Subject: PUBLIC SECTOR ACCOUNTING & FINANCE (PSAF)

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PSAF – Mar 2025 – L2 – Q5- International public sector accounting standards

Explain major activities of IPSASB to deliver its mandate.

Question

a) The International Public Sector Accounting Standards Board (IPSASB) – formerly the Public Sector Committee (PSC) – of the International Federation of Accountants (IFAC) focuses on the accounting, auditing and financial reporting needs of national, regional, and local governments, related governmental agencies and the constituencies they serve. In 2004, the PSC was relaunched as the IPSASB with revised terms of reference to reflect the Board’s mandate.

Required: (i) Explain the major areas of activities undertaken by IPSASB to deliver its mandate. (ii) Discuss FOUR non-authoritative materials that the IPSASB develops and issues in fulfilling its objectives.

b) Public Financial Management requires regulation within a macroeconomic framework to ensure that public funds are sustainable, reduction of fiscal risk and to support the general economic policy of the Government. In the Government’s quest to realise this goal, the role of the Ministry of Finance and the Bank of Ghana cannot be overlooked.

Required: Explain FIVE roles each of the Minister for Finance and the Bank of Ghana in supporting the general economic policy of government.

Answer

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Tags: Guidance, IPSASB, Public Sector Accounting, Stakeholder engagement, Standard Setting
Level: Level 3

Topic: The context of public financial management
Series: MAR 2025

PSAF – Mar 2025 – L2 – Q4 – Financial statements discussion and analysis

Prepare a paper evaluating Borga and Obi Manso’s 2023 financial performance using specified metrics.

Question

Below are IPSAS-compliant financial statements of two developing countries, Borga and Obi Manso for the year ended 31 December 2023 expressed in the local currency of Ghana and published by an international public financial management organization domiciled in Accra, Ghana.

Statement of Financial Performance for the Year ended 31 December 2024

	Borga	Obi Manso
	GH¢ million	GH¢ million
Revenue
Tax Revenue	302,400	317,300
Non Tax Revenue	50,400	76,000
Grants and Donations	10,440	5,985
	363,240	399,285
Expenditure
Employee compensation	190,512	161,880
Goods and Services	41,208	50,350
Consumption of Fixed Assets	4,680	8,550
Interest	77,880	76,000
Social Benefits	8,160	17,100
Subsidies	–	4,275
Other Expenses	4,800	9,880
	327,240	328,035
Surplus	36,000	71,250

Statement of Financial Position as at 31 December 2024

	Borga	Obi Manso
	GH¢ million	GH¢ million
Assets
Non-Current Assets
Property, Plant and Equipment	96,000	180,500
Equity Investments	42,000	33,250
Loans Receivables	4,800	2,850
	142,800	216,600
Current Assets
Loan Receivables	33,600	37,050
Inventory	4,800	11,400
Cash and Cash Equivalent	57,600	30,400
	96,000	78,850
Total Assets	238,800	295,450
Funds and Liabilities
Current Liabilities
Payables	36,000	40,850
Deposits and Trust Monies	58,800	57,000
	94,800	97,850
Non-Current Liabilities
Domestic Debt	24,000	38,000
External Debt	50,400	85,500
	74,400	123,500
	169,200	221,350
Accumulated Funds	69,600	74,100
Funds and Liabilities	238,800	295,450

Required: a) Prepare a paper for presentation at an upcoming PFM forum to evaluate the performance of the two countries using the following metrics: i) Revenue to Total Assets ii) Current Ratio iii) Debt to Owners Fund iv) Accumulated Fund to Total Assets v) Common Size analyses of Tax Revenue, Compensation of Employees and Surplus

b) Using the metrics above, interpret the performance of the two countries under efficiency, short-term liquidity and long-term liquidity/stability of the countries with a metric each.

Answer

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Level: Level 2

Topic: Financial Statements Discussion and Analysis
Series: MARCH 2025

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.

Question

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:

Taxes on individual income (referred to as pay-as-you-earn) will be suspended until 2029.
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%.
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%.
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.

Answer

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Tags: Debt Management, Efficiency, Fiscal Policy, Government Expenditure, PFM Act, Public Financial Management, Tax suspension
Level: Level 2

Topic: Public expenditure and financial accountability framework
Series: MARCH 2025

PSAF – Mar 2025 – L2 – Q2 – International public sector accounting standards

Explain the meaning of a qualifying asset per IPSAS for Ghana Highway Authority.

Question

Ghana Highway Authority prepares its financial statements in accordance with International Public Sector Accounting Standards (IPSAS). The Government of Ghana has approved the sum of GH¢678,000 to the Ghana Highway Authority for the construction of a qualifying infrastructural asset.
The following costs were incurred during the construction of the Asset:
i) The sector minister in the process recommended his brother as a consultant to conduct feasibility analysis on the construction of the asset. The consultant charged the Authority the sum of GH¢350,000.
ii) An installation of platforms to enable the project to be undertaken were designed and built at a cost of GH¢225,900.
iii) Some foreign elements of the service required that Letter of Credit was processed to enable execution of the project, and the legal fees charged was GH¢275,000.
iv) Importation of specific components from Germany to execute the project in question cost the Authority €58,890.
v) Haulage and Freight charges cost €5,725.
vi) Cleaning and engine oil for first testing of equipment at the project site amounted to GH¢19,430.
vii) The cost of warranty on the asset was €3,400 should the Authority take advantage of the warranty agreement.
viii) Delivery, handling and other overhead amounted to GH¢156,800 out of which 60% were attributable.
ix) The Ghana Highway Authority consequently incurred cost of GH¢398,560 in modification of an adjoining infrastructure to facilitate the project.
The Government of Ghana was not able to provide all the amount hence the Minister for Finance gave approval to the Chief Executive Officer (CEO) of the Authority to borrow the excess amount from open market which a financial institution provided at a commercial rate of 35% per annum. Government of Ghana (GoG) accounting policy adopts the allowed alternative approach of borrowing costs under IPSAS 5: Borrowing Costs.
A check from the professional website of the Institute of Architects and Engineers in Ghana indicates that the professional fee that can be charged under the service rendered by the consultant would cost only GH¢195,000.
To the extent that the funds borrowed was not GoG funds, and the fact that the funds would be required after 100 days to pay for the cost of the asset, which was provided earlier than envisaged, the CEO took advantage of the 14 weeks’ grace period for payment and invested the funds in a 91-day investment which yielded a return of 24.09% per annum at first maturity when the funds were held in anticipation of payment.
The prevailing exchange rate on the date of the contract was GH¢13.50 to €1.00, however on the day of payment the exchange rate shot up to GH¢15.57 to €1.00.

Required:
a) Explain what is meant by a qualifying asset.

b) Determine the cost of the qualifying asset for capitalization.

c) Based on the information provided, indicate FIVE notes to the accounts in the books of the Ghana Highway Authority.

d) Explain another method or approach by which the borrowing cost could be recognized under IPSAS 5: Borrowing Costs.

Answer

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Level: Level 2

PSAF – Mar 2025 – L2 – Q1- Preparation and presentation of financial statements for covered entities

Prepare the Statement of Financial Performance for Hamile Teaching Hospital for 2023 per IPSAS and related regulations.

Question

The Trial Balance below relates to Hamile Teaching Hospital, a public hospital.

Trial Balance for the year ended 31 December 2023
	Debit	Credit
	GHc’000	GHc’000
Government subvention		100,750
Out-patient services fees		35,000
In-patient services fees		40,000
Development Partner grants (ii)		16,000
Established position salaries	62,000
Casual Labour	5,600
Contract appointment (local and foreign)	1,400
Limited engagements	200
Rent (iii)	500	150
Insurance	340
Consultancy services	120
Conferences, workshops and training	4,500
Purchase of drugs	60,000
Purchase of medical consumables	80,000
Office expenses	20,000
Repairs and maintenance	6,000
Interest on loan	10,000
Pharmacy sales		180,000
Diagnostic		85,000
Mortuary Services		9,400
Cafeteria and Canteen		4,650
Extension services		14,500
Furniture and office equipment (iv)	200,000	40,000
Medical equipment & accessories (iv & v)	420,000	120,000
Motor vehicles (iv)	120,000	20,000
Land and buildings (iv)	300,000	70,000
Bank and Cash	30,000
Receivable from National Health Insurance Scheme (vi)	65,000
Receivable from patients	15,000
Payables		26,000
Loan from foreign Institution (2028) (vii)		350,000
Inventory of drugs	22,000
Inventory of medical consumables	12,000
Accumulated Fund		336,210
Other expenses	13,000
	1,447,660	1,447,660

Additional Information:
i) The hospital prepares its financial statements in accordance with the International Public Sector Accounting Standards (IPSAS), the Public Financial Management Act 2016, (Act 921), the Public Financial Management Regulation 2019, L.I 2378, and the current Chart of Accounts of the Government of Ghana.
ii) The Development Partner grants received from the Health Care Fund, an international organization that provides free medical care to the rural poor and vulnerable individuals, are typically unconditional. However, 40% of this year’s grant is subject to certain conditions, which had not been met as of December 31, 2023.
iii) Rent received in advance during the year amounted to GH¢20,000 while rent owed by the hospital for the year amounts to GH¢300,000.
iv) The hospital charges consumption of fixed assets on straight line basis as follows

Non-current Assets	Estimated Useful Life
Furniture and office equipment	5 years
Medical equipment and accessories	4 years
Motor vehicles	5 years
Buildings	10 years

Land constitutes 30% of the amount of land and building shown in the trial balance.
v) A medical equipment valued at GH¢20,000,000 which is included in the medical equipment and accessories listed on the trial balance, was completely damaged due to consistent power fluctuations. The value of this equipment should be written off.
vi) The hospital submitted a claim of GH¢11,000,000 to the National Health Insurance Scheme for services provided to patients in the last quarter of 2023, but the payment has not yet been received. This transaction has not yet been reflected in the trial balance.
vii) The hospital took a loan of $100,000,000 from Health World Bank on January 1, 2023, when the exchange rate was $1 to GH¢3.50. The exchange rate on 31 December 2023 is $1 to GH¢5.
viii) The inventories on 31 December 2023 were as follows:

Inventory type	Cost	Net Realizable Value	Current Replacement
	GHc’000	GHc’000	GHc’000
Drugs	15,000	16,000	14,000
Medical consumables	10,000	11,000	9,000

Required:
Prepare for Hamile Teaching Hospital:
a) Statement of Financial Performance for the year ended 31 December 2023.

b) Statement of Financial Position as of 31 December 2023.

c) Disclosure notes to the financial statements.

Answer

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Topic: Preparation and presentation of financial statements for covered entities
Series: MARCH 2025

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.

Question

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).

Answer

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Topic: Public expenditure and financial accountability framework
Series: Nov 2024

PSAF – Nov 2024 – L2 – Q5b – Nolan’s Principles of Public Life

Explains four of Nolan’s Seven Principles of Public Life, which guide ethical behavior in public office.

Question

Nolan’s Seven Principles of Public Life serve as guidelines for ethical behavior in public service. They are not typically enforceable through direct legal actions; instead, they often operate as moral and professional standards shaping the behavior of individuals in public office.

Required:

Explain FOUR of these principles.

Answer

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Tags: Accountability, Integrity, Leadership, Nolan’s Principles, Professionalism, Public Ethics, Public Governance, Public Service, Selflessness
Level: Level 2

Topic: Public expenditure and financial accountability framework
Series: Nov 2024

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.

Question

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.

Answer

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Topic: Public expenditure and financial accountability framework
Series: Nov 2024

PSA – Nov 2024 – L2 – Q4c – Events After the Reporting Date

Explanation of events occurring after the reporting date and their impact on financial statements.

Question

Explain THREE limitations of ratio analysis

Answer

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Tags: Adjusting Events, Events After Reporting Date, Financial Statements, Non-adjusting Events
Level: Level 2

Topic: General purpose financial reporting framework
Series: Nov 2024

PSAF – Nov 2024 – L2 – Q4b – Public Expenditure and Financial Accountability

Explanation of the Public Expenditure and Financial Accountability framework and its application.

Question

Based on your results in (a), write a report to the newly appointed board analyzing and indicating whether their performance is better in comparison with the old board.

Answer

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Tags: Accountability, Budgeting, Compliance, Financial Reporting, Public Expenditure
Level: Level 2

Topic: Financial Statements Discussion and Analysis
Series: Nov 2024

PSAF – Nov 2014 – L2 – Q4 – Public Sector Financial Statements

Explanation of reporting vs. authorization dates, and types of events after reporting date with treatment examples.

Question

The General National Communication Commission (GNCC) is the sub-regulatory body in the Communications industry. It is mandatory for the Board of GNCC to submit its Report/Financial statements to the Ministry of Communication before publication in accordance with IPSAS 14 (Events after the reporting date). The events occurring after the reporting date could be favourable and/or unfavourable.

You are required to:

a. Distinguish between the reporting date and authorization date of the financial statements, giving examples. (4 Marks)

b. Explain briefly the differences between Adjusting and Non-Adjusting events after the reporting date, giving TWO examples of each. (8 Marks)

c. Identify the events (occurring after the reporting date) in the following situations and explain briefly the treatment of each:

i. General National Communication Commission carries its inventories at the lower of cost and net realizable value. At 31 December 2013, the cost of inventory determined under the First In, First Out (FIFO) method as reported in its financial statement for the year ended was N5 million. Due to severe recession and negative economic trends, the inventory could not be sold in January 2014. On 10 February, GNCC entered into an agreement to sell the entire inventory for N3 million. (2 Marks)

ii. The statutory audit of GNCC for the year ended 31 December 2012 was completed on 28 February 2013. The Financial Statement was signed by the Chief Executive Officer on 8 March 2013 and approved on 10 April 2013. The following events have since occurred:

A special equipment costing N605,000 purchased on 1 September, 2012
was destroyed by fire on 31 December, 2012. GNCC had booked a
receivable of N508,000 from the insurance company in respect of this
claim. On completion of investigation by the insurance company, it was
discovered that the fire broke out due to negligence on the part of a
machine operator. Consequently, the insurance company repudiated
liability.

iii. A debtor owing N900,000 filed for bankruptcy on January 15, 2013. The financial statements had included an allowance for doubtful debts relating to this debtor for N60,000 only. (2 Marks)

Answer

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Tags: Adjusting Events, Financial Statement Authorization, IPSAS 14, Non-adjusting Events, Reporting Date
Level: Level 2

Topic: Public Sector Financial Statements

PSAF – Nov 2014 – L2 – Q3 – Public Sector Audit

Explanation of financial fraud types and calculation of revenue loss within EFCC operations.

Question

Fraud is described as an intentional act involving deception to obtain an unjust or illegal advantage. It involves the presentation of a statement or representation made recklessly or without the belief in the truth or suppression of facts.

The Economic and Financial Crime Commission (EFCC) is a criminal investigation organisation in charge of investigating financial crimes involving politicians, economic saboteurs, and electoral fraudsters. EFCC’s “modus operandi” is such that any suspect or ‘accused’ must deposit all his money and other belongings with the exhibit section headed by Mr. Oripipe, a cashier, who is expected to pay all cash receipts collected by him to the Banking officer. The banking officer issues a revenue receipt to the Cashier.

Mrs. Innocent, the resident auditor, conducted a physical cash survey and discovered that the total amount on the duplicate receipt book with the banking officer is N4,550,000, which does not agree with the actual cash paid in. It was suspected that the organisation has been defrauded.

The following information relates to the deposits collected from January to December 2013:

Cash from Honourable Talaka: N12,500
Cash from a container with five suitcases, each containing N250,000: N1,250,000
Cash recovered from Anine, a criminal that raided Ifako bank: N4,000,000
Cash sales of impounded lace: N425,000
Five boxes containing consumable items earlier disposed of for N16,000, mistakenly kept in Mr. Oripipe’s drawer, were later discovered by the auditor.
On investigation, it was discovered that the banking officer was illegally removing N500 from every N2,500 paid to him by the cashier.

Required:

a. Explain briefly FOUR types of financial fraud. (4 Marks)

b. Prepare the correct statement of deposits from detainees as it should be in Mr. Oripipe’s records and identify the shortfall due to his negligence. (10 Marks)

c. Calculate the amount of cash lost by the government as a result of the fraud. (6 Marks)

Answer

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Tags: Cash Handling, EFCC Operations, Financial Control, Fraud Detection, Fraud Prevention, Public Sector Audit
Level: Level 2

Topic: Public Sector Auditing

PSAF – Nov 2014 – L2 – Q2 – The Budgeting Process in the Public Sector

Examination of government budgeting purposes, budget types, and factors affecting budget implementation in Nigeria.

Question

In all Government units, the executive arm prepares the budget and submits the same to the legislative arm for review, modifications, and approval. The approved budget serves as a basis for the activities of that government unit for the fiscal year under focus.

Required:

a. Explain any TWO main purposes which a government budget serves. (2 Marks)
b. Explain any THREE basic features of each of the following budget concepts:

i. Performance budgeting. (6 Marks)
ii. Zero-based budgeting. (6 Marks)

c. Nigeria is said to be low in budget implementation. Discuss any THREE key factors that negate efficient and effective budget implementation in the Nigerian public sector. (6 Marks)

Answer

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Tags: Budget Efficiency, Budget Implementation, Government Budget, Nigerian Public Sector, Performance Budgeting, Zero-Based Budgeting
Level: Level 2

Topic: The Budgeting Process in the Public Sector

PSAF – Nov 2014 – L2 – Q1 – Government Revenue

Calculation and distribution of revenue collected by Olakoma Federation across federal, state, and local levels.

Question

Eboda State is one of the 30 states in the Olakoma Federation. The Federation has a population of 120 million people with 700 local government councils and a land mass of 300,000 sq kilometers.

Eboda State has a population of 12 million, 25 local government councils, and a land mass of 30,000 sq kilometers.

The following transactions took place in the Office of the Accountant-General of Olakoma Federation during the year ended December 31, 2013:

Revenue Source	Amount (N’ Million)
Crude oil sale	350,000
Domestic oil receipts	445,000
Miscellaneous oil receipts	105,000
Royalty on crude oil	101,000
Royalty on gas	95,000
Rentals on oil field	87,000
Gas flared penalty	77,000
Petroleum profit tax	650,000
Companies income tax	500,000
Other non-oil taxes	225,000
Import duties	255,000
Export duties	125,000
Excise duties	320,000
Custom penalty charge	115,000
Custom fees account	120,000
Common external tariff levy	100,000
Court fees	30,000
PAYE of armed forces	55,000
7% Port levy	25,000
Value Added Tax (VAT)	700,000

Additional Information:

The Olakoma Customs Service is entitled to 7% cost of collection on all revenues collected, while the Federal Inland Revenue Service is entitled to 4% of non-oil revenue.
The sharing formula for the Federation Account and VAT is as follows:

Category Federation Account VAT

Federal Government 52.68% 15%

State Governments 26.72% 50%

Local Governments 20.60% 35%
A 13% derivation is paid to oil-producing states, based on oil and gas-related income.
The sharing ratio in (ii) above is based on the following criteria:

Category State Local Government

Equity 40% 40%

Population 30% 30%

Land Mass 20% 20%

Internally Generated Revenue Effort 10% 10%
The total internally generated revenue effort of the 30 states and 700 local government councils amounted to N500 billion and N300 billion, respectively.
The total internally generated revenue effort of Eboda State and its 25 local governments amounted to N50 billion and N20 billion, respectively. Eboda State is not one of the oil-producing states.
All revenues due to all local governments in each state are paid to the State Joint Local Government Account. This account is entitled to 10% of the Internally Generated Revenue (IGR) of the state.

Category	Federation Account	VAT
Federal Government	52.68%	15%
State Governments	26.72%	50%
Local Governments	20.60%	35%

Category	State	Local Government
Equity	40%	40%
Population	30%	30%
Land Mass	20%	20%
Internally Generated Revenue Effort	10%	10%

Required:

a. State the differences between the Federation Account and the Consolidated Revenue Account. (4 Marks)

b. Calculate:

i. Olakoma Custom Service’s cost of collection. (3 Marks)
ii. Federal Inland Revenue Service’s cost of collection. (2 Marks)
iii. The 13% derivation paid to oil-producing states. (3 Marks)

c. Calculate the amount to be credited to:

i. Consolidated Revenue Fund of Olakoma Federal Government. (6 Marks)
ii. Eboda State Consolidated Revenue Fund Account. (6 Marks)
iii. State Joint Local Government Account. (6 Marks)

(Show workings)

Answer

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Tags: Allocation Formulas, Consolidated Revenue Fund, Cost of Collection, Federation Account, Government Revenue, Revenue Allocation, State Revenue
Level: Level 2

Topic: Government Revenue

PSAF – May 2021 – L2 – Q6b – The Budgeting Process in the Public Sector

Explanation of budget uses and steps for National Chart of Accounts application in public budgeting.

Question

The importance of classification code as a system driven for budget cannot
be over emphasised as it forms the basis for budgeting and budgetary
control mechanism. Thus, for a country, state or local government to
achieve a reasonable level of success in accountability, transparency,
performance evaluation and adherence to Appropriation Act, the
application of unified chart of accounts is paramount.

Required:

Discuss FOUR uses of budget and FOUR steps to be followed to ensure completeness of using the National Chart of Accounts for budgeting.

Answer

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Tags: Accountability, Budget Classification, Budget Completeness, Chart of Accounts, Transparency
Level: Level 2

Topic: The Budgeting Process in the Public Sector
Series: MAY 2021

PSAF – May 2021 – L2 – Q6a – Fiscal Policy and Public Finance

Explanation of expenditure assignment principles and drawbacks in a multi-level government setting.

Question

Expenditure assignment deals with the division or sharing of expenditure, regulatory, and tax functions or responsibilities among multi-levels of government in a federation.

Required:

Explain THREE principles guiding expenditure assignment and highlight TWO of its drawbacks.

Answer

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Tags: Decentralization, Expenditure assignment, Fiscal Management, Government Functions, Public Sector
Level: Level 2

Topic: Fiscal Policy and Public Finance, Government Expenditure
Series: MAY 2021

PSAF – May 2021 – L2 – Q5b – Fiscal Policy and Public Finance

Analysis of debt burden through key ratios and explanation of sources for external debt

Question

External debt does not constitute a burden when contracted loans are optimally deployed and the return on investment is sufficient to meet maturing obligations, as and when due, while servicing of the domestic economy is not undermined. The magnitude and severity of debt burden cannot be determined on the basis of debt volume only, rather, the debt volume should be viewed in combination with certain debt ratios for better appreciation of the debt problem.

Required:

Discuss THREE ratios commonly used to analyze the degree of indebtedness of a country and explain TWO sources of external debts.

Answer

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Tags: Debt Analysis, Debt Ratios, External Debt, Fiscal Responsibility, Public Finance
Level: Level 2

Topic: Fiscal Policy and Public Finance
Series: MAY 2021

PSAF – May 2021 – L2 – Q5a – Public Sector Financial Statements

Identification of inventory costs excluded under IPSAS 12 and disclosure requirements for financial statements.

Question

IPSAS 12 on Inventories deals with the valuation and presentation of inventories in the financial statements in the context of the historical cost system, the most widely adopted basis on which financial statements are presented.

Required:

In accordance with IPSAS 12, identify FOUR costs that are excluded from the cost of inventories and FOUR requirements to be disclosed in the financial statements.

Answer

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Tags: Disclosure Requirements, Exclusions, Financial Reporting, Inventory Valuation, IPSAS 12
Level: Level 2

Topic: Government Expenditure, Public Sector Financial Statements
Series: MAY 2021

PSAF – May 2021 – L2 – Q4b – Public Sector Reforms

Feasibility analysis of primary health centre PPP project based on guiding principles and associated risks.

Question

The Ministry of Health of Federal Republic of Wazobia is currently
considering public-private partnership as a means of improving health
facilities in some rural areas in the country. The Ministry intends to use
Public-Private Partnership (PPP) to construct and manage modern primary
health centres in rural areas to increase access to quality health facilities.
The project would be fully financed by the private sector, but will be built
on land secured from the state governments. The private sector requires
government guarantee to borrow externally to execute the project.
Currently, health services are free, however, the new project, when executed through Public-Private Partnership would be on “user-pay” basis.
The government and the private contractors determine the average fees
payable per user and it will be subject to an upward review from time to
time. In order to stimulate private sector interest in the project, the Ministry
intends to protect the private sector against risks associated with the
project. Meanwhile, the Ministry would insist that local materials and skills
are employed in the construction and management of the primary health
centre projects. The project is also environmentally friendly as there will be
little or no destruction of the forest vegetation. The project when completed,
will be of great benefit to the country as a whole.

Required:
Based on guiding principles of Public-Private Partnership identify and
explain THREE principles and TWO associated risks of the feasibility of the
proposed primary health centre projects by the Ministry of Health.

Answer

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Tags: Health Facilities, PPP, Project Feasibility, Public Sector Finance, Risk Assessment
Level: Level 2

Topic: Public Sector Reforms
Series: MAY 2021

PSAF – May 2021 – L2 – Q4a – The Budgeting Process in the Public Sector

Explanation of MTEF, Budget Call Circular, and their main differences for public sector budgeting.

Question

As the Accountant in charge of the expenditure division, you are to assist the Director of Finance in the ministry to set up a budget committee. You have also been asked to review the recently issued 2020 Budget Call Circular.

Required:

Explain briefly the following:

Medium Term Expenditure Framework (MTEF) including FOUR of its objectives (6 Marks)
Budget Call Circular (2 Marks)
The main difference between MTEF and Budget Call Circular (2 Marks)

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Tags: Budget Call Circular, Budgeting Process, Fiscal Policy, Government Expenditure, MTEF
Level: Level 2

Topic: Government Expenditure, Regulatory and Institutional Framework, The Budgeting Process in the Public Sector
Series: MAY 2021

Subject: PUBLIC SECTOR ACCOUNTING & FINANCE (PSAF)

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PSAF – Mar 2025 – L2 – Q5- International public sector accounting standards

Explain major activities of IPSASB to deliver its mandate.

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PSAF – Mar 2025 – L2 – Q4 – Financial statements discussion and analysis

Prepare a paper evaluating Borga and Obi Manso’s 2023 financial performance using specified metrics.

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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.

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PSAF – Mar 2025 – L2 – Q2 – International public sector accounting standards

Explain the meaning of a qualifying asset per IPSAS for Ghana Highway Authority.

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PSAF – Mar 2025 – L2 – Q1- Preparation and presentation of financial statements for covered entities

Prepare the Statement of Financial Performance for Hamile Teaching Hospital for 2023 per IPSAS and related regulations.

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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.

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PSAF – Nov 2024 – L2 – Q5b – Nolan’s Principles of Public Life

Explains four of Nolan’s Seven Principles of Public Life, which guide ethical behavior in public office.

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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.

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PSA – Nov 2024 – L2 – Q4c – Events After the Reporting Date

Explanation of events occurring after the reporting date and their impact on financial statements.

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PSAF – Nov 2024 – L2 – Q4b – Public Expenditure and Financial Accountability

Explanation of the Public Expenditure and Financial Accountability framework and its application.

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PSAF – Nov 2014 – L2 – Q4 – Public Sector Financial Statements

Explanation of reporting vs. authorization dates, and types of events after reporting date with treatment examples.

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PSAF – Nov 2014 – L2 – Q3 – Public Sector Audit

Explanation of financial fraud types and calculation of revenue loss within EFCC operations.

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PSAF – Nov 2014 – L2 – Q2 – The Budgeting Process in the Public Sector

Examination of government budgeting purposes, budget types, and factors affecting budget implementation in Nigeria.

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PSAF – Nov 2014 – L2 – Q1 – Government Revenue

Calculation and distribution of revenue collected by Olakoma Federation across federal, state, and local levels.

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PSAF – May 2021 – L2 – Q6b – The Budgeting Process in the Public Sector

Explanation of budget uses and steps for National Chart of Accounts application in public budgeting.

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PSAF – May 2021 – L2 – Q6a – Fiscal Policy and Public Finance

Explanation of expenditure assignment principles and drawbacks in a multi-level government setting.

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PSAF – May 2021 – L2 – Q5b – Fiscal Policy and Public Finance

Analysis of debt burden through key ratios and explanation of sources for external debt

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PSAF – May 2021 – L2 – Q5a – Public Sector Financial Statements

Identification of inventory costs excluded under IPSAS 12 and disclosure requirements for financial statements.

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PSAF – May 2021 – L2 – Q4b – Public Sector Reforms

Feasibility analysis of primary health centre PPP project based on guiding principles and associated risks.

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PSAF – May 2021 – L2 – Q4a – The Budgeting Process in the Public Sector

Explanation of MTEF, Budget Call Circular, and their main differences for public sector budgeting.

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