• Basis of accounts
• Revenue recognition
• Provision for bad debt
• Expenditure
• Transactions denominated in foreign currencies
• Consumption of fixed assets

WORKINGS:

WORKINGS:

Government Fiscal Policy is the term used for government’s policy of taxation. The primary fiscal policy objective of government is to ensure macroeconomic stability within the macroeconomic and fiscal framework of the country.
Under the PFM Act 2016, the following principles guide the formulation of fiscal policy objective.

• sufficient revenue mobilisation to finance Government programmes;
• maintenance of prudent and sustainable levels of public debt;
• ensuring that the fiscal balance is maintained at a sustainable level over the medium term;
• management of fiscal risks in a prudent manner; and achieving efficiency, effectiveness and value for money in expenditure

• Mid-year review
• Budget performance report
• Supplementary budget
• Virement
• Reallocation of funds
• Cash forecasting

Budget Guidelines seek to provide clear instructions about the processes and procedures MDAs and MMDAs should use to prepare their budget proposals and budget estimates.
Below are the importance of Budget Guidelines in Public Sector Accounting and Finance

• control of aggregate expenditure to ensure affordability; that is, consistency with the macroeconomic constraints;
• effective means for achieving a resource allocation that reflects expenditure policy priorities;
• efficient delivery of public services (productive efficiency); and
• minimization of the financial costs of budgetary management (i.e., efficient budget execution and cash and debt management practices).

• Recruitment of quality and competent revenue staffs.
• Outsourcing of revenue collections to competent commission collectors.
• Setting of revenue targets for revenue collectors.
• Proper supervision of revenue staffs to prevent revenue leakages of records.
• Rotation of revenue staff to prevent collusion.
• Accurate data collection to ascertain improved revenue forecast.
• Education, sensitisation and demonstration to general public that revenue collected will be used for the benefit of the community.
• Periodic valuation and revaluation of taxable properties to ensure proper property rate collection.
• Motivation of revenue staff including periodic awards to induce productivity.
• Improving the monitoring of revenue collection.
• Introduction of electronic payment system.

The general rule is that all covered entities shall use GIFMIS from the commencement of procurement process through to payment.
The procedures for payment of works procured by MDA include the following:
i) Inspection for the purpose of certification
As a condition for certification, the PSO shall inspect the physical output of the works and supplies in the field. This can be done before progress payment is made or when the work is fully completed.
The PSO may authorise an officer with adequate expertise to carry out the inspection on his behalf.

ii) Certification of completion of works or supply of goods and services
Upon the completion of works or supply of goods and services, the Principal Spending Officer (PSO) prepares a certificate statement in respect of the work and stores received and this statement shall include:

• The quantity and particulars of the works and supply.
• The method and result of the inspection,
• Any evidence supporting the results.
• the necessary remedial actions where the PSO identifies that the work or supply is inconstant with contracts or specification such as partial rejection, full rejection and others actions.

iii) Record invoices and supporting document
When certificate is issued, the PSO records the details of the invoices in the GIFMIS and upload the certification statement and other supporting documents onto the GIFMIS.

iv) Record of approval of payment voucher
A payment by a covered entity shall be accompanied with a payment voucher authorised by the head of accounts and approved by the PSO on the GIFMIS.
Here the head of accounts and the PSO should ensure:

• the validity, accuracy and legality of the claims for payments.
• the commitment has been approved through the Purchase Order or Expense Order generated under the GIFMIS.
• An invoice, certificate statement and completed set of supporting documents are recorded in the GIFMIS.

v) Payment
When a payment voucher is approved, the Controller and Accountant General shall release the cash to the covered entities using the GIFMIS.
All payments for expenditure of covered entities shall be made through GIFMIS system using the following methods:

• Electronic fund transfer (EFT)for third party transactions
• System cheques or electronic means for withdrawal of money for internal payments of allowance.
• Physical cash disbursement only from imprest and payment of allowances to ultimate individual beneficiaries.

(a) entering or attempting to enter into a collusive agreement, whether enforceable or not, with any other supplier or contractor where the prices quoted in their respective tenders, proposals or quotations are or would be higher than would have been the case has there not been collusion between the persons concerned;

(b) directly or indirectly influencing in any manner or attempting to influence in any manner the procurement process to obtain an unfair advantage in the award of a procurement contract;

(c) altering any procurement document with intent to influence the outcome of a tender proceeding and this includes but is not limited to
(i) forged arithmetical correction;
(ii) insertion of documents such as bid security or tax clearance certificate which were not submitted at bid opening; and

(d) request for clarification in a manner not permitted under this Act.

Fixed assets:
i) Proper use of the fixed assets
Ensure that systems exist to prevent wrongful use of public assets by persons, authorised or not authorised. For example, institute tracking systems over vehicles and other assets. Physical restriction such as locks, security systems are also important to safeguard the uses of assets.
ii) Establishing Fixed asset coordinating unit
To ensure effective management the principal spending officer should establish coordinating unit within the entity to take responsibility for fixed asset management
iii) Keep proper records on fixed assets
The entity should keep and update fixed asset register to ensure accurate record on fixed assets for effective checks and decision making.

Investment of Excess Moneys:
i) Establish an investment policy for the entity in accordance with the PFM Act and the regulations to ensure that investment activities are discharged lawful and prudently.
ii) Ensure accurate accounting and reporting of investments made from public moneys.

Advances and Loans:
i) Establish appropriate advance and loan schemes for approval of Minister of Finance and parliament, as the case may be.
ii) Institute effective recovery systems for advances and loans made under the scheme.
iii) Proper accounting and reporting practices are followed for advances and loans.

Cash management:
i) Put in place an effective cash planning and for casting system to ensure effective management of cash resources of the entity.
ii) Ensure effective custody of the cash resources by ensuring that all cash are deposited gross in the designated bank accounts,
iii) Ensure that banks accounts are opened for the entity under the approval of the controller and accountant general and this shall be part of the treasury single accounts system.
iv) Regular bank reconciliation procedures should be laid down and followed.

• Lack of integration between budget preparation and execution systems.
• Inadequate budgetary controls.
• Lack of interface between various Public Financial Management (PFM) Systems across MDAs and MMDAs.
• Undue delays in processing transactions due to cumbersome manual process.
• Poor record keeping on public financial transactions.
• Lack of reliable data for effective fiscal planning.
• Weak accounting and fiscal reporting systems.
• Lack of transparency in budget execution.
• Delays in financial reporting.

• Statutory/ Legal Requirement: The conduct of financial business by public organizations is governed by laws, rules and regulations, example The 1992 Constitution, Financial Administration Act etc. This legal framework entreats officers to keep proper records of all transactions and produce them for inspection at the instance of the appropriate authorities, for example the Minister of Finance. This is to assure the public that they are complying with the law and meeting the objectives for which they were set up.
• Compliance and Stewardship: It is the objective of public sector accounting to provide the responsible authorities and users of such information with the assurance that there has been conformity with legal and other mandatory requirements in the organization’s use of resources.
• Viability: Another objective of financial reporting of public sector organizations is to enable the authorities to monitor and evaluate the performance of such organizations, as well as to predict the economic conditions of such organizations. Similarly, it affords readers to judge whether the organization can continue to provide Goods & Services in the future (going concern).
• Planning and Authorization Information: Public sector accounting has the objective of providing financial information which serves as the basis for planning future policies and activities and to provide support.
• Full disclosure of the financial results of department and agency activities.
• Production of adequate financial information needed for department and agency management purposes.
• Effective control over and accountability for all funds, property, and other assets for which each department and agency is responsible.
• Reliable accounting reports to serve as the basis for preparation and support of department and agency budget required to control the execution of the budget and to provide financial information.
• Suitable integration of department and agency accounting with the central accounting and reporting operation of the Treasury Department.

• Commitment accounting is used solely in relation to expenditure; not revenue.
• It is an alternative accounting bases which is more theoretical; it is less widely adopted in practice compared with cash and accrual accounting.
• The entries are complicated when orders are cancelled or when there is amendment of the content or an order to illustrate how the entries are made to let us assume a manager orders 50 bags of cement is GHS8.80.
• To avoid returning uncommitted resources back to government’s general fund, rush orders for inappropriate jobs or services can be made to commit unused cash balances.

• It recognises the existence of the transaction in terms of service to be given or received but not the inflow and outflow of cash. It is a realistic and practical concept because it takes both cash and credit transactions into consideration; debtors and creditors are found in the accounting books because of the credit terms.
• There is distinction between capital expenditure and revenue expenditure. This allows for the matching of output activity and programme with cost incurred, thus performance measurement. The cost of fixed asset which is depreciated is what is expensed and not the total cost as applies under the cash accounting.
• This technique allows for the preparation of the final accounts in the form of preparation of the operating statement and balance sheet. There is full disclosure of the resources on the land and the actual use of the resources as well as outstanding liabilities.
• With accrual accounting receivables and payables are recognised.
• Under accrual accounting, revenues are recognised when they are earned and expenditure recognised when they are incurred.

• Cash inflow and cash outflow is the only basis for recording transactions in the books of account. The cash book is the main book of document thereafter posting is made to ledger.
• Credit transactions which result in debtors and creditors are not recorded, debtors and creditors accounts are therefore not kept.
• Both revenue and capital income and revenue and capital expenditure are treated in the books as revenue income or revenue expenditure. Fixed assets are not recognised under cash basis, they are written off in the year of purchase, so there is nothing like depreciation of asset.
• Cash accounting reports no surplus or deficit and no assets or liabilities. In the absence of these items found in the balance sheet, the cash accounting basis do not require the preparation of a balance sheet.

• Transparency and competition:
  Transparency and competition are critical to enhance the general public’s confidence in public officials and, more importantly, in PPP arrangements. Contracting authorities must make contract information publicly available. In fact, authorities can do this by disclosing key contract details to the public. In addition, competition is very essential to ensure value for money. Proposed projects must be advertised and allow investors to bid under a competitive environment.
• Favourable legal framework:
  PPP laws and policy frameworks are important to govern the implementation process. Currently, there is inadequate legal framework for PPP practice in Ghana. Ghana had only a national policy guide; which did not give many details as to how the implementation process is. More essentially, the guide does not clearly stipulate the procedures for managing unsolicited proposals, which are the widely adopted approach for PPP implementation by the government. The PPP Bill was however laid in parliament in 2016.
• Right project identification:
  The right public facility must be identified and procured using the PPP concept. Right project identification simply implies the selection of public facilities with strong technical, social, and economic rationale for PPP. In fact, most of past PPP projects implemented in Ghana have been based on “campaign promises” but not from a well-structured infrastructure plan.
• Capacity building:
  Enhancing the skills of local practitioners (both public officials and local investors) is important toward the growth of PPP in Ghana. Many local practitioners particularly public servants have very little idea and knowledge on the management of PPP projects. More importantly, engaging in competitive negotiation is sometimes a challenge. In this regard, seminars and short courses on PPP negotiations and general implementation approach should be regularly organized for practitioners.
• Extensive stakeholder engagement:
  External stakeholders play crucial role in the successful implementation of PPP projects. Essentially, stakeholders such as civil society groups, local communities, and trade unions should be engaged right from the beginning of the project. Local practitioners should desist from engaging external stakeholders at the later stage of the project development because it irritates the public and fuels the negative public perception on PPP transactions.
• Appropriate risk allocation:
  Proper risk identification and allocation cannot be undermined when practitioners want to achieve success. Risks must be properly identified and allocated to the best party. Essentially, contracting authorities should neither retain excessive risks nor transfer too many risks to investors. In fact, risk sharing must be balanced. It should not be a way of favoring one party since this can result in conflict at a later stage.
• Local content and safeguard of consumers rights.
• Value for money