Accountant general Andreas Antoniades told the House public expenditure committee this week that the treasury plans to introduce accrual accounting for revenues and expenses, on an unofficial basis, for the first time in 2025.

He added that by the end of 2025 a new system for electronic public procurement contracts will also be launched, which, in his words, “will enhance transparency and accountability”.

Antoniades explained that under the accrual basis, revenues will be recorded in the financial year to which they belong and expenses when they occur, regardless of the movement of cash.

He clarified that the application of this system will be carried out on a pilot basis during the first two years, 2025 and 2026.

He stressed that accrual accounting has been applied in other countries for many years and added that “this will provide greater transparency”.

Antoniades said that the state budget will continue to be prepared on the current basis for submission to parliament, but at the same time there will also be a separate cash flow statement to demonstrate to parliament the government’s cash position.

Commenting on the matter, auditor general Andreas Papaconstantinou said that accrual accounting is a project “of particular importance, but it has been delayed,” pointing out that there had been an earlier failed attempt.

“We are concerned because it is a difficult project,” he said, adding that the change is not easy and requires “great care” in the first years “to ensure proper reflection of revenues and expenditures.”

He emphasised that “the transition period for the implementation of accrual accounting, in order to ensure the proper reflection of revenues and expenditures, requires great care.”

The auditor general also said that there is “very close cooperation” with the treasury.

He added that “the responses from the treasury were immediate and the implementation of some of our recommendations has been achieved almost in their entirety”.

Audit director of Ernst & Young Akis Kikas stated that most of the audit findings “concern accounting policies or practices that do not comply with the principle of preparing financial statements.”

“All our recommendations and suggestions have been implemented and have been addressed by the treasury,” he added.

Antoniades also referred to various modernisation changes, including the introduction of digital systems, and stressed that “we are engaged in a reform campaign with information systems.”

“We have seven projects that are progressing,” he added.

On the issue of data consolidation, he explained that the next step is that “data will be collected from all organisations of the wider public sector and we will produce consolidated financial statements with the plan set for 2027”.

He further said that in May 2026 a new project will be implemented, a platform into which semi-governmental organisations and local authorities will input their data.

He added that this will improve practices followed by each organisation because “we will structure the format through which they will prepare their information”.

He also referred to the upgrade of the accounting system, to a modernised system that will expedite pension payments under the new occupational plan, and to the electronic issuance of pension income certificates, as already done for salaries.

He reiterated that by the end of the year the new electronic public procurement system will begin operation, noting that it “will enhance transparency and accountability.”