PUBLIC SECTOR ACCOUNTING AND FINANCE CONTACT LINK: WhatsApp BBM 5614BDC7 CALL HOURS: Tuesdays 7pm to 8pm and Fridays 7pm to 8pm.

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1 PUBLIC SECTOR ACCOUNTING AND FINANCE CONTACT LINK: WhatsApp BBM 5614BDC7 CALL HOURS: Tuesdays 7pm to 8pm and Fridays 7pm to 8pm. TOPIC: SUBSIDIARY ACCOUNTS SOLUTION TO QUESTION1: (a.) The subsidiary accounts section is responsible for keeping the following below the line accounts or records: Deposits The operation of deposit account is regulated by chapter 16 of the Financial Regulation Deposits are money paid to government for safe keeping e.g. Students Repatriation Fees, Prisoners Property. The deposits are usually made for specific purposes and are withdrawable by the depositors at maturity of the purpose or if no longer required or may be paid to revenue as the case may be. STARRY GOLD ACADEMY Page 1

2 Advances Advances are regulated by chapter 17 of the F.R Advances consist of two classes Personal and Non-personal. Remittance/Cash Transfer are amount forwarded from the head office to its units within Nigeria or outside Nigeria in the case of external affairs. Area offices may also make remittance/cash transfer of revenue or surplus cash to the head office as in the case of the department of Customs and Excise, External Affairs ministry, railways, airways, etc Imprests are sums advanced to officers to meet expenditure under the current estimates for which vouchers cannot be presented immediately to the Accountant-General or the sub-accounting officer for payment. Investment (b.) Estacode is an allowance calculated in foreign currency and paid to officer on official assignment outside the country. (c.) The officers that are entitle to an advance: STARRY GOLD ACADEMY Page 2

3 Officer on transfer Officer on temporary appointment Officer on first appointment Retiring officer (d.) The following monies cannot be placed on deposit: Money due to merchants Unclaimed salaries Unspent balances of voted expenditure SOLUTION TO QUESTION 2: Correspondence Advance These are advances given to government officials undergoing a part-time course or sitting for an external examination like ICAN, or attending evening classes. STARRY GOLD ACADEMY Page 3

4 The following condition must be complied with before the advance can be granted: The officer must be sound enough to cope with the course The course taken should be relevant to his work The study/course must make him/her more efficient at work and or improve performance The course is being taken with a recognised institution The completion of the course should not automatically lead to an advancement/promotion. The mode of repayment should be formalised No interest should be charged on correspondence advance The officer should produce receipt to show that the whole advance was spent on the course. To enter into agreement for repayment To be paid in 24 consecutives instalments STARRY GOLD ACADEMY Page 4

5 Instalmental recoveries must be effected every month until advances is fully recovered and under no circumstance should the recovery be deferred or postponed at the request or convenience of the officer A new advance should not be granted unless the previous advance has been fully recovered and in any case not within three years of a previous advance except in an exceptional cases approved by the Accountant-General of the Federation. SOLUTION TO QUESTION 3: (a.) Imprest System Imprests are sums advanced to officers to meet expenditure under the current estimates for which vouchers cannot be presented immediately to the Accountant-General or the sub-accounting officer for payment. The authority for the issue of imprest is the Annual Imprest Warrant issued to the Accountant General of the federation by the Minister of Finance. (b.) The objectives of sound imprest system: STARRY GOLD ACADEMY Page 5

6 To minimise the amount of cash held within the organization To ensure control is maintained over payments of cash expenses without undue administrative cost To ensure expenses are correctly summarised and recorded in the organization accounts The Features of a sound imprest system: To appoint particular individuals as imprest holders and to determine a certain amount of cash, estimated to cover their normal level of expenditure The imprest holder should only re-imburse staff on the presentation of properly authorised vouchers, which the imprest holder will later submit to claim re-imbursement. The imprest balance, vouchers and payment analysis must always be available for checking by the internal audit Ensure that the cash is securely held under lock and key and restricted except to the imprest holder. STARRY GOLD ACADEMY Page 6

7 (c.) The principles of internal control on imprest systems: Physical security of assets Segregation of duties or internal check The presence of inspectors and internal auditors for on the spot surprise check Control over losses by restricting the amount of imprest Regards, Taiwo Awoyemi. (PSAF Lecturer) StarryGold STARRY GOLD ACADEMY Page 7