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PSA522/662 – PA FEB 2022
PSA522/662 FEB 2022

SUGGESTED ANSWER
QUESTION 1
a. Four (4) types of responsibility centre.
i. Revenue centre
ii. Expense centre
iii. Investment centre
iv. Profit centre
(4 points with explanation x 1 mark= 4 marks)
b. Three (3) components of budget process cycle under the management

instrument.
i. Coordination
• Serves as a useful tool through which the actions of the different parts of
an organization can be brought and reconciled into a common plan.
• Compels managers to examine the relationship between their
department’s operation and those of other departments to identify and
resolve conflicts
ii. Control
• To ensure objectives set at planning stage will be achieved and all
divisions of the organization are cooperating to achieve that goal.
• Control devices – legislative control over executive & executive control
over government agencies or departments.
iii. Communication
• Must be definite line of communication in an organization -to be kept
informed of plans, constraints and policies to which the organistion is
expected to conform
• E.g. Top management communicate its expectations to lower level
management, so that all parties understand the expectations and can
co-ordinate their activities to attain them
iv. Planning
• To develop objectives and preparing various budgets to achieve those
objectives.
• Long term plan (systematic and formal)– strategic or corporate
planning. Short term plan (accept present environment)– budgeting
• set forth the objectives of the organization and the proposed way of
accomplishing them.
v. Evaluation
• Provides definite objectives for evaluating performance at each level of
responsibility.
• A financial report (compare the budgeted & actual revenue &
expenditure) – basis for evaluating compliance to accounting standards.
• Any variances between budget and actual represent a divergence from
what was planned to happen. Reasons for variances need to be
analysed & to be corrected to ensure planned performance is achieved.
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PSA522/662 – PA FEB 2022
vi. Motivation
• A useful device for influencing managerial behaviour and motivating
managers to perform online with organizational objectives.
• A budget provides a standard that under certain circumstances, a
manager may be motivated to strive to achieve.
(any 3 components with explanation x 2 marks= 6 marks)
c. Implications of Outcome based budgeting that are significant to government

systems and processes.
• OBB strengthens the linkages between national objectives and

strategies which are cascaded down to agency level and institutions.
Alignment of outcomes, programs and institutions facilitated through
strengthening the top-down process, provides better linkages between
top-down and bottom up planning. This lead to better focus on
strategic and medium term objectives to support the achievement of
national outcomes and financial sustainability which was missing
under modified budgeting systems.
• Programmes and activities were restructured, which help to eliminate
waste and redundancies. Cost cutting and enhancement of a
ministry’s efficiency is also encouraged via limiting the introduction of
new and unplanned policies during the year.
• The budget review process is more focused on programme
performance and results rather than input and output. Various
agencies are involved in the budget preparation process, including the
National Budget Office, EPU and PSD. This results a better budget
examination and coordination between the central agencies and the
spending ministries.
• OBB enhances public sector performance via the inclusion of
cohesive performance monitoring, reporting and evaluation in the
budget process and documents. Performance targets and
performance indicators were also incorporated in the budget
documents, which facilitates the monitoring and evaluation process.
• The budget process is framed by the medium-term national plan. This
ensures the link between short-term plans and the long-term Malaysia
Plan, which is fundamental to the achievement of long-term objectives
and sustainability.
• The preparation of operating and development budgets is integrated,
resulting in an all-inclusive and comprehensive budget, enhancing the
budget as management tools. The integrated budget leads to more
balanced allocations between operational expenditure and
development expenditure
• Performance and budgeting data is better prepared and reported, with
a multi-year view to support the decision-making process at al levels.
• Any other relevant answers.
(Any 5 point with explanation x 2 marks = 10 marks)

(Total: 20 marks)
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PSA522/662 – PA FEB 2022
QUESTION 2
a. Three (3) regulatory requirements for fund accounting.
• Article 97 (1) of the Federal Constitution – all revenues & monies howsoever
raised or received by Federation shall be paid into Federal Consolidates
funds.
• Article 97 (2) of the Federal Constitution – all revenues & monies howsoever
raised or received by State shall be paid into States Consolidated Fund
• Article 97 (3) of the Federal Constitution –for Islamic -related revenues,
including zakat, fitrah, baitulmal or other similar religious revenue, need to be
paid into a separate fund and shall not be paid out except under the authority
of state or federal law.
• Section 7 (a) of the Financial Procedure Act 1957 – All types of money or
revenue received except for loans and trusts are to be accounted for in the
Consolidated Revenue Account
• Section 7 (b) of the Financial Procedure Act 1957 –Consolidated Loan
Account is established by the federal or the state government to keep all
moneys received by way of loan.
• Section 7 (c) of the Financial Procedure Act 1957 –Consolidated Trust
Account is established to account for all receipts and payments of trust funds
and monies received by government for specific purposes.
• Section 16 of the FPA 1957 states that at the end of financial year, the
authorised financial authority must prepare:
a) A full and particular statement of Consolidated Revenue Account
b) A full and particular statement of Consolidated Loan Account and
c) A statement of receipts and expenditure of Consolidated Trust Account
• Government Accounting Standard No.3 – Consolidated Revenue Account
• Government Accounting Standard No.4 – Consolidated Trust Account
• Government Accounting Standard No.5 – Consolidated Loan Account
(Any 3 legal requirement with explanation x 2marks = 6 marks)
b. Three (3) types of Consolidated Funds.

Sec 7 (a) FPA 1957 – all types of money or revenue received except for loan
& trusts are the sources to Consolidated Revenue Account (except Islamic
religious revenue).
Four types of revenue:
Tax revenue;
Non-tax revenue;
Other receipts; and
Revenue from Federal Territories
Used to pay for two types of operating expenditure:
Charged expenditure (Article 98, FC)
Supply expenditure (Articles 100 and 101, FC)
Any excess will be contributed to the Consolidated Trust Account.
Consolidated trust account
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PSA522/662 – PA FEB 2022
Sec 7 (c) of FPA 1957- Consolidated trust account is set up under which all
receipts & payments of both government & public trust funds & monies
received by the government for specific purposes are accounted for.
PPK No 4- Dec 2004 effective for financial year 2006
Three main classification of Consolidated Trust Account:
Government Trust Fund (Section 10, FPA, 1957)
Public Trust Fund (Section 9, FPA, 1957)
Deposits
Consolidated Loan Account

Sec 7 (b) FPA 1957- Consolidated Loan Account established by the Federal &
State government to keep all moneys received by way of loan
Art 111 of the FC
PPK No.5
Sources – domestic borrowing (local bank & financial institution)& external
borrowing (foreign banks, financial institution, IMF & World Bank)
All receipts & disbursements are accounted for the purpose of repayment of
outstanding loans & transfer to other funds
(3 types of CF with explanation x 3 marks = 8 marks)
c. There (3) categories of unclaimed money.
• Moneys which are legally payable to the owner, and have remain unpaid for a
period of not less than one year after they have become payable. E.g.
salaries,wages,bonuses, commissions and dividends.
• Moneys standing to the credit of an account that has not been operatedin
whatever manner by the owner for a period of not less than seven years. E.g.
saving accounts, current accounts and fixed deposits (with automatic renewal
instructions.
• Moneys to the credit of a trade account which has remained dormant for a
period of not less than two years.
(3 categories with explanation x 2 marks= 6 marks)

(Total: 20 marks)
QUESTION 3
a. Three (3) users of financial reporting in public sector.

• Legislator
The FS provide information on the impact & the achievement of the nation to
bring about social and economic development and harmony in the society.
This information is crucial to the legislators, as they are involved in approving
the budget as well as implementing new taxes
• Government Manager & Executives
They formulate various plans, programs, activities & projects for
implementation at various levels in line with government objectives. This
information will help them to make decision and evaluate the successful
implementation of various programs and activities by the government towards
achieving various government objectives.
• Government Auditors & Oversight Committees
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PSA522/662 – PA FEB 2022
They are responsible to ensure that public moneys are properly spent.
Besides they are also accountable to check the level of compliance with
government’s rules, regulations and policies.
• Taxpayers
They pay various taxes thus they require information on the sources and uses
of government resources.
• Investors & Vendors
Investor’s main objective is to achieve their investments goals. Information
from the PSA will help them make decisions relating to business risks &
opportunities in government projects and contracts
• Employees & Voters
Being the backbone of the government, employees are interested on
information about their salary structure and the strength of the department
they work for. Meanwhile, voters who are the decision makers of the ruling
government would like the government to perform effectively and efficiently in
their duties
• Non-Governmental Organizations (NGOs)
In Malaysia, NGOs take care special interest groups. They need information
on the impact of government policies on certain sectors of the society.
(Any 3 users with explanation x 2 marks = 6 marks)
b. Explain the following components of federal government financial statements;
i. Statement of financial position

The statement of financial position of the Federal Government shows the
amount of cash and investments held in respect of three accounts of the
consolidated fund, namely consolidated revenue account, consolidated trust
account and consolidated loan account. In accordance with the cash basis of
accounting adopted by the Federal Government only investment held for
revenue and specific trust accounts are disclosed in this statement.
ii. Statement of cash receipts and payments

Statement of cash receipts consists of receipts in the form of revenue,
loan,capital receipts and trust receipts. Meanwhile statement of cash
payments in the form of operating expenditure, development
expenditure,repayment of loans,external assistance,capital expenditure and
trust expenditure.
iii. Statement of memorandum accounts

The statement of Memorandum Accounts is a statement that shows some of
the assets and liabilities of the Federal Government, which are not disclosed
in the Statement of Financial Position.
iv. Notes to financial statements

Notes to financial statements include further explanations and detailed
schedules of amounts shown in the financial statements.
(4 point of explanations x 2 marks= 8 marks)
c. Discuss the differences between cash accounting and accrual accounting.
• Cash accounting is simple compared to accrual accounting because there are

more rules to follow when implementing accrual accounting.
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PSA522/662 – PA FEB 2022
• Under the Company Act 2016, cash accounting is not allowed to be practised
in the accounting system because it does not comply with the matching
concept recommended by international standards. Accrual accounting is
allowed because the information is reliable and relevant, as well as meeting
stakeholders’ needs.
• In cash accounting, the income or expense is recognised when there is an

inflow cash in reality. Under the accrual method, the revenue is recorded
when it is earned.
• Under the cash accounting, the expenses is recognised when there is outlow
of cash in reality. Under the accrual method, the expenses are reported when
they are incurred.
• In cash accounting, the cash flow demonstrated the financial performance of

organization. The lower the cash inflow, the lower the financial performance
of an organization. Meanwhile, accrual accounting takes into account
economic effects such as appreciation of assets.
• In matching concepts, the expenses of a particular accounting period are

matched with the revenue. Accrual accounting fulfill the criterion; that is why it
is regarded as an effective tools for recording receipts and payments.
However the cash accounting does not follow the matching concepts.
• The degree of accuracy is higher in accrual accounting when compared to

cash accounting. In accrual accounting, the transaction occurring in a
particular financial year would be recognised regardless whether the money is
received or paid; while cash accounting recognizes the money received or
paid in a particular financial year regardless when the transaction occurred.
For instance, the income of the last two years is paid in the current financial
year for cash accounting and this does not reflect the accurate financial
performance of particular period.
• Any other relevant answer.
(3 point of explanations x 2 marks= 6 marks)
(Total: 20 marks)
QUESTION 4
a. Three (3) purposes of government auditing.
• To determine any embezzlement from the estimation being planned

• To declare any wrongdoings in relation to the principles, orders, rules and
regulations
• To declare the elements and factors which fail to lead for effectiveness,
efficiency and economical utilization of the government’s resources
(3 points with explanation x 2 marks = 6 marks)
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PSA522/662 – PA FEB 2022
b. Explain the framework for public sector auditing.
• Each government organization will have to maintain proper accounts to

record its daily operations and at the end of the accounting year, annual
financial statements will have to be prepared.
• According to Article1 06 of the FC, Auditor General is to audit the financial
statements of each governments organization according to the relevant
standards and regulations.
• Sec.9 of the Audit Act 1957 requires the AG to prepare the Audit Report at
the end of the audit process at the AG department’s level. The overall audit
process does not end at this stage.
• The audited financial statements and the Audit Report will be passed to a
parliamentary committee called Public Accounts Committee. This
committee will review the statements and report as well as provide
comments and suggestions on them.
(4 point of explanation x 2 marks= 8 marks)
c. Discuss role of auditors towards accountability in public sector organization.
• Auditors can play a significant role in developing and administering

accountability systems at all levels of government and throughout all
public sector organisations.
• Auditors can give comments on the government’s accountability for
provincial debt, internal control and other aspects of systems and
procedures that assist the government in its operation and financial
accountability.
• Auditors should engage in the development of new accountability
mechanisms, that would support the decision making process in the
public sector.
• Auditors should enhance accountability in a way that would help public
sector agencies recapture measure of public confidence that is so vital to
them.
• Auditors may also play some role in developing and administering the
public policy homework accountability accounting framework.
• In the absence of an active management effort to report on effectiveness
however there is always possibility that auditors may be ask to fill the gap
and assume what would more properly be a management responsibility.
• Auditors should provide opinions on the reliability and suitability
information reported by management about effectiveness.
• Any other relevant answers
(Any 3 point with explanation x 2 marks= 6 marks)

(Total: 20 marks)
QUESTION 5
a. Travelling expenses according to TI 100.

Travelling claims according to the general orders should be presented not later
than the tenth day of the succeeding month. Vouchers should give full details
of dates, times, distances, rates, the officer’s designation and basic salary,
method of travel, nature of duty, etc.
(2 marks)
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PSA522/662 – PA FEB 2022
b. VOTE BOOK
VOTE Approved amount for the year

B25… Allocation as at the estimated RM …308,700√
year 2021 ….
45,000√ Date Amount Total to date Date Amount Total to
PROG/A Additional allocation for the RM ……………. 308,700√ 15.3.21 6,500√ date
KT year ….…………. ……………. ……………… ….…………. ……………. 329,200
288057 …………
353,700 8.3.21 45,000√ 353,700
OBJECT Total allocation for the year RM ……………. …………….. …………… ………………. …………….. …………… ……………
9.3.21 (31,000) √ 322,700
25000 ………… ……… …………… ………… …………….
√
RM RM RM RM RM RM
Date Details Liabilities Code Voucher Debit Credit Liabilities Outstanding Net Balance
b/f S.O.D.O no. charged liabilities expenditure to date
(paid)
(1) (2) (3) (4) (5) (6) (7) (9) (10) (11)
√ √ √ (8)
APPENDIX 1 (1)
Balance b/d
1.3.21 32,500√ 18,900√ 257,300√
Carry forward 9,300√

2.3.21 liability 2020 9,300√ 41,800√ 18,900 248,000√
Sign agreement SG2021/01

with Sykt Mawar 13,500√√ 55,300√ 18,900 234,500√
5.3.21
Issued LO to LO2021/02
iversiti Teknologi MARA

7.3.21 Warisan Ent 4,000√√ 59,300√ 18,900 230,500√
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PSA522/662 – PA FEB 2022
Received WP02/21
9.3.21 additional 45,000√ 59,300 18,900 275,500√
allocation
Issued sub- WPK03/21
CONFIDENTIAL
12.3.21 allocation 31,000√ 59,300 18,900 244,500√

warrant to Sg
Besar Branch
Received WPP04/21
15.3.21 transfer 6,500√ 59,300 18,900 251,000√
allocation from
object 22000
Issued payment PV01/21

19.3.21 voucher to 2,800√ (3,000) √ 56,300√ 21,700√ 251,200√
ProStar Bhd
Payment of TNB PV02/21
21.3.21 825√ 56,300 22.525√ 250,375√
TNB- PV02/21
24.3.21 cancellation of 825√ 56,300 21.700√ 251,200√
cheque
Issued new PV03/21
24.3.21 payment 852√ 56.300 22.552√ 250,348√
voucher for TNB
Issued Payment PV04/21
APPENDIX 1 (2)
26.3.21 voucher to Sykt 9,000√√ (9,000)√ 47.300√ 31.552√ 250,348

Mawar
Closing Entry
31.3.21 47,300√ (47,300) √ 0√ 31.552 297,648√
c. 54√ X 1/3 = 18 MARKS
END OF SOLUTION
9
CONFIDENTIAL 1 AC/FEB2021/PSA522
SUGGESTED SOLUTION
FEB2021
SOLUTION 1
a. Two (2) component of government expenditure.
Operating or management expenditure
 Represents all charges to the budgeted allocation, consists of charged

expenditure (Art98) supply expenditure (Art100)
 Art 98 FC – Charged expenditure is an expenditure that has been approved by
parliament. Examples are any grant, remuneration, pension, compensation for
loss of offices and gratuities.
 Art 100 FC – Supply expenditure is an expenditure that has to be submitted to
the parliament for approval. Expenditure to be met from the consolidated fund but
not charged the on and shall be included in a bill known as supply bill.
Development expenditure
 Incurred for development purposes, amount usually large.

 To finance, the government usually borrows on long-term basis either from
internal or external financial Institutions.
 Allocated to domestic social services such as education and health, economic
services such as transport and public utilities, internal security and defense
(Any 3 points with explanations x 2 marks = 6 marks)
b. Four (4) functions of EPU:
i) Formulate policies and strategies for socio-economic development

ii) Prepare medium and long term plans
iii) Prepare development programmes and project budget
iv) Monitor and evaluate the achievement of development programmes and
projects
v) Advise government on economic issues
vi) Initiate and undertake necessary economic research
vii) Plan and co-ordinate the privatization programme and evaluate its
achievement
(Any 4 points x 1 1/2 marks = 6 marks)
c. OBB has created an integrated results framework at every level of the budget
process. Under OBB, the program structures are reviewed and refined through an
integrated program activity structure, which provides hierarchical linkages of ministry
programs and activities, and systematically aligns them to national priorities. It also
establishes a logical structure on how program information is strategically collected
and utilized for planning, budgeting, and M&E. Each program under OBB is an
intervention aimed at addressing a specific problem, compared to programs under
MBS, where many were institutional in nature. Activities are a common unit for under
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MBS and OBB, but they can only be mapped to one specific program, even where
they may contribute to achieving multiple program outcomes. This helps to create a
one-to-one match between the administrative and program-activity structures to
preserve accountability and line of sight. Outcome objectives, along with relevant
KPIs, are defined at all three levels of ministry, program, and activity. As the budget
book is still approved by program, the activity level detail is used for internal
management purposes within the ministry.
Or any relevant answers.
(Any 4 points with explanation x 2 marks = 8 marks)
(Total: 20 marks)
SOLUTION 2
a. Characteristic of fund accounting
 Each fund is an independent accounting entity whereby the revenue, loan and trust
account can stand on its own. This means making decisions independently
regarding the best use of limited resources.
 Each fund has its own set of accounts with complete double entry & financial
statements
 Each fund must be self –balancing and autonomous. Self-balancing means the total
of the assets of a particular fund must be equal to the total of liabilities and fund
balance. Autonomous means that although a governmental unit may be composed
of several different funds, they should be focus on its general government activities
and spending activities, where crucial decisions, objectives, goals can be identified.
(Any 2 points x 2 marks = 4marks)
b. Consolidated fund accounts.

All types of money or revenue received except for loan & trusts are the sources to
Consolidated Revenue Account (except Islamic religious revenue). The money are
used to maintain operating expenditure; namely charged expenditure (Art 98 FC) &
supply / operating expenditure (Art 100 FC). Any excess will be contributed to the
Consolidated Trust Account.
Consolidated Trust Account

Set up under which all receipts & payments of both government & public trust funds &
monies received by the government for specific purposes are accounted for. Primary
types are Development Fund, Housing Loan Fund and Miscellaneous Government
Trust Funds.
Consolidated Loan Account

Established by the Federal & State government to keep all moneys received by way
of loan. Sources – domestic borrowing (local bank & financial institution) & external
borrowing (foreign banks, financial institution, IMF & World Bank) All receipts &
disbursements are accounted for the purpose of repayment of outstanding loans &
transfer to other funds
(Explanations of consolidated account 2 marks each x 3= 6 marks)
(Relationships = 2marks)
c. Factors that could influence Malaysian government accounting agencies to the success
of the government administration
 Treasury - play a major role in the development of governmental accounting. Any

change to the accounting systems is under the control of Treasury.
 Ministries/Politicians - play an important role in the development of governmental
accounting. Politicians may give pressure for a change, if they want to.
 Technological changes - technological change has made an impact on
governmental accounting in Malaysia. The technology had been used to improve
accounting procedures and reporting.
 International pressure - Malaysia obtained loans from international bodies such as
the World Bank and the International Monetary Fund (IMF). These international
bodies would require Malaysia to practice transparency in its financial reporting and
disclosing accounting information on an accrual basis.
 Change from Modified Cash to Accrual Accounting - accrual accounting could
provide better accountability for the government. Accrual accounting would be more
appropriate even though the simplicity in implementing cash accounting is still the
first choice.
 New accounting standard-changing from cash to accrual accounting requires a
different set of accounting standard than the treasury circulars. Standard setter
should be an independent body from regulator (treasury) and the implementer
(AGD). An independent body should be set up.
 Or any relevant answers.

(4 points together with explanations x 2 marks = 8 marks)
(Total: 20 marks)
SOLUTION 3
a. Factors to be considered in the process of changing from cash to accrual accounting in

the preparation of financial reporting of public sector:
 Redesigning the chart of accounts

 Collection accurate information on capital assets and their value
 Establishing long-term liabilities
 Recognizing and accounting for government’s receivables
 Drafting new legislation and standards for the accrual budgeting system
 Reporting debt and debt management
 Intensive training for users of the system at all level of government
 The acceptance of the new system by users
 The right IT system to be in place to record and report the data
 Or any relevant answers
(Any 4 points x 1.5marks = 6 marks)
b. Notes to the financial statements provides more information that contained on the face
of the financial statement and this enhances the understandability of the financial
statements.
 Accounting policies are in compliance with the laws, rules and regulations relating to
accounting and financial management of the Federal Government.
 Accounting entity includes all ministries and departments of the Federal
government.
 The financial year is defined by Section 3 of the Financial Procedure Act 1957 as a
period of 12 months ending on the 31st day of December every year.
 The financial statements have been prepared using Ringgit Malaysia (RM).
 The financial statements are prepared on the same basis as the budget to enable
comparison to be made.
 When there is a change in the presentation or classification of items, the
comparative amounts have been restated unless otherwise stated.
Or any other relevant answers.
(4 points x 2 marks = 8 marks)
c. The implication of information Technology (IT) on financial reporting in public sector:
 require more financial resources

 required of specialist IT skills. - technical IT and enterprise resource planning (ERP)
expertise are needed to make sure the government have a good internal control
system.
 The government need to consider redesigning the system to make sure it supports
the new system.
 require a lot of system changes: Adequate IT system is needed in recording and
reporting data
Or any relevant answers
(Any 3 points with explanations x 2 marks = 6 marks)
(Total: 20 marks)
SOLUTION 4
a. Functions of PAC in relation to the public sector auditing process.
 PAC will examine Auditors’ report on whether expenditures exceeded authorized

limit and whether appropriations are not spent according to rules and regulations
 PAC will also examine whether individual programmed have achieve its objective
and whether value of money being obtained
 To ensure money spent in accordance to purpose and programmes as in approved
 To monitor that public officials spend money in most effective and efficient manner
 To maintain high standards of accountability
(Any 3 points X 2marks= 6marks)
b. Three (3) approaches to enhance accountability among public sector organization in

Malaysia
 Continuous revisions of policies and circulars

 Ensure the existence of good governance setting
 Strengthen the internal control system and practice
 Encourage performance achievement amongst staff through appropriate approach
 Create sufficient post
 Build active ‘public participation’
(Any 3 with explanation x 2 marks = 6 marks)
c. Evaluate the issues in Malaysian public sector auditing pertaining to the expansion and
transformation of information technology (IT) and information system (IS).:
 Be aware of IS security risks, controls and standards & to maintain their skills in
order to undertake effective audit
 Support from the top management & encourage worthwhile changes
 Understand the objectives & practical implication of the improved IS
 Auditor need training and development to upgrade their skills
 Need to be familiar with relevant information security regulations & be able to
recognise & understand the system
 Strong evaluation control to interpret audit findings
 Remain independent towards the implementation and operation of the systems they
audit
 Embrace changes by adopting audit approaches, which fits into the new information
system
Or any relevant answers
(Any 4 points x 2marks= 8 marks)
(Total: 20 marks)
QUESTION 5
a. Credit Expenditure
Credit expenditure is when refund of payment has been received. For example,
personnel telephone charges or cancellations of cheques. There are two different
situations to be recorded in the votebook.i.e. when there is no requirement for
payment or requirement for repayment.
( 2marks)
b. Vote Book- refer appendix 1

(18marks)
(Total: 20marks)
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Dec18
QUESTION 1
a. Three (3) types of responsibility centres that are headed by a manager who is responsible
for the activities of that unit.
 Revenue centres – An organisational unit in which outputs are measured in monetary

terms but are not directly compared to input costs.
 Expense centres – An organisational unit where inputs are measured in monetary
terms but outputs are not.
 Profit centres – An organisational unit where performance is measured by the
difference between revenues (outputs) and expenditure (inputs)
 Investment centres – An organisational unit where outputs are compared with the
assets employed in producing them.
b. Main function of budget in public sector.
i. Fiscal Policy Instrument

 Involves taxation measures to provide revenue for the government to spend on
the development programmes of the country.
 Budget serves as an allocation, distribution and stabilisation functions.
 Allocation fin. Resources – to various activities i.e. economic, social,
administration.
 Distribution- free education, books & subsidies for lower level income groups.
 Stabilisation – strengthen economic growth, diversify the sources of growth, and
reduce unemployment & zero-inflation.
 Any relevant answers
ii. Management Instrument

 Instrument for planning and management of financial resources that ensures
objectives are achieved as planned.
 Properly documented – help management to control cost and use of resources.
 By comparing budgeted & actual figure (variances) – provide information whether
activities are properly planned and managed. (Instrument for performance
evaluation)
 Any relevant answers
c. Discuss any four (4) challenges in implementing Outcome Based Budgeting (OBB)
 The level of acceptance and understanding related to OBB in the public sector is
still low. As such, the government may face losses of trainers.
 The development of OBB is an evolution that requires commitment from top
management of ministries and agencies. The top management must emphasize
on performance orientation culture.
 The qualities of information in the results framework need to be improved in

providing better information on programme performance and to increase the
opportunity for the department to use strategic planning as the basis for budget
preparation.
 The government needs to review the existing structure of programmes and
activities to adapt to the OBB
 The structure of OBB requires more work and more commitment from the officer.
Thus, the workload may be more compared to the number of officers available.
QUESTION 2
a. Government accounting personnel under government accounting machinery.
 Accountant General - The principal accountant in the government of the Federation

and the head of the Accounts Division of the Federal Treasury with the authority in
matters of accounting procedure over the accounts of the Governments of the
Federation and of the States.
 Controlling Officer – Holds the responsibility as the Chief of Accounting Officer.

Appointed by Ministry of Finance or Chief Minister or Menteri Besar in respect of
each purpose of expenditure provided for any financial year.
 Accounting Officer -Every public officer who is charged with the duty of collecting,
receiving, accounting, disbursing of public money and with the receipt, custody or
disposal of public stores.
b. Recovery of surcharge;
Section 21 of the Financial Procedure Act 1957
 Deduction from the salary of person surcharged or

 Deduction from the pension of the person surcharged
 By equal monthly instalment nor exceeding one-fourth of the total monthly salary or
pension of the officer.
c. Three (3) types of Government Trust Fund under Consolidated Trust Account.
Development Fund
 Development Fund Act 1966.

 Aims is for economic development of the nation.
 Consist of loans for development, contributions from Consolidated Revenue
Account & repayment of loan given out from this fund.
 Transfer from Consolidated Loan Account represents the main source of finance
to the Development Fund
Housing Loan Fund
 Government Housing Loan Fund Scheme -Housing Loan Fund Act 1971
 Provides housing loan facilities to members of Federal Administration, members
of Parliament, members of State Administration and members of Legislative
Assembly, Judges, Government employees from Civil Service, Police Force and
Armed Force.
 Receipts comprises of appropriation from Consolidated Revenue Account &
Development Fund, proceeds from loans raised through transfer from Loan
Account, housing loan repayment & interest earned.
Miscellaneous Government Trust Funds
 Sec10 FPA 1957 – specific trust purposes in line with Federal Constitution
 Part of the fund is revolving in nature while others provide for outright payments.
 Source of the fund is from appropriations from the government.
 The five main categories are Clearance Account, Trading Account, Loan
Account, Contingency Fund and Miscellaneous Funds
 Until 2012, 176 accounts – including National Trust Fund, Poor Student Fund,
National Sport Fund and Oversea Student Welfare
(DEC 2019)
QUESTION 1
a. Explain briefly four (4) regulatory framework for preparation of budget.

 Art 99 (1) FC - Statements of the estimated receipt & expenditure of the Federation
for a particular year shall be laid before YDA & House of Representative before the
commencement of that year unless parliament decided not to.
 Art 99 (2) and (3) FC – Provide that the estimates of expenditure shall show the total
sums required to meet expenditure charged on consolidated fund, and the sums
required to meet expenditure for other purposes proposed to met from the
consolidated fund.
 Art 100 FC – Stated that expenditure to be met from the Consolidated Fund
(excluding charged expenditure) should be included in a bill known as Supply Bill.
 Art 101 FC- A supplementary Supply Bill showing the sums required or spent shall
be laid before the House of Representatives if the amount appropriated by the
Supply Act for any purpose is insufficient, or that a need has arisen for expenditure
for a purpose for which no amount has been appropriated by the Supply Act, or that
money has been expanded for any purpose in excess of the amount appropriated for
that purpose.
 Sec 15 FPA 1957 – The estimates or budget prepared are required to show clearly
the subdivision of expenditure proposed, amount expected to be received & spent on
the year & purpose of the expenditure.
 TI 29-51
o Budget preparation for Federal & States is the responsibility of secretary
general reporting to Treasury or State Financial Officer respectively.
o Circular requesting the preparation of draft estimates for next year will be
distributed to all Controlling Officer.
o Draft estimates will be examined by Sec. General.
o Estimated revenue will include gross receipts of CF & the estimated
expenditure should show expected amount to be spent from Consolidated
Revenue other than those to be spent in C. Loan & C. Trust a/c.
b. Explain the three (3) functions of Budget management Division (BMD).
• To determine allocation of federal resources is in line with the national objective and
policy.
• To make sure all Ministries/ Departments/ Agencies spend the allocation effectively
and efficiently according to the approved amount.
• To manage grants allocated to the States and local authorities base on the Federal
Constitution and decisions of the Cabinet and National Finance Council.
c. Discuss three (3) principles in implementing Outcome Based Budgeting in the public
sector.
1. Planning and constructing of budget is based on Programme Based Approach
 Programme Based Approach emphasizes the planning and construction of budget
through formation of Intervention Programmes to meet the ministry’s goal.
 Preparation of budget will be made based on outcome and the identified
programme output.
2. Roles and responsibility of Ministry of Finance, Economic Planning Unit and Public
Service Department in examining ministry’s budget
 Public Service Department, Economic Planning Unit and Ministry of Finance are
collectively responsible to examine the budget to ensure the prepared budget
conforms to the requirements to achieve the outcome at ministry and national level.
3. Ministry’s programmes aligned to the National Results Framework (NRF)

 The programmes implemented by the ministry must contribute clearly to the
National Results Framework (NRF).
4. Medium-term perspectives in planning and budget

 The planning and budget need to consider the medium-term perspective so that it
suits the period to achieve the outcome of programmes or activities that might not
be achieved in a particular budget year.
 This is to enable the Programme Manager or the Head of Activities to plan on how
to utilize the resources more effectively.
5. Strengthen performance management

 Strengthening the monitoring and evaluation process enables effective decision
making to be made based on valid evidence.
 This will strengthen the public sector performance management.
6. Empowering Controlling Officer

 The Controlling Officer should be given the power to manage the resources under
his control and will be responsible to the achievement of outcome and expected
result.
7. Incentives for results achievements

 To strengthening the accountability of officers in the public sector, the result
achievements must be directly associated with rewards and restrictions.
8. Continuous development of ability

 Continuous development of ability is needed to ensure sustainability of principles
and practices of OBB through systematic training plan at national and ministry’s
level.
QUESTION 2
a. Explain briefly four (4) function of Treasury.
 Formulate and implement fiscal and monetary policies in order to ensure effective
and efficient distribution and management of financial resources.
 Formulate financial management and accounting processes, procedures and
standards to be implemented by all government.
 Manage the acquisition and disbursement of federal government loans from
domestic and external sources.
 Monitor that Minister of Finance incorporated companies are managed
effectively.
 Monitor the financial management of ministries, government departments and
statutory bodies.
 Formulate and administer policies related to be the management of government
procurement.
 Formulate and administer government housing loans for public sector employees.
b. Explain three (3) reasons for the need of accounting systems and procedures in public
sector.
 Fulfil public needs and interests: The government’s primary goal is to care for and fulfil
the various needs and interests of the general public.
 Diverse government objectives: the objectives of the government are in multiple forms;
nonetheless, all objectives need to be achieved through compliance of relevant legal
and statutory requirements.
 Large amount of annual expenditure. The government has large expenditure at all
level, both for the operation and development of the country.
 To ensure high financial accountability: The government is entrusted to manage public
money effectively and efficiently. Additionally, the public is interested to know the
sturdy control and monitoring system are in place.

c. Discuss two (2) types of external borrowing under Consolidated Loan Account.
Market Loans
 Market loans are loans obtained from international financial institutions, which are
negotiated at common market rates raised for general purposes.
 The duration of borrowings time is between 14 to 20 years. It is regulated under the
external Loan act 1963. They comprise of Syndicated Loan, Bond Issues and
Floating Rate Notes.
 Syndicated Loan consists of 20-30 banks group together providing loans and the
interest payable to them is based on the floating rate basis of LIBOR, YEN or the
SWISS FRANC. The maturity period is around 10 years. Bond Issues are loans
provided on an ‘IOU’ method. The issues price is determined by market conditions of
demand and supply and the maturity period is between 5 and 15 years.
 Bond Issues are loans from the government in Tokyo, Frankfurt, Amsterdam and
Zurich.
 Floating Rate Notes are external loans where the interest payable is based on the
Floating Rate and has a maturity period of between 10 and 30 years.
Project Loans
 Project loans are borrowings in term of money, services and technical studies,
which are secured for specific development projects.
 It is regulated under External Loan Act 1963, Loan Act (International Bank) 1958,
Loan Act (Islamic Development Bank) 1977, Loans Act (Asian Development Bank)
1968 and other relevant acts.
 These loans are obtained from Multilateral and Bilateral government sources.
Examples of multilateral sources are the World Bank, Asian Development Bank and
the Integrated Development Bank. Bilateral sources are on government to
government basis for example, Malaysian and Japan.
Wakala Global Sukuk
 One form of external borrowing for Malaysia government to continue support its
prudent debt management practice
 The Wakala Global Sukuk is Malaysia’s 3rd USD denominated sovereign sukuk
issuance.
 New benchmark for in Islamic capital market.
 The first 10-year global sovereign USD Sukuk for 2011, structures under the Syariah
principle of Wakala, largest dual-tranche global USD sukuk ever issued.
JUNE 2018
QUESTION 1
a. Component of budget process cycle

a. Coordination
 Serves as a useful tool through which the actions of the different parts of an
organization can be brought and reconciled into a common plan.
 Compels managers to examine the relationship between their department’s
operation and those of other departments to identify and resolve conflicts
b. Control
 To ensure objectives set at planning stage will be achieved and all divisions
of the organization are cooperating to achieve that goal.
 Control devices – legislative control over executive & executive control over
government agencies or departments.
c. Communication
 Must be definite line of communication in an organization -to be kept informed
of plans, constraints and policies to which the organistion is expected to
conform
 E.g. Top management communicate its expectations to lower level
management, so that all parties understand the expectations and can co-
ordinate their activities to attain them
d. Planning
 To develop objectives and preparing various budgets to achieve those
objectives.
 Long term plan (systematic and formal)– strategic or corporate planning.
Short term plan (accept present environment)– budgeting
 set forth the objectives of the organization and the proposed way of
accomplishing them.
e. Evaluation
 Provides definite objectives for evaluating performance at each level of
responsibility.
 A financial report (compare the budgeted & actual revenue & expenditure) –
basis for evaluating compliance to accounting standards.
 Any variances between budget and actual represent a divergence from what
was planned to happen. Reasons for variances need to be analysed & to be
corrected to ensure planned performance is achieved.
Motivation
 A useful device for influencing managerial behaviour and motivating
managers to perform online with organizational objectives.
 A budget provides a standard that under certain circumstances, a manager
may be motivated to strive to achieve.
b. Features of a good budgetary control system in the public sector.

 The organization is broken down into various responsibility centre where each centre
is to carry out identified activities. A detailed plan is formulated into a comprehensive
budget.
 The objectives, outputs and outcomes of the organization are used as the bases for
measuring performance.
 A performance indicator is developed to monitor and evaluate the performance and
progress of each responsibility centre of the organization.
 A continuous performance evaluation is carried out to determine the performance of
the organization (output or outcomes) in comparison with the budgets.
c. Strategic Process of Implementing OBB – M&E strategy

 Impact Minister should M&E programme/activity to measure expected performance
achievement and evaluate the effectiveness of programme/activity that had been
planned online via MyResult.
 It involves aspect of result achievement, financial and physical implementation of the
project.
 The implementation of programme/activity been assessed to measure performance
achievement and to make appropriate modifications, if necessary.
 Evaluation of the overall programme/activity should be done at least once in 5 years
to determine the continuity, additions, amendments or elimination of
programmes/activities.
 The framework for M&E consists of input, process, output, outcome and impact.
 Evaluation process under OBB emphasis on appropriateness, effectiveness, efficiency
and economy.
 Two methods of evaluation that need to be performed that are formative evaluation
and summative evaluation.
QUESTION 2
a. Duties of controlling officer according to Section 15A of the Financial Procedure Act
1957:
 To control the authorized estimates for the particular purpose;
 To be in charge of the public monies collected, received, held or disbursed and all
public stores received, held and disposed;
 To secure proper exercise of performance of their duties;
 To report to the appropriate Service commission and financial authority for every
event of possible surcharge arises or occurs under their control
 To be responsible to explain the correctness of the statement of public monies
under which he is controlling;
 In relation to the budget process of his agency, the controlling officer is responsible
to examine budget of all agencies or departments under his control, to consolidate
the budget for all agencies under which he is controlling, and to ensure that the
budget allocations are spent efficiently and effectively.
b. Features of government accounting system:
 Government accounting system has to be designed to comply with the constitution,

statutory and other legal requirements. The accounting system differs among the Federal
government departments, state government and statutory bodies.
 The accounting system must be related to budget classification, where for example,
supply expenditure, emoluments and receipts are maintained according to the budget.
This is because budgeting and accounting are complementary functions in the
government’s financial management and therefore, they must be closely integrated.
 Accounts must be maintained in a manner that will clearly identify the objects and
purposes for which funds have been received and expended. The executive authorities
are responsible for the custody and the use of funds for programme execution in
government agencies.
 Accounting system must be designed in a way that will facilitate the audit by external
review authorities and readily furnish the information needed for effective audit. This is
consistent with the accountability process, whereby accounting will establish the
evidence by documenting, classifying and recording transactions and auditing, to prove
the existence of such evidence. Auditing will ensure that payment made is budgeted for
and follows proper procedures.
 The accounting system must be developed in a manner that will permit effective
administrative control of funds and operations, programme management and, internal
audit and appraisal. Vote accounting is used in ensuring effective recording of
government activities. To achieve this objective, a vote book is maintained on allocation
received, amount spent, committed and its balance.
c. Management of Consolidated Revenue Account
 All monies and revenue received except for loan and trust are to be accounted for
into the Consolidated Revenue Account (Section 7(a) FPA 1957;
 These moneys are used to maintain operating expenditure which include Charged
expenditure (article 98 FC) and Supply expenditure (article 100 FC);
 Moneys from Zakat, Fitrah, Baitulmal and other Islamic religious revenue are not
to be paid into this account (PPK No. 3);
 The expenditure includes the transfers to Development Fund and Housing Loan
Fund and allocations to state government.
 The revenues are in the form of direct taxes, indirect taxes and other receipts;
 The operating expenditure comprises of all charges to the budgeted allocation
that pertain to emoluments, supplies and services, assets, grants, fixed charges
and other expenditures;
PSA522 – JAN 2018
Suggested Solutions
PSA 522 – JANUARY 2018
Question 1
a. Four (4) types of budgetary control techniques whereby the actual results are compared
with budgets.
 Fund Control
This type of control refers to the procedures set up to ensure that the fund is properly
kept and used in the right way.
 Revenue Control
This type of control refers to the procedures set up to ensure the collection of
revenues of the governments are from properly identified sources, there are proper
monitoring of such collections and the revenues collected are accounted for properly
in the correct funds and proper books of accounts.
 Expenditure Control
This is the control procedure within the spending organisation to ensure that all
spending is done exactly for the purposes that has been agreed. This is also known
as Vote Control and is exercised by the accounting officer of the organisation.
 Cost Control
This is the control procedure to ensure the total cost incurred for any activity of an
organisation is within the right valuation.
 Cash Control
This type of control ensures that spending plans for a period are made by a
department based on approved vouchers. Cash forecast need to be done to avoid
any overspending request that would lead to deficit.
 Payment/Disbursement Control
This procedure is to ensure that payment for any activities through preparation of
payment vouchers is properly authorised.
 Salary/Payroll Control
This control is to ensure that right amounts are paid to the right people in the
organisation and at the right time to avoid fraud and payment to non-existing
workers.
(Any 4 types with explanation x 2 = 8 marks)
b. Main components of national expenditure as part of the budget components.
Operating or management expenditure

 Represents all charges to the budgeted allocation, consists of charged expenditure
(Art98) supply expenditure (Art100)
 Art 98 FC – Charged expenditure is an expenditure that has been approved by
parliament. Examples are any grant, remuneration, pension, compensation for loss of
offices and gratuities.
 Art 100 FC – Supply expenditure is an expenditure that has to be submitted to the
parliament for approval. Expenditure to be met from the consolidated fund but not
charged the on and shall be included in a bill known as supply bill
1
https://www.coursehero.com/file/79156401/SOLUTION-PSA522-JAN-2018-1doc/
PSA522 – JAN 2018
Development expenditure
 Incurred for development purposes, amount usually large.
 To finance, the government usually borrows on long-term basis either from internal or
external financial Institutions.
 Allocated to domestic social services such as education and health, economic
services such as transport and public utilities, internal security and defence
(Any 3 point x2 types = 6 marks)
c. Three (3) principles of designing Outcome Based Budgeting (OBB) based on TC No.2
Year 2012.
Planning and constructing of budget is based on Programme Based Approach

Programme Based Approach emphasises the planning and construction of budget
through formation of Intervention Programmes to meet the ministry’s goal.
Preparation of budget will be made based on outcome and the identified programme
output.
Roles and responsibility of Ministry of Finance, Economic Planning Unit and

Public Service Department in examining ministry’s budget
Public Service Department, Economic Planning Unit and Ministry of Finance are
collectively responsible to examine the budget to ensure the prepared budget
conforms to the requirements to achieve the outcome at ministry and national level.
Ministry’s programmes aligned to the National Results Framework (NRF)

The programmes implemented by the ministry must contribute clearly to the National
Results Framework (NRF).
Medium-term perspectives in planning and budget

The planning and budget need to consider the medium-term perspective so that it
suits the period to achieve the outcome of programmes or activities that might not be
achieved in a particular budget year. This is to enable the Programme Manager or
the Head of Activities to plan on how to utilize the resources more effectively.
Strengthen performance management

Strengthening the monitoring and evaluation process enables effective decision
making to be made based on valid evidence. This will strengthen the public sector
performance management.
Empowering Controlling Officer

The Controlling officer should be given the power to manage the resources under his
control and will be responsible to the achievement of outcome and expected result.
PSA522 – JAN 2018
Incentives for results achievements
To strengthening the accountability of officers in the public sector, the results
achievements must be directly associated with rewards and restrictions.
Continuous development of ability

Continuous development of ability is needed to ensure sustainability of principles and
practices of OBB through systematic training plan at national and ministry level. This
is the role of the public sector training institute and appointed OBB trainer.
(Any 3 principles with explanation x 2 =6 marks)
(Total: 20 marks)
QUESTION 2
a. Four (4) legal requirements for government's revenue and money received that would be
accounted into the Consolidated Fund.
 Article 97 (1) of the Federal Constitution – all revenues & monies howsoever raised
or received by Federation shall be paid into Federal Consolidates funds.
 Article 97 (2) of the Federal Constitution – all revenues & monies howsoever raised
or received by State shall be paid into States Consolidated Fund
 Article 97 (3) of the Federal Constitution –for Islamic -related revenues, including
zakat, fitrah, baitulmal or other similar religious revenue, need to be paid into a
separate fund and shall not be paid out except under the authority of state or federal
law.
 Section 7 (a) of the Financial Procedure Act 1957 – All types of money or revenue
received except for loans and trusts are to be accounted for in the Consolidated
Revenue Account
 Section 7 (b) of the Financial Procedure Act 1957 –Consolidated Loan Account is
established by the federal or the state government to keep all moneys received by
way of loan.
 Section 7 (c) of the Financial Procedure Act 1957 –Consolidated Trust Account is
established to account for all receipts and payments of trust funds and monies
received by government for specific purposes.
 Section 16 of the FPA 1957 states that at the end of financial year, the authorised
financial authority must prepare:
a) A full and particular statement of Consolidated Revenue Account
b) A full and particular statement of Consolidated Loan Account and
c) A statement of receipts and expenditure of Consolidated Trust Account
 Government Accounting Standard No.3 – Consolidated Revenue Account
 Government Accounting Standard No.4 – Consolidated Trust Account
 Government Accounting Standard No.5 – Consolidated Loan Account
(Any 4 legal requirement with explanation x 2marks = 8 marks)
b. Three (3) primary characteristics of fund accounting that are maintained by the public
sector organisation.
 Each fund is an independent accounting entity whereby the revenue, loan and
trust account can stand on its own. This means making decisions independently
regarding the best use of limited resources.
PSA522 – JAN 2018
Each fund has its own set of accounts with complete double entry & financial
statements
 Each fund must be self –balancing and autonomous. Self-balancing means the
total of the assets of a particular fund must be equal to the total of liabilities and
fund balance. Autonomous means that although a governmental unit may be
composed of several different funds, they should be focus on its general
government activities and spending activities, where crucial decisions, objectives,
goals can be identified.
( 3 point x 2 marks = 6 marks)
c. Three (3) situation where government officer may be surcharged according to Section 18
of the Financial Procedure Act 1957.
 Has failed to collect any monies owing to the Federal Government or the State
government for the collection of which he is or was responsible.
 Is or was responsible for any improper payment of public moneys of the Federal
Government or the State government for any payment.
 Is or was responsible for any deficiency in or for the destruction of any public
monies, stamps, securities, stores or other property of the Federal Government
or the state government.
 Being or having been an accounting officer failed or has failed to keep proper
accounts or records.
 Has failed to make any payment or is or was responsible for any delay in the
payment of public moneys of the Federal Government or the state government to
any person to whom such payment is due under any law or under any contract,
agreement or arrangement entered into between that person with federal or state
government.
(Any 3 groups x 2 marks = 6 marks)
(Total: 20 marks)
QUESTION 3
a. Four (4) accounting basis adopted in the public sector
i. Cash basis
ii. Modified cash basis
iii. Modified accrual basis
iv. Accrual basis
(4 marks)
b. Three (3) limitation of Modified Cash Basis.
 Such information may not be useful, the disclosure could be potentially

misleading from the financial reporting perspective.
 All expenditure are expensed during the financial year when payment are made,
without taking into regard the timing and manner
 The financial position of Federal Consolidated Fund is too narrow to faithfully
represent the resources controlled by as well as the present obligation of, the
government
 Limited basis for determining fiscal strategy, has limited product or service pricing
and has limited disincentives for fraud and corruption
(Any 3 point of explanation x 2 marks = 6 marks)

4
PSA522 – JAN 2018
c. Five (5) items disclosed in Notes to the Financial Statements.
 Accounting policies are in compliance with the laws, rules and regulations relating
to accounting and financial management of the Federal Government.
 Accounting entity includes all ministries and departments of the Federal
government.
 The financial year is defined by Section 3 of the Financial Procedure Act 1957 as
a period of 12 months ending on the 31st day of December every year.
 The financial statements have been prepared using Ringgit Malaysia (RM).
 The financial statements are prepared on the same basis as the budget to enable
comparison to be made.
 When there is a change in the presentation or classification of items, the
comparative amounts have been restated unless otherwise stated.
 Any other relevant answers.
(Any 5 point x 2 marks =10 marks)
(Total: 20 marks)
QUESTION 4
a. Audit framework in Malaysian Government. Support your answer with illustration.
Each government organization will have to maintain proper accounts to record its
daily operations and at the end of the accounting year , annual financial statements
will have to be prepared. According to Article1 06 of the FC, Auditor General is to
audit the financial statements of each governments organization according to the
relevant standards and regulations.
Sec.9 of the Audit Act 1957 requires the AG to prepare the Audit Report at the end of
the audit process at the AG department’s level. The overall audit process does not
end at this stage. The audited financial statements and the Audit Report will be
passed to a parliamentary committee called Public Accounts Committee. This
committee will review the statements and report as well as provide comments and
suggestions on them.
(Illustration 3 marks, and any 3 explanation x 2 marks each = 9 marks)
b. The responsibility of Auditor General with regards to secrecy of the information

gathered. Quote the relevant provision from the Audit Act 1957.
PSA522 – JAN 2018
 Section 8 (3) of the Audit Act 1957 (1 mark)
 It is the responsibility of AG to maintain the secrecy of the information, which has

been obtained.
 Neither the AG or any other person shall divulge or communicate except in the
course of duty to another person performing duties under this act
(2 point x 2 marks = 4 marks)
(Total: 5 marks)
c. Three (3) challenges in achieving accountability among government agencies and

public servants in Malaysia.
Managing Outcome Based Results

The public sector Malaysia has undergone a pragmatic change in tis financial
management system and structure; that is from output-based to outcome-based
results as the focus of organizational performance. The changes demands greater
understanding and commitments from all public sector personnel in dealings with
their day-to-day work.
Issues Relating to Human Capital

The expansions of public sector structure with the reforms involved have led to the
need for high human capital. There is a shortage of number of staffs to take charge
on administrative and financial matters, especially in the field of audit and accounting.
Managing Attitudes Concerning ‘Resistance to Change’

Adoption of new systems and practices to certain extent creates uneasiness among
the existing public sector personnel. Existing personnel generally are complacent
with the current system and practices; and they usually resist to any new changes,
hence refuse to accept and adapt new working responsibilities.
Creating High Work Ethics and Values

The high number of public sector personnel in Malaysia may be a challenge to the
country in ensuring that the workforce embraces good common values such as
professionalism, honesty, trustworthy and integrity towards achieving high work
ethics.
Keeping up with the Growing IT Environment

Introduction and the use on IT is essential component in enhancing the effectiveness
of accountability in public sector. The commitment to support IT programmes and
projects is also crucial. All level of government personnel should equip themselves
with the on-going transformation in the government management system and
practice.
(Any 3 point with explanation x 2 marks = 6 marks)

(Total: 20 marks)
QUESTION 5
a. Identify two (2) purposes of classifying the code of expenditure in the preparation of the
vote book.
PSA522 – JAN 2018
 To simplify the process of preparation of vote book
 To enable detailed information to be gathered for the purpose of revenue &
expenditure analysis.
 To fulfil the needs of the accounting system implemented by the Accountant General
office
 To fulfil the needs of the Department of Statistics in the preparation of the complete
national accounts.
(Any 2 = 2 marks)
b. Vote Book -refer to Appendix 1
(18 marks)
PSA522 – JAN 2018
VOTE BOOK
VOTE 640,000√ Approved amount for the year
……B27… Allocation as at the estimated year 2017 RM ……………
√….
30,000√ Date Amount Total to date Date Amount Total to date
PROG/AKT Additional allocation for the year ……………. 3.1.2017 640,000 640,000√ 15.1.2017 30,000√ 640,000
RM
030300 √ ….…………. ……………. ……………… ….…………. ……………. ………………
670,000 4.1.2017 (46,000)√ 594,000 22.1.2017 (5,000) √ 635,000
OBJECT Total allocation for the year RM ……………. …………….. …………… ………………. …………….. …………… ……………….
27000√ 10.1.2017 16,000 √ 610,000 23.1.2017 (24,000) √ 611,000
.................... ……………… ……………. ……………….. ……………… ……………. ………………..
RM RM RM RM RM RM
Date Details Liabilities Code Voucher no. Debit Credit Liabilities Outstanding Net Balance to
b/f S.O.D.O charged (paid) liabilities expenditure date
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
√ √ √
3.1.2017 Received Allocation WP 1/17 640,000√ 640,000√

from DG
Issue allocation of
4.1.2017 warrant to WPK1/17 46,000√ 594,000√
Pej.Kesihatan Bangi
Sykt Alat Pejabat
7.1.2017 Yusuf Sdn Bhd – 27222 P/T121212 24,000√ 24,000√ 570,000√
supplies of
stattioneries
9.1.2017 Shazali Perabot –
supplies of office 27322 LO13435 44,400√ 68,400√ 525,600√
equipment
Transfer allocation
10.1.2017 from object 30000 WPP4/2017 16,000√ 68,400 541,600√
13.1.2017 Payment to Shazali

Perabot 27322 BP100303 24,400√ (24,400)√ 44,000√ 24,400√ 541,600
15.1.2017 Received additional WP 3/17 30,000√ 44,000 24,400 571,600√
PSA522 – JAN 2018
allocation of warrant
from DG
Date Details Liabilities Code Voucher no. Debit Credit Liabilities Outstanding Net Balance to
b/f S.O.D.O charged (paid) liabilities expenditure date
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
MS Computer SB
17.1.2017 -supplies of computer 27422 IDN13436 6,800√ 50,800√ 24,400 564,800√
Sykt Mizi – supplies of

18.1.2017 hygienic product (Aug 27522 P/T191919 37,500√ 88,300√ 24,400 527,300√
2017)
Transfer allocation of
22.1.2017 warrant to object WPK 20/17 5,000√ 88,300 24,400 522,300√
23000
Notice to reduce
23.1.2017 allocation by DG NPP 1/17 24,000√ 88,300 24,400 498,300√
Payment to Sykt
24.1.2017 Alatan Pejabat Yusuf 27222 BP100304 23,500√ (24,000) √ 64,300√ 47,900√ 498,800√
Sdn Bhd
Cancellation of cheque
26.1.2017 issued to Shazali 27322 BP100303 24,400√ 24,400√ 88,700√ 23,500√ 498,800
Perabot
29.1.2017 Collection of personal 31522 PP20000 540√ 88,700 22,960√ 499,340√

telephone charges
(54 √ x ⅓ = 18 marks)
END OF SOLUTION
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PSA522/662 – PA FEB 2022

PSA522/662 FEB 2022

a. Four (4) types of responsibility centre.

b. Three (3) components of budget process cycle under the management

(any 3 components with explanation x 2 marks= 6 marks)

c. Implications of Outcome based budgeting that are significant to government

• OBB strengthens the linkages between national objectives and

(Any 5 point with explanation x 2 marks = 10 marks)

a. Three (3) regulatory requirements for fund accounting.

(Any 3 legal requirement with explanation x 2marks = 6 marks)

b. Three (3) types of Consolidated Funds.

Consolidated Revenue Account

Consolidated trust account

Consolidated Loan Account

(3 types of CF with explanation x 3 marks = 8 marks)

c. There (3) categories of unclaimed money.

(3 categories with explanation x 2 marks= 6 marks)

a. Three (3) users of financial reporting in public sector.

(Any 3 users with explanation x 2 marks = 6 marks)

b. Explain the following components of federal government financial statements;

i. Statement of financial position

ii. Statement of cash receipts and payments

iii. Statement of memorandum accounts

iv. Notes to financial statements

(4 point of explanations x 2 marks= 8 marks)

c. Discuss the differences between cash accounting and accrual accounting.

• Cash accounting is simple compared to accrual accounting because there are

• In cash accounting, the income or expense is recognised when there is an

• In cash accounting, the cash flow demonstrated the financial performance of

• In matching concepts, the expenses of a particular accounting period are

• The degree of accuracy is higher in accrual accounting when compared to

• Any other relevant answer.

(3 point of explanations x 2 marks= 6 marks)

a. Three (3) purposes of government auditing.

• To determine any embezzlement from the estimation being planned

(3 points with explanation x 2 marks = 6 marks)

b. Explain the framework for public sector auditing.

• Each government organization will have to maintain proper accounts to

c. Discuss role of auditors towards accountability in public sector organization.

• Auditors can play a significant role in developing and administering

(Any 3 point with explanation x 2 marks= 6 marks)

a. Travelling expenses according to TI 100.

VOTE Approved amount for the year

Carry forward 9,300√

Sign agreement SG2021/01

iversiti Teknologi MARA

12.3.21 allocation 31,000√ 59,300 18,900 244,500√

Issued payment PV01/21

26.3.21 voucher to Sykt 9,000√√ (9,000)√ 47.300√ 31.552√ 250,348

c. 54√ X 1/3 = 18 MARKS

a. Two (2) component of government expenditure.

Operating or management expenditure

 Represents all charges to the budgeted allocation, consists of charged

 Incurred for development purposes, amount usually large.

(Any 3 points with explanations x 2 marks = 6 marks)

b. Four (4) functions of EPU:

i) Formulate policies and strategies for socio-economic development

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

a. Characteristic of fund accounting

b. Consolidated fund accounts.

Consolidated Revenue Account

Consolidated Trust Account

Consolidated Loan Account