Conversatorio: El proceso de implementación de las NICs en el Sector Público en el Perú

Name: Conversatorio: El proceso de implementación de las NICs en el Sector Público en el Perú
Uploaded: 2020-12-23T07:26:14.000Z
Duration: 2 h 40 min 33 s

Introduction to the Implementation of PSNI in Public Accounting

Overview of the Discussion

The speaker welcomes colleagues and attendees, emphasizing the importance of health and introducing the topic of public accounting standards.

The discussion focuses on adapting or adopting international accounting standards due to economic development and financial complexities in public entities across Latin America.

Structure of the Conversatorio

The conversatorio is divided into five parts, with each analyst presenting for a maximum of 15 minutes.

Topics include:

Adoption of PSNI and its impact on transparency in Peru (Dr. Jesús Captcha).

Current implementation landscape (Juan Francisco Álvarez).

Diagnosis of tools related to accounting plans (Eduardo Ventura).

Methodology and Future Considerations

Methodological Approach

The second part will discuss methodologies for implementing PSNI in Peru.

Subsequent discussions will cover whether to adopt or adapt ANIQ ESP standards, along with timelines for adoption.

Opening Remarks by Dr. Jesús Captcha Carvajal

Importance of Transparency

Dr. Captcha emphasizes the relevance of transparency as a public policy, especially given recent corruption events affecting public trust.

He highlights a significant loss of confidence not only in politicians but also across institutions, including state accounting.

Experience-Based Insights

Dr. Captcha's participation is based on consulting experiences and interactions within coordination committees aimed at promoting international standards.

He discusses efforts towards implementing norms that enhance accountability within public sector entities.

Challenges and Benefits Observed

Adoption Insights from Latin America

A study revealed that while about 60% of countries adopted AMICS EP, full application remains limited; notable examples include Chile and Colombia.

Despite challenges, there is consensus among accountants regarding the benefits associated with adopting these international standards.

Public Trust Issues

Insights on Public Asset Management and Transparency

The Role of Information in Asset Management

The discussion highlights the importance of revealing public assets and improving asset management, particularly in health infrastructure, which has faced significant challenges despite prior investments.

It is noted that the public health sector has collapsed under pressure, indicating a disconnect between investment and efficiency in service delivery.

Emphasis is placed on the need for effective information systems to provide useful data to citizens, enabling informed decision-making regarding political leadership.

Political Dynamics and Populism

The speaker points out that current electoral processes are heavily influenced by populism, which thrives on a lack of transparency and accountability from politicians.

Citizens often struggle to understand financial situations due to insufficient access to clear information about state resource allocation and debt levels.

Challenges in Implementing Normative Frameworks

A paradox arises where technical limitations exist alongside a lack of political will to apply existing normative frameworks effectively.

Historical efforts (2017-2020) focused on identifying gaps in Peru's application of established accounting standards (NIC SP), highlighting ongoing issues with compliance.

Findings from Financial Audits

An analysis of general accounts revealed numerous observations related to non-compliance with accounting standards, including unmonitored state assets and excessive provisions.

Specific examples include mismanagement of state resources such as unregistered assets and improper financial estimations affecting overall fiscal health.

Implications for Future Compliance

Observations indicate systemic issues tied not only to accounting errors but also administrative irregularities that complicate compliance with established norms.

Limitations identified during audits suggest a need for improved oversight mechanisms within public entities at all government levels.

Implementation Challenges of Accounting Standards

Need for Comprehensive Application of NIC ESP

The discussion highlights issues at the process, system, and personnel levels that necessitate a different response, leading to the conclusion that full application of NIC ESP is essential from both professional and civic perspectives.

Gradual Implementation Approach

Emphasizes the need for a gradual approach due to challenges in understanding regulatory frameworks and resource limitations (material, human, technological). Initial diagnostics and error correction are crucial before moving forward.

Phased Transition to Normative Application

Stresses that starting with NIC without addressing existing errors could lead to misapplication. A structured transition is necessary to ensure accurate recognition and measurement under a new model.

Importance of Structured Phases

Outlines three critical phases for successful implementation:

Phase 1: Diagnosis of current situations including training.

Phase 2: Error correction, policy definition, and technology integration.

Phase 3: Methodological adjustments based on S&P standards.

Interinstitutional Collaboration Necessity

Highlights the importance of collaboration between regulatory bodies and control entities. Identifying types of errors is essential for effective implementation strategies.

Long-term Commitment Required for Effective Implementation

Five-Year Plan for Full Adoption

Indicates that achieving full compliance with S&P standards may take over five years, requiring detailed planning during initial phases focused on error adjustment and normative policy definitions.

Role of Professional Bodies in Implementation

Suggests that accounting professionals must play a significant role in fostering adherence to new norms. Unified efforts among various institutions are vital for success.

Transparency as an Anti-Corruption Measure

Transparency's Impact on Corruption

Discusses how transparency can reduce corruption risks by making it harder for larger entities to evade scrutiny. Lack of accountability undermines democracy and public trust.

Call for Political Will

History of Accounting Standards in Latin America

Overview of Norms and Resolutions

The history of accounting standards begins with the issuance of norms by the General Directorate of Public Accounting, starting with the first resolution from the Accounting Regulatory Council in 1993.

Initial focus was on NIF (Normas Internacionales de Información Financiera) and NI GCP (Normas Internacionales de Contabilidad Pública), transitioning to a more concentrated approach on NI GSP (Normas Internacionales de Gestión Pública).

By December 2018, 40 international norms were officially recognized; however, none mandated the obligatory use of NI GSP.

Implementation Challenges

Despite 28 years since initial resolutions, implementation results have been unsatisfactory compared to other Latin American countries that adopted similar standards within three to five years.

Countries like those in Latin America have engaged trainers from IFAC to assist in implementing these standards effectively.

Professional Implications

Knowledge of international accounting standards is crucial for professionals wishing to work across borders, especially given globalization's impact on professional opportunities.

Current State of Normative Framework

Directives and Compliance Issues

Over the years, various directives have been issued by the General Directorate that align with international lists but lack explicit mention of mandatory compliance or parallelism with international norms.

An analysis reveals discrepancies between local directives and international standards, particularly regarding financial statement presentation and compliance issues highlighted during audits.

Audit Observations

Many audit observations stem not only from non-compliance with international norms but also from administrative negligence or procedural lapses within public entities.

Specific Directives Related to International Standards

Key Areas Lacking Clarity

Several directives are closely related to property plant equipment (NIGP 17), yet they fail to provide clear methodologies or procedures as outlined by relevant norms.

The directive concerning financial instruments lacks comprehensive guidelines that align with current regulations; changes are necessary for better alignment.

Practical Applications and Limitations

The concept of amortized cost is underutilized among smaller public entities due to insufficient practical examples provided in existing guidelines.

Overview of Financial Reporting Standards

Integral Results and Value Deterioration

Discussion on the need to reveal both surplus revaluation and changes in equity through unrealized results accounts, highlighting deficiencies in current directives regarding value deterioration.

Emphasis on three variables affecting value deterioration, indicating that existing directives require modification to address various situations adequately.

National Regulatory Framework

Overview of the national regulatory framework, specifically mentioning a governmental accounting plan published by the General Directorate of Public Accounting, which claims to apply all international standards (NI).

Identification of significant deficiencies within the general accounting plan concerning recognition, initial measurement, subsequent measurement effects, disclosure, and presentation.

Conceptual Framework for International Standards

Introduction to essential tools for understanding and applying international standards; highlights the importance of a conceptual framework that must be practiced and analyzed.

Clarification that this conceptual framework is not a standard but contains fundamental concepts and principles applicable to financial information.

Elements of Financial Statements

The objective of the conceptual framework is to provide guidance on financial information aspects not covered by PSNI GCP. It includes eight chapters focusing on theoretical foundations.

Chapter 5 discusses elements of financial statements such as assets, liabilities, equity, revenues, and expenses. Chapter 6 addresses recognition criteria for these elements.

Measurement and Presentation Standards

Examination of asset measurement methods beyond historical cost; introduction of new types of measurements relevant under current standards.

Mentioning 42 issued international standards by IFAC through IRISAS; detailing their status—36 active laws with six repealed—and implications for public sector accounting practices.

Recent Developments in Financial Regulations

Discussion about recent repeals related to investment accounting regulations due to evolving needs in public finance reporting.

Reference to new norms addressing government transfers during COVID-19 pandemic impacts on public entities' financial reporting requirements.

Measurement Bases in Conceptual Framework

Understanding Tax Revenue Measurement

Key Concepts in Tax Revenue and Valuation

The measurement of tax revenue is often subject to interpretation errors, particularly regarding the fair value assessment of tax income.

Active market values are established through dialogue and agreements on pricing, impacting how construction contracts and donated inventories are valued.

Various asset types, including investment properties and financial instruments, can be recorded at historical cost or revalued based on specific accounting standards.

Transitioning Accounting Principles

The discussion highlights the need for a transition from historical cost accounting to more relevant valuation methods like fair value and amortized cost.

Public sector accounting must adapt private sector principles while prioritizing public needs; this includes moving towards generally accepted accounting principles (GAAP).

Challenges in Implementation

There are significant challenges in transitioning from historical costs to alternative measurement criteria such as fair value and net realizable value.

Non-recorded operations can lead to discrepancies in results, emphasizing the importance of accurate financial reporting during transitions.

Phases of Adoption for New Standards

Stages of Financial Reporting Transition

The adoption process can be divided into three phases: transition period, adoption period, and publication of initial financial statements.

Adjustments during the transition phase include opening balance adjustments and retroactive application methodologies for new standards.

Interpretation Difficulties with International Norms

Many international standards pose interpretative challenges due to translation issues; Spanish translations may not align with local realities.

Entities adopting new standards may not have previously recognized all assets or liabilities under prior accounting bases.

Conclusion on Grace Period for Compliance

Final Thoughts on Compliance Timelines

A grace period not exceeding three years is suggested for recognizing certain assets before full compliance with new guidelines is required.

Implementation of International Transparency Standards in Public Sector Accounting

Overview and Introduction

The speaker expresses gratitude to the president and panelists for their clear and educational insights regarding the implementation of international transparency standards.

Focus is placed on software applications used in the public sector, which are crucial for implementing international accounting standards.

Financial Management Tools

The TSJA (Tribunal Superior de Justicia Administrativa) is identified as the official tool for governmental public sector accounting, excluding public enterprises.

Emphasis on the importance of integrated financial management systems (SIAF ESP), particularly its accounting module that records all transactions leading to national financial statements.

Core Components of Financial Administration

The SIAF ESP encompasses various modules beyond just accounting, including budgeting and treasury systems essential for public financial administration.

Seven interconnected systems form the core of public financial management, highlighting budgetary processes and treasury functions.

Budget Execution Processes

The administrative module within SIAF ESP facilitates recording activities related to revenue and expenditure execution across all public entities under the general budget.

Examples provided include expenditures related to construction contracts, pension payments, and other procurement modalities that significantly impact budget execution.

Integration of Financial Data

Most transactions are captured within the general budget framework; however, some events like asset depreciation occur outside this scope.

Operators responsible for registering budgetary executions focus on commitments, accruals, and payments without immediate consideration for accounting aspects.

Data Processing in Accounting Systems

Operators input data into the system using specific coding schemes that facilitate tracking operations related to revenues and expenses.

This data processing creates a structured framework that ultimately leads to generating accounting entries through a central operation table within SIAF ESP.

Understanding the Importance of Accounting Consistency

The Role of Robust Accounting Practices

Emphasizes that a weak accounting foundation leads to unreliable financial reporting, which can undermine the integrity of the general account of the republic.

Highlights that operational consistency is crucial for effective accounting practices, serving as a driving force behind accurate record-keeping.

Implementation Challenges in Accounting Systems

Discusses that the implementation process extends beyond just accountants; it involves creating a comprehensive system for recording transactions accurately.

Notes that detailed information is essential for effective accounting, necessitating adjustments in how data is recorded and processed.

Need for Enhanced Information Systems

Stresses that current systems must evolve to accommodate more detailed financial data, such as component depreciation, to improve reliability and accuracy.

Points out that existing operations tables are insufficient for generating automated and accurate accounting entries.

Transitioning to Advanced Accounting Frameworks

Argues for migrating to a new matrix or event table capable of handling a greater volume and detail of transactions than current systems allow.

References Legislative Decree 1438 from 2018, which outlines the need for an advanced events table to enhance automation in accounting processes.

Standardization and Review Requirements

Indicates that achieving uniformity in accounting requires thorough reviews of various documents and catalogs related to governmental accounting standards.

Underlines the necessity of aligning government accounting plans with international standards regarding recognition, measurement, presentation, and disclosure.

Addressing Catalog Discrepancies

Mentions the importance of reviewing income and expense classifiers due to their close relationship with budgeting and overall financial management.

Observes inconsistencies across different catalogs used by various institutions (e.g., defense ministry), highlighting the lack of a unified catalog system necessary for effective integration.

Conclusion on Integration Efforts

Implementation Challenges in Accounting Systems

Overview of Systemic Issues

The discussion highlights the challenges faced by accountants when dealing with the TSJA (Tribunal Superior de Justicia Administrativa) and its implications on accounting practices, emphasizing the need for harmonized accounting policies to mitigate discretion.

It is noted that a thorough review of all relevant documents is essential, particularly in light of international standards, to ensure compliance and accuracy in financial reporting.

Importance of Implementation Considerations

Effective implementation cannot occur without addressing critical concepts and issues; adjustments must be made to IT tools and catalogs to facilitate successful adoption by accountants.

An example is provided where financial statements from January and March are requested due to budgetary control issues, illustrating real-world implications of these systemic problems.

Budgetary Control Complications

The conversation reveals difficulties related to budget modifications within a public budgeting module that lacks closure like traditional accounting periods, leading to discrepancies in reported figures.

A specific instance is mentioned where an annulment of a budget modification affects previously presented information, complicating reconciliations at year-end.

Need for Accurate Reconciliation Processes

The impact of erroneous data on financial reconciliation processes is discussed; inconsistencies can lead to significant discrepancies between expected and actual figures.

Continuous adjustments are necessary each month to account for prior errors, indicating a cycle of correction that burdens the accounting process.

Recommendations for Successful Implementation

Emphasis is placed on correcting systemic issues before implementing new standards (S&P), as neglecting these details could undermine overall effectiveness.

All revisions should align with implementation efforts, including training sessions that address identified gaps; input from experienced professionals is crucial for effective diagnosis and adjustment.

Regulatory Context and Future Directions

The presentation concludes with acknowledgment of existing regulations regarding the adoption of NIIF (Normas Internacionales de Información Financiera), which aim to enhance financial information quality in Peru.

Discussion on Transparency and Methodology for PSNI Adoption

Insights on Transparency

The concept of transparency is likened to a river, where clearer water allows for better visibility of the fish, symbolizing that more significant issues (the "big fish") become apparent.

Methodology for PSNI Adoption

Panelists are tasked with discussing the methodology necessary for the initial adoption of PSNI in Peru, emphasizing structured input from each participant.

Doctor Jesús Captcha's Perspective

Dr. Jesús Captcha advocates for using MICA ESP 33 as the methodological framework for adopting PSNI, stressing the importance of a preparatory phase before full implementation.

He clarifies that declaring full application does not mean immediate compliance with all standards; there are exemptions and exceptions available during a three-year adjustment period.

Preparation Phase Importance

A thorough preparation phase is essential, involving diagnostics of technology and processes along with training to ensure successful implementation.

During this phase, entities can create interim solutions while gradually adjusting their operations towards compliance with international standards.

Challenges in Public Sector Implementation

Dr. Captcha highlights that correcting errors in public sector accounting is more complex due to regulatory scrutiny and potential sanctions from oversight bodies like Contraloría.

The need for collaboration between various governmental entities is crucial to address identified issues before adopting new standards effectively.

Key Takeaways from Juan Francisco and Eduardo

Juan Francisco emphasizes the necessity of political will as a critical factor in facilitating adjustments within public sector systems to align with international standards.

Comprehensive System Changes Required

Eduardo agrees on the importance of addressing broader administrative changes beyond just accounting practices, including treasury procedures and financial management systems.

He stresses that these changes must be harmonized with international standards to ensure effective integration into existing frameworks.

Sustainability Focus

Implementation of Technological Support in Adaptation Processes

Importance of Technological Tools

The discussion emphasizes the necessity of refining previous phases to enhance the adaptation and adoption of technological tools, particularly in the context of SPM (Sistemas de Gestión de Proyectos).

It is highlighted that without proper IT tools, transparency in information cannot be achieved, which is crucial for effective electronic government applications.

Methodology for Implementation

A transition is made to discuss methodology, with a focus on ensuring appropriate strategies and procedures are established for successful implementation.