HM Treasury sets minimum financial reporting requirements for 2020-21
10 Jan, 2021
In response to the continuing pressures faced by departments and other government entities due to the impact of COVID-19, HM Treasury has taken the decision to reduce the financial reporting requirements for preparers of government annual reports and accounts for 2020-21. This follows reduced reporting requirements for 2019-20 previously issued.
In doing so, HM Treasury has specified, in an Addendum, minimum reporting requirements as per the Financial Reporting Manual (FReM). Although specifying minimum requirements HM Treasury notes that such requirements do not replace the FReM but rather set out minimum financial reporting requirements. Entities may go beyond the minimum requirements where they are able to. The minimum requirements are in place for 2020-2021 only and only relate to non-audited parts of the annual report and accounts.
There are reduced reporting requirements in the performance report including the option of only producing the summary information in the performance overview as set out in paragraphs 5.3.1 – 5.3.3 of the FReM. This is instead of providing the performance analysis as set out in paragraphs 5.4.1 – 5.4.6 of the 2020-21 FReM. For 2020-21 there is also an option not to report against the sustainability reporting requirements as set out in paragraphs 5.4.8-5.4.12 of the 2020-21 FReM. Entities will be expected to include within their performance reports information regarding the impact of Brexit and COVID-19 on departmental activity and outcomes as well as core KPIs, linking these to the UN Sustainable Development Goals where relevant.
Within the accountability report, the only optional requirements relate to the Statement of Outturn against Parliamentary Supply (SoPS). Entities applying the FReM are no longer required to adhere to the comply or explain requirement in paragraph 6.6.7(b) of the 2020-21 FReM, that SoPS disclosures must follow the form of the illustrative disclosures. Entities are also permitted to omit the requirements set out in 6.6.8(d) in relation to supporting text and the presentation of figures in thousands in the SoPS.
There will be no change to the format and content of the financial statements which should continue to be published in line with the requirements of the 2020-21 FReM.
The Addendum is available on the HM Treasury website.
Update May 2021
In April 20201, HM Treasury published the results of an early review into the effectiveness of the reduced reporting requirements. The review gathered feedback via a survey to the Resource Accounts Special Interest Group, qualitative feedback from departments and laying date data. Overall, preparers considered the guidance and measures offered were effective at reducing the financial reporting burden for their 2019-20 annual report and account preparation. HM Treasury will continue to monitor the effectiveness of the measures and guidance for the 2020-21 reporting period and will decide if further measures and guidance will be required in the future.
The Strategic review of the HM Treasury's financial reporting response to COVID-19 is available on the HM Treasury website.
