ACCA, the World Bank, and IFAC say better financial information and thinking must be applied to help manage public finances, and economic indicators need more clarity to provide a better picture of public sector finances in turbulent times.

The COVID-19 pandemic means government spending has increased immensely, with the IMF calculating it to be a staggering US$9 trillion. For ACCA, the World Bank, and IFAC, the concern is that public sector fiscal commitment and interventions are not being captured accurately by governments due to the way they account for this.

In a new report published today, Sustainable public finances through Covid-19, the three organisations are calling for governments to use public sector balance sheets to properly manage their finances through the pandemic, paying attention to their public sector net worth. For some, this means a change in accounting methods from cash to accrual accounting.

Alex Metcalfe, author of the report and head of public sector policy at ACCA says: ‘This global pandemic crisis could be a catalyst for more governments to adopt this approach, which can improve decision-making, act as the benchmark for new fiscal targets, and support governments to rebuild economies for a more inclusive and greener future.’

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