The 2007 financial and economic crisis brought many governments to adopt cogent procedures of public spending review to balance public accounts. Some interventions were adopted in the period of austerity and produced unwanted effects on the economy. In the last years, the spending review in Italy represented fundamental aim of financial statement strategy and concerned all level governments. Regarding this, the Italian public accounting reform facilitates the process, by creating a direct and strict link between spending decisions and their purposes: it has placed cash accounting (which is the main and fundamental accounting system for authorization purposes) side by side with accrual accounting for informative purposes. The introduction of accrual accounting in public administrations for fact-finding or authorization purposes is an issue that is disputed by Italian (Anessi Pessina and Steccolini, 2007; Anselmi et al., 2012) and foreign academics (Guthrie, 1998; Carnegie and West, 2003; Van der Hoek, 2005; Lapsley et al., 2009). EPSAS and IPSAS tend to attribute exclusive importance to accrual accounting.
The aim of this research is to analyse if new accounting path will be able to improve the whole economic circuit of public administrations, starting with taxes of citizens and ending with the supply of goods and/or services to the public.
The research questions that represent the guide lines of project are:
- RQ1) how does the current accounting system improve the management of public resource of local governments and the information to citizen about the activity of public administrations?
- RQ2) how are the public resources allocated in order to rationalize public expenditures and avoid generalized cuts, which can threaten the efficacy and efficiency of the administrative action?
To respond to the above questions, a survey has been realised on a sample of Italian local governments: the method adopted is qualitative (questionnaires analysis) and quantitative (financial statements analysis). To this aim, the adopted theoretical approach is the neo-institutional theory, already used by many authors to analyze managerial accounting reforms which were introduced in public sector, and in particular way, in local governments (Lapsley and Pallott, 2000; Bovaird andDowne, 2006; Pina et al., 2009; Hyndman and Connolly, 2011).
Regarding to two research questions, the results of the survey show that: RQ1) the new accounting system improves the management of public resources, increasing planning, simplifying and making the knowledge of financial resources really available, for political and management decisions which are more aware; RQ2) public revenues are not very used to reach the social priorities aims but in the coverage local governments’ deficits, emerge by the application of new accounting rules. The use of new informative bases, which was originated by the introduction of accrual accounting, to an attention analysis on the usage modalities of expenditure, seems weak now. This research, which proposes a comparison among different accounting techniques used for public resource management (cash accounting and accrual accounting) represents a contribution towards: 1) implementing EPSAS and IPSAS, currently underway; 2) identifying new elements and information useful to improve the management choices and techniques of public managers.
