The document discusses Japan's disclosure of full cost information associated with individual public operations. It notes that while Japan's government financial statements provide comprehensive financial information, they are difficult to use to analyze individual operations or grasp the relationship between outputs and costs. To address this, Japan began in 2014 disclosing full cost information and cost per unit for limited operations. This includes calculating total costs like employee, equipment, and building costs. It provides examples and expected benefits like improved transparency and more efficient administration. Challenges remain in fully allocating costs and expanding to more operations.

1. Disclosure of full cost information associated
with individual public operation
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OECD Public Sector Accruals
Symposium Paris, March 2-3. 2017
Yasuyuki Saka
Director, Public Accounting Office, Budget Bureau,
Ministry of Finance, Japan
Government of Japan

2. Government of Japan
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・Government Financial Statements provide the Japanese
people with a comprehensive information of the
Government’s finance.
Financial Statements under accrual basis
accounting (since FY2003)
Japanese Government Financial Statements
・They provide the financial information for citizens, which
information had not been disclosed enough before.
< Example of information>
・the total value of assets and liabilities
・net liability
・linkage between some part of asset and liability
(ex. foreign currency securities and foreign exchange
fund financing bills)

3. Government of Japan
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―The provided information is difficult to use for
analysis of individual public operation.
―Also it doesn’t allow to grasp the relationship
between the output and cost of the operation.
Problem of “Japanese Government Financial
Statements”
Japanese Government Financial Statements
are difficult to use for the review of individual
public operation

4. Government of Japan
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Existing Policy reviewing System
・Japanese Government implements Policy Evaluation
System as a major tool for reviewing and improving
individual operations.
・However, this system does not have direct link with
Government Financial Statement.
― is reported on cash basis
― only reports direct cost such as operational cost
(=not including employees’ salary for example)
・The cost of each operation unit shown in this system

5. Government of Japan
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Disclosure of full cost information associated
with individual public operation
From FY2014, to enhance financial information
provided for citizens, we have made an attempt to
figure out and issue “full cost information” and “cost
per unit” associated with individual public operation,
although covered operations are limited.

6. Government of Japan
Calculation of full cost
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The way of calculation
(1) Full cost information associated with individual public operation
Each ministry chooses 1~4 operations and calculate full cost
associated with them, based on the figure of Government
Financial Report, by adding up individual costs as follows.
cost of
employees
cost of
equipment
cost of office buildings, etc.
(depreciation cost)
cost of
operation
+ + +
Full cost information
(2)Cost per unit
Cost per unit can be calculated as dividing full cost by figures
such as “number of users”, “number of working days” of the
administrative service.

7. Government of Japan
Examples of full cost information
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( ( A / B ) / 365 )
Example1: Operation of correctional institutions (Ministry of Justice, FY2015)
A Full cost:291,883 million yen
B Number of inmates:62,378 people
Cost per inmate(1day): 12,820 yen
( A / B )
Example2: Passport-related operations (Ministry of Foreign Affairs, FY2015)
A Full cost:19,415 million yen
B Number of passports:3,013,516 books
Cost per passport: 6,443 yen
( A / B )
Example3: Operation of national park management
(Ministry of Land, Infrastructure, Transport and Tourism, FY2015)
A Full cost:12,329 million yen
B Number of annual visitors :33,005,360 people
Cost per annual visitor
: 374 yen

8. Government of Japan
Examples of full cost information
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Example4: Operation of quarantine of entrants
(Ministry of Health, Labour and Welfare, FY2015)
A Full cost:2,811 million yen
B Number of entrants quarantined
:43,907,442 people
Cost per entrants
quarantined :64 yen
( (A1+A2) / B) / 366 )
Example5 : Police operation in Hokkaido Prefecture
(National Police Agency, FY2015)
A1 Full cost (central government)
:3,154 million yen
B Population in Hokkaido
:5,401,210 people
Cost per inhabitant in
Hokkaido(1 day)
: 65 yenA2 Full cost (local government)
:125,492 million yen
( A / B )

9. Government of Japan
Sample image of publications
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Summary of operation
FY20X1 FY20X2 FY20X3
Cost of employees
x x x
Provision for
retirement benefits x x x
…
Cost of equipment
x x x
Cost of consumable
supplies x x x
…
Cost of office buildings, etc.
(depreciation cost) x x x
Cost of operation
x x x
Cost of outsourcing
x x x
…
Full cost X yen
Cost per unit X yen
Revenue associated with
operation (except tax)
X yen
Transition of full cost and cost per unit
0
4,000
8,000
12,000
16,000
0
100,000
200,000
300,000
400,000
FY20X1 FY20X2 FY20X3
(yen)
Cost per unit(right scale)
Full Cost
Revenue associated with
operation (except tax)
Financial Analysis
Details of full cost
(million yen)
(We explain summary of the operation in
2~3 lines.)
(We briefly explain the financial analysis of
transition of full cost from the previous year.)

10. Government of Japan
Expected effect of full cost information
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Detailed disclosure of
full cost information
Improvement of the
transparency of
fiscal information
Expected effects
Analyzing whether the amount
of administrative service
provided for the people and
cost of it are well-balanced, by
continuing to provide full cost
information for years
Comparing content and
amount of cost of employees
or cost of equipment among
the same kind of operations
Utilization (of the
information) as a tool
to make administrative
activities more efficient
and appropriate

11. 11
Government of Japan
Relationship between full cost information and
productivity
- If we consider some “output” number divided by full cost
(“input”) as “productivity”, some of our “cost per unit” number
could be seen as a inverse number of “productivity”.
Ex. Cost per unit of “Operation of correctional institutions”
= full cost (“input”) / number of inmates controlled by
correctional institutions (“output”)
- Although the Japanese government doesn’t intend to
introduce the notion of “productivity” itself by this “cost per
unit” information, we could use it to measure “productivity” to
some extent.

12. Government of Japan
Challenges and future initiatives
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Challenges
Future initiatives
We consider this attempt can be important method for
disclosure of national financial information by making
efforts constantly to improve and develop it. We will
continue this attempt.
―There remains technical problems such as method to allocate
cost of employees or cost of equipment to individual public
operations.
― At present, operations which are chosen to calculate full
cost are extremely limited with regard to overall policies of
Japanese central government.