Question Tag: PFM Act 2016

Search 500 + past questions and counting.
Professional Bodies Filter
Program Filters
Subject Filters
More
Tags Filter
More
Check Box – Levels
Series Filter
More
Topics Filter
More
  • 10 Marks

PSAF – Nov 2018 – L2 – Q2a -Public expenditure and financial accountability framework

State and explain four ways to safeguard public financial resources under the PFM Act 2016.

The Public Financial Management (PFM) Act, 2016 (Act 921) was introduced to ensure that public funds and resources are properly safeguarded and are used economically, efficiently, effectively, and with due propriety.

Required:
State and explain FOUR (4) ways in which public financial resources can be safeguarded under the PFM Act 2016.

Ways in which public financial resources can be safeguarded under the PFM Act 2016 include:

  • Clear Definition of Powers and Responsibilities: The PFM Act clearly defines the powers and responsibilities of financial stewards, including individual office holders, ensuring that roles are explicitly assigned to central players in the financial administration of the country. This includes the responsibilities of the Minister of Finance, Chief Directors, Principal Spending Officers, and the Controller and Accountant-General, among others.
  • Micro and Fiscal Policy Principles and Strategies: The Act provides guidelines for the formulation of micro and fiscal policies, ensuring that public financial resources are managed in line with the country’s macroeconomic framework, thereby safeguarding economic stability.
  • Budget Preparation, Approval, and Management: The Act establishes strict guidelines for the preparation, approval, and management of the national budget. It ensures that budgetary allocations are in line with the government’s priorities and are used efficiently, reducing the risk of mismanagement of public funds.
  • Establishment of Funds and Debt Management: The Act establishes the Contingency Fund, Sinking Fund, and mechanisms for debt servicing and public debt management. These provisions ensure that resources are available for emergencies and that the country’s debt is managed sustainably, safeguarding financial resources from being exhausted by unforeseen events or mismanagement.
  • Establishment of Audit Committees: The Act replaces Audit Report Implementation Committees with Audit Committees, which are tasked with ensuring that financial reports are accurate and that any recommendations made by auditors are implemented. This strengthens oversight and accountability, ensuring that public resources are protected from misuse.
  • Offenses and Penalties: The Act outlines offenses and penalties for non-compliance, including surcharges and penalties for contraventions. This serves as a deterrent against the misuse of public funds, helping to safeguard financial resources.
  • It has set dates under which Public Accounts are supposed to be submitted and
    audited
  • The Act has also establish Audit Committees to replace Audit
    Reports Implementation Committees.
  • 10 Marks

PSAF – May 2018 – L2 – Q2a – The context of public financial management

Define a Covered Entity, Public Funds, and identify sources for the Sinking Fund under the PFM Act 2016.

The Public Financial Management (PFM) Act 2016, Act 921 applies to a covered entity and a public officer responsible for receiving, using, or managing public funds. The PFM Act, Act 921 provides for the creation of a sinking fund by the Minister to be used to redeem specific debt obligations of the Government.

Required:
i) What is “a Covered Entity” as defined by the PFM Act 2016, Act 921? (3 marks)

ii) What is “Public Funds” as defined by the PFM Act 2016, Act 921? (2 marks)

iii) Identify FIVE sources of money for the sinking fund. (5 marks)

i) The PFM Act 2016 defines a covered entity to mean:

  • Executive, Legislature, and Judiciary;
  • Constitutional bodies;
  • Ministries, Departments, Agencies, and local government authorities;
  • The public service, autonomous agencies;
  • Statutory bodies.

(3 marks maximum)

ii) The PFM Act, consistent with the 1992 Constitution, defines public funds as:

  • The Consolidated Fund, the Contingency Fund, and any other fund established by or under an Act of Parliament.

(2 marks maximum)

iii) Under the PFM Act, the following are the sources of money for the sinking fund:

  • Periodic contributions of specified amounts determined by the Minister as part of the annual budget.
  • Repayment inflows of money on-lent by the Ministry to covered entities, state-owned enterprises, and public corporations.
  • Moneys that accrue to the Fund from the investment of moneys of the Fund.
  • Moneys borrowed or raised from capital markets for the purpose of redemption of existing debts.
  • Moneys approved by Parliament for debt repayment under subsection (4) of section 23 of the Petroleum Revenue Management Act 2011 (Act 815).
  • Any other moneys that the Minister, with the approval of Parliament, determines to be paid into the Fund.

Take control of your business data with insight and in-depth understanding by taking this course. 

Services

Contact Info

  • +233203701923
    +233543919232
  • info@noohrabusiness.com

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope