Due to the recent economic crisis, government stakeholders all over the world are facing pressure to review their fiscal performance management and introduce higher levels of accountability, including increased transparency of public finance management. Financial reports prepared in accordance with the International Public Sector Accounting Standards (IPSAS) allow users to reliably assess the accountability for all resources public entities control.
Entities looking to adopt IPSAS Accrual or IPSAS Cash and Modified Cash should be cognisant of a few considerations surrounding an implementation of this nature and seek guidance where they can. Certain measures to ensure successful adoption include key staff training, IT infrastructure investment along with significant process and resource alignment. In this blog, we’ll share three helpful tips toward a successful IPSAS implementation:
1. Outsourcing compliance
With compliance requirements on the rise, the risks of failing to meet demands have increased in many industry sectors. Smaller entities need to manage other day-to-day tasks and aren’t always equipped with the resources needed to handle the full range of compliance responsibilities.
The increasing number and complexity of regulations, continuing shortage of talent, and constant pressure from stakeholders to reduce operating costs, makes outsourcing a viable option when resources are a concern. However, outsourcing does come with some challenges. Back and forth communication can be a time consuming task. Therefore, it may be beneficial to consider doing your own financial statements.
2. Training staff
Because of the ever changing and increasingly complex standards, compliance training is rarely at the top of anyone’s to-do list, but that will have to change when your organisation adopts IPSAS Accrual or IPSAS Cash and Modified Cash. In order to prepare financial statements in alignment with IPSAS, staff need compliance training. In smaller, compliance consultants can provide training to all levels of staff. Compliance experts should communicate the necessary information to employees according to their function, making sure they are adequately educated on all regulatory considerations relating to their roles.
Larger entities will typically have the resources in-house. Corporate Compliance Officers (CCO) may communicate compliance considerations to key staff who will be responsible for their individual business units. CCOs would have to consistently meet with trainers to make sure the message is being conveyed properly.
3. Using technology
Software platforms exist that can help streamline compliance implementations while simultaneously reducing cost and resource-overheads during IPSAS Accrual or IPSAS Cash and Modified Cash adoptions. A report by PWC on integrating technology into compliance programs states that, “New technological tools can make financial service firms compliance programs both more effective and more efficient. Technology can help utilize existing resources and can extend the depth of coverage.”
Auditing and compliance-based software platforms reduce the amount of resources required to continually adhere to regulatory demands by automating much of the manual functions and processes involved..
Gearing up for IPSAS
With IPSAS still in its beginning stages in countries like Kenya, entities that are taking cognisance of these standards now are positioning themselves favourably for successful adoption. According to Kaseya.com, “In today’s compliance environment, if you can’t prove you’re following your procedures, the expectation from the examiners is that you aren’t.” Entities that do not use technology to manage their compliance obligations run the risk of exposing themselves to this reality.
Investigating how others have achieved successful IPSAS Accrual or IPSAS Cash and Modified Cash implementations will help government entities better understand the scope of the undertaking. For news and updates on developments around IPSAS Accrual or IPSAS Cash and Modified Cash and other regulatory considerations surrounding government entities, visit our blog page regularly. Also, contact us if you need assistance with the latest disclosure changes on IPSAS Accrual or IPSAS Cash and Modified Cash.