Audit – All change at Whitehall.

Driven by the Treasury, government accounting practices are being radically altered to bring them more in line with private sector accounting.

The project, known as ‘Whole of Government Accounting’, has involved a root and branch shake-up in the way the public sector accounts for itself.

This, combined with the introduction of resource accounting and budgeting in central government, means public sector accountants and auditors are set to live in interesting times.

Ian Carruthers, head of the Treasury’s WGA team, last week spelt out the implications for the profession at the CIPFA national conference, setting out the timetable for implementation.

The WGA are commercial-style accounts covering the whole of the public sector.

Like departmental resource accounts, WGA will be produced on an accruals basis and use generally accepted commercial accounting standards and practices, adapted where necessary for central government.

The aim will be to produce a consolidated set of accounts, presenting a ‘true and fair’ view of government financial activities.

The first step towards creating this consolidation will be the introduction of central government accounts, which will be dry run during 2001-02 and 2002-03.

But WGA will not be achieved until the accounts of all public sector bodies converge.

The Treasury has said it is planned that local authorities will be included within WGA when the coverage of the accounts is extended to the whole of the public sector. However, the Treasury added there would be number of significant issues to be addressed before a final decision on the expansion could be taken.

There were still important differences between the central government ‘resource accounting manual’ and the local government ‘statement of recommended practice’. Indeed, there are major departures between UK GAAP and both the RAM and SORP.

But it will not be just the technical changes that will present challenges – accountants and auditors in the public sector will also face significant cultural changes as well, some of which will be advantageous.

As John Stanford, assistant director of CIPFA’s policy and technical directorate says: ‘There will be enormous challenges for public sector accountants, but great benefits as well. It will enhance their “portability” as they will no longer be hamstrung by practices which are at the core of their own daily work but differ from those they will find elsewhere in the public sector.’

Details of the Whole of Government Accounting programme can be found at

CIPFA’s website, also carries detailed information on the government programme.

Related reading