Accounting for public entities-from where?

raindrop · #1 Sunday, September 27, 2015

Hello,

I am using Sohail Afzals book (part 1) and I can only find accounting for not for profit but I cant find accounting for public entities. Can anyone please guide me in this regard where to prepare it from or is it one or the same thing?

Thanks,

zash · #2 Tuesday, September 29, 2015

- Accounting Entity: centralized and self accounting (SE)
- Accounts Office: DAO, AG and AGPR.
- Accounting Record: Any document upon which accounting transactions are recorded or any other document issued or used in the preparation and processing of accounting transactions.
- Accrual Accounting: recognises expenses when economic benefits have been consumed and revenues when economic benefits have been generated.
- Advance: An amount paid by the Government to a contractor/supplier for the purpose of securing goods or services; or an amount provided to a Government employee for a specified purpose, and to be adjusted as per terms and condition of the advance.
- Advice Note: A list of authorised payments sent by an accounts office to a branch of the SBP or NBP. (includes daily advice, payroll advice, pension advice, direct credit advice)
- Appropriation: An allocation of funds to a spending ministry or department on the basis of the Authenticated Schedule of Authorised Expenditure.
- Approval: The permission given by an authority or a delegated authority to undertake a particular action, such as incurring expenditure. asset Future economic benefits controlled by the entity as a result of past transactions or other past events.
- Assignment Account: A Government bank account established with the NBP, to provide independent drawing facility for nominated projects and other activities, within the prescribed limitation.
- Audit Trail: The capability to trace a particular balance from the financial statements down to its source documents (and vice versa), as evidence that the balance is complete and accurate.
- Authorisation
o In accounting terms, the approval given by an authority or a delegated authority for a particular payment to be made.
o In the context of the Budget, the process of passing the Annual Budget Statement through the legislature for approval.
- The Bank: State Bank of Pakistan, or The National Bank of Pakistan, as an agent of the SBP, unless otherwise specified.
- Bank return: A batch of documents received from the bank including the bank scroll, supporting vouchers, paid cheques and other documents.
- Bank Scroll: A daily advice received from a designated branch of the National Bank of Pakistan or State Bank of Pakistan, listing receipt collected and payments disbursed on behalf of the Government, against each of the Government bank accounts.
- Budget: Defined in article 80 of the Constitution, a statement of the estimated receipts and expenditure of the Government for a financial year, referred to as the Annual Budget Statement.
- Capital Expenditure:
o For the purposes of budgeting, expenditure met from capital receipts, as given by a particular grant number in the Chart of Accounts.
o In accounting terms, expenditure incurred for the purpose of acquiring, constructing or enhancing physical assets or on schemes of capital outlay, as given by the object code in the Chart of Accounts.
- Capital Receipt
o For the purposes of budgeting, receipts obtained from sources of finance other than revenue (e.g. loans).
o In accounting terms, receipts generated from the proceeds of sale of physical assets or receipts intended to set-off capital expenditure.
- Cash Accounting: records cash payments and cash receipts only.
- Cash Balance: The amount held in a particular bank account at any point in time.
- Cashflow: The net movement in the cash balance over a particular reporting period, given by the sum of payments and receipts.
- Cashflow Statement: A financial report provided to show the net movement in cash over a particular reporting period, showing how and where the cash has been applied.
- Cashflow Forecast: An estimate made of likely future cashflows based on historical patterns of expenditures and receipts, knowledge of expected payments (commitments) and collections (demands), changes in Government policy and other factors.
- Centralised Entity: Any accounting entity for which the Accountant-General accounting entity is responsible for the processing of its accounting transactions (e.g. certifying, authorising and issuing payments) and maintaining its accounts.
- Certification: A process undertaken by the DAO/AG/AGPR, including Executive Engineer of a public works division, involving verification (proper approval and validity)and audit (scrutiny against irregularities) of a payment prior to it being made. (previously referred to as pre-audit).
- Charged Expenditure: As defined in Article 81 of the Constitution, certain expenditures met from the Consolidated Fund, which may be discussed, but not submitted to the vote of the National Assembly (or Provincial Assembly in the case of Provinces).
- Chart of Accounts: A listing of codes on the basis of which accounting transactions are classified to provide meaningful financial information.
o Entity: Govt, Div, Dept, Attached Dept, DDO
o Object
o Fund
o Function
o Project
- Claim Voucher: A document submitted by DDOs to the DAO/AG/AGPR office, containing the particulars of a valid and duly approved claim for payment against a nominated budget head. (previously referred to as a bill).
- Clearing Account: A type of General Ledger account which is used to transfer a balance from one entity or process to another (includes exchange and settlement accounts).
- Commitment: An obligation to make a future payment, the funds for which are reserved against the allocated budget of an entity.
- Consolidated Financial Statementss: A set of financial reports produced by the Pakistan Audit Department which presents a consolidated summary of the Annual Accounts of the Federation and each Province.
- Consolidated Fund: Defined in Articles 78 and 118 of the Constitution, refers to all revenues received by the Federal/ Provincial Government, all loans raised and all moneys received in repayment of any loan by that Government. Balances are not carried forward at year end.
o Expenditure
§ Charged
§ Voted
· Capital Expenditure (Dev/Non-Dev)
· Revenue Expenditure (Dev/Non-Dev)
o Reciept
§ Capital
§ Other Receipts
- Consolidated Monthly Accounts: The Monthly financial reports produced by the Accounts AG/AGPR, (Consolidated from reports of DOAs) which present a summary of the accounts of the Federation/Provinces and submitted to Auditor General, Finance Division/Department. These also include additional reports produced by AG/AGPR i.e Revenue Analysis, Public Debt and Project Expenditure Reports.
- onsolidation: Aggregation of information from several entities to present as if one entity, therefore eliminating transactions between the entities being consolidated.
- Contingent Expenditure: All non-development expenditure, other than salaries and salary related expenditure.
- Control Account: A type of general ledger account which summarizes a number of transactions from a subsidiary ledger into a single balance.
- Delegated Authority: An officer formally empowered by the responsible authority to perform a particular function.
- Development Expenditure: Expenditure provided in grants, relating to development projects. Development projects are projects undertaken to acquire, build or improve physical assets or develop human resources.
- Direct Credit: A facility provided by the banks which allows salaries and other employee related payments to be made directly into the bank accounts of those persons, without the need for an exchange of physical cash or cheques.
- Disclosure: Display of financial information in a supplementary note to the financial statements, rather than in its main body, in order to provide further detail about a particular item.
- Entity: An organisational unit of Government. This term can be applied to specific types of organisational units, depending on the context (i.e. self-accounting entity, centralised accounting entity, spending entity).
- Equity: An accrual accounting concept defined as the residual interest in the assets of an entity after the deductio n of all its liabilities.
- Exchange account: A General Ledger account through which transactions between centralised accounting entities and self-accounting entities of the Federal Government are recorded.
- Excess: An amount of expenditure exceeding the approved budget, which is regularised through an Excess Budget Statement.
- Exempt entity: Any entity outside the scope of the Manual of Accounting Principles and related manuals. expense (i) In accrual accounting, defined as a decrease in future economic benefits in the form of reductions of assets or increases in liabilities of the entity, other than those relating to distributions to Government as owner, that result in a decrease in equity (ii) In cash and modified cash accounting, defined as the outflow of cash arising as a result of payments issued in a given reporting period.
- Financial Asset: A reporting classification of assets, used to describe cash held and any assets readily convertible to cash.
- Financial Year The financial year commencing 1 July and ending 30 June, consisting of t1welve monthly periods.
- Fixed Assets: Assets characterised by their long-term or strategic purpose. Fixed assets are usually physical in nature, such as plant and equipment, buildings etc. In financial reporting, used synonymously with ‘non-financial assets’, because they are not readily convertible to cash.
- Function: An element used in the Chart of Accounts, which provides financial information on particular economic activities, according to the International Monetary Fund’s Government Finance Statistics (GFS) classification scheme.
- Fund: A pool of money, set aside and used for an intended purpose, as provided by legislation or special orders (e.g. Consolidated Fund, trust fund).
- Funds Available: A term used in budgetary control to describe the remaining budget allocated to an entity, after deducting outstanding commitments and actual payments.
- General Ledger: summarized record of all account balances maintained by a DAO/AG/AGPR office The primary ledger in which accounting transactions are recorded, in double entry format, and from which financial reports are produced.
- Grant: Funding provided to a Ministry or Department, through the Schedule of Authorised Expenditure.
- Imprest Account: Petty cash system for making small payments. Contains a set balance of cash which is subsequently replaced by petty cash vouchers on payment of cash.
- Internal Controls: A term used to describe the system of checks, reports and procedures that are enforced in an accounting system to protect against fraud and to ensure complete and accurate financial information is produced.
- Journal Entry: a uniquely numbered input voucher to the General Ledger, containing accounting transactions, used in the double-entry recording system. representing a particular group of subsidiary ledger transactions
- Liability: Future sacrifices of economic benefits controlled by the entity as a result of past transactions or other past events.
- Materiality: An amount is material to the accounts if its omission or misstatement is likely to influence the economic decisions made by the users of the information.
- Memorandum Account: An account maintained separately to the General Ledger but still operated within the internal control process. Information recorded in memorandum accounts is used to provide supplementary information to the Financial Statements.
- Modified Cash Accounting: A method of accounting in which all cash payments and receipts are recorded, along with certain assets and liabilities/commitments non-development Expenditure provided for in grants, relating to the on-going costs of Government, such as salaries and allowances of employees and contingent expenditures.
o Commitments
o Fixed Assets – asset register, asset valuation
o Financial Assets– cash, current assets and other assets
o Liabilities: Public Debt, current liabilities, deferred liabilities
- Object: A Chart of Accounts element used to classify financial information according to the IAS accounting requirements (e.g. asset, liability, revenue, expenditure, equity), and provide sub-classifications therein (e.g. salaries, travel, transport).
- Obligation: Obligation in the context of commitment means the legal requirement to honour the terms of a contract rather than the term “commitment” which is used in its accounting context.
- Payroll Section: The section within the DAO responsible for preparing the payroll.
- Permanent Record: A record required to be maintained in order to generate accounting transactions, but is not in itself a transaction. (e.g. payroll records, GP fund records. pension records).
o Establishment register: record of posts, position and strength
o Payroll register: employees payroll record used to generate pay bills
o Pension Records
o GP Fund Records: employees contribution, advances and payments
- Personal Ledger: A ledger account maintained by the DAO/AG/AGPR, established as a drawing facility for nominated purposes.
- Public Account : Defined in Article 78 of the Constitution, all other moneys received by or on behalf of the Federal Government, other than the Consolidated Fund, or deposited with the Supreme Court or any other court established under the authority of the Federation. balances are carried forward at year end: Two Types Special Deposits and Trust Accounts
o General Provident Fund
o Insurance Fund
o Benevolent Fund
o Releif and Welfare Funds
o Reserves
- Public Debt: The total liability arising from the borrowings of the Government, including both domestic loans and foreign (or external) loans.
- Receipt (i) An amount of cash collected or the process of collecting money. (ii) An official document provided to a payer, as proof that money was received.
- Receipt Voucher: A form with which amounts collectable by the Government are deposited with the bank, containing the particulars of the receipt. (Previously referred to as a challan).
- Recognize: Reported on, or incorporated in amounts reported on, the face of the financial statements of the entity.
- Reconciliation: A process of substantiating recorded financial information against an alternative source of data (e.g. bank reconciliation, reconciliation between accounts offices and spending departments).
- Release: A sanction given by Ministry of Finance, permitting a particular budgetary allocation to be spent, on the basis of cash being available.
- Revenue (i) In accrual accounting, defined as increases in future economic benefits in the form of increases or enhancements of assets or decreases of liabilities, other than those relating to contributions by the Government as owner, that result in an increase in equity. (ii) In cash and modified cash accounting, defined as an inflow of cash, arising as a result of collections received in a given reporting period.
- Self-accounting Entity: Any accounting entity that performs its own accounting function and maintains its own accounts, including certification, authorization and issue of payments.
- Settlement Account: A General Ledger clearing account through which cash transactions between governments are recorded.
- Special Deposits Accounts: comprising of Public Account moneys that are operated under the authority of Ministry of Finance, but are not trust accounts. They are not legal entity.
o Savings Bank Accounts
o National Deposit accounts
o National Deposit certificates
o Revenue Deposits
o Court Deposits
o Personal deposits.
o Welfare/Development Funds
- Statement of Assets and Liabilities: A financial report consisting of balances of assets and liabilities for an entity, as at a particular period end date.
- Statement of Revenues and Expenditures: A financial report consisting of balances of revenues and Expenditures for an entity, over a given reporting period.
- Sub-Ledger: Book of initial entry of all accounting transactions in a particular accounting office, for subsequent double entry into the General Ledger.
- Subsidiary Ledgers and Registers: a detailed record of individual accounting transactions that are subsequently summarised into a journal entry. For example, the receipts and payments recorded each day by a DAO shall be entered initially into the subsidiary ledger.
- Supplementary Budget: Provided in Article 84 of the Constitution, an additional budget statement laid before Parliament, where funding for an existing service is insufficient, or the need for a new services has arisen which was not included in the original budget.
- Surrender: An amount included in the original approved budget, that is given back because it has not or will not be spent in the financial year by the entity.
- Suspense Account: An account used if the correct head to be debited or credited is unable to be identified at the time of transaction, which shall be cleared once the correct head is identified.
- Trust Account: Legal entities in their own right, under the stewardship of the Government, and as such expected to produce financial statements in their own name. Trust accounts are normally established under an Act of Parliament or Presidential Order. These include Benvolent, insurance, departments trust accounts like railways
- Voted Expenditure: As defined in Article 82 of the Constitution of Pakistan, that part of the Annual Budget Statement relating to other expenditure, submitted to the National Assembly in the form of demands for grants, on which the Assembly votes.
- Budgetary process
o Policy Setting by Cabinet
o Preparation by Ministry of Finance and spending Ministries
o Authorization by Cabinet, national/Provincial Assembly, Schedule of Authorise Expenditure
o Implementation – Ministry of Finance, Spending Ministries, Release, appropriation
o Reporting and Monitoring- Spending Ministries, Pakistan Audit Department, Excesses, Supplementary grant
o Review – spending Ministries, PAD, PACs
- Annual Financial Statements: Submitted at end of each year by Auditor General to President/Governor, Finance Division/Department, National/Provincial Assembly, Public Accounts Committee. These Include:
o Statement of Assets and Liabilities
o Statement of Revenues and Expenditures
o Statement of Cashflows
o Notes to the Financial Statements
o Analysis of Surplus / Deficit
o Summary of Appropriation Accounts (by function as well as Division /Department and grant)
o Analysis of Revenues (by Division / Department).
- Half-yearly and quarterly reports: Abbreviated version Annual Financial statements produced by AG/AGPR to be submitted to PAD, Ministry/Department of Finance.
- Monthly reports: produced by accounting offices i.e DOA, and treasury, sub treasury offices submitted to AG/AGPR for consolidation. These include:
o Summary Schedule - Consolidated Fund
o Division/ Department Schedule - Consolidated Fund
o Public Account Summary Schedule
o DAO Bank Reconciliation Report
o Grant Expenditure Analysis.
- Overview of Primary Accounting Record: Source Document (eg Claim Voucher) and Permanent Accounting Record (e.g Payroll register) to Sub Ledger ( Detailed data wise transaction) to Journal Entry (Double entry batch input to GL) to General Ledger ( Summarized Accounts Balances)
- Core Accounting Process and control
o Internal Controls
§ Well defined delegation of authority
§ Clear financial instructions
§ Checking and verification
§ Segregation of duties
§ Bank reconciliation
§ Control Accounts
o Receipts
§ Receipt voucher (Challan)
§ Recognized on cash or clearance of cheque
o Expenditure
§ Recorded when cash paid unless direct credit or commitment
§ when it is certain that cash has or will be drawn from the bank account
§ Claim Voucher (Bill)
§ All payments through checks other than imprest
§ Types of expenses: Salaries, contingent, GP fund payment, loans and advances, pension payments
§ No expenditure be incurred unless provided for in the Schedule of Authorized Expenditure for the year and the expenditure has been approved by a delegated authority.
§ claim voucher must be approved by a delegated authority within the entity
§ incurring the expenditure
§ claim voucher must be certified by a delegated officer in the relevant District Account Office / Accountant General Office / Accountant General Pakistan Revenue Office.
· Verification – checking that validly prepared and duly approved
· Pre-audit - scrutinizing the claim for possible irregularities
§ Certification that sufficient funds are available in the relevant budget head to make the payment
§ cheques must be signed by two delegated officers, whose specimen signatures
§ have been registered with the bank
o Inter entity transactions: through settlement accounts except NFC, grants and interest on loans
§ Two Types:
· Inter- Entity Between Departments of same organization
o Transactions between centralized entities
o Transaction involved SEs
· Between different Governments e.g. Federal – Provincial
o Bank reconciliation
§ daily agreement of transactions between bank branches and DAOs
· SBP shall report cash balances of each government bank account on a daily basis to the MoF, Finance Dept, AGPR, AGs
§ Monthly consolidation by AGs of DAO
§ Monthly reconciliation by AGs of overall balances derived from DAO reconciliations and bank HQ reports.
o
- Classification of Budget
o Consolidation Fund: Receipts and expenditures
o Non Development Expenditure: Administrative operations
§ Permanent Budget
§ Temporary Budget (NIS) New Item Statement
o Development Expenditures: Planing Commission, PC-I, PC II
o Forecast revenues: FBR, Excise and taxation
- Steps for Expenditure Transaction
o Sanction of exp: Delegation of Financial Power, Budget Availability,
o Claim voucher (except salaries) Form 4B
o Approval of expenditure: DDO
o Registration of purchase order/claim voucher
o Certification (pre-audit) of claims: DAO/AG
o Authorization of payment. DOA/AG/AGPR
o Issue of payment: Dual Signatory cheques
o Recording in records
o Imprest Account (Petty cash must be recorded in petty cash book) Above Rs 200 must produce voucher for reimbursement.
o Arrears Claim within six months
o Payment for supply in advance
o Commitment Advise (Form 4C)
o Claim Register (Form 4H)
o Certification and authorization register (Form 4I)
o Checque Register (Form 4J)
o Imprest account claim (\Form 4K)
o Daily Advice Note (Form 4L)
o Abstract (Form 4GG)
o Last Pay Certificate : For 4Y
o Establishment register (From 4T)
o Payroll register (Form 4U)
o Pension Register (Form 4V)
o GP Fund Register (Form 4W)
- Accounting for Expenditure
o Appropriation Control register (Form 4D) to record commitments, ‘allocated budget less payments and commitments’.
o Manual Accounts Record: Sub ledger to general Ledger
o Accounting Entries: DR: Expenditure head Account, CR Cheque Clearing Account
o Procedure for expenditure: Incurring Officer (Claim Voucher)– Approving officer within entity (Check)- sent to DOA/AG/AGPR for certification and authorization – Verifying officer ( delegated by DOA to certify and update verification and authorization register – authorization (Dao and update Budget head register) – cheque prepared by delegated officer(update cheque register and prepare Daily Advice Note (DAN) – cheque signed by delegated officers – cheque sent to payee
o Recording a transaction: paid claim voucher – Accounts Officer (records the transaction and file the voucher, (enter in sub ledger, Prepares abstract, general journal) – Delegated officer in accounts section (receives information weekly and monthly from DDO and produces monthly accounts) – AG or delegated officer (produces consolidated monthly accounts)
o Salaries ;Establishment and payroll register, pay slip. DR salary…. CR Bank Account, Revenue Head Account (Income Tax), GP Fund Account, Other Accounts
- Monthly Accounts consolidation pack – produced by DOA, SEs, AG/AGPR for their own transaction and prepared from primary sources of General Journal. These reports are sent to AG/AGPR for producing consolidated monthly accounts and cash flow statements. Deadline is 7th of each Month.
o Summary Schedule –Consolidated Fund also called Revenue and Expenditure Statement – Consolidated Fund
o Division/Department – Consolidated Fund
o Public Account –Summary Schedule
o Statement of Cash flows
o Grant Expenditure Analysis
o Program Reports
- Consolidated Monthly /Quarterly Accounts (CMA). Produced by AG/AGPR through info from Accounts offices and sent to AGP and MoF. Deadline 15th of each month and 20th of each quarter
o Above reports of Monthly Pack plus
o Project Expenditure Statement 7th of each month contains project description, cost and budget etc
o Statement of Fixed Assets, 7th of each month: contains owner (Min/Div), cost, addition, disposal, value current
o Revenue Analysis
o Debt Report, 7th of each month
o Losses Report
- Financial Statements of Federation, Provinces and Republic
o Half Yearly Statements: by AG/AGPR for Dept, MoF, Deadline 20th Feb, include
§ Statement of Assets and Liabilities
§ Statement of Revenue and Expenditures
§ Statement of Cash flows
o Annual Financial Statements: by AGP for President, Governors, MoF, CG, Deadline 20th August and include:
§ Statement of Assets and Liabilities
§ Statement of Revenue and Expenditures
§ Statement of Cash flows
§ Notes to Financial Statements
§ Summary of Appropriation Accounts by Grants and Appropriations
§ Appropriation Accounts by Economic Functions and departments/Divisions
§ Revenue Analysis
- Financial Control reports
o Revenue Confirmation Statements: by DOA/AG/AGPR for agreement with CBR of receipts on monthly basis: dead line to CBR 5th of each month; PAO – CBR to approve and return on 7th of each month; DOA to AG/AGPR for intimation 10th of each month.
o Disbursement Confirmation Statements by DOA on monthly basis: deadline sent to DDO 5th of each month, DDO approves and sent back to DOA 7th, DOA to AG/AGPR 10th
o Division/Department Statements: same as MCA and QCA,. AG/AGPR sent to Dept/Div for confirmation and verify: Deadline to Dept/Div upto 5th, PAO after approval returns back to AG/AGPR till 7th,
o Exchange and Settlement Control Statement: by DOA on monthly basis showing balance payable/receivables between entities to AG till 7th of each month

raindrop · #3 Tuesday, September 29, 2015

Can anyone recommend me from where to study this area? How can we prepare the financial statements for Public entities?

I am more interested in knowing how to prepare the longer question on it, like financial statements etc.

thanks

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