ICAN PUBLIC SECTOR ACCOUNTING AND FINANCE ...starrygoldservices.com/icanknow16/icanpsafnovwk5qa.pdfTOPIC: BUDGETING & BUDGETARY CONTROL, GOVERNMENT ADVANCES, PENSION & GRATUITY, AUDITING

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ICAN PUBLIC SECTOR ACCOUNTING AND FINANCE

SKILLS LEVEL

TOPIC: BUDGETING & BUDGETARY CONTROL, GOVERNMENT

ADVANCES, PENSION & GRATUITY, AUDITING OF GOVERNMENT

ACCOUNTS, PUBLIC ACCOUNTABILITY & FISCAL TRANSPARENCY.

WEEK FIVE QUESTIONS – NOV 2016

Kindly go through chapter 1 in the video lecture before you attempt the

questions because the topics have been simplified and analyzed for easy

understanding

mailto:[email protected]

http://www.starrygoldacademy.com/


QUESTION ONE

(a) Mr. Nuhu Emeka – Balogun was appointed into the services of

Falomo Local Government in 1973. He rose to the post of Council

Treasurer in 2004 when his total annual remuneration was N4,716,500.

He was promoted in the same year to Grade Level 14 officer on a

salary of N5,322,000, which he held till December 31, 2006 when he

finally retired from service.

In the year 2004, his total pension relating to the old Pension Scheme

was computed and transferred to the Central Bank Redemption Bond

Account with an annual interest on 4% per annum Compound Interest

Rate Basis, effective from December 31, 2004.




Also, his yearly contribution as regards the New Pension Reform Act

2004 also attract interest of 5% per annum effect from December

2004.

You are required to compute :

(i) Total value of Pension due to him based on the old Pension

Scheme from the Central Bank. Redemption Bond Account as at

31 December 2006.

(ii) Total value of Pension due to him based on his contributory

Pension Scheme on retirement.

(iii) Total Value of Pension due to him on Retirement from service

on December 31st, 2006

NOTE: Rate of Contribution is 15% of Gross Remuneration per annum.




(b) In accordance with Financial Regulation 1819, the officer controlling

expenditure shall ensure that the Standard Personal Emoluments

Records contain certain information, mention six (6) of such

information.

(c) According to Pension Reform Act 2014, enumerate ten (5) Powers of

the National Pension Commission.

(ii) State eight (5) Functions of the National Pension Commissions

(d) With reference to the Pension Reform Act 2014 , explain the provision

of the Act as regards;

(i) Death of an employee

(ii) Missing Employees

E. State the conditions under which an employee may make

withdrawals from his Retirement Savings Accounts where he is less




than 50 years or retires from service before attaining the age of 50

years.

F. What are the pre-requisites for granting license for an entity to be in

operation as (i) Pension Fund Administrator (ii) Pension Fund

Custodian

QUESTION TWO

(a) Differentiate between Primary and Secondary objective of carrying out

an audit in the Public Sector.

(b) i. What is Internal Control?




ii. Outline the importance features of Internal Control with brief notes on

each of the features.

(c) State eight (8) tests to be carried out when auditing a revenue

collector.

(d) List out seven (7) internal control questionnaires to evaluate the

operation of imprest accounts.

QUESTION THREE

(a) Discuss the importance and the essential features of a sound budgetary

control system.

(b) The success of a budgetary system depends upon its acceptance by those

affected by its operation:




i. Discuss the reasons why Divisional Heads of a Ministry may be

reluctant to participate fully in the preparation of budgets.

ii. List FOUR undesirable consequences of imposing budgets on

Divisional Heads of a Ministry.

(c.) Effective cash management is one of the challenges of Treasuries all over

the world. You are required to state THREE objectives of cash planning

and management.

(d.) The Personnel Division of Ministry of Security Affairs is about preparing its year 2013 Personnel Budget. As the newly posted Accountant to that Division, you have been called upon to prepare the budget. Going through the records you ascertained the following:

JOB TITLE NO.-IN-POST

GRADE LEVEL

SALARY =N=

Director of Security Affairs - 16 220,000 X 10,000

Deputy Director 1 15 180,000 X 6,000

Asst. Director 2 14 170,000 X 5,500 Asst. Chief Accountant 2 13 140,000 X 5,400

Principal Accountant 4 12 120,000 X 5,200

Senior Security Affairs 8 10 100,000 X 4,000




Officer Security Affairs Officer 1 6 09 85,000 X 3,600

Security Affairs Officer ii 8 08 75,000 X 3,000

Principal Security Affair Asst.

12 10 100,000 X 4,000

Senior Security Affair Asst.

10 09 85,000 X 3,600

H.E.O (Account) 12 08 75,000 X 3,000

E.O.(Security Affairs) 15 07 70,000 X 2,700

Field Security Affairs Officer i

21 06 62,000 X 2,500

Senior Clerical Officer 18 05 50,000 X 2,000

Clerical Officer 25 04 42,000 X 1,800

Asst. Clerical Officer 20 03 40,000 X 1,500

Office Assistant 5 03 40,000 X 1,500 Driver 10 03 40,000 X 1,500

Cleaner 15 02 30,000 X 1,200




Additional relevant information include:

i. All the salary levels shown above are step1 of each grade and it is the

management policy to forward Personnel Cost Budget based on step 4 of

the grade level.

ii. The Deputy Director and the Assistant Directors are due for promotion

during the budget year. Two Principal Security Affairs Assistant are to retire

at the end of the current year

iii. During the year 2013, four Senior Security Affairs officers will be employed

to strengthen the Security Affairs Department.

iv. Staff allowances constitute 30% of staff salaries.

You are required to prepare a Personnel Cost Budget for 2013 based on the above

information.

(e.) Alpha Local Government council planned the following incomes and

expenditure for the last quarter of the year ended 31st December 2005:




(i) REVENUE:

REVENUE

Actual Revenue certain of being

collected against the month =N=

Outstanding Revenue

=N=

August 1,480,000 600,000

September 960,000 450,000 October 1,672,000 920,000

November 2,450,000 618,000

December 1,980,000 520,000

Federal Statutory allocation of N1,360,000 for the 3rd

quarter of the year

is expected in October, while that of the last quarter of N1,560,000 is

expected in December




(ii) EXPENDITURE:

Sept Oct Nov Dec

=N=’ =N=’ =N=’ =N=’ Personnel emolument 512,000 492,000 504,000 762,500

rent 130,400 212,000 182,600 195,900

Other charges 160,000 168,000 124,400 250,000

Depreciation of fixed assets

60,000 60,000 60,000 60,000

capital 988,600 1,630,000 3,780,000 1,400,000

(iii) OTHER REVENUE:

Year 2014 Aug Sept Oct Nov Dec

=N=’ =N=’ =N=’ =N=’ =N=’

State govt. allocation 300,000 270,000 450,000 380,000 600,000

In lieu of rate 120,000 95,000 106,000 78,000 150,000




Additional Information:

Of the outstanding revenue, 40% are collected in the month, 50% in the following month and the balance in second month later.

State allocations are expected in the month due

In lieu of rate are received one month in arrears

Personnel emolument, other charges are paid when due

Rents are paid monthly in arrears

Capital expenditure are paid as follows: October N2,000,000; December N1,800,000.

Cash balance 1st October is expected to be N670,800

The treasurer intends to invests excess of fund after making provision for contingencies as follows:

October N1,500,000

November N1,480,000

December N2,800,000 (a.) You are required to prepare the cash budget for the year 31

st December

2005 and Investible funds for the period.




QUESTION FOUR

The following shows details of Revenue Collected by Emir State in the year 2005:

HEAD DESCRIPTION APPROVED

ESTIMATE

2005

ACTUAL

REVENUE

JAN-DEC’05

=N= =N=

1001 TAXES 113,272,500 35,369,535

1002 FINES AND FEES 97,271,790 39,235,860




1003 LICENCES 16,722,750 12,078,660

1004 EARNINGS & SALES 78,314,130 1,346,955

1005 RENT ON PROPERTY 6,105,825 1,923,675

1006 INTEREST & REPAYMENT 9,843,000 15,712,845

1007 RE-IMBURSEMENT 284,820,075 1,281,150

1008 MISCELLANEOUS 10,966,500 2,814,810

1009 FEDERATION ACCOUNT 1,188,000,000 1,320,718,995

TOTAL 1,805,316,570 1,430,482,485

You are required:

Reproduce this table with two additional columns showing favourable or adverse variance.

Suggest reasons why there are shortfalls in actual revenue of some of the heads

In the case of head 1007, where actual revenue was less than 1%. Explain the likely reasons for this dismal failure




What practical measures would you recommend to the management to prevent such failures in future?

(ii.) Mention any FIVE functions of the Ministry of Budget and Planning unit in the

Office of the Accountant-General of the Federation.

(iii.) What do you understand by Cash budgeting and state THREE merits of preparing

it

(iv.) Why Revenue budgeting? What purposes does it serves?

QUESTION FIVE

a. List out the SEVEN conditions which have to be fulfilled for the grant of

Correspondence Advances, as stipulated in the Financial Regulations of

year 2006.




b. Outline the basic considerations for granting and repaying

Correspondence Advance

QUESTION SIX

i. What do you understand by ‘Fiscal Transparency?

ii. Outline any the code of good practices and fiscal transparency.

iii. State any FIVE major measures put in place to enhance Public Accountability.

iv. Why there still exists no effective Public Accountability in Nigeria?

v. List and explain any TWO Components of Public Accountability. vi. Itemize the conditions that facilitate the promotion of Public Accountability.



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ICAN PUBLIC SECTOR ACCOUNTING AND FINANCE ...starrygoldservices.com/icanknow16/icanpsafnovwk5qa.pdfTOPIC: BUDGETING & BUDGETARY CONTROL, GOVERNMENT ADVANCES, PENSION & GRATUITY, AUDITING