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New framework for public sector management


THE Office of the President and Cabinet (OPC) has officially launched the Accrual-Based Reporting consultative discussions to transition from cash-based accounting to a more comprehensive method to increase public sector accountability.


The Public Accountants and Auditors Board (PAAB) is working on legalising the framework for Accrual Based Reporting with a date of 2023 set aside for implementation.

Speaking to NewsDay on the sidelines of a consultative workshop yesterday in Harare, the PAAB chairman Brian Njikizana said accrual accounting would also include assets in the reporting.

“Accrual accounting is quite different from cash accounting. Cash accounting is recording your receipts and payments. Accrual accounting brings in obligations and entitlements.
For example, if you have enjoyed a service but have not yet paid, accrual accounting will record that service that has been enjoyed as an obligation. Also, if government has rented a service to which it is become entitled to money that will be recorded as revenue,” he said

“Currently, we just go from here to here, government has spent so much and government has received so much, however, with accrual accounting it will also say government has got these kinds of assets.”

He said this would help the country become more attractive to international lenders since accrual accounting covers more than just revenue and expenditures.

The accrual accounting method has been adopted by about 52% of countries around the world since it measures the performance and position of a company by recognising economic events regardless of when cash transactions occur.

For government, this would mean looking at everything else concerning public funds rather than just revenues and expenditure.

One benefit is that the current cash inflows and outflows will be combined with future expected cash inflows and outflows to give a more comprehensive picture on the performance of government.

The Department for International Development spearheaded these consultative discussions back in 2015 and allocated $6,3 million towards the awareness campaign.

Chief Secretary to the President and Cabinet Misheck Sibanda said the adoption of an accrual-based reporting framework for the public sector would facilitate the migration towards such an objective.

“As such, the Roundtable (workshop) aligns closely with government’s ongoing drive to update our administrative systems, to bring them into line with proven modern practices and to strive to fully professionalise the public sector — with the auditing and accounting element thereof certainly being one of the very top priorities,” Sibanda said in a speech read by Corporate Governance and Delivery Unit secretary in the OPC Stuart Comberbach.

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