Development in FA

BEFORE INDEPENDENCE

• Known as Accountant General Department/ Jabatan Akauntant Negara Malaysia

(JANM).
• responsibility: to maintain and prepare the accounts of Federal Government.
• Mission: is to strive for improving public sector accountability by providing
excellent accounting services and management information to the satisfaction of
various users, thereby, achieving the national objectives.
• Objectives :
- to prepare quality public accounts in accordance with legal and professional
requirements
- to provide quality accounting consultancy, and advisory services to the
satisfaction of our clients,
- to manage human resource on accounting for public sector agencies,
- to regulate and enforce accounting and - management related matters as
prescribed under the relevant regulations
- to provide quality and timely accounting and financial information.
 After independence
• Ministry of Finance
• Vision : Treasury is to make the Ministry of Finance as an excellent government agency in
economic financial management towards realizing Malaysia as a developed country and
competitive globally.
• Mission: are to strengthen the competitiveness and resilience of the national economy
through effective economic and financial policies and to ensure the economic growth
remains strong and stable by implementing an efficient management.
• Roles and responsibilities:
- to analyze the country’s and international economic situation and then to make an
economic forecast for planning purposes,
- to raise revenue through tax and loan from internal and external sources to be utilized by
the Federal Government,
- to allocate sources of finance efficiently to the government agencies through budget
process,
- to determine an efficient system of acquiring, utilizing, administering and disposal of assets,
- to provide services to government agencies and State Government through central
contract, housing loan and other loan
- to supervise insurance industry in Malaysia.
 Budgeting
Definition :
• Statement of revenue and expenditure for the future
which is used as planning and management tools of national
economic sources to fulfil the people needs.

Objective Budget
• Plan revenue and expenditure of government in the future.
• Allocate revenue between department according to policy decisions and
needs.
• As working guide to the administration and control of finances.

Roles of Budgeting
• Fiscal policy tool - Integrated South-Bandar Tasik Selatan Transport
Terminal (TBS-BTS).
• Management Tool - Islam Hadari

Component Public Budget

Revenue – Federal, State and Local government Revenues
Expenditure – Operating expenditure (Charged & Supply)
Short term not less than 5 year
- Development Expenditure ( long term)
 Tax Administration
Definition:
• Compulsory charged imposed by the state or public authority in
respect of which no specific services to the individual is rendered
in return.
• Taxes are levied by government primarily as a means of raising revenue
to finance the operations of government.

Types of tax
Direct tax - Form of tax charged directly to the taxpayer of persons, as
citizens and consumers, and organizations such as companies
and corporations based on revenues, profits and so on.
- Example: Income tax, real property gains tax, stamp duty,
corporate tax, petroleum tax.

Indirect Tax - Form of tax charged indirectly to any person or user when a
person is purchasing or using goods and services taxed.
- Examples: sales tax, custom duties, service tax, excise duties,
export and import duties.
 AUDIT
- auditing as a systematic process of objectively
obtaining and evaluating evidence regarding
assertions about economic actions and events Roles of auditing
to ascertain the degree of correspondence
 Financial accountability
between the assertions and the established
criteria and communicating the results to  Managerial accountability
interested users  Program accountability
Source: (the report of the Committee on Basic
Auditing Concept of the American Accounting Types of audit
Association)  Internal
There are several purposes of auditing which are:  external
 To determine the accuracy
 To identify the degree of compliance
 To identify the extent of effectiveness and
efficiency
 To identify financial position and condition
 Treasury (MoF)
• government departments
Several functions that ministry of
vision is to be the premier agency finance have are:-
responsible for the management of
• To formulate and implement fiscal
the nation’s finance and economy
and monetary policies in order to
Mission of ministry of finance is to ensure effective and efficient
manage the nation’s finance and distributions and management of
economy effectively, transparently financial resources
and efficiently to achieve the
• To monitor that minister of finance
nation’s development goals.
incorporated companies are manage
Motto is to driving the economy effectively
through excellent financial policies
• To monitor the financial
Objectives:- management of ministries,
• Ensure sustained and continuous government departments and
economic growth statutory bodies
• Ensure effective and prudent
financial management
• Improve quality of life and well
being of society
 Public accounting
Definition
• In the context of public sector, accounting is more of the process of
studying the accounting practices by those public sector organizations in
ensuring accountability in providing services to the public at large.
• 3 major concepts;
-Maintenance of books and records
- Compliance with rules and regulations
- Preparation of reports and statements
Principles of PA
 legality
 Keeping / maintenance
 Accountability
 Stewardship
 Types of PA
Accrual accounting
- revenues are recognized in the period, which they are earned and
expenses are recognized in the period in which they are incurred in
earning the revenue.
Cash accounting
- refers to the transaction flow in and out of money valued on the
cash received or paid. This does not take into
account any benefit from the demand or payment of cash acquired.
Modified cash accounting
- still using the basic elements of cash as the main element
-The government has modified it where the accounting year has
been extended to 13 months.

Accounting system structure

-Micro Accounting System (MAS)
-Standard Accounting System for Government Agencies (SAGA)
 Public procurement
Definition
• Is the process by which
government departments or
agencies purchase goods and
services from the private sector
• In Malaysia, the ministry of
finance (MOF) was responsible
for all the procurement
procedures, both internally and
outside of Malaysia
Objectives
• To promote the use and
development of local supplier,
• To reduce the problems and
difficulties in supply through the
strengthening of relations between
public agencies and major supplies
• Increase the effectiveness and skills
of procurement function and
reducing costs related to the
management,
• To reduce and control the costs of
purchasing goods and services,
• To increase the value for money for
every purchase.
Types of Procurement
• Casual purchase
- For the cost of not more
than RM 10,000 a year or for
a particular item.
- Involved the purchase of goods and
services of up to a value of rm50, 000
• Quotation
- Either the supply or service of
value not exceeding
RM 50, 000 should obtain quotations  performance
from at least five suppliers who are
registered with the ministry of
finance in a related field.
• Tender
- Specifically for all public
procurements which had a value
above RM200, 000
• Requisition
- Public agency to offer minor
works and repair that does
not change the original structure or
physical form of buildings such as
public agencies.
Process procurement
• Preparing and deciding on what
to buy
• Determining the quantity and
costing
• Selecting the supplier
• Assessing the supplier’s past
• Preparing the contract
agreement
• Monitoring the services or
completion as per agreement
• Ensuring that the goods are
received on time, in good
condition and meets the
standard of quality as stated in
the contract
 Legal framework for public financial admin

 FEDERAL CONSTITUTION
- PART VII (ARTICLE 96 – 112)

 FINANCIAL PROCEDURES ACT 1957

- PART II (SECTION 4)
- PART III (SECTION 6,15,16,17,18)

 AUDIT ACT 1957

- (SECTION 5)