New government finance system launched after seven years
Resource accounting for central government came into full force last week, replacing the old system of cash accounting.
The switch, which has taken over seven years to implement, marks the biggest overhaul of financial management in Whitehall since Gladstone’s reforms in the mid-1860s.
The system is designed to ensure the full economic costs of government activity are measured in a way similar to the private sector by including non-cash costs and measuring the full cost of holding and using assets.
As part of the process, the government has been forced to value all its assets. The results will be published in the government’s Register of Assets. Officials at the Treasury describe the move as a significant milestone, saying there has been a quantum leap in departments’ ability to produce and use financial information.
However, Sir John Bourn, head of the National Audit Office, warned there is some way to go before the new system was functioning properly.
In his last general report, Sir John said: ‘I remain concerned at an over-reliance on too few key personnel and a lack of technically competent supporting staff in departments to prepare accounts.’
MoD accounts full of errors: www.accountancyage.com/Public+Services/1117152.