4.3. Statistics Finland's experience on cost accounting

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Presentation transcript:

4.3. Statistics Finland's experience on cost accounting Pasi Henriksson, Director of Administration 15.12.2015

Stable budget development Finances 2012 to 2016 Stable budget development EUR million 2012 2013 2014 2015 estimate 2016 Budget proposal FUNDING 65.2 65.3 65.8 63.1 61.3 Budget appropriation 49.2 50.4 51.8 50.7 - Revenues from operations subject to charge 8.9 8.1 7.6 7.7 7.0 Other 2.0 1.9 1.4 0.9 - Appropriations carried forward 5.1 4.9 4.4 3.6 2.7 EXPENDITURE 60.3 60.9 62.2 60.4 58.8 - Change in appropriations -0.2 -0.4 -0.8 -0.9 28 November, 201828 November, 2018 Statistics Finland

Personnel 2012 to 2016 2012 2013 2014 2015 Perfor-mance target document 2016 Budget proposal Personnel, staff-year 864 842 832 750 730 monthly-paid employees 736 720 651 - - interviewers 128 106 112 99 Retired 38 56 40 28 November, 201828 November, 2018 Statistics Finland

Statistics Finland’s internal and external accounting Refers to producing necessary accounting data for external parties, e.g. the Ministry of Finance, the Tax Authority Regular bookkeeping (external bookkeeping) Budget accounts (government expenditure accounts). 2) Internal accounting: Refers to producing necessary accounting data for internal purposes Cost accounting Allocation of working hours. 28.11.2018

The contents of bookkeeping In bookkeeping, expenditure and income are allocated as precisely as possible. Every book entry at Statistics Finland always includes a) the business bookkeeping account, b) the budget account and c) the cost accounting data. The agency's external business bookkeeping is monitored with the business bookkeeping account. The realisation of the agency's budget is monitored with the budget account. Cost centres, as well as tasks and activities are needed in Statistics Finland’s cost accounting and working hour tracking. 28.11.2018

Working time reporting system and cost accounting The working time reporting system creates the basis for cost accounting, pricing and result calculation. In Statistics Finland, the role of working time reporting is crucial in cost accounting. Cost accounting cannot be carried out without working hour tracking. Statistics Finland's cost structure in 2014: mEUR % Personnel costs 47 76 Premises 6 9 Other expenses 15 Total expenses 62 100 28.11.2018

Why do costs have to be monitored at Statistics Finland? Cost accounting provides information about the activities of public entities. This is important because the services are produced with tax revenue. The activities must be transparent. Cost accounting is needed for the management of the agency to support decision-making. If all expenses of the activities are not known, decisions can be made based on insufficient information. We must know whether we should do something ourselves or buy the service. Cost accounting is needed in order for us to be able to price products and service, e.g. in activities subject to charge. 28.11.2018

Statistical production process (incl. Assigments, standard products) STOJ supports Statistics Finland's process management Services in the STOJ system Core process Working time reporting system (allocation of hours worked) Common for Statistics Finland (SH, TP, TI, HA) support functions Translation services Graphic services Statistical production process (incl. Assigments, standard products) Support functions Development activities Project management / development programmes PORTTI reporting portal (BI-data warehouse, MS SQL Server) 28.11.2018

Statistics Finland's cost accounting model EUR Column headings Row headings 2014 2015 62 832,72 -3 252 366,65 Others/Not classified -14 046,14 1 Core activity -11 731 168,78 -9 189 075,09 1.1 Statistics production -13 965 828,84 -11 008 818,72 1.2 Final performances of charged activities 4 143 629,34 3 557 734,27 1.3 Coordination and communication -1 006 752,35 -907 267,62 1.4 Other products and services -902 216,93 -830 723,02 2 Core activity support -7 706 133,19 -5 887 097,72 2.1 Data collection support -1 195 856,96 -915 018,93 2.10 Other services for core activity -351 137,89 -454 553,71 2.2 Own projects of statistical topics -2 021 007,50 -1 090 617,95 2.3 Classifications and methods -433 292,29 -436 395,58 2.4 Publication support -749 438,67 -491 533,63 2.5 Information service, library -1 153 345,71 -784 402,01 2.6 Support services for charged activities -141 912,79 -250 387,76 2.7 Core activity IT -1 309 427,71 -1 047 659,70 2.9 Research services -350 713,67 -416 528,45 3 Support activities -22 580 761,67 -18 452 510,60 3.1 Management and general administration -5 797 992,76 -4 792 412,11 3.2 Administration -3 746 681,28 -2 704 962,99 3.3 IT services -3 773 587,45 -3 066 484,05 3.4 Training -1 614 615,89 -953 129,33 3.5 Internal communication -374 823,65 -356 699,74 3.6 Facilities and materials management -6 559 334,39 -6 016 183,01 3.7 Other support activities -713 726,25 -562 639,37 4 Absences -10 648 664,05 -8 487 334,70 4.1 Absences All total -52 603 895 -45 282 431 The aim of the cost accounting model has been to define a calculation model for dividing costs to final performances and to make a solution for its technical implementation. In Statistics Finland's cost accounting model, the costs of core activity support, other support activities and absences are allocated to final performances and to cost allocation accounting codes (incl. projects) according to the calculation rules of each support activity group. The calculation model follows the activity hierarchy that can be reported from the reporting portal Portti. 27 November 2015 Administration/Financial administration

Methodological description, image1 Final performances accounting code1 Total costs Total costs of final performances accounting code2 Direct expenses (posting method, systems: Rondo, M2, Kieku, Ajanhallinta) Expenditure on wages and salaries Acquisitions of materials and supplies Administrative expenses Facilities expenses Other expenses Support performances cost allocation accounting code1 accounting code3 Costs of support activities Costing of cost allocation accounting code accounting code4 cost allocation accounting code2 accounting code5 28/11/2018 Etunimi Sukunimi

Implementation and stages of cost accounting in the system KIEKU Implementation and stages of cost accounting in the system TOOL USED MS SQL SERVER Valmis reports in the Portti reporting portal Financial admin. DW - result data set of cost accounting Financial admin. DW - external accounting realisation data Operational guidance and planning system STOJ Final performance/ support performance examination Classification of accounting codes (incl. projects) into cost allocation groups Selection rules of cost allocation accounting codes (checking / editing) Data checking Stage 1 - Formation of LASKE data Realisations of STOJ and drivers outside accounting (e.g. use of IT services) Checking of cost allocation rules / programming (cost allocation sums and recipients, share of recipients in cost allocation, location of accounting codes in the solution matrix) Stage 2 - drivers and cost allocation shares Reciprocal cost allocation takes account of mutual interaction of support activities Solution of equation groups / result vector 1. matrix calculation is used to find out the total costs of support activities 2. costs of final performances are calculated (with the share found out in stage 2) Stage 3 - reciprocal cost allocation Direct expenses of cost allocation accounting codes (stage 1 data) formed from final performances and support performances are downloaded to the data warehouse (DW) Cost allocation events are downloaded In DW cost allocation with both final performances and support performances as such Reporting of the results in Portti (ready reports/ cube reports with Excel) Stage 4 - results

Outputs of the cost accounting system Laske can be used to produce Statistics Finland's financial statement reporting (starting from 2015). Cost coverage calculation of charged activities Cost coverage calculation of co-financed activities Comparable data can be presented calculated for 2014 in the financial statement for 2015 Other outputs Total costs of final outputs Total costs of statistical topics Total costs of process stages Cost coverage of assignments Cost coverage of product groups Cost comparisons and analyses of support activities Total costs of development / projects Total costs of cost pools Pricing calculations Cost calculations for external funders etc. 27 November 2015 Administration/Financial administration

Outputs of the cost accounting system (charged activities) Laske - costings of charged activities   2013 2014 Revenues Direct income Revenues from charged activities 7 997 585 7 537 169 Other revenues 785 1 348 Direct income total 7 998 370 7 538 517 Revenues total Costs Direct expenses Materials, supplies and goods - 87 964 - 11 032 Travel expenditure - 139 609 - 186 755 Other expenses (incl. rents) - 485 909 - 570 312 Expenditure on wages and salaries -2 421 065 -2 395 615 Purchases of services - 194 899 - 204 642 Direct expenses total -3 329 446 -3 368 356 2 Core activity support (cost allocation) 2.1 Data collection support - 82 816 - 64 364 2.10 Other services for core activity - 26 2.6 Support services for charged activities - 385 187 - 291 656 2.7 Core activity IT - 206 027 - 272 340 2 Core activity support (cost allocation) total - 674 030 - 628 387 3 Support activities (cost allocation) 3.1 Management and general administration - 729 187 - 659 957 3.2 Administration - 376 378 - 349 712 3.3 IT services - 218 314 - 281 982 3.4 Training - 235 604 - 185 637 3.5 Internal communication - 26 737 - 39 595 3.6 Facilities and materials management - 386 348 - 373 582 3.7 Other support activities - 48 403 - 69 398 3 Support activities (cost allocation) total -2 020 971 -1 959 863 4 Absences (cost allocation) 4.1 Absences -1 223 419 -1 171 283 4 Absences (cost allocation), total 5 Depreciation and interests (cost allocation) 5.1 Depreciation - 18 455 - 21 067 Costs total -7 266 322 -7 148 956 27.11.2015 HA/Taloushallinto

Utilisation of LASKE results Facilitates decision making by the management. Cost consciousness increases – even things that are free of charge generate costs. Pricing becomes easier and more versatile. Reporting speeds up and uses plain language (e.g. financial statement reporting). Manual reporting diminishes and becomes easier. Enables monitoring of the total costs of Statistics Finland's all activities. 27 November 2015 Administration/Financial administration

Challenges Versatile reporting is easy to implement, but how reports are used require "reflection". Work needs to be started on how the compilation of cost-benefit analyses is implemented. What do the figures really reveal? Cost allocation is partly a question of decision. From the perspective of final performances, most of the costs are fixed; there is either no cause or its calculation is too laborious with relation to benefit. The system is complete, so their use can now be developed. 27 November 2015 Administration/Financial administration