MUSCAT, AUGUST 24
Oman’s Ministry of Finance (MoF) is preparing to transition the government’s financial reporting system to accrual accounting, marking a significant step in the modernisation of the Sultanate of Oman’s public-finance management framework.
The ministry is seeking to appoint a qualified consultant to support the transition and develop a rollout-ready national package of accounting standards, policies, procedures and implementation tools based on International Public Sector Accounting Standards (IPSAS).
According to experts, the move represents a fundamental change from the cash-oriented approach traditionally used in government accounting, under which transactions are principally recognised when money is received or paid. Under accrual accounting, revenues and expenses are recognised when they are earned or incurred, while assets and liabilities are recorded when the government obtains or assumes them, regardless of when cash changes hands.
The significance of the transition lies in the much broader picture of public finances that accrual accounting can provide. Rather than focusing primarily on cash flows and annual budget execution, the system will give the government greater visibility over what it owns, what it owes, the costs it incurs and the resources available to it.
According to the MoF, the reform is intended to strengthen the accuracy and completeness of financial reporting, improve visibility over government assets and liabilities and enhance resource management, transparency and accountability.
The adoption of an IPSAS-based framework will also bring Oman’s public-sector financial reporting closer to internationally recognised accounting practices. IPSAS standards are specifically designed for governments and other public-sector entities and provide a common framework for reporting financial performance and financial position.
The transition, however, will involve considerably more than changing accounting entries. The appointed consultant is expected to help develop the national accounting framework, including IPSAS-based standards, accounting policies and procedures, implementation tools and a practical rollout package.
It is also likely to require changes to financial-management systems, reporting processes, data structures and institutional practices, as well as training and capacity building for government finance personnel.
The transition also builds on a multi-year programme of public-finance reforms undertaken by the MoF in line with Oman Vision 2040. Key reforms included the development of a Government Financial Management Information System, establishment of a Treasury Single Account, creation of a National Asset Register and strengthening of debt-management and macro-fiscal capabilities.
More recently, the Ministry has been advancing the Unified Government Financial System (Maliyah), a modern electronic platform designed to support budget planning, execution, monitoring and reporting. Importantly, the system has been developed to support the eventual application of accrual accounting, while other reforms include the introduction of programme and performance-based budgeting, the government asset register, expenditure-control initiatives and the updating of the Financial Law’s executive regulations.
Leave a comment