Abstract

Notwithstanding hope and prayer, budgetary outcomes often differ from budget estimates. Although one reason for this is the tentative nature of estimates, another reason for discrepancy is that government budgeteers tend to deliberately ignore certain likely developments and hope that every adverse development will be matched by a positive development. It is also pointed out, although conclusive statistical evidence is lacking, that the budgetary outcome is different largely on the expenditure side, while variations on the revenue side, both positive and negative, are generally limited. Partly with a view to addressing this problem, efforts have been made, through the introduction of governmentwide accounting standards, to minimize the expenditure variations between estimates and outcome. While accounting standards in any form, including commercial practices, have several other major aims, their focus on proper recording, valuation, and regular disclosure makes it easier to recognize four types of liabilities—payables, funded, contingent, and unfunded. When accounted for, these liabilities contribute to a budgetary outcome congruent with estimates. This chapter discusses the features of these liabilities and how they are recognized, budgeted, accounted for, and managed.

Notwithstanding hope and prayer, budgetary outcomes often differ from budget estimates. Although one reason for this is the tentative nature of estimates, another reason for discrepancy is that government budgeteers tend to deliberately ignore certain likely developments and hope that every adverse development will be matched by a positive development. It is also pointed out, although conclusive statistical evidence is lacking, that the budgetary outcome is different largely on the expenditure side, while variations on the revenue side, both positive and negative, are generally limited. Partly with a view to addressing this problem, efforts have been made, through the introduction of governmentwide accounting standards, to minimize the expenditure variations between estimates and outcome. While accounting standards in any form, including commercial practices, have several other major aims, their focus on proper recording, valuation, and regular disclosure makes it easier to recognize four types of liabilities—payables, funded, contingent, and unfunded. When accounted for, these liabilities contribute to a budgetary outcome congruent with estimates. This chapter discusses the features of these liabilities and how they are recognized, budgeted, accounted for, and managed.

Payables

In the balance sheet approach to accounting, entries are made on both sides of the register to represent the inflow and outflow of an entity. On the outflow side, there are entries for accounts payable, interest payable, and other funded liabilities. Their counterparts on the inflow side are accounts receivable, interest receivable, and associated categories. In the commercial world, the difference between accounts receivable (which are funds owed by the distributors to the manufacturing company) and accounts payable (which are funds owed by the manufacturing company to its own suppliers) is of considerable importance in determining the magnitudes of working capital. Although the concept of working capital does not have the same applicability in the public sector as in the commercial world, it does influence cash management.

To the extent that the recovery of receivables is slower than expected and given that most payables to public authorities, including interest payable, can be changed at short notice only at great cost to the government’s credibility, the need for short-term borrowing may arise. Borrowing, in turn, would affect the overall level of expenditure contributed by interest payments on the amounts borrowed. Recovery of receivables, which is now largely considered in the context of credit management, is not covered here because the focus is on the expenditure side.

Accounts payable by public authorities fall into four broad categories: (1) payment for personnel services in the form of wages, salaries, and associated benefit payments; (2) payment for services and equipment received from other publicly owned organizations and enterprises; (3) payment for services and equipment provided by private sector contractors; and (4) interest payable by the government. The first category often involves payment in the fiscal year following the year in which services are rendered. These transactions are usually covered by the relevant budgetary authority, although in some cases, pending the approval of the new and requisite authority, an interim measure, such as a vote-on-account or a continuing budget resolution, may be approved to carry out the transaction. The second category usually involves payments to public utilities and other organizations that may or may not be owned by the government. Prior to the intensification of privatization efforts, most government accounts payable reflected the amounts owed to water, electricity, transportation, and communication companies. Because governments represent a big buyer of these services, perhaps the biggest, they seem to enjoy some perquisites with the supplier, including delays in payments.

The third category involves transactions with private sector contractors for the supply of equipment, fabrication in major projects (including turnkey jobs), or routine supply of consumables, such as cleaning materials to a government-owned hospital. These transactions are covered by contracts arrived at through a legal process involving open tenders and scrutiny of bids. The contracts also specify the terms and conditions of payment. For major projects, such as those funded by international financial institutions, contractors generally received an advance that serves as working capital, which is then recovered over the period of the contract. The fourth category covers transactions that are usually considered part of public debt management. It is not uncommon for interest payable, when the government is in a period of severe financial crisis, to be capitalized and the debt payment to be rolled over.1

How payables are recorded and how they are recognized in the budget for additional funding depend largely on the type of accounting system used in a government. Until recently, many cash-oriented systems based on single-entry bookkeeping did not provide for the recognition of these payables. Now, however, with the massive application of computer technology to record government transactions, facilities exist to permit their explicit recognition. General ledger systems provide for recording budgetary authority and appropriation, apportionments, and the payment status of apportionments. Subsidiary systems can be used to record accounts payable; for example, journal entries are maintained for facilitating a follow-up of accounts payable. The general ledger reflects journal entries liquidated.2 In some countries, the magnitudes of these transactions in the last week of the fiscal year are significant. Apart from the rush of expenditures usually noted in the last month of the fiscal year, the transactions reflect on the lackadaisical manner in which the budget is implemented for a major part of the fiscal year. Accordingly, some countries stop issuing checks by the third week of the last month of the fiscal year so that accounts can be closed promptly at the end of the year. This does not necessarily mean that there are no payables at the end of the year. A second approach has been to maintain a legally specified complementary, or liquidation, period at the end of the fiscal year. This implies that two sets of books are maintained for a major part of the year—one set for the current year and another for the previous year(s). This approach complicated the maintenance and closing of accounts and their reconciliation with the monetary flows recorded at the paying end, that is, by banks. The practice, which was common in Latin American countries, has largely been abandoned.

When payables are explicitly recognized, they must also be taken into consideration in the formulation of budgets. The accumulation of payables implies that liquidity management has become a fiscal policy issue. Normally, liquidity management is viewed as a routine matter, largely concerned with regulating the flow of resources to finance payments. When the fiscal situation is fragile, and limits on domestic credit to the government have been specified (as noted elsewhere, this does not apply to some European countries where central banks have been made independent and no longer provide credit to the government), some countries, engaging in window dressing, have built up payment arrears. In some accounting systems, arrears were not recorded and therefore could not be measured. With the application of computer technology and related software that generates data for each stage of the expenditure process, the measurement of arrears ceased to be a major issue. Indeed, where general ledger systems are in use, the difference between accounts payable at the beginning of the year and at the end of the fiscal year indicates a buildup in payables. To identify purely transitional arrears that reflect delays in the administrative process, the age profile of arrears can easily be gleaned from computer records.

The availability of computer facilities does not necessarily mean that governments will not build up arrears. Indeed, as long as a country’s fiscal situation remains fragile, it is only reasonable to assume that the government will avail itself of every policy variable in its arsenal to address what it perceives to be a critical issue. Some policy economists view a buildup in arrears as relatively harmless in that the monetary impact on the economy would be within the limits envisaged at the onset of the fiscal year. This is because the impact is determined by, among other variables, domestic credit, which, in turn, is partly based on the credit expansion that is itself partly based on the credit extended to the government. Such a view ignores a number of other substantive aspects.

First, a buildup in arrears implies that some credit expansion may have already taken place and was recorded, appropriately, as credit to the private sector. In the event, it is the private sector that would be extending informal credit to the government. But no economic agent in the private sector, each one being highly professional and thus rational, would extend such informal credit at the expense of its own profit margin. Indeed, it might be adding more than the expense incurred, its own premium, and therefore would be adding to the overall cost of the services provided by public authorities.

Second, a buildup in arrears may have a more enduring impact on the expenditure control framework. The spending agencies are likely to perceive the buildup as laxity in control and as a leakage that is approved by the central economic ministries. This outcome will be considered a green light to incur more arrears, this time with impunity. This perverse effect is likely to be compounded if the payments process is politicized. When payment arrears accumulate, actual payments are normally made on a first-in, first-out basis. However, when contractors with large pending bills lobby to bring pressure on the paying officials—at the political and civil service levels—the payment queue is likely to be sidestepped, and a political approach for the selection of bills for payment may emerge. This phenomenon has been observed in the past and, given human nature, is likely to continue in the future with attendant costs.

Third, the continued prevalence of arrears in payment implies a steady erosion of the accountability process. Accountability requires that output and income be related in a specific time frame so as to permit proper costing of services. Costing is based on the actual value of goods and services consumed or used in the time frame to provide a given service. Cost-based data would inevitably be different from flow-based data. The discrepancy between those two sets would be heightened in the context of an accumulation of arrears in payment.

It is important that a vigilant eye be kept focused on costing and the accumulation of arrears, so as to anticipate deviations from the approved policies and to ensure that deviations do not become an entrenched part of the expenditure control framework.

Other Funded Liabilities

These transactions refer to the liabilities incurred during an accounting period that are not paid in that period and are thus carried over to the following year. The most common of these liabilities occurs when goods are not immediately available on an off-the-shelf basis and when their supply has long time lags. Some of these lags in delivery may not be recognized by the suppliers, who may have little incentive to expedite delivery once a firm contract is entered into. Although governments are the biggest buyers of goods and services and should enjoy the presumed powers associated with a monopsony, they are often reduced to the level of a Gulliver manipulated by the Lilliputian multitudes of contractors. Although an industrial policy is advocated as a way out of this common experience, the fact remains that in the continuum of the expenditure process, there are several funded liabilities.

Such funding poses some problems, however, in systems where budget appropriations are routinely allowed to lapse. In these cases, the spending agencies are required to persuade the central agencies to continue the allocations in the following year. The central agencies, for their part, may frequently be myopic and view the unspent amounts as savings. In systems that are based on obligation, however, the payment of these liabilities is unlikely to pose any issue as long as proper records are maintained.

Funded liabilities tend to be large in cases where centralized procurement is in place and spending agencies, functioning as clients, draw their supplies from the procurement agency. Previously, transactions among departments were conducted through “suspense” accounts and book adjustments. With the breakup of internal monopolies and with increasing decentralization of procurement responsibilities to spending agencies, this type of funded liability may no longer pose systemic problems.

Contingent Liabilities

These liabilities refer to transactions that arise mostly from guarantees given by governments on behalf of an enterprise owned by it, by a private enterprise, by a nongovernmental organization, or by an individual. Although guarantees existed in one form or another for a number of years, they have become more prevalent since the late 1970s as most of the liabilities stemming from guarantees had to be redeemed by governments. As a result, budget deficits increased. Because many of the guarantees had to be redeemed at short notice during the fiscal year, questions arose as to their nature, the recording of the transactions, recognition during the budgetary process, and related policy action.

A government provides a guarantee when the party concerned does not have the requisite creditworthiness to raise capital or contract a loan on its own and therefore seeks protection under the overall umbrella of the government. To that extent, government intervention undermines market forces, promotes moral hazard and less-than-prudent behavior, and, insofar as the guarantees must be redeemed at a later date, they add to the costs borne by the taxpayer. Guarantees are often provided outside the normal budgetary process after the market has rejected the risk. Initially, this transaction may not attract the attention of the legislature because the liability is not recognized until it falls due, by which time there may be little option but to acquiesce in the transaction and finance the redemption. Although legislatures have recently begun to demand additional information and even prior approval for such transactions, in most countries guarantees are the province of the executive branch, and little organized information is provided to the legislature.

Notwithstanding the well-recognized problems of guarantees and related liabilities, it is unlikely that governments will cease to provide them. Indeed, given that, in general, the public sector is shrinking and the private sector and nongovernmental organizations are providing more services, the use of guarantees may be more extensive than in the past. In response, greater attention must be paid to the formulation of policy packages aimed at addressing these liabilities.

These liabilities can be broadly divided into two categories: formally recognized contingent liabilities and nonquantifiable contingent liabilities. The former are those liabilities that are associated with the provision of guarantees. The latter, considered part of unfunded liabilities, are discussed in the following section. The contingent liabilities are generally recorded only when the contingency is evident, that is, when the guarantee must be redeemed and the necessary budget provision made. The general ledger system used for accounting can also have a subsidiary system devoted to registering and tracking the status of guarantees. As the guarantees become due to be redeemed, the necessary action is initiated to make provisions in the budget. To ensure broader accountability, the government and each agency must prepare an annual statement of contingent liabilities as a part of the overall accounts. These guarantees need to be graded with reference to weights allotted to risks, proportional payment responsibilities (as shareholders), and those that are given to organizations over which governments may not have any control. Thus far, however, experience shows that many countries prepare statements about liabilities but very little information is available on the value of contingent assets. As a result, accounting information is uneven.3

By registering and tracking guarantees, the public authorities are able to anticipate future liabilities. If, however, public finances are not to be subjected to short-term stress, it is important that a financing mechanism also be developed. The original objective of a guarantee is to facilitate a third party’s receiving a loan but not to subsidize that operation. Because the party seeking the loan is expected to pay the full cost involved, a formula for pricing guarantees is necessary. This raises the larger issue of subsidizing risks. Financial realities have forced some governments, for example in certain Nordic countries, to envisage a pricing formula where part of the guarantee would be redeemed by the government and part through market forces or the private sector. The liability of the government is thereby limited to a specific percentage. This process permits an explicit recognition of this type of liability so as to minimize the shocks on the budget during the course of the fiscal year.

Unfunded Liabilities

In addition to the liabilities described in the preceding sections, several other liabilities need explicit recognition, for example, unfunded liabilities. Some countries have already begun to set up accounting standards that deal with these other liabilities. For example, the financial statements of the Government of New Zealand provide for a recognition of the various types of liabilities described above and also include a listing of nonquantifiable contingent liabilities. Similarly, the agency financial statements prescribed by the Government of the United States (United States, Office of Management and Budget, 1993) include details of liabilities not covered by budgetary resources.

Unfunded liabilities take a variety of forms and, for analytical convenience, may be examined in the following terms: (1) liabilities stemming from legislated guarantees (different from those discussed earlier, which are extended as government policy and at its discretion); (2) liabilities arising from a change in legislation with retrospective effect; (3) hidden liabilities arising from insurance programs; (4) payments arising from the termination of contractual agreements and indemnity payments to compensate contractors for losses incurred in support of government activities; (5) environmental liabilities, such as those arising from the release of hazardous wastes and other pollutants; and (6) payments made to compensate for market failure.

Legislated Guarantees

Any legislation generally includes provisions that make the government responsible for certain types of payments. These may include compensation for disaster victims, liabilities arising from the exercise of official powers, foreign exchange and other losses incurred by the central bank, compensation for third-party claims, payment of taxes and royalties on behalf of government development organizations that have been given a corporate status, liability for previous contracts, assurance of a net rate of return to producers of electricity or fertilizers whose primary buyer and distributor is the government, and provision of foodstuffs to the public at a set price. Out of this vast range, major items, such as subsidies involved in public distribution systems of foodstuffs, are usually estimated and provided for in the budget. The others, largely because of their contingent nature, may not be reflected in the budget. These may come to light long after the requisite legislation has been enacted and, in all probability, are forgotten because of a lack of claims in the interregnum.

Liabilities from Legislative Changes

Experience has shown that a country may enact legislation after the start of the fiscal year to augment existing benefits with retrospective effect as well as to provide new benefits. This represents an unfunded liability In some cases, awards issued by the judiciary or related adjudication authorities may also have a significant impact on the budget. While some of the awards relating to wage adjustments are anticipated in the form of lump sum appropriations in the budget, those sums may not be adequate and further enhancement may be needed. The judicial awards and legislation with retrospective effect are not usually anticipated because of the uncertainty of the outcome. Such liabilities may be very large and, in the absence of any margin in the budget, would need sudden action that may not be forthcoming.

Hidden Liabilities

In conjunction with providing social safety nets and related benefits, governments have set up separate pension organizations, as well as pension benefit guarantees when pensions are organized by employer organizations. In the former case, benefits are paid out on a pay-as-you-go basis. When the annual benefits are substantially higher than contributions, the difference is funded by a transfer from the government budget. When the government budget itself is running a deficit, the pension organizations in some countries are encouraged ostensibly as a short-term approach (but which often becomes a continuing practice) to borrow funds from the public. The annual budgets of both the government and the pension organization may not fully reveal actual practices and thus would not show the hidden liabilities.4

In some instances (for example, the Pension Benefit Guarantee Corporation in the United States), employee retirement funds are insured by a corporation set up by the government. These employee funds may not be fully funded, and funding may depend on the prevailing tax legislation. In Japan, for example, companies provide up to the maximum tax-allowable amount—usually 50 percent of the amount payable if employees ceased employment at balance sheet date.5 To that extent, the accounts would understate the liability for pensions. When such pension plans are insured by the government corporation and when the plans terminate with insufficient assets to cover their benefit obligations, the corporation assumes the liability for the funding of benefits. The corporation then values the assets it receives and the liabilities it is responsible for financing. Usually, however, the assets are not adequate (given the moral hazard situations associated with insurance activity), and the overall difference constitutes a hidden liability and therefore a hidden or informal debt of the government.6 Similar instances may be found in other industrial and developing countries. Experience also shows that, in the absence of adequate accounting and proper liability tracking, sudden fiscal crises may emerge with a lasting impact on governments’ financial plans.

Termination of Contracts

In some special circumstances, firm contracts that have been legally entered into by governments may be revoked for, among other reasons, a lack of funding. Termination frequently involves payment for violation of contractual agreements. Payment may be voluntary or made through awards arrived at through a judicial or quasi-judicial process. Termination of contracts, while not unusual, may occur more frequently in the future. As services are contracted out, or as international bidding (to be monitored by the proposed World Trade Organization) becomes obligatory, contracts are likely to become more complex. Inevitably, the judicial process will be invoked more frequently than it has been in the past.

Environmental Liabilities

Public consciousness about the impact of pollution has risen and is likely to rise further as greater investments are made in the production of basic chemicals and related industries. Governments in both industrial and developing countries have enacted legislation for the treatment of industrial wastes. In some countries, current legislation stipulates that industries should also limit the disposal and treatment of waste. While legislation may be adequate, or may need selective strengthening, the more important fact is that waste control technology is not fully secure.7 When leakages occur, the potential for third-party liabilities increases. These liabilities, which are difficult to anticipate and estimate, must be borne by the government. In addition, extreme cases of leakage occasionally occur, such as those in Bhopal, India and in Chernobyl, where some relief expenditure had to be incurred from the public exchequer.

Market Failure Liabilities

The public authorities may be required to step in, even when insurance provision exists, to correct major market failures. A typical instance is the failure of commercial banking institutions, where the deposit insurance funds may not be adequate and the assets of the institutions are far from marketable. In these cases, maintaining public confidence and market stability is of paramount importance, and governments may have no short-term option other than to intervene and shift the burden to the taxpayers. The losses of a few would be offset by the contributions of the many. Estimating these liabilities would be like estimating the size of the iceberg from its tip and is therefore problematic.

The preceding scenarios illustrate the likelihood of the annual fiscal policy stance receiving shocks from a variety of sources. What should a government do? It is a truism that in governmental activities, as in other human activities, what needs to be addressed must be properly measured; what needs to be measured must be identified and defined. Decision makers cannot be soothsayers, but their consideration and judgment are made easier when their tasks are defined and measured properly. The government accounting system needs to be designed so as to provide opportunities for the agencies to record the type of liabilities described above.

The commercial-type accounts introduced in Australia, New Zealand, and the United States provide, with varying coverage, for the recording of these liabilities. Simply recording the transactions is not a solution. The role of recording is to disclose the financial condition of the entity and the government and the liabilities that need to be explicitly recognized as part of the annual budget exercise. The size of the liabilities may be larger than estimated and may tend to mushroom after the start of the fiscal year. As Benjamin Disraeli once noted, “what we anticipate seldom occurs; what we least expect generally happens.” For this reason, the accounting information on liabilities must be functionally integrated with the annual budget process to provide a basis for scenario planning for policymakers. Such efforts may not offer full protection, but, by improving preparedness, they imply a radical departure from the old order of managing the crisis when it actually occurs.

A related approach is to create an unallocated budgetary reserve to meet contingent situations. Experience, however, shows that every reserve, regardless of its specific and legitimate objectives, attracts a lot of claimants and the use of the reserves would become a contentious and highly politicized issue. Moreover, when the overall fiscal stance is tight, there would be little leeway to allocate separate resources for reserves. It is more prudent to have systems that permit the recording and tracking of these liabilities so that they may be appropriately addressed. In the absence of such systems, the results would be (and have been) different, reminding policymakers of Anthony Eden’s words (1960, p. 520): “It is impossible to read the record now and not feel that we had a responsibility for always being a lap behind—always a lap behind, the fatal lap.”

Debt Management

Before development planning was the norm, the debt of most countries, except during such emergencies as wars, was small and manageable. For the most part, such debt was raised on behalf of the government by the central bank in its capacity as the government’s fiscal agent. The day-to-day management of the debt was also generally handled by the central bank. Because many countries did not have a developed capital market, the issues were also subscribed, in large measure, by the central bank. In addition, the central bank provided advances to the government for ways and means and related overdrafts. For all intents and purposes, the central bank and the government had an intimate relationship. Any debt raised by the central bank was redeemed through regular budgetary appropriations, and in several cases governments maintained a wide variety of sinking funds as a manifestation of their financial prudence and overall trustworthiness. In retrospect, such an effort appears misplaced in a context where there were no organized capital markets.

In due course, arrangements were made for each type of issue of public debt, with fairly simple accounting conventions. Broadly, three types of transactions were recognized. First, there were specific fund liabilities, which were directly related to and expected to be paid from proprietary and trust funds. These liabilities were limited to the specific funds. Second, there was the long-term debt, which was secured more through the government’s general credit and revenue-raising powers than through its sinking funds. Third, debt was issued, mostly at the local level in industrial countries, to finance capital projects. Each project was funded by a separate issue of debt and was expected to be paid from the revenues raised after the project became fully operational. The accounting system was accrual-based in that a liability was registered as soon as it became apparent. This was a common feature even in those systems that were traditionally considered to be cash-based ones.

Developments

This picture of accounting changed radically during the early 1950s when debt financing came to be viewed as an instrument in the government’s regular financing arsenal. During the 1970s and 1980s, both the domestic debt and the external debt increased substantially. Meanwhile, it was found that maintaining sinking funds was no longer appropriate in a context where debt was extinguished through new issues of debt rather than from accumulated reserves. As the external debt grew, it became necessary to pay more attention to institutional and accounting issues. A number of countries, mostly at the instance of international financial institutions, set up computer-operated external debt recording and monitoring systems.8

The exponential growth in debt has rapidly transformed the way in which debt is managed, the way monitorable limits on the levels of debt are established, and a government’s relationship with its central bank. There are major differences in the way industrial countries and developing countries organize debt, but the differences are shrinking with the opening of economies and the associated globalization of trade. In the industrial countries, several new instruments for borrowing in domestic and external markets have been introduced. Other developments include an intensified internalization of government securities markets, an improvement in the depth and liquidity of wholesale markets for government securities, and the increased availability of improved market functioning and market management through “specialists in government securities (primary dealers).” Associated with this growing market diversification, there was greater automation in the securities market and more efficient clearing and settlement procedures.9

The alarming increase in debt and its impact on countries’ fiscal health has induced governments to pursue policies aimed at reducing the growth of debt. One of the principal aims of fiscal policy in many European countries during the 1980s was to contain the deficit so that the debt, too, could be limited. In addition to policy measures, this stance also took the form of legislating, through constitutional amendment, the size of the deficit and the limits on borrowing. In the Western European countries, these efforts culminated in the Maastricht Treaty, which specified acceptable levels for the deficit and the outstanding debt. While the operational aspects remain to be fully worked out, these specifications have become a restraining influence on the member countries and have induced them to undertake more urgent measures aimed at fiscal consolidation. In sum, the treaty puts a stop to the practices of recent years of incurring burgeoning deficits and financing them through internal and external borrowing. Hereafter, the governments are expected to be bound by the Maastricht conventions. These developments could have an emulating effect on other countries.

In early 1994, member countries of the European Union began to enact legislation to make their central banks independent of the government. Hereafter, central banks would no longer provide short-term advances. In fact, they would not participate in the primary market of government securities. Increasingly, governments would be looking into the prospect of regulating the depth and liquidity of wholesale markets for government securities. These trends are likely to promote similar practices in other countries, including in the developing world.

The complex new environment in which public debt management will be undertaken has several elements, of which accounting is only one. But accounting must adapt to the context in which it is expected to work and must internalize the changes in its day-to-day operations. The accounting manager is not a substitute for a debt portfolio manager, neither of whom can function without the other. Indeed, the portfolio manager has a unique dependence on the accountant. Accountants and related professionals must recognize and reorient themselves to the changing world.

Continuing Objectives

In reorienting accounting traditions, due note should also be taken of the principles, or objectives, of debt management policy. Here again, there is a marked difference between the monetary policy orientation of the portfolio manager and the orientation of the accountant. The former is more concerned with the market impact of the proposed issue of debt, the choice of instruments, and the interest rate, as well as the maturity profile of the issue. The accountant is likely to be more concerned, by virtue of his or her assigned functions, with the structuring of assets to match liabilities. As governments compete more among themselves and with the private sector, accountants are expected to function more like comptrollers in the commercial world managing their assets, so that, in the eyes of the public, net worth is preserved or increased. Accountants perform in the open and under the vigilant eye of the public and cannot resort to sleight of hand.

Matching assets and liabilities is a formidable and complex task. In governments, there is more information and certainty about liabilities than about assets. The normal assets on which information is available are liquid assets, such as cash balances and foreign exchange reserves (including gold), and, to a lesser extent, the investment portfolio (the financial shares held) and recoverable loans. The valuation of these assets, however, is likely to be subject to volatility, reflecting changes in the interest rate and exchange rates. Physical assets, as reflected in the national income accounts, show the strength and the potential of the economy rather than the net worth. A compilation of assets would throw light on a country’s net worth and the degree of openness of the government. A distinction must be drawn between foreign and domestic liabilities, so that matching assets can be arranged. Although the overall task is much larger than may be performed by accountants alone, they play an important role.

One objective common to the accountant and the debt manager relates to borrowing costs. As borrowing becomes a regular feature of the management of government finances, the need for containing costs becomes paramount. This consideration did not previously dominate government financial management because the central bank generally managed most day-to-day debt operations. With increasing independence for the central banks, debt management is likely to revert to the governments. Cost containment in the management of debt has two elements. The first involves securing the best possible terms for the proposed issue and finding a method that is both administratively simpler and cheaper. The second relates to the administrative costs of the organization engaged in the management of the debt.

Securing the best possible terms is an overriding objective for both the accountant and the portfolio manager. Their roles may get so intermingled in the process that it is hard to determine where the accountant’s role stops and the manager’s starts. (It could in fact be argued that these distinctions are artificial and that they do not, in practice, exist. The distinctions are helpful, however, in clarifying their roles.) This strong relationship becomes even stronger in a context where the instruments and their costs and risks are constantly changing. The issue of debt in several countries is managed in close consultation with banks and other financial institutions, which generally receive fees for their services. In some cases, the fees are substantial and contribute to the higher costs of borrowing. Such increases in costs may have their own dynamics and may partly nullify the strenuous efforts made to contain the costs incurred in the provision of goods and services. Alternatives such as auctions, which generally do not involve the payment of fees and commissions, may have to be explored. These efforts must go hand in hand with efforts to contain organizational costs (see discussion below).

Organization

Debt management, which is relatively simple and structured, falls into four broad categories of administrative arrangements. (1) In general, the issue and day-to-day management of debt are handled by the central bank. (2) In some countries, the management of external debt is handled by the finance or planning ministry (in conjunction with foreign aid), and domestic aid issues are handled by the central bank.10 (3) In some cases, both foreign and domestic debt are under the jurisdiction of the government, although the central bank, acting as fiscal agent of the government, may be maintaining the debt register—that is, holding debt. (4) In a few cases, the national debt, comprising both external and domestic debt, may be administered by a separate organization that is directly accountable to the legislature or organized as a separate or autonomous fund within the overall guidance of the government.11

Although these relationships have generally been designed for administrative convenience or the financial credibility of governments, they need to be reviewed with reference to three criteria. First, do these arrangements have the effect of reducing the independent role the central bank is expected to perform? As debt instruments become more diversified and greater reliance is placed on primary markets for sustaining the debt issues, it may be administratively convenient to shift to the government some of the burdens currently assumed by the central bank. Such an arrangement, while providing the requisite independence to the bank, may also make the government’s fiscal behavior more responsible and prudent. This shift also implies that governments can borrow on their own creditworthiness. Second, given the inherent close linkages between debt and fiscal and monetary policies, the administration should be so located as to serve the immediate needs of both. In principle, organizational fragmentation can be offset by a technology-driven information system, which makes information available to all participants at the same time. There may, however, be some advantage in locating the center of administration closer to the action—that is, to the ministries of finance. And, third, the costs of each arrangement should be explicitly evaluated with reference to the advantages and disadvantages of each.

Role of Accounting

The first contribution of an accounting system to the management of debt is its ability to determine the borrowing requirement. The difference between receipts and expected outlays is the usual basis for determining the overall borrowing requirement. However, the entire amount so determined may not be borrowed from the public, primarily because the government manages several funds in a trust capacity, including provident funds, pension funds, and other deposits. Most of them are expected, either by law or by convention (which by force of habit may have the same applicability as law), to be invested in government securities.12 In addition, most foreign borrowing, including from international financial institutions, may represent parts of an ongoing program rather than totally new borrowing. These amounts are also estimated by the accounting system. In addition, through their effort to restructure the external debt, governments have also been engaged in debt-for-equity and debt-for-debt swaps.13 In all stages of determining the overall magnitude of government debt, as well as the choice of bargaining strategies to renegotiate the debt, accounting plays a prominent role.

In these and related areas, the preferred basis of accounting is accrual. A cash-based system would be inadequate to indicate the full ramifications of the debt. An accrual system is therefore conventionally used to register short- and long-term liabilities and the process for liquidating them. Curiously, the systems in practice follow the accrual approach only for public debt transactions and not for registering the wide variety of unfunded and contingent liabilities discussed earlier in this chapter. One option is to maintain an accrual-based accounting system with appropriate bridges to the cash system. The accrual principle as now implemented by many governments is rather rudimentary. Ideally, for example, under the accrual system all costs would be allocated to the period in which they are incurred and to the instrument from which they originate. Thus, interest costs would be spread over the life of the security rather than being shown as an expense item (as in the cash-based system) in the year in which it is redeemed.14

It is also necessary, in the interest of accountability, that the costs involved (including fees and the value of a number of tax incentives, such as the postal savings certificates) be calculated so that the costs of government policy preferences can be established. As an extension of this, it is necessary to show all debt instruments at their current market value, including both gains and losses. This would allow debt managers to wind up or withdraw some instruments whose coupon rate of interest is below par and, thus, whose redemption costs would be substantially reduced. Both criteria suggest that the accrual principle should be carried to its logical conclusion and that a balance sheet statement and income and expenditure statement of debt should be prepared. These statements would show how governments are managing their vast public debt, costs incurred (including opportunities lost), and gains made.

When the public debt is substantial, cash management in government is likely to be affected in more than one way. For example, bunching of interest and debt repayments could skew the pattern of spending, and considerable borrowing may be required at certain times of the year. If a borrowing episode were to coincide with the busy season of the year insofar as credit markets are concerned, the costs of borrowing may be higher than anticipated. For this reason, the accounting system has the responsibility of indicating, at the onset of the fiscal year, the timing involved in debt-payment operations. These links will be well serviced when the debt system is computerized and detailed information is available on payments due, so that the central budget managers can take them into account in formulating their cash management plans for an entire year.

The accounting system also has a major role in maintaining the public debt register and an efficient system to pay debt holders. The first function involves printing, maintaining, and delivering physical certificates representing the debt titles. In a number of countries, more often in the developing world, a long lag is observed between the subscription to the debt issue and the supply of the physical certificates. The lag occurs primarily because the entries are made manually in the register and could, in turn, contribute to a situation where financial derivatives introduce a good deal of speculative activity into the equation.15 This has the potential of working against the stated objectives of monetary policy.

The payment process includes reconciliation between the debt register and the actual payments. Governments or their central banks maintain individual accounts of the holders of public debt so that necessary authorization can be issued for the payment of interest and principal. But because the actual payments may be made by another agency, discrepancies may emerge between the register and the payments. For this reason, a regular reconciliation between the two is essential.16 Payments to debt holders may, depending on how the accounting system is organized, involve two stages: authorization from the government account, and from the central bank or commercial banks designated for the purpose to the holders of the debt. While it is natural to expect these two stages to be synchronized, in practice administrative delays at both ends have made debt holders cynical. In some countries, the payment function has been transferred to commercial banks, particularly where the transactions are large and frequent.

The complexity of government operations is clearly growing, giving rise to a need to review accounting systems and ways to strengthen them. These issues will become more important in the future as operations become even more complex. The need for early action cannot be overemphasized.

1

The settlement of liabilities of the above type may pose problems in systems in which annual lapse of budgeted funds is a common feature. To prevent such lapses, several formal and informal procedures are in vogue. In some countries, capita) or development expenditures are carried over to the next year legally. In a few countries, the unspent amounts are revoted to be spent in the following year. In a few cases, the unspent amounts are diverted to personal ledger or deposit accounts to be available for spending during the following year. These measures generally erupt onto the scene during the last part of the fiscal year, when there is a frenetic activity to save the unspent budget allocations. This avoidable rush is largely due to the absence of a well-slruclured tracking system for monitoring commitments.

2

In some cases, either as a result of deliberate action or because of transit delays, there may be large amounts in unpaid checks. Technically considered a float awaiting payment by the banking system, unpaid checks could pose a major policy issue. Similar is the case of interenterprise arrears in the public sector that may eventually have to be financed by the public budget. These transactions must be specifically recognized in the accounting system so that timely warnings can be sent to policymakers. See Chapter 1.

3

Considerable attention has been given to guarantees in the United States, and the Federal Accounting Standards Advisory Board has recently developed standards to deal with them.

4

Specifically in regard to pensions, there is in general an implicit public debt. A recent report by the World Bank (1994b, p. 90) observes that, because of its emphasis on current cash payments, pay-as-you-go finance hides the true long-run costs of pension promises. The current situation is only the tip of the iceberg. When workers pay their social security taxes, they expect to get a specific benefit in return. The present value of this future stream of expected benefits is known as the “implicit public pension debt,” This liability for the government, corresponding to the “entitlement” people believe they have acquired, is the iceberg underneath the tip. Although this implicit debt varies by country and depends on the coverage of the pension system, the age distribution of workers, the level of benefits, and the discount rate used in the calculation, in many countries, it is two or three times the value of the conventional explicit debt (emphasis added). To some extent, this is abetted by government budget practices. Budgets usually based on cash are limited to a fiscal year and to that extent do not recognize hidden debt. If hidden debt is recognized, budgets do not reveal its magnitude.

5

For a comparative survey of three practices, see International Capital Markets Group (1992).

6

For an illustrative discussion of these aspects, see United States, General Accounting Office (1989 and 1992b).

7

For a discussion of the experience of the United States, see General Accounting Office (1990b). The GAO later recommended that the insurance companies engaged in property and casualty insurance should disclose annually the number and type of environmental claims and the estimated range of associated claim costs and expenses. See also United States, General Accounting Office (1993).

8

Separate off-the-shelf software was provided by the Commonwealth Secretariat, United Nations Conference on Trade and Development, and the World Bank. These efforts have facilitated the central dissemination of information on external debt by the IMF and the World Bank.

9

For a detailed discussion see Broker (1993), pp. 15–19.

10

Even in this context there may be different arrangements. In some countries, treasury bills, usually of a duration of 90 days, are issued by the ministries of finance, while securities of other types are managed by the central banks.

11

Some autonomous funds were set up during the interwar years in France at a time when the financial credibility of the government was very low. This later became a common feature in French-type accounting systems.

12

This could mean that those funds are earning less than they would have secured if they had been invested in private securities. To that extent, they subsidize the government by reducing their debt-servicing burden. But the extent of this subsidization cannot be ascertained with precision, as the accounting systems are not structured to calculate these amounts.

13

In a debt-for-equity swap, foreign commercial banks are given local currency for their foreign-denominated debt, which they can then invest in a local project. Governments usually set limits on eligible projects and the repatriation of dividends and principal.

Under the debt-for-debt program, the foreign commercial bank exchanges government debt for a debt owed to the government by a private or government-owned corporation. The corporation then undergoes a capital restructuring so that the debt becomes common equity. There have also been cases of debt-for-environmental-improvement swaps. As a part of this swap, international wildlife preservation funds are channeled to selected developing countries experiencing depleting ecologies.

14

This has an impact on the size of the budget deficit. In estimating budget deficits, repayments are netted against new loans and the net estimates are shown, for analytical purposes, as a below-the-line item. The detailed transactions may be shown in the budgets even when such outlays are considered as charged or requiring no legislative approval.

Where, however, debt instruments are issued at zero-coupon rates, interest costs would be included in budget estimates only at the time of their redemption. Meanwhile, the budget deficit would appear lower, although in reality it is growing all the time.

15

This was experienced in India during 1993. Scheduled banks started exchanging scrips and providing advances on the basis of the prospective delivery of debt certificates. The speculative activity, as a result, was substantial.

16

This was one of the problems experienced in the administration of debt in the United States. See General Accounting Office (1990c).

Author: A. Premchand
  • Ahmed, Viqar, and Michael Bamberger, Monitoring and Evaluating Development Projects: The South Asian Experience (Washington: World Bank, 1989).

    • Search Google Scholar
    • Export Citation
  • American Accounting Association, Accounting Education and the Third World (Sarasota, Florida: The Association, 1978).

    • Search Google Scholar
  • Apostolou, Nicholas G., and Larry D. Crumbley, Handbook of Governmental Accounting and Finance (New York: Wiley, 1988).

    • Search Google Scholar
  • Arrow, Kenneth J., The Economics of Information (Cambridge, Mass.: Harvard University Press, 1983).

    • Search Google Scholar
  • Banca d’Italia, Ordinary General Meeting of Shareholders (Abridged Report) (Rome, 1992).

  • Beauchamp, Chris (1990a), “The Audit of Privatization,” International Journal of Government Auditing, Vol. 17 (July 1990), p.9.

    • Search Google Scholar
  • Beauchamp, Chris (1990b), “National Audit Office: Its Role in Privatization,” Public Money and Management, Vol. 10 (Summer 1990), pp. 5558.

    • Search Google Scholar
    • Export Citation
  • Berg, Elliot, and United Nations Development Program, Rethinking Technical Cooperation (New York: UNDP, 1993).

  • Berliner, Callie, and James A. Brimson, Cost Management for Today’s Advanced Manufacturing. The CAM-I Conceptual Design (Boston: Harvard Business School Press, 1988).

    • Search Google Scholar
    • Export Citation
  • Brewer, John, The Sinews of Power: War, Money and the English State, 1688–1783 (New York: Knopf, 1989).

  • Brimson, James A., Activity Accounting: An Activity-Based Costing Approach (New York: Wiley, 1991).

  • Broker, Gunther, Government Securities and Debt Management in the 1990s (Paris: Organization for Economic Cooperation and Development, 1993).

    • Search Google Scholar
    • Export Citation
  • Canada, Office of the Auditor General, Annual Report of the Auditor General of Canada for 1993 (Ottawa, 1993).

  • Chan, James L., ed., Research in Governmental and Non-Profit Accounting, Vol. 1 (Greenwich, Conn.: Jai Press, 1985).

    • Search Google Scholar
  • Cottarelli, Carlo, Limiting Central Bank Credit to the Government: Theory and Practice, IMF Occasional Paper 110 (Washington: IMF, 1993).

    • Search Google Scholar
    • Export Citation
  • Davies, Hywel M., Ali Hashim, and Eduardo Talero, Information Systems Strategies for Public Financial Management (Washington: World Bank, 1993).

    • Search Google Scholar
  • Durham, Paul, ed., Output and Performance Measurement in Central Government: Some Practical Achievements (London: H.M. Treasury, 1987).

  • Eden, Anthony, Full Circle: The Memoirs of Anthony Eden (Boston: Houghton Mifflin, 1960).

  • Enthoven, Adolf J.H., Jaroslav V. Sokolov, and A.M. Petrachkov, Doing Business in Russia and the Other Former Soviet Republics (Montvale, New Jersey: Institute of Management Accountants, 1992).

    • Search Google Scholar
  • Ernst & Young, International Accounting Standards (Manama, Bahrain, 1993).

  • European Union, International Monetary Fund, Organization for Economic Cooperation and Development, United Nations, and World Bank, System of National Accounts 1993 (Brussels/Luxembourg, New York, Paris, Washington, 1993).

    • Search Google Scholar
    • Export Citation
  • Folkerts-Landau, David, Peter Garber, and Timothy D. Lane, “Payment System Reform in Formerly Centrally Planned Countries,” in Building Sound Finance in Emerging Market Economies, ed. by G. Caprio, D. Folkerts-Landau, and T.D. Lane (Washington: IMF, 1994).

    • Search Google Scholar
    • Export Citation
  • Geiger, Dale R., “Trade Offs Between Comparable Consistency and Relevant Customization in Federal Management Accounting,” The Government Accountants Journal (Summer 1994), pp. 2327.

    • Search Google Scholar
  • German Foundation for International Development, Modern Budgeting and Accounting Procedures in Public Finance (Berlin: The Foundation, 1981).

    • Search Google Scholar
  • Goode, Richard, and C. Eugene Steuerle, “Generational Accounts and Fiscal Policy,” Tax Notes, Vol. 65 (November 1994), pp. 10271032.

    • Search Google Scholar
    • Export Citation
  • Gore, Al, From Red Tape to Results: Creating a Government That Works Better and Costs Less (New York: Times Books, 1993).

    • Search Google Scholar
  • Governmental Accounting Standards Advisory Board, Objectives of Financial Reporting (Stamford, Conn.: Financial Accounting Foundation, 1987).

    • Search Google Scholar
    • Export Citation
  • Governmental Accounting Standards Advisory Board, Codification of Governmental Accounting and Financial Reporting Standards (Norwalk, Conn.: GASB, 1993).

    • Search Google Scholar
  • Gupta, M. P., Government Accounting and Control (New Delhi: Ashish Publishing House, 1993).

  • Hardy, Daniel C., and Ashok K. Lahiri, Cash Shortage in the Former Soviet Union, IMF Working Paper 94/67 (Washington: IMF, 1994).

  • Haveman, Robert, “Should Generational Accounts Replace Public Budgets and Deficits?” Journal of Economic Perspectives, Vol. 8 (Winter 1994), pp. 95111.

    • Search Google Scholar
    • Export Citation
  • Herzlinger, Regina E., “Effective Oversight: A Guide for Nonprofit Directors,” Harvard Business Review (July-Aug. 1994), pp. 5260.

    • Search Google Scholar
  • Hood, Christopher, “A Public Management for All Seasons,” Public Administration, Vol. 69 (1991).

  • Hyden, Goran, No Shortcuts to Progress: African Development Management in Perspective (Berkeley: University of California Press, 1983).

  • International Accounting Standards Committee, International Accounting Standards 1993 (London: The Committee, 1992).

  • International Capital Markets Group, Harmonization of International Accounting Standards (London: ICMG, 1992).

  • Johnson, H. Thomas, and Robert S. Kaplan, Relevance Lost: The Rise and Fall of Management Accounting (Boston, Mass.: Harvard Business School Press, 1987).

    • Search Google Scholar
    • Export Citation
  • Kautilya, The Arthashastra, edited, rearranged, translated, and introduced by L.N. Rangarajan (New Delhi: Penguin Books, 1992).

  • Kendig, William L., “Reinventing Financial Management: Lessons Learned in Standardizing Accounting Systems,” Government Accountants Journal (Summer 1994), pp. 2838.

    • Search Google Scholar
    • Export Citation
  • King, M., I. Lapsley, F. Mitchell, and J. Moyes, “Costing Needs and Practices in a Changing Environment. The Potential for ABC in the NHS,” Financial Accountability and Management, Vol. 10 (May 1994), pp. 14359.

    • Search Google Scholar
    • Export Citation
  • Kotlikoff, Laurence, J., Generational Accounting: Knowing Who Pays and When, for What We Spend (New York: Free Press, 1992).

  • Leone, Alfredo, “Effectiveness and Implications of Limits on Central Bank Credit to the Government,” in The Evolving Role of Central Banks, ed. by P. Downes and R. Vaez-Zadeh (Washington: IMF, 1991), pp. 363413.

    • Search Google Scholar
    • Export Citation
  • Likierman, Andrew, Public Expenditure: The Public Spending Process (London: Penguin Books, 1988).

  • Likierman, Andrew, “Financial Reporting in the Public Sector,” in Public Sector Accounting and Financial Control, ed. by D. Henley, C. Holtham, A. Likierman, and J. Perrin (London: Van Nostrand Reinhold International, 3d ed., 1989).

    • Search Google Scholar
    • Export Citation
  • Likierman, Andrew, “Management Accounting in U.K. Central Government—Some Research Issues,” Financial Accountability and Management, Vol. 10 (May 1994), pp. 93115.

    • Search Google Scholar
    • Export Citation
  • Lomax, Lucy, Approaches to Standardizing Accounting Practices for Improved Financial Management and Decision-Making in U.S. Federal Agencies and Government Ministries in Other Countries (unpublished; Washington, 1994).

    • Search Google Scholar
    • Export Citation
  • McCulloch, Brian W., “Accounting and Management Reform in New Zealand” (unpublished; Wellington: The Treasury, 1992).

  • Mikesell, R. M., and Leon E. Hay, Governmental Accounting (Homewood, Ill.: Richard D. Irwin, 4th ed., 1969).

    • Search Google Scholar
  • New Zealand, The Treasury, Financial Statements of the Government of New Zealand for the period ended 30 June 1993 (Wellington, 1993).

  • New Zealand, The Treasury, (1994a), Financial Statements of the Government of New Zealand for the six months ended 31 December 1993 (Wellington, 1994).

    • Search Google Scholar
    • Export Citation
  • New Zealand, The Treasury, (1994b), A Guide to the 1994 Budget Documentation (Wellington, 1994).

  • Organization for Economic Cooperation and Development, The Control and Management of Public Expenditure (Paris: OECD, 1987).

  • Organization for Economic Cooperation and Development, Measuring Performance and Allocating Resources (Paris: OECD, 1989).

    • Search Google Scholar
  • Organization for Economic Cooperation and Development, Accounting for What?: The Value of Accrual Accounting to the Public Sector (Paris: OECD, 1993).

    • Search Google Scholar
  • Organization for Economic Cooperation and Development, Public Management Developments: Survey (Paris: OECD, various issues).

    • Search Google Scholar
  • Pendlebury, Maurice, Rowan Jones, and Yusuf Karbhari, “Developments in the Accountability and Financial Reporting Practices of Executive Agencies,” Financial Accountability and Management, Vol. 10 (Feb. 1994), pp. 3346.

    • Search Google Scholar
  • Pendlebury, Maurice W., ed., Management Accounting in the Public Sector (Oxford: Heinemann, 1989).

    • Search Google Scholar
  • Peterson, Stephen B., Saints, Demons, Wizards, and Systems: Why Information Technology Reforms Fail or Underperform in Public Bureaucracies in Africa, Development Discussion Paper No. 486 (Cambridge, Mass.: Harvard Institute for International Development, 1994).

    • Search Google Scholar
    • Export Citation
  • Pingitzer, Jürgen C., and Bruce J. Summers, “Small Value Transfer Systems,” in The Payment System: Design, Management, and Supervision, ed. by B. Summers (Washington: IMF, 1994).

    • Search Google Scholar
    • Export Citation
  • Premchand, A., Performance Budgeting (Bombay: Academic Books, 1969).

  • Premchand, A., Government Budgeting and Expenditure Controls (Washington: IMF, 1983).

  • Premchand, A., Public Expenditure Management (Washington: IMF, 1993).

  • Premchand, A., Changing Patterns in Public Expenditure Management (unpublished; Washington: IMF, 1994).

  • Premchand, A., ed., Government Financial Management (Washington: IMF, 1990).

  • Summers, Bruce J., “Clearing and Payment Systems: The Role of the Central Bank,” Federal Reserve Bulletin, Vol. 77 (February 1991), pp. 8191.

    • Search Google Scholar
    • Export Citation
  • Summers, Bruce J., “The Russian Payment System,” in Building Sound Finance in Emerging Market Economies, ed. by G. Caprio, D. Folkerts-Landau, and T.D. Lane (Washington: IMF, 1994).

    • Search Google Scholar
  • United Kingdom (1994a),Better Accounting for the Taxpayer’s Money: Resource Accounting and Budgeting in Government (London: HMSO, 1994).

    • Search Google Scholar
    • Export Citation
  • United Kingdom (1994b), Fundamental Review of Running Costs (London: H.M. Treasury, 1994).

    • Search Google Scholar
  • United Kingdom Department of Health and Office of Population Censuses and Surveys (1994c), The Government’s Expenditure Plans 1994–95 to 1996–97: Departmental Report (London: HMSO, 1994).

    • Search Google Scholar
    • Export Citation
  • United Nations, A Manual for Programme and Performance Budgeting (New York: 1965).

  • United Nations, Government Accounting and Financial Reporting in Developing Countries, TCD/SEM.87/3, INT/86/R58 (New York, 1988).

    • Search Google Scholar
  • United Nations, Computerization of Government Accounting in Developing Countries, TCD/SEM.91/2, INT/90/R79 (New York, 1991).

  • United Nations, Conference on Trade and Development, Accounting, Valuation, and Privatization (New York, 1993).

  • United Nations, Economic and Social Commission for Asia and the Pacific, The Control and Management of Public Expenditure: Issues and Experience in Asian Countries (Bangkok, 1993).

    • Search Google Scholar
    • Export Citation
  • United States, Congressional Budget Office, Using Performance Measures in the Federal Budget Process (Washington, 1993).

    • Search Google Scholar
  • United States, Federal Accounting Standards Advisory Board, Financial Resources, Funded Liabilities, and Net Financial Resources of Federal Entities (Exposure Draft) (Washington, 1991).

    • Search Google Scholar
    • Export Citation
  • United States, Federal Accounting Standards Advisory Board, Accounting for Selected Assets and Liabilities (Washington, 1992).

    • Search Google Scholar
  • United States, Federal Accounting Standards Advisory Board (1993a), Accounting for Direct Loans and Loan Guarantees (Washington, 1993).

    • Search Google Scholar
  • United States, Federal Accounting Standards Advisory Board (1993b),Accounting for Inventory and Related Property (Washington, 1993).

    • Search Google Scholar
  • United States, Federal Accounting Standards Advisory Board (1993c), Objectives of Federal Financial Reporting (Washington, 1993).

  • United States, Federal Accounting Standards Advisory Board (1994a), Accounting for Liabilities of the Federal Government (Exposure Draft) (Washington, 1994).

    • Search Google Scholar
  • United States, Federal Accounting Standards Advisory Board (1994b), Entity and Display (Exposure Draft) (Washington, 1994).

  • United States, Federal Accounting Standards Advisory Board (1994c), Managerial Cost Accounting Standards for the Federal Government (Exposure Draft) (Washington, 1994).

    • Search Google Scholar
    • Export Citation
  • United States, General Accounting Office, Title 2, Accounting, GAO Policy and Procedures Manual for Guidance of Federal Agencies (Washington, 1988).

    • Search Google Scholar
  • United States, General Accounting Office, Employee Benefits: Companies’ Retiree Health Liabilities Large, Advance Funding Costly (Washington, 1989).

    • Search Google Scholar
    • Export Citation
  • United States, General Accounting Office (1990a), Cost Accounting Issues: Survey of Cost Accounting Practices at Selected Agencies (Washington, 1990).

    • Search Google Scholar
    • Export Citation
  • United States, General Accounting Office (1990b), Hazardous Waste: Funding of Postclosure Liabilities Remains Uncertain (Washington, 1990).

    • Search Google Scholar
    • Export Citation
  • United States, General Accounting Office (1990c), Public Debt: Management Actions Needed to Ensure More Accurate Accounting (Washington, 1990).

    • Search Google Scholar
    • Export Citation
  • United States, General Accounting Office, Financial Audit: FSLIC Resolution Fund’s 1989 Financial Statements (Washington, 1991).

    • Search Google Scholar
  • United States, General Accounting Office (1992a), Navy Ships: Plans and Anticipated Liabilities to Terminate SSN-21 Program Contracts (Washington, 1992).

    • Search Google Scholar
  • United States, General Accounting Office (1992b), Pension Plans: Hidden Liabilities Increase Claims Against Insurance Program (Washington, 1992).

    • Search Google Scholar
    • Export Citation
  • United States, General Accounting Office, Environmental Liability: Property and Casualty Insurer Disclosure of Environmental Liabilities (Washington, 1993).

    • Search Google Scholar
    • Export Citation
  • United States, General Accounting Office, and Canada, Office of the Auditor General, Federal Government Reporting Study: A Joint Study (Gaithersburg, MD: USGAO, 1986).

    • Search Google Scholar
    • Export Citation
  • United States, General Accounting Office, Joint Financial Management Improvement Program, Financial Handbook for Federal Executives and Managers (Washington, 1991).

    • Search Google Scholar
  • United States, General Accounting Office, Joint Financial Management Improvement Program, (1992a), Facing the Facts of the CFO Act (Washington, 1992).

    • Search Google Scholar
    • Export Citation
  • United States, General Accounting Office, Joint Financial Management Improvement Program, (1992b), Strategies to Improve Communication between Program and Financial Managers (Washington, 1992).

    • Search Google Scholar
    • Export Citation
  • United States, General Accounting Office, Joint Financial Management Improvement Program, (1994a), Reinventing Government, The Financial Manager’s Role (Washington, 1994).

    • Search Google Scholar
    • Export Citation
  • United States, General Accounting Office, Joint Financial Management Improvement Program, (1994b), Report on Financial Management Improvements 1993 (Washington, 1994).

    • Search Google Scholar
  • United States, Office of Management and Budget, “Form and Content of Agency Financial Statements,” OMB Bulletin No. 93–02 (Washington, 1992).

    • Search Google Scholar
    • Export Citation
  • United States, Office of Management and Budget, Federal Financial Management Status Report and 5-Year Plan (Washington, 1993).

  • United States, Office of Management and Budget, Budget of the United States Government: Analytical Perspectives, Fiscal Year 1995 (Washington, 1994).

    • Search Google Scholar
    • Export Citation
  • United States, Treasury Department, Financial Management Service (1989a), FMS Disbursement Guide (Washington, 1989).

  • United States, Office of Management and Budget (1989b), Now That You’re a Certifying Officer (Washington: 1989).

    • Search Google Scholar
  • United States, Office of Management and Budget, Vendor Express and the Vendor (Customer) (Washington, 1990).

    • Search Google Scholar
  • World Bank (1994a), Adjustment in Africa: Reforms, Results and the Road Ahead (New York: Oxford University Press, 1994).

  • World Bank (1994b), Averting the Old-Age Crisis (Oxford, England; New York: Published for the World Bank by Oxford University Press, 1994).

    • Search Google Scholar
    • Export Citation
  • World Bank (1994c), Governance: The World Bank’s Experience (Washington, 1994).