PRESENTER 2 - THOMAS K.

TURAY

THE IMPORTANCE OF PUBLIC SECTOR ACCOUNTING INFORMATION TO USERS

The internal users require accounting information in order to ascertain the various levels
of regulatory compliance and whether actual expenditure is in accordance with the
budget. They like to ascertain whether or not adequate safeguards are available for the
protection of public resources. Conversely, the external users require accounting
information to ascertain the financial viability of the public sector organisations and the
efficiency and effectiveness of management.
CONSTITUTIONAL AND REGULATORY FRAMEWORK OF PUBLIC SECTOR
ACCOUTING
The public sector accounting is regulated by the following:
The Constitution of a country. The constitution of the country is one of the legal
frameworks that regulate the receipt and disbursement of public funds.
Auditor general’s office: The office of the auditor general is mandated by the constitution to
audit all government ministries and spending agencies. This is to ensure that accountability
of government resources is done. The auditor general’s report is submitted to the president
and thereafter to parliament.
Accountant general’s office: an office mandated to prepare government financial
statements.
State Finance Act: The State Finance Act of various countries provides guidance on
management and operation of government funds. The act would regulate on the accounting
system, books of accounts of accounts to be kept and the procedures to be followed in
preparation of government financial statements.
Financial Regulations: These are manuals of government Ministries/government
departments which deals with financial and accounting matters. The regulations set out the
procedures and steps to be followed in treating most of government transactions
DUTIES OF AN ACCOUNTING OFFICER
The functions of an Accounting Officer include the following:
1. To establish and manage an effective, efficiently run and result-oriented Internal
Control Department in his Ministry.
2. To ensure that proper books of accounts and system as specified by the Minister of
Finance are kept.
 PRESENTER 2 - THOMAS K. TURAY
3. To ensure that all revenue accruable to his Ministry are collected and accounted for as
and when due.
4. To ensure that there is provision for effective security system over all government
funds.
5. To install adequate preventive measures against frauds and misappropriation of funds.
6. To ensure that only trustworthy, dedicated and reputable officers are entrusted with
government funds.
7. To ensure that all payments are backed up with proper authority and that only services
and goods provided are paid for.
8. To make available all the cash, stamps, bank statements etc. in his custody when such
is requested for by the Accountant-General of, or Auditor-General for, the
Government.
9. To ensure that financial statements statutorily required are prepared without delay.
CONCEPTS AND PRINCIPLES APPLICABLE TO PUBLIC SECTOR ACCOUNTING
AND FINANCE
Concepts have been defined as broad basic assumptions which underlie the preparation of
financial statements of an enterprise. Public Sector Accounting is an integral but separate
branch of Financial Accounting, sharing in common many concepts and principles
applicable in the private sector. These concepts include: Consistency, Materiality,
Periodicity, Duality, Entity, Historical Cost and Going Concern.
BASES OF PUBLIC SECTOR ACCOUNTING
There are three bases under which the financial statements of a public sector enterprise
are compiled. These are:
(a) The cash basis.
(b) The accrual basis.
(c) The commitment basis.