Losing Control: the gap in multi-level government reporting Josette Caruana

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Uploaded by Josette Caruana     Uploaded date: May 14, 2020    
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Publication date
May 07, 2019
Paper language
Abstract
Purpose: The objective of this paper is to analyse the relationship between control by the Maltese Central Government on Local Government and the basis of budgetary and financial reporting used.

Design: Semi-structured interviews were carried out with the controller (Central Government officials and the National Audit Office), while a survey was carried out with the controlled (Maltese Local Councils).

Findings: The study analyses the role of reporting in agency and fiscal federalism theories. The financial reporting basis used by Maltese Local Councils may be undermining the control that Central Government seeks to exercise over Local Government spending and debt levels. The Local Councils’ financial statements report accrual deficits and increasing liabilities; but this overspending appears to slip through Parliamentary scrutiny because the latter approves cash allocations to Local Councils. The financial reports do not highlight overspending in cash terms. Furthermore, the Central Government should be consistent in its policy towards Local Government, which may require more elaborate reporting.

Value: This study highlights the importance of aligning the reporting required (top-down) and the reporting presented (bottom-up) – otherwise, control is at stake.
Preferred Citation
Caruana, J. and Zammit, K. (2019). Losing Control: the gap in multi-level government reporting. Journal of Public Budgeting, Accounting & Financial Management, 31(2), pp.264-284
Keywords
agency costs; autonomy; financial control; fiscal federalism; local government; political accountability
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Category
Other
Type of Paper
Published paper

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From the journal
Journal of Public Budgeting, Accounting & Financial Management

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