Question Tag: Public Sector

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PSAF – Nov 2024 – L2 – Q2a – Valuation of Legacy Fixed Assets

Valuation and accounting treatment of legacy fixed assets in compliance with IPSAS.

Question

The Ministry of Indigenous Enterprises has been charged to collect legacy fixed assets data and value them in accordance with International Public Sector Accounting Standards (IPSAS). The Fixed Assets Coordinating Unit (FACU) of the Ministry has collected for valuation the following data for your action:

The Ministry owns a four (4) storey Office Administration block. The average cost per floor is GH¢4,741,256.25. The building was constructed on a land size of 20 plots of land owned by the Ministry. Currently, a plot of land in that area costs GH¢2,500,000. The FACU has measured the sizes of the building as follows:

Length: 87.5 meters
Width: 42.65 meters
Reference Price per Square Meter: GH¢4,432

However, a professional body, the Institute of Architects and Engineers, has given the reference price for the cost of such an office building at an estimated price of GH¢87,965,025. The building has not seen any further facelift ever since. However, a fence wall with a gate to enforce security and secure the land has just been completed in the current year at a cost of GH¢8,970,000 with a lifespan of 50 years.

The year of construction of the office building could not be determined, yet an old watchman who had been there for ages remembers that the building was constructed some 42 years ago, a time when his seventh child was born. It is the decision of the Government of Ghana on the adoption of IPSAS not to take advantage of the three-year exemption period but to account for legacy fixed assets by taking 60% of the reference cost of the legacy assets as the deemed cost, with a reduced lifespan of 30 years.

Required:

i) Calculate the cost of the land and buildings with structures to be brought into the books on the adoption of IPSAS and determine the depreciation chargeable in the first year in respect of these assets. ii) Show the extract of Statement of Financial Position of the Ministry of Indigenous
Enterprises as at that date

Answer

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Tags: Depreciation, Financial Statements, Fixed Assets, IPSAS, Public Sector, Valuation
Level: Level 2

MA – Nov 2024 – L2 – Q4a – Cost-Benefit Analysis (CBA) for Public Sector Investment

Evaluation of a healthcare capital investment project using cost-benefit analysis.

Question

The Faith Specialist Hospital (FSH) is a special government health facility under the Ghana Health Service (GHS) that provides specialized medical scans for complex health conditions. Management of FSH is planning to install an ultra-modern imaging machine that will improve the quality and accuracy of scans. The new installation will require an additional capital investment of GH¢420,000. The GHS policy on capital projects is that all new projects should achieve an internal rate of return of at least 30%.

Forecast demand for the services of this new machine over its five-year useful life are as follows:

Year	Number of Scans
1	1,250
2	2,700
3	3,500
4	1,400
5	675

Projected charge per scan: GH¢650
Variable costs per scan:

Consumables: GH¢330
Labour and overheads: GH¢176

Operating fixed costs per year: GH¢264,000 (includes depreciation on a straight-line basis)

Apart from the financial forecasts above, it is also envisaged that the project will produce non-financial benefits in several forms. Although it is hard to place a precise value on this, expert opinion suggests that this could approximate GH¢70,000 per annum.

Required:

i) Using cost-benefit analysis (CBA) computations, evaluate if the project should be undertaken.

ii) Enumerate TWO limitations of evaluating projects in the public sector.

Answer

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Tags: Capital Budgeting, Cost-benefit analysis, Investment Appraisal, IRR, Public Sector
Level: Level 2

Topic: Introduction to capital budgeting
Series: Nov 2024

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.

Question

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.

Answer

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Tags: Procurement, Procurement Laws, Public Financial Management, Public Sector, Single source procurement, Tender Committee, Tendering
Level: Level 2

Topic: Public sector financial management reforms
Series: Nov 2024

ICMA – Nov 2024 – L1 – Q3a – Value for Money (VFM)

Explains the components of Value for Money (VFM) in the public sector.

Question

Value for Money (VFM)
Value for Money (VFM) is an objective that can be applied to any organization whose main objective is non-financial but has restrictions on the amount of finance available for spending, which the public sector is no exception.

Required:
Explain the components of VFM.

Answer

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Tags: Economy, Effectiveness, Efficiency, Public Sector, Value for Money
Level: Level 1

Topic: Cost-Volume-Profit (CVP) Analysis
Series: Nov 2024

ICMA – Nov 2024 – L1 – Q2c – Government Budgeting Challenges

Identifies and explains the challenges or limitations in government budgeting.

Question

Challenges in Government Budgeting
Budgeting in the public sector relates to a process of translating government plans and policies into financial terms by systemically relating cost to attaining the objectives of government plans and policies. As important as this process is, there are some challenges and limitations associated with government budgeting.

Required:
State FOUR challenges (limitations) of government budgeting.

Answer

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Tags: Budgeting Challenges, Financial planning, Government Budgeting, Public Sector
Level: Level 1

Topic: Budgeting Models and Systems
Series: Nov 2024

AAA – Nov 2013 – L3 – AII – Q18 – Public Sector Audits

Identify the body responsible for reviewing the Auditor General's report for the Federation.

Question

The report of the Auditor General for the Federation is reviewed by…………which has the power to invite any person indicted for public hearing.

Answer

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Tags: Audit Review, Auditor General, Public Sector
Level: Level 3

Topic: Public sector audit
Series: NOV 2013

AAA – Nov 2013 – L3 – AII – Q6 – Public Sector Audits

Explores the alternate terminology for balance sheets of parastatals.

Question

The balance sheet of parastatals is also referred to as a statement of………….and…………….

Answer

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Tags: Audit Standards, Balance Sheet, Financial Statements, Public Sector, Terminology
Level: Level 3

Topic: Public sector audit
Series: NOV 2013

AAA – Nov 2012 – L3 – AII – Q8 – Public Sector Audits

Identifies the type of monthly accounts submitted to the Accountant-General by a Self-Accounting Unit.

Question

The monthly accounts submitted to the Accountant-General of the Federation by a Self-Accounting Unit are referred to as ……………………

Answer

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Tags: Accountant General, Financial Reporting, Government Accounts, Public Sector, Self-Accounting Unit
Level: Level 3

Topic: Public sector audit
Series: NOV 2012

AAA – Nov 2012 – L3 – SA – Q5 – Public Sector Audits

Key inclusions in the final report of a Board of Inquiry for public sector investigations.

Question

Regarding investigation in the public sector, the final report of the Board of Inquiry shall include:

A. The number of memoranda received from the public
B. A statement of the exact amount of loss that has been incurred
C. Certification from the Due Process office
D. Report of the Auditor-General for the Federation
E. External Auditors’ opinion statement on the loss that occurred

Answer

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Tags: Auditor General, Board of Inquiry, Loss Reporting, Public Sector
Level: Level 3

Topic: Public sector audit
Series: NOV 2012

CSME – May 2017 – L2 – SC – Q7 – Corporate Governance

Explain the Nolan principles guiding public life and discuss standards for ethical conduct in the public sector.

Question

Nolan Committee on standards in public life was set up to report on standards of behaviour amongst politicians, civil servants and public bodies. Provide an analysis of Nolan‟s‟ SEVEN Principles of Public Life. (15 Marks)

Answer

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Tags: Accountability, Ethics, Integrity, Nolan Principles, Public Sector
Level: Level 2

Topic: Corporate Governance
Series: MAY 2017

PSAF – May 2017 – L2 – Q5a – The context of public financial management

This question identifies symptoms of defective corporate governance in a public sector organization and discusses the responsibilities of the Board of Directors in promoting good governance.

Question

Ghana Approval Authority (GAA) is a public sub-vented organization established in 1995 as a standard approving authority for industrial, medical, and food substances in Ghana. Dr. Kamkam was appointed as the Chief Executive Officer (CEO) four years ago and he reports to a seven-member Board of Directors. GAA derives its powers from an Act of Parliament that was passed over two decades ago. The CEO upon resumption of office found that the enabling enactment of the Authority is out of date and could not regulate the activities of the board effectively. He therefore introduced a lot of innovations and initiatives to run the Authority effectively and efficiently, however, some of his initiatives were inconsistent with the provisions of the enabling enactment. His initiatives, despite their inconsistency with the law, produce great results for the Authority.

Dr. Kamkam has a very good relationship with the Board of Directors over the period resulting from fat allowances and kingly treatment he offers them, especially the board chairman who is a personal friend to him. This empowers him to make unilateral decisions knowing that the board is under his full control and dominance. The board meets fewer times than required by the enabling Act of the GAA. Furthermore, internal audit is not given the required attention by management and the audit committee has not been constituted in the last four years.

The Authority outsourced most of its supporting services to the private sector. The CEO has ensured that all of these services are outsourced to companies owned by his close friends and relatives. In some cases, the services are outsourced to companies in which the board chairman has significant interest. Past records support the action of the CEO that outsourcing to close associates produces better services than an “arm’s length” sourcing. The Authority is also not able to meet information disclosure requirements due to the policy of the CEO to operate on the blind side of the public in order to reduce visibility and nose-poking behaviors of the media.

Required:

i) Explain FOUR symptoms of defective corporate governance that can be identified in GAA. (6 marks)

ii) Identify FOUR responsibilities expected of the Board of Directors of GAA to promote good corporate governance. (4 marks)

Answer

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Tags: Board Responsibilities, Conflict of Interest, Corporate Governance, Internal Audit, Public Sector
Level: Level 2

Topic: The context of public financial management
Series: MAY 2017

PSAF – May 2017 – L2 – Q4b – General purpose financial reporting framework

This question explains the qualitative characteristics that the financial statement may lack.

Question

Given the information available, explain TWO qualitative characteristics of a general purpose financial report that the financial statement you have prepared in question (a) lacked. (4 marks)

Answer

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Tags: Comparability, Financial Reporting, Public Sector, Qualitative Characteristics, Timeliness, Understandability
Level: Level 2

Topic: General purpose financial reporting framework
Series: MAY 2017

PSAF – May 2017 – L2 – Q3a – Public sector fiscal planning and budgeting

This question involves preparing a cash forecast for a public hospital for the first quarter of 2017 and advising on financing options.

Question

KTM Regional Hospital is a public referral hospital under Ghana Health Services established in 1980. The hospital is a sub-vented organization that finances its operations from Internally Generated Revenues (IGR) and government subventions. In order to forecast for the first quarter of 2017, you are provided with the following information on revenues and expenditure projections of the Hospital for the fourth quarter of 2016 and first quarter of 2017.

Month	IGR (GH¢ ‘000)	Subvention (GH¢ ‘000)	Donations (GH¢ ‘000)	Non-Established Post (GH¢ ‘000)	Goods and Services (GH¢ ‘000)	Non-Financial Assets (GH¢ ‘000)	Other Expenditure (GH¢ ‘000)
October 2016	2,000	8,000	200	300	700	1,200	120
November 2016	2,400	–	–	310	740	–	240
December 2016	2,500	–	100	400	900	1,000	125
January 2017	3,000	10,000	500	600	800	–	130
February 2017	3,200	–	700	820	1,600	–	150
March 2017	3,400	–	900	800	840	–	290

Additional Information:

The cash and bank balance of the Hospital as at December 2016 was a deficit of GH¢500,000.
Breakdown of IGR:
- National Health Insurance Customers (60% of IGR) pay two months after service.
- Corporate Customers (20% of IGR) have one-month credit terms.
- Cash Customers (20% of IGR) pay immediately.
Government subvention is released in two equal instalments in the second and third month of each quarter.
Donations for March 2017 (GH¢900,000) will be received 40% in cash and 60% in kind.
Non-established post refers to wages and salaries for casual and contract workers, paid in the month incurred.
Goods and services are paid 40% in the month incurred and 60% in arrears.
Non-financial assets are paid for in four equal instalments starting from the month of purchase.
Other expenses are paid as and when incurred.

Required:

i) Prepare a cash forecast for the Hospital for the first quarter of 2017, showing the forecast for each month and that of the quarter as a whole. (12 marks)

ii) On the basis of the cash forecast in (i) above, advise management on the financing options available to them for the 2017 fiscal year. (4 marks)

Answer

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Tags: Budgeting, Cash Flow Management, Cash Forecasting, Hospital Finance, Public Sector
Level: Level 2

Topic: Public sector fiscal planning and budgeting
Series: MAY 2017

PSAF – May 2016 – L2 – Q4d – Public sector fiscal planning and budgeting

This question discusses the reasons for the necessity of a decentralized financial management system in Ghana.

Question

The problems associated with decentralized financial administration and exercising controls have received considerable attention from both academicians and legislators.

Required: Explain FOUR reasons why it is necessary to have a decentralized financial management system in Ghana.

Answer

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Tags: Decentralization, Financial Administration, Financial management, Ghana, Public Sector
Level: Level 2

Topic: Public sector fiscal planning and budgeting
Series: MAY 2016

PSAF – May 2016 – L2 – Q4b – The context of public financial management

This question addresses the concept of corporate governance in the public sector and its principles.

Question

i) Explain the term, corporate governance as applied to the public sector.

ii) Explain THREE corporate governance principles commonly used in public financial management.

Answer

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Tags: Corporate Governance, Financial management, Governance Principles, Public Sector
Level: Level 2

Topic: The context of public financial management
Series: MAY 2016

PSAF – May 2016 – L2 – Q4a – The context of public financial management

This question discusses the concept of public accountability and mechanisms to ensure it in the public sector.

Question

a) i) What is public accountability?

ii) Explain THREE mechanisms for ensuring public accountability in the public sector.

Answer

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Tags: Financial management, Mechanisms, Public Accountability, Public Sector
Level: Level 2

Topic: The context of public financial management
Series: MAY 2016

PSAF – May 2016 – L2 – Q3e – Public procurement

This question addresses the procedures established by Local Authorities to control revenue.

Question

Revenue control describes the various checks put in place to ensure that all moneys due are received and accounted for.

Required: Explain FOUR procedures established by Local Authorities to control revenue.

Answer

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Tags: Financial management, Internal Controls, Local Authorities, Public Procurement, Public Sector, Revenue Control
Level: Level 2

Topic: Public Procurement
Series: MAY 2016

PSAF – May 2016 – L2 – Q3d – Preparation and presentation of financial statements for central government

This question covers the explanation of the features of the new Chart of Accounts used in the public sector.

Question

The new Chart of Accounts has been designed to reflect the generic organisational structure of Government and its requirements for financial reports. It is based on the Ghana Finance Statistics Manual, International Monetary Fund, and Government of Ghana Reporting requirements.

Required: Explain FOUR features of this new Chart of Accounts.

Answer

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Tags: Chart of Accounts, Financial management, Financial Reporting, Government of Ghana, IMF, Public Sector
Level: Level 2

Topic: Preparation and presentation of financial statements for central government
Series: MAY 2016

PSAF – May 2016 – L2 – Q3b – Preparation and presentation of financial statements for central government

This question addresses how to ascertain the current market values of different public sector assets.

Question

In public sector accounting, assets and liabilities are valued at their current market values or at fair prices, which is defined as the amount of money that would have to be paid to acquire the asset on the valuation date.

Required: Explain how you would ascertain the current market values of the following public sector assets:

i) Securities;

ii) Motor Vehicles;

iii) Office buildings.

Answer

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Tags: Asset Valuation, Motor Vehicles, Office Buildings, Public Sector, Securities
Level: Level 2

Topic: Preparation and presentation of financial statements for central government
Series: MAY 2016

PSAF – May 2016 – L2 – Q3a – Public sector fiscal planning and budgeting

This question asks about the concept of a Long-Term Development Plan, its guiding principles, and reasons for failure in Ghana.

Question

Of late there has been a lot of discussions on the necessity for a Long-Term Development Plan in Ghana.

i) What is a Long-Term Development Plan?

ii) Outline THREE guiding principles of a Long-Term Development Plan.

iii) Explain TWO reasons why earlier Long-Term Development Plans failed in Ghana.

Answer

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Tags: Development Planning, Ghana, Guiding Principles, Long-Term Development Plan, Public Sector
Level: Level 2

Topic: Public sector fiscal planning and budgeting
Series: MAY 2016

Question Tag: Public Sector

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PSAF – Nov 2024 – L2 – Q2a – Valuation of Legacy Fixed Assets

Valuation and accounting treatment of legacy fixed assets in compliance with IPSAS.

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MA – Nov 2024 – L2 – Q4a – Cost-Benefit Analysis (CBA) for Public Sector Investment

Evaluation of a healthcare capital investment project using cost-benefit analysis.

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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.

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ICMA – Nov 2024 – L1 – Q3a – Value for Money (VFM)

Explains the components of Value for Money (VFM) in the public sector.

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ICMA – Nov 2024 – L1 – Q2c – Government Budgeting Challenges

Identifies and explains the challenges or limitations in government budgeting.

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AAA – Nov 2013 – L3 – AII – Q18 – Public Sector Audits

Identify the body responsible for reviewing the Auditor General's report for the Federation.

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AAA – Nov 2013 – L3 – AII – Q6 – Public Sector Audits

Explores the alternate terminology for balance sheets of parastatals.

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AAA – Nov 2012 – L3 – AII – Q8 – Public Sector Audits

Identifies the type of monthly accounts submitted to the Accountant-General by a Self-Accounting Unit.

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AAA – Nov 2012 – L3 – SA – Q5 – Public Sector Audits

Key inclusions in the final report of a Board of Inquiry for public sector investigations.

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CSME – May 2017 – L2 – SC – Q7 – Corporate Governance

Explain the Nolan principles guiding public life and discuss standards for ethical conduct in the public sector.

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PSAF – May 2017 – L2 – Q5a – The context of public financial management

This question identifies symptoms of defective corporate governance in a public sector organization and discusses the responsibilities of the Board of Directors in promoting good governance.

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PSAF – May 2017 – L2 – Q4b – General purpose financial reporting framework

This question explains the qualitative characteristics that the financial statement may lack.

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PSAF – May 2017 – L2 – Q3a – Public sector fiscal planning and budgeting

This question involves preparing a cash forecast for a public hospital for the first quarter of 2017 and advising on financing options.

You're reporting an error for "PSAF – May 2017 – L2 – Q3a – Public sector fiscal planning and budgeting"

PSAF – May 2016 – L2 – Q4d – Public sector fiscal planning and budgeting

This question discusses the reasons for the necessity of a decentralized financial management system in Ghana.

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PSAF – May 2016 – L2 – Q4b – The context of public financial management

This question addresses the concept of corporate governance in the public sector and its principles.

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PSAF – May 2016 – L2 – Q4a – The context of public financial management

This question discusses the concept of public accountability and mechanisms to ensure it in the public sector.

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PSAF – May 2016 – L2 – Q3e – Public procurement

This question addresses the procedures established by Local Authorities to control revenue.

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PSAF – May 2016 – L2 – Q3d – Preparation and presentation of financial statements for central government

This question covers the explanation of the features of the new Chart of Accounts used in the public sector.

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PSAF – May 2016 – L2 – Q3b – Preparation and presentation of financial statements for central government

This question addresses how to ascertain the current market values of different public sector assets.

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PSAF – May 2016 – L2 – Q3a – Public sector fiscal planning and budgeting

This question asks about the concept of a Long-Term Development Plan, its guiding principles, and reasons for failure in Ghana.

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

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