GS/OAS/SAF/DFAMS – September 23, 2014 Third progress report on IPSAS, continued

Set of internationally recognized accounting standards for the public sector Derived from IFRS (International Financial Reporting Standards – private sector) Applicable to annual audit book What’s IPSAS?

True value of what you own and what you owe (assets / liabilities) You are following internationally recognized standards Additional annual financial statements and notes to the financial statements What you get with IPSAS

Changed by IPSAS 1. Management and donor reports 2. General purpose financial statements OAS financial Information OAS financial Information Only one set of financial statements changes with IPSAS Intended for stakeholders with authority for decision-making Audited and intended for the general public with no authority for decision-making

Money savings Modified management reports (quarterly report) Easier to understand annual financial statements (audit book) Specific guidelines to improve how we handle certain operations ( travel, CPRs, budget presentation, etc.) What you don’t get with IPSAS

Why $5.2 million Internal and external financing is required 3. Implementation requires external support 2. Internal and External costs 1. Total cost to implement in almost 4 years $5.2 million $2.2 million in OAS managers directly assigned (internal) $3.0 million in external financing $1.6 million in IPSAS project manager/expert, business process analyst and assistant $0.3 million in training materials, web page, translations $1.1 million in CPRs to support continuing operations IPSAS costs not included in proposal Continued compliance ERP implementation IPSAS costs not included in proposal Continued compliance ERP implementation

Temporary supervisors + project manager/expert + Business process analyst + project manager/expert + Business process analyst What is the implementation strategy Continuing operations need temporary CPRs as managers are shifted to IPSAS Staff for continuing operations Existing managers Temporary CPRs 25% time75% time Continuing operations IPSAS implementation

Why four years and $5.2 million Major efforts are required before IPSAS-compliant financials are published Establish team Communication strategy Training to all stakeholders Business process redefinition Changes to OAS regulatory framework Conversion of beginning balances Specimen financial statements Major overlapping efforts are required to publish first set of IPSAS-compliant financial statements

Implement IPSAS with existing resources (require external financing) Ignore continued compliance costs after IPSAS implementation Delay decision to implement or not What we cannot do

Begin to implement IPSAS now: allocate $3 million in 3-4 years (per plan), or Don’t implement IPSAS and gradually continue improving financial information, or Build a capital fund to finance IPSAS and, once financed, begin implementation What we could do going forward