Central Banking Technical Assistance to Countries in Transition

Statement on Bookkeeping and Accounting Reforms

Susana Almuina, Ian McCarthy, Gabriel Sensenbrenner, and Justin Zulu
Published Date:
December 1995
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The need for technical assistance to effect structural changes in the accounting framework for the National Bank of the Republic of Kazakhstan and the entire banking system was identified during the first technical mission of the IMF’s Monetary and Exchange Affairs Department. At that time the Bank of France and the Bank of Japan were designated as the main consultants to the National Bank for the design and implementation of a new chart of accounts and payments system, respectively.

Despite the official nature of these comments, the Bank must express gratitude to its French colleagues, Mr. Guéranger and Mr. Leblanc, who were so patient in helping the Bank staff understand the structure of the old chart of accounts, and the logic of international standards, and to reach a conclusion on the necessity of reforms. Initially, the technical assistance was to be provided for the main accounts, but subsequently assistance was also given in resolving problems (stages and levels) related to the composition of the supporting accounts.

An Accounting Reform Division was organized within the Accounting and Reporting Department to coordinate the actions of the consultants and provide in-depth analysis of the work being carried out. One of the units of this Division prepares instructions and provides explanations on the new chart of accounts for National Bank staff. The other unit performs the same functions for the commercial banks.

To ensure a smooth transition to the new system, the National Bank agreed with the consultants on the need to develop bridge tables for accounts and bookkeeping entries and accompanying aggregate indicators. After intensive training of accountants, the new chart of accounts should be introduced by the second half of 1994. But the viability of the new plan directly depends upon its adaptation to the existing mechanism—the payment system. After detailed study of this problem, the National Bank requested that investments for modernizing the payments system be one of the components of a technical assistance loan from the World Bank. The National Bank purchased a modern payments system with the resources disbursed. The National Bank plans to interface it with the new chart of accounts by October 1994, with a view toward having both systems implemented in concert. The next step, establishing the viability of the clearing centers and the service bureaus, will be determined with the help of the Bank of France and the consultants awarded the World Bank tender.

The development of a new chart of accounts and payments system with the advice of the Bank of Japan and the Bank of France (and the support of the World Bank and consultants) complements significantly the modernization of the electronic system: software packages for both the main and supporting bookkeeping and accounting systems. Until now, the existence of old technology had delayed the implementation of the new chart of accounts. In fact, the main obstacle in the implementation of the new chart has been the nonavailability of modern computer equipment and technical networks.

As for mastery of new areas of operations, the accounting staff has already begun training to perform the functions of the Current Accounts Unit, which will coordinate the issuance of an improved daily balance sheet of the National Bank. However, in this area the National Bank suffers from the inadequate professional skills of the staff and lack of knowledge of practices of colleagues from cooperating central banks, including such areas as preparing consolidated balance sheets and such bottlenecks as recording foreign exchange and cash transaction operations.

The seminars on accounting were of great value while preparing the reforms, and the experience of Kazakh accountants was used as demonstration material during the second Accounting Seminar in Vienna.

In the course of implementing the new chart of accounts, the consultants were requested to present in detail some accounting items, transactions, and rules on opening and introducing specific accounts. The last technical assistance mission from the Monetary and Exchange Affairs Department also included experts with knowledge of accounting procedures for treasury bills, related transactions, and auctions.

In the future it would be useful to have as a consultant an accountant who has long practical experience of basic accounting routines and daily central bank activities and who has worked on the staff of one of the cooperating central banks.

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