- Funding Programme
- Year
- 2021
Strengthening financial management through accrual accounting and IT systems improvements.
The European Commission has helped Portugal to advance its commitment to implement accrual-based accounting in respect of service concession agreements. The project also provided strategic advice to Portugal on how to further integrate and strengthen the information systems that support financial management drawing on the experience of other OECD countries and taking account of advances in technology.
Context
Portugal is in the process of implementing a broad ranging set of budget management reforms, according to its 2015 Budget Framework Law. The European Union and the OECD have been supporting these reforms through a series of projects.
In 2021, UniLEO requested support from the European Commission to develop policies and guidance materials to implement accrual accounting in respect of service concession agreements, consistent with IPSAS standards and international good practice. In addition, UniLEO requested advice on the functional requirements for an integrated financial management information system that would underpin budget reforms with higher quality financial information.
Support delivered
The OECD advised to the Ministry of Finance on the implementation of the accounting standard for service concession agreements, and the development of more integrated financial management information systems.
The activities consisted of fact-finding surveys and interviews with officials in Portugal, and analysis of the experience of other OECD countries. This was followed by the delivery of draft analytical reports and recommendations, that were discussed in a series of workshops in Lisbon involving government officials, EU officials and experts from the OECD. The work was carried out between September 2021 and May 2023.
Results achieved
The Project provided clear and concrete recommendations on the process for implementation of the accrual-based accounting standard for service concession agreements and on the user requirements and technical requirements for an integrated financial management information system.
The Government of Portugal considers that the experience with this project and the recommendations made in the reports issued, will support Portugal, based on the experience of other OECD countries, to strengthen from a technical point of view the strategic decisions it will have to promote in the process of implementing the reform of public financial management, particularly with regard to technological solutions for financial management systems and the accounting treatment of service concession contracts.
It is expected that the two reports will enable the Portuguese Ministry of Finance to move forward with reforming the accounting treatment for Service Concession Agreements and with the design, selection and implementation of new Financial Management Information Systems. Progress on both areas will lead to improved financial reporting and higher quality financial data, thereby improving financial decision making in Portugal.
More about the project
You can read the project public brief here: