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UNIVERSITY OF GHANA BUSINESS SCHOOL

DEPARTMENT OF ACCOUNTING
ACCT 402: PUBLIC SECTOR ACCOUNTING
2nd SEMESTER 2024/2025 ACADEMIC YEAR

TUTORIAL SET 1

QUESTION 1

The power to tax, borrow and create money to meet the aspirations of the Ghanaian public and
to raise their standard of living is based on the sovereign authority of the state. Required:

i. State three (3) factors which the Government takes into consideration before borrowing.
ii. State three (3) sources of Government Domestic Borrowing.
iii. Discuss three (3) challenges mitigating against widening and deepening the domestic base
of Ghana.

QUESTION 2

Debt sustainability has become a matter that many social commentators are worried about as
the level of Ghana’s debt to GDP keeps increasing beyond acceptable thresholds. Discuss the
causes of rising debt levels and recommend a sustainable approach for solving the problem of
debt sustainability in Ghana.

QUESTION 3

a) Discuss the following ways by which public institutions can be distinguished from
private institutions.
b) Highlight the similarities the exist between public institutions and private institutions

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QUESTION 4

A Public Private Partnership (PPP) is a contractual arrangement between a public entity and a
private sector party. Required:

i. Explain two (2) factors that the Government would consider before entering into a PPP
agreement.
ii. State two (2) financial risks in PPP

iii. Explain the following types of Public-Private Partnership arrangement

a) Service Concession

b) Rehabilitate, operate, and transfer

c) Joint Venture asset

d) Build-Operate-Transfer

e) Build-Transfer-Operate

f) Build-Own-Operate

g) Design-build-operate-Maintain

h) Design-build-finance-operate

i) Management contract

QUESTION 5

The power sector has been experiencing enormous challenges in recent times in terms of
finance and management. The multi-million-dollar investment of the government in the power
distribution system seems not to achieve the desired results. In search of a remedy, the
government has implemented several reforms in the sector, including the corporatisation of the
agency responsible for power distribution, which aims to give it a business-like nature to drive
efficiency. Some years thereafter, the problem of financial constraints coupled with corporate
governance issues have surfaced stronger than before. The government has been advised to
consider using Public Private Partnership (PPP) as a vehicle to revamp the power sector. The

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Minister for Energy has been tasked to develop a PPP proposal which leverages on both private
sector finances and management expertise to salvage the sinking power sector. Required:

i. As an advisor to the Minister, present to the Minister two (2) PPP arrangements that can
be used to achieve the objective of the government, indicating clearly the effect of each
of the proposals on public monies, management and residual assets.

QUESTION 6

Describe the economic systems known to you, highlighting the role of the public sector while
also discussing two (2) merits and two (2) demerits linked to those economic systems.

QUESTION 7
Public policies are shaped and influenced by a diverse set of stakeholders at the global, national
and local levels. Stakeholders with competing ideologies, power, and interests can influence
the formulation of policies and reshape the adopted policies by contesting and negotiating their
implementation. The Government of Ghana has established the GOLDBOD in recent years,
which has been described as a game changer for Ghana’s economy.

You are required to:

i. State the objectives of the GOLDBOD initiative.
ii. Identify the stakeholders associated with the GOLDBOD initiative and categorize them
as Apathetic, Latent, Promoters, and Defenders.
iii. Provide justifications for the above categorization of stakeholders.

QUESTION 8

Subject to Article 179 of the Constitution, the President shall cause to be laid before Parliament
at least one month before the end of the financial year an estimate of Revenue and Expenditure
of the government for the ensuing financial year.

Required:

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 i. Discuss the major steps followed by the Ministry of Finance in the preparation and
execution of the estimate of revenue and expenditure.
ii. Discuss the areas that require improvement based on your knowledge of public
budgeting in other countries.

QUESTION 9

The Minister of Finance has just presented the annual Budget Statement to the Parliament of
Ghana. It was observed that the revenue estimates were far lower than the expenditure
estimates.

a) Identify and explain the type of Budget that the Minister has presented.

b) Identify three (3) main sources of financing this type of Budget.

c) Examine the economic implications of any two sources of financing that you have
identified in (b) above.

d) State and explain any three (3) important budgetary objectives of the government that
the preparation of the annual estimates helps to achieve.

QUESTION 10

A. The Budget Committee of the District Assembly prepares a draft estimate based on
inputs from heads of decentralized departments and sub-district structures and submits
it to the General Assembly for approval.
i. State two (2) reasons that may necessitate a budget revision at the District
Assembly.

B. The Director of Budget shall release warrants before the commitment of any transaction
by the Assembly.
You are required to:

i. Why warrants are important in public sector accounting.

ii. Explain the following types of warrants:

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 • General Warrant

• Specific warrant

QUESTION 11

Budgeting is an essential element of Public Financial Management, and it is a requirement of

the Constitution and other Public Financial Management enactments. Budgeting is a process
that requires the engagement and participation of citizens for accountability purposes. The
prime objective of budgeting is to set out the financial plans of the government for the ensuing
year and how the government plans and programs will be financed.

Required:

i. Explain two (2) provisions in the 1992 Constitution relating to budgeting.

ii. Explain the role of budget guidelines in budgeting and identify three (3) items of
information to be expected in a budget guideline.

QUESTION 12

a) Discuss the budgeting process in Ghana based on the Medium-Term Expenditure

Framework (MTEF).
b) Discuss the merit and demerit of the MTEF process.

QUESTION 13

The budget of a government is a summary of the anticipated resources (often but not always
from taxes) and expenditures of that government. National budget seeks to achieve several
objectives including ensuring financial control, goal attained, and managerial productivity.
Similarly, there are many budgeting approaches available to public sector managers to pursue
the foregoing objectives.
You are required to:
i. State and discuss three (3) budgeting approaches that can be used to pursue each of the
afore-mentioned objectives of budgeting, including the strengths and weaknesses of
each of the approaches.

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QUESTION 14

The Budget Department of a Ministry, Department and Agency (MDA) has received the
following inputs from the cost centres for the 2025 budget year.

Budget items GH¢

Construction Works –New Projects 289,199.28

Information and Documentation 250,877.16

Depreciation of Assets 450,000.00

Miscellaneous General Expenditure 180,000.00

Property Purchases 366,874.28

Staff Allowances 50,315.60

Research Activities 243,596.45

Charges and Fees 17,752.62

Repairs and Maintenance 32,294.05

Rehabilitation Expenses 661,506.00

Special Services 24,327.00

Travel and Transport 270,789.35

Printing and Publication 151,924.25

Materials and Consumables 193,236.81

General Cleaning 450,000.71

Utilities 650,000.81

Salaries for Established Post 783,594.00

Staff Overtime 871,900.00

Advertisement and Media 170,000.74

Out-of-Station Allowances 131,114.85

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 Insurance 74,943.28

For the 2025 fiscal year, the Ministry has projected to generate an amount of GH¢3,036,230.57
from Internally Generated Funds. The law allows the MDA to retain all internally generated
funds and use it to finance their budget expenditure.

From the information highlighted above, you are required: As a member of the MDA’s budget
committee;

a) Prepare the MDA's annual Budget using the current chart of accounts for public
sector and submit to the Ministry of Finance as their proposed budget for the
2025 fiscal year;

b) Calculate the amount of budgetary subvention support required from the

Ministry of Finance for the 2025 fiscal year.

QUESTION 15

You are the head of the Budget department of the Ministry of Works; the Ministry intend to
prepare the budget for the 2025 fiscal year and intends to use the 2024 budget as a base.

Below is the detail of the 2024 Budget.

Notes GH¢

Revenue (1) 80,920,000

Compensation of Employees (2) 24,000,000

Goods and Services (3) 39,000,000

Interest 700,000

Assets (4) 40,000,000

Notes to the Accounts

1) Revenue GH¢

IGF 32,000,000

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 Government Grant 48,920,000

80,920,000

2) Compensation of Employees GH¢

Established post 19,000,000

Non- established post 3,200,000

Allowances 1,800,000

24,000,000

3) Goods and Services GH¢

Utilities 12,000,000

Consultancy cost 5,000,000

Repairs and maintenance 7,000,000

Stationary 6,000,000

Training and seminars 9,000,000

39,000,000

4) Assets GH¢

Building 25,000,000

Equipment 15,000,000

40,000,000

In the preparation of the budget for 2025, the following assumptions are made:

i. The Ministry has just introduced new equipment, and as a result, it is hoped that the
IGF would increase by 36%. However, there would be a cut in the government Grants
by GH¢ 9,600,000.
ii. Established post salaries would increase by GH¢3,920,000, whereas non-established
post salaries would increase to GH¢4,960,000; meanwhile, all forms of allowances
would increase by 15%.

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 iii. With the introduction of the new equipment, utility costs would increase to
GH¢9,700,000, repair costs would also increase by 9%, and training and seminar costs
would also increase to GH¢17,820,000
iv. The Ministry expects to acquire new equipment, which is expected to increase the
equipment cost by GH¢150,000,000

From the information highlighted above, you are required:

a) Using the 2024 Budget as a base and assumptions made, prepare the Budget for the
2025 fiscal year.
b) Identify and explain the type of Budget approach used by the Ministry in the Budget
preparation.
c) Explain two (2) merits and two (2) demerits of the Budget approach adopted in the
preparation of the 2025 Budget.
d) Explain an alternative approach you would have suggested to the Ministry for their
subsequent budget preparation and explain two (2) reasons why that approach is
appropriate under the circumstances.

QUESTION 16

The approved estimates for the quarterly expenditure of the Ministry of Education are
highlighted below. Also shown is the actual expenditure for the month of January 2024.

Expenditure Approved estimate for Actual expenditure

January-March, 2024 for January 2024
GH¢ GH¢

Established post 27,141 7,239

Non-established post 6,708 1,767

Overtime allowance 1,044 147

Electricity charges 240 125

Water charges 600 79

Telecommunication 693 478

Postal charges 51 23

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 Stationery 4,038 1,131

Travel allowance 17,250 4,643

Maintenance of official vehicle 14,700 4,911

Car rental 468 227

Maintenance of equipment 6,000 2,588

Insurance 138 30

Bank charges 72 19

Training and conference cost 36,000 5,688

New building 60,000 12,500

173,781 41,588

Additional information:

i. The budget for electricity was based on 100 units to be used as GH¢1.9 per unit per
quarter. The actual usage was 150 units at GH¢2.5 per unit per quarter;

ii. The budget for water was based on 125 litres at GH¢0.9 per unit per quarter. Actual
usage was 150 litres at GH¢1.5 per unit per quarter.

From the information highlighted above, you are required to:

a) Prepare the monthly statement comparing the budget figures with the actual
expenditure, showing the variances between them.
b) How much of the total variance in electricity expenses was due to the price increase?

c) How much of the total variance in water charges was due to more water usage?

d) Give three reasons for the large variance in Telephone expenses.

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