The government has started a pilot run of the new accounting system for its entities as it moves to professionalise the public sector, Business Times can report.
Zimbabwe has adopted the International Public Sector Accounting Standards (IPSAS) implementation plan which will come into full effect by 2025 to enhance financial accountability in central government, urban and rural authorities.
The government, which has been using a cash accounting system since 1923 when the country was declared a republic (the Republic of Southern Rhodesia under premier Charles Coghlan), has asked the Public Accountants and Auditors Board (PAAB) to help in the revamping of the public sector’s financial management system to enhance performance and overall service delivery.
Business Times can report that about 15 entities have been identified to run the trial project.
Last week, the government, through the Accountant-General’s office, met all chief executive officers of state enterprises, and urban and rural authorities to prepare them for the transition.
Tendai Kachasu, an official in the Accountant-General’s office, confirmed that the pilot programme had been launched.
“IPSAS will improve governance, foster transparency and account- ability and will attract investors,” Kachasu said. “We have established governance structures – the IPSAS working group and the national steering committee. Now, we are running pilot projects. We have targeted 15 entities comprising of three ministries, two commissions, two parastatals and eight local governments,” Kachasu explained.
Zimbabwe’s central government, and urban and rural authorities spend large sums of public funds on a range of services. A stronger accounting system will help the government meet tax payers’ demands for transparency and accountability.
Financial experts say fixing the finances of Zimbabwe’s public sector is key because a strong accountancy backbone is crucial to the health of the economy. Funds are currently not managed in the public interest.
The cash-basis accounting system, which the government is currently using, recognises transactions between the government, local authorities and their clients only when the money is paid. But, the public sector is migrating towards the adoption of an accrual based reporting system, to ensure great transparency and accountability in how government records, reports, utilises the wealth of financial data it receives, and processes at any given time.
The shift to the accruals based IPSAS, which will recognise those transactions within the time period that they occur, is part of a wider public finance management reform in the public sector. The new accounting system is expected to con tribute to better use of public funds.
It will also allow better public service performance. An enhanced transparency is part of the core focus of the accounting profession. This can support the fight against corruption and financial mismanagement, and drive economic development.