Taxpayer time and money spent on producing Whole of Government Accounts (WGAs) may not be very useful, according to new research. Since the 1980s, democracies across the world have invested in reporting their spending as a single consolidated set of figures. Research commissioned by the Association of Chartered Certified Accountants (ACCA) is looking at the literature on the use of government consolidated accounts across the UK, Australia, New Zealand, Canada and Sweden to explore whether they are making their activities and spending more transparent and essential users are getting the information they need. The in-depth review is being carried out by Durham University research teams. While WGAs have been promoted as encouraging greater transparency and accountability by setting out single bottom line figures for what the public sector owns and owes, little is known about how useful these consolidated reports are to a range of users. The key findings of the initial research suggest that while governments believe that consolidated accounts will be of benefit – they have yet to convince potential users- including many in government. In the UK the available literature was found to focus on how WGAs could be used, rather than on their usefulness. In Australia it was found that financial markets, credit ratings agencies and analysts make little use of WGAs. Dr Danny Chow of Durham University, who is leading the research, said: “There is little academic literature or research on the use of consolidated public sector accounts - despite its importance - and is only emerging for some countries such as the UK, Australia and New Zealand. “We believe that may be because there have been problems in speaking to core decision makers and because it has been overshadowed by other issues in public sector reforms. “This research aims to get to the heart of the issue of whether consolidated accounting meets the real world needs of those who could and should be using them.” For example, in Canada, government-wide consolidated financial statements is mainly used for accountability reporting to Parliament and are not used , or perceived useful , for managerial planning, decision-making and control purposes. The second part of the research, which is now underway, will look at the pressures that each of the governments face in producing consolidated accounts and why they are doing it. The research will also identify who uses WGAs and how they are affected by the changes in approach which may be adopted as a result of a change in political power along with institutional changes. Gillian Fawcett, Head of the Public Sector at ACCA, said: “Governments are focusing on producing consolidated reports for users they assume will be interested. But to date, there has not been any research into who really uses the reports and what information they actually need. “Equally, nobody can be sure whether the end-users of government accounts are able to understand and interpret them and are therefore able to demand change where it is needed. This ongoing research aims to identify those users and ask them what they really want from government accounts.” She added: “Anyone who wishes to contribute to that research can contact me at gillian.fawcett@accaglobal.”
Posted on: Sun, 05 Oct 2014 19:36:46 +0000
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