May 2017 Q2 a.
The objective of enactments relating to public financial management, among others, is to safeguard the public funds from plunder. One way to achieve this objective is by making specific provisions on the modalities for making payment from the Consolidated Fund (Article 178 of 1992 Constitution). The law requires that all payments from the Consolidated Fund should be authorized and the payment should comply with certain general rules.
Required:
i) Identify and explain THREE ways of authorising payments out of the consolidated fund. (6 marks)
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- An appropriation Act passed by Parliament. When a budget is laid before Parliament is approved by passing an Appropriation Act and any expenditure covered by the Appropriation Act is properly authorised for payment out of the Consolidated Fund.
- Supplementary estimate approved by a resolution of Parliament. Whenever a new estimate is brought to Parliament for approval, it constitutes a supplementary estimate and when approved by Parliament through a resolution, it serves as authority for spending from the Consolidated Fund.
- Request of expenditure in advance of appropriation approved by resolution of Parliament. In a year where the budget will not take effect from 1st January, the President may request Parliament to approve spending prior to the approval of the budget for the first quarter of the year. Such vote on account or provisional votes constitute authority to withdraw money from the Consolidated Fund.
ii) Identify FOUR statutory payments permissible by law in the public sector. (4 marks)
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- Interest payment and repayment of debt.
- Pension payments.
- Statutory transfer to District Assembly Common Fund,
- Statutory transfer to Ghana Education Trust Fund,
- Statutory transfer to National Health Insurance Scheme,
- Statutory transfer to Ghana Infrastructure investment fund etc.