Blockchain-Backed Audit Trails for High Assurance Financial Transactions in Public Sector Accounting

Abstract

Public sector institutions rely heavily on transparent and tamper-proof financial processes to ensure
accountability, reduce fraud, and strengthen public trust. Traditional accounting systems, however, often suffer from
data manipulation risks, inconsistent audit trails, and a lack of real-time verification mechanisms. This study
proposes a blockchain-enabled audit framework that integrates timestamped smart contracts, distributed ledger
recording, and public-key cryptographic attestations to secure financial workflows in government treasury and
accounting departments. The system ensures immutability of transactions, automates compliance verification, and
enables auditors and external stakeholders to perform independent validation without compromising data privacy. A
case study using anonymized municipal financial records demonstrates that blockchain-based audit trails
significantly enhance transparency, reduce opportunities for unauthorized data alteration, and increase fraud
detection efficiency. The findings show that blockchain can serve as a robust backbone for next-generation public
sector financial governance, providing real-time traceability, verifiable expenditure records, and strengthened
institutional credibility. This work concludes that integrating blockchain into government financial systems has the
potential to transform accountability frameworks and support high-assurance public administration.