Government recently adopted the International Public Sector Accounting Standard (IPSAS) to strengthen efforts in as far as cleansing of public sector finance management is concerned.
IPSAS is an accounting tool that is aimed at establishing constant evaluation of public assets and government financials to mitigate corruption.
This forms part of government reforms to improve accountability, transparency and profitability within the public sector.
Opening the third Zimbabwe IPSAS Working Group meeting today, permanent secretary in the Ministry of Finance and Economic Development, George Guvamatanga said government has committed to migrate to accrual based accounting system from cash basis under the IPSAS Implementation Strategy and Plan (ISP).
“Consistent with global trends, the government of Zimbabwe will migrate to accrual based accounting under the IPSAS Implementation Strategy. There will be change of management in public sector and transparency and accountability will be enhanced,” said Guvamatanga.
The exercise will target central government, all local authorities (rural and urban) and other state entities fully funded by government excluding Parastatals to constantly publish their financials.
The accrual basis of accounting provides a better picture of an entity’s profits during an accounting period better than the cash basis for an example, revenues are reported on the income statement when earned rather than wait to record them later when they are received.
The IPSAS is also expected to address issues of identifying and evaluating idle state properties which have been long neglected and unaccounted for, conducting an arrears stock take and harmonising central government and local government accounts charts.
“Adopting the IPSAS will provide a wider set of reforms to maximise the resources and potential in public money and improve trust in government,” executive chairman of International Public Sector Accounting Standards Board, Ian Carruthers said.
About 25 percent of world governments have adopted the IPSAS with projections that in the coming five years the figure will grow to 65 percent.
But in Zimbabwe the IPSAS faces challenges in the wake of peculiar macro-economic factors reigning in the country since last year.
Analysts are however cautious about the market price distortions in currency values when local authorities and central government use the IPSAS accounting tool for figures starting last year fourth quarter to date. This they say, is likely to bring distortion of figures.
Cases of graft in the public sector has brought the country’s public finance management into question particularly non-compliance by some state entities to statutory obligations.
According to the Accountant General, out of 60 rural authorities only Goromonzi rural authority submitted its books for auditing on time in 2017.
The latest scandal has been the US$ 500 000 paid by ZINARA to a non-existent company in the past two years, a local press has reported.
