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The use of horizontal accounting information
A survey of legal persons with statutory tasks, part 3
There are significant differences in the ministries' use of horizontal accounting information in their vertical supervision of legal persons with statutory tasks. This audit provides an insight into whether and how ministries use horizontal accounting information in both their policies and their practice. In the light of our findings, we provide guidance on the use of horizontal accounting information in vertical supervision. The guidance can form a framework for ministers to improve the transparency of their use of horizontal accounting information.
The use of horizontal accounting information is the third publication in our series of surveys of accountability and supervision at legal persons with statutory tasks and other institutions at arm's length from central government.
Many public tasks are carried out by institutions at arm's
length from central government that are funded from the public
purse. Ministers supervise the institutions to ensure that they
carry out their tasks correctly and spend their funding regularly.
The ministers' supervision may make use of horizontal
accounting information provided by the institutions. Horizontal
accounting information is issued in order to inform stakeholders
and other interested parties of an institutions' performance.
It is produced for a different purpose than vertical accounting
information and is therefore different in nature. Ministers cannot
use an institution's horizontal accounting information to
account vertically to the House of Representatives without
qualification. The question is how does or can a minister use
horizontal accounting information in his supervision.
Our report explains how the ministries deal with horizontal
accounting information in both policy and practice. In the light of
our findings we provide guidance on the use of horizontal
accounting information in vertical supervision. The main issues are
consultation between the supervisor and the institution being
supervised, the consideration of opportunities and risks,
implementation in policy, the setting of information requirements
and periodic verification of the information.
To account vertically to the House of Representatives, a minister cannot use horizontal accounting information issued by an institution without qualification. The question is how can a minister use such information in his supervision. The main lessons we learned from our audit are:
- Horizontal accounting information is not a substitute for a minister's vertical supervision but a complement.
- The various opportunities and risks attaching to the use of horizontal accounting information must be weighed against each other.
- If ministers make more use of horizontal accounting information, government policy should be fleshed out on this point.
The Minister of the Interior and Kingdom Relations wrote in his response to our report that he agreed with the lessons learned and would use the guidance to update the Framework Vision of Supervision.