Deloitte study: Government finance departments struggling to meet more complex public sector demands

The study provides an unprecedented look at the world of finance in more than 200 government departments from 28 countries, including Jordan and the UAE.

Responses from surveyed government finance officials indicate that despite progress in streamlining transactional efficiency over the past decade, significant financial management constraints continue to face governments around the world.

Risk management is highlighted as one of a myriad of challenges finance officials face within their organizations. For example, more than half of the officials who participated in the study reported that their organization's ability to audit its own financial accounts falls at or below an accepted baseline for the finance field industry benchmark. Only 29% of the government finance officials surveyed describe their organization's capabilities as having moved beyond a baseline level in risk management.

"This increases the likelihood of error and can mask the actual financial health of an organization,"

said study author William D. Eggers, Deloitte Global Research Director, Public Sector.

Another area of concern in government finance is the lack of current data. Close to 68% of officials surveyed cited the lack of current information as either a moderate or significant barrier to improving the performance of their organizations. For example, a majority indicated that they did not have enough information on asset costs to understand the full cost of delivering public services. Most respondents also indicated that they did not have the data they needed to measure the return-on-investment (ROI) from government programs.

Recognizing these shortcomings, public officials cite the ability to produce more relevant and up-to-date financial information to support decision-making as their No. 1 priority for improving financial performance in the next three years. In addition, growing service/non tax revenues and improving the transparency and integrity of financial information are cited as second and third most important to improve financial performance.

" Deloitte has recognized addressing the financial management needs of governments in the Middle East", said Nader Srouji, partner in charge for Consulting at Deloitte Middle East, "and has undertaken to develop a team of experienced consultants targeting the public sector". The team has a mix of talents spanning the strategy space through to implementation, offering thus a wide range of solutions to public sector entities.

Deloitte ME is currently executing for the public sector two major projects in Kuwait and Jordan. The projects are designed to implement ERP application to achieve better financial management for public sector entities.