Money calculator

Accountability & transparency vital in public sector finances

By: Gillian Fawcett, Head of Public Sector, ACCA
Published: Tuesday, December 24, 2013 - 07:00 GMT Jump to Comments

There is a critical need to build financial capacity and expertise in the public sector in order to ensure openness, trust and accountability in its finances.

With government’s spending on public services accounting for more than one-third of GDP in most countries around the world, public sector finance professionals have a role as important as custodians for the reputation of this vital sector.

Globally, the public sector is rapidly changing and the demands on public services are growing, together with the tax bill.

At a time when austerity measures are still biting and public services across Europe are facing huge cuts, a common challenge is the need to grow financial expertise and capacity and retain skills within the public sector.

This is particularly valid in the UK, where most public services are cutting out on average 25 per cent of their budgets.

It is not just austerity that public services have to contend with either. The toxic mix of ageing populations, rising healthcare costs, reform of welfare support, and infrastructure costs are all complex challenges that governments are attempting to navigate.

This is at a time when public expectations of public services are growing along with a desire for transparency and accountability in the way public funds are handled.

Without financial expertise, it is difficult for countries to develop the effective public financial management that will support growth. 

An absence or lack of accountants also makes it difficult for governments to implement effective financial reporting based on accounting standards, as only technically trained staff can understand and apply the standards.

At ACCA’s recently held fifth international public sector conference Financial Reporting for an Open World, Anthony Harbinson, deputy president of the Association of Chartered Certified Accountants, said there was a view “that the public sector is plagued by poor institutional fiscal management”.

This, he says, is “exacerbated by issues of poor public financial management and reporting”. 

In economies where accountability structures are underdeveloped, the above could be held to be true, especially where there appears to be a lack of political interest in reform.

Although trust in public services is falling in some areas, many countries in the developed and developing world are making significant improvements.

However, much more needs to be done in improving many aspects of public financial management and financial reporting.

There is an urgent need to build financial expertise in the public sector. Accountability and transparency are central to public sector finances – only with this expertise can governments ensure openness and trust.

Gillian is Head of Public Sector for ACCA Global responsible for developing international policy on technical matters affecting finance professionals in public services

The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of The Information Daily, its parent company or any associated businesses.

Comments

Latest

Small and medium enterprises (SMEs) are more likely to employ low skilled workers and others from disadvantaged…

Scientists have discovered four species of Brazilian insect where the female possesses a penis and the males possess…

Stimulating the spine with an electrical current during physical therapy could in the future help people paralysed…

An Earth-sized planet has been found in the habitable zone of its star for the first time, according to sensational…

HC2014

Middle-aged people who experienced bullying in childhood and early adolescence disproportionately report suicidal…

An organic soil frozen at the bottom of the Greenland Ice Sheet has been discovered after 2.7 million years, offering…

This year's annual education conference from UK teachers' union NASUWT is set to pull apart four years of Michael…

The government favours potentially ineffective regulation of shale gas extraction over a real exploration of its…

HC2014

A breast cancer sub-type which is notoriously hard to detect has now been specifically associated with a genetic variant.

The Science Capital Birmingham event brings data and business experts together to discuss exploiting the commercial…

A new form of MRI scan that can show ‘brown fat’ in a living person could help in the development…

A severe eye infection called microbial keratitis can be caused by bacteria that survive for four hours in lens solution.