Belgian and European Legal Framework

Since 2003, a new legal framework has been in place for public accounting in Belgium, based on the law of July 17 1975, on corporate accounting.

This framework is applicable to the federal authority and federated entities, including the Wallonia-Brussels Federation. It now requires general accounting to be kept in conjunction with budgetary accounting.

The law did not require the first certification until the accounts for the year 2020, which is why 17 years have passed since the 2003 laws were passed.

To meet these requirements, all public entities must prepare a general account, consisting of the annual accounts, which represent the economic interpretation of the department's activities, and the budget execution account, which provides information on how the budget authorizations were used. The annual accounts consist of the balance sheet, the profit and loss account, the summary account of budgetary operations, which includes the revenues and expenditures recorded in the budgetary classes of the chart of accounts based on the economic classification, and an appendix.

Accounting Principles

The general accounts are drawn up in accordance with the AR2009 chart of accounts, which includes a system of standardized accounts and rules for recording, charging and evaluating transactions. The AR2009 chart of accounts is also applicable to the communities, regions and the Joint Community Commission.

Accounting is based on transactions, in accordance with the requirements of ESA2010. Thus, operations are recorded in the general accounts and charged in the budgetary accounts based on entitlements established at the time of transactions and not at the time of payments, for both revenue and expenditure.

In practice, the general ledger accounts include all accrued entitlements, whether budgetary or not, whereas the budgetary accounts record only budgetary accruals.

Time Frame

The accounting year begins on January 1 and ends on the following December 31, to bring the budget into line with the accounts.

Budget closure is the third and final phase of the budgetary process. It begins with the drawing up of the general account by the Administration and its transmission to the Court of Audit by the Minister of the Budget on behalf of the Government before June 30 of the year following the financial year in which the credits were used. The establishment of the general account for fiscal year N is an operation of fiscal year N+1.

Presentation of the General Accounting of the French Community

The balance sheet 

The French Community's balance sheet is an accounting document, presented in the form of a table, which gives an overview of the situation or assets at a given time. It is divided into two parts, one showing the uses (assets) and the other the resources (liabilities).

The assets identify and value the assets of the French Community; the liabilities identify and value the commitments of the French Community with respect to external parties.

The balance sheet is a photography of the assets and the liabilities of the Ministry.

The Profit and Loss (PnL) 

The French Community’s PnL is an accounting document, presented in the form of a table, representing all expenses and income for a given period.

The nature of the expenses and income contained in this table can be broken down into three categories: operating, financial and exceptional (this is the PCMN view; the PCN AR2009 view is different).

The final result is the sum of these three categories.

It is therefore a summary document whose purpose is to indicate the performance of the French Community.

The income statement does not measure financial movements (in money), but flows of enrichment or depletion of assets.

The budgetary operations summary account (BOCA)

The BOCA is a summary table of the budgetary operations (expenditures and revenues) carried out during the year.

Expenditures and revenues are classified by destination according to the economic classification.

Reconciliation of the accounting and budgetary results for the year

The purpose of reconciling the accounting and budgetary results is to explain the differences between the accounting result and the budgetary result.

The budget performance account shows the budgetary income earned, the consumption of commitment and settlement appropriations from traditional appropriations and budgetary funds during the past financial year and the outstanding budgetary commitments at the end of the financial year.

The Budget Execution Account Annex

The appendix provides at least:

1.  Information useful for assessing data on fixed assets, receivables and debt,
2. A commentary aiming at reconciling the budgetary balance with the entity's result for the year,
3. A statement of off-balance sheet rights and commitments
4. A report on transfers of real property and on disposals of real property for valuable consideration

The management account

The management account shall include the revenues and expenditures made on the financial accounts of the central treasurer.

Audits

The Court of Audit audits the General Account and, after drafting its Report on it, initiates the contradictory phase with the Administration and the Cabinet of the Minister of Budget.

In conclusion of its Report, it issues a certification (favorable, with cautions or unfavorable) or, if necessary, the reasons that prevent it from certifying the account (abstention).

It should be noted that the observations and possible certification of the Court of Accounts will be published in an appendix to the decree approving it.

The Court of Audit's observation booklet is presented and commented on in the Budget Committee.

The draft decree of account is then voted in the Parliament during a plenary session, approving by this act the use that the Administration has made of the credits authorized by the Parliament during the vote of the budget in the previous fiscal year.