BYBY

PreambleFinancial AuthoritiesExpectation Gap & the Service CharterTransaction Processing Cycle Mode of OperationConclusionQ & AReferences

The Science of Accounting is a continuously evolving body of knowledge that changes in line with the turbulent business environment. These changes have extended the boundaries of Accounting and created a problem in defining its scope.

This presentation attempt to demystify the mode of operations of a typical Accounts Department in a Government-owned Hospital and bridge the “expectation gap”, using the premier General Hospital as a case study.

Like other field of Science, the practice of Accounting is based on a set of Laws, Principles, Concept and standards, collectively called GAAP. In the Public sector, these are codified as Financial Authorities.

FINANCIAL AUTHORITIES

Examples of FINANCIAL AUTHORITIES are:The 1999 Constitution of the Federal Republic of NigeriaAnnual Appropriation ActSupplementary Appropriation ActWarrants Issued by the Minister of FinanceTreasury Circulars and Financial CircularsOfficial Gazette of the GovernmentFinancial Regulations Issued by the Minister of Finance

Public Procurement Act of 2007Fiscal Responsibility Act of 2007Pension Reform Act of 2004Revenue Mobilization, Allocation and Fiscal Commission Act,2004Finance (Control and Management )act 2004EFCC Act 2004ICPC Act 2002

SECTIONS/UNITS UNDER THE ACCOUNTS DEPARTMENTSALARIES SectionVARIATION SectionF.I.S UnitRECONCILIATION AND REVENUE MONITORINGFUNDS SectionC.P.O

SECTIONS/UNITS UNDER THE ACCOUNTS DEPARTMENT

ACCOUNTS DEPT.

CLERICAL OFFICER

SALARIES VARIATIONS F.I.S FUNDS C.P.O

RECONCILIATION&REVENUE MONITORING

EXPECTATION GAP Vs SERVICE CHARTER

EXPECTATION GAP is an Accounting term use to describe the disparity between what the public is expecting from Accountants and what the profession require of the Accountants to do.

SERVICE CHARTER is a policy initiative that seeks to establish a vibrant social contract between a public officer/organisation and external parties (the Client)

TRANSACTION PROCESSING CYCLE

Each transaction follows a standardized procedure which is a flow of activities from the Medical director (Accounting Officer) through the head of Accounts to the relevant Section/Officer of the Accounts Department.

In Public Service, the monthly remuneration of workers are usually charged to the Consolidated Revenue Fund (CRF) on the authority of Recurrent Expenditure Warrant.Prior to the introduction of the e-Payment systems by the Lagos state government, staff salaries were manually processed base on an extremely tedious and delicate procedures. However, with the advent of NEFT (National Electronic Fund Transfer) and NUBAN (Nigerian Uniform Bank Accounts Numbers), Payments of staff salaries has brought a relief to Accounts department. The simple steps to be follow include:Salary Meeting Sending of H.O.P List to CPDVD through S.T.O and C.I.ADirect Credit from CPDVD

VARIATIONThis section takes care of any variance in staff salaries ranging from Short-payments, unpaid Salary Arrears , Erroneous deductions e.t.c .Procedures for a typical Variation work include the following :Application/Complaint Letter by the affected Officer

Approval of the Medical Director

Directives from the Head of Accounts

Computation by the Variation Officer using Variable Cards

Verification by the Internal Auditor

Verification by Auditor at S.T.O

Processing by CPDVD

Release of Pay 04, prior to Salary Schedule for Correction

Payment of the new Salary

FINANCIAL INFORMATION SYSTEMS (F.I.S) UNITLagos State public Service is reputed to be the most advance in terms of Economic Planning , Financial Operations and Database Management. In year 2001, the Government introduced an integrated web-based application called Oracle Financials(Oracle 11i) This application uses an automated system to upload and process financial data and generate electronic financial statements in an effective and efficient manner.

RECONCILIATION AND REVENUE MONITORINGThis section monitor financial transactions and ensure that balances in various Accounts accord with expectation. The section also seek to proffer reasonable answers to any disagreement between Account balances, particular on transaction between the Organization and third parties. achieving the objectives of financial reporting.Some of the FUNCTIONS include:Review Bank StatementsReview Cash book of Various AccountsCompute Revenue ReturnsPrepare Bank reconciliation Statements

A Voucher is any document showing evidence of authority for the payment or receipt of money or stores as authorized by the Accounting Officer.There are 3 Classification of Vouchers namely :

Payment VouchersReceipt Vouchers Adjustment Vouchers

VOUCHERS

A written request for fund indicating the need for an item or service The request must contain the approval of the Accounting Officer.A written directive to the Head of Accounts from the MD on the requestA directive from the head of Account to the Funds SectionPreparation of Vouchers by the Funds SectionScheduling of Vouchers to the IAU for Pre-AuditSending of Vouchers to the Head of Accounts for signingHead of Accounts Send Vouchers to the C.P.O for ListingC.P.O commence processing of cheques for withdrawal.

PREPARATION OF VOUCHERS

The Central Pay Office (C.P.O)This section of the Accounts department is responsible for processing payments, maintaining statutory records and retirement of vouchers.Payments procedures :Completion of Vouchers by Funds SectionCompilation of Vouchers (Listings)Writing and confirmation of ChequesSigning of Cheques by the MD and H.O.ARegistration of Payments into appropriate RegisterPresentation of Cheques for withdrawalSigning of Vouchers and Register by the beneficiaryPresentation of Reciepts and relevant documents

RETIREMENT OF VOUCHERSAnyone who has collected money from a Government Organisation for purchases or Service rendered (other than employeess) is expected to sign and submit certain documents. This process called Retirement involves the following :Signing of VouchersSubmission of Reciepts (NOT INVOINCE) or Honour Certificate.Submission of Store Reciept Vouchers (SRV)- for tangible itemsSubmission of Job Completion Certificate(for Construction &Technical Work)Minutes of the meeting Authourising the action

REFERENCES

Financial Regulations (2009 Edition).No 72,.Vol.96

1999 Constitution of the Federal Rep. of Nigeria

Berger, T. M. (2009) IPSAS explained West Sussex, United Kingdom: John Wiley & Sons Ltd.

IPSASB (2011) Handbook of International public sector accounting pronouncements Vol. I &II. New York, USA: IFAC

Mackenzie, Coetsee, Njikizana, Chamboko and Colyvas (2011) Interpretation and application of IFRS. New Jersey, USA: John Wiley & Sons Ltd.

Siddiqui, J. (2011) Public sector financial management. Paper presented at IPSAS course in Manchester, United Kingdom.