Study on the conversion of a double-entry accounting ... · PDF fileHessian Ministry of Finance Study on the conversion of a double-entry accounting system to uniform European Public

Hessian Ministry of Finance

EPSAS

Study on the conversion of a double-entry accounting system to

uniform European Public Sector Accounting Standards

Illustrated by the example of the state of Hesse

MinR Harald Bott

Lisbon, 26/04/2017

Call for proposals of the

European Commission (21040/2014/003)


Population: 6.2 million (Germany: 82 million)

Area: 21,115 km2

Capital: Wiesbaden

State of Hesse – in the center of Germany / Europe

Accounting in Hesse

▪ Hesse as a center of science, research and future

industries

▪ Rhine Main Area with high industrial density,

Financial Center Frankfurt, ECB, Frankfurt Airport

International and ESOC (Darmstadt)

Lisbon, 26/04/2017 2

▪ GDP Hesse (2015): € 263 billion

Germany: € 3,026 billion

▪ Budget Hesse (2017):

€ 35.3 billion


Study on the conversion of a double-entry accounting

system to uniform European Public Sector Accounting

Standards

Illustrated by the example of the state of Hesse

Preface

# 1: Initial situation

# 2: Experiences from similar projects

# 3: Acceptance Management as a success factor for

the implementation project

# 4: EPSAS Implementation Project

Conclusion

Annex

EPSAS Study

Our Study

3Lisbon, 26/04/2017

Project plan


EPSAS Study

Initial situation: accounting in the state of Hesse

Lisbon, 26/04/20174

Bookkeeping / Accounting Consolidation Optimization

1998 1.1.20051.1.20032001 1.1.2009

Implementation double-entry

accounting in about 800

offices 2001 - 2004

1998 Cabinet decision

to introduct double-entry

accounting 2005

1st Consolidated Opening

Balances on ministerial group

level

2009State of Hesse:

Consolidated

Opening Balance

(audited)

1st (audited) consolidated

financial statements – State of

Hesse

2003

1st Opening

balances of

accounting units

Current consolidated

financial statements

31.12.201531.12.2009 31.12.2013

Unqualified

auditors' opinion


5

EPSAS Study

Group structure

Use of Accounting

▪ 80 accounting units

▪ 11,300 SAP users

Financial reporting

▪ Information

▪ Budgeting

▪ Financial statistics

Lisbon, 26/04/2017


Experiences from similar Hessian projects

Success factors from earlier projects that implemented accounting modifications / conversions:

▪ Clear objectives and clear political mandate: Political support must not be limited to the start but has to

be followed up with sustainable interest and engagement.

▪ High-priority political support by power promoters: Regarding the Hessian project of the “NVS” (reform

of Hessian accounting and controlling), it was positive that the Hessian Prime Minister had pushed the

project over and over again.

▪ Broad-based acceptance management at all levels of administration. Not only executives, but also

employees who are to "live" the new system. Hesse: Inclusion of further parties involved in the budget

process, in particular Parliament.

EPSAS Study

6Lisbon, 26/04/2017


Acceptance Management as a success factor

▪ Successful change process requires proper and adequate dealing with affected persons

▪ Careful analysis of project environment and project stakeholders is important.

▪ Phases of EPSAS Acceptance Management

Phase I: Period from the completion of the study up to the moment when development of EPSAS will have

reached a high level of concretization

Phase II: EPSAS have reached a high level of concretization, start of implementation project is foreseeable

(expected 12 to 6 months before project start)

Phase III: Start of implementation project until its completion.

EPSAS Study

7Lisbon, 26/04/2017

Observation (Phase I)

Concretization(Phase II)

Implementation(Phase III)


Assumptions

Our project plan for EPSAS implementation is based on the following assumptions:

▪ For budgetary purposes, Hesse will hold on to the link between double-entry accounting and budget

planning / controlling - even on the basis of new accounting requirements.

▪ The national accounting regulations for the public sector, in Germany the principles of government

double-entry bookkeeping1 (so-called “Standards staatlicher Doppik”), are adapted to EPSAS.

▪ The (national / international) requirements for financial reporting are adjusted to EPSAS. The statistical data

is collected on a corresponding double-entry basis.

EPSAS Study

8Lisbon, 26/04/2017

1 within the meaning of §§ 7a, 49a HGrG


1. Project definition

2. Functional concept

3. Technical concept

4. Implementation

5. Introduction

6. Support

7. Completion

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M1M 2

M 3M2 M 4 M13M12M 9M 6 M10M 5 M 7/8 M11

EPSAS Implementation project

EPSAS Study

Project phases

Milestones

Timeline

2025 (e.g.)

Oct. 2026Nov. 2021 Dec. 2023

Lisbon, 26/04/2017 9

Project plan


▪ Clear legal framework, objective, arbitrary and

reliable depiction of government and

administrative action, narrowed down options

(in important areas)

▪ Accounting is suitable as a basis for

budgetary management in public sector

bodies that interlink accounting and budgetary

control within their budget sovereignty.▪ Financial reporting

on a double-entry accounting

basis without complex parallel

operation

EPSAS: our expectations

EPSAS

10Lisbon, 26/04/2017


11Lisbon, 26/04/2017

Thank you for your attention!

Harald Bott

Accounting, Payment transactions, Reporting services


Friedrich-Ebert-Allee 8, 65185 Wiesbaden, Germany

Tel.: +49 (611) 322500 / Fax: +49 611 327132500

E-Mail: [email protected]

mailto:[email protected]

Documents

Study on the conversion of a double-entry accounting ... · PDF fileHessian Ministry of Finance Study on the conversion of a double-entry accounting system to uniform European Public