Europe needs to learn PFM lessons, says FEE chief

13 Jul 15

Europe’s track record in public finance accounting “is not that good” and lessons must be learnt now, the chief executive of the Federation of European Accountants told CIPFA’s international seminar.

Speaking at the July 7 event, Olivier Boutellis-Taft observed that the lessons that needed to be learned are “not entirely clear”.

There was still too much debate, especially in the European Parliament around the International Accounting Standards Board governance. And there was still confusion about the independence of the standard setter and how it could accelerate proper governance.

“So what does that mean for public finance? One of the issue is the lack of enforcement which has made a big contribution in putting [Europe] where we are today with the financial and political crisis,” he said.

“But also it’s about thinking about the experience we have with the International Financial Reporting Standards and considering that maybe that there would be a solution with the endorsement of the European Public Sector Accounting Standards.

He added that people in Brussels were starting to revisit the EPSAS issue.

Boutellis-Taft’s comments reflected widespread sector concern that public financial management accounting reforms in some member states were “slow, unilateral, inconsistent” and that changes were not being considered at European level.

He said there was no denying that in a number of countries, “especially countries that are singular, very large and in the centre of Europe” are not very inspired by the prospect of accounting reform and the shift to accrual accounting.

But he said: “We should not underestimate the relationship between [financial] reporting and management, especially when it comes to the public sector.

“Without reporting, without transparency, I don’t think public financial management will improve.”

He called on delegates to focus on capacity building and training and to speak to the world, not only accountants, saying it was “time for all of us to stick our heads above the parapet” and engage with governments.

Mira Dobovišek, director of the Centre for Excellence in Finance: South East Europe, also addressed delegates.

She said: “Countries need to be learning from each other’s success and failures. We do not need to repeat the same mistake again and again in every country. We can learn from each other and become better and more efficient.”

  • Judith Ugwumadu
    Judith Ugwumadu

    Judith writes about public finance, public services and economics across Cooking Recipes International and Cooking Recipes. She previously undertook reporting stints at Financial Adviser, Global Security Finance and The Sunday Express.

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