The Chief Director at the Ministry of Finance, Eva Mends, is urging all accountants in the public sector to uphold the Public Financial Management Law to help reduce government debt.

According to her, sanctions enshrined in the PFM Act should be meted to those who breached the law.

As part of fiscal measures to reduce the country’s debt, government has instituted the Arrears Clearance and Preventive Strategy to stop the accumulation of new arrears, among others.

Speaking at the Post 2023 Mid-Year Budget Forum PFM Matters Arising organise by the Institute of Chartered Accountants Ghana, she said the issue of arrears has become a major problem in public financial management and all and sundry need to address it.

“As we all know, we are facing major economic challenges and there is a need for us to improve on a number of fiscal measures. One on the revenue side and as we know a number of revenue measures were passed and are doing quite well on the tax. And on the expenditure side, there are quiet number of issues; but fundamental to our expenditure management challenge has to do with commitment controls.  You would find in the Mid-Year Review the introduction of a new measure or a new strategy called the Arrears Clearance and Preventive Strategy”.

“First of all, we have a chunk of arrears that we have to clear and we also need to improve measures to prevent accumulation of new arrears.  The issue of arrears has become a major part of our public financial management. First of all, how did they come about? It comes about when government is unable to pay for works done or services rendered. It also comes about when we are unable to generate enough revenue to meet the expenditures that the come in”, she added.

Eva Mends also expressed concerns about Ministries, Departments and Agencies (MDAs) commitment to projects or expenditure without reference to what is in the budget, saying, “The outturn year commitments are more than the outturn year projections of the budget. So that is also an issue”.

She was also unhappy that a lot of MDA's do not due diligence with respect to project development, stating, most project costs are understated and also there are a lot of cost variations.

“So there are major challenges when it comes to these arrears. For instance, you have companies that work for government and are not being paid and so they turn to take bank loans and are not even able to pay”, Eva Mends added.

ICAG Vice President urged accountants to sustain ethics, rule of law

Vice President of ICA Ghana, Augustine Addo, for his part urged accountants and auditors to uphold the ethics and the rule of law governing the profession.

“In addition the Institute of Chartered Accountant Ghana also continually developed a very well design plans to be able to support the development of accountants and auditors to live up to expectations. But what is very important is how do we use these expertise and the ethical requirement that we have taught our accountants of Ghana in terms of revenue penetration and expenditure rationalisation”.

“It is the accountant and the auditors in the public space who have to ensure that this is done and therefore we are using this platform to encourage all our accountants and auditors to ensure that this is done. In addition our accountants are like goalkeepers; we have trained you to know how to control the systems you will really apply, what the tools and other partners have helped you to develop”, he added.

He used the platform to encourage all accountants and auditors to exhibit fiscal discipline.

“How do we prioritise our expenditure, how do we ensure fiscal discipline. In fact, if you look at the 2019 Auditor General Report, they highlighted in terms of budget overruns. It’s unfortunate the department and agencies that spend heavily are those that I wouldn't like to mention names. Presidency, Ministry of Finance, Parliament House; they were the heavy heavy culprit”.

He called for sanctions in order to deter others from breaching the law.