FRAB encouraged by changes to deliver improvements in financial reporting
The Financial Reporting Advisory Board (FRAB) has published its 16th annual report.
The report highlights that the year reflected in the report saw the latest in a series of major changes that the public sector has faced in relation to financial reporting – the first Clear Line of Sight reports. This follows the introduction of accruals accounting, the move to International Financial Reporting Standards, and the introduction of Whole of Government Accounts.
Commenting on this year’s report, Kathryn Cearns, the FRAB Chairman, said:
The major changes recently introduced in public sector financial reporting have been aimed at increasing the transparency of government finances, ensuring accountability for the stewardship of assets, and delivering improvements in the efficient and effective use of resources.
Although these changes are now complete, many challenges remain for financial reporting in the public sector, not least ensuring that they embed and deliver the benefits expected of them.
It is clear from the reaction of Parliament and other stakeholders to Whole of Government Accounts that financial reporting can complement the fiscal figures by providing a different window into public sector finances. But to be effective financial reports must meet the needs of users.
To that end the Board is encouraged by recent developments aimed at streamlining and simplifying the accounts, and we look forward to working with our public sector colleagues on this and other key reporting issues over the coming year.
The report also highlights that during this reporting year, the changes introduced as a result of the FRAB review have ensured that not only does the Board remain fit for purpose, but that is also continues to act independently as an advisory body. Looking ahead, the Board looks forward to assisting the Relevant Authorities in improving early engagement on difficult and new financial reporting matters following recent constructive discussions.
The report is available to download online.
Notes for Editors
FRAB is an independent advisory body set up in 1996 initially to oversee the Treasury Resource Accounting Manual, which set out how Government departments should prepare their resource accounts. Resource Accounting and Budgeting (RAB) placed the planning and control of Government expenditure on an accruals accounting basis – comparable to the way that the private sector manages its finances and prepares its accounts. The Government Resources and Accounts Act 2000 placed the Board’s role on a statutory basis.
The Board’s remit has been extended since its inception in 1996 and it now includes the provision of advice on financial reporting standards and principles in respect of:
- Executive non-departmental public bodies and trading funds
- Accounts for which the Scottish Ministers and the Department of Finance and Personnel, Northern Ireland are responsible for issuing reporting requirements
- Accounts of the National Health Service Trusts in England, Northern Ireland and Wales
- NHS Trusts in England, Wales, Northern Ireland
- NHS Foundation Trusts
- Local Authority accounts across England, Wales, Scotland and Northern Ireland
- Local Authority accounts across England, Wales, Scotland and Northern Ireland
The Board comprises Chairman: Kathryn Cearns, Consultant Accountant, Herbert Smith Freehills LLP Independent/External members: Andrew Buchanan, Global Head of IFRS, BDO IFR Advisory Limited; Ron Hodges, Professor of Accounting, University of Birmingham; Roger Marshall, Chairman, UK Accounting Council; Veronica Poole, Global Managing Director IFRS Technical, Deloitte LLP. Preparers/users: Bob Branson, Head of Financial Management, Environment Agency; Janet Dougharty, Deputy Director Local Government Finance, DCLG; Kathryn Gillatt, Finance and Corporate Services Director, Driving Standards Agency; Sue Higgins, Director-General (Finance and Corporate Services), Communities and Local Government ;David Hobbs, Head of Accountancy Advice, Office for National Statistics.
Contact: Philip Trotter 020 7270 4538