IAN CARRUTHERS - Directiomedia.directio.it/WCOA/Multimedia/3-4_Slide_Carruthers.pdf · 2018. 5....
Transcript of IAN CARRUTHERS - Directiomedia.directio.it/WCOA/Multimedia/3-4_Slide_Carruthers.pdf · 2018. 5....
IAN CARRUTHERSMember, International Public Sector Accounting
Standards Board (IPSASB), and Policy and Technical Director,
Chartered Institute of Public Finance and Accountancy, UK
Fiscal Sustainability and Service
ReportingBy Public Sector Entities
Ian Carruthers
IPSASB Member
Director, Policy and Technical, CIPFA, United Kingdom
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Public Sector Conceptual Framework
• Primary service delivery objective
• Importance of accountability
• General Purpose Financial Reports (GPFRs) – broader than General
Purpose Financial Statements
• IPSASB developing Recommended Practice Guidelines (RPGs) for
GPFRs
• Good practice - not required to assert IPSAS compliance
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Reporting on the Long-Term Sustainability of an Entity’s Finances
Objective
• Provide indication of projected sustainability of entity’s finances over
specified time horizon in accordance with stated assumptions.
Status and Scope
• Recommended Practice Guideline (RPG1)
• Doesn’t directly address environmental sustainability
• Includes entity’s future financial flows across all areas
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LTFS: Linkages to Financial Accounts
Future cash flowsPast cash flows
Liabilities incurred and settled to date
Assets obtained and realized to dateIn
flo
ws
Ou
tflo
ws
Present economic sacrifices settled in future (Liabilities)
Present economic benefits realized in the future (Assets)
Expected resources to be realized in the future
Expected obligations to be settled in the future
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Reporting LTFS Information
• Long Term Fiscal Sustainability (LTFS) definition:
– Ability of an entity to meet service delivery and financial commitments both now
and in the future
• Form and content of reporting dependent on entity
• May be part of GPFRs or separate report
• Draw on wide range of information sources
• Current policy, demographic and economic assumptions
• Projection time horizons reflect entity characteristics
• Longevity of key programmes
• Dependence on other entities for funding
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Determining Whether to Report on LTFS
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Reporting Service Performance
• Principles-based approach to reporting service performance
information to meet user needs
• Information on entity’s:
– Important services
– Service performance objectives
– Achievement of those objectives
• Assist users to assess an entity’s service efficiency and effectiveness
• Developed as Recommended Practice Guideline (RPG)
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Reporting Approach
• Five types of performance indicator:
– Inputs;
– Outputs;
– Outcomes;
– Efficiency; and
– Effectiveness
• Entity may present service performance information either:
– As part of report including the financial statements; or
– In a separately issued report.
• RPG [3] due for approval December 2014
Fiscal Sustainability and
Service ReportingBy Public Sector Entities
Robert Dacey, IPSASB Member
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U.S. Comprehensive Long-Term Fiscal Projections
• Statement of Long-Term Fiscal Projections for the U.S. Government
– present value of projected receipts and non-interest spending (75
year horizon)
– assuming current policy without change
– in dollars and as a % of GDP (gross domestic product)
– significant changes in the projections from period to period
• To be audited beginning in fiscal year 2015 (unaudited for 2010-2014)
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U.S. Comprehensive Long-Term Fiscal Projections
Key Disclosures
• Fiscal gap - the change in non-interest spending and/or receipts that would be necessary to maintain public debt at or below a target percentage of gross domestic product (GDP)
• Significant assumptions underlying the projections
• Significant changes in the projections from period to period
• Significant departures from current law
• Limitations on long-term fiscal projections
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U.S. Comprehensive Long-Term Fiscal Projection
• Key Required Supplemental Information (unaudited)
• Historical and projected trends in:
– Receipts and spending
– Treasury debt held by the public as a % of GDP
• Factors expected to significantly impact projections
• Results using alternative scenarios
• Likely impact of delaying corrective action when a fiscal gap exists
(“cost of delay”)
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2013 Long-Term Projections of Federal Receipts and Spending (75 years) - Unaudited
Source: Fiscal Year 2013 Financial Report of the United States Government
$ Trillions (PV) % of GDP (PV)
Receipts:
Social Security Payroll Taxes 46.1 4.2
Medicare Payroll Taxes 15.4 1.4
Individual Income Taxes 113.2 10.4
Other Receipts 41.5 3.8
Total Receipts 216.2 19.8
Non-interest Spending:
Social Security 62.4 5.7
Medicare Part A 23.5 2.2
Medicare Parts B&D 24.4 2.2
Medicaid 25.2 2.3
Defense Discretionary 23.1 2.1
Non-defense Discretionary 27.4 2.5
Other Mandatory 34.0 3.1
Total Non-interest Spending 220.2 20.2
Non-interest Spending less Receipts 4.0 0.4
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Historical and Projected Receipts and Spending
Source: Fiscal Year 2013 Financial Report of the United States Government
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Historical and Projected Debt Held by the Public
Source: Fiscal Year 2013 Financial Report of the United States Government
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Costs of Delaying Fiscal Reform on Fiscal Gap
Period of Delay
• No Delay (Reform in 2014)
• 10 Years (Reform in 2024)
• 20 Years (Reform in 2034)
Change in Average Primary Surplus
• 1.7 percent of GDP - 2014-2088
• 2.1 percent of GDP - 2024-2088
• 2.6 percent of GDP - 2034-2088
Source: Fiscal Year 2013 Financial Report of the United States Government
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Sensitivity of Key Assumptions
% of GDP
Change in
% of GDP from
base
of 1.7%
2013 Fiscal Gap - Change in primary surplus needed to maintain current debt/GDP 1.7
Sensitivity of Key Assumptions on Fiscal Gap
Per Capita Health Care Cost Growth (base-weighted average growth at GDP plus 0.2%)
1% point higher 4.7 3.0
2% points higher 7.6 5.9
Interest Rate (base-5.5%)
0.5% higher 2.0 0.3
1.0% higher 2.2 0.5
0.5% lower 1.4 (0.3)
Discretionary Spending (base-budget caps through 2021; 4.5 % of GDP thereafter)
growth with inflation and population 0.3 (1.4)
growth with GDP at pre-budget cap levels 2.0 0.3
Changes in Individual Income Revenue Growth (base-0.1% of wages and salaries per year )
0.2% of wages and salaries per year 0.7 (1.0)
0.0% of wages and salaries per year (no real bracket creep) 2.7 1.0
Note: 1% of the PV of GDP (75 years)= $10.9 trillion
Source: Fiscal Year 2013 Financial Report of the United States Government
KEN WARRENMember, IPSASB, and Treasury’s Chief Accounting Advisor,
New Zealand
Fiscal Sustainability and Service
Performance Reporting by
Public Sector Entities
Ken Warren, New Zealand
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Growing Social Commitment
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Unemployment Benefit
Invalid's Benefit
Sickness Benefit
Proportion of Working Age on Benefit
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The World Ain’t Simple
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Investment Approach to Welfare
• A change in service-delivery to focus on investing in people who have the
highest risk of remaining on benefit for the long-term
• Transparent reporting regarding the cost of life-time benefit receipt
• A ‘liability’ based on insurance methodology allowing
– Ministers to set challenging liability performance targets
– Empowered agencies (with expertise & information) to determine priorities,
incentivised by Ministers to make optimal decisions
• Ongoing monitoring and evaluation of the benefit system to understand
the benefit population
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Tracking the Government’s Commitment
10
20
30
40
50
60
70
80
90
Am
ount
($b)
Change
Exp+loan
Non-ben
Youth
Supp living
Sole Parent
Jobseeker
86.8 -1.5 -1.3 83.9 -1.1 +0.7 -1.8 +1.1 -2.6 -0.8 -3.0 76.5
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Sole Parents, Youngest Child Aged 5-13
Now
• Sole Parent numbers relatively static after an increase during GFC
• Sole parent numbers falling, greater cancellations and fewer grants
Pre-reform
• General benefit application process
• Assessment generally limited to benefit eligibility
• Active triage
• Assessment for both benefit eligibility and service provision (choice of providers)
Expectations• Zero-to-limited work expectations
• Weak incentives to obtain work
• Work supports available are generic across all people on benefit
• Eligibility to work supports restricted by prioritisation to full-time work
• Part-time work obligations in force
• Work focus and supports available are still the same as before, however business cases underway to try new supports
• Generalised “one size fits all” case management
• Differentiated case management with differentiated service streams and providers
Application
Case Management
Work Supports
Performance
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Trials to Inform Actuaries And Managers
• Contracting of specialist services for beneficiaries with common characteristics
Overview What will be learnt
External Case Management
• Whether external providers can achieve better outcomes than a comparable internal service
• ROI and scale of impact
External and Internal post placement
• Allocation of people on benefit to alternative service providers – run as a randomised control trial
Service Delivery Model
• Amenability of people to service streams
• Impact of the different services and the cost effectiveness
• Provision of post-placement support to help people who have recently exited benefit retain employment
• Will compare internal and external provision of post-placement support
• Will measure how effective this service is at retaining recent exits in employment
• ROI and scale of impact