​Preparation of public authorities’ accounts

Two accounts are published annually:

• The general account of the GOB
• The general account of the consolidated entity

We call the compilation of these individual general accounts consolidation. This is not only legally required, it also balances the government accounts. Plus: she ensures that we achieve the objective of the European Fiscal Compact (Article 3 of the Treaty for Stability, Coordination and Governance in the Economic and Monetary Union). And that is not unimportant. Consolidation allows the budget balance and debt of individual and regional accounts to be evaluated according to European criteria.

All financial transactions and data are recorded in the general account. It provides a detailed overview of revenues from taxes, subsidies, fees and other sources, as well as expenditures on government programs, infrastructure projects and citizen services.

The general account describes the total financial picture of the government services, cabinets, the Brussels Parliament, the OAA and other regional entities at the end of an accounting period. It is an important part of the accounting system: it ensures that we can manage finances efficiently and evaluate the position of the Region: monitor cash flows, register costs and revenues, and evaluate the financial results and capital position.

The general account consists of two parts:

• The annual accounts consist of the balance sheet, the profit and loss account and the summary budget account (CROB). They provide an overview of the assets, i.e. fixed assets, receivables and cash balances, the liabilities, i.e. equity and debts. The profit and loss account shows expenses and income. The CROB is a summary of the budget transactions of the year.
• The implementation account and its appendix provide an overview of how the budget authorizations were implemented. The implementation account is drawn up on the basis of the budget accounts and follows the form of the budget.

The preparation of the general account is the responsibility of the Brussels government, as determined in the ordinance (OOBBC: article 59 and the law of 16 May 2003). The Regional Accountant draws up the general accounts.

The general annual accounts include all revenues and costs incurred by a government department, cabinet or parliament during the past financial year.

The annual accounts consist of three main parts:

• the balance sheet, which shows the assets and liabilities and the financial position of the entity at the end of the financial year, December 31
• the profit and loss account, which shows the costs and revenues of the past financial year. The difference between the two results in a profit (income > expenses) or a loss (expenses > income).
• the explanatory notes provide additional information and explanations about the figures.

Regional government authorities are obliged by regulation (Article 59 of the OOBBC) to consolidate the general accounts of regional government services with those of autonomous administrative bodies. The accountant of the Region thus combines the assets, liabilities, expenses and income of the bodies that are part of the consolidated regional entity into one balance sheet and presents them as if they form one entity.

This gives us a global and clear picture of the assets (assets and liabilities), the profit and loss account and the implementation account of the budget of the entire regional entity.

Consolidation is a logical continuation of the reforms that have been implemented aimed at good management of public finances. A transparent and precise consolidated General Account of the regional entity is an essential condition for determining budgetary policies and managing risks.

Consolidating the different general accounts is slightly different for the two parts:

• the annual accounts are consolidated according to the prevailing rules in the private sector and where necessary adapted to the public sector. 
• The annual accounts contain both general accounting and budgetary accounting. the budget implementation account and its annex are merged – without reclassification, elimination or addition. This is a simplified consolidation.

The organic ordinance with provisions for budget, accounting and control (OOBBC, 23/02/2006) determines how many entities are consolidated within the regional accounting system.

According to the OOBBC, every accounting entity within the Brussels-Capital Region must present a general account every year. The ordinance also defines what a regional entity is:

the Services of the Regional Government the organizations that fall under SEC subsector 13.12 of regional authorities

The SEC regulates the European system of national and regional accounts. It dictates the rules that government agencies must follow so that Eurostat can produce public statistics. The SEC divides the economy into segments or sectors: producers, households, governments, rest of the world… Public authorities are sector 13, which consists of subsectors such as central government, regional governments (e.g. the Brussels Capital Region, subsector 13.12), local governments (e.g. municipalities), social security institutions.

The Maastricht criteria for combining public finances are determined by SEC rules and apply to the public sector sector. This includes, among other things, the calculation of the excessive budget deficit (< 3% GDP) and the calculation of the government debt (< 60% GDP).

The ICN (Institute for National Accounts) draws up the list of organizations within this subsector. This list will be updated at the end of April and the end of September. The scope of consolidation published by the ICN in September comes into effect for the financial year beginning on January 1 after the publication date.