Responding to COVID-19: insight, support and guidance
These days the debate on local authority accounts closedown is essentially around two things. The first is the extent to which financial statements should simply be a discrete ‘end in itself’ rather than an expression of modern progressive public financial management. The second centres on how finance departments, under the constant strain that austerity measures bring, cope with the challenge of the demand for instant information and the use of more innovative means of financial management and accounts closedown.
In a simplistic practical sense, prompt production does ease the problem of managing competing demands for scarce staff resources and historically it lessens the impact of old year work on the programming and performance of new year work. Prompt closure also means that key financial decisions can be taken earlier on the basis of known facts about the organisation’s financial position.
Since Regular as Clockwork, local government has continued to carry out more financial accounting work during the year, streamline reporting and bring forward their closedown timetables under more ambitious publication dates.
The common characteristic in the undoubted improvement tends to be more progressive statutory deadlines. However, a number of milestones have emerged, which has made it imperative that all authorities review their arrangements for producing financial statements. For many, it means substantial and urgent improvements in their performance.
It is noteworthy that most practical developments in accounts closedown have revolved around the pace or speed of disclosure. While the local authorities of the past could focus upon speed in itself, for local authorities of the present and future, speed is a mere essential that, in the world of digital media, is the accepted norm. This means that any focus on improving prompt disclosure will merely get us to where we should have been, not to where we want to be.
This article is an extract from a comprehensive review and thought leadership paper written by CIPFA and EY; more details can be found at www.cipfa.org/closedown.