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Accounting for government stores, Public sector accounting

Accounting for government stores, Public sector accounting

Legislation

Accounting for government stores, Section 30-37 of the financial administration Act, 2003 (Act 654) provides the rules for the administration of government stores. This is reproduced below:

RECOMMENDED TO READ: Fund Accounting in public sector accounting

PART IV – GOVERNMENT STORES

Government stores

  1. (1) each government department shall maintain adequate records of stores, and the minister in consultation with the public procurement board, established under the public procurement Act may make regulations governing the acquisition, receipt, custody, issue and disposal of the stores.

(2) except as determined by the minister and subject to any other enactment, government stores shall be procured from only Value Added Tax registered person.

Join acquisition of stores

  1. (1) subject to the provisions of this Part, two or more departments may for the purposes of economy or convenience acquire stores together.

(2) heads of departments acquiring joint stores shall be responsible for their respective share of resources committed to the joint stores.

Responsibility for government stores

  1. (1) a person is responsible for the proper custody, care and use of government stores under the control of the person.

(2) Notwithstanding subsection (1), a head of department is responsible for the general management of government stores held within the department and for the performance of the duties of subordinate staff in relation to the government stores.

Procurement of stores

  1. procurement of government stores for departments shall be by, or under and enactment of parliament.

Transfer of government stores

  1. subject to any other enactment, a transfer, lease, loan or sale of government stores shall not be made to any person except by or the authority of an enactment.

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Discharge of accountability for Government stores

  1. (1) A head of department is accountable for the government stores form the time of acquisitions to the time they are of no further use or value to government.

(2) Accountability is discharged when government stores have been:

(a) consumed in the course of public business and records are available to show that the government stores have been consumed;

(b) Worn out in the normal course for public business and deletion form the accounts has been approving by the minister and they have been disposed of in accordance with the minister’s directions:

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  1. c) Lost, stolen, destroyed damaged or rendered unserviceable other than by fair wear and tear, and if deletion from the accounts has been approved by parliament.

(3) The minster may by regulation delegate powers of deletion and disposal under subsection (2)(b) to a principal spending officer and the delegated power shall be personally exercised by the principal spending officer.

(4) If the minister is satisfied that the retention of any government stores is no longer in the public interest, the minister may authorize disposal in accordance with section 30 of this subject to any regulation approved by parliament governing the disposal.

(5) Authority for deletion from the accounts in cases that fall within subsection (2) ©, rests with the minister who may be regulation delegate powers of deletion to the principal spending officers and the delegated power shall be personally exercised by the principal spending officer.

(6) Deletions from the accounts under subsection (5) shall be reported as Regulations made under this Act may prescribe.

Special enquiry

  1. (1) Where the minister has good reason to believe that a malfeasance has occurred in connection with government stores, the minister shall bring this to the notice of parliament and the Auditor- General.

(2) Parliament may request the Auditor-General to enquire into and report on the matter.

Application of stores

  1. Subject to section 34, government stores shall not be applied for any purpose other than towards the furtherance of the programs and objectives of government departments.

Meaning of Government Stores

FAR 182.

(1) Government stores are made up of supplies of consumable and non-consumables which are received, stored and available for issue.

(2) Government stores must:

(a) Be physically visible, movable and not issued out for use, and

(b) Included scraps, obsolete items and unserviceable items

Management of Government stores

FAR 182

(1) The acquisition, receipt, custody, control, issue and disposal of Government stores shall be in accordance with the provisions of these regulations, the Financial Administration Act 2003 (Act 654) and the public procurement Act, 2003, (Act 6630 and any regulation made under Act 663

(2) Subject to sub-regulation (1) the minister may give general directions in writing to the procurement Board on matters relating to Government stores under Act 663

Financial management implications

FAR 183

(1) Any officer responsible for the financial management of a department purposes in the relation to the most economical way

(2) subject to the provisions of any enactment, a head of department shall be the chief authority in relation to the procurement and use of government stores.

(3) A head of department shall be accountable for the proper care, custody and use of Government stores form the time of acquisition until they have been or otherwise disposed of in accordance with these Regulations.

(4) A department shall procure government stores from only Value Added Tax (VAT) registered persons or entities and departments that require an exemption for any specific case shall apply to the minister with the necessary justification.

Types of Stores

Inventories

Inventories are goods and services held by producers for sale, use in production, or other use at a later date. Inventories are valued at their current market prices on the balance sheet date rather than their acquisition prices. In principle, current market prices should be available for most types of inventories, but in principle, current market price should be available for most types of inventories, but in practice the values of inventories frequently are estimated by adjusting book or acquisition values of inventories with the aid of price indexes.

Strategic stocks

Strategic stocks include goods held for strategic and emergency purposes, goods help by market regulatory organization, and commodities of special importance. Such stocks may be quite large for some governments and represent important components of government policies.

Materials and supplies

Materials and supplies consist of all goods held with the intention of using them as imports to the units. Government unit may hold a variety of goods as material and supplies, including office supplies. Every Government unit may be expected to hold some materials and supplies, especially office supplies. Materials and supplies often can be valued on the basic of the current market price for the same goods.

Work in progress

Work in progress consist of goods and services that have been partially processed, fabricated, or assembled by the producer but that are not usually sold, shipped, or turned over to other without further processing and whose production will be continued in later date or time.

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Eric Adjei

Eric Adjei

A professional with six (8) years’ experience in finance and accounting. Demonstrating expertise in accounting procedures, computerized accounting system management and financial operations. Financially astute with excellent analytical, problem solving, management, people supervision, organizational, business administration, operation and commercial management and teaching skills.

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