State financial statements still face many difficulties

2019 is the first year that the State Treasury makes the State Financial Statement 2018. Photo: T.L

Sufficient legal basis

To prepare for the making of the State Financial Statement 2018, the Ministry of Finance and the State Treasury issued guidance documents. Currently, the legal framework for the preparation of the State Financial Statements 2018 has been issued.

According to the State Treasury, the state accounting information system has been built appropriately, ensuring fast, accurate synthesis of state financial information effectively, on time, and fully according to management requirements.

The State Treasury is also urgently researching and building a general state accounting information system so that external units can send financial information to the State Treasury electronically and support the State Treasury to receive or manually enter state financial information submitted by units, summarize, prepare State financial statements and reports on district financial information.

Especially, from June 10, the State Treasury officially put into operation the portal to receive information from external units; while other items have been put into operation since mid-July.

To implement this new task, in terms of organizational structure, the State Treasury has supplemented the task of performing state accounting for the accounting department at the provincial, municipal and district state treasuries. Currently, the State Treasury has basically completed the consolidation of accounting mechanisms to be ready for the implementation of the general state accounting at the central and local levels.

The State Treasury said that, since March, the whole system has organized three training courses (on policy mechanisms, send the report providing financial information) for estimate units level I- the central level and provincial level- information providers and for officers of the provincial and district treasuries- units synthesizing and preparing the State financial statements (on the mechanisms, policies, and operation of the general State accounting system). Currently, the State Treasury continues to organize training for management officials and main users of the provincial State Treasury.

Accounting regime is not synchronized

The State Treasury said because 2019 is the first year that the State Treasury has implemented the preparation of the State Financial Statements 2018, the development and promulgation of guidance documents are still slow, and the general state accounting information system has not been operated fully.

Another difficulty in implementing State financial statements is that some other units (such as investors and non-state financial funds that have their own accounting regime) still apply the former accounting regime in the fiscal year 2018 due to the accounting regimes applied to these units that have not been amended and issued.

Therefore, the State Treasury has instructed the units to send reports in accordance with the former accounting regime and the State Treasury will synthesize some basic financial indicators of the units, such as net assets and surplus/deficit in the year. This solution is only temporary because the financial information of the unit has not been fully reflected in the state financial statements. After the new accounting regime is issued and applied, the financial information of these units will be fully synthesized according to each criterion.

Another difficulty in preparing the State Cash Flow Statement 2018 is that the fiscal year 2018 is the first year that the estimate units’ level 1 shall prepare a consolidated financial statement, so Circular 99 guides that these units are not required to summarize and present the financial figures 2017. However, this is the necessary information to synthesize some indicators inthe State Cash Flow Statement 2018.

Therefore, for the State Cash Flow Statement 2018, instead of being based on the State financial statements, the State Financial Performance Report can be made based on data of Local State budget finalization report and State budget finalization report 2018. This solution will ensure that the State Cash Flow Statement 2018 is consistent with the provisions of the Accounting Law 2015.