- 10 Marks
Question
The objective of enactments relating to public financial management, among others, is to safeguard public funds from plunder. One way to achieve this objective is by making specific provisions on the modalities for making payments from the Consolidated Fund (Article 178 of the 1992 Constitution). The law requires that all payments from the Consolidated Fund should be authorized and the payment should comply with certain general rules.
Required:
i) Identify and explain THREE ways of authorizing payments out of the consolidated fund. (6 marks)
ii) Identify FOUR statutory payments permissible by law in the public sector. (4 marks)
Answer
i) Ways of authorizing payments out of the Consolidated Fund:
- Appropriation Act: When Parliament passes an Appropriation Act, it authorizes the withdrawal of funds from the Consolidated Fund to cover expenditures outlined in the budget.
- Supplementary Estimate: A supplementary estimate approved by Parliament allows additional funds to be withdrawn when new or additional expenditures arise during the fiscal year.
- Advance of Appropriation: When a budget is not effective from the start of the fiscal year, Parliament may approve an advance of appropriation to authorize expenditure until the full budget is passed.
ii) Statutory payments permissible by law:
- Interest Payment and Debt Repayment: Payments related to the servicing and repayment of national debt.
- Pension Payments: Statutory pension payments to retired public sector employees.
- Statutory Transfers: These include transfers to the District Assembly Common Fund, Ghana Education Trust Fund, and the National Health Insurance Scheme.
- Statutory Transfers to Ghana Infrastructure Investment Fund: Payments allocated to the Ghana Infrastructure Investment Fund for development projects.
- Topic: Public sector fiscal planning and budgeting
- Series: MAY 2017
- Uploader: Joseph