Emerging issues - CPA congress 2014

Emerging Accoun-ng Issues Survey Results

May 2015

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What are the emerging accoun-ng issues in the Canberra market today?

Planning in Tight Fiscal

Environment 22%

PGPA Implementa:on

16%

Budgetary Repor:ng

13% Corporate Services 13%

HR / Payroll Consolida:on

10%

Capability & Capacity Planning within Finance

10% Enterprise Agreement Cos:ngs

9%

Machinery of Government Consolida:on

7%

Ranking of Emerging Issues In a recent Finance Industry Conference sponsored by Synergy Group Australia, we asked over 1,000 a@endees to idenAfy and rank the emerging issues in the financial and budget arena for the Canberra accounAng market.

The results of this survey reveal the reality of a Aght fiscal environment and the need to keep up with changes in Federal Government. The survey produced over 200 responses with the emerging issues illustrated below according to the highest ranked issue by each respondent:

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The results of the survey idenAfied “Planning in Tight Fiscal Environment” as the major issue impacAng the Canberra accounAng market, followed by PGPA Act ImplementaAon and Budgetary ReporAng under AASB 1055. These issues are discussed in detail overleaf.

InteresAngly, Planning in Tight Fiscal Environment came up as the top priority for four of the seven sectors represented in the survey. PGPA ImplementaAon reflected the second priority in three of the seven sectors. The demographic of the respondents were as follows, including almost two thirds of respondents who work in Federal Government:

Federal Government

64%

Educa:onal Ins:tu:on

5%

ACT Government 5%

Not-‐For-‐Profit 3%

Science & Technology

1%

Recruitment 1%

Other 21%

Responses by Sector

Findings

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49% of respondents nominated planning for a Aght fiscal environment as a key issue for them.

The need for prudent financial management has become increasingly important as agencies are under pressure to manage funds more effecAvely. With the recruitment freeze, budget cuts, and efficiency dividends, there has never been a greater need for agencies to ‘do more with less.’ Synergy has a comprehensive understanding of the federal budget process, including:

!  Design and implementaAon of business planning and budget development processes

!  Development of long term financial forecasAng models, including operaAng budgets, capital budgets and sensiAvity cashflow analysis

!  Development of cosAngs for new policy proposals

!  PreparaAon of Por\olio Budget Statements

!  Alignment of external and internal budgets

!  IdenAficaAon and cosAng of savings iniAaAves required to meet budget savings

!  SelecAon and configuraAon of budgeAng systems, including interfaces with CBMS and the agency’s FMIS

!  Development of ongoing budget monitoring and reporAng.

Synergy can help because we are Federal Government budget specialists. We have been engaged by a number of large, medium and small government agencies to provide assistance in the development of their internal and external budgets.

Emerging Issue #1: Planning for a -ght fiscal environment

Post Machinery of Government consolidaAon EA CosAngs / NegoAaAons

Finance funcAon capability and capacity planning Finance / HR / payroll system consolidaAon

Corporate shared services Budgetary ReporAng (AASB 1055)

PGPA ImplementaAon Planning for a Aght fiscal environment

13% 19% 23% 23%

28% 29%

34% 49%

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34% of respondents nominated PGPA ImplementaAon as a key issue for them.

This is no surprise – the core elements of the PGPA Act commenced on 1 July 2014, but it has a ‘long tail’ of reforms that are being progressively implemented over several years.

Although many agencies have now come to grips with the Stage 1 resource management reforms (e.g. by transiAoning from CEIs to AAIs, removing ‘FMA Reg 9’ language from

purchasing processes and a greater focus on risk management), some are finding themselves unprepared for the Stage 2 changes to planning, performance monitoring and evaluaAon.

In our experience, the key challenges include:

!  Designing performance indicators that are both measurable, and meaningfully related to the achievement of agency outcomes

!  Re-‐casAng the Corporate Plan, which for many agencies has previously been for internal consumpAon only, as a public accountability document

!  Ensuring that the informaAon that will be used to measure performance is robust and well-‐documented, given that it may now be subject to audit.

Synergy has extensive experience in all stages and aspects of PGPA Act implementa-on – we have assisted many agencies (both former FMA Act agencies and former CAC Act bodies) to understand their obliga-ons, plan the required changes and implement the transi-on.

Emerging Issue #2: PGPA Implementa-on





13% 19% 23% 23%

28% 29%

34% 49%

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29% of respondents nominated budgetary reporAng (AASB 1055) as a key issue for them.

The recent release of Australian AccounAng Standard AASB 1055 Budgetary ReporAng was designed to increase accountability and transparency. The new standard seeks to improve transparency and accountability in financial reporAng and agencies will be subject to addiAonal audit requirements by the ANAO.

The changes from AASB 1055 are likely to have significant impacts on agencies. The new standard now requires reporAng of budgetary informaAon by not-‐for-‐profit enAAes within the GGS, in parAcular:

!  original budgeted financial statements presented to Parliament;

!  variance of actual amounts presented in the financial statements and the corresponding original budgeted amounts; and

!  explanaAons of the major variances.

These new requirements apply to annual reporAng periods beginning on or aler 1 July 2014.

Currently in many departments and agencies there is a disconnect between the Por\olio Budget Statements, the

Internal Budget and the reporAng of actual results in the financial statements.

To address this issue, Synergy has developed a Budge-ng and Repor-ng Model that can be used to inform the development of the PBS, link to the Internal Budget and actuals, and understand the assump-ons and varia-ons between items in the PBS, internal budget and financial statements.

Emerging Issue #3: Budgetary Repor-ng





13% 19% 23% 23%

28% 29%

34% 49%

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With the recent release of the Federal Budget, what do you think are our most pressing emerging issues today?

Who are we Synergy is one of Canberra’s largest and fastest growing accoun-ng and consul-ng firms specialising in the provision of services to government departments and agencies. Synergy has been opera-ng since 1999 and provides a compe--ve alterna-ve to many of the interna-onal accoun-ng and consul-ng firms.

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Emerging issues - CPA congress 2014