Consolidated Non-Financial Public Sector

GFS presents a specific accounting structure for the measurement of non-financial public sector (general government sector plus non-financial public enterprises).

Because the non-financial public sector is based on the distinction between private and government ownership and control, and not on purpose/function as is the criteria for classifying institutional units into institutional sectors, its measurement raises some problems that are not encountered when measuring government or non-financial enterprises separately. By focusing on some key aggregates like saving, capital formation and financing, rather than on the components of current account operations, the main difficulties in consolidating statistics for activities that are different in nature (e.g., market versus non-market production) are avoided.

Measuring the total non-financial public sector, the principle of cash accounting is followed, and transactions are recorded when cash is paid or received.

Government finance statistics are recorded on a cash basis, but accounts for he non-financial enterprises are recorded on an accrual basis and have to be adjusted to cash accounting (see; ‘Adjustment to cash basis’ above).
However, it should be noted that figures for the total non-financial public sector derived as the sum over the general government sector (institutional sector in SNA) and the non-financial public corporations sector (sub sector, part of the non-financial corporation sector in SNA) as recorded in the system of national accounts will be on an accrual basis.

The statistics compiled for the non-financial public sector (based on the GFS manual) will be consolidated. This means that transactions between different levels of government, between different non-financial public enterprises, as well as between government units and non-financial public enterprises will be eliminated from the aggregates. E.g., subsidies paid to non-financial public enterprises will be recorded in separate statistics for government and non-financial public enterprises, but will be consolidated, or eliminated, in statistics compiled for the total non-financial public sector.

The GFS manual provides a framework for compiling statistics for the non-financial public sector. As stated above, as long as following a cash based system, it is not possible / does not make sense adding together market and non-market production. For this reason, the statistical statement for the non-financial public sector does not include an operating account, but starts off with ‘own savings’.