Fundamental of Accounting psa

8/10/2019 Fundamental of Accounting psa

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Mini Project PresentationPublic Sector Accounting

PREPARED BY: ALI BIN A.RAHIM (AC089503) ABDUL RAHMAN BIN IZAM (AC089489) ABDUL HAFIZ BIN ABDUL HISHAM (AC089497) MUHAMMAD HAFIFI BIN ABDUL MANAP (AC088240) MUHD SOLIHIN BIN MAHMUD (AC086471)

PREPARE FOR MISS AZLEEN BIN ILIAS

SECTION: 1AM


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Fundamental ofaccounting system

Accounting is a federal matter and therefore the states would need to comply with directions fromthe central government in all accounting matters.

The Accountant General (AG) is the principal accountant in the government and head of the accountsdivision. principal functions are to safeguard, account for and be the custodian for all federalgovernment collections of revenue, loans and trust funds and prepared financial statement.


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TYPE OF ACCOUNTING SYSTEM

Cash and Accrual Basic

Since government accounts are kept on a cash basis, separate trust funds forthem were set up in the federal accounts to account for their receipts andpayments. However, their financial statements on commercial lines are tabledseparately in Parliament.


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ACCOUNTING STANDARDS The responsibility for financial and accountingprocedure vests with the Minister of Finance. It isthe duty of the Treasury and its principalaccounting officer, the Accountant General (AG),to issue instructions and directions on accountingmatters and procedures, monitor that a propersystem of accounts is established and ensure thatprocedures comply with generally acceptedaccounting principles and standards.


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PRODUCTION OF THE ACCOUNTS Section 16 of the Financial Procedure Act requires thatthe annual financial statements be prepared as soon aspracticable after the end of every year for the purposeof audit, but no date is mentioned in this law for thesubmission of the accounts.


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Fund Accounting

Types of fund accounting

1)Consolidated Revenue Account

2)Consolidated Trust Account

3)Consolidated Loan Account


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1)Consolidated RevenueAccount

Consolidated Revenue Account in which account shall be kept of all moneysin the Fund.

Consolidated Revenue Account section 7(a)


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Consolidated Revenue Account

Federal government revenueTax revenue Non-Tax revenue

Miscellaneous ReceiptsRevenue from Federal Territories


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Expenditure Control

Three types of expenditure

Charged Expenditure is expenditure that is directly charged to the ConsolidatedFund

Operating Expenditure are expenditure to finance the daily programmes andactivities of a ministry, department or agency

Development Expenditure is the capital expenditure either for a short or mediumterm which entails long term returns


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2) Consolidated loan account

Consolidated Loan Account in which account shall be kept of all moneysreceived by way of loan upon the public credit of the Federation or of theState, as the case may be.

Consolidated Loan Account section 7(b)


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Consolidated loan account

Why should consolidate loans?

Loan consolidation can greatly simplify loan repayment by centralizing the loans toone bill and can lower monthly payments by giving up to 30 years to repay theloans


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Types of loans can be consolidated

Direct Subsidized Loans

Direct Unsubsidized Loans

Subsidized Federal Stafford Loans

Unsubsidized Federal Stafford Loans

Direct PLUS Loans

PLUS loans from the Federal Family Education Loan (FFEL) Program

Supplemental Loans for Students (SLS)Federal Perkins Loans

Federal Nursing Loans

Health Education Assistance Loans

some existing consolidation loans


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Syndicated loanA syndicated loan is one that is provided by a group of lenders and isstructured, arranged, and administered by one or several commercial orinvestment banks known as arrangers

Bond issues

Bonds are issued by public authorities, credit institutions, companiesand supranational institutions in the primary markets

Floating rate

floating rate loan (or a variable or adjustable rate loan) refers to a loanwith a floating interest rate


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3) Consolidated trust account

Consolidated Trust Account in which account shall be kept of all moneys

received subject to a trust and to be applied in accordance with the termsof the trust.

Consolidated Trust Account section 7(c)


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Consolidated trust account

Development Fund

This fund is set up in accordance with the development fund 1965 forthe economic development of the nations

Housing Loan Fund

The government housing loan fund scheme is financed by the housingloan fund in accordance with the provision of the housing loan fund actNo.4 of 1975 (revised 2004).

Miscellaneous Government Trust Fund

The miscellaneous government trust fund are classified into 5categories, namely the clearance account, trading account, loanaccount, contingencies fund and miscellaneous fund.


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Public Trust Funds

Section 9 of the financial procedure act 1957 (revise 1972) establishedthis fund to account for trust monies entrusted to federal governmentand special trust and act other than financial procedure act1957(revised 1972) for monies received for specific purpose.

Deposits

Deposits consist of money received by the federal government for aspecific purpose under any law or contractual agreement and arerefundable when the specific purpose has been achieved.


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Definition of financial reporting

-Government duties to be publicly a Financial reporting is a set of documents prepared

usually by Government agencies at the end of an accounting period. It generally

contains summary of accounting data for that period,1 with background notes, forms,

and other information. The Governmental Accounting Standards Board (GASB) , 1984

has appropriately identified financial report is not end in itself but is intended to provideinformation useful for many purpose. Financial reporting help fulfill accountable


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Legal requirement and procedure

Section 16 (1) of the Financial Procedures Act 1957 states that, the financial authority shall for the purposeSection 9 of the Audit Act 1957, after the end of every financial year prepare in respect of the year thefollowing

A Statement of Consolidated Revenue Account A Statement of Consolidated Loan Account A Statement of Consolidated Trust Account A Statement of Assets & Liabilities of the Federation or States at the end of a financial year


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Objective of financial reporting

Compliance and stewardship

Basis of Planning

Performance and Evaluation

Quality of Services

Statement of Achievement

Fact and Figure


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Statement of memorandum Account Asset

Recoverable loans

InvestmentSubcription to internasional organization

Statutory deposit

Liabilities

Public debt

Guarantees

Notes payable

Unclaimed securities

Central depository account


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Statement of financial position

shows the amount of cash and investment for the accounts of theConsolidated Fund which consist of Public Money and Consolidated Fund.

Public money is money that has been collected by the state. It consist Cashand Investment.

Consolidated Fund, it consist of Consolidated Revenue Account, ConsolidatedLoan Account and the third is Consolidated Trust fund.


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Statement of cash receipt

In the statement of cash receipt, it is include revenue, loan, external assistance,capital receipts and trust receipts,

Statement of financial performance.

The statement of financial performance of the federal government includerevenue, revenue surplus, overall surplus of deficit.


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Notes to the financial statement

It consist of 12 items, there are:

- Accounting Policies And Practices

- Presentation Of The Federal Government Financial Statements

- Cash

- Investment

- Consolidated Revenue Account

- Consolidated Loan Account

- Consolidated Trust Account- Memorandum Of Assets

- Memorandum Of Liabilities

- Contingent Liabilities

- Account Receivables

- Advances To Contractors


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Requirement of Financial Reporting

Basic principleCredibility.

Fair Presentation

Value Added

Consistency and Uniformity

Annual Financial Statements

Financial Disclosures Reporting Entity

Full Reporting Capacity

Budgetary Reporting

Statistical reporting


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Contents of Financial Reporting StandardsGeneral Principles

Financial ReportingDefining the financial reporting entityComprehensive Annual Financial ReportAdditional financial reporting considerationsNotes to financial statementsBudgetary reportingCash flows statementsSegment informationReporting entity and component unit presentation and

disclosuresSupplemental and special purpose reportingStatistical SectionInterim financial reporting


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Documents

Fundamental of Accounting psa