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Economy & Business, Volume 8, 2014

IMPROVING GOVERNMENT FINANCIAL REPORTING IN ORDER TO INCREASE THE TRANSPARENCY AND EFFICIENCY OF PUBLIC SERVICE DELIVERY
Jelena Poljašević, Dražena Vujičić Radisavljević
Pages: 611-626
Published: 29 Aug 2014
Views: 1585
Downloads: 718
Abstract: The public sector, respectively general government sector, presents a significant part of the national economy. Consumption in the public sector primarily depends on its size and the effectiveness of management. Irrational resource management has a number of negative implications for the country as a whole; increasing in public expenditure leads to an increase in the fiscal burden of population and economy. The public sector is required to achieve certain objectives with lower costs. Traditionally performance measurement moves to the efficient and effective delivery of public services. An appropriate accounting system is required to be designed to provide overall information about all aspects of government activity in order to make political, economic and social decisions and evaluation responsibilities of public managers. These objectives can be achieved only by accepting the full accrual basis of accounting. The adoption of the accrual basis, incorporating the budget into the accounting system and harmonization of accounting and statistical bases are the main features of new, improved government accounting system. This system provides an information basis for the presentation of such financial statements which include complete information about the reporting entity in a manner that meets the objectives of financial reporting and enables decision-making and evaluation responsibilities. Since the goal of government entities is not to make profit, but to provide services to citizens in order to achieve these objectives, it is necessary to measure and report about success of providing established services beside financial, for the evaluation of the impact of current decisions on future generations, today, presentation of report on fiscal sustainability is required. New Public Management and accrual accounting base are the best way to improve public sector management and raise the efficiency and transparency, since the decisions of public managers are based in most cases on the reports that are the product of accounting.
Keywords: government accounting system, public sector, financial reporting, the cash and accrual basis of accounting, statistical bases of reporting, budget
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