BULAWAYO City Council (BCC) plans to upgrade its accounting system to International Public Sector Accounting Standards (IPSAS) to improve the production of its financial statements.
Southern Eye understands that the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) are failing to capture the uniqueness of public sector and municipal activities and to promote effective financial reporting systems.
Council financial director Kempton Ndimande recently indicated that council made a resolution to migrate to IPSAS; and for its financial services department staff to be trained on the financial system to be adopted.
Ndimande said he was granted authority to negotiate with Training and Advisory Services (TAS) for training, which could take four years up to May 31, 2025.
“The financial services department, working together with the chamber secretary (Sikhangele Zhou), has concluded negotiations with Training and Advisory Services. TAS will assist council with full adoption of the International Public Sector Accounting Standards,” council minutes read.
“In carrying out this assignment TAS’s scope of works would include a drafting of the implementation plan, project management of the IPSAS implementation plan, updating of the accounting policies for council to be in line with IPSAS, updating of the accounting procedure manual for council, and ensuring compliance with all Implementation requirements by the relevant stakeholders.”
BCC will include other stakeholders such as the (Finance and Economic Development ministry, Office of the Auditor-General, Public Accountants and Audit Board, external auditors, and the Local Government and Public Works ministry management to impart knowledge to BCC employees during the training period.
“The agreed upon fee was US$3 300 per month, payable in US$ or RTGS dollar at the ruling willing-buyer willing-seller rate at the time of settlement. This amount was lower than the annual audit fees of US$55 000. The contract would run for the first 12 months and thereafter, could be terminated before year 2025 by giving notice to do so.”
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In August, council managed to produce 2021 financial statements on time, which were submitted to the Finance and Economic Development ministry and the Auditor-General by June 30, 2022.
During debate in council chambers, mayor Solomon Mguni sought clarity on the difference between IPSAS and LADS systems.
In response, town clerk Christopher Dube said the LADS system was an enterprise resource planning system whereas IPSAS was a reporting standard.
In April 2019, Finance minister Mthuli Ncube urged government institutions to move with speed to adopt global accounting systems.
The Local Government and National Housing ministry then set up an implementation plan for local authorities to migrate to IPSAS by 2024.
Bulawayo was selected as one of the pilot cities to migrate to IPSAS.
