The Analysis of Income Statement and Final Balance Sheet in Local Governments: A Case Study for Financial Sustainability

The global financial crisis represents one of the main reasons for the situation suffered by many European countries both at national and local level. Furthermore, the increased attention given to financial budgeting in the last years highlights the importance for public administrations to learn more about how to measure financial sustainability, how to implement strategies to avoid distress, and how to represent the expected results of these strategies. We propose an explanatory case study to analyze the first results obtained through a plan devised to restore a good financial condition through a process of spending review in the municipality of Rome, one of the most important local governments. More specifically, we have analyzed the income statements and the final balance sheets for the years 2013-2017.