Accrual Budgeting: Experiences of Other Nations and Implications for the United States
AIMD-00-57
Published: Feb 18, 2000. Publicly Released: Feb 18, 2000.
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Highlights
Pursuant to a congressional request, GAO reviewed other countries' experiences in accrual budgeting, focusing on: (1) countries' reasons for shifting to accrual budgeting; (2) the ways other countries are using accrual-based information in the budget; (3) the implications of accrual budgeting for decision-making; (4) the key implementation challenges (technical and political) associated with the use of accrual budgeting; and (5) issues raised by these countries' experiences that may be informative to the United States.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| As Congress considers changes in the budget structure and process, it would be well served to explore ways to improve information on two dimensions: breadth and time horizon. This report dealt with one way to lengthen the time horizon for information. Congress should consider the selective use of accrual measurement in the budget in areas where it would enhance obligation-based control. |
Closed – Implemented
|
The House defeated H.R. 853, which would have required moving to accrual budgeting for federal insurance programs, among many other budget process changes. Unlike other parts of the bill, the accrual budgeting for insurance proposal enjoyed bipartisan support. Thus it is likely that the proposal may be made in future congresses. The Administration has proposed legislation to require agencies, beginning in FY 2003, to contribute the agency share of the full actuarial cost of retirement for Civil Service Retirement System (CSRS) employees and the agency portion of the government's share of post-retirement health benefits costs. As of August 2006, we are in consultation with a number of Members to move forward on this issue with legislation to be introduced in the next Congress. |
| As Congress considers changes in the budget structure and process, it would be well served to explore ways to improve information on two dimensions: breadth and time horizon. This report dealt with one way to lengthen the time horizon for information. Congress and the Office of Management and Budget should consider whether and when to use mechanisms, such as capital acquisition funds, to better match budget recognition with the consumption of resources while preserving up-front control. |
Closed – Not Implemented
|
OMB staff are supportive of mechanisms like capital acquisition funds. According to the FY 2002 budget documents, OMB is encouraging agencies to examine their budget structures to align them better with program outputs and outcomes and to charge the appropriate account with significant costs used to achieve these results. The capital acquisition funds would contribute to this. |
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Topics
Accrual basis accountingBudget authorityBudget controllabilityBudget obligationsBudgetingCash basis accountingCost-based budgetingFederal employees retirement systemForeign governmentsPerformance measures