karakteristik organisasi sektor publik

PERTEMUAN 1PERTEMUAN 1

KARAKTERISTIK ORGANISASI KARAKTERISTIK ORGANISASI SEKTOR PUBLIKSEKTOR PUBLIK

TUJUAN PEMBELAJARANTUJUAN PEMBELAJARAN

Karakteristik sektor publikKarakteristik sektor publik

Sejarah sektor publik Sejarah sektor publik

Perbedaan sektor publik dan privatePerbedaan sektor publik dan private– Persamaan dan perbedaanPersamaan dan perbedaan– PelaporanPelaporan

Sektor PublikSektor Publik

Sektor Publik disebut bidang yang Sektor Publik disebut bidang yang membicarakan metode manajemen negaramembicarakan metode manajemen negara

Dalam arti sempit diartikan sebagai pungutan Dalam arti sempit diartikan sebagai pungutan negaranegara

Sektor publik diartikan dari berbagai disiplin Sektor publik diartikan dari berbagai disiplin ilmu (Kaufman) ilmu (Kaufman) administrasi, politik, administrasi, politik, sosiologi, hukum, ekonomi dan akuntansi.sosiologi, hukum, ekonomi dan akuntansi.

Sektor publik = organisasi yang Sektor publik = organisasi yang menggunmenggunakan dana masyarakatakan dana masyarakat

Organisasi Sektor PublikOrganisasi Sektor Publik

Organisasi sektor publik disebut sebagai Organisasi sektor publik disebut sebagai entitas ekonomi karena memiliki sumber entitas ekonomi karena memiliki sumber daya ekonomi yang tidak kecil bahkan daya ekonomi yang tidak kecil bahkan sangat besar. sangat besar.

Selain itu organisasi sektor publik juga Selain itu organisasi sektor publik juga melakukan transaksi-transaksi ekonomi melakukan transaksi-transaksi ekonomi dan keuangan tetapi dengan tujuan dan keuangan tetapi dengan tujuan yang berbeda dengan perusahaan yang berbeda dengan perusahaan komersial komersial

Organisasi Sektor Publik (cont’d)Organisasi Sektor Publik (cont’d)

Pengertian Sektor Publik sangat luas karena Pengertian Sektor Publik sangat luas karena masing-masing disiplin ilmu mempunyai definisi masing-masing disiplin ilmu mempunyai definisi sendiri.sendiri.

Dari sudut pandang ilmu ekonomi, sektor publik Dari sudut pandang ilmu ekonomi, sektor publik sering didefinisikan sebagai “suatu entitas yang sering didefinisikan sebagai “suatu entitas yang aktivitasnya berhubungan dengan penyediaan aktivitasnya berhubungan dengan penyediaan barang dan jasa untuk memenuhi kebutuhan barang dan jasa untuk memenuhi kebutuhan dan hak publik”dan hak publik”

Jenis Organisasi Sektor PublikJenis Organisasi Sektor Publik

Lembaga pemerintahLembaga pemerintah

Organisasi agamaOrganisasi agama

Organisasi sosialOrganisasi sosial

YayasanYayasan

Instansi pendidikanInstansi pendidikan

Organisasi kesehatanOrganisasi kesehatan

Ciri-ciri Organisasi Sektor PublikCiri-ciri Organisasi Sektor Publik

Dijalankan tidak untuk mencari keuntungan Dijalankan tidak untuk mencari keuntungan financialfinancial

Dimiliki secara kolektif oleh publikDimiliki secara kolektif oleh publik

Kepemilikan atas sumber daya tidak Kepemilikan atas sumber daya tidak digambarkan dalam bentuk saham yang dapat digambarkan dalam bentuk saham yang dapat diperjualbelikandiperjualbelikan

Keputusan-keputusan yang terkait dengan Keputusan-keputusan yang terkait dengan kebijakan maupun operasi didasarkan pada kebijakan maupun operasi didasarkan pada konsensus, kalau organisasi pemerintah melalui konsensus, kalau organisasi pemerintah melalui suatu badan legislative.suatu badan legislative.

KarakteristikKarakteristik

Tujuan Tujuan untuk mensejahterakan rakyat secara untuk mensejahterakan rakyat secara bertahap baik dalam kebutuhan dasar dan kebutuhan bertahap baik dalam kebutuhan dasar dan kebutuhan lainnya baik jasmani maupun ruhani.lainnya baik jasmani maupun ruhani.Aktivitas Aktivitas pelayanan publik seperti dalam bidang pelayanan publik seperti dalam bidang pendidikan, kesehatan, penegakan hukum, transportasi pendidikan, kesehatan, penegakan hukum, transportasi publik dan penyediaan pangan.publik dan penyediaan pangan.Sumber pembiayaan Sumber pembiayaan berasal dari dana masyarakat berasal dari dana masyarakat berbentuk pajak dan retribusi, laba perusahaan negara, berbentuk pajak dan retribusi, laba perusahaan negara, pinjaman pemerintah serta pendapatan lain-lain yang pinjaman pemerintah serta pendapatan lain-lain yang sah dan tidak bertentangan dengan perundangan yang sah dan tidak bertentangan dengan perundangan yang berlakuberlaku

Karakteristik - lanjKarakteristik - lanj

Pola pertanggungjawaban Pola pertanggungjawaban bertanggung bertanggung jawab kepada masyarakatjawab kepada masyarakatKultur organisasi Kultur organisasi bersifat birokratis, formal bersifat birokratis, formal dan berjenjang.dan berjenjang.Penyusunan anggaran Penyusunan anggaran dilakukan bersama dilakukan bersama masyarakat dalam perencanaan masyarakat dalam perencanaan program.Penyusunan anggaran dan program program.Penyusunan anggaran dan program dipublikasikan untuk dikritisi dan didiskusikan dipublikasikan untuk dikritisi dan didiskusikan oleh masyarakat sebelum disahkan.oleh masyarakat sebelum disahkan.Stakeholder Stakeholder masyarakat, pegawai, investor, masyarakat, pegawai, investor, lembaga internasional, lembaga donor, kreditor, lembaga internasional, lembaga donor, kreditor, dlldll

SejarahSejarah

Organisasi sektor publik telah dimulai Organisasi sektor publik telah dimulai sejak ribuan tahun lalu (Vernon Kam 89)sejak ribuan tahun lalu (Vernon Kam 89)Praktik tersebut dihasilkan dari interaksi Praktik tersebut dihasilkan dari interaksi antar warga.antar warga.Organisasi sektor publik diklasifikasikan Organisasi sektor publik diklasifikasikan dalam :dalam :– Semangat kapitalisme (capitalism spirit)Semangat kapitalisme (capitalism spirit)– Peristiwa politik dan ekonomi (economic and Peristiwa politik dan ekonomi (economic and

politic events)politic events)– Inovasi teknologi (technology innovation)Inovasi teknologi (technology innovation)

Sejarah Sektor PublikSejarah Sektor Publik

3000SM

Abad5

1000SM

AbadKe 01

2000SM

Abad13

PeriodeYunani

PeriodeRomawi

PeriodeEropa

PeriodeMesir

PeriodeBabilonia

• Piramid dan Spinx dibangun 2650 SM• Abraham 2000SM• Code Hamurabi 1750 SM• Musa 1400 SM

Sejarah Organisasi Sektor PublikSejarah Organisasi Sektor Publik

• MesirMesir• Organisasi kementrian didirikan untuk Organisasi kementrian didirikan untuk

mengadministrasikan laporan untuk perdana menterimengadministrasikan laporan untuk perdana menteri• Menteri membuat laporan bulanan terkait dengan Menteri membuat laporan bulanan terkait dengan

hasil pemungutan pajak.hasil pemungutan pajak.• Distrik menyimpan catatan kekayaan sebagai dasar Distrik menyimpan catatan kekayaan sebagai dasar

pemungutan pajak.pemungutan pajak.

• BabioniaBabionia• Praktik pencatatan telah dilakukan dalam berbagai Praktik pencatatan telah dilakukan dalam berbagai

kegiatan untuk menghasilkan pendapatan dan kegiatan untuk menghasilkan pendapatan dan produksiproduksi


• YunaniYunani• Pemerintah membagi secara adil sumber Pemerintah membagi secara adil sumber

pendapatan yang diterima oleh Phartenonpendapatan yang diterima oleh Phartenon• Telah mengembangkan berbagai metode Telah mengembangkan berbagai metode

pencatatan barang yang berharga.pencatatan barang yang berharga.• Praktik akuntansi digunakan untuk Praktik akuntansi digunakan untuk

mendukung mekanisme pajakmendukung mekanisme pajak• Pencatatan transaksi di Genoa Pencatatan transaksi di Genoa transaksi transaksi

keuangan antar pemerintah yang berkuasa keuangan antar pemerintah yang berkuasa dan rakyatdan rakyat


• GerejaGereja• Administrasi keuangan gereja telah dilakukan Administrasi keuangan gereja telah dilakukan

dengan rapidengan rapi

• IslamIslam• Pencatatan kekayaan mendukung Pencatatan kekayaan mendukung

penghitungan zakat pada zaman penghitungan zakat pada zaman pemerintahan khalifahpemerintahan khalifah

• Baitul mal sebagai bendahara / keuangan Baitul mal sebagai bendahara / keuangan negara telah memiliki pencatatan yang rapi.negara telah memiliki pencatatan yang rapi.


• Inggris – abad 15Inggris – abad 15• Pemerintah berusaha melakukan mengatur Pemerintah berusaha melakukan mengatur

semua pertahanan.semua pertahanan.• Pelaporan keuangan dirinci lebih rinci Pelaporan keuangan dirinci lebih rinci

tenaga kerja, metode produksi, tipe dan tenaga kerja, metode produksi, tipe dan kualitas barang, harga penjualan dan metode kualitas barang, harga penjualan dan metode pemasaranpemasaran


• Abad 18 Abad 18 Perubahan mendasar Perubahan mendasar• Inisiatif individu lebih dihargai dan diberi Inisiatif individu lebih dihargai dan diberi

peluang seluas-luasnyapeluang seluas-luasnya• Revoluasi industriRevoluasi industri• Pengembangan akuntansi keuangan dan Pengembangan akuntansi keuangan dan

manajemen di perusahaan lebih dipicu oleh manajemen di perusahaan lebih dipicu oleh perkembangan praktik akuntansi sektor perkembangan praktik akuntansi sektor publik.publik.


• Abad 19-20Abad 19-20• Mulai menyamakan akuntansi sektor publik sebagai Mulai menyamakan akuntansi sektor publik sebagai

proses pencatatan pajak yang dipungut oleh proses pencatatan pajak yang dipungut oleh pemerintah.pemerintah.

• Pejabat publik sebagai penanggungjawab Pejabat publik sebagai penanggungjawab pengumpulan pajak dan pembelanjaannya.pengumpulan pajak dan pembelanjaannya.

• Dimulainya praktik audit atas dana pemerintahDimulainya praktik audit atas dana pemerintah• Namun pejabat pemerintah yang mengaudit juga Namun pejabat pemerintah yang mengaudit juga

memiliki tanggung jawab administrasi lain.memiliki tanggung jawab administrasi lain.

Perkembangan Akuntansi Sektor PublikPerkembangan Akuntansi Sektor Publik

1952 1952 Istilah sektor publik, diperkenalkan. Istilah sektor publik, diperkenalkan.Sering dikaitkan dengan bagian Sering dikaitkan dengan bagian manajemen ekonomi makromanajemen ekonomi makro

1970 1970 Kritikan thd sektor publik, tidak Kritikan thd sektor publik, tidakefisien dan tidak mendukung efisien dan tidak mendukung

pembangunanpembangunan1980 1980 Reformasi Sektor Publik di Reformasi Sektor Publik di

Negara Industri. Basis kas ke Basis Negara Industri. Basis kas ke Basis Akrual.Akrual.

Lingkup Organisasi Sektor PublikLingkup Organisasi Sektor Publik

Bergerak dalam lingkungan yang sangat Bergerak dalam lingkungan yang sangat kompleks dan variatifkompleks dan variatif

Sektor publik menyerap banyak tenaga Sektor publik menyerap banyak tenaga kerjakerja

Faktor Lingkungan yang mempengaruhi:Faktor Lingkungan yang mempengaruhi:– Faktor EkonomiFaktor Ekonomi– Faktor PolitikFaktor Politik– Faktor KulturalFaktor Kultural– Faktor DemografiFaktor Demografi

Aspek FilosofiAspek Filosofi

Filosofi sektor publik bisa didasarkan pada Filosofi sektor publik bisa didasarkan pada market concept, individualism, market concept, individualism, performance orientation, kompensasi dll.performance orientation, kompensasi dll.

Perbedaan filosofi akan mempengaruhi Perbedaan filosofi akan mempengaruhi kebijakan publikkebijakan publik

Misal :Misal :– orientasi sentralisasi ke arah desentrasiliasiorientasi sentralisasi ke arah desentrasiliasi– Market mekanism dan social mechanismMarket mekanism dan social mechanism– Birokrasi dan penghargaan konsumenBirokrasi dan penghargaan konsumen

Kesamaan antara organisasi sektor Kesamaan antara organisasi sektor publik dengan entitas lainnyapublik dengan entitas lainnya

bagian yang tidak terpisahkan dalam sistem bagian yang tidak terpisahkan dalam sistem perekonomian nasional karena sama-sama perekonomian nasional karena sama-sama menggunakan sumber daya baik keuangan menggunakan sumber daya baik keuangan maupun manusia.maupun manusia.menghadapi sumber daya terbatas untuk menghadapi sumber daya terbatas untuk mencapai tujuannyamencapai tujuannyamemiliki pola manajemen keuangan yang sama, memiliki pola manajemen keuangan yang sama, dimulai dari perencanaan sampai pengendalian dimulai dari perencanaan sampai pengendalian dimana penggunaan akuntansi menjadi dimana penggunaan akuntansi menjadi kebutuhan dalam hal ini.kebutuhan dalam hal ini.Dalam beberapa hal keduanya menghasilkan Dalam beberapa hal keduanya menghasilkan output produk yang sama.output produk yang sama.

Perbedaan yang signifikan antara organisasi Perbedaan yang signifikan antara organisasi sektor publik dengan perusahaansektor publik dengan perusahaan

Tujuan organisasiTujuan organisasiPerusahaan Profit oriented sedangkan organisasi Perusahaan Profit oriented sedangkan organisasi pemerintah merupakan organisasi non-profit-orientedpemerintah merupakan organisasi non-profit-oriented

Sumber-sumber pendanaan Sumber-sumber pendanaan Perusahaan komersial didanai melalui hasil operasi Perusahaan komersial didanai melalui hasil operasi perusahaan bersangkutan selain investasi dari perusahaan bersangkutan selain investasi dari pemegang saham. Sedangkan organisasi sektor publik pemegang saham. Sedangkan organisasi sektor publik melalui involuntary financial resources contribution .melalui involuntary financial resources contribution .

Peraturan perundanganPeraturan perundanganOrganisasi sektor publik khususnya lembaga pemerintah Organisasi sektor publik khususnya lembaga pemerintah harus melakukan aktivitas sesuai dengan peraturan harus melakukan aktivitas sesuai dengan peraturan perundangan yang berlaku perundangan yang berlaku

PerbandinganPerbandingan

Tertutup untuk publikTerbuka untuk publikAnggaran

Fleksibel: datar, piramid, fungsional

Birokratis, kaku, hierarkhis

Struktur Organisasi

Ke Pemegang Saham dan kreditur

Ke Masyarakat dan Parlemen

Pertanggungjawaban

Modal sendiri, utang bank, obligasi, saham, dlsb

Pajak, Retribusi, utang, obligasi, Laba Badan Usaha, dlsb

Sumber Pendanaan

Profit MotiveNonprofit MotiveTujuan Organisasi

Sektor SwastaSektor Publik

Standar AkuntansiStandar Akuntansi

PemerintahanPemerintahan– Standar Akuntansi Pemerintah (SAP), PP No Standar Akuntansi Pemerintah (SAP), PP No

24 tahun 200524 tahun 2005– Regulasi pemerintah lainnyaRegulasi pemerintah lainnya

Organisasi Nir labaOrganisasi Nir laba– PSAK 45PSAK 45

BENTUK REFORMASIBENTUK REFORMASI

Penataan peraturan perundang-Penataan peraturan perundang-undangan;undangan;

Penataan kelembagaan;Penataan kelembagaan; Penataan sistem pengelolaan keuangan Penataan sistem pengelolaan keuangan

negara/daerah; dannegara/daerah; dan Pengembangan sumber daya manusia di Pengembangan sumber daya manusia di

bidang keuanganbidang keuangan

DASAR HUKUMDASAR HUKUM UU No. 17/2003 Keuangan Negara;UU No. 17/2003 Keuangan Negara; UU No. 1/2004 Perbendaharaan Negara;UU No. 1/2004 Perbendaharaan Negara; UU No. 15/2004 Pemeriksaan Pengelolaan dan Tanggung Jawab UU No. 15/2004 Pemeriksaan Pengelolaan dan Tanggung Jawab

Keuangan Negara;Keuangan Negara; UU No. 25/2004 Sistem Perencanaan Pembangunan Nasional;UU No. 25/2004 Sistem Perencanaan Pembangunan Nasional; UU No. 32/2004 Pemerintahan Daerah;UU No. 32/2004 Pemerintahan Daerah; UU No. 33/2004 Perimbangan Keuangan antara Pemerintah Pusat dan UU No. 33/2004 Perimbangan Keuangan antara Pemerintah Pusat dan

Pemerintahan Daerah;Pemerintahan Daerah; PP No. 23/2005 Pengelolaan Keuangan BLU;PP No. 23/2005 Pengelolaan Keuangan BLU; PP No. 24/2005 Standar Akuntansi Pemerintahan;PP No. 24/2005 Standar Akuntansi Pemerintahan; PP No. 58/2005 Pengelolaan Keuangan Daerah;PP No. 58/2005 Pengelolaan Keuangan Daerah; PP No. 8/2006 Pelaporan Keuangan dan Kinerja Instansi Pemerintah.PP No. 8/2006 Pelaporan Keuangan dan Kinerja Instansi Pemerintah. PP N0. 3/12007 Pelaporan Pertanggungjawaban Penyelenggaraan PP N0. 3/12007 Pelaporan Pertanggungjawaban Penyelenggaraan

Pemerintah DaerahPemerintah Daerah PP 6/2008 Evaluasi Kinerja Penyelenggaraan Pemerintah DaerahPP 6/2008 Evaluasi Kinerja Penyelenggaraan Pemerintah Daerah

G&NP ACCOUNTING ANDG&NP ACCOUNTING ANDFINANCIAL REPORTINGFINANCIAL REPORTING

Based on distinctive Based on distinctive ConceptsConceptsStandardsStandardsProceduresProcedures

not found in private business not found in private business organizationsorganizations

Designed to accommodate information Designed to accommodate information needs of the users of financial reportsneeds of the users of financial reports

G&NP ACCOUNTING ANDG&NP ACCOUNTING ANDFINANCIAL REPORTINGFINANCIAL REPORTING

Applicable to –Applicable to –– Local governmentsLocal governments– Central governmentCentral government– Nonprofit and governmentalNonprofit and governmental

UniversitiesUniversitiesHospitalsHospitalsVoluntary health and welfare organizationsVoluntary health and welfare organizationsOther not-for-profit organizationsOther not-for-profit organizations

UNIQUE CHARACTERISTICSUNIQUE CHARACTERISTICS

Absence of profit motive; most tax exemptAbsence of profit motive; most tax exempt

Constituency (citizen / taxpayer) ownership Constituency (citizen / taxpayer) ownership versus stockholder ownershipversus stockholder ownership

No direct relationship between resources No direct relationship between resources received and services providedreceived and services provided

Consensus policy-setting by elected or Consensus policy-setting by elected or appointed oversight bodyappointed oversight body

MAJOR ORGANIZATION TYPESMAJOR ORGANIZATION TYPES

General governmentGeneral government – federal, state, county, city, – federal, state, county, city, town, village, special district (pemerintah pusat, town, village, special district (pemerintah pusat, propinsi, kota, kabupaten, kecamatan, desa)propinsi, kota, kabupaten, kecamatan, desa)

EducationEducation - public school districts, community - public school districts, community colleges, colleges and universitiescolleges, colleges and universities

Health and welfareHealth and welfare - hospitals, nursing homes, - hospitals, nursing homes, service agenciesservice agencies

AlsoAlso - religious and charitable agencies, - religious and charitable agencies, foundationsfoundations

GROWTH AND IMPORTANCE OF GROWTH AND IMPORTANCE OF G&NP SECTORG&NP SECTOR

Major political, social and economic factor; 1/3 of Major political, social and economic factor; 1/3 of expenditures in U.S. economyexpenditures in U.S. economy

Sound financial management is importantSound financial management is important

Finances often more complex than comparable Finances often more complex than comparable size private businesssize private business

Employment opportunities increasingEmployment opportunities increasing

Represents substantial portion of CPA exam Represents substantial portion of CPA exam accounting and financial reporting sectionaccounting and financial reporting section

SIMILARITIES OF G&NPSIMILARITIES OF G&NPTO BUSINESSTO BUSINESS

Integral part of U.S. economic systemIntegral part of U.S. economic system

Acquisition of resources to provide goods Acquisition of resources to provide goods or servicesor services

Financial management processesFinancial management processes

Financial information systemsFinancial information systems

Cost analyses, control and evaluation Cost analyses, control and evaluation techniquestechniques

Some similar servicesSome similar services

SOME SIMILAR BUSINESS SOME SIMILAR BUSINESS ACTIVITIESACTIVITIES

Examples:Examples:– Transportation systems (transit, airports, roads)Transportation systems (transit, airports, roads)– Sanitation servicesSanitation services– UtilitiesUtilities– Stadiums, arenasStadiums, arenas

Reason for similar accounting for business type Reason for similar accounting for business type activities (discussed later)activities (discussed later)

DIFFERENCES BETWEENDIFFERENCES BETWEENG&NP & BUSINESSG&NP & BUSINESS

Organizational objectivesOrganizational objectives

Sources of financial resourcesSources of financial resources

Regulation and controlRegulation and control

Financial reporting modelFinancial reporting model

Other distinguishing characteristicsOther distinguishing characteristics

DIFFERENCES IN ORGANIZATIONAL DIFFERENCES IN ORGANIZATIONAL OBJECTIVESOBJECTIVES

G&NP:G&NP:– Provide services as resources permitProvide services as resources permit– Operate on a year-to-year basisOperate on a year-to-year basis– Expend resources to serve constituencyExpend resources to serve constituency– Focus guides accounting & reporting:Focus guides accounting & reporting:

Budget and budget statusBudget and budget statusSources and uses of financial resourcesSources and uses of financial resourcesWorking capitalWorking capitalCash flowCash flow

DIFFERENCES IN ORGANIZATIONAL DIFFERENCES IN ORGANIZATIONAL OBJECTIVESOBJECTIVES

Business:Business:

– Profit motiveProfit motive

– Seeks to increase wealth of ownersSeeks to increase wealth of owners

– Focuses on net income / earnings per shareFocuses on net income / earnings per share

– Automatic allocation and regulation deviceAutomatic allocation and regulation device

G&NP DIFFERENCES IN G&NP DIFFERENCES IN FINANCIAL RESOURCESFINANCIAL RESOURCES

No distinction in invested capital & No distinction in invested capital & revenue transactionsrevenue transactions

Owner investments and sales typically Owner investments and sales typically insignificant or nonexistentinsignificant or nonexistent

Taxation (unique to government)Taxation (unique to government)

Grants and shared revenuesGrants and shared revenues

How Do Governmental and Not-For-Profit How Do Governmental and Not-For-Profit Organizations Differ From Business Organizations? Organizations Differ From Business Organizations?

No direct and proportional relationship No direct and proportional relationship between resources provided and the between resources provided and the benefits receivedbenefits received

Absence or Lack of a profit motiveAbsence or Lack of a profit motive

Absence of transferable ownership Absence of transferable ownership rightsrights

Collective ownership by constituentsCollective ownership by constituents

Policy-setting processPolicy-setting process

How Do Governmental and Not-For-Profit How Do Governmental and Not-For-Profit Organizations Differ From Business Organizations?Organizations Differ From Business Organizations?

For businesses, annual report is the most significant For businesses, annual report is the most significant financial document. For governments and non-profits, financial document. For governments and non-profits, budget is very important. budget is very important. Budget is the culmination of the political process. Budget is the culmination of the political process.

Need to ensure inter-period equity for most governments Need to ensure inter-period equity for most governments and non-profits.and non-profits.

Revenues may not be linked to constituent demand or Revenues may not be linked to constituent demand or satisfaction. satisfaction.

No direct link between revenues and expenses.No direct link between revenues and expenses. Many of the assets of government and non-profits are Many of the assets of government and non-profits are

restricted to particular activities and purposes. restricted to particular activities and purposes. No distinguished ownership interests.No distinguished ownership interests. Less distinction between internal and external accounting Less distinction between internal and external accounting

and reporting.and reporting.

Power ultimately rests in the hands of the Power ultimately rests in the hands of the people people

People vote and delegate that power to public People vote and delegate that power to public officialsofficials

Created by and accountable to a higher level Created by and accountable to a higher level government – ex. State Governments are government – ex. State Governments are accountable to Federal Governments while accountable to Federal Governments while City Governments are accountable to State City Governments are accountable to State Governments, etc.Governments, etc.

Power to tax citizens for revenuePower to tax citizens for revenue

How Do Governmental and Not-For-Profit Organizations Differ From Business Organizations?

MAJOR FINANCIAL RESOURCE MAJOR FINANCIAL RESOURCE COMPARISONCOMPARISON

GOVERNMENTGOVERNMENT

For OperationsFor Operations– TaxesTaxes

For CapitalFor Capital– GrantsGrants– DebtDebt

BUSINESSBUSINESS

For OperationsFor Operations– SalesSales

For CapitalFor Capital– StockStock– DebtDebt

AN EXAMPLEAN EXAMPLE

SUBTLE DIFFERENCES INSUBTLE DIFFERENCES ING&NP FINANCIAL RESOURCESG&NP FINANCIAL RESOURCES

Monopolistic services; no open marketMonopolistic services; no open market– Police and fire servicesPolice and fire services

User charges based on cost without profitUser charges based on cost without profit– Health and social servicesHealth and social services

Charges often only cover part of costCharges often only cover part of cost– Transit, colleges or universitiesTransit, colleges or universities

REGULATION AND CONTROLREGULATION AND CONTROL

Business:Business:

– Able to modify or withdraw unprofitable goods and Able to modify or withdraw unprofitable goods and services from the marketplaceservices from the marketplace

– Responds to value of resources provided to type and Responds to value of resources provided to type and quality of goods and services providedquality of goods and services provided

– Profit motive and measurement result in an allocation Profit motive and measurement result in an allocation and regulation of resources vs. goods and services and regulation of resources vs. goods and services providedprovided

REGULATION AND CONTROLREGULATION AND CONTROL

G&NP:G&NP:

– NotNot able to modify or withdraw some unprofitable goods able to modify or withdraw some unprofitable goods and services from the marketplaceand services from the marketplace

– Value of resources provided Value of resources provided often not relatedoften not related to type and to type and quality of goods and services providedquality of goods and services provided

– Goods and services provided often unique and without Goods and services provided often unique and without charge or at a “token” chargecharge or at a “token” charge

G&NP’s DIFFICULTY IN G&NP’s DIFFICULTY IN EVALUATING RESULTSEVALUATING RESULTS

No market supply and demand test for value No market supply and demand test for value of servicesof services

Indirect relationship between resource Indirect relationship between resource providers and service recipientsproviders and service recipients

Absence of profit testAbsence of profit test

Forced resource contributions (taxation)Forced resource contributions (taxation)

G&NP OPERATIONSG&NP OPERATIONSAFFECTED BY:AFFECTED BY:

ExternalExternal elements elements

– Federal / state statutes and lawsFederal / state statutes and laws

– Grant regulationsGrant regulations

– Judicial decisionsJudicial decisions

G&NP OPERATIONSG&NP OPERATIONSAFFECTED BY:AFFECTED BY:

InternalInternal elements elements

– Charter, by-laws, ordinancesCharter, by-laws, ordinances

– Contractual obligationsContractual obligations

– Trust / donor agreementsTrust / donor agreements

G&NP OPERATIONS REGULATED & G&NP OPERATIONS REGULATED & CONTROLLED BY:CONTROLLED BY:

Organization structureOrganization structure– Governance elected, line of authorityGovernance elected, line of authority

Personnel policies and proceduresPersonnel policies and procedures– Who hires / fires, compensationWho hires / fires, compensation

Source of financial resourcesSource of financial resources– Taxes, debt and rate limits Taxes, debt and rate limits

(Continued)(Continued)

G&NP OPERATIONS REGULATED & G&NP OPERATIONS REGULATED & CONTROLLED BY:CONTROLLED BY:

Use of financial resourcesUse of financial resources

– Restricted, budgeting, purchasingRestricted, budgeting, purchasing

Accounting and financial reportingAccounting and financial reporting

– Structure, reporting types, recipientsStructure, reporting types, recipients

AuditingAuditing– Who, frequency, scope, grantsWho, frequency, scope, grants

ACCOUNTING & FINANCIAL ACCOUNTING & FINANCIAL REPORTING OBJECTIVESREPORTING OBJECTIVES

Making resource allocation decisionsMaking resource allocation decisions

Setting goals and objectivesSetting goals and objectives

Directing and controlling resourcesDirecting and controlling resources

Reporting on resource custodianshipReporting on resource custodianship

Contributing to efficiency and effectivenessContributing to efficiency and effectivenessAmerican Accounting AssociationAmerican Accounting Association


Objectives address needs of Objectives address needs of externalexternal users of financial informationusers of financial information

Managers and other Managers and other internalinternal users have users have specialized needs for financial informationspecialized needs for financial information

FASB - Statement of Financial Accounting Concepts No. 4FASB - Statement of Financial Accounting Concepts No. 4


For general purpose For general purpose externalexternal financial reporting: financial reporting:

Making resource allocation decisionsMaking resource allocation decisions

Assessing services and ability to continueAssessing services and ability to continue

Assessing management stewardship responsibilities Assessing management stewardship responsibilities and performanceand performance

FASB - Statement of Financial Accounting Concepts No. 4FASB - Statement of Financial Accounting Concepts No. 4

FINANCIAL REPORTING FINANCIAL REPORTING INFORMATION NEEDSINFORMATION NEEDS

Economic resources, obligations, net resourcesEconomic resources, obligations, net resources

Effects of transactions / events on resourcesEffects of transactions / events on resources

Performance measurement of resource changesPerformance measurement of resource changes

Service efforts and accomplishmentsService efforts and accomplishments

Sources of cash flows and liquiditySources of cash flows and liquidityFASB - Statement of Financial Accounting Concepts No. 4FASB - Statement of Financial Accounting Concepts No. 4

ACCOUNTING & FINANCIAL ACCOUNTING & FINANCIAL REPORTING CHARACTERISTICSREPORTING CHARACTERISTICS

Remember –Remember –

AccountingAccounting– is a service function andis a service function and– must meet user information needs in a must meet user information needs in a

given environmentgiven environment

Accounting control provisions in Accounting control provisions in

G&NP environmentG&NP environment


Accounting control provisions inAccounting control provisions in

G&NP environmentG&NP environment

– Use of “funds”Use of “funds”– Budgetary controlsBudgetary controls


Therefore, the two most important legal and Therefore, the two most important legal and administrative controls affecting administrative controls affecting governmental and nonprofit accounting and governmental and nonprofit accounting and financial reportingfinancial reporting

1.1. Funds and fund accountingFunds and fund accounting

2.2. BudgetsBudgets and appropriations and appropriations


What are What are key differenceskey differences of government and nonprofit from of government and nonprofit from business accounting & financial reporting?business accounting & financial reporting?

Use of fund accountingUse of fund accounting

Use of special accounting for restricted activitiesUse of special accounting for restricted activities

Presentation of budgetary comparisons in Presentation of budgetary comparisons in connection with regular financial reportingconnection with regular financial reporting

Financial reports are used primarily to:Financial reports are used primarily to: Compare actual financial results with legally adopted Compare actual financial results with legally adopted

budgetbudget Assess financial condition and results of operations Assess financial condition and results of operations Assist in determining compliance with finance-related Assist in determining compliance with finance-related

laws, rules, and regulations of the governmentlaws, rules, and regulations of the government Assist in evaluating efficiency and effectiveness of Assist in evaluating efficiency and effectiveness of

management, its resources and programsmanagement, its resources and programs

DISCUSSION: A large majority of citizens never have DISCUSSION: A large majority of citizens never have the time to evaluate the financial reports of SLGs, but the time to evaluate the financial reports of SLGs, but candidates seeking an elected position (those running candidates seeking an elected position (those running for election) in government, use these reports to attack for election) in government, use these reports to attack the incumbent.the incumbent.

Objectives of Financial Reporting—State and Local Governments (SLG)

Objectives of Financial ReportingObjectives of Financial Reporting

““ACCOUNTABILITYACCOUNTABILITY is the cornerstone of all is the cornerstone of all financial reporting in government,” (GASB financial reporting in government,” (GASB Concepts Statement No. 1Concepts Statement No. 1, par. 56). , par. 56).

Please see the summary of concepts Statement 1.Please see the summary of concepts Statement 1.

What do we mean by accountability?What do we mean by accountability? How does “interperiod equity” relateHow does “interperiod equity” relate

to accountability? to accountability?

These questions are very important!These questions are very important!

Q: What do we mean by accountability?Q: What do we mean by accountability?

A: Accountability arises from the citizens’ A: Accountability arises from the citizens’ “right to know.” It imposes a duty on “right to know.” It imposes a duty on public officials to be accountable to public officials to be accountable to citizens for raising public monies and citizens for raising public monies and how they are spent.how they are spent.

Objectives of Financial Reporting(cont’d)

Q: How does “interperiod equity” relate to Q: How does “interperiod equity” relate to accountability?accountability?

A:A: Interperiod equity is a government’s obligation to Interperiod equity is a government’s obligation to disclose whether current-year revenues were disclose whether current-year revenues were sufficient to pay for current-year benefits—or did sufficient to pay for current-year benefits—or did current citizens defer payments to future taxpayers? current citizens defer payments to future taxpayers?

(In other words, the expenses have been (In other words, the expenses have been incurred now and will be paid later from taxes incurred now and will be paid later from taxes collected in future years.)collected in future years.)

It is important to understand this concept of It is important to understand this concept of “interperiod equity”!“interperiod equity”!

Objectives of Financial Reporting: (cont’d)

Objectives of Financial Reporting—Objectives of Financial Reporting—Federal GovernmentFederal Government

Accountability is also the foundation of Accountability is also the foundation of federalfederal government financial reporting government financial reporting

Federal Accounting Standards Advisory Federal Accounting Standards Advisory Board (FASAB)’s standards are targeted at Board (FASAB)’s standards are targeted at both:both:

internal users (management), and internal users (management), and external usersexternal users

FASB – Financial Accounting Standards BoardFASB – Financial Accounting Standards Board Business organizations: ex. Wal-MartBusiness organizations: ex. Wal-Mart Nongovernmental not-for-profits: ex. Rice University, Nongovernmental not-for-profits: ex. Rice University, American Cancer SocietyAmerican Cancer Society

GASB – Governmental Accounting Standards BoardGASB – Governmental Accounting Standards Board Governmental organizationsGovernmental organizations Governmental not-for-profits: ex. University of HoustonGovernmental not-for-profits: ex. University of Houston

FASAB – Federal Accounting Standards Advisory BoardFASAB – Federal Accounting Standards Advisory Board Federal Government and its agenciesFederal Government and its agencies Ex. Department of Agriculture, Department of Ex. Department of Agriculture, Department of Transportation, Department of Energy, Department Transportation, Department of Energy, Department of Education, Department of Defense and others.of Education, Department of Defense and others.

Sources of GAAP And Financial Reporting Standards

FINANCIAL REPORTINGFINANCIAL REPORTINGSTANDARDS-SETTING STRUCTURESTANDARDS-SETTING STRUCTURE

G A S ACG O VERNM ENT AL

ACCO UNT ING ST ANDARDSADVISO RY CO UNCIL

G A S BG overnm ental

AccountingStandards Board

F A S ACFINANCIAL

ACCO UNT ING ST ANDARDSADVISO RY CO UNCIL

F A S BFinancial

AccountingStandards Board

F AFFinancial Accounting Foundation

State and local governments

All other organizations

www.gasb.org

Role of FAF(Financing & Oversight)

Role of GASAC & FASAC(Advisory)

GASB and FASBGASB and FASB

The objectives of both GASB and FASB:The objectives of both GASB and FASB: Endorse the notion that financial reporting Endorse the notion that financial reporting

encompasses information on service efforts encompasses information on service efforts and accomplishments.and accomplishments.

Emphasize that the ability to measure Emphasize that the ability to measure accomplishments is still undeveloped. accomplishments is still undeveloped.

View this aspect of performance reporting as View this aspect of performance reporting as a long-term goal rather than an immediate a long-term goal rather than an immediate imperative.imperative.

General Purpose General Purpose External Financial ReportsExternal Financial Reports

Management’s discussion and analysisManagement’s discussion and analysis

Government-wideGovernment-wide Fund financial Fund financial

financial statementsfinancial statements statementsstatements

Notes to the financial statementsNotes to the financial statements

Required supplementary information Required supplementary information

(other than MD&A)(other than MD&A)

Comprehensive Annual Financial Report Comprehensive Annual Financial Report (CAFR) -- recommended, but not (CAFR) -- recommended, but not

mandatory --mandatory -- Introductory sectionIntroductory section

Financial section Financial section

Statistical sectionStatistical section

NOTE: A hard copy of the NOTE: A hard copy of the City of Houston’s CAFR is City of Houston’s CAFR is available in Dr. available in Dr. Khumawala’s office for you Khumawala’s office for you to review if you are to review if you are interested.interested.

CAFR - Introductory SectionCAFR - Introductory Section Title page Title page

Contents page Contents page

Letter of transmittalLetter of transmittal

Other (as desired by management)Other (as desired by management)

You can view online at the City of Houston’s Annual You can view online at the City of Houston’s Annual Reports for the years 2004, 2003, and 2002 at the Reports for the years 2004, 2003, and 2002 at the following link: following link: http://www.ci.houston.tx.uh/mayoroffice/annualreport.html..

Auditor’s report Auditor’s report

MD&AMD&A

Basic Financial StatementsBasic Financial Statements

Required Supplementary InformationRequired Supplementary InformationRSI (Other than MD&A)RSI (Other than MD&A)

Combining the individual fundCombining the individual fundstatements and schedulesstatements and schedules

Remember GASB Statement No. 34 is the Remember GASB Statement No. 34 is the NEWNEW reporting reporting model that SLGs model that SLGs have to followhave to follow..

This is the NEW GAAP!!!This is the NEW GAAP!!!

CAFR—Financial Section CAFR—Financial Section (GASB Statement No. 34)(GASB Statement No. 34)

Management’s Discussion and Analysis (MD&A)

Brief objective narrative providing management’s analysis of the government’s financial performance

This is basically “Tell It Like It is.”

Basic Financial StatementsBasic Financial Statements

Government-wide Financial StatementsGovernment-wide Financial Statements

Statement of Net Assets Statement of Net Assets

Statement of Activities Statement of Activities

Fund Financial Statements (see next Fund Financial Statements (see next slide)slide)

Notes to the Financial StatementsNotes to the Financial Statements

The Government-wide Financial The Government-wide Financial Statements are required under GASB Statements are required under GASB 34.34.

Fund Financial StatementsFund Financial Statements

Balance Sheet - Governmental Funds Balance Sheet - Governmental Funds

Statement of Revenues, Expenditures, and Changes Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds with in Fund Balances - Governmental Funds with reconciliationreconciliation

Statement of Net Assets - Proprietary Funds Statement of Net Assets - Proprietary Funds

Statement of Revenues, Expenses, and Changes in Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds Fund Net Assets - Proprietary Funds

Statement of Cash Flows - Proprietary Funds Statement of Cash Flows - Proprietary Funds

Statement of Fiduciary Net Assets Statement of Fiduciary Net Assets

Statement of Changes in Fiduciary Net Assets Statement of Changes in Fiduciary Net Assets

Tables and charts showing multiple-year Tables and charts showing multiple-year trends in financial and socioeconomic trends in financial and socioeconomic informationinformation

CAFR - Statistical Section

Fund accounting reports financial information Fund accounting reports financial information for separate self-balancing sets of accounts, for separate self-balancing sets of accounts, segregated for separate purposes or to account segregated for separate purposes or to account for resources restricted as to use by donors or for resources restricted as to use by donors or grantors grantors

Funds are separate accounting and fiscal Funds are separate accounting and fiscal entitiesentities

Fund Accounting

FUNDS & FUND ACCOUNTINGFUNDS & FUND ACCOUNTING

Purpose –Purpose –

To control and segregate resources that are To control and segregate resources that are – externally restrictedexternally restricted and and – internally (managerially) designatedinternally (managerially) designated

To ensure and demonstrate compliance with To ensure and demonstrate compliance with legallegal and and administrativeadministrative requirements requirements


Externally restrictedExternally restricted resources have resources have accountability obligations. Examples accountability obligations. Examples include those for:include those for:Capital purposes - Capital purposes - – Church building additionChurch building addition– Hospital facilityHospital facility– City sewage treatment plantCity sewage treatment plant

Operating purposes –Operating purposes –– University researchUniversity research– County road maintenanceCounty road maintenance


Internally designatedInternally designated resources of resources of management only have internal management only have internal accountability obligations. Examples:accountability obligations. Examples:Capital purposes -Capital purposes -– Building additionsBuilding additions– A new facilityA new facility– New roadsNew roads

Operating purposes -Operating purposes -– ResearchResearch– Road maintenanceRoad maintenance


Funds are established to:Funds are established to:

Control restricted and designated resourcesControl restricted and designated resources

Ensure and demonstrate compliance with –Ensure and demonstrate compliance with –– Legal requirementsLegal requirements– Administrative controlsAdministrative controls

OTHER G&NP VS. COMMERCIAL OTHER G&NP VS. COMMERCIAL DISTINGUISHING CHARACTERISTICSDISTINGUISHING CHARACTERISTICS

OBJECTIVESOBJECTIVES

Acquiring andAcquiring andspendingspendingresources legallyresources legallyand appropriatelyand appropriately

Seeking toSeeking toincrease or evenincrease or evenmaintain capitalmaintain capital

CONTROLSCONTROLS

Use of statutory,Use of statutory,fund andfund andbudgetarybudgetary

controlscontrols

Presence ofPresence ofsupply, demandsupply, demandand profit devicesand profit devices

Governments & NonProfitOrganizations

Businesses

G&NP / COMMERCIAL G&NP / COMMERCIAL ACCOUNTING DIFFERENCESACCOUNTING DIFFERENCES

Compliance control and accountability in Compliance control and accountability in government and nonprofit organizations government and nonprofit organizations result in different concepts and terms in-result in different concepts and terms in-

AccountingAccounting

Financial reportingFinancial reporting

AuditingAuditing

G&NP / COMMERCIAL G&NP / COMMERCIAL ACCOUNTING DIFFERENCESACCOUNTING DIFFERENCES

Different meaning of terminology –Different meaning of terminology –

– Accounting entity = fundAccounting entity = fund– Reporting entity = entire organizationReporting entity = entire organization– Periodicity = flow of annual financial resourcesPeriodicity = flow of annual financial resources– Matching = use in business-type activities onlyMatching = use in business-type activities only– Going concern = business-type activitiesGoing concern = business-type activities

Summary

In this course you will become familiar with current GASB, FASB, and FASAB standards relative to governmental and not-for-profit organizations.

Accounting and reporting for governmental and not-for-profit entities differ from those of for-profit entities because each type of entity has different purposes and reporting objectives.

““......Even when developed to the ultimate Even when developed to the ultimate stage of perfection, governmental stage of perfection, governmental accounting cannot become a guaranty of accounting cannot become a guaranty of good government. At best, it can never be good government. At best, it can never be more than a valuable tool for promotion of more than a valuable tool for promotion of sound financial management...” sound financial management...” Professor Professor R. M. Mikesell, 1951R. M. Mikesell, 1951

FINAL NOTEFINAL NOTE

RefenceRefence

Akuntansi Sektor Publik, Deddi Akuntansi Sektor Publik, Deddi Nordiawan, Penerbit Salemba Empat, Nordiawan, Penerbit Salemba Empat, 20092009Governmental & Non Profit Accounting, Governmental & Non Profit Accounting, Freeman, Prentice Hall, 8th ed, 2007Freeman, Prentice Hall, 8th ed, 2007Government & Not-For-Profit Accounting, Government & Not-For-Profit Accounting, Michael H. Granof, Michael H. Granof, 33nd Edition, 200nd Edition, 20077Akuntansi Sektor Publik, Indra Bastian, Akuntansi Sektor Publik, Indra Bastian, Erlangga, 2010.Erlangga, 2010.

karakteristik organisasi sektor publik

Documents

wide financial

interperiod

np operations

profit organizations

proprietary

financial

financial

financial