Euro Stat

eurostat H
EUROPEAN COMMISSION
Directorate C: National and European Accounts
Luxembourg,^*/'01
ESTAT/C-3/MHF/LA/AK/dm D(2009) 30272
Mr Bill Keating
Director - Macro-economic statistics
Central Statistics Office
Ardee Road, Rathmines
IRL - Dublin 6
Subject: Preliminary view on the ESA95 accounting treatment of the National Asset
Management Agency (NAMA) and related majority privately owned SPV
Ref.: Your letter dated 22 September 2009
Dear Mr Keating,
Thank you for your letter regarding the treatment of the National Asset Management Agency
(NAMA) and related majority privately owned SPV and the accompanying analytical note. I
would like to inform you Of the preliminary view of Eurostat on the above-mentioned case.
The accounting issue for Which a clarification is requested
Description of the case
In order to restore stability to the Irish banking system in the context of thefinancial crisis, the
Irish Government is establishing the National Asset Management Agency (NAMA), which will
arrange and supervise the purchase of approximately €77 billion worth of property related loan
books from certain financial institutions. The draft legislation to enable the creation of this body
was published on 10 September 2009 (the National Asset Management Agency Bill 2009). The
Bill was presented to the National Parliament on 16 September, and it is planned that the Bill will
pass into law at the end of October.
NAMA, once established, will create a Special Purpose Vehicle (SPV) to purchase certain assets
from participating institutions in order to further the purposes of the legislation - most of these
assets will be loans associated with property development. This SPV will have a majority of
private equity. It will fund the purchase of the loan books from financial institutions by issuing
securities, most of which will be backed by a guarantee from the Irish Government.
Because of the large amounts involved, CSO asked if Eurostat would examine the details and
advise if it considers CSO's analysis to be consistent with Eurostat's Decision on the statistical
recording of public interventions to support financial institutions and financial markets during the
financial crisis, which was published on 15th July 2009,
@ B A T I M E N T JEAN M O N N E T • R U E ALCIDE D E GASPERI - L-292G LUXEMBOURG-KIRCHBERG ( m ) BATIMENT J O S E P H BECH -

5, RUE ALPHONSE WEICKER • L-2721 LUXEMBOURG-KIRCHBERG ( | ) ( + 3 5 2 ) 4301 -1 • INTERNET: HTTP7/EC.EUROPA.EU/EUROSTAT
Given the critical national importance of the issue, CSO staff, along with representatives of the
Department of Finance and of NAMA, also visited Eurostat on 13 October 2009 to provide further
information, including about recent developments.
Methodological analysis and clarification by Eurostat
Eurostat welcomes the detailed analysis provided by the CSO focusing on the classification of
NAMA and the related SPV.
Classification of NAMA
The National Asset Management Agency (NAMA), is publicly owned and has as its purpose to
conduct a specific government policy (to arrange and supervise the purchase of impaired related
loan books). Therefore, according to the decision of 15 July 2009 of Eurostat on the statistical
recording of public interventions to supportfinancial institutions andfinancial markets during the
financial crisis (later: the decision of Eurostat), it is to be classified within the general government
sector.
Classification of the SPV
NAMA will delegate the purchase and management of the selected loans to a separately created
SPV, which will be jointly owned by the private investors (51%) and NAMA (49%). The
subscribed capital of this SPV will be EUR 100 million. This SPV will purchase the assets from
banks using debt securities which it issues, which will consist of securities guaranteed by the Irish
government (95%), and subordinated debt securities (5%); the latter will only be redeemed if the
SPV makes profits.
In order to decide on the classification of the SPV, according to the Eurostat decision and the
related Guidance note, in the case of majority privately-owned special purpose entities, three
factors have to be examined in more detail: the purpose of the institutional unit, the duration for
which the unit is established, and whether the losses it is expected to make are small in
comparison with the total size of its liabilities.
The purpose of the SPV
According to the analysis of the Irish Central Statistical office, the sole purpose of the SPV would
be the purchase and management of loan booksfrom financial institutions that are currently in
distress as a result of thefinancial turmoil.
The Irish authorities also clarified that this SPV cannot be used for other purposes in the future, as
this would require the Parliament to pass another Bill, which is not probable. Moreover, the
definition of assets to be purchased cannot be enlarged without prior consultation with European
Commission services.
The duration of the SPV
As regards the duration of the special purpose vehicle created by NAMA, the proposed legislation
on NAMA clearly states that its lifetime is temporary and linked to thefinancial crisis. Section
219 of the legislation also provides that, at the end of 2012, the Minister of Finance will examine
the extent to which NAMA has achieved its objectives and decide whether its continuation is
justified. This examination could also take place at any time before then if the Minister so decides.
The updated Guidance note on the Decision of Eurostat reinforces the idea of a temporary scheme,
which in the case of newly created majority privately-owned bodies means that"the entity is only
2
active acquiring assets (including granting loans) during the period of the financial crisis, and the
entity simply disposes of assets or retains them until maturity is the subsequent period!'. The SPV
will be required to purchase assets defined in the legislation and, due to the necessary
administrative procedures, is expected to do so by the end of June 2010.
The size of expected losses
Concerning the expected losses for government, the Decision does not set a quantitative threshold,
therefore a rather detailed analysis has to be carried out, especially of the guarantee arrangements,
the design of the scheme and the elements which will be in place to reduce the risks for
government arising from the entity.
Regarding guarantees, the majority of the bonds issued by the SPV itself tofinance the purchase
of assets will be backed by government guarantee. The subordinated debt issued by the SPV is not
guaranteed by government, and its repayment is conditional on the SPV making a profit.
The design of the scheme in the proposed legislation provides an assurance that potential losses
born by the government could be expected to be limited. According to the business plan, the net
present value of the SPV will be 4.8bn euro, under the condition that the real estate prices in
Ireland will increase by 10% in the coming 10 years. Eurostat is not in a position to judge whether
this condition in plausible, however the presence of market investors is reassuring (those
providing 51% of the equity of the SPV).
Moreover, other elements, put in place to reduce the exposure of government to losses, also ensure
compliance with the Eurostat decision. The price paid for the loans of banks are calculated from
the value of assets already written down by the banks and then a 30% haircut is applied on these
book values. This so-called "LTEV- long term economic value" is paid for the assets, which are
assessed individually by the experts. The current market value is 15% lower than the LTEV but
Irish authorities believe that under the current conditions the market values for properties are
artificially low.
An important additional element - which Eurostat understands will shortly be introduced into the
legislation - is a levy to be imposed on participating banks if the SPV were to have losses at the
end of the operating period. The Irish authorities confirmed that under the new proposal, the
participating banks have to pay a tax surcharge on their operating profits until the loss of the SPV
is recouped.
Conclusion
Based on the preliminary information provided, Eurostat agrees with the CSO's analysis that
NAMA should be classified inside the general government sector, and that the master SPV should
be classified in thefinancial corporations sector.
Procedure
This preliminary view of Eurostat is based on the information provided by the country authorities.
If this information turns out to be incomplete, or the implementation of the operation differs in
some wayfrom the information presented, Eurostat reserves the right to reconsider its view. To
this end Eurostat would request to be informed of thefinal details of the operation.
In this context, we would like to remind you that Eurostat is committed to adopt a fully
transparentframework for its decisions on debt and deficit matters in line with Council Regulation
479/2009 and the note on ex-ante advice, which has been presented to the CMFB and cleared by
the Commission and the EFC. Eurostat is therefore publishing all official methodological advice
(ex-ante and ex-post) given to Member States on the Eurostat website. In case you have objections
concerning this specific case, we would appreciate if you let us know. In any case (regardless of
whether you have objections or not) we would like to receive an answerfrom you on the issue no
later than 30 October 2009.
Yours sincerely,
Luca Ascoli
Head of unit C.3
4
copies-. L A, AK

AniPhrfomh-Oifig Staidrimh
Mr. Luca Ascoli, m

Head of Unit C.3, r ,.-I.:*! .'T. ' "'•swifff f
Eurostat,
Batiment Jean Monnet, 01 OCT 2(109 00723 0
Rue Alcide De Gasperi,
m r
L-2920 Luxembourg-Kirchberg
5
M M - ;v c •
22nd September, 2009
Dear Luca,
Last July I sent you a letter concerning the classification of the National Assets Management
Agency and associated SPVs. Mick Lucey subsequently contacted you to tell you that certain
operational aspects of the new Agency were being clarified and that the methodological paper
would need to be updated. I'm now attaching this updated paper.
I would be grateful if Eurostat would now examine the details and advise if it considers CSO's
analysis to be consistent with Eurostat's Decision on the statistical recording of public
interventions to support financial institutions and financial markets during the financial crisis,
which was published on 15th July, 2009.
The Bill establishing the new Agency is currently being debated in the national parliament and it
is expected that it will become law next month. I would therefore be grateful if Eurostat would
deal with this matter as soon as possible. If it helps, Mick Lucey would be happy to travel to
Luxembourg with officials from the Department of Finance and of NAMA to explain any aspects
of the arrangements that may need clarification.
Yours sincerely,
Bill Keating
Assistant Director General
Macroeconomic Statistics Division
Ardee Road Bothar Ath Fhirdiaidh Tel LoCall 1890 313 414 (ROI)
Rathmines Rath Maoinis 0870 876 0256 (UK/NI)
Dublin 6 Baile Atha Cliath 6 +353 1 498 4000
Ireland Eire Fax +353 1 498 4229
e-mail information @cso.ie
This Office may also be contacted through Cork at +353 21 453 5000
Website www.cso.ie
ESA95 accounting treatment of the National Asset Management Agency
(NAMA) and related majority privately owned SPV
1. Introduction
In order to restore stability to the Irish banking system in the context of the financial crisis, the Irish
Government is establishing the National Asset Management Agency (NAMA), which will arrange and
supervise the purchase of approximately €77 billion worth of property related loan books from certain
financial institutions. The draft legislation to enable the creation of this body was published on 10
September 2009 (the National Asset Management Agency Bill 2009 ("the Bill")1). The Bill was
presented to the Dail (National Parliament) on 16 September2, and it is planned that the Bill will pass
into law in October.
We have been informed that NAMA, once established, will create a separate Special Purpose Vehicle
(SPV) to purchase certain assets from participating institutions in order to further the purposes of the
legislation - most of these assets will be loans associated with property development. This SPV will
have a majority of private equity. It will fund the purchase of the loan books from financial institutions
by issuing securities, most of which will be backed by a guarantee from the Irish Government.
CSO has been asked to advise on how NAMA and this SPV will be classified in national accounts.
This note provides details of the entities and CSO's views on how the units should be classified.
Because of the large amounts involved, CSO would be grateful if Eurostat would examine the details
and advise if it considers CSO's analysis to be consistent with Eurostat's Decision on the statistical
recording of public interventions to support financial institutions and financial markets during the
financial crisis, which was published on 15 th July, 2009.
Given the critical national importance of the issue, CSO would ask Eurostat to deal with this matter as
soon as possible. If it would help Eurostat to arrive at a decision, CSO staff would be happy to travel
to Luxembourg along with representatives of the Department of Finance and of NAMA to meet the
relevant officials.
2. Structure and operation
2.1. NAMA
The Bill provides that NAMA will be established on a statutory basis, as a separate body corporate
with its own Board appointed by the Minister for Finance and with management services provided by
the National Treasury Management Agency (NTMA - currently classified within General
Government).
NAMA will arrange and supervise the identification and valuation of property-backed loans on the
books of qualifying financial institutions in Ireland, but will delegate the purchase and management of
these loans to a separately created SPV (see below).
2.2. Master SPV

We are advised by the interim management of NAMA that, once established, it will create a Special
Purpose Vehicle ("the Master SPV"), which will be responsible:
a) for the purchase, management and disposal of loan assets identified and valued by NAMA, and
b) for financing the asset purchases by issuing debt securities: these will consist of securities
guaranteed by the Irish Government (95%) and subordinated debt securities (5%) - the latter may
only be redeemed if the SPV makes a profit.
The Master SPV will be a separate legal entity and will be jointly owned by private investors, who will
own 51% of its equity, and by NAMA, which will hold the remaining 49%. The subscribed capital of
the Master SPV will be €100m.
1
http://nama.ie/Publications/2009/NAMABill10Sept2009.pdf
2
Speech by Minister of Finance: http://nama.ie/Publications/2009/Second Stage Speech 16SEP09.pdf;
Supplementary documentation: http://nama.ie/Publications/2009/Supplementary Documentation.pdf
1
The Master SPV will have its own Board, with members appointed by NAMA and the Private Sector
equity investors. However, since the State is guaranteeing the securities issued by the Master SPV, the
NAMA representatives on the Board will maintain a veto over all decisions of the Board that could
affect the interests of NAMA or of the Irish Government.
The Master SPV will be run with the objective of making a profit on the purchase and management of
the assets it purchases. The profits earned by the SPV will be distributed to the shareholders according
to the following arrangement, which reflects the fact that the debt issued by the Master SPV will be
guaranteed by the Irish Government:
• the equity investors will receive an annual dividend linked to the performance of the Master SPV
• On winding up of the Master SPV, the equity investors will only be repaid their capital if the
Master SPV has the resources; they will receive a further equity bonus of 10% of the capital if the
Master SPV makes a profit.
• All other profits and gains of the Master SPV will accrue to NAMA.
The Master SPV may create a number of subsidiary SPVs, each of which will be responsible for the
loan book of an individual financial institution. Any such subsidiary SPVs will be 100% owned by the
Master SPV. Whether these subsidiaries should be classified inside or outside of the General
Government Sector (S.13) therefore depends on the classification of the Master SPV. For this reason
this note considers only the classification of the Master SPV.
2.3. Assets - valuation and acquisition

The estimated €77 billion worth of loans will be bought at a discount from the financial institutions to
take account of the need for write-downs of the value of the impaired loan assets.
The loans purchased will include both performing and non-performing loans. Each loan asset will be
individually valued, and the price paid will generally be based on its long-term economic value
(LTEV). The LTEV is defined in s.70(2) of the Bill, in accordance with EU Commission guidelines, as
the value which an asset "can reasonably be expected to attain in a stable financial system when current
crisis conditions are ameliorated."
2.3.1. Estimated value and nature of assets

The market value and LTEV of the loans to be purchased will be determined on a case by case basis
after an expert examination of each individual loan and associated collateral. Indicative valuations for
the loan books were included in the presentation of the NAMA bill to the Dail (see 'NAMA High
Level Statistics' in supplementary documentation). In summary, these estimated valuations are as
follows (rounded to the nearest €bn):
Item Source €bn

(1) Current book value of loans Accounts of banks 77
(2) Rolled-up interest included in (1) NAMA estimate 9
(3) Book value of loans less interest [(1) - (2)] 68
(4) Average Loan-to-Value % at origination Estimate by banks 77%
(5) Property value at origination [(3) - (4)] 88
(6) NAMA purchase price (LTEV) NAMA est. [(1) x 70%] 54
3
(7) Average fall in property values NAMA estimate 47%
(8) Current market value of properties [(3)x [100%-(7)]] 47
(9) Expected difference between LTEV and MV [(6) - (8)] 7
(10) Difference between LTEV and MV as % of MV [(9) - (8)] 17%
(11) Subordinated debt included in purchase price [(6) x 5%] 3
(12) % increase over MV needed for NAMA to avoid losses [[(6) - (11)] - (8) - 100%] 10%
3
This is a weighted average based on NAMA's estimates of an average decline in market prices of 60% for Irish
Land & Development property, 50% for Irish commercial property, and 40% in all property outside Ireland.
2
It is stated in the supplementary documentation and in the Minister's speech (pp. 10, 11) that:
• The estimated €77bn in loans is held by five institutions, namely:
a) Allied Irish Bank (€24 billion)
b) Anglo Irish Bank (€28 billion)
c) Bank of Ireland (€16 billion)
d) Educational Building Society (€1 billion)
e) Irish Nationwide Building Society (€8 billion)
• 36% of the loan assets will be backed by land and 28% by development property. The remaining
36% consists of associated commercial loans.
• The geographical spread of the property associated with the loan assets is: Ireland: 67%, Northern
Ireland: 6%, rest of UK: 21%, USA: 3%, Other: 4%
• 40% of these loans are estimated to be cash-flow producing, and it is projected that this cash flow
will be sufficient to cover interest payments on the SPV bonds and operating costs.
2.3.2. Valuation and acquisition process

As noted above, each loan asset (and the property underlying that asset) will be individually valued. In
detail, the valuation and acquisition process will work as follows:
1) A financial institution applies to participate in the NAMA scheme.
2) If this application is accepted, NAMA is empowered to examine the bank's books and designate
assets for purchase by the SPV.
3) A Market Value - defined in s.70(2) of the Bill as "the estimated amount that would be paid by a
willing buyer to a willing seller in an arm's-length transaction after proper marketing (where
appropriate) where both parties acted knowledgeably, prudently and without compulsion" - is
calculated for each designated asset, and for the underlying property.
4) A LTEV is then calculated for each asset, based on the Market Value, any previously calculated
LTEVs of similar assets, and 'adjustment factors', which include, as defined in s.77 of the Bill:
a. EU State Aid rules;
b. pricing and macroeconomic trends;
c. planning, transport and energy implications;
d. "an appropriate discount rate to reflect NAMA's cost of funds plus a margin that
represents an adequate remuneration to the State that takes account of the risk in relation
to the bank assets acquired by NAMA".
The draft Regulation on property and asset valuation, implementing s.77 of the Bill, further
provides that:
• for any property other than land, LTEV = MV (s.3);
• the LTEV of a particular parcel of land cannot be more than 125% of the MV (s.7);
• the LTEV of the total portfolio of land assets of a financial institution cannot be more
than 120% of the MV (s.7).
5) NAMA offers to buy the portfolio of designated assets from an institution at a price not greater
than the sum on the LTEVs of those assets.
6) If the institution believes there are material errors in the valuation of this asset portfolio, it may
appeal NAMA's valuation to an independent valuation board.
7) Once the valuation is finally agreed, the Master SPV (or a subsidiary) gives the institution
securities (including 5% subordinated debt) in exchange for the asset portfolio.
2.4. Risk analysis
2.4.1. What are the risks?

There are two main linked areas of risk, which relate to uncertainty about the current and future state of
the property market in Ireland and worldwide:
a) Prices will continue to fall below the purchase-date MV.
b) The adjustment factor applied to the MV to obtain the LTEV is too large, so that the market
will not recover sufficiently to allow the assets acquired to be sold for at least the purchase
price.
3
It is difficult to quantify the level of risk involved in (a) and (b) above. However, NAMA have been
advised that, while there may be some short-term fall in MVs after assets are purchased, 'based on
capital values, the bottom has been reached in the US, UK and Europe', and in Ireland 'the market
expects that the bottom may be reached in the last quarter of 2009 or the first quarter of 2010.'
Based on the available expert advice, NAMA and the Department of Finance have concluded that
NAMA will be profitable over its expected 10-year lifetime, estimating its net present value at some €6
billion.
2.4.2. Who bears the risks?

If the Master SPV makes a loss, the equity invested in the majority private-sector owned Master SPV
and the associated dividends will be lost.
More significantly, the subordinated debt held by the banks, representing 5% of the asset purchase
price, will also be lost. Note that this transfer of risk to the banks covers 35% of the difference between
the estimated price paid to the banks by the Master SPV (the LTEV) and the estimated MV of the
assets ([(11) - (9)] in the table above).
The remaining 95% of the securities used to purchase the bank assets are Government-guaranteed, so
that Government is ultimately at risk if the Master SPV makes a loss and is forced to call this
guarantee. In this case, however, the Minister of Finance has committed to the introduction of a levy on
the banks involved to recoup the losses made.
2.5. Restriction of operation to financial crisis

The legislation provides that NAMA and any associated entities, including the Master SPV, are
established to deal specifically with the financial crisis (see s.2 of the Bill). Section 219 of the Bill
provides that, at the end of 2012, the Minister of Finance will examine the extent to which NAMA has
achieved its objectives, and decide whether its continuation is justified.
3. Analysis of the accounting treatment
3.1. Classification of NAMA

NAMA is publicly owned. Its primary objective is to arrange and supervise the removal of impaired
property related loan books from the balance sheets of qualifying financial institutions. CSO considers
that, on the basis of Eurostat's Decision of 15 th July, 2009 (The statistical recording of public
interventions to support financial institutions and financial markets during the financial crisis), NAMA
should be classified within the General Government Sector (S.13).
3.2. Classification of the Master SPV
3.2.1. Is the Master SPV a separate institutional unit?

ESA95 paragraph 2.12 sets out the rules whereby an entity can be considered an institutional unit:
"A resident unit is regarded as constituting an institutional unit if it has decision-

making autonomy in respect of its principal function, and either keeps a complete set
of accounts or it would be possible and meaningful, from both an economic and legal
viewpoint, to compile a complete set of accounts if they were required. In order to be
said to have autonomy of decision in respect of its principal function, a unit
must:
a) be entitled to own goods or assets in its own right; it will therefore be able to
exchange the ownership of goods or assets in transactions with other institutional
units;
b) be able to take economic decisions and engage in economic activities for which it is
itself held to be directly responsible and accountable at law;
The Master SPV will be a separate legal entity to NAMA. The SPV and any subsidiaries will enter
into primary service agreements with the financial institutions to service the portfolio of loans. These
will be arms length commercial transactions. NAMA, through the NTMA, will provide management
services to the Master SPV and its subsidiaries.
4
The Master SPV will have a wide range of powers, including the following:
1. lend;
2. borrow or raise funds, including the issuance of bonds;
3. contract options and other derivative financial instruments;
4. give guarantees or sureties;
5. form or take an interest in companies;
6. enter into partnerships or joint ventures which allow for private sector participation in the
form of private equity
7. establish trusts;
8. borrow or lend securities, including equity and debt instruments;
9. purchase other property, assets or rights;
10. invest;
11. sell or dispose of property or investments;
12. give or take property leases;
13. undertake land and property development so as to realise the full value of its assets.
Because of the large amounts of debt that it is guaranteeing, NAMA will maintain a veto on all
decisions of the Master SPV and its subsidiaries that could affect the interests of NAMA or of the Irish
Government.
The Master SPV will at regular intervals prepare full sets of accounts giving details of its sales and
purchases and a balance sheet showing its assets and liabilities.
In summary the Master SPV will be
• a separate legal entity entitled to own goods and assets in its own right;
• have autonomy of decision in its day to day operations;
• be able to incur liabilities on its own behalf; and
• have complete accounting information
On this basis the CSO considers that it will satisfy the requirements to be considered a separate
institutional unit.
3.2.2. Is the Master SPV market or non-market?

The SPV will purchase both performing and non-performing loans. Performing loans will be held to
maturity and non-performing loans will, if necessary, be foreclosed and the property used as collateral
taken instead. As explained earlier, the loans will be bought at a discount to take account of the need
for write-downs of the value of the impaired loan assets. This will reflect the distressed state of the
Irish property market, prices in certain segments of which have fallen 50 to 60 percent since the
market's peak in June 2007.
It is intended that the SPV will be profitable, and it must fulfil the obligation placed on NAMA in the
legislation to maximise yields from the assets it acquires. The current target is that it should make a
return of 45% on its investments over 7 years.
Note that the subordinated debt assets which will make up some 5% of the payment to the institutions
will only be redeemable if the SPV makes a profit: this measure is designed as a further protection
against the risk of losses.
As noted above, NAMA estimates that the aggregate LTEV will be some 15% higher than the Market
Value, so that the subordinated debt, at 5% of the portfolio acquisition price, is equivalent to 35% of
this LTEV/MV premium.
Based on these estimates, the Master SPV will only make an aggregate loss if the market value of the
assets acquired increases by less than 10% in the 7 to 10-year lifetime of NAMA. (see (12) in the table
on p.2).
Since the loan assets are being purchased at objectively established discounted prices that are based on
the expected future return on these assets, the CSO considers that the Master SPV is unlikely to incur
losses and, on the basis of the Eurostat Decision of 15 th July, can be considered a market unit and
classified accordingly.
5
3.2.3. Ownership of the Master SPV
As mentioned above, the Master SPV will be jointly owned by private investors and by NAMA. The
private investors will subscribe 51% of the capital, and stand to lose all of this if the Master SPV does
not make a profit.
The CSO therefore considers that the SPV will be a majority privately owned entity.
3.2.4. Conclusion
In summary, the Master SPV
• will be a separate institutional unit
• will be established for a temporary duration specifically linked to the financial crisis
• will have as its sole purpose the purchase and management of loan books from financial
institutions that are currently in distress as a result of the financial turmoil
• will be majority owned by private investors
• will purchase the loan assets at significantly discounted prices based on the expected future returns
on the assets acquired. The SPV therefore will have a commercial profit making objective and is
not expected to make future losses. The payment of 5% of the acquisition price in subordinated
debt securities represents a further protection against losses.
On this basis the CSO considers that in line with the Eurostat Decision published on 15 th July, 2009
(The statistical recording of public interventions to support financial institutions and financial markets
during the financial crisis), the SPV should be classified in the Financial Corporations sector (S.12).

Dublin
September, 2009
6
EDP Consolidated Inventory
of sources and methods
Ireland
September 2007
1
1. Delimitation of General Government
Year n-1
In April (n) and October (n) the Ministry of Finance compiles preliminary EDP statistics for
the year n-1 in collaboration with the Central Statistics Office (CSO). The Ministry of
Finance is primarily responsible for compiling the accounts for Central Government (S.1311)
and Social Security (S. 1314) while the CSO estimates the net lending borrowing of Local
Government (S.1313) based on balance sheet data compiled by the Department of
Environment, Heritage & Local Government.
The non-market agencies included within the General Government Sector are identified in
consultation with the CSO. Such agencies are grant-aided by Departments of State and
details of the grants payable are given in the Book of Estimates .This is an annual publication
produced by the Department of Finance which provides detailed information on the incomes
and expenditures of all Government Departments (see Annex 2 Note 1). New agencies are
therefore readily identifiable and their classification as market or non-market is decided in
consultation with the CSO and involves, if necessary, parent Departments. The listing of
Extra Budgetary Funds is verified each year with the personnel in the budget control section
of the Department of Finance that monitors the budget allocations of the individual
Departments.
Year n-2
In April (n) the Minister of Finance compiles revised preliminary estimates for the year n-2,
again in consultation with the CSO. In October (n), the CSO prepares final accounts for the
year n-2 which are available in their publication National Income and Expenditure. These
accounts are reflected in the EDP statistics produced by the Ministry of Finance in October
(n).
Annex 1 contains a list of units classified to the General Government sector.
2. Central Government data

This section describes the availability and use of main data sources for the Central
Government sub-sector (S.1311) by type of unit and the adjustments made in order to reach
ESA95 definitions. It also covers the treatment for half finalised, finalised and current data,
and the process of revision of data.
Central Government is defined to include all bodies established through political processes
and for whose activities a Minister of Government or other responsible person is accountable
to the people through the Oireachtas (National Parliament). This responsibility extends to
the presentation of detailed audited annual accounts to the Oireachtas. Central Government
includes legislative, judicial and executive bodies established in this manner. The sector does
not include public corporations or enterprises engaged in the production of market services
or goods.
The three main classes of Central Government entity are:
2
• Government Departments (Ministries) and other Offices of State, funded by the Exchequer
(see Annex 1 [a]);
• Non-market agencies. These are controlled and funded almost entirely from the
Exchequer and may be regarded as extensions of Government departments (see Annex 1
[b]); and
• Various extra-budgetary funds for which separate accounts are maintained and which are
directly administered by Departments (or in some cases by the National Treasury
Management Agency (NTMA), for example the National Pensions Reserve Fund (NPRF)
(for listing, see Annex 1 [c]);.
(1) The Exchequer

Article 11 of the Constitution of Ireland (Bunreacht na hEireann) provides that "all revenues
of the State from whatever source arising shall, subject to such exception as may be provided
by law, form one fund and shall be appropriated for the purposes and in the manner and
subject to the charges and liabilities determined and imposed by law. " This fund, known as
the Central Fund, is the amount standing to the credit of the Exchequer Account at the
Central Bank. The banking transactions of the Fund are effected through the Exchequer
Account. The Exchequer Balance is a cash flow measurement which identifies the difference
between receipts physically paid in to and expenditures paid out of the Exchequer Account in
each calendar year. These revenues and expenditures are assigned under Ireland's
Budgetary conventions between the Current Budget and the Capital Budget. Fully audited
details of the Exchequer receipts and expenditure outturn are given in the Finance Accounts
and Appropriation Accounts (see Annex 2, notes 6 and 5 respectively). Forecast data are
given in the White Paper on Receipts and Expenditure (see Annex 2, note 2) and in the Budget
Book (see Annex 2, note3). These publications are issued annually by the Department of
Finance.
(2) Non-Commercial Semi-State Bodies (Non-market agencies)

The main non-commercial semi-state bodies included in the Central Government sub-sector
are Foras Aiseanna Saothair (FAS - the State Training and Employment Authority),
Enterprise Ireland, the Industrial Development Authority (IDA Ireland) and Teagasc (the
Irish Agriculture and Food Development Authority) (for full list see Annex 1 [b]) Sales
revenues of these agencies account for less than 50% of their costs. Commercial semi-state
companies, though publicly controlled, are not classified in the General Government sector
because they are market entities. Audited accounts are available for each semi-state body
(3) Extra-Budgetary Funds

A Government Department, or in some cases the NTMA, manages the extra-budgetary funds
(see full list of funds attached at Annex 1 [C]). Budgetary data in respect of these funds are
given in either the Appropriation Accounts, the audited accounts of the fund in question or the
NTMA Annual Report and Accounts (for years before 2003, the NTMA Annual Report and
Financial Statements). The main extra-budgetary funds in Central Government are the
National Pensions Reserve Fund (NPRF) and the Dormant Accounts Fund. The NPRF is
controlled and managed by the National Pensions Reserve Fund Commission, which has
discretionary authority to determine and implement an investment strategy for the Fund based
on commercial principles and subject to prudent risk management. The NTMA was appointed
as manager of the Fund to act as agent of the Commission. Data relating to the Fund are
published in an annual report and financial statements (see
3
http://www.nprf.ie/Publications/annualReports.htm; a summary quarterly performance
statement is also issued
(see quarterly press releases http://www.nprf.ie/Publications/pressReleases.htm).
2.1 Availability and use of data sources

2.1.1 Data sources for Central Government main unit: "The State"
1a) Information available/used for this sub-sector in the current year n-1 and year n-2
notified in April (n) and October (n):
1
Table 1 - Source Data Accounting
Accounting Source Data Accounting April (n) October (n)
Rules(C/A/M)
Year n-1 Year n-2 Year n-1 Year n-2
4- Budget Reporting
• Summary
C (1) Current revenue and expenditure A/U A/U A/U A/U
C (2) Current and capital revenue and A/U A/U A/U A/U
expenditure
expenditure and financial
transactions
(4) Balance sheets NA/NU NA/NU NA/NU NA/NU
• Detailed
expenditure
transactions
4- Financial Statements
(9) Profit and loss accounts NA/NU NA/NU NA/NU NA/NU
4- Other Reporting
(11) Statistical surveys NA/NU NA/NU NA/NU NA/NU
(12) Other:(please specify) NA/NU NA/NU NA/NU NA/NU
The public accounts sources used for Exchequer transactions are the following:
• Revised Estimates for Public Services (also known as the Revised Estimates
Volume): Detailed unaudited figures for expenditure and receipts of Government
Departments. Estimated outturns are available by March (n) for year (n-1) (see
Annex 2, note 4)
1
A/U (available/used), A/NU (available/not used), NA/NU (not available/not used)
C (Cash), A (Accrual), M (Mixed Cash-Accrual)
4
• End-year Exchequer returns (Exchequer Statement): Unaudited details of all
inflows and outflows to the Exchequer account. Data are available by March (n)
for year (n-1) (see Annex 2, note 7)
• Appropriation accounts: Audited figures for expenditure and receipts of
Government Departments. Details are available by March (n) for year (n-2) (see
Annex 2, note 5)
• Finance accounts: Audited figures of inflows and outflows to the Exchequer
account. Data are available by March (n) for year (n-2) (see Annex 2, note 6)
1b) Reasons for not using the available accounting reports and criteria for choosing only
one of them (consistency with data sources used in other sub-sectors, accrual basis, etc)
if two different accounting reports are available for the same unit.
Different reports are used for preliminary and final data. For example, the 'Appropriation
Accounts' provide audited final figures for items for which preliminary unaudited results
were initially taken from the publication 'Revised Estimates for Public Services' (also known
as the Revised Estimates Volume)'. The level of detail provided in these reports is almost
identical. The valuation rules, consistency with other sources, etc. are in general the same for
all sources.
1c) Complementary codification at data source, by counterpart sector
Data on transfers between the different sub-sectors of General Government are usually
available in the public accounts and are used to check the consistency of data in primary and
counterpart sources.
1d) Complementary information of other units/departments that are not reflected in the
Budget Reporting, when compiling ESA95 accounts.
A small amount of additional information is required to compile the ESA95 accounts.

- The National Treasury Management Agency (NTMA) produces details of the national debt
interest on an ESA95 basis. This is not available in the main Exchequer accounts, which
are all on a cash basis.
- The Central Bank provides details of the capital gains and losses contained in the surplus
income paid over to the State.
- Initial estimates of taxation receipts are normally taken from the (monthly) Exchequer
returns (also known as Exchequer Statements). However, these are updated following the
publication of the Revenue Commissioners Annual Statistical Report
seehttp://www.revenue.ie/publications/corppubs/statreport2005.htm. The Central
Statistics Office (CSO) has always taken the data in the Revenue Commissioners Report
as more definitive. Usually, the two sets of figures are in close agreement.
In recent years the CSO also calculates VAT and Excise Tax receipts on an accrual basis, by
adjusting the cash amounts to reflect the usual time gap between the accrual of tax and the
cash payment. These data are used in place of the cash amounts recorded in the public
accounts.
5
1e) Consistency of classifications used in the Budget Reporting of "the State" and in the
Budget Reporting of other General Government entities.
The valuations used in Budget Reporting of 'the State' are generally on a cash basis,.
However, the format, classifications and level of detail provided for sub-sectors in different
reports may not be comparable on a line by line basis.
1f) Source (direct or indirect) of basic data requested by the National Statistical
Institutes
The basic data are published in reports such as the Revised Estimates Volume, Finance
Accounts and Appropriation Accounts etc. (see Annex 2). The Ministry of Finance maintains
an internal database, which is a detailed national accounts classification of the receipts and
expenditures of government departments mappable to the Department by Department Vote
classifications contained in the Revised Estimates Volume. This database is available to the
CSO. Its contents are independently verified by the CSO. The Ministry of Finance makes any
necessary changes to its database on foot of any corrections and reclassifications notified by
the CSO. The CSO uses the figures in the database to compile its initial estimates of the
accounts of Central Government. The values are subsequently updated by the CSO to
incorporate the more final audited results provided in the Appropriation Accounts.
1g) Nature of the data sources - cash, accrual or mixed
See Table 1
All accounts of the State - Revised Estimates Volume; Finance Accounts; Appropriation
Accounts are produced on a cash basis. Some limited adjustments are made to time adjust the
data to an accruals basis. (See Section 2.2.1 (b) below)
1h) Circumstances in which data available from basic sources is consolidated.
Transactions reported in the basic sources are unconsolidated and record gross flows
between units classified within Central Government and between these units and entities
classified in other sub-sectors of General Government. For example, the accounts of the State
include grants made to other areas of general government e.g. to the local government sector.
These are consolidated out in the compilation of the EDP statistics for General Government.
Full details of such grants are set out in the Revised Estimate Volume and in the internal
database of the Ministry of Finance.
1i) Changes in the accounting rules foreseen in the near future (if any).
No changes to the accounting rules are expected in the near future.
2.1.2 Data sources for Central Government: Other entities / other central government
bodies (please detail)
The main central government bodies other than the Exchequer are:
6
• Non-market agencies. These are controlled and funded almost entirely from the
Exchequer and may be regarded as extensions of Government departments (for list see
Annex 1 [b]).; and
• Various extra-budgetary funds for which separate accounts are maintained and which
are directly administered by Departments (or in some cases by the National Treasury
Management Agency (NTMA), for example the National Pensions Reserve Fund (NPRF))
(see list of funds attached at Annex 1 [C]).

Rules(C/A/M)
4- Budget Reporting
• Summary
M (1) Current revenue and expenditure A/U A/U A/U A/U
M (2) Current and capital revenue and A/U A/U A/U A/U
expenditure
transactions
• Detailed
M (5) Current revenue and expenditure A/U A/U A/U A/U
expenditure
transactions
4- Financial Statements2
A (9) Profit and loss accounts NA/NU A/U A3/U A/U
A (10) Balance sheets NA/NU A/U A2/U A/U
4- Other Reporting
C (12) Other: A/U A/U A/U A/U
(please specify) Administrative
returns from supervising line
Departments to the Ministry of
Finance
Non-market agencies:
Final data for these agencies are derived from their published audited accounts. Most of
these accounts are usually available by March (n) for year (n-2). Estimates for the most
recent year are based on the provisional income and expenditure statements for these
2
Available for non-market agencies only
3
Only some will be available
7
agencies contained in the Revised Estimates Volume. These statements are compiled from
estimates provided by each agency to its parent Department.
Extra budgetary funds:

Audited accounts for year (n-1) are usually available by September (n). Estimates provided by
the supervising Departments are used until the audited accounts become available.
The accounting reports are used.
The basic source data usually provide information on the gross flows between the different
sub-sectors of General Government. This information is used to check the consistency of
primary and counterpart data.
2d) Complementary information which is not in the financial statements, when

compiling ESA95 accounts.
No additional information is collected.
2e) Consistency of classifications used in this sub-sector and in the Budget Reporting of
units in other sub-sectors of General Government.
The audited accounts of non-market agencies in central government are compiled on an

accruals basis but the layout and the detail provided in the accounts is specific to each
agency. The audited accounts of most extra-budgetary funds are compiled on a cash basis and
again the level of detail provided can differ.
Institutes
The basic data for the non-market agencies and for most of the extra budgetary funds are
generally sourced independently by the CSO from published reports or from the National
Treasury Management Agency (NTMA). Data for the remaining extra budgetary funds are
requestedfrom the supervising Department through the Ministry of Finance.
The accounts of non-market agencies in central government, which are published in their
annual reports, are compiled on an accruals basis. The information used for preliminary
estimates, which is sourced from the public accounts, is generally reported on a cash basis.
Both the preliminary and final accounts of the extra-budgetary funds are generally compiled
on a cash basis.
8
Accounts of the non-market agencies and extra budgetary funds are individually examined
and in the basic data there is no consolidation of transactions with other units.
CSO is not aware of any proposals to change the accounting standards of these units.
2.1.3 Data for the current year (n-1) notified in April (n) - detailed explanation
i) Common data sources used for finalised and half-finalised data for the current year in
the first notification.
Generally, the same sources are used. However, the Finance Accounts, the Appropriation
Accounts, the Statistical Report of the Revenue Commissioners and audited accounts of the
non-commercial semi-state bodies and the extra-budgetary funds are not available in time for
use in the first notification.
ii) Data sources specifically used in the context of the first notification
The Revised Estimates Volume, the Budget Book and unpublished data from the Department
of Finance, other relevant Government Departments and the NTMA
iii) Estimation methods that may be used in the context of the first notification and their
importance in the central budget and for other units included in central government.
For central budget

For year (n-1), provisional outturn data are given in the monthly Exchequer returns (
Exchequer Statements are available at http://www.finance.gov.ie/ViewDoc.asp?DocId=-
1&CatID=5&m=f). This accounts for most of Central Government. The experience has been
that final data differ only marginally from the provisional outturns.
For other units included in central government

The Revised Estimates Volume, usually published in time for the end-March EDP return,
gives outturn information for year n-1 for the non-commercial semi-state bodies. Where the
Revised Estimates are published after the March EDP notification, outturn information on
non-commercial semi-state bodies is provided by the sponsoring Department. Information in
relation to the NPRF is provided by the NTMA.
2.1.4 Auditing Process
I) Working balances of Central Government that were submitted to an auditing process.
The starting working balances for the Central Government sector of EDP notification Table 2
at end-March (n) for the years n-4, n-3 and n-2 were subject to an auditing process. The
starting working balance for the years n and n-1 will be audited in due course. However, it
should be noted that historically there is minimal difference between the provisional outturn
and the audited outturn for this sector.
9
II) Incorporation of the findings of the auditing process in the national accounts.
The main findings of the auditing process in relation to Central Government - the
Appropriation Accounts and the Finance Accounts - are generally available at end-
September (n) for the year (n-1). However, minimal adjustment to the national accounts is
required on foot of these reports. Preliminary information for the year (n-1) is readily
available from the Exchequer Statements produced by the Ministry of Finance in January (n)
and in the Revised Estimates Volume produced by the Ministry of Finance by March (n). The
detail contained in the Appropriation Accounts usually varies very little from the preliminary
information available in the earlier Revised Estimates Volume. See Annex 2 for further details
of these and other publications produced by the Ministry of Finance.
2.2 Data treatment

2.2.1 Half finalised and finalised data
a) Financial transactions that may be included in the public accounts of central

government and are excluded in table 2.
The main financial transactions contained in the Irish accounts are detailed below.
FEOGA (Fonds europeen d'orientation et de garantie agricole) payments

This item refers to advance payments from the Exchequer to final recipients (farmers,
enterprises etc) of agricultural subsidies due from the European Union under the Guarantee
section of the European Agricultural Guidance and Guarantee Fund (EAGGF or FEOGA).
In Ireland's National Accounts, FEOGA subsidies are recorded on an accrual basis. The
amounts included for a given calendar year are the reimbursements claimed by the
Department of Agriculture, Fisheries and Food from the EU in respect of expenditures
actually incurred in the calendar year. These can differ significantly from the actual
reimbursements by the EU in the year, which can be received up to three months after the
Irish Exchequer pays the subsidies. Such advance payments to recipients by the Exchequer of
EU FEOGA subsidies are treated in the National Accounts as the acquisition of a financial
claim on the EU, with no impact on the GGB, and are classified as 'Loans granted' in Table 2
of the Excessive Deficit Procedure (EDP) return. The corresponding payments when received
from the EU are classified in Table 2 as 'Loans, repayments'.
Other loans
The FEOGA advances described above account for about 95% of the amounts recorded as
loans granted and repaid in Table 2 of Ireland's EDP return for Central Government. The
remaining values are accounted for by small amounts of loan transactions between the
Exchequer and various commercial semi-state companies.
Sales of state assets

Sales of state assets such as commercial state-owned companies are treated as financial
transactions. Examples are the sale of the Industrial Credit Corporation in 2001, the sale of
the Agricultural Credit Corporation in 2002 and the sale of a 60% stake in Aer Lingus in
2006. Reference to such transactions is normally made in the Budget Book in the Table
"Explanation of the net difference between the Exchequer Balance and General Government
Balance" (Table 2 of the 'Budget Statistics and Tables' section of the Budget Book from
10
Budget 2003 onwards, Table 6 in prior years. For Table 2 in 2007 Budget Book see
http://www.budget.gov.ie/2007/downloads/BudgetTables.pdf). These transactions are
recorded as sales of equity in Table 2 of the EDP return.
Other sales/acquisitions of equities

Apart from the sale of state companies, the other amounts shown in EDP Table 2 in recent
years under the financial transactions heading are small and relate to small acquisitions and
disposals of share capital in a variety of companies.
Gains arising from the Euro changeover

In accordance with a Eurostat decision (Eurostat news release number 88/2002 of 22 July
2002), neither Central Bank profits arising from the write-off of its Irish note issuance
liability nor Central Government profits from seignior age on legacy Irish coins are treated
as income in compiling Ireland's GGB. Transfers to the Exchequer of proceeds from these
transactions are classified as 'Other financial transactions' in Table 2 of the EDP return.
b) Information and method (s) used for the adjustment cash/accrual for items other than
interest.
The following adjustments are implemented:
A. Adjustments among other accounts receivable/payable
Receivables
The item "Difference between Net Revenue Receipts and Exchequer tax receipts"
comprises an adjustment for Exchequer returns on tax proceeds. Initial estimates of taxation
receipts are normally taken from the (monthly) Exchequer returns, and later on updated
following the publication of the Revenue Commissioners Annual Report. The CSO has
always taken the data in the Revenue Commissioners Report as definitive. Usually, the two
figures match quite closely.
The items "Accrual adjustment of VAT and Excise tax receipts" and "Accrual adjustment
of PAYE Income Tax receipts" capture the time adjustment for VAT and for income taxes.
Taxes are reported on a cash basis, with the exception of Value Added Tax (VAT), Excise
duties andPAYE Income taxes, which are reported on a time-adjusted cash basis.
VAT is time-adjusted by two months.
The time adjustment involved for excise duties depends on the type of goods involved,
reflecting differences in the grace period for payment of the duty
Cigarettes
For cigarettes, the accrual period is two months except for December payments. This is
because the grace period at the end of the year is shortened, with November receipts and
much of December receipts falling due in December, in addition to the standard October
receipts.
11
Vehicle Registration Tax
For Vehicle Registration Tax (VRT), a one-month accrual period applies.
Hydrocarbon oils
Hydrocarbon oils have no time lag as all excise duties must be paid in the month in which
they are incurred.
Other goods
For other excise, a one-month accrual period has applied since December 2001. Until then,
slightly different rules applied to end of year returns for alcohol.
Pay As You Earn (PAYE) income taxes on wages which are deducted by employers are time
adjusted assuming an average one month delay between the accrual of the taxes and their
payment to the tax authorities.
The item ""UMTS licence receipts" captures the adjustment for UMTS receipts that are
recorded in the Irish accounts in accordance with the Eurostat decision of July 2000 (Eurostat
News Release No 81/2000 of 14 July 2000). The full net present value (NPV) of the three
licences sold in 2002 is included in the calculation of the net lending / net borrowing for that
year. Only €102 million of the €208 million NPV sales proceeds was actually received in
2002 and included as revenue in calculating the 'Exchequer Balance' at the top of Table 2 of
the EDP return. The outstanding €106 million has been accrued and entered as part of 'Other
adjustments' in that year. Receipt of the outstanding amount (due to begin in 2006) will give
rise to negative adjustments in Table 2.
The item "Accrual adjustment for EU transfers" represents the necessary accrual adjustment
relating to EU flows.
EU transfers payable to Central government are initially reported on a cash basis in the
source data. Using direct information obtained from the units managing the various EU
sponsored investment schemes, the amounts received are allocated to the period in which the
relevant expenditure actually took place before being included in the National Accounts
Payables
The item "Accrual adjustment for military expenditure" represents the necessary accrual
adjustment to record military expenditure on a delivery basis (implementing the Eurostat
decision on military expenditure).
The item "Accrual adjustment for nursing home charges repayment" represents the accrual
forward into 2005 of the full projected cost of the repayment of charges previously deducted
from certain residents of nursing homes. This in line with the Eurostat decision of August
2005.
The item "Accrual adjustment for other voted expenditure" represents the necessary accrual
adjustment for voted expenditure (the bulk of Central Government spending). It is derived
from the adjustments for payables/receivables in the audited Appropriation Accounts, and is
net of the adjustment for military expenditure.
The item "Accrual adjustment for transfers to Local Government" represents the
counterpart of an adjustment for receivables in the accounts of the Local Authorities.
12
The item "Impact of Departmental Balances" represents an adjustment for the impact of
monies transferred from the Exchequer to Departments which may not be fully spent by
Departments in the same year. This adjustment, which is calculated as the change in
Departmental Balances between the start and end of the year, ensures that actual spending by
Departments and their agencies is recorded in the calculation of the net lending / net
borrowing (rather than the Exchequer issuance).
The item "Impact of Capital Carryover system" represents an adjustment for capital
expenditure allocations of departments and agencies which have been carried unspent from
one year to the next under the Capital Envelopes/Carryover system.
B. Adjustments among net borrowing/net lending of other central government bodies
The item "National Pensions Reserve Fund" (positive sign) represents the annual payments
from the Exchequer into the NPRF, together with the amounts of investment income (less
costs) earned by the Fund. The NPRF is a long-term pension reserve established by
Government to meet part of the State's future pension liabilities from the year 2025 onwards.
The Fund is treated as an extra-budgetary fund and is classified within the Central
Government sub-sector. Annual payments into the NPRF from the Exchequer amount to 1%
of GNP. In addition, in the early years of its existence (this also applied to its precursor, the
Temporary Holding Fund for Superannuation Liabilities), proceeds from the sale of state-
owned companies were allocated to the Fund.
The item "Capital Services Redemption Account" represents an adjustment for transactions
between the Exchequer and this account. The adjustment equates to the difference between
funds received from the Exchequer and expenditure from the account.
The item "Dormant Accounts Fund" (negative sign) captures the money paid by the
Dormant Accounts Fund (an extra-budgetary fund of Central Government) to various
beneficiaries. The Dormant Accounts Fund automatically receives deposits and life insurance
contracts that are not claimed by original holders. These deposits are not booked
as government revenue but as an incurrence of a liability (payable). The outlays
of the Dormant Accounts Fund are aimed at financing social expenditure, and are recorded as
government expenditure.
The item "Other Extra-Budgetary Funds" comprises adjustments for extra-budgetary fund
operations. Details of the receipts and expenditure of these funds are given in the
Appropriation Accounts, the audited accounts of the fund in question, or the NTMA Annual
Report and Accounts (forecast and provisional outturn information is provided by the
sponsoring government departments). The Table 2A adjustment represents the difference
between the amounts transferred from the Exchequer to the funds, and the expenditure
incurred by these funds as reported from the various sources.
The basic expenditure and other income components, (e.g. Intermediate Consumption,
Compensation of Employees Social Benefits and property income) are also available and
these have traditionally been used, without adjustment, in the EDP returns. However, in
recent years, the Appropriation Account publication has also provided information on the
end-year values of receivable and payables of each Government Department. This
13
information was used for the first time in the October 2006 EDP return in order to convert
the basic cash information to an accruals basis.
The audited accounts of semi-state bodies presented in their annual reports record revenue
and expenditure on an accrual basis. These accounts are used by the CSO in the compilation
of National Income and Expenditure and are reflected in the data underlying the EDP return.
c) Sources and methods used for the calculation of interest on an accrual basis.
Interest on the national debt is calculated on an accrual basis by adjusting the value of cash
payments of interest by the change in the value of the stock of accrued but unpaid interest
recorded at the start and end of each year. The NTMA provides this information each year.
d) Information on other accounts receivable/payable that may be provided in public

accounts data.
The public accounts in Ireland provide an incomplete picture on accounts receivable and
payable, and only limited adjustments are included in Table 2 of the EDP return.
e) Sources and method (s) for the adjustment related to units classified within or outside
central government.
The non-commercial semi-state bodies (i.e. non-market agencies) classified within the Central
Government sub-sector are largely funded by Exchequer or EU grants and only a small
proportion of their spending is financed from own resources or through borrowing.
Information on their net borrowing, for EDP Table 2, is obtained either from the audited
accounts or, before these become available, from the agency statements contained in the
Revised Estimates Volume (for details of the Revised Estimates Volume, see Annex 2 Note 4).
f) Other adjustments regularly implemented.
The item "Assumption of Nitrigin Eireann Teoranta debt" (negative sign) captures debt
assumption by government benefiting public enterprises. These are recorded as capital
transfers from Government to the enterprise, with an adverse impact on the net lending / net
borrowing. In recent years, the only such transaction has been the assumption by the Minister
for Finance in 2001 and 2002 of the debt of Nitrigin Eireann Teoranta (NET), a public
corporation. This reduced the net lending / net borrowing in the two years (and increased the
General Government Debt) by €241m and €10m respectively.
The item "Provision for on —balance sheet PPPs" (negative sign) is a prudential provision
against the possibility that the capital assets under some PPP contracts, initially recorded as
'off balance sheet' may subsequently be ruled to be 'on balance sheet', so that the capital cost
would have to be accrued to the initial construction period rather than recorded as part of the
unitary payments made over the lifetime of the contract.
g) Sources of information used for transactions which need specific attention (in cases
where they are not directly identifiable in public accounts): debt assumption, debt
cancellation, privatisation, securitisations, capital injection into public corporations,
payments from the central bank.
14
Details of the transactions mentioned would usually be available in published sources either
in the Finance Accounts, Appropriation Accounts, Revised Estimates Volume, Budget Book or
in the audited accounts of the non-commercial semi-state bodies. Where additional
information is required it is sourced from the Department of Finance or the relevant
government department. Further details of several of these items are given in parts (a) to f)
above. The only securitisation of public revenues to date relates to the securitisation in 1995
and 1996 of approximately €240 million of local authority house mortgage receivables. Full
information is provided by the NTMA, which manages the company concerned (Ulysses
Securitisation plc). Note: Securitisation procedure effectively concluded in August 2006 with
the redemption of the long-term asset backed bond issued by Ulyssess, however the Ulyssess
entity still continues in existence)
2.2.2 Revision process
Steps in the revision process of data, for the State and for other units included in central
government, after the first notification
For central budget

For year (n-1) more definitive outturn information may be available from the Appropriation
Accounts and the Finance Accounts in time for the September year (n) notification. However
in some years this information becomes available too late and is reflected only in subsequent
returns.
For other units included in central government

For the year (n-1), more definitive information becomes available in the Appropriation
Accounts, the audited accounts of non-commercial semi-state bodies (i.e. non-market
agencies) and the NTMA Annual Report and Accounts.
3. State Government
Not applicable for Ireland
15
4. Local Government
This section describes the availability and use of main data sources for the Local Government
sub-sector (S.1313) by type of unit and the adjustments made in order to reach ESA95
definitions. It also covers the treatment for half finalised, finalised and current data, and the
process of revision of data.
The Local Government sub-sector consists of all bodies established for the purpose of local
administration: Local Authorities, Health Boards (up until their abolition at 31.12.2004) and
Vocational Education Committees (VECs). The sub-sector is funded primarily by grants from
Central Government. (Note: The 11 Regional Health Boards were abolished with effect from 1st
January, 2005 and have been replaced by a single body, the Health Service Executive (HSE), which is
responsible for the delivery of health services nationwide. The HSE is considered a unit of Central
Government and its activities are included in the accounts of S.1311Central Government)
1. Local Authorities
Local Authorities are monitored and controlled by the Department of Environment, Heritage
and Local Government. Local Government revenues consist essentially of three sources:
grant allocations from Central Government

charges for services (such as public utilities)
local property taxes ("rates ") on commercial properties
Under the Local Government Act 2001, local authorities are required to adopt a balanced
current budget. Rates must be struck annually at a level sufficient to make up any deficiency
in the budget of a local authority (i.e. the revenue generated by rates when taken together
with revenue from other sources, such as local service charges, should be sufficient to meet
the budgeted expenditure level). The 2001 Act also provides that a local authority may
borrow money in a manner that it considers suitable for the effective performance of its
functions. Such borrowing is, however, subject to the consent of the appropriate Minister. As
a general rule, each request for borrowing is assessed on the local authority's capacity to
make repayments. Most of the borrowing of local authorities is for capital purposes (mainly
housing). Each year the Department of the Environment, Heritage and Local Government
publishes the Local Authority Budgets (The latest published budgets available are for 2005,
see
http://www.environ.ie/en/LocalGovernment/LocalGovernmentAdministration/LocalGovernme
ntFinance/PublicationsDocuments/FileDownLoad,5440,en.pdf) . This publication contains
aggregate details of the estimates of receipts and expenditure on revenue account adopted by
local authorities.
2. Health Boards
Health Boards, abolished with effect from 1 January 2005 were responsible for the
administration of health services in local areas. They were monitored and controlled by the
Department of Health and Children, and are mainly financed by grants from the Exchequer.
Under Section 8 of the Health (Amendment) No 3 Act, 1996
(http://www.irishstatutebook.ie/ZZA32Y1996S8.html) the Minister for Health and Children
specified the ceiling for the expenditure that could be incurred by a health board and
specified the maximum amount of debt which the board could incur. The purpose of allowing
health boards to borrow was mainly to allow them some liquidity in the management of
16
expenditure. With effect from 1 January 2005 a single body, known as the Health Service
Executive, took over the functions of the existing health boards.
3. Vocational Educational Committees (VECs)

VECs are statutory committees of Local Authorities, although they have their own corporate
status under the Vocational Education Act, 1930
http://www.irishstatutebook.ie/ZZA29Y1930.html VECs are monitored and controlled by the
Department of Education and Science. They are responsible for managing vocational schools
(second level) in local areas and are financed partly from local rates (property tax on
commercial property) and partly from Exchequer grants. Under the 1930 Act, a vocational
education committee may, with the consent of the Minister for Education and Science, borrow
by means of bank overdraft or otherwise for the purposes of the vocational education fund
which it maintains. VECs are a relatively small element of the Local Government sub-sector.

4.1.1 Data sources for Local Government main units: municipalities, localities
This section describes the compilation process for Local Authorities. These comprise County
Councils, City Councils and Town Councils.
Table 3 - Source Data Accounting *

Rules(C/A/M)

-1- Budget Reporting
• Summary
expenditure
(3) Current and capital revenue and NA/NU NA/NU NA/NU NA/NU
transactions
• Detailed
C (5) Current revenue and expenditure NA/NU NA/NU NA/NU A/U
C (6) Current and capital revenue and NA/NU NA/NU NA/NU A/U
expenditure
transactions
-I- Financial Statements
-I- Other Reporting
A (11) Statistical survey * A/U A/U A/U A/U
(12) Other: NA/NU NA/NU NA/NU NA/NU
17
(please specify) || 1
* Special questionnaire issued to Local Authorities by the Department of Environment,
Heritage and Local Government to collect details of the value of end year stocks of financial
assets and liabilities
While traditionally there have been significant delays in collecting and collating detailed
income and expenditure information from Local Authorities, this has improved since the
introduction of the Local Authority Financial Management System (FMS) from which data
are now becoming available .In advance of this FMS data coming on-stream, the
Department of Environment, Heritage and Local Government (DoEHLG) conducted and
continues to conduct a special inquiry, specifically established for EDP purposes, which
collects information on the end year stock values of the different financial assets and
liabilities of Local Authorities. This is the 'Statistical survey' referred to in line (11) of Table
5. The survey is undertaken twice yearly, for the March and September EDP reports. The
information on the end-year stock positions is used to estimate the value of transactions in
financial assets and liabilities and using the resulting net lending/borrowing for year (n-1)
and earlier years to corroborate the net/lending borrowing coming from the "above the line "
income and expenditure account, which is reported in the EDP return.
In recent years the CSO has also provided Eurostat with Table 0200 of the ESA95
transmission programme, which provides a detailed breakdown of the Income and
Expenditure of General Government, including Local Authorities, at an interval of T+3
months. However, the data for Local Authorities in this table are early estimates and are
calculated by projecting forward detailed results for an earlier year using aggregate
information on trends in overall revenue and expenditure. The results are not robust enough
to be used for EDP purposes so the estimated income and expenditure figures are adjusted to
be consistent with the net lending/borrowing figures calculated in the twice-yearly financial
return. The aggregate trend information used to compile Table 0200 includes details of
current and capital grants paid to Local Authorities by the Central Exchequer and some
unpublished information provided by the DoEHLG. These are the source data that are
referred to in lines 1 and 2 of the Table 5.
To compile more final results for Local Authorities, CSO subsequently obtained additional
information from the Department of Environment, Heritage and Local Government. This
information was compiled from the annual audited income and expenditure returns that each
individual Local Authority was required to provide to the supervising Department. This more
detailed information only become available several months after the end of the reference year
and is what is referred to in lines (5) and (6) of Table 5. It enabled the CSO to make an
independent estimate of the net lending/borrowing position of Local Authorities for year (n-2)
in September (n). In recent years the initial estimates of net lending/borrowing compiledfrom
the twice-yearly financial return have been reasonably consistent with these later results.
The new Financial Management System is increasingly providing comprehensive information

on the non-financial transactions of local authorities for year n-1 notified in October year n
18
The available accounting information is used.
As explained above, pending the full introduction of the new FMS, the CSO obtains detailed
information on the audited annual incomes and expenditures of Local Authorities, albeit after
a delay. This information is used to compile a detailed non-financial account for Local
Authorities which provides an independent estimate of net lending/borrowing for year (n-2) in
September (n). The results differ from the estimates compiled from the twice-yearly financial
return, although in recent years these differences have been relatively small. CSO has
decided, to continue to put greater emphasis on the net lending/borrowing figures derived
from the financial return as they are considered to be more closely in line with the accounting
principles required under ESA95 while at the same time trying to minimise the discrepancy.
The income and expenditure information obtained by CSO from the audited returns that Local
Authorities provide to the DoEHLG is cash-based, and includes certain transactions in
financial assets and liabilities that are classified in the Local Authorities' accounting systems
as capital receipts and outlays. CSO attempts to exclude these transactions by using
supplementary information on housing loans etc., which they obtain from a variety of sources.
While the adjustments made are considered to be conceptually correct, the CSO is concerned
that timing or reporting differences could affect the consistency of the adjustments being
made and of the values included in the underlying income and expenditure statements.
Because of this, the net lending/borrowing figure calculated from the twice-yearly financial
questionnaire, as mentioned before, continues to be preferredfor the EDP return.
Complementary codification is not available for the local government sector.

Prior to the introduction of the FMS, the accounting system used by Local Authorities
traditionally included in what they label the 'capital account', indistinguishably from items
that were properly classified as capital under ESA95, certain transactions in financial assets
and liabilities. The amounts involved were not explicitly reported in the annual audited
accounts, which did not include balance sheets. In order to compile the non-financial
accounts for Local Authorities the transactions in financial assets and liabilities were
excluded using information that is contained in other reports largely obtained by the
DoEHLG from the Local Authorities.
other General Government units.
Local Authorities have their own unique budget reporting system.
Institutes
The basic data for the Local Authorities sector is obtained independently by the CSO from the
DoEHLG, which also provides copies of some of the material to the Department of Finance.
19
Data are usually on a cash basis. The information collected in the twice-yearly financial
return now includes data on the value of end of year payables and receivables.
Data reported for the local government sector is separate and is not consolidated with other
areas of central government or the social security fund sub-sector.
A new Financial Management System (FMS) was introduced for Local Authorities in 2003.
For the year 2004 onwards, this is providing greater detail of the income and expenditure of
Local Authorities reported on an accrual basisThe annual reports produced from the new
FMS also include Balance Sheets, distinguishing between financial and non-financial assets.
The CSO and the DoEHLG have worked closely together to see that the information provided
in the new annual accounts are being incorporated correctly into the national accounts
calculations and are being used to improve the existing estimates.
4.1.2 Data sources for Local Government: Local Government bodies / non-profit
institutions
This section describes the compilation process for Health Boards (HBs) (abolished on 1st
January 2005 and replaced by the Health Services Executive, a unit classified to Central
Government) and Vocational Education Committees (VECs). The Health Boards, which
included the Eastern Regional Health Authority, were established to administer the health
services in their own local areas and were responsible to the Minister for Health and
Children. VECs manage second and third level regional colleges in their local areas.

Rules(C/A/M)
-1- Budget Reporting
• Summary
expenditure
transactions
• Detailed
C (5) Current revenue and expenditure NA/NU NA/NU NA/NU A/U
C (6) Current and capital revenue and NA/NU NA/NU NA/NU A/U
expenditure
20
transactions
-I- Financial Statements

A (10) Balance sheets NA/NU NA/NU NA/NU A#/NU
-I- Other Reporting

A (11) Statistical surveys * A/U A/U A/U A/U
(please specify)
* Special questionnaire issued to Health Boards (prior to their abolition on 1 January 2005)
and Vocational Education Committees by their supervising Departments to collect details of
the value of end year stocks of financial assets and liabilities
# Refers to Health Boards only. Balance sheet information not available for Vocational Education
Committees
As in the case of Local Authorities, there have traditionally been delays in collecting and
collating detailed income and expenditure information for Health Boards (HBs) and
Vocational Education Committees (VECs). The result was that detailed national accounts for
these bodies could not be produced until several months after the end of the reference year.
This was not adequate for EDP purposes, so some years ago their supervising Departments
put in place a similar financial reporting system as is used to collect information for Local
Authorities. Questionnaires are issued twice-yearly asking for details of their end-year
stocks of financial assets and liabilities. This is the 'Statistical survey' referred to in line (11)
of Table 6. The information provided is used to estimate the value of transactions in financial
assets and liabilities and the resulting net lending/borrowing for year (n-1) and earlier years,
which is reported in the EDP return.
Non-financial accounts of HBs and VECs are also estimated by the CSO for Table 0200 of the
ESA95 transmission programme, which provides a detailed breakdown of the Income and
Expenditure of General Government, including these units, at an interval of T+3 months.
However, the data for HBs and VECs in this table are very estimated and are calculated by
projecting forward detailed results for an earlier year using aggregate information on trends
in overall revenue and expenditure. The results are not robust enough to be used for EDP
purposes so the estimated income and expenditure figures are adjusted to be consistent with
the net lending/borrowing figures calculated in the twice-yearly financial return. The
aggregate trend information used to compile Table 0200 includes details of the current and
capital grants paid to these bodies from the Central Exchequer and some unpublished
information provided by their supervising Departments. These are the source data that are
referred to in lines 1 and 2 of Table 6.
To compile more final results for HBs and VECs, the CSO subsequently obtains additional
information from their supervising Departments. This information is compiled from returns
provided by each Health Board and VEC to their supervising Department. This more
detailed information only becomes available about 18 months after the end of the reference
year and is the data source referred to in lines (5) and (6) of Table 6. This information
enables the CSO to make an alternative estimate of the net lending/borrowing position of HBs
and VECs for year (n-2) in September (n), but this estimate is considered to be inferior to the
estimate derived using the twice-yearly special financial questionnaire.
21
Prior to their abolition, the CSO started to obtain income and expenditure statements and
balance sheets directly from Health Boards. These are prepared in a standardised format
and form the basis of the income and expenditure information traditionally obtained via their
supervising Department. However, the information provided in the published balance sheets
has not up to now being used in the compilation of the ESA95 accounts or EDP returns for
the Health Boards.
As in the case of Local Authorities, the estimate of net lending/borrowing obtained using the
twice-yearly financial return is considered more reliable than the alternative estimate based
on the income and expenditure details provided by the supervising Departments.
2c) Complementary codification at data source, by counterpart sector.
None is available.

No extra data are used.
units in other sub-sectors of General Government.
The format and detail of the available information for Health Boards is unique, as are the
data available for VECs.
Institutes
The twice-yearly financial return for HBs and VECs is transmitted to the CSO via the
Department of Finance. The supervising Departments provide other details, including
income and expenditure statements, directly to the CSO.
See table 4 above.
All data are reported unconsolidated.
Health Boards were abolished with effect from 1st January, 2005 and have been replaced by a
single body the Health Service Executive (HSE), which is responsible for the delivery of
health services nationwide. The HSE is considered a unit of Central Government and its
22
activities will be included in the accounts for S.1311. For accounting purposes, the new
Agency has been designated as a stand-alone Vote in the Book of Estimates and
Appropriation Accounts and produces its own Revenue Income & Expenditure Account,
Capital Income & Expenditure Account and Balance Sheet. This means that from 2005
onwards, while the accounting information available for the new Agency will be similar to
that which already exists for other Central Government Departments, it will also be presented
on an accruals basis.
In respect of year (n-1), sources of data include the Revised Estimates Volume and
unpublished information provided by the supervising departments (the Department of
Environment, Heritage and Local Government, the Department of Health and Children and
the Department of Finance as appropriate.
Information available in March for the previous year (n-1) is limited and is available only at
a very aggregated level. To compile the detailed National Accounts, the CSO subsequently
obtains more detailed information from the Departments that supervise the Local Authorities
and VECs (also Health Boards to end-2004). These enable the CSO to make an independent
estimate of the net lending/borrowing position of Local Government. The most recent CSO
results compared reasonably well with the estimates compiled for the March 2007 EDP
return which were based on earlier estimates of the overall balances for Local Government,
adjusted for loans granted and loan repayments. However, the detailed information that the
CSO needs to compile these independent estimates becomes available only some years after
the reference year and well outside the timeframe required for EDP reporting.
Work is underway on improving the quality and scope of information for Local Government.
As noted in section 1.3.1 (c) above, the Department of Environment, Heritage and Local
Government introduced a new accounting system for Local Authorities in 2004. Following
discussions with the CSO, relevant Government Departments have established a new
quarterly statistical reporting system for Local Government units, for use in EDP compilation
and also for the short-term public finance statistics and quarterly financial accounts for
General Government now required for Local Government. The new system, which for local
authorities is based on the FMS,has lead to an improvement in the timeliness and accuracy of
information on local authority receipts and expenditures.
ii) Data sources specifically used in the context of the first notification.
See section 4.1.3 part i)
iii) Estimation methods that may be used in the context of the first notification
Estimates are made of outturns based on known information at the time. As explained above,
there are delays in gathering the final data in relation to the income and expenditure of local
government units and the exact nature of the revenues/expenditure can only be confirmed
when the more detailed information becomes available.
23
I) Working balances of Local Government that were submitted to an auditing process.
In the Local Government Sub-sector (S. 1313), an independent working balance is available
only for the Local Authorities. This is published in audited accounts but with varying delays,
depending on the local authority in question.
Revisions arising from the audit of Local Authorities are also automatically included in the
EDP reports when the final audited accounts are published. This can give rise to revisions in
historical data.
4.2 Data treatment
a) Original source of data used as a starting step
For years (n-4) and (n-3) and the September notification for n-2, the primary source is the
National Income and Expenditure, published by the CSO. This is compiled from detailed
information provided by the government departments that supervise the Local Authorities and
VECs respectively (also Health Boards to end-2004).
For the March notification of year (n-2), sources of data include the Revised Estimates
Volume, Appropriation Accounts, Housing Statistical Bulletin, Local AuthorityBudgets,
unpublished information provided by the two supervising government departments (three
departments up to end-2004) and the Department of Finance (as appropriate).
b) Financial transactions that may be included in the public accounts of local

Government and are excluded in table 2.
Information on the incomes and expenditures of Local Government is available only in very
aggregated form, and does not fully distinguish financial transactions from non-financial
transactions. This contrasts with Central Government, for which information on financial
transactions is readily identified in the public accounts. However, the range of financial
operations undertaken by Local Government entities is limited. They generally do not issue
securities, and their borrowing is confined to a limited number of identifiable uses (housing
for example) and to overdraft facilities. Under Section 106 of the Local Government Act,
2001(http://www.irishstatutebook.ie/ZZA37Y2001S106.html), local authorities acquired the
right to lend to each other, but in practice this rarely happens and the amounts are very
small.
For the purpose of the EDP return, local government units are surveyed twice per year by
their supervising departments. Data are collected on asset and liability positions. The survey
results form the basis for the adjustment items "Loans granted" and "Loans repayments".
The following conventions are adopted:
"Loans granted" in Table 2 are
24
(i) loans advanced (assets) (mainly housing loans) and
(ii) principal repayments made on loans incurred (liabilities);
"Loan repayments " are

(i) principal repayments received (on assets) and
(ii) drawdowns (incurrence of liabilities).
c) Information and the method (s) used for the adjustment cash/accrual for items other
than interest.
Information on incomes and expenditures is now available on an accrual basis following the
introduction of new accounting system by Local Authorities in 2004.
d) Sources and methods used for the calculation of interest on an accrual basis.
Data are collected by the new FMS system.
e) Information on other accounts receivable/payable that may be provided in the data

sources.
Data on AF. 7 Accounts receivable/payable are available from the new FMS system for the
years 2003 -2006.
f) Sources and method (s) for the adjustment related to units classified within or outside
local Government.
Not applicable.
g) Other adjustments regularly implemented.
None
h) Sources of information used for transactions which need specific attention (in cases
where they are not directly identifiable in public accounts): debt assumption, debt
cancellation, privatisation, securitisations and capital injection into public corporations
owned by local Government.
Local government in Ireland does not carry out such transactions.
Steps in the revision process of data, after the first notification.
Data may be revised if updated outturn figures become available from the sources described
at 4.3.1 i).
25
5. Social Security Funds
This section describes the availability and use of main data sources for the Social Security
Funds Government sub-sector (S.1314) by type of unit and the adjustments made in order to
reach ESA95 definitions. It also covers the treatment for half finalised, finalised and current
data, and the process of revision of data.
The only social security scheme recognised in the Irish National Accounts is the social
insurance scheme administered through the Social Insurance Fund. This scheme is unfunded.
Contributions received in one period are used to meet expenditures in the same period and
the Government makes up any shortfall in the Fund. Membership of the Social Insurance
scheme is compulsory for most employees and self-employed. They must pay social
contributions that entitle them to receive social benefits. Government sets the contribution
and benefit rates as part of the annual budgetary process. The amounts of the social benefits
payable are not directly linked to either the level of earnings or to the value of the
contributions paid. However, a member must satisfy certain contribution criteria in order to
receive benefits.
Data for the SIF are provided by the Department of Social and Family Affairs (DSFA) in its
role as manager of the Fund's current account, and by the NTMA as manager on behalf of the
Minister for Finance of the accumulated surplus in the Fund.
Until 1996, an Exchequer contribution has normally been required to meet the shortfall on
the SIF. However, no Exchequer contribution has been required since 1997 as the SIF has
consistently been in surplus. The projected accumulated surplus at end 2006 is €3.1billion
Preliminary details of the previous year's outturn and the forecast for the current year of the
receipts and expenditures of the SIF are published each year in the Revised Estimates Volume
under the Vote for the DSFA. Audited accounts of the SIF are subsequently prepared by the
DSFA.
5.1.1 Data sources available: Social Security Funds
The Social Security Funds sub-sector in Ireland consists solely of the Social Insurance Fund
(SIF).
26
4
Rules(C/A/M)
4- Budget Reporting
• Summary
expenditure
transactions
• Detailed
expenditure
transactions
-1- Financial Statements
A (10) Balance sheets A/U A/U A/U A/U
-1- Other Reporting
(please specify)
The available reports are used.
Information collected directly from the Social Insurance Fund (SIF) and the statement of
receipts and expenditures for the Social Insurance Fund contained in the Revised Estimates
Volume are used until the audited accounts of the Fund become available. There is usual
minimal difference between the provisional outturn contained in the Revised Estimates
Volume and the final audited version.
No complementary codification is available. Transactions between the Fund and the

Exchequer are reported in the accounts of the two entities and can be checked for
consistency.

4
A/U (available/used), A/NU (available/not used), NA/NU (not available/not used)
C (Cash), A (Accrual), M (Mixed Cash-Accrual)
27
Additional information is not required for the compilation of EDP statistics for this sector-
sufficient detail is available in the published accounts.
other General Government units.
The format and detail provided in the accounts of the Social Insurance Fund are unique to the
Fund.
Institutes
The basis data for the Social Security Sector is requested independently from the responsible
entity for the accounting statements (i.e. the Department of Social and Family Affairs).
Accounts of the Social Security Sector are mixed. Receipts of the fund are recognised on a
cash basis. Payments are recognised on the basis of cheques and payable orders issued
during a year, personalised payable orders, postdrafts and vouchers cashed at Post Offices,
and moneys issued by way of electronic fund transfer. Balance Sheet is on an accruals basis.
There are separate accounts for the Social Security sub-sectorwhich are not consolidated
with other areas of general government.
No changes to the accounting rules for the social security sector are foreseen at the present
time.
Where audited accounts are not available for year (n-1), the DSFA provides data that are
consistent with the outturn for the SIF contained in the Revised Estimates Volume.
ii) Data sources specifically used in the context of the first notification.
See section 5.1.2 part i)
iii) Estimation methods that may be used in the context of the first notification
As outturn figures are available for the first notification, no estimation is required.
28
I) Working balances of each of the sub-sectors that were submitted to an auditing

process.
The starting working balances for the Social Security sector of EDP notification Table 2 at
end-March (n) for the years n-4, n-3 and n-2 were subject to an auditing process. The starting
working balance for the years n and n-1 will be audited in due course. However, it should be
noted that historically there is minimal difference between the provisional outturn and the
audited outturn for this sector.
Audited accounts of the Social Insurance Fund were available in mid-December 2006 in
relation to the year2005. However, preliminary details of this account for the year 2005 were
available in the Revised Estimates Volume produced by the Ministry of Finance in February
2006. There is very little difference between the preliminary accounts and the eventual final
audited version for any given year. Therefore, there are minimal revisions to the national
accounts on foot of the publication of audited accounts of the social security sector.
5.2 Data treatment

a) Original source of data used as a starting step
Audited accounts provided by the DSFA.
b) Adjustments for financial transactions in units' data sources used for units classified
in the Social Security Funds sub-sector.
No adjustment is needed.
c) Information and the method (s) used for the adjustment cash/accrual (excluding
interest) for social contributions and social benefits.
Social contributions and social benefits are reported on a cash basis, but, since the October
2006 EDP report, timing adjustments have been made in order to convert social contributions
paid on earnings liable to PAYE income tax to an accrual basis using the simple time
adjusted method.
d) Sources and method used for the calculation of interest on an accrual basis where
units' data sources provide only information on a cash basis.
Not available but debt liabilities are negligible
29
e) Information on other accounts receivable/payable that may be provided in units' data
sources.
Information on accounts receivable/payable is available from the Balance Sheet of the Fund's
accounts. This data has been incorporated in the notifications since the end-September 2006
notification.
f) Other adjustments regularly implemented.
The item "Accrual adjustment for social contributions" captures the time adjustment
applied to Pay Related Social Insurance (PRSI) contributions due from employees and
employers to the State. These are time adjusted assuming an average one month delay
between the accrual of the taxes and their payment to the tax authorities.
Annual adjustments are made in respect of the expenses of administering the SIF which are
recovered from the Fund each year and credited to the Departmental Vote to which the
expenses are attributable. Adjustments are also made for exceptional items, for example in
2000 in respect of a once-off transfer to the National Training Fund and in 2002 in respect of
a once-off transfer to the Exchequer. Details of any such adjustments are contained each year
in the Revised Estimates Volume.
Steps in the revision process of data, after the first notification.
Data may be revised

(1) if the outturn figures for year (n-1) are revised by the DSFA or
(2) when audited outturn figures become available.
30
6. Actual data on government debt
6.1 Half finalised and finalised data
In addition to the main published sources referred to in Section 1.1 (1) and 1.1.1 (e) above
(White Paper on Receipts and Expenditure, Budget Book, Revised Estimates Volume,
Appropriation Accounts, Finance Accounts - for explanations of each of these publications,
see Annex 2 below), the Department of Finance requests specific data from supervisory
Government Departments in relation to the liabilities and certain financial assets of local
authorities, health boards (up until their abolition on 1 January 2005 when a single body, the
Health Services Executive, took over their functions), other local agencies, non-commercial
state bodies and other relevant state bodies. The data collected consists of:
- gross liabilities to Central Government, to the rest of General Government and to the
private sector. Private sector debt is broken down into: bonds; other debt with original
maturity less than one year; and other debt with original maturity of greater than one
year.
- gross debts guaranteed by Central Government
- deposits with Central Government, with the rest of General Government and with the
private sector.
a) Adjustments to the data sources that may be needed in order to value debt according
to the specific EDP rules for each government sub-sector.
The vast majority of data required for the compilation of the gross debt (stock) of each sub-
sector and of the contribution which the debt of each sub-sector makes to General
Government Gross Debt (and hence GGGD itself) are directly available at nominal value,
and no adjustments are necessary. A very high proportion is directly reported by the NTMA
(approximately 94.8% of GGGD in2000, 89.4% in2006) with the vast majority of this data
being reported at nominal value. For the small remainder, the Agency supplies the
information necessary to adjust the data to nominal value.
Central Government (S.1311)

For Central Government deposit liabilities (which in Ireland consist of the so-called "small
savings" - Savings Certificates, Prize Bonds, National Instalment Savings and Savings
Bonds), the nominal value of the liability includes the accrued interest when it is actually
credited to the instrument holder. This is in accordance with ESA95 Manual on Government
Deficit and Debt, Part V. 1 b, Bullet point 1.
Debt denominated in foreign currency is valued in accordance with the ESA95 Manual on
Government Deficit and Debt, Part V.2. The necessary information is provided by the NTMA.
Liabilities of non-commercial semi-state bodies (Non-market agencies) are reported at book

value, which for EDP purposes is taken as being equivalent to the nominal value. All such
liabilities are in national currency.
Local Government (S.1313) and Social Security Funds (S.1314)

Liabilities of S.1313 and (when relevant) S.1314 are directly reported at nominal value.
S. 1314 does not incur any EDP-relevant liabilities other than loans (some insignificant short-
31
term bank overdraft liabilities), some minor balances due to Central Government institutional
units and some small amounts of sundry creditors. In the 1990s, S.1313 issued small
quantities of long-term securities other than shares (maximum €0.2 million) but since year
2000 has not incurred any liabilities contributing to the GGD other than bank overdrafts and
long-term loans(2006: Total €3,876m, some 8.9% of the GGGD).
b) Sources of information used for the consolidation of debt and the valuation of
holdings at the level of each government sub-sector (intra-flows and positions) and at the
level of general government sector (inter-flows and positions).
- At the level of each government sub-sector (intra-flows and positions)

Consolidating intra sub-sector flows and positions for Central Government involves three
elements.
1. A small proportion of Irish Gilts (i.e. long-term government bonds issued by Central
Government) is held by the Post Office Savings Bank Fund (POSBF), an extra-budgetary
fund classified within the Central Government sub-sector. The NTMA, which administers
the Fund, provides the data needed for consolidation. (To elaborate, deposits by
households placed with the Post Office Savings Bank (POSB), a separate and distinct
institutional unit classified outside General Government, are on-lent to the POSBF. The
Minister for Finance guarantees the repayment and servicing of the deposits. A portion of
the amounts received from the Post Office Savings Bank via the POSBF Fund is invested
in long-term securities other than shares (Irish Government Bonds/Gilts). All data
requiredfor this operation are available at nominal value.)
2. The Housing Finance Agency (HFA), the Local Government Fund and the Private
Residential Tenancies Board (PRTB) (all units classified to Central Government; the HFA
was reclassified to the Central Government sub-sector for the March 2007 EDP
notification on recommendation of Eurostat, see * below) each hold a portion of the
short-term Exchequer Note securities in issue.
* (The HFA had been established in 1982 by legal act for the purpose ofproviding loans for the acquisition or
construction of houses. Initially, the Agency raised funds on the bond market by way of index-linked bonds and on-lent
these funds to individual borrowers. Changes to the founding act governing the Agency in 1986, 1992 and 2002 altered
its role by broadening the purpose of the loans but basically restricting the circle of borrowers to local authorities
which could then on-lend to individuals. By 2006, only 1% of the HFA loan book was vis-a-vis individual borrowers.
Because of the limited nature of HFA activity and the fact that in most instances it cannot refuse to provide loans when
requested by local authorities and approved by its parent Department, the Department of the Environment, Heritage &
Local Government, CSO concluded and proposed that the entity should be reclassified to Central Government and
Eurostat agreed with this conclusion in its advice of early March 2007.
The Local Government Fund was established by the Local Government Act 1998
(http://www.irishstatutebook.ie/1998/en/act/pub/0016/index.html.) The Fund was established with effect from 1 January,
1999. The proceeds of motor tax (net of refunds) and an Exchequer contribution are paid into the Fund.
For 2005 Fund accounts, please see
http://www. environ. ie/en/Publications/LocalGovernment/Administration/FileDownLoad, 203 7, en.pdf
The PRTB was established in September 2004 to resolve disputes between landlords and tenants, operate a national
tenancy registration system and provide information and policy advice on the private rented sector. The PRTB dispute
resolution service replaces the courts in relation to the majority of landlord and tenant disputes. (PRTB website is
accessible at http://www.prtb.ie/)
32
3. Information on short-term borrowings by the Exchequer from certain funds under the
control of the Minster for Finance ("Ways and Means" funding, in national
terminology) is readily available and consolidation is straightforward.
Local Government (S.1313)

Most transactions of Local Government units are with Central Government or sectors outside
General Government. Financial transactions in EDP-relevant instruments between units
within the sub-sector happen only rarely and usually for small amounts (4.2m at end-2006).
Consolidation is therefore not a significant problem.
Social Security Funds (S.1314)

Since this consists of a single entity, the Social Insurance Fund, intra sub-sectoral flows and
positions do not arise.
- At the level of general government sector (inter-flows and positions)

Information on EDP-relevant liabilities of S.1311 to S.1313 and S.1314 is provided by the
NTMA. (In recent years, such liability holdings have consisted entirely of short-term debt
securities.) Since March 2007 notification, the Housing Finance Agency has been reclassified
to Central Government and its principal asset, namely loans to local authorities, are
consolidatedfrom the asset side of the consolidated General Government balance sheet
Non-market agencies or extra-budgetary funds within S.1311 generally do not have claims on
or liabilities to S.1313 or S.1314.
Local Government (S.1313)
Information on liabilities of S.1313 to S.1311 is collected directly from the sponsoring
government departments by the Department of Finance and also from the Housing Finance
Agency (Local authorities borrow from HFA which since the March 2007 notification has
been reclassified to Central Government). S.1313 has no relevant liabilities to or claims on
S.1314.
Social Security Funds (S.1314)

Liabilities of S.1314 to S.1311 consist of
-) AF. 7 accounts payable - short-term amounts owed by the Fund to certain government
departments. AF. 7 is outside the scope of GGGD.
c) Use of financial accounts for the implementation of table 3, concerning assets and
other liabilities.
At end-September 2006, a set of financial accounts and balance sheets for the General
Government sectorwas transmitted by CSO to Eurostat and a summary sub-set of the data
were published nationally for the first time in March 2007 in CSO's Institutional Sector
Accounts publication
http://www.cso.ie/releasespublications/documents/economy/current/institutionalacc.pdf and
http://www.cso.ie/releasespublications/documents/economy/current/Financial_tables_2_and_
3.xls . These data are not yet fully integrated with the EDP compilation system maintained by
the Department of Finance. However data consistency checks are being carried out between
the two databases for ongoing reconciliation purposes. While the CSO compilation system for
33
Annual Government Financial Accounts is not yet fully integrated with the EDP compilation
system maintained by the Department of Finance, the two agencies work closely together in
an attempt to ensure that there is consistency in treatment of methodological and compilation
issues under the two reporting frameworks.
In addition to the annual government financial accounts data, the following quarterly data
have been transmitted to Eurostat and ECB by CSO under Regulation (EC) No 501/2004 of
the European Parliament and of the Council of 10 March 2004 on quarterly financial
accounts for general government (QFAGG):
Asset Positions Liability Positions Asset Transactions Liability

Transactions
ESA95 Sub-sectors
S.1311 Yes * Yes * Yes * Yes *
Central Government
(consolidated)
S.1313 Yes ** Yes **
Local Government Yes *** Yes ***
(consolidated)
S.1314 Yes ** Yes ** Yes ** Yes **
Social Security Fund
(consolidated)
S.13
General Government Yes *** Yes *** Yes *** Yes ***
(consolidated)
S.13
General Government Yes **** Yes **** Yes **** Yes ****
(non-consolidated)
* Test transmissions have been made since 2002 in advance of Regulation No. 501/2004 of 10 March 2004 coming into force
** First transmission made June 2004, the first time these data were statutorily required under the regulation.
*** First transmission made June 2005, the first time these data were statutorily required under the regulation.
**** First transmission made 9March 2006, t + 8 months after the data were statutorily required under the regulation, the
delay was caused by difficulties experienced in the compilation of the data
Certain counterpart data relating to sectors S.1311 (Central Government) and S.1314 (Social
Security Funds) are also required Regulation (EC) No 501/2004 and these are now being
transmitted to Eurostat and ECB. Ireland had requested and was granted a derogation for 12
months (i.e. until June 2005) for these items. They were first transmitted for the first time in
early March 2006 due to difficulties experienced in the compilation of the data.
QFAGG statistics differ from those covered by EDP notifications in that they are required to
be at market value, to be inclusive of accrued interest and to cover the complete set of ESA95
financial asset and liability categories including liability instruments not included in the EDP
definition of GGGD.
Under a long-standing arrangement, reporting for EDP has been the responsibility of the
Department of Finance. While the CSO compilation system for QFAGG is not yet fully
integrated with the EDP compilation system, the two agencies work closely together in an
attempt to ensure that there is consistency in treatment of methodological and compilation
issues under the two reporting frameworks.
34
d) Sources of information for the adjustments relating to transactions in debt
instruments that are not valued at the nominal (face) value of the instrument, for each
government sub-sector.
Since all data for the three sub-sectors of General Government needed to compile the EDP
return are available at nominal value, no adjustments are necessary.
e) Sources of information used for the adjustments relating to a change in nominal debt
that does not result from a transaction (other change in volume), for each government
sub-sector.
There have been no such occurrences in recent years.
6.2 Data for the current year notified in April
a) Data sources that may be used specifically in the context of the first notification
Complete but unaudited accounts in respect of borrowings on behalf of Departmental Central

Government and accounts of extra-budgetary funds are normally available from the NTMA in
time for the first notification. Data for the remainder of S.1311 (for example for non-
commercial semi-state bodies) and for S. 1313 and S. 1314 are obtained from the supervisory
Government departments or in the case of the HFA, directly from the entity itself; these are
preliminary outturn figures for the current year (n - 1) at the time of the first notification.
b) Estimation methods that may be used in the context of the first notification.
As noted in 6.2(a) above, complete but unaudited accounts in respect of borrowing on behalf
of Departmental Central Government are normally available for the first notification.
For the rest of General Government (including non-commercial semi-state bodies), the
available data are preliminary and not quite comprehensive. Missing data are estimated on
the basis of historical figures and current year outturns in the rest of the sector.
c) Steps in the revision process of data, after the first notification.
As indicated above, almost final data for the most significant units of Central Government are
available for the first notification. Before the second notification, supervisory Government
departments are asked to supply updated data in respect of the rest of Central Government
(mainly the non-commercial semi-state bodies) andfor Local Government.
35
7. Specific issues
7.1 Long-Term Contracts between Government and Private Entities
7.1.1 Identification and data sources of long-term contracts between Government and
Private Entities (PPPs).
All expenditure of State owned agencies has to be reported in the public accounts. However
there are additional rules for reporting on PPP long-term contracts. Prior to undertaking
such projects, State authorities are required to notify and consult with the National
Development Finance Agency (NDFA). This Government Agency advises state authorities on
the optimal means offinancing public investment projects in order to achieve value for money
and also provides advice on the financing, refinancing and insurance of public investment
projects to be undertaken by means of PPP arrangement or within the public sector.
The legal act establishing the Agency (National Development Finance Agency Act, 2002)
http://www.finance.gov.ie/documents/publications/legi/ndfabill.pdj requires that all State
Authorities undertaking public investment projects, including PPPs, must seek the advice of
and consult with the Agency in the following circumstances:
• For major projects and grouped projects costing in excess of €20 million; and
• For projects costing less than €20 million, where State Authorities require financial, risk
and/or insurance advice.
State Authorities are defined in the Act and include all major components of the Central and
Local Government Sectors.
New public budgetary procedures, which were introduced in Budget 2004, also require
Departments of State to separately identify and report on PPP contracts. These procedures,
known as 5-year multi-annual capital envelopes, determine the amounts available to
Departments for investment on capital projects. The envelopes distinguish and make separate
allocations for (1) traditional procurement projects financed directly from the Exchequer and
(2) PPP projects financed by the private sector or the NDFA. In the case of PPP projects, the
full capital cost is charged against the Capital Investment Envelopes up front even though the
projects will be funded by unitary payments from the Exchequer over the period of the
contract. PPP projects which are fully funded by user charges are additional to the Envelope.
Local government projects which are funded from local government own resources are
currently also outside the Envelope.
Guidelines, outlining the treatment of PPP projects for national accounting purposes, have
been finalised and issued to Government Departments
http://www.ppp.gov.ie/keydocs/guidance/otherguidance/PPPs%20Clarification%20of%20Eur
ostat%20rules%20for%20Depts%20-June%2006.doc In order to be recorded correctly in
the national accounts, Section 5.9 of the Guidance Note explains that Departments must
'supply to their PPP Unit details of the construction cost (including VAT and capitalised interest),
unitary payment split between interest, capital repayment and service costs of each PPP project. PPP
Units will be asked to submit this information to the Department of Finance at regular intervals
36
7.1.2 Alternative data sources in cases of lack of comprehensiveness or reliability.
The CSO has ongoing contact with the Department of Finance and the National Development
Finance Agency (NDFA) and the existing information sources are considered adequate.
7.1.3 Terminology used for PPPs in the national language(s) and correspondence in
English.
The term PPP is commonly used. The legal Act enabling State Authorities to participate in
such contracts is entitled 'State Authorities (Public Private Partnership Arrangements) Act,
2002.' [http://www.finance.gov. ie documents publications legi al02.pdf However, the
contracts described in Section 3 of the Act are wider than the scope of the Eurostat Decision
of 11th February 2004 and include
• the design and construction of an asset, together with the operation of services relating to
it and the provision offinance, if required, for such design, construction and operation
• the construction of an asset, together with the operation of services relating to it and the
provision offinance, if required, for such construction and operation
• the design and construction of an asset, together with the provision of finance for such
design and construction
• the provision of services relating to an asset for not less than 5 years and the provision of
finance, if required, for such services
The Guidance Note referred to in the previous section also clarifies the term PPP (see
Glossary of terms, page 25) and the scope of the Eurostat Decision (See Appendix 1).
7.1.4 Agency, organization, or association dealing specifically with PPPs.
In the private sector no such agency exists. In the public sector, as explained earlier, PPP
arrangements are monitored and co-ordinated by the NDFA and the Central PPP unit located
within the Department of Finance. All State agencies must notify and consult with the NDFA
in advance of undertaking projects above a certain size. In addition a Central PPP Unit
located in the Department of Finance provides guidance on best practice in the appraisal and
procurement of PPP projects with a particular focus on establishing and providing value for
money. State Departments involved in PPP contracts also have their own PPP units and must
report information on these projects to the central PPP unit in the Department of Finance.
Financial information on these projects is available to the CSO on request.
7.1.5 Legal instruments, including laws, regulations, or decrees, governing or regulating

PPPs.
The following legal Acts have already been referred to:

1. The State Authorities (Public Private Partnership Arrangements) Act, 2002.
2. National Development Finance Agency Act, 2002
37
In Ireland, the general policy is not to issue guarantees or to provide letters of comfort. The
Department of Finance publication 'Public Financial Procedures'
http: www.irlgov.ie/govacc/ or
http://www.finance.gov.ie/ViewDoc.asp?fn=/documents/PublicFinancialProcedures/default.ht
m&CatID=15&m=f sets out the accounting principles and procedures to be applied by
Government Departments and stipulates that "a guarantee may only be issued where there is
specific statutory authority to issue such a guarantee. "
7.2 Long-term contracts for military equipment

7.2.1 Contracts used by military forces for the procurement of equipment:
Most contracts for large equipment, such as aeroplanes, include prepayments. On delivery
some payments may be withheld pending confirmation that the equipment functions correctly.
7.2.2 Borderline cases regarding the classification of some goods as military goods or as
other equipment used by military forces.
Ships acquired by the Irish Defence contain relatively small amounts of weaponry and are
often used for purposes such as fisheries protection, which in some countries are undertaken
by coastguard services. In the Irish National accounts these items were initially capitalised
and not treated as military equipment. However, following discussions with Eurostat it was
agreed to reclassify these items as military equipment on the basis that the ships are owned by
the military and carry mountings for weapons.
7.2.3 Recording of the impact on government expenditure from the above-mentioned

contracts.
The impact is recorded on an accruals basis.
7.2.4 Available information for the treatment of the above-mentioned contracts in

national accounts.
Data sources allow a recording of military equipment purchases on an accruals basis.
7.3 Pension Schemes
7.3.1 Definition of pensions
In Ireland, the term pensions is generally understood to mean the lump sum or recurrent
payments due to people on retirement as a result of old-age or incapacity on health grounds.
7.3.2 Classification of pension schemes
Pension schemes are classified according to their nature distinguishing between social
insurance and social assistance schemes. The State administered social insurance and
assistance schemes are both classified within the General government sector, as is the
unfunded occupational pension scheme applying to most public sector workers. Workers in a
38
small number of non-market agencies, which are classified within the General Government
sector, belong to funded occupational pension schemes. These schemes, along with the
funded pension schemes in commercial state owned corporations, are classified in the
Insurance sub- sector and not in General Government
The National Pension Reserve Fund (NPRF) is a long-term pension reserve established by
Government to meet part of the State's future pension liabilities. From the year 2025
onwards, monies can be withdrawn from the Fund and used to meet part of the costs of the
State's unfunded occupational and social welfare pension liabilities. Annual payments into
the NPRF from the Exchequer amount to 1% of GNP. The Fund is treated as an extra-
budgetary fund and is classified within the Central Government sub-sector.
7.3.3 Classification of social insurance pension schemes
Social welfare pensions in Ireland are paid by the State under two main schemes. One is a
social security scheme whereby most employees and self-employed in the State are required to
pay social contributions to a Social Insurance Fund and, as a consequence, are entitled to
receive social benefit payments. These are considered social insurance pensions.
The other scheme administered by the State is a social assistance arrangement. This provides
means-tested benefits to low income households or individuals. Beneficiaries are not
required to pay social contributions and the scheme is not considered social insurance.
The State also operates an unfunded occupational pension scheme for its employees and this
is also considered a social insurance pension scheme.
7.3.4 Definition of social security schemes
The only social security scheme recognised in the Irish National Accounts is the social
insurance scheme administered through the Social Insurance Fund. This scheme is unfunded.
Contributions received in one period are used to meet expenditures in the same period and
the Government makes up any shortfall in the Fund. Membership of the Social Insurance
scheme is compulsory for most employees and self-employed. They must pay social
contributions that entitle them to receive social benefits. Government sets the contribution
and benefit rates as part of the annual budgetary process. The amounts of the social benefits
payable are not directly linked to either the level of earnings or to the value of the
contributions paid. However, a member must satisfy certain contribution criteria in order to
receive benefits.
The scheme therefore satisfies the criteria for classification as a social security scheme. It is
imposed by law and is controlled and managed by government. Membership is also
compulsory for most employees and self-employed. Finally, government is, at least in part,
responsible for financing the scheme insofar as it must make up any funding shortfalls in the
scheme.
7.3.5 Classification of institutional units supporting pension schemes. Borderline cases
. In the Irish Accounts, the State's social insurance scheme, administered through the Social
Insurance Fund (SIF), is separated from Central Government and classified in the Social
Security Funds sub-sector (S. 1314), even though the SIF appears not to fully satisfy the
ESA95 definition of an institutional unit. For instance it may be considered not to have
autonomy of decision in respect of its principal function because the investment policy for its
39
reserves are set out in legislation and the Fund is prevented from investing in other than a
fairly restricted set of financial instruments.
The day to day management of the social insurance scheme is also undertaken by staff of the
Department of Family and Social Affairs and not by a stand-alone entity. However, the
Department charges the SIF an administration fee, which is calculated to recover the full
costs of the staff employed in administering the scheme.
Classification of the SIF in the Social Security sub-sector is based on the SNA93. This
manual recognises that in some jurisdictions the operations of the social security schemes may
be so closely integrated with other activities of government that it may be difficult to
distinguish them separately. However it proposes that in the core national accounts 'so long
as they remain separately constituted funds they must be treated as separate institutional units
in the System'.
7.4 Guarantees
7.4.1 Treatment of new guarantees provided
These are treated as contingent liabilities and therefore not recorded in the national
accounts.
7.4.2 Treatment of Guarantees called (and not repaid within the same year by the
original debtor)
There are very few cases of called guarantees, but cash payments relating to the call are
treated as capital transfers in the national accounts in the year of payment. An example would
be the calling of the Nitrigin Eireann Teoranta debt guarantee in 2001 and 2002, see Section
2.2.1 (f) above, section on debt assumptions.
7.4.3 Treatment of repayments related to guarantees called
This has not occurred in Ireland in recent years.
7.4.4 Treatment of write-offs by government, if any, of government assets that arose

from calls
This has not occurred in Ireland in recent years.
40
ANNEX 1
List of the units included in each of the sub-sectors of general government.
The Structure of Central and Local Government

Central Government
Central Government is defined to include all bodies established through political processes and for
whose activities a Minister of Government or other responsible person is accountable to the people
through the Oireachtas (National Parliament). This responsibility extends to the presentation of
detailed audited annual accounts to the Oireachtas. Central Government includes legislative, judicial
and executive bodies established in this manner. The sector does not include public corporations or
enterprises engaged in the production of market services or goods. The three main classes of Central
Government bodies are:
a) Departments of State
b) Bodies which are not Departments but which are funded almost entirely from the Exchequer, are
subject to controls and may be regarded as extensions of Government Departments and
c) Various Extra-Budgetary Funds for which separate accounts are maintained and which
are directly administered by Departments.
(a) Departments of State

There are currently 15 Departments of State. These are financed by appropriations from the
Exchequer Account that are voted each year by the national Parliament. Some Departments have a
number of votes, which provide separate appropriations for sub-offices and activities. For instance,
the Central Statistics Office (CSO) is part of the Department of Taoiseach but has its own separate
Vote. The full list of Departments and extra Votes is as follows:
Departments
Department of Agriculture,Fisheries and Food
Department of Arts, Sport and Tourism
Department of Communications, Energy and Natural Resources
Department of Community, Rural and Gaeltacht Affairs
Department of Defence
Department of Education and Science
Department of Enterprise, Trade and Employment
Department of the Environment, Heritage and Local Government
Department of Finance(Current Minister of Finance is also Tanaiste - Deputy Prime Minister)
Department of Foreign Affairs
Department of Health and Children
Department of,Justice, Equality and Law Reform
Department of Social and Family Affairs
Department of the Taoiseach (Prime Minister)
Department of Transport and the Marine
Additional Votes
The President's Establishment
Office of the Attorney General
Office of the Comptroller and Auditor General
Office of the Appeals Commissioners(for the purposes of the Income Tax Acts)
Office of the Revenue Commissioners (Taxation and Customs)
41
Office of Public Works
State Laboratory
Secret Service
Chief State Solicitor's Office a component part of the Office of the Attorney General
Office of the Director of Public Prosecutions
Valuation Office
Public Appointments Service
Office of the Commission for Public Service Appointments
Office of the Ombudsman
National Gallery
Garda Siochana (National Police Service)
Irish Prison Service
Courts Service
Property Registration Authority
Commissioners of Charitable Donations and Bequests for Ireland
International Co-operation (Official Development Assistance, accounted for by the Office of the
Minister for Foreign Affairs)
Health Services Executive Army Pensions
Superannuation and Retirement Allowances
Office of the Minister for Children (separate Vote but accounted for by the Office of the Minister for
Health and Children)
(b) Other Non-market Agencies included in Central Government Sector

AN BORD PLEANALA
POBAL
DEVELOPMENT COOPERATION IRELAND (previously APSO)
BORD BIA
FAILTE IRELAND
BORD IASCAIGH MHARA
CENTRAL & REGIONAL FISHERIES BOARD (CRFB)
DATA PROTECTION COMMISSIONER
DUBLIN INSTITUTE FOR ADVANCED STUDIES
ENTERPRISE IRELAND/
ENVIRONMENTAL PROTECTION AGENCY
EQUALITY AUTHORITY
FAS
FOOD SAFETY AUTHORITY OF IRELAND
FORFAS
GARDA SIOCHANA COMPLIANTS BOARD
HEALTH AND SAFETY AUTHORITY
HIGHER EDUCA TION A UTHORITY
HORSE RACING IRELAND
HOUSING FINANCE AGENCY
IDA IRELAND
IRISH FILM BOARD
IRISH SPORTS COUNCIL
IRISH WATER SAFETY
LABOUR RELATIONS COMMISSION
LAW REFORM COMMISSION
LEGAL AID BOARD
MARINE INSTITUTE
NATIONAL DEVELOPMENT FINANCE AGENCY (NDFA)
NATIONAL ROADS AUTHORITY
NATIONAL STANDARDS AUTHORITY OF IRELAND
NATIONAL TREASURY MANAGEMENT AGENCY (NTMA)
NATIONAL ECONOMIC & SOCIAL COUNCIL (NESC)
42
NATIONAL ECONOMIC & SOCIAL FORUM (NESF)
NATIONAL SPORTS CAMPUS DEVELOPMENT AUTHORITY
PRIVATE RESIDENTIAL TENANCIES BOARD
RADIOLOGICAL PROTECTION INSTITUTE OF IRELAND
RAILWAY PROCUREMENT AGENCY (RPA)
TEAGASC
THE ARTS COUNCIL (COMHAIRLE)
UDARAS NA GAELTACHTA
NATIONAL DISABILITY AUTHORITY
MEDICAL BUREAU OF ROAD SAFETY
RESIDENTIAL INSTITUTIONS REDRESS BOARD
ULYSSES SECURITISATION PLC
WESTERN DEVELOPMENT COMMISSION
(C) Extra Budgetary Funds included in Central Government Sector
ADULT EDUCATION ORGANISATIONS FUND

BARRETSTOWN CASTLE TRUST
BILATERAL AND OTHER AID FUND
CAPITAL SERVICE REDEMPTION ACCOUNT (CSRA)
CISTE NA GAEILGE
COISTE AN ASGARD
DEPARTMENT OF EDUCATION SCHOLARSHIP FUND
DORMANT ACCOUNTS FUND
EMPLOYMENT GUARANTEE FUND
FISHERY HARBOUR CENTRES FUND
FOOD AID CONVENTION FUND - FOOD AID DONATIONS
FUND FOR CULTURAL, SCIENTIFIC ETC. ORGANISATIONS
FUND FOR ORGS PROMOTING IRELAND AS AN EDUCATIONAL CENTRE
GARDA SIOCHANA REWARD FUND
GENERAL EXPENSES OF YOUTH AND SPORTS ORGS FUND
HORSE AND GREYHOUND RACING FUND
INTESTATE ESTATES FUND DEPOSIT ACCOUNT
LAND BOND FUND
LOCAL AUTHORITY LIBRARY AND ARCHIVE SERVICE
LOCAL GOVERNMENT (EQUALISATION) FUND
LOCAL LOANS FUND
MARINE WORKS MAINTENANCE FUND
NATIONAL LOTTERY SUSPENSE ACCOUNT
NATIONAL PENSIONS RESERVE FUND
NATIONAL TRAINING FUND
OVERSEAS TOURISM MARKETING INITIATIVE
PLASTIC BAG/GROUND FILL LEVY FUND
POST OFFICE SAVINGS BANK FUND
PROGRAMME FOR PEACE AND RECONCILIATION
PROVISION AND RENOVATION OF SWIMMING POOLS
RENT & INTEREST ACCOUNT No. 3
RENT & INTEREST ACCOUNTS NOs 1 & 2
SALMON CONSERVATION BALANCE FUND (Inland fisheries)
SALMON RESEARCH AGENCY FUND
SCIENTIFIC AND TECHNOLOGICAL EDUCATION (INVESTMENT) FUND
SMALL SAVINGS RESERVE FUND (SSRF)
SOCIAL INSURANCE FUND
SPECIAL ACCOUNT FOR COMPENSATION OF HEP C
STOCK ACCEPTED IN PAYT OF DEATH DUTIES/INHERITANCE DUTIES
SUNDRY MONIES DEPOSIT ACCOUNT
TASK FORCE - HOUSING AID FOR THE ELDERLY
43
WESTERN INVESTMENT FUND
44
Local Government
Local Government incorporates all bodies established for the purpose of local administration. The
principal bodies included are (a) Local Authorities, (b) Health Boards (which existed up to the end of
2004) and (c) Vocational Education Committees.
(a) Local Authorities
Local authorities operate under the supervision of the Minister for the Environment, Heritage and
Local Government and consist of 5 City Councils, 29 County Councils, 5 Borough Councils and 75
Town Councils as well as 8 Regional Authorities and 2 Regional Assemblies. Detailed lists of the
individual Councils are as follows:
The 5 City Councils:
Cork City Council

Dublin City Council
Galway City Council
Limerick City Council
Waterford City Council
The 29 County Councils:
Carlow County Council

Cavan County Council
Clare County Council
Cork County Council
Donegal County Council
Dun Laoghaire/Rathdown County Council
Fingal County Council
Galway County Council
Kerry County Council
Kildare County Council
Kilkenny County Council
Laois County Council
Leitrim County Council
Limerick County Council
Longford County Council
Louth County Council
Mayo County Council
Meath County Council
Monaghan County Council
North Tipperary County Council
Offaly County Council
Roscommon County Council
Sligo County Council
South Dublin County Council
South Tipperary County Council
Waterford County Council
Westmeath County Council
Wexford County Council
Wicklow County Council
45
The 5 Borough Councils:
Clonmel Borough Council

Drogheda Borough Council
Kilkenny Borough Council
Sligo Borough Council
Wexford Borough Council
The 75 Town Councils:
Ardee Town Council

Arklow Town Council
Athlone Town Council
Athy Town Council
Balbriggan Town Council
Ballina Town Council
Ballinasloe Town Council
Ballybay Town Council
Ballyshannon Town Council
Bandon Town Council.
Bantry Town Council
Belturbet Town Council
Birr Town Council
Boyle Town Council
Bray Town Council
Buncrana Town Council
Bundoran Town Council
Carlow Town Council
Carrickmacross Town Council
Carrick-on-Suir Town Council
Cashel Town Council
Castlebar Town Council
Castleblayney Town Council
Cavan Town Council
Clonakilty Town Council
Clones Town Council
Cobh Town Council
Cootehill Town Council
Droichead Nua Town Council
Dundalk Town Council
Dungarvan Town Council
Edenderry Town Council
Ennis Town Council
Enniscorthy Town Council
Fermoy Town Council
Gorey Town Council
Granard Town Council
Greystones Town Council
Kells Town Council
Kilkee Town Council
Killarney Town Council
Kilrush Town Council
Kinsale Town Council
Leixlip Town Council
46
Letterkenny Town Council
Lismore Town Council
Listowel Town Council
Longford Town Council
Loughrea Town Council
Macroom Town Council
Mallow Town Council
Midleton Town Council
Monaghan Town Council
Mountmellick Town Council
Muinebheag Town Council
Mullingar Town Council
Naas Town Council
Navan Town Council
Nenagh Town Council
New Ross Town Council
Passage West Town Council
Portlaoise Town Council
Shannon Town Council
Skibbereen Town Council
Templemore Town Council
Thurles Town Council
Tipperary Town Council
Tralee Town Council
Tramore Town Council
Trim Town Council
Tuam Town Council
Tullamore Town Council
Westport Town Council
Wicklow Town Council
Youghal Town Council
(b) Health Boards
The Health Act, 1970 provided for the establishment of eight regional health boards which were
responsible for the administration of health services in their local areas from 1971 to 2004. The eight
health boards were as follows:
Eastern Health Board

Midland Health Board
Mid-Western Health Board
North Eastern Health Board
North Western Health Board
South Eastern Health Board
Southern Health Board
Western Health Board.
In March 2000, the Eastern Regional Health Authority was established to co-ordinate the provision of
healthcare services in Dublin and the surrounding counties. Three Area Health Boards were also
established - the South Western Area Health Board, the Northern Area Health Board and the East
Coast Area Health Board. They were responsible for delivering in their own areas the services
previously provided by the Eastern Health Board, which was ceased.
47
These 11 Health Boards were abolished with effect from 1st January, 2005 and have been replaced by
a single body the Health Service Executive (HSE), which is responsible for the delivery of health
services nationwide. The HSE is considered a unit of Central Government and its activities will be
included in the accounts for S.1311. For accounting purposes, the new Agency has been designated
as a stand-alone Vote in the Book of Estimates and Appropriation Accounts (for details of these
Government accounting publications see Annex 2). This means that from 2005 onwards, the
accounting information available for the new Agency will be similar to that which already exists for
other Central Government Departments.
(c) Vocational Education Committees (VECs)
The Vocational Education Committees, although statutory committees of Local Authorities, have their
own corporate status and do not come within the system of city and county management. There are 33
VECs operating in respect of 27 county council areas, 5 city council areas and one in the former
borough area of Dun Laoighaire. They provide and manage second level Vocational Schools and
Community colleges in their own local areas, employ administrative and teaching staff and provide
education and ancillary services for their administrative areas. They are financed partly from local
rates and partly from Exchequer grants.
VEC Dun Laoghaire

VEC City of Cork
VEC City of Dublin
VEC City of Galway
VEC City of Limerick
VEC City of Waterford
VEC County of Carlow
VEC County of Cavan
VEC County of Clare
VEC County of Cork
VEC County of Donegal
VEC County of Dublin
VEC County of Galway
VEC County of Kerry (Kerry Education Service)
VEC County of Kildare
VEC County of Kilkenny
VEC County of Laois
VEC County of Leitrim
VEC County of Limerick
VEC County of Longford
VEC County of Louth
VEC County of Mayo
VEC County of Meath
VEC County of Monaghan
VEC County of Offaly
VEC County of Roscommon
VEC County of Sligo
VEC County of Tipperary North
VEC County of Tipperary South
VEC County of Waterford
VEC County of Westmeath
VEC County of Wexford
VEC County of Wicklow
48
The VEC sub-sector also includes third level Institutes of Technology. These were originally an
integral part of the VECs, with no independent legal status. In 1992 they were established as
independent colleges but they continue to operate under the aegis of the VECs. They include
14 Institutes of Technology,
Athlone Institute of Technology,

Institute of Technology Blanchardstown,
Institute of Technology Carlow,
Cork Institute of Technology,
Dublin Institute of Technology
Dundalk Institute of Technology,
Dun Laoghaire Institute of Art, Design and Technology,
Galway-Mayo Institute of Technology,
Letterkenny Institute of Technology,
Limerick Institute of Technology,
Institute of Technology Sligo,
Institute of Technology Tallaght,
Institute of Technology Tralee,
Waterford Institute of Technology.
Tipperary Rural and Business Development Institute and

Tourism College, Killybegs.
49
ANNEX 2
Annual publications issued by the Department of Finance
1. Estimates for Public Services (Abridged Estimates Volume) (known as the

"Book of Estimates") and Summary Public Capital Programme
Each year, the Government prepares the Estimates of Public Service (abridged version) in
the autumn/early winter for the coming year. (Since 1975 the accounting year for
government is the calendar year. However the tax year has been aligned with the
calendar year only since 2002. Before that, it ended on 5 April.)
The Book of Estimates gives an outline of the revenues and expenditures (capital and
current) of each Department and Office of State for the coming year. It also gives the
estimated outturn for the current year. It is published at least seven days before the
annual Budget (in recent years it has been published in mid to late November, around
three weeks before Budget Day which, since 1997, has been in early December of the
year prior to the year to which the Budget relates). A Summary Public Capital
Programme (PCP) (i.e. a planned investment programme) is published at the same time.
For the 2007 Estimates for Public Services (Abridged Version) and Summary Public Capital
Programme, see Department of Finance webpage
http://www.finance.gov.ie/documents/estimates2007/Estimates12007.pdf
2. White Paper on Receipts & Expenditure
A White Paper on Receipts & Expenditure, setting out estimates of the receipts and
expenditure of the State for the current and coming financial years, is published on the
Friday before the Budget. It sets out the pre-Budget opening position as follows: the
projected outturn for the current year and, in relation to the new year, estimated
receipts from taxation at pre-budget rates, estimated Central Government expenditure,
both voted and non-voted, the estimated Exchequer Borrowing Requirement (EBR) and
the estimated GGB. The estimates are in highly aggregated form. The Estimates for
individual Departments and Offices of State are updated following the Budget and each
one is presented and debated separately in the Parliament in June or July. (see also
"Revised Estimates for Public Services" below).
For the 2007 White Paper on Receipts & Expenditure for the year ending 31 December2007,
see Department of Finance webpage
http://www.finance.gov.ie/documents/pressreleases/2006/bc0154.pdf
3. The Budget
The Budget is usually presented in late November/early December of the year prior to
the year to which the Budget relates. It sets out the Government's overall budgetary
targets (current budget, capital budget, overall borrowing, GGB, GGGD) for the
following three years, outlines taxation policy and may make adjustments to the already
published Abridged Estimates. The Budget statement sets out the latest available
50
estimates of revenue and expenditure outturn of the current year, the projected
expenditure for the coming year and details of the revenue from taxation and other
resources that would be needed to meet that expenditure, and announces proposed
changes to expenditure and taxation. The Budget aggregates and financial envelopes for
each Ministerial Vote Group for the two years following the new Budgetary year are
also published.
The Budget measures are given immediate legal effect by financial resolutions of the
parliament on the evening of the Budget speech. The annual Finance Bill gives
legislative effect to the tax changes proposed in the Budget statement and to other
detailed taxation measures deemed necessary. The Second Stage of the Bill must be
passed by Dail Eireann (the lower house of parliament) within 84 days of Budget Day
and the Bill, having been passed by both Houses, must be signed by the President of
Ireland within four months of Budget Day.
The Budgetary papers ("Budget Book") published as a compendium on the Department

of Finance website contain the following documents:
• Financial Statement - the Minister's speech to Dail Eireann on Budget day

• Budget Measures - detailed list of changes announced in the Budget together with
the estimated cost or yield
• Budget Statistics and Tables - gives detailed budgetary projections for the next
three years
• Financial Resolutions - temporary legislative backing for immediate budgetary
changes
• Stability Programme Update - the economic background to the Budget, and the
Government's economic strategy over the following three years. It is produced in
compliance with the EU Stability and Growth Pact
See Department of Finance webpage: http://www.budget.gov.ie/ for links to the current and
previous Budgets.
4. Revised Estimates for Public Services (also known as the Revised Estimates
Volume or Revised Book of Estimates) and Public Capital Programme
A revised and more detailed Estimates Volume is published some months after the
Budget (usually in February/March). It reflects expenditure changes announced in the
Budget statement and any other adjustments to expenditure since Budget Day. The
estimates are debated and approved by the parliament and its committees.
The Appropriation Bill, which is passed in December following the publication of the
Revised Estimates, gives statutory effect to the Estimates (including Supplementary
Estimates) approved by Dail Eireann. (In this context, "to appropriate" means to assign
stated amounts for specific purposes; the Appropriation Act is the statutory authority
that authorises issues from the Central Fund for Supply Services and appropriates all
money granted by parliament to some distinct use.)
The full Public Capital Programme (PCP), which sets out in detail the planned
investment programme of the public sector and its financing, is published along with the
51
Revised Estimates Volume. It reflects any Budget day changes to the Summary PCP
(which is published before the Budget) and any other subsequent amendments.
See the following Department of Finance webpages for Revised Estimates Volume 2007
(Revised Estimates for Public Services):
http://www.finance.gov.ie/documents/estimates2007/REV2007.pdf
For the 2007 Public Capital Programme, see
http://www.finance.gov.ie/documents/estimates2007/PCP.pdf
5. Appropriation Accounts
Article 33 of the Constitution of Ireland states that a Comptroller and Auditor General
(C&AG) must be appointed to control on behalf of the State all disbursements and to
audit all accounts of moneys administered by or under the authority of the parliament.
The main function of the C&AG, who is appointed by the President on the nomination
of the parliament, is to carry out an annual audit of the Irish Government's accounts
(the Appropriation Accounts) and to submit an annual report of the audit to the
parliament. The Appropriation Accounts are an end of year statement of the spending by
Departments and Offices of State of the moneys voted by the parliament. It compares
the voted Supply Estimate for the individual categories of expenditure, separately
identified within the financial allocation of a Department or Office of State under the
Revised Estimates, with the actual payments made and receipts brought to account, and
explains any substantial differences. The Annual Report of the Comptroller and Auditor
General and the Audited Appropriation Accounts are usually published in the last week
of September.
For the Annual Report of the Comptroller and Auditor General and the Audited
Appropriation Accounts for the year ended 31 December 2005 see:
http://www.audgen.gov.ie/viewdoc.asp?fn=/documents/annualreports/2005/2005_Report_Eng
.pdf
and
http://www.audgen.gov.ie/viewdoc.asp?fn=/documents/annualreports/2005/2005 Accounts.p
df
6. Finance Accounts
The Department of Finance each year prepares detailed accounts of the Central Fund
for the previous year, known as the Finance Accounts. (The Central Fund is the
destination of all State revenues and the source of all Government spending, except
where provided otherwise by law.). The Finance Accounts is the most comprehensive,
but not the most detailed, set of accounts published by the Government. It includes, in
summary form, information on almost every aspect of the Government's financial
operations. Part One contains particulars of receipts and issues from the Central Fund
under a number of headings such as Tax Revenue, Non-Tax Revenue, Capital
Investments and Capital Receipts, also gives details of loans guaranteed by government.
Salaries, pensions and allowances paid directly from the Central Fund are detailed in
Schedule 1 of the publication. Details relating to the National Debt are in Part Two, and
are provided by the NTMA. The Finance Accounts are audited by the Comptroller and
52
Auditor General and presented by the Minister for Finance to the parliament.
The Finance Accounts are usually published in the last week of September.
See Department of Finance webpage:

http://www.finance.gov.ie/ViewDoc.asp?DocId=-1&CatID=10&m=f for links to the 2005 and
previous Finance Accounts.
7. Monthly Exchequer Returns (Exchequer Statements)

An account of the receipts into and issues from the Exchequer Account (on a cumulative
basis from 1 January), called the Exchequer Statement, is published in the first week of
every month in ''Iris Oifigiuil'' (the official Irish State gazette).
(see http://www.irisoifigiuil.ie/currentissues.asp for current issues,
http://www.irisoifigiuil.ie/archive.asp for archive).
Details of the current and previous Exchequer Statements are also available on Department of
Finance webpage
http://www.finance.gov.ie/ViewDoc.asp?DocId=-1&CatID=5&m=f
53
EUROPEAN COMMISSION
EUROSTAT

Unit C-3: Public finance
Luxembourg, 3 March 2009
- FINAL FINDINGS -
EDP dialogue visit to Ireland

17-18 November 2008
Executive Summary
The EDP dialogue visit to Ireland took place on 17-18 November 2009 with the aim to assess
existing statistical capacity, to review the division of responsibilities concerning the compilation
of EDP statistics and government accounts, to discuss the quality and exhaustiveness of primary
data sources, to review the progress achieved in implementing ESA 95 methodology
(sectorization of units, accrual principles), to assure that provisions from the ESA95 Manual on
Debt and Deficit and recent Eurostat decisions are duly implemented and that specific
government transactions are properly recorded in the EDP tables, and, finally, to examine the
compliance with the ESA95 transmissions programme and the consistency of these data with
EDP statistics (as requested by the Regulation (EC) 3605/1993, as amended).
First, Eurostat discussed with the Irish authorities the institutional arrangements and source data
used for the compilation of government finance statistics. As regards data sources, Eurostat
welcomed the first results of the improved accrual-based system local government reporting
system. Eurostat congratulated the Irish authorities for the improvements since the last dialogue
visit.
As far as the analysis of the October 2008 EDP notification is concerned, Eurostat examined a
few questions concerning the tables of the EDP reporting and suggested a few changes. These
were of a largely presentational nature with no impact on the government balance. Eurostat
thanked the Irish authorities for providing the pilot questionnaire for the October 2008 EDP
notification.
Concerning the delimitation of the government sector, Eurostat further enquired about Irish
Rail, voluntary hospitals and schools, the local authority house rental account, the public
television, public universities, North-South Bodies, the Irish Intervention Agency and the
National Oil Reserves Agency. In some cases a reclassification was agreed, in others there is a
need for further investigations, notably in the case of public universities .
The follow-up of Council Regulation 2516/2000 and recording of other transactions

on an accrual basis were discussed. Eurostat concluded that the accrual principle is
implemented for certain taxes (PAYE income taxes, VAT and excises) and social contributions.
The accrual principle is also respected for the recording of interest. Eurostat welcomed the
efforts of the Irish authorities to comply with the decision on the recording of EU flows, which,
apart from Cohesion Funds, now seems to be implemented.
There was a detailed discussion on Public Private Partnerships, a form of financing which has
gained importance in Ireland in recent years. The Irish authorities are fully aware of these
transactions, and the CSO - with the cooperation of the responsible bodies - is able to analyse
the contracts and to assess the risks borne by the government and the private partner. Some
individual projects were examined during the meeting, and the CSO will also consult Eurostat
in case of significant or complicated projects.
Equity injections in Ireland are negligible and there are no planned privatizations in Ireland.
There were no specific issues discussed concerning guarantees, however the recent financial
crisis has led to new government guarantees. The transfer of pension funds from public bodies
to the government was discussed, and Eurostat gave advice for points to examine in more detail.
2
Eurostat took note of the current situation as far as the accounting implications of the financial
turmoil are concerned, and invited the CSO to inform Eurostat on new developments.
Concerning the ESA95 transmission programme, Eurostat and the Irish authorities agreed that
the CSO provides the missing series as soon as it can.
3
Final findings
Introduction
In accordance with article 8d of Council Regulation (EC) No 2103/2005 of 12 December 2005,

amending Council Regulation (EC) No 3605/93 as regards the quality of statistical data
in the context of the excessive deficit procedure, Eurostat carried out an EDP dialogue visit
in Ireland on 17-18 November 2008.
Eurostat was represented by Mr. Luca Ascoli, head of unit C.3, Mr. John Verrinder and Miss
Agota Krenusz. The representatives of the Directorate General for Economic and Financial
Affairs (DG ECFIN) and the European Central Bank (ECB) also participated in the meeting as
observers.
Representatives of the Irish Central Statistics Office (CSO), the Department of Finance and the
Central Bank of Ireland were present.
Eurostat carried out this EDP dialogue visit with the aim to assess the existing statistical
capacity, to review the division of responsibilities concerning the compilation of EDP statistics
and government accounts, to discuss the quality and exhaustiveness of primary data sources, to
clarify the issues relating to EDP tables raised in the context of previous notifications, to review
the progress achieved in implementing ESA 1995 methodology (sectorisation of units, accrual
principles), to assure that the provisions from the ESA 1995 Manual on Debt and Deficit and
recent Eurostat decisions are duly implemented, and that specific government transactions are
properly recorded in the Irish EDP tables and national accounts.
In relation to procedural arrangements, Eurostat explained the procedure, in accordance with

article 8 of Regulation 3605/1993 as amended, indicating that the Main conclusions and action
points would be sent within days to the Irish statistical authorities, who may provide comments.
Within weeks, the Provisional findings would be sent to the Irish statistical authorities in draft
form for their review. After adjustments, Final Findings will be sent to the Economic and
Financial Committee (EFC) and published on the website of Eurostat.
The meeting was constructive and Eurostat appreciated the explanations provided by the Irish
authorities during the dialogue visit. Eurostat thanked the Irish authorities for the information
and for the documentation provided before and during the dialogue visit.
4
1. Statistical capacity issues
1.1. Institutional responsibilities in the framework of the reporting of data under the
Excessive Deficit Procedure and government finance statistics compilation
Introduction
Eurostat inquired about the institutional arrangements and division of the responsibilities
in the framework of the reporting of data under the EDP and government finance statistics.
Discussion and methodological analysis
The IE authorities gave a detailed account and explanations of the institutional arrangements
in place for the EDP reporting. EDP statistics for the current year n are compiled by Department
of Finance (DoF), as well as data for the year n-1 for central government (CG) and social
security funds (SSF), while the CSO compiles data for local government (LG) for the year n-1.
Other years (n-2, n-3 etc.) are prepared in particular by the CSO with some contribution of the
DoF.
The Irish authorities explained that they do not have any formal agreement of cooperation
between themselves but they cooperate on a daily basis. An expert is seconded from the CSO to
the Department of Finance. The EDP notifications are compiled in cooperation. The CSO will
provide Eurostat with a flow chart of the arrangements. The CSO has a service level agreement
with the Central Bank of Ireland for financial accounts. Eurostat recommended that statistical
decisions taken by the CSO for the other authorities should be documented.
Findings and conclusions
Eurostat took note of these explanations and found that the arrangements are solid and well
established. The IE authorities will provide Eurostat with a flow chart on the arrangements of
compilation of EDP tables.
1.2. Data sources, EDP inventory
Introduction
Eurostat enquired about the exhaustiveness, timeliness and consistency of data sources used
in the compilation of the government finance statistics.
The CSO explained that data sources for central government are on a cash basis, even though
there are data available on some payables/receivables, and that there is no intention to introduce
full accrual based accounting. The CSO has accrual based data for non-market agencies, while
data for extra-budgetary funds are on a cash basis. Balance sheet data are available for the
Social Insurance Fund.
Eurostat took note of the explanations and noted that there is no intention to introduce accrual
based accounting in public accounts.
5
1.2.1. Local government source data (FMS)
Introduction
Eurostat enquired about the experiences with the new Financial Management System (FMS)
introduced in 2004 for reporting of local government units.
The new Financial Management System (FMS) introduced in 2004 for reporting of local
government units has proved to be very useful when compiling local government accounts. The
FMS is accrual based. There is a good breakdown of revenues and expenditures. However there
is some need to further improve the detail in the capital accounts. The CSO therefore continues
to rely on the quarterly financing data collection by the Department of Environment, Heritage
and Local government, and uses its result (B.9f) for the compilation of EDP tables, until the
results are fully reconciled between this and the FMS. A full reconciliation between the non-
financial and financial accounts is still to be made, therefore the CSO takes B.9f as the
definitive figure, also for the EDP notification. The eventual aim is to fully reconcile non-
financial and financial accounts for Local Government, using the outcome of the FMS for the
compilation of EDP table 2C.
Eurostat took note of these explanations and found that the ongoing improvements are
encouraging.
1.2.2. Financial accounts data
Introduction
Eurostat raised the issue of financial accounts.
Improvements were achieved in financial accounts since the last EDP visit (provision of a full
set of consolidated financial accounts). It was stressed that the work needs to continue and there
is some room for improvement in the reconciliation of figures, especially for loans. The Central
Bank of Ireland confirmed that the results prepared by the CSO are in line with money and
banking statistics counterpart information.
Eurostat congratulated the Irish authorities for the improvements achieved since the last
dialogue visit, and stressed the need for further improvement.
6
1.3. Revision policy
Introduction
Eurostat enquired about the CSO's revision policy.
The CSO explained that it regularly checks historical data and follows an open revision policy.
Revisions to data of older periods (for instance to year n-4 figures in the EDP notification) is
rare and usually involve revision of errors and/or the implementation of methodological
changes, for instance the reclassification of the House Financing Agency.
Eurostat took note of the explanations.
7
2. Follow-up of the October 2008 EDP reporting - analysis of EDP tables
Introduction
A few questions concerning the October 2008 EDP notification were discussed.
2.1. Coverage and timeliness

Eurostat thanked the CSO for having filled in the pilot exercise of the EDP related
questionnaire and asked about its experiences. According to the CSO the pilot exercise does not
impose a much greater burden than the existing questionnaires, and the guidelines are helpful.
Concerning the table on PPPs, the CSO needs more time to collect information and complete
the table. Concerning table 8 (Reconciliation of stocks and flows of government claims) the
CSO agreed to include further information in the next sending (Action point 1).
The Irish authorities will provide more information in tables 8 (Reconciliation of stocks and
flows of government claims) and table 11 (PPPs) of the Pilot questionnaire relating to
notification tables in the next round of EDP notification.
2.2. Examination of EDP tables
2.2.1. EDP table 1
No specific issues were identified.
2.2.2. EDP table 2A-D

Some small issues were clarified concerning EDP tables 2A-D.
The issue of adjustments for public accounts were discussed. The CSO confirmed that there is
no overlap between the items "Departmental balances" (corrections for current expenditure) and
"Capital carryover system" (corrections for capital expenditure).
Military expenditure data were not yet fully reconciled and the CSO had some difficulties with
obtaining balanced source data. The CSO promised to examine these figures in cooperation
with the Department of Defence and to try to report reconciled figures to Eurostat in the April
2009 EDP notification.
Concerning the issue of the reconciliation of transfers between the central and local
government, the CSO explained that it considers the accrual based figures from the FMS more
appropriate, therefore it makes an adjustment to the figures of central government (which is
shown under a separate line in EDP table 2A).
Eurostat took note of these explanations and the CSO will provide reconciled military
expenditure figures to Eurostat by the April 2009 EDP notification (Action point 2).
8
2.2.3. EDP table 3A-E
Eurostat enquired about EDP table 3E, as during the last dialogue visit it was said that ""The IE
authorities recognized that the financial statement of the Social Insurance Fund (SIF) could be
used to improve the reporting of the EDP Table 3E." (quoted from the Final findings of the
dialogue visit of July 2006).
The CSO explained that there is no more information it could include in this table to improve it.
Eurostat took note of the explanation.
2.2.3.1. Statistical discrepancies
During the previous dialogues visit of July 2006 the issue of the statistical discrepancies was
already discussed and it was said that " The IE authorities recognized that the statistical
discrepancy was not specifically related to the transactions/stocks articulation, and that the
item "Difference between financial and capital accounts (B.9f-B.9)" needs not to be zero.
Eurostat recalled the ongoing work on discrepancy carried out at the European level, and
suggested splitting the statistical discrepancy position to be reported." Eurostat also enquired
about the low level of discrepancies.
It was agreed that the CSO will allocate the existing statistical discrepancy figures on the line
(B.9-B.9f) in the next notification (Action point 3). The CSO also confirmed that the relatively
small size of statistical discrepancies is explained by the correct reconciliation of non-financial
and financial figures.
9
3. Methodological issues and recording of specific government transactions
3.1. Delimitation of general government, application of 50% rule in national accounts
Introduction
Eurostat enquired about the arrangements concerning delimitation issues and the application of
the 50% rule. The Department of Finance explained that it checks before each EDP notification
the list of units to be included in the central government sector. It is the CSO that determines
the statistical classification of units. No check is made for the local government, because the
Department of Environment, Heritage and Local government sets restrictions on the creation of
new units by local government and controls them regularly.
3.1.1. Public transport (railway, motorway, transportation companies, airports, ports)
Introduction
Eurostat further enquired about the classification of the Irish Rail, an issue which was raised by
the Irish authorities before the previous dialogue visit. Irish Rail is a subsidiary of CIE, the Irish
Transportation Company but contrary to the holding corporation its sales to cost ratio is close to
50%. The classification of holding corporations and their subsidiaries was discussed several
times at the FAWG and the respective guidance note will be published soon.
The CSO indicated that, following the view of the Financial Accounts Working Party that non-
market subsidiaries of public holding companies should be classified within General
Government, it intends to make a reclassification of Irish Rail to General Government, once it
has confirmed that the 2008 projections for the company show a ratio of costs to sale below
50%. Eurostat recommended the reclassification take place when the cost to sales ratio falls
below 50% (according to the figures provided, in 2006), or at the time the decision is taken to
reclassify. The CSO mentioned that it would prefer to undertake a further backward revision of
data.
The CSO will examine the 2008 figures of the Irish Rail and if appropriate, the CSO will
reclassify Irish Rail inside government, for the April 2009 EDP notification (Action point 4).
3.1.2. Classification of voluntary hospitals and schools
Introduction
At the request of the Irish authorities the classification of voluntary hospitals and schools was
discussed. The schools are government funded but because of the perceived lack of direct
'control' by Government, the Irish authorities have classified them outside government.
Similarly, voluntary hospitals are classified outside government due to indirect control of
government. Since government control increased over hospitals recently, the Irish authorities
were considering the reclassification of these units inside government.
10
Concerning the voluntary schools, it was explained that Exchequer grants to secondary schools
are considered Government transfer payments and included in the National Accounts as Final
Consumption of Households. The Government expenditure on these schools is already captured
in National Accounts calculations, and as these schools do not run a deficit, their inclusion or
exclusion in Government would not make an impact on Government deficit/surplus.
Due to the parallel with the classification of public universities, it was decided that the existing
sector classification of voluntary schools should be retained for the moment. Eurostat
recommended that the CSO further investigate the institutional arrangements of the schools,
especially concerning their independence in employment policy (e.g. hiring and dismissal of
teachers).
As regards the voluntary hospitals, the Irish authorities explained that these are 95%
government funded and that these are mainly controlled by the government. Therefore, it was
agreed that since voluntary hospitals were mainly financed and controlled by government, the
CSO would reclassify them to the general government sector in time for the next EDP
notification. It was also concluded that these institutions should be reclassified at the time of the
creation of the HSE (Health Service Executive) in 2005, which extended effective government
control over these hospitals.
As regards the voluntary schools, the CSO will further investigate the question of government
control. As regards the voluntary hospitals, the CSO will reclassify these into general
government, as these are mainly financed and controlled by government, from 2005, for the
April 2009 EDP notification (Action point 5).
3.1.3. Classification of Local Authority house rental account
Introduction
The House Rental Accounts of Local Authorities are treated as quasi corporations (outside the
general government sector). Local Authorities rent out their accommodation at subsidised prices
to low-income families. In National Accounts, these rents are valued at their full economic
value and the difference between the economic rents and the rents actually paid by tenants is
considered to be a social benefit in kind provided by the Local Authorities to households.
According to the Final findings of the previous dialogue visit: "The classification of those
entities inside government seems supported by the fact that they might not meet the quasi-
corporation criteria: autonomy of decision and a complete set of accounts. A reclassification
inside government would probably have limited impact on the general government deficit, but a
more noticeable one on the revenue and expenditure levels and composition."
The Local Authority house renting units no longer maintain a full set of accounts, which is one
of the main criteria for the existence of a quasi-corporation, and the houses are purchased and
owned by the local governments. The Irish authorities and Eurostat agreed that the accounts
11
should therefore be reclassified to local government before the next EDP notification (action
point 6). The CSO explained the statistical recording of voluntary housing administered by
Local Authorities. Eurostat asked the CSO to send as soon as possible an explanatory note with
examples on the recording of payments to developers for affordable housing (Action point 7).
The Irish authorities will reclassify the House Rental Accounts of Local Authorities for the
April 2009 EDP notification and will provide Eurostat with an explanatory note on the
recording of transactions involving affordable housing, with examples.
3.1.4. Follow-up issues from the previous dialogue visit:
3.1.4.1. RTE
Introduction
During the last dialogue visit the issue of the state owned television company was raised. Radio
Telefis Eireann (RTE) currently receives a licence fee income, which is a substantial portion
of its total revenue. This is currently classified as sales, pending the outcome of the Eurostat
guidance. The company is classified in S.11. Most of the company's income comes from
commercial activities (mainly from sales of advertising). The television channel TG4 however
is almost completely government financed and controlled by government (before 1 April 2007 it
was under RTE). Also the IE authorities confirmed that there is a need to classify TG4 within
the General Government sector.
The CSO confirmed that more than 50% of the revenue of RTE comes from commercial
activities, so even if television licence fees are not considered as sales, it should be considered
as a market body as it complies with the 50% rule. Concerning TG4 it was agreed that this will
be reclassified into central government (Action point 8), as its income comes mainly from
government (more than 85%) and it is controlled by government. The CSO will further
investigate from which date the reclassification should take place.
The CSO will reclassify television TG4 into the general government sector, with the date of
reclassification to be examined by the CSO (Action point 8).
3.1.4.2. Public Universities
Introduction
The classification of public universities was raised by the Irish statistical authorities during the
last Dialogue Visit, where they provided an extensive analysis of the control issue. This issue
was also discussed during the common meeting between Eurostat, the ONS and the CSO in
London in January 2007. The conclusion then was "that this topic should be further discussed
with the Financial Accounts Working Party and that, for the moment, IE and UK do not need to
change the classification of universities". This issue will be discussed in the coming Financial
Accounts Working Group.
12
The Irish authorities distributed the questionnaire on public universities sent to Eurostat. In their
answer to the questionnaire sent they say that "the universities continue to enjoy a substantial
degree of statutory and practical autonomy and are therefore classified to the NPISH sector".
According to Eurostat, the issue of financing and control has to be examined. The Irish
authorities explained that they have made a further investigation of the sources of finance for
universities which calls into doubt if more then 50% of university finance arises from block
grants. Eurostat mentioned that it will examine the results of the questionnaire on public
universities sent back by all Member States and present the results during the next Financial
Accounts Working Party; it will consider how to take account of financing issues. Eurostat
recommended the CSO to further investigate the financing arrangements of Irish universities
and in particular the government payments in lieu of student fees and research grants.
The Irish authorities will further investigate the financing arrangements of Irish universities, in
particular the government payments in lieu of student fees and research grants (Action point 9).
3.1.4.3. North-South Bodies
Introduction
The issue of the North-South Bodies, units created by the Good Friday Agreement in 1998, was
discussed shortly during the last dialogue visit and then during the common meeting between
Eurostat, the ONS and the CSO in London in January 2007, as this concerns both countries.
Eurostat further enquired about the activities and financing of these bodies. The IE authorities
explained that these bodies (8 altogether) carry out activities of common interest, some merely
bringing together under one roof government activities previously carried out by separate bodies
on both side of the border. These bodies are currently considered, both in the IE and UK
national accounts, as international organizations, and government transfers funding these bodies
are treated as current or capital transfers of general government (S.13) to the Rest of the World
(S.2). Eurostat explained that it had a concern about the classification of such bodies in S.2, and
that the bodies' expenditure might be considered for integration in the resident government
accounts, in proportion to the funding. Eurostat pointed at SNA 1993 paragraph 14.27 that
specifically identifies cases of ventures jointly held by governments, with a recommendation of
splitting the unit or of allocating it to either of the general governments.
Having investigated the status and operations of these bodies, the CSO agreed with Eurostat
that as these bodies are non-market bodies, it seemed they should be included in the general
government sectors of Ireland and the United Kingdom, in proportion to their funding. The
CSO intended to contact the Office of National Statistics to provide details of their findings and
to agree a common approach on classification and measurement.
13
It was agreed that the CSO will apply any changes in the classification of the North-South
bodies in the next April 2009 EDP notification (Action point 10). The CSO will also follow-up
on the recording of EU flows to these bodies and inform Eurostat as soon as possible (action
point 11).
3.1.4.4. Irish Intervention Agency
Introduction
The ESA95 Manual on government deficit and debt specifies the rules for classification
of the "market regulatory agencies": "By convention these units should be classified in the
sector general government if their costs incurred in market regulation compared to the total
costs are less than 80%, and in the sector non financial corporation if their costs incurred
in market regulation compared to the total costs are more than 80%. "
During the last dialogue visit the Irish authorities explained that the Irish Intervention Agency
was classified as a unit acting on behalf of the EU, in the S.11 sector (outside both the general
government and the public sector). The agency's tasks included market interventions as well
as the distribution of subsidies under EAGGF. The 80 % convention of the ESA95 Manual
on government deficit and debt, which has been previously applied, has not been verified
recently. By that time Eurostat suggested re-applying the "80% test" for the purpose of the
sectorisation of the Irish Intervention Agency.
The CSO had been unable to check the 80% rule for the Intervention Agency, due to a lack of
data. However, the CSO noted that it has to investigate a potential recording inconsistency in
2007 of EUR 450 million euro linked to EU co-financing of agricultural subsidies.
A report will be prepared and sent to Eurostat as soon as possible on the potential recording
inconsistency (Action point 12).
3.2. Implementation of accrual principle
3.2.1. Accrued taxes and social contributions
Introduction
Eurostat enquired about changes in the recording of taxes.
There are no updates to report on the methods used for the calculation of accrued taxes. The
CSO explained that tax credits are not significant in Ireland.

Eurostat reminded the CSO to inform Eurostat if any change in the recording of taxes does
occur.
14
3.2.2. Calculation of accrued interest
Introduction
Eurostat enquired about the changes in the recording of accrued interest.
Concerning accrued interest it was confirmed that the National Treasury Management Agency
(NTMA) calculates the accrued interest for central government and the social security sub-
sector, while the CSO makes the calculations for the local government. Data for savings
accounts held at An Post are available on an accruals basis. There are no interest consolidation
problems between sub-sectors.
Eurostat took note of the explanations.
3.3. Recording of specific government transactions
3.3.1. Public Private Partnerships
Introduction
Eurostat enquired about the institutional arrangements and current PPP projects.
The Irish authorities explained that PPPs in Ireland are supervised by the National Development
Finance Agency (NDFA), which must be consulted in all cases of investments of project value
of EUR 30 million or more, except for transport projects, which are supervised by the National
Roads Authority and the Railway Procurement Agency. The NDFA assesses risks according to
the guidelines set by the PPP unit of the Department of Finance and the methods used are
consistent with the current MGDD chapter on PPPs of Eurostat. Other PPPs would probably be
identified by the Irish statistical authorities through the press and other sources.
During the meeting several individual projects were briefly discussed. Eurostat enquired about
the road concessions and the M50 project. Since the CSO had no detailed information on these,
it promised to send more information in writing.
The government buyout of the Westlink toll bridge was discussed. The CSO explained in detail
the payment arrangements (unitary payments until the end of the concession period) and the
recording of the transaction. The amount paid by the government will affect the expenditure of
government in 2008 (with other accounts payable recorded), and in subsequent years the cash
payments will reduce the other accounts payable. Eurostat agreed with this treatment.
The transfer of risks was discussed in the case of the Criminal Court Complex and the National
Conference Centre. The CSO will further investigate these and report to Eurostat.
Concerning the Cork School of Music, Eurostat appreciated the detailed analysis of the contract
by the CSO. The Irish authorities will further examine the precise situation regarding the
deduction of rectification costs from any government buyout operation.
15
The CSO mentioned that it will further consult Eurostat on the Dublin Metro project because of
its significance.
The CSO will send a note to Eurostat on toll road concessions and further details of the M50
upgrade project. The CSO will also provide Eurostat with notes on the classification of the
Criminal Courts Complex and the National Conference Centre, similar to the one they provided
for the Cork School of Music. Eurostat also requested copies of the contracts on the M50
upgrade, the Criminal Courts Complex and the National Conference Centre projects. In the case
of the Cork School of Music project the deduction of rectification costs from any government
buyout operation will be clarified and the CSO will notify Eurostat as soon as possible (Action
point 13).
3.3.2. Capital injections in public corporations, dividends (interim dividends),

privatization
Introduction
Eurostat enquired about the capital injections in Ireland.
Equity injections in Ireland are reported as negligible. The government capital injections into
Udaras na Gaeltachta appear to be repetitive, and therefore indicative of a capital transfer and
not an equity injection, therefore Eurostat asked CSO to further investigate this. Concerning
local government, the CSO recognizes no capital injections. There are no planned privatisations
that the Irish authorities are aware of.
The Irish authorities will notify Eurostat about the capital injection into Udaras na Gaeltachta
(Action point 14).
3.3.3. EU flows
Introduction
Concerning EU transfers, Eurostat thanked the CSO for its comprehensive note on the current
arrangements and enquired about the application of the Eurostat decision for the payments from
the Cohesion Fund.
Eurostat advised that the current recording of the European Regional Development Fund and
the European Social Fund should be maintained and be changed only if specified by the new
MGDD chapter on EU transfers. The CSO will ensure that the Eurostat Decision is also applied
to Cohesion Fund receipts in the April 2009 EDP notification.

It was concluded that Ireland complies with the Eurostat decision on EU grants.
16
3.3.4. Guarantees
No specific issues were raised on guarantees.
3.3.5. Transfer of pension funds from public bodies to government
Introduction
The possible transfer to government of obligations of the pension funds of five universities and
of other public bodies was also discussed at the request of the Irish authorities.
There was a short discussion about the transfer of pension funds. Eurostat proposed that the
CSO 1) checks whether the mentioned pension funds are recorded as autonomous or non-
autonomous in the national accounts at present, and 2) reviews a copy of their accounts.
Eurostat also underlined the importance of checking the respective values of the assets and
liabilities of these pension funds.
The CSO will further examine this issue.
3.3.6. Swaps
No specific issues were raised on swaps.
3.3.7. Others
Introduction
At the request of the CSO, the classification of oil levies and of the National Oil Reserves
Agency was discussed.
The National Oil Reserves Agency (NORA) is responsible for the holding of national strategic
oil stocks, meeting Ireland's obligation under EU law, to hold a 90-day strategic oil stock. It is
funded entirely through levies that all oil importers and refiners must pay. NORA is controlled
by the government.
The Irish authorities requested the help of Eurostat in order to determine whether the levy paid
to this company is a tax (and unrequited payments), or it is a sale of service as the company
provides a service in return. The CSO also mentioned that if it is decided that the levy is a tax,
then NORA has to be classified inside government. It was noted that the impact on government
balance in 2007 would be: +2.5mn, while the impact on debt would be considerable as NORA's
borrowings are quite big.
17
Eurostat will examine the situation of similar companies in Europe, for the statistical treatment
of the levy paid to these companies and for their classification. If the levies paid to NORA are
considered as taxes, the company has to be reclassified to the general government sector.
4. Other issues
4.1. ESA95 Transmission Programme (tables 2, 6, 7, 9, 11, 25, 27 and 28)
Some missing items in ESA tables were discussed. The CSO will provide the missing series as
soon as it can.
18
Annex: List of participants
Name Institution
1. Luca Ascoli Eurostat Head of Unit C.3 - Public Finance
2. John Verrinder Eurostat Unit C.3 - Public Finance
3. Agota Krenusz Eurostat Unit C.3 - Public Finance
4. Janis Marzubris DG ECFIN
5. Christophe Duclos ECB
6. Bill Keating CSO Assistant Director General - Macro Economic

Statistics
7. Mick Lucey CSO
8. Ciaran Judge CSO
9. Margaret Kinsella CSO
10. Rod O'Mahony CSO
11. Ciara O'Shea CSO
12. Mary Cussen Central Bank
13. Ciaran Counihan DoF
14. Caren Mulcahy DoF
CSO - Central Statistical Office
DoF - Department of Finance
19
EUROPEAN COMMISSION
EUROSTAT

Unit C-3: Public finance
Luxembourg, 16 November 2006
- FINAL FINDINGS -
EDP dialogue visit to Ireland

4-5 July 2006
Executive Summary
The EDP dialogue visit to Ireland took place on 4-5 July 2006 with the aim to assess existing
statistical capacity, to review the division of responsibilities concerning the compilation
of EDP statistics and government accounts, to discuss the quality and exhaustiveness
of primary data sources, to review the progress achieved in implementing ESA 95
methodology (sectorization of units, accrual principles), to assure that provisions from the
ESA95 Manual on Debt and Deficit and recent Eurostat decisions are duly implemented and
that specific government transactions are properly recorded in the EDP tables, and, finally,
to examine the compliance with the ESA95 transmissions programme and the consistency
of these data with EDP statistics (as requested by the Regulation (EC) 3605/1993,
as amended).
First, Eurostat discussed with the Irish authorities the institutional arrangements and source
data used for the compilation of government finance statistics. As regards data sources,
Eurostat welcomed the introduction of a comprehensive accrual-based system for local
government. Concerning the delineation of the government sector, Eurostat considered several
cases in order to discuss whether these units are to be classified inside or outside
of government.
As far as the analysis of the April 2006 EDP notification is concerned, Eurostat examined
in detail the tables of the EDP reporting and suggested a few changes. Most of these were
of a presentational nature with no impact on the government balance.
The tables in the "questionnaire related to EDP tables" were analysed. It was agreed that Irish
authorities would review some figures from this questionnaire to support full consistency with
the EDP tables.
The follow-up of Council Regulation 2516/2000 and recording of other transactions

on an accrual basis were discussed. Eurostat concluded that the accrual principle was currently
not fully implemented in particular for taxes (except VAT and excises) and social
contributions, as well as for EU flows. The Irish authorities were encouraged to make a swift
effort in this respect.1
The implementation of the recent Eurostat's methodological decisions and compliance with
the rules given by the ESA95 Manual on government deficit and debt were discussed, as e.g.
the treatment of capital injections, debt assumptions, debt cancellations, state guarantees,
military equipment expenditure, PPP projects, etc. Ireland is not concerned by the decision
of Eurostat on funded pension schemes.
Concerning the ESA95 transmission programme, Irish authorities agreed with the need to step
up work to ensure consistency between the EDP reporting and the quarterly financial accounts
for general government (ESA95 table 27). Eurostat also noted that Ireland did not comply
with its reporting obligation in respect to annual financial accounts.
1
In the October 2006 notification, Ireland already made considerable efforts to apply the accrual principle for all
taxes and the EU flows.
2
Ireland submitted a subset of consolidated ESA tables 6 and 7 for years 1998-2005 in November 2006.
2
The meeting was constructive and Eurostat welcomed the transparent, well structured and
comprehensive approach of Ireland to the EDP related work. Eurostat also appreciated
the volume of additional documentation provided by the Irish authorities.
3
Provisional findings
1. Introduction
In accordance with article 8d of Council Regulation (EC) No 2103/2005 of 12 December

2005, amending Council Regulation (EC) No 3605/93 as regards the quality of statistical data
in the context of the excessive deficit procedure, Eurostat carried out an EDP dialogue visit
in Ireland on 4-5 July 2006.
The delegation of Eurostat was headed by Mr. N0rlund, Director of National and European
Accounts. The European Central Bank (ECB) also participated in the meeting as observer.
The Irish authorities were represented by the National Statistical Office, the Ministry
of Finance and the Central Bank of Ireland. Eurostat carried out this EDP dialogue visit with
the aim to assess existing statistical capacity, to review the division of responsibilities
concerning the compilation of EDP statistics and government accounts, to discuss the quality
and exhaustiveness of primary data sources, to review the progress achieved in implementing
ESA 95 methodology (sectorization of units, accrual principles), to assure that provisions
from the ESA95 Manual on Debt and Deficit and recent Eurostat decisions are duly
implemented and that specific government transactions are properly recorded in the EDP
tables, and, finally, to examine the compliance with the ESA95 transmissions programme and
the consistency of these data with EDP statistics (as requested by the Regulation (EC)
3605/1993, as amended).
2. Statistical capacity issue
Introduction
Eurostat inquired about the institutional arrangements and division of the responsibilities
in the framework of the reporting of data under the EDP and government finance statistics.
Discussion
The IE authorities gave a detailed account and explanations of the institutional arrangements
in place for the EDP reporting. EDP statistics for current year n are compiled by Department
of Finance (DoF), as well as data for the year n-1 for central government (CG) and social
security funds (SSF), while the CSO compiles data for local government (LG) for the year n-
1. Other years (n-2, n-3 etc.) are prepared in particular by the CSO with some contribution
of the DoF. It was noted that the cooperation between the IE authorities took place without
formal agreements and as part of normal interactions between government departments.
In this context, Eurostat found that the current practice of seconding a CSO staff to the DoF
was a particularly useful arrangement to ensure enhanced communication and understanding
of issues in between the two institutions.
Eurostat took note of these explanations and found that the arrangements are solid and well
established. The IE authorities would consider the merits of the formalisation of these
institutional arrangements. Additionally, Eurostat requested the IE authorities to strictly
respect the transmission deadline for the EDP tables delivery.
4
3. Data source issues
Introduction
Eurostat enquired about the exhaustiveness, timeliness and consistency of data sources used
in compilation of the government finance statistics.
Discussion
The IE authorities gave an account of sources data availability and their use for EDP statistics
reporting. The main data sources providers are the Department of Finance (DoF), the National
Treasury Management Agency (NTMA), the Department of Environment, the Heritage and
Local Government, the Department of Health and Children, the Department of Social and
Family Affairs (DSFA) etc.
As regards central government, some balance sheet information (stocks of accounts receivable
and payable) is available. However, this information is so far used rather in a limited way
in the government statistics compilation. Some further statistical work is needed to exploit
the existing information on the changes in stocks of accounts receivable and payable and
associate them with the appropriate ESA95 transactions, a practice commonly used by other
compilers in Europe.
For local government, the IE authorities gave an account of the introduction of the new
Financial Management System (FMS). Since this introduction, which started in 2003, the
Local Authorities are keeping their books using a business accounting approach, reporting
accrual-compliant financial statements (profit and loss statement, balance sheet and multiple
notes) within 3 to 6 months, and using a common chart of accounts. Separately, the reform
of the health care system of the 1 st January 2005 created a break in time series:
the disappearance of a number of units previously classified in the LG sub-sector, and
simultaneously the creation of a single institutional unit, the Health Service Executive (HSE),
classified in the CG sub-sector. It was noted that, following this reorganization, the source
data for the new HSE was not detailed enough yet for the compilation of the national
accounts, but this was expected to improve soon.
The social security fund sub-sector consists only of the Social Insurance Fund (SIF), which
is a social security scheme, administratively operated by the DSFA. The balance sheet and
opening statement was examined.
Eurostat took note of these explanations and found that the situation is generally sound and
improvements in the way are encouraging.
As regards data sources for central government it was agreed that the IE authorities would
endeavour maximizing the use of information available regarding notably the government
spending to ensure accrual adjustments. Eurostat encouraged exploiting the existing
information on stocks of payables and receivables reported by budgetary units, so to bring
a measurement of the government deficit closer to accrual.
5
As regards Local government, Eurostat welcomed this considerable improvement
in the source data. It is expected that the EDP notification in October 2006 will be fully based
on FMS for the year 2005.
4. Delimitation of the General government sector
Eurostat enquired about the division of responsibilities for the classification of entities
in the sector of general government. Furthermore, a number of methodological issues were
discussed related to the classification of some institutional units according to ESA 95.
4.1 Social Insurance Fund
Introduction
The SIF is the only unit sectorised in the SSF sub-sector, and it is administrated
by the Department of Social and Family Affairs. The revenues are constituted by social
security contributions and the expenditures comprise the social benefits and some
administrative charges.
Discussion
The Irish authorities confirmed that all transactions related to SIF are currently recorded
on a cash basis. It was noted that some additional balance sheet information is not currently
used in the compilation of the SIF account.
A discussion took place on the question whether SIF had enough autonomy of decision
to make it an institutional unit. If this was not the case, the SIF would be a social security
scheme included in central government sub-sector, leaving the social security fund sub-sector
empty.
It was agreed that the sector classification of the Social Insurance Fund merited further
analysis, notably with respect of establishing its institutional unit character. Eurostat
suggested that the SIF accounts needed to be reviewed; the SIF data needed to be recorded
on an accrual basis and the existing balance sheet information had to be incorporated in non-
financial and financial accounts.
4.2 Irish transport companies (Coras Iompair Eireann)
Introduction
This issue was raised in 2004 by the Irish authorities. Coras Iompair Eireann (CIE) is the fully
state owned holding company, which has three operating subsidiaries: Irish Rail, Dublin Bus
and Bus Eireann. Based on the overall activities of the CIE group, the holding company
is a market unit, nonetheless the sales of one of its subsidiaries - the Irish Rail, have been
consistently around 50% of its production costs. The question is whether Irish Rail should be
sectorized in government.
6
Discussion
It was discussed whether a non-market subsidiary of a market public institutional unit could
or should be classified within general government i.e. whether when one of the subsidiaries
(Irish Rail in this case) falls below the threshold (and stays there), while the others (and the
group taken as a whole) stay above the threshold, the below-threshold company should be
reclassified in the government sector. 3 . In an exchange of letter, Eurostat had advised
that the holding, being de facto a shell, could be sectorized outside government, on the basis
that the group was predominantly market. In the absence of significant independent sales and
considering limited costs, Eurostat authorized the classification outside government using
an analogy already existing for the non-financial /financial sector. Under this condition,
Eurostat observed that the question of the sectorization of Irish Rail was also linked with
the notion of allowing, in the system, the position: equity liability for general government.
Notwithstanding a previous exchange of letters on this issue, Eurostat took note that in this
specific case the size of the subsidiary was not marginal. Eurostat stated that it would inform
the CSO of its opinion on this issue before the next October 2006 EDP notification.
The IE authorities would in the meantime provide further factual information of the case
in question: size of the respective subsidiaries, and information on planned investments.
4.3 Radio Telefis Eireann
Introduction
Radio Telefis Eireann (RTE) currently receives a licence fee income, which is a substantial
portion of its total revenue. RTE is permitted to raise additional revenues through commercial
advertising but the amounts are now capped as an indirect aid to private broadcasters who
do not have access to the licence revenues. The licence fee income is currently treated
in national accounts as a payment by households for a market service and on that basis, RTE
is classified as a market unit. The issue is whether this is correct. The ONS of the United
Kingdom had reclassified the TV "licence fee" in the National Accounts as a tax.
Discussion
The licence fee is a payment that entitles the holder to receive radio/television signals. It was
noted that the ONS decision was based on the fact that the television licence was payable
on ownership of a television without particular link to the access to the public television that
the licence proceeds finances, and without a reasonable way to avoid it. It was recalled that
ESA79 (paragraph 460c) recorded television licences by convention as sale of service,
whereas ESA95 methodology merely lists TV licenses as plausible or typical example of sales
of services. This might not be appropriate anymore, at time of competition between
broadcasting providers, and considering that the tax/service borderline criteria outlined
in ESA95 paragraph 4.80 and its footnote 5 should generally apply.
3
An issue that was briefly examined at the May 2005 meeting of the Eurostat Financial Accounts Working
Group, under item D.2.d - Equity liability of government.
7
As regards the question of classification of the TV/radio licences, either as provision

of services or as a tax, and the resulting sector classification of television companies, it was
agreed that the issue merited a review of current interpretation of ESA95 conventions.
Eurostat will reflect on an appropriate way to organise this review.
4.4 Horse Racing Ireland
Introduction
Horse Racing Ireland performs a range of functions, for example administrating and
promoting the Irish horseracing industry, managing racecourse, operating totalisator on course
betting, guarantying prize money, granting permits to on course bookmakers etc. The issue
is the appropriateness of using gross or net betting income for the calculation of 50 % rule and
recording of revenue and expenditure.
Discussion
It was noted and agreed that it would be in accordance with ESA95 rules to use net betting
for the measure of sales of services (ESA 4.135) with implication for the income test
for the purposes of the 50% rule.
Eurostat found appropriate that the IE authorities would use net betting and would reclassify
this unit in case the 50% test is not met.
4.5 Housing Finance Agency
Introduction
The sectorization of the Housing Finance Agency (HFA) for land acquisition was a follow-up
from the previous November 2002 EDP mission to Ireland. The HFA had been solely lending
to Local Authorities for on-lending purposes to house owners and in a limited way
to voluntary housing associations. HFA has been classified so far in S.12 and its activity was
almost exclusively the provision of funds for Local Authorities. The issue is whether the HFA
should be classified in government or not.
Discussion
It was noted that an important consideration was whether the HFA was acting as a genuine
financial intermediary, or was simply another way to organize levying financing for local
government: some of the criteria discussed were whether local government could borrow from
other sources (notably long-term finance), whether the HFA can lend to other parties and
borrow from various sources, and whether the HFA has genuine technical capacities for
conducting its borrowings or instead relies extensively on the National Treasury Management
Agency (NTMA) know-how and capacity.
8
It was agreed that the criteria for determining the sector classification needed to be clarified,
and in particular the understanding of the ESA95 paragraph 2.37. Eurostat will provide the
necessary clarifications before the next October 2006 EDP notification. The IE authorities will
provide further factual information on this issue, notably to what extent HFA relies
on the NTMA capacities and financing.
4.6 Public universities
Introduction
Ireland reviewed the classification of Universities for national accounts purposes in 2003.
The conclusion reached at the time was that due to the degree of autonomy from government
enjoyed by these institutions, they are privately and not publicly controlled and hence it was
appropriate to continue classifying them as 'Non-profit institutions serving households' i.e.
that they remain classified outside the General Government sector.
Discussion
The IE authorities explained their analysis, i.e. that those are not controlled by government,
leading to the classification as non-profit institutions serving households in S.15. It was noted
that although government was the main financing provider, it only had a minority
participation to university boards and was not influential in establishing the curriculum.
Eurostat noted that the funding originated mainly from government and wondered whether
universities were genuinely free to open classes competitively or whether government had not
de facto control on the orientations taken by universities when determining the funding
allowances. On the other hand, the capacity to close activities without government
authorization might be a consideration to support a hypothesis of autonomy of decision.
Eurostat found that the analysis is prima facie in accordance with ESA95 rule, in so
far as the classification inside government required that the unit be financed and controlled
by government. A question remained whether the majority government financing
of Universities provided de facto control to government, and Eurostat reserved its decision
to be provided by the October 2006 EDP notification.
4.7 North-South Bodies
Introduction
The North-South Bodies were set up by Ireland and UK following the Good Friday agreement
in relation to the Northern Ireland question.
Discussion
The IE authorities explained their current practice as classifying these bodies as international
organisations, within the Rest of the World (S.2) and the payment to the bodies as current
or capital transfers to S.2.
9
It was agreed that this question required further analysis notably in the light of SNA 14.27,
as well as clarification of the accounting treatment used by the UK statistical authorities.
4.8 Market regulatory agency
Introduction
The ESA95 Manual on government deficit and debt specifies the rules for classification
of the "market regulatory agencies": "By convention these units should be classified in the
sector general government if their costs incurred in market regulation compared to the total
costs are less than 80%, and in the sector non financial corporation if their costs incurred
in market regulation compared to the total costs are more than 80%."
Discussion
It was explained by the IE authorities that the Irish Intervention Agency, was classified,
as a unit acting on behalf of the EU, in the S.11 sector (outside both the general government
and the public sector). The agency's tasks included market interventions as well
as the distribution of subsidies under EAGGF. The 80 % convention of the ESA95 Manual
on government deficit and debt, which has been previously applied, has not been verified
recently.
Eurostat suggested re-applying the "80% test" for the purpose of the sectorisation of the Irish
Intervention Agency.
4.9 House Rental Account
Introduction
The House Rental Account of Local Authorities is treated as a quasi corporation (outside
general government sector). Local Authorities rent out their accommodation at subsidised
prices to low-income families. In National Accounts, these rents are valued at their full
economic value and the difference between the economic rents and the rents actually paid
by tenants is considered to be a social benefit in kind provided by the Local Authorities
to households. The IE authorities indicated an interest to review the treatment of the House
Rental Account of Local authorities.
Discussion
The classification of those entities inside government seem supported by the fact that they
might not meet the quasi-corporation criteria: non-autonomy of decision and lack of complete
set of accounts. A reclassification inside government would probably have limited impact
on the general government deficit, but a more noticeable one on the revenue and expenditure
levels and composition.
10
Eurostat expressed support for a classification of those entities inside government, as those
seem not to meet the quasi-corporation criteria.
4.10 Other Local government units
Introduction
The IE authorities indicated that the new FMS based financial statement for local government
had revealed a large number of participation of local governments in various ventures, which
had not been examined yet.
Discussion
The IE authorities were in the process of examining this new issue, with an aim to try
applying the 50% criteria. Whilst the CSO has access to accounting information reported
in tax returns, a noticeable part is not yet computerized, impeding faster progress.
Eurostat took a note of this issue and supported the IE authorities to continue in this work.
5. Implementation of accrual principle
5.1 Taxes and social contributions

Introduction
It was recalled that Regulation 2516/2000 requires taxes and social contributions to be
recorded on an accrual basis using one of the specified methods - using assessments and
declarations or using cash data.
Discussion
The IE authorities gave an account of accounting practices relating to the recording of taxes
and social contributions and their current plans for moving further in the direction of accrual
recording. It was noted that Ireland only partly complied with the requirement
of the Regulation (EC) No 2516/2000 i.e. only VAT and excises taxes were recorded on an
accrual basis (time adjustment method used).
It was agreed that further effort would be made already for the next October 2006 EDP
notification in order to extend the time adjustments to more of the revenue items (social
contributions notably). Eurostat underlined the importance of making progress in compliance
with the Regulation, not only in Ireland, but also in general across Member States.4
4
In the October 2006 notification the IE authorities made a considerable effort to report accruals for all taxes and
social contributions and for the EU flows.
11
5.2 Interest
Introduction
The National Treasury Management Agency (NTMA) produces details of the national debt
interest on an accrual basis. Interest on the national debt is calculated on an accrual basis
by adjusting the value of cash payments of interest by the change in the value of the stock
of accrued but unpaid interest recorded at the start and end of each year. Local government
interest has been recorded on a cash basis, however the introduction of the new accruals based
Financial Management System for LG should mean that, from 2004 onwards, interest receipts
and payments would be correctly recorded on an accruals basis. One issue was the very large
entries in the lines "Issuances above (-)/below (+) par" and "Redemptions of debt above
(+)/below (-)par".
Discussion
The IE authorities explained that the large entries in the lines "Issuances above (-)/below (+)
par" and "Redemptions of debt above (+)/below (-) par" in the EDP table 3B are related, aside
from the entries connected to a large bond exchange in 2005, to the NTMA repos activities
(repurchase agreement) designed to improve the liquidity of the bond market. The NTMA
indicated that bonds provided against cash in this context, entered the Maastricht debt, and
that whereas the amount outstanding could exceed 1 billion euro, it was largely liquidated
by the end of year. Eurostat recalled that repos were considered, for statistical purposes,
as loans and not as transactions in the underlying securities. However a complication might
arise due to the fact that repos are conducted on specially issued bonds rather than existing
bonds, which might need further reflection.
In addition, the EDP Table 3B item "difference between interest accrued and paid" needed
to be corrected for 2002 for a noticeable amount.
Eurostat took note of the National debt coverage and of the efforts to consolidate interest
in General government sector. In addition it was agreed that the entry in the EDP Table 3B for
2002 needed to be corrected, and that the IE authorities would examine the additional
implications. Eurostat indicated a need to reflect further on the appropriate recording of these
transactions.
5.3 EU flows
Introduction
The decision of Eurostat published on 15 February 2005 says that transfers from the EU
to a Member State should not have any impact on the deficit. EU flows are in Ireland currently
recorded on a cash basis. However, about 70% of the EU transfers received by Ireland relate
to the EAFFG Guarantee schemes and are for the benefit of third parties; in the Irish National
Accounts, these are routed directly from the EU to the final recipients and therefore do not
affect the General Government net lending/borrowing.
12
Discussion
The IE authorities reported on their efforts made to implement Eurostat decision No 22/2005.
rd
In relation to the Cohesion fund and the 3 Community Support Framework, Eurostat was
informed that noticeable delays might occur between the moment of expenditure and
the moment the claim is submitted, in particular because of lack of proper incentives
for various agencies (notably at a local level) to provide the appropriate documentation.
rd
rd
In addition, the advance at the origin of the 3 CSF has been booked as revenue. The CSO
indicated a lack of reliable source data to identify the moment of actual expenditure.
Eurostat concluded that there are outstanding issues on source data availability to ensure
accrual reporting.
5.4 Military equipment

Introduction
On 9 March 2006 Eurostat released a decision on recording military expenditures. According

to this decision expenditure on purchases of military equipment should be recorded
on a delivery basis.
Discussion
The IE authorities confirmed that they were able to implement the Eurostat decision
No 31/2006 on the recording of military equipment expenditure in a proper way using
information from the Appropriation Accounts, although implying some estimates for
distinguishing the military equipment from other expenditure.
It was agreed that more extensive use of information on the payables/receivables would
reduce the reliance on estimates for the compilation of the government deficit. The IE
statistical authorities confirmed the absence of leases of military equipment.
6. Analyses of the EDP tables and EDP related questionnaire
Eurostat reviewed the EDP tables as they were reported in April 2006 together with the EDP
related questionnaire. On this occasion specific government transactions were discussed
as well, based also on some additional clarifications received from the IE authorities.
A number of minor inconsistencies between EDP tables and the EDP questionnaire were
discussed and agreed, leading to some corrections. Some issues related to presentation of data
in EDP tables, notably with moving items under receivables/payables and under other
financial transactions, were discussed and agreed. In addition, EDP inventories might be
usefully updated.
13
6.1 EDP Table 2A
6.1.1 Capital injections in public corporations and privatisation
Introduction
The treatment of capital injections in government accounts is covered by the Eurostat News
release No 98/2003 and subsequently clarified in the new chapter of the ESA95 MDD. Capital
injections, super-dividends and privatisations are requested to be reported in the EDP related
questionnaire.
Discussion
Information on capital injections, super-dividends and privatisations provided in the EDP

tables and the EDP related questionnaire was reviewed and their consistency analysed and
discussed.
There are no realized or planned large capital injections recorded as transaction in equity
(F.5). The IE authorities informed Eurostat on plans of the privatisation of Air Lingus, which
should not lead to accounting difficulties. It was agreed that the EDP related questionnaire
would be corrected for some inconsistencies.
6.1.2 Dormant accounts
Introduction
The Dormant Accounts Fund receives deposits and life insurance contracts that are not
claimed by original holders. They aim at financing social expenditure. The Fund is classified
in central government as an extra-budgetary fund, while proceeds collected on foreclosed
deposits are not booked as government revenue but as an incurrence of a liability (payable).
The outlays of the Dormant Accounts Fund are recorded as government expenditure.
Discussion
The IE authorities explained the accounting treatment chosen regarding transactions with
the Dormant Accounts Fund.
It was noted that this treatment was in line with a previous advice given by Eurostat.
6.1.3. UMTS
Introduction
Treatment of the allocation of mobile phone licences (UMTS) is covered by the Eurostat
News Release No 81/2000 and subsequently clarified in the chapter of the ESA95 MDD.
Sales of 3 UMTS licences took place in Ireland in 2002, for a net present value of €208 mio
recorded as deficit reducing in 2002. Receipts of the outstanding amount were due to begin
after a grace period.
14
Discussion
The treatment of the UMTS licence in the EDP tables was reviewed.
It was agreed that the IE authorities would verify whether an entry should have been made
in the EDP table 2A for 2006 (end of the grace period), and would provide to Eurostat
a schedule of future payments.
6.1.4 Debt cancellation, debt assumption, debt write-offs and state guarantees
Introduction
Treatment of debt assumption and debt cancellations / write-offs and also treatment of state
guarantees is covered by the ESA95 MDD. There have not been any debt cancellations
in the framework of Paris Club. The only state guarantee called in recent years was related
to Nitrigin Eireann Teoranta (N.E.T.), a loss making state-owned company.
Discussion
Recording of debt cancellation, debt assumption and debt write-offs and state guarantees were
discussed based on information provided in the EDP related questionnaire and in the EDP
tables.
It was confirmed that there have been nearly no debt cancellations, debt assumptions, debt
write-offs (apart from one case in 2001 and in 2002), and that nearly no guarantee has been
called (apart from one case).
6.1.5 PPP projects
Introduction
The CSO provided a substantial amount of information on its PPP projects in the context
of the December 2004 Eurostat PPP questionnaire, including a list of all PPP projects.
Discussion
The IE authorities explained the situation concerning the implementation of the PPP as well
as the "prudential" nature of the entry of the € 58 mio in 2006 as expenditure to cover
potential unplanned PPP expenditure.
In the context of potential future PPPs, it was agreed to analyse further the possibility
of separating in national accounts the government acquisition of land from the rest of a PPP
transaction, even if included in the PPP contract. The IE authorities will also review the level
of guarantee attached to some of the PPP contracts (schools) and the possible incidence
on their classification.
15
6.1.6 Carbon Fund
Introduction
The Carbon Fund was established in 2006. This fund is designed to allow Ireland meet its
Kyoto targets for greenhouse gas emissions and works together with the national
implementation of the EU Emissions Trading Scheme. The IE authorities explained that the
aim of this Carbon Fund is purchasing carbon rights for further distribution to manufacturers.
Discussion
Transactions in carbon rights are currently treated by the Irish authorities as purchases
of intangibles non-produced assets, impacting the deficit at time of purchase. The subsequent
granting for free of those allocations is recorded as a transfer expenditure matched
by a disposal of intangible, thus being neutral for the deficit.
It was noted that the statistical treatment of those transactions was being currently under
consideration at Eurostat.
6.1.7. Other issues in the EDP table 2A
Introduction
Eurostat discussed remaining issues of the EDP Table 2A.
Discussion
The recently established carry over system was discussed as well as treatment of seigniorage
on coins. In addition, The IE authorities indicated that they were not aware of financial leasing
by central government units but would review and confirm this to Eurostat, and that the FMS
reporting (newly operational - see above) explicitly identifies those for Local government.
Eurostat asked whether there have been any securitisations operations or sale and lease back
operations carried out by government units in recent years.
Eurostat took note that a carry over system (established in 2004) leads to a need
for an adjustment in the EDP table 2A, for properly adjusting the moment of recording
reported in the Finance Accounts. Eurostat took note that the proceeds collected
by the Treasury related to the seigniorage on coins, following a 2002 law, are appropriately
neutralized within EDP table 2A. The Irish authorities will investigate the potential existence
of the financial leasing in the central government.
Finally, the Irish authorities confirmed that there were no securitisations operations or sale and
lease back operations carried out by government units in recent years.
16
6.2. EDP Table 3B
Introduction
Statistical discrepancies in the EDP table 3B are not split between "Difference between
financial and capital accounts (B.9f-B.9)" and "Other statistical discrepancies". The high
amounts under acquisition of shares and other equity represent investments of the National
Pension Reserve Fund.
Discussion
Several items from the EDP table 3B were discussed, in particular the item of Statistical
discrepancies.
The IE authorities recognized that the statistical discrepancy was not specifically related
to the transactions/stocks articulation, and that the item "Difference between financial and
capital accounts (B.9f-B.9)" needs not to be zero. Eurostat recalled the ongoing work
on discrepancy carried out at the European level, and suggested splitting the statistical
discrepancy position to be reported.
6.3. EDP Table 3E

Introduction
No debt is reported for the SSF in the EDP table 3E and also no adjustment entries between
government deficit and change in debt apart from item currency and deposits (F.2).
Discussion
The possible recording of other transactions of the SIF, apart from currency and deposits, was
discussed. The IE authorities further documented the composition of the SIF assets, which
suggests that no consolidation (for F.2.) is required.
The IE authorities recognized that the financial statement of the Social Insurance Fund (SIF)
could be used to improve the reporting of the EDP Table 3E.
7. Data consistency and ESA 95 transmission tables
Introduction
Eurostat reviewed with the Irish authorities the state of data delivery in the framework
of the Council regulation (EC) No 2223/96 of 25 June 1996 on the European system
of national and regional accounts in the Community, as amended (ESA95 transmission
programme) and its consistency with EDP statistics. The consistency of EDP data was high
in particular with non-financial government accounts (both annual and quarterly). On the
other hand consistency of EDP data with annualised quarterly financial accounts was not
satisfactory, as large differences were identified.
17
Discussion
Eurostat noted that Ireland did not comply with its reporting obligation with respect to annual
financial accounts (ESA tables 6 and 7). It was noted that annual financial accounts
for general government should be based on the quarterly data, and that they would generally
not be changed by the process of rebalancing of the whole financial accounts. ESA Table 11
(COFOG) was also discussed.
The IE authorities agreed with the need to step up work to ensure consistency between
the EDP reporting and the quarterly financial accounts for general government (ESA95 table
27). As regards financial accounts, The IE authorities indicated that in the financial accounts
for 2001 - 2005 (both balance sheets and transactions) to be reported by end-September 2006,
the results for General Government shall be reported on both the consolidated and non-
consolidated bases. Eurostat welcomed this noticeable improvement.5
As regards ESA table 11, Ireland indicated that currently missing function on Environmental
protection would be transmitted in the next official transmission to Eurostat.
5
A first subset of consolidated annual financial accounts was transmitted to Eurostat on 07 November 2006.
18

Euro Stat

Diunggah oleh

Informasi Dokumen

Deskripsi Asli:

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

Euro Stat

Diunggah oleh

Hak Cipta:

Format Tersedia

eurostat H

Ref.: Your letter dated 22 September 2009

The accounting issue for Which a clarification is requested

Description of the case

@ B A T I M E N T JEAN M O N N E T • R U E ALCIDE D E GASPERI - L-292G LUXEMBOURG-KIRCHBERG ( m ) BATIMENT J O S E P H BECH -

Methodological analysis and clarification by Eurostat

Classification of the SPV

The purpose of the SPV

The duration of the SPV

The size of expected losses

Central Statistics Office

Mr. Luca Ascoli, m

2. Structure and operation

2.2. Master SPV

2.3. Assets - valuation and acquisition

2.3.1. Estimated value and nature of assets

Item Source €bn

2.3.2. Valuation and acquisition process

2.4. Risk analysis

2.4.1. What are the risks?

2.4.2. Who bears the risks?

2.5. Restriction of operation to financial crisis

3. Analysis of the accounting treatment

3.1. Classification of NAMA

3.2. Classification of the Master SPV

3.2.1. Is the Master SPV a separate institutional unit?

"A resident unit is regarded as constituting an institutional unit if it has decision-

3.2.2. Is the Master SPV market or non-market?

Central Statistics Office

Annex 1 contains a list of units classified to the General Government sector.

2. Central Government data

The three main classes of Central Government entity are:

(1) The Exchequer

(2) Non-Commercial Semi-State Bodies (Non-market agencies)

(3) Extra-Budgetary Funds

2.1 Availability and use of data sources

1c) Complementary codification at data source, by counterpart sector

A small amount of additional information is required to compile the ESA95 accounts.

1g) Nature of the data sources - cash, accrual or mixed

1h) Circumstances in which data available from basic sources is consolidated.

No changes to the accounting rules are expected in the near future.

Table 2 - Source Data Accounting

Extra budgetary funds:

The accounting reports are used.

2c) Complementary codification at data source, by counterpart sector

2d) Complementary information which is not in the financial statements, when

No additional information is collected.

The audited accounts of non-market agencies in central government are compiled on an

2g) Nature of the data sources - cash, accrual or mixed

For central budget

For other units included in central government

2.1.4 Auditing Process

I) Working balances of Central Government that were submitted to an auditing process.

2.2 Data treatment

a) Financial transactions that may be included in the public accounts of central

FEOGA (Fonds europeen d'orientation et de garantie agricole) payments

Sales of state assets

Other sales/acquisitions of equities

Gains arising from the Euro changeover

The following adjustments are implemented:

A. Adjustments among other accounts receivable/payable

VAT is time-adjusted by two months.

For Vehicle Registration Tax (VRT), a one-month accrual period applies.