Taining On Fin MGT-CSTC

COMPETENCE BASED TRAINING ON
FINANCIAL MANAGEMENT
FOR SENIOR ACCOUNTANTS, AD1 & ANALOGUS GRADES
Facilitator: Mac-Effort K. Adadey

(FCCA, ICAG, IIA, COIS, PMP, CICP, CIFP, MBA, MSc)
COURSE MODULES
1. OVERVIEW OF PFM
2. PUBLIC SECTOR BUDGETING
3. PUBLIC PROCUREMENT
4. GIFMIS
5. PUBLIC SECTOR ACCOUNTING AND AUDITING

BY Mac-Effort K. Adadey 2
MODULE 1:
OVERVIEW OF PUBLIC FINANCIAL
MANAGEMENT
Public Financial Management 3

Overview of PFM Systems & Practices
Outline
1. Meaning of Public Sector and why Public Sector
Organisations exist
2. Meaning of PFM
3. Understanding PFM Systems
4. Thematic Areas of PFM Cycle
5. Evolution of PFM Systems in Ghana
What is Public Sector?
Public Sector refers to:

•Government-owned organizations,
and
•Government-provided services.
WHY PUBLIC SECTOR ORGANISATIONS EXIST?
To provide basic or essential services to all citizens regardless of ability to

pay
To provide services that are beyond the private needs of those using the
services
To aid control and economic regulations of certain key areas, eg. Defense,
Energy, Health, Water, Law & Order, Economic Affairs, etc.
To correct perceived inequalities in the standard of leaving (minimum wage,
standard of education, health, road, etc)
To fulfil legal requirements for their establishment

PUBLIC FINANCIAL MANGEMENT
❑Public financial management systems and practices in

Ghana today are anchored on following laws:
❑The PFM Act 2016 (Act921)
❑The PFM Regulations 2019 (LI 2378)
❑Other supporting financial laws

Object of the PFM Act 2016
❑The PFM Act 2016 (Act 921) was passed on 25th August
2016 to regulate the financial management of the public
sector within a macroeconomic and fiscal framework:
❑to define responsibilities of persons entrusted with the
management and control of public funds, assets, liabilities and
resources,
❑to ensure that public funds are sustainable and consistent
with the level of public debt;
❑to provide for accounting and audit of public funds and to
provide for related matters.
Some Terminologies/ Interpretations under the PFMA
Public Institutions
❑Public institutions in Ghana are referred to as Covered Entities
under the Act.
❑Covered Entities comprise:
❑The Executive, Legislature and Judiciary;
❑Constitutional bodies;
❑Ministries, Departments Agencies and local government authorities;
❑ The public service;
❑Autonomous agencies; and
❑Statutory bodies.
Terminologies…
Titles
❑“Minister” in the Act means the Minister responsible for Finance;
❑“Chief Director (CD)” means the Chief Director of the Ministry of
Finance
❑“Principal Account Holder (PAH)” means the sector Minister or
the political head of a covered entity;
❑“Principal Spending Officer (PSO)” in relation to a covered
entity, means the Chief Director, Chief Executive or the most senior
administrative head responsible for producing outputs

General Responsibilities under the PFMA
❑Section 3 of the PFMA states that “The Minister,
Chief Director, Controller and Accountant-General, a
Principal Account Holder, a Principal Spending
Officer and any other public officer designated by
the Minister to manage public funds shall discharge
their respective responsibilities and exercise their
powers in accordance with this Act and the
Regulations”

What is PFM
❑PFM refers to the set of laws, rules, systems and

processes used by sovereign nations (and sub-national
governments), to mobilise revenue, allocate public
funds, undertake public spending, account for funds
and audit results, (Andrew Lawson, 2015).

What is PFM System?
❑PFM System is defined in section 102 of the PFM Act

2016, as “ legal and administrative procedures established to
permit covered entities to conduct activities in a manner that
ensures correct usage of public funds to meet defined
standards of probity, regularity, efficiency and effectiveness.

PFM System....
❑MacEffort Adadey (2014) defines PFM System as a
‘framework of three Ps…
❑Policies… laws & regulations
❑Processes (enabled by technology)
❑People
…which are deployed in a coordinated manner to ensure
effective and efficient use of public funds to meet the needs of
a Nation.’

Thematic Areas of PFM Cycle
❑PFM encompasses a broad set of functions commonly conceived as a cycle of

six phases
6. Review and
1. Planning
Audit
5. Accounting 2. Budget
and Reporting formulation
4.Budget 3. Budget
Execution Approval
EVOLUTION OF PFM SYSTEMS IN GHANA
❑ The goal of Public Financial Management Reform is to improve fiscal discipline and
macro-economic stability.
❑A review of GoG Accounting and Financial Management systems was conducted in the
early 1990s which identified several weaknesses, including the following:
1. Lack of strategic planning
2. Weak compliance with financial regulations
3. Weak budgeting system
4. Lack of proper accounting, auditing and reporting
5. Ineffective public expenditure monitoring
6. Lack of accurate and timely financial information for decision making
7. Personnel and payroll problems
8. Incomplete aid and debt management information
9. Low level of human resource capacity
PFM Problems…
❑The problems above led to the launching of PUFMARP (Public Financial
Management Reform Programme) in July 1995 at Akosombo by the
then Minister of Finance.
❑Earlier efforts to address these problems were conducted in a
piecemeal and isolated manner, found to be ad-hoc, disjointed and
incomprehensive.
❑PUFMAP, which ended in 2002, aimed at improving the weaknesses
identified in a more coordinated and integrated manner.
❑As such, PUFMARP was packaged as a comprehensive programme
that consisted of 10 major components (as in the next slide)

PUFMARP Components
1. Legal Reforms for PFM
2. Budget Reforms (MTEF, ABB, PBB, etc.)
3. Accounting and Financial Reporting
4. Cash Management
5. Fiscal Decentralisation
6. Audit Reform
7. Procurement Reform
8. Revenue Management Reforms
9. Aid and Debt Management
10.Payroll Reforms (the IPPD)
PFM REFORMS
❑ The GIFMIS is the major PFM project currently ongoing in Ghana, after
PUFMARP and BPEMS.
❑The GIFMIS Project started in 2011 and is in its 3rd Phase now:
❑Phase 1 - 2011 to 2014
❑Phase II- 2015 to 2019
❑Phase III- 2020 and beyond, focusing on system deepening and
consolidation
❑GIFMIS will be discussed further under Module-4 of this training

MODULE 2:
PUBLIC SECTOR BUDGETING
Outline
1. Meaning of a Budget
2. Stages of budget preparation
3. Functions of a Budget
4. Multi-Annual Considerations of Budget
5. Budgeting Concept in Ghana
6. Legal framework of budgeting in Ghana
7. Budget classifications
8. Budget reports
WHAT IS A BUDGET?
Budgeting is a universal and essential activity of governments and it is
defined in several terms by many scholars:
1. According to Sullivan and Steven (2003):“Budget is a financial plan and a
list of all planned expenses and revenues. It is a plan for saving, borrowing
and spending.”
2. Beardon and Yawson (2000):“Budget is the outcome of systems and
relationship through which the varying needs and desires of a nation are
heard, prioritized, and funded”.
3. Wildavsky, A. (1978): “Budget is a document, containing figures that
propose expenditure for certain items and purposes. A budget is also a
statement about the future, and it attempts to link proposed expenditures
with desirable future events.
STAGES OF BUDGET PREPARATION IN GHANA
1.Budget Circular
2. Draft Estimates
3. Budget Hearing
4. Consolidation
5. Cabinet Approval
6. Presentation to Parliament
7. Parliamentary Approval
8. Publication in the
Gazette
FUNCTIONS OF A BUDGET
1. Policy Statement- that declares the goals and specific objectives an
authority wishes to achieve by means of the expenditure concerned.
2. Redistribution of wealth- to bridge the gap in standard of living
disparity
3. Administrative authority- the budget is a work program on which
each institution can base its own operational work program.
4. A coordinating instrument- containing all the information on the
policies, objectives and activities by which government activities can be
integrated
5. A control instrument- to be used by the legislative authority over the
executive authority and by the executive authority over the
administrative authority and even for internal control within a single
component of the administrative authority
MULTI-ANNUAL CONSIDERATIONS OF BUDGET
Annual budget must reflect three paramount multi-annual considerations:
a) The future recurrent costs of capital expenditures
b) The funding needs of entitlement programs (for example debt service

and transfer payments) where expenditure levels may change, even
though basic policy remains the same
c) Contingencies that may result in future spending requirements (for

example government loan guarantees)
BUDGETING CONCEPTS
There are different budgeting concepts that an entity or a country can

adopt in the public sector, including the five listed below:
1. Zero Base Budgeting (ZBB)
2. Incremental Budgeting (IB)
3. Activity Bases Budgeting (ABB)
4. Rolling Budget
5. Programme/Performance Based Budgeting (PBB)
ZERO-BASED BUDGETING (ZBB)
❑ZBB starts from the basis that no budget lines should be carried forward from
one period to the next simply because they occurred previously. Instead,
everything that is included in the budget must be considered and justified.
❑ZBB in its purest form “involves the preparation of operating budgets on the
assumption that the organisation is starting out afresh in the new planning
period.
❑It requires the organisation’s objectives to be clearly stated and assessing the
different ways of delivering those objectives before the budget is allocated.
❑ZBB is less of ‘how should we deliver this service with the money available’ and
more of ‘here’s what we have to achieve, different options for achieving it and the
budget required for each of those options’.
INCREMENTAL BUDGETING (IB)
❑The previous year’s budget is carried forward for the next
annual budget.
❑The budget is adjusted for known factors such as new
legislative requirements, additional resources, service
developments, anticipated price and wage inflation and so
on.
❑A key characteristic of IB is that budget preparation is a
process of negotiation and compromise.
ACTIVITY BASED BUDGETING (ABB)
❑ABB is an approach developed from activity-based
costing.
❑Rather than assuming that overheads/ costs are related to

volumes of production or service, the ABB technique
attempts to identify what activities drive cost by linking cost
to those activities.
❑This provides more robust information for budget

preparation as planned changes in production or service
activities can be connected to changes in costs.
ROLLING BUDGET (RB)
❑RB is suitable under uncertain conditions
❑A rolling budget can be defined as “a budget constantly updated
by adding a further period, e.g. a month or quarter or a year and
removing the earliest period.”
❑A medium term (say 4 years) rolling process would mean that a
budget would be prepared every year, and each time rolling
forward for one year.
❑The first year would be planned in detail and remaining years less
so, reflecting the uncertainty about the long-term of the organisation.
❑Ghana is currently running a four-year (MTEF) budget regime
PROGRAMME-BASED BUDGETING (PBB)
❑The main aim of PBB is to connect performance information with the allocation and
management of resources.
❑It seeks to link planned expenditure to a defined level of performance
❑PBB approach requires that you define
❑The policy objectives
❑Target outputs and outcomes to be achieve within the budget period
❑Responsibility for each target output
❑Performance measurement criteria to track achievement of targets and objectives
❑The performance objectives are integrated with the budget preparation to allow for the
alignment of spending plans with performance reporting at the time the budget process
is initiated.
❑ At the end of each budget period, performance-based audits are conducted to
measure the results of programmes using the same performance measures produced in
the budgeting process.
❑Ghana started PBB in 2014
Some Issues with PBB
Public entities need to be clear about what they are trying to achieve, hence
the need for a clear strategic direction for public entities (which may not
always be the case)
Translating strategic goals and objectives into performance measures can be

very difficult. In many public services, outcomes are difficult to measure and
there is a tendency to fall back upon less appropriate output and input
measures
Management may not accept a performance budgeting process. There are
often problems in defining who is accountable for performance and managers
may fear that they will be reprimanded for failure to achieve published
performance targets, and thus may try to avoid being accountable
Issues with PBB..
Systems for collecting cost and performance information may need to be well
developed. Costing out services can be difficult and decisions on how to deal
with overheads are problematic
Information may need to be presented in appropriate formats to a variety of

users. Public Entities continue to publish budget and performance information in
separate documents
A lack of political acceptance of reform may prevail. Performance information

represents a threat to the ‘political’ aspect of budgetary decision making since its
explicit measurements tend to limit the discretion politicians can exercise.
LEGAL FRAMEWORK
FOR PUBLIC SECTOR
BUDGETING IN
GHANA
Annual Budget Guidelines
PFM Act 2016
❑Section (20) - The Minister, subject to Cabinet approval, shall issue guidelines for the
preparation of the budget for each financial year to be circulated to all covered
entities not later than the 30th June of every year.
❑The guideline shall include:
1. the economic outlook for the country;
2. revenue forecasts;
3. the multiple year ceilings for each covered entity in line with the Fiscal Strategy Document;
4. the ceilings on the required number of staff for each covered entity
5. the selection criteria for investment projects
6. the ceilings for the preparation of the budget estimates of local government authorities;
7. details of expenditure under statutory funds
8. any other information required from a covered entity to enable the Minister prepare the
annual budget in accordance with the requirements of section the law
Timelines for Annual Budget
Section (21)
❑Issue Budget guideline not later than 30th June of each financial year
❑Draft or proposed annual budget not later than 1st October
❑Submit the proposed annual budget to Cabinet for approval not later than
15th October.
❑Cabinet shall, not later than the 30th October communicate to the Minister, the
decision of Cabinet on the proposed annual budget.
❑The Minister shall, on behalf of the President, lay before Parliament not later
than 15th November the annual budget for the ensuing financial year.
❑Parliament shall approve the budget by 31st December
❑The Minister shall, publish in the Gazette, the Appropriation Act on or before
the 31st of December of each financial year.
Budget Commitment
Section (25)
❑After approval of the annual budget by Parliament, the Minister shall, within
ten days of the ensuing month, issue quarterly expenditure ceilings in respect
of approved annual budget.
❑The Controller and Accountant-General shall, based on the quarterly
expenditure ceilings release funds (Warrant) to the Principal Spending
Officers of covered entities.
❑A Principal Spending Officer shall commit the budget of a covered entity
based on the quarterly warrants issued
Budget Commitment..
❑A Principal Spending Officer or any other public officer shall not commit
Government to a financial liability, including contingent liability, unless
that Principal Spending Officer is specifically authorised to do so under
this Act, the Regulations or directives issued pursuant to this Act.
❑A Principal Spending Officer who contravenes this is liable to an
administrative penalty of two thousand penalty units.
❑A commitment in respect of staff recruitment shall, subject to financial
clearance by the Minister, be within the limits set by Parliament
❑ Subject to Parliamentary approval granted under section 21, the
Minister shall grant clearance before a covered entity signs a multi-year
contract
Virement
Section (32)
❑The Minister may, on the request of a Principal Spending Officer, execute a
virement in respect of an amount of money allocated to the covered entity of
that Principal Spending Officer, subject to the following conditions:
1. a virement of funds allocated for wages and salaries in an expenditure vote shall
not be made unless the virement is in respect of wages and salaries within that
expenditure vote;
2. a virement that involves a change in the spending plans approved by the Minister
for the current financial year shall require the prior written approval from the
Minister;
3. a virement may be made from a recurrent expenditure to capital expenditure as
well as from one capital expenditure to another capital expenditure but shall not
be made from a capital expenditure to a recurrent expenditure; and
4. a virement shall not be made in respect of appropriated amounts between covered
entities without the approval of Parliament in a supplementary estimate.
BUDGET CLASSIFICATIONS
CHART OF ACCOUNTS (COA)
CoA is a structured set of codes that GoG implemented a harmonised
provides a framework for Recording, CoA (with 74 digits in 12
Classifying, and Organising Budget Data segments) in 2011, based on IMF
and Accounting Transactions into GFS 2001 (revised in 2014) to
Reports and Statements. CoA could be meet legal requirements,
Numeric, Alphabetic or Alphanumeric. international best practices and
GoG is using numeric CoA future needs of the country.
The harmonised CoA was significantly updated in 2017 (by structure and
values/elements) and 2019 to:
1.Enable more MDAs & MMDA to produce their own sets of final accounts (from 99 to 999 entities)
2.Incorporate policy objectives, and all educational & health institutions in Ghana on the CoA
3.Meet IPSAS and GFS 2014 requirements
4.Accommodate the newly create regions and districts
5.To accommodated all major towns in each district of Ghana
6.Etc.
GOG COA
Segment Description Size Range
1 Balancing/Institution 3 001-999
2 Funding 5 01001 - 99999
3 Functions of Gov’t 5 70101 - 79999
4 Organisation 10 0010101001 – 9999999999
5 Policy Objectives 6 000001 – 999999
6 Program/Sub Program 8 00100001 – 99999999
7 Project 7 0000001 – 9999999
8 Activity 6 000001 – 999999
9 Location 7 0101101 – 9999999
10 Spare 1 6 000001 – 999999
11 Spare2 4 0001 - 9999
12 Natural Account 7 1000001 - 9999999
Total 74
Public Funds of Ghana
❑Article 175 of the 1992 Constitution states, ”The Public Funds of Ghana shall
be the Consolidated Fund, the Contingency Fund and such other public funds
as may be established by or under the authority of an Act of Parliament”
❑Public funds of Ghana are therefore categorised as follows:

1. The Consolidated Fund
2. Internally Generated Fund
3. Statutory Funds
4. Donor Fund
5. Any other funds as may be established by an Act of Parliament
Types/ Sources of Government Revenue
Domestic
1. Tax
Revenue Customs duties
Fees, fines and licenses by public entities

2. Non-Tax
Revenue Royalties for mineral resources
Returns on Public Investments (Interests, Dividends, etc.)

Etc.
4. Grants
Below The Line
Borrowings
Budget Classification on the GoG Chart of
Accounts
The Natural Account segment of the CoA is made up of:
1. Revenue
2. Expenditure
3. Assets (formerly investments)
4. Liabilities
Budget Classification on the CoA..
1. Revenue
1.1 Taxes (Direct & Indirect)
1.2 Donor Grants & Reliefs
1.3 Non-Tax
1.3.1 Interest
1.3.2 Lands and Royalties
1.3.3 Rents of Land, Buildings and Houses
1.3.4 Licenses
1.3.5 Fees
1.3.6 Fines, penalties, and forfeits
1.3.7 Miscellaneous and unidentified revenue
Budget Classification on the GoG Chart of
Accounts
2. Expenditure
2.1 Compensation of Employees (formerly Personnel Emoluments)
2.2 Goods and Services (combination of the former Admin. & Service Exp.)
2.3 Consumption of Fixed Assets (Depreciation)
2.4 Interests
2.5 Subsidies and
2.6 Grants
2.7 Social Benefits
3. Assets (formerly investments)

3.1 Financial assets (eg. Bonds, equity, etc.)
3.2 Non-Financial asset- capital expenditure (eg . Building)
4. Liabilities BY Mac-Effort K. Adadey 47

More on Expenditure Classification
2.1 Compensation of Employees 2.2 Goods & Services
2.1.1 Established Position 2.2.1 Materials and Office Consumables
2.2.2 Utilities
2.1.2 Arrears
2.2.3 General Cleaning
2.1.3 Non-Established Post 2.2.4 Rentals/Lease
2.1.4 Other Allowances 2.2.5 Travel and Transport
2.2.6 Repairs and Maintenance
2.1.5 National Pension Contribution 2.2.7 Training, Seminar and Conference Cost
2.2.8 Consultancy Expenses
2.2.9 Special Services
2.2.10 Other Charges and Fees
2.2.11 Emergency Services
2.2.12 Insurance
BUDGET REPORTS
What is a Budget Report ?
❑A budget report, also known as Budget Execution Report (BER) is
an internal report used by management to compare the estimated or
budgeted projections with the actual performance numbers achieved
during a period.
❑BERs are basically the set of management reports that provide

information on budget executions for decision making
❑These are the different types of reports that explain how the
budgetary appropriations are being utilised based on specific
information requirements of managers of entity or public funds
Preparing the Budget Report
❑Since budgets are financial goals based on estimates and future
projections, they are often inaccurate and can differ largely from the
actual financial performance of an entity.
❑During a fiscal period, managers often compare the budgeted
numbers that were prepared at the beginning of the period to the
actual numbers ( the outturn). This serves two main purposes:
a) First, managers can correct problems occurring to make the
performance more inline with the financial goals in the budget.
b) Second, they can evaluate how realistic and accurate their predictions
were. If their predictions were way off during the period, they can
adjust their next budget accordingly.
Preparing the Budget Report…
❑There are usually two columns listed side by side for the budgeted
numbers and the actual performance results for the period.
❑Often there is a third column added to list, the variances.
❑Favorable variances occur when the actual numbers are better than the
budgeted numbers. These are marked with an F in the margin.
❑Unfavorable variable are just the opposite. When actual numbers are
worse than budgeted number, a U written in the margin identifying the
poor results in that area.
❑ A number of these reports are available on the GIFMIS which can
be generated by users
Types of BER
Name Of Report Uses
1 Appropriation Report - It shows the approved budget for an MDA for the
MDA year at Cost Center Level
2 Appropriation Report - It shows consolidated approved budget for all
National MDAs
3 Ceilings Report MDA It shows the appropriation, ceilings and
reallocation by item and MDA
4 Budget Release Report - It shows budgetary releases to an MDA by Item
MDA (COE, G&S, ASSETS) against Appropriation by cost
center
5 Budget Release Report - It shows budgetary releases to all MDA by Item
National (COE, G&S, ASSETS) against Appropriation
Types of BER…
Name Of Report Uses
6 Actual Expenditure Report It shows actual expenditure of an MDA
(INVOICE) - MDA by Item against Releases per invoices
approved on GIFMIS by cost center
7 Actual Expenditure Report It shows actual expenditure of all MDA

(INVOICE) - National by Item against Releases per invoices
approved on GIFMIS
8 Commitment Report (PO) - Shows the sum of PO Approved but yet
MDA to be Invoiced by cost center
9 Commitment Report (PO) - Shows the sum of PO Approved but yet
National to be Invoiced by MDAs
Sample BERs
MODULE 3:
PUBLIC PROCUREMENT

PUBLIC PROCUREMENT
Outline
1. What is Procurement?
2. Concept of Value For Money
3. Procurement Legislation
4. Procurement Methods
5. Procurement Structures
6. Right to Review
7. Disposal of Stores

What is Procurement?
Procurement is the acquisition of goods, services or
works in the right quantity, of the right quality at
the right time in the right place at the best possible
total cost of ownership, the right price, for the direct
benefit or use of the procurer.

Definitions
“GOODS” means objects of every kind and

description including raw materials, products and
equipment and objects in solid, liquid or gaseous
form, and electricity, as well as services incidental
to the supply of the goods if the value of those
incidental services does not exceed that of the
goods themselves.
(Section 98 of ACT 663 as amended)
Definitions...
“SERVICES” means the furnishing of labour, time, or effort not
involving the delivery of a specific end product other than
REPORTS, which are merely incidental to the required
performance; and includes consulting, professional and
technical services but does not include employment
agreements or collective bargaining agreements.
THE TYPE THAT DELIVERS ONLY REPORTS IS KNOWN AS
CONSULTING OR PROFESSIONAL SERVICES
Definitions…
“TECHNICAL SERVICES” means services which are

tendered and contracted on the basis of
performance of a MEASURABLE PHYSICAL OUTPUT
such as drilling, mapping, aerial photography,
surveys, seismic investigations, maintenance of
facilities or plant and similar operations.
Also known as NON-CONSULTING Services
Definitions…
“WORKS” means work associated with the
construction, reconstruction, demolition, repair or
renovation of a building or structure or surface
and includes site preparation, excavation,
erection, assembly, installation of plant, fixing
of equipment and laying out of materials,
decoration and finishing, and any incidental
activity under a procurement contract.
Concept of Value for Money
Private vrs. Public Procurement
PUBLIC
PRIVATE
• USES OWN FUNDS • USES PUBLIC FUNDS DERIVED

• ACCOUNTABLE TO SELF AND FROM TAXES, LOANS,
FEW PEOPLE INTERNALLY GENERATED
• AFFECTS SELF AND FEW PEOPLE FUNDS, GRANTS etc.
• CAN DISCRIMINATE • ACCOUNTABLE TO THE
“PEOPLE”
• NO SET PROCEDURE
• AFFECTS A LARGE NUMBER OF
PEOPLE
• CANNOT DISCRIMINATE
• SET PROCEDURE
Public Procurement Legislation
The Public Procurement Act, 2003 (Act 663); and
the Public Procurement (Amendment) act, 2016
(act 914) provide the legal basis for the use of
public funds to procure goods, services and/or
works in Ghana; and operate within the
broader context of the Public Financial
Management Act, 2016 (Act 921)
Content of the Public Procurement Act 2003 (as amended)
❑The Ghana Public Procurement Act contains:

❑9 Parts
❑99 Sections
❑6 Schedules
❑The 9 parts and 6 schedules are stated below
The 9 Parts of PPA
▪ PART 1: Establishment of the Authority

▪ PART 2: Procurement Structures
▪ PART 3:Procurement Rules
▪ PART 4: Methods of Procurement
▪ PART 5: Tendering Procedures
▪ PART 6: Methods and Procedures to engage the Services of Consultants
▪ PART 7: Complaints and Administrative Review
▪ PART 8: Disposal of Stores, Vehicles, Plant and Equipment
▪ PART 9: Miscellaneous Provisions
The 6-Schedules
1st SCHEDULE: • Categories of Entity Tender Committees
2nd SCHEDULE: • Thresholds for Ministries, Departments and Agencies
3rd SCHEDULE: • Thresholds for RCCs and MMDAs
4th SCHEDULE: • Composition of Tender Review Committees
5th SCHEDULE: • Thresholds for Procurement Methods
• Standard Tender Documents and Standard Requests for

6th SCHEDULE: Proposals
Scope of Application of Act 663 (as Amended)
The Act 663 (as amended), applies to:
1. The procurement of Goods, Works and Services, financed in whole
or in part from public funds except where the Minister decides that
it is in the national interest to use a different procedure;
2. The disposal of public stores and equipment; and
3. Procurement with funds or loans taken or guaranteed by the State

and foreign aid funds except where the applicable loan
agreement, guarantee contract or foreign agreement provides the
procedure for the use of the funds.
Application of Act 663…
Entities
1. Central management agencies
2. MDAs and MMDAs
3. Sub-vented agencies;
4. State Owned Enterprises to the extent that they utilise public funds;
5. Public universities, public schools, colleges and hospitals;
6. The Bank of Ghana and financial institutions such as Public Trusts, Pension
Funds, Insurance Companies and Building Societies which are wholly
owned by the Republic or in which the Republic has majority interest;
7. Institutions established by Government for the general welfare of the
public or community.

Methods of Procurement
1. Open Competitive Tendering – Default Method

❑ National Competitive Tendering (§ 44)
❑ International Competitive Tendering (§ 45)
2. Limited Competitive Methods
❑ Restricted (Selective) Tendering (§ 38 & 39)
❑ National Or International
❑ Request For Quotations (§ 42 & 43)
3. Non-competitive Method
❑ Single-source Procurement (§ 40 & 41)
❑ Note: 2& 3 above Require approval of the Public Procurement Authority
FIFTH SCHEDULE - THRESHOLDS FOR PROCUREMENT METHODS
PROCUREMENT METHOD CONTRACT VALUE THRESHOLD

(1) International Competitive Tender
(a) Goods Above GHC 10,000,000.00
(b) Works Above GHC 15,000,000.00
(c) Technical Services Above GHC 5,000,000.00
(2) National Competitive Tender
(a)Goods More than GHC 100,000 up to GHC 10,000,000.00
(b)Works More than GHC 200,000 up to GHC 15,000,000.00
(c) Technical Services More than GHC 50,000 up to GHC 5,000,000.00
(3) Price Quotation
(a) Goods Up to GHC 100,000.00
(b) Works Up to GHC 200,000.00
(c ) Technical Services Up to GHC 50,000.00
(4) RESTRICTED TENDERING SUBJECT TO APPROVAL BY PPA
(5) SINGLE SOURCE PROCUREMENT SUBJECT TO APPROVAL BY PPA
ALL CONSULTANCY SERVICES NO THRESHOLD. PROCEDURES AS OUTLINED IN PPA
MANUAL
MANDATORY PREQUALIFICATION
(A) GOODS ABOVE GHC 10,000,000.00
(B) WORKS ABOVE GHC 15,000,000.00
(C) TECHNICAL SERVICES ABOVE GHC 5,000,000.00
OPEN COMPETITION
a)Guided by threshold, however estimated cost

notwithstanding, allowed if competition can be
1. obtained without participation of foreign firms
• LOCALLY REGISTERED – regardless of Nationality of
NATIONAL Principals
COMPETITIVE • DOMESTIC – wholly Ghanaian owned or Ghanaian as
TENDER (NCT) majority shareholder(s) or will not subcontract more than
(§ 44) 50% of total value of Works to foreign firm
b)Payment in local currency

Open Competition…
• Based on threshold stated in Fifth

2. Schedule
INTERNATIONAL
COMPETITIVE • Irrespective of estimated cost, Foreign
TENDER (ICT) Firms needed to enhance competition
(§ 45)
• Payment may be made in foreign
currency
Restricted Tendering (§ 38 & 39)
• Specialized nature of activity with Limited number of Providers;
CIRCUMSTANCES • Time and Cost to evaluate large number of tenders
• Open competition failed.
• Justification for use of method and shortlist of firms

PPA’S
• Profiles of firms
REQUIREMENTS
• Estimated cost
• No advertisement; but all other procedures are the same as

TENDERING
requirements for NATIONAL/ INTERNATIONAL competitive
PROCESSES tenders.
Request for Quotation (§ 42 & 43)
• Method driven by Threshold

ALSO KNOWN AS • For readily available/off-the-shelf items
PRICE QUOTATION
• Low value items/activities/services
OR SHOPPING
• Does not require elaborate/detailed specifications
• Does not require advertisement or Public Opening of Tenders

• Formal Request sent to Providers (Standard Tender Documents available)
TENDERING
PROCESSES • At least THREE (3) Providers shall be invited
• Quotations shall be evaluated completely with Evaluation Report and
recommendation for award prepared
NB: Despite limited competition, use of price quotation does not require PPA’s approval
Single Source Procurement (§ 40 & 41)
• Exclusive rights or existence of only one Provider
• Urgent need of Goods, Services or Works
• Goods, Works or Services to address catastrophic event or emergency
CIRCUMSTANCES • Additional supplies to ensure standardization
• For purposes of research, experiment, study or development
• procurement that concerns National Security
• To promote National Policy
• Justification for use of method and selection of Provider

PPA’s • Profile of Provider
REQUIREMENTS • Justification of estimated cost and reasonableness of cost
• Draft of Contract and Conditions of Contract
PROCUREMENT STRUCTURES
HEAD OF ENTITY
1. Responsible and accountable for procurement actions taken
2. Ensure that provisions of Act 663 as amended are complied with
3. The concurrent approval by a Tender Review Committee shall not
absolve the head of entity from accountability
4. Carry out procurement, taking cognizance of the provisions of the
PUBLIC FINANCIAL MANAGEMENT ACT, 2016 (ACT 921).
5. Empanel competent and qualified Evaluation Panels
6. Ensure that contracts are properly managed
7. Exercise sound judgment in making procurement decisions
8. Refer to the Entity Tender Committee for approval, a procurement
above the approval threshold of the head of entity.
Procurement Structures…
Tender Evaluation Panel
▪The Panel is an AD-HOC body made up of experts
▪The experts need not be in-house
▪Use SPECIFIED and PREVIOUSLY PUBLISHED criteria in the
tender documents for evaluation
▪Panel is ONLY an advisory body
▪ Shall NOT include Entity Head, Board or ETC members.
ENTITY TENDER COMMITTEE
❑Approval of Procurement Plans and ensuring that the Procurement Plan relates to
Strategic Plan
❑Examine reasonableness of cost estimates and timelines
❑Examine appropriateness of selected procurement routes
❑Examine tendering process and Evaluation Reports
❑Appropriateness of tender documentation
❑Conduct of tendering process
❑Objective evaluation of tenders
❑Granting of approvals
❑Seek concurrent approvals
❑Ensure the disposal of stores, vehicles and equipment in accordance with the
provisions of Act 663 as amended
Entity Tender Committee…
▪Contract administration
▪Appointment of Contract Administrator
▪Contents of contract documents
▪Monitoring of progress
▪Delivery and closure of contract
TENDER REVIEW COMMITTEE
▪ Examination of tendering process and Evaluation Reports
▪Appropriateness of tender documentation
▪Conduct of tendering process
▪Objective evaluation of tenders
▪Granting of concurrent approvals
▪Participate public procurement fora
▪Provide guidelines for negotiation of contracts
▪Review decisions of Heads of Entities in respect of
complaint
Right to Review (S78)
▪ A supplier, contractor or consultant that claims to have suffered, or that may
suffer loss or injury due to a breach of a duty imposed on the procurement
entity by this Act, may seek review in accordance with the Act.
▪ The following shall however not be subject to the review:
❑ the selection of a method of procurement under Sections 35 to 43,
❑ the choice of a selection procedure under Sections 75 (6) (a), 75 (6) (b) or section 76,
❑ the limitation of procurement proceedings in accordance with section 44; and
❑ a decision by the procurement entity under section 29 to reject tenders, proposals, offers or
quotation.
▪ Entity obliged to respond to complaint
▪ Complainant may seek administrative review from PPA
▪ Complainant may proceed to court if not satisfied with the outcome of the
administrative review
Disposal of Stores, Plant & Equipment..
▪Head of Entity convenes a Board of Survey to assess items to
be disposed
▪Upon approval of the Board of Survey’s recommendation,
the ddisposal of obsolete and surplus items shall be by:
▪ transfer to government departments or any other public
entities, with or without financial adjustment;
▪ sale by public tender to the highest tenderer, subject to reserve
price;
▪ sale by public auction, subject to a reserve price; or
▪ destruction, dumping, or burying as appropriate.
Procurement Offences
The following constitute offences under the Public Procurement Act:
1. Entering or attempting to enter into a collusive agreement, whether
enforceable or not, with any other supplier or contractor where the prices
quoted in their respective tenders, proposals or quotations are or would be
higher than would have been the case has there not been collusion between
the persons concerned;
2. Directly or indirectly influencing in any manner or attempting to influence in
any manner the procurement process to obtain an unfair advantage in the
award of a procurement contract
3. Altering a procurement document with intent to influence the outcome of a
tender proceeding and this includes but is not limited to
▪ forged arithmetical correction, insertion of documents such as bid security or tax
clearance certificate which were not submitted at bid opening;
▪ request for clarification in a manner not permitted under this Act.
MODULE 4:
THE GIFMIS
Outline
1. Meaning of GIFMIS
2. Objectives of GIFMIS
3. Legal basis for GIFMIS
4. Core GIFMIS Modules
5. The GIFMIS P2P Process
6. Some implementation challenges
What is GIFMIS?
❑GIFMIS stands for Ghana Integrated Financial

Management Information System
❑It is an integrated computerized financial
management system for:
❑Budget Preparation
❑Budget Execution
❑Accounting and Financial Reporting
❑Cash Management.
❑Assets management
❑Human resource and payroll
management
What is GIFMIS…
❑The PFM Act 2016 defines GIFMIS as the
electronic platform used by the Government to:
a) manage commitments made against
appropriation,
b) process payment claims,
c) record revenue and expenditure transactions, and
d) produce monthly, quarterly and annual financial
reports;
Objectives of GIFMIS
❑The key objectives of GIFMIS include to:
a. Improve accuracy, comprehensiveness, reliability, and timeliness of financial
and fiscal reporting at all levels of government
b. Provide credible financial information for better and informed decision-
making;
c. Promote accountability and transparency of the PFM processes
d. Provide the platform for the implementation of IPSAS
❑The rollout of GIFMIS began in 2012 with the MDAs subsisting on

Consolidated Fund resources prior to its extension to cover other public funds
namely as IGF, Statutory Funds and Donor Funds at the Central Government
entities and then to the MMDAs.
❑Deployment of other components of GIFMIS is also ongoing- i.e budget,

HRMIS, etc.
Scope of GIFMIS
• Budget
• Financial
• Central Govt. Accounting
Entities (MDAs) • HRMIS
• Local Gov’t • Payroll
(MMDAs) • Audit
• Procurement
• CS-DMRS (Debt. Mgt. syst.)

• E-Monitor/ E-payment (Non- • Consolidated Fund
tax rev. sys) • IGFs
• TRIPS & GCMS (Tax rev. syst)
• T-24 & SWIFT (Banking syst.) • Statutory Funds
• Donor Funds
LEGAL BASIS FOR GIFMIS
Regulations 13 and 14 of the PFM Regulations
2019 (LI 2378) provides for the establishments,
uses, components and responsibilities for
GIFMIS as follows:
1. Establishment of GIFMIS
❑(1)…the Minister shall establish an
integrated computerised financial
management information systems known as
Ghana Integrated Financial Management
Information Systems (GIFMIS) and other
related electronic platforms.
Legal Basis for GIFMIS…
2. Uses of GIFMIS
❑(2) The GIFMIS shall be the core electronic platform of Government
to be sued for:
a) budget preparation,
b) budget execution,
c) revenue management,
d) expenditure administration,
e) cash management,
f) asset management,
g) debt management,
h) payroll management,
i) accounting and financial reporting,
j) human resource management, and
k) public investment management
❑by a covered entity to improve efficiency in managing public funds
including the Consolidated Fund, internally-
generated funds, statutory funds and donor funds.
3. Components of GIFMIS
❑The GIFMIS includes the following components:
1. Financial Accounting System
2. Payroll System;
3. Human Resource Management Information Syste
m;
4. Strategic Planning and Budget System;
5. Debt Management System
6. Revenue System
7. Public Investment Management System;
8. Treasury and Fund Transfer System
9. Procurement System;
10. Public Investment and Asset Management System;
and
11. any other system determined by the Minister.
Legal Basis for GIFMS: Responsibilities
(PFMR 14)
The Minister for Finance
❑(1)The Minister has overall responsibility for the inst
allation and operations of the components of the
GIFMIS and shall provide the policy guidelines
for the use of the GIFMIS
The Head of Covered Entity

❑ (2) The heads of covered entities responsible for th
e implementation of the GIFMIS as specified in sub-
regulation (3) of regulation 13 or as determine by the
Minister, shall ensure that the necessary provisions and
protocols are put in place to ensure efficient running
of the systems as prescribed by the policy.
Responsibilities of the User of GIFMIS
❑ (3) A user of the GIFMIS shall be granted access to the GIFMIS and the
authorised access that is granted to a user shall constitute a valid signature for
transactions on the system
❑ (5) A user of the GIFMIS is personally liable for the improper use of the
system for the transaction that the user is authorised to process, review,
approve or access on the systems
❑ (6) Records, logs or audit trail generated from the GIFMIS is admissible at
law as valid evidence in the case of any malpractice or malfeasance
perpetrated on the system
❑Section 25 (6) of the PFM Act 2016 (Act 921) states “Where a covered entity
enters into a contract or any other arrangement that commits or purports to
commit Government to make a payment, the contract or arrangement shall be
approved by the Principal Spending Officer of that covered entity and the
Principal Spending Officer shall enter the contract or arrangement into the Ghana
Integrated Financial Management Information System (GIFMIS)”.
❑Section 98(b) states “A person who issues a local purchase order outside the
Ghana Integrated Financial Management Information System or any other
electronic platform in use by Government, commits an offence and where no
penalty is provided for the offence, is liable on summary conviction to a fine of
not less than one hundred and fifty penalty units (GHC1800) and not more than
two hundred and fifty penalty units (GHC3,000) or to a term of imprisonment of
not less than six months and not more than two years or to both”.
CORE MODULES OF GIFMIS

Budget System
• Hyperion Planning Plus

Oracle • for Strategic Planning
• Hyperion Public Sector Planning and
Hyperion Budgeting
• for Costing
(MoF) • Hyperion Project Financial Planning
• for Project & Contract mgt.

Revenue Systems
Tax Revenue Non-Tax

Financials
(GRA) Revenue
Accounts
e-Monitor
TRIPS Receivable
(MoF)
Module (CAGD)
e-Payment
GCMS
(NITA)

Financial Accounting System
• Purchasing module
• for Purchase Requisition, Purchase Order, SRA
IFMIS • Accounts Payable module

• for PVs, accounting (Dr. & Cr.) & accruals
• Cash Management module
Modules • for EFT, ABR & cash forecasting
• Accounts Receivable module
• for recording revenue
(CAGD) • Fixed Assets Module

• for fixed assets register & accounting for fixed assets
• General Ledger
• for holding budget, warrants & financial reporting

The HRMIS
Employee
Establishment Employee Cost
Profile
Management Management
Management
For position For

For control budgetary
Employee (Organisations,
Locations, control over
bio-data
Grades, Jobs, payroll cost
Positions and
position
hierarchies)
Payroll System
IPPD (Integrated
• For paying salaries of government
Personnel Payroll
employees and pensioners (CAP
Database) at
30)
CAGD
• ESPV validations
• E-PVs
Sub-systems • E-pay slips
• Bio-metric systems

Procurement System
• E-Catalogue
e-Procurement • for catalogue-based tenders
• E-Attestation
Modules • for supplier profile and database
• E-Registration
(PPA) • for user registration and management
• E-Notification
“to enhance • for publishing procurement notices & and granting access
transparency, to tender documents
• E-Tendering
compliance, • for submission of tenders
provide common • E-Awarding
platform for • for opening & evaluation of tenders
• Contract & Project Management (CPMS)
effective • for contract and project management
competition “ • Spend Glass
• for reporting and business analytics
Debt Management System
•For recording and

CS-DRMS tracking of domestic
(MoF) and external
borrowings
Cash Management Systems
• Electronic Funds Transfer (EFT)

IFMIS CM • Automatic Bank Reconciliation
• Cash Forecasting
• For tracking government bank

B-Tracking balances at BoG and Commercial
banks
Assets Management System
IFMIS FA •Fixed Assets

Module Register
•Accounting for Fixed
Assets
GIFMIS Procure-To-Pay Process
❑The following expenditure processes (called P2P) have been
electronically configured on the GIFMIS:
1. Budgeting
2. Expenditure Initiation
3. Purchase Ordering
4. Store Receipting
5. Payment
6. Records of payment documents

GIFMIS Expenditure Process
❑The approved Budget is first loaded and activated on the

GIFMIS at the beginning of the financial year.
❑Budget is released on the GIFMIS via Warrant, as required
by law
❑Users can make request for release of Budget (i.e Warrant) on the
system
❑Expenditure cannot be processed on GIFMIS without budget

GIFMIS Process…
Once budget is released on the system, the following processes
follow:
1. Purchase Requisition (for expenditure initiation)
2. Purchase Order (when supplier is selected)
3. Stores Receive Advice (when goods/services are taken
on charge)
4. Payment Voucher/Invoice (to pay for the transaction)

GIFMIS Process…
5. Run Cash requirement report to establish total bills due for payment
6. Run cash pooling report to establish total cash available on the bank
accounts of the entity. That is if the bank accounts are all setup on the
system and updated promptly.
7. Make payment on the system
❑Electronic Funds Transfer for 3rd parties transactions
❑System Cheques for moneys required for internal payments
❑NB: dummy payments are made on the systems for the entities not yet connected to the EFT
functionality

GIFMIS EFT Process

GIFMIS Cheque

GIFMIS Expenditure Controls
❑The P2P processes are configured on Approval Hierarchies (at least 3 levels)
to ensure segregation of duties
❑Matching rules (Invoice-to-SRA-to-PO) are applied to ensure payment for only
goods received and accepted, except transactions requiring no PO (eg T&T,
allowances, etc)
❑Financial docs created (PV, PO, SRA, PR, etc) are also electronically available
and can be printed out for reference, thus addressing the fears of missing
financial documents

GIFMIS IMPLEMENTATION CHALLENGES
1. Inadequate ICT infrastructure across the

country
❑Network connectivity
❑Computer and accessories
2. Low level of computer literacy in the
public sector
3. Inadequate capacity building for users
and support team
4. Inadequate post implementation support
for user entities
5. Low commitment towards usage
MODULE 5
PUBLILC SECTOR ACCOUNTING
AND AUDITING

PUBLIC SECTORT FINANCIAL REPORTING
Outline
1. Public Sector Accounting Basis
2. The GoG Chart of Accounts
3. Financial Reporting Goal of Government
4. Internal Audit
5. External Audit
6. Audit Committees
7. PFM Offenses and Penalties
Public Sector Accounting Basis
❑ Accounting Basis refers to the methods used to determine
when transactions or events are recognized in the entity’s
accounts and reported in the entity’s financial statement.
❑It answers the question: when will a transaction be captured

in the books of accounts ?
❑The basis of accounting determines the extent of information

that an accounting system can collect and therefore report
Accounting Basis…
❑There are two main known bases of accounting: Cash basis and
accrual basis. However both have modifications, so we have
modified cash basis and modified accrual basis.
❑Thus we have four bases in the public sector for government to
choose from:
1. Cash basis/accounting
2. Modified cash basis/accounting
3. Accrual basis/accounting
4. Modified accrual basis/accounting

Accounting Basis…

Illustration of Accounting Bases
❑The following stages of a transaction can be used to illustrate the differences in
accounting for each basis:
Stage 1 Stage 2 Stage 3

Placing an order Receiving goods Making payment
❑Under the cash basis, the transaction would be recognized in Stage 3,

❑Under the accrual basis at Stage 2 and under the commitment basis at Stage 1.
❑Under the modified cash basis, the transaction would be recognized at Stage 2 if an
invoice is received and payment occurs soon after (e.g. one month).
❑Under the modified accrual basis, the transaction would be accounted for in the same
way as under the accrual basis, except where the goods represent long term assets,
which are written off in the year of acquisition (i.e. not capitalized).

Financial Reporting Goal of GoG
The goal of GoG as provided in the PFM Act 2016 is to produce

annual accounts of the entire public sector to cover All Public
Funds at all Covered Entities, using the IPSAS Accrual Basis of
accounting.
Covered Entities and the CAGD are required under the PFM Act
to prepare and submit Quarterly and Annual Accounts on all
public funds as provided below:
PUBLIC SECTOR BUDGETING & FINANCIAL REPORTING BY

MAC-EFFORT ADADEY
Quarterly Accounts
❑The PFM Act 2016 under section 79, requires Covered Entities to
prepare and submit quarterly financial statements to the Controller
and Accountant-General by the 15th day of the month following
each quarter of each financial year; and submit any other relevant
report within the time that the Controller and Accountant-General
may determine.
❑The Controller and Accountant-General, on the other hand, shall

prepare and submit quarterly financial statements to the Minister by
the end of the month following the end of each quarter.
MAC-EFFORT ADADEY
Annual Accounts
❑Under section 80 of the PFM Act, Covered Entities shall, within two
months after the end of each financial year, prepare and submit to
the Auditor-General and Controller and Accountant-General, the
accounts and information set out in the Schedule to the Act and in the
format determined by the Controller and Accountant-General.
❑The Controller and Accountant-General shall, within three months

after the end of each financial year, prepare and submit to the
Minister of Finance and the Auditor-General the consolidated annual
accounts of Government
MAC-EFFORT ADADEY
Requirements for Production of the National Accounts
Production of the Government Accounts is driven by the following key

factors:
1. Effective application of the GoG Chart of Accounts (CoA) by all

Covered Entities
2. Effective use of the GIFMIS to process or capture all financial

transactions by Covered Entities

MAC-EFFORT ADADEY
The Financial Reporting Road Map of CAGD
Phase 1: • Central Government Reporting by 2018.
• General Government Reporting (Central

Phase 2: Gov’t plus MMDAs) by 2019.
• Whole Government Reporting by 2020

1. Central Gov’t
Phase 3: 2. Local Gov’t
3. Government interest in SOEs & GBEs

MAC-EFFORT ADADEY
INTERNAL AUDIT

What is Internal Audit ?
• Internal audit helps an organization

❑The Institute of Internal accomplish its objectives by bringing
Auditors (IIA) defines
Internal Auditing as an systematic, disciplined approach to
independent, objective evaluate and improve the effectiveness
assurance and consulting of Risk Management, Control and
activity designed to add Governance processes.
value and improve an
organization’s operations
. • Internal audit should be conducted
objectively and be designed to improve
and mature an organization’s business
practices.
Risk Based Internal Auditing by: MacEffort K. Adadey 130
Importance of Internal Audit
1. Provides Objective Insight
2. Improves Efficiency of Operations
3. Evaluates Risks and Protects Assets
4. Assesses Controls
5. Ensure Compliance with Laws and Regulations

Stages of Internal Auditing Process
Planning Execution Reporting Follow-up

• To ensures that • To ensure that all • To produce the end • To ascertain the
appropriate attention is activities planned are product or final status of
devoted to significant carried out to achieve deliverable of the implementation of
areas of the audit, the audit objectives audit work that can audit
potential problems are be relied upon to recommendations by
identified and that the improve operations the audited entity.
skills and time of the
staff are appropriately
utilised.
Internal Audit…
Section 83 of the Public Financial Management Act 2016 (Act921) provides for
internal auditing as follows:
• 3. An Internal Auditor of the Internal Audit Unit
of a covered entity shall:
Mandate:
a)appraise and report on the soundness and

1. A covered entity shall have an application of the system of controls operating
Internal Audit Unit. in the covered entity;
b)evaluate the effectiveness of the risk
Functions:
management and governance process of a
covered entity and contribute to the
improvement of that risk management and
governance process;
c)provide assurance on the efficiency,
2.The head of the Internal Audit Unit effectiveness and economy in the
Reporting:
shall report administratively to the administration of the programmes and

Principal Spending Officer and operations of a covered entity; and
functionally to the Audit d)evaluate compliance of a covered entity with
enactments, policies, standards, systems and
Committee of that covered entity. procedures.
EXTERNAL AUDIT

External Audit
Under Section 84 of the PFM Act:
❑The Auditor-General shall, within six months after the end of each financial
year, examine and audit the public accounts submitted under this Act in
accordance with article 187 of the Constitution and the Audit Service Act,
2000 (Act 584).
❑The governing body of a public corporation or a state-owned enterprise
shall
❑cause to be prepared, not later than two months after the end of each
financial year, an annual account in respect of that financial year; and
❑submit to the Minister, not later than four months after the end of each
financial year, an audited financial statement

Report on Audit Findings and Recommendations (S85)
❑A Principal Spending Officer shall, on an annual basis, submit the

following to the Minister and Auditor-General:
❑a report on the status of implementation of recommendations made by
the Auditor-General in respect of that covered entity; and
❑a report on the status of implementation of recommendations made by
Parliament in respect of that covered entity.
❑The Attorney-General shall, on an annual basis, submit a report on
the status of any action commenced on behalf of the Government to
the Minister, Auditor-General and Parliament following findings of
the Auditor-General and recommendations of the Public Accounts
Committee of Parliament.
Audit Committee (S86..)
❑There is established by this Act, an Audit Committee that shall serve one
particular covered entity or any other covered entities in a sector.
❑An Audit Committee consists of five members majority of whom shall be
independent members.
❑The IAA and the ICAG shall nominate the majority of members from among
persons who do not work in the covered entity to which the Audit Committee
relates and two other members shall be nominated by the Principal Account
Holder.
❑The chairperson of an Audit Committee shall be elected from among the
independent members of the Committee
❑The Principal Account Holder shall appoint the chairperson and members of
an Audit Committee.

Functions of Audit Committee (S88)
❑An Audit Committee shall ensure that the head of a covered entity,
to which the Audit Committee relates, pursues the implementation of
any recommendation contained in:
❑an internal audit report;
❑Parliament’s decision on the Auditor-General’s report;
❑Auditor-General’s Management Letter; and
❑the report of an internal monitoring unit in the covered entity concerned
particularly, in relation to financial matters raised; and
❑Prepares an annual statement showing the status of implementation
of such recommendations

Offences under the PFM Act (S96…)
Below are 14 Offences under the PFM Act 2016:
1. Authorizing an expenditure exceeding the approved appropriation in the
relevant budget
2. Making an un-authorised commitment resulting in a financial obligation for
the Government,
3. Failing to collect moneys due to the Government,
4. Being responsible for any improper payment of public funds or payment of
money that is not duly verified in line with existing procedures,
5. Being responsible for any deficiency in or for the loss, damage or destruction
of any public funds, stamp, security, stores or any other Government
property
Offences…
6. Accepting or receiving money or valuable consideration for the performance
of an official duty
7. Promising, offering or giving bribes
8. Willfully making or signing a false certificate, false return or false entry in a
book
9. Failing to report knowledge or information in respect of fraud committed by
a person against the Government, contrary to any enactment related to
public financial management, to the appropriate authority or law
enforcement authority
10. Refusing or failing to produce or submit any information required under this
Act
Offences…
11. Issuing a purchase order outside the GIFMIS or any other electronic platform
in use by Government
12. Misusing or permitting the misuse of any Government property which results
in a loss of public resources,
13. Contravening or knowingly permitting another person to contravene a
provision of this Act or the Regulations
14. Instigating another person to contravene a provision of this Act or the
Regulations

Penalties under the Act
❑Penalties under the Act include:
1. Fine ranging from 50 to 2,500 Penalty Units (i.e GHC600 to
GHC30,000).
2. Summary conviction ranging from 6 months to 5 years imprisonment
3. Both fine and imprisonment
4. Surcharge for the loss to Government up to three times the amount
5. Disciplinary action including dismissal, demotion or suspension.

DISCUSSIONS

Scenario 1
❑The Minister for Rural Development visited a small community called Kaketo in
the Volta Region to inspect the state of social amenities there, including a
health center, a school and a borehole for water supply, among others. The
Chief and opinion leaders of Kaketo appealed to the Government, through
the Minister, to make access to the social services (i.e health, education and
water) absolutely free since majority of the people could not afford payment
for such services due to endemic poverty in the community. The Minister
responded that making such services absolutely free cannot be sustainable
and that, even though there was no profit motive, there was the need to cover
cost of providing such services to ensure sustainability. Therefore, all
beneficiaries in the Kaketo community should do their best to pay for such
services, at least for now.
❑Within the context of public financial management and public sector budgeting,
what are your views about this scenario?
Scenario 2
❑Mr. Freeman, a newly appointed chief director at one of the sector Ministries
asserted that the GIFMIS is one of the means that the Government is using to
frustrate MDAs in utilising their approved budgets. According to Mr. Freeman,
he was informed that the GIFMIS can withhold funds and delay payments for
goods and services. Also, considering the unjustifiable delays and
unpredictable nature of the release of funds from Ministry of Finance and
Controller and Accountant General’s Department, he did not see the need to
compound financial challenges of his Ministry by using the GIFMIS to process
financial transactions, once he can provide the necessary documentations to
support financial transactions at the Ministry.
❑Based on your understanding of the budgetary process and the GIFMIS, what are
your comments about Mr. Freeman’s assertions?
Scenario 3
❑The President of the Republic of Ghana was scheduled to visit one of the
Municipal Assemblies in the Western Region. Three days to the President’s visit,
Mr. Mensah, the Municipal Finance Officer (MFO), was directed by the
Municipal Chief Executive (MCE) via the telephone to issue a cheque amounting
to GHC400,000.00 to a contractor who has started fixing some portions of
the roads in the Municipality ahead of the President’s visits. There was no
contract to this effect, let alone work certificate and approved payment
voucher. The Municipal Coordinating Director (MCD) did not know about this,
and he has just been informed by the MFO about the MCE’s directive.
❑As the MCD and based on your knowledge of PFM, budgeting and public
procurement, what will you do in such a situation?

The End

Taining On Fin MGT-CSTC

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COMPETENCE BASED TRAINING ON

Facilitator: Mac-Effort K. Adadey

2. PUBLIC SECTOR BUDGETING

5. PUBLIC SECTOR ACCOUNTING AND AUDITING

Public Financial Management 3

Public Sector refers to:

To provide basic or essential services to all citizens regardless of ability to

To fulfil legal requirements for their establishment

❑Public financial management systems and practices in

❑The PFM Act 2016 (Act921)

❑The PFM Regulations 2019 (LI 2378)

❑Other supporting financial laws

Public Financial Management 10

Public Financial Management 11

❑PFM refers to the set of laws, rules, systems and

Public Financial Management 12

❑PFM System is defined in section 102 of the PFM Act

Public Financial Management 13

Public Financial Management 14

❑PFM encompasses a broad set of functions commonly conceived as a cycle of

Public Financial Management 17

Public Financial Management 19

Annual budget must reflect three paramount multi-annual considerations:

a) The future recurrent costs of capital expenditures

b) The funding needs of entitlement programs (for example debt service

c) Contingencies that may result in future spending requirements (for

There are different budgeting concepts that an entity or a country can

❑Rather than assuming that overheads/ costs are related to

❑This provides more robust information for budget

Translating strategic goals and objectives into performance measures can be

Information may need to be presented in appropriate formats to a variety of

A lack of political acceptance of reform may prevail. Performance information

❑Public funds of Ghana are therefore categorised as follows:

Fees, fines and licenses by public entities

Returns on Public Investments (Interests, Dividends, etc.)

3. Assets (formerly investments)

3. Assets (formerly investments)

4. Liabilities BY Mac-Effort K. Adadey 47

❑BERs are basically the set of management reports that provide

7 Actual Expenditure Report It shows actual expenditure of all MDA

Public Financial Management 58

Public Financial Management 59

Public Financial Management 60

“GOODS” means objects of every kind and

“TECHNICAL SERVICES” means services which are

• USES OWN FUNDS • USES PUBLIC FUNDS DERIVED

❑The Ghana Public Procurement Act contains:

▪ PART 1: Establishment of the Authority

1st SCHEDULE: • Categories of Entity Tender Committees

2nd SCHEDULE: • Thresholds for Ministries, Departments and Agencies

3rd SCHEDULE: • Thresholds for RCCs and MMDAs

4th SCHEDULE: • Composition of Tender Review Committees

5th SCHEDULE: • Thresholds for Procurement Methods

• Standard Tender Documents and Standard Requests for

2. The disposal of public stores and equipment; and

3. Procurement with funds or loans taken or guaranteed by the State

Public Financial Management 72

1. Open Competitive Tendering – Default Method

PROCUREMENT METHOD CONTRACT VALUE THRESHOLD

a)Guided by threshold, however estimated cost

b)Payment in local currency

• Based on threshold stated in Fifth

• Justification for use of method and shortlist of firms