Public Sector Financial Reporting Task Force
3 November 2011
Telephone meeting.
Present
- Grant Hehir (Chairman)
- Kevin Stevenson
- Stein Helgeby
- Robert Williams
In attendance:
- Peter Gibson
- Tim Youngberry (for the IPSAS discussion only)
- Michael Lim (Secretary)
Key matters
-
To facilitate the Task Force’s report back to the FRC in December on the Monitoring of IPSAS project, a discussion was held on stakeholder views about IPSAS.
- The letters received from stakeholders (AASB, HoTARAC and ACAG) in relation to IPSAS were acknowledged. It was agreed that it would be useful to do a side-by-side comparison of the letters.
- It was noted that NSW Treasury had provided a separate letter, culminating in an observation that the ultimate objective in standard-setting was to have a single global standard setter covering both private and public sectors. It was agreed that the letter will be circulated to Task Force members.
- A summary of ongoing work at the New Zealand Accounting Standards Board on establishing a new set of IPSAS-based standards for the private and public not-for-profit sectors was provided. Key points were:
- The approach chosen will result in a set of multiple books with three tiers. Considerable work will be required to establish and maintain the new framework.
- The overall outcome is likely to be fairly similar to the current standards, as many special provisions contained in the previous NZ GAAP were being added back to the new IPSAS-based standards.
- It was agreed that the work being done in NZ was of strong interest to the Task Force, and that it would be useful to include some of the key observations on the NZ approach as part of the report to the FRC in December.
- Tim Youngberry (IPSASB member) provided his thoughts on IPSAS and their possible relevance for Australia. Key conclusions included:
- Strengths of the IPSASB include the quality of its staff and its ability to draw on the resources of key national standard setters. Its main weakness is its lack of resourcing.
- The quality of public sector financial reporting in many jurisdictions is still low, even in developed economies. The ongoing financial crisis has demonstrated the need for a set of global, high-quality public sector reporting standards that could be applied by governments. IPSAS are the only available standards, and there is growing interest especially in Asia and South America in adopting them.
- While Australia has long accepted and implemented the concept of independently set standards for the public sector, it is still worthwhile to continue monitoring the global situation. The key longer term development in this regard is the growing appetite for global financial reporting standards for the public sector, and the fact that IPSAS are the only available candidate to fulfil this role.
- Michael Lim provided a summary of findings with respect to IPSAS from a recent trip with the FRC Chairman to visit international stakeholders. Key findings included:
- There is general support for assisting with the further development of IPSAS, but also widespread concern about the current governance and resourcing of the IPSASB.
- The IFAC review of the governance of the IPSASB will be delayed until completion of the Monitoring Group’s review, which is due to commence with the release of a consultation paper before the end of the year.
- A discussion was held about how Australia could do more to support the use of independent financial reporting standards in the public sector globally, as suggested at the last FRC meeting.
- Kevin Stevenson said that this was a matter he would be pushing during his tenure as Chair of the AOSSG, and that Australia would be best positioned to exert influence in this respect in Asia. It was noted that in addition to high-quality standards the political will on the part of governments to commit to these standards was also necessary.
- It was agreed that the Task Force report to the FRC at its December meeting should propose a submission by the FRC to the Government to the effect that the Australian Government should exert its influence internationally to support the increased adoption by governments of independently set, high-quality accounting standards for the public sector such as IPSAS.
- The Task Force discussed the list of suggested strategic issues. It was agreed to focus on three priority areas, as follows:
- Recognising the needs of small entities in the public sector and how to deal with them.
- The role of wider, non-financial reporting in the public sector, including reporting in areas such as environmental information, performance delivery and sustainability.
- It was pointed out that at least some of these areas were being covered by current AASB. It was agreed that it would be worthwhile to devote part of the next meeting to a detailed presentation and discussion of the current AASB projects related to public sector reporting standards, before deciding on any further action in this and other areas.
- The public sector reporting institutional framework – including the current roles of standard-setters, regulators, preparers, auditors and users in the various jurisdictions in Australia, and whether there are better models.
- The roles and powers of various entities such as auditors-general, finance and treasury departments and parliament were discussed, including differences in these roles between the various jurisdictions in Australia
- It was agreed that more information on the situation in the various jurisdictions was required in order to facilitate further discussion on this topic. Stein Helgeby agreed that he would arrange for the collection of relevant information, possibly through HoTARAC.
- It was agreed that the next Task Force meeting will be held in February 2012.
Agreed actions
| Action | Responsible person |
Deadline |
|---|---|---|
Circulate NSW letter |
Michael Lim |
Immediate |
Prepare a side-by-side comparison of the stakeholder letters providing their views on IPSAS for discussion at the next FRC meeting |
Stein Helgeby |
In time for inclusion in the report to the next FRC meeting (see next item) |
Draft the Task Force report to the next FRC meeting in December, including summary information on stakeholder views on IPSAS, key observations on the NZ approach, and a proposal for a submission by the FRC to the Government to the effect that the Australian Government should exert its influence internationally to support the increased adoption by governments of independently set, high-quality accounting standards for the public sector such as IPSAS |
Stein Helgeby/Kevin Stevenson (summary of NZ views and reasons for adopting IPSAS-based standards) |
The next FRC meeting is on 14 December, with agenda papers due a week in advance. It would be desirable to provide the draft report to Public Sector Financial Reporting Task Force members for comment before the end of November, allowing sufficient time to finalise the report so that it can be included in the agenda papers for the meeting. |
Provide a presentation at the next Task Force meeting on the ongoing work by the AASB in public sector reporting |
Kevin Stevenson |
February 2012 |
Commence collection of information in relation to the roles played by the various stakeholders in the public sector reporting framework at all levels in Australia. |
Stein Helgeby |
Provide an update to the next Task Force meeting in February 2012 |
Circulate dates for next Task Force meeting for agreement by members |
Michael Lim |
December |