Public sector and third sector category
As the UK’s economics and finance ministry, HM Treasury (HMT) is responsible for formulating and implementing the government’s financial and economic policy. HMT has been trying to consolidate a vast number of audited accounts from the many thousands of organisations across the public sector. It was important to provide transparency over public finances, to give accountability over how this money is spent, and to enable the public and stakeholders of all types to examine and, over time, help shape the priorities through which public servants create value for society.
There was a need to create Whole of Government Accounts to provide transparency, accountability, comparability, and a better decision-making process from among the most complex and logistically challenging accounts in the world. This involved creating a consolidated set of accounts for an entire public sector encompassing over 6,000 entities.
It has been an evolutionary process and the 2014/15 financial statements were the first to reduce the number of qualifications. By achieving this, HMT hopes to increase public trust and perception of the accounts and help focus attention on underlying analysis rather than technical challenges. The use of improved data should help manage public expenditure. For the first time, HMT has a complete picture of all of the government’s assets and liabilities. That simply didn’t exist before. It represents a fundamental change in the way public finances are reported to Parliament and the public.
The time it took to produce the accounts and trying to reduce that is a major challenge. Another is the complex and challenging task in getting to grips with how different public sector bodies account for transactions.
The Whole of Government Accounts project is an accounting tour de force. The production of a single consolidation incorporating all the activities of the UK public sector is the culmination of 15 years’ work and is a significant technical feat.