Government accounting is a specialized branch of accounting that focuses on the financial management and reporting of government entities. It involves tracking and documenting public funds, ensuring transparency, and adhering to specific accounting standards applicable to the public sector. Government accountants play a crucial role in managing budgets, monitoring expenditures, and producing financial statements for public scrutiny. The complexity arises from the unique nature of government operations, such as multiple funds, regulations, and the need to balance social objectives with fiscal responsibility. The integration of accrual accounting, fund accounting, and compliance requirements distinguishes government accounting from traditional corporate accounting practices.

1. AC321 Government Accounting
PNG GOVERNMENT
ACOUNTING
(PFMA – REQUIREMENTS)
Week 6/7

2. Learning Objectives
1. Understand the Government Accounting
Process
2. Understand the importance of the
Appropriation Acts.
3. Understand the Finance Management
control (PFMA)......DownloadsGov
Accounting BooksPublic Finance Mgt Act
FINAL.pdf
4. Understand Budget Expenditure Control,

3. Public Finance Management Act
(PFMA)
Read and get acquainted with the
Public Finance Management control
(PFMA)......DownloadsGov Accounting
BooksPublic Finance Mgt Act FINAL.pdf

4. DIVISION 1 - APPROPRIATIONS
• FINANCIAL MANAGEMENT AND
CONTROL
• BUDGET AND EXPENDITURE CONTROL
• Expenditure incurred from the Consolidated
Revenue Fund is subject to annual
appropriations made by the Parliament through
the Appropriation Acts. Appropriation (General
Public Services Expenditure 2017) Bill 2016.pdf

5. Adjustment of Appropriations
• Reallocation Between Services: Section 24 of
the Public Finances (Management) Act, 1995
• Reallocation For New Services and Between
Services:
• Allocation of additional appropriation to a
New Service
• Limits on Reallocation:

6. DIVISION 2 - MINISTER'S
WARRANT,
Soon after the annual Appropriation Act is
passed by the Parliament, the Minister's
Warrant is issued under Section 29(1) of the
Public Finances (Management) Act, 1995.

7. DIVISION 2 - MINISTER'S
WARRANT,
It constitutes an authorisation to the Secretary
for Finance & Treasury, to issue Warrant
Authorities to National Government
Departments, Provincial Government and Local
level Government and agencies to release funds
from the Consolidated Revenue Fund.
However the Minister's Warrant does not
constitute an authorisation to these agencies to
commit or spend.

8. DIVISION 2
• WARRANT AUTHORITIES AND
• CASH FUND CERTIFICATES

9. Issue of Warrant Authorities.
These are issued by the Secretary for Finance
& Treasury under Section 29(1) of the Act,
"authorising the expenditure of moneys from
the Consolidated Revenue Fund for the
purpose for which these moneys are
appropriated A Warrant Authorities constitute
the authorisation to implementing agencies to
commit and spend funds out of the
Consolidated Revenue Fund.

10. • 6.2 Warrant Authorities are issued for
items of expenditure under each activity
and project.
• 6.3 Normally, Warrant Authorities are
issued periodically by the Secretary for
Finance & Treasury for example monthly
warrants, and the amount of Warrant
Authorities is based upon cash availability.

11. Warrants Issue
6.4 The amount in Warrant Authorities is
generally based on estimate of cash flow
requirements submitted by agencies. However,
Warrant Authorities can be issued for reduced
amounts if in the opinion of the Minister
"financial exigencies or the public interest so
require

12. Warrants Issue
6.5 Warrant Authority for Donor
Funded Projects will be treated as Non-
Cash Warrant Authorities and issued on the
basis of funding available from the Donor
agencies.
• (DONOR FUNDED PROJECTS)

13. Lapse of warrant
All recurrent appropriations out of the
Consolidated Revenue Fund lapse at the
end of the fiscal year with the exception to
advances of Government contribution to
donor-funded projects.

14. Cash Ceilings:
• Based on total estimated revenues of the
National Government during a month that can
support that month's actual expenditure, it is
prescribed that Cash Ceilings should be allocated
in aggregate, but separately, for:
• (i) Personnel Emoluments Items - To
Department of Finance & Treasury processed by
Dept. of Finance& Treasury
• (ii) Other Goods and Services - To
Implementing agencies.

15. Cash flow
Cash flows received from Departments are
input to the Planning and Budgeting System
(PBS) computer in the Department of Finance &
Treasury. Warrants are generated on the
system with reference to the Fund Flow.

16. Cash Fund Certificates:
• Cash Fund Certificates:
• Cash Fund Certificates shall bear distinct (six digit)
numbers to identify the Financial Delegate to whom
they are issued.
• The first three digits of the CFC number must indicate
the Division Number of the Department followed by a
three digit number that identifies the Financial
Delegate (or the CFC Holder). For example:
Department CFC No. Serial No.
• Finance & Treasury 207-001 001,002
• Health 240-013 001,002

17. DIVISION 3 - CONTROL OF PUBLIC
EXPENDITURE
The system of Decision-making in Government
Expenditure.
The Responsibilities of Implementing Agencies
and the Department of Finance & Treasury.

18. • The Department of Finance & Treasury is responsible
for economic and financial policy, and is the custodian
of the consolidated revenue fund. It bears the
responsibility for:-
• (a) allocating the amount of money to be made
available for each purpose to each agency;
• (b) advising agencies on financial matters through
issue of Financial Instructions, and for assisting them to
maintain proper practice in the expenditure of public
money.

19. Cash flow
• Cash flow statements are prepared
on the basis of amounts approved in
the budget.
• Generally, a circular on their
preparation is also issued by the
Department of Finance & Treasury

20. Statement of Fund Flow
• 20.1It is prepared for the following purposes
It should be issued by the Department of Finance &
Treasury.
• To ensure that commitments are planned.
• To monitor de-commitments against planned
commitments.
20.2 It shows the estimated commitment for each month
of the year under each vote (item under an activity or
project) against the annual estimate of expenditure.
20.3 Preparation of the Statement of Fund Flow is
important because Warrant Authorities issued on this basis
set the ceiling within which funds can be committed, and
commitment is the first and most important point of
expenditure control.

21. 21 Statement of Expenditure Outflow
21.1 This statement is prepared for the
following purposes:
• To determine the amounts of monthly
cash ceiling (separately for salary.
Department of Works items, and other
items) to be issued by the Department of
Finance & Treasury for each
Implementing Agency.

22. Statement of Revenue Inflow
22.1 This statement shows the revenue
projection month-by-month for each sub-heat
under each revenue head against the approved
annual amount in the Budget.
The projected amount is the amount of revenue
expected to be deposited in the bank to the
credit of government account.

23. • The Revenue Inflow is important for:
• (a) planning and control of cash requirements,
and
• (b) deciding the amount of Warrant Authority
and/or monthly cash ceiling.

24. DIVISION 5
• - EXPENDITURE DECISIONS :
• SECTION 32 OFFICERS is the
Authorized Financial Delegate of a
Department, Agency, Institution.

25. Section 32 Officer
• Expenditure Decisions: All expenditure
decisions are taken by the Section 32 officer
who is in charge of the particular area of work
(Activity or Project) by approving requisitions
of expenditure.

26. Appointment of Section 32 Officers:
Section 32 officers are appointed only by
Departmental Heads under Section 32 of the
Public Finances (Management) Act, 1995.
These appointments are to be published in the
Government Gazette and a copy of gazettal
notice submitted to the Department of Finance
& Treasury.
Section 32 appointments are made by positions
and any change in the incumbency of the
positions does not need alteration to the list.

27. Duties of Section 32 Officers:
• At the time of approving requisitions for
expenditure, Section 32 officers should:
• (a) Keep in view the objectives and priorities
of the implementing agency and program
(projects);
• (b) Take into account the alternatives and
ensure that the proposed expenditure is the
best way of achieving the Program objectives
and the tasks under the Activity/Project;

28. Duties of Section 32 Officers:
• (c) Ensure that funds are available as per the
Cash Fund Certificate held by the Financial
Delegate;
•
• (d) Observe due economy and avoidance of
waste and extravagance;
•
• (e) Ensure that the proposed expenditure is
according to established plans and will not
result in other planned expenditure being
delayed or aborted through lack of funds;

29. Terms to be familiarized with in the Government
Accounting.
1. Explain what is Public Finance Management
Appropriation Act. (PFMA)
2. Explain what an Appropriation Bill is?
3. Explain what Consolidated Revenue is?
4. Explain what a WARRANT AUTHORITIES AND
CASH FUND CERTIFICATES are?
5. Who is a Section 32 Officer? What is his
responsibilities?