State entities to participate in financial reporting awards

Nairobi; Kenya: The office of Accountant General has requested Financial Reporting (FiRE) awards promoters to include Public Sector Category in the 2015 event.

The move to include government entities in this award is informed by the fact that currently, government ministries, department and agencies are using a variety of standards including (International Financial Reporting Standards (IFRS’s), International Public sector Accounting Standards (IPSAS) accrual, (IPSAS) modified or cash basis as their accounting and financial reporting framework.

The reporting entity can be a parastatal, fund, donor financed project or a central government institution. county governments as well as ministries, departments and state agencies are now linked to the Integrated Financial Management System (IFMS), for effective management of public resources.

economic crisis

“The present financial reporting framework does not show a complete picture of the government financial resources particularly assets created by public funds. Additionally, the cash financial framework does not show obligations in terms of liabilities such as loans that the government owes to third parties.  It does not also measure transactions, events and circumstances that have financial impact necessary to access fiscal policy and fiscal sustainability” said Benard Ndung’u, the Accountant General.

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He made these remarks recently while presiding over Institute of Certified Public Accountants of Kenya (ICPAK’s) Public Finance Management (PFM) conference in Mombasa. The recent global economic crisis and severe fiscal constraints has brought the need for governments to transparently report all their assets and liabilities.

In the case of Kenya, the Auditor General has raised numerous queries on financial statements by public entities due to lack of a defined accounting framework. “Financial reporting in the public sector has been neglected as shown by the adverse opinion on these statements by the Auditor General,” said Benson Okundi-Chairman of ICPAK.