Academic journal article The Journal of Government Financial Management

PAR-The Report We Love to Hate

Academic journal article The Journal of Government Financial Management

PAR-The Report We Love to Hate

Article excerpt

One reason for creating the PAR was to integrate performance and financial information, and some agencies have made a good effort to line up costs with goals and outcomes

One of the tenets of citizen-centric government is public accountability-putting information out there so citizens can judge for themselves just how well their government is performing and managing resources. For the federal government, this public accountability manifests itself in an often-colorful document, somewhere around 300 to 400 pages long and two inches thick, called the Performance and Accountability Report, or PAR.

There's no doubt the PAR is comprehensive. In fact, some say the PAR is too comprehensive and as a result, too complicated for most people to use. But the PAR should be, and can be, a useful document. With that thought in mind, AGA set forth a cooperative research project to determine the usefulness of PARs for their intended audiences, and how that usefulness can be improved. And why not? Agencies are required to go through the time and effort to produce a PAR, so it should be a relevant and reliable report.

The approach to this research project was simple and straightforward. Current literature was reviewed to find out what was being written about financial reporting and accountability. The National Academy of Public Administration (NAPA) graciously hosted a panel of PAR preparers and users to discuss ways to improve. More than 100 people attended.

Finally, a survey instrument was developed for face-to-face interviews. It was made available online through the AGA website for anyone who wanted to take the survey and participate in the study. More than 40 people were interviewed and almost 60 participated online, representing a good mix of civilian and military agencies. Respondents ran the gamut from Senior Executive Service members and political appointees down through the ranks to auditors, financial managers, budget directors and program managers.

For those interested in "bottom-line" results, almost 80 percent of about 100 respondents thought the PAR had useful information, had a useful format, improves information quality, measures performance and demonstrates accountability. Virtually all respondents wanted to improve it by publishing a summary or highlights document, seriously editing the current, lengthy version and making it available online.

For those who want to learn more about public financial reporting, read on, because as it turns out, trying to improve public financial reporting is not just a federal government problem. Based on the literature review, it seems that locally, nationally and internationally, for the private and public sector, the financial community is struggling to improve both the substance and form of public reporting.

Why such difficulty with how to improve public reporting? One simple reason is because things have changed, and changed dramatically and rapidly in the last decade: traditional ways of accounting and reporting simply don't fit in the 21st century. This point was driven home most succinctly in international literature, specifically a study about the challenges of reporting in the 21st century done by the Institute of Chartered Accountants in England & Wales (ICAEW) in their New Reporting Models for Business.1 This report focused on the following questions:

* Should financial statements address all stakeholders?

* Can financial statements be changed to be more transparent?

* Will the reporting structure benefit from a new framework?

While the ICAEW Report focuses on business reporting, some observations from that report are worth consideration. Figure 1, taken from that report with slight modifications, compares the reporting framework of the past to what is needed in the future. It captures many of the reasons why reporting financial information is under pressure to change and improve. Identifying some of the key drivers of the change may help shape the changes agencies can make to improve their PARs. …

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