Consistent with Figure 3.1, Responsible Agencies are required to prepare and update an accounting position paper and the Fiscal Impact Tables (see Appendix 2) at each project milestone and if new project information would result in significant changes to the accounting or budget treatment.
The accounting position paper should be consistent with the following (including updates to these policies):
■ TPP 15-02: Budgeting for availability PPPs
■ TPP 06-08: Accounting for PPPs.
The accounting position paper should identify the:
■ balance sheet, income statement and cash flow impacts of the PPP project from the Responsible Agency's perspective, General Government Sector and Total State Sector
■ estimated full contingent exposure to Government, including:
- the termination liability, in the case of private party default or voluntary termination by the Government
- the sum of any individual actual or contingent liabilities under specific clauses of the project delivery contract, combined with the probability of each outcome
■ adjustments for forthcoming likely new accounting standards, as appropriate.
The Fiscal Estimates and Financial Reporting Division of NSW Treasury is responsible for accounting policy guidelines. Responsible Agencies should consult with NSW Treasury to agree on the most appropriate accounting treatment for each individual PPP transaction.
The Auditor-General will ultimately be issuing to Parliament an audit opinion on the financial statements of the Responsible Agency and the whole-of-government accounts. These audits will include considerations of the accounting treatment for any PPPs. In some cases the views of the Audit Office may differ from NSW Treasury's view.
Responsible Agencies should therefore keep the Audit Office updated on the proposed accounting treatment for a PPP project, especially if there are unique aspects to the transaction.
NSW Treasury issues an annual Treasury Circular (for example, TC16-01) on early close reporting procedures which requires accounting treatment of significant and complex transactions to be resolved at an early stage. Responsible Agencies need to comply with this Circular.