Implementation of Financial Reporting in the Romanian Public System According to International Accounting Standards (IPSAS): Theoretical-Methodological Approaches

Introduction

The financial accounting activity in the Romanian public system has registered remarkable progress, an aspect also identified by the tendency to prepare not only financial reports, useful for microeconomic analysis and decision making at the level of public institutions, but also various statistical reports, useful for macroeconomic analysis and decision making at the country and government level. The continuous improvement of national and international accounting references will lead to a much more realistic picture of financial reporting for public entities.

Therefore, the financial information of these entities gains more accuracy and more details, being available in real time and easier to verify by various actors, such as: the Ministry of Public Finance the chief authorizing officer or the Court of Accounts. The close monitoring of the financial-accounting situation in the public system strengthens the bases for the correct use of the resources of each institution, by strictly observing the budgeted provisions, so that the resulting information shows concrete proposals for the preparation of future budgets. Romania has been and still is actively involved in the effort to modernize public sector financial management, so that a commitment-based accounting system is currently applied in all sectors and at all levels of the public system, by taking over elements from International Accounting Standards for the Public Sector (IPSAS).

This new international approach to public management is a consequence of the increased diversification of accounting systems, the quality of government reporting and the interest of international financial institutions. In this sense, the institutions of the public system have gone through a long road of reforms that have considered the financial reporting system that must meet the needs of transparency and publicity of budgetary data related to the public system according to European or international regulations, trust of the data collected through cross-validations between the records of the system and the financial records of public institutions. Increasing efficiency in the activity of public institutions, transparency in their management using modern tools for communication and transmission of information are major objectives that are constantly found in the strategies of the public system. Therefore, one of the tools for implementing these objectives is the use of the ForExeBug system which allows the standardization of the reporting and transmission of various types of financial statements for each entity in the public system only in electronic format, standardized and secure which allows to increase confidence of data collected by cross-validation with system data.

The transmission option allows that in addition to the centralization of situations, simultaneously the data can be used for multicriteria analysis and time series by interconnecting with the IT system of the Ministry of Public Finance. Thus, the major advantage of using that system is obvious, if we consider the fact that the system allows electronic monitoring and control of legal and budgetary commitments, with a direct impact on improving financial discipline and preventing the formation of arrears of public institutions.

Therefore, through the implementation of this system, we also find a series of operational advantages that take into account: the aggregation, centralization and automatic consolidation of the data collected through the electronic reporting forms of the financial statements; automatic generation of summary reports based on the data collected and automatic validation of data on budget execution of revenues and expenditures; automatic validation of data on payments made by public institutions through treasury accounts with approved budgets; allows the control of the budgetary commitments of the reporting entities and provides the authorizing officers with information on the use of the approved budget at the level of all hierarchically subordinated public institutions; the reduction of the volume of data to be reported by each authorizing officer and, at the same time, the reduction of working time and related resources, as a result of the decrease of the data to be centralized and reported.

In this context, the purpose of our study is to perform an analysis on the implementation of financial reporting in the Romanian public sector in accordance with the requirements of International Public Sector Accounting Standards, which should include increased transparency and coherence, comparability of financial information, decision making as well as the correct and real management of all aspects arising therefrom.