Professional Documents
Culture Documents
LECTURE OUTLINES
Definition Purposes
Objectives and characteristics of PSA Accountability and stewardship in public sector Differences between public sector accounting and accounting in private sector Users of public sector accounting information
INTRODUCTION
Public Sector A political organization set up with power to direct, regulate and control mens activities to enable them to live together harmoniously and constructively and to solve their common problems. Normally refers to the government sector
Component of PS in Malaysia
Federal Government: - Ministries, Departments & Public enterprises State Government: - Departments & public enterprises Local Government: - Departments Federal Statutory Bodies
NO. OF DEPTS
126 256 88 93 146
%
18% 36% 12% 13% 20%
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Local Government
Plurality of objectives
Contributors of resources receive no direct interest
a system of identifying, classifying, recording, summarizing, analyzing & reporting of financial data & information of organization in accordance with accepted principles, concepts, conventions, standards & regulations.
Thus, accounting in public sector look at both the money and public property to
Purposes of PSA
OBJECTIVES OF PSA
To provide information necessary for efficient, effective and economical management
Annual budget
Estimated expenditure
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The budget serves as a master blueprint for planning, control, and evaluation of governmental, proprietary, and fiduciary fund financial positions.
Method The approved amount will be credited to an appropriation account and after actual expenditures, the account will be debited. The balance in the accounts will show the approved amount which not yet spend
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Characteristics of Public Sector Accounting .. Cont Vot accounting - All the expenditure and allocation need to be recorded in the vot book before payment has been made.
Coding system - All the government entities need to practised the standardised coding system provides by the Treasury
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Characteristics of Public Sector Accounting .. Cont Accounting basis Government entities practiced 3 types of accounting basis depend on the nature of that entity:
Commitment Accrual Cash
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Accounting Commitment):
Example of Activities
Basis
(Cash, Accrual
Accrual,
and
Commitment 10 Jan 2011 Record in vote book: Purchase of goods Issue local order
Date Expenditure
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Stewardship - Willingness to be accountable for the wellbeing of the larger organisation by operating in the service, rather than in control, of those around us (Amstrong, 1997).
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Accountability
Components of Accountability
Budgeting - provides the precise standards by which to
moneys follow the required regulations & are accounted properly -Auditing - to prove the existence of the evidence of accountability. It provides independent judgement of the govts financial statements
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Accountability .. CONT
Types of Accountability Financial (fiscal) Accountability -Liability to ensure that all the transactions are accounted for and the accounts are reliable and transactions really took place above suspicion and in accordance to prevailing rules and regulations -comprised all aspects of compliance and management on the part of government bureaucrats in administering govt. operation. - compliance means that the govt. Servants have to follow the laws, rules and regulations when collecting revenues,
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Accountability .. cont
Management Accountability
- Liability to ensure there is an effective, efficient and economical utilization of public fund by org. in achieving govt. objectives.
- It is important because the fund resources come from public money and there is no individual ownership for the money and public property
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Accountability .. Cont.
Program Accountability Liability to ensure that each program which has been planned and implemented achieve the objectives set earlier in terms of cost and output. to determine whether the objectives stipulated for the govt. organization are being achieved
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Accountability
Financial Statement To collect & spend public money
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INSTITUTIONAL MECHANISMS TO STRENGTHENING PUBLIC ACCOUNTABILITY Malaysian Anti-Corruption Commission (MACC) Public Complaints Bureau (PCB) Parliamen (Dewan Rakyat and Dewan Negara) Auditor General Office (AG)
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IMPLEMENTATION
1) Control system: Tender management storage management 2) Infrastructure of Financial Management: * Integrated accounting system Computerize financial system (include vote book and others financial instrument) 3) Financial management efficiency: Macro accounting system Modified budgeting system 4)New programs: * Financial management award Computerize budgeting system
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ACCOUNTABILITY MODEL
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Parliament: Approves budget proposal No expenditure can be incurred without parliamentary approval No tax can be levied without necessary legal process Parliament is the place where accountability in govt. begins
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Cont..
2) Treasury: Keeper of the public purse Examine expenditure proposals before presenting to parliament Has the right to limit and suspend budget 3) Agencies: Controlling bodies of agencies are required to manage funds under their control in accordance with govt. policies, procedures and circulars
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Cont..
4) Auditor general: Plays the role as the external auditor to govt. To prepare audit reports for submission to parliament Responsible to conduct: - Financial audit (compliance) - Performance audit (output and goals)
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Cont..
5) Public accounts committee (PAC): Responsible to examine the public account and the auditor general report if the account does not meet the proper accountability of public fund by public officials.
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Private
Financial Performance According to year incorporated Accrual
4) Budget Preparation
5) Auditing - appointment - Scope
Mandatory
Voluntary
-BOD
External users:
Citizens/voters,
Internal users:
Government
THE END..
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