Budgeting for federal insurance and retirement programmes: Cash or Accrual

Megan Carroll, David Torregrosa, Sebastien Gay (), Wendy Kiska and Robert Sunshine

OECD Journal on Budgeting, 2020, vol. 20, issue 2

Abstract: Federal retirement programmes and some federal insurance programmes have long-term effects on the budget. But the federal budget process typically uses cash-based accounting measures that cover a 10-year period, which may be too short to accurately report those programmes’ net budgetary effects over the long term. In contrast, using accrual accounting for such programmes would accelerate the recognition of long-term costs and would display the expected costs of new commitments when they were incurred and thus were most controllable. However, such estimates are less transparent and verifiable than cash-based estimates, involve more uncertainty, and can complicate budget reporting.

Keywords: accrual budgeting; federal budgeting; federal insurance; federal retirement (search for similar items in EconPapers)
JEL-codes: H50 H60 (search for similar items in EconPapers)
Date: 2020
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