Advisory Committee regarding the Government Accounting System

The Minister of Finance and the President of the Court of Audit have signed a request for advice from the newly-established Advisory Committee regarding the Government Accounting System.

They did so in response to a report issued by the Court of Audit entitled ‘Budget reserves. Putting money to one side as a budgeting instrument’. In it, the Court recommends that the Minister of Finance consider keeping government-wide accrual accounts alongside the strict obligation-cash accounting system. In response, the Minister suggested that a joint advisory committee (consisting of members of the Court of Audit and the Ministry of Finance) should be established to study the pros and cons of keeping the two sets of accounts, taking account of European and international developments. The advisory committee is chaired by the Secretary-General of the Ministry of Finance.

The government currently keeps the accounts for the budget and for revenue and expenditure on an obligation-cash basis, and on an accruals basis where necessary. Nearly all the line ministries work with an obligation-cash accounting system and many executive organisations at arm’s length from the ministries use an accruals system.

All agencies and most autonomous administrative authorities currently keep accrual-based accounts. Municipalities and provinces also work with an accrual accounting system. On the whole, central government keeps a substantial proportion of its accounts for expenditure and revenue on an accruals basis.

The Advisory Committee regarding the Government Accounting System will consider the advisability of keeping accrual-based accounts in the context of: (1) the transparency of public accounts, (2) financial management, (3) budget standards and control, and (4) the production of EMU figures. An important factor will be the ability to retain the high quality of the Dutch figures and improve them where possible in the future. The central government budget and annual accounts must also remain accessible and readable.

The advisory committee is expected to issue its report at the beginning of 2017. Both the government and the Court of Audit will form an opinion on the committee’s report and inform the House of Representatives accordingly.