Question Tag: Revenue management

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  • 4 Marks

PSAF – Nov 2016 – L2 – Q5a – Public sector fiscal planning and budgeting

Explain revenue management and identify three procedures involved.

i) Explain the term Revenue Management.
ii) Identify three procedures involved in Revenue Management. (4 marks)

i) Revenue Management is the recognition, measurement, and accounting for revenue. It also involves the management of the potential and actual revenue of an organization in such a way as to ensure that revenues due are properly collected and accounted for.ii) Procedures in the Management of Revenue:Identification and documentation of various sources of revenue available for the MDA.Provision of information to management on guidance and practices to promote the collection of such revenue.Establishment of management and accounting policies and procedures for revenue mobilization and collection.Establishment of an internal control system for revenue management.Posting of key personnel to take charge of revenue management.Establishment of roles and responsibilities of revenue personnel.Revenue should be properly receipted and promptly paid in gross into the designated bank account of MDA.

  • 5 Marks

PSAF – July 2023 – L2 – Q5b – Public sector financing initiatives

Explain the challenges that the Ghana Integrated Financial Management Information System (GIFMIS) promises to address in public financial management.

The Ghana Integrated Financial Management Information System (GIFMIS) was launched to eradicate or reduce the endemic challenges in the public financial management system. Many experts hailed it as the panacea for the developmental challenges of Ghana.

Required:
In reference to the above, explain FIVE (5) challenges that the GIFMIS promises to address in public financial management in Ghana.

  • Poor Budgeting and Budgetary Control:
    Before GIFMIS, public financial management faced issues with poor budgeting and lack of effective budgetary control, leading to overspending. GIFMIS provides a reliable budgeting framework and enhances budgetary control through real-time budget performance monitoring.
  • Weak Expenditure Control:
    Previously, expenditures on activities, programs, and projects without budgetary provision were common, leading to unbudgeted spending and increased liabilities. GIFMIS ensures that all expenditures are supported by budget commitments, thereby preventing overspending and unplanned liabilities.
  • Delay in Financial Reporting:
    Manual and unintegrated financial reporting systems led to delays in producing timely financial reports, which hampered accountability and decision-making. GIFMIS strengthens financial reporting by enabling the provision of timely and accurate financial information.
  • Low Integrity of Financial Information:
    The manual processing of financial data resulted in unreliable information. GIFMIS enhances the integrity of financial information by providing a platform that integrates various financial management processes, ensuring data accuracy and reliability.
  • Poor Cash Management:
    Managing government cash resources was problematic, with separate accounts maintained by individual entities, leading to inefficiencies. GIFMIS introduces a Treasury Single Account (TSA) system, improving cash management by consolidating government funds.
  • Weak Revenue Management:
    Issues like delayed lodgment of tax revenues collected by commercial banks caused revenue losses. GIFMIS addresses these challenges by enabling real-time revenue lodgment into the consolidated fund, reducing delays and potential losses.
  • Poor Human Resource/Payroll Management:
    The existence of ghost names on payrolls was a significant issue. GIFMIS integrates human resource data with the payroll system, ensuring that only qualified employees are paid, thereby saving government funds.
  • 8 Marks

PSAF – Nov 2017 – L2 – Q3b – Public Sector Fiscal Planning and Budgeting

Describes revenue management and control measures to prevent revenue losses in public sector organizations.

Revenue management is a challenge in many public organizations, including the Damsa District Assembly in which you are currently engaged as Finance Officer responsible for revenue management and control. There are rampant revenue losses resulting from delayed or unbanked collection, failure to assess and collect revenue, inappropriate use of value books, and poor record keeping, among others. Consequently, your Assembly has persistently failed to meet its revenue budget over the years and the Ministry of Local Government has recently cautioned the District Chief Executive (DCE) and tasked him to improve the revenue performance of the Assembly or face dismissal.

In a meeting with the DCE, he put it bluntly: “the Revenue Officer should do something about this immediately else I will fire him before I am fired. My head and your head are on the chopping board; you know it”.

Required:

As the Finance Officer responsible for revenue, describe FOUR revenue management and control measures you would put in place for the Assembly to remedy revenue losses pointed out in the case.

Revenue management and control measures to remedy revenue losses

i) Delayed or unbanked collection

  • I would ensure that all revenues are banked immediately.
  • One measure to achieve this is through an arrangement with banks to facilitate direct deposit by the payers into the bank account of the Assembly.

ii) Failure to assess and collect revenue

  • All revenue payers should be identified and levied appropriately.
  • Revenue collectors should be trained and motivated to perform their duties efficiently.
  • Electronic means should be used to effect revenue collection.

iii) Inappropriate use of value books

  • Security and custody of the value books should be ensured.
  • Ensure that only approved value books acquired from Controller and Accountant General are used.
  • The head of finance should ensure proper custody of stock of value books, and these value books should be issued out to only responsible staff. Proper records should be maintained for the issue of value books.

iv) Poor record keeping

  • A responsible officer should be appointed for record keeping over revenue. The cash receipt book or transcript should be updated regularly. Implementing approved accounting software would be an effective measure to improve the record-keeping process.

(2 marks each for every point well explained = 8 marks)

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