The boundaries of a Europeam government as a reporting entity : the Maltese perspective

Abstract

Purpose: This research compares the consolidation rules contained in IPSAS and the ESA95, in particular with regards to the government entities which would be included in a financial report for a national government. The IPSAS are applicable for the financial report prepared from a government accounting system, whereas the ESA95 rules are applicable to statistical reports submitted by EU member states to Eurostat, which statistical reports are a product of national accounting. This study has taken the Maltese public sector as a case-study where these two consolidation boundaries are analyzed. Design: In order to achieve the objectives of this research, a qualitative research methodology approach was used. This involved the triangulation of data obtained through documentary research with information gathered through open-ended personal interviews with government officials involved in government financial reporting and EU statistical reporting. Findings: The findings of this study clearly demonstrate the importance of EU statistical reporting for governments of EU member states and its significant priority for Maltese government officials. Moreover this study illustrates the strategic difference that the adoption of IPSAS would have on the boundary of government reporting. Given that IPSAS consolidation requirements seem farfetched, an alternative for better reporting is still needed. This study puts forward two recommendations that would result in more inclusive and transparent reporting: a principles based approach and a rules based alternative. Conclusion: Unreliable statistical reporting played an important part in the EU crises. Changes need to be made so that similar events do not take place again. One of the most important issues is the consideration of having wider boundaries of what constitute a government for EU reporting purposes. Value: This study would be very useful for both government authorities and EU bodies involved in the current development of the EPSAS. The EPSAS need to consider changing the boundaries of a government for statistical reporting so that these encompass more public sector entities which would result in more inclusive and transparent reporting.