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Ring-fence right skills, councils told

Business
Acting Auditor General Rheah Kujinga said local authorities need to bring financial reporting to date, while updating their systems to sustain the IPSAS software.

DEPUTY Accountant-General Morgen Makina says local authorities need to ring-fence the right skills to implement the International Public Sector Accounting Standards (IPSAS).

Presenting at the Local Authorities Convention held in Masvingo recently, Makina also said councils must procure the correct systems that allow the full implementation of IPSAS because it plays a pivotal role in enabling transparency, accountability and uniformity.

Zimbabwe adopted IPSAS as a reporting framework after the gazetting of Statutory Instrument 41 of 2019 on Public Accountants and Auditors (Prescription of International Standards) Regulations.

All reporting entities are required to migrate to the IPSAS framework by 2025 and produce IPSAS-compliant financial statements.

“Local authorities need to strengthen the capacity of local authorities' accountants and auditors. Local authorities' business is complex and requires the right people with the right skill sets at all levels, therefore, the first step is to carry out a people and resource gap analysis to identify the level of existing skills gaps and action to be taken to fill the gaps,” Makina said.

“Local authorities need to assess the existing systems and processes and whether they are sufficient for the full implementation of IPSAS.”

He indicated that financial management culture and behaviour change in terms of political and wider organisational and leadership is necessary for staff and stakeholders to understand IPSAS requirements.

“There must be changes in financial management culture and behaviour in terms of political and wider organisational and leadership. Structures must be in place to effectively prioritise plans to deliver the change, manage critical dependencies and risks, and ensure staff and stakeholders understand what is required of them,” he said.

“There should also be project delivery by setting up a project team encompassing the right people with the right skills, knowledge, and approach to drive the reforms. There must be a change in systems and policies by putting in place the right infrastructure, corporate governance and business processes.”

Makina noted that 92 local authorities were trained and the implementation guidance is from IPSAS 33 for first-time adoption of Accrual Basis IPSAS, while those that were already implemented are guided by IPSAS 3.

“From my assessment, we have done our best to equip and make sure that local authorities are well-trained at all levels and some of them have been registered as public accountants in the IPSAS category. Now it is in their hands whether they are serious, others in the middle of the fence, or others are not serious at all,” he said.

“Some that have challenges are approaching us and we are helping them. Some were already implementing IPSAS which are supposed to use IPSAS 3, but those that started when it was adopted by the government are using the IPSAS 33.”

Acting Auditor General Rheah Kujinga said local authorities need to bring financial reporting to date, while updating their systems to sustain the IPSAS software.

“What is important also is to make clear assumptions in whatever we are doing. We need to make sure that financial reporting is always up-to-date because 2025 is around the corner and it is just next year,” she noted.

“The big issue is making an effort to keep the financial outcome up-to-date. There is a need for some strategies to address that because we are a bit behind. The other thing is the issue of ICT which is undoubtedly a challenge for the local authorities. Those two need to be addressed.”

Some key areas that IPSAS addresses include revenue recognition, financial instruments, public-private partnerships, asset management, budget reporting and the presentation of financial statements. IPSAS provides guidelines on the structure and content of financial statements, ensuring that they are clear, transparent and informative.

 

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