Please enable JavaScript.
Coggle requires JavaScript to display documents.
External Financial Reporting in public sector organisations…
External Financial Reporting in public sector organisations
Aims and Objectives
Bodies that make up Public Services
Public Benefit Entity
FRC defines:
"reporting entities whose primary objective is to provide goods or services for the general public or social benefit"
Public Service Organisation
Resources to complete organisation's objectives provided or directed by Government
Organisation exists to provide benefit to public not shareholders
Users of Accounts
Investors
Lenders
Suppliers
Employees
Customers
The Public
Government Agencies
Groupings:
Anthony (1978)
FASAB (1994)
GASB (1998)
ASB (2007)
Difference between Private & Public
Demonstrate how and where money has
been spent, not how profit has been generated
Private Objective
Increase Shareholder net wealth
Public Objective
...will shape the format & content of their FS
Commissioners & Providers
Commissioner
A commissioner is an organisation that is not directly responsible
for providing services to the public. Commissioners will buy in
services from other organisations, which could include otherpublic
service or third sector organisations or the private sector.
Provider
A provider will deliver services directly to the public, for example
National Health Service Foundation Trusts, parts of local authorities and many central government agencies and non-Departmental public bodies
Objectives
Breaking Even
Value for Money, Accountability & Stewardship
Providing bot Statutory & Non Services
Financial Reporting Council (FRC)
Responsible for setting accounting standards in the UK
Provides assurance to specific SORPs
Sub Committee
Committee on Accounting for Public-benefit Entities (CAPE)
Works with public sector and not for public organisations
Regulation and Legislation
Regulations
Parliamentary
Purpose of organisation and how it should report
Accounting Standards
Applied to all Financial Reporting
Accounting Practice
How Accounting Standards can be applied
Specific Rules
Each sector may develop rules to cover specific areas
Accounting Theories and Principles
Fund and Entity Theories
Entity Concept
Considers that an organisation is distinct from any individual or group of individuals associated with it (ie grouped as a whole)
Fund Accounting
Identifiable funds which can only be used for a specific purpose
Financial Statements contain all assets, liabilities, revenues & expenses whether internal or external
Fund in LAs
Collection Fund
How local taxation is collected & applied
Housing Revenue Fund
Reporting of Housing service
Pension Fund
Seperate statement showing LA pension fund
General fund
Reserve that accounts for non-specific activity
Applying Generally Accepted Accounting Practice (GAAP)
Drives financial reporting requirements
Interprets IFRS
Central Government
Financial Reporting Manual (FReM)
Produced by Treasury
Interprets IAS
Provides Guidance
NHS
Group Accounting Manual (GAM)
Annual Reporting Manual (ARM)
GAM
Produced by DoH
Applies FReM & IAS
ARM
Published by NHS Improvement
Local Goverment
Code of Practice
Produced by CIPFA
Governs reporting
Housing Associations & FE
Based on specific SORPs
Uses FRS 102
Public Private Partnerships
PFI
Private investment in Public sector
Accountability
Parliamentary Accountability
Post event check on expenditure in accordance with purposes approved by Parliament
Financial Accountability
Stewardship of FS
Present a True & Fair view
Demostrated by annual targets & strategic plans
Political Accountability
accountability for actions to the people or elected reps
Legal Accountability
Actions are within law
Managerial Accountability
Accountable for achieving goals & VFM
use of performance measures
International Federation of Accountants (IFAC)
Global organisation representing the accounting standards