[Governmental Financial Management and Debt Crisis:
Some Lessons From Experience]
Sep 27, 1984
A personal view was presented to an international organization on governmental financial management and debt crisis. The speaker maintained that financial data are only as reliable as the systems which process them and that reported figures often vary as to accuracy and reliability due to weaknesses in internal controls. Further, professional independent auditing stimulates the discipline which all systems need to ensure data integrity. The New York City debt crisis of the 1970's provided a good example of how effective independent auditors can be when dealing with a public sector debt crisis. However, since debt crises are not limited to just one country, there is a need for more international collaboration, exchange of information and ideas, and even training programs. Like many others, the U.S. government does not have an efficient, up-to-date accounting system, resulting in a reliance on a lot of memorandum records that are sometimes less than adequate and not always standardized. The speaker noted that, although better financial information will not solve serious budget problems, it will aid in making better financial decisions and prevent past mistakes from being made.