Academic journal article The Government Accountants Journal

Governmental Accounting and Reporting: A Data Warehousing Approach

Academic journal article The Government Accountants Journal

Governmental Accounting and Reporting: A Data Warehousing Approach

Article excerpt

The Governmental Accounting Standards Board (GASB) will soon adopt a new accounting and reporting model.' Intended to remedy many of the deficiencies of the current model, its key feature is an additional set of financial statements-governmentwide, full accrual statements that consolidate the various fund types and account groups.

The theme of this article is that while the new model might have been appropriate for 1984-the year in which GASB was established and began work on the model-it has been overtaken by both technological advances and the need for new types of information. The 21st century demands not merely a reformulation of existing statements, but a whole new approach to financial accounting and reporting. More specifically, it requires governments to take advantage of data warehouses or similar electronic databases. These databases would enable governments to provide not only more information, but also better information-that is, information in a form and at a level of aggregation designated by individual users.

The controversy over the proposed GASB model has centered mainly on which measurement focus and basis of accounting should underlie the financial statements-an issue that has long beset government accounting. However, advances in the ways in which data can be stored and accessed now have the potential to minimize the significance of the conflict. Data warehousing and comparable data management schemes permit users to "have it all." Reports need no longer be constrained by page limitations or concerns over "information overload." Organizations can readily either present statements on more than one basis (such as on both financial resources and all economic resources bases) or provide sufficient information for users to convert from one basis to another.

Of course, neither data warehouses nor the interfaces required to access the data are free goods; the cost of both the additional information and the required hardware and software will have to be borne by someone. But as technology advances and as data warehouses especially designed for governments become more widely available from commercial vendors, these costs are certain to be reduced. If data warehouses are beyond the financial reach of many governments today, they most likely will not be by the time governments would have to implement the proposed model, even if the GASB were to adopt it today. Hence, the board might better serve its constituents by developing an approach to reporting that is suited to the computerized environment of the future rather than the paper-based world of the past. Data Warehouses as a

Means of Facilitating Reporting

Data warehouses are electronic repositories for combining and storing vast amounts of information from different sources. These sources may include mainframe databases, client-server relational databases, spreadsheets and text reports.2 In conjunction with other elements of decision support or executive information systems, they permit users not only to obtain "raw" data, but also to combine, summarize and analyze the data in ways that best facilitate their own decisions or evaluative judgments. Further, using "data mining" techniques such as regression analysis, they can test for statistically significant trends and relationships among the elements of the database (for example, how growth in population affects various types of expenditures).

Data warehouses can be entered through the Internet. Hence governments could open them to the public at large or could limit certain of the data to specified parties (data on a vendor's balance could be restricted to that particular vendor). Electronic data warehouses free reporting entities from the constraints of conventional paper reports. They thereby enable the entities to present accounting information from multiple perspectives and to expand the magnitude and scope of accounting-related data.

Government data warehouses could make available to the public the type of financial and related information that wellmanaged governments already collect and that influential users, such as rating services, demand. …

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