PUBLIC SECTOR
ACCOUNTING AND FINANCE
FREDRICK AMISSAH, CA
EVALUATION OF FINANCIAL POSITION, PERFORMANCE AND PROSPECTS OF PUBLIC SECTOR
ENTITIES
COMMON SIZE ANALYSIS
QUESTION ONE
Presented below is the Statement of Financial Performance of the Consolidated Fund of
Ghana.
Revenue and Expenditure Statement of the Consolidated Fund for the
year ended 31 December, 2018
GH¢’million GH¢’million GH¢’million
2018 2017
Actual Actual 2018 Budget
Revenues
Direct tax 16,450 12,400 20,200
Indirect tax 22,200 25,600 34,100
Non-tax revenue 7,500 5,800 7,000
Grants 1,300 1,900 2,000
Total revenue 47,450 45,700 63,300
Expenditure
Compensation for employees 29,800 24,300 25,900
Use of goods and services 10,300 9,860 18,000
Consumption of fixed Asset 240 220 -
Interest 19,660 14,550 16,780
Subsidies 510 430 1,920
Other expenses 1,600 1,430 2,450
Exchange difference 620 400 -
Total Expenditure 62,730 51,190 65,050
Net Operation Result (15,280) (5,490) (1,750)
Required:
Based on a Common Size Statement of Financial Performance, write a report discussing and
analysing the financial performance of the Consolidated Fund in line with the Recommended
Practice Guide 2, Financial Statement Discussion and Analysis.
QUESTION TWO
Presented below is the Statement of Financial Performance of Ogundipe Metropolitan
Assembly for the year ended 31 December 2020.
GH¢’million GH¢’million GH¢’million
2020 2019 2020
Actual Actual Budget
Revenues
Decentralized Transfer 16,450 12,400 20,200
IGF 22,200 25,600 34,100
Donation and Grants 1,300 1,900 2,000
Total revenue 39,950 39,900 56,300
Expenditure
Compensation for employees 29,800 24,300 25,900
Use of goods and services 10,300 9,860 18,000
Consumption of fixed Asset 240 220 -
Interest 19,660 14,550 16,780
Grants 510 430 1,920
Other expenses 1,600 1,430 2,450
Total Expenditure 62,110 50,790 65,050
Net Operation Result (22,160) (10,890) (8,750)
Required:
i) Prepare Common Size Statement of Financial Performance for the year ended 31
December 2020.
ii) Based on the Common Size Statement of Financial Performance prepared in i) above,
write a report analysing the financial performance of Ogundipe Metropolitan Assembly in
line with the Recommended Practice Guide 2, Financial Statement Discussion and Analysis.
QUESTION THREE
Presented below is the Statement of Financial Position of the Consolidated Fund of Ghana as at
the year ended 31 December 2021 and 2020.
2021 2020
Non-current asset
Property, Plant and Equipment 88,191 78,220
Financial Assets 27,124 27,289
Total Non-Current Assets 115,315 105,509
Current Asset
Inventory 3,207 1,903
Cash and cash equivalent 16,106 14,007
Total Current Assets 19,313 15,910
Total assets 126,369 121,419
Non-current liabilities
Domestic debt 45,924 44,791
External debt 45,015 41,826
Total Non-Current liabilities 90,939 86,617
Current liabilities
Payables 12,154 4,581
Deposits and Trust Monies 11,054 10,909
Total Current Liabilities 23,208 15,490
Financed by
Accumulated Fund 20,481 19,312
Total liabilities and Fund 134,628 121,419
i) Prepare Common Size Statement of Financial Position for the year ended 31 December 2021
and 2020.
ii) Based on the Common Size Statement of Financial Position prepared in i) above, write a report
analysing the financial position in line with the Recommended Practice Guide 2, Financial
Statement Discussion and Analysis.
RATIO ANALYSIS
QUESTION ONE
Country X and Country Y are Sub-Saharan African Countries that attained independence around the same
period. Presented below are the financial statements of the two countries.
Statement of Financial Performance for the year ended 31 December 2020
Country X Country Y
GH¢ million GH¢ million
Revenues
Domestic tax 39,675 25,500
International trade tax 27,300 31,995
Non-tax revenue 11,250 19,200
Grants 1,950 1,650
Total revenue 80,175 78,345
Expenditure
Compensation for employees 44,700 30,450
Use of goods and services 15,450 21,000
Consumption of fixed capital 360 420
Exchange difference 1,485 900
Interest 29,490 15,690
Subsidies 765 180
Other expenses 2,400 2,145
Total Expenditure 94,650 70,785
Net Operation Result (14,475) 7,560
Other information:
Population 30,000,000 22,500,000
Gross Domestic Product (GH¢) 217,500,000,000 165,000,000,000
Statement of Financial Position as at 31 December 2020
Country X Country Y
GH¢ million GH¢ million
Non-Current Assets
Property, plant and equipment 3,675 33,600
Equity investment 12,000 8,250
15,675 41,850
Current Assets
Receivables 10,050 12,600
Cash and cash equivalent 7,050 27,000
5 | www.aspireproconsult.com | 0555 213 559
17,100 39,600
Total Assets 32,775 81,450
Funds and Liabilities
Accumulated Fund (120,300) 7,200
Current Liabilities
Payables 9,300 6,150
Trust monies 2,100 1,350
Domestic debt 24,000 6,750
35,400 14,250
Non-current Liabilities
Domestic debt 54,000 27,000
External debt 63,675 33,000
117,675 60,000
Total Fund and Liabilities 32,775 81,450
Required:
i) From the information provided, compute for the two countries respectively:
• Grant to Total Revenue ratio
• Wage Bill to Tax Revenue ratio
• Interest to Revenue ratio
• Debt to GDP ratio
• Capital expenditure per Capita
• Wages bill to Total Expenditure ratio
ii) Based on the result in question i), write a report discussing and analysing the financial performance and
financial position of the two countries. Include in your report the limitations of the analysis of the two
countries.
6 | www.aspireproconsult.com | 0555 213 559
QUESTION TWO
The financial information below relates to the Consolidated Fund of Ghana.
Statement of Financial Position of the Consolidated Fund as at December 31, 2018
2018 2017
GH¢'million GH¢’million
Non-Current Assets
Property Plant and Equipment 4,200 5,600
Equity investment 10,000 12,000
Total Non-current assets 14,200 17,600
Current Assets
Work in progress 2,500 2,000
Receivables 1,100 900
Cash and cash equivalent 3,250 2,980
Other assets 450 600
Total current assets 7,300 6,480
Total assets 21,500 24,080
Funds and Liabilities
Accumulated Fund (111,280) (111,620)
Current Liabilities
Payables 1,600 19,000
Trust monies 2,540 2,300
Domestic loans 11,240 12,500
Total Current Liabilities 15,380 33,800
Non-Current Liabilities
Domestic loans 52,000 43,000
External loans 65,400 58,900
Total Non-Current Liabilities 117,400 101,900
Total Funds and Liabilities 21,500 24,080
Additional Information:
i) The total market value of all final goods and services produced domestically in Ghana for 2018 and 2017
fiscal year amounted to GH¢205,100,940,000 and GH¢185,600,400,000 respectively.
ii) According to the Statistical Service data, the population of the country is estimated as 25,000,000 in
2018 and 23,900,000 in 2017.
7 | www.aspireproconsult.com | 0555 213 559
Required:
i) From the information above, compute for the two financial years, the following ratios: Gross Debt
• Net Debt percentage
• Debt per Capita
• Debt to Gross Domestic Product ratio
• Total Asset to debt
• Capital Asset per Capita
ii) Based on the ratios computed, write a report discussing and analysing the financial position of the
Consolidated Fund to the Head of a “think tank” of a Civil Society Organisation for Financial
Accountability.
BUDGET VARIANCE ANALYSIS
QUESTION ONE
a) Below is the Revenue and Expenditure Extract of the Consolidated Fund for the year ended
31 December 2021.
Consolidated Fund of Ghana
Statement of Financial Performance for the year ended 31 December, 2021
Actual Original Budget
GH¢'000 GH¢'000
Revenues
Tax revenues 270,000 312,000
Non tax revenues 26,700 39,000
Grants and Donations 7,200 10,800
Total revenue 303,900 361,800
Expenditures
Compensation of employees 121,500 124,800
Goods and Services 54,000 120,700
Consumption of fixed capital 1,950 -
Interest 81,000 82,100
Social benefit cost 1,500 1,800
8 | www.aspireproconsult.com | 0555 213 559
Subsidies 1,080 1,170
Grants 2,700 2,910
Other expenditure 34,020 32,000
Total expenditure 297,750 365,480
Net Operating result 6,150 (3,680)
Additional information:
The Minister for Finance, has presented a mid-year budget review toParliament that
included a supplementary (additional) budget for 2021. The Minister has cited several local
and international reasons for the budget adjustments. The approved supplementary
budget is as follows:
GH¢’000
Compensation of employees 11,500
Goods and services 17,000
Interest 2,500
Social benefit cost 1,500
Subsidies 180
Total expenditure 32,680
Required:
Prepare a Budget Performance Report showing relevant variances and explanation for the
possible causes.
QUESTION TWO
Below is the Revenue and Expenditure Extract of Nkong District Assembly for the year ended 31 December,
2020.
Annual Revised Budget Actual
Budget Performance
GH¢’ 000 GH¢’ 000 GH¢’ 000
Decentralised Transfer 32,000 35,000 42,000
Internally Generated Fund 56,000 45,000 33,000
Compensation 23,000 20,000 25,700
Goods and Services 13,000 18,000 24,000
Non -Financial Asset 18,000 15,000 12,000
Required:
i) Prepare a Budget Performance Report of Nkong District Assembly based on the extract above.
ii) Write a report analysing the Budget Outturn whiles assessing the likely causes of the variances during the
year.
9 | www.aspireproconsult.com | 0555 213 559
