Question

Question 1

a) Briefly discuss the reporting requirements of IPSAS 24: Presentation of Budget
Information, and justify the relevance of this standard in governmental budgeting and
accountability
b) The concept of Value for Money (VFM) in the public sector has been associated with the
5Es. The relevant elements of the VFM can be applied as an assessment tool for almost all
government programmes/projects. Using relevant public sector examples, you are required
to:
i) Demonstrate how the concept of VFM is applied in the distribution of the District
Assembly Common Fund (DACF)
ii) Demonstrate how the concept of VFM can be used to attain the objective(s) of
public procurement

Answer 1

a)
Objective
To ensure that public sector entities discharge their accountability obligations and enhance the transparency of their financial statements by demonstrating compliance with
the approved budget for which they are held publicly accountable and, where the budget and the financial statements are prepared on the same basis, their financial
performance in achieving the budgeted results.

Summary
• IPSAS 24 applies to public sector entities, other than GBEs, that are required or elect to make publicly available their approved budget.
• Original budget is the initial approved budget for the budget period.
• Approved budget means the expenditure authority derived from laws, appropriation bills, government ordinances, and other decisions related to the anticipated
revenue or receipts for the budgetary period.
• Final budget is the original budget adjusted for all reserves, carry over amounts, transfers, allocations, supplemental appropriations, and other authorized legislative, or
similar authority, changes applicable to the budget period.
• An entity shall present a comparison of budget and actual amounts as additional budget columns in the primary financial statements only where the financial
statements and the budget are prepared on a comparable basis.
• An entity shall present a comparison of the budget amounts either as a separate additional financial statement or as additional budget columns in the
financial statements currently presented in accordance with IPSAS. The comparison of budget and actual amounts shall present separately for each level of
legislative oversight:
– The original and final budget amounts
– The actual amounts on a comparable basis
– By way of note disclosure, an explanation of material differences between the budget and actual amounts, unless such explanation is included in other public
documents issued in conjunction with the financial statements and a cross reference to those documents is made in the notes
• An entity shall present an explanation of whether changes between the original and final budget are a consequence of reallocations within the budget, or of
other factors:
– By way of note disclosure in the financial statements
– In a report issued before, at the same time as, or in conjunction with the financial statements, and shall include a cross reference to the report in the notes to the
financial statements
• All comparisons of budget and actual amounts shall be presented on a comparable basis to the budget.
• An entity shall explain in notes to the financial statements the budgetary basis and classification basis adopted in the approved budget, the period of the approved
budget, and the entities included in the approved budget.
• An entity shall identify in notes to the financial statements the entities included in the approved budget.
• The actual amounts presented on a comparable basis to the budget shall, where the financial statements and the budget are not prepared on a comparable basis, be
reconciled to the following actual amounts presented in the financial statements, identifying separately any basis, timing, and entity differences:
– If the accrual basis is adopted for the budget, total revenues, total expenses and net cash flows from operating activities, investing activities, and
financing activities
– If a basis other than the accrual basis is adopted for the budget, net cash flows from operating activities, investing activities, and financing activities
The reconciliation shall be disclosed on the face of the statement of comparison of budget and actual amounts or in the notes to the financial statements.

Imp Note (Dear Student, Part b answer will post soon. due to technical difficulty kept it incomplete. Sorry for the inconvinience)