Local authorities have embraced government’s direction to fully implement the International Public Sector Accounting Standards (Ipsas) accrual-based accounting from cash-based accounting.
In a statement during regional trainings to orient local councils to the new system, National Local Government Finance Committee director of finance Kondwani Santhe said it was encouraging to note that councils have embraced the more efficient and effective system.
He said: “Malawi has developed a four-staged implementation approach to full Ipsas accrual and the plan is that by 2026, all government ministries, departments and agencies [MDAs], including local councils, prepare their financial statements on full accrual.”
Santhe said the development follows guidance from the Accountant General that all MDAs should comply with Ipsas accrual Stage Two as a minimum requirement as well as in the 2019/20 financial statements preparations.
“Looking at the enormous work and the quasi-organisational nature of local councils, coupled with various financial obligations and the need for more financial disclosures, reporting and presentation, local authorities will henceforth prepare financial statements on Ipsas accrual Stage Three,” he added.
In his presentation during one of the training sessions, chief auditor in the National Audit Office, Wachawaseme Mwale, said the trainings for directors of finance and other accounting personnel from all local councils nationwide will improve accountability and transparency in financial reports, ensuring that they meet international standards.
On her part, Finance Managers Network (Local Authorities) chairperson Ellen Kaira-Mwale, who is also director of finance at Mulanje District Council, said the training will improve local councils’ financial reporting and other capabilities following harmonisation, standardisation and migration of accounting processes from the Ipsas cash to Ipsas accrual Stage Three.
She commended the the committee for taking the council officers through the process.
Said Kaira-Mwale: “It is a new system and is easy to follow and audit. It also increases transparency, reporting and accountability. If a council fails to provide financial statements by October 31 this year, it shall be an individual officer’s inefficiencies.”
Speaking during the Blantyre training, the committee’s financial analyst Dalitso Mainjeni said the orientation would enhance standardisation and reporting by councils so that there is comparability in council performances and timely generation of transactions.
Ipsas accrual reporting complies with Section 13 of the Public Finance Management Act while Ifac encourages governments and public enterprises to use the Ipsas.