From a development partner’s standpoint, how does the limited number of professional accountants in the public sector impact transparency, accountability, and effective use of public funds?
I see across the world the number of professional accountants in the public sector is rapidly growing, with their stature and role enhancing significantly. However, despite this positive trend, there remains a need for more accountants to fully address the requirements related to transparency, accountability, and the effective use of public funds. These elements are crucial for good governance and help build trust in government and institutions, especially during challenging times.
Professional accountants are vital in the public sector, perhaps even more so than in the private sector. While the private sector focuses on profit and wealth maximization, governments have broader goals like economic regulation, provision of public goods, law enforcement, national security, and social equity. These diverse objectives make transparency and accountability critical in the public sector, in which professional accountants play a preeminent role. From my experience, institutions with more professional accountants tend to align better with transparency and accountability principles. Accountants have often been seen as mere ‘bookkeepers,’ in the past, but this has completely changed today. They are now recognized as key pillars of good governance worldwide, contributing significantly to financial management and policy formulation.
Government revenues often mix with donor funds to achieve common goals. Development partners are eager to support governments in their efforts to be transparent, accountable, and use public resources effectively. For example, the World Bank uses the Report on Observance of Standards and Codes – Accounting and Auditing to assess and support efforts to improve accounting and auditing in both public and private sectors. As part of World Bank staff working on Africa, I fondly recollect my involvement in the creation and strengthening of the Institute of Malawi into a high-quality Professional Accounting Organization. Another example is work on the Zambia Institute of Chartered Accountants qualification (CA Zambia), which now includes a public sector accounting stream for students aiming to work in the public sector.
Considering the growing complexity of financial management in governments, how do you assess the demand for accountants in the public sector, and what challenges exist in attracting and retaining qualified professionals in this area?
I see the demand for professional accountants in the public sector as extremely high, influenced by several key factors. First, governments are increasingly focused on Public Financial Management (PFM) reforms to ensure budget outcomes—such as fiscal discipline, allocation efficiency, and service delivery—positively impact citizens. As the head of the Public Expenditure and Financial Accountability (PEFA) Secretariat, I recognize that many of the 94 dimensions in the PEFA framework are related to the accounting profession. Skilled accountants are essential for developing robust PFM systems.
Second, fiscal management is shifting towards a balance sheet approach using accrual basis accounting. By 2025, it’s forecasted that 50% of countries will report on an accrual basis, providing a complete picture of revenues, expenditures, assets, and liabilities. This approach requires top-notch accountants to ensure effective fiscal management.
Third, sustainability reporting in the public sector is gaining importance for climate action initiatives, particularly with the issue of draft standards by the IPSASB. This calls for a larger number of professional accountants working in this space and collaborating with other experts.
Despite the high demand, challenges exist in attracting and retaining qualified accountants. Some governments use generalist recruitment systems, which may not prioritize specialized accounting skills. Additionally, public sector compensation often falls short compared to the private sector. However, many accountants are driven by the opportunity to contribute to public policy and development, directly impacting good governance. There are laudable initiatives in various jurisdictions aimed to enhance the role of accountants in the public sector, with development partners and IFAC playing a crucial role in scaling up these efforts.
Do you believe there is a gap in the skills gap among accountants in the public sector? If so, what specific competencies should be strengthened to improve financial accountability and efficiency?
Yes, I believe there is a significant skills gap among accountants in the public sector. This gap often originates at the educational level, where universities and Professional Accounting Organizations (PAOs) do not adequately address the unique requirements of public sector accounting. Reflecting on my own experience in the late eighties and early nineties, after completing my undergraduate degree in accounting from Andhra University and my Chartered Accountancy qualification from the Institute of Chartered Accountants of India, I joined the Government of India as a Deputy Accountant General. At that time, I found that much of what I had learned academically did not directly apply to government accounting practices or financial management. The knowledge I gained about government accounting and financial management was primarily acquired on the job.
While there have been improvements since then, with universities and PAOs increasingly incorporating public sector accounting aspects into their curricula, the gap remains significant. To address this, accountants in the public sector should enhance their skills in Public Financial Management, economics, and public policy. There is still a need for country specific curriculum for students as practices in the public sector vary across countries and regions.
Moreover, with the advent of Artificial Intelligence, many routine accounting and auditing tasks in the public sector are being automated. This shift allows public sector accountants to focus on more value-added functions. These functions include predictive analysis of budget decisions on service delivery, perpetual forecasting of balance sheets, consolidation of accounts across various government levels for comprehensive government balance sheets, and identifying red flags and risks related to wastage, fraud, and corruption.
To strengthen financial accountability and efficiency in the public sector, accountants should also develop their IT skills and expertise in these value-added areas. By doing so, they can better adapt to the evolving landscape of public sector accounting and contribute more effectively to their organizations.
Can you share good examples of collaboration between governments, professional bodies, and development partners to ensure a sustainable pipeline of skilled accountants who can effectively serve both the private and public sectors? What barriers have you seen to the implementation of effective arrangements?
There are several exemplary practices of collaboration between governments, professional bodies, and development partners aimed at ensuring a sustainable pipeline of skilled accountants for both the private and public sectors. One notable initiative is MOSAIC (Memorandum of Understanding to Strengthen Accountancy and Improve Collaboration), which serves as a global framework to enhance cooperation among the International Federation of Accountants (IFAC), international donors, and the development community. I commend IFAC for facilitating this coordinated effort and am eagerly looking forward to the upcoming MOSAIC Steering Committee in London, where further strategies will be discussed to leverage the growing impact of professional accountants in the public sector.
Another significant example is the Foundational Accounting and Financial Management Skills Enhancement Program (FASE) project by the World Bank. This initiative aims to develop an Accounting Technicians’ qualification for Africa, which is now being expanded to other regions. The program provides knowledge resources and support to enable countries to train and deploy “accounting technicians” for both the public and private sectors. These technicians are well-trained in essential, practical skills such as bookkeeping, controls, cash management, and budgeting, but are not fully qualified chartered or certified accountants. Their training period is shorter and focused on the basic and practical skills urgently needed in low-capacity countries.
Recent initiatives in PAO capacity development, facilitated through IFAC’s MOU with organizations like Gavi and the Global Fund, and encouraged by the World Bank, are also excellent examples of effective arrangements.
However, the primary barrier to implementing such arrangements globally is the need to address unique country and regional requirements. It is encouraging to see MOSAIC’s efforts in this direction, particularly through collaboration with regional groupings like the Pan African Federation of Accountants (PAFA).
Can you share insights into your journey from working in the public sector to your current role at the World Bank? What key experiences, challenges, and lessons shaped your transition, and how has your background in the public sector influenced your work at the global level? What would you say to someone who is considering working in the public sector?
I began my professional career as a partner in our family firm of Chartered Accountants in India. After a few years, I transitioned into the premier civil services of India, where I spent over a decade and a half in leadership positions within the Government of India. Subsequently, I joined the World Bank, where I currently serve as the Head of the PEFA Secretariat and the Global Lead for Public Financial Management.
The academic rigor and professional foundations established through my Chartered Accountancy course were instrumental in my career achievements. Chartered Accountancy is, in my view, one of the best career choices for anyone interested in finance. It allows you to be an expert in specific technical issues, while having the ability to see the bigger strategic picture. My work in government provided me with hands-on experience in the realities of development work, which has been invaluable in my current role. I encourage anyone interested in international development to consider working within government for at least a few years to gain practical insights.
My career transitions have been smooth at a technical level, thanks to the fungible and synergetic skills I developed in both the private and public sectors during the formative years of my career. I have continuously improved these skills over time. The key to successful transitions lies in cultivating soft skills and adaptability across different organizational and regional cultures.
For anyone considering a career in the public sector, whether in government or with development partners like the World Bank, my advice is to view it as a calling. The satisfaction derived from contributing to the public sector is immense. Being a professional accountant in the public sector offers significant advantages. To all young professional accountants and those aspiring to become one, I encourage you to explore public sector opportunities if you are driven by a passion for service and development impact. The world needs more professional accountants in the public sector.
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