UNIVERSITY OF GHANA BUSINESS SCHOOL

MPhil., MSc. And MBA

PRACTICE ASSIGNMENT

PUBLIC SECTOR ACCOUNTING AND FINANCE

APRIL 2021

ATTEMPT ALL QUESTIONS

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Q.1
The following is a summarized list of the receipts and payments extracted from the ledger
of the Consolidated Fund account of the Central Government of Ghana for the year ended
31 December, 2020:

GHc'million
Transfer to the Road Fund 900
Borrowing from the domestic commercial banks 1,150
Recoveries of opening Taxes Receivables 2,500
Net Treasury Operations 2,100
Repayment of domestic borrowing during the year 1,320
Repayment of external borrowing during the year 2,600
Corporate Income tax 5,800
Loans and advances granted during the year 2,200
Transfer to District Assembly Common Fund (DACF) 1,560
Seminar and workshops 1,250
Medical support for pregnant women 1,230
Training and capacity building 1,720
Value added taxes 10,200
Grant received in support of school feeding programme 2,800
Subsidies on fuel 2,200
Income tax (PAYE) 4,500
Financial investment during the year 3,300
Established post salaries 6,200
Custom and Excise duties 5,800
Non-established post salaries 2,050
13% SSF contribution 1,500
Rent tax 2,450
Staff allowances 1,750
Transfer to other statutory funds 800
Administrative cost 650
Fees and charges for services 3,140
Infrastructure works completed 5,430
Trust funds 1,750
Cash payment to support the aged 1120
Foreign travelling cost 1,430
Dividends and other investment income 1,200
National award and celebrations 1,260
Repairs and maintenance 1,670
Purchase of property plant and equipment 1,840
Capital project grants received 1,420
Infrastructure works in progress 3,000
Domestic debt interest paid 2,400

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 Recoveries of loans and advances 635
External borrowing during the year 15,500
External debt interest paid 2,650
Subsidies on utilities 3,430
Other bilateral grants 1,320
Fines, Penalties and forfeiture 2,040
Transfer to GET Fund 1,325
Other expenses 1,845
Proceeds from disposal of PPE 1,500
State Protocol Expenses 740
UN Peace keeping Expenses 1150
Refund of medical expenses of paupers 2,235

The following additional information is made available:

1. The Government of Ghana applies the full accrual basis International Public Sector
Accounting Standards (IPSAS) as the basis for preparing its financial statements.

2. Balances extracted from the ledger of the Consolidated Fund as at 1/01/20

consisted of:
GHc' million
Inventories 1,500
Treasury bills issued 2,040
Domestic Debt 6,450
External Debt 8,350
Payables 2,430
Loans and advances 6,500
Financial Investments 3,800
Taxes Receivable 2,870
Cash and cash equivalent 4,140
Trust Funds 1,470
PPE 6,000
Infrastructure completed 2,400
Infrastructure in progress 8,500
Revaluation Reserve 4,500
Accumulated fund 8,520
Consumption of Fixed Capital:
PPE 1,200
Infrastructure completed 750

3. The probability of receipt of the outstanding opening Taxes Receivables as at 15th

February 2021 was almost nil as the entity government expects to collect the tax

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 from had been declared insolvent. In December 2020 Investments with a carrying
amount of GHc1,600 million was liquidated for GHc1,200 million.

4. During the year, the Parliament of Ghana approved a transfer of 10% of accrued
total tax revenue to the District Assembly Common Fund.

5. The capital project grant was received from the Chinese Government in November
2020. The Government of Ghana reasonably expects to comply with the grant
agreement. The Government of Ghana is unlikely to comply with some of the
conditions for grants amounting to GHc600 million of the other bilateral grants. The
Government of Ghana has already complied with grant condition in respect of a
bilateral grant from the United States of America amounting to GHc2,200 million.
This grant is highly probable to be received in the first month after the financial
year end.

6. The approved budget for the 2020 fiscal year excluding that of capital expenditure
and investments is as follows:

Original
Supplementary
Budget
Budget

GHc’million GHc ’million

Direct taxes 8,000 5,500
Indirect taxes 14,000 4,000
Non-tax revenue 7,500 2,500
Grants 6,000 2,000
Compensation of employees 5,500 3,500
Goods and Service cost 6,000 3,000
Public debt interest 4,000 1,600
Subsidies 4,200 750
Transfers 7,400 1,200
Social benefits 1,200 800
Other expenses 1.300 300
Consumption of Fixed Capital 4,500 -
6. Domestic debt interest and external debt interest amounting to GHc750 million and
GHc450 million respectively was due but not paid due to the financial constraints
during the year.

7. The Government of Ghana applies the revaluation model for its non-current assets
(existing prior to the adoption) in line with IPSAS 17: Property, Plant and
Equipment. In this respect, a professional valuer was engaged who produced the

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 following values as at 31st March, 2020: Property, Plant and Equipment GHc15,000
million; Infrastructural assets completed GHc25,000 million and Infrastructural
assets in progress GHc20,000 million. GHc5,000 of Infrastructure in progress was
completed and transferred to Infrastructure at 31st December, 2020. Prior to the
revaluation exercise, Property, Plant and Equipment with a cost of GHc1,500 million
and accumulated Depreciation of GHc375 million was sold. All additions to non-
current assets were done before 31st March, 2020.

8. It is the policy of government to provide for consumption of fixed assets on all non-
financial assets acquired during the year and those already existing using the
straight line method at the following rates:
Property, Plant and Equipment 25%
Infrastructure asset completed 20%

No depreciation is charged on assets sold during the year.

9. Salaries and other emoluments outstanding during the year amounted to GHc800
million while that of use of goods and services amounted GHc550 million.
Additionally, GHc2,450 million of rent paid during the year relate to 2021. GHc250
million relating to other expenses was outstanding as at 31st December, 2020.

10. As at 31st December, 2020, corporate tax assessments amounting to GHc4,150

million was still outstanding to be paid by corporate entities to government, whilst
the total amount owed to government as at 31st December, 2020 in respect of taxes
on goods and services stood at GHc1,800 million. It is estimated that, only 75% of
the outstanding taxes to government may be recovered.

11. Inventories included in use of goods and services available at the end of the year
was as follows:
Inventories for use Inventories for sale
GHc’ million GHc’ million
Historical Cost 1,800 800
Replacement Cost 1,400 400
Net Realisable value 800 600

You are required to:

Prepare the following financial statements in accordance with the PFM laws of Ghana,
the Chart of Accounts of government and relevant accrual basis IPSAS:
a) Statement of Receipts and Payments of Cash of the Consolidated Fund for the
year ended 31st December, 2020 15 marks
b) Statement of Financial Performance of the Consolidated Fund for the year ended
31 December 2020; 15 marks

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c) Statement of Financial Position of the Consolidated Fund as at the year ended 31
December 2020; 15 marks
st
d) Statement of Changes in Net Assets and Equity for the year ended 31 December,
2020; 5 marks
st
e) Cash Flows Statement of the Consolidated Fund for the year to 31 December,
2020; 15 marks
f) Separate Statement of Budget Comparison with Actuals in accordance with IPSAS
24; and 15 marks
g) Notes to the financial statements. 20 marks
Total Marks: 100%

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