Balanced Budget Requirements Revisited

We test the effect of balanced budget requirements (BBRs) on budget outcomes using data published in audited financial statements. With a focus on the General Fund, we find states frequently reported deficits in their adopted budgets and relied on sizeable and favorable expenditure variances to close budget gaps before the end of the budget period. Empirical analysis shows that technical or strict BBRs procedures did not increase the likelihood that a state would report a balanced budget. We corroborate our findings using fund balance data. If technical or strict BBRs are effective, states would report higher fund balances, all else equal. Results show that states that adopted political BBRs reported lower fund balances. More importantly, the adoption of strict or technical BBRs did not lead to higher fund balances.

Fund accounting and government-wide financial reporting during the Pre-IPSAS implementation era from a Nigerian experience

PurposeThis paper assessed accuracy level in accounting for government funds in Nigeria's federal treasury and their faithful presentation in government financial reporting. It aimed to determine whether the reported annual balances in Nigeria's financial reporting were reliable or otherwise. Data used in analysis were obtained from secondary sources from federal treasury.Design/methodology/approachEx-post “facto” analysis method was adopted in the study involving the use of statistical techniques of absolute or aggregate mean percentage error derived from differences between recomputed and published fund balances and was employed. This was augmented with interactive review meetings of the initial case research report with the management of Nigeria's audit agency.FindingsResults distilled from the consolidated revenue fund (CRF), development fund and public debt show that recomputed values were greater than the fund balances in the gazetted financial statements. Results for contingency fund (CTF), federation account fund (FAF), special trust fund (STF) and sundry deposit fund yield equal figures and accurate. The paper concludes that there were serial understatements of the core public fund balances in the financial statements over the years. This trend of reporting incorrect in three core public funds in financial statements rendered Nigeria's financial position unreliable in the affected years for decisions. It also facilitated frauds, mismanagement of funds and corrupt practices.Research limitations/implicationsThe scope of the research is restricted to assessment of degree of accuracy in fund accounting, faithful representation of the respective fund balance in the liabilities side of FGN balance sheet and the reliability of the financial position. But, it did not consider or cover the implementation of International Public Sector Accounting Standards (IPSASs) in federal treasury since FGN had not issued any full IPSAS–oriented financial statements as on 2015.Practical implicationsIdentification of deficiencies in fund account balances, structural defects in fund accounting and acts of understatement of carrying balances in CRF and capital development fund (CDF) implies that the aggregate core fund liabilities reported in financial statement of government entities without corresponding assets do not actually reflect a true and fair financial position in some countries. It reveals remarkable degree of financial information asymmetry in government financial reporting. Illusionary fund accounting has direct linkage to poor fiscal governance in many sovereign with associated sub-optimal delivery of public goods and service level distress syndrome in many economies; lead to poverty, unemployment, crisis and macroeconomic disturbances.Social implicationsThe study contributes to the development of fund accounting system; strengthening government financial reporting architecture and practices. It provides framework for tracking financial information asymmetry in government financial reporting and mismanagement of public funds. It provides platform to effect necessary adjustment (correction) during the “first time 3-year adoption” adjustment window in Nigeria. Flowing from the findings, it advocates for institutionalization of government fund accounting standards and provides evidence for migration to accrual accounting system in countries that have not already implemented it. Evaluation system developed herein will improve fund management in federal treasury and contribute to efficient public financial management, good governance and enhance development of public accounting practice.Originality/valueThis exploratory empirical research is the one to ever evaluate accuracy level of fund accounting in sovereign entities and faithful representation in government's financial position prior to implementation of accrual accounting and financial reporting. The study established substantial level of illusionary accounting for public funds and information asymmetry in published government's financial reporting. It is necessary to rectify these discrepancies in fund accounting and financial reporting prior to and or during the first three years of the IPSAS transition implementation programme. These research deliverables provide adopters with relevant data for adjustment accounting during the transition period in strengthening public financial reporting in order to realize the benefit of full IPSAS accrual accounting.

Analisis Efektivitas Pendapatan Asli Daerah dan Dana Perimbangan di Kabupaten Kerinci Tahun 2011 – 2016

This research entitled the effectiveness of Revenue Equalization Fund and regional Original in Kerinci 2011-2016 Year, with the aim to find out how large the original revenue growth areas and Fund Balances in the Regency of Kerinci 2011-2016 Year and To find out how large a rate Efekstivitas the original Revenue Equalization Fund and Areas in Kerinci 2011-2016 Year. This research dalaksanakan in the District of Kerinci using Secondary data, with data collection techniques Research Library with Descriptive method quantitative and qualitative descriptive. As for the analysis tools used i.e. the ratio of the growth and the ratio of effectiveness. Based on the results of the study showed that the original receipt of an income Growth Areas in the Regency of Kerinci from year 2011 – 2016 is always increasing. While the percentage of growth experiencing fluctuations. The average nominal Target for 6 years 2011-2016 years of Rp. 49,597,954,211, where the average target percentase 2011-2016 year of 17.79%. Growth targets and the realization of Equalization Funds in the Regency of Kerinci, explained that in nominal target of receiving funds from the balance of the year 2011 – 2016 in total amounting to Rp. 3.767.521., 800.135,20 average per year or Rp. 627,920,300,022.53. So also with the percentage growth target receiving funds Balances experienced fluctuation that is 20.53% average. Whereas the effectiveness of the original Income Areas in the Regency of Kerinci Years 2011-2016, an average realization of greater than the target which entered criteria very effectively with the value of the average of 105.79%. The effectiveness of the Equalization Funds in the District of Kerinci 2011-2016 Years, on average exceeds its realization of targets set. It means that by the criterion of effectiveness including the categories very effectively with an average effectiveness of 100.39 percentasi%. Keywords: effectiveness, Revenue Equalization Fund and regional Original

District stressors and teacher evaluation ratings

Purpose Federal and state policymakers in the USA have sought to better differentiate the performance of K-12 teachers by enacting more rigorous evaluation policies. The purpose of this paper is to investigate whether these policies are working as intended and explore whether district stressors such as funding, enrollment, and governance are associated with outcomes. Design/methodology/approach The authors examined teacher evaluation ratings from 687 districts in Michigan to identify the relationship between district stressors and two outcomes of interest to policymakers: frequency of high ratings and variation of ratings within districts. A qualitative index of variation was used to measure variation of the categorical rating variable. Findings About 97 percent of teachers in Michigan are rated effective or highly effective, and variation measures indicate overwhelming use of only two ratings. Charter school districts have fewer teachers rated highly than traditional districts, and districts with higher fund balances have more teachers rated highly. Districts with increasing fund balances have higher variation. Practical implications The findings suggest that district stressors presumably unrelated to teacher performance may influence teacher evaluation ratings. State teacher evaluation reforms that give districts considerable discretion in designing their teacher evaluation models may not be sufficient for differentiating the performance of teachers. Originality/value This research is important as policymakers refine state systems of support for teacher evaluation and provides new evidence that current enactment of teacher evaluation reform may be limiting the value of evaluation ratings for use in personnel decisions.

Revenue Budget Variance and Capital Expenditure Realization Emperical Evidence from Indonesian Local Goverments

This study aims to examine the effect of local revenue variance, variance of fund balances and budget account surplus (SILPA) for capital expenditure realization. The population in this study were all districts / cities in Indonesia, with observations taken from 2010 to 2014 amounting to 508 districts / cities from 34 provinces. Based on the Slovin formula, obtained a sample of 345 districts / cities as observation data. Data obtained from local government budget and budget realization report 2010-2014). Multiple regression analysis applied to data analysis. Empirical results indicate that the variance of local revenue is related to the realization of capital expenditure. The results also reported the relationship between variance of equilibrium funds and capital expenditure realization as well as the relationship between budget account surplus and capital expenditure realization. The results are also related simultaneously between the variance of local revenue, variance of fund balance, and budget account surplus (SILPA) for capital expenditure realization. The conclusions of this study are the variance of local revenue, the variance of fund balance, and the remaining budget have a positive effect on capital expenditure. Thus, local governments can be said to have changed the variance of Regional Income, balance funds and SiLPA to capital expenditures. The consequence is the emergence of new capital expenditure programs that may not be realized.