Question

QUESTION THREE
Public financial management is critical for successful delivery of public services. The prime objective of public financial management is to ensure that public resources allocated to projects and programmes through covered entities are applied economically, efficiently and effectively to enhance value for money in public spending. Contrary to expectation, public financial management in Ghana is bedevilled with gross infractions, irregularities and malpractices which deny the citizens the quality of public service delivery they deserve. The current Auditor General’s Report on Public Accounts of the central government agencies, the local governments and educational institutions reveal that several millions of Ghana Cedis is lost to financial impropriety and malpractices. This has been on the increase over the years. surely, these occurrences should attract policy attention.

Ghana Moni is a Civil Society Organisation with the prime aim of demanding and promoting accountability in Ghana. Ghana Moni is organising an essay writing competition for Final Year Accountancy Students in all Universities in Ghana on the topic: Accounting for Financial Impropriety in Public Financial Management in Ghana. The aim of the competition is to gather fresh and further evidence on the causes and practical remedies of the persistent misuse of public resources. The award for winners is GHS100,000.00. The deadline for submission is 48 hours from now.

Required:
Make your entry into the competition in strict compliance with these requirements:
i) Abstract (Not exceeding 100 words)

ii) Introduction (Not exceeding 200 words)
Taxonomy of financial impropriety (Not exceeding 300 words)
Causes of financial impropriety in the public sector (Not exceeding 600 words)

v) Practical remedies of financial impropriety (Not exceeding 600 words)

vi) Conclusion (Not exceeding 100 words)

Answer 1

Abstract

Finance in its absentia cripples the urge to grow, especially for a nation like Ghana where a significant proportion of its population lives below the line of poverty. An effective public financial management system hence calibrate the standards and helps people to recover from poverty. However, financial impropriety using the loopholes seems to hold back the initiatives taken to a greater extent and in ultimate drowning the country into poverty traps. In this connection, the paper tries to propose certain remedies curtailing the essence of these malpractices and help to gain financial stability.

Introduction

Pilferage of funds from the system by way of fraud is not surprising in the under-developed as well as developed nations. Malpractices have become common and prevalent from the beginning of the civil society. However, malpractices of funds when becomes enormous tends to be a serious concern for the nation that needs special attention. Fascination of becoming rich overnight besides having a poor economic as well as financial base make indulge innocent citizens in the trap of perpetrators involving in to frauds like the Advance Fee Fraud (AFF). Among others collection of advance fees to finalize an offer of employment, conversion of hard currency, selling out of crude oil and gold at below-market prices are some of the prominent areas where funds from the formal financial system get involved and in turn reducing the efficiency of the funds available within the economy.

Taxonomy of financial impropriety

Impropriety can be defined as a set of practices that are not acceptable to the society in large. However, the definition cannot be inferred in a narrow sense of just deceiving anyone from his/her/its rights rather enlarging its contours and putting the whole society as a single unit. If anyone selling the crude oil or gold at a price lower than that prevailing in the market assuming that he/she/it has accessed it from a source that is either free or less priced potentially exposes the economy to that source. Anyone borrowing a fund from a bank and subsequently flying off with that in search of a desired lifestyle or misusing the resources not just put a threat on the bank to become bankrupt but also put the economy into risks which he/she/it is basically a part of.

Causes of financial impropriety in the public sector

One can think of a number of causes leading to financial impropriety in the public sector. However, consciousness is one among the essentials which put forwards such type of derogatory thoughts. Unless and until one is aware of his duties either being a member of the family or the country from where he belongs to it is impossible to address such malpractices in large. In addition lack of a proper monitoring system especially in the public sector enlarges the scope to deceive. Banks and other formal financial intermediaries are mainly concerned about the creditworthiness of a client at the time of fund disbursal and become very lenient thereafter, which basically distinguishes them from the private players in the market.

Practical remedies of financial impropriety

Practically it is not possible to assure that even with the full proof blueprint that we may approach certainly leads to the desired phenomenon. Even countries well vested with standard monitoring faces such instances since there is a moral element involved in the issue. However, in the long run these unwanted practices can be diluted to a greater extent. The major concern rises from the demand side where the majority of the people lack consciousness. The government may think of increasing the number of propagandas increasing consciousness among the countrymen. Drive to achieve a certain financial literacy and further belongingness to the country is expected to alleviate these practices to a greater extent. Additionally, monitoring the effective use of funds may certainly help to catch the fraudsters in the primary stage and avoid spreading their channel. Regulations can further tighten to reduce leakage and impose a sizable penalty to demolish ill thoughts at their inception.

Conclusion

Poverty around the globe is a serious issue to tackle which in the absence of finance is next to impossible. Financial impropriety especially when practiced at large becomes the major huddle to overcome. Redundancy while lending funds would increase poverty and put the country decades back. While practicing conscious lending followed by good monitoring regarding the usage of funds would certainly lead to a better, safer and happier tomorrow.