Cities Should Clean Up their Financial Reporting
Submitted by Michael Brydon on Tue, 12/08/2015 - 09:40
Canada's C.D. Howe Institute has published a report critical of budgeting and reporting processes in Canadian cities:
Building Better Budgets: Canada’s Cities Should Clean Up their Financial Reporting
To reiterate, our key premise is that a smart nonexpert should be able readily to compare municipal
spending using only the main tables in the city’s budget documents and financial statements.
The authors recommend that cities move to accrual accounting for budget preparation. In accural accounting, a council or board would not see the cost of (say) a multi-million dollar sewage treatment plant but would instead see the annual taxpayer "footprint": the debt servicing costs + steady-state operating costs broken down by taxes and user fees.