New development: Whole state accounting—Experiences of the state of Hesse

Gerrit Rüdiger and Harald Bott

Public Money & Management, 2025, vol. 45, issue 6, 587-591

Abstract: The state of Hesse began voluntarily converting its cash and budget system to an accrual-based accounting system in 1998. A particular challenge in the conversion of the accounting system is involving all departments and employees in this reform process, as the transition from cash accounting to accrual accounting requires a fundamental change to existing administrative processes. The continuous political support of the state government over several legislative periods was of particular importance. The path that Hesse has taken in converting its accounting system from 1998 to the current adoption of the new financial regulations in 2022 has been highly successful. The state now has a sensible combination of the strengths of accrual-based and cash-based accounting with performance-oriented management. The accrual accounting system increases the transparency of the budget and provides significant additional information for politicians, managers and citizens. The cash-based budget remains an important management tool for budget preparation and the debt brake.

Date: 2025
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DOI: 10.1080/09540962.2024.2340208

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