NOVEMBER 2016 PROFESSIONAL EXAMINATIONS

PUBLIC SECTOR ACCOUNTING & FINANCE (PAPER 2.5)

CHIEF EXAMINER’S REPORT, QUESTIONS & MARKING SCHEME

STANDARD OF QUESTIONS
The choice of questions, their interpretation and quality were geared strictly towards
the confines and relevance of the syllabus and standards of previous examinations.
This approach was meant to avoid a mismatch between the syllabus and the actual
comprehension of candidates of questions that were set. There were hardly any typing
errors in the question scripts and the questions were generally devoid of ambiguities.
The weighting principle was used in allocating marks in order to avoid wide
variations in marks allocation.

GENERAL PERFORMANCE
Scripts that were marked and moderated indicated poor performance in some centres
and good performance in other centres. This may be due to better teaching facilities
available in some centres and the absence or non availability of teaching facilities in
other areas throughout the country.

Strengths & Weaknesses of Candidates

Generally most candidates fared better in question I, that is, Preparation of Financial
Statements. The weaknesses of many candidates were exhibited in the theory
questions. This shows that there is a poor understanding of the subject-matter of
Public Sector Accounting. For example, there were several deviations in the answers
of theory questions which indicate that many candidates did not understand the
context and content of the syllabus.
It is difficult to provide a complete assessment of areas where most candidates were
ill-prepared for the examination. The topics that were poorly answered include: Public
Accountability, Budgetary Control, Budget Hearing and Management of public
expenditure. But, in general, almost all questions could not be handled with adequate
skill.

However, one can also explain that candidates sitting for Public Sector Accounting
and Finance have a peculiar handicap – that is, the absence of a comprehensive
manual that covers all topical areas of the syllabus. Without a comprehensive manual
issued by the Institute of Chartered Accountants, Ghana there is the tendency for
candidates to drift in their answers to questions. A comprehensive manual will
provide authoritative solutions and a good reference to specific questions in the
learning phase of the candidates. It will help candidates to avoid anomalies, errors,
deviations and inconsistencies that undermine the value of the answers provided by
candidates in the Public Sector Accounting and Finance Examination.

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PUBLIC SECTOR ACCOUNTING & FINANCE QUESTIONS

QUESTION ONE

Below is the Trial Balance of the Consolidated Fund for the year ended 31 December, 2014.
Debit Credit
GH¢'million GH¢'million
Established post salaries 6,762
Non-establish post salaries 2,008
Casual labour cost 234
Administration cost 3,352
Conferences and seminars 1,255
Foreign travel cost 745
Direct taxes 6,941
Indirect taxes 7,716
Non tax revenues 1,156
Grants 825 1,258
Subsidies for consumption 641
Subsidies for production 361
Social benefits 38
Domestic debt interest 1,453
External debt interest 1,741
Purchase of motor vehicle 247
Purchase of equipment 42
Purchase of ship 367
Construction of infrastructure 560
Equity and security investment 560
Loans and advances 980
Cash and bank 67
Gold and other reserves 860
Treasury bills 11,120
Bonds on GSE 13,462
Euro bonds 7,456
Bilateral and multilateral debt 17,422
Trust fund and deposits 2,235
Other expenditures 910
Accumulated fund 44,758 -
68,766 68,766

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 Additional Information:
i) It is the policy of Controller and Accountant General to adopt accrual basis of preparing
the public accounts of the Consolidated Fund for the first time in compliance with the
Financial Administration Regulation 2004 and the International Public Sector
Accounting Standards (IPSAS). The effective date is 31 December 2014.
ii) The current Chart of Accounts based on the GFS 2001 is used in the classification of
revenues and expenditures.
iii) Consumption of fixed capital charged on cost for the year has been computed as
GH¢156, 000,000.
iv) Direct tax revenues due to government but were not received at 31st December 2014
amounted to GH¢49, 000,000.
v) An established post salary in arrears as a result of salary increment in the fourth (4 th)
quarter of 2014 was GH¢56,000,000 and goods and services outstanding at the end of
the year amounted to GH¢12, 000, 000.
vi) The grant shown in the trial balance as expenditure represents statutory transfer to the
District Assembly Common Fund (DACF). Any arrears in the DACF should be treated
as payable. The current rate of transfer is 7.5% on the amount received.
vii) Public debt interest of GH¢14,000,000 was due to creditors but was not paid as at 31
December 2014.
Required:
a) Prepare in a form suitable for publication and in accordance with the relevant Financial
Laws and IPSAS:
i) Statement of Financial Performance of the Consolidated Fund for the year ended 31
December 2014.
ii) Statement of Financial Position of the Consolidated Fund as at 31 December 2014.
(Show all workings clearly)
(18 marks)

b) Disclose any TWO significant accounting policies as part of the notes to your accounts, as
much as the information provided will permit. (2 marks)

(Total: 20 marks)

QUESTION TWO

a) Competitive tendering is a method of public procurement that seeks tenders from all
potential suppliers or contracts in order to achieve value for money in public procurement.
Competitive tendering is carried out in accordance with the competitive tendering
procedures under the public procurement law.

Required:
Explain FOUR procedures involved in carrying out national competitive tendering for the
procurement of goods, services and works. (6 marks)

b) State and explain FOUR key financial management provisions in the 1992 Constitution.
(6 marks)

c) Explain FOUR modalities for making payments out of the Consolidated Fund. (4 marks)

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d) In Ghana the government has enacted the Financial Administration Act, 2003 and the
Financial Administration Regulations (L.I. 1802) to ensure that public funds and resources
are properly safeguarded and are used economically, efficiently, effectively and with due
propriety.

Required:
Identify TWO essential provisions of the Financial Administration Act and Regulations
meant to protect public funds and safeguard public resources and property. (4 marks)

(Total: 20 marks)

QUESTION THREE

a) Budget hearing is a critical activity in the budget process which is conducted to review
strategic plans and estimates of the departments in order to ensure that these plans and
estimates are in accordance with government’s macroeconomic policy framework.

Required:
Explain FOUR significant principles of Budget Hearing that ensures that Ministries,
Departments and Agencies (MDAs) prepare their budget proposals in accordance with the
government macroeconomic policy framework. (4 marks)
b) The Controller and Accountant General or an officer appointed by him has the legal
authority to reject a requisition submitted by Ministries, Departments and Agencies
(MDAs) for payment.

Required:
Explain FOUR circumstances that will compel the Controller and Accountant General or
an officer appointed by him to reject a requisition submitted by an MDA for payment.
(4 marks)

c) Public accountability requires clear definition of responsibilities of public officials and a

clear understanding of relationships between public officials and stakeholders on the need
for transparency and accountability.

Required:
Discuss FOUR policy objectives of government that ensures that government institutions
adhere to the principles of public accountability. (4 marks)

d) The budgetary control function ensures effective control over government units in public
spending and accountability for all funds, property and other assets for which each
department or agency is responsible.

Required:
Explain FOUR methods used by government to ensure that government entities comply
with budgetary control regulations. (4 marks)

e) In accounting for Government Stores, the head of department shall report annually on the
value of stocks held by his department.

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 Required:
Identify EIGHT financial information that must be disclosed by a head of government
department when accounting for government stores. (4 marks)

(Total: 20 marks)

QUESTION FOUR

a) Discuss FOUR benefits that an MDA will derive if it follows the due process in public
procurement. (4 marks)

b) Resources of Local Government Authorities are very often limited. Therefore there is the
need for the limited resources to be efficiently allocated in order that a greater output is
achieved from the limited resources.

Required:
Identify FOUR policies that would influence the allocation of resources in a Local
Government Authority. (4 marks)

c) Explain FOUR challenges that the government will encounter if public sector accounts are
not classified. (4 marks)

d) As a means to ensure strong financial management in the public sector and citizen
confidence in public institutions, the government has introduced a number of financial
reforms including International Public Sector Accounting Standards (IPSAS) in public
financial management.

Required:
Discuss FOUR methods used by government to ensure the success of these reforms.
(4 marks)
e) Effective management of public expenditure is an essential mechanism for the effective
allocation and the use of public funds to achieve the nation’s policy objectives.

Required:
Identify FOUR procedures necessary for effective management of public expenditure.
(4 marks)

(Total: 20 marks)

QUESTION FIVE

a) i) Explain the term Revenue Management.

ii) Identify THREE procedures involved in Revenue Management. (4 marks)

b) IPSAS 1 Presentation of Financial Statements identifies a complete set of financial

statements (under the accrual basis) as a statement of financial position, statement of
financial performance, statement of changes in net assets/equity, cash flow statement and
accounting policies and notes to the financial statement.

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 Required:
Identify FOUR major disclosures that must be made in respect of the general government
sector in the preparation of financial statements. (4 marks)

c) Explain the following terms used in tax administration in Ghana:

i) Tax Policy
ii) Tax Planning (4 marks)

d) In December 2009, the three tax revenue agencies, the Customs, Excise and Preventive
Service (CEPS), the Internal Revenue Service (IRS), the Value Added Tax Service (VATS)
were merged in accordance with Ghana Revenue Authority Act 2009, Act 791 to become
the Ghana Revenue Agency.

Required:
Discuss FIVE benefits of the integration to Tax Payers and the Tax Administration in
Ghana. (5 marks)

e) There shall be appointed in accordance with Article 195 of the1992 Constitution, a

Controller and Accountant-General who is responsible to the Minister of Finance”.

Required:
Discuss how the Controller and Accountant-General ensures public Accountability.
(3 marks)

(Total: 20 marks)

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MARKING SCHEME

QUESTION ONE

Workings
1. Direct tax GHc'M 7. Non-financial assets GHc'M
Trial balance 6,941 Motor vehicle 247
Receivable 49 Equipment 42
6,990 Aircraft 367
Infrastructure 560
2. Compensation for employees 1216
Established post 6,762 Consumption of fixed capital -156
Non-established post 2,008 1060
Casual labour 234
Saary arrears 56 8. Domestic Debt
9,060 Treasury bills 11,120
Bonds 13,462
3. Goods and services 24,582
Administrative cost 3,352
Conferences and seminar 1,255 9. External Debt
Foreign travel 745 Bilateral & Multilateral 17,422
Oustandings 12 Euro Bonds 7,456
5,364 24,878

4. Public debt interest 10. Payable

Domestic debt Interest 1,453 Salary 56
External debt interest 1,741 Goods and services 12
Interest outstanding 14 Interest 14
3,208 DACF 274
356
5. Subsidies
Consumption 641 11. Accumulated Fund
Production 361 Balance b/f -44,758
1002 Surplus -3,717
-48,475
6. Grants
Grants paid 825
DACF arreas 273
DACF for the year )
[ (6941+7716) x0.075 1099

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i) Statement of Financial Performance of the Consolidated Fund
for the year ended 31 December, 2014
Revenues GHC'Million GHc'Million
Direct tax 6,990
Indirect tax 7,716
Non-tax revenue 1,156
Grants 1,258
17,120
Expenditures
Compensation for employees 9,060
Goods and services 5,364
Consumption of fixed capital 156
Public debt interest 3,208
Subsidies 1,002
Grants 1,099
Social benefit 38
Other expenditures 910 20,837
Deficit - 3,717

ii) Statement of Financial Position as at 31 December 2014

Assets GHc'Million
Non financia asset (NBV) 1,060
Equity and security investment 560
Loans and advances 980
Gold and other reserves 860
Revenue receivable 49
Cash and Bank 67
Accumulated Fund 48,475
52,051
Liabilities and Fund
Payables 356
Domestic debt 24,582
External debt 24,878
49,816
Trust Fund and Deposit 2,235
52,051

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(b)

Notes on Accounting Policy include:

i) Basis of Accounting
The accounts are prepared on accrual basis for the first time.
ii) Consumption of Fixed Capital/depreciation policy
Depreciation is charged on non-financial assets acquired during the year.
Infrastructure is depreciated at 5% per annum on cost and other PPEs are
depreciated at 10% per annum on cost.

iii) Accounts are prepared in compliance with the IPSAS and the Financial
Laws of the country.
Mark allocation
Basis of scoring Tick/Mark
a)
Workings 31
Statement of financial performance 15
Statement of financial position 12
TOTAL TICKS 58
Score per tick @0.31
Mark 18
b)
1 mark each for two policies disclosed 2
TOTAL MARK 20

EXAMINER’S COMMENTS
This was generally fairly well answered by most candidates. Some candidates
however performed very poorly in answering the question, showing that they were
ill-prepared for the examination.

QUESTION TWO

a) Stages of national competitive tendering procedure are

 Invitation of tenders and prequalification
 Submission of tenders
 Evaluation and Comparison of tenders
 Contract offer and administrations

i) Invitation of tenders and prequalification is the first stage which involves:

 Preparation of standard tender document in accordance with PPA
requirements

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  Preparation of invitation document which should contain all relevant
information required by the Public Procurement Law. It must contain every
information the tenderer needs in completing the tender document.
 Advertisement is made in national newspaper (or other approved media)
for the supply of GSWs. The tenderers should be given at least two weeks
to prepare and submit their tenders.

ii) Submission of tenders

 All Tenders shall be deposited in the designated locked tender box (or such
other arrangements as stated in the Tender Document) until the Tender
Opening.
 The Tender Document will have provided clear instructions to tenderers on
the marking and sealing of Tenders and the procedures to be followed for
submission.
 The closing date and time for submission of Tenders must be determined in
advance and stated in the Tender Document.
 The tenderer who submits a tender should be given a receipt showing the
date and time of delivery.
 A tender submitted after the deadline should be returned to the tenderer
unopened.
 The tenderer may submit a tender security together with the tender
document when required by the entity.

iii) Evaluation and Comparison

Opening of tenders
 Tender Opening shall commence immediately after the close of the tenders
(as stated in the tender document).
 A Tender Opening Panel shall comprise at least 3 persons, including a
member of the Entity Tender Committee.
 They shall ensure that minutes of the tender opening proceedings are duly
written.
Examination of tenders

 Tenders submitted and opened should be examined to ensure that they

meet the requirements of the tender document.
 A tender shall be considered responsive if it conforms to the requirements
of the tender invitation documents.
 A tender should not be accepted such as if
o the supplier is not qualified to tender
o The tender is not responsive
o The supplier refused to effect minor correction indicated
o There is evidence of inducement from the supplier

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Evaluation of tenders

 Head of Procurement Entity shall constitute an Evaluation Panel Consisting

of a minimum of three persons with the required expertise to conduct the
evaluation.
 Procurement Entities must evaluate Tenders solely on the basis of the
information provided in the respective Tenders and no changes in the
Tender price or substance of a Tender will be permitted.
 Responsive tenders should be evaluated based on the set criteria in the
tender invitation document.
 The Tender Evaluation Panel will prepare an evaluation report for
submission to the Tender Committee.
 The evaluation report should be prepared using the standard format for the
Evaluation of Goods.
 The appropriate review authority (Head of Procurement Entity, Tender
Committee, District, Regional, Ministry or Central Tender Review Board) in
accordance with the thresholds stated in the schedule, will review the
evaluation report and recommendations presented in the Evaluation
Report.
 The approval shall be ‘One stop’ only. i.e. concurrent approvals must be
obtained.

Contract Offer

 Following approval from the relevant review body, the contract will be
awarded to the Tenderer who has submitted the lowest evaluated Tender.
 Before contacting the Tenderer, a formal commitment of the required funds
against the budget of the Procurement Entity must be approved.
 Notice of the tender award shall be issued promptly to the successful
Tenderer. The successful Tenderer shall be required to confirm in writing
acceptance of the tender award and submit the appropriate Performance
Security (if required).
 The Tenderer shall be invited to attend for contract signature, or where this
is not practical, provided with all four copies of the Contract for signature
and return of three signed copies of the Contract to the Procurement Entity.
 Failure of the Tenderer to confirm acceptance of the award, or to submit the
Performance Security, or to sign the contract may constitute grounds for the
annulment of the award and forfeiture of the Tenderer’s Tender Security.
 In that event, the Procurement Entity may award the contract to the next
lowest evaluated Tenderer, whose offer is substantially responsive and is
determined to be qualified to perform the contract satisfactorily.
(1.5 marks each for 4 Stages = 6 marks)

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 (b) Key Financial Management Provisions in the 1992 Constitution
i) Responsibility Accounting
The constitution defines clearly the powers and responsibilities of financial
stewards (individual office holders) and their precise roles and functions,
for example, the appointment of the Auditor General, his roles and
responsibilities.

ii) Approval and Authorization Policies

It defines clearly approval and authorization policies, for example, loans
shall be approved by parliament

iii) Revenue Policies

In order to institute sound code of instructions to regulate the revenue
function, the constitution has outlined revenue policies, for example, all
revenues, receipts and trust monies shall be paid into the Consolidated
Fund

iv) Establishment of Public Funds

The constitution establishes public funds for the efficient management of
government business.

v) Financial Management and Accounting Practices

Public sector financial management practices established by the
constitution include the following:
 Public debts shall be charged to the Consolidated Fund;
 Bank of Ghana is the central bank and shall issue currency and shall
be in charge of monetary policy; and
 There shall be established public corporations.

vi) Imposition of Taxes

The right to impose taxes in Ghana is vested in parliament.
(1.5 marks each for 4 points = 6 marks)

(c)
Modalities for making payments out of the consolidated fund.
i) Payments should be approved by parliament in the Appropriation Act in
accordance with the purpose described and within the limits set by the item
classification ;
ii) Release of funds to government entities shall be in accordance with
warrants issued by the Ministry of Finance and copied to Controller and
Accountant General;

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 iii) Before a payment is made a valid obligation must exist, that is supplier
performs contract and submits invoices to institutions for processing and
payment;
iv) All payments must be certified by the head of department, that is, the officer
in control and accountable for the use of the public monies or an officer
deputizing for him;
v) A competent person must certify that the goods have been received or that
the service has been carried out as expected;
vi) The invoice and other documents requesting payment are correct and
suitable for payment and the creditor is correctly identified;
vii) The approval process of the MDA have been fully followed.
(4 marks for 4 points)

(d)
The Act and Regulations:
i) Establish the Consolidated Fund, the central mechanism for the control of
public finances, outlining the principle by which funds are collected into the
consolidated fund, kept and disbursed;
ii) Establish the modalities for the collection of revenue;
iii) Establish budgetary control over public finances related to revenue and
expenditure and to receipts and payments. For example, it outlines
government borrowing and lending, transactions in trust moneys and any
other transactions occurring within the Consolidated Fund.
iv) Describe the conditions under which appropriations are made. Government
expenditure is subject to annual legislative appropriation;
v) Establish the mechanism by which the Controller and Accountant General
ensures that payments from appropriations are lawfully made. No payment
must be made except in a manner provided by law. Specific enactments may
give continuing authority for payments such as charged expenditure;
vi) Establish principles under which Government Accounts are managed and
kept, the preparation of government accounts and the reporting of final
accounts of government;
vii) Describe the management and accountability of Government stores;
viii) Outlines the establishment and operations of revolving funds.
(2 marks for 2 points = 4 marks)

(Total: 20 marks)

EXAMINER’S COMMENTS
Question 2(a) was fairly well answered, but questions 2(b) and 2(c) were not well
understood by many candidates. It will seem that the candidates who performed
poorly in answering these two questions did not study or understand this part of the
syllabus.

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QUESTION THREE

a) Principles of Budget Hearing

 The MDA budget should not be a new political proposal which will lead to
incremental or radical changes in the government macroeconomic framework;
 There should be certainty in the budget outcomes of the MDA budget
proposals;
 It is important to determine whether there are new commitments or there are
alternative choices that do not conflict with government policies,
 All relevant costs in the MDA budget proposals must be captured so that
incremental costs do not extend beyond one fiscal year;
 MDA budget proposals must not conflict with existing laws or legal rules of
the nation;
 It is necessary to establish whether projects or programmes in MDA budget
proposals will lead to variations of costs.
(4 points for 4 marks)

b) The Controller and Accountant General has the authority to reject a

requisition:
i) If a payment voucher is not properly authorised by the head of the
department or a person appointed by him, for example his deputy or
authorised spending officer;
ii) If a payment voucher is not accompanied by all relevant documents and
certification as approved by the Controller and Accountant-General;
iii) If a payment voucher is not a lawful charge on an appropriation (vote)
which has been authorised in the approved estimates;
iv) If payment of the payment voucher would result in expenditure in excess
of the appropriation;
v) If payment of the payment voucher would reduce the balance available in
the vote that it would not be sufficient to meet commitments charged
against it.
(4 points for 4 marks)

c) Adherence To Principles of Public Accountability

i) Government institutions must define their vision, mission and annual and
longer term objectives and agree or establish plans to achieve them;
ii) Government institutions must oversee the delivery of planned results by
monitoring performance against strategic objectives and targets and ensure
corrective action when necessary;
iii) Government institutions must ensure that there is appointment,
development and succession of their management staff;
iv) Government institutions must ensure the formal approval and adoption of
a monthly and annual report of the entity including the financial statements;

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 v) Government institutions must protect all public property and control public
resources entrusted to them. (4 points for 4 marks)

(d)
Budgetary Control Function
The budgetary rules exercise effective control over government units in public
spending and accountability for all funds, property and other assets for which each
department and agency is responsible. Compliance to spending rules is the basis
for public accountability. Methods used to demand budgetary accountability
from government units include the following:

 Adherence to fixed targets (expenditure ceilings)

 Adherence to spending on intended purpose of programmes;
 Reduction of spending overruns, that is, spending within legally binding
appropriations;
 Stricter prioritization to achieve objectives of public organizations;
 Greater efficiency in spending to improve economic sustainability;
Reduction of volatility of spending in order to create a degree of predictability in
fiscal policy and making fiscal policy less stabilizing.

e) Financial Information disclosed for Government Stores

 Additions to Stores for the period
 Inventory Balances
 Stores to be disposed of in the coming year and already disposed.
 Re-order levels
 Maximum stock levels
 Payment lists
 Quantity of stock received during the period
 Minimum stock levels
 Budget of stores for the year and upcoming year
 Deterioting lists
(Any 8 points for 4 marks)

(Total: 20 marks)

EXAMINER’S COMMENTS
Question 3(a) was very badly answered. Indeed only a handful of candidates
answered the question well.

Question 3(b) answers were fair, though not too satisfactory. It gives the impression
that many candidates have not studied the Finance Administration Regulations L.I.
1804 of 2004 well.

Questions 3(c) and 3(d) were very poorly answered. Most probably candidates had
very scanty knowledge of the principles of Public Accountability and Budgetary
Control.

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Question 3(e), Accounting for Government Stores, is a fairly easy question. It is
surprising however that many candidates messed up with the question. They had a
very poor idea about the process of Accounting for Government Stores.

QUESTION FOUR

(a)
Benefits of Due Process in Public Procurement
i) The entity will safeguard its public funds and assets;
ii) It will improve its system of fiscal management through more efficient and
effective use of public monies;
iii) It will enhance transparency and accountability in its management and
procurement processes;
iv) It will be able to build public confidence in its financial activities;
v) It will practice efficient use of resources through competitive bidding and
value for money;
vi) It will improve its financial planning system.
(4 points for 4 marks)

(b)
Allocation of Limited Resources in a District Assembly
i) Ensure that utilization of resources are linked to the priorities of the
Assembly;
ii) Ensure that the Assembly’s strategic plan lead to overall achievement of
Assembly’s stated objectives and outputs before committing limited
resources;
iii) Ensure that there is transparency and stakeholder participation in the use
of resources;
iv) Ensure that there is better planning information that will lead to policy
predictability before committing resources;
v) There is the need to persuade donors and other development partners to
fund some of the Assembly’s priority activities.

(4 points for 4 marks)

(c)
Challenges of Accounts not classified
It will be difficult to perform the following accounting functions without accounts
classification:
i) Harmonization of Accounts;
ii) Uniform classification of Accounts;
iii) Financial and budgetary control;
iv) Financial Reporting;
v) Computerization of large amounts of financial information;
vi) Resource Allocation;
vii) Expenditure / Revenue Tracking;

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 viii) Development of Audit Trail

(4 points for 4 marks)

(d)
Introduction of Financial Reforms
i) Establishment of appropriate legal framework;
ii) Orientation of stakeholders towards new reforms and technologies;
iii) Capacity building of management and staff of public entities;
iv) Structural changes to effectively and efficiently integrate new reforms into
mainstream activities of MDA’s;
v) Strict enforcement of laws through monitoring, evaluation and sanctions;
vi) Political support of government and development partners.
(4 points for 4 marks)

(e) Procedures Required For Effective Management of Public Expenditure

i) There is the need for effective control of cash;
ii) It is essential that the regulations and the instructions given by the
Controller and Accountant General with respect to disbursement of public
funds, are fully complied with;
iii) Details of all payments must be properly authorised and captured;
iv) An approving officer shall only approve a commitment where sufficient
unspent and uncommitted warrant balance exists for the purpose of the
commitment or where the Minister of Finance has approved a commitment
extending beyond the current financial year;
v) A payment from the MDAs account shall be made where an Approving
Officer has duly authorised the payment and the Head of Finance has
certified that the details of the payment are correct and the payment may be
properly made;
vi) All payments must be supported by a payment voucher which shall contain
the particulars of the service works or goods being paid for by the MDA.
(4 points for 4 marks)

(Total: 20 marks)

EXAMINER’S COMMENTS
Question 4(a) was fairly well understood and answered. However for Questions 4(b),
4(c) and 4(d) many candidates could not give satisfactory answers.

QUESTION FIVE

a) Revenue Management
i)This is the recognition, measurement and accounting for revenue. It also involves
the management of the potential and actual revenue of an organisation in such a
way as to ensure that revenues due are properly collected and accounted for.

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 ii) Procedures in the Management of Revenue
- Identification and documentation of various sources of revenue available for
the MDA;
- Provision of information to management on guidance and practices to promote
the collection of such revenue;
- Establishment of management and accounting policies and procedures for
revenue mobilization and collection;
- Establishment of internal control system for revenue management;
- Posting of key personnel to take charge of revenue management;
- Establishment of roles and responsibilities of revenue personnel;
- Revenue should be properly receipted and promptly paid in gross into the
designated bank account of MDA.
(4 marks)
b) Disclosures
Disclosures made in respect of the general government sector shall include at least the
following:
a) Assets by major class, showing separately the investment in other sectors;
b) Liabilities by major class;
c) Net assets/equity;
d) Total revaluation increments and decrements and other items of revenue and
expense recognized directly in net assets/equity;
e) Revenue by major class;
f) Expenses by major class;
g) Surplus or deficit;
h) Cash flows from operating activities by major class.

(Any 4 points for 4 marks)

c)
i. Tax Policy
This includes simplicity, efficiency, fairness and ability to collect sufficient
revenue.

ii. Tax Planning

This is to ensure that tax liability is not unduly high. It is also meant to lead
to minimization of litigation, the ability to provide productive investment
and the prevention of tax evasion and double taxation
(4 marks)

d) Benefits of Integration of the Revenue Collecting Agencies

 Reduced administrative and tax compliance cost
 Better service delivery
 Improved departmental information flow.
 Holistic approach to domestic tax and customs administration
 Enhanced revenue mobilisation

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 (5 points for 5 marks)

e) How the Controller and Accountant-General ensures Public Accountability

There shall be appointed in accordance with article 195 of the Constitution, a
Controller and Accountant-General who is responsible to the Minister for the custody,
safety and integrity of the Consolidated Fund and other public funds designated
under the care of the Controller and Accountant-General.
 The Controller and Accountant-General is responsible for the compilation and
management of the accounts prepared in relation to the Consolidated Fund and
other public funds and for this purpose the Controller and Accountant-General
may give general instructions to the Principal Spending Officers of departments
which shall not be inconsistent with this Act or any regulations or instructions
issued under this Act.
 The Controller and Accountant-General is the Chief Accounting Officer of the
Government who has responsibility to keep, render and publish statements of
public accounts as required by this Act or any other enactment.
 As Chief Accounting Officer, the Controller and Accountant-General is the chief
adviser to the Minister and the government on accountancy matters and is the
person who approves accounting instructions of departments and promotes the
development of efficient accounting systems within departments.
 (The Controller and Accountant-General receives, disburses and provides secure
custody for moneys payable into the Consolidated Fund and other funds and for
this purpose shall establish such accounts with the Bank of Ghana and its agents
as are considered necessary for the deposit of the moneys.
 A bank account shall not be opened for any department except under the authority
of the Controller and Accountant-General and a bank shall not open an account
for any department without the authority of the Controller and Accountant-
General.
 Without limiting the generality of these duties, the Controller and Accountant-
General shall
(a) in consultation with the Auditor-General, specify for departments, the accounting
basis, policies and the classification system to be applied in public accounting and
ensure that a proper system of accounting is established in each case; and
(b) ensure, in so far as is practicable, that adequate provisions exist for the safe custody
of public money, securities and accountable documents.

(Any 3 points for 3 marks)

(Total: 20 marks)

EXAMINER’S COMMENTS
Perhaps Question 5 was among the questions that was best handled by majority of
candidates. Answers that were given to Questions 5(a), 5(b), 5(c) and 5(d) were
generally satisfactory.

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However, Question 5(e) was not well understood by majority of candidates. Instead
of emphasizing on the public accountability function of the Controller and Accountant
General, they rather described his duties.

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