By Alois Vinga
FINANCE Minister Mthuli Ncube Wednesday launched the Migration to Accrual Based International Sector Accounting Standards implementation plan that will see government institutions move up to speed with global accounting systems.
This is after President Emmerson Mnangagwa has already appended his signature on the plan which will be run for seven years.
Ncube said migration is now inevitable as public sectors globally are adopting the new accounting methods.
“As the world moves towards globalisation, government cannot remain isolated with our own systems and practices at a time when the moment for IPSAS adoption is increasing.
“Government needed to keep abreast with the latest developments and best practices…in the international community,” he said.
The Implementation Strategy and Plan will be rolled out between now and 2025 as it equips the public sector with capacity to migrate from Cash based accounting to Accrual based accounting methods.
Currently, the country’s public sector is using a cash basis accounting technique which only reflects current expenditures against cash available and this technique does not encourage full disclosure of liabilities which an entity carries.
The strategy’s implementation will necessitate migration to accrual accounting where revenue is recorded when earned and expenses are recorded when consumed.
The overall objective of the ISP is to strengthen public financial management through adoption of accrual based IPSAS framework and will yield improved quality of financial reporting for government, facilitating timely and informed decision making by managers and supporting developments in the public sector.
Over the past years, the Office of the Auditor General has urged government to come up with an accounting system which encourages full disclosure of financial details as the previous systems contained serious loopholes which could not detect the embezzlement of funds.
Government recently unveiled Statutory Instrument 41 of 2019 which prescribes the domestication of International Financial Accounting Reporting Standards compelling public sector entities to adopt the new accounting standards.
The Implementation Strategy Plan is being co-funded by government and its development partners.
“As a way of showing its commitment to adopt IPSAS, government has availed $700 000 in the 2019 National budget, while the World Bank has also supported the initiative by allocating US$300 000 for the project,” Ncube added.