strategy

Improving financial reporting in the public sector

Synonyms:
Improving financial monitoring of government agencies
Correcting inaccurate public finance data
Providing public finance statistics
Improving public finance statistics
Clarifying budgetary procedures in the public sector
Offering adequate accounts of public finances
Providing sufficient transparency in public finances
Description:
If state-owned enterprise finances are to be made more transparent then there needs to be up-to-date data on actual and planned spending and revenues and on changes in assets and liabilities. Such data should be organized in a systematic accounting framework and assembled regularly by a central agency. Once established, such a reporting system is an invaluable tool of fiscal analysis and policy. Accurate financial reporting requires competent auditing, as does creation or maintenance of good internal financial management and also public assurance that funds collected by state-owned enterprises are not misused.
Implementation:
Systematic accounting standards already applying in developing country utilities which receive foreign assistance or loans can, in principle, be adapted without much difficulty to apply to other state-owned enterprises. This, together with the use of a common fiscal year for all public bodies, facilitates the consolidation of public sector accounts.

It is often useful to separate commercial and noncommercial public entities, integrating noncommercial activities into the budget. This allows enterprises that are able to finance themselves to be monitored differently from those that continue to depend on budgetary transfers.

It may be necessary temporarily to bring in foreign firms for initial rounds of audit and for local staff training, since public audit institutions and the domestic audit profession are often too weak to carry out radical reform of state-owned enterprise audit procedures.

Subjects:
Statistics
Data, codes
Finance
Accounting
Agencies, dealers
Inspection, tests
Measurement
Government
Public
Cybernetics
Reform
Type Classification:
F: Exceptional strategies