ARCHIVED - Evaluation of International Public Sector Accounting Standards Board Contribution Program

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Executive Summary

Study Objective

This evaluation study was designed to provide feedback on the relevance and performance of the five-year International Public Sector Accounting Standards Board (IPSASB) contribution program, which is being considered for renewal subsequent to March 2011.

Background

In August 2006 the Treasury Board of Canada approved the terms and conditions for a contribution program supporting the activities of the IPSASB. The IPSASB is an independent board of the International Federation of Accountants (IFAC) which has a mandate to issue international public sector accounting standards (IPSASs). The objectives of the IPSASB contribution program are to: 1) further the development of international public sector accounting standards; and 2) increase the visibility of Canada in the setting of these standards, in part by relocating the IPSASB Secretariat to Toronto.

Under this program, the Government of Canada contributes $200,000 annually to the standards development activities of the IPSASB, for a total of $1 million over the five-year period ending March 31, 2011. A parallel contribution also was made by the Canadian Institute of Chartered Accountants (CICA) to achieve the same objectives.

The Financial Management Sector (FMS) within the Office of the Comptroller General (OCG), Treasury Board Secretariat (TBS) administers the contribution program on behalf of the Government of Canada. In accordance with the federal government's Evaluation Policy, an evaluation study was required to assess the relevance and performance of the program, and to provide feedback regarding the extension of the program subsequent to FY 2010-11.

The evaluation study was carried out by Kelly Sears Consulting Group on behalf of the Financial Management Sector and the Internal Audit and Evaluation Bureau. The study was launched in September 2010 and completed in January 2011. The evaluation involved key informant interviews with representatives of Treasury Board Secretariat, the IPSASB and several stakeholders, along with an extensive review of background documents, file information, IPSASB publications and the international literature on public sector accounting standards.

Conclusions

The IPSASB contribution program has made good progress in achieving most of its intended outcomes. The main conclusions of the study are the following:

• In the past five years IPSASB has completed the development and publication of a full set of 31 accrual basis standards and updated its cash basis standard and guidance documentation.
• The level of engagement of the global community in improving public sector accounting standards has steadily increased over the past several years as measured by the year-over-year level of participation in the IPSASB standards development process and the significant continuing engagement of such international organizations as the International Monetary Fund, G 20, and World Bank.
• IPSASB has partially achieved its intermediate outcome of member countries adopting and implementing accounting standards. This is an on-going process. Over eighty countries have engaged in pursuing the implementation of accrual based standards equivalent or similar to those published by IPSASB during the past ten years.
• The combined financial contributions made by the Government of Canada and the CICA have been a key factor in stabilizing the funding and advancing the work of the IPSASB at a critical time in its evolution.
• The IPSASB contribution program together with the parallel funding from the CICA have directly influenced the participation of Canadian public sector institutions and stakeholders in the development of high quality public sector accounting standards.
• Although Canada has been highly influential in the world of public sector accounting standards, the TBS contribution program has not been as publicly recognized. There is little evidence of increased visibility for the Government of Canada.
• There is a significant net benefit to Canada arising from the IPSASB contribution program, the office relocation to Toronto along with the co-location with the CICA.
• The terms and conditions of the contribution agreement were appropriate to the risk. Using existing IFAC accountability instruments for reporting provided TBS with an efficient and sufficient means of oversight of the contribution program spending.
• At the time the IPSASB contribution program was initiated it was fully aligned with the federal government's agenda of the day. While political imperatives such as economic stimulation and deficit reduction now dominate the agenda, accountability remains a cornerstone of the Government of Canada's priorities and is highly relevant.
• The IPSASB contribution program is complementary to the support provided to IFAC by the CICA, international organizations and, to a lesser extent, world governments. Funding for IPSASB activities from outside sources, although increasing, remains a challenge. The support from the CICA does not duplicate or work at cross purposes with the Government of Canada's funding support.
• There is a strong rationale for continuing some level of support by the Government of Canada which would complement the CICA funding in support of the investment by IFAC in its Canadian operations.

Recommendations

1. The Government of Canada via TBS should continue providing financial support to the IPSASB's international public sector accounting standards activities.
2. TBS should continue to collaborate with the CICA and the Public Sector Accounting Board (PSAB) to engage the Canadian public sector accounting community and stakeholders in the development of high quality global accounting standards.
3. In considering the objectives of the funding arrangement subsequent to 2010-11, the TBS should consider requesting that IPSASB commission an independent study on the constraints and benefits from adoption of IPSASs at the national, state and local government level.
4. TBS should encourage the IPSASB to increase public communications and consultation processes in the French language to reflect the bilingual status of Canada.
5. TBS should develop a communication strategy in support of Canada's contribution in the development of public sector accounting standards and encourage the IPSASB to proactively communicate the extent and benefits received from the Government of Canada.

I Introduction

The Financial Management Sector (FMS) of the Office of the Comptroller General (OCG), in association with the Internal Audit and Evaluation Bureau (IAEB) of the Treasury Board Secretariat (TBS), was responsible for conducting an evaluation of the International Public Sector Accounting Standards Board (IPSASB) contribution program. The IPSASB is an independent board of the International Federation of Accountants (IFAC). Under this program, the Government of Canada contributes $200,000 annually to the IPSASB, for a total contribution of $1 million over the five-year period ending March 31, 2011.

The evaluation study was designed to provide feedback on the relevance and performance of the five-year IPSASB contribution program which is being considered for renewal subsequent to March 2011. As such, in keeping with the terms and conditions of the Treasury Board approval of the program and in accordance with the Government of Canada's Policy on Evaluation (2009), the objectives of the evaluation study were to assess:

• The extent to which the program is achieving its expected outcomes, including the participation of the Government of Canada in IPSASB activities.
• The effective utilization of program resources in relation to the outcomes of the program.
• The relevance of the program to: 1) federal government priorities, and 2) TBS priorities.

The study was conducted by Kelly Sears Consulting Group under the direction of the Financial Management Sector of the OCG (the "Project Authority") and with the stewardship of IAEB. The first phase of the study involved the preparation of an evaluation framework report. This report was based on a review of documentation provided by the Project Authority and consultation with TBS managers. It provided a concise description of the program, specified the program's objectives/intended results, outlined the set of evaluation issues and questions, and described the evaluation methodology. The subsequent evaluation phase involved interviews with representatives of IPSASB and other stakeholders, together with a review of documents and relevant literature on public sector accounting standards.

The evaluation commenced in September 2010 and was completed in January 2011.

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