XBRL in Municipalities

DIRECTORATE GENERAL OF FINANCIAL COORDINATION WITH REGIONAL GOVERNMENTS AND LOCAL AGENCIES

STATE SECRETARIAT FOR FINANCE AND BUDGETS

GENERAL SECRETARIAT FOR FINANCE

MINISTRYOF ECONOMYAND FINANCE

11

Alejandro AmeliviaAlejandro AmeliviaHead of e-government areaHead of e-government area

New perspectives on financial data reporting across different levels of government

Ministry of Economy and Finance. Spain.Ministry of Economy and Finance. Spain.





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THE DIRECTORATE GENERAL OF FINANCIAL COORDINATION THE DIRECTORATE GENERAL OF FINANCIAL COORDINATION WITH LOCAL AGENCIES (DGFCLA)WITH LOCAL AGENCIES (DGFCLA)

THE DGFCLA is responsible for the financial relationships between central and local goverments.

Functions:

Applying and managing the local financing system

Technical assistance and management of inquiries regarding budgetary and financial system of local agencies

Preparing and publishing statistics on financial and budget activity of Local Agencies





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FINANCIAL LOCAL INFORMATIONFINANCIAL LOCAL INFORMATION

The ministry of economy and finance (meh) has competences for requesting local governments to report financial information

The local budget settlement data are used in the decision making process about local financing and in budgetary statistics design

Local Governments have to report a copy of their annual budget settlement (year t) to the central Administration before march 31 (year t+1).





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LOCAL BUDGET SETTLEMENT DATA REPORTSLOCAL BUDGET SETTLEMENT DATA REPORTS

Potential units reporting their data:

8.110 local governments

1.615 organisms dependent on the administrative structure of local governments

51 provincial governments

160 organisms dependent on the administrative structure of the provincial governments

>9000 other local entities and its dependent units

Total: 18314 supervised entities





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MUNICIPALITIES. DISTRIBUTION IN TERMS OF POPULATIONMUNICIPALITIES. DISTRIBUTION IN TERMS OF POPULATION

> 1.000.000 inhabitants 2 0,02 4.678.380 10,83

De 500.001 a 1.000.000 inhabitants. 4 0,05 2.676.465 6,19

De 100.001 a 500.000 inhabitants. 52 0,64 10.130.473 23,45

De 50.001 a 100.000 inhabitants. 72 0,89 4.853.517 11,24

De 20.001 a 50.000 inhabitants. 207 2,55 6.131.649 14,19

De 5.001 a 20.000 inhabitants. 877 10,82 8.525.702 19,74

<= 5.000 inhabitants. 6.893 85,01 6.058.828 14,03

Total 8.107 99,98 43.055.014 99,67

Cities with Special Autonomy Status 2 0,02 142.670 0,33

Total 8.109 100 43.197.684 100

%Population Strata Nº of Municipalities

% Population





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BUDGET REPORTING PROCEDUREBUDGET REPORTING PROCEDURE

Traditionally, the local governments have reported their printed financial information

This fact caused a great delay in final data publication

On the other hand, the risk of errors in data was too high

Since 2006, the virtual office of financial coordination with local agencies offers some new web applications to capture local financial data





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VIRTUAL OFFICE OF FINANCIAL COORDINATION WITH LOCAL VIRTUAL OFFICE OF FINANCIAL COORDINATION WITH LOCAL AGENCIES AGENCIES





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VIRTUAL OFFICE: IMPROVING PROCESSESVIRTUAL OFFICE: IMPROVING PROCESSES

The virtual office was intended to be an open communication channel between MEH and local entities

From the virtual office, authorized local users can easily access online applications in order to immediately submit their data, reducing time to gather and publish the information

The communication is “full duplex”





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VIRTUAL OFFICE: LOCAL BUDGET SETTLEMENT DATA VIRTUAL OFFICE: LOCAL BUDGET SETTLEMENT DATA CAPTURECAPTURE WEBWEB APPLICATIONAPPLICATION





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PROCEDURE FOR DATA CAPTUREPROCEDURE FOR DATA CAPTURE

Current possibilities when submitting information:

Data Entry (typing) in web forms

Data import from Excel spreadsheets

Submission of XBRL instances





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A LEGAL DISPOSITION TO MODERNIZE DATA CAPTUREA LEGAL DISPOSITION TO MODERNIZE DATA CAPTURE

Establishes general conditions and procedure for submitting Local Governments budget settlemens

Order EHA/468/2007, February 22Order EHA/468/2007, February 22

Data signing exempts the local financial manager from sending a printed, hand-signed copy of the budget

First legal text in Spain to mention XBRL. This law regulates data transmission in three possible ways: Typing, Spreadsheet importing and XBRL transmitting.





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LOCAL FINANCIAL DATA. FORMAT CONFLICTSLOCAL FINANCIAL DATA. FORMAT CONFLICTS

Local agencies are free to use any application or database to manage and store their budgetary data

A standard interchange format was required. It should

• be easy to use by all the local agencies

• be able to store or display any kind of budgetary data

• be flexible enough to fit any existing storing system

So it had to be !





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TRADITIONAL PROCEDURE: MORE WEAK POINTSTRADITIONAL PROCEDURE: MORE WEAK POINTS

The information is demanded by other institutions, such as external financial control courts (regional and national), regional governments, banks… And it was difficult to share.

This fact means that local corporations have to send the same information using different formats in order to accomplish all legal requirements

And consequently, increasing their management costs





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THESE DISADVANTAGES CAN BE ELIMINATEDTHESE DISADVANTAGES CAN BE ELIMINATED

The DGFCLA has considered XBRL as the best solution for an efficient financial data interchange, where so many organizations are involved

When using XBRL all the actors take some advantage

• Public administrations

• Audit and external control institutions

• Universities

• Banks

•Analysts





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MODEL BASED ON XBRL. EFFICIENCY GAINSMODEL BASED ON XBRL. EFFICIENCY GAINS

The use of XBRL in local budget reporting provides:

• Better information transparency

• Less time to publish data

• More quality on information

• Costs reductions

• Better G2G relationships among all the actors

• Better G2A relationships





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LENLOC: DEPLOYMENT ESTRATEGYLENLOC: DEPLOYMENT ESTRATEGY

Developed by XBRL Spain and DGFCLA

Difficulties

• Small L.A. have no resources

• Different “Source” accounting applications

DGFCLA focused on Accounting Applications firms

• 5 firms 90% Local Agencies

•Opportunity to increase business

• XBRL is recomended by Law





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LENLOC TAXONOMYLENLOC TAXONOMY

Local Accounting application(any)

Datavisualization

XBRLLENLOCInstance Database

Automaticdump

Data Analysis and transformation

Valid data

Validated data

Errorsdescription

Invalid data

User checks and signs

Signed data

Local Agency Ministry





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LENLOC STRUCTURE (I)

AccountsAccountslenloc-cta-2007-01-31.xsdlenloc-cta-2007-01-31.xsd

FunctionsFunctionslenloc-fun-2007-01-31.xsdlenloc-fun-2007-01-31.xsd

Common ElementsCommon Elementslenloc-com-2007-01-31.xsdlenloc-com-2007-01-31.xsd

Ordinary ModelOrdinary Modellenloc-com-2007-01-31.xsdlenloc-com-2007-01-31.xsd

Simplified ModelSimplified Modellenloc-com-2007-01-31.xsdlenloc-com-2007-01-31.xsd

Budget SettlementBudget Settlementlenloc-liq-2007-01-31.xsdlenloc-liq-2007-01-31.xsd

FunctionsFunctionslenloc-fun-2007-01-31.xsdlenloc-fun-2007-01-31.xsd

AccountsAccountslenloc-cta-2007-01-31.xsdlenloc-cta-2007-01-31.xsd





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LENLOC STRUCTURE (II) • Namespace: http://www.meh.es/es/fr/gaap/8-9-1999/2007-01-31

– Authority: Ministerio de Economía y Hacienda (meh)– Country: España– Report: Financiero (fr) – Account: GAAP – Legal References:

• Orden Ministerial: 8 de Septiembre de 1999• Orden EHA 466/2007

– Version Date: 2007-01-31• Prefix:

– Budget Settlement Schema: lenloc-liq• Namespace: http://www.meh.es/es/fr/gaap/8-9-1999/lenloc-liq/2007-01-31

– Ordinary model Budget Settlement Schema: : lenloc-ord• Namespace: http://www.meh.es/es/fr/gaap/8-9-1999/lenloc-ord/2007-01-31

– Simplify model Budget Settlement Schema: : lenloc-sim• Namespace: http://www.meh.es/es/fr/gaap/8-9-1999/lenloc-sim/2007-01-31

– Common Elements in Simplify and Ordinary Budget Settlement Schema: : lenloc-com• Namespace: http://www.meh.es/es/fr/gaap/8-9-1999/lenloc-com/2007-01-31

– Accounting Schema: lenloc-cta• Namespace: http://www.meh.es/es/fr/gaap/8-9-1999/lenloc-cta/2007-01-31

– Functions Schema: lenloc-fun• Namespace: http://www.meh.es/es/fr/gaap/8-9-1999/lenloc-fun/2007-01-31

http://www.meh.es/es/fr/gaap/8-9-1999/lenloc-liq/2007-01-31

http://www.meh.es/es/fr/gaap/8-9-1999/lenloc-ord/2007-01-31

http://www.meh.es/es/fr/gaap/8-9-1999/lenloc-sim/2007-01-31











http://www.meh.es/es/fr/gaap/8-9-1999/lenloc-com/2007-01-31

http://www.meh.es/es/fr/gaap/8-9-1999/lenloc-cta/2007-01-31

http://www.meh.es/es/fr/gaap/8-9-1999/lenloc-fun/2007-01-31





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LENLOC STRUCTURE (III)

• Files:– lenloc-liq-2007-01-31.xsd– lenloc-ord-2007-01-31.xsd

• lenloc-ord-2007-01-31-presentation.xml• lenloc-ord-2007-01-31-definition.xml• lenloc-ord-2007-01-31-label.xml• lenloc-ord-2007-01-31-reference.xml• lenloc-ord-2007-01-31-calculation.xml

– lenloc-sim-2007-01-31.xsd• lenloc-sim-2007-01-31-presentation.xml• lenloc-sim-2007-01-31-definition.xml• lenloc-sim-2007-01-31-label.xml• lenloc-sim-2007-01-31-reference.xml• lenloc-sim-2007-01-31-calculation.xml

– lenloc-com-2007-01-31.xsd• lenloc-com-2007-01-31-label.xml• lenloc-com-2007-01-31-reference.xml

– lenloc-cta-2007-01-31.xsd• lenloc-cta-2007-01-31-presentation.xml• lenloc-cta-2007-01-31-definition.xml• lenloc-cta-2007-01-31-label.xml• lenloc-cta-2007-01-31-reference.xml

– lenloc-fun-2007-01-31.xsd• lenloc-fun-2007-01-31-presentation.xml• lenloc-fun-2007-01-31-definition.xml• lenloc-fun-2007-01-31-label.xml• lenloc-fun-2007-01-31-reference.xml





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LENLOC STRUCTURE(IV)

LENLOC imports the DGI taxonomy in order to identify local entities and their dependent organizations

Two hypercubes or n-cubes of concepts regarding expenses, incomes and functions: accounts (lenlo-cta) and functions (lenloc-fun)

Two principal schemas: ordinary and simplified (lenloc-ord and lenloc-sim) depending on municipal population

A schema which collects the rest of the common concepts ( lenloc-com)





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EXAMPLE OF AN XBRL INSTANCE: INCOMES AND EXPENSES





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NEW CAPTURE WEB APPLICATION USING XBRLNEW CAPTURE WEB APPLICATION USING XBRL

LENLOC WEB Application. Video.





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DERIVED BENEFITS OF USING XBRL BY THE LOCAL ENTITIESDERIVED BENEFITS OF USING XBRL BY THE LOCAL ENTITIES

Advantages of using LENLOC for transmitting data

Transmission from the local budget settlement is fast, easy, secure, and guarantees data consistency.

Improves the process transparency, as well as the analysis and control of budgetary data from local corporations

It allows users to consult detailed and validated information from its original source

Administrative costs reduction





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LENLOC Results: OverallLENLOC Results: Overall





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LENLOC RESULTS: Evolution ox XBRL senders and signaturesLENLOC RESULTS: Evolution ox XBRL senders and signatures

20062007

2008*

3,35% 10,98%

55,80%

4,99%15,39%

53,15%

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

70,00%

80,00%

90,00%

100,00%

Years

XBRL %

Total Local Entities Local Agencies

% Signed

8,90%15,45%

53,73%

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

2006 2007 2008*

Years





2727

FUTURE EVOLUTION (I): LENLOC 2010FUTURE EVOLUTION (I): LENLOC 2010

New budget structure published

Released: LENLOC 2010 Taxonomy

First instance to be received: March 2011

Cooperative work with Local Accountance app developers





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FUTURE EVOLUTION (II): PENLOC 2010FUTURE EVOLUTION (II): PENLOC 2010

Initial budget transmission

Demanded by Local Agencies

First instance to be received: January 2010

Released: Penloc 2010





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FUTURE EVOLUTION (III): Convergence of taxonomiesFUTURE EVOLUTION (III): Convergence of taxonomies

The public sector taxonomy subgroup, conducted by the igae, was created in the XBRL Spain association …

… aiming to disign a taxonomy for reporting the local governments general account to the external financial control courts (regional and national)

Now, the DGFCLA and IGAE have proposed the convergence of lenloc and public sector taxonomies into a new one





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Thanks for your attentionThanks for your attention

[email protected]@[email protected]@meh.es

Technology

XBRL in Municipalities