Abstract
The Czech Republic has recently introduced and implemented public sector accounting reform. The aim of the reform was to make the Czech public finance system more transparent, efficient and realistic. The authors of this reform, in fact, intended to bring public sector accounting and public financial management closer to private sector practices that, from their point of view, fulfil the reform goals previously mentioned. After a few years of functioning in this new accounting environment, certain associated points and problems have arisen that have to be tackled. The aim of this paper is to describe public sector accounting reform and its post-implementation process to current state in the Czech Republic based on pilot empirical research mirroring the opinions and experience of municipal Chief Financial Officers and its comparison with similar examples from other countries. The pilot sample for this research consists of municipal Chief Financial Officers and the research method is based on questionnaires and interviews with them. Results and findings achieved by this pilot research show that the reform of the new public sector accounting system in the Czech Republic has been developed in very extended scope in comparison with other countries, estimated costs perceived by users (local governments) are prevailing over advantages and benefits and thus there was identified certain degree of scepticism which may disrupt further efficient and positive use of this new accounting system.
Highlights
The Czech Republic belongs to a group of countries that decided to reform its public sector in certain different ways in recent decades
The goal of this paper is to identify and assess the costs and benefits associated with the application and implementation of the public sector accounting reform process in the case of the Czech Republic municipal sector, and compare them with relevant findings and outcomes internationally
One can say that the reform process in the Czech Republic mentioned in this paper is still ongoing
Summary
The Czech Republic belongs to a group of countries that decided to reform its public sector in certain different ways in recent decades. Legislative intentions concerning public sector accounting reform in the Czech Republic was approved in 2007, followed by its introduction and implementation in 2010 and the following years in the context of the Czech public finance reform process. The aim of this intention, from the perspective of the author and implementer of this reform (the Ministry of Finance of the Czech Republic; the MoF CR), was to create conditions for the effective provision of correct, complete and on-time information about the financial situation of the government and relevant accounting units (the MoF CR, 2008). The main targets intended by MoF to be achieved by this reform process were following (Ministry of Finance Czech Republic, 2008): to make state accounting in the analogy of private sector organization and considering efficiency principles and specifics of the state; improvement of accounting methods used by accounting units in public sector, to make conditions for efficient ensuring relevant information concerning economic situation of the state including the record of information about receivables and liabilities on the central level as well as on the lower levels of government, to eliminate the fragmentation of various registers and statements (reports) of accounting units connected with public budgets and property of the state, to ensure credibility of accounting information for the purpose of reporting and compiling of financial statements of the Czech Republic, to enhance the quality of the information provided by the Czech Republic out and by individual accounting units’ inner, to make possible continuous gaining of relevant accounting information for operating management (real time decisions), to make accounting statements and reports available on-line by digitalizing all documents to lower administrative burden on doing accounting and control mechanisms
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