What are the Good Practices in Chart of Accounts Design?

[Napodano]

From the FreeBalance blog https://freebalance.com/en/blog/pfm/good-practices-on-chart-of-accounts-design/?utm_source=ZohoCampaigns&utm_campaign=2022-Blogs-06-english&utm_medium=email : 

'Integration of budget and accounting classifications: in countries where the budget classifications are not integrated with the COA, or only partially integrated, there is risk of loss of important information undermining the effectiveness of budget control and reporting.

Sufficient structure for fiscal management: the COA should include fund source, organization, economic and function classifications.

Adaptability: The COA should be able to be changed—particularly in the context of an Integrated Financial Management Information System (IFMIS)—to respond to changes such as reorganization of government and changing needs.

Simplified structure: to facilitate data entry, the structure of the COA should be intuitive and usually no more than 30 digits in total and support easy ways to find the right classifications

Reporting Objects: The COA can drive external reporting and transparency without adding any burden to data entry through the use of alternative roll-up structures or “side concepts”.

Integration with authorization: permissions and access within the GRP system should be directly linked to the COA to control access.

Error checking and validation: across COA segments so that it is impossible to associate an expense against programs or economic purposes that are not owned by a line ministry and to validate debits and credits'

[John Short]

In the context of budgeting for climate change and gender responsiveness, tracking of climate and gender  related expenditures through CoA and budget classification has been shown to be weak in the respective PEFAs that I have seen.  Addressing this is something that could be done by the IMF/WB etc. and then adjusted by countries to reflect individual country circumstances.  This would be one way to improve Gender and Climate Change PEFA scores that would be reflective of  policy in these areas.

[MarkoPFM]

Developing a policy segment standardised to, day, OECD-DAC purpose codes in the derived segment of the chart of accounts would enhance depth and traceability and enable far better monitoring of policy. 

[John Short]

A wider discussion on data in
https://blogs.imf.org/2022/08/23/achieving-net-zero-emissions-requires-closing-a-data-deficit/?utm_medium=email&utm_source=govdelivery.

The focus is more on the financial sector.