CPA ADVANCED LEVEL
ADVANCED PUBLIC FINANCIAL MANAGEMENT
THURSDAY: 4 August 2022. Morning paper. Time Allowed: 3 hours.
Answer ALL questions. Marks allocated to each question are shown at the end of the question.
(a) Government Investments and Public Enterprises (GIPE) is a department in the National Treasury and Planning that helps the Cabinet Secretary to exercise the oversight and ownership role in State corporations and other government investments. This department discharges its mandate through the Divisions of Monitoring and Supervision, Reforms and Finance and Administration.
(i) With clear examples, describe ways in which the Government Investments and Public Enterprises (GIPE) assists the Cabinet Secretary to carry out the oversight and ownership role in state corporations and other Government investments. (6 marks)
(ii) Discuss the functions of the Public Private Partnership Committee as envisioned in the Public Private Partnership Act, 2021 or its equivalent legislation in your country. (6 marks)
(b) The Public Finance Management Act, 2012 allows the Cabinet Secretary for the National Treasury and Planning
with the approval of the Cabinet to make a public pronouncement of the budget policy highlights and revenue raising measures for the National Government to set pace for the budget preparation for the year.
Analyse the steps followed by the National Government in preparation of the annual budget. (8 marks)
(a) The office of the Auditor General is tasked with auditing and reporting in respect to a particular year on the accounts of the National and County Governments, all funds and authorities, all Courts Commissions, Independent offices, National Assembly, senate and accounts of all County Governments among other public entities. However, a report prepared by Transparency International reveals that the audit process has critical gaps that affect the efficiency of the audit, quality of audit reports and implementation of the recommendations that emanate from the audit process.
Discuss five challenges faced by the Auditors General in auditing public sector entities. (5 marks)
(b) The Cabinet Secretary, National Treasury and Planning is empowered to designate persons as receivers of national government revenue under Article 209 (1), (2) and (4) of the Constitution.
Summarise three responsibilities of a person designated as a receiver of revenue. (3 marks)
(c) Describe the main provisions of Section 96 of Public Finance Management Regulations 2015 in regard to operations of Treasury Single Account in Kenya. (12 marks)
(a) Accounting officers of procuring entities are in charge of preparing annual assets disposal plans of items declared as unserviceable, surplus or obsolete stores, assets or equipment and also appoint the disposal committee as set out under Section 53(4) of the Public Procurement and Asset Disposal Act and Regulations, 2020.
(i) Explain the main contents of the annual assets disposal plan. (4 marks)
(ii) Discuss the key functions performed by a procuring entity’s Asset Disposal Committee. (6 marks)
(b) In one of the monthly virtual talk series organised by Public Finance experts in the country dubbed “Is the Country’s Public Debt Sustainable?”, the experts noted that the country’s debt level may not be sustainable in the long run if the current trend of borrowing continues. The experts urged the government to put in place mechanisms that will ensure prudent public debt management to cushion citizens from the adverse effect that may result from excessive borrowing. Specifically, the experts advised the government to strengthen the Debt Policy, Strategy and Risk Management Department at the National Treasury and Planning.
(i) As a public finance management expert, advise the government on the specific functions that the Debt Policy, Strategy and Risk Management department should carry out in order to ensure that the country’s public debt level is sustainable. (6 marks)
(ii) Discuss the concept of Medium-Term Debt Management Strategy as used in public debt management. (4 marks)
(a) Your country has undertaken public financial management reform initiatives and currently is working on implementation of 2018-2023 Public Financial Management Reform Strategy. This strategy seeks to build on the success of previous public financial management reforms to date and address the challenges encountered.
(i) Analyse the objectives of the Public Financial Management Reform Initiatives undertaken in your country. (6 marks)
(ii) Describe the challenges faced by the government in undertaking public financial management reforms. (4 marks)
(b) Public Financial Management Regulations require Internal Auditors to comply with the International Professional Practices Framework and Accounting Standards Board Policies and Guidelines to conduct audits. The internal auditors should also adhere to the core principles which ensure internal audit effectiveness.
(i) Discuss the functions carried out by the office of the Internal Auditor-General at the National Treasury and Planning. (6 marks)
(ii) Summarise four core principles for professional practice of internal auditing as application in the public sector. (4 marks)
(a) The budget policy statement sets out the broad Strategic priorities and policy goals that guide the national and county government in budget preparation for the subsequent financial year and over the medium term.
Explain the contents of the Budget Policy Statement. (8 marks)
(b) Public Financial Management Processes and tasks are very complex and technical since they involve macroeconomic forecasting, budgeting, accounting and auditing. This complexity limits public scrutiny and provides possible avenues for corruption. In most instances, corruption manifests itself in form of illegal money transfers at the budget execution but can also occur during other stages of the public financial management process.
As an expert in public financial management, evaluate the possible avenues that public officers could use to perpetrate corrupt acts in the public financial management process and propose measures to counter them. (12 marks)