This presentation was made by Delphine Moretti, OECD Secretariat, at the 18th Annual Meeting of OECD Senior Financial Management and Reporting Officials held at the OECD Conference Centre, Paris, on 1-2 March 2018

1. GETTING ADDED VALUE
OUT OF ACCRUAL REFORMS
Delphine Moretti
Senior Policy Analyst
Budgeting and Public Expenditure Division
Public Governance Directorate

2. 2
The promises of accrual reforms have not
been yet fully realised
0
10
20
30
40
50
60
Greater
Transperency
Enhanced
accountability
Better
Financial
Analysis
Information
on full cost of
goverment
operations.
Increasing
awarness on
public
finances
Better
decisions on
assets and
liabilities
Efficeny of
business
processes
Percentage
Percentage of OECD-countries that asses that accrual reform
objectives have been fully realised (2016 OECD Accruals Survey)

3. 3
Consensus on achievement of “true and fair
view of public finances” objective
• Reforms profoundly improve the range of and manner in which
financial transactions are reported in the public sector and
contribute to the professionalization of finance function…
• … But may also bring to light previously undetected weaknesses in
financial processes.
• Need to prepare stakeholders to initial audit qualifications and gain
support from experts groups.

4. 4
Accrual accounts are a building block for
other fiscal reports
• Limited financial
analysis…
• But data from accrual
accounts is used for
preparing other fiscal
reports and increase the
overall reliability of fiscal
reports.
• Fiscal risks management
is an area where further
outcomes could be
achieved.
Fiscal framework in the United Kingdom

5. • Not unusual for countries to combine:
– Cash/commitment for budgeting
(spending authorisations);
– Modified accrual (ESA or GFSM) for
fiscal targets/headlines;
– Accrual (national or IPSAS) year-end
reporting.
• Leading to potential confusion in
parliament on usefulness of each set of
accounts (budget reports, financial
statements and national accounts).
• Solutions include harmonisation,
alignment but also assistance on how to
use F/S for scrutiny.
5
Parliamentary work is done with various sets
of accounts
38%
46%
15%
Cash basis
Modified
accrual basis
Accrual basis
Headline measure or Fiscal target
(for 10 countries using accrual accounting)

6. 6
Improvements to financial communication are still
needed
UK: Snapshot of WGANZL: Snapshot the Financial
Statements of the
Government
• Management commentaries, snapshots, etc. widely used.
• “Translating” technical terms in to a language that is relevant to
policy makers and the general public could be a next step.

7. 7
Accrual reforms delivered mixed outcomes in
resource management
• Concrete outcomes in some
countries:
– in virtually all countries,
improvements in cash and other
assets and liabilities management
(e.g. defence inventories)
– in some countries, introduction of
capital charges and full costs used
for determining service pricing.
• Limited development of cost
accounting and benchmarking
of government services.

8. 8
Accrual data considered useful for monitoring
of individual entities
• Accrual information is clearly
useful for the monitoring and
management of individual
entities (agencies, local
governments).
• Prevents over-commitment,
and allows for comprehensive
oversight of financial
performance
Source: New South Wales Treasury Corporation (2013), Financial
Sustainability of the New South Wales Local Government Sector
Example: Scoring the financial
sustainability of local governments with
accrual data

9. THANK YOU FOR YOUR ATTENTION
http://www.oecd.org/gov/budgeting/
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