Financial Accountability Handbook

Transcription

1 Financial Accuntability Handbk >> Vlume 5 Reprting Systems Infrmatin Sheet 5.2 Preparatin f Financial Statements Intrductin The Financial Accuntability Act 2009 (the Act) and the Financial and Perfrmance Management Standard 2009 (the Standard) detail the bligatins that each accuntable fficer and statutry bdy has in the preparatin f the agency s financial statements. This Infrmatin Sheet is intended t assist agencies t meet their bligatins in the preparatin f the statements mandated by the Act, the Standard and ther prescribed requirements. It als incrprates requirements fr the inclusin f the results f cntrlled entities in agency financial statements. Prescribed requirements the Act Sectin 62 f the Act prescribes the requirements fr the preparatin, certificatin and audit f agency financial statements. The Act als requires the financial statements t be included in the annual reprt f the department r statutry bdy. N changes may be made t the financial statements nce they have been certified by the Auditr-General (r delegate) and the statements shwn in the reprt must be exactly as certified and nt abridged r amended in any way when they are reprduced in the annual reprt. Sectin 77 f the Act prescribes that the accuntable fficer must delegate respnsibility fr preparatin f financial statements t the chief finance fficer. Hwever, the accuntable fficer remains accuntable fr the accuracy f thse statements. Prescribed requirements the Standard Part 3 f the Standard cntains detailed requirements with respect t the: preparatin f annual financial statements preparatin f financial statements fr newly frmed agencies preparatin f financial statements fr ablished departments r statutry bdies, and timing fr giving annual financial statements t the Auditr-General. Agencies must prepare their financial statements in accrdance with Australian Accunting Standards (unless a statutry bdy has an apprval frm the Treasurer nt t prepare general purpse financial statements). Departments must cmply with, and statutry bdies must have regard t, the minimum reprting requirements cntained in the Financial Reprting Requirements fr Queensland Gvernment Agencies (FRRs), published by Queensland Treasury. As well as minimum reprting requirements, the FRRs als cntain Accunting Plicy Guidelines and mdel financial statements. Agencies must als cmply with the Nn-Current Asset Plicies fr the Queensland Public Sectr, als published by Queensland Treasury.

2 >> Vlume 5 Reprting Systems IS 5.2 Preparatin f Financial Statements Financial Management Framewrk >> Overview Diagram Annual financial statements Agencies must negtiate a date t give their annual financial statements t the Auditr-General (r delegate). This date must allw the financial statements t be certified by the Auditr-General within tw mnths after the end f the financial year. The Standard prvides fr the Treasurer t extend this date in cnsultatin with the Auditr- General (t a maximum f six mnths after balance date), but nly if a whle-f-gvernment reasn exists which may impact n the financial statement preparatin (fr example, a significant and late machinery f Gvernment change). Financial statements fr newly frmed agencies Sectin 44 f the Standard requires newly frmed agencies t prepare financial statements frm the date f frmatin until the end f the financial year in which the agency was established. If the frmatin date is within fur mnths f the end f the financial year, an apprval can be sught frm the Treasurer fr the financial statements t be prepared frm the frmatin date t the end f financial year fllwing the year in which the agency was established. An apprval will generally nly be given where a small number f immaterial transactins ccurred prir t the end f the first financial year. The relevant Minister is required t table a ntice in Parliament stating that the agency s financial statements fr that perid will be included in the fllwing year s financial statements. Final financial statements fr ablished agencies Sectins 47 and 48 f the Standard detail the requirements fr the preparatin f final financial statements by ablished agencies. Final financial statements must be prepared at the date f ablitin f the agency, being either the gazettal date (department) r repeal date (statutry bdy). Preparatin f final financial statements must have regard t the fllwing: If the financial statements fr the previus financial year have been certified and audited prir t the ablitin date, the final perid will be frm the day immediately after the end date f the previus financial year s financial statements until the ablitin date. If the financial statements fr the previus financial year have nt been certified and audited prir t the ablitin date, the accuntable fficer r statutry bdy has an ptin t have the final perid frm either: the beginning f the previus financial year until ablitin date, r frm the day immediately after the end date f the previus financial year s financial statements until the ablitin date. The final financial statements must be certified by the frmer accuntable fficer and frmer chief finance fficer (departments) r the frmer chairpersn and frmer respnsible persn (statutry bdies). If the persn previusly in ne f these psitins is n lnger available t certify the financial statements, the Treasurer will appint a persn t assume the respnsibility. The frmer accuntable fficer fr an ablished department, r the frmer apprpriate Minister fr an ablished statutry bdy, must give the final financial statements t the Auditr-General by the date agreed between the frmer accuntable fficer / Minister and the Auditr-General. Financial Accuntability Handbk Date Issued: Octber 2013 Page 2 f 5

3 >> Vlume 5 Reprting Systems IS 5.2 Preparatin f Financial Statements Financial Management Framewrk >> Overview Diagram Cnslidatin f cntrlled entities Accunting Plicy Guideline (APG) 10 Cnslidated Financial Statements prvides guidance n the definitin f a cntrlled entity f an agency. Fr public sectr agencies, cntrl may be determined with reference t legislative r executive authrity r administrative arrangements, including whether: Ministerial apprval is required fr the agency s budget the Minister r a central authrity has the pwer t appint and/r remve members f the bard f management Ministerial pwer f cntrl and directin exists, r the State is entitled t receive the residual net assets f the agency in the event it is wund up. Where it is determined that the entity is a cntrlled entity, APG 10 utlines disclsure and cnslidatin requirements that apply t bth the parent and cntrlled entities. Benefits f an effective system f internal cntrls in the preparatin f financial statements Benefits f effective internal cntrls ver the preparatin f financial statements include: Financial statements can be cmpleted n time, are relevant and present a true and fair view f the financial perfrmance and psitin f the agency. Infrmatin in the statements will be understandable t users and cmparable t ther public sectr entities. Vlume 3 f the Financial Accuntability Handbk cntains infrmatin abut the develpment, implementatin and peratin f agency systems f internal cntrls and prcesses. Financial statements preparatin planning The preparatin f annual financial statements requires gd frward planning, effective management f systems and prfessinally qualified and experienced accunting staff. Other key cnsideratins include: Has there been cnsultatin with the finance/audit cmmittee t agree dates t review the financial statements prir t certificatin? Has there been cnsultatin with utsurced service prviders n prcessing, cut ffs and timing requirements fr the preparatin f agency financial statements? Has a financial statement preparatin timetable been prepared and cmmunicated t all relevant staff, including key respnsibilities and cmpletin dates? Critical dates may include: preparatin and analysis f key recnciliatins and cmpletin f stcktakes general ledger cut-ff dates (fr example, fr bank accunts and ther transactinal ledgers) preparatin f a financial statements template (that is, the frmat f the financial statements withut the numbers) preparatin f draft ntes t the financial statements Financial Accuntability Handbk Date Issued: Octber 2013 Page 3 f 5

4 >> Vlume 5 Reprting Systems IS 5.2 Preparatin f Financial Statements Financial Management Framewrk >> Overview Diagram availability f cmpleted draft financial statements fr review date fr certificatin f financial statements audit cmmittee review date, and date fr submissin f draft financial statements t external audit. Have agency staff been made aware f Whle-f-Gvernment reprting requirements prir t cmmencing the preparatin f the agency s financial statements? Have staff been made aware f any changes in the prescribed requirements, t ensure cmpliance with the new requirements? Has cmmunicatin with cntrlled entities detailed their bligatins with respect t cnsistent accunting plicy treatments and dates fr cmpletin and submissin f their financial infrmatin (fr either cnslidatin r nte disclsure purpses)? Have regins been made aware f their respnsibilities in the financial statement preparatin prcess (fr example, undertaking inventry r prperty, plant and equipment stcktakes, and identifying year end accruals)? Have all cntrl and subsidiary ledger accunts been recnciled and recnciling items fllwed up befre end f financial year ledger clsures? Are asset stcktakes, valuatins and impairment assessments scheduled fr cmpletin within reasnable time fr the results t be reviewed and any actin taken? Have significant accunting plicy matters been discussed with external audit t ensure timely reslutin f any issues? Have internal and external audit met and agreed n the wrk t be undertaken, if any, by internal audit in the review f the financial statements? Are regular update meetings planned with external audit t mnitr prgress f the audit and issues arising? Preparatin f detailed wrking papers fr each material accunt balance will assist in a smth audit prcess. The wrking papers shuld reference supprting dcumentatin, such as recnciliatins, results f stcktakes, cnfirmatins frm external parties and infrmatin abut significant assumptins used in the calculatin f balances. The wrking papers shuld als be crss-referenced t the general ledger. Strategies fr earlier financial statement preparatin As mandated in the Standard, agency financial statements must be cmpleted and audited within tw mnths after the end f the financial year. Strategies that can ensure this timeframe is met may include: use f early clse prcedures. This ccurs when an agency clses its ledgers near t but befre the end f the financial year (fr example, at the end f the third quarter, r at the end f the eleventh mnth), and draft financial statements are prepared and a preliminary audit cnducted. This shuld allw the end f year clsure t fcus n subsequent transactin analysis and audit. preparatin f mnthly, quarterly r six-mnth financial statements. By preparing such statements (supprted by apprpriate wrking papers) regularly, agencies have the pprtunity t refine their preparatin prcesses. early preparatin f prfrma financial statements which include all cmparative infrmatin, updated accunting plicy ntes and applicatin f new/amended accunting standards and Queensland Treasury plicies. Financial Accuntability Handbk Date Issued: Octber 2013 Page 4 f 5

5 >> Vlume 5 Reprting Systems IS 5.2 Preparatin f Financial Statements Financial Management Framewrk >> Overview Diagram early reslutin f accunting issues fr all ne-ff, cmplex r significant transactins and changes in accunting plicies r estimatins. recnciliatin and analysis f balance sheet cntrl accunts n a quarterly basis. perfrming regular variance analysis with meaningful explanatins, fr actuals versus riginal budget, and actuals versus previus year s year-t-date actuals. This may assist departments with identifying emerging issues r unusual transactins which need investigatin. regular recnciliatin and review f cntrl and suspense accunts. regular reprting n cntingent assets and liabilities. early cmpletin f all asset (including inventry) stcktakes, including the investigatin f any discrepancies. Service prviders and financial statement preparatin Where agencies utsurce preparatin f their financial statements, the agency shuld cmmunicate early with the prvider t ensure a clear understanding f the extent f wrk required and the timeframes t cmplete the wrk. The agency remains respnsible fr the financial statements, and it is imprtant that a quality assurance prcess be undertaken. Whle-f-Gvernment reprting Fr agencies included in the cnslidated whle-f-gvernment r general gvernment sectr financial statements, the planning prcess utlined abve shuld include reference t the prcesses and key dates fr inputting data int the Tridata system. Infrmatin abut the requirements fr the whle-f-gvernment cnslidated reprting will be released in Treasury Financial Circulars. Further infrmatin (including previus Financial Circulars) is available frm the Tridata intranet website at: Related resurces Australian Accunting Standards Bard Financial Reprting Requirements, Queensland Treasury Nn-Current Asset Plicies fr the Queensland Public Sectr, Queensland Treasury Further infrmatin If yu have any questins cncerning the Financial Accuntability Handbk, please cntact the relevant Business Branch f Treasury fr yur agency. Alternatively, the Financial Management Helpdesk with details f yur query and a respnse will be prvided: [email protected] Financial Accuntability Handbk Date Issued: Octber 2013 Page 5 f 5