South Africa is set to implement 17 accrual-based public sector accounting standards within the next year.
The standards will apply to all public sector entities and lead to enhanced financial reporting, transparency and accountability, according to Patrick Kabuya, the project director for public sector and Africa at the South African Institute of Chartered Accountants (SAICA).
Kabuya said the application of the standards, which were developed by South Africa’s Accounting Standards Board and recently approved by Finance Minister Trevor Manuel, will conclude an accounting standards reform process that started in 2003. He added the implementation will make South Africa one of the few countries in the world to adopt accrual-based standards in the public sector. The standards are modelled on International Public Sector Accounting Standards.
Kabuya explained the principles in the public sector standards reflect the government’s objective of focusing on service delivery, in contrast to the private sector’s aim of increasing shareholder wealth.
“The ultimate outcome will not only enhance service delivery to the South Africa public. It will, in addition, help to mitigate corruption through heightened management and control of the public sector’s assets and liabilities,” he said.
The application of the standards in all public sector entities will generate quality and complete information on assets, liabilities, revenue and expenditure, Kabuya added.
“In consequence, taxpayers will have a far better idea of the public sector’s income and outgo, assets and liabilities,” he said.
The process of implementing the new accounting standards will not be straightforward, Kabuya said: “The challenges it presents will require strong partnerships between public sector entities and various institutions.”
SAICA, alongside the government, is stepping up training to cater for the increased public sector regulation.
The institute’s Training Outside Public Practice programme is helping develop public sector accountants. Its successes have included increasing the number of qualified chartered accountants in the Auditor General’s office from six to 120 in five years.
“Most encouragingly, there are some 271 CAs in training, 114 of whom are black,” Kabuya concluded.