If you know how money is spent, imagine how far it could go

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5 minute read 21 Nov 2018
By

Mark MacDonald

EY Global Public Finance Management Leader

Experienced leader of public sector reform. Works with governments around the world. Advises on designing and implementing programs to help improve performance and create better citizen outcomes.

5 minute read 21 Nov 2018

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By harnessing blockchain technology, governments can spend taxpayer resources more efficiently and effectively.

Blockchain can be hard to grasp. But the central idea is simple: blockchain makes it easier to move money from one individual (or organization) to another. It solves a basic problem in money transfer: when one person wants to transfer money to another, it does so through a trusted third party – typically a bank. The bank takes time to process the transaction and charges a fee. Blockchain eliminates the need for a third party – therefore reducing the time it takes to transfer the money and cutting the cost of the transaction.

So how can this be applied to public finance?

Blockchain is best suited to situations where we have to deal with interfaces in the exchange of resources and information across organizational boundaries. Like when a government’s central budget authority allocates money to government departments, who then spend it through other government agencies.

At present, public finance managers face a series of challenges as money moves from the central budget authority, through government ministries and departments, to delivery agents. They lack timely, low-cost access to financial and non-financial information that could help improve decision-making and unlock better public finance outcomes.

Our tool, EY Blockchain for Public Finance, helps governments to overcome these problems.

Watch the video to find out more.

Summary

EY’s application of blockchain to public finances addresses long-standing inadequacies that hamper financial management. By integrating financial and non-financial reporting in government, reconciling and consolidating information within and across government and external agencies, and producing near-real-time performance reporting and advanced analytics, our tool allows government to see, at any moment, where money is being spent and what is being achieved.

About this article

By

Mark MacDonald

EY Global Public Finance Management Leader

Experienced leader of public sector reform. Works with governments around the world. Advises on designing and implementing programs to help improve performance and create better citizen outcomes.