Public sector outshone by its private cousin

The new body, comprised of those finance directors in Whitehall and elsewhere
who control the biggest chunks of taxpayers’ money, will be faced with some
scepticism about governance and control issues in the public sector.

The challenge they face is to instill faith in the integrity of government
accounting. Mary Keegan, in her interview on page 15, defends against criticisms
that the public sector is not up to the standard of its private sector
counterparts. Government auditors pick up small mistakes and regard them as
material; private sector auditors do not, she argues.

Looking at the list of achievements in public sector accounting, you could be
forgiven for wondering what all the fuss was about. Whitehall has moved to
resource accounting. Its accounts are now slicker, more professional and more
transparent than ever before. But even in its successes, government accounting
reveals how far it has to go.

The fact that there weren’t many qualified accountants in Whitehall until now
is shocking enough. And the creation of a Government Hundred Group betrays a
view that private sector accounting is better. Imitation is the sincerest form
of flattery.

The most damaging stories on government accounting emanate from stories such
as those at the DWP, where the accounts have been qualified for nearly 20 years.
The Government Hundred Group should think about what it plans to do about that.
If it believes that the problems are overstated due to the auditing methods of
the NAO, perhaps those should change. Otherwise the public sector, by reputation
if not reality, will continue to be the private sector’s poorer cousin.

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