1. Danish GFS compilation system Use of primary data in national accounts By Kristina Stæhr Vest Gitte Frej Knudsen Martin Rasmussen

2. 1.Primary sources and the GFS system  Budgetary sources  Extra budgetary sources  Data structure in the GFS system  Subsectors  Financial/non-financial accounting data 2.Other entries 3.The classification process 4.Time adjustment 5.Accounting principles 6.Micro-macro link 7.Output (non-financial) 8.Software (non-financial) Overview 2 9.Continual revisions 10.Who compiles the GFS? 11.Data relationships in financial accounts  Ensuring consistency  The Bottleneck issue 12.Software (financial)

3. 1.1 Budgetary sources  Central government accounts  Municipality and regional accounts  Accounts for Social security funds  Unemployment funds 1. Primary sources and the GFS system 3

4. 1.2 Extra budgetary sources  Central government extra budgetary units  Universities  Secondary schools  State Church  Local government extra budgetary units Nationwide organization for the municipalities (KL) Nationwide organization for the regions (Danish Regions) Tourist information agencies 1. Primary sources and the GFS system 4

5. 1.3 Data structure in the GFS system 1. Primary sources and the GFS system 5 Central governmentSocial securityLocal government § 81-89Various national account calculations and imputations § 80Municipalities accounts § 71-79Various national account calculations and imputations § 64-69Various national account calculations and imputations § 70Regions accounts § 51Consolidation § 52-56Central government national account calculations § 56-59Extra budgetary units § 61State Church national account calculations § 62State Church accounts § 63Social security funds § 01-45Central government accounts55.000 entries 150 entries 4.000 entries 15.000 entries 4.000 entries

6. 1.4 Delimitation of subsectors  Extra budgetary institutions are added to the dataset.  Entries outside the GFS definition of general government in the budgetary information concerning public quasi corporations are not removed but classified as “Sector delimitation corrections”.  The primary data set can be reconstructed by leaving out the Extra budgetary institutions in GFS system. 1. Primary sources and the GFS system 6

7. 1.5 Delimitation of financial/non-financial accounting data  All financial entries (according to ESA95) originating from the primary non-financial sources are not removed from the data but classified as “Financial transactions”.  This practice enables us to keep track on the transition from primary data to national accounts statistics/GFS. 1. Primary sources and the GFS system 7

8. Other sources  Taxes  Income transfers to households (quarterly government finance statistic)  Extra-budgetary units National accounts compilation Primary accounting data + Extra-budgetary units -Public quasi corporations -All financial entries 2. Other entries and calculations 8

9. Automated coding process of data  Codes are applied using a matching process:  type of transaction  COFOG  Consolidation  Trivial entries are coded automatically using conversion rules from primary accounts to GFS/national accounts Manual process  Manual coding is applied on residual entries Validation of data  Logic tests  Inspection of time series at macro level and micro level 3. The classification process 9

10.  All time adjustments are made as supplementary corrections to the original entries and not by substituting the entries  Taxes  Income transfers (quarterly government finance statistic)  This again helps keeping track on the transition from primary data to national accounts variables and aggregate/GFS statistics 4. Time adjustments 10

11.  Micro accounting on a accrual or commitment basis  Commitment basis used as a proxy for accrual basis  For some entries commitment basis = cash (e.g. wages and salaries)  Accrual principle  Income and expenditure attributed to the period accrued on an annual basis  On a quarterly basis more time adjustments needed, for example:  Interests  Consumption of fixed capital 5. Accounting principles 11

12. Input data Primary accounts data Entry no 1 Entry no 2 DIOR Coding process Output statistics GFS/national accounts (non financial) Category i Category i+1 Category i+n 6. Micro-macro link 12 DIOR = Detailed Integrated Government Accounts Categories defined by: Sector, type of transaction, COFOG, industry

13. Types of questions to be answered:  How has a given transaction in a certain government institution been classified in GFS/national accounts?  Which effect has a given transaction on government consumption, deficit etc.?  Where does an expenditure/revenue category in GFS have its origin in primary accounts? 6. Micro-macro link 13

14.  Type of transaction (SNA/ESA) table  Revenue, expenses and net lending/borrowing  On subsectors  COFOG table  Cross compilation table – COFOG and type of transaction  Tax, specification table  Income transfers, specification table  Subsidies, specification table 7. Output (non-financial accounts) 14

15.  The GFS compilation system is developed in Oracle  The system generating tables is programmed using SAS  The GFS compilation system is basically a database where calculations is manually added to the entries in the system (Excel) 8. Software (non-financial accounts) 15

16. Timeline for revisions in the Danish GFS Prelimenary/final accounting data  The March-version is based on preliminary accounting data.  When the March-version is published the data is flagged as preliminary.  If there are problems with the quality of data in a version it is described in the publication article and in the StatBank Denmark.  Final GFS version in November (t+3). 9. Continual revisions 16

17. The compilation of the government account is split into two different processes in Statistics Denmark:  Financial accounts  Non-financial accounts -Special issue: Balancing the two compilation systems  Non-financial accounts are compiled by Gitte Frej Knudsen and Martin Rasmussen.  Financial accounts are compiled by Louise Kristensen and Kristina S. Vest. 10. Who compiles the GFS? 17

18. 11. Data relationships in financial accounts

19. Ensuring consistency between financial and non- financial accounts:  Initially the systems are based on the same datasources  Changes with an effect on the working balance made on one side of the system must be mirrored completely on the other side of the system  When replacing datasources on one side of the system consistency must be assured.  Issues about balancing the systems 11. Data relationships in financial accounts 19

20. The Bottleneck issue:  Support of upstream dataproducers  Refering questions  Metadata and documentation  Explaining differences  Consistency checks 11. Data relationships in financial accounts 20

21.  At present most of the system is excel based  Some dataprocessing takes place in SAS  In future: Oracle based system  Pros and cons of the two systems 12. Software (financial accounts) 21