Question Tag: Internally Generated Funds

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  • 4 Marks

PSAF – May 2019 – L2 – Q2d – Public sector fiscal planning and budgeting

Identify ways to improve Internally Generated Funds (IGF) of local governments.

d) You have recently been appointed as a District Chief Executive (DCE) of a particular district. It has come to your attention that the Internally Generated Funds (IGF) of the District Assembly are very low, and you intend to address the problem for the assembly.

Required:
Identify FOUR (4) ways in which the IGF of the assembly can be improved.
(4 marks)

Ways by which the Internally Generated Fund (IGF) of Local Governments can be improved include:

  • Recruitment of quality and competent revenue staff: Hiring skilled personnel to manage revenue collection processes effectively.
  • Outsourcing of revenue collections: Engaging competent commission collectors to enhance the efficiency of revenue collection.
  • Setting revenue targets: Establishing clear revenue targets for revenue collectors to drive performance.
  • Proper supervision: Ensuring effective supervision of revenue staff to prevent revenue leakages and ensure accountability.
  • Rotation of revenue staff: Rotating revenue staff to prevent collusion and complacency.
  • Accurate data collection: Collecting and updating accurate data to improve revenue forecasts and collection strategies.
  • Public education and sensitization: Educating the public on how revenue collected will benefit the community, thereby encouraging compliance.
  • Periodic valuation of taxable properties: Regularly valuing and revaluing taxable properties to ensure accurate property rate collections.
  • Motivation of revenue staff: Providing incentives, including periodic awards, to motivate revenue staff and increase productivity.
  • Introduction of electronic payment systems: Implementing electronic payment systems to make revenue collection more efficient and reduce leakages.
  • 6 Marks

PSAF – May 2019 – L2 – Q2a – Public Procurement

Analyze internal control measures for public assets, outline payment procedures for capital expenditure, explain procurement offenses, and suggest ways to improve IGF in local governments.

a) The backward development in the public sector has been attributed to weaknesses in the Internal Control Systems in the public sector. Proper systems for the effective control over the custody and management of assets in public institutions are critical for Public Sector Accounting.

Required:
Analyze FOUR (4) key control measures required to be put in place to ensure effective management of Public Assets.
(6 marks)

The following controls are necessary for effective management of public assets:

Fixed assets:
i) Proper use of the fixed assets: Ensure that systems exist to prevent wrongful use of public assets by both authorized and unauthorized persons. For example, institute tracking systems over vehicles and other assets. Physical restrictions such as locks and security systems are also important to safeguard the use of assets.

ii) Establishing a Fixed Asset Coordinating Unit: The principal spending officer should establish a coordinating unit within the entity to take responsibility for fixed asset management.

iii) Keep proper records on fixed assets: The entity should maintain and update a fixed asset register to ensure accurate records for effective checks and decision-making.

Investment of Excess Moneys:
i) Establish an investment policy: The entity should establish an investment policy in accordance with the PFM Act and regulations to ensure lawful and prudent investment activities.

ii) Accurate accounting and reporting: Ensure that all investments made from public monies are accurately accounted for and reported.

Advances and Loans:
i) Establish appropriate schemes: Implement appropriate advance and loan schemes with the approval of the Minister of Finance and Parliament, where necessary.

ii) Institute effective recovery systems: Ensure effective recovery systems for advances and loans made under the scheme.

iii) Proper accounting and reporting: Follow proper accounting and reporting practices for advances and loans.

Cash management:
i) Cash planning and forecasting: Implement an effective cash planning and forecasting system to ensure efficient management of cash resources.

ii) Custody of cash resources: Ensure that all cash is deposited gross in designated bank accounts.

iii) Approval of bank accounts: Open bank accounts under the approval of the Controller and Accountant General as part of the Treasury Single Account system.

iv) Bank reconciliation: Regularly perform bank reconciliations to ensure accurate records of cash transactions.

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