Auditimi publik 1 kontrolli I lartë I shtetit
Inflows of resources by concessions of
Download 30.22 Kb. Pdf ko'rish
|
- Bu sahifa navigatsiya:
- Inflows specified in the contract
- Consolidation Government business enterprises
- Entities for specific purposes
- As. Prof. Dr. Hysen Cela Chairman of IEKA Kledi Kodra, FCCA
- II. COST – BENEFIT ANALYSIS
- III. DEBATES AND REFLECTIONS ON CBA
- Debates about justice and morality of CBA
Inflows of resources by concessions of agreement. Provisions for revenue sharing. For those deals where the operator is expected to raise revenue from the fees directly from third parties or from users of the public good, the provider usually negotiates the contract to include a provision for the allocation of these revenues between him and the operator. In this way, if the use of the property exceeds expectations then the operator will share success with the provider. This provision would serve to protect the provider from political risk and public criticism that can be made for inclusion in an agreement, which can be very profitable for a private operator. Allocation of income can be based on share of all income earned by the operator, the income threshold over a certain income or as the operator reaches a specific rate of return. For example, as part of a BOOT agreement for the construction of a large parking lot, the provider receives a fixed fee for each ticket sold. This provider uses the fee to finance actions (activities) for the community. Also, in a deal that includes the construction of a road where passing is paid, the provider has the right to receive 40% of the total income as net cash from the deal attain that offer operators a pre tax rate of return of 6.5% on funds total invested. Part of providers grow to 80% of the total revenue collected as cash contract gives the operator a rate of return of 8%. Provisions for income are often included in the terms of an agreement together with a minimum guarantee for the operator. For example, an agreement for the operation of a highway with payment contains a provision for revenue sharing. This provision requires the provider to benefit about 57% of the revenues that exceed those estimates. This provision may be accompanied by other provisions where the provider will pay 80% of any difference between the estimated revenues compared with current ones. In this way, the provider application minimizes the risk of giving PUBLIC AUDIT Accounting for Concession Agreements under International Accounting Standards for the Public Sector 276 No.4, January April, 2013 the operator a sort of guarantee for minimum income, which have the potential to be even bigger if the project results to be a successful one. The current proposals of the Board emphasize that providers should recognize that income (and receivables) as they entry, hereupon in line with the substance of the agreement and after is met any contingency event, (such as exceeding the minimum threshold income). Inflows specified in the contract The Board has proposed that inflows stipulated in the contract received from the operator by a provider has to be recognized in the same way as the income earned is recognized during the life of the agreement, starting from the beginning of the concession where the property is fully operational and operator has the ability to collect fees from third parties. Before this point, the provider normally can not begin to implement its part of the contract, which is usually the property access operator. Provider recognizes the contractual income using the straight line method or a method that best reflects the economic consumption. Any income earned by the operator in advance, must be reported by the provider as a liability, until it is earned. Consolidation Government business enterprises When the operator is a government business enterprise, there will always be some control indicators discussed in paragraphs 39 and 40 of IPSAS 6, especially if this kind of enterprise is created to serve as operator in the concession agreement. This operator, in general, should be consolidated in the financial statements of providers. Entities for specific purposes The operator in this case is a purpose entity separate and control indicators described in paragraph 39 of IPSAS 6 will not be available in relations between the operator and the provider. However, the contractual terms of these agreements may result in the presence of some of the indicators of control in paragraph 40 of ISPSAS 6. For example, in a purpose entity created to separate a toll road, following the provisions of the contract, may be indicative of the provider’s control strength to the operator: The operator is allowed to obtain debt as specified in the contract and the provider must approve in advance any additional debt. All fees and charges for crossing the street are subject to approval by the Minister of Transportation and may vary from application providers. The provider may require you to be laid off any employee who is incapacitated for example, is rude or non competent etc.. The provisions of the agreement in this example, which may indicate that the provider receives benefits from the activities of the operator, are as follows: The operator is required to ensure that the highway will be open to traffic at all times and traffic flow, meets predefined standards that meet the objectives of transport providers about. The operator shall make payments to providers if the return of the project exceeds a certain limit. Prof. Asoc. Dr. Hysen Cela Kledi Kodra, FCCA PUBLIC AUDIT 277 ALSAI Literature: IPSASB consultation Paper IFAC website IASB Framework Law No. 9633 date 18.12.2006 “On concessions” Etc.. by: As. Prof. Dr. Hysen Cela Chairman of IEKA Kledi Kodra, FCCA Head of Audit Department to the PwC in Albania AUDITIMI PUBLIK 279 COST BENEFIT ANALYSIS IN THE PUBLIC INVESTMENT EVALUATION by: As. Prof. Dr. Manjola Naço, Blerta Zilja, Msc. ABSTRACT Cost Benefit Analysis (KPA) is one of the preferred methodologies in evaluating and selecting the Public Investment (IP), however, there have been critics. Described as a social methodology, it continues to strive to gain more and more ground to become not only the key to leadership in the Public Investment decision (IP), but as the starting point for assessing the reforms, legal frameworks or new strategies and policies. Despite the use of cost benefit analysis, has become the latest trend worldwide, state agencies for assessment and evaluation of public investment projects, debates and widespread criticism from the academic world have been accompanying it throughout the journey, as much as it seems there is a deep division between researchers and institutions, where one party consistently criticize this methodology, reveals its subjectivity and issues that carries its use in decision making, while the other side remains quiet and increasingly use its frequently , turning it in a common procedure, which seems to have preceded any decision relating to public funds, regardless of its nature. This paper aims to bring an overview of the need for public investment analysis and why cost benefit analysis (CBA) is one of the appropriate methods for their implementation. It focuses on the main criticisms from the academic world on the effectiveness of CBA. Cost Benefit Analysis (KPA) is one of the preferred methodologies in evaluating and selecting the Public Investment (IP), however, there have been critics. PUBLIC AUDIT Cost Benefit Analysis in the Public Investment Evaluation 280 No.4, January – April, 2013 Key words: public investments, public funds, cost benefit analisysis, decision making. I. INTRODUCTION In conditions of limited resources, governments are forced to choose between the multitude of investment projects offered. Financing a project automatically means decrease of funds available to finance another project. These circumstances require a better economy of funds, more efficient use of their best means and the best tool to accomplish this goal, remains the analysis. Grøvdal and HJELLE (1998) noted that politicians face this situation by selecting which projects to support, in order to achieve the best allocation of available resources, but at the same time achieving the goals set. The situation becomes more complex if we bear in mind that for the same funds, compete projects with different purposes and it stands to the government of a country to establish priorities and policies that will guide decision making. Every decision, should have complete information in advance about the entirety of the costs and benefits rilevant in decision making, the need for funding, the useful life of the project, side effects, or externalities and environmental impacts. In this context, it is also the reason why policy makers need assessment methods and techniques, so that all the information collected is processed to allow ranking of potential projects, given their contribution to the achievement of the main objective of the government, growth the welfare of its citizens. Setting goals, objectives, funding priorities and strategies related to all decisions that belong to the public sector (Berechman, 2009). These analyzes become increasingly more complex (Turcanu Gamper, 2007; Walker, 2000), detailed and comprehensive, focusing not only on economic and financial sides of analysis, but by placing more and more emphasis on social and environmental effects. All developed countries have worked on modeling and perfecting the processes of assessment and evaluation of public investment, drafting standards, which aim to orient toward an effective decision making process. The techniques used for this purpose are numerous, but the essence of all is the cost benefit analysis, which corresponds to a simple logic: public investment should be financed when the benefits derived therefrom, justify the costs. Even in our country, under the framework of the reforms undertaken in 2000 on Public Financial Management, Ministry of Finance drafted the procedures for Public Investment Program (PIP), which joined the Draft Budget package Framework (MTEF). They began to be implemented for the first time in 2006 and had as main objective the effective management of public investment. In general, PIP was a set of rules and procedures to be applied in assessing the budgetary institutions of IP. They covered in a synthetic way how tests should be carried out, aiming to orient decision to use public funds for the IP, toward the economic, financial and social analysis. However, the dilemmas Manjola Naço, As. Prof.Dr. Blerta Zilja, Msc. PUBLIC AUDIT 281 KLSH associated with the success of these procedures in their mission are numerous. Despite trying to give PIP the role it belongs, they risk being a formality that must be met by budgetary institutions for compliance with Annex No. 8 of the PBA, but basically without realizing their importance and role in decision making. However, despite the cost benefit analysis (CBA) is judged as the preferred methodology in evaluating and selecting public investment, there have been critics. The methodology described as social, it continues to strive to gain more and more ground to become not only the key to leadership in IP decision, but as the starting point for assessing the new reforms, legal frameworks or strategies and policies. The paper is organized as follows. The first part presents cost benefit analysis and its path to becoming the most used methodology of evaluation of IP, while the second part deals with the most important criticism against the CBA, the righteousness of its results and the role that it should play in decision making. CBA still remains, the most used methodology by state agencies. II. COST – BENEFIT ANALYSIS Cost benefit analysis was presented for the first time in 1844 as an idea by engineer and economist, Arsne Jules Tienne Juvnal Dupuit. Engaged in the inspection of investments in roads and bridges, he began to show interest in economic problems that accompany construction contracts of public works and their analysis of cost effectiveness. However, it was the British economist Alfred Marshall, who created the basis for measuring the "immeasurable” and popularization of the CBA. Focused on the theories of cost, value and delivery, he developed the concept of marginal utility. The return of CBA as a leader methodology for the analysis of public investments was made by "The control of water Act" in 1936, which required the federal government of the United States to undertake projects only if the benefits of anyone that could occur, were higher than the estimated costs. According to Pearce (1971) the CBA took formal shape only in the 1950s. In this work, helped Eckstein (1958), McKean (1958) and Krutilla & Eckstein (1958), who formalized the criteria for public investment in relation to the criteria set out in welfare. Over time, the use of CBA started to take place not only in the assessment of water use projects in the U.S., but also in other areas such as transport, health, or Energy (Sewell, Davis, Scott, and Ross, 1965 ). Shortly after the U.S., United Kingdom (UK) was the second country to embrace the use of this methodology. It was implemented for the first time in the UK in 1960 (Coburn, Beesley, & Reynolds, 1960) in the evaluation of the first highway in Britain and since then, transport remained one of the main areas where the use of CBA, is widely applied . Cost benefit analysis began to be part of the Budget Planning and Programming, initially starting in 1962 in the U.S. (Agard, 1970). Despite meeting the requirements for assessing the costs and benefits, which according to the "The control of water Act " are still controversial (Shapiro and Schroeder, 2008), this line of philosophy PUBLIC AUDIT Cost Benefit Analysis in the Public Investment Evaluation 282 No.4, January – April, 2013 was embraced quickly by government agencies of different countries, as it justifies basically whenever state intervention itself justifies investment. Furthermore, international financial institutions like the World Bank and IMF, unless they bring their manuals and guides for certain issues complementary to CBA are exerting more and more pressure for this kind of analysis to finance various projects throughout the world. According to Adler and Posner (1999), the start of the widespread use of CBA was the result of three important historical developments, which created the conditions for its flourishing. First, it was "The control of water Act", in 1936. This moment marked the beginning of this methodology use by public agencies in the United States (Porter, 1995). The second development was influenced by the Progressivism era in 1890 1920. Proponents of this movement believe in clean government and the separation of politics from administration expertise. They support the Efficiency Movement, which could identify the old sectors to be modernized through engineering and scientific solutions, which could also be applied to the public sector (Nelson, 1987). According to them, the scientific principles and expertise can be used to guide the state and its decision (Purcell, 1973) and to reduce the power of politics and the administration and government connections (Callahan and Jennings, 1983). The thought the knowledge would have made civil society react, continued until 60s, when appeared the line to debate, on the influence and analysis on economic and social decision making. The third element that closes the circuit was the invention of welfare economics, which can apply scientific principles, which were propaganded by progressives. Dasgupta and Pearce (1972) argued that the early economists believed that the welfare economic concepts, can be used to enable more effective implementation of government policy. They further strengthened their position when states of different countries began to seek their help in the design of formal procedures of CBA. In literature, there can be found endless definitions on CBA. We thought to bring representative definition as that of Boardman et al., (2006), who sees CAB as "a method for determining the policy which expresses in quantitative terms, the impact value and the effects of a particular policy in monetary terms "in order" to help in a more effective social decision making through efficient allocation of society's resources when the market fails". In theoretical content, the final goal of the CBA, is to provide an efficient allocation of resources available to the state. Efficiency depends on the nature of the objectives every government, it has set itself but generally in the literature, national income growth seems to emerge as the main objective. In different words, the whole purpose of government is to maximize social welfare in terms of restrictions on which it has no control or power (Layard, 1972). Manjola Naço, As. Prof.Dr. Blerta Zilja, Msc. PUBLIC AUDIT 283 KLSH According to Stanbury (1988) CBA goal is "to improve or ensure efficient distribution and maybe, growth of social welfare " and Nas (1996, p.2) related to the purpose stated: "... to help the social decision making by comparing all relevant information for a project or policy, in order to take a decision on the contribution of social welfare alternatives to using methods like net present value, internal rate of return or report benefits / costs .. . ". From this perspective it seems that the prevailing rule of CBA is to choose a project that maximizes net social benefits (Walker, 2000), or projects that maximize social benefits overcome the social costs (Haveman and Weimer 2003). This treatment of CBA is actually in full compliance with the necessity of its use for the evaluation of public investment in infrastructure in general and in particular. III. DEBATES AND REFLECTIONS ON CBA Regardless Cost Benefit Analysis (CBA) is judged as the preferred methodology in evaluating and selecting public investment, there have been critics. The main question mark, researchers have, relates to CBA itself, if it is the appropriate methodology that should guide decision if it ensures the fulfillment of the use of budget funds and state function itself: maximizing the welfare of its citizens. The main problem with the CBA according to researchers, is that it often produces results justified from a moral point of view of society, contrary to theories of decision making and political equality does not allow redistribution. One other very strong line of criticism relates to the role to be played by the CBA in decision making. According to the positivists, politicians and decision makers are those who need to see the importance of meeting the various targets and CBA have just offered up figures, while according to another group of researchers, the role of CBA must be normative, leading decision making and show what to do. Debates about justice and morality of CBA Despite the introduction of the idea of CBA before 1900 and its enforcement act in 1936 in the United States, the CBA has not yet found itself as a reliable and objective methodology. Protection through its classic Pareto principle, as will be discussed below, has many criticisms, which do not justify on the scientific plan its properly use of CBA. Its implementation gained more ground after the contributions that led researchers in the field of economics, but at the same time served as a strong basis for the CBA. One of the many criticisms made to the CBA is that its use does not improve the condition of society, and still further, that it does not produce moral results in distribution and welfare maximization. It is also seen as one of the predominant reasons why may be overlooked using CBA (Richardson, 2000; Frank, 2000; Sandel, 2009). And in fact, Sandel (2009) said: "Our reluctance relates to something that has to do with morality the idea that it is not possible to measure and compare the value and benefits of a single scale." To create protection against criticism, the group of authors who are in favor of PUBLIC AUDIT Cost Benefit Analysis in the Public Investment Evaluation Download 30.22 Kb. Do'stlaringiz bilan baham: |
Ma'lumotlar bazasi mualliflik huquqi bilan himoyalangan ©fayllar.org 2024
ma'muriyatiga murojaat qiling
ma'muriyatiga murojaat qiling