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Step by step completing State financial statements

11:45 | 12/06/2022

VCN - The State Treasury is completing the State Financial Statements (State Financial Statements) to accurately reflect the overall picture of state finances.

State Treasury meets schedule on State financial statements State Treasury meets schedule on State financial statements
State financial statements: Reliable information on national finance State financial statements: Reliable information on national finance
State financial statements still face many difficulties State financial statements still face many difficulties
The Government has requested the ministries and local agencies to overcome difficulties and complete the State Financial Statements. Photo: Internet
The Government has requested the ministries and local agencies to overcome difficulties and complete the State Financial Statements. Photo: Internet

Information about the financial picture

According to the State Treasury, by the end of December 2021, 63 sets of provincial state financial statements were completed and submitted to the provincial People's Committees and reported to the provincial People's Councils. The State Treasury has also completed the synthesis and preparation of the national state financial statements for 2020, to submit it to the National Assembly's Committee on Finance and Budget. Currently, the Government has completed the State Financial Statements for 2020 and the State Budget Finalization Report and reported to the National Assembly at meeting session in May 2022 in accordance with the provisions of the 2015 Accounting Law.

According to the State Treasury's assessment, the state financial statements in 2020 reflect some information on the situation of assets, sources of asset formation, income, expenses and the movement of State cash flows. In addition, the state financial statements also reflect a part of the value of infrastructure assets, including road transport infrastructure and clean water works in rural areas.

Furthermore, the 2020 State Financial Statements analysed and explained information more specific for data and indicators such as: asset assessment information, the scope of asset data, information on the artifacts of some infrastructure assets (road, irrigation, maritime); additional information on non-budget state financial funds, state capital at enterprises; analytical information on the state's liabilities, the relationship with public debt, etc. In addition, the terms used in the report have also been explained and clarified.

The State Treasury also said that by the fiscal year 2020, relevant accounting regimes had been issued, applied to all units in the state sector, providing sufficient information for making state financial statements.

Overcome difficulties

After three years of implementing the preparation of the State Financial Statements, the preparation of State Financial Statements still has some shortcomings and difficulties. For example, regarding the scope of information, the 2020 State Financial Statements do not include assets such as aviation, maritime, national railway, inland waterway and irrigation infrastructure assets. The reason is that the ministries, Government and local agencies have neither completed the inventory, classification and valuation of assets and the assignment, management, use and exploitation of assets; nor database and reporting regime on the management and use of infrastructural assets under state management, said the State Treasury.

In addition, there are also other shortcomings such as: regulations on management in specialized laws for commercial infrastructure assets, power supply infrastructure, industrial cluster infrastructure, urban infrastructure, infrastructure of industrial parks and economic zones, infrastructure of hi-tech zones, infrastructure of urban areas, dykes, heritages and antiquities have not been issued yet or are incomplete and inconsistence with the provisions of law on management and use of public properties.

As the guidelines on administrative accounting regimes and other accounting regimes applicable to other state-owned accounting units are new, the implementation in first few years are difficult. Besides, agencies, units and organizations have not paid attention to investing in equipment and accounting software, and have not closely directed the provision of information according to regulations, so the quality of information is limited.

In order to overcome difficulties and obstacles to complete the State Financial Statements, the Government has directed ministries, central and local agencies to soon issue Vietnamese Public Accounting Standards; amend and supplement regulations on the provision of information, synthesis and preparation of state financial statements and the state accounting regime.

Moreover, the Government has asked ministries, central and local agencies to quickly complete the national database on public properties; specify responsibilities for information provision of agencies and units assigned to manage and use infrastructure assets and specific properties; and strengthen training, guidance and dissemination of knowledge on preparation, synthesis and provision of financial information for making state financial statements. Along with that, it is necessary to pay attention to investing in equipment and accounting software, closely direct the provision of input report information to ensure the quality of the state financial statements; promote the use of information and data of state financial statements for analysis, policy making, management of local resources.

In addition, in order to synthesize state infrastructure assets and complete the state financial statements for the following years to ensure compliance with international standards and practices, the Government has assigned the Ministry of Finance to review and assess the current situation, study solutions and develop plans and roadmaps to complete the State Financial Statements.

Publicize State financial statements: Opportunities for management and supervision Publicize State financial statements: Opportunities for management and supervision

According to the State Treasury, through studying the experience of a number of countries such as the UK, the US, Korea, Malaysia, New Zealand, etc., it usually takes the countries 7-10 years to switch to accrual accounting and prepare Government financial statements. Accordingly, shortcomings in the preparation of State Financial Statements in Vietnam in the first years are inevitable.

By Thuy Linh/ Huyen Trang