Enhancing the Role of the Accountant General’s Department in the Caribbean - A Challenge from the Sidelines!

Posted by Mark Silins

In the Caribbean, and in many English-speaking countries for that matter, the State Treasury is called the Accountant General’s Department (AGD). In this post I will explore what the main tasks and functions of the AGD should be, and what minimum functionality should be expected from them.

The AGD is, one could say, the engine room that supports effective public financial management, or at least it should be. Ensuring the completeness of all financial information in the accounting system each day ensures that key financial reports are available to support timely decision making. The AGD is also the processing centre for expenditures and receipts.  Its systems should support the proper classification of all financial stocks and flows of government and provide reports on these for all different stakeholders, including parliamanent.   

 

Compiling Government Finance Statistics (GFS) -- an IMF Fact Sheet

Posted by Sagé de Clerck, IMF Statistics Department

The IMF has prepared a Fact Sheet describing what is involved in compiling government finance statistics (GFS), and how these data relate to the fiscal cycle, source data, and accounting systems. GFS are key to economic analysis and also a major input for national accounts statistics. GFS facilitate consistency with other macroeconomic datasets and enhance international comparability.

Data users are often faced with a myriad of fiscal data: from the budget process, from various specialized budget reports, or from audit reports, and users can easily get lost in the data labyrinth. The Fact Sheet will help users of fiscal data better understand these differences. Compilers of GFS will also find it helpful to understand differences among these various datasets and how they relate to each other. Where necessary, GFS compilers should publish reconciliations of the data to instill confidence in the reliability of the data.

Frequently asked questions from users suggest a need to clarify the different types of data and their applications. For example, “central government budget data” are used in policy decisions at a national level while “budget execution reports” are useful to monitor progress with implementing these decisions. In contrast, to capture governments' involvement in the production and growth of the economy, as measured in the national accounts, a more comprehensive measure covering the "general government" is required.

Germany: Ministry of Finance's Task Force Recommends Introduction of Performance Budgeting and Accrual Accounting

Posted by Michel Lazare

A few days ago, our FAD colleague and PFM Blog author Marc Robinson published a short article in IMFSurvey Magazine titled "Major Reforms for German Budget System." Here is a summary of the key points; the full text of the article is accessible by clicking here.

The German Ministry of Finance's Budget and Accounting Reform Task Force, who was assisted by staff of FAD, recently recommended "the introduction of product budgets--often known elsewhere as programs. The intention is to focus greater attention in the budget formulation stage on choices about how much money is allocated to" various outputs.

"Under the task force's proposals, the product budgets would not in the first instance be used for parliamentary budget appropriations. The idea is that they would initially be used [...] in formulating the budget. The logical next step would, however, be to shift the annual budget law also onto programmatic basis."

From Line-item to Program Budgeting - Opening the 'black-box' of spending

Posted by Bill Dorotinsky

A perennial question of annual public budgeting for Ministries of Finance and legislatures, and the general public, is "What are we getting for the money?" It is the proverbial "black box" of annual spending, where funds are allocated by traditional line-item budgets to agencies, but there is no sense of what the money actually achieves. While under line-item budgeting, budget offices know what inputs are being purchased, there is no clear indication of what activities, purposes, or objectives -- or ultimately outputs or outcomes -- are being purchased, or how government policies translate into spending. A common first step for many countries towards opening the black box of spending is to adopt a program classification of spending, and introduce program budgeting. A program classification is often thought of as a first step in introducing a performance orientation into the budget process.

While sounding like a very dry, technical exercise, the reality of successful introduction of program budgeting is more complex, involving elements of change management across government. Various governments across the globe have been introducing program budgets over many decades, including within the past decade in Russia, Brazil, and more recently, the Republic of Korea (RoK). A recent book by the Korean Institute of Public Finance and the World Bank, From Line-item to Program Budgeting (John Kim, Editor; Seoul, 2007), summarizes some key lessons from the global experience, and offers practical advice to countries embarking on this journey.

Transitioning to accrual -- IFAC resource

Posted by Bill Dorotinsky

As a follow-up to our October 15 blog "Transition to Accrual Accounting," a reader suggested we also highlight the International Federation of Accountants(IFAC) International Public Sector Accounting Standards (IPSAS) research paper Study 14 "Transition to the Accrual Basis of Accounting: Guidance for Governments and Government Entities (second edition)" (December 2003). This authoritative, 268-page guide covers issues of managing the process of change, skills assessment and training, financial reporting issues, as well as coverage of specific topics such as treatment of cash and intangible assets. This guide is available for free electronic download at the IFAC web bookstore link above.