EY - Building better budgets

Building better budgets

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Finance on the frontlines

EY has a globally connected network of experienced, multidisciplinary professionals who are working with governments and public sector organizations around the world to address complex problems and achieve leading practice in PFM, helping to implement sustainable change in mature and emerging countries. Our 500 PFM specialists worldwide support government efforts to apply clear, consistent and transparent policies, controls and procedures. Our services include:

  • Financial process improvement

    Building better public financial management (PFM) institutions and processes

    Effective budget institutions are key pillars of any country’s PFM system. These institutions contribute to the strategic goals of the government by making public finances transparent, overseeing the regular payment of salaries of civil servants and improving service delivery. However, strengthening budget institutions is neither easy nor quick.

    We support governments around the world to improve service delivery, become more transparent and accountable to citizens, and reduce corruption. We work with ministries, agencies and departments to help manage public institutions and finances, as well as implement public sector reforms that promote public accountability and greater engagement with society.

    Over the past few decades, we have helped build better budget institutions and improve the PFM capacity of many countries, resulting in:

    • Improved budget management, enhanced resource allocation and accountability, as well as greater efficiency in service delivery
    • Sustained improvements in fiscal discipline supported by clear institutional rules and accountability for performance
    • A legal and regulatory framework that supports the strategic objectives of the modernized budget
    • An integrated and comprehensive budget that maximizes returns to government spending through better targeting of strategic priorities and effective spending
    • Program-oriented budget management that underpins performance and service delivery
    • Sustained and measurable improvements achieved through capacity-building reforms
  • Public sector accounting reform

    Accounting for better government

    In the wake of the global financial crisis, citizens, parliaments, the media and other interest groups are increasingly demanding timely, reliable and detailed information from public bodies. To satisfy this demand, governments and other public sector organizations need to provide better and more comprehensive information about their financial position and performance.

    We can help public sector entities to convert from their current accounting framework to accrual-based accounting and financial reporting standards, such as the International Public Sector Accounting Standards (IPSAS), the International Financial Reporting Standards (IFRS) or national (accrual-based) Generally Accepted Accounting Principles (GAAP).

    We have developed a robust conversion framework that will help governments implement best practice in public sector accounting. We also have formed an alliance with CIPFA, the Chartered Institute of Public Finance and Accountancy, to help public sector organizations prepare for IPSAS conversion. Our professionals also provide clients with a full range of GAAP conversion services, from assisting in the development of comprehensive diagnostic reviews and conversion implementation plans (road maps) to delivering comprehensive conversion projects.

  • Financial IT transformation

    Policymakers need to ensure that financial information is delivered in a transparent and timely manner. Strengthened IT systems are often critical. In addition to delivering better value for money, IT transformation can lead to better quality and efficiency, as well as guaranteeing data security and enhanced transparency.

    However, any IT transformation project requires dedicated resources, a good understanding of leading practices, the ability to transform business requirements to specific functional requirements, and change and project management capabilities.

    We have implemented financial IT projects for governments around the world. Our offerings include:

    • Integrated Financial Management Information System (IFMIS)
    • Planning, budgeting and monitoring
    • Centralized payments and budget control
    • Financial consolidation
  • Improvement of revenue collection

    Taxing questions — and answers

    The way taxes are raised matters, but it’s not straightforward. Globalization, for example, has made internationally mobile capital more difficult to tax. This requires, among other things, the introduction of changes to domestic and international laws and regulations and the creation of regional and international policies.

    This is not an easy task as the current centralization of capital in a few selected countries increases the bargaining power of large firms and investors over governments. At the same time, governments are under pressure from their citizens and tax activists to ensure their tax systems are transparent and fair, and to better articulate to voters the direct link between tax collection and government spending.

    To address these challenges, policies must be designed to support early-stage and more established entrepreneurial ventures. It is also important to create certainty and predictability. It is difficult for businesses to invest if there is doubt about whether the rules will change.

    A successful tax system requires a holistic approach as it needs to combine:

    1. Sound tax policies that take into account the reality of today and potentially tomorrow’s business world
    2. Modern tax administration, including its IT platform that is linked to other branches of the government
    3. A skilled labor force that will be able to administer the system

    All three of these components need to be in place to deliver a fair and balanced tax system.

  • Cost reduction programs

    Cost reduction: a structured approach

    Governments around the world face rising costs in delivering public services while budgets are shrinking, and voters show no appetite for tax increases but still demand better services and value for their money.

    Radical and innovative thinking is urgently required around how governments deliver public services, especially if improved outcomes are to be achieved for strengthened services for citizens and less cost to the taxpayer.

    To minimize the impact on services, departments and public bodies will need to identify and plan for sustained cost reductions and deliver them as part of a well‑managed change program. We are well positioned to help policymakers and service delivery chiefs with a sustainable cost reduction strategy that provides:

    • A framework of potential levers and opportunity areas to achieve sustainable net cost reduction
    • A global approach — both top-down (from strategy to implementation) and bottom-up (from services to policies)
    • A clear and result-oriented approach
    • Supporting methods and tools

Download a more detailed description of our service offerings, or contact us today.

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