By Vivienne Russell | 17 July 2013
Ireland needs to harmonise and modernise accounting standards across its public sector as part of a wider push to improve fiscal disclosure, the International Monetary Fund has said.
At the request of the Irish government, the IMF carried out a Fiscal Transparency Assessment of the country in March this year.
Its report, published yesterday, found Ireland was approaching best practice in terms of its fiscal reporting and forecasting, while the government had ‘ambitious’ plans to improve the timeliness, quality and comprehensiveness of its budgets, statistics and accounts.
But the fund also raised concerns that fiscal disclosure in Ireland remains ‘fragmented and diffuse’.
Ireland was urged to take a series of actions over the next five years, which taken together would put Ireland at the ‘forefront of fiscal transparency practice within a reasonable timeframe and relatively modest additional cost’.
As well as harmonised public sector accounting, these should include recognition of all assets, liabilities and associated fiscal flows in fiscal reports, and an acceleration of the timetable for submission and approval of the annual budget and financial statements.
Responding to the IMF’s conclusions, the Irish government said it had already begun to implement some of the recommendations. It cited the publication, in April, of the first set of quarterly financial statistics for the general government. This included data on the value of public-private-partnership contracts, government guarantees and an estimate of the general government’s overall net financial worth. The Irish government is also bringing forward the date of the Budget to October 15 in line with European Union fiscal reforms and the requirement for common budgetary timelines.
Finance minister Michael Noonan said: ‘These plans demonstrate an encouraging degree of existing convergence with internationally accepted standards. The government has already taken a number of significant steps to improve the coverage, quality, and timeliness of its fiscal reports since this assessment was conducted in March.
‘We have referred the recommendations and associated action plan contained in the report to a steering group, under the supervision of the Departments of Finance and of Public Expenditure and Reform, for assessment and implementation as appropriate.’
During the Ireland inspection, IMF inspectors piloted a new instrument for evaluating countries’ fiscal transparency based on a revised draft of its Fiscal Transparency Code.
