Models of Public Budgeting and Accounting Reform, Volume 2 Supplement 1.

356 Pages·2002·1.658 MB·English

by  OECD

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model and its two subsets of the German tradition and the French tradition as well
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42 2002 13 1 P
ISBN 92-64-19897-0
OECD Journal on Budgeting
OECD Journal on Budgeting -:HSTCQE=V^]^\Z:
Volume 2, Supplement 1 Volume 2, Supplement 1
Models of Public
Budgeting and
Accounting Reform
OECD JOURNAL ON BUDGETING
Volume 2/Supplement 1
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960,
and which came into force on 30th September 1961, the Organisation for Economic
Co-operation and Development (OECD) shall promote policies designed:
– to achieve the highest sustainable economic growth and employment and a
rising standard of living in Member countries, while maintaining financial
stability, and thus to contribute to the development of the world economy;
– to contribute to sound economic expansion in Member as well as non-member
countries in the process of economic development; and
– to contribute to the expansion of world trade on a multilateral, non-
discriminatory basis in accordance with international obligations.
The original Member countries of the OECD are Austria, Belgium, Canada,
Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United
Kingdom and the United States. The following countries became Members
subsequently through accession at the dates indicated hereafter: Japan
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(Article 13 of the OECD Convention).
Cette publication est disponible en anglais uniquement.
© OECD 2002
Permission to reproduce a portion of this work for non-commercial purposes or classroom
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FOREWORD
The papers in this supplement to the OECD Journal on Budgeting
originated from an international symposium held in April 2001 in Beijing,
China. The symposium was sponsored by the Ministry of Finance of the
People’s Republic of China and was conducted by the National Institute of
Accounting, in association with Tsinghua University’s School of Economics
and Management and Institute of Accounting Research.
The papers give a comprehensive overview of various OECD Member
country accounting models and as such are valuable not only to China, but to all
countries. The main theme of these models is accountability and confidence in
the execution of the budget plan. While the models are different and constructed
to meet the needs of individual countries, there is great utility in presenting a
comparative understanding of the theoretical basis for the systems. This
understanding is especially important for non-member countries where an
OECD “best practices” approach may not be valid. Presentations like these
show that there is no single way to construct an accounting system, but rather
that principles and common elements are important.
The views expressed are those of the authors and do not commit or
necessarily reflect those of governments of OECD Member countries.
EDITORS
James Chan (Editor), Professor of Accounting, University of Illinois at
Chicago, United States.
Chen Xiaoyue (co-editor), Professor of Accounting and Finance, Tsinghua
University; and Vice President, National Accounting Institute, People’s
Republic of China.
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CONTRIBUTORS
Richard Allen, Director, Public Expenditure and Financial Accountability
(PEFA) Program, World Bank, Washington, D.C.
Tom Allen, Chairman, Governmental Accounting Standards Board, United
States
Aad Bac, Professor of Government Accountancy, Tilburg University,
Netherlands
Eugenio Caperchione, Professor of Public Sector Accounting, University of
Modena and Reggio Emilia, Italy
James Chan, Professor of Accounting, University of Illinois at Chicago, United
States
Benoit Chevauchez, Director, Public Management Institute, Ministry of
Economics, Finance and Industry, France
Noel Hepworth, Chairman, Public Sector Committee, European Federation of
Accountants; Chairman, Institute of Public Finance, United Kingdom
Xiang Huaicheng, Minister of Finance, People’s Republic of China
Lou Jiwei, First Vice Minister of Finance, People’s Republic of China
Klaus Lüder, Professor Public Financial Management and Business
Administration, German Postgraduate School of Administrative Sciences,
Speyer, Germany
Alex Matheson, Head of Division, Budgeting and Management, Public
Management Service, Organisation for Economic Co-operation and
Development, Paris, France
Vicente Montesinos, Professor of Accounting, University of Valencia, Spain
Riccardo Mussari, Professor of Public Management, University of Siena, Italy
June Pallot, Professor Accounting, University of Canterbury, New Zealand
Kuno Schedler, Professor of Public Management, University of St. Gallen,
Switzerland
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MODELS OF PUBLIC BUDGETING AND ACCOUNTING REFORM
James L. Chan, Editor
Chen Xiaoyue, Co-Editor
Preface by Xiang Huaicheng...........................................................................7
Introduction by James L. Chan.......................................................................9
1. Accountability and Governance
Public Accountability and Government Financial Reporting by Tom L. Allen11
Better Public Sector Governance: The Rationale for Budgeting and Accounting
Reform in Western Nations by Alex Matheson............................................37
2. China and Central-Eastern European Models
China by Lou Jiwei.......................................................................................51
Central and Eastern Europe by Richard Allen..............................................81
3. Anglo-American Models
United Kingdom by Noel Hepworth...........................................................115
New Zealand by June Pallot........................................................................163
United States by James L. Chan..................................................................187
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4. Continental European Models -1
Germany by Klaus Lüder..........................................................................2245
Switzerland by Kuno Schedler....................................................................243
Netherlands by Aad Bac..............................................................................265
5. Continental European Models - 2
France by Benoît Chevauchez.....................................................................285
Italy by Eugenio Caperchione and Riccardo Mussari.................................305
Spain by Vicente Montesinos......................................................................333
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PREFACE
BY
XIANG HUAICHENG*
China’s financial systems have undergone essential changes since
China adopted the reform and opening policy. The previous phase focused on
fiscal revenues aspects, and the management of expenditures is emphasised in
the present phase. The reforms of the fundamental management systems (cid:1)(cid:2)(cid:3)(cid:4)(cid:5)(cid:6)
as government budgeting, treasury management system and budget accounting
system (cid:1) are particularly emphasised. This is a profound reform – indeed a
revolution – of the traditional budget management systems. It covers changes in
budget concepts, the budget preparation system and budgetary management. We
hope that through this budget reform, we can promote the establishment of a
public finance system that corresponds to the socialist market economy. Such a
system would make better use of information technology and significantly
improve the level of budget management. For this purpose, the Ministry of
Finance of China has set up a special budget reform group. A number of
capable and talented staff members will concentrate their time and energy on
researching and solving the problems that are likely to be confronted in the
budget reform process.
As the reform and opening-up process progresses further, continuous
efforts will be made to improve and perfect China’s enterprise accounting
system and budget accounting system. In 1993, the enterprise accounting
system underwent a fundamental reform. Enterprise accounting standards and
the enterprise accounting systems by industry were defined and promulgated.
This drew open the prologue of reform of China’s enterprise financial
accounting system. After that, 13 specific accounting standards were issued
successively and a new enterprise accounting system was published by the end
of 2000. This development occurred in the wake of the accelerated development
of the China’s capital market, the establishment and completion of a modern
enterprise system and China’s accession to the World Trade Organisation.
These new standards and new systems, while exhibiting Chinese characteristics,
are compatible fully with international accounting practices.

*. Xiang Huaicheng is Minister of Finance, People’s Republic of China.
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In 1997, China’s budget accounting system underwent fundamental
reforms as well. These included: a new general budget accounting system, an
administrative unit accounting system and the public service unit accounting
system. The adoption of these systems signified the shift of China’s budget
accounting system to fit the socialist market economy. For the time being,
combined with the reforming of budget management system, accounting
systems for the government and non-profit organisations are studied and issued
that both correspond with China’s conditions and are in full co-ordination with
the international accounting practice.
The Ministry of Finance has a tentative plan for the issue of
government budgeting management and accounting reform in China. Vice
Minister Lou Jiwei will address this topic during his presentation.
I note that all the experts present at the symposium have carefully
prepared thoughtful papers of a high calibre. I believe their insightful
presentations will certainly benefit all the participants. I extend my best wishes
for a successful symposium.
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INTRODUCTION
BY
JAMES L. CHAN*
The papers in this volume originated from an international symposium
held in April 2001 in Beijing, China. The symposium was sponsored by the
Ministry of Finance of the People’s Republic of China and was conducted by
the National Institute of Accounting, in association with Tsinghua University’s
School of Economics and Management and Institute of Accounting Research.
As China engages intensively in reforming its government budgeting and
accounting, there is a sense that developed nations may have valuable lessons to
share. The symposium therefore sought to promote the exchange of knowledge
and perspectives between Chinese policy-makers and scholars and their
colleagues primarily in Europe and the United States.
China’s current reform efforts are authoritatively described in
considerable detail in this volume. These efforts have tried to incorporate the
best practices from other – especially Western – nations. Rather than presuming
to know what these practices are and who has them, I made an attempt to
present a relatively comprehensive and representative sampling of
contemporary Western practices in the field of government budgeting and
accounting. Essentially there seem to be two schools of thoughts or patterns of
practice (“models”). The Anglo-American model is rooted in the English
traditions and has its modern manifestations in Great Britain itself, the United
States, New Zealand among others. The Continental European model appears to
have two variants: the “Latin” version is practised in France, Italy and Spain,
and perhaps elsewhere; and the “German” version in, for example, Germany.
Switzerland, and perhaps the Netherlands. The identification of countries
sounds tentative because practices – being pragmatic – value usefulness rather
than ideal types. For the symposium, it was neither possible (due to resource
constraints) nor necessity (as only illustrative practices were sought) to include
all countries. In this regard, the Chinese host wisely suggested the inclusion of
Central and Eastern countries, whose reform experiences might also be
instructive.

* . James Chan is Professor of Accounting, University of Illinois at Chicago,
United States.
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