## 1. Priority Recommendations ## Source details **Canonical URL:** [1. Priority Recommendations](https://www.imf.org/-/media/files/publications/cr/2020/english/1khmea2020001.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2020/english/1khmea2020001.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2020/english/1khmea2020001.pdf.json) --- ### Summary of mission outcomes and priority recommendations - Mission activities: in-country workshop (December 2–4, 2019) and follow-up technical assistance (December 5–13, 2019). - Workshop attendance: 41 participants. - TA participation: Ms. Irina Dubinina (STX), Mr. Basanti (Regional JSA3 GFS/PSDS Project Manager at CDOT), and Ms. Mei Ling Tjung (GFS expert) participated in TA through December 13, 2019. - Objectives: strengthen compilation and dissemination of fiscal data in line with GFSM 2014 and the PSDS: Guide (PSDSG); support surveillance and decision making; participate in MEF inter-agency workshop on data consistency (December 5–6, 2019). - Outcomes and progress: - GDP (General Department of Policy) compiled 2015–2018 annual time series for consolidated budgetary central government (BCG) and local governments (LGs). - Reconciled these data with fiscal data published in the Article IV Staff Report. - GDP staff compile GFS financial balance sheets on a pilot basis based on accounting data sources. - Bridge table between GFS and national Table of Government Financial Operations (TOFE) presentations and a Technical Note on the GFSM 2014 framework have been published on the MEF website; mission recommended extending the Technical Note with focused explanations of differences between TOFE and GFS and advantages of using GFS for fiscal analysis and policy making. - MEF Consolidated Action Plan in Stage 3 (CAP3-2020) contains GFS-related Key Performance Indicators: compiling GFS tables (Activity 21.3) and determining the budget deficit in accordance with GFS system (Activity 33.3). - MEF disseminates official PSDS and metadata on a semi-annual basis in the Cambodia Public Debt Statistical Bulletin; GDP submitted PSDS for 2018Q1–2018Q4 and metadata questionnaires to the Joint WB-IMF Quarterly PSDS database on April 1, 2019 (data relate to gross BCG debt position covering loans and debt securities). - Inter-agency workshop participants (MEF, NIS, CDC, NBC) agreed on need for enhanced cooperation. ### Priority recommendations (selected) - Target Date: May 2020 - Coordinate and agree on the institutional coverage of the general government and public sector with NIS and NBC. - Responsible institutions: GDP MEF, NBC, NIS - Target Date: October 2020 - Bridge the 2019 budget execution reports of public administrative establishments (PAEs) with GFSM 2014-compliant formats, compile consolidated GFS for general government including a GFS balance sheet (Table 6) and report them to STA and IMF Asia and Pacific Department (APD). - Responsible institution: GDP MEF - Target Date: October 2020 - Publish 2015–2018 consolidated GFS balance sheets (Table 6) for BCG and LGs as part of GFS on the MEF website. - Responsible institution: GDP MEF ### High-level recommended institutional actions - Enhance coordination of GFS/PSDS developments with PFM reforms and integrate into CAP3-2020 and beyond (CAP4). - Include specific provisions relating to GFS in revisions to the 2008 Public Finance System Law as part of Fiscal Reporting (Pillar I of the IMF Fiscal Transparency Code). - Formalize inter-agency cooperation via establishment of a working group and a formal Memorandum of Understanding (MOU). --- ### A. Expanding institutional and data coverage — findings - Coverage of fiscal statistics excludes extrabudgetary units and balance sheets data; monthly and annual GFS include Statement of Government Operations and detailed Revenue, Expense, and Transactions in Assets and Liabilities for BCG. - GFS consolidating all three levels of LGs are compiled on an annual and a semester basis due to consolidation complexity. - Annual GFS for general government are published on an unconsolidated basis due to absence of reliable source data on extrabudgetary units (PAEs). - By end-2019, 15 institutions reported expenditure reports to General Department of National Treasury (GDNT); some PAEs also presented trial balances but consistency issues exist and some PAEs postponed implementing MEF accounting and reporting standards. - The mission noted that the overall balance for 29 PAEs amounted to 0.66 percent of gross domestic product in 2018. - Two types of source data for extrabudgetary units received by GFS team: attachment to the annual budget (main aggregates on PAEs’ transactions) and financial reports of PAEs (including trial balances, execution reports, flash estimates, etc.). Recommended actions: - Bridge the 2018 budget execution reports of PAEs with GFSM 2014-based formats and compile consolidated GFS for general government. - Bridge the 2018 financial reports of 11 PAEs with GFSM 2014-based formats and compare the results with GFS based on budget execution data to improve accuracy of GFS compilation bridge tables. - Use attachment to the annual budget as a first-step source to expand institutional coverage to include PAEs and progressively improve the reliability and consistency of source data for PAEs. --- ### B. Enhancing source data for GFS and PSDS — findings - GDP staff started using final trial balances for BCG and all three levels of LG as source data in compiling annual GFS; trial balance for BCG is not available on a monthly basis. - High-frequency GFS for BCG are compiled based on Revenue and Expenditure Reports and additional data (externally financed operations and on-lending). - GFS team continues compiling GFS for BCG based on the trial balance to understand differences; main discrepancies relate to debt, on-lending loans, and acquisitions of nonfinancial assets, mainly from differing exchange rate valuations applied by different source data providers (GDNT and GDICDM). - Monthly GFS discrepancies arise from differences between query-based revenue/expenditure reports and the posted monthly trial balance; questionnaire/query reports are based on data collected before approval, whereas the posted trial balance reflects data after posting to the general ledger (FMIS). All transactions are recorded in FMIS but query-based reports omit some posted items. Recommended actions: - Perform internal reconciliation on an annual basis to ensure data consistency between query-based and posted data. - Adjust for valuation differences among source data on loans and on-lending loans, acquisition of nonfinancial assets financed from abroad, and debt liabilities. - Map new COA codes to GFS classifications based on economic substance rather than national definitions, apply mapping consistently, and document changes (coverage, source data, time of recording, valuation, classification) in metadata; extend changes back to earliest data available on a best effort basis to maintain data consistency (see Appendix VII). --- ### C. Reconciling GFS with other macroeconomic datasets — findings - Government activity appears across GFS, national accounts (SNA), MFS, and ESS (BOP/IIP); principles and concepts are broadly similar and relationships are explained in GFSM 2014, Appendix 7. - Discrepancies between macroeconomic datasets usually arise from differences in coverage and sectorization, classification, valuation, and time of recording. - Mission proposed basic reconciliation tables to be populated with general government data from national accounts, BOP, IIP, and MFS to support discussion on data consistency (see Appendix V). Recommended actions: - Coordinate and agree on institutional coverage of the general government and public sector with NIS and NBC. - Reconcile GFS on general government financial balance sheets with NBC-compiled statistics (MFS, BOP/IIP) on an annual basis by comparing data, identifying differences, reconciling them, and explaining reasons in a note of reconciliation. - Reconcile GFS on general government with NIS annually (totals for Saving, Net investment in NFAs, and Net Lending/Borrowing) by comparing sources, identifying differences, reconciling them, and explaining reasons in a note of reconciliation. --- ### 17. Institutional arrangements regarding responsibilities, methodology, data sharing ### Institutional arrangements and Memorandum of Understanding (MOU) - Institutional arrangements regarding responsibilities, methodology, data sharing and reconciliation by statistics producing agencies should be formalized. - A MOU represents an important instrument that strengthens the need to integrate and coordinate efforts. - Useful MOU distinction: - Steering Committee (senior member Working Group) responsible for strategic decision making. - Operations Working Groups (expert level Working Group) responsible for executing ongoing compilation and reconciliation. - Topics to consider in drafting a MOU are listed in Appendix IX to this report. - Recommended action: Form a Working Group for reconciling GFS with data on general government in other datasets of macroeconomic statistics (NBC and NIS). ### Action Plan — overview of targets, recommendations, expected results, and responsible institutions (selected timeline) - Outcome: Data are compiled and disseminated using the coverage and scope of the latest manual/guide: GFSM2014, and PSDSG. - May 2020 - Coordinate and agree on the institutional coverage of the general government and public sector with NIS and NBC. - Expected result: An agreed and updated (when necessary) list of institutional units of general government and public sector used in statistics compilation in MEF, NIS, NBC. - Responsible Institutions: GDP MEF, NBC, NIS - May 2020 - Bridge the 2018 budget execution reports of PAEs with GFSM 2014-based formats and compile consolidated GFS for general government. - Responsible Institutions: GDP MEF - June 2020 - Bridge the 2018 financial reports of 11 PAEs with GFSM 2014-based formats and compare results with GFS based on budget execution data. - Responsible Institutions: GDP MEF - July 2020 - Reconcile GFS on general government financial balance sheet with NBC statistics (MFS, BOP/IIP) annually; document reasons for differences in a note of reconciliation. - Responsible Institutions: GDP MEF, NBC - July 2020 - Reconcile GFS on general government with NIS annually (Totals for Saving, Net investment in NFAs, Net Lending/Borrowing); document reasons. - Responsible Institutions: GDP MEF, NIS - October 2020 - Bridge the 2019 budget execution reports of PAEs with GFSM 2014-based formats, compile consolidated GFS for general government including GFS balance sheet (Table 6), and report to STA and APD. - Responsible Institutions: GDP MEF - October 2020 - Publish 2015–2018 consolidated balance sheet (Table 6) for BCG and LGs as part of GFS on the MEF website. - Responsible Institutions: GDP, MEF - November 2020 - Perform internal reconciliation annually to ensure consistency between query-based and posted data, and between different source data on loans, on-lending loans, acquisition of nonfinancial assets financed from abroad, and debt liabilities. - Responsible Institutions: GDNT, GDICDM, GDP MEF - December 2020 - Form a working group on reconciling GFS with data on general government in other datasets (NBC and NIS). - Responsible Institutions: GDP MEF - Outcome: Data are compiled and disseminated using the classification of the latest manual/guide: GFSM2014, and PSDSG. - August 2020 - Review source data for GFS Classification of the Functions of Government (COFOG) (Table 7) for BCG expenditure (expense and net acquisition of nonfinancial assets). - Responsible Institutions: GDP, GDB, MEF - October 2020 - Compile annual GFS COFOG (Table 7) for BCG expenditure in line with GFSM 2014. - Responsible Institutions: GDP, MEF - November 2020 - Develop proposal to GDB to determine budget deficit in accordance with GFSM 2014. - Responsible Institutions: GDB, GDNT, GDP MEF - November 2020 - Generate and review GFS Table 2 (Expense) for BCG and LGs from FMIS and correct mapping of COA to GFS in FMIS. - Responsible Institutions: GDP, FMIS Team MEF, GDNT - December 2020 - Prepare the first draft of documentation on business-process for GFS compilation and dissemination. - Responsible Institutions: GDP MEF - August 2021 - Generate and review GFS Table 3 (Transactions in Assets and Liabilities) for BCG and LGs from FMIS and correct mapping of COA to GFS in FMIS. - Responsible Institutions: GDP, GDICDM, GDNT, MEF - Outcome: Higher frequency data compiled and disseminated internally and/or to the public - May 2020 - Establish regular reporting to the Joint WB–IMF quarterly PSDS database to publish PSDS for Cambodia. - Responsible Institutions: GDP and GDICDM, MEF - May 2020 - Update the derivation table to present the derivation of aggregates from TOFE to GFS and post it on the MEF website. - Responsible Institutions: GDP MEF - May 2020 - Add explanations on the differences between TOFE and GFS and advantages of using GFS in fiscal analysis on the MEF website. - Responsible Institutions: GDP MEF - September 2021 - Compile and publish consolidated GFS for BCG and LGs on a quarterly basis (starting from 2021 Q1 and Q2 and then on a quarterly basis). - Responsible Institutions: GDP MEF ### Advantages of GFSM 2014-based presentation (selected points) - GFSM 2014-based presentation includes Statement of Government Operations and detailed tables on Revenue, Expense, Transactions in Assets and Liabilities covering BCG; annual consolidated Statement of Government Operations covering GFS for all three levels of LGs is presented separately. The Derivation Table from TOFE to GFS for BCG reclassifies TOFE Revenue, Expenditure, and Financing transactions to derive GFSM 2014 aggregates. - Key analytical advantages: - Improves identification of revenues, expense, net investments in nonfinancial assets, and financing transactions enabling systematic evaluation of impact of policies on long-term fiscal sustainability. - Emphasizes government Net Worth: GFS revenue and expense represent transactions that increase or decrease Net Worth; net acquisition of nonfinancial and financial assets and net incurrence of liabilities change composition of assets and liabilities but not Net Worth. - Supports an integrated framework where changes in balance sheet stock positions are explained by corresponding flows—transactions and other economic flows—permitting policy effects to be analyzed in terms of financial operations and financial position of government. --- ### 2. A GFSM 2014-based presentation is closely linked to other macroeconomic frameworks ### Linkages and harmonization benefits - GFSM 2014-based presentation is closely linked to national accounts, balance of payments and international investment position, and monetary and financial statistics. - Government budgeting and accounting systems are based on national rules which may not align with macroeconomic statistics guidelines, producing inconsistencies. - GFSM 2014 serves as a bridge to align budgeting and accounting information with macroeconomic statistics, facilitating interaction between technical specialists and policy makers. - Broad conceptual correspondences: - Transactions in financial assets and liabilities, net lending/net borrowing in GFS conceptually is the same as in the SNA. - GFS net operating balance differs from SNA saving by the value of capital transfers and taxes on capital transactions, and capitalized expense. - Government final consumption expenditure and gross fixed capital formation are used in calculating GDP from the expenditure approach. ### International comparability and policy relevance - GFSM 2014 supports internationally comparable statistics for general government and subsectors, facilitating cross-country analyses. - GFSM 2014 is the internationally recognized guideline for compiling fiscal statistics; concepts, classifications, and definitions are intended to be universally valid. - Under the Sustainable Development Goals, fiscal reporting is important for assessing transparency of public finance and government’s ability to achieve development objectives. - The United Nations, the IMF, the WB, the OECD, and other international organizations use the GFS framework to evaluate efficiency of PFM system, fiscal transparency, and good governance in Cambodia. --- ### Appendix VI — Main aggregates on Extrabudgetary Units (29 PAEs), 2015–2018 (selected figures) - I. Total Revenue (planned / implementation and ratios) - 2015 Planning: 990,500.9; Implementation: 756,934.2; 76.4% 1.03% - 2016 Planning: 1,120,028.2; Implementation: 879,989.3; 78.6% 116.3% 1.08% - 2017 Planning: 1,052,487.8; Implementation: 1,140,375.7; 108.4% 129.6% 1.27% - 2018 Planning: 1,104,715.1; Implementation: 1,461,010.6; 132.3% 128.2% 1.48% - 1. Revenue (highlights) - 2015 Planning: 929,292.9; Implementation: 737,546.3; 79.4% 1.00% - 2016 Planning: 1,067,173.7; Implementation: 846,191.5; 79.3% 114.7% 1.04% - 2017 Planning: 1,009,218.6; Implementation: 837,496.3; 83.0% 99.0% 0.93% - 2018 Planning: 1,070,470.9; Implementation: 975,319.7; 91.1% 116.5% 0.99% - 1.1 Grants from Central Government - 2015 Planning: 186,855.9; Implementation: 174,942.6; 93.6% 0.24% - 2016 Planning: 238,717.9; Implementation: 240,519.3; 100.8% 137.5% 0.30% - 2017 Planning: 268,434.4; Implementation: 264,789.2; 98.6% 110.1% 0.30% - 2018 Planning: 270,487.1; Implementation: 219,863.8; 81.3% 83.0% 0.22% - Compensation of employees: Wages and salaries - 2015 Planning: 65,087.3; Implementation: 58,955.3; 90.6% 0.08% - 2017 Planning: 57,407.7; Implementation: 62,319.2; 108.6% 93.7% 0.07% - 2018 Planning: 66,527.9; Implementation: 10,253.7; 15.4% 16.5% 0.01% - 1.2 Institutional Direct Revenue - 2015 Planning: 742,437.0; Implementation: 562,603.7; 75.8% 0.77% - 2016 Planning: 828,455.8; Implementation: 605,664.0; 73.1% 107.7% 0.75% - 2017 Planning: 738,277.2; Implementation: 549,387.8; 74.4% 90.7% 0.61% - 2018 Planning: 798,080.8; Implementation: 726,721.9; 91.1% 132.3% 0.74% - 2. Internal Financing - 2015 Planning: 10,308.0; Implementation: 0.0; 0.0% 0.00% - 2016 Planning: 2,149.8; Implementation: 18,526.5; 861.8% - 0.02% - 2017 Planning: 13,897.6; Implementation: 2,725.2; 19.6% 14.7% 0.00% - 2018 Planning: 34,085.6; Implementation: 9,284.0; 27.2% 340.7% 0.01% - 3. Cash Balance (Surplus) - 2015 Planning: 50,900.0; Implementation: 19,387.9; 38.1% 0.03% - 2016 Planning: 50,704.8; Implementation: 15,271.2; 30.1% 78.8% 0.02% - 2017 Planning: 29,371.6; Implementation: 300,154.2; 1021.9% 1965.5% 0.33% - 2018 Planning: 158.6; Implementation: 476,406.9; 300382.7% 158.7% 0.48% - II. Total Expense - 2015 Planning: 771,691.4; Implementation: 690,561.9; 89.5% 0.94% - 2016 Planning: 890,511.4; Implementation: 826,875.6; 92.9% 119.7% 1.02% - 2017 Planning: 737,490.2; Implementation: 645,526.3; 87.5% 78.1% 0.72% - 2018 Planning: 875,307.0; Implementation: 810,490.0; 92.6% 125.6% 0.82% - II.1 Current Expense (selected) - 2015 Planning: 483,641.2; Implementation: 397,003.4; 82.1% 0.54% - 2016 Planning: 591,514.2; Implementation: 510,006.6; 86.2% 128.5% 0.63% - 2017 Planning: 710,482.8; Implementation: 589,221.6; 82.9% 115.5% 0.66% - 2018 Planning: 734,873.0; Implementation: 678,536.7; 92.3% 115.2% 0.69% - Wages (selected) - 2015 Planning: 195,842.7; Implementation: 167,566.0; 85.6% 0.23% - 2016 Planning: 216,143.3; Implementation: 198,661.9; 91.9% 118.6% 0.24% - 2017 Planning: 299,395.4; Implementation: 241,466.7; 80.7% 121.5% 0.27% - 2018 Planning: 266,209.7; Implementation: 215,817.7; 81,1% 89.4% 0.22% - III. Overall Balance/Surplus - 2015 Planning: 218,809.6; Implementation: 66,372.3; 30.3% 0.09% - 2016 Planning: 229,516.8; Implementation: 53,113.7; 23.1% 80.0% 0.07% - 2017 Planning: 314,997.6; Implementation: 494,849.4; 157.1% 931.7% 0.55% - 2018 Planning: 229,408.0; Implementation: 650,520.6; 283.6% 131.5% 0.66% --- ### Appendix VII — Selected consistency issues, STA queries, and mission recommendations (selected) - Taxes reclassified from Tax revenue to Non-tax revenue (2016 onward) caused abrupt drops in some tax series; mission recommended mapping national classification to GFSM 2014 categories based on economic substance (examples: Taxes on specific services 1144; Taxes on use of goods and on permission to use goods or perform activities 1145). - Taxes on exports (1152) dropped sharply in 2016 due to reclassification of Management commissions and export visas; mission recommended review and consistent mapping. - Interest breakdown inconsistency: - 2005–2014 compiled on GFSM 2001 (no interest breakdown); 2015 onward compiled on GFSM 2014 with breakdown: Interest from non-residents (14111), Interest from residents other than general government (14112), Interest from other general government units (14113). - Mission recommended review COA mapped to 14112, check source data, record breakdown as NA if source data do not allow subsector allocation, and back cast 2005–2014 interest to the 2015–onward breakdown if appropriate. - Dividends (1412) spike in 2018 due to transactions from State-owned Enterprise recorded in Dividend from public enterprises (72012); mission recommended review for super-dividends treatment (record as financial asset withdrawal if disproportionately large). - Subsidies and social benefits mapping inconsistencies; mission recommended review COA mapping and back cast changes to earliest data available. --- ### 6. Fixed assets, liabilities and other reconciliation notes (selected) ### Fixed assets data gap (Table 3) — reported data points - CHANGE IN NET WORTH: TRANSACTIONS c/ ....... 3,726,078.6 - Net acquisition of nonfinancial assets d/ .............. 5,375,707.1 - 311 Fixed assets .................................................................... 5,374,244.5 - 3111 Buildings and structures ....................................................... 5,288,080.3 - 3112 Machinery and equipment ................................................... 78,453.1 - 3113 Other fixed assets ................................................................ 7,711.1 - 3114 Weapons systems ................................................................ ... - Mission recommendations: - Review definition, coverage and source data of net acquisition of fixed assets breakdown. - Map updated COA to GFS classification consistently based on economic substance. - Backcast changes in GFS classification breakdown to the earliest data available. ### Net incurrence of liabilities and other accounts payable — findings and recommendations - From 2005-2008 transactions recorded in net incurrence of liabilities in currency and deposits (3302); subsequent years zero—may reflect reclassification. - Net incurrence of liabilities in equity and investment fund shares (3305) derived from Domestic creditors (3315) + External Creditors (3325), both zero; single transaction in 2006 due to formula error. - Net incurrence of liabilities in loan (3304) should be 620.9 instead of 514.6 in 2016; missing 109.2 was recorded in 3305. - Mission recommendations: - Research and review datasets for net incurrence of liabilities in currency and deposits. - Reclassify deposits from private sector companies as other accounts payable rather than debt instruments. - Review horizontal and vertical checks and derivation tables before publishing annual data. - Other accounts payable — missing transactions in 2018 (account 77011 had zero practical value since then); mission recommended review and consistent mapping. ### Local governments — selected issues and recommendations - Tax revenue series for local governments very inconsistent due to mapping reclassifications across years (detailed mappings for 2012–2014 vs 2015–2018 given in source). - Use of goods and services (22) larger than compensation of employees (21) for local governments; explained by maintenance and repairs of assets built by Central Government. - Grants between local governments (2018): two matching grant transactions removed after consolidation to avoid double counting. - Social benefits and Subsidies: large outlier in social benefits in 2014; mission recommended review, split old COA (Chap65) where possible, estimate splits if necessary, and back cast changes. - Reconciliation tables provided for cross-checking MEF and NBC data across claims on banks, liabilities of banks to GG, deposits by subsector and currency, debt securities, loans, equity, and other accounts receivable/payable. --- ### Appendix IX & X — MOU topics and Indonesian experience (selected) - Appendix IX lists partner organizations (MEF, NBC, NIS, CDC, others), preamble, legal context, methodology/compilation, data sharing and confidentiality, responsibilities of Steering Committee and Working Groups. - Appendix X describes Indonesian GFS implementation experience: institutional mandates, Minister of Finance Regulation on IGFSM, components of GFS system (compilers, data, business process, methodology, reports), workflow from transactions to macroeconomic statistics, regional guidance for 34 Treasury Regional Offices, and a joint regulation on reconciliation between FABS and GFS including period/schedule, coverage, business processes, treatment of discrepancies, and notes of reconciliation. *Source: 1khmea2020001 - IMF mission report excerpts (chapters and appendices).* ### 1. Priority Recommendations __________________________________________________________________ 7 ### 1. Priority Recommendations ### Summary of mission outcomes and priority recommendations - Mission activities: in-country workshop (December 2–4, 2019) and follow-up technical assistance (December 5–13, 2019). - Workshop attendance: 41 participants. - TA participation: Ms. Irina Dubinina (STX), Mr. Basanti (Regional JSA3 GFS/PSDS Project Manager at CDOT), and Ms. Mei Ling Tjung (GFS expert) participated in TA through December 13, 2019. - Objectives: strengthen compilation and dissemination of fiscal data in line with GFSM 2014 and the PSDS: Guide (PSDSG); support surveillance and decision making; participate in MEF inter-agency workshop on data consistency (December 5–6, 2019). - Outcomes and progress: - GDP (General Department of Policy) compiled 2015–2018 annual time series for consolidated budgetary central government (BCG) and local governments (LGs). - Reconciled these data with fiscal data published in the Article IV Staff Report. - GDP staff compile GFS financial balance sheets on a pilot basis based on accounting data sources. - Bridge table between GFS and national Table of Government Financial Operations (TOFE) presentations and a Technical Note on the GFSM 2014 framework have been published on the MEF website; mission recommended extending the Technical Note with focused explanations of differences between TOFE and GFS and advantages of using GFS for fiscal analysis and policy making. - MEF Consolidated Action Plan in Stage 3 (CAP3-2020) contains GFS-related Key Performance Indicators: compiling GFS tables (Activity 21.3) and determining the budget deficit in accordance with GFS system (Activity 33.3). - MEF disseminates official PSDS and metadata on a semi-annual basis in the Cambodia Public Debt Statistical Bulletin; GDP submitted PSDS for 2018Q1–2018Q4 and metadata questionnaires to the Joint WB-IMF Quarterly PSDS database on April 1, 2019 (data relate to gross BCG debt position covering loans and debt securities). - Inter-agency workshop participants (MEF, NIS, CDC, NBC) agreed on need for enhanced cooperation. ### Priority recommendations (Table 1) - Target Date: May 2020 - Priority recommendation: Coordinate and agree on the institutional coverage of the general government and public sector with NIS and NBC. - Responsible institutions: GDP MEF, NBC, NIS - Target Date: October 2020 - Priority recommendation: Bridge the 2019 budget execution reports of public administrative establishments (PAEs) with GFSM 2014-compliant formats, compile consolidated GFS for general government including a GFS balance sheet (Table 6) and report them to STA and IMF Asia and Pacific Department (APD). - Responsible institution: GDP MEF - Target Date: October 2020 - Priority recommendation: Publish 2015–2018 consolidated GFS balance sheets (Table 6) for BCG and LGs as part of GFS on the MEF website. - Responsible institution: GDP MEF ### High-level recommended institutional actions - Enhance coordination of GFS/PSDS developments with PFM reforms and integrate into CAP3-2020 and beyond (CAP4). - Include specific provisions relating to GFS in revisions to the 2008 Public Finance System Law as part of Fiscal Reporting (Pillar I of the IMF Fiscal Transparency Code). - Formalize inter-agency cooperation via establishment of a working group and a formal Memorandum of Understanding (MOU). --- ### A. Expanding institutional and data coverage — findings and recommended actions Findings: - Coverage of fiscal statistics excludes extrabudgetary units and balance sheets data; monthly and annual GFS include Statement of Government Operations and detailed Revenue, Expense, and Transactions in Assets and Liabilities for BCG. - GFS consolidating all three levels of LGs are compiled on an annual and a semester basis due to consolidation complexity. - Annual GFS for general government are published on an unconsolidated basis due to absence of reliable source data on extrabudgetary units (PAEs). - By end-2019, 15 institutions reported expenditure reports to General Department of National Treasury (GDNT); some PAEs also presented trial balances but consistency issues exist and some PAEs postponed implementing MEF accounting and reporting standards. - The mission noted that the overall balance for 29 PAEs amounted to 0.66 percent of gross domestic product in 2018. - Two types of source data for extrabudgetary units received by GFS team: attachment to the annual budget (main aggregates on PAEs’ transactions) and financial reports of PAEs (including trial balances, execution reports, flash estimates, etc.). Recommended actions: - Bridge the 2018 budget execution reports of PAEs with GFSM 2014-based formats and compile consolidated GFS for general government. - Bridge the 2018 financial reports of 11 PAEs with GFSM 2014-based formats and compare the results with GFS based on budget execution data to improve accuracy of GFS compilation bridge tables. - Use attachment to the annual budget as a first-step source to expand institutional coverage to include PAEs and progressively improve the reliability and consistency of source data for PAEs. --- ### B. Enhancing source data for GFS and PSDS — findings and recommended actions Findings: - GDP staff started using final trial balances for BCG and all three levels of LG as source data in compiling annual GFS; trial balance for BCG is not available on a monthly basis. - High-frequency GFS for BCG are compiled based on Revenue and Expenditure Reports and additional data (externally financed operations and on-lending). - GFS team continues compiling GFS for BCG based on the trial balance to understand differences; main discrepancies relate to debt, on-lending loans, and acquisitions of nonfinancial assets, mainly from differing exchange rate valuations applied by different source data providers (GDNT and GDICDM). - Monthly GFS discrepancies arise from differences between query-based revenue/expenditure reports and the posted monthly trial balance; questionnaire/query reports are based on data collected before approval, whereas the posted trial balance reflects data after posting to the general ledger (FMIS). All transactions are recorded in FMIS but query-based reports omit some posted items. Recommended actions: - Perform internal reconciliation on an annual basis to ensure data consistency between query-based and posted data. - Adjust for valuation differences among source data on loans and on-lending loans, acquisition of nonfinancial assets financed from abroad, and debt liabilities. - Map new COA codes to GFS classifications based on economic substance rather than national definitions, apply mapping consistently, and document changes (coverage, source data, time of recording, valuation, classification) in metadata; extend changes back to earliest data available on a best effort basis to maintain data consistency (see Appendix VII). --- ### C. Reconciling GFS with other macroeconomic datasets — findings and recommended actions Findings: - Government activity appears across GFS, national accounts (SNA), MFS, and ESS (BOP/IIP); principles and concepts are broadly similar and relationships are explained in GFSM 2014, Appendix 7. - Discrepancies between macroeconomic datasets usually arise from differences in coverage and sectorization, classification, valuation, and time of recording. - Mission proposed basic reconciliation tables to be populated with general government data from national accounts, BOP, IIP, and MFS to support discussion on data consistency (see Appendix V). Recommended actions: - Coordinate and agree on institutional coverage of the general government and public sector with NIS and NBC. - Reconcile GFS on general government financial balance sheets with NBC-compiled statistics (MFS, BOP/IIP) on an annual basis by comparing data, identifying differences, reconciling them, and explaining reasons in a note of reconciliation. - Reconcile GFS on general government with NIS annually (totals for Saving, Net investment in NFAs, and Net Lending/Borrowing) by comparing sources, identifying differences, reconciling them, and explaining reasons in a note of reconciliation. *Source: 1khmea2020001 - 1. Priority Recommendations (Cambodia), IMF mission report excerpt* ### 17. Institutional arrangements regarding responsibilities, methodology, data sharing ### 17. Institutional arrangements regarding responsibilities, methodology, data sharing ### Institutional arrangements and Memorandum of Understanding (MOU) - Institutional arrangements regarding responsibilities, methodology, data sharing and reconciliation by statistics producing agencies should be formalized. - A MOU represents an important instrument that strengthens the need to integrate and coordinate efforts. - Useful MOU distinction: - Steering Committee (senior member Working Group) responsible for strategic decision making. - Operations Working Groups (expert level Working Group) responsible for executing ongoing compilation and reconciliation. - Topics to consider in drafting a MOU are listed in Appendix IX to this report. - Recommended action: - Form a Working Group for reconciling GFS with data on general government in other datasets of macroeconomic statistics (NBC and NIS). ### Action Plan — overview of targets, recommendations, expected results, and responsible institutions - Outcome: Data are compiled and disseminated using the coverage and scope of the latest manual/guide: GFSM2014, and PSDSG. - May 2020 - Recommendation: Coordinate and agree on the institutional coverage of the general government and public sector with NIS and NBC - Expected results: An agreed and updated (when necessary) list of institutional units of general government and public sector that is used in the statistics compilation in MEF, NIS, NBC - Responsible Institutions: GDP MEF, NBC, NIS - May 2020 - Recommendation: Bridge the 2018 budget execution reports of PAEs with the GFSM 2014-based formats and compile consolidated GFS for general government - Expected results: The 2018 budget execution reports are bridged with the GFSM 2014-based formats. Consolidated 2018 GFS are compiled including PAEs - Responsible Institutions: GDP MEF - June 2020 - Recommendation: Bridge the 2018 financial reports of 11 PAEs with GFSM 2014-based formats and compare the results with GFS based on budget execution data - Expected results: 2018 GFS based on financial reports are compared with 2018 GFS based on budget execution for 11 PAEs, discrepancies identified; follow up steps proposed to minimize discrepancies - Responsible Institutions: GDP MEF - July 2020 - Recommendation: Reconcile GFS on general government financial balance sheet with the NBC statistics (MFS, BOP/IIP) on an annual basis by comparing data, identifying differences, reconciling and explaining the reasons for differences in a note of reconciliation - Expected results: Annual reconciliation with NBC is conducted, differences identified and explained in a note of reconciliation. - Responsible Institutions: GDP MEF, NBC - July 2020 - Recommendation: Reconcile GFS on general government with the NIS (Totals for Saving, Net investment in NFAs, and Net Lending/Borrowing) annually by comparing, identifying differences, reconciling and explaining the reasons in the note of reconciliation - Expected results: Annual reconciliation with NIS is conducted and differences identified and explained in a note of reconciliation. - Responsible Institutions: GDP MEF, NIS - October 2020 - Recommendation: Bridge the 2019 budget execution reports of PAEs with GFSM 2014-based formats, compile consolidated GFS for general government including GFS balance sheet (Table 6) and report them to STA and APD - Expected results: The 2019 budget execution repots are bridged with GFSM 2014-based GFS. Consolidated 2019 GFS are compiled including PAEs and Table 6, reported to STA and APD - Responsible Institutions: GDP MEF - October 2020 - Recommendation: Publish 2015–2018 consolidated balance sheet (Table 6) for BCG and LGs as part of GFS on the MEF website - Expected results: 2015–2018 consolidated balance sheet (Table 6) for BCG and LGs are published as part of GFS on the MEF website - Responsible Institutions: GDP, MEF - November 2020 - Recommendation: Perform internal reconciliation on an annual basis to ensure data consistency between query-based and posted data, different source data on loans and on-lending loans, acquisition of nonfinancial assets financed form abroad, and debt liabilities. - Expected results: Annual internal reconciliation on query-based and posted data, different source data on loans and on-lending loans, acquisition of nonfinancial assets financed from abroad, and debt liabilities conducted and documented in a note of reconciliation - Responsible Institutions: GDNT, GDICDM, GDP MEF - December 2020 - Recommendation: Form a working group on reconciling GFS with data on general government in other datasets of macroeconomic statistics (NBC and NIS) - Expected results: An official working group on reconciling GFS with data on general government in other datasets of macroeconomic statistics established by inter-agency decree or MoU - Responsible Institutions: GDP MEF - Outcome: Data are compiled and disseminated using the classification of the latest manual/guide: GFSM2014, and PSDSG. - August 2020 - Recommendation: Review source data for GFS Classification of the Functions of Government (COFOG) (Table 7) for BCG expenditure (expense and net acquisition of nonfinancial assets) to conclude on consistency with GFSM 2014 recommendations - Expected results: Consistency with GFS requirements checked, differences identified, proposals of further alignment with GFSM 2014 recommendations - Responsible Institutions: GDP, GDB, MEF - October 2020 - Recommendation: Compile annual GFS COFOG (Table 7) for BCG expenditure (expense and net acquisition of nonfinancial assets) in line with GFSM 2014 recommendations - Expected results: Annual GFS COFOG (Table 7) for BCG expenditure (expense and net acquisition of nonfinancial assets) consistent with GFSM 2014 recommendations - Responsible Institutions: GDP, MEF - November 2020 - Recommendation: Develop proposal to GDB to determine budget deficit in accordance with GFSM 2014 - Expected results: Proposals on determining budget deficit in accordance with GFSM 2014 are developed, formalized and sent to GDB - Responsible Institutions: GDB, GDNT, GDP MEF - November 2020 - Recommendation: Generate and review GFS Table 2 (Expense) for BCG from FMIS, make necessary corrections of mapping COA to GFS in FMIS - Expected results: GFS Table 2 for BCG generated from FMIS reviewed, compared with Table 2 from the GFS Classification Assistant, necessary corrections of mapping COA to GFS in FMIS are made - Responsible Institutions: GDP and FMIS Team MEF - November 2020 - Recommendation: Generate and review GFS Table 2 (Expense) for LGs from FMIS, make necessary corrections of mapping COA to GFS in FMIS - Expected results: GFS Table 2 for LGs generated from FMIS reviewed, compared with Table 2 from the GFS Classification Assistant, necessary corrections of mapping COA to GFS in FMIS are made - Responsible Institutions: GDP and FMIS Team MEF - December 2020 - Recommendation: Prepare the first draft of documentation on business-process for GFS compilation and dissemination - Expected results: A first draft of documentation on business-process for GFS compilation and dissemination is prepared - Responsible Institutions: GDP MEF - August 2021 - Recommendation: Generate and review GFS Table 3 (Transactions in Assets and Liabilities) for BCG from FMIS, make necessary corrections of mapping COA to GFS in FMIS - Expected results: GFS Table 3 for BCG generated from FMIS reviewed, compared with Table 3 from the GFS Classification Assistant, necessary corrections of mapping COA to GFS in FMIS are made - Responsible Institutions: GDP, GDICDM, GDNT MEF - August 2021 - Recommendation: Generate and review GFS Table 3 (Transactions in Assets and Liabilities) for LGs from FMIS, make necessary corrections of mapping COA to GFS in FMIS - Expected results: GFS Table 3 for LGs generated from FMIS reviewed, compared with Table 3 from the GFS Classification Assistant, necessary corrections of mapping COA to GFS in FMIS are made - Responsible Institutions: GDP and GDNT, MEF - Outcome: Higher frequency data has been compiled and disseminated internally and/or to the public - May 2020 - Recommendation: Establish regular reporting to the Joint WB–IMF quarterly PSDS database to publish PSDS for Cambodia - Expected results: Quarterly PSDS for Cambodia are published in the Joint WB–IMF database - Responsible Institutions: GDP and GDICDM, MEF - May 2020 - Recommendation: Update the derivation table to present the derivation of aggregates from TOFE to GFS and post it on the MEF website - Expected results: Derivation table from TOFE to GFS updated and posted on the MEF website - Responsible Institutions: GDP MEF - May 2020 - Recommendation: Add explanations on the differences between TOFE and GFS and advantages of using GFS in fiscal analysis on the MEF website - Expected results: Explanation on the differences between TOFE and GFS and advantages of using GFS in fiscal analysis are published on the MEF website - Responsible Institutions: GDP MEF - September 2021 - Recommendation: Compile and publish consolidated GFS for BCG and LGs on a quarterly basis - Expected results: Consolidated GFS for BCG and LGs are compiled and published on a quarterly basis on the MEF website starting from 2021 Q1 and Q2 and then on a quarterly basis. - Responsible Institutions: GDP MEF ### Advantages of using GFSM 2014-based presentation (selected points) - The GFSM 2014-based presentation published on the MEF site includes Statement of Government Operations and detailed tables on Revenue, Expense, Transactions in Assets and Liabilities covering BCG. Annual consolidated Statement of Government Operations covering GFS for all three levels of LGs is presented in a separate table. A Technical Note presents an overview of the GFSM 2014 analytical framework. The Derivation Table from TOFE to GFS for BCG provides a direct link between two datasets by reclassifying TOFE Revenue, Expenditure, and Financing transactions to derive the main aggregates and balancing items of the GFSM 2014-based presentation. - Key analytical advantages: - Improves identification of revenues, expense, net investments in nonfinancial assets, and financing transactions allowing a more systematic evaluation of the impact of current policies on long-term fiscal sustainability. - Emphasizes government Net Worth: GFS revenue and expense represent transactions that increase or decrease Net Worth; net acquisition of nonfinancial and financial assets and net incurrence of liabilities change composition of assets and liabilities but not Net Worth. - Supports a fully integrated framework where changes in balance sheet stock positions are explained by corresponding flows—transactions and other economic flows (price changes, debt write-offs, catastrophic losses, etc.), permitting policy effects to be analyzed in terms of their impact on financial operations and financial position of government. *Source: 17. Institutional arrangements regarding responsibilities, methodology, data sharing (chapter content).* ### 2. A GFSM 2014-based presentation is closely linked to other macroeconomic ### 2. A GFSM 2014-based presentation is closely linked to other macroeconomic ### Linkages with other macroeconomic statistical frameworks - GFSM 2014-based presentation is closely linked to national accounts, balance of payments and international investment position, and monetary and financial statistics. - Government budgeting and accounting systems are based on national rules which are not aligned with macroeconomic statistics guidelines, producing inconsistencies in different reporting formats. - GFSM 2014-based presentation serves as a bridge to align budgeting and accounting information with macroeconomic statistics to support interaction within and between technical specialists (economists and accountants) and policy makers in the formulation of fiscal and macroeconomic policy. - Broadly, the same principles and concepts are applied in GFS, national accounts, balance of payments and international investment position, and monetary and financial statistics: - Transactions in financial assets and liabilities, net lending/net borrowing in GFS conceptually is the same as in the SNA. - GFS net operating balance differs from SNA saving with the value of capital transfers and taxes on capital transactions, and capitalized expense. - Government final consumption expenditure and gross fixed capital formation are used in calculating GDP from expenditure approach. ### Harmonization benefits and uses of GFS data - Harmonization between GFS and other macroeconomic datasets allows: - Use of GFS data as source data or combination with other datasets to assess general government sector developments relative to the rest of the economy. - Assessment of impact on macroeconomic indicators such as GDP, national income, consumption, saving, investment. - Analysis of the government’s contribution to macroeconomic developments and the achievement of fiscal policy objectives: macroeconomic stability, efficient resource allocation, redistribution of income and service delivery. ### International comparability and policy relevance - GFSM 2014-based presentation supports the compilation of internationally comparable statistics for the general government sector and its subsectors and facilitates cross-country analyses of government operations and stock positions. - Globalization increases demand for internationally comparable GFS to detect sources of vulnerability and take timely corrective measures to prevent international financial crises and associated large fiscal deficits and rising debt levels. - GFSM 2014 represents the internationally recognized guidelines for compiling fiscal statistics; its basic concepts, classifications, and definitions reflect economic principles intended to be universally valid regardless of institutional or legal government structure, statistical sophistication, or financial accounting system. - Under the Sustainable Development Goals, fiscal reporting is important for assessing transparency of public finance and government’s ability to achieve development objectives, including delivering services to the public. - The United Nations, the IMF, the WB, the OECD, and other international organizations use GFS framework to evaluate efficiency of PFM system, fiscal transparency, and good governance in Cambodia. ### Appendix VI — Main aggregates on Extrabudgetary Units, 2015–2018 (selected figures) - Panel: 29 PAEs — columns presented as Planning and Implementation for years 2015, 2016, 2017, 2018 with percent of Planning, percent of GDP, and other ratios. - I. Total Revenue (planned / implementation and ratios shown across years) - 2015 Planning: 990,500.9; Implementation: 756,934.2; 76.4% 1.03% - 2016 Planning: 1,120,028.2; Implementation: 879,989.3; 78.6% 116.3% 1.08% - 2017 Planning: 1,052,487.8; Implementation: 1,140,375.7; 108.4% 129.6% 1.27% - 2018 Planning: 1,104,715.1; Implementation: 1,461,010.6; 132.3% 128.2% 1.48% - 1. Revenue (breakdown highlights) - 2015: 929,292.9 Planning; 737,546.3 Implementation; 79.4% 1.00% - 2016: 1,067,173.7 Planning; 846,191.5 Implementation; 79.3% 114.7% 1.04% - 2017: 1,009,218.6 Planning; 837,496.3 Implementation; 83.0% 99.0% 0.93% - 2018: 1,070,470.9 Planning; 975,319.7 Implementation; 91.1% 116.5% 0.99% - 1.1 Grants from Central Government - 2015 Planning: 186,855.9; Implementation: 174,942.6; 93.6% 0.24% - 2016 Planning: 238,717.9; Implementation: 240,519.3; 100.8% 137.5% 0.30% - 2017 Planning: 268,434.4; Implementation: 264,789.2; 98.6% 110.1% 0.30% - 2018 Planning: 270,487.1; Implementation: 219,863.8; 81.3% 83.0% 0.22% - Compensation of employees: Wages and salaries - 2015 Planning: 65,087.3; Implementation: 58,955.3; 90.6% 0.08% - 2016 Implementation row shows 5,190.7 66,517.6 (note: source layout); 1281.5% 112.8% 0.08% - 2017 Planning: 57,407.7; Implementation: 62,319.2; 108.6% 93.7% 0.07% - 2018 Planning: 66,527.9; Implementation: 10,253.7; 15.4% 16.5% 0.01% - 1.2 Institutional Direct Revenue - 2015 Planning: 742,437.0; Implementation: 562,603.7; 75.8% 0.77% - 2016 Planning: 828,455.8; Implementation: 605,664.0; 73.1% 107.7% 0.75% - 2017 Planning: 738,277.2; Implementation: 549,387.8; 74.4% 90.7% 0.61% - 2018 Planning: 798,080.8; Implementation: 726,721.9; 91.1% 132.3% 0.74% - 2. Internal Financing - 2015 Planning: 10,308.0; Implementation: 0.0; 0.0% 0.00% - 2016 Planning: 2,149.8; Implementation: 18,526.5; 861.8% - 0.02% - 2017 Planning: 13,897.6; Implementation: 2,725.2; 19.6% 14.7% 0.00% - 2018 Planning: 34,085.6; Implementation: 9,284.0; 27.2% 340.7% 0.01% - 3. Cash Balance (Surplus) - 2015 Planning: 50,900.0; Implementation: 19,387.9; 38.1% 0.03% - 2016 Planning: 50,704.8; Implementation: 15,271.2; 30.1% 78.8% 0.02% - 2017 Planning: 29,371.6; Implementation: 300,154.2; 1021.9% 1965.5% 0.33% - 2018 Planning: 158.6; Implementation: 476,406.9; 300382.7% 158.7% 0.48% - II. Total Expense - 2015 Planning: 771,691.4; Implementation: 690,561.9; 89.5% 0.94% - 2016 Planning: 890,511.4; Implementation: 826,875.6; 92.9% 119.7% 1.02% - 2017 Planning: 737,490.2; Implementation: 645,526.3; 87.5% 78.1% 0.72% - 2018 Planning: 875,307.0; Implementation: 810,490.0; 92.6% 125.6% 0.82% - II.1 Current Expense (selected lines) - 2015 Planning: 483,641.2; Implementation: 397,003.4; 82.1% 0.54% - 2016 Planning: 591,514.2; Implementation: 510,006.6; 86.2% 128.5% 0.63% - 2017 Planning: 710,482.8; Implementation: 589,221.6; 82.9% 115.5% 0.66% - 2018 Planning: 734,873.0; Implementation: 678,536.7; 92.3% 115.2% 0.69% - Wages (selected) - 2015 Planning: 195,842.7; Implementation: 167,566.0; 85.6% 0.23% - 2016 Planning: 216,143.3; Implementation: 198,661.9; 91.9% 118.6% 0.24% - 2017 Planning: 299,395.4; Implementation: 241,466.7; 80.7% 121.5% 0.27% - 2018 Planning: 266,209.7; Implementation: 215,817.7; 81,1% 89.4% 0.22% - III. Overall Balance/Surplus - 2015 Planning: 218,809.6; Implementation: 66,372.3; 30.3% 0.09% - 2016 Planning: 229,516.8; Implementation: 53,113.7; 23.1% 80.0% 0.07% - 2017 Planning: 314,997.6; Implementation: 494,849.4; 157.1% 931.7% 0.55% - 2018 Planning: 229,408.0; Implementation: 650,520.6; 283.6% 131.5% 0.66% ### Appendix VII — Consistency in Annual Data Series: STA queries, comments, and mission recommendations (selected issues and recommendations) - Taxes reclassified from Tax revenue to Non-tax revenue (2016 onward) caused abrupt drops in some tax series: - Taxes on specific services (1144) — Casino tax (70041), Lottery Tax (70042), Sport betting tax (70043) were reclassified to Non-tax revenue (73061, 73062, and 73062) in national classification and mapped to Other Revenue (1421) in GFS. Mission recommended MEF GDP to map national classification to Taxes on specific services (1144). - Taxes on use of goods and on permission to use goods or perform activities (1145) — Export Licenses (70051) and Local Business Licenses (70052) reclassified to Non-tax revenue (73065, 73066) and mapped as Other revenue (1421). Mission recommended mapping national classification to 1145 per GFSM 2014 unless fees are commensurate with control function cost. - Reclassification in national classification does not require changing GFS mapping if economic substance remains the same. - Taxes on exports (1152) dropped sharply in 2016 due to reclassification of Management commissions and export visas from tax revenue (71015) to Non-tax revenue (73067). Mission recommended MEF GDP review definitions and map COA consistently based on economic substance. - Exchange taxes (1154) large in 2013–2014 were mapped from Other exchange revenue (7398) until 2014; 7398 reclassified to Non-tax revenue starting 2015. Mission recommended MEF GDP review definition and coverage of Other exchange revenue (7398) and map updated COA consistently. - Interest breakdown inconsistency (1411 → 14111–14113): - 2005–2014 compiled on GFSM 2001 (no interest breakdown); 2015 onward compiled on GFSM 2014 with breakdown: Interest from non-residents (14111), Interest from residents other than general government (14112), Interest from other general government units (14113). - Mission recommended MEF GDP review COA mapped to 14112, check source data, record breakdown as NA if source data do not allow subsector allocation, and back cast 2005–2014 interest to the 2015–onward breakdown if appropriate. - Dividends (1412) spike in 2018: - 2018 dividend increase due to new transactions from State-owned Enterprise recorded in Dividend from public enterprises (72012). - Mission recommended MEF GDP review source data and mapping of Dividend from public enterprises (72012), and check for super-dividends treatment (record as financial asset withdrawal if disproportionately large). - Subsidies breakdown inconsistency: - Subsidies to private enterprises were recorded only in some years; Grants to private enterprise (6505) lacks practical data from 2015 onward. - Mission recommended MEF GDP review COA mapping to Subsidies to public corporations (251) and to private enterprises (252) and back cast changes to earliest data available. - Social benefits breakdown changes: - Inconsistencies caused by reclassification of account mappings across years—assessed as a real change. - Mission recommended MEF GDP review COA mapping to social assistance and employment-related social insurance schemes and back cast changes to maintain consistency. *Source: 1khmea2020001 - 2. A GFSM 2014-based presentation is closely linked to other macroeconomic* ### 6. In table 3, could they ### 6. In table 3, could they ### Fixed assets data gap (Table 3) - Finding: In the updated time series file, the breakdown of the fixed asset data (3111–3114) has been filled. - Definition (GFSM 2014): "Net acquisition of fixed assets equal the acquisition minus disposals of nonfinancial assets and consumption of fixed capital." - Data points reported: - CHANGE IN NET WORTH: TRANSACTIONS c/ ....... 3,726,078.6 - Net acquisition of nonfinancial assets d/ .............. 5,375,707.1 - 311 Fixed assets .................................................................... 5,374,244.5 - 3111 Buildings and structures ....................................................... 5,288,080.3 - 3112 Machinery and equipment ................................................... 78,453.1 - 3113 Other fixed assets ................................................................ 7,711.1 - 3114 Weapons systems ................................................................ ... - Mission recommendation: - MEF GDP should review definition, coverage and source data of the breakdown of net acquisition of fixed assets (building and structures, machinery and equipment, other fixed assets and weapon systems). - Map the updated COA to corresponding GFS classification consistently based on the economic substance of the national classification. - Backcast changes in GFS classification breakdown to the earliest data available to maintain data consistencies. ### Net incurrence of liabilities — currency and deposits (3302) and equity (3305) - Findings: - From 2005-2008, there were transactions recorded in net incurrence of liabilities in currency and deposits (3302); subsequent years exhibited zero value. This pattern may be due to reclassification of source data. - Net incurrence of liabilities in equity and investment fund shares (3305) was derived from Domestic creditors (3315) + External Creditors (3325), both having 0 value; a single transaction in 2006 resulted from an unintended error caused by formulas. - The net incurrence of liabilities in loan (3304) should be 620.9 instead of 514.6 in 2016; the missing 109.2 was recorded in equity and investment fund shares (3305), explaining unusual patterns. - Context (GFSM 2014): "The net incurrence of liabilities represents both incurrence and repayment of liabilities." - MEF GDP reporting detail: - Debt liabilities in currency and deposits were mapped from Guaranties deposit-bidding guaranties (4601) and Guaranties deposit-contract implementation (4602), indicating deposits of guarantee for public procurements. - Based on MEF GDP information, these liabilities consist of subaccounts of local governments, line ministries and private sector companies; they are actually deposits/prepayments made by private sector companies when contracting with government units. - Mission recommendations: - MEF GDP to further research and critically review these data sets and the nature of net incurrence of liabilities in currency and deposits. - Reclassify deposits from private sector companies as other accounts payable rather than debt instruments. - Review horizontal and vertical checks and derivation tables before publishing annual data on the MEF website or IMF’s GFSY. ### Other accounts payable — missing transactions in 2018 - Finding: - There were no transactions recorded in other accounts payable in 2018, whereas every other year reported values. - From 2018, there were no transactions recorded in the security deposits account because mapped account 77011 had zero practical value since then. - GFSM 2014 guidance: - "Other accounts receivable/payable consist of trade credits and advances and miscellaneous other items due to be paid or received." - Explains nature of trade credits, advances, and miscellaneous items (e.g., accrued but unpaid taxes, dividends, rent, wages and salaries, social contributions). - Mission recommendation: - MEF GDP to review the definition, coverage and source data of the updated COA mapped to Other account payable, particularly account 77011, to ensure consistent mapping to corresponding GFS classification. - Team to double check data source after the public financial clearance law release. ### Local governments — taxes, expenses, grants, and social benefits - Taxes — inconsistency due to mapping reclassifications: - Finding: Tax revenue series for local governments are very inconsistent because of mapping reclassifications across years. - Specific mapping changes: - 2012–2014: - Inherent tax (7006) → Taxes on income, profits, and capital gains payable by corporations and other enterprises (1112) - Excise Tax (7003) → Turnover and other general taxes on goods and services (11413) - Taxes on goods and services or activities (7005) → Taxes on specific services (1144) - 2015–2018: - Inherent tax (7006) → Taxes on financial and capital transactions (11414) - Excise Tax (7003) → Excises (1142) - Taxes on goods and services or activities (7005) → Taxes on use of goods and on permission to use goods or perform activities (1145) - 2018 decentralization: Tax on rental of movable and immovable properties (70014, 70015) were decentralized from central government to local governments. - GFSM 2014 clarifications: definitions of Taxes on income, profits, and capital gains (111), Taxes on financial and capital transactions (11414), Turnover and other general taxes on goods and services (11413), Excises (1142), Taxes on specific services (1144), and Taxes on use of goods and permission to use goods or perform activities (1145). - Mission recommendation: - MEF GDP to review definition, coverage and source data of Inherent tax (7006), Excise Tax (7003), and Taxes on goods and services or activities (7005). - Map updated COA to corresponding GFS classification consistently based on economic substance. - Where national classification reclassifies revenue between tax/non-tax, mapping to GFS is unchanged if economic substance remains the same. - Expenses — compensation of employees (21) vs use of goods and services (22) - Finding: Use of goods and services (22) is larger than compensation of employees (21) for local governments, contrary to typical expectations. - Explanation: Higher 22 is mainly due to Local Government expenses on Maintenance and Repairs of assets (buildings, bridges, temples, roads, irrigation systems, technical equipment) built by Central Government. - GFSM 2014 clarifications: definitions of compensation of employees and use of goods and services; ordinary maintenance and repair classified as use of goods and services, major renovations recorded as acquisitions of fixed assets. - Mission recommendation: - MEF GDP to review definition, coverage and source data of updated COA and map consistently to GFS classification. - Check borderline accounts between compensation of employees and use of goods and services. - Grants between local governments (2018) - Finding: Two matching and unusual grant transactions in 2018 were initially recorded as current grants to other general government units (2631) representing grant transfers LG1→LG2/LG3 and LG2→LG3. - Action taken: Consolidation method applied to remove duplicate counting; after TA mission discussion, these transactions should not be recorded as expenses and have been removed. - GFSM 2014 guidance: Grants (26) defined and classification by recipient and current vs capital; grants between general government units are nonzero only for subsector statistics and are eliminated in consolidation for general government sector. - Mission recommendation: - MEF GDP to review national classification mapped to current grants to other general government units (2631) and capital grants to other general government units (2632). - Map updated COA to corresponding GFS classification consistently and review elimination of reciprocal accounts to ensure proper identification. - Social benefits and Subsidies (2014 outlier) - Findings: - Large outlier in social benefits in 2014; breakdown of social benefits inconsistent. - Old COA of Subsidy and Social assistants (Chap65) was mapped to Social benefits (27) in 2014. - No data provided for other expense (28) for 2012–2014 due to insufficient LG statistics; consistent breakdown available only from 2015 onward. - GFSM 2014 clarifications: definitions of Subsidies (25) and Social benefits (27). - Mission recommendations: - MEF GDP to review definition, coverage and source data of updated COA mapped to social assistance and employment-related social insurance schemes to ensure consistent mapping. - Backcast any changes in GFS classification breakdown to the earliest data available to maintain data consistency. - Review old COA (Chap65) mapped to Social benefits (27); split the account to corresponding GFS classification. If actual data are not available, estimate splits using best available data and backcast to earliest data available. ### Other substantive QA and reconciliation notes - Accounting and data checks: - Mission suggested MEF GDP review horizontal and vertical checks and derivation tables prior to publishing annual series (MEF website or IMF GFSY). - Specific data correction example: net incurrence of liabilities in loan (3304) should be 620.9 (not 514.6) in 2016; the 109.2 was misrecorded in 3305. - Reconciliation tables: - Appendix includes reconciliation tables for general government in GFS, BOP/IIP, MFS, and SNA covering items such as current and capital grants, net acquisition of financial assets (GFS 322), net incurrence of liabilities external (GFS 332), stocks as of December 31, 2019 (MEF data, NBC data, Difference), and General Government in GFS and National Accounts comparisons (e.g., Current Revenue minus Current Expense [GFS] vs NIS: Saving, net [SNA B8n]; Net investment in nonfinancial assets [GFS 31] vs NIS: Net investment [SNA P5g-K1+NP]; Net lending/borrowing comparisons). - Specific stock and reconciliation items are tabulated in the Appendix (e.g., CLAIMS of GG on BANKS, LIABILITIES of BANKS to GG, DEPOSITS by subsector and currency, DEBT SECURITIES, LOANS, EQUITY, OTHER ACCOUNTS RECEIVABLE/PAYABLE) for cross-checking MEF and NBC data. *Italic: Content derived from the IMF staff technical assistance dialogue and table notes in the supplied chapter.* ### Appendix IX. Topics to Consider in a Memorandum of ### Appendix IX. Topics to Consider in a Memorandum of Understanding ### Partner organizations - MEF, NBC, NIS, CDC, others statistics producing agencies. ### Preamble - Explaining the need and purpose of the MOU, importance to produce high-quality macroeconomic statistics. ### Preamble: Purpose of compiling macroeconomic statistics/GFS/PSDS - Purpose of compiling and usefulness of macroeconomic statistics/GFS/PSDS. ### Legal context - Brief overview of the regulation on compiling and disseminating macroeconomic statistics/GFS/PSDS. ### Methodology / Compilation - Reference to manuals and guidelines, explanation on methodological consistency and interlinkages. ### Data sharing and confidentiality - Description of data to share between partner organizations. ### Responsibilities and obligations of the Steering Committee - Strategic decision-making. ### Responsibilities and obligations of the Working Group(s)/Task Force - Expert level groups responsible for the ongoing data compilation and reconciliation. --- ### Appendix X. GFS Compilation Guidelines: Indonesian Experience ### Institutional coverage and mandates - Ministry of Finance Directorate General of Treasury compiles Government Finance Statistics (GFS) at the national level and regional level. - The head quarter of Directorate General of Treasury (Directorate of Accounting and Financial Reporting) compiles GFS with the coverage of General Government and Public Sector at the national level, while 34 Treasury Regional Offices compile GFS with the coverage of General Government at the regional level. - The GFS compilation is mandated in the State Finance Law and Government Regulations. - The Ministry of Finance issued Minister of Finance Regulation on Indonesian GFS Manual (IGFSM) and GFS system as GFS implementation guidelines. ### Coverage of GFS compilation in Indonesia - IGFSM is adapted from GFSM 2014 according to Indonesian government needs and national interest. ### I. Minister of Finance Regulation on Indonesian Government Finance Statistics Manual (IGFSM) — Structure - 1. Introduction - a. Background - b. Objectives - c. The importance of GFS implementation - d. Users and Compilers - e. Use of GFS - 2. Coverage - a. Sector classification in SNA - b. Unit institutions - c. Decision tree - d. Sector classification in GFS - 3. Analytical Framework - a. Flows, Stocks and Accounting Rules - b. GFS reports - 4. GFS Chart of Account ### II. Minister of Finance Regulation on Government Finance Statistic system — Components - The Government Finance Statistics system is prepared based on IGFSM. - 1. Compiler units: DG Treasury, consists of Headquarters and 34 Treasury Regional Offices. - 2. Data (Chart of Accounts/Financial Reports) - 3. Business process - a. Data collection - b. Verification (verify data source, vertical and horizontal cross check) - c. Reconciliation - Accounting reconciliation - Internal reconciliation: between unit in charge of finance and unit in charge of fixed assets and inventories in a spending unit. - External reconciliation: between unit in charge of finance in a spending unit and Treasury Service Office. - GFS reconciliation - Internal reconciliation: among unit within the Ministry of Finance - External reconciliation: Ministry of Finance, Central Bank and Statistics Indonesia - 4. Methodology and policies - 5. GFS Reports and Metadata - 6. Period and timeline of reporting - 7. Update of reports ### Workflow (as presented) - Accounting - Accounting reconciliation - Government Finance Statistics - GFS reconciliation - GFS mapping - Transactions → Journal → General Ledger → Trial balance → Financial Statements → Government Finance Statistics → Macro economic statistics ### III. Director General of Treasury Regulation on technical guidance on Regional Government Finance Statistics - Director General of Treasury issued Director General of Treasury Regulation on technical guidance on Regional Government Finance Statistics as a compilation guidance for the 34 Treasury Regional Offices. - 1. Compiler units: 34 Treasury Regional Offices. - 2. Data (Chart of Accounts/Financial Reports) - 3. Business process to prepare GFS working sheet: - a. Central Government - b. Provincial and Local Governments GFS - c. Consolidated Regional Government GFS - d. General Government GFS - e. Estimation - 4. Methodology and policies - 5. GFS Reports and Metadata - 6. Period and timeline of reporting - 7. Update of reports ### IV. Joint regulation on technical guidance on reconciliation between FABS and GFS - Joint regulation on technical guidance on reconciliation between Financial Accounts Balance Sheet (FABS) prepared by the Central Bank and Government Finance Statistics (GFS) prepared by DG Treasury, Ministry of Finance. - The technical guidance on reconciliation between Financial Accounts Balance Sheet (FABS) and GFS will serve as guidance for the both Ministry of Finance and the Central Bank including each institutions’ regional offices to perform reconciliation regularly. - 1. Overview - 2. Government Finance Statistics (GFS) - 3. Financial Account and Balance Sheet (FABS) - 4. Reconciliation - a. Period and schedule - b. Coverage - c. Business processes - d. Treatment of discrepancies - e. Notes of Reconciliation *Appendix IX. Topics to Consider in a Memorandum of Understanding; Appendix X. GFS Compilation Guidelines: Indonesian Experience* --- _Source: https://www.imf.org/-/media/files/publications/cr/2020/english/1khmea2020001.pdf_