Question Tag: Public Financial Management

Search 500 + past questions and counting.
  • Filter by Professional Bodies

  • Filter by Subject

  • Filter by Series

  • Filter by Topics

  • Filter by Levels

PSAF – Mar 2025 – L2 – Q3- Public sector fiscal planning and budgeting

Examine implications of Ghana's 2025-2028 fiscal policy proposals per PFM Act 2016.

a) The Government has unveiled its transformative agenda, driven by its fiscal strategy, covering the period 2025 -2028. In the Agenda 2028 document released by the government, the following strategies were outlined:

  1. Taxes on individual income (referred to as pay-as-you-earn) will be suspended until 2029.
  2. Development will be driven by debt, with the government leveraging its goodwill to borrow from development partners and investors to fund its development programmers and projects. By the end of 2024, the debt-to-GDP ratio was projected to reach 80%.
  3. There will be significant government expenditure aimed at boosting development and enhancing citizens’ living conditions. Data from 2024 indicate that the fiscal balance relative to GDP stands at 17%.
  4. All forms of extravagance and wastefulness within the public sector will be eradicated to ensure efficiency, effectiveness, and value for money across all government operations.
    The statement also noted that the government reserves the right to suspend the fiscal rules and targets as and when necessary.

Required:
i) Examine the implications of the government’s policy propositions (1 to 4) in relation to the principles of formulating and implementing fiscal policy objectives outlined in the Public Financial Management Act 2016, (Act 921).

ii) Discuss the steps and events that will necessitate a cabinet approval for a suspension of the fiscal rules and targets under the Public Financial Management Act 2016, (Act 921).

b) The Public Expenditure and Financial Accountability (PEFA) Framework is designed to evaluate the public financial management performance of public institutions. However, some critics, including the Director of Finance of your entity, argue that PEFA represents a form of neo-colonialism repackaged for Africa, and therefore, African countries should resist its assessment.

Required:
i) Explain to the Director of Finance FOUR reasons your country’s PFM system should be subjected to PEFA assessment.

ii) Discuss FOUR limitations of the PEFA framework used to assess PFM systems.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "PSAF – Mar 2025 – L2 – Q3- Public sector fiscal planning and budgeting"

FM – Mar2025 – L2 – Q5 – Working Capital Management

Compute Gagba LTD's working capital requirement after a 15% sales increase using provided financial and operational data.

a) Gagba LTD, a manufacturing company, is planning to expand its operations to meet increasing demand for its products. As part of this expansion, the company needs to determine its working capital requirements to ensure smooth operations and avoid liquidity issues. The company has provided the following financial and operational data for the year ended 31 December 2023:

  1. Sales Data:
  • Annual Sales: GH₵18,000,000
  1. Cost Data:
  • Cost of goods sold (COGS): 70% of sales
  • Inventory turnover ratio: 8 times per annum
  • Accounts receivable turnover ratio: 6 times per annum
  • Accounts payable turnover ratio: 4 times per annum
  1. Operation Data:
  • Average inventory: GH₵1,500,000
  • Average Accounts receivable: GH₵2,000,000
  • Average accounts payable: GH₵1,200,000
  1. Additional Information:
  • Desired Cash balance: GH₵500,000
  • Projected Increase in Sales due to expansion: 15%
  • Cost of capital: 12% per annum Required: Compute the working capital requirement for Gagba LTD after the planned expansion. (10 marks)

b) The Ministry of Health in Ghana is conducting a review of its procurement practices and the overall performance of its Public Financial Management (PFM) system. The review aims to enhance value for money in public spending while adhering to the principles outlined by the Public Expenditure and Financial Accountability (PEFA) framework. You are provided with the following data for the fiscal year 2023:

    1. Budgeted Public Expenditure: GH₵50 billion
    2. Actual Public Expenditure: GH₵52 billion
    3. Total Procurement Expenditure: GH₵25 billion
    4. Value of Contracts Awarded through Competitive Tendering: GH₵15 billion (60 contracts)
    5. Value of Contracts Awarded through Restricted Tendering: GH₵5 billion (20 contracts)
    6. Value of Contracts Awarded through Single-Source Procurement: GH₵5 billion (20 contracts)
    7. Number of Procurement Violations Detected: 15 (with a total value of GH₵300 million)
    8. Disposal of Stores and Equipment: GH₵100 million Required: i) Analyse the variance in the public expenditure and its implications for the PFM system in Ghana. (3 marks) ii) Discuss which procurement method appears to provide the best value for money with suitable computations. (7 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "FM – Mar2025 – L2 – Q5 – Working Capital Management"

PSAF – Nov 2024 – L2 – Q5c – Functions of the State Interests and Governance Authority

Explains four functions of the State Interests and Governance Authority (SIGA) in overseeing state entities.

The Nine Hundred and Ninetieth Act of the Parliament of the Republic of Ghana entitled the State Interests and Governance Authority Act, 2019 was established to oversee and administer state interests in state-owned enterprises, joint venture companies, and other state entities and to provide for related matters.

Required:

Explain FOUR functions of the State Interests and Governance Authority (SIGA).

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "PSAF – Nov 2024 – L2 – Q5c – Functions of the State Interests and Governance Authority"

PSAF – Nov 2024 – L2 – Q5a – Public Financial Management Regulations

Explains the provisions in PFM Regulation 2019 for a Principal Spending Officer in the payment process and differentiates between misapplication and misappropriation of funds.

a) The Public Financial Management Regulation makes the Principal Spending Officer (PSO) personally responsible for all payments of the covered entity. To mitigate possible risk exposure of the PSO during the payment process, the regulations provide guidance to assist approving authorities before signing off any payment.

In recent times, the Auditor-General has faulted PSOs for infractions such as misapplication of funds, misappropriation of funds, and partially accounted payments among others. Similar observations were cited in the 2023 Management Letter of Nipa Ye Municipal Assembly.

Required:

i) With reference to the PFM Regulation 2019, LI 2378, explain the provisions available to the PSO in the payment process before approval.

ii) Distinguish between misapplication of funds and misappropriation of funds as used by the Auditor-General with an example each.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "PSAF – Nov 2024 – L2 – Q5a – Public Financial Management Regulations"

PSAF – Nov 2024 – L2 – Q3a – Public Financial Management Cycle

Explaining objectives and improvements in public financial management systems.

As part of efforts to improve public financial management, the government has engaged experts to evaluate the entire public financial management cycle. The review report indicates that every component of the cycle is malfunctioning and emphasizes the need for a stronger commitment to building a robust system to achieve the desired outcomes.

Required:

i) Explain THREE key objectives of an orderly and open public financial management system.

ii) Recommend TWO ways of enhancing each stage of the public financial management cycle towards the attainment of desired outcomes.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "PSAF – Nov 2024 – L2 – Q3a – Public Financial Management Cycle"

FM – Nov 2024 – L2 – Q4b – Procurement and Tendering Procedures

Discuss circumstances under which single-source procurement is appropriate and functions of the Entity Tender Committee.

The Farms and Gardens Authority (FGA), a public entity, wants to buy 100 computers and 20 printers for its administrative offices. The Chief Executive Officer (CEO) is considering using the single-source procurement method to procure the computers and printers while pushing back on the recommendations of the Entity Tender Committee.

Required:

i) State TWO circumstances under which single-source procurement would be appropriate for the goods the FGA wants to procure.

ii) Advise the CEO on TWO functions the Entity Tender Committee is expected to perform in the FGA’s procurements.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "FM – Nov 2024 – L2 – Q4b – Procurement and Tendering Procedures"

ICMA – Nov 2024 – L1 – Q5b – Budgeting Models and Systems

Explain the benefits of GIFMIS to the government of Ghana.

Efforts to improve Public Financial Management (PFM) Systems in Ghana led to the Ghana Integrated Financial Management Information System (GIFMIS), which is an adaptation of the Integrated Financial Management Information System (IFMIS). The rationale of GIFMIS is to establish an integrated ICT-based PFM system in Ghana at national, regional, and district levels.

Required:

State FOUR benefits of GIFMIS to the government of Ghana.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "ICMA – Nov 2024 – L1 – Q5b – Budgeting Models and Systems"

PSA&F – Nov 2019 – L2 – Q6a – Government Revenue

Explains three ways to authorize payments from the Consolidated Revenue Fund (CRF) and discusses two statutory payments permitted by law to be charged directly to the CRF.

The objective of public financial management is to safeguard public funds from mismanagement. One way to achieve this is by ensuring that payments from the Consolidated Revenue Fund (CRF) are properly authorized.

Required:

  • Identify and explain THREE ways to authorize payments from the CRF.
  • Discuss TWO statutory payments that can be charged directly to the CRF.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "PSA&F – Nov 2019 – L2 – Q6a – Government Revenue"

PSAF – Nov 2020 – L2 – Q6a – Public Sector Reforms

Identify five objectives each of GIFMIS and IPPIS under Nigeria's Public Financial Management reforms.

In July 2003, the Federal Government commenced the implementation of deliberate policies, programmes, and projects aimed at strengthening the economy, governance, and fighting corruption. This led to the first Economic Reform and Governance Project (ERGP) initiative, approved in December 2004, in line with FGN’s goal to strengthen governance, accountability, reduce corruption, and deliver services more effectively. This brought about reforms in the public sector of the economy. The Government Integrated Financial Management Information System (GIFMIS) and Integrated Personnel and Payroll Information System (IPPIS) are parts of the Public Financial Management (PFM) reforms approved in 2004.

Required:
Identify five objectives each of Government Integrated Financial Management Information System (GIFMIS) and Integrated Personnel and Payroll Information System (IPPIS). (10 Marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "PSAF – Nov 2020 – L2 – Q6a – Public Sector Reforms"

PSAF – Nov 2016 – L2 – Q3d – Public sector fiscal planning and budgeting.

Explain four methods used by the government to ensure compliance with budgetary control regulations.

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 the government to ensure that government entities comply with budgetary control regulations. (4 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "PSAF – Nov 2016 – L2 – Q3d – Public sector fiscal planning and budgeting."

PSAF – Nov 2016 – L2 – Q3b – Accounting policies for cash and accrual-based accounting systems.

Explain four circumstances where the Controller and Accountant General can reject payment requisitions by MDAs.

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)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "PSAF – Nov 2016 – L2 – Q3b – Accounting policies for cash and accrual-based accounting systems."

PSAF – Nov 2016 – L2 – Q3a – Public sector fiscal planning and budgeting.

Explain four significant principles of budget hearing that align MDA budget proposals with government macroeconomic policy.

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 the 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.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "PSAF – Nov 2016 – L2 – Q3a – Public sector fiscal planning and budgeting."

PSAF – May 2021 – L2 – Q5a – Public sector fiscal planning and budgeting

Analyze the budget performance of Atuum District Assembly and explain the functions of internal audit under the Public Financial Management Act.

a) Since the creation of Atuum District Assembly (ADA) in 2011, inadequate revenue mobilization has been its major challenge making the Assembly unpopular. The newly appointed District Chief Executive (DCE) is concerned about the effectiveness of the revenue budget system of the Assembly.

Below is the extract of the Revenue Budget of the Assembly for the 2021 financial year:

Revenue Annual Budget (GH¢) Actual to March (GH¢)
Licenses 880,000 244,000
Fees and Miscellaneous charges 3,400,000 890,000
Investment income 600,400 178,000
Property rate 5,400,000 1,310,000
Basic Rate 750,000 120,000
Grants and donations 1,000,000 320,000

The budget allocation over the various items over the quarters is in the ratio of 3:3:2:2. The DCE indicates that the budget reliability measures of Public Expenditure and Financial Accountability (PEFA) are ideal for assessing the budget performance of the Assembly. In the framework, the following interpretation is given to budget outturns:

  • Outturn/variance not greater than 5% is scored as A, indicating very good budget reliability.
  • Outturn higher than 5% but not exceeding 10% is scored B, indicating good budget reliability.
  • Outturn higher than 10% but not exceeding 15% is scored C, indicating average budget reliability.
  • Outturn higher than 15% is scored as D, indicating poor budget reliability.

Note that each revenue item is treated as an indicator under the PEFA framework.

Required:

i) As the Budget Officer, prepare the statement of budget performance for the first quarter of the 2021 financial year, indicating clearly the outturn percentage and the respective scores. (5 marks)
ii) Write a report to the DCE on the budget performance of the Assembly and suggest ways of improving the budget reliability of the Assembly. (6 marks)
iii) Discuss FOUR (4) benefits of effective revenue budgeting in the Assembly. (4 marks)

 

b) In a recent audit committee meeting, there arose a serious disagreement between the Director of Finance and the Chief Internal Auditor concerning the internal audit role in the public sector. The Internal Auditor insists that internal audit’s primary responsibility in the public sector is to carry out intensive pre-audit or to vouch. He concludes that internal audit without pre-audit is useless and unfit for purpose. The Director of Finance opposed this view vehemently, arguing that pre-audit is an old-fashioned practice in the public sector and in the 21st century this should not be encouraged in a forward-looking organization like theirs.

Required:
As a member of the Audit Committee, educate the two key officers of the organization on the functions of the internal audit under the Public Financial Management Act, 2016 (Act 921). (5 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "PSAF – May 2021 – L2 – Q5a – Public sector fiscal planning and budgeting"

PSAF – May 2021 – L2 – Q3a – Public expenditure and financial accountability framework

Explain the objective of the PEFA framework, its uses, and the sources of information for PEFA assessment.

The Public Expenditure and Financial Accountability (PEFA) Framework has gained worldwide recognition due to its contribution to public financial management discussions. It is one framework that has received acceptance across the globe.

Required:
i) Explain the objective of the PEFA framework. (2 marks)
ii) Discuss FOUR (4) uses or applications of the PEFA Reports. (4 marks)
iii) Explain FOUR (4) sources of information for the PEFA assessment. (4 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "PSAF – May 2021 – L2 – Q3a – Public expenditure and financial accountability framework"

PSAF – July 2023 – L2 – Q5b – Public sector financing initiatives

Explain the challenges that the Ghana Integrated Financial Management Information System (GIFMIS) promises to address in public financial management.

The Ghana Integrated Financial Management Information System (GIFMIS) was launched to eradicate or reduce the endemic challenges in the public financial management system. Many experts hailed it as the panacea for the developmental challenges of Ghana.

Required:
In reference to the above, explain FIVE (5) challenges that the GIFMIS promises to address in public financial management in Ghana.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "PSAF – July 2023 – L2 – Q5b – Public sector financing initiatives"

PSAF – Nov 2020 – L2 – Q3 – Public expenditure and financial accountability framework | Financial statements discussion and analysis

Explain the PEFA framework, compute financial ratios for two countries, and analyze their financial performance and position.

a) Public financial management is critical for the successful implementation of government policies and developmental goals. Public financial management is a linchpin that ties together available resources, delivery of services, and achievement of government policy objectives. The need to assess the extent to which public financial management systems operate led to the development of the Public Expenditure and Financial Accountability (PEFA) framework by a coalition of seven international development partners. Since 2001, the PEFA framework has received recognition across the world.

Required:

i) Explain the purpose of the PEFA framework. (3 marks)
ii) Explain the key pillars of an open and orderly public financial management system under the PEFA framework. (7 marks)

b) Country A and Country B are Sub-Saharan African Countries that attained independence around the same period. Presented below are the financial statements of the two countries:

Statement of Financial Performance for the year ended December 31, 2018

Description Country A (GH¢ million) Country B (GH¢ million)
Domestic Tax 26,450 17,000
International trade tax 18,200 21,330
Non-tax revenue 7,500 12,800
Grants 1,300 1,100
Total revenue 53,450 52,230
Compensation for employees 29,800 20,300
Use of goods and services 10,300 14,000
Consumption of fixed capital 240 280
Exchange difference 990 600
Interest 19,660 10,460
Subsidies 510 120
Other expenses 1,600 1,430
Total Expenditure 63,100 47,190
Net Operation Result (9,650) 5,040

Statement of Financial Position as at 31 December 2018

Description Country A (GH¢ million) Country B (GH¢ million)
Non-Current Assets
Property, plant and equipment 2,450 22,400
Equity investment 8,000 5,500
Total Non-Current Assets 10,450 27,900
Current Assets
Receivables 6,700 8,400
Cash and cash equivalent 4,700 18,000
Total Current Assets 11,400 26,400
Total Assets 21,850 54,300
Description Country A (GH¢ million) Country B (GH¢ million)
Funds and Liabilities
Accumulated Fund (80,200) 4,800
Current Liabilities
Payables 6,200 4,100
Trust monies 1,400 900
Domestic debt 16,000 4,500
Total Current Liabilities 23,600 9,500
Non-current Liabilities
Domestic debt 36,000 18,000
External debt 42,450 22,000
Total Non-current Liabilities 78,450 40,000
Total Funds and Liabilities 21,850 54,300

Required:

a) From the information provided, compute for the two countries respectively:
i) Grant to Revenue ratio
ii) Wage Bill to Tax Revenue ratio
iii) Interest to Revenue ratio
iv) Capital Assets ratio
v) Debt to GDP ratio
vi) Capital expenditure per Capita
(4 marks)

b) Based on the result in question (a), write a report discussing and analyzing the financial performance and financial position of the two countries. Include in your report the limitations of the analysis of the two countries. (6 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "PSAF – Nov 2020 – L2 – Q3 – Public expenditure and financial accountability framework | Financial statements discussion and analysis"

PSAF – May 2017 – L2 – Q2a – Public sector fiscal planning and budgeting

This question explores the methods of authorizing payments from the Consolidated Fund and identifies statutory payments permissible by law in the public sector.

The objective of enactments relating to public financial management, among others, is to safeguard public funds from plunder. One way to achieve this objective is by making specific provisions on the modalities for making payments from the Consolidated Fund (Article 178 of the 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 authorizing payments out of the consolidated fund. (6 marks)

ii) Identify FOUR statutory payments permissible by law in the public sector. (4 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "PSAF – May 2017 – L2 – Q2a – Public sector fiscal planning and budgeting"

PSAF – May 2017 – L2 – Q1b – Accounting policies for cash and accrual-based accounting systems

This question explains the differences between accrual and cash accounting, justifies the adoption of accrual accounting in the public sector, and describes the concept of commitment accounting.

You have received an official email from your Director which reads:

“Hello Accountant,

Hope you are doing well. We have closed from a workshop organized by the Controller and Accountant General’s Department on public financial management not long ago and the discussion was all about the adoption of accrual accounting in the public sector. It was emphasized that migration from cash basis to accrual basis is necessary to improve financial reporting and transparency in the public sector. You know I have little knowledge in Accountancy so I was completely lost in the discussions and I wished you had attended the workshop with me.

Another issue discussed was commitment accounting. We were made to understand that commitment accounting strengthens public financial management and therefore departments must ensure that every expenditure is committed in accordance with the appropriation prior to spending.

Please could you help me with some information on these issues?

Thank you, Director.”

Required: i) Explain to the Director THREE differences between accrual accounting and cash accounting. (3 marks)

ii) Identify THREE justifications for adopting accrual accounting in the public sector. (3 marks)

iii) Explain the term commitment accounting and illustrate how it could strengthen public financial management. (4 marks)

 

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "PSAF – May 2017 – L2 – Q1b – Accounting policies for cash and accrual-based accounting systems"

PSAF – Nov 2023 – L2 – Q5b – Public sector fiscal planning and budgeting

Explanation of public financial management terms including Mid-year Review, Virement, and Revised Budget.

b) Explain the following terms as applied to public financial management:

i) Mid-Year Review (2 marks)

ii) Virement (2 marks)

iii) Revised Budget (1 mark)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "PSAF – Nov 2023 – L2 – Q5b – Public sector fiscal planning and budgeting"

PSAF – Nov 2019 – L2 – Q4a – Public Procurement

Explain the procedure for disposing of vehicles under the Public Procurement Act.

In the recent Auditor General’s Report, your organization has been indicted for mismanagement of public assets contrary to public financial management rules. The auditors found that three (3) Toyota vehicles which have no service potential to the entity (all exceeding 12 years in age) are left at the mercy of the weather without disposing them. At the Public Accounts Committee hearing, members were unhappy with the development and recommended that the entity disposes of the assets immediately in accordance with the provisions of the Public Procurement Act, 2003 (Act 663) as amended by the Public Procurement Amendment Act, 2016 (Act 914). Unfortunately, the Head of the entity seems not to have any clue of how this should be done.

Required:

Write a memo to the Head of the Entity explaining the procedures involved in disposing of the vehicles under the Public Procurement Act 2003 as amended.
(6 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "PSAF – Nov 2019 – L2 – Q4a – Public Procurement"

Oops!

This feature is only available in selected plans.

Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.

If you’re not subscribed to a plan, click on the button below to choose a plan