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Transcript of Study on the conversion of a double-entry accounting ... · PDF fileHessian Ministry of...
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Hessian Ministry of Finance
EPSAS
Study on the conversion of a double-entry accounting system to
uniform European Public Sector Accounting Standards
Illustrated by the example of the state of Hesse
MinR Harald Bott
Lisbon, 26/04/2017
Call for proposals of the
European Commission (21040/2014/003)
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Hessian Ministry of Finance
Population: 6.2 million (Germany: 82 million)
Area: 21,115 km2
Capital: Wiesbaden
State of Hesse – in the center of Germany / Europe
Accounting in Hesse
▪ Hesse as a center of science, research and future
industries
▪ Rhine Main Area with high industrial density,
Financial Center Frankfurt, ECB, Frankfurt Airport
International and ESOC (Darmstadt)
Lisbon, 26/04/2017 2
▪ GDP Hesse (2015): € 263 billion
Germany: € 3,026 billion
▪ Budget Hesse (2017):
€ 35.3 billion
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Hessian Ministry of Finance
Study on the conversion of a double-entry accounting
system to uniform European Public Sector Accounting
Standards
Illustrated by the example of the state of Hesse
Preface
# 1: Initial situation
# 2: Experiences from similar projects
# 3: Acceptance Management as a success factor for
the implementation project
# 4: EPSAS Implementation Project
Conclusion
Annex
EPSAS Study
Our Study
3Lisbon, 26/04/2017
Project plan
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Hessian Ministry of Finance
EPSAS Study
Initial situation: accounting in the state of Hesse
Lisbon, 26/04/20174
Bookkeeping / Accounting Consolidation Optimization
1998 1.1.20051.1.20032001 1.1.2009
Implementation double-entry
accounting in about 800
offices 2001 - 2004
1998 Cabinet decision
to introduct double-entry
accounting 2005
1st Consolidated Opening
Balances on ministerial group
level
2009State of Hesse:
Consolidated
Opening Balance
(audited)
1st (audited) consolidated
financial statements – State of
Hesse
2003
1st Opening
balances of
accounting units
Current consolidated
financial statements
31.12.201531.12.2009 31.12.2013
Unqualified
auditors' opinion
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Hessian Ministry of Finance
5
EPSAS Study
Group structure
Use of Accounting
▪ 80 accounting units
▪ 11,300 SAP users
Financial reporting
▪ Information
▪ Budgeting
▪ Financial statistics
Lisbon, 26/04/2017
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Hessian Ministry of Finance
Experiences from similar Hessian projects
Success factors from earlier projects that implemented accounting modifications / conversions:
▪ Clear objectives and clear political mandate: Political support must not be limited to the start but has to
be followed up with sustainable interest and engagement.
▪ High-priority political support by power promoters: Regarding the Hessian project of the “NVS” (reform
of Hessian accounting and controlling), it was positive that the Hessian Prime Minister had pushed the
project over and over again.
▪ Broad-based acceptance management at all levels of administration. Not only executives, but also
employees who are to "live" the new system. Hesse: Inclusion of further parties involved in the budget
process, in particular Parliament.
EPSAS Study
6Lisbon, 26/04/2017
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Hessian Ministry of Finance
Acceptance Management as a success factor
▪ Successful change process requires proper and adequate dealing with affected persons
▪ Careful analysis of project environment and project stakeholders is important.
▪ Phases of EPSAS Acceptance Management
Phase I: Period from the completion of the study up to the moment when development of EPSAS will have
reached a high level of concretization
Phase II: EPSAS have reached a high level of concretization, start of implementation project is foreseeable
(expected 12 to 6 months before project start)
Phase III: Start of implementation project until its completion.
EPSAS Study
7Lisbon, 26/04/2017
Observation (Phase I)
Concretization(Phase II)
Implementation(Phase III)
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Hessian Ministry of Finance
Assumptions
Our project plan for EPSAS implementation is based on the following assumptions:
▪ For budgetary purposes, Hesse will hold on to the link between double-entry accounting and budget
planning / controlling - even on the basis of new accounting requirements.
▪ The national accounting regulations for the public sector, in Germany the principles of government
double-entry bookkeeping1 (so-called “Standards staatlicher Doppik”), are adapted to EPSAS.
▪ The (national / international) requirements for financial reporting are adjusted to EPSAS. The statistical data
is collected on a corresponding double-entry basis.
EPSAS Study
8Lisbon, 26/04/2017
1 within the meaning of §§ 7a, 49a HGrG
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Hessian Ministry of Finance
1. Project definition
2. Functional concept
3. Technical concept
4. Implementation
5. Introduction
6. Support
7. Completion
Pro
ject
sta
rt
Co
nso
lidat
ed f
inan
cial
sta
tem
ents
acco
rdin
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EP
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rove
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y H
essi
an
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urt
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dit
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Pro
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en
d
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get
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EP
SAS
Pro
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agr
eem
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fun
ctio
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del
ta a
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ysis
co
mp
lete
d
Fun
ctio
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nce
pt
app
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Tech
nic
al c
on
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t ap
pro
ved
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t an
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al b
ud
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ori
ngt
acc
ord
ing
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PSA
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t fi
nan
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tem
ents
acc
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EPSA
S
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ud
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epo
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PSA
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M1M 2
M 3M2 M 4 M13M12M 9M 6 M10M 5 M 7/8 M11
EPSAS Implementation project
EPSAS Study
Project phases
Milestones
Timeline
2025 (e.g.)
Oct. 2026Nov. 2021 Dec. 2023
Lisbon, 26/04/2017 9
Project plan
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Hessian Ministry of Finance
▪ Clear legal framework, objective, arbitrary and
reliable depiction of government and
administrative action, narrowed down options
(in important areas)
▪ Accounting is suitable as a basis for
budgetary management in public sector
bodies that interlink accounting and budgetary
control within their budget sovereignty.▪ Financial reporting
on a double-entry accounting
basis without complex parallel
operation
EPSAS: our expectations
EPSAS
10Lisbon, 26/04/2017
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Hessian Ministry of Finance
11Lisbon, 26/04/2017
Thank you for your attention!
Harald Bott
Accounting, Payment transactions, Reporting services
Hessian Ministry of Finance
Friedrich-Ebert-Allee 8, 65185 Wiesbaden, Germany
Tel.: +49 (611) 322500 / Fax: +49 611 327132500
E-Mail: [email protected]