Posted by Michel Lazare
The YouTube video below is a presentation on long-term fiscal issues in the US made by David M. Walker, the US Comptroller General and head of the U.S. Government Accountability Office (GAO).
While the gist of David Walker's presentation is about long-term fiscal sustainability issues in the US, it is also quite interesting from a pure institutional PFM perspective.
First, David Walker clearly shows, at the beginning of the presentation, the difference between cash and accrual: while the US position has improved in FY2005 on a cash basis it has sharply deteriorated on an accrual basis according to David Walker's estimate (for more information on cash versus accrual, see the post published by our PFM Blog colleague, Abdul Khan: "Transition to Accrual Accounting -- IMF Technical Guidance Note"); and
Second, this presentation clearly illustrates the lesser known of the three roles of supreme audit institutions (SAI) like the GAO. As David Walker puts it in some of his presentations, SAIs have three key roles:
- Oversight: SAIs assess and certify the government fiscal accounts;
- Insight: SAIs perform value for money audits, assessing the performance of government programs and agencies; and
- Foresight: SAIs highlight the long-term implications of ongoing policies and their sustainability.
Not all SAIs have developed these three roles. Some of them, in particular, in the least developed countries are focusing entirely on oversight; most of the SAIs have nevertheles, to some degree at least, started developing the insight role; but just a few, and the GAO is at the fore front, have significantly developed the foresight role.
More on David's Walker's views on the US fiscal policies? Here is a video from David Walker's interview by CBS's "60 Minutes" journalist Steve Kroft.
Thanks to The Bayesian Heresy blog for pointing the first of the two videos above.
