Based on the survey for the workshop

1. Institutional arrangements and methodological issues in the compilation of statistics on the General Government Sector- Summary of results Based on the survey for the workshop

2. Introduction • Questionnaire to collect information on: • Institutional arrangements and main methodological issues • Questions were targeted at: • National accounts (NA) and government finance statistics (GFS) compilers • 16 replies • Summary of main issues/topics identified • An input to the group sessions and panel discussion • Country presentations (Albania, Armenia, Serbia, Turkey)

3. I. Institutional arrangements • I.1.a Institution officially responsible for NA • National Statistical Office (NSO) in all 16 countries • I.1.b Institution officially responsible for GFS • Ministry of Finance (MoF) in most countries • Often the Treasury department • Central Bank (CB) (Bosnia and Herzegovina) • In cooperation between MoF and NSO (Armenia, Serbia, The former Yugoslav Republic of Macedonia)

4. I. Institutional arrangements • I.2 Institutions responsible for the dissemination of GFS data and for the data transmission to the IMF and/or Eurostat • All countries that replied provide data for IMF and three countries also for Eurostat • In most countries the responsible organization is MoF • In cooperation between MoF and NSO (Armenia, Kyrgyzstan, Serbia and Turkey) • Central Bank (CB) (Bosnia and Herzegovina)

5. I. Institutional arrangements • I.3 Is the department(s) in charge of GFS statistics also subject to the Law on State Statistics • GFS compiler is part of the statistical system in seven countries (Albania, Kazakhstan, Serbia, Turkey, The former Yugoslav Republic of Macedonia, Uzbekistan, Bosnia and Herzegovina) • Other arrangements: • NSO has coordinating role between all agencies who are involved in the compilation and dissemination of any kind of statistics (Georgia) • MoF (GFS) is not subject to the statistical law, but the provision of GFS data to the NSO is regulated in the law (Armenia, Kyrgyzstan, Moldova) • The NSI publishes the GFS data, thus making them part of official statistics

6. I. Institutional arrangements • I.4 Agreements for cooperation (NSO & MoF) and data exchange for the production of NA • Agreements or arrangements for exchange of data are in place in all countries • Memorandums of understanding or other special agreements between the NSIs and the MoF (often including the CB) • Examples of other arrangements: • General agreements for data exchange between institutions regulated in the Law of Statistics (Armenia, Azerbaijan, Kazakhstan, Ukraine, Montenegro) • …or in the Statistical Programme (Turkey, Ukraine) • Confidentiality issues

7. I. Institutional arrangements • I.5 Permanent inter-agency expert group(s) to coordinate the implementation of the GFSM 2001, the 2008 SNA/ESA 2010 and other macro-economic statistics • Specific working groups linked to development of GG accounts / GFS (Albania, Serbia, The former Yugoslav Republic of Macedonia, Turkey) • Inter-agency working group: Belarus, Kazakhstan, Moldova, Ukraine, Uzbekistan, Mongolia • Established for the implementation of the 2008 SNA • Informal arrangements (Armenia, Georgia) • Ad-hoc groups to solve specific problems (Azerbaijan) • No: Kyrgyzstan, Montenegro, Bosnia and Herzegovina

8. II.a Institutional set up - Strengths • Legal basis regulating the provision of data (Kazakhstan, Turkey, Ukraine, Uzbekistan) • Implementation of international statistical or accounting standards (Belarus, Georgia, Kazakhstan, Serbia, Bosnia and Herzegovina) • Strategic planning: implementation of Government Accounts is in the strategy/plan for development of statistics (Kazakhstan, Turkey) • Interinstitutional Working Groups (Albania, Turkey) • Separate units under Treasury department (GFS) and under NAD (GG&regional accounts) (Albania) • Quality of data sources (Armenia, Azerbaijan, Belarus, Serbia, ...) • Complete and accessible data sources, comprehensive coverage • Several independent information sources

9. II.b Institutional set up - Weaknesses • Coordination and collaboration • Lack of sufficient coordination (e.g. Armenia, Azerbaijan, Kazakhstan, Albania, Mongolia) results in • Inconsistency between the data sets (Albania, Uzbekistan, Mongolia, …) • Different coverage of the government sector (Albania, Kazakhstan, Bosnia and Herzegovina) • Insufficient detail for the needs of national accounts (Ukraine) • Need for a protocol or special format to define the data transmission between the institutions (e.g. Kazakhstan, Ukraine, Turkey, Bosnia and Herzegovina)

10. II.b Institutional set up - Weaknesses • Other methodological and data issues • Cash-basis data • Obtaining consolidated data • Data timeliness, accuracy and reliability • Short time-series • Estimation of consumption of fixed capital of government units • Limited resources (Expertise, Experience, Leadership) • Lack of methodological guidelines and advice in Russian (e.g. Kazakhstan)

11. III. Methodological issues • III.1 Compliance of fiscal statistics with the GFSM 2001 methodology / the ESA Manual on Government Deficit and Debt • Ongoing implementation of GFSM 2001 in many countries • Still according to GFSM 1986 (Moldova, The former Yugoslav Republic of Macedonia, Mongolia) → use of conversion tables, preliminary data according to GFSM 2001 • Fiscal data classified in accordance to the GFSM 2001 or comparable national budget classification (Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Albania, Serbia, Turkey, Bosnia and Herzegovina) • Some differences in methodology → use of automatic linking prepared by IMF (Kazakhstan) • Legal and institutional framework to support GFS (Belarus, Kazakhstan) • Budget Code does not define the concept of consolidated general government budget (Ukraine)

12. III. Methodological issues • III.2.a The institutional coverage of the General Government sector and its sub-sectors (11 replies) • Further work on coverage and delineation of the GG and its subsectors • Often countries stated that the classification in the national budget does not comply with the coverage of the SNA institutional sector • Data cover only central and local government • No information on the subsectors • Data coverage for certain units: in healthcare, social services, “semi-budget units” • Issues related to data on defence (data confidentiality) • Agreed list of GG institutions defined by a dedicated working group (Turkey, Serbia (to be finalized))

13. III. Methodological issues • III.2.b Valuation of transactions, other economic flows, and stocks • Not many countries replied • Plans to address the issue, experimental calculations in relation to the development of balance sheets or financial accounts (Kyrgyzstan, Serbia, Albania) • Valuation of non-financial assets and liabilities: historical cost of investment taking into account accumulated depreciation (Ukraine) • Equities, held by government and local authorities are not accounted as financial assets (Ukraine) • Bridge table to convert economic flows into NA concepts (developed by TurkStat and MoF)(Turkey)

14. III. Methodological issues • III.2.c Time of recording of transactions • Accrual based GG accounting (Turkey, Bosnia and Herzegovina) • Some countries have a mixture of cash based GFS and accrual recording for certain transactions or units (Ukraine, Mongolia) • Adjustments in NA to transfer cash based data to estimated accruals (Armenia, Azerbaijan, Belarus, Serbia, Ukraine, …) • The NA data for the Government sector is left on cash basis (Georgia, Albania, …)

15. III.2.d Sufficient detail to calculate main aggregates and analytical balances of GG sector and sub-sectors • The source data are of sufficient detail or there are agreements with MoF for provision of additional data (Armenia, Albania, Belarus, Moldova, Mongolia, The former Yugoslav Republic of Macedonia, Turkey) • Insufficient detail for some items, on-going work to address the outstanding issues (Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Ukraine, Serbia) • The following issues were mentioned: • Breakdown of expenditures – “Other expenditures” (Azerbaijan) • Depreciation of fixed assets, government sales, taxes and subsidies on production for governmental institutions (Georgia) • Lack of detailed information and comparable classifications (Ukraine) • Lack of non-consolidated data (Serbia) • No sufficient detail on the subsectors (Kazakhstan)

16. III. Methodological issues III.3 Use of GFS government accounts as an input to the national accounts and intersectoral consistency • In many countries the full sequence of accounts for GG and the subsectors is not available • On-going projects to implement (or improve) sector accounts for general government and its subsectors (Belarus, Georgia, Kazakhstan, Albania, Serbia, The former Yugoslav Republic of Macedonia, Turkey, …) • GFS accounts are used for the compilation of SNA sector accounts in Albania, Kyrgyzstan?, Turkey, Mongolia,… • On-going work to develop full set of GG accounts and ensure intersectoral consistency (Albania) • No reconciliation, because of differences in the coverage of the GG sector (Kyrgyzstan)

17. III. Methodological issues III.3 Use of GFS general government accounts as an input to the national accounts and intersectoral consistency • Most countries do not use GFS data, but reports on the execution of the state and local budgets (Armenia, Azerbaijan, Georgia, Kazakhstan, Moldova, Ukraine, Uzbekistan), accounts for social security funds and administrative data • Reconciliation between the National Accounts sectors and subsectors is done on the base of detailed budget data • GFS and NA data are not reconciled • All countries use the data to compile GDP (output, expenditures of GG), Production and generation of income accounts • About half compile the full sequence of SNA non-financial accounts for GG and only few produce GG financial accounts

18. IV. Future Work IV.1 Issues in GFS and SNA general government accounts that need most urgent attention • Strengthening Institutional Cooperation (Armenia, Albania, Kyrgyzstan, Serbia, ...) • Inter-agency working groups/committees • Clear definition of responsibilities • Transition to GFSM 2001 and SNA 2008, with a focus on: • Development of unified chart of accounts and changes in the financial and budgetary reporting (Azerbaijan, Belarus, Kazakhstan, Ukraine) • Development of Balance Sheets of General Government (Azerbaijan, Albania, Kazakhstan, Ukraine, Mongolia): revised classification of assets (including financial), valuation of assets, holding gains and losses • Methodology for estimating consumption of fixed capital (e.g. Albania)

19. IV. Future Work IV.1 Issues in GFS and SNA general government accounts • Transition to GFSM 2001 and SNA 2008, with a focus on (continued): • Accrual accounting (e.g. Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, ….) • Coverage of the GG sector (Azerbaijan, Kyrgyzstan, Serbia, The former Yugoslav Republic of Macedonia): delineation and institutional coverage; expanding to public sector accounts • Improvement of the detail, timeliness and periodicity (e.g. Azerbaijan, Kyrgyzstan, Moldova, The former Yugoslav Republic of Macedonia) • Improving the consistency and integration of GFS and NA accounts: bridge table (e.g. Albania) • Recording military expenditure (e.g. Mongolia, The former Yugoslav Republic of Macedonia) • Human and IT resources

20. IV. Future Work • IV.2 Type of support needed • Training workshops and courses(e.g. Armenia, Kazakhstan, Kyrgyzstan, Mongolia, Serbia, Turkey, Ukraine) • Organizational and methodological issues • Further improvement of GFS towards better institutional coverage and accrual basis • Conducting cross-sectional analysis of the SNA and GFS, linking between them and using GFS in NA compilation • Strengthening capacities and raising awareness of the importance of GFS/SNA • Accounting for Social Security Funds • Sharing and studying best practices among countries (e.g. Armenia, Azerbaijan, Kyrgyzstan, Serbia)

21. IV. Future Work • IV.2 Type of support needed • Funding and technical assistance from international organizations to accelerate the GFSM 2001 implementation (e.g. Azerbaijan, Moldova, Serbia, Turkey, Montenegro) • Advisory services on • Delineation of the sector, valuation of assets (state-owned land, natural resources, the market value of the shares, other fixed assets of the state (Belarus) • Significant changes to take place in the pension system of Kazakhstan e.g. a Single Pension Fund. Need help in accounting of the relevant positions (Kazakhstan) • Linking GFSM 2001 and SNA 2008 (Mongolia, The former Yugoslav Republic of Macedonia ) • Assessment of the experimental data produced in the framework of NA requirements, related to the government sector (Albania)

22. IV. Future Work IV.3 Current or planned use of GFSM 2001 in policy work • Promoting the use of GFSM 2001 in the policy context is under discussion in some countries • Current uses: • Assessing the performance of general government and its economic impact • Assessing sustainability of fiscal policy • Comparison of budget indicators of Belarus, Russian Federation and Kazakhstan • Possible future uses: • Comparing balance sheet assets of the general government • Monitoring efficiency in the allocation and use of government resources • In Mongolia MoF set up a working group to improve fiscal analysis using GFSM 2001