Source · Select Committees · Public Accounts Committee
Recommendation 5
5
The Treasury has aspirations to standardise financial reporting across government but has not set out...
Conclusion
The Treasury has aspirations to standardise financial reporting across government but has not set out how this will make the WGA more useful or accessible. The Treasury faces difficulties when trying to categorise transactions and balances reported by over 9,000 organisations into robust categories that are useful to the user. The Government Finance Function within the Treasury is undertaking work to align finance processes across government such as expense claims. It is also planning to standardise how Departments categorise their balances and transactions, which should reduce the significant manual work required to produce the WGA. We welcome all efforts to enhance the quality of information provided in the WGA and support the Treasury’s work to achieve this aim. We previously recommended Whole of Government Accounts 2018–19 7 that financial reporting within the WGA could be improved by providing more detailed disclosures, in addition to that required by financial reporting standards. We expect the work of the Government Finance Function could result in the WGA including more useful information for users, such as much more detailed analysis of how taxpayers’ money is spent on the purchase of goods and services, the costs across government of EU Exit and the cost of COVID-19. The Treasury’s plans to publish underlying data alongside the WGA is an innovative solution that could further improve transparency and accessibility. Recommendation: The Treasury should report against the progress of the work carried out by the Government Finance Function in the WGA given how key it is to improving both the production of the WGA and the insights it can provide. It should ensure its programme includes and accelerates plans to implement tools and processes to improve the information it gathers on cross-government issues such as EU Exit and COVID-19.
Government Response
Acknowledged
HM Government
Acknowledged
5.1 The government agrees with the Committee’s recommendation. Target implementation date: Autumn 2021 5.2 The Government Finance Function is developing a performance framework to measure progress against the strategic deliverables it set out in its 2019 strategy and to drive enhanced insight across central government. The function will begin reporting in April 2021 and will use the performance framework to measure the overall impact of the function across the core finance activities set out in the Government Finance Standard. The convergence of finance processes and data standards to improve the comparability of data across departments is integral to this, enabling greater consistency and comparability of finance information. Additionally, minimum standards for board pack management information have been agreed by the Finance Leadership Group and are in the process of being embedded by departments, with a sub-set of early adopters due to implement in April 2021. HM Treasury is also piloting certified data analytics training in partnership with the Institute of Chartered Accountants in England and Wales (ICAEW) to enhance data analytical and visualisation skills. 5.3 A full review of the Government Finance Function’s progress against the objectives set out in the 2019-2023 Government Finance Function Strategy is presented in the Function’s Annual Review 2020. WGA 2019-20 will include a summary that will allow the public and Parliament a snapshot of the work of the Government Finance Function. 5.4 Consistent reporting of cross government spending remains a significant challenge, with consistent definitions, treatment of opportunity costs or allocations of staff costs to projects as barriers to consistent reporting of costs. However, the implementation of OSCAR 2 allows for more efficient gathering of data, as well as the potential for comparing data across organisations to generate insight. The convergence of finance data, technology and processes should allow for more comparability. 5.5 HM Treasury has also set out additional reporting requirements on EU Exit and COVID-19 for departmental Annual Reports and Accounts (ARA), as outlined to the Committee in the Chief Secretary’s letter of 3 December 2020. The WGA 2019-20 performance report will include estimated expenditures on EU Exit and COVID-19, using the best available information, including departmental ARA as they become available.