Malta shifts to accrual
accounting
By: Emily
Twinch | 15 Aug 2017
Malta’s Ministry of Finance is working towards
introducing accrual accounting to all government departments over the next two
and a half years.
The Maltese Government signed a deal last month
awarding financial services firm
Grant Thornton Malta the contract to implement the system, worth an estimated
€11.6m.
Finance Minister Edward Scicluna tweeted on the
day:
A red letter day for MFIN -
implementing very long time promise to switch to accrual system. We promise AND
deliver. pic.twitter.com/Kil4g2XAp7
— Prof Edward Scicluna (@edward_scicluna) July 10, 2017
Rob Whiteman, chief executive of CIPFA, said:
“Importantly, the Maltese government’s ambition is to make full use of the
information it generates.”
“The transition from cash to accrual accounting is
a key part of strengthening a country’s public financial management and accrual
based information should be used to inform the budgetary decision making which
will improve fiscal sustainability, good governance and transparency.”
As well as implementing the Corporate Financial
Management Solution system over the next 30 months, the Maltese government has
promised to provide intense training for existing and new employees.
Scicluna said: “Ministries and departments will
need to have their employees trained in necessary skills so this investment is
fully exploited.”
Government employees will be expected to do
operational work and help implement the system, the Ministry of Finance stated.
The Maltese government explained transferring from
its current cash flow accounting system to accrual accounting will mean
departments will have a “more transparent account of income and their
expenditure”.
Paulanne Mamo, Malta’s general Treasury Director,
said the move was an “important step” that would “lead to the country have a
transparent financial reporting system”, help ensure “government expenditure is
under control” and make the “decisions necessary to continue to register a
surplus”.
The deal was signed by Anthony Cachia, Malta’s Director
General of the Department of Contracts, Joseph Pullicino, a partner at Grant
Thornton Malta on 10 July.
Work on a
tender for the contract began in 2014.
Emily
Twinch
Deputy Editor,
Public Finance and Public Finance International
Original article published on 15/08/2017:
http://www.publicfinanceinternational.org/news/2017/08/malta-makes-shift-accrual-accounting