Brazil leads international discussion on new UN accounting standards

In March, Brazil reinforced its leadership in advancing global financial practices by coordinating a key discussion within the United Nations (UN) Panel of External Auditors. The virtual meeting brought together representatives from more than ten Supreme Audit Institutions (SAIs) to discuss the implementation of IPSAS 48, the standard that governs the accounting of transfer expenses.

The new rule has a direct impact on transparency and on how transfers made by UN entities to third parties, such as governments and partner NGOs, are measured, as these actors are responsible for implementing the organization's mandates and policies on the ground.

The workshop was part of the work plan of the IPSAS 48 Working Group under the UN Panel of Auditors, coordinated by Brazil, and carried out in collaboration with the SAIs of Switzerland, Indonesia, Germany, and France. The group's main objective is to foster a consistent technical interpretation of the new standard.

The significance of transfers within the UN

To illustrate the scale of the issue, transfer expenditures to implementing partners represent the second-largest category of spending within the United Nations, second only to personnel costs. In the Brazilian context, such operations are comparable to government grant agreements and require rigorous accountability, not only in financial terms, but also in terms of the results effectively achieved.

Therefore, the proper implementation of IPSAS 48 is considered essential. It will ensure traceability, transparency, and credibility in the use of billions of dollars allocated to highly vulnerable populations, including refugees, displaced persons, women, and children.

Challenges and Expert Perspectives

The event brought together experts directly involved in both the development and implementation of the standard. Representing the IPSAS Board, the international body responsible for issuing public sector accounting standards applicable to governments and global entities, technical managers and project leaders Eileen Zhou and Edwin Ng took part in the discussions.

The specific context and challenges of the United Nations system were addressed by representatives of the UN Task Force on Accounting Standards (UN TFAS). Johanna Clark, Vice-Chair of UN TFAS and Acting Chief Financial Officer of UN Women, and Catherine Muli, Senior Finance Manager at UNDP, highlighted three major challenges faced by UN agencies:

• Managing the legal complexity surrounding the enforceability of agreements;

• Monitoring the use of implementing partners;

• Ensuring accounting consistency across the dozens of entities that make up the UN system.