Gov’t launches new Public Sector Accounting Standards

Mr Seth Terkper, Minister of Finance, on Monday, launched a new process for adoption and implementation of the Accrual Basis of International Public Sector Accounting Standards (IPSAS).

The IPSAS, which is a high quality global financial reporting standards for use by public sector entities around the world, would serve as the basis for preparing and presenting financial statements of public funds.

It was initially issued by the International Public Sector Accounting Standards Board of the International Federation of Accountants, and meant to serve the public interest by requiring the presentation and disclosure of financial transactions in a comprehensive and consistent fashion, to enhance transparency and the accountable management of public resources.

The Minister launched the IPSAS at a forum organized by Controller and Accountant-General’s Department (CAGD) in collaboration with Institute of Chartered Accountants, Ghana, to create awareness among public sector institutions and the public on the processes for the adoption of an accounting standard solely for the sector.

Mr Terkper explained that the Ministry of Finance through the CAGD in consultation with the Auditor General and the Institute of Chartered Accountants, Ghana, had considered a number of options and against the background of strong commitment to continuing advances in Public Financial Management (PFM) reforms, recommended the adoption of the IPSAS.

According to him the Government , had since independence, implemented a wide-range of PFM reforms, and still remained committed to ongoing and continuing improvement of financial statements of the public sector.

Mr Terkper cited the introduction of the Ghana Integrated Financial Management Information Systems (GIFMIS), which provided a computerized platform for the processing of government financial transactions from budget preparation, through budget execution, accounting to financial reporting, as one of such PFM reforms.

It also integrates the Budgeting, Accounting, Payroll, Cash Management and interfaces with procurement systems of the Public Procurement Authority, the National Contract Base of the Ministry of Finance as well as the Macro Fiscal system being developed by the Finance Ministry and the Bank of Ghana systems.

He said GIFMIS seeks to automate various components of PFM in an integrated form thereby helping to minimize the number of human interventions and interfaces, resulting in an effective and efficient control over the budget as well as cash and safeguard the national purse and minimize malfeasance.

He said successful implementation of the IPSAS as basis for GIFMIS, would therefore facilitate more effective and transparent preparation of the national budget and the public accounts leading to an efficient management of the assets and liabilities of government, better decision-making, and generate cost awareness and efficiency among other things.

He said the Ministry of Finance would recommend to Cabinet, the use of IPSAS for the preparation of all Ministries Departments as well as Metropolitan, Municipal and District Assemblies financial records and accounts including public accounts to parliament.

Professor Kwame Boasiako Omane-Antwi, President of the ICAG, said Ghana must learn from the experiences of other countries by first ensuring extensive training, vigorous awareness creation to understand the standards and with the parallel running of accounting systems to ensure a successful migration.

He pledged the Institute’s readiness to support all implementing agencies, especially the CAGD in the execution of that endeavour.