ASIA PUBLIC SECTOR ACCOUNTING & REPORTING ......— ACCA, CIMA, CPA Australia, MICPA ACCOUNTANT...

ACCOUNTANT GENERAL’S DEPARTMENT OF MALAYSIA

1Excellent Accounting @ Your Service


ASIA PUBLIC SECTOR ACCOUNTING &REPORTING CONFERENCE

REGIONAL AND NATIONAL EXPERIENCES

MALAYSIA

Hotel Hilton, Kuala Lumpur

14th Sept 2015

Devantri Kaur



INTRODUCTIONTOP – DOWN APPROACH

— NEM Report

— Fiscal Discipline and Reform

REFERENCES AND ASSISTANCE

● IPSASB STUDY 14 - Transition to the Accrual Basis of Accounting

● IPSAS 33 - First-Time Adoption of Accrual Basis IPSASs

● STUDY VISITS

● INTERNATIONAL MONETARY FUND (IMF) Technical Assistance

— Review Govt. Strategy for Accrual Accounting

— Change Management for External Stakeholders

— Potential Impact on Fiscal Deficit

— Internal Control for Accrual Accounting



Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Legend : Work Completed

20162012 2013 2014 20152011

*1GFMAS Go Live !

Awareness

Core Team Set Up

Review & Approve Amendment of FC, FPA 1957 And Relevant Act

GASAC Set Up

Accounting Policies Approval

Development of Accounting Standards

Core Team Training

Data Collection Training (Assets)

SAD’s Set Up

CFO Training

Consultant Appointment

New Biz Requirement

System Design

TOT & EUT

SI Appointment

System Development & Testing

System Documentation & Manuals

Data Collection

Data Migration

PROJECT TIMELINE

*Subject to Readiness of System!



GovernmentAccounting

Standard AdvisoryCommittee (GASAC)

GovernmentAccounting

Standard AdvisoryCommittee (GASAC)

SystemDevelopment

Working Committee

SystemDevelopment

Working Committee

Accrual AccountingImplementation

Working Committee

Accrual AccountingImplementation

Working Committee

Accrual AccountingSteering Committee

[Chairman : AG]

Accrual AccountingSteering Committee

[Chairman : AG]

GOVERNANCE STRUCTURE

Ministry AccrualAccounting

ImplementationCommittee



IMPLEMENTATION STRATEGY

● STANDARDS & POLICIES

— Accounting Standards (MPSAS)

— Accounting Policies and Manual

● LAW & REGULATION

— Review and Propose amendment of legislation and rules

● PROCESS & TECHNOLOGY

— System and Processes Gap Analysis

— Design and Develop Accounting System

● HUMAN RESOURCES

— Capacity Building

— Change Management

— Training



STANDARDS AND POLICIES &LAW AND REGULATION

GOVERNMENT ACCOUNTING STANDARDS ADVISORY COMMITTEE (GASAC)

— Members – Professional Accounting Bodies, Auditor, MOF, Ministries, Universities, StateTreasurer, Accountant General’s Department etc.

● STANDARDS AND POLICIES

— IPSASMPSAS

— Accrual Accounting Policy

— Transition Policy

— Accrual Accounting Manual

— Day 2 SOPs (work in progress)

● LAW AND REGULATION

— Proposed amendments to Financial Procedure Act 1957 and other Relevant Acts(work in progress)

— Concept of Consolidated Fund

— Financial Statements to be tabled



PROCESS & TECHNOLOGY

● IT SYSTEM – Centralized, Single Data Base, Integrated, Harmonized

● PROCESS TO BE – Payment, Receipting, Payroll, Bulk Payment

● CHART OF ACCOUNTS – New Reporting Structure, COA & AccountingCodes

● FINANCIAL DOCUMENTS – Accrual Requirement, Current Requirement(GST), Value Added Process (e.g. – Online Acknowledgement), InformationAnalysis

● DATA COLLECTION – Assets, Liabilities



DATA COLLECTION

● TRANSITION POLICY

● SERVICE PROVIDER

● BASE ASSET SYSTEMS

● DATA COLLECTION STRATEGY

— Formulation & Testing Of Templates

— Training

— Roll Out to Pilot and Not Pilot RCCCs

— Cost or Deemed Cost

— Monitoring LMs progress

● DATA VERIFICATION PROCESS

● MOCK RUNS



HUMAN RESOURCES

CAPACITY BUILDING

● ACCOUNTS DIVISION IN MINISTRIES

— Creation / Strengthen

— Functions

— Management Accounting

— Consultation

— Financial Accounting

— Monitoring

— Administration & Finance

● RCCC

— Strengthening with minimum accounting personnel (work in progress)

● PROFESSIONAL QUALIFICATIONS

— ACCA, CIMA, CPA Australia, MICPA



Public AccountsCommittee (PAC) –

Presentation, Reports

Town hall withAccountant General

Meeting – TopManagement of Public

Administration

Thought LeadershipSeminar

National Public SectorAccountants

Conference (NAPSAC)

Promotion - Bulletin,Flyers, Banners,Websites, Video

Courses – FinancialManagement

Accounting Manual

Workshop, CoursesCFO, IPSAS, Soft Skills

etc.Policy and Standards

Financial DocumentsConcepts of Accrual

Accounting

Chart of AccountsSystem Training –

1GFMAS

CHANGE MANAGEMENT& TRAINING



CHALLENGESSYSTEM DEVELOPMENT

• Complexity of public sector accounting• Requirements for

• Modified Cash and Accrual Reports• Interface with external systems• Dual Ledger• Inter Entity• Trust Accounts

• Tight timeline for system development



CHALLENGESCAPACITY BUILDING

● LACK/INADEQUATE ACCOUNTING PERSONNEL IN RCCCs

— Budget Constrain

— Government Policy – Lean Organization

● UP SKILL PUBLIC SECTOR PERSONNEL

— Accounting Standard

— Accounting Policies

— Unlearn and Learn

● IT SYSTEM TRAINING

— 50,000 End-Users (First Time SAP users)

— Limited Time

— Many Modules



CHALLENGESASSETS & LIABILITIES OPENING BALANCES

● Unavailability of Records

● Incompleteness of Records

● Inaccuracy of Records

● Complex Assets and Liabilities (PFIs & PPPs)

● Military Assets



CHALLENGESMANAGING STAKEHOLDERS’ EXPECTATION

DIVERSE / CONFLICTING EXPECTATIONS

● National Audit Department – True and Fair View

● Top Management Of Public Administration – Adequate Information

● Public Accounts Committee – Accountability

● Public – Accountability & Transparency

● Politicians – Feel / Look Good



LESSON LEARNT

● Be Practical With Solutions (i.e. componentization)

● Base Asset System Helps

● Motivate The LMs To Get Moving

● Understand The Concept Of Materiality

● Recognize The Need To Focus On Day 2 Activities

● Firm User Requirement

● Minimum Customization – off-the-shelf accounting system

● Realistic Timeline

● Project Management – close monitoring



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