CHAPTER ONE INTRODUCTION Background of the study That there is a serious problem of lacking accountability and transparency in the

public service is not only well known but fairly documented. General and specific observations within the service and comments from international bodies like World Bank (WB), Transparency International (TI), all seem to suggest that the problem is not only real but also enduring.

A considerable body of literature has developed, particularly examining the nature of governmental accounting and financial reporting. Research in this category typically explains the practical application of accounting standards in the governmental settings, discusses currently unresolved governmental accounting issues, and or questions current practices in governmental accounting and financial reporting (Aruwa, 2002; Giroux and Apostolou, 1991; Granof and Mayper, 1991; Hay and Antonio, 1990; Raman and Wilson, 1990; Ingram, Raman, and Wilson, 1989; Lewis, Patton, and Green, 1988; and Ingram, Raman, and Wilson, 1987). Some of the major issues identified include: a perceived gap in the information content of government financial report and information need of users and lack of external accountability (Aruwa, 2002), the need to integrate budgeting, accounting and financial reporting and that a strong and enduring relationship exists between government accounting and budgeting (Chan, 1992), and the need to reform budgeting processes in view of large budget variances (Granof and Mayper, 1991). Chan (1992) rightly captured the state of the governmental accounting system. 1

Problem Statement “The present accounting system…is not capable of ensuring that the goods and services procured by governments are necessary; that expenditures are reasonable, that adequate care and safeguards are exercised over government resources, that the system avoids waste and use of unproductive procedures, and that revenues are adequately mobilised and collected” Takie Yaoboi( 2008)

The Public Accounts Committee (PAC, 1996) also put forward their experience “…it transpired frequently in evidence given to the Public Accounts Committee that queries raised at audit are often ignored by the ministry concerned. However, ministries were not always aware that attending to matters raised during audit could help improve their procedures”

The government financial reporting function seems to have been subjected to the greatest amount of criticism in recent years with regard to its information content and its apparent inability to meet the assumed need of a variety of user-groups. In addition, individuals and institutions outside the government have become virtually interested in the financial activities and status of governments. Example of such users includes creditors, citizen groups (i.e. taxpayers, service recipients or voters), business enterprises and others, yet the Government Financial Reports remain the singular picture of the resources entrusted, how the resources are employed during a fiscal year, and in what form the resources are now held.


However, there are overwhelming calls on government to shift emphasis from traditional stewardship financial reporting to the presentation of more informative Government Financial Statements.

Gary (2008) observes that various persons who have written on the subject of financial reporting in the Federal Government have termed it ‘antiquated, fragmented, incomplete, unreliable and lacking timeliness…’ Gary further submits that to a person schooled in government accounting, the Federal Government Financial reporting is disgraceful. All of these epithets may have merit, especially in respect of the statutory background of government accounting, the adequacy of the information content and the extent to which it satisfies public accountability criteria.

Morey (1926) acknowledged that many errors of principle will be committed if there are no material modification to the public accounts, in adopting private sector accounting procedures. In addition, if relevant information contained in Government Financial Statements could provide financial information, the timing of publication can impair its reliability, completeness, and usefulness and so adversely affect users of Published Government Financial Statements (Oshisami, 1994).

These observations and opinions typified above have several implications. A foremost implication is that the existing accounting, financial, administrative, legal and social ingredients have not been effective in promoting the desired culture of accountability and transparency in the public service. As all those elements remain in place and for the fact


that any measure, aimed at improving accountability has to build on them, this research is intended to examine them more closely with a view to providing further insights into their current status and prospects for remedial action

Research questions • Does the financial reporting apparatus of government meet the minimum accountability criteria? • What factors mitigate or contribute to the financial reporting system of government accountability? • How can government financial reporting system be improved to enhance it role in public accountability?

Objectives of the study Broad objectives The study is aimed at examining Fiscal accountability, Managerial accountability, Programme accountability, and Individual accountability within the context of the role of government financial reporting in public accountability in Ghana.

Specific objectives In practical essence, the research shall attempt to achieve the following objectives: • To ascertain if the financial reporting apparatus of Government meets the minimum accountability criteria; 4

To identify the factors that contribute to or mitigate the financial reporting system of Governmental accountability;

To suggest improvements on Government Financial reporting system that could enhance its role in public accountability

Scope and Limitation of the study The study is focused on examining Fiscal accountability, Managerial accountability, Programme accountability, and Individual accountability within the context of the role of government financial reporting in public accountability in Ghana. The study will focus on the Controller and Accountant-General’s Department and the audit service as these are the two main institution the entire government reporting and accountability rest on. It is envisaged that there may be some issues of non- cooporation from staff with respect to questionnaire answering. Secondly, direct application of would-be findings to non-public sector institutions will be misplaced because this will be a case study.

Significance of the study The study will help the researcher to understand Fiscal accountability, Managerial accountability, Programme accountability, and Individual accountability within the context of the role of government financial reporting in public accountability in Ghana. The research will provide the basis for the organization to review the Fiscal accountability, Managerial accountability, Programme accountability, and 5

statement of the problem. Organization of the study The study will be organized in five chapters.Individual accountability within the context of the role of government financial reporting in public accountability in Ghana. The research will throw light on public sector accountability and the theories backing it. research methodology. etc. The third chapter will cover research methodology which will cover areas such as research design. Chapter one will be the introduction and include background of the study. sample and sampling techniques. instruments. population. conclusion and recommendations. and data collection procedure and data analysis. research objectives. research questions. The last chapter will cover summary. The research will become a corner stone on which further researchers in the field of public sector finance will be built. Chapter four will cover data presentation and analysis of findings. limitation of the study. 6 . Chapter two will cover literature review.

CHAPTER TWO LITERATURE REVIEW Introduction The following topics would be critically examined as basis for the study: Legal framework of Government Accounting. government accounting and financial reporting. Forms and Content of accountability and summary of Literature. Financial Administration Regulation (FAR). financial regulations and financial instructions provide for the control and management of public finances at the federal level and for the audit of the accounts of individual states. the Audit Service Act. and the Annual Appropriation and Supplementary Appropriation Acts. the Constitution covers the following key areas in government accounting: The operation of 7 . Government Financial Statements and Uses. Objectives of Government Accounting. and financial regulations and states financial instructions are founded. treasury circulars. the Financial Administration Act(FAA). 2003.2000. 1992.According to Oshisami (1992). The financial memoranda regulate the local governments’ accounting. Legal Framework of Government accounting The public sector accounting in Ghana is rooted in a number of legal instruments. respectively. which sets the general framework for the total financial management.2006. However. The legal instruments at the national level include: The Constitution of Ghana. Anyafo (1994) notes that these legal instruments constitute the statutory bed rock upon which the government accounting manuals.

and the appropriation procedure. The Audit Service Act of 2000 sets out the duties of the Auditor-General for the nation. The Financial Administration Act (FAA). In addition the Act regulates the accounting system.funds. 1994). The Audit Service Act of 2000 provides for the Audit and accountability for the public funds of government in Ghana. Perhaps. The Audited financial statements are thereafter presented to the public accounts committees of the Parliament . to the Auditor-General for the nation the accounts showing the financial position of the republic of Ghana on the last day of such financial year. the most important aspect of the Act is that it regulates the accounting format and basis of accounting for the preparation of government accounts. the external controls for operating the accounting system in terms of audit and investigations. The 8 . not only for regulating financial and accounting matters. 2003 governs the management and operation of government funds. within a period of seven months after the close of each financial year. Appropriation Acts are enacted annually for the purpose. the books of accounts to be maintained and the procedures to be followed in the preparation of accounts and government financial statements (Anyafo.2003 and the Audit Service Act. but principally to provide for the issue from the Consolidated Fund such sums of money as demanded justifiable for the recurrent expenditure including contribution to the Oil Fund for capital projects for the service of the nation. The constitution. 2000 mandate the Accountant-General of the nation to sign and present. the Financial Administration Act.

They contend that Cash basis of accounting is adjudged useful for short term fiscal control whereas Accrual basis of accounting is the superior method for the economic resources of any organization. 1981) of USA. all funds of a government must be classified into one of 9 . The Financial administration Act. and thus enhances their relevance. NCGA recommends use of the accrual basis to the fullest extent practicable in the Government environment. it results in accounting measurements based on the substance of transactions and events rather than merely when cash is received and disbursed. The legal instruments of Government accounting are not without criticisms in respect of certain stipulations. have been criticized variously by Ngwu (1999). Oshisami (1992). completeness and comparability. and National Council on Governmental Accounting (NCGA. They posit that the present general application of cash basis of accounting may not entirely permit the Government financial reports to achieve its objectives. In essence. the report of research conducted by Likireman and Vass (1984) on government expenditure recommended continued adoption of cash basis of accounting by government. However. timeliness. neutrality.Constitution authorizes the President to make withdrawals from the Consolidated Fund of the sum necessary to meet the expenditure and the appropriation of those sums for the purpose specified therein. Chan (1992). The mandatory use of cash basis accounting as specifically mandated by Finance (Control and Management) Act. Gary (1992).2003 also requires the preparation of government accounts on fund basis. This provision in its present state makes the accrual basis of accounting illegal.

1994). or expendable and nonexpendable funds.three fund categories: Governmental. The category of a fund determines the type of accounting and financial reporting that is accorded the activities conducted. legal and contractual compliance. Chan (2006) opines that this practice. assets owned or held. Objectives of Government Accounting Ghanaian system of government accounting has its roots from the British colonialists who were confronted with accounting and reporting problems that required resolution without the assistance of professional accounting standard-setting organizations (Anyafo. considering the voluminous annual report resulting from this practice. was collected in amounts that at least equalled the cash paid for those purposes and whether laws restricting the collection and expenditure of public funds were followed by those who administered the programme. Holder (2002) submits that the primary users of such reports were the administrators and legislative representatives of government that were guided by that information in performing their duties. proprietary. it is not ‘user-friendly’. A question arose as to whether each fund should also constitute a reporting entity. Holder (1992) 10 . The primary focus of financial accounting and reporting in those early days was determining whether cash. produced comprehensive reports that are not comprehensible. usually generated from general tax levies support current operating activities. and liabilities incurred by that particular fund (Tackie-Yaoboi. however justifiable on grounds of stewardship. and fiduciary. 2008). Critics further argue that reporting by fund creates a fragmentary and incomprehensible picture of government finances.

the accounts showing fully the financial position as at the last day of each financial year of the Consolidated Revenue Fund and all other Government funds. Similarly. Tackie-Yaoboi (2008) states the objectives of government accounting as: • To ensure that a full account is made to the legislature on management of public finances and that its financial control as prescribed by the operated in accordance with the provisions of the Constitution of the Republic of Ghana. use of funds requires stewardship reporting. the purpose of government accounting is to provide information about the economic and financial affairs of government agencies. However. Glyn (1987) reports that in Australia.opines that little thought was originally given to the usefulness of the information content of Government Financial Statements for external accountability. In essence. institutions and units. which preclude external reporting by the government. In the light of Financial Administration Act No. the report of the committee on Public Sector Accounting stated the primary objectives of accounting in the public sector 11 . 654 2003. and • To enable the Accountant-General to present to the Auditor-General for audit purposes. It is tailored to emphasize the use of funds provided to accomplish objectives designed in the best interest of tax payers.

balances and requirements of short-term financial resources of the government unit. • To provide financial information useful for monitoring performance under terms of legal. After considering the governmental environment and users needs. contractual and judicial requirements. • To provide information useful for determining and predicting the economic condition of the government unit and changes therein. Glyn (1987) relates these objectives to include: • To provide information useful for determining and predicting the flows. and 12 . Governmental Accounting Standard Board (GASB) of USA (1987) proposed the following objectives: • Financial reporting should assist in fulfilling government’s duty to be publicly accountable and should enable users to assess that accountability. lacking in the legal requirement of financial reporting in the Ghanaian context is the external reporting by government. Comparatively. • Financial reporting should assist users in evaluating the operating results of the government entity for the year. and • To provide information useful for evaluating managerial and organizational performances. • To provide financial information useful for planning and budgeting and allocation of resources on the achievement of operational objectives.organisations as provision of information necessary for management controls and public accountability.

planning programming budgeting system (PPBS) and the accrual basis of accounting need to be firmly implemented for the accounts to provide financial data useful for economic analysis and reclassification of government transactions to assist in development of national accounts. The importance of using Published Government Financial statements as a vehicle for public accountability through meeting external reporting requirements has been steadily increasing.• Financial reporting should assist users in assessing the level of services that can be provided by the government entity and its ability to meet its obligations as they become due. programmeplanning and appraisal of performance in physical and financial terms. 13 . 1999): Cash accounting seems to constrain the realization of Accounting system being capable of serving the basic financial information needs of development. yet the financial reporting requirement have not changed from what were the practices in the colonial period. It is however observed that what is published by the Ghanaian government varies greatly in the relative emphasis given to each of these objectives and functions. A comparison of Ghanaian Governmental Accounting system and the United Nations’ model for Government Accounting further highlights the areas of discrepancies (Ngwu.

These financial statements include. Although the government supplies additional information. 1994). and the inadequacies inherent in the application of cash basis of accounting without supplementary information. In the corporate report (1975) published in the United Kingdom.” 14 .Government Financial Statements and Uses The five Audited Financial Statements made available by the Auditor-General of Ghana represents the authentic and legal financial position of government at any time. under operational criteria: the balance sheet. 1992): finalisation of accounts for publication. We consider that such rights arise from the public accountability of the entity whether or not supported by legally enforceable powers to demand information. the users of corporate reports are defined as: “Having a reasonable right to information concerning the reporting entity. and is generally considered short of full disclosure (Anyafo. All of the financial data in these publications contain up-to-date figures. statement of operations. The five statements conform to the basic minimum which should be prepared for government. However. It is held also that a presentation of financial statements for the year without budgetary comparisons is first of all not in conformity with standard accounting principles and practice. the presentation format. Statement of Recurrent Expenditure. Statement of Assets and Liabilities. Consolidated Revenue Fund (CRF). the five statements suffer from some technical deficiencies in three areas (Oshisami. Statements of Revenue. but do not remove all the inadequacies. and the Development Fund. statement of sources and operation of funds.

1981) of USA sponsored research paper identified many internal and external groups (and uses) as potential users. Legislative and oversight officials. 1978) and the American Institute of Certified Public Accountants (AICPA. and as taxpayers. ability or resources to obtain specific information. as voters. In particular. only material differences need to be disclosed in the notes. Ngwu (1998) identified internal users (and uses) of Government financial reports as Government. and Trade unions. and other external users. The Governmental Accounting Standard Board (GASB. Public official. 1974) paper group on the objectives of financial statement. following the approach similar to that of Financial Accounting Standard Board (FASB. the respondents (users) were interested in information regarding events that may materially affect the statements after balance sheet date: contingent liabilities and instances of non-compliance with laws. focused on external users who have limited authority. 15 . Investors and Creditors. 1987) of USA however.The National Council on Governmental Accounting (NCGA. Hay and Antonio (1990) observe that interviewees indicated that notes disclosures on government financial reports should be concise and contain essential information. Another disclosure that users would like to see is material differences between the original budget and the final budget (due to supplementary appropriations). Chan (1992) equally identifies external users of Government financial statements as: Citizens group: as service recipients. regulations and agreement. In addition. Users recommended that for each major fund. users’ states that if budget and GAAP reporting differences are not reconciled on the face of the statements.

The form and content of accountability is further enhanced by procedural influences such as timeliness (or report authentication and communication) as well as the process (details of form and content). Accountability and transparency are inseparable. 16 . accountability is enhanced by the extent to which the duty to answer is discharged. Oral representation or verbal account of actions represent the minimum and weakest form in the discharge of responsibility for accountability. and complete legitimacy of expenditure. and accountability is meaningless if it does not spring from transparent medium. 1996). Fiscal accountability is concerned with adherence to applicable laws and regulations. or other category. all those who have any role to play at any point in the organizational process carry the responsibility to account for actions undertaken (United Nations Development Programme. Programme accountability and Individual accountability (UNDP. Furthermore. Four important criteria are regarded as basic to public service accountability. 1996). and additional disclosures regarding assets and liabilities are necessary Forms and Content of Accountability By the nature of accountability. The mutually reinforcing transparency is worthless if it does not match appropriate accountability for use of discretion. UNDP. it becomes strengthened and even stronger if account is documented in writing and backed by supporting documents to evidence claims in the account. consistency with appropriate accounting principles and traditions.a five year history be provided regarding each major revenue source and a five-year expenditure history for each major fund by function. accuracy and fairness of reports. These include Fiscal accountability. program. Managerial accountability.

probity and integrity. trust. and the need for economy. The extent to which each element of accountability has to be strengthened to provide necessary and sufficient inducement for strong accountability should form the primary concern of such improvement. All have to go concurrently. It is held that individual accountability enhances overall transparency (UNDP. Individual accountability is related to the personal qualities and conduct demonstrated by accountable officers. the maintenance of adequate records and books of account. The capacity for efficient service delivery also depends on the honesty and integrity of the public service. The existence of procedures and regulations. CHAPTER THREE 17 . The level of accountability and transparency in the public service has serious implications for economic and social development. 1996). honesty. prompt generation of credible reports. the compliance with every pertinent provision or personal quality of moral and financial rectitude cannot singularly ensure accountability. it involves such attributes as commitment. and effectiveness of operations. Programme accountability is broadly concerned with overall evaluation of programme impact and the extent to which intended goals and aspirations are attained.Managerial accountability deals with the generation of essential information for decision making. It is also useful to note that the foregoing criteria serve to define the dimensions of accountability. efficiency.

Sample size A sample size of 124 employees at Controller and Accountant General’s Department and the Audit service of Ghana was selected for the study. Population The target population for the study was the staff of Controller and Accountant General’s Department and Audit service of Ghana. Here the population is divided into various group using a sampling interval. Sampling technique A systematic random sampling of the population was taken only as a representatiive of the aggregation of the elements that comprise the research. presenting analyzing and sourcing of data for the study.RESEARCH METHODOLOGY Introduction This chapter looks at the methodology employed in collecting. 18 .

The study made use of questionnaire. while secondary data were sourced through the use of books from the library. Primary data were sourced through the use of questionnaires evaluated to the staff of controller and accountant general department and the audit service. from Controller and Accountant General’s Department and Audit Service. it was also to investigate to find solutions to the research objectives. coded and classified in other to ensure that errors and mistakes are minimized. Research design This aspect indicated and explained how specific objectives were to be achieved. The focus of quality control is to ensure that the process of data collection and data collected are error-free or error is minimized to the barest minimum. articles from journal. Both qualitative and quantitative techniques were used. The interest of the research was to gather information from various categories of workers.statistical manner. grouped. and internet sources. Quantitative techniques like statistical tools and the use of figures to give pictorial representation of findings and qualitative techniques are use to describe items or objects in a non.Sources of data Both primary and secondary data were used in this study. Quality control Data collected from the study were handled with care. a scale used to measure perception of respondents about government accountability. This means that data collected from the study were 19 . Follow-up interviews were conducted to clarify aspects of the responses to be provided.

we encountered certain difficulties which are worth documentary. The researchers were constrained by time and financial resources and could not therefore apply other methods of research aside questionnaire.handled with care. and averages to understand the relationships between responses given by respondents. standard means. Type of statistical test The study tested for the standard deviations. Descriptive statistics were used to compare the bio data characteristics of the respondents that participated in the study. Data presentation It involved the use of descriptive statistics in the form of frequency tables.In collecting the data for interpretation and analysis. The researchers made use of descriptive statistics in the form of frequency distribution tables and diagrams. Limitation of the methodology Because of the size of the sampling size the result of the study cannot be generalized. Questionnaires also required careful design to ensure that key issues are included. journals to the internet. 20 . grouped. Data presentation were presented by the procedures and the manner in which data collected were arranged and presented in a meaningful manner for easy understanding. Data analysis Data were analyzed using statistical software (mainly SPSS Software). coded and classified in a manner that will ensure errors and mistakes are minimized.

Poor response to the question could lead to inadequate information for valid data analysis.whilst avoiding ambiguous or confusing questions. CHAPTER FOUR 21 .

the financial Administration Regulation 2004 (LI. Legal framework The controller and Accountant-General’s Department otherwise known as the Accountant Class was establish under the Civil Service Act. during the pre-independence era of the then Gold Coast and was referred to as the ‘Treasury’. 1802) provide the legal framework that governs the operation and the function of the Controller and Accountant-General. This necessitated a change of name to Controller and Accountant-General. the role and responsibilities of the Accountant –General was clearly defined to include the responsibilities of exercising efficient and effective financial control in the budget execution process.DATA PRESENTATION AND ANALYSIS OF FINDINGS Introduction This chapter looks at how data collected were analyzed and presented in a meaningful manner for easy understanding. Duties and Functions 22 . 1960 (CA. This name was maintained until 1937 when it was re-named the Accountant General’s Department because of its expanded roles. The 1992 Constitution. In 1967.5). Overview of Controller and Accountant General’s Department Evolution of CAGD The controller and Accountant General’s Department as it exist today was established in 1885.

• Have access at all reasonable times to all files. • • Approve all departmental accounting instruction. is the chief advisor to the Minister of Finance and Economic Planning and the Government on accountancy matters. • Receive from heads of public Services such information. Make disbursements on behalf of Government (include the payment of monthly salaries to the government employees and pension gratuity and monthly pension 23 . render and publish statement of Public Accounts on the Consolidated fund of Ghana.The Controller and Accountant General of the Republic of Ghana. documents and other records relating to the accounts of every Government department. in his capacity as the chief Accountant officer of the Government. reports and explanations on all accounting matters necessary for the proper performance of his function. • Station in all Government departments. He is also empowered to: • Keep. • • • Receive all Public and Trust monies payable into the consolidated fund. prepare. Promote the development of efficient accounting system within all Government departments. Provide secure custody of Public and Trust monies. his staff to enable him to more efficiently carry out his statutory and other functions.

such account with the Bank of Ghana and its agents for the deposit of Public and Trust monies. using the most appropriate technology. 24 . Core Values The core values upon which all their activities are based are: • Putting Customers first. as well as release funds to execute government projects and developments throughout the country). well-motivated and dedicated staff. Vision Their vision is that of the public service with positive culture. skilled. • Establish on behalf of government. Mission Statement They exist to provide public financial management services to the Government and the general public through efficient. constantly seeking ways to improve the delivery of financial management service to the government and the general public. • Be solely responsible for the opening of the accounts for any government department.payment to those on retirement. Meeting the needs and aspiration of Government and the citizenry. client-focused and result oriented.

through continuous improvement and innovation they are able to improve and increase client satisfaction. Audit Service is therefore the monitoring and accountability organ of the state. They aspire to act with honesty.• Serving The Whole Country. • Continuous Improvement and Innovation. • Valuing people. 25 . and the Supreme Audit Institution (SAI) of Ghana. Public Corporations and Organizations established by an Act of Parliament and report the findings to Parliament. Municipal and District Assemblies. The Service is headed by the Auditor General who is mandated to audit the public accounts of Ghana and all public offices including Metropolitan. Overview of Audit Service 0f Ghana Audit Service of Ghana is a constitutional body under the direction of a seven (7) member governing board . They aim to serve the diverse interest of their clients • Acting With Integrity. transparency in the delivery of their service. openness. They value people by creating a culture that celebrates excellent service.

The President in consultation with the Council of State appoints the chairman and four other members of the Board. It was headed by a Director. ensure accountability and transparency in the Public Sector and Article 188 of the 1992 Constitution reaffirms this position. On 22nd August 1969. The 1992 Constitution(Article 187. The Auditor-General and the head of Civil Service or his representative are automatic members of the Governing Board.The 1969 Constitution made it an oversight body to promote good governance. (Act 584) reaffirms provisions made in the 1969 Constitution. In the 1950s. 26 . This was to increase the degree of independence of the Service. the constitution of the 2nd Republic converted the department into the Audit Service headed by an Auditor-General. Thus. 189) and the Audit Service Act 2000. Audit Service is the only institution mandated by the Constitution to monitor the use and management of all public funds and report to Parliament. Governing body A seven-member body called Audit Service Board governs the Audit Service. 188. Establishment Audit Service was established in 1910 by the colonial government and was called the Audit Department. the name was changed to AuditorGeneral's Department.

administrative and operational independence of the Audit Service. accountability and probity in the public financial management system of Ghana by auditing to recognized international auditing standards. and cost effective auditing services. underpin the Audit Service's vision and Mission statements • To implement the provisions in the 1992 Constitution and the Audit Service Act 2000 (Act 584) and the Audit Service regulations (constitutional instrument number CI 56) towards the financial. the management of public resources and reporting to Parliament. • To introduce and implement human resource policies and practices that promote the recruitment. delivering professional. Vision The vision of Audit Service is to be one of the leading Supreme Audit Institutions in the world. Strategic Objectives The seven strategic objectives listed below. career development.Mission Statement The Audit Service exists to promote good governance in the areas of transparency. motivation. excellent. empowerment. advancement and retention of high professional calibre staff. training. 27 .

28 . other professional bodies.• To promote increased accountability. Parliament and the accountability and good governance agencies. Consequently. • To improve and sustain communication and cooperation between the Audit Service and its clients. The respondents were from Office of the Controller and Accountant-General Department (CAGD) and Auditor-General of the republic of Ghana. monitoring and reporting policies and procedures to promote cost effective and efficient delivery of auditing services. we sought to know how much consideration is given by the current financial reporting system to the four forms of accountability and we asked respondents to make suggestion to improving the system. • To increase audit coverage and to produce regular and timely audit reports on all areas mandated by the Constitution and the Audit Service Act and promptly make such reports accessible to interested parties and stakeholders. Description of the subject 110 responses were received from 124 questionnaires distributed. accounting for a response rate of 89 percent. facilities and logistical support needs to ensure optimal performance by all staff of the Service. 14 out of 124 questionnaire were not responded to and completed. • To provide the enabling environment. probity and transparency in the management and utilization of public resources by applying modern and emerging auditing techniques. • To establish and operate quality control standards and performance assessment.

2 and 1 is 15 which when divided by 5 (number of response categories) yields 3. male (55) and female (55).0 X 15) Demographic Data Institution and Gender of Respondents Table 4. The sum of weights 5.0 was determined along the following logic.3.Data Analysis The procedures employed for data analysis were based on responses from the likert-scale measures. and use of tables for data presentation. The cut-off mean of 45.0 (3.1 Institution and Gender of Respondents Institution CAGD AUDIT SERVICE Total Male 35 20 55 Female 30 25 55 Total 65 45 110 Source: Field data May.2012 The result from the study shows that questionnaires were evenly distributed among the sexes.4. Since there are 15-items. CAGD has (65) respondents representing 59. the intern of institution that they represent. the mean will be 45. However. 29 .9%.1% of the respondent while Audit service (45) respondents representing 40. The analysis tools used include mean.0.

3%).3% 29.2012 The study reveals that respondents between the ages of 33-39( 29.18-25 representing (11.2 Age group of Respondents Age 18-25 26-32 33-39 40-45 45-above Total Number 13 30 32 25 10 110 Percentage 11.8% 27.40-45 representing (22.1% 100% Source: Fi Source: Field data May.7% 9.Age group of Respondents Table 4.1% 22. They were closely followed by respondents within the ages of 26-32 (27.I%) Section of Operation of Respondents Table 4.3 Section of Operation of Respondents 30 .8%) and finally 46 and above representing (9.7%).1%) dominated the study.

1% 13.1%.4 Job Tenure of Respondents Number of years worked Number 1 2 3 4 5 6 and above 10 15 35 20 5 25 31 Percentage 9.2% 4.7% .Section of operation Public Accounts Audit and Investigation GIFMIS Finance Audit Information Technology Audit MIS Totals Number 47 15 13 12 13 10 110 Percentage 42.8 9.6% 11.1% 100% Source: Field data May.2012 The study reveals that the public account department dominated the study with 47responses representing 42.7% 13.8% 10. Job Tenure of Respondents Table 4.6% 31.7%.8% 18.6% 22.9% 11. while respondents from Management Information System (MIS) show the minimum of all responses representing 9.

2012 The research points to the fact that people with 3years working experience at their respective section dominated the study representing 31. Total Source: Field data May .5 Educational Level of Respondents Level of education Masters Professionals University/polytechnic Senior High/Technical Junior High/Middle sch.2% 40.2012 20 45 45 110 Number Percentage 18. Educational Level of Respondents Table 4.9% 40.Total 110 100% Source: Field data May . The following scores were reported in respect of fiscal. programme. managerial. and individual accountability: 32 .9% 100% The research indicates that there are equal percentages of respondents between persons with professional and that of university and polytechnics qualification.8%.

the combined mean score of 58.4 61.7 43. The common place knowledge that public servants can always produce receipts and supporting documents even where in fact there is little or nothing on ground is a clear testimony to the low mean score of 43.6 40.75 was indicated by the respondents in respect of the fiscal accountability in the governmental system and it gave an indication that respondents believed there is a fair amount of fiscal accountability in governmental financial reporting.6 Fiscal Accountability Fiscal Accountability: Adherence to applicable regulations Consistency with good accounting principles Accuracy and fairness of reports Reality and legitimacy of transactions Combined Mean Score Source: Field data May.Fiscal Accountability Table 4.6 43.75 Managerial Accountability Table 4.3 36.2 54. 2012 Mean Scores 41.8 for reality and legitimacy of transactions. Mean Scores 75. 2012 At present.8 58.53 33 .7 Managerial Accountability Managerial Accountability: Competent information Operational performance Contribution to objectives Combined mean Source: Field data May.

Again the reports are not timely made available. the combined mean score of 33. to enable groups external to the government obtain accounting information to assist them in evaluating the performance of functionaries in charge of government operations.5 33. and • The cash basis of accounting is deemed inappropriate for the attainment of objectives of government (Oshisami.1 32.66 . 1992. 2002). 2012 Similarly.A combined mean score of 40. The recorded score depicts a weak managerial accountability since its below the cut-off mean. Gary. accounting is not presently integrated with budgeting. 2008).53 was reported for the level of managerial accountability. • The financial reports does not Provide information showing the relationship between services rendered and operating outlays. which is a limitation imposed by the constitution. or budgetary objectives and financial reporting (Chan. Programme Accountability Table 4. which could also have arisen from the following findings: • Researchers have shown that the information content of government financial statement does not convey adequate information to respective user groups (Aruwa.66 was reported for programme accountability and this shows a weakness in programme accountability. 2006).8 Programme Accountability Programme Accountability: Benefits Impact Sustainability Combined mean Source: Field data May.4 26. This may be a 34 Mean Scores 42.

28 was reported for individual accountability which show a weakness since it falls below the average score.28 35 . 2012 An alarming combined mean score of 22.4 20.9 Individual Accountability Individual Accountability: Commitment Honesty Integrity Transparency Combined mean Source: Field data May.5 24. Public service is frequently characterised as reflective of the general society. Value for money audit is yet to be given practical effect to expect managerial and programme accountability. Auditing in the public service is generally governmental.4 22.function of the budgeting system in use. It is Mean Scores 23.8 20. Individual Accountability Table 4.line item budgeting system and the inadequacy of the financial reports to meet the information needs of diverse user groups.

It can be inferred that.81. Another important suggestion was the effective application of financial regulations and laws. Again the results also showed that a trained and strengthen Internal Audit Units within the various MMDAs would lead to an improvement in public sector accountability. if the GIMFIS is effectively implemented and a sense of ownership is demonstrated by the various MMDAs public sector accountability will improve. This result imposes responsibility on government to strengthen the accountability apparatus within the public service.thus easy to find respondents justifying lack of accountability by the human components of the dimensions of accountability. 2012 % 90 95 80 Respondents are of the view that. Suggested Ways of Improving Governmental Accountability Table 4. the surest way in ensuring public sector accountability is to allow the various 36 .10 Suggested Ways of Improving Governmental Accountability Suggestions: Effective Implementation of GIFMIS (Ghana Integrated Financial Management Information System) Strengthen of Internal Audit Units Effective application of financial laws Source: Field data May. The overall combined mean score is below average score of 38.

Elaborated financial regulation and rigid accounting system are deliberately designed to guide the actions and conduct of public officers in the conduct of and accounting for scheduled activities. and individual accountability. Summary of Findings • This research has indicated that the financial and accounting data remain.laws enact to bite when there is wrong doing and an effective reward system for those who exposes wrong. the best index of accountability. perhaps. CHAPTER FIVE SUMMARY. These epithets are anchored on fiscal accountability. managerial accountability. 37 . we can derive empirical conclusions with respect to the four dimensions of accountability. CONCLUSION AND RECOMMENDATIONS Introduction From the foregoing analysis and findings. programme accountability.

fake acquisitions and ghost disbursements are directly traceable to weak internal control system. • The individual accountability. • The cash basis of accounting which the Ghana Integrated Financial Management Information System (GIFMIS) imposes would also appear to be realistic going by the traditional activities of government. which could have also arisen from the following findings. • However. The problems related to wrong approvals. wasteful expenditure. Again. financial accountability is strictly emphasized. The reported findings depicts a weak managerial accountability. value for money is not a feature of the present system. Researchers have shown that the information content of government financial statement does not convey adequate information to respective user 38 . an important element of the system is at its lowest ebb of accountability and transparency.e CAGD and Audit Service) believed there is a fair amount of fiscal accountability in governmental financial reporting. wrong payments.• In scope and content the financial regulations appear to be quite adequate. There are sufficient provisions to guide every responsible officer and to safeguard official resources. there is the added need for managerial and programme accountability which the prevailing system has not adequately catered for. Conclusion Respondents from both organization (i.

Auditing in the public service is generally governmental. 2002). This result imposes responsibility on government to strengthen the accountability apparatus within the public service.groups (Aruwa. Conclusion drawn from this study indicated that financial and accounting data remain the best index of accountability available as at now. And that rigid and elaborated financial and accounting systems are deliberately designed to achieve this end. and The Cash Basis of Accounting is deemed inappropriate for the attainment of objectives of government (Oshisami. accounting is not presently integrated with budgeting. 2008). In another breathe. which is a limitation imposed by the constitution. 2003. Value for money audit is yet to be given practical effect to expect managerial and programme accountability. or budgetary objectives and financial reporting (Chan. This may be a function of the budgeting system in use. The study shows a weakness in programme accountability. 2006). Gary.line item budgeting system and the inadequacy of the financial reports to meet the information needs of diverse user groups. reports are not timely made available. The study also shows a weakness in Individual accountability. The overall combined mean score for the study falls below average which is very weak. 39 . It is thus easy to find respondents justifying lack of accountability by the human components of the dimensions of accountability.

Establishment of Government Accounting Standard Board Establishment of Governmental Accounting Standard Board. as Ghanaian Accounting Standard Board is to the private sector accounting.there is the need for managerial and programme accountability which the prevailing system has not adequately catered. Usage of Modified Accrual Basis of Accounting 40 . Wastage and other forms of malfeasance can directly or indirectly be traceable to weak internal control systems Taking all these together. one is tempted to infer that though the accountability and control apparatus in the public service may not be the best. and standards that should operate within the public sector. Recommendations The findings and conclusions of the paper necessitated the following recommendations on legislative requirement. to determine the detailed procedures. and report content and presentation: Legislative Requirement: Legal Mandating of Users Right The right of users to request special financial reports must be legally mandated. it has some minimum technical components that should elicit tolerable standards of accountability and transparency. principles. and be made accessible.

to enable groups external to the government obtain accounting information to assist them in evaluating the performance of functionaries in charge of government operations. in view of the importance now attached to it. This could be achieved through: 41 . complete. the modified accrual basis of accounting should be adopted in reporting government financial transactions. Enhancement of Auditor General's Autonomy The office of the Auditor-General whose constitutional duty it is to examine and authenticate the books of accounts is deliberately designed to be party of government but yet outside it. Content and Presentation: Provision of Information Provision of information showing the relationship between services rendered and operating outlays. Efforts have to be made to enhance the autonomy and staffing situation and facilities too. Value for Money Audit Value for money audit should be mandated by law as well as a shift from stewardship reporting to emphasis on external accountability and programme planning budgeting systems. Improvement in Presentation Style Improvement in the quality and style of presentation of the statements with focus to make it understandable. reliable and consistent.The present statue makes the accrual basis of accounting illegal.

for measuring and reporting constituents of the financial statements. • disclosure of the reconciliation between actual expenditures on the budget basis and the modified accrual basis.deficits in fund balances or retained earnings of individual funds. notes to include: Basis of presentation and explanation of funds and fund accounts. it's possible to carry out further research on how the issues look like in other public sector organizations and its impact on public sector governance. Basis of accounting. 42 . Direction for Future Research The scope of this research was not so broad and attempted to assess Government Financial Reporting and Public Accountability in Ghana with respect to the CAGD and the Audit Service of Ghana.• expansion of the contents of the notes to financial statements. researchers cannot conclude that the findings of this research can be equally applicable to the private sector and other public sector organizations as well. material violations of finance related legal and contractual provisions. For this the survey is limited to Controller and Accountant General's Department and Audit Service of Ghana. excess expenditures over appropriations. In connections to this limitation. As a result. This would enable a comprehensive conclusion to be drawn about government financial reporting and public accountability in Ghana. and disclosure on adverse situations.

(2nd Ed.M. Government and Public Sector Accounting: Legal and Constitutional Framework.C. “The Government Environment: Characteristics and Influences on Governmental Accounting and Financial Reporting”. J. “Research in Government Accounting and Reporting”..H. Accounting and Finance Thesis. New York: John Wiley & Sons.S (2002). Brooks. Promoting Financial Accountability in Decentralized Administration: The Ghanaian Experience Decentralization as a Tool for Democratization and Development . Aruwa. London. (1994). Handbook on Governmental Accounting and Finance.P. (1992).(1996). (2006). D. Inc. Enugu-Nigeria: Gopro Press Vol..U.Delhi.(1995). The Management of Public Sector Financial Records: the Implication for Good Gorvenment . Bhatta. Handbook on Governmental Accounting and Finance. Bowen. Zaria.B. I. (4th Ed. Anyafo.(1995). Public Financial Reporting . the Interpretation of Voting in Allocation of Economic Resources. November Edition.L. Empirical Investigation of the Information Content of Published Government Financial Statements. R. New York: John Wiley & Sons. Ato. and Crumbley. M. A. Quarterly Journal of Economics. G. (1943). University of Ghana .Vikas Publishing House. and Crumbley. A. D.Legon. In: Apostolou. In: Apostolou. G.). the Corporate Report.Sc.PVT Ltd. H. Akotia. S. United Kingdom. Inc.L. Chan.REFERENCES Accounting Standards Committee (1975).).Accra.L. 43 .L.A.O. G.

). Gary. Handbook on Governmental Accounting and Finance.. G. Columbus. 1981). and Crumbley.G.S.L.U. (1987). Sponsored Research Study on “the Tripartite Relationship among Citizenry. D.L. Conference on Public Administration Reform and European Integration Budva. London: Basil Blackwell Ltd. “Financial Reporting”.A. D. G.). (1992). Public Sector Financial Accounting. (1998).L.Daniel. U. Glyn. Governmental Accounting Standard Board (GASB.J.N.W.T. Proposal on Objectives of External Reporting by Government. Ohio: Charles E. (2008). D. Holder. New York: John Wiley & Sons Inc.(2009). ‘Future Developments in Government Accounting and Reporting’. T.A. Montenegro. Merrill Publishing Co. J. In: Apostolou.Carlifonia National Council of Governmental Accounting (NCGA. Financial Accounting Standard Board (FASB) and American Institute of Certified Public Accountants (AICPA) (1978). and Crumbley. Public Sector Accounting and Finance. 44 . G.A. (2nd Ed. G.L. New York: John Wiley & Sons.J. Research in Education. . Enugu-Nigeria: Computer Edge Publishers. and Crumbley.).S. G.). 1987). Handbook on Governmental Accounting and Finance. Klingenstierna. Government Accounting and Financial Control. Ngwu.J. Hayman. Public Sector Accounting. (1992). F. Zaria-Nigeria: ABUP.L. Handbook on Governmental Accounting and Finance. Fiscal Administration Analysis and application for the Public Sector. In: Apostolou. Oshisami.(1991). Legislature and Bureaucracy”. In: Apostolou. Inc. (1999). N. K. (2nd Ed. New York: . U. Inc Giroux. Plc. and Apostolou. Lagos-Nigeria: Megavons (W. J. (1968). (1992).. “The Market Reaction to the Information Content of Municipal Surplus/Deficit ratios. Mikesell. W. Books/Cole Publishing Co. Controlling Public Money :Internal Financial Control and External Audit. (4th Ed. Report of Paper Group on the Objectives of Financial Statements.. Public Budgeting and Financial Management”.John Wiley & Sons.

Assessing the Effectiveness of Undergrate Programmes of the Department of Special Education(UEW)in Promoting Inclusive Education in Ghana. United Nations Development Programme (UNDP. Committee Report. 1996). Aid Management Programme ‘Modular Training/Learning Package: Financial Management (Module 3). Scott. United Nations (1958). Accra. Manual of Economic and Functional Classification of Government Transactions.(2008).Winneba. Tackie Yaoboi.Accra.S.’ Nigeria. The public Administration of Africa in the 21st centry.(2000) .D. Ethics in Business and Public Administration Introductory Essays and Cases.WADSO. 45 .K. UNO. Woode.G. Abuja.(2000).Public Accounts Committee (1996).N.

... i) ……………… ii) ……………… 46 . Age Group of respondent: 18-25[ ] 26-32[ ]33-39[ ] 40-45 46-above[ ] 4..... ASSURANCE IS GIVEN FOR THE CONFIDENTIALITY OF THE INFORMATION TO BE PROVIDED... Have you worked in other districts before? Yes [ ] No [ ] If yes name the district and years worked.APPENDIX A QUESTIONAIRE SOLELY DESIGNED FOR ACADEMIC PURPOSE IN SOLICITING INFORMATION ON GOVERNMENT FINANCIAL REPORTING AND PUBLIC ACCOUNTABILITY IN GHANA... 5..... For how long have you worked in the section?.. 6.. I WANT TO THANK YOU IN ADVANCE FOR THE TIME IN RESPONDING TO THIS QUESTIONAIRE. Organization ………………………………………………………………………………………… ………………… 2... Gender: Male [ ] Female[ ] 3. PLEASE WRITE AND TICK WHERE APPROPRIATE PART ONE: PERSONAL DATA 1. Section of operation………...

PART TW0: Rank how much consideration is given by the current financial reporting system to the following types of accountability. There is no right or wrong answers. Others (Specified)…………………………………….Operational performance 47 [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] .iii) ……………… 6.Competent information 6. Junior High/Middle School [ ] e. Level of education: a.Adherence to applicable regulation 2.) Key: SD= Strongly Disagree D=Disagree N=Neutral A= Agree SA= Strongly Agree SD N A SA D STATEMENT 1 2 3 4 5 [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] FISCAL ACCOUNTABILITY 1. ICA/ACCA/CIMA (Professionals) [ ] b. Please.Accuracy and fairness of report 4. Senior High/Technical [ ] d.Consistency with good accounting principles 3. There are many different opinions about this subject and I would like to know your personal opinion. tick the number to the right of each statement that best describe your agreement or disagreement with the statement (1 being the lowest. University /Polytechnic [ ] c. 5 being the highest.Reality and legitimacy of transactions MANAGERIAL ACCOUNTABILITY 5.

Impact 10.Benefits 9.Contribution to objectives [ ] [ ] [ ] [ ] [ ] PROGRAMME ACCOUNTABILITY 8. Provide a suggestion on how government accountability and financial reporting can be improved …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… ………………… 48 .Commitment 12.Sustainability [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] INDIVIDUAL ACCOUNTABILITY 11.Transparency [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] 15.Honesty 13.7.Integrity 14.

Transparency International (PAC) Public Accounts Committee (FAA) Financial Administration Act 49 .ABBREVIATION (WB) .World Bank (TI) .

Municipalities.(FAR) Financial Administration Regulation (GASB) Government Accounting Standard Board (NCGA) National Council on Government Accounting (PPBS) Planning Programming Budgeting System (CRF) Consolidated Revenue Fund (FASB) Financial Accounting Standard Board (AICPA) American Institute of Certified Public Accounts (UNDP) United Nations Development Programme (MIS) Management Information System (GAAP) Generally Accepted Accounting Principles (CAGD) Controller and Accountant General’s Department (MMDA) Ministries. Departments and Agencies (GIFMIS) Ghana Integrated Financial Management Information System 50 .

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