Operation Sunlight
Richard Webb
The Budget papers for 2009–10 contain changes to the
presentation of information. The changes were foreshadowed in
Operation Sunlight. According to the Department of Finance and
Deregulation website:
Operation Sunlight is the Government’s
reform agenda to improve the openness and transparency of public
sector budgetary and financial management and to promote good
governance practices.[1]
Perhaps the most praiseworthy change is the presentation of
information at the program level in Portfolio
Budget Statements.[2] In the past, some agencies provided information at the
program level but others did not. Now, not only is information
provided at the program level but the Portfolio Budget Statements
include the three forward estimates years at the program level.
This is in addition to information for the previous and current
budgets as has been provided in the past. For years, Members of
Parliament have sought information at the program level and program
funding over the forward estimates years. One wonders why this
information was not provided before since the information obviously
existed.
A second change is the revision of outcomes. A criticism of some
outcomes is that they were too vague. On the one hand, this allowed
flexibility as to where funds could be allocated. On the other
hand, this limited parliamentary scrutiny of spending. The
Department of Finance and Deregulation, in conjunction with
agencies, has reviewed all outcomes. Readers will judge how
successful this exercise has been. One problem that arises when
outcomes are revised is that it might be difficult to obtain
comparable data for earlier years.
A third change is that Budget Paper no. 4 includes a detailed
table listing all special accounts authorised under the
Financial and Management Accountability Act 1997. The
table shows, by portfolio and entity, estimated balances and flows
for the budget year and for the previous year. Again, this is a
worthwhile addition.
The presentation of income statements in 2009–10 has
changed to show the ‘net cost of services’. The net
cost of services is derived by deducting from an agency’s
expenses its ‘own source income’. This is income in the
forms of revenue from the sale of goods and services, profits from
the sale of assets etc. The money appropriated by government is
then deducted from the net cost of services to derive the
agency’s surplus or deficit, as the case may be.
The rationale for the change is that the net cost of
services:
… recognises the nature of public sector
activity and the emphasis on the net cost of services to
Government.[3]
It is true that the presentation of accounting data as used by
the private sector, especially the concept of profit and loss, is
not very meaningful for government agencies that are funded mainly
by government appropriations. The net cost of services recognises
this by highlighting the contribution that agencies can make from
their own resources to funding their activities on the one hand,
and the contribution from government on the other hand.
It is questionable whether the adoption of net cost of services
really adds much. While some readers of budget papers may be
interested to know the net cost of services, it is probably of
little interest to most readers. Many readers, especially those
with no accounting knowledge, would not have any familiarity with
the concept. Finally, the revised presentation is complicated
compared with the straightforward presentation of past years.
[1].
Australian Government, ‘Operation Sunlight’, Department
of Finance and Deregulation website, viewed 18 May 2009,
http://www.finance.gov.au/financial-framework/financial-management-policy-guidance/operation-sunlight/index.html
[2].
Australian Government, ‘Portfolio budget statements’,
Budget 2009–10 website, viewed 18 May 2009, http://www.budget.gov.au/2009-10/content/pbs/html/index.htm
[3].
Australian Government, Operation Sunlight: enhancing budget
transparency, Australian Government, December 2008, p. 18,
viewed 18 May 2009,
http://www.finance.gov.au/financial-framework/financial-management-policy-guidance/operation-sunlight/docs/operation-sunlight-enhancing-budget-transparency.rtf
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