Making Cost Data Work for Public Financial Management

Lorena Rivero del Paso, Chloe Cho and Ramon Narvaez Terron

No 2025/159, IMF Working Papers from International Monetary Fund

Abstract: This paper examines the role of cost accounting in public financial management, focusing on budget credibility, performance-based budgeting, public procurement, and corruption detection. Despite demonstrated benefits, cost accounting remains underutilized in the public sector due to implementation constraints. The working paper proposes the adoption of automated cost accounting systems to streamline processes, reduce operational costs, and support complex data analyses. It further emphasizes the need for interoperability between government financial systems and administrative records to enhance the granularity of costing indicators. The paper also explores machine learning as a method to support budgetary decision-making with cost accounting data.

Keywords: Cost accounting; Budget credibility; Performance budgeting; Procurement; Interoperability; Machine learning; Anomaly detection; Automation; Digital transformation; Digitalization; GovTech; Financial Management Information Systems; cost accounting data; machine learning algorithm; cost data; Budget planning and preparation; Fiscal accounting and reporting; Performance-based budgeting; Global (search for similar items in EconPapers)
Pages: 42
Date: 2025-08-08
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