By Sara Breen, Bid and Programme Manager – International Advisory, CIPFA
Ghana is on track to join Tanzania, who successfully adopted accrual basis International Public Sector Accounting Standards (IPSAS) at all levels of government in 2013. IPSAS promises to promote trust and transparency, identify and fight corruption, and help reduce poverty, with the Chartered Institute of Public Finance and Accountancy (CIPFA) developing a key implementation strategy to help guide Ghana to successful IPSAS adoption.
The Public Financial Management Reform Project (PFMRP) is part of a longer term strategy aimed at improving budget management, financial control and reporting for the Government of Ghana. As part of that project, the government sought to improve fiscal transparency and accountability in the public accounts of Ghana, with the view of providing enhanced financial information to support decision making across the public sector.
The minister of finance, in collaboration with the Institute of Chartered Accounts Ghana (ICAG), launched the adoption of IPSAS in Ghana on 27 October 2014. A formal announcement of this policy was included in the 2015 Budget Statement and Economic Policy presented to Parliament in November 2014.
In this policy document, the Government of Ghana recognised the importance of high-quality financial reporting standards in shaping the relevance, reliability and quality of the general purpose financial statements, which required the adoption of the accrual basis of IPSAS. The information provided by accrual basis IPSAS would enable users to assess the true and fair view of performance, financial position and cash flows of government; show how government finances its activities and meets its liabilities and commitments, and compel government to maintain complete records of assets and liabilities.
In announcing the plan, then-ICAG President Prof. Kwame Boasiako Omane-Antwi affirmed that the successful implementation of accrual basis IPSASs would facilitate a more effective and efficient management of the assets and liabilities of government; provide more useful information that would lead to better decision-making; generate cost-awareness and efficiency in the operation of government; and, ultimately, facilitate improved service delivery to the people of Ghana, and help reduce poverty.
The Controller and Accountant General’s Department (CAGD) was assigned lead responsibility for delivering the policy and established an IPSAS Implementation Committee (IPIC) to co-ordinate the process of implementation, which was planned to be completed by 2020. CAGD invited the CIPFA to provide technical assistance to develop an IPSAS implementation strategy and outline project plan.
CIPFA prepared a strategic level implementation strategy and outline project plan, which indicated the areas where CAGD, in conjunction with key stakeholders, needed to take policy decisions in order to make progress in planning and implementing IPSAS and technical accounting areas that the CAGD needed to consider. As well as providing an implantation roadmap, it was intended that the strategy and plan would support the securing of necessary funding for IPSAS implementation across the Government of Ghana.
In particular, the implementation strategy and outline project plan encompassed:
- the range of activities that would need to take place to ensure successful implementation of IPSAS
- a suggested approach to implementation
- examples of the structures that the Government of Ghana would need to establish to facilitate implementation
- a high level plan and roadmap for implementation
- an indicative budget for the implementation.
Drawing on its substantial international experience in providing advice on the transition to accrual and capacity building and its established relationship with ICAG, CIPFA undertook a number of field missions to Ghana, in order to assess the existing government accounting context through data gathering and interviews. Based on this research and review of recent external assessments, CIPFA developed an implementation strategy and outline project plan which identified the key steps that would need to be taken to successfully adopt IPSAS.
This included a review of Ghana’s financial laws and regulations; a re-engineering of business processes in the institutions responsible for public sector financial reporting in Ghana; improved use of technology; improved staff capacity; a review of accounting policies; and an effective change management strategy in institutions with responsibility for public financial management.
This article was first published in The Accountant.