Mr. William Beausang:

There has been a significant programme of work, as set out in the report of the Comptroller and Auditor General, in implementing the recommendations made in the report on fiscal transparency. It is really in the area of financial reporting about which I am speaking, where a Government decision needs to be made on whether we should move to accrual accounting as set out in the presentation of the Comptroller and Auditor General, where progress has been slowest. Internationally, when people look at the move from cash to accrual accounting in reporting on the fiscal accounts, an authoritative international organisation such as the OECD states the value of accrual accounting is unclear and even disputed in some instances. In the light of the costs and implications of a move to full accrual accounting for reporting purposes, from the perspectives of the Department of Public Expenditure and Reform and the Department of Finance, we need to be very clear that the benefits should outweigh the costs. Countries have been at this process for up to ten years and when they report on progress, they state they have only realised half of the benefits in terms of transparency and accountability they expected to see.

To explain very quickly to the Deputy, the financial management shared services project is under way. It will integrate 31 financial systems into a single financial system in the coming years. The decisions made in looking at the IMF's report on fiscal transparency and the implementation of the recommendations on reporting were that we had to move to that single system before we would be able to consider a move to accrual accounting. Fundamentally, that is where we are.

A huge amount of work is being undertaken in making the move to the single financial system and establishing the single financial management shared service.