Addressing fiscal problems in the US
Fiscal problems mean that government finance professionals across the US are taking center stage, says Daniel J. Murrin.
The American public is not aware enough of the overall budget problems facing policy-makers.
One of the most notable consequences of the financial crash and economic downturn is the resulting lack of revenue for the US Government.
Lack of standardization and transparency in reporting, together with the sheer volume of data available, makes it harder to deliver clear, concise information on the extent of the fiscal crisis to citizens and elected officials.
Further delays in taking action will leave future generations facing the prospect of paying higher taxes, having less income and health care security in retirement, and less access to education resources. So what can be done?
- Government finance leaders must set the right example. Doing more, the same or less with a smaller budget is unavoidable and will in fact help foster innovation and change. One option would be to consolidate operations through reorganizations and development of shared services to achieve cost savings.
In addition to deploying techniques such as benchmarking and value stream analysis, it is also important for financial managers not to operate in isolation.
- The American public is not aware enough of the overall budget problems facing policy-makers. To provide better financial data for decision-making, improving the communication of information is a prerequisite.
While the effective use of social media channels such as Twitter will help disseminate the message to a wider audience, improving the way financial information is presented is a key priority.
The Citizen Centric Report, an initiative of the Association of Government Accountants in the US, aims to counter this trend by providing citizens with financial information in a clear and understandable form, updated regularly and available to all.
- Policy-makers, in both the legislative and executive branches, require enhanced data produced in the timeframes necessary for effective decision-making. The continued development of e-Reporting will help by accelerating the deployment of information, as well as addressing issues of understandability.
However, government operations form only a small portion of the solution to the challenges facing the US. Achieving efficiencies while maintaining the effectiveness of government agencies and addressing issues of waste, fraud and abuse will not close the budget gap.
Governments will be forced to look at the effectiveness of programs as well as make trade-offs in deciding which programs to fund and what to cut.
Delivering this at a time of budget cutbacks will not be easy, but it can be done. The government financial community needs to:
- Explore new ways to provide timely information
- Improve the quality and types of data available for decision-makers.
- Ensure that citizens become better informed on key fiscal issues
These are the first necessary steps towards restoring US finances to a sustainable and balanced level.