When discussing accountability in the public sector, attention almost always focuses on the same indicators: how much revenue was collected, how much was spent, and whether spending occurred within the limits set by law. This information is essential and indispensable for ensuring financial discipline and the accountability of public managers.

However, in an increasingly complex economy, do these elements alone provide a true picture of the financial reality of state institutions? Angola has been developing important mechanisms to strengthen transparency and accountability in the public sector. Resolution No. 4/16, dated December 6, issued by the Court of Auditors, established the requirements and instructions for the rendering of accounts by central and local government bodies, public institutes, and other entities funded by the General State Budget. More recently, Presidential Decree No. 86/24, dated April 9, reinforced the requirement for public institutions to render accounts and undergo external audits of their financial and balance sheet statements.

Estes diplomas representam avanços relevantes e demonstram a preocupação crescente das autoridades com a qualidade da informação financeira produzida pelo sector público. Contudo, também evidenciam uma realidade que merece ser discutida: o actual modelo de relato continua fortemente centrado na execução orçamental e no cumprimento legal, deixando frequentemente em segundo plano uma visão mais abrangente da posição financeira das entidades públicas.

Na prática, grande parte da informação produzida procura responder à pergunta: “como foram utilizados os recursos disponibilizados?”. Trata-se de uma questão fundamental. Porém, os cidadãos, os decisores políticos e os próprios organismos de supervisão precisam cada vez mais de respostas para outras perguntas igualmente importantes. Que activos possui uma instituição pública? Qual o seu valor real? Que investimentos serão necessários para garantir a continuidade dos serviços prestados? Que responsabilidades futuras já existem, mesmo que ainda não tenham sido pagas? Qual o custo efectivo da prestação de determinados serviços públicos?

These questions are rarely fully addressed in a reporting model that is predominantly focused on financial execution. As a result, it is possible for two entities to have similar levels of budget execution and yet find themselves in vastly different financial and asset situations. Consider, for example, an entity with modern infrastructure, properly inventoried assets, and liabilities under control. Compare this situation with another institution facing deteriorated equipment, accumulated liabilities, or significant future investment needs. If the analysis is limited solely to budget execution, these differences may go unnoticed.

It is precisely to address this challenge that many countries have been modernizing their public financial reporting models by gradually adopting the International Public Sector Accounting Standards (IPSAS). These standards aim to provide a more complete picture of the financial position of public entities by recognizing assets, liabilities, revenues, and expenses when economic events occur—not merely when cash flows in or out.

International experience shows that this approach tends to increase transparency, improve the quality of information available for decision-making, and strengthen citizens’ confidence in the management of public resources. More importantly, it provides insight not only into performance in the current fiscal year but also into the institutions’ future ability to continue fulfilling their mission.

Naturally, the modernization of public financial reporting goes beyond the adoption of new accounting standards. It is a more profound process involving information systems, asset inventory and valuation, the strengthening of internal control systems, improvements in data quality, and capacity building for the professionals responsible for preparing and overseeing financial information.

For this reason, the debate on the evolution of public reporting in Angola should be viewed as an opportunity for institutional transformation (with a systemic impact on public accounts) and not merely as a technical reform limited to the accounting dimension. The goal is not to abandon the budgetary approach—which continues to play a central role in public finance management—but rather to complement it with a perspective that allows for a better understanding of the state’s assets, its future obligations, and the financial sustainability of public policies. The timing seems particularly opportune for this reflection. In a context where there is increasing discussion of the adoption.

The experience accumulated by organizations specializing in auditing, consulting, risk management, and institutional transformation shows that the evolution of financial reporting models rarely occurs abruptly. On the contrary, the most successful processes are typically those that follow a gradual approach, based on rigorous assessments, clear objectives, and realistic implementation plans. Angola has already taken important steps toward strengthening accountability.

The next challenge may involve broadening the scope of the information produced, so that the numbers tell a more complete story about the use of public resources and the ability of institutions to generate value for society. Because, in the end, true transparency is not just about knowing how much was spent.

It also involves understanding what the government owns, what commitments it has made, how much it costs to provide public services, and its capacity to continue doing so in the future. This is likely the next major stage in the evolution of public financial reporting in Angola. And it is a debate worth starting right away.

*MAURO GARCIA, Audit Director at KPMG Angola

*Source: Expansão