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MANAGEMENT ACCOUNTING IN EUROPEAN SOCIAL FUND FINANCED PROJECTS IN ROMANIA

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Author(s): Tatiana Dãnescu | Dogar Cristian | |

Journal: Annals of the University of Oradea : Economic Science
ISSN 1222-569X

Volume: 1;
Issue: 2;
Start page: 662;
Date: 2012;
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Keywords: Management accounting | Accounting system | European Social Fund | communication | sound financial management.

ABSTRACT
Associating spent amounts in European Social Fund (ESF) financed interventions to eligible activities could be important premises for safeguarding the sound financial management principle. Incorporating management accounting in the beneficiaries accounting systems may provide primary warranties about compliance to the above mentioned principle as described in the EC Regulation 1605-2002 This study aims to explore some facts in actual accounting management implementation, as a base for future improvements of Romanian ESF beneficiary’s accounting systems ESF financed interventions covers a large range of labor market related services, delivered to the people to increase adaptability and occupational mobility with the aim of allowing or improving labor market access. Even if these services are diverse and delivered by various entities such as government agencies, enterprises or NGO’s, they do have something in common; they cannot generate incomes, but costs for implementing entities. But costs according to the sound financial management principle calls for tracing money with eligible activities using at least some if not all of management accounting concepts. Without some specifics from the donor or a mutual accepted best practice model, most of the ESF beneficiaries are reporting their efforts to actual researches and specialized literature regarding management accounting implementation in services delivering activities. This study was realized in March 2012 by applying an investigation instrument, an on-line questionnaire collecting both opinions and factual data as well to a number of 962 members of a practice community for ESF interventions implementation. This technique was used to test hypotheses regarding the premises for a future improvement of the existing accounting system model by incorporating management accounting. 130 members of this community answered anonymously, revealing an important concern for management accounting usage, even if only less than 15% declared that they organize it continuously. The rest of more than 85% perceive an important concern about tracing money with budget breakdowns and activities within their projects, just about 65% of them considering also that their work is different now in an ESF project than in past situations. More than 83% of the ones organizing management accounting stated that their actual work is different than in past situations. Analyzing all the answers, we may consider that our hypothesis is correct and there is a real opportunity for accounting system improvements, by incorporating management accounting. Some other conclusions about interactions between the accounting and internal control systems may be drawn from the way that community members perceive communication from and to the accountant. Possible weaknesses of the internal control system may lead to unpleasant effects for sound financial management. This study is a part of a larger research “New models of the accounting and internal control systems of ESF financed interventions in Romania”, addressing a qualitative approach of ESF absorption through improved practices. The research is coordinated by Prof. Dr. Tatiana Dãnescu and elaborated by PhD student Cristian Dogar.
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