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Finalised framework on public sector governance released

  • IFAC (International Federation of Accountants) (lt gray) Image

03 Jul 2014

The International Federation of Accountants (IFAC) and the Chartered Institute of Public Finance and Accountancy (CIPFA) have released a finalised international framework on governance in the public sector. The framework contains seven key principles designed to ensure that public sector entities achieve their intended outcomes whilst acting in the public interest at all times. The framework encourages a focus on sustainable economic, social and environmental outcomes and the links between governance and public financial management, and supports the use of International Public Sector Accounting Standards (IPSAS) and Integrated Reporting.

The finalised framework, titled International Framework: Good Governance in the Public Sector, was developed by an 'international reference group' of individuals drawn from a wide range of organisations and follows the publication of an exposure draft in June 2013. The stated aim of the framework is "to encourage better service delivery and improved accountability by establishing a benchmark for aspects of good governance in the public sector". It is designed to be used by those who develop and set public sector governance codes when existing codes at the national or sectoral level are updated or new codes are put in place.

The framework considers governance as comprising the arrangements put in place to ensure that intended outcomes for stakeholders are defined and achieved. It seeks to do this by setting out seven principles covering topics such as ethics, openness, defining outcomes and how they are achieved, capability development, risk management and strong financial management.

The seventh principle focuses on implementing good practices in transparency, reporting and audit to deliver effective accountability. Specific recommendations related to the seventh principle include:

  • Accountability reports should be written and communicated in an open and understandable style appropriate to the intended audience, whilst striking a balance between the right amount of information and imposing onerous requirements on the entity to prepare
  • Public sector entities should report publicly at least annually in a timely manner, and performance information and accompanying financial statements should be prepared on a consistent and timely basis, with International Public Sector Accounting Standards (IPSAS) prepared by the International Public Sector Accounting Standards Board (IPSASB) seen as providing "the most complete suite of accrual-based international financial reporting standards developed specifically for the public sector"
  • Integrated reporting is also seen as supporting public sector entities in engaging with stakeholders in a more integral and coherent manner
  • The provision of assurance through external audit is an essential element of a public sector entity's accountability, whilst internal audit can also contribute to accountability mechanisms.

Click for press release (link to IFAC website).

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