UN IPSAS Project Pedro Guazo, 5/10/2018 UN IPSAS Project Pedro Guazo, Director, Accounts Division and Acting Deputy Controller United Nations

IPSAS: What, Why, When 2 2

UNSAS – IPSAS Differences However, for Budgetary issues we remain UNSAS, creating 2 worlds, the Budgetary World and the Financial Statements World.

Challenge: Much “more” than UNSAS

Why IPSAS - The benefits (A/60/846 Add.3) 5

IPSAS: The Challenges 6 6

IPSAS: The biggest challenges Expenditure based on delivery Goods Services Delivery Principle More assets than before Physical verification Valuation Impairment Asset Accounting

UNSAS vs. IPSAS: Expense recognition Example: Recognition of expense for 2-year services contract Issue of purchase order UNSAS (current) Y1 Y2 Y3 Y4 Y5 Y6 Expenditure (obligation) recognized $ 6,000 - - - - - Period of Performance UNSAS: Expenditure recognized at the issue of purchase order (obligation) IPSAS Y1 Y2 Y3 Y4 Y5 Y6 Expense recognized $ 3,000 $ 3,000 Period of Performance IPSAS: Expense recognized as services are delivered.

UNSAS vs. IPSAS: Asset accounting - $ 60,000 No asset recognized; cost of vehicle recorded as expenditures Y6 Y5 Y4 Y3 Y2 Y1 UNSAS (current) $10,000 $60,000 Annual depreciation expense IPSAS Full cost charged on purchase Useful Life of the Vehicle UNSAS: Expenditure recorded when purchase order is issued. IPSAS: Cost of the vehicle is spread-out over 6 years of useful life as depreciation. Example: Recognition of Asset and Depreciation Asset recognition $10,000

UNSAS vs. IPSAS: Liability recognition $ 48,000 - No liability recognized; expenditure recognized when staff leaves the Organization Y6 Y5 Y4 Y3 Y2 Y1 UNSAS Period of Performance after staff becomes eligible UNSAS: Expenditure is recognized upon separation. Example: Recognition of liability for staff repatriation benefit $ 39,964* Liability recognized when staff becomes eligible, using actuarial assumptions Y6 Y5 Y4 Y3 Y2 Y1 IPSAS Period of Performance after staff becomes eligible IPSAS: Liability is recognized when staff has earned the benefit; *$48,000 discounted at 5.5% for 6yrs

PK Financial Statement Highlights Management Committee 14 November 2014

Revenues & Troops by mission Total $8,011.49M Mission # Troops Overall Percentage UNFICYP 217 1% UNDOF 183 UNIFIL 2,368 10% MINURSO 0.9% UNMIK 363 1.5% MONUSCO 5,311 22% UNMIL 2,299 UNOCI 2,179 9% MINUSTAH 2,915 12% UNAMID 6,372 27% UNSOA 679 3% UNISFA 176 UNMISS 722 MINUSMA 0% MINUSCA Total 24,001 100% * As at 30 June 2014. Figures in millions of USD

Expenses by category Total $7,905.68M * “Other Operating Expenses” covers: Acquisitions, bank charges, communications utilities, contracted services, credits to MS for staff assessments, doubtful debt expenses, fees, fellowships/grants/other, insurance, joint activities, maintenance expenses, net foreign exchange gains/losses, other, rent, rentals, shared services, shipping/freight services, stationary and office supplies, subscriptions and publications, tax reimbursements, UNDP cost recovery, utilities, and write-offs other than A/R

Assets - Liabilities/Assets Mission Assets Liabilities Assets - Liabilities/Assets UNFYCIP $33M $11M 67% UNDOF $88M $9M 90% UNIFIL $392M $182M 53% MINURSO $68M $20M 71% UNMIK $41M $32M 23% MONUSCO $599M $393M 34% UNMIL $174M $85M 51% UNOCI $237M $97M 59% MINUSTAH $292M $110M 62% UNAMID $929M $242M 74% UNSOA $362M $115M 68% UNISFA $194M $50M UNMISS $441M $186M 58% MINUSMA $313M $133M MINUSCA $16M $62M -286% Sub Total $4179M $1727M Employee Benefits Funds $1369M --- Total $3095M 26% * As at 30 June 2014. Figures in millions of USD 5/10/2018 ipsas.un.org

Financial Indicators * As at 30 June 2014. Figures in millions of USD Cash and cash equivalents 563.43 Investments 741.55 Total monthly average budgeted expenditure 658.8 Months of operations with cash available 1.98 Cash and cash equivalents 563.43 Investments 741.55 Assessed Contributions receivable 693.32 Voluntary contributions receivable 7.35 Total monthly average budgeted expenditure 658.807 Months of operations with cash available & contributions receivable 3.04 Cost of goods sold and consumed 168.18 Opening inventory 1 July 2013 377.32 Total inventory at 30 June 2014 389.13 Average Inventories 383.22 Average days to sell and consume inventories 831.71 * As at 30 June 2014. Figures in millions of USD 5/10/2018 ipsas.un.org

Budget performance 5/10/2018

IPSAS sustainability

IPSAS Project: Current Context Current phase: Post Implementation => Launch of sustainability activities. Aim: Ensure IPSAS is embedded in operations and is on a sustainable footing before the project is institutionalized. End-state vision articulated: IPSAS sustainability end-state vision presents a view of IPSAS when sustainability is achieved. Five pillar sustainability plan: Plan of activities to enable the vision has been documented and approved by the Management Committee and presented to the General Assembly.  

IPSAS sustainability plan Five pillar plan to enable the end-state vision of IPSAS was approved A. Manage the benefits of IPSAS B. Strengthen Internal Controls C. Manage the Regulatory Framework D. Automate FS & manage changes to systems/processes d enhancements E. Deploy training and skills development Ongoing work towards IPSAS-compliant accounting and reporting A B C D E Monthly reporting tool kit to support data integrity Deployment of the SIC based on COSO Training on the SIC On-going monitoring and internal controls testing. Manage changes to IPSAS policy framework Impact assessments of changes to IPSAS Updates to FRR, and IPSAS guidance documents and SOPs Well articulated skills strategy to support IPSAS Update IPSAS training products: CBTs, ILTs Support for CPE for staff accountants Formal certification for impacted staff Benefits realisation plan with KPIs and benefits owners Benefits tracking tool Deployment timeline Benefits training for managers Automation of the IPSAS financial statements Clarity of Book of Record with ERP deployment & transition arrangement plan Ongoing update of systems and processes for changes to IPSASs 19