The report examines the use being made of consolidated government accounts in a sample of countries which prepare them. It highlights the importance of the information they provide to support policy decisions, fiscal transparency and accountability before making recommendations to promote their wider use in support of sustainable public services.
A key finding was that a combination of overly complex financial reporting and a lack of financial literacy among parliamentarians is making it more difficult for policy makers to take advantage of the potential benefits available from consolidated government accounts.
Consolidated, accruals-based government accounting has been promoted by many commentators as contributing to macroeconomic policy-making, enhancing parliamentary scrutiny and accountability, and facilitating a more joined-up approach to government by integrating accounting information systems.
But such theoretical claims have not been tested against the reality of how such accounts are being used, and who is using them.
Whilst there are notable variations in the uses and users across the countries analysed, the findings of this study suggest that a number of unifying themes can be drawn.
At the highest level the move towards accruals-based consolidated accounting has been an effective catalyst to transform the standards of accounting practice across governments.
Consolidated government accounting based reforms have further highlighted limitations in existing systems of accounting and accountability, such as illuminating underreported liabilities or inconsistent accounting, which has in turn raised awareness amongst government officials and auditors of the need for continuous improvement.
To make best use of the information provided by consolidated government accounts, the review make a number of recommendations including:
The need to promote the potential information benefits available to politicians and key government officials alongside improving the financial literacy of these users to facilitate effective scrutiny;
Importance of incorporating budgetary and performance reporting to provide a complete picture rather than just viewing the preparation of consolidated accounts as a compliance exercise;
Both parliament and government need to be more proactive in using consolidated accounts to inform policy development as this supports spending decisions and highlights the extent of intergenerational fairness;
These accounts can prove to be a useful catalyst to drive change and it is important that parliamentary committees scrutinise consolidated government accounts to ensure recommendations are followed up;
To improve the usability and accessibility of accounts further consideration should be given to simplifying the presentation of reports while retaining high-level and good quality information; and
Public trust in the information provided requires the consolidated accounts to be free from audit qualification and produced in a user friendly format soon after the year end.