While we realize that our country is blessed with abundant natural resources, we also acknowledge that our richness in natural resources must be complemented with good governance. Without this balance, we cannot hope to extract the true benefits of those resources.

We acknowledge that our mission to reform our government’s financial reporting system is also a strategic tool to strengthen efforts in detecting and preventing corruption practices by government officials.

We must improve our financial reporting system of our governmental entities in order to realize the goal of enhancing accountability and transparency. It is important that we implement a top down approach where government entities at the central level will lead and set examples for entities at lower levels. Within our effort to enhance the financial reporting system, we must also pay special attention to internal controls as to minimize the quantity and types of material weaknesses. In this process, we feel the need to begin the arduous transition from cash based accounting to accrual based accounting. We will also continue the process of adapting IPSAS.

We realize that financial statements prepared by governmental entities should be able to be used and understood by the general public. Financial statements from the public sector must be designed and develop such that they can be used by the general public to make decisions. For this effort, we must start to develop key performance indicators (both financial and non-financial measures) that are included in governmental entity’s financial reports.

We need to improve our government’s asset management. We realize that asset management across all government levels is far from perfect. Thus, we must embark on strategies to enhance our asset management practices. We must begin by obtaining reliable information on government’s portfolio of assets. Here, we need to build a central database that identifies all government assets (tangible, intangible, and financial). Following this step, we must identify all economic efficiencies and risk factors associated with public property accompanied with solutions to address areas for improvement. Next, we need to improve on our central policy framework on management of public property assets. Included in this step is to effectively utilize assets according to needs and objectives of the public. Finally, we need to focus on improving transparency and accountability on public asset management practices.

We realize the potential benefits that can be attained through accrual accounting, which are better information, enhanced accountability, enhanced transparency, and the prevention of manipulation. The transition to accrual accounting should be done in subsequent steps accompanied with support from all key stakeholders. In the beginning steps, we will focus on using accrual based standards for financial statements. Afterwards, we shall then consider ways to develop budgets using the accrual approach. For this transition, we must start discussion on how to ensure adequate resources in human skills, technology, and systems. Furthermore, we have to establish chart of accounts, accounting policies, and instructions.

The challenges that we face as a nation is part of challenges that exist at the global level. We realize that the old ways and practices of the public sector are no longer acceptable. We need to cultivate strong financial management that fosters accountability, continue to combat corruption that promotes stewardship, and develop timely transparent reporting.

We recognize that pubic sector reporting requirements are unique. It is crucial that we follow accounting standards that best support the success of financial reporting in the public sector. We need accounting standards to build a foundation for financial accountability, create a framework for accounts and audits, and set appropriate benchmarks. Thus, we must consider the importance of adapting IPSAS. We recognize that IPSAS was developed with the mission to serve the public interest by developing high quality accounting standards for use by public sector entities to prepare financial statements. The IPSASB has done the necessary steps to ensure that the standards issued are relevant to the public sector. The importance of IPSAS is evident through its focus on high quality reporting, governmental transparency, and good governance. We must also remember that adaption of standards is not just about accounting. It is about reforming the public sector’s financial management and improving the use and productivity of all public sector resources.