Bean counters - are great at ticking the boxes.  In a recent forum, I heard bean counters being referred to as “persnickety”, i.e. fussy and focusing on trivial matters. In the fast-paced world of reporting, accountants and auditors need to move from being “compliance officers” to “integrators”.  

With the move to sustainability reporting, integration and applying an integrated mindset, are key. As accountants we should be thinking beyond the financial statements to how the work we do fits into the entity’s plans and what was achieved.

When I reflect on what governments – including our own – already report, there is some overlap with what could potentially be “sustainability reporting” in the public sector. While the scope of sustainability reporting is evolving, it is likely to report on environmental, social and governance (“ESG”) matters. Many governments subscribe to the United Nations Sustainable Development Goals (UN SDGs) and design their “scorecards” to work towards achieving these goals by 2030. The scorecards usually result in non-financial measures being developed and reported in the annual report. The scorecards and performance measures are supported by an approved budget, with the planned and budget execution reported in the financial statements, and/or the annual report.  

While governments may already report some of what could be considered “sustainability-like” information, what is missing is the integration with the financial and non-financial information. Regardless of how sustainability reporting develops in the public sector, entities could drastically improve the relevance of the information they provide to users by creating a clear “line of sight”, i.e. integration, between the information they report on their strategic/annual plans, their budgets, their financial results, and their performance measures.

To reflect a clear integration of ideas between planning and execution requires collaboration across an organisation. The annual report can no longer be the responsibility of the finance team alone. While the finance team in an organisation may have the necessary knowledge about the qualitative characteristics of reporting, a multi-disciplinary, cross-functional team is required to bring together the technical aspects related to budgeting, financial and non-financial performance reporting.

While this collaboration may seem obvious, I have observed that the same type of collaboration required for the financial statement preparation, is absent. A good example is the information required for assets in the financial statements. The most relevant information on assets will be produced when asset managers, engineers, the budget department and accountants collaborate. Finding out the right information from the experts and deciding how best to report it is critical to producing high-quality, credible financial information.

While reporting requirements will inevitably evolve, what we should focus on most is how our thinking and approach to preparing the financial statements and annual report can evolve. As we plan, budget and report going forward, think about how these can be better integrated to tell a story so that users of the budget, financial statements and annual report, can start to think about sustainability and their role. We need to be deliberate about providing users with information that is relevant to them rather than providing “data” that ticks a box. In short, we need to move from mere compliance to being integrators.