MZUMBE UNIVERSITY

Prepared:
Mr. Emmanuel Mtui
Department of Accounting 0717 642 046
and Finance (DAF)

ACC 325:
PUBLIC SECTOR ACCOUNTING
 REGULATORY FRAMEWORK
OF
PUBLIC SECTOR ACCOUNTING
Learning Objectives:

1. Reforms of the accounting and reporting system in

the public sector.
2. The legal and regulatory framework of public sector
accounting.
3. Tanzania Legal Frameworks.
 Public Sector Accounting and accounting
systems-Theoretical aspects

 PS Accounting is the language of public transparence

and accountability by means of which the key affairs
of an economic entity are expressed and summarized
 A collection of principles and rules that govern the
transformation of data into the information used in
management processes.
 Cont´d...
 It is a series of linked activities, beginning with
observing, then collecting, recording, analyzing and
finally communicating (reporting) information to its
users.
 The transformation of data into information is
accomplished by a system consisting of components,
namely, people, machines, procedures, processes and
methods, organized to accomplish a set of specific
functions
 Public sector reforms
 Public sector reforms implemented under the
New Public Management (NPM) model and
good governance which have an equally
affected the area of Public Sector accounting.
 focus on the need for governments to
demonstrate quality improvements and value
for money in public services.
 Aspects of NPM
 The NPM emphasizes the application of private sector
management techniques as well as simulation of
competitive market behavior.
 i.e. the first area of NPM reform [regarding public
financial management]involved changes to financial
reporting systems, including the promotion of accrual-
based financial reporting framework across all public
sector entities, and reliance on professionally set
accounting standards, i.e. International Public Sector
Accounting Standards (IPSAS)
 Cont´d...
 The main reasons for the shift from cash to accrual basis
are usually put down to a need for data transparency
improvement, an effort of accountability enhancement,
and an effort of efficiency improvement in the public
sector.
 has helped the public sector to improve the quality of
financial information, simplified the internal and
monitoring control of governmental units and added
value to the financial information.
 Regulatory Frameworks
Regulatory framework of public sector
accounting is as a result of the nature of
government activities and operations.
 According to Oshisami (1992), the legal
formalities in the area of Public Sectors
accounting include laws, rules, regulations,
customs and accepted norms of behaviors.
 Regulatory Frameworks
 Provide a proper presentation of financial reports in the
public sector.
 Since the system are regulated by the various legal
frameworks established by the government/state to
manage and control public funds in the country.
 Objectively, relates to management control and to
provision of information to enable managers to report
the discharge of their responsibilities in the use of the
resources under their custody
 Public sector F.W
 Awoyemi (1989) opined that is governmental system
of how certain activities which is that of erecting and
maintaining certain public works and certain
institutions, which can never be the interest of
individuals to erect and maintain because the profit
could never repay the expenses to any individual or
small number of individuals, though, it may
frequently do much more than repay it to a great
society.
 Public Sector Accounting
The American Accounting Association (2010)
states that the primary objectives of accounting
in the public sector organization are to provide
the information necessary for faithful, effective,
efficient and economical management of an
operation and of the resources entrusted to it.
 Definition of PSAcc.
A process of recording, communicating,
summarizing analyzing and interpreting a
government financial statements in aggregate an in
details reflecting all levels of transactions involving
the receipt, custody and disbursement of
government funds (Oshisami, 1992).
 To fulfil legal requirement as law requires that
government accounts are prepared and audited annually.
 Function of PSAcc.
 The purposes are to demonstrate the
propriety of transitions and their conformity
with established rules, to give evidence of
accountability for the stewardship of
government resources and to provide useful
information for good control and efficient
management of government operations.
 Sets of Tanzania legal framework
 The legal and regulatory framework for public sector
accounting and financial management consists of the
following among others:
i. URT, Constitution provisions of 1977
ii. Public Finance Act No. 6 of 2001 revised 2004
iii. The Provision of Public Audit Act, 2008
iv. Public Procurement Acts 2016
v. The Annual Appropriation Acts
vi. Standing Orders for Public service of 2009
vii. Financial Regulations/Accounting Manual
 1. URT, Constitution provisions of 1977
 The constitution is the fundamental law from which
all other laws in the country are derived.
 Thus it is the most important regulatory framework
of public sector accounting. It provides for the
establishment of the consolidated revenue fund and
the establishment of public organs as well
institutional among others.
Cont´d...
The most relevant sections of the 1977 Constitution for
public sector accounting are:
 Section 135 (1) and (3): The establishment and
operation of the Consolidated Revenue Section (1) to
(3): This provision treats the procedure for
authorization of expenditure from the Consolidated
Revenue Fund.
 Sections 137 grant procedure for authorization of
expenditure of moneys from the Consolidated Fund
Cont´d...
 Section 137 (2) This section makes provision tor the
running of government when the approval of the
budget is delayed. It authorizes the President to
withdraw money from the Consolidated. Revenue
Fund of the state for six (6) months pending the
approval of the budget.
 Sections 143 deal with the Auditor-appointment
General's and term.
Cont´d...
 Section 142 (2). The section provides for the
remuneration of the President and other statutory
officers.
 Section 145 (5). The audit of public accounts is discussed.
 Section 140: 1 (a-b). This provides for the creation of the
Contingencies Fund.
 Section 149: Ministers and other presidential appointee
officers are required by the Constitution to reveal their
assets and liabilities, as well as their oaths of allegiance.
 2. Public Audit Act, 2008
 This Act together with some sections of the URT,
constitution covers the area of audit and
accountability in respect of the federal government.
 Generally deals with the audit of government
accounts. It Act covers the appointment, tenure,
remuneration and termination of the Auditor-
General for the State. (known in the Act as the
Controller and Auditor General).
Cont´d...
 The Act provides that the CAG shall on behalf of the
Parliament inquiries into and audit the accounts of all
accounting officers and of all persons entrusted with
the collection, receipt, custody, issue or payment of
public moneys, or with receipt, custody, issue, sale,
transfer or delivery of any stamps, securities, stores
or other property of the government of the State (
section 11:1-8).
 Scope of audit
 Section 17:1 The Controller and Auditor-General
shall determine the scope and extent of the
examination or inspection of the accounts or any
other audit of each auditee under this Act, which he
considers desirable in carrying on his responsibilities
and functions specified under Part II of this Act.
 provisions Article 143(5) of the Constitution shall
apply to every such report.
 3. Public Finance Act No. 6 of 2001
revised 2004
This is the major law on which the foundation of
government accounting rests. It is the basic legal
framework which governs the procedure and control of all
financial operations of government.
 The Act regulates the management and operation of
government funds. It prescribes the books of accounts to
be operated and the procedures to be adopted in the
preparation of accounts and financial statements.
The Act consists of six parts:
 PART I: Provides for the general supervision and
legislative control of public monies. It authorizes the
Minister of finance to supervise the expenditure and
finances of the state as to ensure that a full account is
made to the Legislature.
 PART II: provides for the management of the
consolidated revenue fund It gives the Minister the
power to authorize by warrant the issue from the
Consolidated Revenue Fund of moneys necessary to
meet statutory expenditure
Cont´d...
 PART III: This part deals with government
investments. It provides for the authorization and
management of government investments.
 Provides that the disposition of moneys of the
Consolidated Revenue Fund or of such other public
fund for any such purpose shall need no legislative
authority other than that contained in this section
and maybe made by the Accountant-General
Cont`d...
 PART IV: This part provides for the legislative
authorization of expenditure This section provides that in
accordance with the provisions of the Constitution, the
Minister shall cause to be prepared in each financial year
estimates of the revenues and expenditure of the state
for the next following financial year, which shall be
presented to the President for approval and when
approved by her shall be laid before Controller and
Auditor General for exerminations.
Cont´d...
 PART IV: Audit of public authorities and other bodies.
Any statutory body being a pubic authority or other
body administering public funds.
Any public corporation, or any corporate
orunincorporate body in which the controlling interest
vests in the state, or in any agency on behalf of the
state, or body established by or any law for the time
being in force or administering public funds or monies.
 4. Public Procurement Acts 2016
 The purpose of this Act is to ensure the transparent,
purposeful and economical use of the financial
resources of the contracting authority, the equal
treatment of persons and the effective use of existing
competition in public procurement.
 This Act provides for the public procurement
procedures, the rights and obligations of subjects
involved in public procurement, the procedure for
the exercise of state
Cont´d...
 According to PAA- 2008: Sect 11:2
This Act provides for the public procurement
procedures, the rights and obligations of subjects
involved in public procurement, the procedure for the
exercise of state.
 Section 26: (1) The Authority shall maintain proper books of accounts and
other records relating to its accounts and prepare an annual statement of
accounts including the income and expenditure account and the balance
sheet.
 Section 27: (1) The accounts of the Authority shall be audited by the
Controller and Auditor-General.
 Standing Orders for Public service of 2009

 Objectively was to ensuring that all Civil Servants

have the fullest possible understanding of the Laws
and regulation which apply throughout all agencies
of Government.
 The powers to constitute and abolish offices in the public
service are vested in the President under Article 36(1) of the
Constitution. Her has, however, delegated his powers to the
Permanent Secretary.
 The Annual Appropriation Acts

 Appropriation Bills when passed into laws become

Appropriation Acts. They regulate financial matters, including
the payment or withdrawal from the Consolidated Revenue
Fund.
 Appropriation Acts are passed yearly, for the release of public
money so as to render services in the years to which they
relate. Appropriation Acts may direct a change in the way of
operating any fund, apart from the Contingencies Fund and
the Consolidated Revenue Fund.
 TREASURY/FINANCE CIRCULARS AND
CIRCULAR LETTERS

 These are administrative instruments which

are issued for the purpose of guiding day-to-
day routine operations of the departments of
government. They are used in amending
existing provisions of public service rules and
Financial Regulations.
 Financial Regulations/Accounting
Manual
 This is an accounting and control document which
serves several purposes. It is primarily a code of
regulation. But among its other secondary important
purposes are that is serves as a body of guiding
principles and embodies a number of methods or
uniformity in the recording of certain financial
transactions, events and positions.
According to Oshisami (1992) financial regulations specify in
rather general terms the requirements of standardization in
the design of accounting system and the framework within
which deviations are or would be allowed. In particular, the
following clauses regulate accounting practice:
 Gives the Accountant-general the responsibility for
ensuring that adequate systems exist in all ministries and
departments and for coordinating these systems amongst
the ministries on one hand and between the ministries
and the treasury on the other hand (FR-10:3)
 Aims at ensuring that all new systems or materials
variations of existing systems are assessed by him
before installation to foreclose technical details in
design and or inconsistency with other existing
systems(FR-10:4).
 FR 12:12, 13:06 and 13:07 taken together mandated
the preparation of an accounting code to embrace
the general provisions of the financial regulations
and in addition, the particular requirement of the
ministry, department or unit.
THANK YOU FOR LISTENING

THE END.