Corporate Governance in the Public Sector - A Governing Body Perspective
Comments from the Association of Chartered Certified
Accountants
November 2000
We welcome the intention of the IFAC Public Sector Committee (PSC) to publish the study with the aim of contributing to good governance and accountability in the public sector throughout the world. ACCA has long argued that a sound corporate governance structure is a necessary pre-requisite to public sector entities adopting International Public Sector Accounting Standards (IPSAS), as advocated by the IFAC PSC.
We believe that the study as it stands may lack sufficient detail to be of practical guidance to government officials of less developed nations, who may be currently introducing or contemplating the introduction of democratic processes and sound financial administrative systems to government departments and their agencies. As you are well aware, governments of such nations are under considerable pressure from other governments, financial institutions and agencies such as the World Bank to implement and maintain a sound internal control environment for policy implementation and decision making as a condition of receiving grants or loans from such bodies, and hence they will need considerable support in this area.
The IFAC PSC acknowledges that the study is based on the United Kingdom corporate governance framework for public sector authorities. It is ACCA's view that whilst such a framework may be a useful benchmark for governments of well developed nations when reviewing their governance arrangements, it is not sufficient for less developed nations which may not only be facing financial and legal barriers to change but may also be facing technical, educational and cultural barriers.
ACCA believes that, if IFAC is to realise its aim, the study needs to go back to first principles and explain what structures and processes are needed to be set in place for effective decision making and for implementing government policies in a democratic society.