ACCOUNTANT-general,Daniel Muchemwa, has disclosed that government is faced with several challenges in its quest to implement a new accounting framework, the International Public Sector Accounting Standards (IPSAS).
A revamp of the public sector financial management system is expected to result in improved governance, transparency and public accountability.
Zimbabwe’s public sector is currently using the cash basis accounting framework but in four years, government will migrate to full IPSAS. This means the public sector will move to an accruals framework from a cash basis accounting system.
“Our target to migrate to IPSAS from a cash basis accounting system is 2021,” said Muchemwa, who spoke at the Institute of Chartered Accountants of Zimbabwe (ICAZ) convention for the public sector, which was held in the capital last week.
“IPSAS accounting and reporting standards are aimed at improving the quality of general purpose financial reporting by the public sector entities, leading to better informed assessment of the resource allocation decisions made by government. Adoption will result in improved governance, transparency and public accountability.
“I expect to have a functioning system in four years time. But I see a number of challenges in the implementation of IPSAS. We need political buy in; we need the support and political will of government; we need political will of key decision makers including Cabinet, Parliament and Parliamentary committees,” he said.
“The cost of implementing IPSAS is high. Government should incorporate the cost to implement IPSAS in the budget as the nation prepares to adopt the new framework. We also need to ensure everyone is trained to the correct level. We have a problem of qualified accountants meaning that there is also need to recruit and train qualified staff. There is also a lot of resistance from government departments,” said Muchemwa.
Government has since roped in the Public Accountants and Auditors Board (PAAB) to help in implementing the plan.
Many countries around the world are now using the accruals accounting system, or full IPSAS, including Australia, Canada, New Zealand, United Kingdom and United States of America.
Among African countries that have adopted IPSAS are Rwanda, Tanzania, Uganda, Zambia, Algeria, Ghana, Nigeria, South Africa, Liberia, Morocco and Mauritania.
Using cash basis accounting framework makes it difficult to accurately assess performance, to detect deviation from agreed strategic plans and, therefore, to take early corrective action.
This has prompted government to embark on a series of restructuring and reform measures aimed at modernising its outdated administrative systems including the introduction of IPSAS.