• Lack of adherence to rule of law and due process.
• Ineffective boards (individual Dominance and lack of independence).
• Conflict of interest.
• Lack of internal and external scrutiny.
• Lack of transparency.

• Organisational structure and process (for roles, communication, accountability, compliance and controls)
  The board should comprise independent minded directors. It should include an appropriate combination of executive directors and non-executive directors to prevent one individual or a small group of individuals from dominating the board’s decision taking. The board should be of a size and level of diversity commensurate with the sophistication and scale of the organisation. Appropriate board committees may be formed to assist the board in the effective performance of its duties.
  All organisations should be headed by an effective board. Responsibilities and accountabilities within the organisation should be clearly identified.
• Controls (risk management, audit, M&E)
  The board should be responsible for risk governance and should ensure that the organisation develops and executes a comprehensive and robust system of risk management. The board should ensure the maintenance of a sound internal control system.
• External reporting (standards, financial and performance reports)
  The board should present a fair, balanced and understandable assessment of the organisation’s financial, environmental, and social and governance position, performance and outlook in its annual report and on its website.
• Audit, Accountability for resources and stewardship (at the senior level)
  Organisations should consider having an effective and independent internal audit function that has the respect, confidence and cooperation of both the board and the management. The board should establish formal and transparent arrangements to appoint and maintain an appropriate relationship with the organisation’s auditors.
• Responsibility (towards stakeholders, avoiding conflict of interest, etc)
  The board should be responsible for ensuring that an appropriate dialogue takes place among the organisation, its shareholders and other key stakeholders. The board should respect the interests of its shareholders and other key stakeholders within the context of its fundamental purpose.
• Value for money
• Rule of Law
• Board Independence

Incremental budget is derived from the current year’s budget by adding amounts expected to be required or decreases resulting from shrinkage in the scale of operations forced by pressures such as spending limitations mandated by the electorate, or cuts in capital expenditure. In arriving at the budgeted figure for an item in any given year, consideration is given to past period item and any change expected, either increase or decrease. The magnitude of change is determined by using either general inflationary rate or specified price indexes as a benchmark.

Advantages of incremental

• The process of preparing this type of budget saves time and does not generate volumes of paperwork especially for the decision package.
• Drawing decision packages and ranking operations does not require management skills which may not exist in the organization.
• Incremental Budget is always acceptable to staff or management or trade unions who may prefer the cosy status quo and who see the detailed examination of alternatives, cost benefits as a threat rather than a challenge.
• There are considerable advantages in ranking packages and its associated subjective judgements. Political pressures within organizations does not contribute to the problem of ranking different types of activities.
• It may emphasize longer term benefits which is more important in the end.
• It requires little information system in an organisation to provide the informational needs of the budgetary process.

Disadvantages of Incremental Budget

• It does not make for a complete, specific and detailed scrutiny of the objects of expenditure. If anything at all it is the incremental amounts that are justified. It may therefore contain expenditures which are not reasonable, inefficient items may also remain financed for a long time.
• There is the tendency of favouring existing programmes at the expense of new ones because budgets are built on inputs or instrumentalism without considering whether it is worth spending on the existing programme.
• It encourages budget controllers to spend whatever amount is allocated for the year, whether that entire amount is needed or not. This stems from the fact that the incremental budget stresses the potential loss of annual unspent monies; i.e. return to government chest any unspent monies. Coupled with this is the fear of budget cuts in subsequent years in areas of under expenditure.
• Incremental budgeting encourages the carrying forward of past inefficiencies this problem could have prevented by adopting Zero-Based Budgeting.

The best alternative to be adopted is Zero Based Budgeting (ZBB):
It is a method of budgeting whereby all the activities are re-evaluated each time a budget is formulated. Each functional budget starts with the assumption that the function does not exist and is zero cost. Increments of cost are compared with increments of benefit, culminating in the planning of maximum benefit for a given budget cost.
NB: other methods including Activity Based Budgeting, Programme Based Budgeting and Zero base budgeting may be prescribed by candidates.

The reasons for adopting this approach is as follows:

• It ensures better allocation and utilization of resources because of the prioritisation procedure adopted (i.e. the ranking of projects).
• ZBB focuses attention on value for money and makes explicit the relationship between the input of resources and the output of benefits.
• It develops a questioning attitude and makes it easier to identify inefficient, obsolete or less cost effective operations. That is, it is possible to identify and remove inefficient or obsolete operations.
• ZBB leads to increased staff involvement, which may lead to improved motivation and greater interest in the job.
• It is a systematic way of challenging the status quo and obliges the organization to examine alternatives existing in cost behaviour patterns and expenditure levels.
• Zero-based budgeting addresses and supports comprehensive planning, shared decision making, the development and application of strategies and allocation of resources as a way of achieving established goals and objectives.
• It helps to create an organizational environment where changes are accepted.
• Zero-based budgeting prevents the carrying forward of past inefficiencies that can be a feature of incremental budgeting

A tenderer in public procurement shall:

• possess the necessary professional and technical qualifications and competence,
• have adequate financial resources,
• have the necessary equipment and other physical facilities,
• have managerial capability, reliability, experience in the procurement object.
• have the personnel to perform the procurement contract;
• have the legal capacity to enter into the contract;
• be solvent, not be in receivership, bankrupt or in the process of being wound up, not have its business activities suspended and not be the subject of legal proceedings that would materially affect its capacity to enter into a contract;
• fulfil its obligations to pay taxes and social security contributions.
• Meeting ethical and environmental requirements associated with the procurements.

Essential provisions of the Public Financial Management Act which aim at ensuring that resources are properly safeguarded are:

• The Act defines clearly the powers and responsibilities of financial stewards (individual office holders) and their precise roles. It defines the central players in the financial administration of the country, the assignment of responsibilities, their functions and roles. This includes responsibilities and powers of Minister of finance, responsibilities of Chief Director, duties of a Principal Spending Officer, duties and functions of Controller and Deputy General and Accountant-General, and parliament and it oversight responsibility.
• It addresses micro and Fiscal Policy Principles and Strategies.
• Budget preparation approval and it management.
• It establishes Contingency Fund, it payments and advances.
• It establishes Sinking Fund and Debt Servicing.
• It also establishes new strategies of cash and asset management. The Act establish Treasury Single Account, Consolidated Fund and issues involved in Investment of balance on the Consolidated Fund.
• It has establish new ways of Public Debt Management by establishing an office at the Ministry of Finance to deal with Public Debt Management, the Act has shown the purposes under which borrowing can be made.
• It has set dates under which Public Accounts are supposed to be submitted and audited.
• Last but not the least, the Act has also establish Audit Committees to replace Audit Reports Implementation Committees.
• Lastly, miscellaneous provisions such as Offence and Penalties, Surcharges and Penalty for Contravention of the Act.

• Public sector accounting enables governments to demonstrate accountability for public resources to the citizens.
• Public sector accounting provides useful information that supports social, economic and political decision making of government.
• Public sector accounting is a tool that enables efficient allocation of public resources to the priorities of government.
• Public sector accounting serves as a tool used by government to control its plans, programmes and activities.
• It also helps to measure performance of government in terms of economy, efficiency and accomplishments.
• Public sector accounting is a means of meeting legal requirements to public accounts quarterly and annually..

• Means of funding is different. Public sector entities are financed largely from the public resources resulting from taxes, levies and other public moneys whereas private sector is financed through capital contribution of owners such as shares. Therefore, public entities are collectively owned by the citizens without equity interest but equity interest is the basis of private ownership.
• Accountability structures are different. Public sector entities are accountable to citizens through parliament but private entities are accountable to the shareholders through the board of directors.
• The nature of goods and services they offer is different. Public sector is engaged in the provision of public goods and services which are non-excludable and non-divisible. Private sector is involved in the provision of private goods that are rivalry, divisible and discriminatory. Thus, public sector operates in a monopolistic market where private sector operates in a competitive market.
• The regulatory environment is different. Public sector entities are established by a specific enactment of Parliament where as private sector entities are governed by general commercial enactments and other industry specific enactments.

Primary users of GPFRs are service recipients and their representatives and resource providers and their representatives.

• To provide financial information useful for determining and predicting the flows, balance and requirements of short-term financial resources of government;
• To provide financial information useful for determining and predicting the economic condition of the government unit and changes therein;
• To provide financial information useful for monitoring performance under terms of legal, contractual and fiduciary requirements;
• To provide information useful for evaluating managerial and organizational performances;
• Determining the costs of programme, functions and activities in a manner which facilitates analysis and valid comparison, with established criteria among time periods and with other sector ministers;

• Economy. Economy measure the cost of inputs employed in achieving policy outcomes of government. It is concerned about the cost of public service delivery. Economy is about cost minimization of public services through effective cost control and accountability mechanisms. A tool used in measure economy of government performance is the budget.
• Efficiency. It measures the process of achieving a programme outcome and policy outcomes. It is concerned with judicious use of public resources in attainment of a given outcome. Efficiency focuses mainly of the conversion of the inputs to output and aims at optimization n of the conversion process. It calls for reduction of wastage and inefficient technologies in achieving policy outcomes.
• Effectiveness. This measures the impact of obtaining value for money. It can be quantitative (the amount of effectiveness) or qualitative (the value of effectiveness). It is about attainment of policy outcome. Once government achieves result, the government is said to be effective.
• Equity. It is concerned with performance in terms of balancing the needs of the current generation with that of future general. It focuses on sustainability, environment and the social justice. Therefore, a government must be seen to take the future generation into consideration when embarking on government programmes and policy,
  (Note that all the four elements must the present to achieve value for money.)

Why government can be assessed at the end of the tenure?

• Governments are accountable to the people therefore the people must be able to assess the performance of the government.
• The plans and budgets of government is presented to the people at the beginning of each year and therefore the economy, efficiency and effectiveness and equity can be assessed from this information.
• Actual outcomes are reported as part of the accountability process and therefore information to assess value for money is always available.

• To scrutinize the audit reports submitted to Parliament by the Auditor-General and conduct investigations into the cases of financial irregularities contained in the AG’s Report;
• To submit report to Parliament on their work indicating the findings and recommendation for consideration of the house; and
• To make a follow up on the implementations of the recommendation.

• To ensure that the head of a covered entity pursues the implementation of any recommendation contained in an internal audit report; Parliament’s decision on the Auditor-General’s report; Auditor-General’s Management Letter; and the report of an internal monitoring unit in the covered entity concerned particularly, in relation to financial matters raised.
• To ensure that the head of a covered entity prepares an annual statement showing the status of implementation of any recommendation contained in an internal audit report; Parliament’s decision on the Auditor-General’s report; Auditor-General’s Management letter; the report on financial matters raised in an internal monitoring unit of a covered entity; and any other related directive of Parliament.
• To perform other advisory function in relation to internal control systems, risk management and compliance to rules, procedures and policies.