FINANCIAL CONTROL AND MANAGEMENT OF PUBLIC FUNDS DAVID ABBAM ADJEI

INTRODUCTION AND DEFINITION

Financial controls are those plans, methods, procedures, rules and institutions established for the achievement of the objectives the government department, safeguards its assets and create conditions for the production of reliable accounting records and reports

AUTHORITIES FOR FINANCIAL CONTROL

Various laws and legislative instruments have set up bodies, institutions and some individuals that have been given the responsibility for the control and management of public funds These institutions and individuals are: 1. The Minister of Finance 2. The Controller and Accountant General

3. The Head of Department

4. The Parliament (Public Accounts Committee) 5. The Audit Service

6. The Internal Audit Agency

THE MINISTER OF FINANCE

POWERS AND RESPONSIBILITIES OF THE MINISTER OF FINANCE 1. The Minister shall

(a) develop and implement a macro

economic and fiscal policy framework for the country and shall i. supervise and monitor the finances of the country; and

co-ordinate international and intergovernmental financial and fiscal relations; (b) advise Government on the total resources to be allocated to the public sector and the appropriate level of resources to be allocated to individual programmes and activities within that sector.

ii.

2. The Minister shall ensure that periodically and not

less than once a year

a. the fiscal policy of Government; and

b. a statement of the current and projected

state of the economy and finances are presented to Parliament.

3. The Minister shall ensure that

a. systems are established throughout the

public sector i. to budget for the use of resources; and ii. to approve requests for the issue of public money prior to inclusion in estimates of expenditure for submission to Parliament

b.

c.

when Parliament has approved the Consolidated Fund Expenditure Estimates, authority to disburse funds to meet the expenditure is conveyed to Principal Account Holders through the Controller and AccountantGeneral; and transparent systems are established and maintained which:

provide a full account to Parliament for the use of resources and public moneys; and ii. ensure the exercise of regularity and propriety in the handling and expenditure of public funds. 4. Approval of withdrawal from the Consolidated Fund of moneys allocated by Parliament shall be by warrant signed by the Minister of finance
i.

DUTIES OF THE MINISTER OF FINANCE 1. The Minister shall have responsibility for the management and control of the Consolidated Fund and such other public funds as shall be designated as being in the care of the Minister and of matters relating to the financial affairs of the Government.

2. The Minister may make such regulations or may give

such directions as may appear to the Minister to be necessary and expedient for the proper implementation of the intent and purpose of FAA and the safety, economy and advantage of public revenue and property.

3. The Minister shall ensure that any directions given

above are brought to the notice of persons directly affected. 4. The Minister may cause the inspection of the books, records and offices of a department.

CONTROLLER AND ACCOUNTANT GENERAL

DUTIES RESPONSIBILITIES OF THE CONTROLLER AND ACCOUNTANT-GENERAL 1. The CAG is responsible to the MoF for the custody, safety and integrity of the Consolidated Fund and other public funds designated under the care of the CAG

2. The CAG is responsible for the compilation and

management of the accounts prepared in relation to the Consolidated Fund and other public funds. The CAG may give general instructions to the Principal Spending Officers of departments for the purpose of the above

3. The CAG is the Chief Accounting Officer of the

Government who has responsibility to keep, render and publish statements of public accounts 4. As Chief Accounting Officer, the CAG is the chief adviser to the MoF and the government on accountancy matters.

For the purpose of the above, the CAG approves accounting instructions of departments and promotes the development of efficient accounting systems within departments.

5. The Controller and Accountant-General receives,

disburses and provides secure custody for moneys payable into the Consolidated Fund and other funds for the above purpose the CAG shall establish such accounts with the Bank of Ghana and its agents as are considered necessary for the deposit of the moneys.

6. the Controller and Accountant-General shall (a) in consultation with the Auditor-General, specify for departments, the accounting basis, policies and the classification system to be applied in public accounting and ensure that a proper system of accounting is established in each case; and

(b) ensure, in so far as is practicable, that adequate provisions exist for the safe custody of public money, securities and accountable documents.

HEADS OF DEPARTMENTS
DUTIES OF A HEAD OF DEPARTMENT Section 2 of the FAR list the financial duties of the HOD as follows: 1. Manage and operate the departments accounting systems, so as to ensure the accountability of all officers transacting such business and facilitate the efficient discharge of such business;

2. Ensure that the departments accounting system has

been approved by the Controller and AccountantGeneral in consultation with the Auditor- General; 3. Secure the efficient and effective use of appropriations under that departments control and within government policy and also in compliance with any law, regulations or instructions of the state

4. Secure the due and proper collection of government

revenue collectable by the department within the terms of any law or of instructions issued or approved by the Controller and Accountant-General; 5. Requisition, commit, order, receive and make payments for goods and services within the funds appropriated to the department and in accordance with these relevant laws and regulations

6. Receive and order the disbursement of any trust

moneys for which the head of department has been appointed as administering authority by or under any enactment or agreement; 7. Manage and reconcile the bank accounts authorised for the department by the Controller and Accountant General;

8. Preserve in good order and secure the economical

use of all equipment and stores used by the department; 9. Prepare monthly departmental accounts in a form prescribed by the Controller and AccountantGeneral Department, within the time period set by the Controller and Accountant General

10. prepare, sign and submit within three months after

the end of the year, to the Minister, the Auditor General and the Controller and Accountant-General Department, annual departmental accounts in the form prescribed by the Controller and AccountantGeneral Department in consultation with the Auditor-General;

11. Answer questions raised by the Auditor General in respect of the financial transactions and accounts of the Department
12. Appear before the Public Accounts Committee to give any explanations required by the Committee in respect of the annual departmental accounts; and

13. compile and maintain assets register of the

department as determined by the Controller and Accountant-General.

THE PARLIAMENT
The Parliament of Ghana has so many powers for the control and management of public funds The constitution gives the following powers and duties to the Parliament: 1. Authorisation, imposition and variation of tax. a. No taxation shall be imposed otherwise than by or under the authority of an Act of Parliament Article 174(1)

b.

Where an Act, enacted in accordance with the above confers power on any person or authority to waive or vary a tax imposed by that Act, the exercise of the power of waiver or variation, in favour of any person or authority, shall be subject to the prior approval of Parliament by resolution.

2. Authorisation of disbursement from public funds.

No moneys shall be withdrawn from any public fund, other than the Consolidated Fund and the Contingency Fund, unless the issue of those moneys has been authorised by or under the authority of an Act of Parliament. Article 178(2)

3. Approval of provisional estimates

supplementary estimates of the government must be approved by parliament 4. Authorisation of Public Loans No loan shall be raised by the Government on behalf of itself or any other public institution or authority otherwise than by or under the authority of an Act of Parliament. Article 181(3)

5. Monitoring of foreign exchange

The Committee of Parliament responsible for financial measures shall monitor the foreign exchange receipts and payments or transfers of the Bank of Ghana in and outside Ghana and shall report on them to Parliament once in every six months. Article 184 (1)

The parliament has committees to make sure that the above functions are performed accordingly These committee are: 1. The Finance Committee 2. The Public Accounts Committee

THE FINANCE COMMITTEE

This committee is responsible for the following: 1. Receives appropriation and finance bills for consideration of parliament 2. Suggest improvements in the vote submitted for approval 3. Authorizes the appropriation bill into an appropriation act

4. Determine whether an estimate should be included in the appropriation act

THE PUBLIC ACCOUNTS COMMITTEE This committee is responsible for the following: 1. Monitor the expenditure of all the relevant organisations 2. Monitor the revenue collection of the revenue agencies

3. Demand explanations for significant

deviations of expenditure from estimates 4. Receives public accounts, debate it and submit a report on it to the whole house 5. Can suggest or submit public officers and citizens who appear before them for prosecution

THE AUDIT SERVICE

Any public officer who: 1. is responsible for the conduct of financial business on behalf of the Government of Ghana, 2. is responsible for the receipt, custody and disbursement of public and trust moneys, or 3. is responsible for the custody, care and use of public stores,

Shall keep proper records of all transactions and shall produce records of the transactions for inspection when called upon to do so Auditor-General (section 1 of FAR, 2004) In the performance of the above function, the following provisions are made in various laws and regulations:

1. Section 166 of the FAR indicates that copies of all warrants and cash release instructions issued to departments shall be sent to the Auditor General
2. The Auditor-General or any officer representing the Auditor-General shall have access to any copy of Cash Security Instructions in the presence of the officer responsible for its custody, but notes of its content shall not be taken (Sec 54 of the FAR)

3. Section 196 (1) of the FAR says the public accounts,

the accounts of departments and statutory corporations and other public institutions shall be audited in accordance with the provisions of the Audit Service Act, 2000 (Act 584) and Regulations made under that Act.

4. In consultation with the CAG approves departments

accounting system 5. Auditor- General have the right to ask for and to receive from a bank, statements of any bank account of a department and other information relating to transactions in the account. Section 55 of the FAR.

6. Section 80 (1) A head of department responsible for

administering a Special Fund shall prepare an annual report and financial statements of transactions in relation to the Special Fund, which shall be separately certified by the Auditor-General. 7. Sec 86 (1) A head of department responsible for administering a Trust Fund shall prepare an annual report and financial statements of its transactions, which shall be separately certified by the AuditorGeneral.

8. Section 177 (1) After parliamentary approval, revised estimates shall be communicated to the Auditor-General and the department concerned.
9. Section 252. The imposition of a surcharge by the Auditor-General constitutes a claim against the officer concerned, and the head of department shall immediately recover the full amount surcharged from that officer,

THE INTERNAL AUDIT AGENCY

OBJECTIVE OF THE AGENCY The basic objective of the Agency is to coordinate, facilitate and provide quality assurance for internal audit activities within the Ministries, Departments and Agencies and the Metropolitan, Municipal and District Assemblies.

FUNCTIONS OF THE AGENCY The section 3(2) of the Act gives the function of the Agency The Agency shall ensure that: 1. financial, managerial and operating information reported internally and externally is accurate, reliable and timely;

2. the financial activities of MDAs and

MMDAs are in compliance with laws, policies, plans, standards and procedures; 3. national resources are adequately safeguarded; 4. national resources are used economically, effectively and efficiently;

5. plans, goals and objectives of MDAs and

MMDAs are achieved; and 6. risks are adequately managed in the MDAs and MMDAs.

DUTIES OF THE AGENCY The Agency shall: 1. promote economy, efficiency and effectiveness in the administration of government programmes and operations; 2. prepare plans to be approved by the Audit Agency Board for the development and maintenance of an efficient internal audit for the MDAs and MMDAs;

3. facilitate the prevention and detection of

fraud; and 4. provide a means for keeping the MDAs and MMDAs fully and currently informed about problems and deficiencies related to the administration of their programmes and operations and the necessity for appropriate corrective action.

5. The Agency shall monitor, undertake

inspections and evaluate the internal auditing of the MDAs and MMDAs.

PRINCIPLES AND PRACTICES OF FINANCIAL CONTROLS

In public sector financial administration, various principles, that is rules, procedures and methods are used to control the collection and use of funds They include: 1. Legislative approval of budget and funds 2. Approval of disbursement through warrants

3. Performance measures through value-for4.

5.
6. 7.

money audit Expenditure reviews by MoF and CAGD Ensuring allocative efficiency through priorities and alternatives Expenditure ceilings Constitutional limits on revenues and expenditures

PRACTICE OF FINANCIAL CONTROLS In public sector accounting the application of financial control principles depends on the type of accounts being operated The accounts could be: 1. Public Accounts (On consolidated funds) 2. Other Government Accounts

Generally the financial controls are: 1. Accounting controls through the warrant systems 2. Controls though the authorisation and approval procedures 3. Controls through basic arithmetical procedures

4. Policy and procedural controls through

departmental accounting instructions 5. Other rules stipulated by the FAR, 2004 Within the framework of the above regulations and practices, the main instruments of control are:

1. The Budget
2. The Estimates 3. Warrants 4. Appropriations 5. Vote books

6. Payment vouchers
7. Expenditure ledgers

THE BUDGET
This is the financial plan for the ensuing period of time and contains a forecast of all revenue and expenditure approved for the period. It serves as tool for financial control because in the sense that it is a guide for the various MDAs for their activities

The budget also contains the Fiscal policy, the Monetary policy and objectives of the state which must be implemented

THE ESTIMATES
This is the most crucial part of the budget. It is the amount required and anticipated to carry out certain activities These funds are released quarterly to the various MDAs to carry out their programmes It is the duty of the CAGD to ensure that these votes are not exceeded

It is also the duty of the CAGD and the head of department to ensure that the funds are used for the purpose and also used judiciously

APPROPRIATIONS
This is the authority from the Parliament to the MoF to spend the items and estimates in the annual budget This is a financial control mechanism because no amounts can be spent outside the Appropriations To spend any additional amounts the MoF must go back to Parliament and seek approval

WARRANTS
A warrant is an authority to incur an expenditure It is a financial document issued on the authority of the approved estimates and budget The warrant will indicate the spending officer and the amount to be spent within a given period and expenditure item

The warrant is prepared in four copies and distributed as follows: 1. The Paying treasury 2. The Vote controller 3. Spending officer 4. Certifying officer

There are two types of warrant: 1. The General warrant- used to access personal emoluments(item 1) and Administration expenses (item2) 2. The Specific warrant- used to access service expenses (item3) and Investments expenditure(item 4)

AUTHORISATION LEVELS OF GENERAL WARRANT Authorisation 1 This is the national warrant issued by the MoF to the Director of Budget Authorisation 2 This is the Ministry warrant issued by the Director of Budget to the MDAs

Authorisation 3 This is a Department Warrant issued by the MDAs to their respective departments under them Authorisation 4 This is the Divisional warrant issued by the Departments to the various divisions under the department

Authorization 5 This is Spending units warrants issued by the various divisions to its cost centres where actual spending takes place It must be noted that the budget and estimates can only be committed at authorisation 5

Note that specific warrants are issued for items 3 and 4 directly to pay for the expenditure A warrant is an important financial control document because: 1. It gives the spending officer the authority to request for payment of the funds

2. It gives the indication to the spending

officer as to how much he/she can spend 3. It shows that sufficient funds are available in the vote or otherwise to cover expenditure 4. It rations the amount of the vote that can be spent during a period

5. The warrant determines how the funds are

to be used and also specifying the account items and number

VOTE BOOK(LEDGER CONTROL)

The disbursement from the main treasury accounts is backed by Financial Encumbrance(FE) The FE is a financial document used to record expenditure and commitment at the Treasury department The FE gives authorisation to MDAs to make disbursement from the public funds

A book kept to record all approved provisions or appropriations of various MDAs is called the VOTE BOOK or vote ledger They are balanced to ensure that the allocations have correct balance and disbursement are within limits of the approved expenditures

PAYMENT VOUCHERS(PVs)
The demand for an amount to be paid under a departments vote is made by the preparation of payment voucher Vouchers are written evidence of transactions and payment made to a supplier of goods or services There are two types of vouchers: 1. Ghana Government Payment Vouchers, and

2. Internal Payment Vouchers

The PVs are important for financial control because: 1. They provide complete details of the transactions in a standard format 2. The reviewer does not need to refer to the supporting documentation elsewhere

3. They are a way of ensuring that all required

documentation is present and that approval has been obtained from the necessary authority 4. Once signed by the recipient, the PV will provide evidence of payment 5. They show the item numbers, ensuring that the funds have been used appropriately

CASH MANAGEMENT AND CONTROL

In the public sector accounting, cash management is principally concerned with analysing liquidity across the MDAs It involves examining all resources of the entity, matching these resources against expenditure commitments and others

REASONS/BENEFITS OF CASH MANAGEMENT The importance of effective cash management in the public sector are: 1. To help minimise borrowing and ensuring a free flow of activities in the various governments units

2. The second reason is that government

resources flow into MDAs in a seasonal pattern and without cash management it will be very difficult for the MoF to make informed decisions on financing and investment activities 3. Effective cash management may lead to macroeconomic balances and control of inflation etc

4. Proper cash management will help

anticipate cash shortages and surpluses so as to adopt the necessary measures to deal with them 5. Efficient cash management increases the certainty that government activities will be paid for

LACK OF CONCERN FOR CASH MANAGEMENT IN THE PUBLIC SECTOR Research have shown that most public sector spending officers do not care much about cash management A number of reasons explain the lack of concern:

1. Governments departments or spending

agencies do not experience any cost for managing their cash resources poorly 2. Governments departments or spending agencies do not receive any benefit for managing their cash resources very well

3. The main focus of the budget execution

process is on the release of funds to spending officers for specific activities. So far as the money is spent on that activity, the objective is achieved 4. The main focus of government accounting system is the accountability of funds and not the efficiency with which the funds were utilised

CASH CONTROL MEASURES The government has been adopting certain cash control measures These measures include: 1. Establishment of cash limits 2. Daily banking of all receipts 3. Period surprise cash counts

4. Provision of a safe, which has to be under

dual control 5. Establishment of authority limit 6. Balancing of cash books 7. Preparation of bank reconciliation statements

EFFECTIVE CASH CONTROL PRACTICES The following control practices can be adopted to improve cash management and control in the public sector: 1. Cash flow forecast on monthly basis 2. Cash inflow control to minimise when money is due to be received and the time money is available for spending

3. Cash outflow control such that

procurement procedures are strictly followed 4. Cash balances should be kept to the minimum

THE IMPREST SYSTEM

Section 282 of the FAR defines imprest as a sum of cash advanced to a public officer to meet payments which are otherwise inconvenient to disburse from Public Funds, through the normal payment procedures

CLASSES OF IMPREST Imprests are of two classes, namely (a) Standing Imprests, held throughout the financial year and replenished as necessary by presentation of paid payment vouchers to the head of department; and

(b) Special Imprests, issued for making a particular payment, or group of payments which must be fully retired by the date specified in the approval to operate the imprest. Imprests shall be used only for the specific purpose for which are issued

The application of imprest moneys for purposes other than those authorised, is a breach of financial discipline RULES FOR OPERATING AN IMPREST The imprest holder has the following responsibilities with respect to the imprest:

1. Keep a cash book in which is shown on the

debit side the receipt of the cheque and of the total amount of the imprest quoting the warrant number 2. Keep a cash book in which is shown on the credit side the details of all payments made out of the imprest

3. Obtain a written receipt for all payments

made to serve as evidence of disbursement. Where receipt could not be obtained, Honour Certificate is acceptable 4. Ensure that funds are available under a General Imprest Warrant

5. Ensure that vouchers are properly prepared and authenticated 6. Sub-imprest can be used but for the sole purpose for which the main imprest was issued. Also make sure that the subimprest is replenished from the main imprest only

RETIREMENT OF IMPREST Imprest shall be retired at the close of a financial year and any imprest not so retired shall be adjusted to a personal advance account in the name of the imprest holder. Failure to retire an imprest by the due date, unless occasioned by the death or incapacity of the imprest holder is a breach of discipline

A head of department shall report details of imprest holders who fail to retire their imprest by the due date to the Controller and Accountant General with a copy to the Auditor-General or the representative of the Auditor General.

RULES ON ADVANCES, LOANS AND INVESTMENT

There are several rules for the disclosure of public investments, advances and loans These disclosures are very important for the MoF and CAG to know the extent of public investment, loans and advances for purposes of cash management

Sec 95 (1) of FAE indicates that moneys shall not be advanced or lent from the Consolidated Fund without the approval of Parliament. Moneys released from the Consolidated Fund, as advances or loans or equity investments, shall be subject to limits approved by Parliament

Subject to the directions of the government, the Minister shall be the chief authority for the issue and management of all advances, loans and equity investments of the Consolidated Fund. Examples of Advances are: 1. Workers salary advance 2. Workers car loans

Examples of Loans are: 1. Loans to public corporations and boards 2. Loans to contractors 3. Loans to trust funds 4. Loans to international agencies 5. Loans to other countries

Examples of Equity Investments are: 1. Government investments in public corporations and institutions 2. Government investments in private companies

NEED FOR PRIOR AGREEMENT FOR LOANS/ADVANCES An advance or loan shall not be payable until an agreement specifying conditions and terms of recovery have been concluded between the borrower and the Government The agreement shall be in the form of:

1. a formal agreement signed by both parties in the presence of witnesses; or

2. a formal offer specifying conditions together

with formal acceptance by the borrower. A payment in respect of an advance, loan or equity investment shall not be made until a copy of the appropriate agreement has been lodged with the Controller and AccountantGeneral.

GENERAL AND SPECIFIC AUTHORITY ON ADVANCES All advances from the Consolidated Fund shall require two authorities to give effect to a payment, namely: 1. a general authority providing for a class of advances; and

2. a specific authority for granting any

particular advance within a class; and authority to approve a class of advances. Any scheme for establishing a class of advances shall be submitted to the Minister who shall submit it to Parliament for approval.

A scheme shall include the following information: 1. an explanation to show the public purposes to be served by the scheme and its estimated costs; 2. proposed rules for operation of the scheme, specifying the terms and conditions upon which advances may be made, and the manner and period of recovery;

3. any interest charge to be made for the

advance; 4. designation of the officer or officers authorized to grant and manage advances; 5. means of promulgating rules; and 6. maximum amount of advances allowed.

When the rules for a class of advances are approved by Parliament, the MoF may authorise a head of department to administer advances of that class, upon application by that head, showing likely receipts and payments during any one financial year.

In authorizing a head of department to administer a class of advances, the Minister shall specify the maximum amount that may be advanced under that class at any time. A head of department authorised to administer a class of advances shall ensure that:

1. the total advances outstanding at any given

time do not exceed the authorised maximum; 2. advances are made under proper authority to the person entitled to receive them; and 3. advances are duly recovered in accordance with the regulations or agreements relating to them.

A head of department may delegate responsibility for the administration of advances to the Chief Finance Officer. METHODS OF RECOVERING ADVANCES Advances may be recovered by any of the following methods: 1. deduction from payments due from Government to the borrower;

2. direct payment to the Government by the

borrower or the borrowers proxy; 3. recovery from the borrowers estate; or 4. any other means which may appear to be feasible

CONDITIONS FOR GRANTING OF ADVANCE An advance payment to a public officer shall not be made if: 1. any advance of the same class in the name of the public officer has not been fully repaid;

2. any advance of any class in the name of the

public officer is not being regularly recovered; 3. any advance is outstanding against the officer on account of losses, uncleared cheques or unretired imprest; and 4. the normal instalment of recovery shall cause total advance deductions to exceed 50 per cent of net monthly salary after tax

The outstanding balance of any advance to a public officer becomes a debt to government and is fully recoverable, at the date of the public officer leaving the service, and shall be aggregated with other debts due to government

ADVANCES TO CONTRACTORS This class of advances is provided for the purposes of facilitating the work of Ghanaian contractors by assisting in the finance of works carried out on behalf of Government. An advance shall not be made to a contractor except in accordance with the terms of the contract signed between the Government and the Contractor.

An advance in a contract shall not be made in the form of stores, equipment or service unless the contract agreement provide for the determination of prices of these stores, equipment or services to be charged to the contract.

Recoveries in respect of contract advances shall be made from the contract payments by the head of department. A final payment on a contract shall not be made until the head of department has confirmed that no balance of an advance is outstanding and shall certify this on the voucher for final payment.

GENERAL OR SPECIFIC LOANS Loans from the Consolidated Fund shall be either (a) general classes of loans, issued in accordance with an approved loan scheme, or (b) Specific loans to be approved by Parliament as a matter of policy in particular cases.

A general class of loans shall be approved, administered and accounted for according to the procedures for advances as laid down above. A specific loan shall be sought through the Minister and shall require the approval of Parliament

An approval for specific loans shall be sought in two stages namely (a) authority to negotiate a loan; and (b) approval of the loan agreement Proposals for the granting of a specific loan shall be submitted together with recommendations relating to the terms and conditions to be negotiated.

Loan agreements shall be drawn up in consultation with the Attorney General. The agreement shall contain a clause that its terms are subject to ratification by Parliament after signature by both parties. Upon approval of a loan agreement by parliament the Minister shall endorse the agreement accordingly and the loan shall then be payable.

A copy of the approved agreement shall be forwarded to the Controller and Accountant-General, with a copy to the Auditor-General. The authority/body responsible for administering a specific loan shall: 1. make payment of the loan

1. secure the due and timely collection of interest and observance of any other condition and 2. secure the due and timely recovery of the loan, in accordance with the ratified agreement. The administering authority shall report any failure on the part of the borrower to pay interest or to repay principal by due date, to the Minister.

PUBLIC ACCOUNTS AND LOANS The CAG shall, in the public accounts, include detailed statements of loans from the Consolidated Fund as follows: 1. in the case of general classes of loans, an aggregated statement of loans of each class ; and

2. in the case of specific loans, a detailed

statement of each loan, quoting the original agreement and the balance of principal outstanding at the close of each financial year. 3. In the report, the Controller and Accountant-General shall draw attention to any failure to recover interest or principal.

INVESTMENT PROPOSALS
Proposals for the establishment or purchase of stock or shares in any institution shall be submitted for approval to the MoF The proposals shall give such information as the Minister may require and shall include: 1. copies of any prospectus, 2. accounts or investigation of the financial affairs of the institution concerned

3. and must indicate the proportion of the

equity to be acquired. If a proposal for investment is approved, the MoF shall inform the CAG, appoint the administering authority and forward a copy of the agreement to the AuditorGeneral.

Responsibility of the administering authority on investment The authority administering an equity investment shall: 1. subject to any direction of the Government, act on its behalf in the exercise of ownership rights;

2. protect the public interest in the operation

of the institution concerned; 3. receive the accounts of the institution concerned and draw the attention of the Government to any matters arising; 4. lodge and keep stock and share certificates in safe custody; and

5. ensure the due collection of dividends and

their lodgement into the Consolidated Fund. The administering authority of an equity investment shall be responsible for arranging for the payment of stocks or shares through the Controller and Accountant-General.

Certificate of Shareholding As soon as the stock or share certificates have been received, the administering authority shall forward: 1. the original Certificate of Holding to the MoF; and 2. copies to the Controller and AccountantGeneral and the Auditor-General.

Report to the MoF on Equity Investments The administering authority shall report to the Minister: 1. a forecast of dividend to be included in Consolidated Fund Revenue each year; 2. any failure of the institution to present annual audited accounts;

3. information on distribution of profits;

4. Any delay in declaration and payment of

dividends ; 5. any shortfall in profits and the reasons for it; 6. any unsatisfactory features of the institutions operations likely to endanger Governments investment; and

7. any directions or representations made to

the institutions in the capacity of owner. Statement of Equity Interests in Annual Accounts The CAG must disclose in the annual accounts the following details of the government investments for each institution:

(a) the full title of the institution; (b) the administering authority; (c) the form and value of Governments investment; (d) the proportion of the equity held; and (e) the date of the latest annual audited accounts received from that institution.