Understanding Public Sector Accounting in South Sudan

WHAT IS PUBLIC SECTOR ACCOUNTING?

The term “Public Sector Accounting” refers to a process of learning, recording, analyzing, interpreting, and communicating financial documents, accounting tools and regulatory acts as used at all levels of government by Accounting practitioners in public institutions, South Sudan.

In South Sudan, a Fiscal Year begins on 1st July, and ends on 30th June, in the following year.

OBJECTIVES OF PUBLIC SECTOR ACCOUNTING

The aim of South Sudan’s government is not to make profit, but to render essential services like Health, Education and Transport to South Sudanese.

The Public Sector Accounting can be used to measure revenues (oil revenues and non oil revenues) against state expenses. It can also be used for budgeting, planning and forecasting.

Therefore, the overall objectives of the government accounting in South Sudan are as below;

• reference for accountability
• tool for budgetary planning & control
• tool for an objective budgetary reporting
• provides basis for a fiscal policy
• finds out authenticity of a transaction

USERS OF THE PUBLIC SECTOR ACCOUNTING IN SOUTH SUDAN

The users of Public Sector Accounting information  in South Sudan are in two categories (A & B) which are listed below:

A. Internal Users - This category is made up of the following:

1. The Executive arm of Government which include, the President of the republic of South Sudan, state Governors, administrators of Administrative Areas, county commissioners of various counties & commissioners of Government commissions e.g the commissioner-general of the National Revenue Authority.
2. The national Ministers and State governors
3. Top J1 Administrators, underSecretaries & Directors-general.
4. The managing directors of South Sudan corporations such as NilePet.
5. Subordinates who steer the administration wheels of govt like accounting officers of government agencies.

B. External Users - This group of Public Sector Accounting users comprises:

1. The National Legislative Assembly in Juba
2. The members of general public. ( Strictly South Sudanese)
3. A third party Government agency.
4. Bilateral Partners like People’s Republic of China and others.
5. International Lending agencies such as International Monetary Fund (IMF), World Bank, African Development Bank.
6. Economic blocs like EAC, IGAAD, AU, Arab League, United Nations etc.
7. Creditors, both local and foreign.
8. Socio-Economic reachers at higher institutions of learning like Juba University.
9. National Political parties like SPLM-IO and other stakeholders.

The Budget Process

A Budget is an annual plan of how government agencies and all monies received from other sources will be spent in accordance with its goals and priorities.

Government agencies would seek public participation for development priorities ahead of a new fiscal year from state to state across South Sudan before finally drafting their respective budgets.

THE ROLE OF ANNUAL BUDGET

• a political tool
• a socio-economic tool
• a human development tool
• an administrative tool
• a performance evaluation tool
• a communication device

THE PRINCIPLES OF BUDGETING

1. Budget must be Realistic
2. Budget must be Prioritized
3. Budget must quantify Outputs

THE BUDGET PROCESS IN SOUTH SUDAN

• Step 1:Participatory Planning
• Step 2:Estimating the Resource Envelop
• Step 3:Estimation & Approval of Budget Ceilings
• Step 4:Preparation of Departmental Budgets
• Step 5:Compilation of the Budget
• Step 6: Approval by Executive Council
• Step 7: Approval the Legislative Council

The Differences between Government Accounting and Private Accounting in South Sudan

1. The aim of Private Sector Accounting in South Sudan is to maximize profit while that of the Government is to render essential services to the general public at a free or reasonable cost.
2. South Sudan’s Government gets revenues from the public in form of taxes, Oil proceeds, fines, royalties et al. While Private Sector gets its income mainly from selling goods and services.
3. The Government records financial transactions on ‘cash basis’ while Private Sector uses both Cash Basis & accrual basis.
4. In Public Sector Accounting, fixed assets are not recognized in the balance sheet, while in private sector, both fixed and current assets are reflected in the balanced sheet
5. Current assets like stocks and debtors are not shown in the balance sheet of the government accounting. Debtors and creditors are not accounted for until money is received or paid. Whereas in private sector accounting system, the current assets and current liabilities are shown in the balance sheet.
6. In the Government there is no Annual Board Meeting of shareholders, unlike the commercial enterprises whose shareholders meet annually to evaluate the firm progress. The the government usually seek public participation on issues.
7. In Public Sector Accounting, fund accountability operates substantially. However, the proprietary approach is adopted in private sector accounting.

NOTE: The government Accounting flourishes in a financial year budgetary approach, while budgeting is a yardstick of effective control in private sector accounting.

The Types of Documents used to record financial information by the government 

What is a financial document?

A financial document is a form used by government officials at all levels of government to record revenues and Payments.They are familiar with directors of A/c, Signatories/Operating Mandates of government A/c, revenue inspectors, accounting officers, Bookkeepers, NRA tax collectors amongst others.

These financial documents are distinctly categorized into:

1. Receipt Forms
2. Payment Forms

The Receipt

There are 4 categories of receipts that increase government revenues in South Sudan namely;

• Tax
• Property income
• Gain from a Sale of goods and services
• Transfers

However, the government uses the following documents to record revenues at all levels of government:

1. Cash Receipt (Form 15): Used for recording revenues.
2. The Collectors Account (Form 67): A collector’s record of revenue collection.
3. The Receivable Order (Form 39): is a document of deposit with either a bank or with a local government cashier by a tax collector or entity who has made a deposit.
4. The Deposit Slip (Form 50): refers to a cheque deposit form prepared by a government cashier in order to recognized revenues deposited with a bank using a cheque.
5. The Register of Cheques Received (Form 22): is a register of cheques deposited or received by a government cashier.
6. The Treasury Chest Book (Form 19): refers to the official Cash Book of a government agency at all levels.
7. The Accountant Register of Receipts (Form 65): it is a book used to record daily receipts so as to be able to summarize receipts at the end of the month. The file of Form 39s is used by a book keeper to post Form 65.

The Payments

The government of South Sudan makes payments in various ways not limited to;

1. Cash Payment (Clearing House)
2. Cheque Payment
3. Telegraphic Transfer

NOTE: The electronic medium for payment between government agencies in South Sudan is called “South Sudan Electronic Payroll System”(SSEPS)

⚠️ WARNING: Cryptocurrency is a RED LINE for the government of South Sudan.

The below financial forms are used at all levels of government in order to pay for goods and services purchased;

1. The Cash Payment Order (Form 40): used for cash payments.
2. The Cheque Payment Order (Form 17): used for cheque payments.
3. The List of Cheques Drawn (Form 47): a record of cheques drawn in the names of payees.
4. The Accountant Register of Payment (Form 76): a record of all Payment Order

The Financial Reporting

When a government agency is communicating or reporting on financial information to either internal users or external users. The following financial reports must be presented.

• Quarterly Budget Performance Report
• Half-Year & Annual Budget Performance Report
• Final Accounts
• Audited Accounts

SOURCES OF INFORMATION DURING THE FINANCIAL REPORT

1. The treasury chest book & bank A/c cashbook
2. The accountant register of receipts
3. The accountant register of payments
4. The budget control books
5. The budget document
6. Records of Outputs

Happy Accountability in South Sudan!