Time to look again at accrual budgeting

Abstract

A large number of countries are implementing accrual reporting to provide better accountability for the stewardship of public finances to their citizens. Far fewer nations have moved to an accrual basis for their government budgetary decisionmaking. Those few countries that have made the move do not regret doing so, having achieved significant benefits from that reform. This paper looks again at the benefits of accrual budgeting, at some of the major arguments that have impeded its international implementation, and how those issues have been addressed in the countries that have successfully adopted accrual budgeting. It suggests that the international public financial management community should revisit accrual budgeting, and that efforts to implement it should be redoubled, not because it is a panacea for all budgeting and fiscal problems, but rather because it provides a stable foundation for improving fiscal and budgetary decision-making and for providing fairer and more complete budgetary information to citizens. JEL Classification: H10, H11, H61, H83 Key words: Accrual budget, accrual report, fiscal management, fiscal performance, public finance, accountability