How accountants can help state and local governments

Accountants are responsible for recording and maintaining financial transactions. They ensure taxes are paid on time and tax statements are accurate for audits. They analyze financial statements and contribute to inefficient business operations. Accountants hold a prominent place in any entity that deals with money.

A local government an elected multi-purpose body responsible for a wide range of services in their small geographically marked constituencies. They are established for specific administrative and political purposes. Local bodies are responsible for the maintenance of roads, pavements, parks, marketplaces, town planning, housing, healthcare, education, water, electricity, and other similar utilities.

The state has a larger function of overseeing a country’s administrative matters. Statesmen have their political affiliations and are elected through a rigorous electoral process. The main functions of the state are to do legislation, maintain law and order, provide basic services, and work towards the welfare of its citizens.

All these functions are performed through departments and government machinery. All these require funds. The governments prepare budgets and allocate funds for various service-related functions. Governments transfer these funds to local governments and departments for efficient utilization of resources.

Accountability is one of the basic modern-day requirements for today’s affairs of the state. So how do the governments maintain accountability? What needs to be done to ensure the funds are spent for the purpose they are meant for? But above all, how does the government decide what funds to allocate for what purpose?

That is where the role of accountants come in. Governments function well when they have experienced, competent and qualified accountants on board. They work alongside a range of advisors namely economic experts, finance specialists, social development professionals, and so forth. In the fleet of advisors and experts, accountants hold a prominent place. This is mainly because of their importance in running an efficient government.

Accountants support all departments working under a state. Imagine, planning, and development wing is tasked to identify a location and plan a new city in the suburbs of the state capital. Feasibility report would include the costs associated with the planning phase until the site is developed and becomes fully functional.

Similarly, think of a government that plans to give special allowances for hourly-paid staff who lost jobs in the Covid-19 pandemic. The citizen’s database at the national jobcentre will help identify these specific citizens. How would the state decide on the amount per head to be paid, where would it get funds from? What is the national reserve situation?

Government officials are not accountants themselves nor do they know much about financial terms and procedures. Technical knowledge of accounts only comes after professional studies, work, and experience. It won’t be possible for a government or a political person to learn ABCs of accounting in a few days.

Accountants and financial advisors are required to be on board. Complexities of state’s capital reserves and budgeting do not allow for any errors. It becomes mandatory for accountants to be part of the vital decision making processes on routine activities.

Another role accountants take up is to ensure accountability. This is a crucial management function to measure the efficiency and economy of public resources and ensure the funds are put to good use. This task is embedded in the accounting systems to make effective use of it.

Taking the example as previously stated, questions like the following would be asked at every stage to ensure the effective utilization of resources. Have the government targeted the right group? What is the distribution plan? Are the funds allocated enough? Are all geographical areas targeted? Above all, if the monetary grant has reached the most deserving.

Accountants with accurate knowledge will be able to answer these questions. Dealing with financial transactions is a sensitive matter. Across the world, many governments are accused of financial corruption. That is, taking public money for personal use, giving away commissions to benefit friends, family or acquaintances, and giving gifts.

Since accountants are aware of various budget heads while preparing budgets, plan contingencies, and knowledge of the reserve situation. They are better able to track the use of funds and can spot any discrepancies or misuse in service delivery. Accountants thus play a vital role in maintaining a fair distribution of funds. Audit reports present the reality of projects in numerical and non-numerical data.

Fiscal reports, budgets, audits, tax collection processes, and its implementation are some of the other fields where governments look up to the accountants. They are responsible for the preparation of annual reports and analysis of budget preparations.

As governments are to plan and provide for public service functions, monetary needs can only be fulfilled when an accurate picture is presented to them. Accountants are part of planning and development meetings even if they don’t precisely focus on budgeting because they need to know what is being planned to plan.

So from where does all this money come from? Yes, that is right. Accountants are also responsible for raising funds. This is again done through various strategies, development projects, investments from private sectors.

Tax collection is also one of the mechanisms to collect funds. Investments, prize bonds, insurances are all part of fund generating practices that a state runs under financial programs. Financial experts along with accountants and economy specialists plan, develop, implement, and analyze these programs. Efficacy and efficiency of these programs are monitored and accountants present reports to senior management for decision making on extension or closure.

There is no second opinion on the inclusion of accountants in-state business. All world economies rely heavily on reports and financial analysis of accountants. Audits are conducted at the end of each fiscal year tell if utilization of resources is up to the mark.

Future planning is dependent on reviews, analysis, and projections of accountant Walsall information. Accountants are an integral part of any state machinery and they will remain so. Based on the current situation created by the coronavirus pandemic, governments have directed many funds to the health sector, allowances for unemployed and daily wage workers, healthcare staff, and the general wellbeing of its citizens.

As big chunks of money are diverted, governments will need more fund generation, better allocation of budgets, and planning to ensure they do not go bankrupt or have low reserves to be unable to meet the needs of other social development programs. It can easily be said that in the future significance of accountants in government setup will increase.