## _cr05389 ## Source details **Canonical URL:** [_cr05389](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2005/_cr05389.pdf) ## Other formats - [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2005/_cr05389.pdf.md) - [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2005/_cr05389.pdf.json) --- ### Overall assessment - Finland subscribed to the IMF’s Special Data Dissemination Standard (SDDS) on June 3, 1996, and is in observance of the SDDS. - Exceptions noted: timeliness of data on both general government and central government operations; Finland uses two SDDS flexibility options. - Authorities maintain an advance release calendar and update metadata on the IMF DSBB; metadata specify a plan to improve timeliness of general government data but no similar plan for central government operations. - Main ROSC observations: - Macroeconomic statistics generally high quality and adequate for effective surveillance. - Statistical managers highly aware of quality dimensions. - Shortcomings affecting fiscal analysis and timeliness, and resource constraints in critical areas. - Need to enhance data sources and techniques in response to economic change and high-technology sector developments. ### Prerequisites of quality — institutional arrangements and resources - Legal/institutional roles: - Statistics Finland (SF) responsible for national accounts, CPI, PPI, and government finance statistics (GFS); Bank of Finland (BOF) leads balance of payments (BoP) statistics. - State Treasury produces monthly central government operations and debt data. - SF is part of the National Statistical Service (NSS) comprising about 20 central government agencies (excludes BOF). - Several laws support statistics production: Statistics Act (280/2004), Act on the Bank of Finland (214/1998), and EU regulations. - Data sharing/confidentiality: - SF–BOF collaboration via an annual service level agreement; SF cannot share individual enterprise data with BOF under confidentiality provisions. - Recommendation to explore solutions for exchange of confidential data (see staff recommendations). - Staffing and computing: - National accounts division: 40 person-years in 2004 allocated as: 21 to annual accounts; 6 to nonfinancial government accounts; 6 to financial accounts; 4 to regional accounts; 3 to quarterly accounts and GDP indicator. - Assessment: overall adequate but allocation to quarterly accounts and GDP indicator is too low; tight staffing constrains research and methodological work. - Computer resources and facilities reported as good/excellent. - BOF BoP resources: - Balance of Payments Division comprises a staff of 17; another four-five staff at SF involved in current account and capital account compilation. - BOF staff resources declining and “on the margin of risk”; new compilation system (BOP Corner) introduced in 2004. ### Methodological soundness — conformity and gaps - General: - National accounts follow ESA 95/1993 SNA; price statistics follow CPI Manual (2004) and PPI Manual guidance. - BoP compiled in broad conformity with BPM5; EU/ECB guidance also applied. - Government finance statistics: - SF produced GFS in ESA 95 framework; presentation in GFSM 2001 would facilitate fiscal analysis. - Subsequent action: SF decided to adopt GFSM 2001 analytical framework; first published data scheduled for early 2006. - Recommendation to compile and disseminate annual and quarterly GFS in GFSM 2001 framework; consider extending balance sheets to include nonfinancial assets. - Price indices: - CPI weights based on Household Budget Surveys (HBSs) conducted infrequently; need for more frequent updating or chaining. - HBS effective sample sizes (after nonresponse): - 1985: 8,200 - 1990: 8,258 - 1994: 2,180 - 1995: 2,313 - 1996: 2,250 - 1998: 4,359 - 2001: 5,495 (response rates 63.4 percent and 62.5 percent documented) - SF planning: move to chained annual weights from January 2007; January 2006 revision of weights and product samples proposed using national accounts weights for 2004. - CPI compilation: price collectors — 21 for durable/semi-durables (monthly one week); 50 for nondurables (monthly one-and-a-half days). CPI team: seven members; House-Price team: four members. - PPI: covers mining and quarrying, manufacturing, electricity/gas/water; weights at CPA 6-digit (some PRODCOM 8-digit). - Balance of payments methodology issues: - Some items recorded net of fees/withholding taxes; reserve asset and some portfolio flows include valuation changes. - Data on business services and reinvested earnings collected only annually. - Need to adjust portfolio securities transactions for fees and commissions and to gross up income/service items for withholding taxes. ### Accuracy, reliability, serviceability, accessibility — key operational findings - Accuracy/reliability: - Source data and statistical techniques generally sound; extensive administrative sources supplemented by surveys. - Source data limitations: insufficient detail on intermediate consumption for service activities; inadequate quarterly indicators for communications, machinery and equipment, and external trade in business services. - Many datasets rated LO for source data (see DQAF summary). - Timeliness and periodicity: - National accounts, CPI, PPI, and BoP meet SDDS periodicity and timeliness; GFS timeliness insufficient for some financing data. - Long lag in general government financing data expected to be corrected by end-2005; SF planned to adopt GFSM 2001 presentation early 2006. - SF publishes main quarterly national accounts aggregates in 70 days (58 for Q4); flash GDP in 43 days. - CPI released 14 days after month end (within SDDS one-month requirement). - Central government monthly data timeliness: typical lags 18–25 days for April–November; two-to-four month lag for January–March; up to four months for December. - Consistency and revisions: - Revisions practices generally follow international good practice; scope for improvement exists for BoP revisions transparency. - Since 1999, BOF documents causes of revisions monthly and stores time series of revision impacts. - SF revision schedule: first annual accounts published in February of year t+1; preliminary accounts in July of t+1; final in January of t+3. - Accessibility and metadata: - Data and metadata readily accessible overall; improvements needed: - clearer links between major revenue/expenditure aggregates and balancing items for fiscal users; - improved metadata on QNA and GFS, and more explanations for nonspecialist users. - SF commits to increase metadata and publish more in English and Swedish during 2005. ### DQAF July 2003 — selected summary results (symbol system preserved) - Key symbol definitions: O = Practice Observed; LO = Practice Largely Observed; LNO = Practice Largely Not Observed. - Dimension highlights (selected): - 0.1 Legal and institutional environment: O for National Accounts, CPI, PPI, GFS, BoP. - 0.2 Resources: LO for National Accounts; O for CPI, PPI, BoP; LO for GFS. - 2.3 Classification/sectorization: LNO for Government Finance Statistics; O for others. - 3.1 Source data: LO across all five datasets. - 4.1 Periodicity and timeliness: LNO for Government Finance Statistics; O for others. - 5.2 Metadata accessibility: LO for National Accounts and GFS; O for CPI, PPI, BoP. - Table 1 (DQAF summary) and Table 2/3/4 (sector summaries) used to identify dataset-specific priorities. ### Key shortcomings and priorities identified (verbatim emphases preserved) - Government finance statistics: - Classification/sectorization for fiscal analysis is deficient (2.3 rated LNO). - Timeliness for government finance statistics is insufficient (4.1 rated LNO); long lag in general government financing data expected to be corrected by end-2005. - Resources in government finance area tight (0.2 rated LO). - Metadata accessibility and clarity of links between aggregates and balancing items need improvement. - National Accounts, CPI, PPI, BoP: - Source data limitations (3.1 rated LO) and statistical techniques in some domains (3.3 rated LO) warrant enhancement. - Need for more frequent updating of weighting sources for CPI and PPI and overhaul of PPI quality-change methods. - BoP revisions transparency could be improved (4.3 rated LO). ### Staff recommendations and authorities’ follow-up (selected, verbatim) - Cross-cutting: - Consider additional staffing for quarterly national accounts and GFS sections in SF; recognize new major projects at current staffing likely to harm existing statistics. - Explore solutions regarding exchange of confidential data between SF and BOF; examine how other EU Member States addressed this issue. - National Accounts: - Review sources on external transactions including processing trade. - Consider surveys to generate detailed information on composition of intermediate consumption of service activities. - Improve short-term indicators for communication and machinery/equipment. - Conduct new studies on the hidden economy. - Publish metadata on quarterly national accounts and provide more explanation to nonspecialist users. - Authorities’ follow-up: continue SF–BOF discussions; plan survey of service products per EU Regulation; quarterly sector accounts development project launched to explore investment sources. - CPI: - Chain or update weights more frequently using more frequent HBSs with shorter compilation periods. - Abandon the carry-forward method for seasonal items. - Authorities’ response: consider recommendations; SF to publish more up-to-date metadata in English and Swedish during 2005; carry-forward method retained for seasonal items as an important option given no superior theoretical method currently. - SF planning: move to chained annual weights beginning January 2007; January 2006 weight/product sample revision using national accounts 2004 weights. - PPI: - Collect more detailed information on terms of sales and product specification. - Overhaul methods for seasonal products, missing values, and quality adjustments. - Chain or update weights more frequently. - Authorities’ response: implement recommendations in PPI quality improvement projects; redraft questionnaires; move imputation from long-term to short-term; conduct research on high turnover industries; publish more metadata in English and Swedish during 2005. - Government Finance Statistics (GFS): - Compile and disseminate annual and quarterly general government statistics in line with GFSM 2001. - Extend compilation/dissemination of annual balance sheets to include nonfinancial assets. - Pursue timeliness of monthly central government operations to meet SDDS timeliness and specify plan in SDDS metadata. - Authorities’ response: Finland utilises two SDDS flexibility options for timeliness; intend to examine withdrawing first flexibility by publishing quarterly financial accounts as of beginning of 2006; State Treasury to publish Funds Statements for Central Government Finances for January–March in middle of April starting 2006 (one month earlier); centralization of State accounting into service centres by 2012 could allow even quicker publication; plans to improve GFS presentation at beginning of next year; inclusion of nonfinancial assets under consideration. - Balance of Payments (BoP): - Adjust portfolio securities transactions for fees/commissions and record fees in financial services; take account of netting of withholding taxes in income/service distributions. - Introduce quarterly survey of business services transactions for major enterprises. - Adapt collections involving end-investors and custodians to avoid duplication in loans and repurchase agreements. - Develop methodology to improve valuation of foreign-currency goods transactions and obtain timely information on goods for processing. - Authorities’ response (BOF and SF): clarify survey instructions (fees/commissions, withholding taxes); form task force with NBOC, BOF, SF to consider recording improvements and submit proposals before mid-2006; BOF posted current revision timetable on website since June/July 2005. - Detailed BoP follow-up actions: BOF and SF to explore EU precedents for data sharing; arrange BOF access to individual Customs documentation; task force to consider partner-country data for government services n.i.e.; clarify accrual/principle treatment in international trade in services questionnaire; adapt reporting instructions to avoid double-counting of repos; consider quarterly survey of international business services. ### Selected exact operational and statistical figures (preserved) - SF national accounts staffing (2004): 40 person-years (21 annual accounts; 6 nonfinancial government accounts; 6 financial accounts; 4 regional accounts; 3 quarterly accounts and GDP indicator). - HBS effective sample sizes: 1985: 8,200; 1990: 8,258; 1994: 2,180; 1995: 2,313; 1996: 2,250; 1998: 4,359; 2001: 5,495. - HBS response performance (2001): 37 percent of households refused; 7 percent dropped out during the two-week bookkeeping phase. - CPI team staffing: seven members; House-Price team: four members; price collectors: 21 (durable/semi-durable), 50 (nondurable). - Annual personnel training expenditure per SF staff member: €971 in 2004 (previously €871 in 2002). - BoP Division staff: 17 at BOF; another four-five at SF involved in current/capital account compilation. - Table 1 (BoP sectoral total stock at end-2004, selected entries): - Monetary Financial Institutions — Total stock 113,731 - Other Financial Institutions — Total stock 42,551 - Central Government — Total stock 71,216 - Social Security Funds — Total stock 49,669 - Non Financial Enterprises — FDI Outward Assets — Total stock 34,934; Liabilities — Total stock 9,675 - CPI compilation and releases: - CPI released 14 days after month end. - SF publishes main quarterly national accounts aggregates in 70 days (58 for Q4); flash GDP in 43 days; monthly GDP indicator in ~50 days. - SF publishes advance release calendar; main national releases at 9:00 A.M. on preannounced dates. ### User feedback (April 2005 survey) — summary - Survey dispatched: 160 questionnaires; responses received: 46. - Users most frequently used national accounts and price statistics; average quality ratings on 5-point scale (5=excellent): - price statistics — 4.3 - national accounts — 4.1 - government finance statistics — 4.0 - balance of payments statistics — 3.9 - Majority satisfied with coverage, periodicity, and timeliness; some concerns about adequacy of methodological explanations for non-specialist users and about timeliness/detail for some series (retail sales, household sector, local governments, services breakdowns). ### Priority action items (concise) - Improve timeliness of general government financing data (plan noted to correct by end-2005). - Adopt GFSM 2001 analytical framework for GFS presentation (SF scheduled first published data early 2006). - Address resource constraints in quarterly national accounts and GFS; consider additional staffing. - Increase frequency of updating CPI and PPI weights; move to chained annual weights (SF planning January 2007). - Overhaul PPI quality-change and imputation methods; abandon carry-forward method for seasonal items where appropriate. - Clarify metadata and publish more methodological information in English and Swedish; provide clearer links between fiscal aggregates and balancing items. - Resolve confidentiality/data-sharing constraints between SF and BOF—examine EU precedents and legal solutions. *International Monetary Fund — FINLAND: Report on the Observance of Standards and Codes (ROSC)—Data Module; content unit: _cr05389.* ### 1. Data Quality Assessment Framework July 2003—Summary Results...............................7 ### 1. Data Quality Assessment Framework July 2003—Summary Results ### Overall assessment - Finland subscribed to the IMF’s Special Data Dissemination Standard (SDDS) on June 3, 1996, and is in observance of the SDDS, meeting the specifications for coverage, periodicity, timeliness (for all data categories except two), and dissemination of advance release calendars. - Exceptions: timeliness of data on both general government and central government operations. Finland uses the two flexibility options to which it is entitled. - The authorities regularly maintain an advance release calendar for all data categories and promptly disseminate data according to this calendar. - Metadata are regularly updated on the IMF’s Dissemination Standards Bulletin Board (DSBB). The metadata specify a plan to improve the timeliness of the general government data, but no similar plan is specified for the data on central government operations. - Main ROSC observations: - Finland’s macroeconomic statistics are of generally high quality and adequate to conduct effective surveillance. - Statistical managers are highly aware of all dimensions of quality. - Shortcomings that may detract from accurate and timely analysis and policy formulation include: - deficiencies in the classification of government finance statistics for fiscal analysis, - timeliness of government finance statistics, - resource constraints in some critical areas. - Scope to enhance certain data sources and statistical techniques in light of changes in the economy and the high technology sector. ### Prerequisites of quality and institutional arrangements - Legal and institutional framework: - Several laws support statistics production, including the Statistics Act (280/2004) and the Act on the Bank of Finland (214/1998), supported by Finnish and European regulations. - SF is responsible for national accounts, consumer and producer price indices, and government finance statistics; BOF has the lead on balance of payments statistics. Monthly data on central government operations and debt are produced and disseminated by the State Treasury. - Effective data-sharing arrangements exist; SF is involved in producing parts of the balance of payments under a service level agreement with BOF renewed each year. SF cannot share individual enterprise data with BOF under confidentiality provisions. - SF is part of the National Statistical Service (NSS) comprising about 20 central government agencies (excludes BOF). - Resources and staffing: - Staffing levels are broadly sufficient but tight, especially in quarterly national accounts and government finance areas; additional major development work would be extremely difficult without additional resources. - Computer resources and facilities at SF are reported as good/excellent. - Professionalism, transparency, and ethics: - Statistical agencies adhere to objectivity, provide guidelines on ethical conduct, and publish quality guidelines (SF published Quality Guidelines for Official Statistics in 2002). - Advance notice is given of major methodological changes; terms and conditions for compiling statistics are available on SF’s website (English version more difficult to navigate). - European Statistical System (ESS) influence: - Finland is a member of the ESS; EU law applies to much of the statistical program. SF and BOF staff participate in ESS working groups and committees. ### Methodological soundness and measurement issues - Finland’s macroeconomic statistics follow internationally accepted standards and guidelines. - Government finance statistics produced by SF follow ESA 95; presentation in GFSM 2001 framework would facilitate more comprehensive fiscal analysis but plans had not been developed at mission time. - Subsequent to the mission, SF decided to adopt the analytical framework of GFSM 2001 for producing and presenting fiscal data; the scheduled date for the first published data is early 2006. - Valuation and recording of stocks and flows follow international guidelines or good practices. - Data source limitations and methodological needs: - Extensive use of administrative data sources provides coverage and efficiency but lacks detail for precise macroeconomic compilation, notably: - insufficient detail on composition of intermediate consumption of service activities, - inadequate quarterly indicators for communications, machinery and equipment, and external trade in business services. - With evolving economy and high technology complexity, there is a need for: - more frequent updating of weighting sources for CPI and PPI, - an overhaul of methods handling quality change in the PPI. ### Accuracy, reliability, serviceability, and accessibility - Accuracy and reliability: - Source data and statistical techniques are generally sound; statistical outputs generally portray reality. - Extensive use of administrative sources supplemented by surveys; surveys provide insufficient detail in some areas. - Serviceability: - Data are available on a very timely basis and with good frequency, except for government finance statistics (long lag in general government financing data expected to be corrected by end-2005 and noted on the DSBB). - Consistency across datasets is mostly adequate. - Revisions practice generally follows international good practice; scope for improvement exists for balance of payments statistics. - Accessibility: - Data and metadata are readily accessible overall. - Improvements desired: - clearer links between major revenue and expenditure aggregates and balancing items in government finance statistics for fiscal policy users, - improved metadata on quarterly national accounts and government finance statistics. - Prompt and knowledgeable support is provided to users. ### DQAF July 2003 — Summary Results (selected findings from Table 1) - Key to symbols: O = Practice Observed; LO = Practice Largely Observed; LNO = Practice Largely Not Observed; NO = Practice Not Observed; NA = Not Applicable. - Dimension 0 — Prerequisites of quality: - 0.1 Legal and institutional environment: O for National Accounts, CPI, PPI, Government Finance Statistics, Balance of Payments Statistics. - 0.2 Resources: LO for National Accounts; O for CPI, PPI, Balance of Payments; LO for Government Finance Statistics. - 0.3 Relevance: O across all five datasets. - 0.4 Other quality management: O across all five datasets. - Dimension 1 — Assurances of integrity: - 1.1 Professionalism: O across all five datasets. - 1.2 Transparency: O across all five datasets. - 1.3 Ethical standards: O across all five datasets. - Dimension 2 — Methodological soundness: - 2.1 Concepts and definitions: O for National Accounts, CPI, PPI, Balance of Payments; LO for Government Finance Statistics. - 2.2 Scope: O for National Accounts, CPI, PPI, Balance of Payments; LO for Government Finance Statistics. - 2.3 Classification/sectorization: O for National Accounts, CPI, PPI, Balance of Payments; LNO for Government Finance Statistics. - 2.4 Basis for recording: O for National Accounts, CPI, PPI, Government Finance Statistics; LO for Balance of Payments Statistics. - Dimension 3 — Accuracy and reliability: - 3.1 Source data: LO across all five datasets. - 3.2 Assessment of source data: O across all five datasets. - 3.3 Statistical techniques: LO for National Accounts, CPI, PPI, Balance of Payments; O for Government Finance Statistics. - 3.4 Assessment and validation: O across all five datasets. - 3.5 Revision studies: O across all five datasets. - Dimension 4 — Serviceability: - 4.1 Periodicity and timeliness: O for National Accounts, CPI, PPI, Balance of Payments; LNO for Government Finance Statistics. - 4.2 Consistency: O for National Accounts, CPI, PPI, Balance of Payments; LO for Government Finance Statistics. - 4.3 Revision policy and practice: O for National Accounts, CPI, PPI, Government Finance Statistics; LO for Balance of Payments. - Dimension 5 — Accessibility: - 5.1 Data accessibility: O for National Accounts, CPI, PPI, Balance of Payments; LO for Government Finance Statistics. - 5.2 Metadata accessibility: LO for National Accounts and Government Finance Statistics; O for CPI, PPI, Balance of Payments. - 5.3 Assistance to users: O across all five datasets. ### Key shortcomings and priorities identified - Government finance statistics: - Classification/sectorization for fiscal analysis is deficient (2.3 rated LNO). - Timeliness for government finance statistics is insufficient (4.1 rated LNO); long lag in general government financing data expected to be corrected by end-2005. - Resources in government finance area are tight (0.2 rated LO). - Metadata accessibility and clarity of links between aggregates and balancing items need improvement. - National Accounts, CPI, PPI, Balance of Payments: - Source data limitations (3.1 rated LO) and statistical techniques in some domains (3.3 rated LO) warrant enhancement. - Need for more frequent updating of weighting sources for CPI and PPI and overhaul of PPI quality-change methods. - Balance of payments revisions transparency could be improved (4.3 rated LO). ### Staff recommendations and developments noted - Enhance classification and presentation of government finance statistics in a framework consistent with GFSM 2001 to facilitate comprehensive fiscal analysis by revenue and expense accounts. (Subsequent action by SF: adoption of GFSM 2001 analytical framework with the first published data scheduled for early 2006.) - Improve timeliness of general government financing data (noted plan to correct by end-2005). - Address resource constraints to enable necessary development work, especially in quarterly national accounts and government finance statistics. - Improve metadata for quarterly national accounts and government finance statistics and clarify links between major fiscal aggregates and balancing items. - Update weighting sources for CPI and PPI more frequently and revise methods for handling quality change in the PPI to reflect economic changes and the high technology sector. *Source: Data Quality Assessment Framework July 2003—Summary Results (Finland ROSC data module).* ### 0. Prerequisites of quality ### 0. Prerequisites of quality ### Assurances of integrity - The Bank of Finland (BOF) collects, compiles, and disseminates Finland’s balance of payments statistics. - The Act on the Bank of Finland (No. 214/1998) states that the BOF shall provide for the compilation and publication of statistics as necessary for carrying out its tasks, but does not specifically identify balance of payments statistics. - Legal authority for the BOF to collect information for the compilation of balance of payments statistics is set out in section 28 of the Act and in Council Regulation No. 2533/98. - Although the Act does not explicitly state that individual data will be treated as confidential, the secrecy rules of the Act on Officials of the Bank of Finland (No. 1166, 1998) implicitly provide for such confidentiality, as does Regulation No. 2533/98. - BOF staff having access to confidential information are subject to financial and other disclosure requirements. ### Institutional arrangements and data sharing - Statistics Finland (SF) is involved in producing parts of the balance of payments statistics, specifically the current account items, excluding investment income, and the capital account. - The SF–BOF arrangement is underpinned by a service level agreement between the BOF and SF, renewed each year. - Adhering to confidentiality provisions, SF cannot share individual enterprise data with the BOF; permitting consistency checks by sharing would enhance the accuracy of balance of payments statistics. ### Resources - The level of resources devoted to compiling the balance of payments and other external sector statistics has been declining and is now on the margin of risk. - In 2004, a new balance of payments compilation system was introduced, which provides staff with the tools to better manage the compilation process. - Without additional resources, it will be difficult to undertake any important developmental work. ### Relevance and user engagement - BOF participation in the Ministry of Finance-chaired advisory group and in the work program of the European Central Bank and Eurostat, as well as queries from users, help monitor the relevance and practical utility of existing statistics in meeting users’ needs. ### Other quality management processes - Processes to focus on quality include trade-offs made each year in the budget process, as well as regular assessment of survey coverage and the causes of revisions to published statistics. ### Professionalism and ethical standards - The BOF is an independent institution governed by public law; it aims to act in conformity with best practices in statistics established at SF. - Staff at the BOF maintain a high degree of professionalism. The Act on Officials of the Bank of Finland (No. 1166) sets out obligations of the BOF and its officials with respect to performance of duties. - Professionalism is actively promoted and supported within the organization. New staff are given guidelines and training on expected behavior in the performance of duties. - The Act on Officials of the Bank of Finland (No. 1166) sets out behavioral requirements expected of staff. The Statistics Unit of the BOF convenes meetings to inform staff of obligations, including disclosure of business activities, shareholdings in companies and other significant assets, debts, guarantees and other liabilities, and secondary occupations. ### Transparency - Report forms and covering letters state the terms and conditions under which the statistics are collected. - No officials outside the BOF have access to the data before their release to the public. - Advance notice is given of major changes in methodology, source data, and statistical techniques. ### Summary assessments from related statistical domains (selected findings) - National accounts: SF compiles national accounts according to ESA 95 and covers all tables recommended for 1993 SNA implementation; time series go back to 1975; source data are available timely; periodicity and timeliness meet SDDS requirements. - Consumer Price Index (CPI): SF compiles CPI in broad accordance with ESA 95 and the Consumer Price Index Manual, 2004 (CPI Manual); weights are based on too infrequent Household Budget Surveys (HBSs); periodicity and timeliness meet SDDS requirements. - Producer Price Index (PPI): SF compiles PPI in broad accordance with ESA 95 and the Producer Price Index Manual, 2004 (PPI Manual); PPI covers resident market enterprises in mining and quarrying, manufacturing, and electricity, gas and water; periodicity and timeliness meet SDDS requirements. - Government Finance Statistics (GFS): SF compiles quarterly and annual general government statistics in the context of national accounts based on ESA 95; statistics are not presented in a comprehensive fiscal analytical framework and plans to follow the IMF’s Government Finance Statistics Manual 2001 (GFSM 2001) framework have not been developed; periodicity meets SDDS requirements but timeliness of some financing data does not meet SDDS requirements. *Source: _cr05389 - 0. Prerequisites of quality* ### 2. Methodological soundness ### 2. Methodological soundness ### Concepts and definitions - The Bank of Finland (BOF) compiles the balance of payments statistics in broad conformity with the guidelines of the IMF’s Balance of Payments Manual, fifth edition (BPM5). - As a European Union Member State, Finland also follows guidelines from the European Central Bank and Eurostat. ### Scope - In principle, all resident-nonresident transactions are recorded in the balance of payments. ### Classification/sectorization - Classification/sectorization systems are broadly in line with the BPM5 guidelines. - Cross-border construction activities of a long-term nature cannot be allocated to direct investment in the current collection system. ### Basis for recording - Market prices are mostly used: - Goods transactions are correctly valued at f.o.b. - Transactions relating to reserve assets and household sector transactions in foreign securities derived from stock data include valuation changes. - Recording is on an accrual basis, except for portfolio dividends and business services. - There is some net recording: - Security transactions are net of fees and commissions. - International receipts and payments of dividends, interest, royalties, and technical fees are recorded net of withholding taxes deducted at source. ### Source data - The source data for balance of payments statistics are mostly obtained from comprehensive data programs. - Data on business services and reinvested earnings are only collected annually; there is potential for double-counting of loans and repurchase agreements. ### Assessment of source data - The compilers closely monitor the survey system to ensure that it functions as expected and strive to ensure that the survey coverage is adequate. - Efforts are made to ensure that the largest enterprises are covered in surveys. ### Statistical techniques - Balance of payments adjustments to trade are not updated. ### Assessment and validation of intermediate data and statistical outputs - Intermediate results are validated against other information. ### Revision studies - Since 1999, the causes of revisions have been documented in internal memoranda on a monthly basis and time series of the impact of revisions on the published data are stored to monitor long-term trends in the revision patterns. ### Periodicity and timeliness - Data meet the SDDS periodicity and timeliness requirements. ### Consistency - Statistics are broadly consistent and reconcilable with those obtained from other frameworks. - The errors and omissions item is large in some years. - Construction activity is treated differently in the balance of payments and the national accounts, reflecting the usage of different internationally accepted guidelines in the BOF and SF. ### Revision policy and practice - The revision policy, which follows European Central Bank guidelines, is not disclosed. - Although the revisions are not measured, assessed, and explained in publications, the “Product Description and Quality Report” contains several useful charts and some analysis of revisions. ### Data accessibility - A range of data on Finland’s balance of payments is readily available in different formats and presentations and without charge. - The statistics are made available to all users at the same time. ### Metadata accessibility - Several sources of metadata meet a range of users’ needs. - To assist users, the BOF has plans to identify, in publications and releases, the sources of these metadata. ### Assistance to users - Prompt and knowledgeable service and support is available to users from the Statistics Desk Phone, which is posted in publications and releases (phone, facsimile, email). - Other technical assistance is also available. *Source: _cr05389 - 2. Methodological soundness* ### 12. Based on the review of Finland’s statistical practices, discussions with the data ### _cr05389 - 12. Based on the review of Finland’s statistical practices, discussions with the data ### Cross-cutting recommendations - Consider additional staffing for the quarterly national accounts and government finance statistics sections in SF. And, across all datasets, recognize that undertaking major new projects at current staffing levels is likely to have a detrimental effect on the existing statistics. - Explore a solution regarding the exchange of confidential data concerning those statistics for which SF and the BOF share responsibility. (This could include examining how other EU Member States have addressed this issue.) ### National Accounts - Review the sources on external transactions, including those on processing trade. - Consider surveys generating detailed information on the composition of intermediate consumption of service activities. - Improve short-term indicators for communication and machinery/equipment. - Conduct new studies on the influence of the hidden economy. - Publish metadata on quarterly national accounts and in general provide more explanation to nonspecialist users. Authorities’ follow-up (Statistics Finland) - Continue discussions with the Bank of Finland to review sources of external transactions. - Increase contacts with the National Board of Customs and Statistics Finland to improve exchange of information on trade statistics for improved estimates for processing trade. - Plan to launch a survey of service products according to the EU Regulation to improve estimates of intermediate consumption. - Recognize need to improve short-term indicators for communication and machinery/equipment; a quarterly sector accounts development project launched this year will explore new data sources for estimating investment. - Acknowledge prior studies on the hidden economy from the mid to the late 1990s were incorporated into national accounts; new research should be made and will be considered for inclusion in future work programmes. - Statistics Finland has increased the volume of metadata on quarterly national accounts published on its Internet site in the current year but agrees more metadata and explanations for non-specialist users are needed. ### Consumer Price Index (CPI) - Chain or update weights more frequently using more frequent household budget surveys with shorter compilation periods. - Abandon the use of the carry-forward method for seasonal items. Authorities’ response (Prices) - Consider the ROSC recommendations as relevant and incorporate proposals as part of standard quality improvement processes. - For strongly seasonal goods in CPI and PPI, Statistics Finland believes there is no theoretically superior method at present and will continue to use the carry forward method as an important option to deal with seasonality. - The recommendation on more frequent updating of weights in the CPI is important and will be considered seriously. - Statistics Finland will publish increasing amounts of up-to-date metadata for CPI users on its website in English and Swedish during the year 2005. ### Producer Price Index (PPI) - Collect more detailed information on terms of sales and product specification, along with prices. - Overhaul methods for treating seasonal products, missing values, and quality adjustments. - Chain or update weights more frequently. - Undertake more research on methods for industries with high model turnover. Authorities’ response (PPI) - Implement several recommendations in specific PPI quality improvement projects and in connection with the next base year revision project. - Redraft the questionnaire via the Survey Laboratory to include more specific information about terms of sales and product-specific quality features. - Move imputation from long-term to short-term imputation. - Undertake further research on high turnover industries with fast changing model varieties. - Monitor data collections that take place less frequently than monthly to ensure they capture price changes accurately and timely. - Publish increasing amounts of up-to-date metadata for PPI users on the website in English and Swedish during 2005. ### Government Finance Statistics (GFS) - Compile and disseminate annual and quarterly general government statistics in line with the analytical framework set out in the GFSM 2001. - Extend the compilation and dissemination of annual balance sheets for the general government sector and its subsectors to include nonfinancial assets. - Pursue the timely provision of source data on monthly central government operations to meet the timeliness requirement of the SDDS and specify in the SDDS metadata a plan to achieve this. Authorities’ response (Statistics Finland and the State Treasury) - Regard ROSC recommendations on GFS as relevant. - Finland is utilising two flexibility options of the SDDS for the timeliness of financial data on general government operations and for the timeliness and periodicity of data on central government operations. - Intend to examine withdrawing from the first flexibility option by starting to publish quarterly financial accounts data as of the beginning of 2006. - Starting from 2006, the State Treasury will publish the Funds Statements for Central Government Finances for January to March in the middle of April, providing information one month earlier than now. - Centralisation of State of Finland accounting into service centres by 2012 could allow even quicker publication of Funds Statements. - Plans to improve presentation of GFS in a comprehensive fiscal analytical framework at the beginning of next year and to improve dissemination of data on government finances inclusive of metadata. - Inclusion of nonfinancial assets in the balance sheet is under consideration. - Emphasize harmonising methods and presentation across ESA95 transmission programme, ECB Guidelines on Government Finance Statistics, IMF Government Finance Statistics, EDP statistics; welcome Eurostat’s plan to harmonise GFS collection and presentation. ### Balance of Payments (BoP) Statistics - Develop methodology to (1) adjust the portfolio securities transactions data on account of fees and commissions (and include in current account) and (2) take account of netting, from income and service distributions, of withholding taxes deducted at source (and include in current transfers). - Introduce a quarterly survey of business services transactions of the most important enterprises. - Adapt collections involving end-investors and custodians to ensure that no duplication occurs in the recording of loans and repurchase agreements. - Develop a methodology to improve the valuation of foreign currency goods transactions in trade statistics; investigate the possibility of obtaining timely information on goods for processing (included in trade statistics) and investigate any recording problems; and determine the need for any other balance of payments adjustments to trade statistics. Authorities’ response (Bank of Finland and Statistics Finland) - Bank of Finland agrees portfolio investment transactions should be recorded exclusive of fees and commissions and that fees and commissions belong in financial services; survey instructions will be clarified to ensure appropriate treatment in all cases. - Respondents will be instructed that investment income, especially dividends and interest accrued, are to be recorded inclusive of withholding taxes, which should be recorded by Statistics Finland in public sector transfers. - Bank of Finland updates BoP survey reporting instructions annually and will adjust them to avoid potential double-counting from inconsistencies. - National Board of Customs, Bank of Finland, and Statistics Finland will form an informal task force to consider recording improvements in the Current Account including trade account adjustment items, processing, repairs and transport; the task force will submit proposals before mid 2006. - The Bank of Finland has posted the current revision timetable of the Balance of Payments Statistics on its website as part of the updated Product Description and Quality Report since June 2005 and as a separate table since early July 2005. Detailed BoP follow-up actions agreed - BOF and SF to explore how other EU Member States have addressed sharing individual enterprise data between NSO and central bank; note that Austria, Denmark, the Netherlands have arrangements to facilitate such sharing. - Arrange with NBOC for BOF to have access to individual Customs documentation for BoP compilation; collaboration within current competences agreed and Statistics Finland already has customs declarations. - Current Account task force to study IMF staff recommendations concerning trade/BoP adjustment items, goods for processing, repairs, transport, and exchange rate valuation for goods in a cost-effective manner. - SF to clarify accrual principle and treatment of Nordic Investment Bank and other regional/international organizations in the international trade in services questionnaire. - BOF to clarify survey instructions so fees and commissions are treated and reported appropriately; SF to investigate improvements to financial services data. - SF to clarify treatment of withholding taxes in survey instructions for international trade in services. - BOF to adapt reporting instructions to avoid duplication in recording loans and repurchase agreements. - SF and BOF to consider how quarterly data requirements of Eurostat, ECB and IMF could be met cost-effectively, including introducing a quarterly survey of international business services. - Task force to consider estimating government services n.i.e. receipts using partner country data and indicators from the Ministry of Foreign Affairs. - Task force to investigate timely information on goods for processing and other trade recording problems; include repairs on goods and expenditures for goods procured in ports in Finland by foreign carriers in study. - Task force to study transport recording problems and propose improved methodology; compilers currently believe these do not pose a serious threat to BoP quality. - NBOC will inform BOF and the task force of bilateral foreign trade comparison findings for consideration. ### Appendices and documentation - The document includes an Appendix I table comparing Finland’s practices to the SDDS Coverage, Periodicity, and Timeliness of Data (Real Sector, Fiscal Sector, Financial Sector, External Sector) and notes on periodicity and timeliness classifications and encouraged categories. - The Detailed Assessments Using the Data Quality Assessment Framework (DQAF) contains dataset-specific assessments and appendices including a summary of the SDDS, the DQAF generic framework, and user survey results. *International Monetary Fund — FINLAND: Report on the Observance of Standards and Codes (ROSC)—Data Module; October 24, 2005.* ### 1. Data Quality Assessment Framework (July 2003): Summary of Results for ### Data Quality Assessment Framework (July 2003): Summary of Results for National Accounts ### 0. Prerequisites of quality — Legal and institutional environment - Organizational responsibility and coverage - Statistics Finland (SF) is the general authority for collecting, processing, and disseminating statistics under the Statistics Act (280/2004). - SF accounts for 77 percent of the National Statistical Service (NSS) production, measured by expenditure. - The NSS comprises nearly 20 agencies; outside the NSS, some 60 other agencies publish central government statistics. - The Statistics Act does not attribute responsibility for preparing individual statistics to specific agencies; SF has assumed responsibility for compiling the national accounts and the status quo is not challenged. - SF objectives and coordination mechanisms - SF’s stated objective: develop Finland’s system of official statistics into a uniform, good quality, relevant, easy-to-use, and cost-efficient system, internationally recognized for high-quality statistics, information services, and expert services. - SF actions to further objectives include: - maintaining a network of coordination with each administrative sector; - preparing a five-year development plan and an annual follow-up report for official statistics; - participating in development projects; - providing reports and opinions on request; - offering training in statistics; - defining common classifications; - promoting a uniform electronic statistical service; and - coordinating and rationalizing data collections. - SF directs a cooperation group for EU matters appointed by the Ministry of Finance (MOF) and publishes a quarterly information bulletin entitled What is New in Official Statistics. - Cooperation with register keepers and other agencies - Key register keepers: National Board of Taxes, Population Register Center, Central Pension Security Institute, Social Insurance Institution, National Board of Patents and Registration. - The register pool also includes: National Land Survey of Finland, Ministry of Justice, Association of Finnish Local and Regional Authorities, Helsinki City Information Office. - Objectives of the register pool: improve quality of basic register services and ensure registers serve as good basic sources for statistics compilation. - Coordination in data collection with the Bank of Finland (BOF) is important, especially after EU accession and participation in the Economic and Monetary Union. - EU legal and verification framework - European law, notably Council Regulation (EC) No 322/97, applies to much of the Finnish statistical program and requires national authorities to produce Community statistics on the basis of uniform or harmonized standards. - Production of national accounts statistics is subject to verification by the European Commission. - The European Statistical System (ESS) and its committees (e.g., Statistical Programme Committee, Committee on Monetary, Financial, and Balance of Payments Statistics (CMFB)) coordinate harmonization and methodological work. ### 0.1 Data sharing, confidentiality, and reporting mandates - Data sharing and coordination - No indications SF encounters major problems regarding data sharing and coordination among data-producing agencies. - SF organizes meetings at least once a year with main providers of source data for the national accounts; specialists regularly contact counterparties in other agencies. - Identified areas for improvement: - Exchange of information between the National Board of Customs and SF. - Differences between macroeconomic statistics published by SF and BOF (noted specifically in treatment of construction abroad and vice versa and in quarterly financial accounts that do not add up to SF’s annual financial accounts). - SF cannot provide individual data to the BOF as long as no laws guarantee the European Central Bank will not use individual data for nonstatistical purposes; BOF has statutory right to collect such data itself. - Confidentiality protections and practices - Legal guarantees: - Statistics Act requires statistics be compiled so reporters are not directly or indirectly identifiable (unless data are public under the Act). - Finnish Personal Data Act (523/1999) institutes a Data Protection Ombudsman. - Act on the Openness of Government Activities (621/1999) and the Finnish Constitution grant access to public documents but allow secrecy for sensitive personal or state interests. - Violation of secrecy obligation is punishable under the Penal Code. - Council Regulation (EC) No. 322/97 includes similar assurances at EU level. - SF procedures and safeguards: - Obligation to inform respondents in writing about intended use, procedures, voluntary/obligatory nature, respondent rights, data protection arrangements, and data storage durations. - Published guidelines on applying the Statistics Act and the Personal Data Act, and guidelines on protection of tabulated enterprise and personal data. - Quality Guidelines for Official Statistics (2002) include a section on data protection. - Micro data released for scientific research are treated to remove variables that would make identification possible. - Access to individual data in SF offices is restricted to staff requiring the information for statistical duties. - SF computers are password-protected; building/floor access secured by electronic passes (note: tailgating risk flagged). - Confidentiality during filing and destruction follows the National Archives Act and SF Archiving Guidelines. - Statistical reporting mandates and respondent relations - Legal basis and rights: - Statistics Act stipulates primary sources should be administrative registers and data from normal activities of enterprises and persons; SF has the right to receive these data. - All public and private entities are obliged to provide SF with data on finances, products, and staff as necessary for statistics. - SF has the legal mandate to collect information directly and may make provision of data obligatory; exception for data confidential for international relations, public safety, national defense, or state safety. - Persons who willfully fail to provide obliged data or willfully provide false data shall be sentenced to a fine; charges are rarely filed in practice. - Practices to secure response and reduce burden: - Letters accompanying questionnaires offer assistance; questionnaires list telephone, e-mail, fax, and postal contact points. - SF limits respondent burden through testing questionnaires and other measures. - Only 5 percent of the information collected by SF is obtained directly (data for 2003). - Quality Guidelines do not explicitly mention securing goodwill with respondents. *Summary based on the Data Quality Assessment Framework (July 2003) detailed assessment for Finland’s national accounts.* ### 0.2 Resources ### 0.2 Resources ### 0.2.1 Staff, facilities, computing resources, and financing - In person-years, 40 total staff were allocated to the national accounts division in 2004. - Allocation of the 40 person-years: - 21 to the annual accounts - 6 to the nonfinancial government accounts - 6 to the financial accounts - 4 to the regional accounts - 3 to the quarterly accounts and GDP indicator - Assessment of adequacy: - Overall adequacy seems to be the case. - Allocation to the quarterly accounts and GDP indicator is considered too low. - Tight staffing constrains research on the data and may reduce production of analytical publications and methodological papers. - Staff qualifications and development: - Qualifications of the staff are good. - Staff skills are maintained and further developed through internal training, a well-functioning internal consultation and feedback process, and occasional external courses (e.g., Eurostat). - A core of experienced staff is maintained, but staff turnover in the national accounts section is considerable: about half of the staff left the section in the last five years, mostly to accept positions elsewhere in central government. - Exit discussions indicate salary is an important factor in decisions to leave SF. - SF generally has no problem attracting new persons; the office’s good image as an employer is corroborated by the annual Staff Satisfaction Survey. - Management is concerned about attracting staff with macroeconomics background; a trainee program with the University of Helsinki has been put in place. - Computing, facilities, and financing: - Computer resources are good; available software is effective for compiling national accounts. - Emergency backups, both internal and external, are in place. - The office building, furniture, and on-site facilities are excellent. - Funding for compiling the national accounts is secure due to good planning and cooperation between the MOF and SF. - Diminishing EU support for national accounts projects makes it very difficult to undertake some important development work, such as the compilation of sectoral balance sheets in combination with other changes in assets accounts. ### 0.2.2 Measures to ensure efficient use of resources - Performance management: - A formal review of staff performance is conducted annually in discussions with individual staff members. - A standard list of elements contributing to performance in the past period is used; for management staff, target performance agreements have been drawn up. - Informal feedback is regularly provided (e.g., weekly subunit meetings). - External evaluation: - Outside expert assistance has been sought to evaluate statistical methodologies and compilation systems, although such outside expertise has not been called in to review the national accounts section. - Cost measurement: - The full cost of compiling statistics, including staff costs and computers used, is measured annually for organizational units (not for individual statistics). ### 0.3 Relevance #### 0.3.1 Monitoring relevance and user consultation - User consultation mechanisms: - SF consults data users, the most important being the Suomen Kansantalouden Tilinpito (SKT) group (~15 members) that convenes three times a year; chaired by the director of the MOF’s Economic Department and including the BOF and four economic research institutes. - Another group includes representatives of the MOF (Budget, Tax, and Economic Departments), the National Board of Customs, the Ministry of Agriculture and Forestry, the Board of Taxes, and SF to consult on EU own-resources issues. - Further feedback received during user courses and seminars when major revisions are planned. - SF encourages users to provide comments and monitors these closely. - International inputs: - Information on new and emerging data requirements is also received during meetings organized at Eurostat, the OECD, the UNECE, the group of Nordic countries, and the International Association for Income and Wealth. ### 0.4 Other quality management #### 0.4.1 Processes to focus on quality - Management influences and guidance: - SF management is highly sensitive to all dimensions of quality, influenced by EFQM excellence model, ISO 9000:2000, the United Nations’ Fundamental Principles of Official Statistics and Handbook of Statistical Organization, and Eurostat’s work on quality. - SF’s Quality Guidelines for Official Statistics (published 2002) list quality criteria: 1. relevance of statistical information; 2. correctness and accuracy of data; 3. timeliness and promptness; 4. accessibility and transparency/clarity of the data; 5. comparability of statistics; 6. coherence and consistency/uniformity of data; 7. documentation. - The list is supplemented with the element “costs,” regarded more as a limitation on quality than a component. - Training and TQM: - Staff have received training on various dimensions of quality. - Every division includes at least one person focused on total quality management issues (18 such persons in total). - In the pilot phase, 45 persons have made self-assessments in line with the EFQM model; a repeat covering more staff is foreseen for 2006. - Publication and commitment: - Organization’s commitment to quality is apparent from the Guidelines and SF’s Annual Report. #### 0.4.2 Processes to monitor quality of the statistical program - Monitoring mechanisms: - Processes are in place to monitor the quality of the statistical program, partly required by performance agreements between the MOF and SF and between SF’s Director General and senior staff. - SF uses balanced scorecards (BSs) to produce and implement strategic plans and to communicate the plans. #### 0.4.3 Quality considerations in planning - Quality influences planning: - Quality considerations influence planning of the statistical program (examples include annual performance agreements, five-year development plan, and annual follow-up report prepared by SF for official statistics). ### 1. Assurances of integrity #### 1.1 Professionalism ##### 1.1.1 Impartial production of statistics - Legal and institutional context: - SF reports to the MOF. - The Statistics Act, the Statistics Finland Act, and the Council of State Decree on Statistics Finland (1063, 2002) do not formally state that SF or NSS authorities are professionally independent; however, several legal provisions support SF’s professional independence and SF acts accordingly. - Provisions supporting professional independence include: - section 3 of the Statistics Finland Act (organization and operational units decided in “working orders,” confirmed by SF’s Director General (DG)); - section 1 of the Council of State Decree on SF (DG’s right to manage activities and finances of SF); - section 5 of the Decree (DG appointed by the Council of State; DG appoints operating unit directors and other staff unless working order assigns decision elsewhere; Minister of Finance appoints a deputy for the DG); - article 10 of Council Regulation (EC) No 322/97 (requires Community statistics be governed by impartiality defined as objective and independent production, free from pressure). - Performance agreement details: - The formal relationship focuses on multi-annual agreements where SF undertakes to fulfill targets within budgetary limitations. - The performance agreement for 2005 covered: 1. main strategic goals for the next four years; 2. targets for operational effectiveness in 2005; 3. performance targets for 2005 (outputs and quality management; operational efficiency; management and development of intellectual resources); 4. resources; 5. validity and follow-up of the agreement. - Approximately 75 agreed performance indicators (examples: statistics production, public image, number of international trips, number of publications, press releases, performance of chargeable services, operational efficiency, staff years, staff training, staff job satisfaction). - Recruitment, promotion, and training: - Recruitment and promotion based on relevant aptitude and expertise; comparative exams not part of the selection procedure. - Selection based on interviews, papers, and written assessments. - Formal class-based and on-the-job training in methodology and compilation methods is provided. - Annual personnel training expenditure per member of staff amounted to €971 in 2004. ##### 1.1.2 Statistical choices informed solely by statistical considerations - Legal requirements: - Under the Statistics Act, choice of data sources, statistical techniques, and dissemination methods must be informed by statistical considerations (sections 3, 10, 11, and 12). Responsibilities regarding cost-efficiency and response burden are specified (section 4). - Section 11 requires statistics be as reliable as possible, give a truthful picture, make use where possible of uniform concepts, definitions, and classifications, and be timely. Similar provisions exist in EU legislation. - Procedures and documentation: - SF published a 132-page Quality Guidelines for Official Statistics covering survey processes, estimation, presentation, documentation, and publication; all chapters use clearly laid-out statistical criteria. ##### 1.1.3 Right to comment on misuse or erroneous interpretation - Practice for addressing misuse: - No specific regulation entitles SF to comment, but in practice SF has an active policy; Information Service issued guidelines on how to respond. - A private agency (Esmerk) monitors 32 national and regional newspapers and summarizes references to SF; other media are also watched. - If erroneous interpretation or misuse is detected, contact is established to explain the issue; in serious cases the DG may write a letter to the editor (this happens a few times a year). In less serious cases, the person responsible signs the reply. ### 1.2 Transparency #### 1.2.1 Terms and conditions publicly available - Availability of legislation and guidelines: - Information on legislation governing SF is available on its website and in its library. - Relevant legislation and guidelines are difficult to find on SF’s website in the English version; legislation is not a heading in the site index. - The key Statistics Act (280/2004) is not available on the site; there is a hyperlink to the repealed Statistics Act (62/1994) that incorrectly takes the user to Council Regulation (EC) 322/97. - Current and previous versions of SF’s Codes and Guidelines on Professional Ethics are in the English language version of SF’s website. - International dissemination standards: - Finland subscribes to the IMF’s Special Data Dissemination Standard (SDDS). - The IMF’s DSBB includes, under “Integrity,” the terms and conditions under which SF’s statistics are produced, including confidentiality of individually identifiable information. - Publication practices: - Statistical publications always include SF’s general contact information; many include references where more specific information can be found. #### 1.2.2 Internal governmental pre-release access publicly identified - Advance access for MOF: - Once a year the MOF is given in advance access to preliminary annual national accounts data (about two weeks before release) for the Economic Survey and EU Excessive Deficit Procedure notification due in February. - The advance access is mentioned in Finland’s SDDS metadata on the IMF’s DSBB. #### 1.2.3 Products clearly identified - Identification of official statistics: - Official publications carry SF’s logo and the mark SVT (explained on the back as indicating an official statistic of Finland); logo includes Statistics Finland in Finnish, Swedish, and English. - Publications include a statement that quoting is encouraged provided SF is acknowledged. - Quality Guidelines note criteria for SVT status, including production by an agency on the SVT producers list and assumption of responsibility for accuracy and content (p. 108). - SVT publications cannot be published under the name of the author, distinguishing them from research working papers. #### 1.2.4 Advance notice of major methodological changes - Advance notice practices: - Advance notice is given to the public when major changes are introduced in methodology, sources, and statistical techniques. - If changes are very large, briefings for the press may be prepared. ### 1.3 Ethical standards #### 1.3.1 Staff behavior guidelines - Code of professional ethics: - SF publishes Guidelines on Professional Ethics, Handbook 30b (Helsinki, 2002). - The Handbook outlines SF’s obligations to society (chapter 2), respondents (chapter 3), customers (chapter 4), and funders and employers (chapter 5), and discusses conflicts among these obligations and between ethics and legislation. - All employees are given a copy on recruitment; all employees were circulated a copy when published in 2002; it is available on SF’s website. ### 2. Methodological soundness #### 2.1 Concepts and definitions - Framework and deviations: - SF follows the European System of Accounts 1995 (ESA 95) as the general framework. - Noted deviations from ESA 95 include: - Non-allocation of financial intermediation services indirectly measured (FISIM). - Recording growth in cultivated assets at the moment of harvest rather than at the moment of growth (particularly an issue for cultivated forests). - SF has made considerable progress in addressing these problems and will introduce the revised data during 2005. #### 2.2 Scope ##### 2.2.1 Consistency with international standards - Implementation of 1993 SNA requirements: - SF compiles all tables and accounts the ISWGNA determined as minimum requirement for 1993 SNA implementation on a regular basis: - annual value added and GDP at current and constant prices by activity; - annual expenditures of GDP at current and constant prices; - annual value added components at current prices by activity; - sequence of accounts for the total economy (up to financial accounts) with an annual frequency; - annual rest-of-the-world accounts (until net lending). - SF also regularly compiles tables/accounts recommended by ISWGNA: - quarterly value added and GDP at current and constant prices by activity; - quarterly expenditures of GDP at current and constant prices; - annual supply and use tables. - Supply and use tables compiled in Finland refer only to the data for the most recent final year at current prices. - Assets and satellite accounts: - Finnish national accounts do not yet include other changes in asset accounts or full balance sheets, although annual data on financial flows and stocks are published (in October) in accordance with ESA 95 and capital stock data are worked out. - National accounts division prepares regional accounts, including regional input/output tables (last such tables referred to 2002; a project is underway for 2005). - SF prepares tourism satellite accounts and, with the National Consumers’ Research Center, a satellite for household production. - Delimitation and production boundary: - Constituent units delimitation follows international recommendations; included as part of the economy: - territorial enclaves in the rest of the world; - free zones/bonded warehouses/factories operated by offshore enterprises under customs control; - workers who work part of the year abroad. - Production boundary includes (even if estimates may not achieve full coverage): - own-account production of all goods for own final consumption; - research and development on own account; - output of goods for own-account fixed capital formation; - mineral exploration; - production of entertainment, literary, or artistic originals; - production of computer software; - illegal output sold to willing buyers. - Asset boundary deviations: - Asset boundary is not entirely in accordance with 1993 SNA: - valuables are not recognized as such and historic monuments are not included; - output does not include agricultural work-in-progress (until recently, growth of forests considered additions to uncultivated natural assets; 1993 SNA treats such growth as an other change in the volume of assets rather than output). - These deviations are kept under review. - Intangible assets included correctly: - Included in the definition of intangible assets are: - mineral exploration (whether successful or not); - systems and standard applications computer software and databases (purchased or built in-house); - entertainment, literary, or artistic originals; - patented entities; - leases and other transferable contracts (such as purchased goodwill). *Source: _cr05389 - 0.2 Resources* ### 2.3 Classification/sectorization ### _cr05389 - 2.3 Classification/sectorization ### Classification and sectorization systems - Classifications of institutional units and transactions follow the ESA 95. - Two additional subsectors are distinguished: housing corporations (term used for units described in some other countries as condominiums) and employment pension schemes. - Industrial classification: Statistical Classification of Economic Activities in the European Communities (NACE) Rev 1. - National product classification: derived from the Classification of Products by Activity (CPA). - Household final consumption breakdown: Classification of Individual Consumption by Purpose (COICOP). - Government functions classification: Classification of the Functions of Government (COFOG). ### Basis for recording: valuation and timing - Valuation largely in accordance with the 1993 SNA: - Market output valued at basic prices. - Intermediate consumption at purchasers’ prices. - Value-added tax included in valuation of intermediate consumption, apart from the deductible part; deductible part excluded from valuation of final uses. - Merchandise imports and exports totals valued at f.o.b.; imports use coefficients for the margin between c.i.f. and f.o.b. determined by the National Board of Customs every five years. - Transactions in foreign currency converted using the midpoint exchange rate prevailing in the market at the moment they take place. - Exceptions and specific practices: - Output for own final use generally recorded at equivalent market prices; own-account production of machinery and equipment recorded at cost. - Transfer pricing is not adjusted to market valuation if detected. - Employee stock options: pending international decisions, the value has not been recorded as part of compensation of employees; SF publishes memorandum items of amounts for employee stock options expressed in euros. - Timing: - Recording is done on an accrual basis in line with the 1993 SNA with relatively small exceptions; in central government, a few expenditures still recorded on a cash basis. - Grossing/netting: - Transactions between establishments within the same enterprise are recorded on a gross basis. ### Accuracy and reliability — overview - Available sources are broadly sufficient to prepare accurate and reliable national accounts statistics. - SF extensively uses administrative data, supplemented by surveys where necessary. - Administrative sources: advantages include good/nearly complete subject coverage, low response burden, and low costs; disadvantages include limited detail, conceptual mismatches (e.g., distinguishing intermediate consumption from gross fixed capital formation), unit type differences, valuation discrepancies, and timing mismatches. ### Annual enterprise/establishment statistics: registers and sources - Business Register (BR): - Covers all enterprises, self-employed persons, and nonprofit institutions in their capacity as employers. - Farms excluded but planned inclusion in 2006. - Central and local government units recorded in a separate register. - BR fed from the Value Added Tax (VAT) Payment Register and the pay-as-you-earn Employee’s Advance Tax Declaration Register. - Updates with new units occur every quarter. - Structural Business Statistics (SBS) in practice combine: 1. BR (major source of turnover and number of employees collected by annual survey). 2. Business income tax register (EVR): profit and loss statements and balance sheet data; EVR is edited/processed by SF; omitted/erroneous data imputed on basis of similar enterprises; limitations: enterprise-level coverage (not establishments) and insufficient breakdown of turnover/costs by type of goods/services. SF adds TILKES sheets to EVR for additional information. 3. Direct surveys: - SF’s establishment statistics: producers in mining and quarrying; manufacturing; electricity, gas, and water supply; construction. Units surveyed: enterprises with 20 or more workers. Collect profit and loss and establishment breakdowns. - PRODCOM survey: establishments in manufacturing with cut-off at establishments with 10 persons employed; gathers output and raw material inputs in values and quantities according to the CPA (roughly 6,000 headings); EU PRODCOM regulation compulsory; particularly useful for balancing supply and use tables. - SF surveys meet sound information gathering requirements; recommendation that similar detailed data be collected for service industries as for manufacturing. ### Main sources for annual accounts (production and expenditure approaches) - Production approach: sector-specific main sources include ministry agricultural quantities/prices, Finnish Forest Research Institute, EVR/TILKES, Establishment/PRODCOM survey, Statistics Finland construction statistics, building stock data, BR, local government finance statistics, financial statements, and various industry-specific administrative sources. - Expenditure approach: household final consumption from Household Budget Survey (HBS), sales statistics, commodity flow method; government consumption from central government accounting data and local government financial statistics; acquisitions of fixed assets from SBS, building construction statistics, central and local government accounting, and industry supplementary data. - Some items marked Not worked out (e.g., acquisitions less disposals of valuables; additions to the value of non-produced non-financial assets). ### Household budget survey (HBS) - Conducted normally at five-year intervals. - Target group: entire population of households residing in Finland, excluding persons living in institutions. - Sampling frame: population register. - Sample size has been between 7,000 and 9,000 households. - Double-stage stratified sampling used. - Data collection period: full 12 months to capture seasonality. - Response performance (2001): - 37 percent of households refused to participate. - 7 percent dropped out during the two-week phase of bookkeeping. - HBS questionnaires include sections for each household member; survey design based on sound principles. ### Government finance statistics sources - Central government statistics prepared by the State Treasury from accounting offices; include budgetary units and extrabudgetary funds (coverage complete); defense expenditure and capital formation included; most data on accrual basis; financial statements sometimes provide only summary information on intermediate consumption; distinction between market and nonmarket activities not always easy. - Municipalities and joint municipal authorities statistics compiled by SF; coverage complete and includes quasi-corporations; local authorities have varied bookkeeping systems, which SF manages. ### Price statistics and quarterly indicators - Available price statistics: monthly consumer price index (CPI) and monthly producer price indices (PPIs) for domestic supply, wholesale trade, exports, imports, and recently for services. - Subindices broadly consistent with national accounts deflation/inflation needs; methodological base of price indices compiled by SF is sound. - Quarterly accounts supported by numerous monthly and quarterly indices consistent with the annual account. - Production-approach quarterly indicators generally rated Good; expenditures-approach indicators mostly Good but with noted weaknesses: - Less than satisfactory: quarterly imports and exports of services (very few direct sources). - Specific quarterly assessments (selected): - Agriculture, hunting, and forestry: Good. - Manufacturing: Good. - Transport, storage, and communication: Good, but Less than satisfactory for communication. - Acquisitions less disposals of tangible fixed assets: Good, but Less than satisfactory for machinery and equipment. - Changes in inventories: Less than satisfactory. - Exports and imports of services: Less than satisfactory. ### Source data quality, limitations, and issues - Source data generally approximate required definitions, scope, classifications, valuation, and timing. - Noted issues: - Administrative data include enterprises not using the calendar year for fiscal reporting; conversion to calendar years not always possible. - Business accounting inventory valuation differs from national accounts requirements; no information on valuation system (LIFO, FIFO, etc.) is available to allow better conversion to current market prices. - Insufficient information on composition of intermediate consumption except for units covered by establishment surveys; includes several quasi-corporations in the public sector. - Government sector sources often do not permit clear distinctions between transaction categories (e.g., sales vs. taxes). - Quality of some sources for transactions with the rest-of-the-world is weak, especially for several services and income categories and for quarterly data. - Recommendation: conduct a study into consistent recording of processing trade to avoid unrecorded or double-recorded processing flows that would affect GDP estimates. - Emerging future issues in source materials: - Emergence of the European Company. - Changes in bookkeeping practices following new International Accounting Standards Board (IASB) recommendations. - Coverage of total economic activities in terms of value added by the data sources is good. ### Timeliness - Annual accounts: no particular timeliness problems. - Quarterly accounts: some sources could improve timeliness; overall situation quite good. - If turnover data are late, compilers can often use two months of VAT data as an approximation. *Source: _cr05389 - 2.3 Classification/sectorization (IMF staff report excerpt).* ### 3.2 Assessment of source data ### 3.2 Assessment of source data ### Assessment of source data (coverage, errors, monitoring) - Source data—including censuses, sample surveys and administrative records—are routinely assessed for coverage, sample error, response error, and nonsampling error; results of assessments are monitored and made available to guide statistical processes. - Sample survey data used are derived using scientifically sound methods. - All source data are reviewed for mistakes and breaks in the time series before use. Checks include: - review of annual changes; - review of possible changes in bookkeeping practices; - comparison of certain ratios (e.g., productivity) with similar establishments. - Editing procedures include detection and analysis of outliers; improbable values are confirmed with providers. Some source data, including those from large companies, may be rejected after review. - Aggregate-level comparisons are made with other statistics, such as the labor force survey. - Administrative data are edited like other sources. SF sometimes lacks capacity to review in detail certain detected problems (e.g., inconsistencies in processing trade with the rest of the world, methodology to quarterize imports and exports of services) and leaves redressing such problems to the compiler of the basic statistics. ### Statistical techniques (3.3) - Sectoral specialists treat source data and employ sound compilation practices; outliers are investigated by checking with the source rather than simply adjusting them. - Imputation for missing entities is very limited due to near-full coverage of administrative data. Fiscal information for small units often provides a basis for grossing up to larger-unit estimates. - Specialists compare basic data with external information on branches of industry. Hidden economy - Estimates for the hidden economy are made but are very small and based on probably outdated studies. Production approach procedures - Output estimates compiled at level of 182 industries (publication level is 70 industries); intermediate consumption compiled at the same level. - Reliance on fixed ratios in value added estimates is negligible. - Output of owner-occupied dwellings is valued as estimated rentals tenants would pay; full value of real and imputed rents is computed uniformly using a considerable breakdown of housing stock by quality characteristics and a specific letting-price survey. - Output of holiday homes is calculated based on cost elements. - Growth of cultivated plants and fish is not treated as work-in-progress (not in agreement with 1993 SNA recommendations); however, growing season nearly fully coincides with the third quarter, so agricultural work-in-progress would be very small. SF is expected to include estimates for work-in-progress regarding forests soon in response to Eurostat observations. - Adjustments are needed because business statistics provide turnover rather than output; one required adjustment concerns changes in inventories. SF adjusts opening and closing valuations of inventories towards average period prices, but this would only correctly remove holding gains if enterprises valued inventories at current market prices (which they do not). - Consumption of fixed capital is calculated with the perpetual inventory method; long series of capital formation by private enterprises, government units, and nonprofit institutions are available from SF. - Nearly all basic statistics use accrual accounting; the few central government expenditures recorded on a cash basis are not converted to accrual. Taxes on products are recorded on a time-adjusted cash basis in accordance with Eurostat guidelines. - Double deflation as recommended by the 1993 SNA is used only for agriculture and some services. SF presently presumes prices of intermediate consumption change in parallel with output prices; SF intends to publish all real value added calculated on the basis of double deflation in December 2005. - Volume measures of taxes and subsidies on products are estimated by applying base-year margin rates to corresponding volume of sales; similar procedure used for calculating output value of trade margins. - GDP volume change is not yet measured using annual chain indices; introduction of chaining is foreseen for December 2005. Up until now, the base year for constant price calculations is changed every five years. Expenditure approach procedures - None of the expenditure components are derived as residuals, including household final consumption expenditure, gross fixed capital formation, and changes in inventories. - Expenditure categories are calculated at a sufficient level of detail; fixed ratios are hardly used. - Specific issues properly addressed: - government final expenditure excludes incidental sales; - expenses of residents abroad are included in household final consumption expenditure and in imports; expenditures of nonresidents in the economy are excluded from domestic household final consumption expenditure and included in exports (derived from border or tourism surveys). - Stores of wealth as valuables are not separately distinguished and data may be incomplete; separate estimates for net acquisitions of valuables expected to be published in December 2005. - SF has dedicated price information for deflation/inflation of expenditure categories at a fine classification level. Implicit deflator of household consumption is consistent with the CPI, allowing for definitional differences. Government final consumption expenditure is deflated by its cost components. If changes in inventories at current prices are calculated correctly, deflation of changes in inventories is also correct. Specific quarterly compilation techniques - Appropriate benchmarking technique used: the Bassie method to combine annual estimates with quarterly indicators. - Finnish system calculates quarterly series from seasonally unadjusted source data, then deseasonalizes. TRAMO/SEATS methodology is used (method promoted by Eurostat). ### Assessment and validation of intermediate data and statistical outputs (3.4) - Intermediate results are validated against other information where applicable; data compiled by sectoral specialists are checked against independent sources. - Intermediate data are thoroughly checked before balancing, with attention to: - changes in value, volume, and price from the previous year; - changes from the previous national accounts estimate for the same period; - consistency between wages and salaries and information on employment; - consistency between labor input and output, and other inputs; - development of real disposable income; - the saving rate: relation of savings to disposable income for households and general government; - net lending levels. - As data near completion, examination occurs in small groups of three to six persons with explanatory notes; adjustments to initial calculations are made if deemed appropriate. - Statistical discrepancies are investigated; GDP is taken to be most accurately measured by the production approach, and remaining statistical discrepancy is included in publications. In annual accounts, the discrepancy should not be larger than 1 percent of GDP at current prices, and its contribution to the annual change of GDP equally not larger than 1 percent. - Use of supply and use tables for balancing at a detailed level has made it possible to remove statistical discrepancies for final estimates at current prices. SF intends to employ the supply and use framework also for balancing final estimates at constant prices; these data are expected to be published in December 2005. - National accounts estimates are not validated against unofficial estimates (such estimates based on reliable methodologies simply are not made). Studies on possible bias in SF data have been carried out; one study for 1982-93 indicated prices for supply had an upward bias and prices for expenditure a downward bias, contributing to decision to use supply and use framework for constant price data. ### Revision studies (3.5) - Differences between initial and revised/final estimates are reviewed to learn from changes. SF provides short explanations of changes made in current price estimates to Eurostat. - SF hesitates to adjust initial estimates for annual data based on historical trends; it seeks improvements in sources or methodologies instead. - Revisions to quarterly accounts are tabulated and published from time to time (once or twice a year); analysis focuses largely on revisions to GDP estimates. - First estimates are not adjusted for possible systematic bias; occasionally indices used are adjusted for unlikely changes (e.g., price indices), but users do not appreciate such adjustments. - SF maintains adequate documentation on revisions. ### Serviceability: periodicity, timeliness, and consistency (4.1–4.3) Periodicity and timeliness - Periodicity of national accounts: annual and quarterly in accordance with the SDDS. A monthly estimate for total output is also made. - Timeliness of quarterly national accounts exceeds SDDS requirement (publication within a quarter after reference period). SF publishes main quarterly aggregates in 70 days (58 for the fourth quarter). - A flash quarterly estimate of GDP is available in 43 days. - Monthly indicator of GDP published with a timeliness of about 50 days. - Quarterly government accounts available in 90 days. - First annual accounts, partially based on quarterly data, are published at the end of February following the reporting year t. At the same time, the first version of complete sector accounts is published. - Preliminary version of annual accounts is published in July of year t+1 (referred to as the “summer calculations”). Consistency - Statistics are internally consistent: - statistical discrepancies between production and expenditure approaches are small; - GDP estimates at current prices, volume measures, and deflators are consistent within the “value = volume x price” framework; - all totals are the sum of the details, except seasonally adjusted quarterly accounts for all categories may not exactly add up to annual totals owing to the deseasonalization method. - Statistical differences between production and expenditure approaches have been reduced to zero for final annual estimates at current prices since 1995. - Fully consistent national accounts time series available from 1975 onward; historic data constructed back to 1860. - Methodological notes identify and explain main breaks and discontinuities in time series; explanations of unusual economic trend changes are included in analytical text of publications (but not in database accessible to users). - Rest-of-the-world account nearly fully consistent with balance of payments compiled by BOF in close cooperation with SF and National Board of Customs. Disparity in imports and exports of services thought to have two origins: - difference in treatment of construction activities abroad between ESA 95 and the 1993 SNA/Balance of Payments Manual, fifth edition; - inconsistencies suspected between SF source for imports/exports of services and BOF source for foreign direct investment. These inconsistencies cannot be investigated because SF is not permitted to provide individual data to BOF, and SF lacks capacity to analyze BOF data in detail. Resulting difference between current external balance and external net lending/borrowing publications between SF and BOF. - National accounts data are consistent with government finance statistics data; SF has main role in compiling and disseminating government finance statistics. Revision policy and practice - Periodic revisions follow a regular and transparent schedule known to the public. Quarterly data are normally revised during the current year and further after each annual accounts publication to ensure consistency. - Publication schedule for annual accounts: - First annual accounts on year t published in February of year t+1; - Preliminary accounts (including functional breakdowns, “summer calculations”) published in July of year t+1 and without modifications in January of year t+2; - Final version published in January of year t+3. In the final version the statistical difference between production and expenditure approaches at current prices has been removed with supply and use tables; these tables published in December of year t+2. - Timing of February issue and summer calculations accommodates MOF for Economic Survey and budget preparation. - Changes from changes in concepts or major data sources do not follow a preset cycle. SF has introduced important changes from application of ESA 95 and related EU decisions; not all changes implemented (e.g., EU decisions on FISIM not yet in operation; major changes to constant price calculations expected). Finland expected to implement major revisions in parallel with other EU member states. Users are made aware of methodological changes via announcements in publications. - Preliminary estimates are clearly indicated in all SF publications, but not in its databases available to users. - Nature and effects of major revisions are explained in statistical publications; routine periodic updates do not usually include such explanations unless the change is exceptionally large. - Analyses of differences between revised and preliminary annual data have been published as incidental studies; last one published by BOF in 2004. Otherwise, such analyses are not disseminated. ### Accessibility (5.1) - National accounts published in a very clear manner; news releases include a chart. However, news release for annual data provides only two most recent years (SF’s wish to sell the publication). Quarterly national accounts table produced for SDDS refers only to the last and previous quarter; Finnish version provides a link to ample data; link expected to be added to English version shortly. - SF ensures statistics are disseminated to facilitate re-dissemination in media. - SF releases all statistics first on the Internet. Annual and quarterly national accounts also published in dedicated hard copy (payable) periodicals. Incidental publications disseminate supply and use/input-output tables (free on Internet), details on capital stock, and time series (payable). Full national accounts series available on SF’s FINSERIES (ASTIKA) database, sometimes for a fee. Data series also made available in Excel. Supply and use tables accessible on the Internet without cost. - Summary national accounts information published in SF’s Statistical Yearbook of Finland and in pocket-size Finland in Figures. - SF publishes an advance release calendar and adheres strictly to preannounced release dates and time (9:00 A.M.). - Data are made available to all users at the same time. Release calendar published annually in December and updated continuously on the Internet; weekly news calendar published each Friday with information for next week. Major users receive e-mail when weekly news calendar is published. DSBB has a link to advance release calendar. - National accounts releases may influence financial markets; press cannot receive advance copies under embargo and access before public release is restricted to specially designated persons within SF (see section 1.2.2 regarding limited advance government access). - Data not routinely disseminated are made available upon request. Customized tabulations can be prepared at a fee covering additional work. Availability of additional statistics is generally known to frequent users but not always indicated in publications; publications containing supply and use/input-output tables mention possibility to receive further details, but annual data publications may not. *Source: _cr05389 - 3.2 Assessment of source data* ### 5.2 Metadata accessibility ### 5.2 Metadata accessibility ### Documentation on concepts, scope, classifications, basis of recording, data sources, and statistical techniques - Very comprehensive methodological descriptions prepared to facilitate the validation by the European Commission of the gross national income data of the member states are available on the Internet. - Other documentation on sources and methods is rather sparse; extensive documents were published in the early 1980s and are outdated. - Hard-copy national accounts publications contain brief explanations of central concepts, the compilation process, and classifications used. - General purpose publications (for example, the Statistical Yearbook of Finland) do not include short explanations; indications are that users require more documentation on sources and methods. - SF organizes courses for users which partially accommodate user needs; materials used in SF’s national accounts course are in principle available to external users, but this is not publicized. - Quarterly national accounts (QNA) suffer from very tight staffing of the Economic Indicator Unit, which is a major impediment to preparing methodological documentation. - SF reviews and updates the SDDS metadata published on the IMF’s DSBB regularly. ### Levels of detail adapted to audience needs - Metadata for the interested but nonspecialist public are hardly available. - More specialized-use information (background papers, working documents) are not available. - The number of staff is cited as the main obstacle to preparing documentation and research papers. ### Assistance to users (5.3) - SF has organized user support in line with MOF’s 1998 decision to develop new kinds of service commitments. - All statistical releases identify contact points for enquiries by mail, telephone, facsimile, and e-mail. - In absence of normal contact staff, telephones are transferred and indicated e-mail boxes are shared to ensure quick response. - SF commits to respond to all requests for information within two working days. - SF publishes two magazines to promote awareness of statistics (subscription at a cost to the user). - A Virtual School of Statistics for self-study is available free via the Internet. - Online learning material for polytechnic education produced with support of the European Social Fund. - SF organizes courses at headquarters; the Media and Communications Unit supports media and other information users. - Each year, 60 to 80 press releases are published and 10 to 15 press conferences are held; one press conference presents the release of the first annual estimates. - Assistance provided to users is monitored and reviewed periodically; user satisfaction surveys are conducted regularly. ### Catalogs, publications, and paid services - SF publishes a description of all statistics on its Internet site. - Under “Statmarket,” the SF Internet site lists publications available to users at a cost, but no information on paid services can be found there. - Once a year, the Information Service prepares a catalog covering both publications and services; prices are clearly disclosed and assistance in placing orders is provided even during nights and weekends. ### Table 1: Finland Data Quality Assessment Framework (July 2003) — Summary highlights - Compiling Agency: Statistics Finland (SF) - Key assessment elements marked in the table include: - 0.1 Legal and institutional environment: O - 0.2 Resources: LO (Staffing is tight in the quarterly national accounts section, making it difficult to undertake research on the data and compile metadata.) - 0.3 Relevance: O - 0.4 Other quality management: O - 1.1 Professionalism: O - 1.2 Transparency: O - 1.3 Ethical standards: O - 2.1 Concepts and definitions: O - 2.2 Scope: O - 2.3 Classification/sectorization: O - 2.4 Basis for recording: O - 3.1 Source data: LO (Too few details on the inputs of service activities and some public quasi-corporations. Measurement problems in imports and exports of services. Weak quarterly sources for communication and machinery/equipment. No information on the commercial valuation of inventories.) - 3.3 Statistical techniques: LO (Double deflation is seldom used (this issue is being addressed). Imputations for the hidden economy are based on dated studies.) - 5.2 Metadata accessibility: LNO (No extensive metadata are available on the QNA methodology. Metadata catering for nonspecialist users are scarce.) - Many other elements shown as O, LO, or LNO across methodological soundness, accuracy and reliability, serviceability, and accessibility. ### Key recommendations (selected, verbatim references to assessment points) - Explore a solution regarding the exchange of confidential data concerning those statistics for which SF and the BOF share responsibility. This could include examining how other EU Member States have addressed the issue (0.1.2, 4.2.3). - Facilitate the exchange of information between the National Board of Customs and SF by arranging more frequent contacts between the specialists involved (0.1.2). - Avoid, to the extent possible, differences between the data published by SF and the BOF (0.1.2). - Consider easing staff tightness in the QNA section (0.2.1, 5.2.1). - Consider preparing and publishing more research and methodological studies, for instance in an SF occasional paper series or scientific periodical (0.2.1, 5.3.2). - Secure external financing for development work, such as the compilation of sectoral balance sheets (0.2.1). - Improve the search facilities in SF’s website (1.2.1). - Record own-account output of machinery and equipment at market prices (2.4.1). - Consider surveys generating detailed information on the composition of intermediate consumption of service activities (3.1.1). - In collaboration with the State Treasury, improve source information on intermediate consumption as well as the distinction between market and nonmarket activities of central government agencies (3.1.1). - Review the sources on external transactions, including those on processing trade. Develop, in consultation with the BOF, additional quarterly sources for external transactions (3.1.1). - Improve short-term indicators for communication and machinery/equipment (3.1.1). - Conduct new studies on the influence of the hidden economy (3.1.1, 3.3.2). - Study possibilities of improving the estimates for changes in inventories (3.1.2, 3.3.2). - Consider adding a small extension to the TRAMO/SEATS program to ensure that the published seasonally adjusted quarterly accounts data exactly add up to the annual totals (4.2.1). - With the databases that are made available to the public, specify which data are provisional and explain main breaks in the series (4.2.2, 4.3.2). - If more detailed data are available to users, always indicate such in the publications. The same is true for paid services offered by SF (5.1.5, 5.3.2). - Publish metadata on QNA and provide more explanation to nonspecialist users (5.2.1). Suggested modalities include adding brief introductions to the chapters in SF’s Statistical Yearbook of Finland or publishing a short introduction to the national accounts. --- ### II. Price Statistics (Consumer Price Indices) — selected institutional and legal points ### Legal and institutional environment (0.1) - Under the Statistics Act (280/2004), Statistics Finland (SF) is the general authority for collecting, processing, and disseminating the statistics; SF accounts for 77 percent of the NSS production, measured by expenditure. - The Statistics Finland Act (49/1992) states SF shall provide for the general development of official statistics in collaboration with other central government authorities. - SF’s objective: develop Finland’s system of official statistics into a uniform, good quality, relevant, easy-to-use, and cost-efficient system; internationally recognized for high-quality statistics, information services, and expert services. - SF actions to further objective include maintaining sector coordination networks, preparing five-year development plans and annual follow-up reports, participating in development projects, providing reports and opinions, offering training, defining common classifications, promoting a uniform electronic statistical service, and coordinating/rationalizing data collections. - Council Regulation (EC) No 322/97 stipulates national authorities produce European Community statistics at the national level on the basis of uniform standards. - Council Regulation (EC) No. 2494/95 required Harmonized Indices of Consumer Prices (HICPs) to be produced using common criteria. - Finnish Parliament ratified the ILO Labour Statistics Convention, C160, 1985 in 1987, giving SF responsibility for compiling the CPI and related obligations. ### Data sharing and coordination (0.1.2) - No indications of major problems in data sharing and coordination among data-producing agencies. - CPI collection, processing and compilation mainly carried out within SF; some agencies supply administrative series (for example, health care data for cost of medical treatment, taxation authorities for the House Price Index used in the CPI). - Statisticians responsible for the CPI remain in regular contact with supplying agencies. ### Confidentiality and protection of individual reporters’ data (0.1.3) - Several legal acts guarantee confidentiality; Statistics Act requires statistics compilation so reporters are not directly or indirectly identifiable. - Data may be released only if permitted by legal provisions or upon express consent; SF has the right to receive individual data if necessary for production of statistics. - The Personal Data Act (523/1999) institutes a Data Protection Ombudsman. - Statistics Act obliges statistical authorities to inform respondents in writing about intended use of data, procedures, rights of respondents, arrangements for protecting data, and storage durations; SF’s practice conforms with these provisions. - SF has published guidelines on applying the Statistics Act and the Personal Data Act and on protection of tabulated enterprise and personal data; Quality Guidelines for Official Statistics (2002) include a section on data protection. - Micro data released to external agencies for scientific research are treated to remove variables that could identify individuals; similar procedures apply for other sensitive units. - Access to individual data in SF offices is restricted to staff requiring information for duties; SF computers are password-protected; building access and floor entrances secured by electronic passes. - When CPI data are released for research, contents are restricted to only the price and class code to maintain confidentiality; strict tabulation rules and procedures prevent disclosure. ### Statistical reporting and response (0.1.4) - Statistics Act requires primary exploited sources to be administrative records and data produced through normal activities of economic units; SF has the right to receive these data and may collect directly where appropriate. - All public and private entities are obliged to provide SF with data on finances, products, and staff as necessary for statistics production. - A person who willfully fails to provide obliged data or willfully provides false data shall be sentenced to a fine; SF may refrain from bringing charges if violation is minor—charges are rarely filed. - The Act stipulates statistical data shall be collected economically and cause respondents least inconvenience. - Questionnaires and letters advise respondents of assistance available; contact details provided on questionnaires. - For the CPI, SF’s legal services have not been used during the last decade; outlet negotiations have resulted in only one or two outlets being dropped each rebasing. - Nonresponse is quite substantial for the Household Budget Survey (discussed elsewhere in the report). *Source: _cr05389 - 5.2 Metadata accessibility* ### 0.2 Resources ### 0.2 Resources ### 0.2.1 Staff, facilities, computing resources, and financing are commensurate with statistical programs - Organization and staffing - CPI compilation and research tasks are carried out in the division of Prices and Wages Statistics, by the Consumer and House-Price Statistics Unit. - The Unit is divided into the CPI and House-Price Statistics teams. - CPI team: seven members (two have master’s degrees or higher, one has a bachelors’ degree, and four are vocationally trained). - House-Price Statistics team: four members (three master’s degree holders and one bachelors’ degree); this team serves the CPI team by compiling house price indices and rent surveys. - Approximately one person-year of house-price resources is allocated to CPI-related tasks, as well as a significant part of the Unit Heads’ working time. - Data collection workforce - 21 price collectors collect prices once a month for one week for durable and semi-durable goods. - 50 price collectors collect prices once a month for one-and-a-half days for nondurable goods. - Price collectors are trained during recruitment, have class-based seminars, and maintain regular contact with full-time staff; when not on CPI tasks they conduct survey interviews for other SF statistics. - Research, external funding, and international links - The Consumer and House-Price Statistics Unit carries out CPI-related research insofar as human resources and external funding permit; Eurostat has been the main source of such funds. - Recent funding was received for work on a project for the price measurement of owner-occupied housing. - Informal contacts exist with academic experts, including Professor Vartia from Helsinki University and his PhD students. - Senior staff have high-level exposure to price index methodology: the head of the CPI is a member of the UN Ottawa Group (International Working Group on Price Indices); senior staff contribute papers to international working parties and task forces. - In 2004 SF hosted the Ottawa Group meeting and an IMF international seminar on the Producer Price Index Manual (PPI Manual). - Staffing pressures and turnover - The annual rate of employees leaving the CPI unit (excluding maternity leave) is 10.3 percent, much higher than the SF average of 3.0 percent. - SF overall reports no problem attracting new employees; management is concerned about attracting staff with macroeconomics background and has a trainee program with the University of Helsinki. - Facilities and computing - Computer resources are good; available software is effective for compiling price indices though some software glitches have occurred. - Emergency backups, both internal and external, are in place. - The office building, furniture, and other on-site facilities are excellent. ### 0.2.2 Measures to ensure efficient use of resources are implemented - Performance review and feedback - A formal review of staff performance is conducted annually in discussions with individual staff members using a standard list of elements contributing to past performance; target performance agreements have been drawn up for management staff. - Informal feedback is provided regularly (for example, during weekly unit and team meetings). - Technology and cost measurement - The prices unit is active in adopting new technology such as electronic, hand-held data-retrieval devices to improve efficiency and accuracy. - Data reporting systems for summary statistics on key quality issues are described as excellent. - The full cost of compiling statistics, including staff costs and computers used, is measured annually at the division and unit level. ### 0.3 Relevance - User consultation and feedback mechanisms - SF consults data users to ensure the CPI meets user needs; organizational arrangements generate feedback as part of SF activities. - SKT group (Suomen Kansantalouden Tilinpito), about 15 members, convenes three times a year; chaired by the director of the MOF’s Economic Department and includes the BOF and four economic research institutes. - Another consultative group includes representatives of the MOF (Budget, Tax, and Economic Departments), the National Board of Customs, the Ministry of Agriculture and Forestry, the Board of Taxes, and SF for issues related to the EU’s own resources. - Further feedback is received during user courses and seminars, particularly when major revisions are planned. - Users are encouraged to provide comments which are monitored closely; feedback is also received during meetings at Eurostat, the OECD, UNECE, the Nordic countries, and the International Association for Income and Wealth. - Compliance with ILO consultation requirements - ILO Labour Convention C160 (1985) includes a formal stipulation to consult users. - To comply, the “TUPOSETO” (“National Board For Income Policy Research”) is consulted; MOF provides the chair, membership is drawn from employers’ and employees’ central organizations, and an SF representative acts as a permanent expert member. - Communication channels - Users are consulted and/or kept informed on CPI detail, periodicity, timeliness, and rebasing via surveys, newsletters, or seminars; e-mail addresses are provided for feedback. ### 0.4 Other quality management - Commitment to quality frameworks - SF management’s quality thinking is influenced by EFQM excellence model, ISO 9000:2000, the United Nations’ Fundamental Principles of Official Statistics and Handbook of Statistical Organization, and Eurostat’s work on quality. - SF published Quality Guidelines for Official Statistics (2002) listing quality criteria: (1) relevance; (2) correctness and accuracy; (3) timeliness and promptness; (4) accessibility and transparency/clarity; (5) comparability; (6) coherence and consistency/uniformity; and (7) documentation. The list is supplemented by “costs” as a limitation on quality. - Training and self-assessment - Staff have received training on quality dimensions; every division includes at least one person focused on total quality management (18 such persons in total—one works on the CPI). - In a pilot phase, 45 persons made self-assessments in line with the EFQM model; a repeat covering more staff is foreseen for 2006. - Monitoring processes - Processes to monitor the quality of the statistical program are in place and partly required by performance agreements between the MOF and SF, and between SF’s Director General and senior staff. - SF uses balanced scorecards (BSs) to produce and implement strategic plans and to communicate plans. - Quality considerations influence statistical program planning; summary reports on missing values each month and BSs influence the Prices Unit inputs to strategic plans. ### 1. Assurances of integrity ### 1.1 Professionalism - Professional independence and legal framework - SF reports to the MOF. The Statistics Act, the Statistics Finland Act, and the Council of State Decree on Statistics Finland (1063, 2002) do not formally state professional independence, but several legal provisions support SF’s professional independence and SF acts accordingly. - Provisions cited include: - section 3 of the Statistics Finland Act (organization and operational units decided in “working orders,” confirmed by SF’s Director-General (DG)); - section 1 of the Council of State Decree on SF (DG’s right to manage activities and finances of SF); - section 5 of the Council of State Decree (DG appointed by the Council of State; DG appoints directors of operating units and other staff unless assigned elsewhere; Minister of Finance appoints a deputy for the DG); - article 10 of Council Regulation (EC) No 322/97 requiring Community statistics be governed by impartiality. - Performance agreements and indicators - Formal relationship with MOF focuses on multi-annual agreements under which SF fulfills targets within budget limitations. - The performance agreement for 2005 covered: (1) main strategic goals for next four years; (2) targets for operational effectiveness in 2005; (3) performance targets for 2005 (outputs and quality management; operational efficiency; management and development of intellectual resources); (4) resources; and (5) validity and follow-up of the agreement. - Approximately 75 agreed performance indicators include statistics production, public image, number of international trips, number of publications, press releases, performance of chargeable services, operational efficiency, staff years, staff training, and staff job satisfaction. - Recruitment, training, and international engagement - Recruitment and promotion are based on relevant aptitude and expertise; selection is via interviews, written assessments, and paper review. - Formal class-based and on-the-job training is provided for the price unit’s employees. - Annual personnel training expenditure per member of staff amounted to €971 in 2004, increasing from €871 in 2002. - In 2004 there were 612 official trips abroad, mostly EU/EFTA meetings, international consulting, scientific training, UN or OECD meetings, and Nordic meetings. - Prices unit staff act as consultants to international organizations, including the IMF; CPI statisticians have access to web, technical materials, and international manuals and contribute to developments in economic statistics. ### 1.1.2 Choice of methods and dissemination - Legal requirements on sources, techniques, and dissemination - Under the Statistics Act, choices of data sources, statistical techniques, and methods of dissemination must be informed by statistical considerations (sections 3, 10, 11, and 12); responsibilities also cover cost-efficiency and response burden (section 4). - Section 11 requires statistics to be as reliable as possible, to give a truthful picture, to use uniform concepts/classifications where possible, and to be timely. - Professional standards also governed by ILO Labour Statistics Convention, C160 (1985) and the Seventeenth International Conference of Labour Statisticians’ Resolution II. - SF publishes a 132-page Quality Guidelines for Official Statistics Handbook, 43b (Helsinki, 2002) covering production procedures, survey processes, estimation, presentation, documentation, and publication. ### 1.1.3 Commenting on misuse and erroneous interpretation - Practice for addressing misuse - No specific regulation entitles SF to comment on erroneous interpretation, but SF has an active policy and Information Service guidelines. - A private agency (Esmerk) monitors 32 national and regional newspapers and summarizes references to SF; other media are also watched. - When erroneous interpretation or misuse is detected, contact is established to explain; in serious cases the DG may write a letter to the editor (this happens a few times a year); in less serious cases a senior official signs a reply. - The prices and wages unit proactively prevents erroneous information (example: special releases and an article issued when a beverage tax cut occurred to explain the price effect). ### 1.2 Transparency - Terms and conditions publicly available - Information on legislation governing SF is available on its website and in its library. - The relevant legislation and guidelines are difficult to find on SF’s English website; the Swedish and English versions are in the process of being revised. The Finnish version is more complete though reportedly still difficult to search. - The current key Statistics Act (280/2004) is not available on the site; a hyperlink points to the repealed Statistics Act (62/1994) and incorrectly opens Council Regulation (EC) 322/97 instead. - SF’s Codes and Guidelines on Professional Ethics are available in English on SF’s website. - Finland subscribes to the IMF’s Special Data Dissemination Standard (SDDS); the IMF’s DSBB includes under “Integrity” the terms and conditions under which SF’s statistics are produced, including confidentiality of individually identifiable information. - Statistical publications include SF’s general contact information and references for more specific information. - Governmental internal access and release policy - SF policy requires statistics be accessible to all users at the same time; this is noted in the Guidelines on Professional Ethics (page 12). - The Statistics Act prescribes publication as soon as possible upon completion; sensitive statistics must not be released prior to official publication date; all users must receive information at the same time. - Government has no internal access to price statistics prior to their public release. - Identification of official statistical products - Official statistical publications carry SF’s logo and the mark STV (explained on the back as an official statistic of Finland); logo includes Statistics Finland in Finnish, Swedish, and English. - Publications state that quoting is encouraged with SF acknowledgement. - SF’s Quality Guidelines set criteria for an SVT publication, including production by an agency on the list of SVT producers and assumption of responsibility by the publishing agency; SVT publications cannot be published under the name of the author, distinguishing them from research working papers. - Advance notice of major methodological changes - Advance notice is given to the public when major changes are introduced in methodology, sources, and statistical techniques; very large changes may be accompanied by press briefings. *Content based only on the supplied document _cr05389 - 0.2 Resources* ### 1.3 Ethical standards ### 1.3 Ethical standards ### Guidelines for staff behavior - A culture of professionalism and independence is evident from the code of professional ethics SF publishes as its Guidelines on Professional Ethics, Handbook 30b (Helsinki, 2002). - The Handbook: - Is described as well-written, clear, and comprehensive on ethical issues facing a statistical agency. - Outlines SF’s obligations to society (chapter 2), respondents (chapter 3), customers (chapter 4), and funders and employers (chapter 5). - Draws attention to possible conflicts between such obligations, such as resource constraints. - Draws attention to conflicts between ethics and legislation and discusses how even strict abidance by the law may be unethical. - Distribution and availability: - All employees are given a copy of this handbook on recruitment. - All employees were circulated a copy when it was published in 2002. - It can also be found on SF’s website. ### Methodological soundness (overview) - The methodological basis for the statistics follows internationally accepted standards, guidelines, or good practices. - Assessment references: - System of National Accounts 1993 (1993 SNA) or the European System of Accounts 1995 (ESA 95), and the Consumer Price Index Manual, 2004 (CPI Manual). - The concepts and definitions from the 1993 SNA are used as guidelines with regard to coverage and valuation. - Methods and procedures from the CPI Manual are used as guidelines for compiling the CPI. - The 1993 SNA and ESA 95 are viewed as interchangeable whenever reference is made in this document to the 1993 SNA. ### Concepts and definitions - Conformance: - Concepts and definitions follow the principles outlined in the CPI Manual and ESA 95/1993 SNA. - Main exception: exclusion of illegal goods and services (follows HICP practice). - Concepts that do not follow international standards are kept under review. - Specific changes: - As of 2002 (CPI 2000=100), church taxes and labor union membership fees, previously included in consumption expenditure, were excluded because they contained elements of income transfers; this aligns with the European Union’s HICP legal framework. - Price concepts: - Transaction prices for matched, detailed product descriptions, recorded for goods and services at purchaser’s prices follow the CPI Manual. - Weights and coverage: - Weights used every five years are national accounts estimates, which in turn are adjusted estimates from a household budget survey (HBS). - Institutionalized residents (old people’s homes, prisons, hospitals, etc.) are excluded from the HBS, but adjustments are made for their estimated expenditure for each product group. - Own-account final consumption is excluded (not advised by the CPI Manual); its exclusion is common practice. - Expenditure by nonresidents is included (follows HICP guidelines) though noted as inappropriate for CPI compilation. - Classification detail: - Expenditure weights are compiled at a sufficiently detailed 5-digit COICOP level. - The 6-digit COICOP classification is extended for product descriptions to a 9-digit level, resulting in some 700 product subclasses. - Estimated regional weights are applied for six regions. - Housing prices use a more detailed classification. - Aggregation process: - Aggregation for items is at the 9-digit and 6-digit level of a detailed consistent COICOP-based classification. - Unweighted elementary indices are compiled in regional elementary product classes. - Regional weights are applied to bring elementary aggregates to national indices. - COICOP weights aggregate national indices up to 4-, 3-, 2-digit COICOP levels and the overall index. ### Scope - Geographic and household scope: - The geographic scope of the HBS is not restricted to a particular geographic area; units sampled include all resident households randomly sampled across rural and urban Finland. - Households of all sizes and incomes are included and selected within strata with probability proportionate to the number of adults (aged 15 and over) in each stratum. - Adjustments are made for the consumption expenditure of residents in institutions. - Business-related households: - Households whose major activity involves an unincorporated business are included; no attempt is made to separate records on business and consumption purposes. - Households whose primary activities are hunting and fishing are included. - Purpose and uses: - No strict formal statement exists about the main purpose of the national CPI, but the key use is escalation of social benefits and use in contractual negotiations on wages and salaries, as opposed to an inflation, HICP, index. - The CPI includes user-cost estimates of owner-occupied dwellings. - The CPI excludes own-account production of goods and services for final consumption and purchases of illegal market goods and services, and includes expenditure by nonresidents. ### Classification/sectorization - Product specification: - Product specification is at the 7-digit COICOP level with some goods at the 9-digit level. - Prices are collected within regions, aggregated using regional weights to the national level, and aggregated across items. - In some instances (insurance, medical products, package tours), separate regional price series are not constructed because prices do not vary over regions. ### Basis for recording - Valuation: - Consumption expenditure is valued at purchasers’ prices. - Own-produced consumption is excluded. - Price collection: - List prices are collected from outlets and centralized sources with guidelines so they represent transaction prices. - Analytical indices: - SF compiles indices for analytical purposes; example: the Net Price Index (NPI) excludes the effect of changes in indirect taxes and subsidies, targeting “market inflation” keeping the effect of government fiscal policies (product taxes and subsidies) fixed. - Recording timing: - Prices from outlets are recorded for the list prices during a few days mid-month rather than the exact transaction date. - Exception: collection of prices in December is earlier than mid-month to avoid the Christmas rush. - Some mainly administered prices are assumed constant over more than one month and are collected at a lower frequency than monthly. - Packaged holidays are recorded when the services are consumed (when the holiday is taken) rather than when paid, following HICP guidelines. - Grossing/netting: - Weights for cars, lotteries, and insurance are net weights in line with the CPI Manual. - Allocation issues: - Difficulty in allocating insurance to categories due to bundling of insurance products into one package; imputations are used. - Gambling and insurance are on a net basis. - COICOP guidance on multi-risk insurance service charges is noted; such service charges are excluded from the current index. ### Accuracy and reliability — Source data (Weights) - HBS and survey sample sizes: - The CPI uses as weights national accounts private consumption expenditure estimates based on the HBSs. - Effective sample sizes (after nonrespondents removed): - 1985: 8,200 households - 1990: 8,258 households - 1994: 2,180 (annual, smaller survey) - 1995: 2,313 (annual, smaller survey) - 1996: 2,250 (annual, smaller survey) - The 1994–96 annual smaller surveys proved unreliable. - The 1995 survey provided weights for nearly 500 categories of product at the 5-digit COICOP level. - Subsequent surveys: - 1998 effective sample size: 4,359 - 2001 effective sample size: 5,495 (response rates of 63.4 percent and 62.5 percent respectively). - Published sources and adjustments: - The published source for data on weights for the CPI is described in the SDDS and in the CPI Handbook for Users as “national accounts 2000 estimates.” - The 2000=100 CPI used national accounts estimates for the weights, which in turn were based on the 1998 HBS because there was no survey in 1999. - Estimates for 2000 were based on the 1998 HBS with data from other sources applied to update figures to 2000. - Use of business register and turnover data: - SF’s business register includes turnover by industry for the retail trade and service industries, which can be partitioned into product groups. - Turnover-based estimates covered 182 goods and services and were used to “update” the weights. - Individual classes were split at the 6-digit COICOP level. - Limitation: retail turnover by industry is not recorded for individual products; estimates must be made to partition industries into products (example given: “retail sales of children’s clothing” partitioned into “outdoor clothing,” “underwear,” and “hats, ties, and gloves, etc.”). - Further adjustments: - Adjustments to HBS estimates included bias corrections (e.g., alcohol and tobacco consumption) and reconciliation with other sources. - Estimates were made for expenditure by people living in institutions omitted from the HBS base population, by product, based on income and consumption potential. - Estimates of expenditure of nonresident visitors were included, following the HICP (a money index) rather than the CPI Manual (a consumption index), which should exclude it. - The usage of the Finnish CPI for escalation purposes is that of a consumption index. - 2001–02 HBS design: - The 2001-02 HBS is based on sound principles regarding sample design and data collection. - The sample is drawn from the population register stratified by five areas, each divided into urban and rural municipalities, and Helsinki, Espoo, Kauniainen, and Vantaa as one area and Åland as another, making 12 areas in all. - Selection of a household within a stratum was with probability proportionate to the number of members aged 15 and over. - The response rate for this effective sample of 5,495 was documented (see source for exact rate). *Source: _cr05389 - 1.3 Ethical standards* ### 62.5 percent. Data collection was by way of a combination of diaries (two weeks), ### _cr05389 - 62.5 percent. Data collection was by way of a combination of diaries (two weeks), ### Weights, household surveys, and rebasing - Data collection for consumption on food and non-durables was collected by diary (two weeks). - The change in the weights is described as "too infrequent by international standards" given the nature of the Finnish economy. - The 2001-02 HBS survey data behind the weights used for the 2005=100 index may, by rebasing in 2010, be more than seven years out of date, given the time required to collect and compile the data. - SF is planning to move to chained annual weights beginning in January 2007. - For January 2006 there will be a revision of weights and product samples. - The weights used for the January 2006 index are proposed to be the national accounts weights for 2004. - The UK Retail Prices Index is cited as an example with a compilation lag of six months. - Concerns about using national accounts 2004 weights: - National accounts weights are higher-level weights based on the 2001-02 HBS and auxiliary data. - Benchmarking and extrapolation over more than five years can fail to reflect changes in consumption patterns. - National accounts source data for weights include expenditure by nonresidents; inclusion is advised for HICP but not for the national CPI used as a compensation index. - Visitors’ expenditure contribution to clothing was last estimated at about 10 percent (of total expenditure on clothing). - HBS clothing estimate has an estimated 95 percent confidence interval of some +/- 6 percent. - Recommendations and practices: - SF should consider a move to more frequent HBSs and more frequent updating of weights using commensurate updating of HBSs. - SF should investigate why the compilation time for HBSs is so long. - If chained weights use national accounts “updated” estimates rather than regular HBSs, SF should be clear in publications that regular HBSs are not used and provide an account of the estimation principles involved. - The need for more frequent weight updating or chain linking is stressed to better represent the basket of goods and services, to reduce spread between Laspeyres and Paasche indices, and to allow introduction of new product classes. - Sample rotations each year within a fixed weight framework, and sample augmentations under existing categories, are possible interim measures. ### Price collection, sampling, and data sources - Monthly prices are collected from a sample of 3,000 outlets selected on rebasing every five years. - Very few outlets drop out over the five-year period, limiting opportunities to introduce new outlets except on rebasing. - A move to annual chained indices would facilitate more frequent sample updates. - Grocery sampling: - A sample of 200 outlets is selected for groceries. - The sampling frame contains sales information by 18 counties. - Selection of counties is according to population size; within counties, sample allocation is with probability proportionate to size (sales figures). - Adjustments to sample size estimates are based on the coefficient of variation of the price change. - Nongrocery sampling: - Outlet sampling is from the 21 largest cities (with populations exceeding 50,000), divided into 14 larger and seven smaller ones. - Exclusion of rural areas is justified on basis that rural shoppers for nongrocery items buy in cities. - For larger cities price collectors select the three most popular outlets and within each outlet three items—the expensive, middle, and low-priced—following broad item description. - For smaller cities the same judgmental sample is selected for two outlets and three items within each outlet. - This selection would result in 168 item prices per product, with variation for products with higher variance in relative price (e.g., petrol had a much larger sample due to price volatility). - Price collection methods: - Most prices collected in outlets by price collectors given broad product descriptions; collectors choose actual product based on brand and price-determining factors and monitor its price over time. - A code designates terms of sale (discounts, buy-one-get-one-free, etc.). - Prices also collected centrally by phone, fax, and e-mail. - Staff monitor specific product areas for likely new products and price-related developments (example: contacting Confederation of Breweries to identify packaging changes for beer). - New technologies being implemented: hand-held data capture devices; scanner data investigation. - Variance estimates used to identify whether a data point need only be collected less frequently than monthly; some prices (cigarettes, airfares, magazines) are collected centrally. - Supplementary and specialized data sources: - Additional source data used to supplement traditional sources for medical treatments, mobile phone services, alcoholic beverages. - Data on the housing price index and rent price index used to supplement core CPI data. - Use of House Price Index and hedonic indices for mobile telephones and ‘fridge-freezers’ in difficult areas. - Participation and contributions to international groups such as Eurostat and the Ottawa Group noted. ### Source data timeliness, periodicity, and collection windows - Some prices are not collected each month for efficiency and reduction of response burden (e.g., dry cleaning, shoe repairs, furniture, electrical appliances, pharmaceutical products). - The 1995=100 CPI Handbook for Users provides periodicity at 5-digit COICOP; over half the pricing by weight is less frequent than monthly. - The CPI team reviewed collection frequencies for the 2000=100 index and tested for bias using monthly data collection for a limited period; such periodic reviews are recommended. - December price collection: - December prices are collected earlier to avoid holiday rush: between December 8 and December 14. - For other months most collection starts on the 11th and finishes on the 17th. - The earlier December collection applies to the CPI core-data collection, which covers 51.1 percent of the index weight. - For housing and centrally collected prices the December collection period does not differ from other months. - Example bias: an increase of 0.1 percent would be biased downwards by 0.01 percent in November-to-December comparison; described as a negligible amount in low inflation times. - December-to-January comparison would be similarly biased upwards; comparisons over the longer period remain unbiased. - Timeliness: - Prices are collected mid-month in outlets; staff informed of visit dates. - Centralized price providers are informed of due-by dates and standard follow-up practices work well for late suppliers. - Source data for weights have a lengthy compilation period following the surveys. ### Assessment of source data, quality indicators, and coverage - Standard errors for weights for COICOP divisions for the 2001-02 HBS: - Food and nonalcoholic beverages: 95 percent confidence interval of €3,305 to €3,430. - Housing and energy: 95 percent confidence interval of €7,272 to €7,506. - Education (worst): intervals €40 to €51. - Clothing and footwear: €829 to €933. - Sampling errors will be higher for more detailed descriptions. - Nonresponse and reconciliation: - Nonresponse errors for cigarette and alcohol considered by reconciling expenditure estimates with other sources. - Estimates for durables rely on recall and require reconciliation where possible. - Nonresponse adjustments were made for each area and household size; bias can still arise if consumption patterns of nonresponding households differ. - Extrapolated weights from prior HBS periods have further errors. - Variance and bootstrap estimates: - Monthly conservative standard error estimates (simple random sampling assumption) are made for grocery items at the 6-digit COICOP level; includes minimum, maximum, and standard deviation of prices. - Bootstrap variance estimates exist for the house price index. - Outlier detection and reporting: - Price collectors have previous month’s data at collection time and can detect outliers. - Desk-level outlier checks in SF; handheld electronic data-entry system facilitates outlier checks in the field. - Policy of no automatic outlier deletion; causes of outliers are followed up. - Summary monthly quality indicator reports produced at detailed 6-digit COICOP level include number of observations, missing prices (temporary and permanent), replacements, etc. - Example for March 2005: 51,736 observations of which 45,684 were observed both in February and March; difference due to 2,119 new prices and 3,933 missing prices requiring an imputation. - Sample review frequency: - A substantial review of the sample takes place on rebasing every five years; five-yearly period is considered too long. - Coverage: - The proportion of household final consumption expenditure not covered in regular CPI compilation is assessed as less than 10 percent. - Accuracy of administrative data received (e.g., House Price index price observations) is routinely assessed. ### Statistical techniques, imputation, and quality adjustment - Missing prices treatment: - Temporarily missing: marked for first month when expected to return; class mean imputation by region and COICOP group applied. - If remaining sample size too small, imputation made at higher-level COICOP classification. - Groceries seasonal goods: last price carried forward until seasonal good re-enters sample—procedure noted as against international good practice and under reconsideration by SF. - Permanently unavailable: “best-seller” replaces missing price for nongrocery items. - For durables and semi-durables, collectors select best seller from same price-quality class; if not possible, replacement judged noncomparable and class mean imputations performed. - For nondurables, small changes in package size quality-adjusted by compiling unit price; thresholds for accepted package size boundaries set centrally. - Special methods (monthly sample replenishment and/or hedonic methods) used for mobile phones, PCs and computer equipment, house prices, new and secondhand cars, and rents. - Imputation characteristics: - Imputations are short-run (modified) between the price reference period and overlap period before short-term linking of the new price. - When products judged comparable, quality adjustment assumes no quality difference between products. - For noncomparable replacements, imputation assumes disappeared product price moved at same pace as other products in same subgroup. - Recommendation: more use should be made of explicit quality adjustments because the validity of the assumption can be questioned. - Tariffs: - Quality-mix-adjustment problem handled using stratified unit values to decompose mean prices into homogeneous units. - New goods and rebasing: - Radically new goods and services are introduced irregularly on rebasing—argument for increasing rebasing frequency. - Index formulae and aggregation: - Geometric means appropriately used in aggregation of elementary price indices. - Aggregation of elementary indices to higher levels uses a Young formula—there is no price-updating of weights. - Weights are rebased every five years; when new weights introduced the new index is linked to the old using an internationally accepted technique. - Elementary aggregate indices first weighted by major regional commodity weights to give commodity indices for whole country; commodity indices then weighted by commodity weights for whole country through COICOP four-, three-, and 2-digit levels. - Regional indices can be calculated though not published due to little demand. ### Housing, owner-occupied housing valuation, and house price index - Rents for CPI rental dwellings: - Measured by an index of rents paid, produced as part of SF housing statistics. - Index calculated on a monthly sample of some 1,900 households derived from the Labor Force Survey. - To reduce sampling variance, data are pooled to three-month datasets before index compilation (procedure equivalent to using three-month moving averages). - Stratification variables: area, number of rooms, type of financing. - Price-determining variables for hedonic regressions include postal code, age, type of building, and the time the data relate to. - Geometric mean rents calculated according to classification categories and adjusted for mix change using estimated regressions. - Aggregation over categories uses the Laspeyres formula. - Owner-occupied housing valuation: - Valued at user cost. - Rental market differs from owner-occupied housing; some dwelling types have hardly any rental market. - Rental market contains rent-subsidized/controlled dwellings and is an inappropriate proxy for owner-occupied housing. - User-cost valuations include rents and cost items affecting market rent (maintenance, interest, depreciation). - Assumption: income from (cost of) own-capital follows change in price of dwellings, i.e., real income from own-capital is zero (may or may not continue). - Depreciation estimated relative to changes in house price index. - Quarterly house price index: - Compiled from tax authority transaction prices and estate agents’ data. - Index compiled using a Laspeyres-type formula for stratified categories. - Unweighted geometric means used for aggregation within strata; hedonic adjustments account for mix changes by location, type, number of rooms, construction year, floor area, micro-location. - Published one month after compilation from over 70,000 house share transactions. - Ninety-five percent standard errors for the House Price Index for the whole country are 7.0± percent. *Source: _cr05389 - 62.5 percent. Data collection was by way of a combination of diaries (two weeks),* ### 3.4 Assessment and validation of intermediate data and statistical outputs ### 3.4 Assessment and validation of intermediate data and statistical outputs ### 3.4 Key validation practices and findings - Some comparisons are made with specific sectors but it is considered difficult to use the indices to validate each other. - Examples of external verification: - Use of world oil prices when examining the price of gasoline for private transport. - Use of car prices from trade organizations. - Use of estimates from external studies on the likely effect of a tax on alcohol when considering the validity of the calculated contribution to the index of the change in tax. - Disaggregated components of the CPI are compared with estimates from other major price indices where applicable (PPI, export price indices, import price indices). - There is limited scope for validation checks using external studies or cross-index comparisons. ### 3.4.2 Investigation of statistical discrepancies in intermediate data - Working-down validation: unusual changes are traced down the aggregation hierarchy to identify their source, which is then examined for errors. - No similar working-down analysis is undertaken at the regional levels, nor is this deemed appropriate. ### 3.4.3 Assessment of statistical discrepancies and regional concerns - Aggregation method: elementary items are aggregated by region and then across regionally-weighted elementary aggregates to provide national level indices. - Confidence concerns: - Notes on sampling errors relating to HBS estimates express diminishing confidence in highly disaggregated weights for each product group at the 6-digit level, and by region at that level. - Response rates vary substantially across regions in the HBS; adjustments for nonresponse to regions may be misleading and vary by region. - Given large sampling errors in regional, detailed estimates of expenditure and possible biases in nonresponse adjustments across regions, reconsideration of current regional aggregation practice is advised unless aggregation is undertaken at a higher level. ### 3.5 Revision studies (linked to validation) - When weights are changed, data for the last two years are re-computed with the new weights to provide a comparator series and to inform on substitution bias (see also 4.3.3). ### 4 Serviceability ### 4.1 Periodicity and timeliness - The CPI is compiled monthly in line with the SDDS. - The CPI is released 14 days after the end of the month of the last release. This is within the SDDS timeliness requirement of one month. ### 4.2 Consistency - Aggregation consistency: - The CPI is consistent in aggregation across regions and items using a fixed weight arithmetic mean of price relatives. - Moving to a chained index would yield an index that is not consistent in aggregation, though its advantages outweigh this lack of aggregation consistency. - Time-series consistency: - Consistent time series data are available for an adequate period of time (at least five years). - Comparisons over this period are not consistent in terms of the product varieties represented. - A time series for the CPI is published from 1914 using the consistent reference period of 1914=100. - For a change in weights the index is backdated with the new weights for a similar basket for a run of two years for comparison. - Reconciliation with other frameworks: - Statistics are broadly consistent or reconcilable with other statistical frameworks. - Need to explain differences between the headline CPI and HICP whenever both series are published. - PPI, CPI, export, import, domestic sales indices, and the Household Final Consumption Expenditure (HFCE) deflator serve analytical purposes and provide indications of the validity of component indices. ### 4.3 Revision policy and practice - The CPI is final when released; there are no preliminary CPI data. - Backdating practice: - When an index is rebased, past indices over the last two years are calculated using the new weights to provide comparison; the “old” index remains the official index over this back period. - Example: The 1995=100 index for January 2000 to December 2001 was calculated using 1995 weights and 2000 weights and compared. Results: 1.6 percent for 1995 weights compared with 1.8 percent for 2000 weights—though there were substantial changes for individual months and product groups (e.g., July; clothing; housing heat and light; food and non-alcoholic beverages; transport). - Communication and notice: - Information on forthcoming rebasing is given on the website one year or more in advance; three months before revision, more detailed information is provided. - Key employer and employee organizations and other users are informed (as required under ILO Convention 160). The ILO receives a report every three-four years on how major users were informed of major changes. - Revisions and related indices: - There are no CPI revisions; the House Price Index (HPI), used in the CPI for user-cost estimates of shelter, is revisable while the CPI is not revised. This inconsistency is recognized and considered pragmatic. - The effect of HPI revision on the CPI is currently minor, though studies should be undertaken and this effect acknowledged. ### 5 Accessibility ### 5.1 Data accessibility - Presentation and releases: - Hardcopy “bulletins” are clearly presented with well laid-out tables and charts. - Hardcopy release and a web release contain similar information. - A note on the website (not in hardcopy) states that more detailed data are available for free on request. - Press releases are made via the Web. - SF has course material on the CPI for teaching purposes available on the Web. - The methodological handbook is now only available on the Web and only changed on rebasing. - The IMF’s DSBB is updated regularly. - The website equivalent of published results at the level of the bulletin is only available in Finnish and not in English. - Dissemination media and format: - The website is the main method for publishing CPI data. - Internet site visits per week between 2000 and 2004 increased from about 12,000, to over 30,000, while the number of publications fell from 141 to 122, and the circulation from about 86,000 to about 48,000. - Production of statistics on the English language and Swedish websites is not as developed as the Finnish site, but updating of these sites is in hand. - Web data can be downloaded as Excel files. - Hard copy bulletins include indices for the 12 COICOP divisions over the last two years and the current year on a monthly basis, and the annual cost-of-living index back to 1951. Twelve-month changes are given for the CPI and the HICP by country. - Releases include explanations of the contributions that different sectors make to overall price change. - Release schedule and equal access: - A clear detailed release schedule is available in all three languages on the website with times and dates well in advance. Releases have been issued punctually. - There is no advance briefing of the press. Statistics are made available to all interested users simultaneously. - The release calendar, published annually in December, is updated continuously on the Internet. A weekly news calendar is published each Friday with information for the next week; major users receive an e-mail when the weekly news calendar is published. The DSBB has a link to the advance release calendar. - Non-routine data: - SF will release data at a more disaggregated level for a fee, where the request is reliable and commensurate with confidentiality requirements. ### 5.2 Metadata accessibility - Documentation: - The 2002 version of the CPI Handbook for Users details the CPI methodology (for the 2000=100 base index), replaced the earlier 1998 version (for 1995=100 index), and was, unlike the previous version, only published on the website and in Finnish. - Web versions of the 2000=100 CPI Handbook for Users in Swedish and English are currently being proposed but, as of the report, an English language and Swedish language version are unavailable, though planned. Resource constraints are the reason. - SDDS metadata, SDDS summary methodologies, and related descriptions are reviewed and updated regularly on the DSBB. - Levels of detail: - The 1995=100 CPI Handbook for Users was well-written and useful for all levels of users. The 2000=100 version is apparently an extended version and thus likely to be most useful. - Eye-catching, user-friendly articles are written for newspapers and brochures for schools. ### 5.3 Assistance to users - Contact points: - Contact details (phone, fax, e-mail) of specialists are clearly given on hard copy and website releases. - Responses to inquiries are within two working days. - Contact with the media is supported by a Media and Communications Unit. - Catalogs: - Catalogs of publications, documents, and other services are available and listed on the website. CPI hardcopy bulletins provide a short advertisement for recent related publications and the url to the website. ### Table 2 summary points (Data Quality Assessment Framework — Price Statistics (CPI)) - Compiling Agency: Statistics Finland. - Key assessment notes related to Accuracy and Reliability (3.1–3.6): - More frequent HBSs and shorter compilation periods are required. - Adjustments should be made to exclude expenditure by nonresidents from the weights. - December prices should be collected mid-month. - More frequent updating of weights/chaining advised. - The carry-forward method for seasonal items should be abandoned. - Appraise use of regional weights where standard errors of regional HBS-based estimates are too large. - Metadata note: - The CPI Handbook for Users for the current index, 2000=100, is not available in English or Swedish. ### Recommendations (extracted) - To avoid damage to current standards, fully resource new initiatives. Staff resources for price indices should be reviewed and expanded to meet new needs (0.2.1). - Exclude estimates of expenditure by nonresidents from the weights (2.2.1 and 3.1.1). - To enable a more frequent updating of weights, or annual chaining, develop more regular household budget surveys (HBSs) with shorter compilation periods. The lag between the HBS and the utilization of the weights is too long (3.1.1). - Develop the judgmental selection of outlets for sampling the prices of nongrocery items to a more formal, probabilistic, or quasi-probabilistic sample selection design (3.1.1). - Review regularly the periodicity of price collection (monthly, quarterly, etc.) to ensure that the periodicity is commensurate with price stability, given the collection of a substantial proportion of prices at a lower than monthly frequency (3.1.2). - Adopt mid-month core price collection for December (3.1.2). - Abandon the use of the carry-forward method for seasonal prices. Make more use of explicit quality adjustments (3.3.1). - Appraise the use of regional weights for aggregation for product groups for which the standard errors of the regional HBS-based estimates are considered too large (3.4.3). - Publish up-to-date metadata for users in English and Swedish (5.2.1). *Content unit: _cr05389 - 3.4 Assessment and validation of intermediate data and statistical outputs* ### 0.1 Legal and institutional environment ### 0.1 Legal and institutional environment ### 0.1.1 The responsibility for collecting, processing, and disseminating the statistics is clearly specified - Statistics Finland (SF) is the general authority for collecting, processing, and disseminating statistics under the Statistics Act (280/2004). - SF accounts for 77 percent of the National Statistical Service (NSS) production, measured by expenditure. - The NSS comprises nearly 20 agencies; outside the NSS, some 60 other agencies publish central government statistics. - The Statistics Act does not attribute responsibility for preparing individual statistics to specific agencies; SF has assumed responsibility for compiling the producer price index (PPI) and no other agency challenges this. - The Statistics Finland Act (49/1992) states SF shall provide for the general development of official statistics in collaboration with other central government authorities; legislation is mostly silent on precise SF responsibilities and instruments. - SF’s stated objective: develop Finland’s system of official statistics into a uniform, good quality, relevant, easy-to-use, and cost-effective system, internationally recognized for high-quality statistics, information services, and expert services. - SF actions to further objectives: - maintain a network of coordination with each administrative sector; - prepare a five-year development plan and an annual follow-up report for official statistics; - participate in development projects; - provide reports and opinions on request; - offer training in statistics; - define common classifications; - promote a uniform electronic statistical service; - coordinate and rationalize data collections. - SF directs a cooperation group for EU matters appointed by the Ministry of Finance (MOF) and publishes a quarterly information bulletin entitled What is New in Official Statistics. - EU membership implies European law applies to a large portion of the Finnish statistical program; Council Regulation (EC) No 322/97 requires national authorities to produce Community statistics at the national level on the basis of uniform or harmonized standards. - SF is required to provide monthly data to Eurostat under the short-term indicators regulation. ### 0.1.2 Data sharing and coordination among data-producing agencies are adequate - No indications of major problems with data sharing and coordination among data-producing agencies. - The National Board of Customs is a main provider for the PPI of export unit values. - SF organizes meetings with the Board at least once every two years; specialists maintain regular monthly contact. - Identified improvement: transmission of detailed data information from the National Board of Customs would help resolve classification problems affecting estimates of revenue to the domestic market. ### 0.1.3 Individual reporters’ data are to be kept confidential and used for statistical purposes only - Several legal acts guarantee confidentiality of individual data: - Statistics Act: statistics compiled so reporters are not directly or indirectly identifiable (unless public by virtue of the Statistics Act); statistical authorities may release data only if explicitly permitted by legal provisions referring to the NSS or upon express consent of the subject; only SF has the right to receive individual data deemed necessary for production of statistics; statistical authority may release confidential data for scientific research or statistical surveys if individuals and other statistical units cannot be identified. Footnote: One minor exception does not apply to data described in this report. - Council Regulation (EC) No 322/97 includes similar confidentiality assurances at EU level. - Finnish Personal Data Act (523/1999) details protection of private individuals and institutes a Data Protection Ombudsman. - Finnish Constitution and the Act on the Openness of Government Activities (621/1999) grant right of access to public domain documents, but grounds for secrecy include sensitive information on persons, private financial interests, and personal privacy. - Statistics Act obligations: inform respondents in writing about intended use of data, production procedures, whether provision is obligatory or voluntary, respondents’ rights, data protection arrangements, and data storage duration; SF practice conforms to these provisions. - SF procedures and guidelines: - published guidelines on application of the Statistics Act and the Personal Data Act; - guidelines on protection of tabulated enterprise and personal data; - data protection section in Quality Guidelines for Official Statistics (2002); - micro data released for research are treated to remove variables that would identify individuals; similar procedures for sensitive information about other units. - Access and physical/security controls: - access to individual data restricted to staff who require it for statistical duties; - staff review all data prepared for dissemination for possible indirect disclosure; - SF computers are password-protected; - access to SF building and entrance to floors is secured by electronic passes; staff offices are not locked and “tailgating” in elevators is noted as a possibility. - Confidentiality concerns: particular problems arise with the PPI regarding confidentiality for highly concentrated industries. - Archiving and destruction: confidentiality during filing and destruction follows the National Archives Act and Statistics Finland’s Archiving Guidelines. ### 0.1.4 Statistical reporting is ensured through legal mandate and/or measures to encourage response - Statistics Act requires primary sources for statistics to be data accumulated in general government administration and data produced by normal activities of employers, self-employed persons, corporations, and foundations; SF has the right to receive these data. - All public and private entities in Finland are obliged to provide SF with data as necessary for production of statistics. - SF has legal mandate to collect information directly and, if appropriate, make provision of data obligatory; SF’s right to collect does not extend to data kept confidential for international relationships, public safety, national defense, or state safety. - Only 5 percent of the information collected by SF is obtained directly (data for 2003). - Sanctions: Statistics Act stipulates willful failure to provide obliged data or willfully providing false data shall be sentenced to a fine; SF may refrain from bringing charges for minor violations and in practice charges are never filed — effectiveness of penalties is uncertain. - Response issues: - relatively low response rates of establishments observed, both at initiation and in continued responses; - PPI staff devote effort to explain importance of enterprise participation but provide little feedback, in part due to lack of interest. - Statistics Act and practice require data collection to be economical and cause respondents the least inconvenience and cost. - SF practices to secure cooperation: - letters with questionnaires advise respondents that SF provides assistance in completing and submitting forms; - questionnaires include e-mail and postal contact points; - SF limits response burden, tests questionnaires before fielding, and uses other measures; - Quality Guidelines for Official Statistics do not explicitly mention securing goodwill with respondents. ### 0.2 Resources #### 0.2.1 Staff, facilities, computing resources, and financing are commensurate with statistical programs - Seven PPI staff also cover the expanding service sector. - Advertisements for new senior staff attract a very large number of applicants. - Staff constraints prevent work on quality adjustment and collection of more prices; tight staffing makes research on data difficult. - PPI relies on staff taking methodological initiatives and developing monitoring systems; staffing insufficient to adopt new methods without other work suffering. - Strengths: - high-level PPI staff active on methodological issues; attend and give papers at international meetings; - PPI staff act as experts on TA missions and have hosted a Fund seminar on the Producer Price Index Manual. - Skills maintained through internal training, internal consultation and feedback, taskforces and workshops (including Eurostat). - Core of experienced staff maintained, but small numbers mean losing critical staff can be detrimental. - SF overall has no problem attracting new persons; annual Staff Satisfaction Survey and number of applicants corroborate good image as an employer. - Management concerned about attracting staff with macroeconomics background; a trainee program with the University of Helsinki is in place. - Computer resources are good; senior PPI staff prefer more tailor-made systems. - Emergency backups, both internal and external, are in place. - Office building, furniture, and other on-site facilities are excellent. #### 0.2.2 Measures to ensure efficient use of resources are implemented - Formal annual staff performance review discussions use a standard list of past performance elements; management staff have target performance agreements. - Informal feedback provided regularly, e.g., weekly subunit meetings. - Prices unit promotes and adopts new technology and has a program for tailor-made facilities for enterprises to respond electronically. - Full cost of compiling statistics, including staff costs and computers used, is measured and monitored annually. ### 0.3 Relevance #### 0.3.1 The relevance and practical utility of existing statistics in meeting users’ needs are monitored - SF consults data users to ensure PPI meets user needs. - Key user consultation groups and interactions: - Suomen Kansantalouden Tilinpito (SKT) group: about 15 members, convenes three times a year, chaired by director of MOF’s Economic Department; includes BOF and four economic research institutes. - A group including MOF (Budget, Tax, and Economic Departments), National Board of Customs, Ministry of Agriculture and Forestry, Board of Taxes, and SF consults on EU own resources issues. - Feedback also received during user courses, seminars, and when major revisions are planned. - SF monitors new and emerging data requirements via meetings organized by Eurostat, IMF, OECD, UNECE, the Nordic countries, and the International Association for Income and Wealth. ### 0.4 Other quality management #### 0.4.1 Processes are in place to focus on quality - Management influenced by EFQM excellence model, ISO 9000:2000, United Nations’ Fundamental Principles of Official Statistics and Handbook of Statistical Organization, and Eurostat’s work on quality. - Quality Guidelines for Official Statistics (2002) list quality criteria: - (1) relevance of statistical information; - (2) correctness and accuracy of data; - (3) timeliness and promptness; - (4) accessibility and transparency/clarity of the data; - (5) comparability of statistics; - (6) coherence and consistency/uniformity of data; and - (7) documentation. - Cost is regarded as a limitation on quality and must supplement the list. - Staff training on dimensions of quality; every division includes at least one person focused on total quality management (18 such persons in total). - PPI compilation staff are members of the Prices and Wages Unit and address quality issues common to PPI and CPI. - Organizational commitment to quality evident from Guidelines and SF’s Annual Report. - Pilot phase: 45 persons made self-assessments in line with the EFQM model; repeat covering more staff foreseen for 2006. #### 0.4.2 Processes are in place to monitor the quality of the statistical program - Processes to monitor quality are in place, partly required by performance agreements between MOF and SF and between SF’s Director-General (DG) and senior staff. - SF uses balanced scorecards (BSs) to produce and implement strategic plans and to communicate the plans. #### 0.4.3 Processes are in place to deal with quality considerations in planning the statistical program - Quality considerations influence planning of the statistical program. - Summary reports on missing values each month and BSs influence the inputs of the Prices Unit into the strategic plan. ### 1. Assurances of integrity #### 1.1 Professionalism ##### 1.1.1 Statistics are produced on an impartial basis - SF reports to the MOF; the Statistics Act, the Statistics Finland Act, and the Council of State Decree on Statistics Finland (1063, 2002) do not formally state SF or NSS authorities are professionally independent, but several legal provisions support SF’s professional independence and SF acts accordingly. - Provisions supporting SF’s professional independence include: - section 3 of the Statistics Finland Act: organization and operational units decided upon in “working orders,” confirmed by SF’s DG; - section 1 of the Council of State Decree on SF: DG has the right to manage activities and finances of SF; - section 5 of the Decree: DG appointed by the Council of State; DG has right to appoint directors of operating units and other staff unless working order assigns decision to another official; Minister of Finance appoints a deputy for the DG at the DG’s submission; - article 10 of Council Regulation (EC) No 322/97: Community statistics governed by impartiality defined as production free from pressure from political or other interest groups regarding selection of techniques, definitions and methodologies. - Formal relationship between SF and MOF focuses on multi-annual agreements where SF undertakes to fulfill targets within budgetary limitations. - Performance agreement for 2005 covered: - (1) main strategic goals for the next four years; - (2) targets for operational effectiveness in 2005; - (3) performance targets for 2005: outputs and quality management, operational efficiency, management and development of intellectual resources; - (4) resources; and - (5) validity and follow-up of the agreement. - Approximately 75 agreed performance indicators include statistics production (databases and data collection), public image, number of international trips, number of publications, press releases, performance of chargeable services, operational efficiency, staff years, staff training, and staff job satisfaction. - Recruitment and promotion based on relevant aptitude and expertise; comparative exams not part of selection; selection via interviews, written work, and written assessments. - Formal class-based and on-the-job training provided; annual personnel training expenditure per member of staff amounted to €971 in 2004. This figure excludes interviewer training. ##### 1.1.2 Choices of sources and statistical techniques as well as decisions about dissemination are informed solely by statistical considerations - Statistics Act requires choices of data sources, statistical techniques, and dissemination methods be informed by statistical considerations (sections 3, 10, 11, and 12), with responsibilities regarding cost-efficiency and response burden (section 4). - Section 11 requires statistics be as reliable as possible, give a truthful picture, use uniform concepts, definitions, and classifications where possible, and be timely; similar provisions exist in EU legislation. - SF published a 132-page Quality Guidelines for Official Statistics outlining statistical production procedures including survey processes, estimation, presentation, documentation, and publication; all chapters use clear statistical criteria. ##### 1.1.3 The appropriate statistical entity is entitled to comment on erroneous interpretation and misuse of statistics - No specific regulation entitles SF to comment on erroneous interpretation and misuse, but SF has an active practice and Information Service guidelines on how to respond. - Esmerk, a private agency, monitors 32 national and regional newspapers and summarizes references to SF; other media also monitored. - If erroneous interpretation or misuse detected, contact is established to explain the issue; Head of the PPI handles normal cases; in serious cases the DG may write a letter to the editor (occurs a few times a year). *Source: _cr05389 - 0.1 Legal and institutional environment* ### 1.2 Transparency ### 1.2 Transparency ### 1.2.1 Terms and conditions for statistics collection, processing, and dissemination - Information on the legislation governing SF is available on SF’s website and in its library. - The relevant legislation and guidelines are difficult to find on SF’s website, at least in the English version. - “Legislation” is not a heading in the site index. - The key Statistics Act (280/2004) is not available on the site; instead there is a hyperlink to the repealed Statistics Act (62/1994). - The hyperlink to the 1994 Act takes the user to Council Regulation (EC) 322/97, rather than the 1994 Act. - The current and previous versions of SF’s Codes and Guidelines on Professional Ethics are available in the English language version of SF’s website. - Finland subscribes to the IMF’s Special Data Dissemination Standard (SDDS). - The IMF’s Dissemination Standards Bulletin Board (DSBB) includes, under the heading of “Integrity,” the terms and conditions under which SF’s statistics are produced, including those relating to the confidentiality of individually identifiable information. - Statistical publications always include SF’s general contact information, and many include references where more specific information can be found. - Data used from other sources are referenced as such. ### 1.2.2 Internal governmental access prior to release - SF policy requires that statistics must be accessible to all users at the same time (noted in the Guidelines on Professional Ethics, page 12). - The Statistics Act prescribes that all statistics shall be published as soon as possible upon completion and that sensitive statistics must not be released prior to the official date of publication, while ensuring all users receive the information at the same time. - Government has no internal access to price statistics prior to their release to the public. ### 1.2.3 Identification of statistical products - Official statistical publications carry SF’s logo and the mark STV, explained on the back as indicating an official statistic of Finland. - The logo includes the name Statistics Finland in Finnish, Swedish, and English. - Publications include a statement that quoting is encouraged, provided SF is acknowledged as the source. - SF’s Quality Guidelines note criteria for a publication to be an SVT (pages 108–10): - Production by an agency or institution on the list of SVT producers. - Assumption of responsibility by the publishing agency for its accuracy and content. - SVT publications cannot be published under the name of the author, allowing research working papers to be distinguished. ### 1.2.4 Advance notice of major methodological changes - Advance notice is given to the public when major changes are introduced in methodology, sources, and statistical techniques. - For very large changes, briefings for the press may be prepared. ### 1.3 Ethical standards (summary) - SF publishes Guidelines on Professional Ethics, Handbook 30b (Helsinki, 2002). - The Handbook outlines SF’s obligations to society (chapter 2), respondents (chapter 3), customers (chapter 4), and funders and employers (chapter 5). - It addresses conflicts between obligations and between ethics and legislation. - All employees are given a copy of the handbook on recruitment; all employees were circulated a copy when it was published in 2002. - The handbook is available on SF’s website. ### 2. Methodological soundness (overview) - Assessment follows guidelines in the System of National Accounts 1993 (1993 SNA) or the European System of Accounts 1995 (ESA 95), and the PPI Manual. - Concepts and definitions from the 1993 SNA are used as guidelines for coverage and valuation; methods and procedures from the PPI Manual are used as guidelines for compiling the PPI. - The 1993 SNA and ESA 95 are viewed as interchangeable when referenced in this document. ### 2.1 Concepts and definitions - 1993 SNA is broadly followed for determination of output weights for the PPI. - Price measurement generally follows principles given in the PPI Manual with domestically produced goods valued at basic prices. - Sampling of headings, establishments, and varieties follows well-considered sample designs. - Prices recorded are, by and large, transaction prices for matched varieties. - Output weights are derived from: - Industrial statistics of Finland. - Foreign trade statistics of the National Board of Customs. - Supplemented by national accounts data. - Weights are provided at the 6-digit (Finnish version of the) Classification of Products by Activity (CPA) classification. - For some products classification is at a more detailed 8-digit PRODCOM-list level. - Classification of economic activities is at the 4-digit level of a Finnish version (TOL 2002) of NACE Rev.1. - Aggregation is through 4-, 3-, and 2- NACE Rev.1 levels. - Publication is from, and including, the 3-digit level. - A particular problem: some highly concentrated industries and confidentiality requirements regarding aggregation. - Reporting unit is the enterprise rather than the preferred establishment. - Output from the enterprise must be apportioned to CPA classifications or aggregated at a higher level. - Business register contains listings by establishments, though not to the level of detail of enterprises. - Recommendation: review sampling of enterprises and establishments on an industry-by-industry basis to consider trade-offs and benefits of sampling at the establishment level. ### 2.2 Scope - PPI coverage includes NACE Rev.1 C to E (mining and quarrying; manufacturing; electricity, gas, and water). - For the export market, coverage extends to A and B (agriculture, hunting, forestry; and fishing) as required for the harmonized series provided to Eurostat. - SF produces a family of price indices including: - PPI covering output to domestic and export markets. - Cost of agriculture production index. - Export price index. - Import price index. - Basic price index for domestic supply (covers construction, NACE Rev.1 F). - Wholesale price index. - Net price index (excludes indirect taxes and includes subsidies). - Harmonised Index of Consumer Prices (HICP). - CPI. - Measure of core inflation. - Industry/sectoral indices for agriculture; bus and motor-coach; rail traffic; earth movers and forest machinery; and public expenditure. - Quarterly PPIs for services started in 2000 and extend to 13 (experimental) indices including hotels; washing and dry-cleaning; investigation and security activities; labor recruitment and provision of personnel; market research and public opinion polling; taxi transportation; and freight transport by road. - Plans to expand coverage from 13 to about 25 industries. - Exclusions: - Changes in output inventories. - Own-account production of market goods and services for own final consumption and fixed capital formation. - Illegal market goods sold to willing buyers. - It is understood that weights will in the future be derived from national accounts estimates, which may lead to further adjustments. - The 2000=100 PPI Handbook for Users contains a section 7 explaining how SF’s PPI differs from the harmonized EU PPI; there is no reference to differences from SNA 1993/ESA 95 and the PPI Manual concepts. ### 2.3 Classification/sectorization - Weights are provided at the 6-digit level of the CPA classification. - For some industries classification is at the 8-digit PRODCOM level (limited). - Classification of economic activities is at the 4-digit level of TOL 2002 (Finnish version of NACE Rev.1). ### 2.4 Basis for recording - 2.4.1 Market prices - Both weights and transaction prices are for market output valued at basic prices. - Exports are measured f.o.b. - Foreign currency export prices are converted into euros, where necessary, at the average rate of the reference month. - In principle, conversion should be at the rate/day specified in any contractual arrangement, though this may not always be possible. - Prices are for specific product codes/models of the output of responding enterprises; product specifications often include bar-code or model number. - Prices to different destinations (domestic and export) may differ and are collected separately for domestic and nondomestic prices. - Transactions between establishments within the same enterprise are not covered. - Transfer prices when exporting to “daughter” companies are used if no other price information is available. - The PPI Manual advises considering market price movements for the same product to represent market conditions; where a Finnish enterprise is the only enterprise in the area, aim to examine price movements of similar products for better estimates. - 2.4.2 Accrual basis - The principle followed is one of accrual, but there are often large time lags between invoicing and payment (notably ship manufacturing and manufacture of large paper machines and gas bells). - More generally, accrual is not always followed. - The time of payment requested is mid-month, the 15th day. - The price requested is for delivery, invoicing, or payment on that date. - It is considered more important to get the date right than the pricing principle when they conflict. - Where possible, accrual price recording should be followed up. - 2.4.3 Grossing/netting procedures - Stage of processing indices are not calculated, so netting is not undertaken in this respect. - No grossing procedure is used for the missing estimates of changes in inventories. *Source: _cr05389 - 1.2 Transparency* ### 3.1 Source data ### 3.1 Source data ### 3.1.1 Source data are obtained from comprehensive data collection programs that take into account country-specific conditions - Three main selections to the PPI sampling: - (1) “products” (CPA headings), to include in the basket; - (2) enterprises for each selected product; - (3) representative commodities to be priced from each enterprise for each product. - Selection of headings: - Initial judgmental cut-off to include large (more than €150 million) headings and representative commodities. - Further selection by stratified sampling with selection by probability proportionate to size (PPS) with stratification by value at a 3-digit NACE Rev.1 level. - Detail and classification: - Data collected at CPA 6- (and PRODCOM-list 8-digit) levels to derive PPIs at the 3-digit industry level and 4-digit product level for covered sectors. - Selection of enterprises: - First stage: systematic sampling with PPS to derive samples of enterprises for each heading. - If one enterprise dominated the sample, it alone was chosen; in other cases two enterprises chosen and supplemented by judgment, including respondents’ input. - Sample and supplier counts: - The PPI index (domestic) is based on 512 headings with 637 data suppliers. - For exports: 288 headings and 298 data suppliers. - Average suppliers per heading: domestic 1.24, export 1.03. - Division of observations between domestic, export, and import surveys based on scientific sampling procedures using an optimization procedure by Bankier (1988). - Sources for export headings and enterprise samples: - Sample of headings and enterprises for exports taken from the National Board of Customs. - Industrial statistics used for industrial commodities samples. - Production weights for domestic market estimated by subtracting exports from production for each heading. - In 8.2 percent of cases, value of supply to home market was negative; such cases were excluded on grounds of misclassification error. - Customs data use Combined Nomenclature (CN); SF uses PRODCOM list; subtraction done at CPA level because Customs provides CN-CPA link but not CN-PRODCOM link, possibly introducing distortions. - Business register: - Nearly 250,000 operating enterprises and about 275,000 operating establishments. - Updated quarterly from taxation registrations; includes smallest firms via “advance year registration practice,” legal units registered as employers, and those liable to pay value-added tax. - Ninety-eight percent of businesses on the register are classified by the PRODCOM list. - Business register includes names and addresses, industry, location, size, and (for enterprises) importer or exporter. - Sampling from the business register is of enterprises; sampling of establishments is preferred where partitioning enterprise output to product/activity levels is problematic. - Weights update frequency and concerns: - Weights are updated only every five years, constraining representativity. - SF pursues sample augmentation and replacement below the 4-digit NACE Rev.1 level to introduce new products/varieties/enterprises. - Concern: weights may take over a year to compile and introduce, then remain for five years — potential nonrepresentativity at the 4-digit level. - Recommendation: more frequent weight updates or chaining at the 4-digit level. ### Prices (selection, collection, nonresponse, and treatment) - Selection of product variants: - Variants for an enterprise within a heading selected jointly with responding enterprises on grounds of representativeness, significance, availability monthly, and likelihood to be available for some time. - No random selection methods employed. - Price quote counts: - Sales to domestic market: 1,186 price quotes — 1.86 per supplier on average. - Export market: 448 price quotes — 1.56 per supplier on average. - Pricing details recorded and periodicity: - Bar code or model number recorded on initiation; prices returned periodically for same variant. - Periodicity depends on frequency of price changes: monthly, bi-monthly, quarterly, annually. - Some product specifications are collected; data are not collected on terms of sale. - External sources and homogeneous products: - For homogeneous products (grain, roundwood), unit values from National Board of Customs used. - Other external sources include Finnish Forest Research Institute and London Metal Exchange. - Sampling error estimation: - Some estimates made using a bootstrapped variance estimator; findings preliminary and under evaluation. - Nonresponse: - Monthly nonresponse rates for prices of sampled enterprises remaining in the sample: 15–30 percent. - Weighted by value weights, response rates much lower at about 5 to 8 percent. - Fall-out and replacement: 25.4 percent of enterprises selected at initiation were replaced at rebasing (percentage in terms of weights likely smaller). - Planned new sampling strategy: select enterprise groups from same size category using PPS, then select reporting unit by simple random sampling; on nonresponse recruit next enterprise in group. - Handling high model turnover: - Where model turnover is high, weights of varieties and their prices collected monthly. - Procedures adopted: - Chained, matched index with paired comparisons each month to account for dynamic expenditure shares and models joining/leaving. - Chained Fisher index compiled, using symmetric base and current period weights. - Fisher index recommended in the PPI Manual (includes substitution effects; supported by economic theory and axiomatic grounds). - Confidentiality concerns: - Preserving confidentiality in price collection for highly concentrated industries raises issues for reconciling volume and deflated value series. ### 3.1.2 Scope, classifications, valuation, and time of recording - Scope differences from 1993 SNA: - Data on changes in inventories are not used in weight derivation; such data available for only 51 headings out of possible 2,901 headings. - Own-account production and consumption of goods and services are excluded. - No adjustments made for illegal goods (relevant for cross-border trade). ### 3.1.3 Timeliness - Periodicity and timeliness: - Periodicity/timeliness adequate for disseminating producer price statistics. - Some price data collected less frequently than monthly to reduce respondent burden and maintain efficiency. - About 30 percent of the data are monthly, and 50 percent are every other month or quarterly. - Some unit value data are not timely; since PPI is not revised the late data are not used. - No revision studies on the effect of late unit value data. ### 3.2 Assessment of source data - Outlier and atypical response procedures: - Procedures do not include automatic deletion — accords with good practice. - Price changes over 10 percent are investigated (cut-off varies for industries with low price change dispersion). - Extreme values are confirmed with respondents. - Price changes at each CPA level examined for outliers on 12-month and month-on-month bases. - Contribution analysis used at a higher level, working down to detect abnormal price change. - Electronic response: - Main form of response (and plans by 2006 for every respondent) is electronic, reducing data transfer errors and allowing more detailed data provision. - Validation against external price series: - World commodity prices (pulp, oil, diesel) used to validate data. - Unit values from customs monitored and validated by examining export unit values to other countries where necessary. - Coverage: - Proportion of total output not covered in regular PPI compilation is low; SF’s price indices increasingly extend to services industries. - Monitoring and reporting: - Ability exists to compile reports on response rates, number of missing values, imputations, etc. - Nonresponse list produced and monitored monthly down to item level. - Imputations are monitored monthly; each imputation evaluated to determine acceptance in imputation module. - The number of imputations is not recorded on the standard monthly report that can be reproduced automatically. ### 3.3 Statistical techniques - Terms of sale and valuation: - Price surveys exclude details of terms of sale other than valuation. - No systematic data collection on terms such as discounts for bulk purchases, warranties, delivery times. - SF’s view: price fluctuations due to bulk purchases treated as pure price change (price discrimination), which is not in accord with the PPI Manual because like-with-like comparisons may not hold. - Product characteristics and quality change: - Detailed characteristics are not routinely collected at initiation; variety often recognized by bar-code or model number, which is insufficient for objective quality adjustment. - If noncomparable replacement is made, no objective criteria exist to judge respondent’s quality adjustment claims; such matters can be discussed with respondents by phone but should be part of normal data collection. - Missing price treatments: - SF recommends carry-forward method for temporary missing prices: - Old price carried forward for three-to-six consecutive months; if still missing, an imputed price (assumed class-based) used until a price obtained; or dropped (implicit overall imputation). - Criticism: carry-forward induces undue price stability and falls short of international standards. - Example: monitoring electricity prices using a 12-month moving average for Nordic Power Exchange does not accord with good practice; actual transaction prices should be used. - For permanent missing prices due to change in data provider: - Class-mean imputations used; these are long-run, assuming missing item price changes equal class average between reference and current period. - PPI Manual recommends short-term (modified) Laspeyres imputation using preceding and current period data. - For permanent missing products: - Four alternative stances when replacement found: - Consider price change pure if replacement has same technical features; - Consider change fully due to quality change; - Respondent makes direct judgment as to valuation of quality change; - Use an overlap, implicitly assuming price difference of overlapping varieties equals quality difference (fourth stance primarily used). - Primary use of indirect adjustments driven by absence of data on specifications. - Aggregation and indices: - Aggregation of prices below 4-digit NACE Rev.1: geometric mean (with exceptions using chained Fisher noted above) for products within an enterprise and across enterprises up to 4-digit level. - Weights updated every five years. - A Laspeyres-type Young index used for aggregation at 4-digit NACE Rev.1 level. - Linked indices published go back to 1949=100 (unpublished older ones to 1913). *Source: 3.1 Source data (Producer Price Index).* ### 3.4 Assessment and validation of intermediate data and statistical outputs ### 3.4 Assessment and validation of intermediate data and statistical outputs ### Validation practices and cross-checks - The PPI is compared with comparable estimates from other sources: national accounts statistics, import price indices, export price indices, the basic price index for domestic supply, the wholesale price index, and the CPI. - Validation is also conducted against commodity price indices as appropriate. - The availability of a family of index numbers allows identification of transmission of inflation through stages and sources; this is used by the Bank of Finland in their analysis. ### Investigation of discrepancies and unusual movements - Unusual movements in the index arising from large movements in particular sectors or from particular reporters are investigated and explained in descriptive documentation, including web and hardcopy releases, with due attention to disclosure requirements. - Hard copy bulletins and web releases include a discussion of the source of overall price changes in terms of sectoral changes. ### Revision studies and practices - The PPI is final; there are no revisions. The PPI in Finland is used as the basis for contracts and has to be final in this respect. - No studies are conducted on the effect of “late” data; with increased use of electronic reporting, late-data effects are not believed to be significant. - Periodic weight revisions are analyzed to determine the effects of substitution bias in the PPI; this analysis extends backwards for a period of two years only, because data changes (replacement products/enterprises) may affect longer comparisons. - Some research studies, such as hedonic analysis for mobile phones, are conducted. - Revisions (weight revisions and their effects) are measured, assessed, and explained in the statistical publication and in the database accessible by users. - Revisions to sample structures take place regularly below the 4-digit level; revisions are every five years and are preannounced. The revision cycle is predetermined and reasonably stable from year to year. ### Serviceability and consistency (selected operational facts) - The PPI is compiled monthly in line with the SDDS requirements. - The monthly index is disseminated within 17 days after the end of reference month. - Consistent time series data are available for five years, although published linked indices go back to 1949=100 (and older unpublished ones to 1913). - When methodological changes are introduced, historical series are reconstructed as far back as reasonably possible, which is two years to avoid undue changes in the sample structure. - Unusual changes in economic trends are explained in analytical text included in publications and web releases. ### Accessibility and dissemination (selected operational facts) - Data are published clearly in hard copy bulletins providing information by sector and over time on a family of PPIs, including import price indices, export price indices, the basic price index for domestic supply, and the wholesale price index; charts and tables accompany the data. - Subject to confidentiality requirements, statistics are disseminated in formats to suit users’ needs (for a fee). The website is the main method for publishing PPI data. - The number of visitors to SF’s Internet pages per week between 2000 and 2004 increased from about 12,000, to over 30,000, while the number of publications fell from 141,000 to 122,000 and the circulation from about 86,000 to about 48,000. - Data on the websites can be downloaded as Excel files. - A clear detailed release schedule is available in all three languages on the website with times and dates well in advance of release; releases have been issued punctually according to the preannounced schedule. The release calendar is published annually in December and updated continuously on the Internet. A weekly news calendar is published each Friday. - There is neither advance briefing of the press nor advance access by government ministers; statistics are made available to all interested users simultaneously. - For a fee, statistics not routinely disseminated are made available upon request, subject to confidentiality requirements. - The 2000=100 PPI Handbook for Users (published on the website in Finnish, Swedish, and English) includes information on concepts, definitions, classifications, data sources, compilation methods, statistical techniques, and other methodological aspects and procedures. The Handbook is not published in hard copy. - SDDS/GDDS metadata, SDDS summary methodologies, and related descriptions are reviewed and updated regularly on the DSBB. - Contact details for each subject field are given on hard copy and website releases; responses to inquiries are within two working days. Prompt and knowledgeable service and support are available to users. The Media and Communications Unit supports the media and other users. ### Key assessment observations (from Table 3 summary) - The Assessment Element 3.4 (Assessment and validation of intermediate data and statistical outputs) is marked O (Practice Observed) in the Data Quality Assessment Framework (July 2003): Summary of Results for Price Statistics (Producer Price Index) for Statistics Finland. ### Recommendations (as provided) - Give further consideration to the issues surrounding the collection and use of appropriate data for highly concentrated industries (0.1.3). - To avoid damage to current standards, fully resource new initiatives. Staff resources for price indices should be reviewed and expanded to meet new needs (0.2.1). - Estimate transactions to nonresident subsidiary companies, where possible, at market as opposed to transfer price (2.4.1). - Consider the sampling of establishments, as opposed to enterprises, where it is likely to be efficient and to lead to an improved classification of output, without double counting (3.1.1). The balance of price collection away from customs data and towards price surveys is appropriate. - Hold discussions with the National Board of Customs to reconcile issues that give rise to the problematic estimates of negative revenues from the domestic market (3.1.1). - Introduce measures to ameliorate the relatively high number of late respondents and of enterprises which cease reporting over the five years. Sole reliance should not be placed on the, albeit useful, sampling strategies to improve the replacement of nonresponding enterprises (3.1.1). - Collect more detailed data on price-determining product specifications and terms of sale, along with prices. - Overhaul methods for treating seasonal products, temporarily missing values, and quality adjustments (3.3.1). - Abandon the use of the carry forward method for temporarily missing items (3.3.1). - Use short-term imputations as opposed to long-term ones (3.3.1). - Collect data on sales as well as prices at the lowest enterprise level for large enterprises producing a variety of products with expected different price changes (3.1.1 and 3.3.1). - Develop a program for the more frequent updating of weights or use of annual chaining (3.3.2). - Undertake further research on methods for dealing with industries with high turnovers in model varieties (3.3.2). - Review regularly the periodicity of price collection (monthly, quarterly, etc.) to ensure that the periodicity is commensurate with price stability, given the collection of a substantial proportion of prices is at a lower than monthly frequency (3.1.2). *Source: _cr05389 - 3.4 Assessment and validation of intermediate data and statistical outputs* ### 0.1 Legal and institutional environment ### 0.1 Legal and institutional environment ### Responsibility and legal framework - Under the Statistics Act (280/2004), Statistics Finland (SF) is the general authority for collecting, processing, and disseminating the statistics. - SF accounts for 77 percent of the NSS production, measured by expenditure. - Finland’s National Statistical Service (NSS) comprises nearly 20 agencies; outside the NSS, some 60 other agencies publish central government statistics. - The Statistics Act does not attribute responsibility for preparing individual statistics to specific agencies; SF has assumed responsibility for compiling the general government statistics (GFS) and this status quo is not challenged by any other agency. - The Statistics Finland Act (49/1992) states SF shall provide for the general development of official statistics in collaboration with other central government authorities. - SF’s stated objective: develop Finland’s system of official statistics into a uniform, good quality, relevant, easy-to-use, and cost-effective system, internationally recognized for high-quality statistics, information services, and expert services. - SF activities to further its objective include: - maintaining a network of coordination for each administrative sector; - preparing a five-year development plan and an annual follow-up report for official statistics; - participating in development projects; - providing reports and opinions on request; - offering training in statistics; - defining common classifications; - promoting a uniform electronic statistical service; - coordinating and rationalizing data collections; - directing a cooperation group for EU matters appointed by the Ministry of Finance (MOF); - publishing the quarterly information bulletin What is New in Official Statistics. - European law applies to a large portion of the Finnish statistical program; Council Regulation (EC) No 322/97 is particularly important and stipulates national authorities shall be responsible for producing European Community statistics at the national level and that Community statistics shall be produced on the basis of uniform standards and, in specific duly justified cases, of harmonized standards. - As part of the European Statistical System (ESS), SF produces and disseminates a significant share of its data according to legal requirements within this system; national accounts statistics, including government finance statistics, are subject to EU law and verification by the European Commission. - SF collects central government operations data from the State Treasury, local government operations data from the local government units, and Social Security Fund (SSF) operations data directly from the SSF. - The State Treasury compiles and publishes monthly data on central government operations on a cash basis and on modified cash basis and on the outstanding debt of the central government; these data are prepared after compilation by 117 accounting offices of the budgetary central government and 11 extrabudgetary central government agencies. - The State Treasury operates under the Act No. 305, February 15, 1991 (Act on State Treasury Activities 15.2.1991/305), and the Act No. 621, May 21, 1999 (Act on the Openness of Government Activities 21.5.1999/621), which regulate public administration and activities of government agencies. ### Data sharing, coordination, and use - Data sharing and coordination among Finnish agencies for government finance statistics are described as very good; SF compilers have frequent informal contact with colleagues in data-providing agencies. - Close liaison between SF and the MOF is driven by the use of general government statistics in fiscal policy formulation, monitoring, forecasting, and preparation for the Excessive Deficit Procedure (EDP). - SF supplies the MOF with national accounts data including the general government account and accounts for all levels of government. - Specialists regularly contact counterparties in other agencies and data providers. ### Confidentiality and respondent information - Several legal acts guarantee that individual reporters’ data should be kept confidential: - The Statistics Act requires statistics be compiled so that reporters are not directly or indirectly identifiable (unless data are public by virtue of the Act). - Data obtained by statistical authorities may be released to other parties only if permitted by legal provisions explicitly referring to the NSS, or upon express consent of the subject of the data. - Only SF has the right to receive individual data if necessary for production of statistics. - A statistical authority may release confidential data for scientific research or statistical surveys if individuals and other statistical units cannot be identified. One minor exception does not apply to data described in this report. - Violation of the secrecy obligation is punishable under the Penal Code. - At the EU level, confidentiality assurances are included in Council Regulation (EC) No 322/97. - The Statistics Act obliges statistics-producing authorities to inform respondents in writing about: - intended use of the data; - procedures to be used in producing the statistics; - principles governing whether provision of data is obligatory or voluntary; - rights of respondents; - arrangements for protecting the data; - duration data will be stored. - SF practice conforms with these provisions and has procedures and guidelines to prevent disclosure of individual reporters’ data, including guidelines on the Statistics Act, the Personal Data Act, and protection of tabulated enterprise and personal data. - Micro data released to external agencies for scientific research are treated to remove variables that would allow direct or indirect identification. - Access to individual data in SF offices is restricted to staff who require the information; staff review all data prepared for dissemination for possible indirect disclosure. - SF computers are password-protected; access to the building and between floors is secured by electronic passes, though “tailgating” is noted as a possibility in elevators. - Confidentiality of data during filing and destruction follows the National Archives Act and Statistics Finland’s Archiving Guidelines. ### Statistical reporting mandates and response encouragement - The Statistics Act requires primary exploited sources for statistical purposes be data accumulated in administrating general government and data produced from normal activities of employers, self-employed persons, corporations, and foundations; SF has the right to receive these data. - All public and private entities in Finland are obliged to provide SF with data on finances, products, staff, etc., as necessary for statistics production. - SF has the legal mandate to collect information directly and, if deemed appropriate, to make provision of data obligatory; however, this right does not extend to data confidential for reasons of international relationships, public safety, national defense, or the safety of the state. - The Statistics Act stipulates that a person who willfully fails to provide obliged data or willfully provides false data shall be sentenced to a fine, though SF may refrain from bringing charges for minor violations; in practice charges are never filed. - The Statistics Act and practice require statistics be collected economically and cause respondents the least inconvenience and cost. - SF uses letters accompanying questionnaires, contact details on questionnaires, assistance for respondents, testing of questionnaires, and other measures to secure cooperation; Quality Guidelines for Official Statistics do not explicitly mention securing goodwill with respondents. - For the State Treasury, a legal mandate ensures reporting of data on operations and debt of the central government; the State Treasury publishes monthly and annual Funds Statement for Central Government Finances. ### 0.2 Resources ### Staffing and qualifications - In May 2005, eight employees in the SF Financial Department are responsible for compiling government finance statistics nonfinancial and financial accounts, both on quarterly and annual bases. - Tight staffing and high turnover have made it difficult to prepare adequate metadata on quarterly releases and to undertake research. - At current staffing levels, undertaking new tasks (e.g., broadening COFOG from the one digit to the 2-digit level, research on GFS data, producing analytical publications and methodological papers, meeting future EU requirements) would have a detrimental effect on existing statistics. - Staff qualifications are described as good; they have on average six years working experience in this area of statistics. - Staff skills are maintained and developed by internal training, a well-functioning internal consultation and feedback process, and occasionally external courses such as those provided by Eurostat. - A core of experienced staff is maintained, but staff turnover in the unit is considerable; exit discussions suggest salary considerations play an important role in decisions to leave SF. - SF as a whole has no problem attracting new persons; management is concerned about attracting staff with macroeconomics backgrounds and has instituted a trainee program with the University of Helsinki supported by SF. - In the State Treasury, five staff members take care of evaluating and disseminating monthly statistics on central government operations and debt as a small part of their job description. - Internal training covers individual statistics and general skills such as foreign languages, data confidentiality, leadership, and dealing with the media. - Limited possibilities exist to follow post-graduate university courses or to take sabbatical leave. ### Facilities, IT, and financing - Computer resources are good; available software is effective for collecting and processing GFS data, maintaining databases, receiving source data automatically, and disseminating compiled statistics. - The data system stores bridge and derivation tables that define links between accounting source data and the GFS in national accounts context; these tables are stored in a form facilitating access and updating. - Emergency backups, both internal and external, are in place. - Office building, furniture, and on-site facilities are described as excellent. - Funding for compiling the national accounts, including the government account, is secure due to good planning and cooperation between the MOF and SF. - Drying up of EU support for national accounts and government account projects makes undertaking some important development work very difficult. ### Efficiency and performance management - A formal review of staff performance is conducted annually in discussions with individual staff members; for management staff, target performance agreements have been drawn up. - Informal feedback is regularly provided, for instance during weekly subunit meetings. - Seeking efficiencies is a main concern of SF leadership; outside expert assistance has been sought to evaluate statistical methodologies and compilation systems. - The full cost of compiling individual statistics is measured annually. ### 0.3 Relevance ### Monitoring user needs and consultation - SF consults data users to ensure GFS in the national accounts context continue to meet user needs. - The most important contact: the Suomen Kansantalouden Tilinpito (SKT) group, consisting of about 15 members, that convenes three times a year and is chaired by the director of the MOF’s Economic Department; the group further comprises the BOF and four economic research institutes. - Another group includes representatives of the MOF (Budget, Tax, and Economic Departments), the National Board of Customs, the Ministry of Agriculture and Forestry, the Board of Taxes, and SF to consult on EU own-resources issues. - Further feedback is received during user courses and seminars when major revisions are planned; SF encourages users to provide comments which are monitored closely. - Information on new and emerging data requirements is received through meetings organized at Eurostat and the OECD, the Nordic countries, and the International Association for Income and Wealth. ### 0.4 Other quality management ### Quality focus and criteria - SF management is highly sensitive to all dimensions of quality and has been influenced by EFQM excellence model, ISO 9000:2000 standard series, the United Nations’ Fundamental Principles of Official Statistics and Handbook of Statistical Organization, and Eurostat’s work on quality. - Quality Guidelines for Official Statistics (2002) list quality criteria: 1. relevance of statistical information; 2. correctness and accuracy of data; 3. timeliness and promptness; 4. accessibility and transparency/clarity of the data; 5. comparability of statistics; 6. coherence and consistency/uniformity of data; 7. documentation. - The list is supplemented by the element “costs,” regarded as a limitation on quality rather than a component. - Staff have received training on quality dimensions; every unit includes at least one person focused on total quality management issues (there are 18 such persons in total). - SF’s commitment to quality is apparent from the Guidelines and SF’s Annual Report. ### Quality monitoring and planning - Processes to monitor the quality of the statistical program are in place, partly required by performance agreements between the MOF and SF, and between SF’s Director General and senior staff. - SF uses balanced scorecards (BSs) to produce and implement strategic plans and to communicate the plans. - Regular checks monitor coverage, classification, missing or erroneous recordings, internal consistency, and consistency between data from alternative or linked sources (SF, the State Treasury, the SSF, and local governments). - Final data on all levels of government are submitted to SF by responsible agencies after being audited. - A recognized trade-off among quality considerations (such as accuracy and timeliness) exists for GFS; an example is the dissemination of preliminary general government accounts in February every year (t+1). *Source: _cr05389 - 0.1 Legal and institutional environment* ### 1. Assurances of integrity ### 1. Assurances of integrity ### 1.1 Professionalism - SF is an independent agency under the MOF. There is no formal statement in the Statistics Act, the Statistics Finland Act, or the Council of State Decree on Statistics Finland (1063, 2002) that SF or the authorities belonging to the NSS are professionally independent, but several legal provisions support SF’s professional independence, and SF acts accordingly. - The formal relationship between SF and MOF focuses on multi-annual agreements under which SF undertakes to fulfill targets within budgetary limitations. The performance agreement for the year 2005 covered: - (1) main strategic goals for the next four years; - (2) targets for operational effectiveness in 2005; - (3) performance targets for 2005 - outputs and quality management - operational efficiency - management and development of intellectual resources; - (4) resources; and - (5) validity and follow-up of the agreement. - Approximately 75 agreed performance indicators include: statistics production (databases and data collection), public image, number of international trips, number of publications, press releases, performance of chargeable services, operational efficiency, staff years, staff training, and staff job satisfaction. - Recruitment and promotion are based on relevant aptitude and expertise. Comparative exams are not part of the selection procedure. Potential staff are selected on the basis of interviews, papers they have written, and other evidence of aptitude; choices are made on the basis of written assessments. - Formal class-based and on-the-job training in Government Finance Statistics methodology and compilation methods is provided for staff. Annual personnel training expenditure per member of staff amounted to €971 in 2004.49 1.1.2 Choices of sources and statistical techniques; dissemination - Under the Statistics Act, the choice of data sources, statistical techniques, and methods of dissemination must be informed by statistical considerations (sections 3, 10, 11, and 12). Section 4 addresses cost-efficiency and response burden. Section 11 requires statistics to be as reliable as possible, give a truthful picture, and make use, where possible, of uniform concepts, definitions, and classifications, as well as be timely. Similar provisions exist in EU legislation. - SF has published a 132-page Quality Guidelines for Official Statistics that sets out statistical production procedures, including chapters on survey processes, estimation, presentation, documentation, and publication, and SF’s commitment to quality. All chapters use clearly laid out statistical criteria. 1.1.3 Commenting on erroneous interpretation and misuse - No specific regulation entitles SF to comment on erroneous interpretation and misuse of statistics, but SF has an active policy; its Information Service has issued guidelines on how to respond. - A private agency (Esmerk) monitors 32 national and regional newspapers and summarizes references to SF; other media are also watched. - If erroneous interpretation or misuse is detected, contact is established to explain the issue. In serious cases, the DG may write a letter to the editor; this happens a few times a year.50 ### 1.2 Transparency 1.2.1 Terms and conditions available to the public - Information on the legislation governing SF is available on its website and in its library. - The relevant legislation and guidelines are difficult to find on SF’s website in the English version. Legislation is not a heading in the site index. The key Statistics Act (280/2004) is not available on the site; instead there is a hyperlink to the repealed Statistics Act (62/1994) which links to Council Regulation (EC) 322/97 rather than the 1994 Act. - The current and previous versions of SF’s Codes and Guidelines on Professional Ethics are on the English language version of SF’s website.52 - Finland subscribes to the IMF’s Special Data Dissemination Standard (SDDS). The IMF’s Dissemination Standards Bulletin Board (DSBB) includes, under “Integrity,” the terms and conditions under which SF’s statistics are produced, including confidentiality of individually identifiable information. - Statistical publications always include SF’s general contact information, and many include references where more specific information can be found. 1.2.2 Internal governmental access prior to release - Once a year, the MOF has advance access to the preliminary annual national accounts and government finance data for preparation of its Economic Survey and for the March Excessive Deficit Procedure notification. The Ministry receives these data about two weeks before their release; these concern work-in-progress estimates. The advance access is mentioned in Finland’s SDDS metadata on the DSBB. - There is no internal government access to the monthly central government operations and debt data compiled by the State Treasury before these data are released by the State Treasury to the public. 1.2.3 Identification of statistical products - Official statistical publications carry SF’s logo (name in Finnish, Swedish, and English) and the mark SVT, explained on the back as indicating an official statistic of Finland. Publications include a statement that quoting is encouraged if SF is acknowledged as the source. - SF’s Quality Guidelines note criteria for a publication to be an SVT, including production by an agency or institution on the list of SVT producers and assumption of responsibility by the publishing agency for accuracy and content (p. 108). SVT publications cannot be published under the name of the author, allowing research working papers to be distinguished. 1.2.4 Advance notice of major changes - Advance notice is given to the public when major changes are introduced in methodology, sources, and statistical techniques. If changes are very large, briefings for the press may be prepared. ### 1.3 Ethical standards 1.3.1 Guidelines for staff behavior - SF publishes a code of professional ethics as Guidelines on Professional Ethics, Handbook 30b (Helsinki, 2002).53 The Handbook outlines SF’s obligations to society (chapter 2), respondents (chapter 3), customers (chapter 4), and funders and employers (chapter 5), discusses conflicts between such obligations and between ethics and legislation, and addresses how strict abidance by the law may be unethical. - All employees are given a copy of this handbook on recruitment; all employees were circulated a copy when it was published in 2002. It is also available on SF’s website. ### 2. Methodological soundness 2.1 Concepts and definitions - The overall structure of Finnish government finance statistics follows international standards and guidelines. SF compiles annual and quarterly general government, central government, and local government statistics on an accrual basis in the context of the national accounts based on ESA 95 and the ESA 95 Manual on Government Deficit and Debt. - The Finnish GFS structure closely follows international standards as recommended in ESA 95 and the ESA 95 Manual on Government Deficit and Debt. These definitions and concepts are broadly similar to those of the IMF’s Government Finance Statistics Manual, 2001 (GFSM 2001), but GFSM 2001 is not used as an analytical framework in national sources. Revenue and expenditure data by economic type and by function can be related to GFSM 2001; the same applies to financial balance sheet figures classified by financial instrument. - SF has provided the IMF with fiscal accounts in a GFSM 2001 format for publication in the IMF’s Government Finance Statistics Yearbook since 1998. - SF stated there is an opportunity to revise dissemination policy to better serve users by disseminating general government finance statistics also in a framework in line with GFSM 2001. - SF collects and publishes local government annual data in a format resembling business accounting. Data are mainly collected by electronic questionnaire from local governments’ accounting systems which conform to the General Accounting Act 1995 (No. 365 March 17) and resemble business accounting. Accounts are divided into operational, capital, and balance sheet accounts; expenditure and revenue are classified by type and by function; balance sheet by financial instruments. Statutory annual accounts provide much of the information required for GFS in national accounts and financial sector balance sheets. - The State Treasury produces and publishes monthly and annual cash data and modified cash data on central government revenue, expenditure, and financing. These data are broadly in line with internationally accepted standards such as IPSAS 2 and GFSM 1986. - Plans to follow the analytical framework of GFSM 2001 had not yet been developed at the time of the mission.56 SF is considering compilation of integrated nonfinancial assets for government, but because of tight resources no statistics on stocks of nonfinancial assets are compiled and disseminated by SF for the general government sector and its subsectors.57 2.2 Scope - Annual and quarterly general government statistics, covering budgetary and extrabudgetary central government,58 social security funds,59 and local governments,60 are compiled and disseminated by SF in the context of national accounts. The scope is consistent with ESA 95 principles, definitions, and concepts. - Public corporations and quasi-corporations considered market producers are excluded from the government sector. Compulsory license fees collected by the TV and Radio Fund for the National Broadcasting Company are treated as payments for services in the corporate sector, outside government. State-owned departmental corporations classified outside general government include Senate Properties,61 the National Board of Forestry, the National Road Corporation, and the Civil Aviation Administration. - All material general government activities are included in general government statistics. No quasi-fiscal activities are carried out by public corporations. Data of various levels of government are available, except for a few functional expenditure items from local government accounts. - Stocks data on nonfinancial assets for the general government sector and subsectors are not compiled and disseminated by SF, but most source data on nonfinancial assets are available according to bookkeeping classifications and valuations. - Basic sources of GFS: central government fiscal accounts, individual accounts for municipalities and joint municipal authorities, and accounts of individual social security funds. Preliminary GFS data are replaced by full-coverage data as soon as possible. - Monthly data on central government operations, covering budgetary and extrabudgetary central government, are produced and published by the State Treasury. The scope is broadly in line with internationally accepted standards. - The GFS as presented by SF in national accounts covers all transactions of units within its scope as in Statement of Government Operations (Table 4.1 in GFSM 2001). Adequate information on Other Economic Flows of all financial assets and liabilities (Table 4.3 in GFSM 2001) and on Sources and Uses of Cash (Table 4.2 in GFSM 2001) is not available. - Stock data for general government's financial assets and liabilities, based on international guidelines for financial accounts (ESA 95), are published annually and are available in comparable time series over a long period. - Consolidated financial balance sheets are not published domestically. Quarterly data for general government's financial assets and liabilities are available and provided to Eurostat according to EU requirements, but are not yet published domestically.62 2.3 Classification/sectorization - SF compiles general government statistics in the context of national accounts (1993 SNA and ESA 95); the institutional sector of general government is fully consistent with ESA 95. GFS statistics are provided separately for consolidated general government, central government (budgetary and extrabudgetary central governments),63 social security funds, and local governments. - Revenue and expenditure are classified by SF in accordance with national accounts, which means classification is not in conformity with GFSM 2001 and EC regulation 1500/2000 guidelines. Neither detailed revenue nor expense accounts exist for general government finances in line with the GFSM 2001 framework.65 - Because classification of flows and stocks (financial and nonfinancial) are largely the same for ESA 95 and GFSM 2001, the available breakdown broadly conforms with GFSM 2001 guidelines. - Financial data distinguish between domestic and foreign financing, and between bank and nonbank financing for domestic financing. - General government consolidated expenditure (outlays) are classified according to the 1999 Classification of Functions of Government (COFOG) back to 1990 for all subsectors. Transactions on nonfinancial assets, classified in line with ESA 95, are disseminated domestically in government sectoral accounts and prepared for Eurostat as required. Main financial balances such as saving and net lending/borrowing are disseminated. - SF does not compile accounting data on the consolidated public sector (consolidated general government sector and public corporate sector). Data on public financial and nonfinancial corporations are published by SF with data on private enterprises in its publication on the corporate sector (Sectoral Accounts). - Central government debt data are disseminated by the State Treasury and distinguish between domestic and foreign debt, and between short- and long-term debt. Central government operations data disseminated by the Treasury are classified in line with business accounting (IPSAS 2), where revenue and expenditure are broken down into detailed categories. - The revenue balance (difference between total revenue and total expenditure) is disseminated, as well as categories on financing and change in liquid assets. Detailed stock data on both financial and nonfinancial assets and liabilities are also disseminated by the Treasury. *Source: _cr05389 - 1. Assurances of integrity* ### 2.4 Basis for recording ### _cr05389 - 2.4 Basis for recording ### Market valuation and valuation principles - Flows and stocks are generally valued at market prices; transactions expressed in monetary values are usually at current market prices. - Foreign currency transactions are converted into euros at the mean rate between the buying and selling rates on the day of the transaction; foreign currency stocks are valued at the mean exchange rate in force at the end of the period. - Quoted shares, bonds, and mutual funds shares: mainly valued at market prices; money market instruments: valued at purchase prices; accrued interest is capitalized to the debt instrument. - Unquoted shares and equity: valued at own funds at book value, in compliance with Eurostat requirements.67 - Outstanding government debt (so-called EMU-debt) is recorded at nominal value in accordance with EU recommendations.68 - Finland uses two valuation principles: (1) market value for ESA 95 statistics and (2) nominal value for the EDP statistics. ### Accrual recording - Stocks and flows in the general government account are recorded on an accrual basis in line with ESA 95 and the ESA 95 Manual on Government Deficit and Debt. - Central government taxes and charges: estimated using techniques that time-adjust cash data, taking account of different timing characteristics of cash flows for different tax types.69 - Other central government revenues (interest and sales) are largely available on an accrual basis from accounting records. - Most transactions from extrabudgetary central government, social security funds, and local governments are available on an accrual basis. - Budgetary central government expenditure is mostly on an accrual basis, with transfers recognized on both commitment and payment (cash) bases.70 - Accrual adjustments are made to some interest items and subsidies paid. Consumption of fixed capital is estimated using a perpetual inventory model based on a very long time series of asset holdings (capital stock model). - The State Treasury prepares central government operations data in the form of a Cash Flow Statement.71 It also prepares the State’s Income and Expenses Statement and the State Balance Sheet for the budgetary central government; these statements are prepared on a modified cash basis. - The Finnish government has no plan to fully implement an accrual basis, consistent with GFS standards, to accounting or budgeting. ### Grossing/netting procedures - Government transactions compiled on a gross basis for revenue, expenditure, and financing for all sectors of the general government. - Financing is recorded on a net basis (e.g., loans minus repayments, purchase of shares minus sales). These procedures are consistent with ESA 95 and GFSM 2001 guidelines. - Same gross/net principles apply to stocks of financial assets and liabilities. - Acquisitions and disposals of nonfinancial assets are in most cases presented net in the national accounts. - SF and the State Treasury correct transactions by netting against original transactions when needed (for example, refunds of taxation or overpaid expenses). ### Source data: coverage and timeliness - SF prepares a preliminary annual general government account in February of each following year; revised preliminary data disseminated in July of each following year; final data disseminated 25 months after the end of the reference year. - Source data: accounting data from the State Treasury, enquiries to main accounting offices, accounts of social security funds, and a survey conducted by SF on local governments.72,73 - Central government: administrative records in the State Treasury; accounting system revised in 1998 and SF reconstructed its data system accordingly; coverage of central government data is almost complete. - Social security funds: main sources are annual reports, financial statements, and separate surveys; SII and ISA mainly provide required data; data reported on an accrual and annual basis. Some entities provide monthly and quarterly data (SII, Unemployment Funds supervised by ISA); employment pension institutes provide quarterly data via ISA and Finnish Pension Association; smaller funds provide annual data only, requiring estimates for quarterly GFS. - Local government data: collected via a standardized Financial Statistics Questionnaire; accounts submitted mainly electronically; SF receives certain data directly from other authorities (e.g., local government tax data from National Board of Taxes, health care data from STAKES). Data on compensation of employees monitored against SII wage bill sum. - Financial data sources: budgetary and extrabudgetary financial statements, debt reports, balance sheets, and SF inquiries; social security fund financial statistics partly from SF’s own inquiry to SII and ISA and investment monitoring data collected by TELA.76 ### Sample surveys and quarterly collection - SF collects quarterly data from local governments based on a sample survey of 50 municipalities (about 54 percent of total local governments’ expenses).77 - Quarterly sample covers revenue and expenditure, gross fixed capital formation, financial investments, and financial assets and liabilities; data gathered via Internet with a time lag of two months. - The fourth quarter collection is combined with the Inquiry for the Financial Statement Estimates and covers all local government units.78 SF uses these data for quarterly national accounts and quarterly statistics on general government financial accounts.79 - Source data are transported to and maintained in a Sybase system. ### Coding, bridge tables, and data processing - GFS codes are not embedded in the chart of accounts; bridge tables have been constructed to facilitate compilation of GFS in a national accounts context. - Data sources and questionnaires are regularly reviewed; new data categories are regularly added to the local government questionnaire. - A comprehensive register of individual public sector units is available and maintained by SF. ### Timeliness of source data (selected exact lags) - Central government monthly data: 18–25 day lag for April to November; two-to-four month lag for January to March; up to a four-month lag for December. - Final data for central government units: provided with a three-month lag after the end of the reference year. - Preliminary local government quarterly survey: obtained within two months from the end of the reference period; final local government data: provided with an 11-month lag after the end of the reference year. - Financing and debt source data: available one to ten months after the reference period depending on sector and asset/liability type. - Difficulties noted in getting local government financing data on time. ### Assessment of source data quality and procedures - No material gaps exist in coverage of the general government sector; final source data based on audited accounts of all general government units. - Trade-off between timeliness and accuracy is explicitly managed: preliminary data published when reasonably complete and accurate, replaced by revised/final audited data later. Status and major quality reservations are identified at dissemination. - Preliminary data are assessed against final data; large changes are investigated and adjustments made to surveys if needed. Financing data changes reconciled with changes in financial assets and liabilities. - SF and State Treasury use check and error lists and direct contact with reporting agencies to address accuracy issues; automated procedures used to monitor State Treasury-reported data. ### Statistical techniques and estimation methods - Final annual data for central government operations, social security funds, and local governments are collected from administrative records and do not require estimation. - Perpetual inventory method used to estimate written-down replacement costs of fixed assets (including infrastructure) to calculate consumption of fixed capital; asset values based on accumulated acquisitions and disposals revalued over a very long period, adjusted for price changes and remaining service life assumptions. - Fourth quarter central government data: mostly from State Treasury records but estimation needed for December using e-mail inquiries to materially significant accounting offices and MOF’s estimated 12 months Cash Report. - Quarterly estimates for social security funds: administrative records for largest funds and statistical estimation for smaller funds. - Quarterly local government sample uses PPS-sampling technique (probability proportional to size) for efficient processing; results adjusted for full coverage. - Procedures exist to estimate missing data and minimize processing errors; preliminary data replaced by revised or final data when more accurate information is available; discrepancies between flows and stocks are identified and investigated. *Source: _cr05389 - 2.4 Basis for recording* ### 3.4 Assessment and validation of intermediate data and statistical outputs ### _cr05389 - 3.4 Assessment and validation of intermediate data and statistical outputs ### Assessment and validation of intermediate data and statistical outputs - Internal checks for consistency are made prior to the production of reports or publications of the GFS in a national accounts context. - Comparisons are made between net lending/borrowing (derived from the nonfinancial accounts) and changes in net financial assets/liabilities (derived from the financial accounts) for every subsector, both on an annual and quarterly basis. - GFS balancing items and reported transfers between general government sectors are checked for internal consistency. - The State Treasury surplus/deficit for the period is compared with corresponding balances made by SF; similar comparisons are made for other subsectors. - Consistency with other related data sources is checked, for example, with banking statistics and balance of payments statistics. - Where major deviations occur, attempts are made to explain differences; significant discrepancies may indicate compilation errors unless well accounted for. ### Validation of stocks, flows, and reconciliation procedures - Stocks of nonfinancial assets are not compiled by SF; flows on these assets are therefore not compared for horizontal consistency. - Stocks and flows on financial assets and liabilities are checked horizontally; some asset categories are reconciled, but data on other economic flows are only partly available. - Automatic procedures check transactions like transfers and interest payments between government sectors for consolidation purposes. - When statistical differences are significant, reconciliation items are investigated to bring the statistical difference to an acceptable level; any unexpected values are investigated at all levels of government. - External public debt stocks and related transactions are compared with corresponding creditor information from other countries manually; collaboration with Eurostat and ECB is used to identify differences in concepts and compilation methods. ### Revision studies and practices (section 3.5) - Revision practice of general government statistics follows that adopted for the national accounts. - Differences between initial estimates and revised or final estimates are reviewed to learn from changes. - Revisions mainly result from routine replacement of preliminary data by revised or final audited data. - Quarterly account revisions are tabulated and published from time to time (once or twice a year). - The introduction of ESA 95 had major impact; revisions have been made to the SF government account back to 1975. - The statistics are regularly archived and can be retrieved for revision studies. ### Serviceability — periodicity and timeliness (section 4.1) - Finland meets the periodicity standard of the SDDS: - Central government operations data, on a cash and modified cash basis, are published monthly. - Central government debt data are published quarterly, distinguished between foreign and domestic debt, and broken down by type of debt instrument. - General government operations data are published annually and meet the SDDS requirement; they are published quarterly as well. - Timeliness: - For general government operations, annual preliminary data for each financial year are published in February of the following year (within the SDDS timeliness requirement of two quarters). - General government financing data are available with a 10-month lag after the reference period; Finland uses a flexibility option and will bring financing data timeliness into line with the SDDS by the end of the year 2005. - Central government operations data do not meet the SDDS timeliness requirement of one month after the reference period for every month; Finland avails itself of a second flexibility option. - For December, data are disseminated with up to four months lag; for January to March with timeliness between two to four months; for other months about 18–25 days after the end of the reference month. - Quarterly central government debt data are published within one quarter as required by the SDDS; Finland disseminates monthly debt data within one month after the reference date. - Structural note: - Special laws and regulations contribute to lags in these statistics. - A plan to centralize accounting systems of about 117 accounting offices is expected to speed up timeliness; realization expected 2010 to 2012. ### Consistency (section 4.2) - Finnish GFS data follow ESA 95 standards and are internally consistent for most accounts: - For revenue and expenditure, aggregates are consistent with components and balances are consistent with these aggregates. - The sum of transaction data for subsectors is consistent with data on the general government. - The sum of quarterly statistics equals the annual statistics for subsectors and the general government. - Government financial accounts: differences between opening and closing balance sheets and net transactions/net other economic flows are not fully reconciled because of lags in data on other economic flows. - Stock data on nonfinancial assets are not compiled in the GFS and national accounts context (apart from stocks included in the SF capital stock model). - Statistical discrepancies: - Over a long period, discrepancies have existed between net lending/borrowing from real accounts (revenue-expenditure accounts) and net lending/borrowing from financial accounts. - Discrepancies are mainly due to dissimilarities in statistical sources and timing; these discrepancies have decreased over the years. - Reported transfers received do not always equal reported transfers paid between central and local governments; SF observes and closely monitors differences, attributing main reasons to timing and classification differences. - Consistency with other frameworks: - Because the general government account is derived within the national accounts, it is consistent with national accounts aggregates such as saving, net lending/borrowing, government consumption, gross fixed capital formation, and consumption of fixed capital. - General government financial balance sheets/financing data and government financial assets and liabilities held by other sectors are not fully consistent with annual monetary and banking statistics, owing to differences in coverage and valuation. ### Revision policy and practice (section 4.3) - Revisions follow a regular and transparent schedule aligned with the national accounts: - Initial data are preliminary and subsequently replaced by final data. - Preliminary data are revised in July and December each year (the data of the December revision are published in January). - The revision cycle and policy are described in publications; revisions are adequately documented in statistical publications and the database accessible to users. - All revisions outside the regular cycle are made known to the public. - Preliminary and revised data: - Preliminary data are clearly identified with symbols in publications. - Revised data are disseminated with the same level of detail as preliminary data; revised data are not annotated in publications. - Users are informed whenever data are revised at the time of dissemination. - Public studies of revisions: - No specific routine revision studies are made public; major revisions (e.g., 1999 ESA 95 implementation, with aggregates calculated back to 1975) have public analyses and descriptions. ### Accessibility (section 5) - Presentation and interpretability: - Government accounts in the national accounts context are presented to allow major aggregates/balancing items to be identified and related to detailed underlying data. - Figures are compiled in accordance with ESA 95; annual and quarterly data are somewhat suitable for budget development and monitoring. - GFS in Finland are not presented according to standard GFSM 2001 components, so a clear link between balances (e.g., net operating balance and net lending/borrowing) and revenue/expenditure accounts is missing. - Central government monthly data: - Monthly data disseminated by the State Treasury for central government operations are on both cash and modified bases; these data are available back to 1998. - These monthly aggregated fiscal data are also published by SF and BOF on a monthly basis and resemble classifications of the GFS manuals (GFSM 2001 and GFSM 1986). - Dissemination media and formats: - SF and State Treasury use news releases and make GFS data available in Finnish, Swedish, and English on their websites free of charge; hardcopies: State Treasury free, SF for a fee. - SF makes more detailed statistics and longer time series available through electronic formats (free or for a fee) and releases all statistics first on the Internet. - Annual and quarterly GFS in national accounts context are also published in dedicated hard copy (payable) periodicals; full government account series are available on SF’s FINSERIES (ASTIKA) database, sometimes for a fee. - Release schedules and simultaneous access: - SF and State Treasury release statistics according to an advance release calendar published on the first of January each year and updated in May and September. - During the last part of the calendar year, SF uses the DSBB to disseminate the one-quarter ahead notice of approximate release dates required by the SDDS. - SF regards it as very important that release of statistics is neither before nor after the preannounced date. - The State Treasury releases an advance release calendar for central government debt figures giving precise release dates one quarter ahead; the State Treasury does not publish this calendar on its website. - Statistics of both SF and State Treasury are made available to users simultaneously on a preannounced date and time; the Internet is the main dissemination channel. - Embargoes are imposed if the press is briefed in advance; release calendar is updated weekly on Fridays and made available from SF’s Internet site; major users receive updates by e-mail as part of the Weekly News Calendar. - Non-routine requests: - Statistics not routinely disseminated are made available upon request (e.g., social benefits). - Simple data requests are provided free; more complicated and time-consuming requests are fulfilled for a fee. - SF makes special compilations on request. *Source: _cr05389 - 3.4 Assessment and validation of intermediate data and statistical outputs* ### 5.2 Metadata accessibility ### 5.2 Metadata accessibility ### 5.2.1 Documentation on concepts, scope, classifications, basis of recording, data sources, and statistical techniques - Very comprehensive methodological descriptions have been prepared to facilitate the validation by the European Commission of the gross national income data of the member states. This inventory is available on the Internet. - Available methodological resources: - EU Manual on Quarterly Nonfinancial Accounts for General Government for Finland. - “Klassificeringar för statistik över ekonomi och verksamhet 2004” for the local governments. - Methodology part for the EDP on the SF website. - Methodological descriptions in the annual Financial Accounts publications. - EDP inventories prepared for Eurostat are published on web pages of Eurostat’s Interest Group (Circa) but are not published nationally. - Shortcomings and gaps: - Other documentation on sources and methods is rather sparse. - Hard-copy publications on government accounts in national accounts context briefly explain central concepts, compilation process, and classifications used, but more general publications (e.g., Statistical Yearbook of Finland) do not include short explanations. - Indications are that users require more documentation on sources and methods. - Very tight staffing at SF is a major impediment to allocating time to preparing methodological documentation, particularly for the quarterly GFS in national accounts context. - Practices: - SF organizes courses for users which partially accommodate user needs for documentation. - SF reviews and updates the SDDS metadata published on the IMF’s Data Dissemination Bulletin Board regularly. ### 5.2.2 Levels of detail adapted to intended audience - Findings: - Metadata for the interested but nonspecialist public are hardly available. - Materials used in SF’s national accounts course are in principle available to external users, but this availability is not publicized. - More specialized-use information, such as background papers and working documents, are not available. - The number of staff appears to be the main stumbling block for preparing documentation and research papers. ### 5.3 Assistance to users #### 5.3.1 Contact points for each subject field are publicized - Organizational practices and service standards: - In accordance with MOF’s 1998 decision to develop new kinds of service commitments to customers, SF has organized its support to users well. - Prompt and acknowledgeable service is always available during working hours. - All statistical releases identify contact points for inquiries by mail, telephone, facsimile, and e-mail. - In the absence of normal contact staff, telephones are transferred and indicated e-mail boxes are shared to ensure quick response. - SF has undertaken to respond to all requests for information within 24 hours. - Outreach and learning materials: - Awareness promoted via two magazines published by SF (subscription at a cost to the user). - Virtual School of Statistics for self-study is available free via the Internet. - Online learning material targeting polytechnic education produced with support of the European Social Fund. - SF organizes courses for users at its headquarters. - Public Relations Unit provides media support; about 10 to 15 press conferences are held annually, including one to present the main release of the national accounts, including the government account. - Monitoring: - Assistance provided to users is monitored and reviewed periodically. - User satisfaction surveys are conducted regularly. - Counterpart practices: - The State Treasury does not identify contact persons for inquiries in their statistical releases on its website or in its publications. #### 5.3.2 Catalogs of publications, documents, and services, including charges - SF publishes a Guide to Statistics. - Under “Statmarket,” the SF Internet site lists various publications available to users at a cost; however, no information on paid services can be found there. - Once a year, the Information Service prepares a catalog covering both publications and services. - Both on the website and in the catalog, prices are clearly disclosed, and assistance in placing orders is provided even during nights and weekends. *Source: _cr05389 - 5.2 Metadata accessibility* ### Table 4 excerpt: Data Quality Assessment Framework — summary findings for Government Finance Statistics (Compiling Agency: Statistics Finland) - Key to symbols: NA = Not Applicable; O = Practice Observed; LO = Practice Largely Observed; LNO = Practice Largely Not Observed; NO = Practice Not Observed; SDDS = Complies with SDDS Criteria - Selected assessment elements and comments (as reported): - 0.2 Resources — LO. Comment: Staffing is tight making it difficult to undertake research on the data and compile metadata. - 2.1 Concepts and definitions — LO. Comment: Statistics are not presented in a comprehensive fiscal analytical framework and plans to follow GFSM 2001 have not been developed (but see footnote 52 on page 110). - 2.2 Scope — LO. Comment: The balance sheet excludes nonfinancial assets. - 2.3 Classification/sectorization — LNO. Comment: Revenue and expense accounts in line with GFSM 2001 and the EC regulation 1500/2000 are not produced. - 3.1 Source data — LO. Comment: Source data on financial and nonfinancial accounts are not complete and financial accounts are not timely. - 4.1 Periodicity and timeliness — LNO. Comment: Financial data on the general government sector are disseminated with 10 months lag. Monthly data on the central government sector not available within one month for December through March. - 4.2 Consistency — LO. Comment: Inadequate reconciliation of data on net/lending borrowing and financing. - 5.1 Data accessibility — LNO. Comment: Clear links between net lending/borrowing and revenue and expense accounts are missing. - 5.2 Metadata accessibility — LNO. Comment: No extensive metadata available on the quarterly GFS methodology. Metadata catering for non-specialist users are scarce. ### Recommendations (as listed) - Compile and disseminate annual and quarterly general government statistics in line with the analytical framework set out in the GFSM 2001 (2.1, 2.3, 5.1). - Extend the compilation and dissemination of annual balance sheets for the general government sector and its subsectors to include nonfinancial assets (2.2). - Pursue timely provision of source data on monthly central government operations in order to meet the timeliness requirement of the SDDS and specify in the SDDS metadata a plan to achieve this. - Consider a plan to fully implement accrual accounting, consistent with GFS standards, in budgetary central government (2.4). ### Balance of Payments Statistics — prerequisites and institutional arrangements (selected findings) ### 0.1 Legal and institutional environment - Institutional responsibilities and practices: - Compilation traditionally the responsibility of the Bank of Finland (BOF), carried out by the Balance of Payments Division of the Statistics Unit. - BOF compiles monthly balance of payments statistics and also compiles statistics on external debt, international investment position (IIP), and the reserves and foreign currency liquidity template. - BOF collects source data in collaboration with Statistics Finland (SF) and the National Board of Customs (NBOC). - BOF focuses statistical activities on statistics compiled for the European Central Bank (ECB), collecting and compiling data for the financial account and investment income. - SF is responsible for collecting and compiling data for the current account items (except investment income) and compiles the capital account. - SF compiles balance of payments-related items on a quarterly or annual basis; BOF estimates much of the services and transfers data in monthly/quarterly statistics. - Both BOF and SF use official foreign trade statistics produced by NBOC and adjust them for balance of payments purposes. - Legal and MOU framework: - Section 1 of the Act on the Bank of Finland (No 214/1998) requires BOF to act in accordance with ECB guidelines and instructions for ESCB tasks, including reporting balance of payments statistics to the ECB. - Community Regulation 2533/98 identifies balance of payments statistics as necessary for ESCB tasks. - MOU on Economic and Financial Statistics between the ECB and Eurostat dated March 10, 2003 shares responsibilities between ECB and Eurostat; ECB primarily responsible for financial account and investment income conceptual work; Eurostat primarily responsible for other parts of the current account and the capital account. - BOF formally transmits balance of payments statistics to the IMF. - Section 3 of the Act on the Bank of Finland provides for compilation and publication of statistics as necessary for carrying out BOF tasks. - A service level agreement or MOU with SF assigns compilation responsibility to BOF with certain collection functions by SF; an MOU arrangement began in 2004 (previously informal). - The MOU covers financial accounts, balance of payments accounts, registers, SDDS, and exchange of general economic statistics; it defines responsibilities, data sets exchanged (and timetable), technical specifications, and contacts. - BOF holds twice-yearly meetings with the NBOC on data-related issues and high-level and middle-management meetings with SF. - Data sharing constraints and implications: - Sharing of individual enterprise information between BOF and SF is asymmetric: BOF guidelines permit it to share with SF, but the Statistics Act (280/2004) does not permit SF to share individual enterprise information with BOF for balance of payments compilation because SF is not part of the National Statistical Service. - Potential exists for biases across direct investment, income, and services due to asymmetric sharing and differing reporting instructions. - BOF could contribute expertise in recording certain services (e.g., financial services), but present resource situation limits substantive work in data areas under SF responsibility. - Several EU countries have changed legislation to permit sharing of enterprise information between the central bank and the central statistical office for balance of payments compilation. - BOF has access to annual data on goods transactions by individual enterprises from the NBOC for frame management but does not have access to declarations and report forms of individual enterprises. ### 0.1.3 Confidentiality and use of reporters’ data - Legal and procedural safeguards: - BOF collection forms and covering letters state data are used for balance of payments compilation for Finland and for the Economic and Monetary Union (EMU) and will only be used for compiling statistics. - Community Regulation 2533/98 (Article 18) requires protection of confidential statistical information obtained for ESCB tasks. - BOF staff have signed confidentiality pledges. - Act on Officials of the Bank of Finland (No 1166, 1998) chapter 2, section 6 (12 December 2004/1231) requires reporting of business activities, shareholdings, significant assets, debt, guarantees, liabilities, and secondary occupations for staff with access to confidential information. - Access controls: Statistics Unit workspace restricted to staff; IT system user rights; access to data approved by designated staff; lockable office doors; visitors require escorts; special procedures for destruction of confidential trash. - Reporters are requested to send completed report forms as encrypted XML files to the BOF; efforts encourage electronic reporting in this form. - Special aggregation rules (automated in 2004) prevent residual disclosure when survey data are disseminated, taking into account number of reporters and their contribution to aggregates; aggregation rules conform with ECB guidelines. - Unit records (with names protected) have not been made available for research purposes to date, though permitted by legislation. ### 0.1.4 Legal mandate and measures to ensure reporting - Legal authority: - Section 28 of the Act on the Bank of Finland (214/1998) specifies BOF’s right to obtain information for balance of payments compilation and may oblige any resident entity to supply required information under penalty of fine; BOF decides on imposition of such a fine. - BOF’s authority to collect information is also based on Community Regulation No 2533/98 concerning collection of statistical information by the ECB. - SF applies the Statistics Act 280/2004 to collect source data under its responsibility. - Finnish foreign trade statistics are based on EC legislation and the national Customs Act of Finland (1466/94), including: - Internal trade regulation (EC) No 638/2004 and Commission Regulation (EC) No 1982/2004 (Intrastat). - Extrastat enacted by Commission Regulation (EC) No 1172/95 and implemented by Commission Regulation No 1917/2000, as amended. - Follow-up and respondent support: - BOF (and SF) undertake follow-up efforts to ensure acceptable survey response rates. - Assistance available to reporters—an e-mail address is identified in survey form/instructions and assistance for electronic reporting is provided. - Compilers are mindful of response burden. *Source: _cr05389 - 5.2 Metadata accessibility* ### 0.2 Resources ### 0.2 Resources ### 0.2.1 Staff, facilities, computing resources, and financing are commensurate with statistical programs - The Balance of Payments Division comprises a staff of 17 (another four-five staff at SF, across different directorates, are involved in compiling the current account data [excluding investment income] and the capital account). - Staff resources have been declining owing to the BOF’s cost-efficiency strategy and are now on the margin of risk. - Considerable reliance is placed on SF to fulfill reporting obligations for balance of payments compilation. - Without additional resources, it will be difficult to undertake any important developmental work. - An Advisor within the Statistics Unit undertakes a considerable amount of the work in general planning and methodological issues. - Collection and processing responsibilities: - Monthly asset and liability forms: Head of the Division, two economists, three statistical assistants, and two other staff. - Annual direct investment surveys and mergers and acquisitions surveys: two economists and three statistical assistants. - Aggregation and dissemination of balance of payments statistics: two economists and two statistical assistants. - Economists rotate to work on methodological projects (example: current project on collecting security-by-security information on portfolio investment). - Support: Statistical Systems Division of the Statistics Unit provides IT and methodological support; IT support also available from the IT Unit. - Staff experience and training: - Three staff have attended the IMF course on balance of payments methodology; all have received specialized in-house training. - A core staff with adequate training is maintained; salary levels are competitive with public administration conditions in the country. - Computing system: - In February 2004, after a comprehensive acceptance test, a new computing system—BOP Corner—was deployed, involving the data warehouse approach. - Compilation process steps: (1) extract heterogeneous data from different source systems to a staging area; (2) transform standardized data into statistics using manifold methods; (3) load data into a multidimensional data warehouse and in some cases into an analytical data store. - Data are offered to compilers in a multidimensional and hierarchical format with on-line analytical processing. - Emergency backup and recovery systems exist. ### 0.2.2 Measures to ensure efficient use of resources are implemented - Periodic reviews of staff performance are conducted. - A work plan is developed for the Statistics Unit; performance is evaluated and discussed with staff twice yearly. - Surveys are reviewed each year together with associated response burden. - The BOP Corner compilation system provided staff with tools to better manage the balance of payments compilation process and to make full use of modern technologies. ### 0.3 Relevance - BOF participates in the Ministry of Finance-chaired Suomen Kansantalouden Tilinpito (SKT) Group to review emerging needs for statistics. - Relevance is an important element of the ECB and Eurostat work programs in meeting the needs for Eurosystem statistics; the BOF and SF regularly participate in ECB and Eurostat statistical meetings. - The Balance of Payments Division participates in the OECD Workshop on International Investment Statistics and is involved in the revision of international statistical guidelines for these statistics. - Other participation: BIS-led Irving Fisher Committee on Central-Bank Statistics; annual meetings with other Nordic central banks on monetary and balance of payments statistics. - Staff are encouraged to contribute working papers and studies for the BOF’s publication program. ### 0.4 Other quality management #### 0.4.1 Processes are in place to focus on quality - Quality is emphasized in the Statistics Unit’s mission statement; the Financial Markets and Statistics Department has two missions: stability of financial markets and compilation of statistics. - Statistical production is guided by guidelines adopted by the ECB Council; these guidelines define concepts and definitions and are in line with generally accepted quality standards. - Statistics are to be compiled in a cost-effective manner. - Annual assessment of survey coverage informs management of the Statistics Unit. - Causes of revisions are examined; staff present papers on quality and methodological issues at national and international forums. #### 0.4.2 Processes are in place to monitor the quality of the statistical program - BOF publishes metadata in the ECB’s European Union Balance of Payments/International Investment Position Statistical Methods. - BOF prepares and disseminates a quality report—Product Description and Quality Report—on the Finnish balance of payments and international investment position statistics; the report describes methodologies and evaluates the impact of revisions and the trend in the errors and omissions item. - An Advisor in the Statistics Unit works closely with staff to improve data. - Response rates are closely monitored and revision studies are prepared each month (see 3.5.1). #### 0.4.3 Processes are in place to deal with quality considerations in planning the statistical program - Trade-offs are discussed in the budget process, in consultation with data suppliers, and through BOF involvement in international forums such as the ECB’s Statistics Committee. - Example: work with the Statistics Committee to improve the accuracy of data of “other financial intermediaries,” including custodians and end investors. - With assistance from the Association of Investment Funds, the Statistics Unit is consulting with data suppliers to assess merits and costs of adopting security-by-security reporting in place of current aggregate reporting. ### 1. Assurances of integrity #### 1.1 Professionalism - 1.1.1 Statistics are produced on an impartial basis - The BOF is an independent institution governed by public law; when performing tasks of the ESCB, the BOF is required to act in accordance with ECB guidelines and instructions (Section 1 of the Act on the Bank of Finland). - The BOF aims to act in conformity with best practices in statistics established by SF. - The Act on Officials of the Bank of Finland (No 1166, 1998) sets out general obligations of BOF and officials with respect to performance of duties. - New staff are given guidelines and training/coaching on expected behavior. - Recruitment considers communication and technical skills in addition to competence in economics and statistics; internal training is provided. - 1.1.2 Choices of sources and techniques and dissemination decisions are informed solely by statistical considerations - BOF, in collaboration with SF and NBOC when necessary, decides on data sources and statistical techniques. - National dissemination decisions are informed solely by statistical considerations, including ECB guidelines. - Staff are encouraged to attend international lectures/conferences and to prepare reports for BOF publication outlets; a recent working paper dealt with the new balance of payments compilation system. - 1.1.3 The appropriate statistical entity is entitled to comment on erroneous interpretation and misuse - No formal policy exists, but the Statistics Unit is entitled to and does comment on significant misinterpretations or misuses of its statistics (no recent need). - BOF’s Communications Unit monitors local and international press and circulates press clippings to staff daily. - Balance of Payments Division staff monitor the financial press for information on cross-border transactions. #### 1.2 Transparency - 1.2.1 Terms and conditions for collection, processing, and dissemination are available to the public - Report forms/instructions and accompanying letter to respondents state reported information will be used for balance of payments compilation for Finland and the Economic and Monetary Union and that individual reporters’ data will not be disclosed. - The Act on the Bank of Finland is available on the website at http://www.bof.fi/eng/1_suomen_pankki/1.2_esittely/index.stm. - The Act on Officials of the Bank of Finland (No 1166, 1998) highlights confidentiality of data collected for economic statistics and staff reporting obligations on their own assets and liabilities. - IMF’s Dissemination Standards Bulletin Board (DSBB) indicates BOF staff are subject to insider trading laws. - BOF uses Studia Monetaria lectures to inform the public about its terms and conditions of operation. - BOF disseminates balance of payments statistics as a service to the public. - 1.2.2 Internal governmental access prior to release is publicly identified - No officials outside the BOF have access to the data before their release to the public; this is stated on the DSBB. - 1.2.3 Products of statistical agencies/units are clearly identified as such - BOF publications clearly identify them as BOF products and display the Bank’s logo. - Tables and charts on the Internet site note copyright by BOF; attribution is requested when statistics are used or reproduced. - 1.2.4 Advance notice is given of major changes in methodology, source data, and techniques - Advance notice is given for major changes (examples: introduction of the survey system in the financial account in 1991 and the abolishment of the settlements system in 1998). #### 1.3 Ethical standards - 1.3.1 Guidelines for staff behavior are in place and well known - The Act on Officials of the Bank of Finland (No 1166, 1998) sets out behavioral requirements. - The Statistics Unit convenes meetings to inform staff of obligations, including annual disclosure of business activities; shareholdings in companies and other significant assets; debts, guarantees and other liabilities; and secondary occupations. ### 2. Methodological soundness #### 2.1 Concepts and definitions - 2.1.1 Overall structure follows internationally accepted standards - Balance of payments statistics are compiled in broad conformity with IMF’s Balance of Payments Manual, fifth edition (BPM5), implemented in 1994. - Guidance from the ECB (financial account), Eurostat (current account), and the OECD (direct investment) is taken into consideration. - Deviations from international guidelines are partly related to source data (example: treatment of long-term construction projects). - Current, capital, and financial transactions are separately identified; financial account distinguishes assets and liabilities. - A 10 percent equity ownership criterion defines a direct investment relationship; transactions and positions are recorded on a directional basis. - Financial leases are recorded in the financial account and valued at the market value of the leased goods (value included in imports). - Goods transactions are recorded on an f.o.b. basis. - Debt forgiven by the government is correctly recorded as transactions in the financial and capital accounts. - Trade credit is covered. - The one-year rule is used to define residency. #### 2.2 Scope - 2.2.1 Scope is broadly consistent with internationally accepted standards - In principle, all resident-nonresident transactions are recorded; compiled data cover the economic territory of Finland. - The Åland Islands are part of the Finnish territory. - The collection of resident-nonresident breakdowns is intended to be consistent with the “center of economic interest” concept, though the concept is not referred to in report forms. - Nordic Investment Bank, European Community institutions (e.g., European Investment Bank), and international organizations are regarded as nonresidents and have separate country codes in BOF surveys. - Treatment of international organizations is not stated in SF’s survey of International Trade in Services. - Goods for processing are included in goods transactions but are not identified separately in source data on a timely basis. - Reinvested earnings on direct investment are included in investment income (with an offset in financial account); reinvested earnings exclude capital gains and losses. - A small estimate is made to imports for smuggling. #### 2.3 Classification/sectorization - 2.3.1 Classification systems used are broadly consistent with internationally accepted standards - Institutional sector classification broadly consistent with BPM5: - General government includes central and local government and social security. - Monetary authority comprises the BOF. - Monetary financial institutions (MFIs) include banks, money market funds, and other credit institutions (full list of Finnish MFIs available on the ECB’s website). - Other sectors include private and government enterprises, insurance companies and other financial institutions, nonprofit institutions, and the household sector. - Short- and long-term transactions in the financial account are registered by original maturity (more than 12 months classified as long term). - The 10 percent ownership principle is applied for direct or indirect ownership of equity as the criterion for recording direct investment. - Special Purpose Entities are defined as direct investment enterprises. - Cross-border real estate transactions of individuals are included. - Direct investment transactions are recorded on a directional basis in the balance of payments and IIP. - Intercompany trade credit has been recorded in direct investment from the beginning of 1999 (earlier recorded under other investment). - Construction activities of a long-term nature cannot be allocated to direct investment under the current collection system and are covered under the services account compiled by SF. - Loans include repurchase agreements (repos) and financial leasing arrangements. #### 2.4 Basis for recording - 2.4.1 Market prices are used to value flows and stocks - Transactions are valued at market prices; BOF report forms instruct securities transactions to be valued at purchase or sale price on transaction date. - Balance of payments is compiled in euros. - BOF monthly and annual surveys: respondents instructed to convert non-euro transactions into euros using the ECB’s middle rate quoted on the transaction date. - SF’s survey of International Trade in Services does not provide guidance on conversion of foreign currency transactions to euros. - Border Interview survey: foreign currency reporting converted into euros using the midpoint exchange rate of the month the interview was done. - Goods exports and imports are valued f.o.b. and c.i.f. respectively in merchandise trade statistics; BOF adjusts import valuations to f.o.b. using freight and insurance factors of 4.9 percent and 0.2 percent respectively (factors based on an NBOC study in 2002-03). - In NBOC merchandise trade statistics, non-euro transactions are converted to euros using selling rates of foreign currencies recorded on the second last Wednesday of the calendar month preceding Customs clearance; same exchange rates used for imports and exports. Declarants in intra-Community trade may choose between these exchange rates and rates applied for value-added taxation on internal trade (based on date of movement of goods or invoice date). - Financial flows of the banking sector are derived from stock data and adjusted to remove valuation changes (see 3.1.2). - Transactions in reserve assets are derived from stock data; no adjustments currently made to exclude valuation changes from derived transactions estimates. Data on reserve transactions based on accounting records and that exclude valuation changes are expected to become available towards the end of 2005. - Transactions associated with foreign securities held by the household sector are derived from outstanding positions reported by custodian banks; derived transactions estimates include valuation changes. A project is underway to derive an adjustment procedure to exclude valuation changes from those portfolio flows. - BOF monthly and annual surveys instruct respondents to convert positions denominated in non-euro currencies into euros using the middle rates quoted by the ECB on the last day of the reporting period. - In the IIP: direct investment equity is valued at book values; portfolio securities are at market values, as are securities held as reserve assets; monetary gold is valued at market prices based on the p.m. fixing in the London bullion market. - 2.4.2 Recording is done on an accrual basis - Finnish balance of payments data adopt the accruals basis for time of recording in principle. - Monthly and annual surveys request respondents to report interest on an accruals basis with offsetting entries recorded in the financial account; there is no recording of arrears. - Accrued interest on nonresident holdings of domestically issued government bonds (liabilities) is computed from stock data (security by security) reported by domestic custodians and the application of current yields (creditor approach). Accrual interest is computed using the debtor and creditor approaches. - Intragroup dividends (direct investment) reported on an accruals basis; portfolio investment dividends reported on a cash basis (as paid to investors). - Data on reinvested earnings are collected only on an annual basis and transactions apportioned equally over the months/quarters. - In trade with non-EU countries (Extrastat), data are recorded according to time of Customs clearance. - In the annual survey on International Trade in Services, enterprises are not instructed to report on an accrual basis. - Border Interview Survey allocates expenditures to the period when the interview took place regardless of length of stay; Finnish Travel Survey collects information on trips that ended in the preceding month. Adjustments for these practices are made in the compilation process. - Advance payments and later payments (credit cards) can confuse accuracy of recording. - Transfers from the European Community (credits) are recorded on a cash basis in monthly statistics but later superseded by annual statistics compiled by SF that are on an accruals basis. - 2.4.3 Grossing/netting procedures are broadly consistent with international standards - Current and capital account transactions are mostly recorded on a gross basis. - Financial transactions are recorded on a net basis, separately for asset and liability components; direct investment is recorded on a directional basis. - Respondents cannot report transactions in financial derivatives separately for assets and liabilities; these are recorded on a net basis. - In the current account, international receipts and payments of dividends, interest, royalties, and technical service fees are recorded net of withholding taxes deducted at source; communications and postal services are recorded on a gross basis. - The treatment of withholding taxes is not addressed in report forms; likely a mixture of gross and net reporting occurs. - Value of withholding taxes on income and service payments to nonresidents during 2003 totaled €353 million,95 more than 80 percent of which pertained to dividend distributions. - In the financial account, intermediated trades in securities issued by residents are believed to be net of fees and commissions. - Some net reporting occurs for issuance of international bonds (issuance less underwriting fees/other expenses); in some cases, recording relates to taxation rules in Finland. - During 2004, resident banks and securities brokers traded €63 billion of domestic equities (sales and repurchases) with nonresidents and €25 billion of debt securities (excludes new issuance in foreign and international markets). *Source: _cr05389 - 0.2 Resources (PDF chapter).* ### 3. Accuracy and reliability ### 3. Accuracy and reliability ### Source data - Source data for the balance of payments are obtained from comprehensive data programs based mainly on monthly and annual surveys. - Compilation system at the BOF is based mainly on monthly and annual surveys with emphasis on the end investor or institutional units that affect investment decisions; reporting by general government has been fully integrated into the survey system. - For most financial surveys, data on transactions, stocks, and income are collected at the same time; monthly stock data serve as an important quality control tool for recording financial flows. - Data collected on a monthly basis include goods transactions (from customs and Intrastat documents), investment income data, financial account data, and a monthly IIP with reconciliation of opening and closing positions; financial derivatives net positions are reconciled. - Data on services transactions, current transfers, and the capital account are collected on a quarterly or an annual basis by SF. - BOF compiles monthly and quarterly forecasts and has developed estimation methods where high-frequency data are not available. - BOF financial surveys are cut-off type; SF employs a stratified sample survey for international business services; monthly trade data by NBOC are based on customs declarations (Extrastat) and Intrastat. - Commission Regulation 1669/2001: imports and exports valued below €1,000 are not included in trade statistics. ### Current and capital accounts — data sources and coverage - Foreign trade statistics: - Intrastat: commodity trade between Finland and other EU Member States (deliveries/internal). - Extrastat: trade between Finland and third countries (exports/third countries). - Valuation: exports (third countries)/deliveries (internal) on f.o.b.; imports (third countries)/deliveries (internal) on c.i.f.; BOF adjusts import data to f.o.b.; SF makes additional adjustments to customs data. - Items not included in trade statistics: - Emergency aid to disaster areas; goods involving no business transactions (dowry, removal goods, inherited objects); products of Finnish fishing vessels sold abroad; imports/exports valued below €1,000; smuggling and shuttle trade. - Transport services: - SF collects quarterly gross income data from domestic shipping carriers by vessel and trip; BOF adjusts to remove domestic transactions; preliminary data use panel method where nonresponse occurs. - Additional sources: resident airlines, National Board of Aviation, railways; road transport receipts/expenditure are expert estimates from Finnish truckers association. - Freight expenditures estimated from c.i.f./f.o.b. adjustment to imports adjusted to remove earnings of resident carriers. - Travel account: - Receipts: Border Interview Survey (sample). - Expenditures abroad: Finnish Travel Survey (sample). - Administrative sources used to estimate nonresident expenditures in the Åland Islands and trips of persons under 15 and over 74. - Undercoverage concerns: seasonal and border workers; expenditures of crews not covered. - Border Interview Survey excludes daily local traffic between Finland and Sweden and Finland and Norway. - Services: - Largest component is business services collected on an annual basis. - Insurance services data from Insurance Supervisory Authority survey. - Government expenditures abroad n.i.e. from Central Government Financial Statement annually; capital expenditures related to embassies separately identified. - Government receipts estimate unchanged for a number of years. - Investment income: - Sourced from monthly and annual BOF financial surveys, mostly reported by end investors or debtors. - Exception: interest payments on foreign holdings of government securities estimated from stock and yield data (see 2.4.2 in source). - Banking sector: income on nonperforming loans (interest/principle in arrears for three months) is not recorded for the financial year unless claim is on public sector entity or has public sector commitment as security. - Compensation of employees: - Receipts from short-term employment abroad based on annual Finnish Tax Administration information taxable on income from abroad during ≤ six months in a single calendar year; these earnings are grossed up by a factor of 1.5 to cover earnings that extend from seven to 12 months in a calendar year. - Debit side estimates based on a model using work permits, average length of stay, and other factors (e.g., short-term employment in the agricultural sector). - Current transfers: - Largest components pertain to transactions with EU institutions; BOF records monthly using official sources; SF finalizes annual data with typically small revisions. - Private transfers (including workers’ remittances) based on former bank reporting system (last available June 1998); transfers by nonprofit institutions serving households estimated separately; households treated as a residual; methodology under review. - Debt forgiveness data from official sources recorded in capital account. ### Financial account — data collection and treatment - BOF financial surveys are cut-off type with fewer respondents; where consolidated reporting occurs respondents must identify enterprises covered. - Direct investment data: - Collected from monthly and annual surveys of direct investors/direct investment enterprises. - Annual questionnaires include basic enterprise information, profit and loss and balance sheet data, intracompany assets and liabilities. - Direct investment equity positions collected only annually in book values; share capital transactions collected monthly (and annually). - Expenditures related to natural resource exploration may not be recorded as equity investment in surveys. - Other assets/liabilities (intracompany claims) include transactions, opening/closing positions, reconciliation, and accrued interest. - Monthly surveys supplemented by two specialized surveys on merger and acquisition activity in Finland and abroad. - Portfolio investment assets: - Collected from monthly and annual surveys of end investors (excluding households) who also report other foreign assets except those related to direct investment abroad. - Securities broken down into shares, mutual fund shares, bonds, and money market paper; respondents reconcile opening/closing positions into transactions (net change), exchange rate changes, and other valuation changes; similar reconciliation for other instruments including accrued interest. - Household holdings of foreign securities reported by resident custodian banks and securities brokers; stock data used to derive transaction estimates. - Security holdings of household sector with nonresident asset managers believed not significant. - Portfolio investment liabilities: - Sourced from monthly and annual surveys of enterprises and domestic custodians; includes debt securities issued abroad and other debt liabilities (except intragroup/direct investment liabilities). - Domestic custodians/securities brokers report intermediated trades to record transactions in domestically issued debt securities and shares; domestic mutual funds data from SF. - Assumption: no overlap between loan liabilities and securities recording for repurchase and sell/buy back transactions in custodian surveys. - Stock data on foreign holdings of securities reported by custodians. - Banking sector (MFIs): - Transactions derived from monthly stock data reported by country, instrument, and maturity; only most important banks report monthly; adjustments made later based on annual survey. - The “tail” not included in monthly statistics at time of source; plans to include tail in position data by the end of 2005. - Separate report form exists for transactions and positions in financial derivatives. - Reserve transactions based on BOF Accounting Department information. ### Survey operations, frames, and coverage - BOF survey approach: - Multifrequency surveys (mostly monthly) for foreign assets and liabilities; annual direct investment surveys based on enterprise balance sheets. - Census collections where most important respondents report monthly (a few quarterly) and most of reporting population annually. - Cut-off system introduced in 1991 for monthly surveys and in 2003 for annual direct investment surveys. - In cut-off direct investment system, small enterprises exempted from reporting are estimated using balance sheet information from Finnish Tax Administration. - Monthly securities broker/custodian survey of cross-border trade in domestic securities is an indirect collection. - Registers and frames: - BOF purchases official register of enterprises and establishments from SF annually containing information on nearly 250,000 operating enterprises, including identification of foreign ownership and domestic enterprises with affiliates abroad. - Frames for BOF surveys structured from multiple sources including balance sheet information on the 15,000 largest enterprises from the Finnish Tax Administration. - Frame kept current by monitoring mergers and acquisitions and direct investment transactions from financial press. - Financial Supervision Authority maintains register of financial institutions. - Cut-off approach considerations: - Frame and measurement error are important concerns; approach facilitates consolidated or individual enterprise reporting. - Sampling error virtually nonexistent for BOF cut-off approach; may be an issue for SF stratified sample International Trade in Services survey. - Table 1 (sectoral coverage and total value of stock at the end of 2004) — key figures presented below. ### Table 1: Sectoral coverage and total value of stock at the end of 2004 (In percent and millions of euros) - Monetary Financial Institutions: Monthly 98, Annual 0, Tail 2, Total 100%, Total stock 113,731 - Other Financial Institutions: Monthly 98, Annual 2, Tail 0, Total 100%, Total stock 42,551 - Non Financial Enterprises — FDI Outward: - Assets: Monthly 96, Annual 4, Tail 0, Total 100%, Total stock 34,934 - Liabilities: Monthly 95, Annual 5, Tail 0, Total 100%, Total stock 9,675 - Non Financial Enterprises — FDI Inward: - Assets: Monthly 33, Annual 47, Tail 20, Total 100%, Total stock 3,913 - Liabilities: Monthly 29, Annual 54, Tail 17, Total 100%, Total stock 12,643 - Non Financial Enterprises — Other Investment: - Assets: Monthly 56, Annual 44, Tail 0, Total 100%, Total stock 1,979 - Liabilities: Monthly 83, Annual 17, Tail 0, Total 100%, Total stock 24,473 - Central Government: Monthly 100, Annual 0, Tail 0, Total 100%, Total stock 71,216 - Social Security Funds: Monthly 95, Annual 5, Tail 0, Total 100%, Total stock 49,669 - Municipalities: Monthly 94, Annual 6, Tail 0, Total 100%, Total stock 2,013 Memorandum items (number of respondents in 2004/2005, consolidated or individual reporting) - Nonfinancial Enterprises — FDI: - Assets respondents: 57 (monthly), 372 (annual) - Liabilities respondents: 57 (monthly), 559 (annual) - Other Claims (Portfolio and other investments): respondents 57 (monthly), 367 (annual) Notes associated with Table 1 from source: - 1/ At end 2003, without inward and outward equity stock. - 2/ Portfolio and other investment, excluding trade credits. - 3/ Portfolio and other investments. ### Coverage assessment, response rates, and processing practices - Annual frame surveys show enterprises below the largest 500 do not in practice report balance of payments variables; if frame properly defined, coverage should be comprehensive. - Approximately 60 consolidated enterprises are selected for detailed monthly reporting on foreign assets and liabilities, including transactions, stocks, and investment income. - Response rates for monthly surveys are close to 100 percent with rigorous follow-up; given high coverage and response rates, no grossing up is undertaken on monthly balance of payments data except for trade credits. - Register information identifies 2,800 enterprises in Finland with foreign ownership (inward direct investment) and around 1,000 enterprises that have affiliates abroad (outward direct investment). - Response rates for annual direct investment surveys were 93 percent for both inward and outward surveys in 2003. - Cut-off exercise uses balance sheet information from Finnish Tax Administration; cut-off procedure executed at 90 percent cumulative coverage in the two direct investment variables—equity and intragroup claims; total value of direct investment for the “tail” calculated using scaled balance sheet variables. - Exporting and importing enterprises surveyed every five years for trade credit information via a stratified sample survey. - For trade in international services, SF’s stratified sample survey (reference year 1999) used a 2003 survey with some 8,400 enterprises; frame divided into three subframes with a total-survey group of 1,925 enterprises (all covered); for small- and medium-sized enterprises stratified sampling drew 16.5 percent of the frame. *Source: _cr05389 - 3. Accuracy and reliability (PDF chapter/section)._* ### 9.8 percent of the small enterprise frame in the final sample. Because a response rate of ### _cr05389 - 9.8 percent of the small enterprise frame in the final sample. Because a response rate of ### Source data definitions, scope, classifications, valuation, and time of recording - Several balance of payments items (trade in business services, current transfers, compensation of employees) are compiled only on an annual basis; BOF makes monthly forecasts using time series analysis and multivariate modeling co-integrated with exports and imports of goods. - Monthly/quarterly business services values are estimated from historical shares in total foreign trade and explanatory indicators (for example, GDP of exporting countries). - Monthly/quarterly compensation of employees and current transfers are estimated at the same value as the previous year, except transactions with the EU which use official cash-basis data. - Annual direct investment survey results are spread evenly into months; previous-year results are used as a proxy for the current year. - Distributed monthly dividends (from survey) are deducted from total estimated monthly profits based on proposed dividend distribution from the annual direct investment questionnaire of the previous year. - Undercoverage exists in the monthly survey for dividends on foreign direct investment; May and June dividend months are supplemented with estimates based on the previous year’s annual survey; first six months of current year initially based on annual survey information from two years earlier and revised in September when the previous year’s annual data become available. - Since June 2004, BOF receives enterprise level holdings monthly from the Finnish Central Securities Depository and regularly crosschecks with custodian data; custodians and brokers provide flows and holdings for equities in the book-entry account system (listed and unlisted). - BOF deducts direct investment entries reported by custodians from custodian-reported equities to arrive at final portfolio investment figures; adjustments also made prior to June 2004. - Security repurchase agreements (repos) are treated as collateralized loans and are included in monthly foreign liabilities reports by direct reporters (excluding intragroup liabilities); direct reporters do not identify repos in liabilities reports, so potential double counting with broker-reported portfolio investment flows exists. - Banking sector flows derived from stock data are adjusted to remove valuation changes (exchange rate fluctuations, price changes, classification changes); adjustments carried to bank, country, and instrument level; loan loss provisions recorded among valuation changes; banks report stock of interest accrued since last payment date and for current month. - Portfolio investment transactions of the household sector are derived from custodian/broker stock data and currently include valuation changes; a project is underway to derive an adjustment to exclude valuation changes from flow measures. - Transactions in reserve assets are derived from stock data and are not adjusted for valuation changes; a system to compile transactions from accounting information expected by end of 2005. ### Timeliness and reporting - Most source data are monthly to meet ECB monthly balance of payments requirements; respondents are asked to submit reports to BOF no later than the 15th business day following the reference month. - Response rates: 94 percent for the 2003 survey; 97 percent for the total survey and 86 percent for the other two frames; 100 percent response rate reported for reporters asked to submit by the 15th business day (though occasional late reporting occurs). - Follow-ups by phone target largest reporters; where primary source data are quarterly/annual (e.g., services), BOF uses estimation techniques to derive monthly/quarterly estimates. - Several series only collected annually (business services, reinvested earnings, compensation of employees); a small number of enterprises account for a very large share of business services survey results. ### Assessment of source data, coverage, and survey frames - Intrastat thresholds (set in 2004): enterprises with annual transactions below 100,000 euros (assimilation threshold) do not need to report; reporting obligation arises when threshold is exceeded; reporting of statistical value voluntary within threshold of 8.6 million euros (acquisitions) and 26.0 million euros (deliveries). - Statistics Unit of NBOC estimates trade below thresholds and adds to registered statistical figures using chapter/country specific coefficients based on cases with both statistical and invoice values. - Share of nonresponses in Finland assessed as insignificant; NBOC believes no estimates necessary though late reporting occurs; no nonresponse issue in Extrastat (customs declarations). - Balance of payments compilers monitor survey coverage and ensure largest enterprises are covered; five largest respondents accounted for some 65 percent of totals in enterprise sector stocks of some items in the early 2000s. - BOF maintains three frames for corporate financial account surveys: direct investment abroad, direct investment in Finland, and monthly/annual surveys on all foreign assets and liabilities; availability of balance sheet information enables auxiliary variable analysis and estimation from registers. - BOF regularly reviews survey frames and register accuracy, cooperates with SF to keep targeted direct investment registers up to date, and monitors financial press for high-value transactions (mergers and acquisitions). - Major system overhaul undertaken in 2004 facilitating comprehensive quality control; tables generated to assess valuation items relative to stock, investment income relationships, and relative/absolute changes. - Revisions are closely monitored; financial account shows no systematic revisions to date, unlike trade statistics where systematic upward revisions to Intrastat imports were identified. - Transactions in real estate (foreign liabilities and assets) are rough estimates based on earlier settlements-based reporting discontinued in 1999 and are believed insignificant; same applies to government receipts. - BOF intends a benchmark survey on cross-border trade credit assets and liabilities in 2005 (update to 2001 survey): stratified sample involving 8,000 exporters and 17,000 importers to collect short-term trade outstanding at end-2004; trade credit has weakest coverage and is grossed up considerably to population level. ### Compilation and statistical techniques - NBOC applies validity and reliability checks on compiled trade statistics: invalid data are corrected; reliability errors reviewed using statistical methods (e.g., regression analysis) and secondary data (e.g., VAT) for consistency and estimation of internal trade below reporting thresholds. - Some SF adjustments to trade statistics for BOP compilation appear unchanged for extended periods; adjustments for coverage, classification, valuation, timing for goods exports have remained virtually unchanged; imports adjustments for coverage and valuation mostly unchanged (c.i.f.-f.o.b. adjustment variable based on NBOC survey results). - Small reasonable adjustment made for smuggling on imports. - Reclassifications applied to goods for processing and nonmonetary gold; goods for processing are included in compiled trade statistics but data are not readily available and are published with considerable lag (e.g., 2005 Yearbook contains data for 2002). - Valuation adjustments intended to improve customs-based conversions into euros (Extrastat) but adjustments do not track exchange rate changes; NBOC database contains currency denomination of trade which could support modeling to correct conversion effects. - Repairs on goods (BPM5 component) were collected and reported to EU but not included in trade data used for BOP compilation; as of January 2005 they are no longer collected for intra-EU trade. - “Goods procured in ports by carriers”: debit side collected by SF from quarterly shipping surveys and annual domestic airlines survey; credit side is an estimate carried forward each year; as of January 2005 “goods delivered to vessels and aircraft” included in intra-EU trade statistics providing a timely data source. - BOF survey operations fully automated: basic edits and changes performed online; reporting workbooks perform initial logic checks before data enter BOP Corner; BOP Corner performs further checks and flags unusual entries; tools permit enterprise-level quality evaluation including comparisons with previous reports; respondents contacted for unresolved issues; stocks from previous month carried forward when timely report not received; annual estimates spread evenly into monthly series. - Syndicated loans: respondents requested to report full drawings even when resident banks participate; separate report form gathers domestic banks’ syndicated loans to residents to eliminate resident-to-resident transactions; BOF plans inquiry to assess enterprises’ ability to correctly identify borrowings from nonresident banks in syndicated loans. - SF processes international trade in services survey with enterprise-level validity checks including turnover comparisons; enterprises contacted for large entries under miscellaneous services; staff maintain “frequently asked questions” and encourage electronic reporting. - No discrepancy exists between sum of monthly data and annual surveys which are integrated into monthly series by equal apportionment or other procedures; reinvested earnings collected annually and apportioned equally across 12 months for the most current year. ### Specific numeric adjustments and factors - Response rates: 94 percent for the 2003 survey; 97 percent for the total survey; 86 percent for the other two frames; 100 percent for reporters asked to submit by the 15th business day (with occasional late reporting). - Five largest respondents accounted for some 65 percent of totals in enterprise sector stocks of some items in the early 2000s. - Intrastat thresholds set in 2004: 100,000 euros assimilation threshold; 8.6 million euros acquisitions threshold (voluntary statistical value reporting); 26.0 million euros deliveries threshold (voluntary statistical value reporting). - BOF benchmark survey planned in 2005: stratified sample of 8,000 exporters and 17,000 importers to collect end-2004 trade credit outstanding. - To estimate imports f.o.b., factors used: 4.9 percent for freight and 0.2 percent for insurance (same factors used for Intrastat and Extrastat); NBOC survey performed in 2002-03 and carried out every five years. *Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2005/_cr05389.pdf* ### 3.4 Assessment and validation of intermediate data and statistical outputs ### 3.4 Assessment and validation of intermediate data and statistical outputs ### 3.4.1 Intermediate results are validated against other information where applicable - Accrued interest on nonresident holdings of domestically issued government bonds is compared: computed using current yields versus coupon payments paid to nonresidents on these securities by custodians. - Data reported by brokers and banks on their sales to and repurchases from nonresidents of domestic securities (equities and debt securities) are compared with changes in the stocks of these securities reported by custodians. - Overall valuation changes reported in the portfolio investment surveys are compared with movements in stock prices and interest rates. - BOF conducts a rough check of foreign holdings of domestic mutual funds reported by SF using independent statistics from the Helsinki Stock Exchange. - Information on securities issued by residents of Finland published in International Financial Review is compared with reporting in the monthly survey of foreign liabilities (excluding intragroup liabilities). - Financial press and press releases by listed enterprises are monitored for merger and acquisition activity and other direct investment transactions; where takeover transactions are identified, a special survey form is sent to obtain information on the transaction. ### 3.4.2 Statistical discrepancies in intermediate data are assessed and investigated - Investment income and associated stocks reported in monthly returns are assessed each year at the global level for each instrument; the implied yields are generally appropriate. - Estimated accrued interest on foreign holdings of government bonds is compared with coupon payments reported by custodians. - Balance of payments and national accounts compilation are integrated in Finland, with a reconciliation each year at a detailed product level with other data on the supply and demand of goods and services. ### 3.4.3 Statistical discrepancies and other potential indicators of problems in statistical outputs are investigated - Errors and omissions are monitored as an indicator of problems in statistical outputs. - The Product Description and Quality Report, to be released in 2005, provides a short analysis of errors and omissions, including charts. The first quality report, made available in 2003 in Finnish only, contained similar information. - Prior studies: 1996 Compilation Methods, Sources of Information and the Time Series for 1975-1992 (Bank of Finland Studies) and the 1995 Analysis on the Errors and Omissions in the Finnish Balance of Payments: Restless Capital Movements, Floating Exchange Rate and Errors Since 1991 (Bank of Finland Discussion Papers). - BOF compares stock of portfolio investment liabilities with IMF’s Coordinated Portfolio Investment Survey (contains partner country information on holdings of Finnish securities). - BOF is familiar with BIS’ international securities statistics and intends to employ these data in connection with development of a new system for recording portfolio investment stocks and flows on a security-by-security basis. - BOF has discussed bilateral direct investment data (mirror studies) with counterparts in several Nordic countries. - NBOC has undertaken mirror studies with authorities in Sweden and the Russian Federation, the latter on an annual basis. - International travel data are validated against indicators on tourist flows, accommodation statistics, and international passenger traffic; bilateral comparisons with Sweden and other EU countries are undertaken regularly. - BOF monitors the impact of monitoring revisions on the errors and omissions. --- ### 3.5 Revision studies ### 3.5.1 Studies and analyses of revisions are carried out routinely and used internally to inform statistical processes - Revision studies have been routinely conducted since the 1980s to inform statistical processes. - Special attention recently to the impact that results of annual surveys have on compiled monthly data, potentially necessitating modifications to estimation methods for the following 12-month period to improve accuracy. - Different vintages of time series are stored to facilitate revision analysis. Four vintages of key variables are available: - first preliminary observations, - data revised next month, - data revised six months (nine months as from 2003) after the end of the reference year, - and the current final data. - Since 1999, causes of revisions have been documented in internal memoranda monthly, and time series of the impact of revisions on the published data are stored to monitor long-term trends in revision patterns. - Several charts are published in Product Description and Quality Report. - Current revision cycle is based on the timetable prepared by the ECB and adequately takes account of the availability of information from annual surveys. --- ### 4 Serviceability ### 4.1 Periodicity and timeliness #### 4.1.1 Periodicity follows dissemination standards - Balance of payments statistics are compiled and disseminated monthly, which exceeds the quarterly periodicity prescribed in the SDDS. - Monthly balance of payments statistics are required to be reported to the ECB, albeit with less component detail than in quarterly submissions. - Quarterly data are derived by summing the monthly data. #### 4.1.2 Timeliness follows dissemination standards - Monthly balance of payments statistics are disseminated within six weeks after the reference month, which exceeds the one quarter lag prescribed in the SDDS. - Monthly balance of payments statistics are required to be reported to the ECB with a lag of 30 working days. - Quarterly balance of payments data are disseminated within three months. ### 4.2 Consistency #### 4.2.1 Statistics are consistent within the dataset - Concepts, definitions, and classifications for producing monthly, quarterly, and annual balance of payments statistics are the same. - Quarterly data are derived by summing monthly information; annual by summing the four quarters. - In some years, the quarterly errors and omissions item has been very large (30 percent of current receipts as presented in charts to be included in the Product Description and Quality Report to be released in 2005). In most years, it was within the 10 percent range. - Financial transactions are reconcilable with changes in the external debt and IIP statistics because most source data require respondents to provide a reconciliation of changes in outstanding stocks between two periods (mostly monthly and annual). - A table showing reconciliation for the most recent year is published in Finland’s Balance of Payments, with data shown by sector and functional category/instrument for transactions, exchange rate and valuation changes, and total change in stocks. #### 4.2.2 Statistics are consistent or reconcilable over a reasonable period of time - Annual Finland’s Balance of Payments contains annual data back to 1995. Longer time series are available upon request or from data vendors. - When changes in source data, methodology, or techniques are introduced, historical data are reconstructed as far back as reasonably possible. Example: when BPM5 was introduced in 1994, data were revised back to 1975. - When BOF discontinued its bank reporting system in 1999, SF introduced tourism surveys; travel data were revised for 1998, and data for 1995-97 were reconstructed. Revision of geographical breakdown was partly extended back to 1992. - Notes to the monthly Financial Markets Statistical Review contain information on breaks in series and other clarifications; footnotes are used in other releases to highlight significant changes. - Brief commentary provided in monthly Statistical Bulletin; annual Direct Investment in Finland’s Balance of Payments and Stock of Portfolio Investment by Country contain more extensive commentary. #### 4.2.3 Statistics are consistent or reconcilable with those obtained through other data sources and/or statistical frameworks - Balance of payments data on goods transactions are based on foreign trade statistics; coverage and classification adjustments are made for balance of payments purposes by BOF and SF. - Balance of payments data are broadly comparable with the rest of the world account in the national accounts. One difference pertains to recording of cross-border construction activity (BOF and SF have adopted different recommended treatments set out in BPM5 and ESA 95, respectively). - In 2004, the monetary and financial institutions (MFI) balance sheet and the balance of payments data collections were unified. In earlier periods, the two sets of data were monitored and were broadly comparable. - Balance of payments transactions relating to external debt and reserve assets are comparable with corresponding stock data for these two data sets. ### 4.3 Revision policy and practice #### 4.3.1 Revisions follow a regular and transparent schedule - Revision cycle is based on timetable prepared by the ECB and Eurostat. - Monthly balance of payments data are preliminary when first released. - Revision pattern: - First month of a quarter revised with release of data for the second month. - With release of data for a quarter, data for the previous quarter are revised. - With the release, in September, of data for the June quarter, the monthly/quarterly data for the two previous years are revised (most comprehensive revisions, incorporate results from annual surveys). - With the release in December of third quarter data, the data for the current year are revised and again with the release in March of fourth quarter data. - Data are considered final 20 months after the end of the year in question and are thereafter not routinely revised. This revision practice is new and not known to the public, although it was referred to in the 2003 Product Description and Quality Report. - Because Eurostat and the ECB have different revision policies for national accounts and balance of payments statistics, the rest of the world account in the national accounts does not align with the balance of payments statistics for a period of time. - Annual revision of the national accounts takes place in June/July while balance of payments statistics are updated in September. - BOF endeavors to make available to SF some revisions of external sector statistics earlier; certain important items, such as reinvested earnings, are not available in time. - Compilers intend to introduce a timetable showing the revision schedule in detail on the BOF’s website and in the 2005 Product Description and Quality Report. #### 4.3.2 Preliminary and/or revised data are clearly identified - Data are preliminary when first released and are denoted as such with an asterisk in some releases. - Revised data are not separately identified. Some information on revisions disclosed in footnotes in publications and releases. #### 4.3.3 Studies and analyses of revisions are made public - Apart from some footnotes, revisions are not explained in publications and releases. - Analysis of revisions in the form of several charts, including plots of the current data minus the first preliminary data and the second preliminary data minus the first preliminary data as percentages of current receipts, is made available in the Product Description and Quality Report (the first report in this series contained the same material). - The 2005 version will be available in Finnish, Swedish, and English. - Revision comparisons are made for the main categories of the current and financial accounts. --- ### 5 Accessibility ### 5.1 Data accessibility #### 5.1.1 Statistics are presented in a way that facilitates proper interpretation and meaningful comparisons - Balance of payments statistics are disseminated according to standard components of the BPM5, and with time series. - Full range of data collected in surveys is made available, including geographical detail (subject to confidentiality constraints). - Data are available in various publications and releases listed in the BOF’s main webpage (Statistics), including Finland’s balance of payments monthly—Statistical Bulletin (net version only); Balance of payments and international investment position (net version only); Gross external debt (net version only); Finland’s Balance of Payments, annually; Direct Investment in Finland’s Balance of Payments (annually); Balance of payments statistics to include breakdowns of counterparty countries. - Financial markets publications: Financial Markets Statistical Review, monthly; Financial Market Report, monthly. - Other: Stock of portfolio investment by country (pdf). - Monthly Statistical Bulletin contains a short commentary on current-period developments in Finland’s balance of payments. Annual Direct Investment in Finland’s Balance of Payments and Stock of Portfolio Investment by Country contain commentary. - Monthly data and charts on BOF’s website show current account, balances on goods, services, and income, and series on net flows on direct investment in Finland and abroad on a 12-month moving total basis; similar information provided on portfolio investment in Finnish securities—net flows and net international investment positions for selected items. #### 5.1.2 Dissemination media and format are adequate - Balance of payments statistics are disseminated in print form and are available on the BOF’s website. At present, the Internet version series cannot be downloaded. - Longer time series can be made available upon request or purchased from data vendors such as SF’s ASTIKA or Etlatieto Ltd. databank (Research Institute of the Finnish Economy). #### 5.1.3 Statistics are released on a preannounced schedule - Release calendar for the coming year, specifying precise dates of release of BOF statistics, is disseminated on the BOF’s website for the coming year by the first of January. - During the last part of the calendar year, BOF uses the DSBB to disseminate the one quarter ahead notice of approximate release dates, as required by the SDDS; a notice is given in the Financial Markets Statistical Review. - Date of the next publication is available in each issue of the Statistical Bulletin; approximate release dates are given for annual publications. #### 5.1.4 Statistics are made available to all users at the same time - Balance of payments statistics are released to all interested parties simultaneously in the BOF press release Finland’s Balance of Payments at 9:00 am (local time) on the BOF’s website. - No officials outside the BOF have access to the data before their release to the public. #### 5.1.5 Statistics not routinely disseminated are made available upon request - Requests for data not routinely disseminated are considered case-by-case and are dependent on resources required to comply with the request. - A prepared set of tables containing detailed annual data on inward and outward direct investment capital flows and stocks (by country and by economic activity) back to 1985 is available to users of statistics upon request. Availability of these data is not disclosed in any of the publications and releases. ### 5.2 Metadata accessibility #### 5.2.1 Documentation on concepts, scope, classifications, basis of recording, data sources, and statistical techniques is available - Documentation sources include: - The European Union Balance of Payments/International Investment Position Statistical Methods (ECB annual publication). - BOF’s monthly Financial Markets Statistical Review (contains short notes on selected data series). - Documentation on the Finnish balance of payments and international investment position—Product Description and Quality Report—released on the BOF’s website in Finnish in 2003; a similar report to be made available in 2005 in Finnish, Swedish, and English. - Jarmo Kariluoto: Finland's Balance of Payments—Compilation Methods, Sources of Information and Time Series for 1975-1992 (Bank of Finland Studies in Economics, 1996, Series A:98). - BOF Working Paper by Marko Myller and Miika Syrjänen, Balance of Payments Compilation System (information on BOF’s new compilation system). - BOF participates in IMF’s annual Coordinated Portfolio Investment Survey and in the Survey of Implementation of Methodological Standards for Direct Investment; detailed methodological information on these initiatives is available on the IMF’s website. A Summary Methodology for balance of payments statistics is available on the DSBB and in the IMF’s Balance of Payments Statistics Yearbook (Part 3). - For trade in international services, SF posts a product description on its Internet site setting out relevance, methodological description of the survey, a short discussion of correctness of compiled data, including response rates for the past four years; similar information provided in SF’s annual Internationalization of Enterprises, which also defines the sampling frame and sample. #### 5.2.2 Levels of detail are adapted to the needs of the intended audience - The metadata identified above, together with other assistance that is available, aid users in better understanding Finnish external sector statistics. - More specialized information is also disseminated, such as the release in 2004 of a BOF working paper on the balance of payments compilation system. *Source: _cr05389 - 3.4 Assessment and validation of intermediate data and statistical outputs* ### introduction of a new balance of payments compilation system—Balance of Payments ### introduction of a new balance of payments compilation system—Balance of Payments ### Assistance to users - 5.3 Assistance to users - 5.3.1 Contact points for each subject field are publicized - Prompt and knowledgeable service and support is available from the Statistics Desk Phone, which is posted on publications and releases (phone, facsimile, e-mail). - The annual Direct Investment in Finland’s Balance of Payments and the Stock of Portfolio Investment by Country also identify subject matter contacts. - All statistical bulletins are published in three languages—Finnish, Swedish, and English. - At SF, information on assistance provided to users via e-mail is stored to assist staff on future requests for information and to identify user interests. - 5.3.2 Catalogs of publications, documents, and other services, including information on any charges, are widely available - On the BOF’s main webpage (Statistics), information (and links) related to BOF statistics are presented in one easy-to-view format. There are also links to reporting instructions for the reporting institutions. - The publications and releases are available on the website or may be obtained by free subscription from the BOF. - Assistance is available at the Statistics Desk Phone, which is posted on releases. ### Data Quality Assessment Framework (July 2003): Summary of Results for Balance of Payments Statistics (Compiling Agency: Bank of Finland) - Key to symbols: NA = Not Applicable; O = Practice Observed; LO = Practice Largely Observed; LNO = Practice Largely Not Observed; NO = Practice Not Observed; SDDS = Complies with SDDS Criteria - Selected assessment elements and comments (as presented): - 0. Prerequisites of quality - 0.1 Legal and institutional environment — X - 0.2 Resources — X - 0.3 Relevance — X - 0.4 Other quality management — X - 1. Assurances of integrity - 1.1 Professionalism — X - 1.2 Transparency — X - 1.3 Ethical standards — X - 2. Methodological soundness - 2.1 Concepts and definitions — X - 2.2 Scope — X - 2.3 Classification/sectorization — X - 2.4 Basis for recording — X - Comment: Reserve transactions and some portfolio flows include valuation changes; interest accruals based on two different approaches; portfolio dividends and business services are not recorded on an accrual basis; portfolio securities are recorded net of fees and commissions; and income and service distributions are recorded net of withholding taxes deducted at source. - 3. Accuracy and reliability - 3.1 Source data — X - Comment: Data for business services and reinvested earnings are only collected on an annual basis; and potential for double counting exists in the recording of transactions in repurchase agreements. - 3.2 Assessment of source data — X - 3.3 Statistical techniques — X - Comment: Balance of payments adjustments to trade are not updated. - 3.4 Assessment and validation of source data — X - 3.5 Assessment and validation of intermediate data and statistical outputs — X - 3.6 Revision studies — X - 4. Serviceability - 4.1 Periodicity and timeliness — X - 4.2 Consistency — X - 4.3 Revision policy and practice — X - Comment: Revision policy is not disclosed to the public. - 5. Accessibility - 5.1 Data accessibility — X - 5.2 Metadata accessibility — X - 5.3 Assistance to users — X ### Recommendations (Balance of Payments Statistics) - Legal and institutional coordination - BOF and SF should explore how other EU Member States have addressed the issue of sharing of individual enterprise data between the national statistical office and the central bank for balance of payments compilation (0.1.2). - Arrange with the NBOC for the BOF to have access to individual Customs documentation for balance of payments compilation (0.1.2). - Methodological and recording improvements - In collaboration with the NBOC, develop a methodology to adjust the valuation of goods denominated in foreign currencies (an administrative rate is currently used) to more closely conform with BPM5 guidelines (2.4.1). - SF to indicate in its survey questionnaire on international trade in services the accrual principle and the treatment of the Nordic Investment Bank and other regional/international organizations (2.4.2). - Develop a methodology to (1) estimate the fees and commissions that are netted from portfolio investment transactions and adjust the flows accordingly and (2) incorporate the fees and commissions in financial services. Report forms would need to be modified to indicate how securities should be reported (2.4.3). - Develop a methodology to (1) estimate the amount of withholding taxes on dividends, interest, royalties, and technical service fees received from abroad for inclusion in current transfers (data on withholding taxes on payments to nonresidents are available from the Finnish National Board of Taxes). The data on income and royalty payments from the latter source should be reconciled with the balance of payments accounts; and (2) gross up the relevant income and service items accordingly. Report forms would need to be modified to indicate how withholding taxes should be treated (2.4.3). - Source data and survey design - Adapt collections involving end investors and custodians to ensure no duplication in the recording of loans and repurchase agreements (3.1.2). - Introduce a quarterly survey of international business services to improve recording of the quarterly (and monthly) balance of payments (3.1.3). - Develop a methodology to estimate receipts of government services n.i.e. on the basis of partner country data in conjunction with indicators of size of foreign representations in Finland from the Ministry of Foreign Affairs (3.2.1). - Trade and other specific adjustments - Investigate, with the NBOC, the possibility of obtaining timely information on goods for processing (included in trade statistics), determine if there are any recording problems (see also national accounts 3.1.2), and determine the need for any other balance of payments adjustments to trade statistics (see also 2.4.1) (3.3.1). - Incorporate reporting on repairs on goods into existing surveys; consider a survey to gather data on expenditures for goods procured in ports in Finland by foreign carriers outside the EU (3.3.1). - As the f.o.b. value of Finnish imports would include any transportation services rendered by domestic carriers, develop a methodology to estimate an offsetting credit entry for these resident-resident transactions included in the balance of payments (similarly on the export side for the carriage of Finnish exports within Finland by nonresident carriers) (3.3.2). - BOF and SF to participate in or review findings from bilateral comparisons of foreign trade statistics undertaken by the NBOC, with a view to assessing scope for adjusting balance of payments data on goods transactions (3.4.3). ### Summary of the Special Data Dissemination Standard (SDDS) - The SDDS prescribes the following practices under each identified dimension: - Data dimension (coverage, periodicity, and timeliness) - the dissemination of 18 data categories, including component detail, covering the four main sectors (real, fiscal, financial, and external) of the economy, with prescribed periodicity and timeliness. - Access dimension - the dissemination of advance release calendars providing at least one-quarter advance notice of approximate release dates, and at least a one-week advance notice of the precise release dates; and - the simultaneous release of data to all users. - Integrity dimension - the dissemination of the terms and conditions under which official statistics are produced and disseminated; - the identification of internal government access to data before release; - the identification of ministerial commentary on the occasion of statistical release; and - the provision of information about revision and advance notice of major changes in methodology. - Quality dimension - the dissemination of documentation on statistical methodology and sources used in preparing statistics; and - dissemination of component detail and/or additional data series that make possible cross-checks and checks of reasonableness. - SDDS subscribers are required to: - post descriptions of their data dissemination practices (metadata) on the IMF’s Dissemination Standards Bulletin Board (DSBB). Summary methodologies, which describe data compilation practices in some detail, are also disseminated on the DSBB; and - maintain an Internet website, referred to as the National Summary Data Page (NSDP), which contains the actual data described in the metadata and to which the DSBB is electronically linked. - The IMF staff is monitoring observance of the standard through NSDPs maintained on the Internet. Monitoring is limited to the coverage, periodicity, and timeliness of the data and to the dissemination of advance release calendars. - Source: http://dsbb.imf.org ### Data Quality Assessment Framework—Generic Framework (JULY 2003 FRAMEWORK) - Quality dimensions, elements, and selected indicators (as listed) - 0. Prerequisites of quality - 0.1 Legal and institutional environment — indicators include responsibility for collecting, processing, and disseminating statistics is clearly specified; data sharing and coordination among data-producing agencies are adequate; individual reporters’ data are to be kept confidential and used for statistical purposes only; statistical reporting is ensured through legal mandate and/or measures to encourage response. - 0.2 Resources — indicators include staff, facilities, computing resources, and financing are commensurate with statistical programs; measures to ensure efficient use of resources are implemented. - 0.3 Relevance — indicators include the relevance and practical utility of existing statistics in meeting users’ needs are monitored. - 0.4 Other quality management — indicators include processes are in place to focus on quality; processes are in place to monitor the quality of the statistical program; processes are in place to deal with quality considerations in planning the statistical program. - 1. Assurances of integrity - 1.1 Professionalism — statistics are produced on an impartial basis; choices of sources and techniques and dissemination decisions are informed solely by statistical considerations; the appropriate statistical entity is entitled to comment on erroneous interpretation and misuse of statistics. - 1.2 Transparency — terms and conditions under which statistics are collected, processed, and disseminated are available to the public; internal governmental access to statistics prior to their release is publicly identified; products of statistical agencies/units are clearly identified as such; advance notice is given of major changes in methodology, source data, and statistical techniques. - 1.3 Ethical standards — guidelines for staff behavior are in place and are well known to the staff. - 2. Methodological soundness - 2.1 Concepts and definitions — overall structure follows internationally accepted standards. - 2.2 Scope — scope is broadly consistent with internationally accepted standards. - 2.3 Classification/sectorization — classification and sectorization systems are broadly consistent with internationally accepted standards. - 2.4 Basis for recording — market prices are used to value flows and stocks; recording is done on an accrual basis; grossing/netting procedures are broadly consistent with internationally accepted standards. - 3. Accuracy and reliability - 3.1 Source data — source data are obtained from comprehensive data collection programs; source data reasonably approximate the required definitions, scope, classifications, valuation, and time of recording; source data are timely. - 3.2 Assessment of source data — source data are routinely assessed for coverage, sample error, response error, and nonsampling error. - 3.3 Statistical techniques — data compilation employs sound statistical techniques; other procedures employ sound statistical techniques. - 3.4 Assessment and validation — intermediate results are validated against other information; statistical discrepancies are assessed and investigated. - 3.5 Revision studies — studies and analyses of revisions are carried out routinely and used internally. - 4. Serviceability - 4.1 Periodicity and timeliness — periodicity follows dissemination standards; timeliness follows dissemination standards. - 4.2 Consistency — statistics are consistent within the dataset and reconcilable over a reasonable period of time and with other datasets. - 4.3 Revision policy and practice — revisions follow a regular and transparent schedule; preliminary and/or revised data are clearly identified; studies and analyses of revisions are made public. - 5. Accessibility - 5.1 Data accessibility — statistics are presented to facilitate interpretation and comparison; dissemination media and format are adequate; statistics are released on a preannounced schedule; statistics are made available to all users at the same time; statistics not routinely disseminated are made available upon request. - 5.2 Metadata accessibility — documentation on concepts, scope, classifications, basis of recording, data sources, and statistical techniques is available and differences from international standards are annotated; levels of detail are adapted to the needs of the intended audience. - 5.3 Assistance to users — contact points for each subject field are publicized; catalogs of publications, documents, and other services, including information on any charges, are widely available. ### Finland: Survey of Users of Macroeconomic Statistics - Survey administration and responses - With the assistance of the Bank of Finland, an informal survey of key users was conducted to complement the IMF staff’s assessment. - Questionnaires (160) were dispatched, and 46 responses received, in April 2005, from a broad range of users, including official agencies, banks, media, other enterprises, employer and employee associations, universities, and research institutes. - Table 6. Finland: Questionnaire Responses by Type of User — April 2005 - Official agencies — 20 - Banks — 4 - Media — 2 - Other enterprises, and employer and employee associations — 4 - Universities and research institutions — 4 - Not specified — 12 - Total — 46 - Key user findings - The respondents most frequently used national accounts and price statistics, as well as labor market statistics and production indices. - Balance of payments and government finance statistics, while still well used, were used less frequently. - Users obtained the statistics from a range of public, private, and international sources but most often from official national sources. - They accessed the statistics in both electronic and hard copy but most often in electronic form from official websites. - The statistics were used for a wide range of purposes. - Respondents were generally very satisfied with the overall quality of statistics produced by Finland. - On a 5-point scale (5 meaning excellent and 1 meaning poor), respondents’ average ratings for the categories of statistics assessed in detail on this mission were as follows: - price statistics — 4.3 - national accounts — 4.1 - government finance statistics — 4.0 - balance of payments statistics — 3.9 - Of those respondents expressing opinions on these matters, the overwhelming majority considered that the underlying methodologies were sound and appropriate and that the statistics were unbiased and accurate. *Source: _cr05389 - introduction of a new balance of payments compilation system—Balance of Payments* ### 9.1 and 9.2). All who commented assessed the statistics as being at least comparable in ### Appendix III: Results of User Survey — Finland (April 2005) ### Overall quality assessment and comparability - All who commented assessed the statistics as being at least comparable in quality with those of other countries in the region; many regarded them (especially national accounts and price statistics) as being better (question 9.3). - Several respondents noted the long tradition of good statistics production in Finland and that this production deserved respect. - Concerns raised: - A few respondents expressed concern about the accuracy in recent years of some initially published national accounts items, relating to investment in machinery and to consumption, claiming the data had provided a misleading picture of the business cycle that was revealed when more complete data became available. - Several raised concerns about price measurements and deflation methods in complex areas, noting difficulties in reconciling export and production volumes for some important commodities, such as electronics and basic metals. ### Serviceability, coverage, and detail - Respondents were overwhelmingly satisfied with the coverage and detail of the statistics (questions 5.1 and 5.2 in Table 2). - Specific requests for more detail: - More detail on house prices. - More detail in quarterly accounts on exports and imports (balance of payments), by activity sector (national accounts), and on services. - More detailed data on the distribution of taxes. - Concerns about government finance series: - One user expressed concern about inconsistencies over time and between definitions for related government finance series, making it difficult to compare government debt levels and corresponding debt service data. ### Periodicity and timeliness - Respondents were almost universally satisfied with the periodicity (frequency of compilation) of official statistics (question 6.1 in Table 2). - A clear majority was satisfied with timeliness (question 6.2). - User comments: - One user commented that the timeliness compared favorably with other countries in the region. - Another noted that shorter time lags would be preferable, but not at the expense of accuracy. - Calls for more timely data on retail sales, the household sector, and local governments. - Request for more timely breakdowns of services data. ### Dissemination practices and revisions - Most respondents were aware of the availability of publicly disseminated advance release calendars (question 7.1). - All who answered observed that the official statistics were released on the preannounced dates (question 7.2). - Revisions: - Although most respondents were satisfied that enough information was published about revisions, a significant minority disagreed, especially regarding national accounts and balance of payments statistics (question 7.3). - Some users observed that explanatory notes or comments were seldom provided when national accounts and balance of payments statistics were routinely revised, even when some large revisions had been made in recent periods. - One user noted that staff provided additional information when asked. ### Accessibility and metadata - Respondents almost universally said they could easily obtain the official statistics (question 8.1). - Several commented favorably about recent increases in the amount of information provided free of charge on the Internet, but others felt that it was still insufficient. - Several were dissatisfied with the fees charged by Statistics Finland and the National Board of Customs for detailed national accounts and merchandise trade data. - Access to methodological information: - While most respondents were satisfied with access to explanatory notes, methodological descriptions, and related references (question 8.2), a significant minority said they could not easily access this information. - Most said the methodology information was sufficiently clear and at an adequate level of detail to be useful (question 8.3). - Several users who undertake detailed analysis said explanatory notes were insufficiently detailed to meet their needs. - Several users with time-critical but basic data needs requested that data be accompanied by some simple standardized ratios and rates of change. ### Key survey statistics (number of responses) - Which official statistics do you use regularly? - 1.1 National accounts (NA): 42 - 1.2 Prices: 38 - 1.3 Government finance statistics (GFS): 16 - 1.4 Monetary and financial statistics (Monetary): 17 - 1.5 Balance of payments (BOP): 20 - 1.6 Other: - Production indices: 26 - Labor market: 27 - Merchandise trade: 18 - International reserves and foreign currency liquidity: 7 - External debt: 10 - International investment position: 10 - Other: 5 - Where do you obtain the national official statistics? - Official press releases and publications on macroeconomic statistics: 34 - Private sector summaries and analyses: 9 - Official policy papers: 16 - Publications from international organizations: 15 - Other sources: 10 - Do you refer to official descriptions of sources and methods? - Yes: 26 - No: 8 - Main purposes for using official statistics: - Short-term decision making: 25 - Longer-term policy formulation: 23 - Econometric model building and forecasting: 16 - Economic research: 21 - Comparison with other countries: 27 - General economic background: 34 - Other: 6 ### Table B — Quality views and counts (selected responses) - Coverage and detail (5.1, 5.2): majority Yes across NA, Prices, GFS, Monetary, BOP, Other (example counts: 5.1 NA Yes: 35; 5.2 NA Yes: 36). - Periodicity (6.1) Yes counts: NA 39, Prices 36, GFS 11, Monetary 19, BOP 21, Other 10. - Timeliness (6.2) Yes counts: NA 35, Prices 36, GFS 10, Monetary 19, BOP 20, Other 10. - Advance release calendar awareness (7.1) Yes counts: NA 33, Prices 32, GFS 8, Monetary 13, BOP 17, Other 9. - Statistics released on announced dates (7.2): Yes counts: NA 33, Prices 32, GFS 10, Monetary 14, BOP 18, Other 9. - Enough information about revisions (7.3) Yes counts: NA 29, Prices 30, GFS 9, Monetary 11, BOP 13, Other 9. - Accessibility of statistics (8.1) Yes counts: NA 38, Prices 36, GFS 13, Monetary 18, BOP 20, Other 10. - Access to methodological information (8.2) Yes counts: NA 29, Prices 30, GFS 9, Monetary 15, BOP 19, Other 10. - Methodology clarity (8.3) Yes: 31; No: 2; No opinion: 7. - How do you get access to official statistics (8.4): - Hard copy official releases: 27 - Hard copy publications: 26 - Data specifically requested: 20 - Official website: 40 - E-mail requests: 22 - Other: 12 ### Section C — Overall assessment (counts and ratings) - Underlying methodology sound and appropriate (9.1) Yes counts: NA 31, Prices 32, GFS 9, Monetary 14, BOP 16, Other 6. - Official statistics unbiased and accurate (9.2) Yes counts: NA 33, Prices 33, GFS 12, Monetary 17, BOP 18, Other 8. - Comparison with other countries in the region (9.3): - Better counts: NA 15, Prices 15, GFS 2, Monetary 4, BOP 4, Other 4. - Same counts: NA 20, Prices 19, GFS 11, Monetary 12, BOP 16, Other 3. - Worse counts: all zeros. - Overall quality ratings (9.4) average ratings: - NA: 4.1 (No. of responses 39) - Prices: 4.3 (No. of responses 36) - GFS: 4.0 (No. of responses 13) - Monetary: 4.0 (No. of responses 19) - BOP: 3.9 (No. of responses 21) - Other: 4.0 (No. of responses 9) *Source: Table 7 and accompanying text from Appendix III of the user survey results (April 2005).* --- _Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2005/_cr05389.pdf_