The consolidated financial statements
The reform of municipal budgetary law has taken an important step forward with the introduction of the New Municipal Financial Management. On 1 January 2009, the city of Beckum converted its accounting system to the double-entry bookkeeping system in accordance with the principles of the New Municipal Financial Management. However, the city will only have a complete overview of the assets and liabilities of the core budget and its holdings once the consolidated financial statements have been prepared.
The regulations governing the consolidated financial statements are contained in Sections 116 and 117 of the North Rhine-Westphalia Municipal Code (GO NRW) in conjunction with Sections 49 and 52 of the Ordinance on Local Authority Budgeting in the State of North Rhine-Westphalia with references to the German Commercial Code.
In accordance with Section 116 (1) GO NRW, the City of Beckum is obliged to prepare consolidated financial statements for the reporting date of 31 December of each financial year. These consist of the statement of comprehensive income, the statement of financial position and the notes to the financial statements. An overall management report and an investment report must also be included.
When the Second Act on the Further Development of the New Municipal Financial Management for Municipalities and Municipal Associations in the State of North Rhine-Westphalia and other Municipal Regulations (2nd NKF Further Development Act - 2.NKFWG NRW) came into force on 1 January 2019, Section 116a GO NRW was introduced. This allowed the possibility of exemption from the preparation of the consolidated financial statements under certain conditions. As the conditions are met for the city of Beckum, it was possible to dispense with the consolidated financial statements for 2019 for the first time. The City Council of Beckum has decided this for the years 2019 and 2020.