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By: musashi
PSASB to release new financial reporting templates for county bursary and emergency funds
All 47 county governments will be required to make separate financial reporting on their bursary and the emergency funds based on new financial reporting templates which will be released by the Public Sector Accounting Standards Board (PSASB) on 30th June this year.
The new templates will apply starting the current financial year 2023/2024 and the subsequent years to enhance accountability and transparency in the use of public resources. According to PSASB, Acting CEO Ms Georgina Muchai, the Public Finance Management Act (2012) requires County Governments to make financial reporting of the bursary, and emergency funds.
“Section 167 of the Public Finance Management Act, 2012 requires that, at the end of each financial year, the administrator of a county public fund shall prepare financial statements for the fund in accordance with the standards and formats prescribed by PSASB. The financial statements should give a true and fair view of the state of affairs of the funds for and as at the end of the financial year,” Ms Muchai said.
The CEO said this in Naivasha during the county governments’ forum on the transition from cash to accrual-based accounting. The forum was aimed at sensitising accountants from the county assemblies and county executives on basic International Public Sector Accounting Standards (IPSAS) and the prerequisites for the adoption of accrual accounting by public sector entities effective 1st July 2024.
Some of the prerequisites for accrual accounting, according to the CEO, include stakeholders’ awareness, capacity building for public sector accountants, establishment of project coordination committees, and identification of assets and liabilities by public sector entities among others.
“Once public sector entities embark on the adoption of accrual accounting, a three-year transition period will be provided to facilitate full compliance with the IPSAS” Ms Muchai revealed. She said the new reporting templates for the county governments come at a time when there has been increased scrutiny by the Parliamentary public finance oversight committees on the application of funds by public sector entities, particularly the county governments.
Muchai added that the standards also come at a time when pertinent issues have been raised by the Office of the Auditor General regarding adverse and disclaimer of opinions on some of the financial statements from public sector entities.
“According to the PFMA 2012 Section 113, county governments are required to allocate, each financial year, emergency funds not exceeding two per cent of the total revenue as shown in the county government’s audited financial statements for the previous financial year.
“These emergency funds and the allocated funds for bursaries should be accounted for and reported separately in the annual financial statements for transparency and accountability,” Muchai added. With the issuance of the new reporting templates, the CEO further said, county governors will be tasked with upholding robust financial management practices to ensure continuous accountability throughout the reporting period.
This responsibility, Ms Muchai added, includes maintaining accurate accounting records, implementing internal controls to support the preparation and fair presentation of financial statements, and safeguarding fund assets.
Additionally, the CEO noted, they must oversee the application of appropriate accounting policies and procedures, including making reasonable accounting estimates for bursaries and emergencies. The new templates, Ms Muchai said, have undergone public participation and are being finalised for release.
She revealed that other reporting templates which are set to be released alongside the bursary and emergency funds templates include financial reporting templates for county governments, technical vocational education and training (TVETs), national/county self-reporting development projects, county corporations/SAGAs, national/county money lending entities, and county equalization funds.
The Public Sector Accounting Standards Board (PSASB) is mandated by section 194 of the PFM Act, 2012 to prescribe frameworks and set generally accepted standards.