Page 4929 - Week 15 - Thursday, 8 December 1994

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Accrual accounting is the basis upon which Australian business and most government commercial enterprises are required to operate and present their accounts. Accrual accounting provides a comprehensive picture of the financial operations, assets, liabilities and performance of a business enterprise.

Government, on the other hand, has traditionally operated on a cash accounting basis with annual budget appropriations and with performance measured in terms of expenditures against those appropriations. In essence, the rationale for cash accounting is that no monies be collected or spent except in ways and amounts approved by Parliament through budget appropriations.

Through 1993 and this year the committee gave close consideration to the desirability of ACT Government accounts being presented on an accrual accounting basis. The committee noted, in particular, Auditor-Generals report no 5/92 on the Budget Outcome Presentation and the Aggregate Financial Statement for the year ended 30 June 1992 which indicated the current limitations of consolidated fund reporting.

The committee subsequently held discussions with the accounting profession and visited New Zealand during May 1994 for intensive discussions with NZ Government officials, professional and business organisations, client bodies and academics to gauge the ramifications of accrual accounting upon the operations of government and the delivery of services to the community. The committee reported to the Assembly on 23 May 1994 and recommends that should the Public Accounts Committee be re-established in the next Assembly it access the documentation and records of this committee in order to consider whether it should pursue this matter.

Australasian Council of Public Accounts Committees (ACPAC)

The committee has been represented at meetings of the ACPAC by the Presiding Member the Deputy Presiding Member, other committee members from time to time and the committee secretary, and has been an active participant in those meetings.

ACPAC meetings have provided a means of interaction between public accounts committees of the Federal and State Parliaments. This contact has been invaluable in establishing a degree of uniformity between Parliaments on their approaches to matters of common interests These have included the role of Auditors-General, the relationship of the Auditors-General to public accounts committees, reporting on public accounts inquiries, possible joint Federal/State/Territory inquiries into matters such as Commonwealth/State grants, financial reporting by governments and public sector accounting standards.

The committee recommends that should the Public Accounts Committee be reestablished in the next Assembly it continue membership of and active participation in ACPAC.

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