SOLUTION PUBLIC SECTOR ACCOUNTING NOV 2010 SOLUTION 1 Receipts and payment account for the year ended 31 st December 2009 REVENUE Receipts from GOG Development EXPENDITURE Personel Emolument Administrative expenses Service activity expenses Investment activity expense Decelopment partner support Deficit GHS 275,254 308,849 701,275 267,559 344,651 GHS 1,422,472 342,868 1,765,340 1,897,588 (132,248) Statement of Accumulated Fund GHS Accummulated fund brought forward 295,209 Decifit for the year (132,248) Balance carried down 162,961 Department of Children Balance Sheet as at 31 st December 2009 Assets Cash at Bank 76,811 Advances 50,500 Investment 35,650 162,961 Represented By: Accummulated Fund 162,961 Workings Personel Emolument Service Activity Expenses Established Post 137,627 Workshops/Meeting 248,723 NonEstablished Post 100,000 Staff Development 10,932 Monthly paid casual labour 37,627 Ext Consultancy 311,191 275,254 Tuetion Fees 15,118 Foreign travel per diem 44,511 Foreign travel expenses 70,800 701,275
Adminstrative Expenses Investment Activity Telecommunication 8,910 Construction works 244,144 Postal charges 1,776 Plant & Equipment 5,408 Sanitation 13,101 Furniture & Fittings 1,050 Vehicle maintenance 96,040 Computers & Accessories 16,186 Furniture & Fittings Maintenance 27,560 Other capital expenses 771 General equipment maintenance 18,535 267,559 Machinery maintenance 24,767 Car maintenance Allowance 36,364 Receipts from GOG Medical refund expenses 26,462 Personel emolument 275,254 Residential accommodation 41,695 Administration expenses 324,275 Office building maintenance 13,639 Service activity 555,418 308,849 Investment activity 267,525 1,422,472 SOLUTION 2 a) The concept of Appropriation in the public sector refers to the procedure through which national revenue is made available to government organisations annually to finance their programmes or activities. b) Appropraitioninaid refers to any income that a department receives outside the consolidated fund. This income is expected to be deducted from the total supply estimate or appropriation needed by the organisation hence this reduces the amount expected to come out of the consolidated fund. c) Department ABC Parliamentary Grant Consolidated Fund Account AccountantGeneral s Dept Bank 200.0 599.4 AccountantGeneral s Dept Account Consolidated Fund Account 200.0 Personal Emolument 200.0 Consolidated Fund Account Appropriationinaid Bank Account 599.4.6 600.0 Travelling & Transport General Expenditure Repairs & Maintenance Other Recurrant Surplus Refund to Chest 226.0 114.0 120.0 110.0 30.0 600.0
Personal Emoluments Travelling & Transport General Expenditure Repairs & Maitenance Other Recurrant Expenses Grant Underspent Parliamentary Grant Account 200.0 Consolidated Fund Account 226.0 AppropriateinAid 114.0 120.0 110.0 30.0 800.0.6 800.0 Personal Emolument Accountant General s Dept 200.0 Parliamentary Grant 200.0 Travelling & Transport Account Bank Account 226.0 Parliamentary Grant 226.0 General Expenditure Account Bank Account 114.0 Parliamentary Grant 114.0 Repairs & Maintenance Bank Account 120.0 Parliamentary Grant 120.0 Other Recurrent Expenses Account Bank Account 110.0 Parliamentary Grant 110.0 AppropriationinAid Parliamentary Grant 0.6 Bank Account 0.6
Department ABC Appropriation Account for the year ended 31 st December 2009 Items Personal Emolument Tranvelling & Transport General Expenditure Repairs & Maintenance Other Recurrant Total recurrant Expenditure Less AppropriationinAid Surplus Surrendered Appropriation Estimate 200 240 100 160 100 800 0.60 0 Actual Appropriation 200 226 114 120 110 770 0.60 769.4 30.0 Under Expenditure 14 40 54 Over Expenditure 14 10 24 SOLUTION 3 Budget Guideline (i) It is a vehicle conyeying policy priorities to stakeholders national goals, economic prospects It indicate the resource envelope of the government (iii) It identifies expected constriants and its impact on the Budget (iv) It communicates instruction for the preparation of the Budget proposal (v) It provides the required templates for the preparation of Budget proposal. Conditions for Restricted Tendering Procurement entity may for reason of economy and efficiency and subject to the approval of the Board engage in procurement by means of restricted Tendering under the following conditions: (i) If goods, works or services are available only from a limited number of suppliers or contractors; or If the time and cost required to examine and evaluate a large number of Tenders is disproportionate to the value of the goods, works or services. Procedures for Restricted Tendering Section 39 (1) Where a procurement entity engages in restricted Tendering on the grounds referred to in Section 38 it shall: (i) Invite Tenders from the suppliers and contractors who can provide the goods works or services Select in nondiscriminatary manner a number of suppliers or contractors to ensure effective competition
(iii) Where the procurement entity engages in restricted Tendering it shall cause notice of the selecting Tendering to be published in public procurement Bulletin. (c) (d) Joint Acquisition of Stores (i) Subject to the provision of this part of the Act (654) two or more departments may for purposes of economy or convenience acquire stores together. Heads of Departments acquiring joint stores shall be responsible for their respective share of the resources committed to the joint stores. The concept relates to the process of switching funds meant for a specified item to finance another item. It is the act of meeting the need for overspending in one area of expenditure by falling on an under spending in another area. This prevents the request for supplementary estimates with the problem of going through the process of parliamentary approval through supplementary appropriation. (e) Parliament is the authority to grant any request for such funds switching after a spending organisation makes an application. Pratically such authority/responsibility is delegated to the Central Budget Agency, the Ministry of Finance in Ghana which approves of this. Further authroity delegation is possible to head of the spending organisation or department, etc. (f) Features i. Virement is not allowed between line items of expenditure ii. It is allowed where savings have been made in other expenditure items iii. It is allowed where the savings do not arise from the deferment of expenditure iv. It is allowed if the extra funds are required for existing services, but not for any new services v. It is not allowed for capital expenditure or expenditure which can lead to incurring extra expenditure in the features vi. It is not allowed for an expenditure that will end up in a change in government policy. SOLUTION 4 General Purpose Financial Statement is a financial statement issued for users that are unable to demand financial information to meet their specific information needs. Examples are: Citizens, Voters, the representatives of the citizenary, members of the public, tax payers, the legislature, the Media etc. Government Business Enterprise is an entity that has all the following characteristics; (i) Is an entity with the power to contract on its own Is an entity that has been assigned the financial and operational authority to carry on a business (iii) Sells good and services in the normal course of its business to other entities at a profit or full cost recovery
(iv) Is not reliant on continuing government funding to be a going concern. (Other then purchases of output at arms length) and is controlled by a public sector entity. (c) Redemption of Government Debt The repayments of external and domestic debts are made out of the consolidated fund. (c) (d) Governement Advances The Controller and Accountant General (CAG) also grants advances to individuals government employee s, ministries, departments and agencies from the consolidated fund. Granting of Loand Loans are also granted from the consolidated fund to statutory organisations and private companies to persue governement policies. Purchase of Securities Governement or the Finance Minister can instruct the CAG to use part of the consolidated fund to buy Securities for interest to be earned. The Securities to be bought should be that of other institutions and not that of public or government. (e) (f) (g) Governement Equity Investment The consolidated fund can be used by governement to purchase shares in statutory and private companies to earn dividends. Statutory Expenditure Statutory payments, liken DACF, Get Fund, Pension, NHIF, road fund etc. are all paid out of the consolidated fund. Trust Moneys Trust moneys in the form of special funds and Deposits are paid out of the Consolidated Fund. (d) Domestic Debts (1) Treasury Bills (2) Bonds (3) Borrowings from local financial institutions (4) Overdraft at Bank of Ghana External Debts (1) Multilateral Debts (2) Bilateral Debts (3) Commercial Loans (4) Suppliers Credit
(e) (i) Public Agency: Is defined under the MDAs (Retention of funds) Act, 706 of 2006 as a body set up by the governement in the public interest with or without an Act of Parliament. Subvention: Is defined by Subvented Agencies Act 706 of 2006 as meaning public funds. (iii) Principal spending Officer: Section 74 of the FAA defined this as meaning the chief director, chief Executive or the most Senior Administrative head of a Ministry, department or agency responsible for producing outputs. (iv) Below the Line Accounts: These are subsidiary accounts that relate to all other transactions and balances of the Consolidated FundAssets, liabilities and reserves. These accounts do not lapse but continue from year to year. SOLUTION 5 Public Sector Organisations exist for the following reasons: (i) (iii) (iv) (v) To provide public goods and services to individuals and institutional consumers regardless of their ability to pay To provide good and services whose investment capital is quite high and hence cannot be provided by the private sector or whose returns are low and therefore unattractive to the private sector, though necessary To achieve a net social benefit rather than net profit so as to enhance equity of access to meeting needs of water, electricity, food, shelter, transport, health and communication, etc To correct inequalities which exist among various social classes and cummunities To influence future social, political, economic or financial environment for optimal growth of the economy. Supernuation (i) A member of a public institution operating superanuation scheme retires on attaining the compulsory retirement age of sixty (60) years or retires volutarily on attaining the age of 55 years and has contributed to the scheme for a period of not less than fifteen years in the aggregate or one hundred and eighty months in the aggregate is entitled to a supernuation pension. Lump sum Payment Where a member of the social security scheme has made less than fifteen years contribution to the fund before the member retires either compulsory or voluntarily the member is entitled to:
A lumpsum of money equal to the members contribution benefit and An interest of 75% at the prevailing government Treasury bill rate on the lumpsum (iii) Consolidated Salary Salary inbuilt with all allowances and basic salary. (c) (i) There must be appropriate Budget Authority. That is expenditure must be authorised by law or officer in control or accountable be identified There is an appropriate Budget period. That is the financial period in which the expenditure is being incurred is specified (iii) Appropriate Budget Classification That is account codes and expenditure classification are provided (iv) (v) (vi) (vii) Appropriate Budget reallocation is approved by Ministry of Finance Payment will be for purposes for which it is intended There will be value for money Documents supporting the expenditure are valued and appropriate (viii) Relevant rules and regulations regarding the expenditure has been complied with (ix) The expenditure has been subjected to Internal audit Scrutiny. (d) The financial duties of a head of department are: (1) Management and operate the department s accounting systems, so as to ensure the accountability of all officers transacting business and facilitate the efficient discharge of such business (2) To ensure that the department s accounting system has been approved by the Controller and AccountantGeneral in consultation with the AuditorGeneral. (3) Secure the efficient and effective use of appropriations under departmental control within the ambit of government policy and in compliance with any enactment or of instructions issued under the authority of any enactment (4) Secure the due and proper collection of governement revenue collectable by department within the terms of any enactment or of instructions issued or approved by the Controller and AccountantGeneral (5) Request, commit, order, receive and make paymentrs for goods and services within the funds appropriated to the department and in accordance with this regulations and any other enactment
(6) Receive and order the disbursement of any trust moneys for which the head of department has been appointed as administering authority by or under any enactment or agreement (7) Manage and reconcile the bank accounts authorised for the department by the Controller and AccountantGeneral (8) Preserve in good order and secure the economical use of all equipment and stores used by the department (9) Transact any other financial business for which the head of department is made responsible, by or under any enactment in accordance with the requirement of the enactment or instructions issued or approved by the Minister (10) Compile and maintain assets register of the department as determined by the Controller and AccountantGeneral (11) Appear before the Public Accounts Committee to give any explanations required by the committee in respect of annual departmental accounts (12) Answer questions raised by the auditorgeneral in respect of financial transactions and accounts of the department (13) Prepare, sign and submit within three months after the year end, to the Minister, auditor General and AccountantGeneral, annual departmental accounts in the form prescribed by the controller and AccountantGeneral in consultation with the auditorgeneral. (e) Moneys paid from the Consolidated fund for public purpose that: Require the eventual repayment of the money into the Condolidated Fund Results in the equisition of equity interest in any institution The breakdown of the consolidated fund financial assets include: i. Cash in the hands of Treasury officers in a Bank operated or held by other agents on behalf of the consolidated fund ii. iii. iv. Securities held on behalf of the government is of special fund Advanced from the consolidated fund Loans from the consolidated fund.