Are the consolidated financial statements of local authorities able to give information about the financial sustainability of public outsourcing?

In the 1990s, Italian local authorities began a process of outsourcing that led to data in their balance sheets losing significance. It became necessary to find a way of giving stakeholders clear and detailed information concerning local authority activity. For Italian law and for the theorists, this instrument is the consolidated financial statements (CFS). In Italy, however, local authorities are not obliged to present it. To date there have been only some pioneering attempts. This study aims to examine the state of the art of this financial instrument and evaluate the CFS’ capacity to provide useful information about financial sustainability. We use the case analysis. So we identify Italian local authorities who have presented CFS and we analyse their contents looking for the presence of financial sustainability elements. This results in a table that enables to measure CFS for their efficiency in communicating about financial sustainability.