- Weaknesses of current system
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4. INTRODUCTION OF UNIFIED ACCOUNTING FOR BUDGET AND ALL BUDGET USERS
1. Basic conditions:- Connecting accounting and budget preparation- Understanding of accounting rules- Political obligation and stability- More stress on controling results over inputs- More education and training for all accounting workers- Adapting IT
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4. INTRODUCTION OF UNIFIED ACCOUNTING FOR BUDGET AND ALL BUDGET USERS
2. Fulfiling conditions in Slovenia:- Connecting accounting and budget preparation – wider analysis of all
public revenues is needed- Understanding of accounting rules –moving towards goals too slow- Political obligation and stability – moving towards goals too slow- More stress on controling results over inputs –moving from
traditional towards ‘results orientated budget’- More education and training for all accounting workers – acquring
certificate of certified accountants for public sector - Adapting IT – adapting of current software and expansion of current
software to local level
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4. INTRODUCTION OF UNIFIED ACCOUNTING FOR BUDGET AND ALL BUDGET USERS
3. Development and modernization of accounting system in Slovenia:
- Passing over to accrual accounting can be done at once or gradually- Three optinons:
- Accrual accounting implemented for state budget, local budgets and all budget users – total implementation
- Accrual accounting implemented for all budget users, but not for state and local budgets
- Accrual accounting implemented for all budget users, except for four state treasuries of public finance (state budget, local budgets, pension and disability fund, health fund)
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4. INTRODUCTION OF UNIFIED ACCOUNTING FOR BUDGET AND ALL BUDGET USERS
3. Development and modernization of accounting system in Slovenia (continued):
- Benefits and weaknesses of each of three options- Fulfiling basic conditions in Slovenia is optimal when:
- Method of slow steps is taken
- Through introduction of third proposed option gradually moving to implementation of full accrual accounting