The new frontiers of reporting for governmental financial sustainability

Abstract

This work is part of the academic debate focused on the information inadequacy of public administrations and the consequent need to imagine an overall reporting system for a fruitful dialogue with the reference community. Financial sustainability requires the implementation of policies that ensure the feasible provision of public services to the present generation, while protecting the needs of future ones, thus ensuring intergenerational equity. Such information does not normally fall in the domain of traditional financial reports; therefore, one naturally questions how information about financial sustainability can be disseminated to the users of local governments. For these reasons, governments should be interested in developing an integrated popular report (IPR). The present research, using a theoretical-deductive methodology, proposes some characteristics and content that an effective integrated popular report should contain in order to respond to the information needs of public sector user groups — citizens, in particular. The research objective can be summarized in the proposition of IPR as a new transparency and communication tool for citizens, which simplifies the existing voluntary reporting in order to jointly acquire the unique benefits of integrated reporting (IR) and popular reporting (PR).

An innovative reporting approach in public sector: The Integrated Popular Reporting

“…Governmental transparency has long been a subject of debate among both scholars and professionals, playing a crucial role in ensuring accountability [4]. Moreover, while transparent financial reporting aids organizations in showcasing accountability [5], accountability encompasses information about financial sustainability [6]. Accountability, which entails the process of keeping the public well-informed while also ensuring that authorities are held responsible, consists of three stages: information, discussion, and outcomes [7].…”

“…Choosing to adopt integrated reporting requires a shift from an analytical vision to a systemic view, merging traditionally separate information systems [35]. Primarily, the organization is understood as a synthesis of six capital categories, spanning financial, productive, intellectual, human, social, and relational and all these must be expressed in a coordinated manner, emphasizing synergy within a single report [6]. While traditional reports do not disclose information about intangible assets, integrated reporting also communicates information about intellectual capital and value creation [36,37].…”

Hacia la divulgación de información de sostenibilidad en el sector público

“…Este tipo de informes está muy extendido en Estados Unidos (Yusuf et al, 2013;Manes-Rossi et al, 2020) y Canadá, pero ha tenido menor aceptación en Europa, aunque cada vez existe mayor conciencia respecto de la importancia de que el ciudadano común los entienda (Van Helden y Reichard, 2019). Sin duda, se trata de un reto para nuestras administraciones futuras, toda vez que los métodos de rendición de cuentas utilizados hasta ahora difícilmente pueden llegar al ciudadano, de forma que algunos autores proponen combinarlos con el informe popular (Cohen y Karatzimas, 2015;Agliata et al, 2022).…”

“…Sin duda el esfuerzo de las administraciones para llegar a esta meta forma parte de su cooperación con la sostenibilidad y requiere una rendición de cuentas a los ciudadanos sobre dichas acciones (Agliata et al, 2022), la cual es fundamental para la buena gobernanza (Bowen et al, 2017;Lauwo et al, 2022). Por eso, las administraciones han comenzado a proporcionar información sobre el cumplimiento de los ods.…”

“…Como área específica, dentro de la información de tipo no financiero requiere especial atención la información de sostenibilidad, o lo que en el sector empresarial se ha denominado información no financiera propiamente dicha, centrada en los aspectos sociales, medioambientales y de gobernanza (Manes-Rossi et al, 2020;Agliata et al, 2022).…”