Question

Question Two
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 procuremen

Answer 1

1.Presentation of Budget Information in Financial Statements requires a comparison of budget amounts and the actual amounts arising from execution of the budget to be included in the financial statements of the entities that are required to or elect to make publicly available their approved budgets , and for which they are publicly accountable.

Relevance of IPS AS 24 in government budgeting and accounting-

• This standard doesn't require approved budgets to be made publicly available,nor does it require that the financial statements disclose information which are not made publicly available.
• This standard requires a comparison of budgeted and actual amounts which are to be included in financial statements and which are held publicly accountable.
• This standard doesn't require disclosure of previous period items.

2.Value for Money has been a key aspect of public service management and its importance has been raised as a consequence of austerity.

(i)Implication of VFM in DACF

• Efficiency -which measures the productivity.It is the efficiency of converting resources into results.
• Effectiveness-which measures the impact of obtaining value for money.It can be quantitative or qualitative.
• Economical-This is the price paid for providing a service at best value,taking price and quality into account.

(ii)The concept of VFM can be used to attain the objective of public procurement through-

• By reducing the cost.
• By reducing the inventory and administration costs .
• Collaboration on cost reduction.
• Through trade offs.
• By implementing payment and warranty terms.

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