Review of 1999: Resource Accounting and Budgeting

The government is back on track to meet its targets to replace its existing cash basis of accounting to a more commercial accruals approach. The process, overseen by Andrew Likierman, head of the Government Accountancy Service, attracted some controversy but all 49 departments have shaped-up during the year.

The news that departments had managed to meet the deadline for preparing the first set of practice accounts marked a significant victory for the accounting service. The next stage of the timetable has already begun with the NAO undertaking the first audit of departments’ dry-run accounts for 1998/99.

From the dry-run accounts will emerge the first published accounts for 1999/2000, which will be followed by resource budgeting for 2001/2002.

An additional requirement will see departments produce output and performance reports, providing a link between analysis of income and expenditure and the ability to show objectives have been achieved.

During the spring, the Ministry of Defence led the way on RAB in what turned out to be a turbulent year for the department. MoD staff studied military operations in the Balkans region to see how the system would operate when it goes live in 2001.

Although accountants did not don hard-harts and camouflage, financial planners in Whitehall watched NATO’s actions against Serb targets as an aid to future planning.

Private sector involvement in the process was also integral. Consultants were employed to assist departments to adapt to new working practices.

Private sector staff were also employed by Whitehall following several NAO reports which criticised the government for failing to employ enough qualified accountants.

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