The Controller and Accountant General's Department (CAGD) has asked all ministries, departments and agencies (MDAs) to brace up for a full implementation of the International Public Sector Accounting Standards (IPSAS) by 2022.
According to the Controller and Accountant-General, Mr Kwasi Kwaning-Bosompem, the IPSAS was meant to improve on transparency and accountability in the management of public resources.
The IPSAS is a set of standards set up by the International Federation of Accountants (IFAC) to regulate and guide the preparation, presentation and disclosure of financial statements to improve public sector financial management.
The overall objective of the IPSAS is to ensure that the MDAs prepare complete and concise financial statements to ensure efficient use of public resources.
Although Ghana announced the adoption of the IPSAS in 2014 and gave 2019 as the deadline for its implementation, the country could not meet the timeline.
Addressing the opening session of a sensitisation forum for chief directors of MDAs in Accra yesterday, Mr Kwaning-Bosompem announced that the new deadline for implementation of the IPSAS was now 2022.
He said the sensitisation forum for the chief directors was the first of many workshops to build the capacity of top officials and technical staff of MDAs and metropolitan, municipal and district assemblies (MMDAs) on the new financial management regime.
Mr Kwaning-Bosompem explained that while the current financial reporting system was not comprehensive enough, the IPSAS regime thrived on an accrual reporting system which was more encompassing and transparent.
For instance, he said at the end of the year, the government had unpaid bills but those were not reported in the current financial statements, adding that the accrual reporting system on the other hand, would state clearly the outstanding bills so that when the budget was being reported, the unpaid bills would be taken cognisance of.
"The country stands to benefit from a comprehensive reporting system because information is money and when you have good information, you attract investors because there is a transparency regime," he added.
Mr Kwaning-Bosompem said the CAGD was committed to leveraging technology to improve the country's financial management system.
He urged all MDAs to strictly comply with a directive to use the Ghana Integrated Financial Management Information Systems (GIFMIS) platform for all government businesses.
The Vice-President of the Institute of Chartered Accountants, Ghana (ICAG), Dr Williams Abayaawien Atuilik, for his part, said the accrual financial reporting system would help address lapses in public financial management.
"The Attorney-General’s Department always makes reference to inadequate information in financial statements prepared by the MDAs and public sector institutions.
The fact is that we are doing partial accounting which does not give a full picture of our debts, assets and commitments and people have to be commissioned to extract information from elsewhere.
If we want to do perfect financial reporting, accrual system is the way to go," he stressed.
Dr Atuilik said the new financial reporting regime would facilitate the monitoring of public assets and the public purse.
The Head of Civil Service, Nana Kwasi Agyekum Dwamena, who also addressed the session, said the accrual reporting system would help improve service delivery and the performance of public institutions.
It was his take that if the country wanted to improve on its financial management system, the way forward was to embrace the new reporting regime.
Nana Dwamena underscored the need for capacity-building programmes for technical staff in the MDAs and the MMDAs for the smooth take-off of the new reporting system.
Ghana announced the adoption of the IPSAS accrual system in 2014 and was expected to roll it out between 2015 and 2019.
Following the country’s inability to meet the deadline, it was rescheduled for 2022.
The implementation of the IPSAS is expected to strengthen the Public Financial Management (PFM) reform strategy and the Ghana Integrated Financial Management Information Systems (GIFMIS).