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This presentation by Ken Warren was made at the 14th Annual OECD Public Sector Accruals Symposium, Paris 3-4 March 2014. Find out more at http://www.oecd.org/gov/budgeting/14thannualoecdpublicsectoraccrualssymposiumparis3-4march2014.htm
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© The Treasury
TIME TO LOOK AGAIN AT ACCRUAL BUDGETING
Ken Warren
Chief Accounting Advisor New Zealand Treasury
© The Treasury
Designed for decision-making
• Generally Accepted Accounting Principles (GAAP)
• Principles for the faithful representation of financial results for accountability purposes and to provide relevant information for decision-making purposes.
© The Treasury
Arguments to use GAAP in budgets:
• More consistency • Greater relevance • Better accountability • Greater Coverage
© The Treasury
Arguments Against
Too complex BUT no worse than cash
Overloads budgeting BUT can simplify
Doesn’t fit with rules BUT and rule for surplus/deficit
Puts cash control at risk BUT strengthens cash control
Integration with appropriations BUT variety of appropriation approaches
Requires depreciation funding BUT it allows doesn’t require that
More prone to manipulation BUT there are standards
More pressing problems BUT foundational issue