Ken Ofori - Atta, Minister of Finance
Ken Ofori - Atta, Minister of Finance

The Corruption Perception Index, CPI 2016 scored Ghana 43 points out of a possible clean score of 100 and ranked the country 70th out of 176 countries included in its 2016 index. 

Overall, only five out of 46 African countries that qualified to be captured by the index scored above 50. Many African countries dominated the bottom of the CPI with Somalia, South Sudan, Sudan, Libya, Guinea Bissau, Eritrea and Angola scoring 10, 11, 14, 14, 16, 18 and 18 with rankings of 176, 175, 170, 170, 168, 164 and 164 respectively.

Globally, Denmark and New Zealand performed best with scores of 90, closely followed by Finland (89) and Sweden (88). Although no country is free of corruption, the countries at the top share characteristics of high standards in open government, press freedom, civil liberties and independent judicial systems. For the tenth year running, Somalia is the worst performer on the index, this year scoring only 10. South Sudan is second to bottom with a score of 11, followed by North Korea (12) and Syria (13).

THE CASE OF GHANA ON THE CPI REPORT

Ghana’s score of 43 points is a likely reflection of the many exposés of public sector corruption in the last few years including the police recruitment scam, Ghana Youth Employment and Entrepreneurial Development Authority (GYEEDA) scandal, Savannah Accelerated Development Authority (SADA) scandal, GHc144m GRA/Subah scandal, the infamous Woyome’s GHC51m judgment debt saga and the Smartty’s bus rebranding deal.

It is obvious that a lot of rot has accumulated in the system over the decades contributing magnanimously to Ghana’s not-too-satisfactory performance from the CPI 2016 survey. The country however remained a fierce force to reckon with in areas of democratic governance, freedom of the press, free, fair and transparent election and separation of powers within the continent of Africa. These qualitative attributes have continued to be our gateway of beacon of hope in Africa.

Nonetheless, it’s equally important that, the public sector financial and accounting management practices have been met with too much contempt, breach, and irregularities – the neglect of most international public sector accounting standards to be specific. It’s very important to note that, IPSAS aims to improve the quality of General Purpose Financial Reporting (GPFR) by public sector entities, leading to better informed assessments of the resource allocation decisions made by governments, thereby increasing transparency and accountability.

Migrating from the traditional cash basis of recording and reporting financial transactions to the full adoption of the accrual basis thereof in the public sector, it’s very necessary government make full utilisation of the relevance and positive effects of the new regime under the International Public Sector Accounting Standards (IPSAS). The harmonisation of the new system is ongoing at the ministries, departments and agencies, MDAs, metropolitan, municipal, district assemblies, MMDAs and other subsidiaries under government.

IPSAS are based on the International Financial Reporting Standards (IFRS), formerly known as IAS. IFRS are issued by the International Accounting Standards Board (IASB). IPSASB adapts IFRS to a public sector context when appropriate. In undertaking that process, the IPSASB attempts, wherever possible, to maintain the accounting treatment and original text of the IFRS unless there is a significant public sector issue which warrants a departure.

What ought to be done?

According to the International Federation of Accountants (IFAC), the International Public Sector Accounting Standards Board (IPSASB) works to improve public sector financial reporting worldwide through the development of IPSAS, international accrual-based accounting standards, for use by governments and other public sector entities around the world.

On March 6, 2017, delegates from the World Bank, International Monetary Fund (IMF), International Public Sector Accounting Standards Board (IPSASB), and International Federation of Accountants (IFAC) convened in Washington, DC, for an international seminar, Transparency and Beyond: Harnessing the Power of Accrual in Managing Public Finances. The meeting was to deliberate on the relevance of the IPSAS an agenda to pitch high the Accrual Accounting Basis  as Key driver to High-Quality Government Financial Transparency  and Decision Making.

It was good news nevertheless that, the Controller and Accountant-General in Ghana is standardizing the preparation and presentation of the country’s annual General Purpose Financial Statements (GPFS) in accordance with the reporting standards promulgated by the Financial Administration Act 2003 and the Financial Administration Regulation 2004 and the International Public Sector Accounting Standards Board (IPSASB) into the latest oracle E-business suite Financial software package (GIFMIS).

The GIFMIS system will utilize the newly approved harmonized chart of accounts, which is also in compliant with current GFS standards, for all financial transactions, reporting and cash management throughout the country. The new approach however, will be a sharp departure from the old system methodology; Medium Term Expenditure Framework (MTEF).

 CONCLUSION

In March 2016, Moody’s Investors Service downgraded Ghana’s issuer and senior unsecured rating by one notch to B3 from B2. The outlook on the rating is negative. It has become very clear that, good governance of a nation must be reflective of efficient, effective and accountable systems. These are the parameters used to measure especially corruption. Globally, most corruption scandals can be mostly equated to the public sector. With my critical observations and from professional fair view point based on the above findings, to minimize the impact of corruption, our public sector entities and Government Business Enterprises (GBEs) must strictly practice the provisions and guidelines contained in the IPSASs.

They must equally be abreast with the regular reviews ongoing with some of the standards. Hopefully, the harmonization which is ongoing is commendable. But it is equally relevant to alert various Heads of Department (HODs) and or principal spending officers of various MDAs and MMDAs   to be in proper tune with the numerous IPSASs whose neglect can collapse public financial management administration, public trust ,fair and equitable resource allocation, revenue and expenditure management  and of course transparent and accountable governance.   

The writer, is a former staff of the Institute of Chartered Accountants, Ghana, ICAG

EMAIL: eligregups@gmail.com

NB: (Views and or issues raised in this article do not represent those of any organization(s) but the independent views as expressed by the writer. This article was also published in the 2017 April/June ICAG Journal)