The purpose of government reports required by the Fiscal Responsibility Act

Abstract

PURPOSE: The Fiscal Responsibility Act (FRA), 2014 brought with it an increase in Government fiscal reporting with the aim to enhance transparency and accountability in the Maltese islands. This study aims to better understand the purpose of the FRA and its stipulated reports; to identify who the users of these reports are and analyse their utility. DESIGN: An exploratory sequential mixed methods process was used for this study. Initially, semi-structured face-to-face interviews were conducted with seven Government officials who were involved in the drafting of the FRA and prepare the reports. This was followed by gathering questionnaire responses from 40 potential users of the reports required by the FRA, as identified by the Government officials. FINDINGS: The FRA was enacted due to being a European Union (EU) requirement after the recent financial crisis and as an attempt to reduce Malta’s growing debt problems. The objectives of the Act are to enhance transparency and accountability. Consequently, the purpose of the Government Reports is to provide an ex-post assessment of the prior year budget and explain any deviations. There appears to be a conflicting view regarding the usefulness of the reports as Members of Parliament (MPs) do not believe that these reports are as useful as much of the rest of the users do. Local stakeholders claim to use the reports, however, actual use seems to be more evident in the international sphere, coinciding with the fact that the Act is an EU requirement. CONCLUSIONS: Malta needed to reform its fiscal framework, thus implemented an FRA. Considering that the Act has been in place for only three years, it has been welcomed quite well as the Government Reports are being put to use by most stakeholders. Putting MPs’ opinion aside, the reports are also said to be useful. Over time, awareness and utilisation of the reports is expected to improve. VALUE: This study is the first to focus explicitly on the Government Reports as required by the FRA. The results of this study may prove valuable for the preparers of the Government Reports as they indicate how the usefulness and usability of the reports can be enhanced.