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| Format: | Artículo científico |
| Language: | en |
| Published: |
Universidade de Santiago de Compostela
2006
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| Online Access: | https://www.redalyc.org/articulo.oa?id=50400502 |
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Table of Contents:
- The effects of poor financial information systems on public expenditure and on the long-term sustainability of local public services. Empirical evidence from the spanish municipalities Guillem López Eugeni García Iván Moreno Estudios Territoriales Public management Financial illusion Spanish local authorities Financial information systems In this paper we describe the ways in which financial illusion (FI) inpublic accounting can be created by misreporting actual expenditureand revenues. We test the effects of FI, due to the absence ofsound financing capital policies, on current public expenditureincreases and on the future sustainability of local public services.We relate these features to the lack of incentives amongst publicmanagers for accurate financial reporting when short term electoralinterests prevail. Our hypothesis is tested for Spain using a sampleof 42 municipalities with population above 20,000 for thefinancial years 1993-2001. We build this unique database on theCatalan Audit Office Reports. Results confirm that there is statisticalrelationship between FI and high current expenditure, netassets variation and managerial slackness. Mechanisms for FI creationhave to do with overvaluing revenues and underestimatingcosts, inadequate provision for bad debts and lack of appropriatecapital funding. 2006 artículo científico 1697-6223 https://www.redalyc.org/articulo.oa?id=50400502 en http://www.redalyc.org/revista.oa?id=504 Urban Public Economics Review application/pdf Universidade de Santiago de Compostela Urban Public Economics Review (España) Num.5