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EU MILITARY OPERATIONS - ACCOUNTING

EU MILITARY OPERATIONS - ACCOUNTING. Georgios.kouvidis@consilium.europa.eu +32 2 281 2014. Where do you think the information needed for the reports is coming from ? Accounting. Introduction. Purpose of

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EU MILITARY OPERATIONS - ACCOUNTING

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  1. EU MILITARY OPERATIONS - ACCOUNTING Georgios.kouvidis@consilium.europa.eu +32 2 281 2014

  2. Where do you think the information needed for the reports is coming from ? Accounting

  3. Introduction • Purpose of • keeping accounts of cash transfers received, of expenditures committed and payments made, as well as inventory of the fixed assets financed by ATHENA budget, • recording all financial transaction in the execution of Common Costs and through ATHENA pre-financed expenditures, • enabling the production of financial reports and annual accounts. • References Council decision 2008/975/CFSP of 18 May December 2008 • Chapter 10, Accounting and Inventory • Chapter 11, Audit and Presentation of Accounts Act of the Special Committee - Financial Rules (as of JAN2009) • Part I, Article 8, 9 and 10 describing the tasks of Budget-, Contracting- and Accounting Officers • Part I, Chapter VIII – Accounting

  4. Introduction 3. Principles and Standards • Unitary (consistent) Chart of accounts • Double entry (method of) book-keeping • Recording “day by day” and “operation by operation” • EURO - Accounting currency • Segregation of the duties • Exclusive responsibility of accounting officer for treasury 4. Main actors (within the HQ’s) • Authorizing Officer (AUT) • Initiating (Budget) Officer (INI) • Accounting Officer (ACT) • Property Accounting Officer (PAO)

  5. Introduction Accounting, starts..... by the first budgetary operation (even in PrepPhase) .....will be executed consistently ….. until the last record is done, the accounts are closed and the final report has left the HQ; ……and thus it lasts from Preparatory Phase through Active Phase to end of Winding Up Phase.

  6. Agenda Principle and standards Actors, tasks, work flow Accounting documents Chart of accounts Budgetary and general accounting Accounting information system

  7. Principle and standards (in accordance with Financial Regulation) • article 42 • Accounts are kept iaw IPSAS (International Public Sector Accounting Standards) • accrual, comparable, consolidated statement, fair and true view, materiality • taking in account the specific nature of military operation. • article 44 • Entries in the accounts made by using the double entry method in the currency of € • equivalence between amount debited and credited • transaction in a currency other than € requires the € counterpart • article 45 • Accounting record shall specify the origin, content and booking reference of each data item and shall refer to relevant supporting documents

  8. Principle and standards (iaw Financial Regulation) • article 46 • Supporting documents are the basis and the proof for any entry into the accounts • produced on paper or on a medium which guarantees the reliability of the • content • Supporting documents are, e.g. • purchase order, invoice • contract, • agreement, • property delivery receipt. • article 47 • Validation of booking entry is required, prohibiting any change or deletion.

  9. Principle and standards (iaw Financial Regulation) • article 49 (3.) • Accounting operations are to be recorded day by day and operation by operation. • Financial operations are: • introduction/decommiting/closing of commitment and their validation • introduction of invoice • linking of invoice to certain commitment and 1st validation • validation of Payment order • any cash transaction • invoicing and introduction of recovery orders • article 49 (6.) • Monthly centralising of all records. • article 49 (8.) • Periodical reconciliation.

  10. AGENDA • Principle and standards • Actors, tasks, workflow • Accounting documents • Chart of accounts • Budgetary and general accounting • Accounting information system

  11. Actors and tasks In terms of Budgetary accounting Task AUT INI . • Initiating of budgetary/legal commitment x • Validation of budgetary/legal commitment x • Introduction of Third Party data x • Checking and initiating of invoice x • Linking invoice and commitment x • Validation of linking x • Preparation of Payment Order x • Validation of Payment Order x • De-Committing/Closing of Commitment x • Validation of De-committing/Closing x • Production of Budget Execution Report x • Accounting Officer • Checking and validation of third party data, Payment Order, invoice • and supporting documents for cash transaction x

  12. Actors and tasks In terms of Cash transaction Task ACT AUT . • Checking and validation of the Payment • Order, invoice and supporting documents • for cash transaction x • Preparation of the document for the cash • transaction (cash on hand or transfer) x • Signing the cash transaction x x • Recording of cash disbursing x • Checking of bank statement x • Recording of bank transfer x • Reconciliation bank/cash x • Treasury management x • Production of Cash Flow Table x

  13. Actors and tasks In terms of general accounting Task INI ACT . • Ensuring that the correct sub-article is used for: • Initiating of budgetary/legal commitment x • Introduction of invoice x • Linking invoice and commitment x • De-Committing/Closing of Commitment x • Reconciliation of the related ledgers x

  14. Actors and tasks in terms of fixed assets Task PAO AUT ACT . • Establishing the inventory of fixed assets x • Assisting the establishment x • Authorising the sale/disinvestment of fixed assets x • Updating the inventory related to: • Receiving of fixed assets x • Movement of fixedassets x • Disinvestment of fixedassets x • Submission of the supporting documents to the • INI for introduction into the accounts x • Depreciation of fixed assets x • Reconciliation of the fixed assets accounts x • Production of summary fixed assets report x

  15. Workflow To ensure the daily booking and accounting you need a) a workflow including all actors as are: Budget officer Contracting officer Accounting officer Property accounting officer b) a workflow covering all areas of accounting as are: Implementation of the budget Introduction of commitments, invoices and recovery orders Introduction of non-consumable goods received and its linking to the certain invoice Linking of commitments and invoices Validation of payments (Payment Order) ………………………………………………………………………… Performance of cash payment documents Disbursing Bank transfers

  16. Workflow for contracts and commitments INITIATOR Creation of the Commitment “RETOUR” (Back for Corrections) Refuse AUTHORIZING OFFICER Check and validation of entries End of process Validated and recorded (End of Workflow)

  17. Agenda Principle and standards Actors, tasks, workflow Accounting documents Chart of accounts Budgetary and general accounting Accounting information system

  18. Documents Accounting documents: Journals and a General ledger • they shall consist of electronic documents • keeping all transactions • ensuring the availability of all data necessary for reports and accounts. • Accounts: • Budgetary Execution Report, • Financial Statements (statement of financial performance; statement of financial position; cash flow statement) • Inventory: • Keeping the information of fixed assets financed through ATHENA and used for the operation. • Supporting documents: • purchase order, contract, agreement, • property delivery receipt.

  19. Agenda • Principle and standards • Actors and tasks • Accounting documents • Chart of accounts • Budgetary and general accounting • Accounting information system

  20. Chart of accounts Chart of accounts (COA) are given by ATHENA and are binding for all levels Budget execution and its accounting. COA ensures consistency, budgetary and general accounting and as well enabling consolidated accounts. Structure of the chart: Budget article Sub-Article General account code . Analytical Purpose Classification of the entry (debit, credit, cost, asset) 0220 – CIS 0220 1000 – Purchase240202201000 xxxx2 - asset 0220 2000 – Service 6005 02202000 xxxx1 - expense 0220 3000 – License211002203000 xxxx2 - asset 0220 9900 – unspecified 6005 02209900 xxxx1 - expense Therefore: Uniquely linked to each other and unchangeable.

  21. Agenda Principle and standards Actors and tasks Accounting documents Chart of accounts Budgetary and general accounting Accounting information system

  22. Budgetary and general accounting • Budgetary accounting • Budget implementation and execution • cash based report General accounting Credited/debited and classified accounts accrual based accounts Will not be performed within the operation until a compatible accounting information system is delivered for the use in OHQ and/or FHQ

  23. Agenda • Principle and standards • Actors and tasks • Accounting documents • Chart of accounts • Budgetary and general accounting • Accounting information system

  24. Accounting information system • Financial Rules, article 52: • Requires an accounting information system available to OHQ and FHQ • ensuring reliability, security, inviolability and ability to provide standardised reports • and accounts; • in addition, this system shall • be easy to use • be useable in theatre in a simplified form • be compatible with accounting information system used on different levels of • the operation • enable production of consolidated accounts at the central level of ATHENA • mechanism

  25. What do we need as precondition Budget Payments Contracts (2009) Financial Data (Reports) Assets You need an Accounting Software

  26. Athena OHQ FHQ FHQ • Deployable : At least 3 sites • Athena (Brussels), OHQ, FHQ • Transfers and consolidations must follow the chain of command • Communication aspects

  27. Financial disputes management General accounting Analytical accounting P I A Reports Thirdparty management Payments and cash flow management Stock / Asset Management ECM Contract Management EBM Budget Management EPM Purchase management ATHENA accounting tool (Deployed in EUTM SOMALIA)

  28. ATHENA accounting tool (Deployed in EUTM SOMALIA) • Multi-Operations & multi-HQ sites • Double-entry public bookkeeping • One single book-entry  Simultaneous update of charts (general, budgetary and analytical) and Third parties • Book-entries inter-HQs • Multi-currency Specificities • Integration of all ATHENA functionalities • Incorporation of the necessary controls • Access to data • Activities to be performed by specific roles Public Integrated Accounting (PIA)

  29. Functional use EPM ECM EBM Assets Financial Data PIA Accounting Software Revenue Management

  30. Functional architecture ATHENA Brussels OHQ OHQ OHQ OHQ OHQ FHQ FHQ Specific parameterisation (including Workflows)

  31. “Council network” Functional architecture Athena server PIA EPM Athena Consolidation Title 1 Athena BXL Common costs Consolidation Operation A Consolidation Operation B OHQ Mission A FHQ Mission A OHQ Mission B FHQ Mission B Data Transfer Data Transfer FHQ D Local dBase FHQ B Local dBase EBM EPM ECM Reporting EBM EPM ECM Reporting

  32. ATHENA operating manual Athena Operational Manual has been prepared to support any actor in any cases of performing the “Accounting” tasks in an operation. 6 -11 Inventory and related software 8 – 1 Accounting 8 – 2 Administrative and accountancy documents 8 – 3 Accounting software 9 – 2 Closure of accounts and SOP like: Model of accounting SOP Model of cash flow management SOP

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