Report on the introduction of accruals-based accounts in government institutions

20-10-2004

Report no. 2/2004

In 2003, the Danish Finance Committee approved a pilot scheme on accruals-based presentation of accounts for 13 government institutions, and following an evaluation of the pilot scheme in 2004 adopted a general introduction of accruals-based accounts in government – effective as of 2005 – as well as a pilot scheme for accruals-based appropriations. Operational appropriations based on accruals-based principles will generally be introduced with effect as of financial year 2007. The Danish Ministry of Finance maintains overall responsibility for coordinating collective implementation and for supporting departments in this process. The departments, on the other hand, are responsible for ensuring implementation of the changed principles in the various ministries.

The NAOD examined whether the Ministry of Finance had organised and implemented a process which efficiently supports introduction of the accounting reform in government, and whether the departments had involved themselves sufficiently in the accounting reform in their area of responsibility.

Furthermore, it was examined whether implementation in the test institutions had proceeded satisfactorily, and whether the planning and preparations of the other government institutions of the transition to accruals-based accounting had commenced satisfactorily.

On this basis, the NAOD issued a number of recommendations concerning the Ministry of Finance’s and the institutions’ further cost-reform work.