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Manual on Sources and Methods for the Compilation of COFOG Statistics

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Manual on Sources and Methods for the Compilation of COFOG Statistics Manual on sources and methods for the compilation of COFOG statistics CLASSIFICATION OF THE FUNCTIONS OF GOVERNMENT (COFOG) 2019 edition Manual on sources and methods for the compilation of COFOG statistics COFOG of compilation the for methods and sources on Manual edition 019 2 MANUALS AND GUIDELINES Manual on sources and methods for the compilation of COFOG statistics CLASSIFICATION OF THE FUNCTIONS OF GOVERNMENT (COFOG) 2019 edition Manuscript completed in September 2019 Printed by the Publications Office in Luxembourg The Commission is not liable for any consequence stemming from the reuse of this publication. Luxembourg: Publications Office of the European Union, 2019 © European Union, 2019 Reuse is authorized provided the source is acknowledged. The reuse policy of European Commission documents is regulated by Decision 2011/833/EU (OJ L 330, 14.12.2011, p. 39). Copyright for the photographs: Cover © LovArt/Shutterstock For any use or reproduction of photos or other material that is not under the copyright of the European Union, permission must be sought directly from the copyright holders. For more information, please consult: https://ec.europa.eu/eurostat/about/policies/copyright Collection: Manuals and guidelines Theme: Economy and finance Print: ISBN: 978-92-76-09696-2 ISSN 2363-197X doi: 10.2785/498446 KS-GQ-19-010-EN-C PDF: ISBN 978-92-76-09695-5 ISSN 2315-0815 doi: 10.2785/110841 KS-GQ-19-010-EN-N Preface The compilation of government finance statistics (GFS) in the European Union has seen a rapid development in terms of methodological rules and practices within a relatively short period of time. The main impetus has come from new EU policies, for which more timely and complete statistics based on a common methodology are necessary. The underlying methodological framework has changed to the European System of Accounts (ESA 2010), although the functional classification (COFOG 99) has remained stable. User needs for government expenditure statistics according to function have grown rapidly in recent years. Policy makers and analysts have increasingly needed to assess the type of the expenditure, and this has meant more demands on data suppliers in terms of both quality and detail of these statistics. EU Member States have to compile annual data in accordance with the classification on COFOG (Classification of the Functions of Government), by ESA economic category, and report them to the European Commission (Eurostat). The reporting of COFOG by EU and EFTA countries has been developed in a relatively short time- frame by national compilers. The revised and more detailed reporting of COFOG divisions has been implemented since 2004 and the 2007 revision of the ESA 95 transmission programme allowed for the voluntary reporting of COFOG groups. With the introduction of ESA 2010 reporting in 2014, the reporting of COFOG groups for the general government sector became compulsory. By then, all EU and three EFTA countries were in a position to fulfil this requirement. This Manual on sources and methods for the compilation of COFOG statistics is in its third edition, the first having been produced in 2007 and the second in 2011. The structure is essentially the same as before, covering user requirements, the analytical framework, methodological guidance, links with other international statistics, and countries’ compilation practices. However, many detailed parts have changed reflecting the need to update and clarify the original texts. Moreover, further methodological guidance is given by the addition of new case studies discussed and agreed by the Task Force on COFOG. The previously developed 35 case studies were reviewed for their compatibility with ESA 2010. Additionally, 16 new case studies discussed in the COFOG TF in recent years have been added. Reporting countries have updated national recording practices following the development of COFOG group data in all countries, the methodological changes associated with ESA 2010 as well as the development of new data sources. On behalf of Eurostat, I would like to thank all the participants in the Task Force as well as other national and international contributors for their invaluable guidance in the updating of this manual. Luca ASCOLI Director Manual on COFOG statistics 3 Acknowledgements Editors Eurostat Vaida Savickaite, Laura Wahrig Nalroh Ltd Helen Shanks, Martin Kellaway Daniela Collesi Assistance Eurostat Kornelia Bezhanova, Lukas Rucka, Reuben Seychell, Yordan Yordanov Belgium Kris Van Cauter, Claude Modart Bulgaria Elena Bakalova Czechia Lucie Smejkalová Denmark Irina Bernstein, Niels Madsen Germany Marion Eberl, Pascal Schmidt Estonia Maria Vassiljeva, Elo Parveots Ireland Jason Sibley Greece Kostas Chrysis Spain Marta Obrero Loma France Camila Marin, Emilie Rodriguez Croatia Valentina Hudiluk, Suzana Šamec Italy Maria Liviana Mattonetti, Daniela Collesi, Daniela Versace Cyprus Despina Kyprianou, Antigoni Christodoulou Latvia Julia Borisova Lithuania Tomas Paulauskas Luxembourg Anne Greiveldinger Hungary Anita Juhász, Gizella Csonka Malta Mark Galea, Clive Sacco Netherlands Robin Milot, Léonard Haakman Austria Hermine Chromy Poland Mariusz Madejski Portugal Nuno Sergio Barros Romania Oana Nastasescu ,Georgeta Mondiru Slovenia Marjana Klinar Slovakia Margita Kupková, Jana Schüllerová, Albert Antolik Finland Anu Karhu, Atte Viranen Sweden Marcus Halvarsson, Daniel Johansson, Johan Norberg United Kingdom Katherine Mills, Bob Richards Iceland Gunnar Axelsson Norway Frode Borgås Switzerland Adrian Brülhart, Peter Steiner, Lea Bürgy The COFOG Task Force & EDP Statistics Working Group and Eurostat collegues from satellite accounts 4 Manual on COFOG statistics Contents Contents Preface .......................................................................................................................................... 3 Acknowledgements ..................................................................................................................... 4 Contents ....................................................................................................................................... 5 1 Background and purpose.. ............................................................................................... 9 1.1. Introduction ....................................................................................................................... 9 1.2. Existing guidance in this field ......................................................................................... 9 1.3. Work of the Task Force on COFOG ............................................................................... 10 1.4. Users’ requirements ....................................................................................................... 11 2 Analytical framework.. .................................................................................................... 19 2.1. The ESA 2010 Transmission Programme and the publication of government finance statistics ..................................................................................................................................... 19 2.2. COFOG and other functional classifications ............................................................... 23 2.3. Definition of the general government sector ............................................................... 25 2.4. Definition of government expenditure .......................................................................... 26 2.5. Accounting methods ...................................................................................................... 34 2.6. Legal background ........................................................................................................... 36 2.7. COFOG classification structure .................................................................................... 36 2.8. Correspondences among COFOG classification and economic transactions ......... 37 3 Methodological guidance.. ............................................................................................. 41 3.1. Multipurpose functions .................................................................................................. 41 3.2. Recording interest by function (including FISIM) ........................................................ 42 3.3. Consumption of fixed capital by function .................................................................... 43 3.4. Recording of consumption of fixed capital on own account R&D production ......... 45 3.5. Allocation of certain social contributions and benefits .............................................. 46 3.6. Individual and collective final consumption expenditure ........................................... 47 3.7. Social transfers in kind vs. individual consumption ................................................... 48 3.8. Estimation methods for provisional year n-1 ............................................................... 49 3.9. Reporting of negative values ......................................................................................... 50 3.10. Assigning an appropriate function: case studies ....................................................... 51 4 Links between COFOG and other international statistics.. ........................................ 73 4.1. Science and Technology Indicators .............................................................................. 73 Manual on COFOG statistics 5 Contents 4.2. Environmental accounts ...............................................................................................
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