ana cristina bittar de oliveira icgfm xbrl in brazil government english

Using XBRL to Improve Transparency in Brazilian Government

Financial Data Collection System (SICOF) Project

National Treasury Secretariat / Information Technology Department

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Using XBRL to improve transparency in Brazilian Government

Context – Brazilian scenario

• Brazil is a Presidentialist Federative Republic composed of:− Federal Government− 26 States (regional governments)− 5.564 Municipalities (local governments)

• Exercise of the power is assigned to distinct and independent bodies, subject to a control system to ensure the enforcement of the laws and the Constitution (www.brasil.gov.br).

• Each of these local and regional governments is a political and administrative sphere, endowed with autonomy, different infrastructure, accounting and financial systems and methodologies.

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Context – Fiscal Responsibility Law (LRF) and Treasury Activities

• The Complementary Law n. 101/2000, called the Fiscal Responsibility Law conceptualizes Voluntary Transfers as the voluntary surrender of current resources to another level of government, by way of cooperation, aid or financial assistance. To be able to benefit of Voluntary Transfers, the LRF attributed to local and regional governments the obligation to provide transparency, through the publication of some periodical management reports:

− Fiscal Management Report (RGF)− Resumed Budgeting Execution Report (RREO)− Registration of Credit Operations (COC)− Annual Balance (Balanço Anual)

• The Treasury is responsible for the publication of the general government fiscal statistics, for the consolidation of federation’s entities accounts, by controlling the Public and Consolidated Debt, the hiring of Public-Private Partnerships, among other activities which are based on analysis of financial data collected from states and municipalities, such as the LRF reports.

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Context – Accounting Standards

• The Accounting department of the National Treasury is working on a Common Chart of Accounts Applied to the Public Sector (PCASP), considering the implementation and use by federal, regional and local governments.

• A legal act (Portaria STN nº 751, December 16, 2009) establishes a gradual implementation of the Common Chart of Accounts (PCASP), starting by the Federal Government till the small Municipalities, optional in 2010 but to be mandatory in the future.

• The Chart of Accounts, the Financial Statements, called DCASP, and the Accounting Procedures are part of the Public Accounting Manual, called MCASP, published by the Treasury annually.

• As well, the Account department defines the Financial Reports Manual, called MDF, that consists in some of the LRF required reports: Fiscal Targets (AMF), Fiscal Risks (ARF), Resumed Budgeting Execution Report (RREO) and Fiscal Management Report (RGF).

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Context – Accounting Standards

Public Accouting Consolidation(LRF Art. 51)

Public Accouting Consolidation(LRF Art. 51)

TransparencyRequirements

(LRF Art. 48 III)

TransparencyRequirements

(LRF Art. 48 III)

Technical Group (Accounting Procedures)Portaria STN 136/2007

PCASP(Common Chart of Accounts

applied to Public Sector)

MCASP(Financial Reports applied to

Public Sector)

Technical Group (Accounting Procedures)Portaria STN 136/2007

PCASP(Common Chart of Accounts

applied to Public Sector)

MCASP(Financial Reports applied to

Public Sector)

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Context – Current Data Collection System (SISTN)

• To perform its legal obligations, the National Treasury, representing the Union, in partnership with a government bank of high capillarity, called CAIXA, has created a system for financial and accounting data collection, called SISTN.

• SISTN was created in a hurry, answering the legal demand (LRF), but with no proper planning to consider its growth, evolution and maintenance. It means high maintenance costs e hard path to evolution.

• This system provides Excel-kind forms for data entry, consisting in more than 4000 cells of information manually inputted per year, per local or regional government.

• The output of this system consists in the publication of the collected reports in PDF format, through the National Treasury portal, that access an application of the partner bank to request and provide the financial reports.

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Context – Current Data Collection System (SISTN)

SISTN Database

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Reporting Government

SISTN Offline mode(Excel-kind)

Homologation

Public consultation

Treasury Portal

Bank Infrastructure

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SISTN Problems

• Bureaucratic process to ensure Authenticity and no-Repudiation;

• All the users complain about input this big ammount of data manually. This process affects the data integrity, reliability and consistency;

• Other Brazilian’s Ministries require the same financial data from local and regional governments, as the Ministries of Education and Health;

• The complex reports generation is performed by governments systems or, in the most of times, by human analytical processes, which means long time and complex reporting process;

• Low representative data: SISTN, in production since 2005, has no more than 60% of the governments reports required by LRF;

• The output (PDF) is not system processing friendly;

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Motivation

• Automation of the financial data collection process in all the spheres of government (local, regional and federal);

• Standard for financial data transfer between governments accounting and financial systems, in a data processing friendly format;

• Data reuse to reduce the reporting burden in a government to government scenario;

• Reduce time and cost of complex reports generation, making it easier to improve the governments adhesion to the reporting program;

• Create the electronically publication of the Common Chart of Accounts and the Financial Reports required for transparency, establishing a consistent relationship between the source data and the reported data.

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Solution – High level Overview of the solution

Accountant + DA

Data Dictionary

IT Department

Reports Style

Standard Accounting and Financial System

(SIAFIC)

PCASP

RREORGFDCASP

SIAFIC

SICOF EditorSICOF Editor SICOFCertifierSICOF

Certifier

SICOFSICOFSICOFReports

WebServices

GovernmentResponsible

Mapping

SICOF• Management• Statistics• Validation• Downloads

STN Reports• Financial Statistics• PPPs report• Public Debt• Debt Consolidation

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TaxonomyMDF

QDCCDCASPPCASP

SICOF Reports

• RGF, RREO, COC• Annual Balance

Legal Reference

and Manuals

SICOFSICOFIT Department

Accountant + DA

Fiscal ModuleFiscal

Module

Management Reports

Viewer

Standard Accounting and Financial System

(SIAFIC)

PCASP

RREORGFDCASP

SIAFIC SICOF EditorSICOF Editor SICOFCertifierSICOF

Certifier

WebServices

Reports Style

SIAFISIAFI

SIESTSIEST

BacenBacen

Treasury Analysis

Taxonomy


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Why XBRL

• Best practices for Financial Reporting, Financial Systems Communication and standard as a common financial reporting language;

• Technology provides functionalities to describe the Common Chart of Accounts in a very convenient format and allows to use the Chart of Account as the basis for the definition of the Reports data dictionary (taxonomy);

• Taxonomy may be extended to support other government needs;

• Part of the reporting complexity (mapping rules) may be concentrated in the taxonomy, what reduces the cost and burden of the reporting process in local and regional governments;

• Automatic filling of forms, more accurate and actual data and a faster and natural reporting functionality;

• Easier to maintain and evolve, as well as audit.

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Taxonomy in three levels

Common Chart of Accounts

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Common Chart of Accounts

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Definition Taxonomy

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Definition Taxonomy

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Reporting Taxonomy

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Reporting Taxonomy

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MappingMapping

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Where we are?

• Business Analysis – Conclusion

A National Treasury’s team visited the Australian SBR Program (Standards Business Reporting Program) by the beginning of April to better understand the business case of Australia, Netherlands, Neo Zealand and Singapore’s initiatives, specially the use of XBRL technology to solve the financial data collection problem.

This very rich experience and the future cooperation will help to guide the Brazilian team in the planning and architectural design phases, making lessons learned in other programs a shortcut to implement a new data collection system in substitution of SISTN.

• Project Planning – In progress

• Architecture Design – Starting soon

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Ana Cristina Bittar de OliveiraDeputy Head of IT [email protected].: +55 (61) 3412-3912

Maria Betânia Gonçalves XavierHead of IT [email protected].: +55 (61) 3412-3912

Contacts:

Questions?