This document is an excerpt from the EUR-Lex website
Document 52013DC0114
REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT Towards implementing harmonised public sector accounting standards in Member States The suitability of IPSAS for the Member States
REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT Towards implementing harmonised public sector accounting standards in Member States The suitability of IPSAS for the Member States
REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT Towards implementing harmonised public sector accounting standards in Member States The suitability of IPSAS for the Member States
/* COM/2013/0114 final */
REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT Towards implementing harmonised public sector accounting standards in Member States The suitability of IPSAS for the Member States /* COM/2013/0114 final */
REPORT FROM THE COMMISSION TO THE
COUNCIL AND THE EUROPEAN PARLIAMENT Towards implementing harmonised public
sector accounting standards in Member States The suitability of IPSAS for the
Member States 1. Legal background and
context This report fulfils the Commission’s
obligation, under Article 16(3) of Council Directive 2011/85/EU of 8 November
2011 on requirements for budgetary frameworks of the Member States[1], to assess the suitability of
the International Public Sector Accounting Standards (IPSAS) for the Member
States by 31 December 2012. It is based on information received through
consultation with Commission services, international organisations such as the IMF,
expert practitioners and other interested parties within the Member States and
beyond, as well as the IPSAS Board, the standard-setter for these standards. The sovereign debt crisis has underlined
the need for governments to clearly demonstrate their financial stability and for
more rigorous and more transparent reporting of fiscal data. Council Directive
2011/85/EU (the Budgetary Frameworks Directive) recognises the crucial role in
EU budgetary surveillance of complete and reliable fiscal data, comparable
across Member States. It therefore sets out the rules on Member State budgetary
frameworks that are necessary to ensure compliance with the obligation under
Article 126 of the Treaty on the Functioning of the European Union (TFEU) to
avoid excessive government deficits. On the one hand, fiscal discipline plays
an essential role in safeguarding Economic and Monetary Union, and on the other
hand, financial stability is based on trust. This report discusses one of the
tools for building this trust and for better measuring and forecasting the
fiscal situation: harmonised public sector accruals-based accounting standards. Article 3 of Directive 2011/85/EU requires
Member States to ‘have in place public accounting systems comprehensively and
consistently covering all sub-sectors of general government and containing the
information needed to generate accrual data with a view to preparing data based
on the ESA 95 standard’[2].
It thereby acknowledges the essential incoherence between public sector accounts,
which only record cash flows, and the fact that EU budgetary surveillance is
based on ESA 95 accruals data. This means that cash data have to be converted into
accruals through approximations and adjustments involving macro-based estimates.
Moreover, where accruals accounts do not exist at the micro level, financial
transactions and balance sheets have to be derived from a variety of different
sources, leading to a ‘statistical discrepancy’ between the deficit compiled
via non-financial accounts and that compiled via financial accounts. The lack of coherence between primary
public-sector accounts and ESA 95 accruals data is also acknowledged in the Commission
communication of 15 April 2011 to the European Parliament and the Council Towards
robust quality management for European Statistics[3]. This communication draws
attention to the high dependence of the quality of European-level statistical
information on the appropriateness of the entire production process. Eurostat
therefore promotes a system of harmonised accruals-based accounting standards,
consistent with the ESA, for all entities of the government sector. IPSAS is currently the only internationally
recognised set of public-sector accounting standards. It is founded on the
international financial reporting standards (IFRS) widely applied by the
private sector and at this point consists of a set of 32 accruals accounting
standards, plus one cash-based standard. It is in this light that Article 16(3) of
Directive 2011/85/EU requires an assessment of the suitability of IPSAS for the
Member States. 2. Introduction Government activity accounts for a major part
of gross domestic product (GDP) in all EU economies, and government assets and
liabilities are substantial in all EU countries. It is therefore important that
they are effectively managed and that governments are accountable for this
management to their citizens, their representatives, investors and other
stakeholders. Government finance statistics provide
information on the accounts of the different sub-sectors of general government
so that policy makers and other stakeholders are able to analyse the financial
position and performance of government and the long-term sustainability of
public finances. The main sources of these statistics are the accounting
records and reports of the various government entities, supplemented with
financial information. Reliable government financial accounts are essential for
the preparation of national accounts and of course for fiscal planning,
coordination and supervision. Two of the most important indicators of
fiscal sustainability are debt and deficit, which are used within the EU for
monitoring compliance with the terms of the Stability and Growth Pact. Article
126 TFEU and Protocol No 12 on the Excessive Deficit Procedure (EDP), annexed
to the Treaties, specify that the ratio of planned or actual government deficit
to GDP shall in principle not exceed 3 % and the ratio of government debt
to GDP shall in principle not exceed 60 %. The Commission closely monitors
these constraints on national fiscal policy in order to ensure the efficient
functioning of Economic and Monetary Union. When a Member State fails to keep
within the limits and this situation is considered to be more than just
exceptional and temporary, an EDP could be launched. After the Commission has
expressed an opinion, the Council then decides, on a proposal by the
Commission, whether an excessive deficit exists and, if so, address the Member
State with recommendations and a timetable for corrective action. 3. Why harmonised
accruals-based public-sector accounting standards are needed Accruals accounting is the only generally
accepted information system that provides a complete and reliable picture of
the financial and economic position and performance of a government, by
capturing in full the assets and liabilities as well as revenue and expenses of
an entity, over the period covered by the accounts and at the moment they are
closed. Accruals accounting entails the recording of entries, not when cash
payments are made, but when economic value is created, transformed or
extinguished, or when claims and obligations arise, are transformed or
extinguished. Cash accounting records transactions when the amount is received
or paid. Accruals accounting is economically sounder than cash accounting,
which is why the current accounting framework for fiscal monitoring in the EU,
the ESA 95, is accruals based. Moreover, the use of accruals accounting in the
public sector is necessary to avoid some of the window-dressing that is allowed
by cash accounting, where a payment can be brought forward or postponed so as
to be recorded in the period that the government chooses. However, accruals
accounting is not meant to abolish or replace cash accounting, in particular
where the latter is used for the purposes of budgeting and budget control. In
fact, accruals accounting should be seen as complementary, rather than as an
alternative, to pure ‘cash accounting’. In providing the full picture of the
economic and financial position and performance of the entities, it puts cash
accounting in its overall context. There would be distinct benefits for public-sector
management and governance in adopting a single set of accruals-based accounting
standards at all levels of government throughout the EU. Accruals micro accounting in the public sector is expected to
improve the effectiveness and efficiency of public administration and to
facilitate the securing of liquidity that is a necessary condition for
maintaining a functioning public service. As with any other economic activity,
the management and control of public sector effectiveness and efficiency hinges
on that of its economic and financial position and its performance.
Double-entry accruals accounting is the only generally accepted system that
provides the necessary information in a reliable and timely manner.
Furthermore, harmonised accruals-based government accounting improves
transparency, accountability and the comparability of financial reporting in
the public sector, and may serve to improve the efficiency and effectiveness of
public audit. 3.1. Current situation with regard to accruals accounting in
EU Member States The majority of Member States have already
implemented accruals accounting according to national standards across the
government sector, or are in the process of doing so. Eleven have mixed
systems, in that they have implemented different accounting practices at
different levels of government[4].
The accounting framework and accounting systems of the European Commission and
the other EU institutions and bodies are accruals based and inspired by IPSAS.
This is also the case for several other international organisations. While there is, therefore, a growing (but
not unanimous) acknowledgment of the need for accruals accounting for
government within the EU and its Member States, a harmonised approach is
currently lacking. 3.2. Macro-accounting framework The ESA provides the macro-level statistical
accounting framework for the government and non-government sectors in the EU
and is accruals based. ESA-based government debt and deficit data for EDP
purposes are the result of consolidating the individual accounts of general
government entities in the Member States and are defined by EU legislation. In the context of EU fiscal surveillance
and the EDP, the Commission, in accordance with Article 126 TFEU, has the task
of regularly assessing the quality both of actual data reported by Member
States and of the underlying government sector accounts compiled according to
the ESA. Recent developments, in particular incidences of inappropriate
financial reporting by some Member States, have demonstrated that the
system for fiscal statistics has not sufficiently mitigated the risk of
substandard quality data being notified to Eurostat. Furthermore, the impact of
the economic and financial crisis has highlighted the need to strengthen the
economic governance structure for the euro area and the European Union as a
whole. The Commission responded on 29 September 2010 by adopting a package of
legislative proposals, the ‘European economic governance package’ (referred to
as the ‘six-pack’), which was adopted by the European Parliament and the
Council on 16 November 2011[5]. This seeks to
extend and improve the surveillance of fiscal policies, macroeconomic policies
and structural reforms to remedy the shortcomings found in existing
legislation. New enforcement mechanisms are planned in the event of non‑compliance
by Member States. It is clear that these mechanisms must rely on high quality
statistical information, produced on the basis of robust and harmonised
accounting standards adapted to the European public sector. The existence and quality of comparable and
coherent upstream accruals data (i.e. the primary accounting data for
government entities) at micro-accounting level are preconditions for the high
quality of debt and deficit data at accruals-based macro-accounting level.
Micro public‑sector accounting in the Member States has many variants, making comparisons
difficult both within and between Member States. The current approach of
reconciling non‑harmonised micro‑level public‑sector accounting data for EDP
purposes is reaching its limits. Harmonised micro-accounting systems for all
public‑sector entities (i.e. general government) in all EU Member States,
combined with internal control and external audit, seems the only effective way
forward to compile accruals-based debt and deficit data of the highest quality
standards in accordance with existing legal requirements. This is also one of
the key ideas behind Directive 2011/85/EU. 3.3. Need for harmonisation For the compilation of macroeconomic statistics on government and
with reference to Article 338 TFEU, the requisite statistical
data would be considerably improved if all government entities used harmonised
accounting standards. This would allow for the use of common bridge tables to
compile the entity accounts into ESA accounts, thus greatly facilitating the
statistical verification processes. Fiscal transparency is necessary for
macroeconomic stability and for surveillance and policy advice. Harmonised
standards for public sector accounting would enhance transparency,
comparability and cost efficiency, and provide the basis for improved
governance in the public sector. At the macro level, the financial crisis
underlines the importance of timely and reliable financial and fiscal data, and
evidences the consequences of insufficiently complete and comparable financial
reporting in the public sector. In the longer term, one might envisage a
move towards a refinement of the main EDP indicators by deriving macro public
accounting (deficit/debt) results based on the much more direct consolidation
of consistent and exhaustive micro accounts. The adoption of an integrated
accounting and reporting framework with some adaptations to ESA 95 concepts
would make it possible to derive the debt and deficit data directly from those
systems. They could be based on genuine and harmonised public‑sector accounting
data, which had been subject to control and audit, be it directly on the key
indicators or indirectly through the financial statements. This could also help
reduce the time taken to report the deficit and debt. Governments have a public interest
obligation to market participants — owners of government debt securities and
potential investors — to provide timely, reliable and comparable information on
their financial performance and position, in the same way that listed companies
have obligations to equity market participants. Also, there is a need to ensure
a minimum level of international comparability, especially as government
securities compete against each other in a global financial market, which calls
for a system based on general public‑sector standards accepted worldwide. With
reference to Article 114 TFEU, harmonised accruals accounting would provide
greater transparency for the proper functioning of the internal market in
financial services, without which there is a danger that owners of government
securities would be entering into transactions without a proper understanding
of the level of associated risk. This in turn could create a contagion risk, which
can be a significant impediment to financial stability. What is true for private‑sector accounting
standards, which are harmonised within the EU for listed companies, is also true
for government entities. Harmonised accruals-based public‑sector accounting
would provide a firmer basis for understanding the economic position and
performance of governments and government entities at all levels. The
superiority of the accruals principle, whether for macro or micro fiscal
monitoring, is indisputable. The macro level is already accruals based;
harmonised accruals accounting is also essential at micro level. At the entity level, there would be
benefits in terms of transparency and accountability, and for the quality of
decision-making because the information available would reflect all relevant
costs and benefits in a comparable manner. Moreover, the prospect of further
fiscal and budgetary integration in the EU highlights the need for harmonised
public‑sector accounting standards in order that budgetary decisions at
national level can be assessed at EU level. For the sake of accountability and
transparency, government entities should report in a complete and comparable
manner on their use of public resources and their performance. 3.4. Future EU governance of
budgetary policies The Van Rompuy/Barroso/Juncker/Draghi report Towards a Genuine
Economic and Monetary Union stresses the need for integrated budgetary and
economic policy frameworks and for example states that: ‘Sound national budgetary policies are the EMU's cornerstone The near term priority is to complete and implement the new steps
for stronger economic governance. In the past few years, significant
improvements to the rules-based framework for fiscal policies in the EMU have
been enacted ('Six-Pack') or agreed (Treaty on Stability, Coordination and
Governance), with greater focus on prevention of budgetary imbalances, on debt
developments, on better enforcement mechanisms, and on national ownership of EU
rules. The other elements related to strengthening fiscal governance in the
euro area ('Two-Pack'), which are still in the legislative process, should be
finalised urgently and be implemented thoroughly. This new governance framework
will provide for ample ex ante coordination of annual budgets of euro area
Member States and enhance the surveillance of those experiencing financial
difficulties. ’. Many of the principle objectives advocated
at the Council Directive 2011/85/EU, such as the greater transparency and
accountability of the public sector, as well as more reliable, timely and more
comparable fiscal statistics necessitate a common, harmonised and detailed
accounting and reporting tool. This report is fully supportive of the
Communication from the Commission A blueprint for a deep and genuine economic
and monetary union — Launching a European Debate[6]. 3.5. Potential costs of
harmonisation Against the potential benefits must be set
the costs of implementing a harmonised accruals‑based government accounting
standard in the EU Member States. The information made available by countries
which have moved to accruals accounting allows us to estimate only in very
broad terms what the costs for the Member States might be, although they are
likely to be significant. Costs are strongly influenced by the scale and pace
of accruals implementation, the size and complexity of the government sector, and
the completeness and reliability of existing systems. In addition, experience
suggests that Member States might find it appropriate to modernise their public
financial management systems when implementing the new accounting standards. As an order of magnitude, and based on the
experience of those countries for which cost data are available, the possible
cost for a medium-sized EU country of moving from a cash-based accounting
system to an accruals-based accounting system, for central government but no
other layers of government, could be up to EUR 50 million. This amount would
include, for example, the expense of putting in place the new standards and the
associated central IT accounting tools, but not the costs associated with a
complete reform of the system of financial reporting. For larger Member States
and, for example, those with systems of autonomous regional government or more
complex government systems, and those which have not made progress on accruals
accounting, the costs could be much higher, especially if the transition to a
harmonised accruals system is combined with wider reforms of accounting and
financial reporting practices. For example, the cost of the accruals and
budgeting reforms in France over the last decade was put at EUR 1 500 million.
For a smaller Member State with national systems of accruals accounting already
in place, the costs might be less than EUR 50 million. All of the
cost estimates collected fall within the range of 0.02-0.1 % of GDP. In
addition, the implementation of harmonised accruals accounting for the Member
States would also require significant investment in terms of leadership,
expertise and resources for the European Commission. It should also be borne in mind that,
despite the fact that accruals accounting is a more elaborate system than pure
cash accounting, the multitude of different accounting standards, charts of
accounts, booking processes and IT systems, as well as auditing standards and
practices that often co-exist, even within one sub-sector of general government
in a single Member State, suggests that harmonisation will bring about a
reduction in bureaucracy and costs which in the medium to longer term would far
outweigh the expected investment. Furthermore, the real and significant expected
financial costs can be weighed against the potential benefits, not least those
of better governance, accountability, better public sector management and the
transparency needed for the proper functioning of markets, thus probably
reducing the yields required by owners of government securities (although this
is not measurable). 4. International public
sector accounting standards (IPSAS) As noted above, IPSAS is currently the only
internationally recognised set of public sector accounting standards. It stems
from the idea that modern public sector management, in line with the principles
of economy, effectiveness and efficiency, depends on management information
systems that provide timely, accurate and reliable information on the financial
and economic position and performance of a government, as would be the case
with any other type of economic entity. At present, the national government
accounting standards of 15 EU Member States make some link to IPSAS. Of these,
nine have national standards based on or in line with IPSAS, five make some
references to it and one uses it for some parts of local government. However, despite
recognition of the high value of IPSAS, no Member State has implemented it in
full. This report is accompanied by a Staff
Working Document which summarises the IPSAS system and Member States’ current
arrangements for public sector accounting[7].
In addition, Eurostat carried out a public consultation between February and May
2012 to collect views on the suitability of IPSAS and a summary of the replies
received is also available[8]. Taking into account the views that Member
State authorities and others put forward in the public consultation, the overall
conclusion is twofold. On the one hand, it seems clear that IPSAS cannot easily
be implemented in EU Member States as it stands currently. On the other hand,
the IPSAS standards represent an indisputable reference for potential EU
harmonised public sector accounts. On the one hand, the following concerns will
need to be addressed: ·
Currently, the IPSAS standards do not describe
sufficiently precisely the accounting practices to be followed, taking into
account that some of them offer the possibility of choosing between alternative
accounting treatments, which would limit harmonisation in practice; ·
At its current state of development, the suite
of standards is not complete in terms of coverage or its practical
applicability to some important types of government flows, such as taxes and
social benefits, and does not take sufficient account of the specific needs,
characteristics and interests of public‑sector reporting. A major issue is the
capacity of IPSAS to resolve the problem of consolidating accounts on the basis
of the definition used for general government, which is now a core concept of
fiscal monitoring in the EU; ·
At present, IPSAS can also be regarded as insufficiently
stable, since it is expected that some standards will need to be updated once
work is completed on the current project of completing the IPSAS conceptual
framework, expected in 2014; and ·
At present, the governance of IPSAS suffers from
insufficient participation from EU public‑sector accounting authorities. During
2012, the governance framework of IPSAS was being reviewed to address issues of
concern to stakeholders. Any reform should ensure that the independence of the
standard-setting process is strengthened, while public‑sector‑specific needs
are effectively addressed. In addition, the IPSAS Board currently seems to have
insufficient resources to ensure that it can meet with the necessary speed and
flexibility the demand for new standards and guidance on emerging issues in the
evolving fiscal climate, particularly in the wake of the crisis. On the
other hand, most stakeholders agree that IPSAS would be suitable as a reference
framework for the future development of a set of European Public Sector
Accounting Standards, referred to below as ‘EPSAS’. 5. How to move towards
harmonised European public sector accounting standards (EPSAS) The final decision as to whether to move to
EPSAS requires further important steps to be taken which do not fall within the
scope of this report and hence cannot be anticipated here. However, the
following sections illustrate how EPSAS could be implemented if the effective
decision was taken. EPSAS would give the EU the capacity to
develop its own standards to meet its own requirements with the requisite rapidity.
It would offer a set of harmonised accruals-based public‑sector accounting
standards, adapted to the specific requirements of EU Member States, that could
be implemented in practice. The EU-wide implementation
of EPSAS would dramatically reduce the complexity of methods and compilation
processes used to transform these data onto a quasi-harmonised basis and
minimise risk as regards the reliability of the data notified by Member States
and published by Eurostat. It can be envisaged that the first step
would be to establish EU governance for this project with the objective of clarifying
the conceptual framework and the aim of common EU public sector accounting. EPSAS
could initially be based on the adoption of a set of key IPSAS principles.
EPSAS could also use IPSAS standards that were commonly agreed by Member
States. EPSAS should, however, not regard IPSAS as a constraint for the
development of its own standards. However, it should be noted that drawing up
a set of harmonised European public sector accounting standards would not in
itself guarantee timely and high quality public accounting data. Additional
conditions would have to be met, including: ·
Strong political support and joint ownership of
the project; ·
Public administrations capable of running a more
complex accounting system in each individual public entity; ·
Integrated IT systems for budget, payment,
contract management, double-entry book-keeping, invoice management and statistical
reporting; ·
Timely reporting (e.g. monthly) of all economic
events in the integrated accounting system of the public entities; ·
Availability of resources, human and modern IT;
and ·
Effective internal control and external
financial audit of public accounting. For all Member States, but in particular
those that currently use only cash accounting, the implementation of EPSAS
accruals accounting would be a major reform. Some of the issues that would
arise are: ·
Conceptual and technical accounting issues; ·
Staff and consultant expertise, training skills; ·
Communicating with and educating managers and
decision-makers; ·
Liaison with, and training of, auditors; ·
Adjustment or modernisation of IT systems; and ·
Adapting the existing national regulatory
frameworks. If the
principle of EPSAS were adopted, the Commission could envisage providing
assistance in some of these areas, for instance by playing a role in organising
the sharing of training and expertise, assisting Member State governments on conceptual
and technical matters, or coordinating and sharing the planning of Member
States’ public accounting reforms. If a Member State had significant and evident gaps, weaknesses
and inconsistencies in its public financial management information systems, it
would be appropriate to consider these in plans to implement EPSAS and this
would have to be reflected in the implementation timetable. 5.1. EPSAS structures The development and adoption of the EPSAS
standards would call for strong EU governance. The system to develop and govern
EPSAS would define the agenda for the development of each standard and there
would need to be clear endorsement procedures. The EPSAS governance structure
would need to encompass the necessary tasks as regards legislation, standard
setting, and provision of technical and accounting advice. The establishment of the EPSAS governance
structure would be guided by, but not follow exactly, the model used by the
Commission in establishing the governance of IFRS in the EU context, because of
the specificity of the public sector and the focus on intra-EU comparability.
It should seek to use, where possible, the experience and expertise of national
public‑sector accounting governance structures in the Member States. Nevertheless, EPSAS would need to establish
and maintain close links to the IPSAS Board in order to inform its agenda and
decision-making and because EPSAS standards may need to differ in some cases
from IPSAS standards. It would be important not to create unnecessary
divergence between EPSAS and IPSAS, and between EPSAS and IFRS, given that
government‑controlled entities may already be required to report on an IFRS
basis or according to national commercial accounting standards. EPSAS should also be developed with a view
to minimising differences with the ESA, in order to give the perspective, ultimately,
of complete integrated systems applicable at micro and macro levels. 5.2. Adoption of EPSAS The
development, endorsement and implementation of EPSAS would have to be a gradual
process, which would take place over a period of time. Implementation would be in steps over the medium term, focusing at first on the
accounting issues where harmonisation is most important, such as revenue and
expenditure (taxes and social benefits, liabilities and financial assets) and
at a later stage considering non-financial assets, etc. The way forward should be selective and
take particular account of the perspective of small and medium-sized entities
and the aspect of materiality. The strategy would need to define priorities,
set key deadlines and thus put forward a concrete road map. In order to take
forward the EPSAS project, the Commission, in cooperation with the Member
States, would draft an agreed core of basic European Public Sector Accounting
Principles with a view to incorporating them in a proposal for a Framework
Regulation. The Framework Regulation should also lay down the system of
governance for EPSAS and the procedure for developing specific EPSAS standards. In order to ensure suitable implementation
at national level, the detailed contents of each standard would be elaborated
with the assistance of the Member States so as to take account of the following
requirements: ·
Accruals-based accounting; ·
Double entry book-keeping; ·
Internationally harmonised financial reporting;
and ·
Taking into account the consistency with ESA
principles. 5.3. What could be a first set of
EPSASs? The first
element could be a proposal for a Framework Regulation requiring the
application of the accruals principle. The EPSAS
standard-setting body could then classify the 32 accruals IPSAS standards into
three categories: ·
Standards that might be implemented with minor
or no adaptation; ·
Standards that need adaptation, or for which a
selective approach would be needed; and ·
Standards that are seen as needing to be amended
for implementation. Member States would be invited to put in
place an implementation plan for all sub-sectors of general government. For
example, the core set of EPSAS should be applicable to all public entities and,
taking into account materiality, should cover the major part of government‑sector
expenditure in the Member States. 6. A way forward The Commission considers that, before deciding
on the actual project of creating EPSAS and implementing it in the Member
States, some further preparatory steps are necessary. There remain several
important questions concerning issues outside the scope of this report, such as
establishing the EPSAS framework and specifying a first set of core EPSAS
standards, as well as the planning of the implementation. The Commission would
need moreover to describe the necessary milestones for the future project, and
take into account impact assessment considerations. A decision can be made only
on the basis of an ex-ante review of pros and cons, and likely costs and benefits. Once such a decision has been taken: based
on the experience of countries which have implemented accruals-based public‑sector
accounting systems over recent years, the process of implementation would be
sequential. It should be determined by carefully considering the starting
position of each Member State as regards, for example, the state of development
of the existing national accounting standards and the availability of balance
sheet data. In some Member States, it might be appropriate to begin
implementation at national level and move on to regional and local levels
later. It is also to be expected that the extent of implementation for smaller
entities would be limited, or at least that the more important entities would
be prioritised, taking into account their materiality. The process could take place in three
stages: (1)
A preparatory stage to gather more information
and points of view, and to develop a roadmap. This stage would begin in 2013
and would involve further consultations, a high-level conference and the
preparation of further more detailed proposals; (2)
A stage to develop and put in place the
practical arrangements, addressing issues such as finance, governance, possible
synergies and the concerns of smaller government entities. This stage should
culminate in the publication of a proposal for a Framework Regulation. The
Framework Regulation would require the application of the accruals principle
and set out plans to develop further specific accounting standards over time;
and (3)
The implementation stage: the process of
implementation should be gradual, and allow more time where a Member State’s
existing accounting standards differ greatly from EPSAS, although it could be
envisaged that implementation should be achieved in all Member States in the
medium term. The proposed strategy consists of a
balanced approach that builds on existing achievements and ensures that the
European Statistical System can operate independently but still work closely
with its main data providers and institutional users. It is also important to
underline that EPSAS should not lead to further bureaucratic requirements,
increased administrative burdens on respondents or delays in statistical
production. The Commission will further develop the
strategy outlined in this report, taking into account resource constraints, in
line with its responsibilities under the Treaties. Given the different issues at stake, it is
important to make swift progress while consulting key stakeholders, including
where legislative initiatives are needed. The next steps, to be started in
2013, will take into account impact considerations and include a road map setting
out in more detail the steps to be taken, including legislative initiatives, to
achieve harmonised public‑sector accounting standards across the Union. [1] OJ L 306, 23.11.2011, p. 41. [2] Council Regulation (EC) No 2223/96 of 25 June 1996 on
the European system of national and regional accounts in the Community, OJ L
310, 30.11.1996, p. 1. [3] COM(2011) 211 final. [4] ‘Overview
and comparison of public accounting and auditing in the 27 Member States’ [5] Regulation (EU) No 1173/2011 of the European
Parliament and of the Council of 16 November 2011 on the effective
enforcement of budgetary surveillance in the euro area, OJ L 306, p. 1;
Regulation (EU) No 1174/2011 of the European Parliament and of the Council
of 16 November 2011 on enforcement measures to correct excessive
macroeconomic imbalances in the euro area, OJ L 306, p. 8; Regulation (EU)
No 1175/2011 of the European Parliament and of the Council of
16 November 2011 amending Council Regulation (EC) No 1466/97 on the
strengthening of the surveillance of budgetary positions and the surveillance
and coordination of economic policies, OJ L 306, p. 12; Regulation (EU)
No 1176/2011 of the European Parliament and of the Council of
16 November 2011 on the prevention and correction of macroeconomic
imbalances, OJ L 306, p. 25; Council Regulation (EU) No 1177/2011 of
8 November 2011 amending Regulation (EC) No 1467/97 on speeding up
and clarifying the implementation of the excessive deficit procedure, OJ L 306,
p. 33; Council Directive 2011/85/EU of 8 November 2011 on requirements for
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