Reconciliation of budgeting and accounting

Figures & data

Table 1. Reconciliation requirements in IPSAS 24, paragraph 47.

Where the financial statements and the budget are prepared on a comparable basis, i.e. the same accounting basis, classification basis, entities, and period as those of the approved budget	No requirement for reconciliation
If the accrual basis is adopted for the budget	The budget actuals must be reconciled to: total revenues and expenses, as well as net cash flows from operating, investing, and financing activities
If a basis other than the accrual basis is adopted for the budget	The budget actuals must be reconciled to: net cash flows from operating, investing, and financing activities

Table 2. Reconciliations (N = 52) of budget actuals and accrual or cash information of IPSAS financial statements of international organizations.

Reconciliation between	Budget expenditure	Budget surplus/deficit	Total
Expenses	8 (15%)	-	8 (15%)
Accrual surplus/deficit	1 (2%)	15 (29%)	16 (31%)
Net cash flows from operating, investing, and financing activities	18 (35%)	10 (19%)	28 (54%)
Total	27 (52%)	25 (48%)	52 (100%)

Table 3. UNESCO’s reconciliation of budget actuals and accrual surplus/deficit 2018.

		US$ 000
Surplus statement of financial performance		1,818
Scope differences
Other proprietary funds surplus	(1,385)
Programme fiduciary fund surplus	(22,579)
Staff fiduciary funds surplus	(3,380)
Subtotal		(27,344)
General fund deficit		(25,526)
Accounting basis adjustments
Revenue
Constant dollar adjustment	(5,870)
Budgetary allotment adjustment	(54,210)
Foreign exchange gain and other non-budgetary income	(14,547)
	(74,627)
Expenses
Employee benefits	43,377
Constant dollar adjustment	3,232
Foreign exchange losses	2,246
Prior year budgetary expenses	4,144
Allowance for unpaid member states’ contributions	68,052
Disbursement relating to 38 C/5 surplus allotted in 2019	5,014
Fixed assets addition, depreciation, and amortization	14,986
Renovation loan repayment	(7,026)
	134,025
Budget basis adjustment
Unliquidated obligations	(8,112)
Total adjustments		51,286
Budget result on modified cash basis		25,760

Table 4. UNESCO’s reconciliation of budget actuals and net cash flows 2018.

	Operating activities	Investing activities	Financing activities	Total
				US$ 000
Actual net surplus statement of comparison of budget and actual amounts	25,760			25,760
Basis differences
Unliquidated obligations	8,283			8,283
Unreceived contributions for year	(89,349)			(89,349)
Other basis differences	49,597			49,597
Presentation difference	8,474	(1,316)	(7,158)
Budgetary result with cash basis	2,765	(1,316)	(7,158)	(5,709)
Entity differences	36,762	(63,936)		(27,174)
Actual amounts cash flow statement	39,527	(65,252)	(7,158)	(32,883)

Figure 1. UNESCO’s budget actual surplus/deficit and accrual surplus/deficit.