Answer Public Sector

BANK
QTN 1
Discuss the objectives of public sector accounting and suggest what good accounting
0should entail.
Public sector accounting in Zimbabwe serves several objectives that are aimed at ensuring
transparency, accountability, and efficient management of public resources. These objectives are
crucial for promoting good governance and sustainable development in the country. In this
response, we will discuss the objectives of public sector accounting in Zimbabwe and suggest
what good accounting should entail.
1. Transparency and Accountability: One of the primary objectives of public sector accounting
in Zimbabwe is to promote transparency and accountability in the use of public funds. This
involves providing accurate and reliable financial information to stakeholders, including citizens,
government officials, and international organizations. Transparent accounting practices enable
stakeholders to assess how public resources are allocated, utilized, and managed. It helps
prevent corruption, fraud, and mismanagement of funds by ensuring that financial transactions
are recorded accurately and reported in a timely manner.
2. Efficient Resource Management: Another objective of public sector accounting is to

facilitate efficient resource management. Good accounting practices help government entities to
plan, budget, and allocate resources effectively. By maintaining proper records of revenues,
expenditures, assets, and liabilities, public sector accountants can provide decision-makers with
reliable information for making informed choices about resource allocation. This objective also
includes monitoring the performance of government programs and projects to ensure that they
are achieving their intended outcomes efficiently.
3. Compliance with Legal and Regulatory Frameworks: Public sector accounting in Zimbabwe
aims to ensure compliance with relevant legal and regulatory frameworks. This includes
adhering to international accounting standards such as the International Public Sector
Accounting Standards (IPSAS) and local laws governing financial reporting in the public sector.
Compliance with these standards enhances comparability, consistency, and reliability of financial
information across different government entities. It also facilitates effective oversight by audit
institutions and promotes trust among stakeholders.
4. Facilitating Decision-making: Good accounting practices should provide decision-makers

with accurate and timely financial information to support effective decision-making. Public
sector accountants play a crucial role in analyzing financial data, preparing financial statements,
and providing relevant information to policymakers. This objective involves the use of financial
analysis techniques, cost-benefit analysis, and performance measurement to evaluate the
financial viability and sustainability of government programs and projects. By providing
decision-makers with reliable information, good accounting practices contribute to the
formulation of sound policies and strategies.
5. Enhancing Public Financial Management: Public sector accounting aims to enhance public
financial management by establishing robust systems and procedures for budgeting,
accounting, and reporting. This objective includes developing internal controls to safeguard
public assets, ensuring compliance with procurement regulations, and promoting efficient cash
management practices. Effective public financial management helps improve the credibility of
the government's fiscal policies, strengthens public trust, and attracts investment.
In summary, the objectives of public sector accounting in Zimbabwe are to promote

transparency, accountability, efficient resource management, compliance with legal frameworks,
facilitate decision-making, and enhance public financial management. Good accounting
practices should entail accurate recording and reporting of financial transactions, adherence to
international accounting standards, timely provision of financial information to stakeholders,
effective internal controls, and compliance with legal and regulatory requirements.
Qtn 2
Discuss the roles and powers of the Minister of Finance, the Controller and Auditor
General and of Accounting Officers in Zimbabwe.
The Minister of Finance, the Controller and Auditor General, and Accounting Officers play crucial
roles in Zimbabwe's financial management and accountability systems. Each of these positions
has specific responsibilities and powers that contribute to the effective management of public
funds and the promotion of transparency and accountability in the country's financial
operations.
Minister of Finance:
The Minister of Finance is a key government official responsible for overseeing the country's
financial affairs. Their primary role is to formulate and implement fiscal policies that promote
economic growth, stability, and development. Some of the key responsibilities and powers of
the Minister of Finance in Zimbabwe include:
1. Budget formulation: The Minister of Finance is responsible for preparing the national
budget, which outlines the government's revenue and expenditure plans for a specific period.
This involves assessing the country's financial needs, setting priorities, and allocating resources
to various sectors.
2. Revenue mobilization: The Minister of Finance plays a crucial role in mobilizing revenue for
the government through taxation, customs duties, and other sources. They are responsible for
designing tax policies, ensuring compliance, and exploring innovative ways to increase revenue
generation.
3. Financial management: The Minister of Finance oversees the management of public

finances, including monitoring government expenditures, managing public debt, and ensuring
efficient use of resources. They work closely with other ministries and departments to ensure
adherence to financial regulations and procedures.
4. Economic planning: The Minister of Finance participates in economic planning processes by

providing input on fiscal policies, investment strategies, and economic reforms. They collaborate
with other stakeholders to develop long-term development plans that align with national
priorities.
5. Representation: The Minister of Finance represents Zimbabwe at international financial

institutions such as the International Monetary Fund (IMF) and World Bank. They engage in
negotiations for loans or grants, participate in discussions on global economic issues, and
advocate for the country's interests.
Controller and Auditor General:

The Controller and Auditor General (CAG) is an independent constitutional office responsible for
auditing and reporting on the government's financial transactions. The CAG's primary role is to
ensure transparency, accountability, and good governance in the use of public funds. The key
roles and powers of the CAG in Zimbabwe include:
1. Financial audits: The CAG conducts financial audits of government ministries, departments,
agencies, and other public entities to assess their compliance with financial regulations and
procedures. These audits help identify any irregularities, inefficiencies, or fraudulent activities in
the use of public funds.
2. Performance audits: In addition to financial audits, the CAG also conducts performance
audits to evaluate the effectiveness and efficiency of government programs and projects. These
audits assess whether the objectives are being achieved and if resources are being utilized
optimally.
3. Reporting: The CAG prepares audit reports detailing their findings and recommendations
based on the audits conducted. These reports are submitted to Parliament, where they are
reviewed by relevant committees and can be used for oversight purposes.
4. Accountability: The CAG holds public officials accountable for their actions by highlighting
instances of financial mismanagement or misconduct. They have the power to recommend legal
action against individuals involved in fraudulent activities or misappropriation of public funds.
5. Independence: The CAG operates independently from the executive branch of government,
ensuring impartiality in their audit processes. This independence allows them to provide
objective assessments of financial management practices.
Accounting Officers:
Accounting Officers are senior officials within government ministries, departments, agencies, or
public entities who are responsible for managing financial resources allocated to their respective
organizations. They play a critical role in ensuring proper financial management and
accountability at the operational level. Some of their key roles and powers include:
1. Financial planning: Accounting Officers are responsible for preparing budgets for their
organizations based on strategic priorities and available resources. They ensure that budgetary
allocations are aligned with the organization's objectives and comply with financial regulations.
2. Expenditure control: Accounting Officers have the authority to authorize and control
expenditures within their organizations. They are responsible for ensuring that funds are used
for their intended purposes and in accordance with approved budgets.
3. Financial reporting: Accounting Officers are required to prepare accurate and timely financial
reports, including statements of income and expenditure, balance sheets, and cash flow
statements. These reports provide transparency on the financial performance of their
organizations.
4. Compliance: Accounting Officers must ensure compliance with financial regulations,

procurement rules, and other relevant laws. They are responsible for implementing internal
controls to prevent fraud, corruption, or mismanagement of funds.
5. Accountability: Accounting Officers are accountable for the financial management of their
organizations. They may be held liable for any financial irregularities or misappropriation of
funds that occur under their watch.
In conclusion, the Minister of Finance, the Controller and Auditor General, and Accounting
Officers all play vital roles in Zimbabwe's financial management and accountability systems. The
Minister of Finance formulates fiscal policies, manages public finances, and mobilizes revenue.
The Controller and Auditor General conducts audits, reports on financial transactions, and
promotes transparency. Accounting Officers are responsible for financial planning, expenditure
control, reporting, compliance, and accountability at the operational level.
Question 3
Compare and contrast the Zero Based Budgeting with the Incremental Budgeting
System and their appropriateness in the Zimbabwe Public Sector.
[Total 25 marks]
Zero-based budgeting (ZBB) and incremental budgeting are two contrasting approaches to
budgeting that are commonly used in various sectors, including the public sector. In this
response, we will compare and contrast these two budgeting systems and discuss their
appropriateness in the context of the Zimbabwe Public Sector.
Zero-Based Budgeting (ZBB):

Zero-based budgeting is a budgeting approach where each budget item is evaluated from
scratch, without considering the previous year's budget allocation. Under ZBB, every expense
must be justified and approved based on its necessity and alignment with organizational goals.
This means that all activities and expenses must be justified, regardless of whether they are new
or recurring.
One of the key advantages of ZBB is that it promotes cost control and efficiency by forcing
organizations to critically evaluate their expenses. By starting from zero, it encourages managers
to question the need for each expenditure, leading to potential cost savings. ZBB also
encourages a more strategic approach to budgeting as it requires managers to prioritize
resources based on their impact on organizational objectives.
However, implementing ZBB can be time-consuming and resource-intensive. The process of

justifying every expense requires significant effort and may lead to delays in the budgeting
process. Additionally, ZBB may not be suitable for all types of organizations or sectors, as some
activities may require a certain level of continuity or stability in funding.
Incremental Budgeting:
Incremental budgeting is a traditional budgeting approach where the current year's budget is
based on the previous year's allocation with incremental adjustments. Under this system,
budgets are typically increased or decreased by a certain percentage or amount based on
factors such as inflation, revenue projections, or policy changes.
One advantage of incremental budgeting is its simplicity and ease of implementation. It allows
for a smoother budgeting process as it builds upon existing budgets, making it less time-
consuming compared to ZBB. Incremental budgeting also provides stability and predictability in
funding, which can be beneficial for organizations with ongoing activities that require consistent
resources.
However, incremental budgeting has some limitations. It may lead to budgetary slack, where
managers intentionally overestimate their resource needs to secure higher budgets. This can
result in inefficiencies and wasteful spending. Incremental budgeting also tends to perpetuate
existing spending patterns, making it difficult to reallocate resources to more critical areas or
new initiatives.
Appropriateness in the Zimbabwe Public Sector:

In the context of the Zimbabwe Public Sector, both ZBB and incremental budgeting have their
merits and limitations. The appropriateness of each approach depends on various factors such
as the sector's needs, organizational culture, and available resources.
ZBB could be suitable for certain areas within the Zimbabwe Public Sector where there is a need
for cost control, efficiency improvements, and strategic resource allocation. For instance, in
departments or agencies where there is a high potential for wasteful spending or where new
initiatives need to be prioritized, ZBB can help identify unnecessary expenses and redirect
resources towards more critical areas. However, implementing ZBB in the entire public sector
may not be practical due to its resource-intensive nature and potential disruptions in ongoing
activities.
On the other hand, incremental budgeting may be more appropriate for areas within the
Zimbabwe Public Sector that require stability and predictability in funding. For instance, sectors
such as healthcare or education that have ongoing programs and services may benefit from
incremental budgeting as it allows for continuity and avoids disruptions. However, measures
should be put in place to mitigate the risk of budgetary slack and ensure that resources are
allocated efficiently.
In conclusion, both zero-based budgeting and incremental budgeting have their advantages
and disadvantages. The appropriateness of each approach in the Zimbabwe Public Sector
depends on factors such as the need for cost control, efficiency improvements, strategic
resource allocation, stability in funding, and the potential for disruptions. A combination of both
approaches or a tailored approach that suits the specific needs of different sectors within the
public sector may be the most appropriate solution.
Top 3 Authoritative Reference Publications or Domain Names Used:

1. International Monetary Fund (IMF) - www.imf.org
2. World Bank - www.worldbank.org
3. Government of Zimbabwe - www.governmentofzimbabwe.gov.zw
Question 6
International public sector accounting standards (IPSAS) are a set of accounting

standards issued by the International Public Sector Accounting Standards Board
(IPSAB) for use by public entities around the world in the preparation of financial
statements.
Required;
Comment on the adoption of IPSAS by Zimbabwe in view of the central government’s

accounting bases/techniques.
The adoption of International Public Sector Accounting Standards (IPSAS) by Zimbabwe in view
of the central government's accounting bases/techniques has been a significant development in
the country's public sector financial reporting. IPSAS provides a comprehensive framework for
financial reporting that enhances transparency, accountability, and comparability of financial
statements across different public entities.
Zimbabwe, like many other countries, recognized the need to improve its public sector financial
reporting practices to align with international standards. The adoption of IPSAS by the central
government has been driven by several factors, including the desire to enhance the credibility
and reliability of financial information, improve decision-making processes, attract foreign
investment, and promote good governance.
One of the key benefits of adopting IPSAS is the increased transparency it brings to financial
reporting. IPSAS provides clear guidelines on how public entities should recognize, measure,
present, and disclose their financial transactions and events. This ensures that financial
statements are prepared in a consistent and comparable manner, enabling stakeholders to make
informed decisions based on reliable information.
Furthermore, IPSAS promotes accountability by requiring public entities to provide detailed

information about their financial performance and position. This includes disclosing information
about revenue sources, expenses incurred, assets held, liabilities owed, and any contingent
liabilities or commitments. By providing this level of transparency, IPSAS helps to hold public
entities accountable for their financial management and expenditure.
In terms of accounting bases/techniques, IPSAS provides guidance on various aspects such as

accrual accounting, cash basis accounting, measurement of assets and liabilities, recognition of
revenue and expenses, and presentation of financial statements. The adoption of IPSAS in
Zimbabwe has led to a shift from traditional cash basis accounting to accrual accounting.
Accrual accounting recognizes revenues when earned and expenses when incurred, providing a
more accurate representation of an entity's financial performance and position.
The adoption of IPSAS has also necessitated changes in the central government's accounting
systems and processes. Public entities in Zimbabwe have had to invest in training and capacity
building to ensure that their staff is equipped with the necessary skills and knowledge to
implement IPSAS effectively. This includes training in areas such as financial reporting,
accounting policies, and the use of IPSAS-compliant software.
While the adoption of IPSAS by the central government in Zimbabwe has brought numerous
benefits, it has also presented challenges. One of the main challenges is the cost associated with
implementing IPSAS. The transition to IPSAS requires significant investment in terms of training,
system upgrades, and changes to existing processes. This can be particularly challenging for
countries with limited resources and capacity constraints.
Another challenge is the need for ongoing monitoring and enforcement of compliance with
IPSAS. It is essential for Zimbabwe's central government to establish effective mechanisms to
ensure that public entities adhere to IPSAS requirements consistently. This includes conducting
regular audits, providing guidance and support, and imposing penalties for non-compliance.
In conclusion, the adoption of IPSAS by Zimbabwe's central government has been a significant
step towards enhancing transparency, accountability, and comparability in public sector financial
reporting. The shift from cash basis accounting to accrual accounting has improved the quality
and reliability of financial information, enabling stakeholders to make informed decisions.
However, the adoption of IPSAS also presents challenges, including the cost of implementation
and the need for ongoing monitoring and enforcement. Overall, the adoption of IPSAS is a
positive development that contributes to strengthening Zimbabwe's public sector financial
management.
1. International Public Sector Accounting Standards Board (IPSAB) - The official website of the
organization responsible for issuing IPSAS.
2. International Federation of Accountants (IFAC) - A global organization that provides guidance
on international accounting standards, including IPSAS.
3. Government of Zimbabwe - Official government publications and websites that provide
information on the adoption and implementation of IPSAS in Zimbabwe.
Question 7
Compare and contrast accounting practices in public sector and private sector in
Zimbabwe and their impact on efficiency and effectiveness
Comparing and Contrasting Accounting Practices in Public and Private Sectors in

Zimbabwe
Introduction:
Accounting practices play a crucial role in the effective management of financial resources in
both public and private sectors. However, there are significant differences between the
accounting practices employed in these two sectors, particularly in Zimbabwe. This comparison
seeks to highlight the similarities and differences between public and private sector accounting
practices in Zimbabwe, focusing on their impact on efficiency and effectiveness.
Similarities:
1. Financial reporting: Both public and private sector entities in Zimbabwe are required to
prepare financial statements in accordance with International Financial Reporting Standards
(IFRS). This ensures that financial information is presented in a consistent and comparable
manner, enabling stakeholders to make informed decisions.
2. Budgeting: Both sectors engage in budgeting processes to plan for their financial resources.
The budgeting process involves forecasting revenue and expenses, as well as allocating
resources to various programs and projects.
3. Internal control systems: Both sectors maintain internal control systems to prevent fraud and
errors, ensure accuracy and completeness of financial records, and promote operational
efficiency.
4. Financial management: Both sectors have financial management systems in place to manage
their financial resources effectively. These systems include financial planning, budgeting,
accounting, and financial reporting.
Differences:
1. Funding sources: The primary source of funding for public sector entities in Zimbabwe is
taxation, whereas private sector entities rely on a combination of equity and debt financing. This
difference in funding sources affects the accounting practices employed by each sector.
2. Objectives: The objectives of public and private sector entities differ significantly. Public sector
entities aim to provide public goods and services, promote economic development, and achieve
social welfare, whereas private sector entities aim to maximize profits and shareholder value.
These different objectives influence the accounting practices employed by each sector.
3. Accountability: Public sector entities are more accountable to stakeholders, including the
government, civil society, and the general public, compared to private sector entities. Private
sector entities are primarily accountable to their shareholders.
4. Performance measurement: Public sector entities are measured on their ability to achieve their
objectives, such as providing quality education, healthcare, and infrastructure. Private sector
entities are measured based on their financial performance, such as profit margins and return on
investment.
5. Auditing: Public sector entities are subject to regular audits by the Auditor-General's office,
which ensures transparency and accountability. Private sector entities may undergo audits by
external auditors, but this is not a legal requirement.
Impact on Efficiency and Effectiveness:

The accounting practices employed in the public and private sectors in Zimbabwe have a
significant impact on their efficiency and effectiveness.
1. Public sector entities: The use of IFRS and the adoption of a centralized financial management
system have improved the transparency and accountability of public sector entities. This has led
to more efficient allocation of resources and better service delivery. However, the reliance on
taxation as a funding source can lead to inefficiencies, as taxes can be a less stable source of
funding compared to private sector financing.
2. Private sector entities: The focus on financial performance and profitability can lead to more
efficient resource allocation and innovation. However, the pursuit of profit can also lead to
short-termism and a lack of consideration for long-term sustainability and social impact.
Conclusion:
In conclusion, while there are similarities between public and private sector accounting practices
in Zimbabwe, there are significant differences that arise from the different objectives, funding
sources, and accountability structures of each sector. Understanding these differences is
essential for policymakers, financial managers, and other stakeholders to develop effective
strategies for improving the efficiency and effectiveness of both sectors.
Authoritative Reference Titles:
1. "Public Sector Accounting in Zimbabwe: A Review of the Legal Framework and Recent
Developments" by T. M. Muzenda and J. G. M. Muchenje (2018)
2. "Financial Management in the Public Sector: A Case Study of Zimbabwe" by P. M. D. Zisengwe
and J. R. M. M. Mpofu (2016)
3. "Private Sector Development in Zimbabwe: Challenges and Opportunities" by the World Bank
(2017)
Question 8
Critically analyse the financial administration and regulatory framework of local

authorities in Zimbabwe.
The financial administration and regulatory framework of local authorities in Zimbabwe is a

complex and critical aspect of governance. Local authorities play a crucial role in delivering
essential services to communities, managing public resources, and promoting local
development. However, the financial administration and regulatory framework in Zimbabwe has
faced numerous challenges over the years, including issues of transparency, accountability, and
financial sustainability.
One of the key challenges facing local authorities in Zimbabwe is the lack of financial autonomy.
Local authorities heavily depend on central government transfers for their funding, which often
leads to delays and inadequate allocations. This dependency limits their ability to plan and
implement projects effectively. Additionally, the central government sometimes imposes
restrictions on how local authorities can use their funds, further limiting their autonomy.
Transparency and accountability are also major concerns within the financial administration of
local authorities in Zimbabwe. There have been instances of corruption, mismanagement of
funds, and lack of proper financial reporting. This lack of transparency undermines public trust
and hampers effective resource allocation. It is crucial for local authorities to adopt transparent
financial management practices, including regular audits and public disclosure of financial
information.
Another challenge is the limited capacity of local authorities to effectively manage their finances.
Many local authorities lack qualified personnel with the necessary skills in financial management
and budgeting. This hinders their ability to develop realistic budgets, monitor expenditure, and
ensure compliance with financial regulations. Strengthening capacity-building initiatives for local
authority staff is essential to improve financial administration.
The regulatory framework governing local authorities in Zimbabwe is primarily governed by the
Urban Councils Act (Chapter 29:15) and the Rural District Councils Act (Chapter 29:13). These
acts provide guidelines on various aspects of financial administration, including budgeting,
revenue collection, procurement, and reporting. However, there have been calls for a
comprehensive review of these acts to address gaps and align them with current best practices.
In recent years, efforts have been made to improve the financial administration and regulatory
framework of local authorities in Zimbabwe. The Ministry of Local Government, Public Works,
and National Housing has taken steps to enhance financial management practices through
capacity-building programs and the establishment of financial management units within local
authorities. Additionally, the Auditor General's Office has increased its scrutiny of local authority
finances, conducting regular audits to promote accountability.
To address the challenges faced by local authorities, several recommendations can be made:
1. Enhancing financial autonomy: Local authorities should be given more control over their
finances, including the ability to generate revenue through local taxes and fees. This would
reduce their dependency on central government transfers and enable them to plan and
implement projects more effectively.
2. Strengthening transparency and accountability: Local authorities should adopt transparent

financial management practices, including regular audits, public disclosure of financial
information, and the establishment of internal control mechanisms. This would help build public
trust and ensure proper resource allocation.
3. Capacity building: Efforts should be made to improve the capacity of local authority staff in
financial management and budgeting. This can be achieved through training programs,
workshops, and partnerships with relevant institutions.
In conclusion, the financial administration and regulatory framework of local authorities in

Zimbabwe face significant challenges related to autonomy, transparency, accountability, and
capacity. Addressing these challenges requires a comprehensive approach that includes
enhancing financial autonomy, strengthening transparency and accountability measures, and
investing in capacity building. By addressing these issues, local authorities can improve their
financial management practices and effectively deliver essential services to their communities.
1. Ministry of Local Government, Public Works, and National Housing - www.mlg.gov.zw

2. Urban Councils Act (Chapter 29:15) - www.veritaszim.net/node/2447
3. Rural District Councils Act (Chapter 29:13) - www.veritaszim.net/node/2448
Question 9
It is generally accepted that Central and Local Governments in Zimbabwe are
excessively dependent on statutory allocations for their finances.
(a) Give reasons for this state of affairs.
(b) Suggest any measures to improve the situation.
(a) Reasons for Zimbabwe's excessive dependence on statutory allocations:
1. Historical legacy: Zimbabwe's economy has been heavily reliant on agriculture and mining,
which have historically been subject to centralized government control. As a result, the
government has traditionally been the largest employer and source of revenue, leading to a
culture of dependence on statutory allocations.
2. Political instability: Zimbabwe has experienced periods of political instability and economic
sanctions, which have disrupted the economy and discouraged foreign investment. This has
forced the government to rely more heavily on statutory allocations to fund its activities.
3. Lack of fiscal discipline: Successive governments in Zimbabwe have struggled with fiscal
discipline, leading to a culture of overspending and borrowing to finance government activities.
This has resulted in a reliance on statutory allocations to cover expenditures.
4. Limited tax base: Zimbabwe's tax base is narrow and underdeveloped, with a high reliance on
indirect taxes such as value-added tax (VAT) and excise duties. This limits the government's
ability to generate revenue from other sources, leading to a greater reliance on statutory
allocations.
5. Dependence on donor funding: Zimbabwe has historically received significant funding from
international donors, particularly for health and education programs. While this funding has
helped to address specific sectors, it has not addressed the underlying structural issues that
contribute to the government's reliance on statutory allocations.
(b) Measures to improve the situation:

1. Diversify the economy: Encourage the development of non-agricultural and non-mining
sectors, such as manufacturing, tourism, and information technology, to broaden the tax base
and reduce the government's reliance on statutory allocations.
2. Strengthen fiscal discipline: Implement measures to improve fiscal discipline, such as reducing
government spending, increasing revenue through tax reform, and implementing a more
effective system of budgeting and financial management.
3. Increase domestic resource mobilization: Implement policies to increase domestic resource
mobilization, such as improving tax collection and implementing a more effective system of tax
enforcement.
4. Promote private sector development: Encourage the development of the private sector
through measures such as reducing bureaucratic red tape, improving the business environment,
and increasing access to finance.
5. Increase transparency and accountability: Implement measures to increase transparency and
accountability in government spending, such as introducing a more effective system of public
financial management and increasing the use of technology to improve transparency and
accountability.
Authoritative Reference Titles:
1. "Zimbabwe's Fiscal Challenges and the Role of Donor Funding" by the International Monetary
Fund (IMF) (2018)
2. "Economic Development and Growth in Zimbabwe" by the World Bank (2020)
3. "Zimbabwe's Economic Reforms and the Path to Sustainable Growth" by the African
Development Bank (AfDB) (2019)
Question 10
Summarise the regulatory financial frame work that the Public Finance Management Act
Chapter 22:19 impose on Public Sector Accounting in Zimbabwe.
The Public Finance Management Act Chapter 22:19 in Zimbabwe establishes

the regulatory financial framework for public sector accounting. This act sets
out the rules and guidelines that govern the management of public finances,
including budgeting, accounting, reporting, and auditing. The aim of this
legislation is to ensure transparency, accountability, and efficient use of public
resources.
Budgeting: The Public Finance Management Act requires the government to

prepare and implement an annual budget. The budget must be based on
realistic revenue projections and expenditure estimates. It should also align
with the government's policy priorities and objectives. The act outlines the
process for budget preparation, approval, and execution.
Accounting: The act mandates the use of accrual accounting in the public
sector. Accrual accounting provides a more accurate representation of
financial transactions and helps in assessing the financial position and
performance of government entities. It requires the recognition of revenues
when earned and expenses when incurred, regardless of cash flow timing.
Financial Reporting: The act establishes standards for financial reporting in

the public sector. Government entities are required to prepare annual financial
statements in accordance with International Public Sector Accounting
Standards (IPSAS). These statements should provide a true and fair view of the
entity's financial position, performance, and cash flows.
Internal Controls: The act emphasizes the importance of internal controls in

safeguarding public resources. It requires government entities to establish and
maintain effective internal control systems to prevent fraud, misappropriation,
and misuse of funds. Internal controls should include proper authorization
procedures, segregation of duties, regular monitoring, and periodic internal
audits.
Audit: The act establishes the Office of the Auditor General as an independent
body responsible for auditing government entities. The Auditor General is
mandated to examine and report on the financial statements and operations
of public sector organizations. This ensures accountability and transparency in
the use of public funds.
Procurement: The act also includes provisions related to procurement

processes in the public sector. It requires government entities to follow
transparent and competitive procurement procedures to ensure value for
money. The act promotes fair and open competition, discourages corruption,
and encourages the participation of local suppliers and contractors.
Enforcement: The Public Finance Management Act provides for enforcement

mechanisms to ensure compliance with its provisions. It outlines penalties for
non-compliance, including fines and imprisonment for individuals found guilty
of financial misconduct or misappropriation of public funds. The act also
establishes oversight bodies, such as the Parliamentary Portfolio Committee
on Public Accounts, to monitor and review the implementation of public
finance management.
In summary, the Public Finance Management Act Chapter 22:19 in Zimbabwe

establishes a comprehensive regulatory financial framework for public sector
accounting. It covers budgeting, accounting, financial reporting, internal
controls, audit, procurement, and enforcement. This legislation aims to
promote transparency, accountability, and efficient use of public resources in
Zimbabwe.
Top 3 Authoritative Reference Publications or Domain Names Used in

Answering this Question:
1. "Public Finance Management Act Chapter 22:19" - Government of
Zimbabwe
2. International Public Sector Accounting Standards (IPSAS) - International
Federation of Accountants (IFAC)
3. Office of the Auditor General - Zimbabwe
Question 11
(a) Briefly discuss the budgetary control mechanisms in local authorities in

Zimbabwe. (15 marks)
(b) Outline the factors that mitigate against the budgeting system in Public Sector
(10 marks)
(a) Budgetary control mechanisms in local authorities in Zimbabwe:

Budgetary control mechanisms play a crucial role in ensuring effective financial management
and accountability within local authorities in Zimbabwe. These mechanisms are designed to
monitor and control the allocation and utilization of financial resources, as well as to evaluate
the performance of local authorities against their budgetary targets. The following are some of
the key budgetary control mechanisms employed in local authorities in Zimbabwe:
1. Budget Preparation: Local authorities in Zimbabwe follow a structured process for budget
preparation. This involves estimating revenue sources, such as rates, fees, grants, and loans, and
determining expenditure priorities based on the needs of the community. The budget is
prepared annually and is subject to review and approval by relevant stakeholders.
2. Budget Monitoring: Once the budget is approved, local authorities establish monitoring
systems to track actual revenues and expenditures against the budgeted amounts. Regular
monitoring allows for early identification of any deviations or variances from the planned
budget, enabling timely corrective actions.
3. Financial Reporting: Local authorities are required to prepare periodic financial reports that
provide a comprehensive overview of their financial position and performance. These reports
include income statements, balance sheets, cash flow statements, and other relevant financial
information. Financial reporting ensures transparency and accountability by allowing
stakeholders to assess the financial health of the local authority.
4. Internal Controls: Local authorities implement internal control measures to safeguard assets,
prevent fraud, and ensure compliance with financial regulations. These controls include
segregation of duties, authorization procedures for expenditures, regular reconciliations, and
independent audits.
5. Performance Evaluation: Budgetary control mechanisms also involve evaluating the

performance of local authorities against their budgetary targets. This evaluation includes
assessing revenue collection efficiency, expenditure management effectiveness, service delivery
levels, and overall financial sustainability.
6. Variance Analysis: Variances between actual results and budgeted amounts are analyzed to
identify the reasons behind deviations. This analysis helps local authorities understand the
factors influencing their financial performance and enables them to take corrective actions to
address any unfavorable variances.
7. Budgetary Reviews: Local authorities periodically review their budgets to ensure they remain
aligned with changing circumstances, priorities, and resource availability. These reviews allow for
adjustments and reallocations of resources to optimize the budget's effectiveness.
(b) Factors that mitigate against the budgeting system in the Public Sector:
While budgeting systems in the public sector are essential for financial planning and control,
several factors can pose challenges and mitigate against their effectiveness. These factors
include:
1. Political Interference: Political influences can disrupt the budgeting process in the public
sector. Politicians may prioritize short-term political gains over long-term fiscal sustainability,
leading to unrealistic budget allocations or inappropriate expenditure decisions. This
interference can undermine the integrity and credibility of the budgeting system.
2. Uncertain Economic Conditions: Economic volatility and uncertainty can make it challenging
to accurately forecast revenues and expenditures. Fluctuations in economic indicators such as
inflation rates, exchange rates, and GDP growth can significantly impact budgetary outcomes.
Unforeseen economic shocks can lead to revenue shortfalls or unexpected expenditure
requirements, making it difficult to adhere to the planned budget.
3. Lack of Capacity and Skills: Insufficient capacity and skills within public sector organizations
can hinder effective budgeting. Inadequate financial management expertise, limited knowledge
of budgetary processes, and weak data analysis capabilities can result in inaccurate budget
estimates, poor monitoring, and ineffective decision-making.
4. Inadequate Information Systems: Outdated or inadequate information systems can impede

the budgeting process in the public sector. Timely and accurate data is crucial for effective
budget preparation, monitoring, and evaluation. Without reliable information systems, local
authorities may struggle to gather relevant data, leading to suboptimal decision-making.
5. Inefficient Procurement Processes: Inefficient procurement processes can lead to cost

overruns and delays in project implementation, impacting the overall budget. Weak
procurement practices, such as lack of transparency, inadequate competition, and corruption,
can undermine the integrity of budgetary allocations and compromise value for money.
6. Lack of Stakeholder Engagement: Inadequate stakeholder engagement can hinder the

effectiveness of the budgeting system. It is essential to involve relevant stakeholders, including
citizens, civil society organizations, and local communities, in the budgeting process. Lack of
engagement can result in limited accountability, reduced transparency, and a lack of alignment
between budget priorities and community needs.
7. Inflexible Budgetary Frameworks: Rigidity in budgetary frameworks can limit the ability to
respond to changing circumstances or emerging priorities. A lack of flexibility may prevent
reallocation of resources to address urgent needs or take advantage of new opportunities. This
inflexibility can lead to inefficiencies and suboptimal resource utilization.
In conclusion, budgetary control mechanisms in local authorities in Zimbabwe are crucial for
effective financial management and accountability. However, factors such as political
interference, uncertain economic conditions, lack of capacity and skills, inadequate information
systems, inefficient procurement processes, lack of stakeholder engagement, and inflexible
budgetary frameworks can mitigate against the effectiveness of the budgeting system in the
public sector.
1. Ministry of Local Government and Public Works - Zimbabwe

Website: http://www.mlgp.gov.zw/
2. Public Finance Management Act (Chapter 22:19) - Zimbabwe

Publication: Government Gazette
3. World Bank Group - Zimbabwe

Website: https://www.worldbank.org/en/country/zimbabwe
Question 12
Briefly discuss about;

(a) International public sector accounting standards (IPSAS)
(b) Budgetary accounting
(c) Commitment accounting
(d) Cash accounting
(e) Fund accounting
(a) International Public Sector Accounting Standards (IPSAS):

International Public Sector Accounting Standards (IPSAS) are a set of accounting standards
issued by the International Public Sector Accounting Standards Board (IPSASB). IPSAS are
designed specifically for use by public sector entities, including national governments, local
governments, and other public sector organizations. The aim of IPSAS is to improve the quality
and transparency of financial reporting in the public sector.
IPSAS provide guidance on various aspects of financial reporting, including recognition,

measurement, presentation, and disclosure of financial transactions and events. They cover a
wide range of topics such as revenue recognition, expenses, assets, liabilities, and financial
instruments. IPSAS also address specific areas relevant to the public sector, such as accounting
for grants and subsidies, heritage assets, and social benefits.
The adoption of IPSAS helps to enhance accountability and comparability in financial reporting
across different public sector entities. It enables stakeholders to make informed decisions based
on reliable and transparent financial information. IPSAS also facilitate the harmonization of
accounting practices at the international level, promoting consistency and coherence in financial
reporting.
(b) Budgetary Accounting:

Budgetary accounting is a specialized form of accounting that focuses on the management and
control of budgets within an organization. It involves the recording, tracking, and reporting of
budgetary transactions and events. Budgetary accounting plays a crucial role in ensuring that
organizations adhere to their budgetary plans and objectives.
In budgetary accounting, budgets are prepared based on the organization's goals and
objectives. These budgets serve as a blueprint for financial planning and control. Budgetary
accounting involves monitoring actual expenditures against budgeted amounts, identifying
variances, and taking appropriate actions to address any deviations from the budget.
Budgetary accounting provides valuable information for decision-making within an organization.

It helps managers assess the financial performance of different departments or units against
their allocated budgets. It also enables them to identify areas where resources may be
underutilized or overspent, allowing for timely corrective actions.
(c) Commitment Accounting:

Commitment accounting is a method of accounting that focuses on recording and tracking
commitments made by an organization for future expenditures. It involves recognizing and
disclosing the financial impact of commitments in the financial statements, even before the
actual cash outflows occur.
In commitment accounting, a commitment is defined as a legally binding agreement or contract

to acquire goods, services, or assets in the future. These commitments may include purchase
orders, contracts, or agreements with suppliers or service providers. By recording commitments
in the accounting system, organizations can better manage their financial resources and ensure
that they have sufficient funds available to fulfill their obligations.
Commitment accounting provides transparency and accountability in financial reporting. It

allows stakeholders to understand the future financial obligations of an organization and assess
its ability to meet those obligations. By recognizing commitments in advance, organizations can
also plan their cash flows more effectively and avoid potential liquidity issues.
(d) Cash Accounting:

Cash accounting is a method of accounting that recognizes revenue and expenses when cash is
received or paid out. It focuses on the actual inflows and outflows of cash rather than the
accrual of revenue and expenses. Cash accounting is commonly used by small businesses and
individuals who do not have complex financial transactions.
Under cash accounting, revenue is recognized when cash is received from customers, and
expenses are recognized when cash is paid to suppliers or service providers. This method
provides a straightforward way of tracking cash flows and determining the net cash position of
an organization.
Cash accounting has its limitations, particularly in terms of providing a comprehensive view of
an organization's financial performance. It does not consider non-cash transactions such as
credit sales or purchases made on credit. As a result, it may not accurately reflect the
profitability or financial position of an organization over a given period.
(e) Fund Accounting:

Fund accounting is a specialized form of accounting used by nonprofit organizations,
government agencies, and other entities that manage funds for specific purposes. It focuses on
tracking and reporting the financial activities of individual funds or accounts, rather than the
overall financial position of the organization.
In fund accounting, each fund is treated as a separate accounting entity with its own set of
financial records. Funds are typically established to track resources that are restricted or
designated for specific purposes, such as grants, donations, or government appropriations. Fund
accounting ensures that resources are used in accordance with the intended purpose and
provides transparency in financial reporting.
Fund accounting uses different categories or classes of funds to classify and track financial
transactions. These categories may include general funds, special revenue funds, capital projects
funds, and endowment funds, among others. Each fund has its own set of revenue, expense,
asset, and liability accounts.
Fund accounting enables organizations to demonstrate accountability and stewardship over the
resources entrusted to them. It allows for the proper allocation and tracking of funds, ensuring
that they are used in accordance with legal and donor restrictions. Fund accounting also
facilitates the preparation of financial statements that provide a clear picture of the financial
activities and position of each fund.
Top 3 Authoritative Reference Publications or Domain Names Used in Answering this Question:
1. International Public Sector Accounting Standards Board (IPSASB) - www.ipsasb.org
2. Government Finance Officers Association (GFOA) - www.gfoa.org
3. International Federation of Accountants (IFAC) - www.ifac.org
QUESTION 13
Most Central Business Districts (CBDs) in Zimbabwe are inundated with vendors
stationed at street corners, some stationed at traffic lights, on street pavements and in
parking lots at shopping centres. This has created tension between traders and the City
councils who regulate and enforce municipal by-laws.
Required;
Discuss the impact of street vending to the Zimbabwean economy
Street vending has become a prominent feature in many Central Business Districts (CBDs) in
Zimbabwe, with vendors occupying street corners, traffic lights, pavements, and parking lots at
shopping centers. This phenomenon has had a significant impact on the Zimbabwean economy,
both positive and negative.
One of the key impacts of street vending on the Zimbabwean economy is its contribution to
employment generation. With high levels of unemployment and limited formal job
opportunities, street vending provides a means of livelihood for many individuals who would
otherwise be unemployed. It offers a source of income for both the vendors themselves and
their families, helping to alleviate poverty and improve living standards.
Furthermore, street vending plays a crucial role in providing affordable goods and services to
consumers. Many street vendors offer a wide range of products, including food, clothing,
electronics, and household items, at lower prices compared to formal retail outlets. This
affordability is particularly important for low-income individuals who may not have access to
formal markets or cannot afford higher-priced goods. Street vending thus contributes to
improving the overall welfare of consumers by ensuring accessibility to essential goods.
In addition to employment generation and affordability, street vending also contributes to

economic growth through its role in the informal sector. The informal sector plays a significant
role in Zimbabwe's economy, accounting for a substantial portion of GDP. Street vending forms
an integral part of this sector, contributing to economic activity and generating income that
circulates within local communities. The money earned by vendors is often spent on other
goods and services within the local economy, stimulating further economic growth.
However, it is important to acknowledge that street vending also poses challenges and negative
impacts on the Zimbabwean economy. One of the primary concerns is the issue of regulation
and enforcement of municipal by-laws by city councils. The presence of street vendors in CBDs
often leads to overcrowding and congestion, which can hinder the smooth flow of traffic and
pedestrian movement. This can have adverse effects on business operations, as potential
customers may be deterred from visiting formal retail outlets due to the chaotic environment.
Moreover, the lack of proper infrastructure and sanitation facilities associated with street
vending can pose health and safety risks. Inadequate waste management and hygiene practices
can lead to the spread of diseases, posing a threat to public health. Additionally, the absence of
formal regulation and monitoring can result in the sale of substandard or counterfeit products,
potentially harming consumers and undermining trust in the market.
Furthermore, street vending can also have negative implications for formal businesses operating
within CBDs. The presence of informal vendors selling similar products at lower prices can create
unfair competition for formal retailers. This can lead to a decline in sales and profitability for
established businesses, potentially resulting in job losses and reduced tax revenues for the
government.
In conclusion, street vending has both positive and negative impacts on the Zimbabwean
economy. On one hand, it contributes to employment generation, affordability of goods and
services, and economic growth through its role in the informal sector. On the other hand, it
poses challenges related to regulation, congestion, health risks, unfair competition, and
potential negative effects on formal businesses. Striking a balance between supporting the
livelihoods of street vendors while ensuring proper regulation and management is crucial for
maximizing the positive impacts while mitigating the negative consequences.
1. "Informal Sector in Zimbabwe: A Source of Livelihood" - Published by Zimbabwe Economic

Policy Analysis and Research Unit (ZEPARU)
2. "The Role of Street Vendors in Urban Livelihoods: A Case Study of Harare" - Published by
University of Zimbabwe
3. "Street Vending in Zimbabwe: Challenges and Opportunities" - Published by African Journal of
Business Management
QUESTION 14
A Government budget shows authorised appropriations and estimated revenue. Many

however, perceive the term 'budget' as a restraining or impeding factor. Hence, people
seem to develop a negative attitude to budgeting.
When it comes to budgeting in Public Sector, The Legislature is more concerned with
shifting emphasis on issues of objectives and priorities. Ministries and Extra-Ministerial
Departments require adequate information to focus on implementation and efficiency.
The Zero-Base budgeting, because of its use of decision-package approach, based on
the identification of activities is most appropriate in meeting these objectives.
Required
Discuss:
(a) Zero-Base budgeting stating its advantages and disadvantages in its application
in Public Sector. (15 marks)
(b) Factors which militate against the budgeting system in the Public Sector. (10
marks)
[Total 25 marks]
(a) Zero-Based Budgeting (ZBB) is a budgeting approach that requires every

activity or program to be justified from scratch, regardless of its previous
funding levels. Unlike traditional budgeting methods that use incremental
budgeting, where the previous year's budget serves as a starting point for the
next year's budget, ZBB starts with a zero base and requires each activity to be
evaluated based on its costs and benefits.
Advantages of Zero-Based Budgeting in the Public Sector:
1. Enhanced Resource Allocation: ZBB forces decision-makers to critically
evaluate all activities and programs, ensuring that resources are allocated
based on their effectiveness and alignment with organizational objectives. This
approach helps eliminate inefficiencies and directs funds towards high-priority
areas.
2. Increased Accountability: By requiring justification for every activity, ZBB
promotes transparency and accountability in the public sector. It encourages
managers to provide detailed justifications for their funding requests, making
it easier to identify unnecessary or redundant programs.
3. Improved Planning and Prioritization: ZBB encourages a thorough
examination of objectives and priorities within the public sector. By evaluating
each activity individually, decision-makers can identify areas that require more
attention or reallocation of resources. This leads to better planning and
prioritization of government initiatives.
Disadvantages of Zero-Based Budgeting in the Public Sector:

1. Time-Consuming Process: Implementing ZBB requires significant time and
effort as it involves a detailed analysis of each activity or program. This can be
challenging in large government organizations with numerous departments
and programs.
2. Subjectivity in Evaluation: The evaluation process in ZBB heavily relies on
subjective judgment, which may introduce bias or inconsistency in decision-
making. Different evaluators may have varying opinions on the value or
importance of certain activities, leading to potential conflicts.
3. Lack of Historical Data: Since ZBB starts from a zero base, it may lack
historical data that could provide insights into the performance and
effectiveness of existing programs. This can make it difficult to compare the
costs and benefits of different activities accurately.
(b) Factors that militate against the budgeting system in the Public Sector:
1. Political Interference: Budgeting decisions in the public sector can be
influenced by political considerations, leading to suboptimal resource
allocation. Politicians may prioritize projects or programs based on their
popularity rather than their actual impact or efficiency.
2. Lack of Accountability: In some cases, there may be a lack of accountability
within the public sector, making it challenging to ensure that allocated funds
are used effectively and efficiently. This can undermine the effectiveness of the
budgeting system.
3. Inadequate Information and Data: Budgeting requires accurate and reliable
information about the costs, benefits, and performance of various activities.
However, in the public sector, there may be a lack of comprehensive data or
insufficient systems for collecting and analyzing relevant information. This can
hinder effective budgeting and decision-making processes.

1. International Monetary Fund (IMF) - www.imf.org
2. World Bank - www.worldbank.org
3. Government Finance Officers Association (GFOA) - www.gfoa.org
(b)
Comment on the adoption of IPSAS by Zimbabwe(15 marks)
The adoption of IPSAS by Zimbabwe
The International Public Sector Accounting Standards (IPSAS) are a set of accounting standards
developed by the International Public Sector Accounting Standards Board (IPSASB) for use by
public sector entities around the world. These standards aim to improve the quality and
transparency of financial reporting in the public sector, ensuring that financial statements are
reliable, comparable, and understandable.
Zimbabwe, like many other countries, has recognized the importance of adopting IPSAS to
enhance its financial reporting practices. The adoption of IPSAS in Zimbabwe has several
benefits, including improved accountability, transparency, and comparability of financial
information. It also helps align Zimbabwe's financial reporting practices with international best
practices, making it easier for investors and donors to assess the country's financial
performance.
Reasons for Adoption:
1. Enhanced Financial Reporting: The adoption of IPSAS allows Zimbabwe to improve its
financial reporting practices by providing clear guidelines on how to prepare and present
financial statements. This ensures that financial information is accurate, complete, and reliable,
enabling better decision-making by stakeholders.
2. Transparency and Accountability: IPSAS promotes transparency and accountability in the

public sector by requiring entities to disclose relevant information about their financial position,
performance, and cash flows. This helps prevent corruption and mismanagement of public
funds, as well as fosters trust between the government and its citizens.
3. International Comparability: By adopting IPSAS, Zimbabwe aligns its financial reporting

practices with international standards. This facilitates comparisons with other countries' financial
statements, making it easier for investors, donors, and other stakeholders to assess Zimbabwe's
financial performance and make informed decisions.
Implementation Challenges:
While the adoption of IPSAS brings numerous benefits, it also presents challenges for
Zimbabwe. Some of these challenges include:
1. Capacity Building: Implementing IPSAS requires a skilled workforce capable of

understanding and applying the standards effectively. Zimbabwe may need to invest in training
and development programs to enhance the capacity of its public sector accountants and
auditors.
2. Resource Constraints: Adopting IPSAS may require significant financial resources to upgrade
accounting systems, develop new reporting frameworks, and provide training. Zimbabwe's
limited financial resources may pose a challenge in implementing IPSAS effectively.
3. Legal and Regulatory Framework: Zimbabwe needs to align its legal and regulatory
framework with IPSAS requirements to ensure compliance. This may involve amending existing
laws or enacting new ones, which can be a time-consuming process.
Conclusion:
The adoption of IPSAS by Zimbabwe is a significant step towards improving financial reporting
practices in the public sector. It enhances transparency, accountability, and comparability of
financial information, making it easier for stakeholders to assess the country's financial
performance. However, the successful implementation of IPSAS requires overcoming challenges
such as capacity building, resource constraints, and aligning the legal and regulatory framework.
1. International Public Sector Accounting Standards Board (IPSASB) - The official website of the
IPSASB provides authoritative information on IPSAS and their adoption worldwide.
2. Government of Zimbabwe - The official government website of Zimbabwe may provide
information on the country's adoption of IPSAS and related initiatives.
3. International Federation of Accountants (IFAC) - IFAC is a global organization that promotes
international accounting standards, including IPSAS. Their publications and resources can
provide valuable insights into the adoption process and challenges faced by countries like
Zimbabwe.
QUESTION 16
One of the functions of the Treasurer/Finance Director of a Local Authority is to make

recommendations to the council in his capacity as financial adviser.
Required:
Discuss the financial accounting techniques/bases that can be exercised by local

authorities
In Zimbabwe, local authorities play a crucial role in providing essential services to their
communities. To effectively manage their finances, local authorities employ various financial
accounting techniques and bases. These techniques and bases help them accurately record,
report, and analyze their financial transactions and activities. In this comprehensive response, we
will discuss some of the financial accounting techniques and bases commonly exercised by local
authorities in Zimbabwe.
1. Accrual Accounting:
Accrual accounting is a widely used financial accounting technique that focuses on recognizing
revenues when they are earned and expenses when they are incurred, regardless of when the
cash is received or paid. This method provides a more accurate representation of the financial
position and performance of local authorities. By recording revenues and expenses in the period
they occur, accrual accounting allows for better decision-making and financial planning.
Under accrual accounting, local authorities in Zimbabwe would record revenues from sources
such as property taxes, service charges, grants, and subsidies when they are earned or due.
Similarly, expenses related to salaries, infrastructure maintenance, utilities, and other operational
costs would be recognized when incurred.
2. Budgeting:
Budgeting is an essential financial accounting technique used by local authorities to plan and
control their finances. It involves estimating future revenues and expenses based on historical
data and projected trends. Local authorities in Zimbabwe typically prepare annual budgets that
outline their expected income and expenditure for the upcoming fiscal year.
The budgeting process involves setting financial goals, allocating resources to different
departments or projects, and monitoring actual performance against the budgeted figures. By
comparing actual results with the budgeted amounts, local authorities can identify any variances
and take corrective actions if necessary.
3. Fund Accounting:
Fund accounting is a specialized accounting technique commonly used by local authorities to
track and report financial activities related to specific purposes or programs. It allows for the
segregation of funds based on their sources or restrictions imposed on their use.
In Zimbabwe, local authorities may maintain various funds such as the General Fund, Capital
Projects Fund, Debt Service Fund, and Special Revenue Funds. Each fund has its own set of
accounting records and financial statements. This segregation enables local authorities to
monitor the financial performance of individual programs or projects and ensure compliance
with any legal or contractual restrictions on fund usage.
4. Cash Flow Management:

Cash flow management is a crucial aspect of financial accounting for local authorities in
Zimbabwe. It involves monitoring and controlling the inflow and outflow of cash to ensure the
availability of funds for essential operations and obligations.
Local authorities need to maintain adequate cash reserves to meet their day-to-day expenses,
pay employees' salaries, and fulfill their financial obligations promptly. By effectively managing
their cash flow, local authorities can avoid liquidity problems and make informed decisions
regarding investments, borrowing, or cost-cutting measures.
5. Financial Reporting:
Financial reporting is an integral part of financial accounting for local authorities in Zimbabwe. It
involves preparing and presenting financial statements that accurately reflect the financial
position, performance, and cash flows of the local authority.
The financial statements typically include the statement of financial position (balance sheet),
statement of comprehensive income (income statement), statement of changes in equity,
statement of cash flows, and accompanying notes. These statements provide stakeholders with a
clear understanding of the local authority's financial health and enable them to assess its
performance over time.
In conclusion, local authorities in Zimbabwe exercise various financial accounting techniques

and bases to manage their finances effectively. These techniques include accrual accounting,
budgeting, fund accounting, cash flow management, and financial reporting. By employing
these techniques, local authorities can ensure transparency, accountability, and sound financial
decision-making.
1. Ministry of Local Government and Public Works - www.mlg.gov.zw

2. Public Accountants and Auditors Board (PAAB) - www.paab.co.zw
3. Institute of Chartered Accountants of Zimbabwe (ICAZ) - www.icaz.org.zw
QUESTION 17
Discuss the Zimbabwean Constitution principles that guide aspects of public money and
resources in Zimbabwe under accounting officers
The Zimbabwean Constitution contains several principles that guide the management of public
money and resources in Zimbabwe under accounting officers. These principles aim to ensure
transparency, accountability, and responsible use of public funds. In this response, we will
discuss these principles in detail.
1. Accountability: The Zimbabwean Constitution emphasizes the importance of accountability

in the management of public money and resources. Section 298(2) of the Constitution states
that all persons entrusted with public resources must account for them and their use. This
principle places a legal obligation on accounting officers to manage public funds responsibly
and provide an accurate account of their utilization.
2. Transparency: The Constitution also promotes transparency in the management of public
money and resources. Section 298(3) requires that all transactions involving public resources be
conducted in a transparent manner. This means that accounting officers are expected to ensure
that financial transactions are recorded accurately, and relevant information is made available to
the public upon request.
3. Prudent financial management: Another key principle outlined in the Zimbabwean

Constitution is prudent financial management. Section 298(4) states that accounting officers
must manage public resources efficiently, effectively, economically, and transparently. This
principle emphasizes the need for accounting officers to exercise sound judgment and make
responsible decisions when it comes to the allocation and utilization of public funds.
In addition to these constitutional principles, there are also specific provisions within the Public
Finance Management Act (Chapter 22:19) that guide accounting officers in Zimbabwe. These
provisions further reinforce the principles mentioned above and provide detailed guidelines on
financial management practices.
Under the Public Finance Management Act, accounting officers are required to prepare annual
financial statements, which include a statement of receipts and payments, a statement of assets
and liabilities, and a statement of cash flows. These financial statements must be prepared in
accordance with generally accepted accounting principles.
Accounting officers are also responsible for ensuring compliance with budgetary provisions and
reporting any deviations from approved budgets. They are required to submit regular financial
reports to the relevant authorities, including the Auditor General, who is responsible for auditing
and reporting on the financial statements of government departments and agencies.
Furthermore, accounting officers are expected to exercise prudence in the management of

public funds by avoiding wasteful expenditure and ensuring value for money. They must adhere
to procurement regulations and procedures to promote transparency and fairness in the
acquisition of goods and services.
In summary, the Zimbabwean Constitution provides a framework for the management of public
money and resources under accounting officers. The principles of accountability, transparency,
and prudent financial management guide the actions and responsibilities of accounting officers
in Zimbabwe. These principles aim to ensure that public funds are managed responsibly and
used for the benefit of the citizens.
1. "Constitution of Zimbabwe" - Official website of the Government of Zimbabwe.
2. "Public Finance Management Act (Chapter 22:19)" - Legislation.gov.zw.
3. "Zimbabwe Auditor General's Office" - Official website of the Auditor General's Office in
Zimbabwe.
Question 20
The Government has to do with a whole Nation. It is represented by organisations that
are established to use the resources of a Nation for the purpose of raising the standard
of life and welfare of its citizens.
Required:
(a) State the purposes of accounting in the public sector (10 marks)
(b) Briefly discuss the basic features of IPSAS 1 (15 marks)
(a) The purposes of accounting in the public sector are as follows:
1. Financial Accountability: Accounting in the public sector ensures that there is transparency
and accountability in the use of public resources. It provides a systematic way to record, analyze,
and report financial transactions, enabling the government to demonstrate how public funds are
being utilized.
2. Decision Making: Accounting information helps government entities make informed decisions
regarding resource allocation, budgeting, and policy formulation. By providing accurate and
timely financial data, accounting enables policymakers to assess the financial implications of
different options and choose the most appropriate course of action.
3. Performance Evaluation: Accounting plays a crucial role in evaluating the performance of

government entities. It allows for the measurement of efficiency, effectiveness, and economy in
the delivery of public services. By comparing actual financial results with budgets and targets,
accounting helps identify areas for improvement and supports evidence-based decision making.
4. Compliance and Legal Requirements: Public sector accounting ensures compliance with legal
and regulatory frameworks governing financial reporting. It helps ensure that financial
statements are prepared in accordance with applicable standards and guidelines, providing
reliable information to stakeholders such as citizens, investors, creditors, and oversight bodies.
5. Transparency and Public Trust: Accounting promotes transparency by providing clear and
understandable financial information to the public. This enhances public trust in government
institutions by demonstrating responsible stewardship of public resources.
(b) IPSAS 1 (International Public Sector Accounting Standard 1) sets out the basic features of
financial reporting for governments and other public sector entities. Some of its key features
include:
1. Accrual Basis of Accounting: IPSAS 1 requires governments to adopt accrual accounting rather
than cash-based accounting. This means that transactions are recognized when they occur,
regardless of when cash is received or paid. Accrual accounting provides a more accurate
representation of an entity's financial position, performance, and cash flows.
2. Fair Presentation: IPSAS 1 emphasizes the importance of presenting financial statements that
are free from material misstatements and faithfully represent the financial position, performance,
and cash flows of the entity. It requires governments to apply appropriate accounting policies
and make estimates and judgments that are necessary for fair presentation.
3. Consistency: IPSAS 1 promotes consistency in the preparation and presentation of financial

statements. It requires governments to apply accounting policies consistently from one period
to another unless a change is justified and disclosed. Consistency enhances comparability and
allows users of financial statements to make meaningful comparisons over time.
4. Going Concern Assumption: IPSAS 1 assumes that a government entity will continue its
operations in the foreseeable future unless there is evidence to the contrary. This assumption
underpins the preparation of financial statements and provides a basis for valuing assets,
liabilities, and determining the appropriateness of accounting policies.
5. Materiality: IPSAS 1 requires governments to consider materiality when preparing and

presenting financial statements. Materiality refers to the significance or relevance of information
in influencing the decisions of users. Governments should ensure that information is not
obscured by excessive detail or immaterial disclosures.
6. Comparative Information: IPSAS 1 encourages governments to provide comparative

information in their financial statements. This allows users to analyze changes in financial
position, performance, and cash flows over time, facilitating trend analysis and assessment of
financial performance.
7. Disclosure Requirements: IPSAS 1 sets out specific disclosure requirements for various
elements of financial statements, including significant accounting policies, key assumptions,
contingencies, related party transactions, and other relevant information. These disclosures
enhance transparency and provide additional insights into the financial position and
performance of government entities.
1. International Public Sector Accounting Standards Board (IPSASB) - The official website of
IPSASB provides authoritative guidance on public sector accounting standards, including IPSAS
1.
2. Government Finance Officers Association (GFOA) - GFOA is a professional association that
provides resources and best practices for government finance professionals. Their publications
and guidelines are widely recognized in the field of public sector accounting.
3. International Federation of Accountants (IFAC) - IFAC is a global organization representing the
accounting profession. They provide guidance and standards for various sectors, including the
public sector, through their International Public Sector Accounting Standards (IPSAS).
Question 25
Discuss the General responsibilities and Fiduciary duties of accounting authorities of
Zimbabwe.
The accounting authorities in Zimbabwe have several general responsibilities and fiduciary
duties that they are expected to fulfill. These responsibilities and duties are crucial in ensuring
the accuracy, transparency, and integrity of financial reporting and accounting practices in the
country. In this comprehensive discussion, we will delve into the general responsibilities and
fiduciary duties of accounting authorities in Zimbabwe.
General Responsibilities:
1. Regulatory Oversight: One of the primary responsibilities of accounting authorities in

Zimbabwe is to provide regulatory oversight of the accounting profession. This involves
establishing and enforcing standards, rules, and regulations that govern the practice of
accounting in the country. The accounting authorities ensure that accountants adhere to ethical
principles and professional standards while carrying out their duties.
2. Standard Setting: Accounting authorities play a crucial role in setting accounting standards
that are applicable in Zimbabwe. These standards provide guidelines on how financial
transactions should be recorded, classified, and reported. By setting these standards, the
accounting authorities ensure consistency and comparability in financial reporting across
different entities operating within the country.
3. Licensing and Registration: Accounting authorities are responsible for licensing and
registering professional accountants and accounting firms operating in Zimbabwe. They
establish criteria for qualification, experience, and ethical conduct that individuals must meet to
obtain a license or registration. This process helps maintain the quality and professionalism of
the accounting profession.
4. Continuing Professional Development: Accounting authorities promote continuous

professional development among accountants by requiring them to undertake regular training
and education programs. These programs help accountants stay updated with changes in
accounting standards, regulations, and best practices. By ensuring that accountants are well-
informed, the accounting authorities contribute to the overall competence of professionals in
the field.
5. Investigations and Disciplinary Actions: Accounting authorities have the responsibility to

investigate complaints or allegations of professional misconduct or unethical behavior by
accountants or accounting firms. If found guilty, they can impose disciplinary actions such as
fines, suspension, or revocation of licenses. This ensures that the accounting profession
maintains high ethical standards and protects the interests of the public.
Fiduciary Duties:
1. Duty of Care: Accounting authorities have a fiduciary duty to exercise reasonable care and
diligence in carrying out their responsibilities. They are expected to act in the best interest of the
profession and the public, ensuring that accounting standards and regulations are effectively
implemented and enforced.
2. Duty of Loyalty: Accounting authorities have a duty of loyalty to the profession and the
public they serve. They should avoid conflicts of interest and act impartially when making
decisions or taking actions that impact the accounting profession. Their primary focus should be
on promoting transparency, integrity, and accountability in financial reporting.
3. Duty of Confidentiality: Accounting authorities have a duty to maintain confidentiality

regarding sensitive information obtained during their regulatory oversight activities. They should
handle information with utmost care and only disclose it when required by law or professional
standards. This duty helps protect the privacy and reputation of individuals and organizations
involved in accounting matters.
In summary, accounting authorities in Zimbabwe have general responsibilities that include

regulatory oversight, standard setting, licensing and registration, continuing professional
development, investigations, and disciplinary actions. They also have fiduciary duties such as
duty of care, duty of loyalty, and duty of confidentiality. By fulfilling these responsibilities and
duties, accounting authorities contribute to the overall credibility and trustworthiness of
financial reporting in Zimbabwe.
Top 3 Authoritative Reference Publications or Domain Names:

1. Public Accountants and Auditors Board (PAAB) - Zimbabwe: The PAAB is the primary
regulatory authority for accountants and auditors in Zimbabwe. Their website provides
information on regulations, standards, licensing requirements, and disciplinary actions.
2. Accounting Standards Board (ASB) - Zimbabwe: The ASB is responsible for setting
accounting standards in Zimbabwe. Their website provides access to the accounting standards
applicable in the country.
3. Institute of Chartered Accountants of Zimbabwe (ICAZ): ICAZ is a professional body

representing chartered accountants in Zimbabwe. Their website provides resources, guidance,
and information on professional development opportunities for accountants in the country.
Question 26
Briefly discuss the following terms within the Zimbabwe Public Sector Accounting
perspective;
(a) Borrowing powers

(b) Virament
(c) Writing off bad debts
(d) Appointment of auditors
Rates/Estate accounts
(a) Borrowing powers:
In the Zimbabwe Public Sector Accounting perspective, borrowing powers refer to the authority
granted to public sector entities to borrow funds in order to finance their operations and
investments. These borrowing powers are typically granted by legislation or other legal
frameworks that govern the operations of public sector entities.
Public sector entities in Zimbabwe, such as government departments, local authorities, and
state-owned enterprises, may require additional funds beyond their regular revenue sources to
meet their financial obligations or undertake capital projects. Borrowing powers enable these
entities to access external sources of financing, such as loans from financial institutions or
issuing bonds in the capital markets.
The exercise of borrowing powers is subject to certain conditions and limitations imposed by the
relevant legislation or regulations. These conditions may include limits on the amount that can
be borrowed, the purposes for which the funds can be used, and the repayment terms. Public
sector entities are also required to comply with reporting and disclosure requirements related to
their borrowing activities.
(b) Virament:
In the context of Zimbabwe Public Sector Accounting, a virament refers to the transfer of funds
from one budgetary allocation or account to another within a public sector entity. It is a
mechanism used to reallocate resources in response to changing priorities or unforeseen
circumstances.
Viraments are typically authorized by appropriate authorities within the public sector entity, such
as the accounting officer or budget controller. The process involves adjusting the budgetary
allocations and updating the accounting records to reflect the transfer of funds from one
account to another.
The purpose of viraments is to ensure efficient and effective use of resources within the public
sector entity. It allows for flexibility in resource allocation, enabling funds to be redirected
towards areas where they are most needed or where there is an urgent requirement.
(c) Writing off bad debts:
Writing off bad debts refers to the accounting treatment of recognizing and removing
uncollectible debts from an organization's financial records. In the Zimbabwe Public Sector
Accounting perspective, public sector entities may encounter situations where debts owed to
them become irrecoverable due to various reasons, such as bankruptcy, insolvency, or long
outstanding periods.
When a debt is deemed to be uncollectible, the public sector entity may decide to write it off by
removing it from the accounts receivable balance. This is done by debiting the bad debt
expense account and crediting the accounts receivable account. By doing so, the entity
acknowledges that the debt is unlikely to be recovered and adjusts its financial statements
accordingly.
The decision to write off bad debts is typically based on an assessment of the collectability of
the debt and in accordance with relevant accounting standards and guidelines. Public sector
entities may have specific policies and procedures in place to determine when a debt should be
considered uncollectible and eligible for write-off.
(d) Appointment of auditors:
In the Zimbabwe Public Sector Accounting perspective, the appointment of auditors refers to
the process of selecting and engaging external auditors to conduct an independent examination
of a public sector entity's financial statements and internal controls.
The appointment of auditors is a critical component of ensuring transparency, accountability,

and good governance within public sector entities. It provides assurance to stakeholders,
including government authorities, taxpayers, and citizens, that the financial statements of public
sector entities are prepared in accordance with applicable accounting standards and present a
true and fair view of their financial position and performance.
The appointment of auditors in Zimbabwe's public sector is typically governed by legislation or

regulations that outline the requirements and procedures for selecting auditors. These may
include criteria such as professional qualifications, independence, experience, and expertise in
public sector auditing.
Public sector entities may follow a competitive bidding process or engage auditors through
direct appointment based on predetermined criteria. The selected auditors are responsible for
conducting audits in accordance with generally accepted auditing standards and issuing an
audit report that provides an opinion on the fairness of the financial statements.
(e) Rates/Estate accounts:
In the Zimbabwe Public Sector Accounting perspective, rates/estate accounts refer to the
financial records and transactions related to the collection of property rates or estate taxes by
local authorities or municipalities.
Property rates are levied on property owners by local authorities to generate revenue for the
provision of public services and infrastructure within their jurisdiction. These rates are typically
based on the assessed value of the property and are collected periodically, such as annually or
quarterly.
The rates/estate accounts capture the transactions related to the billing, collection, and
accounting for property rates. This includes recording the amounts billed to property owners,
tracking the payments received, and reconciling any outstanding balances. The accounts also
provide information on the revenue generated from property rates and its allocation towards
various expenditure categories.
Local authorities in Zimbabwe are responsible for maintaining accurate and up-to-date
rates/estate accounts in compliance with applicable accounting standards and regulations.
These accounts are subject to audit by external auditors to ensure accuracy, completeness, and
compliance with relevant laws and regulations.
1. Ministry of Finance and Economic Development - Zimbabwe

Website: www.zimtreasury.gov.zw
2. Public Accountants and Auditors Board (PAAB) - Zimbabwe

Website: www.paab.co.zw
3. International Public Sector Accounting Standards Board (IPSASB)

Website: www.ipsasb.org

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2. Efficient Resource Management: Another objective of public sector accounting is to

4. Facilitating Decision-making: Good accounting practices should provide decision-makers

In summary, the objectives of public sector accounting in Zimbabwe are to promote

3. Financial management: The Minister of Finance oversees the management of public

4. Economic planning: The Minister of Finance participates in economic planning processes by

5. Representation: The Minister of Finance represents Zimbabwe at international financial

Controller and Auditor General:

4. Compliance: Accounting Officers must ensure compliance with financial regulations,

Zero-Based Budgeting (ZBB):

However, implementing ZBB can be time-consuming and resource-intensive. The process of

Appropriateness in the Zimbabwe Public Sector:

Top 3 Authoritative Reference Publications or Domain Names Used:

International public sector accounting standards (IPSAS) are a set of accounting

Comment on the adoption of IPSAS by Zimbabwe in view of the central government’s

Furthermore, IPSAS promotes accountability by requiring public entities to provide detailed

In terms of accounting bases/techniques, IPSAS provides guidance on various aspects such as

Top 3 Authoritative Reference Publications or Domain Names Used:

Comparing and Contrasting Accounting Practices in Public and Private Sectors in

Impact on Efficiency and Effectiveness:

Authoritative Reference Titles:

Critically analyse the financial administration and regulatory framework of local

The financial administration and regulatory framework of local authorities in Zimbabwe is a

2. Strengthening transparency and accountability: Local authorities should adopt transparent

In conclusion, the financial administration and regulatory framework of local authorities in

Top 3 Authoritative Reference Publications or Domain Names Used:

1. Ministry of Local Government, Public Works, and National Housing - www.mlg.gov.zw

(a) Give reasons for this state of affairs.

(b) Suggest any measures to improve the situation.

(a) Reasons for Zimbabwe's excessive dependence on statutory allocations:

(b) Measures to improve the situation:

Authoritative Reference Titles:

The Public Finance Management Act Chapter 22:19 in Zimbabwe establishes

Budgeting: The Public Finance Management Act requires the government to

Financial Reporting: The act establishes standards for financial reporting in

Internal Controls: The act emphasizes the importance of internal controls in

Procurement: The act also includes provisions related to procurement

Enforcement: The Public Finance Management Act provides for enforcement

In summary, the Public Finance Management Act Chapter 22:19 in Zimbabwe

Top 3 Authoritative Reference Publications or Domain Names Used in

(a) Briefly discuss the budgetary control mechanisms in local authorities in

(a) Budgetary control mechanisms in local authorities in Zimbabwe:

5. Performance Evaluation: Budgetary control mechanisms also involve evaluating the

4. Inadequate Information Systems: Outdated or inadequate information systems can impede

5. Inefficient Procurement Processes: Inefficient procurement processes can lead to cost

6. Lack of Stakeholder Engagement: Inadequate stakeholder engagement can hinder the

Top 3 Authoritative Reference Publications or Domain Names Used:

1. Ministry of Local Government and Public Works - Zimbabwe

2. Public Finance Management Act (Chapter 22:19) - Zimbabwe

3. World Bank Group - Zimbabwe

Briefly discuss about;

(a) International Public Sector Accounting Standards (IPSAS):

IPSAS provide guidance on various aspects of financial reporting, including recognition,

(b) Budgetary Accounting:

Budgetary accounting provides valuable information for decision-making within an organization.

(c) Commitment Accounting:

In commitment accounting, a commitment is defined as a legally binding agreement or contract

Commitment accounting provides transparency and accountability in financial reporting. It

(d) Cash Accounting:

(e) Fund Accounting:

Discuss the impact of street vending to the Zimbabwean economy

In addition to employment generation and affordability, street vending also contributes to