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You are welcome to The public sector accounting guide, here we provide you anything concerning public sector accounting being questions, answers, and topics in public sector accounting and other related topics in Public sector accounting.

In this guide we will consider How does public investment work in the public sector.


Public sector investment is an expense or expenditure made by the central government, a local government unit, or public corporation to acquire financial or non-financial assets with the aim of deriving some future benefit, interest, dividend, growth or productivity in the national economy.


This definition is broad-based and meant to cover all public investments, the item 4 of the national estimates.

However, for purposes of preparing the national accounts of the consolidated Fund, a narrow-based definition of public investments is used, meant to cover only financial assets. This is because the final account of the consolidated fund is prepared on a modified cash basis.

Physical investment (tangible assets) is the most obvious, as involves constructing new buildings, roads and facilities. This is the type of investment included in the public capital budgets, and it is also the focal area of the Governments strategic investment programme.

However, this does not mean that operating expenditure on training, education and research is unimportant for the growth of a society. Expenditure in this areas is often, and rightly so, regarded as valuable investment for both individuals and society.


The financial Administration Regulation 2004 (L.I.1802); Sections 140 to 148 establish the rules for investment proposals:


Table of Contents

Investment Proposals

  1. 1 Proposals for the establishment or purchase of stock or shares in any institution shall be submitted for approval to the Minister quoting the appropriate enactment.
  2. The proposals shall give such information as the Mister may require and shall include copies of any prospectus, accounts or investigation of the financial affairs of the institution concernment and must indicate the proportion of the equity to be acquired.

Approval of Investment

  1. If a proposal for investment is approved, the Minister shall inform the Controller and Accountant-General of the proposed purchase, designate the administering authority, and forward a copy of any agreement made in connection with the acquisition to the Controller and Accountant-General and to the Auditor –General.

Responsibility of the Administering Authority

  1. The authority administering an equity investment shall:
  2. subject to any direction of the government, act on its behalf in the exercise of ownership rights.
  3. protects the public interest in the operation of the institution concerned
  4. Receive the accounts of the institution concerned and draw the attention of the government to any matters arising;
  5. Lodge and keep stock and share certificates in safe custody; and
  6. ensures the due collection of dividends and their lodgments into Consolidated Fund.

Acquisition of Shares

  1. The administering authority of an equity investment shall be responsible for arranging for the payment of stocks or shares through the Controller and Accountant-General.

Certificates of Shareholding

  1. (1) as soon as the stock or share certificates have been received, the administering authority shall forward:
  2. the original Certificate of Holding to the Minister; and
  3. Copies to the Controller and Accountant-General, and the Auditor-General.

(2) The share held shall be checked on the last working day of each subsequent financial year by the administering authority and a new Certificate of Holding where applicable shall be forwarded to the Minister and Controller and Accountant-General and the Auditor-General.

Report to the Minister on Equity Investment

  1. The administering authority shall report to the Minister:
  2. A forecast of dividend to be included in the Consolidated Fund Revenue each year;
  3. Any failure of the institution to present annual audited accounts;
  4. information on distribution of profits;
  5. any delay in declaration and payment of dividends;
  6. any shortfall in profits and the reasons for it;
  7. any unsatisfactory features of the institutions operations likely to endanger Governments investment and
  8. any directions or representations made to the institutions in the capacity of owner.

Annual Accounts

  1. (1) the administering authority shall ensure that copies of the annual audited accounts are forwarded to the Controller and Accountant-General, and to the Auditor-General.

(2) The administering authority shall confirm to the Minister that Governments interest is correctly reflected in the accounts of the institutions concerned and in the public accounts, and shall report any unsatisfactory features reflected in the accounts.

Annual Reports

  1. The administering authority shall include a report on the operation of equity interest in the annual report submitted in accordance with section 41 of the Financial Administration Act, 2003, (Act 654).

Statement of Equity Interests Annual Accounts

  1. (1) The Controller and Accountant-General shall include a statement of all Government Equity interests in the Annual Statement of Accounts submitted in accordance with Section 41 of the financial Administration Act 2003 (Act 654).

(2) The statement shall show in respect of each institution:

  1. The full title of the institution;
  2. The administering authority
  3. The form and value of Governments investment
  4. The proportion of the equity held and
  5. The date of the latest annual audited accounts received from that institution


Public investments include all financial a non-financial asset, which the central government, local government units, and public corporations hold or use over a period of time, to derive economic or financial benefits.

They comprise such assets as:

  • Financial assets help for the purpose of public policy on liquidity management.
  • Policy-related assets which may be acquired for a variety of reasons, such as fostering new industries, assisting ailing government corporations, or helping particular business suffering economic adversity. The categories are monetary gold and SDRs, currency and deposits, loans, securities other than shares, shares and other equity, insurance technical reserves, financial derivatives, and other accounts receivable.

For the purpose of the Consolidated Fund Accounts the following financial assets are recognized: Trust funds, International Agencies, Local Investment, General Revenue balance.

Trust Fund

Investments in Trust Funds represent balances held by a crown Agent in General Account and Sir Alfred Jones and H.S. Newlands Bequest being managed by Crown Agents.

International Agencies

Investments in international Agencies represent Governments Investments in an International organization. These investments are denominated in cedi’s.

Local Investment

Local Investments represent Governments investment in Statutory Boards Corporations and Companies

General Revenue Balance

General Revenue Balance consists of accumulated deficit/surplus on revenue and expenditure, non-cash

Loan disbursements and the net effect of foreign exchange translation of debt balances and remittances

over the year and prior year adjustment.

Non-Financial Assets

Purchase or sales of non-financial assets (fixed assets, strategic stocks, valuables non-produced assets).

Non-finance assets are explained in detail in chapters one and fifteen.

Sales of Non-Financial Assets

The central government and a local government unit and public corporation may purchase fixed assets

such as b buildings or vehicles with the view of driving in come from these assets.

Such investments include construction of court houses accommodation facilities, and acquisition of

other fixed assets used by the government to provide services to the public, for example, fines penalties

and forfeits constitute income from such assets.

The government may construct a court house or acquire a building for the purpose of providing judicial

administration. However, the government will indirectly benefit or derive income through fines,

penalties, and forfeit’s.

Fines and penalties are compulsory current transfers imposed on people by courts of law or quasi-

judicial bodies for violations of laws or administrative rules. Out-of-court agreements are also included.

Forfeits are amounts that were deposited with a government unit pending a legal or administrative

proceeding and that have been transferred to the government unit as part of the resolution of that

proceeding by individuals, establishment or groups of people

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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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