CPA ADVANCED LEVEL
ADVANCED PUBLIC FINANCIAL MANAGEMENT
THURSDAY: 8 December 2022. Morning Paper. Time Allowed: 3 hours.
Answer ALL questions. Marks allocated to each question are shown at the end of the question. Do NOT write anything on this paper.
(a) In a research publication on “Systemic Corruption and Public Procurement in Developing Countries”, the author noted that “Corruption in public procurement affects development and quality of life of citizens in developing countries. The increase in anti-corruption measures globally reflects a consensus that corruption is pervasive and expensive. Public procurement is one area that is prone to corruption due to the huge sums of money involved; the availability of information; and the bureaucratic nature of decision-making, which together present opportunities for abuse. In developing countries, procurement corruption is prevalent because of institutional weaknesses, lack of enforced accountability mechanisms and a culture of silence in relation to public sector malfeasance”.
In the context of the above statement:
(i) Discuss FIVE public procurement corruption schemes that an accounting officer should take cognisance of. (10 marks)
(ii) When the accounting officer of a procuring entity discovers circumstances that could affect the credibility of the procurement process, he is empowered by the Public Procurement and Asset Disposal Act to terminate or cancel procurement or asset disposal proceedings without entering into a contract.
Summarise FIVE circumstances under which the accounting officer is empowered to terminate or cancel procurement or asset disposal proceedings as per the Public Procurement and Asset Disposal Act or equivalent legislation. (5 marks)
(b) There is an ever-closer focus on improving the quality of public financial management around the world, with many countries making important and impressive achievements in strengthening public financial management.
Explore FIVE challenges faced by your country in the implementation of public financial management best practices. (5 marks)
(a) The National Treasury is established pursuant to Article 225 of the Constitution or equivalent legislation as an entity of the national government to help the government discharge the public financial management responsibilities.
Describe EIGHT responsibilities of The National Treasury as enshrined in the Constitution. (8 marks)
(b) The Cabinet Secretary is empowered to guarantee loans of a county government or any other borrower on behalf of the national government and ensure that such a loan is approved by Parliament.
Identify SIX conditions to be met in order for the Cabinet Secretary to guarantee such loans as per Section 58 of the Public Finance Management Act, 2012 or equivalent legislation. (6 marks)
(c) Explain the responsibilities of the Senate Budget Committee in public finance matters as per relevant legislations. (6 marks)
(a) Analyse TWO types of expenditure that are included in the consolidated fund services. (4 marks)
(b) The Public Investment Management Unit was established at The National Treasury to reduce overlaps in government programs, curb runaway project costs and help to improve the quality of life for citizens.
Discuss FOUR roles of the Public Investment Management Unit or its equivalent as mandated by the National Treasury. (8 marks)
(c) Most developing and transition countries have devoted an unprecedented level of attention to the reform of public financial management systems. The results have been mixed with some exceptions, reform progress has been slow and the benefits elusive. Nevertheless, some countries have been more successful in implementing public financial management reforms than others.
Evaluate FOUR critical factors needed by developing countries for successful public financial management reforms. (8 marks)
(a) The Head of Internal Audit Unit under a national government entity should enjoy operational independence through the reporting structure by reporting administratively to the Accounting Officer and functionally to the Audit Committee.
(i) Analyse FOUR measures that should be undertaken by the accounting officer of a national government entity to enhance the independence of the internal audit unit. (4 marks)
(ii) The audit committee plays a key role in supporting and overseeing aspects of an internal audit function’s activities.
Summarise SIX roles of the audit committee in ensuring that the internal audit function performs effectively and delivers its mandate. (6 marks)
(b) In an annual conference held in your country on “Closing the gaps in budget execution”, the keynote speaker observed that the importance of budget execution is reflected in its contribution to economic growth. He added that efficient and effective use of public funds improves the capability of governments and its systems to utilise resources that achieve growth and development targets.
In line with the above observation:
(i) Discuss the guidelines that should be observed at all times during the national government budget formulation and approval. (6 marks)
(ii) Describe TWO matters that should be provided for in the Appropriation Bills. (4 marks)
(a) The Public Audit Act 2015 empowers the Auditor-General to outsource audit services from duly registered audit firms.
Analyse SIX provisions of Section 23 of The Public Audit Act 2015 or its equivalent in relation to outsourcing audit services. (6 marks)
(b) The Cabinet Secretary for The National Treasury has the responsibility of prescribing the format to be used in preparing the estimates of revenues for a particular fiscal year.
Analyse the matters that should be included in the format of estimate of revenues as provisioned by Section 59 of the Public Finance Management Regulations, 2020 or its equivalent. (5 marks)
(c) Evaluate THREE types of funds administered by county governments as provisioned by the Public Finance Management Act, 2012 or its equivalent. (9 marks)