GES Promotion Interview Questions & Answers (Accounts & Audit) Part 5

QUESTION 1

WHAT IS THE IMPORTANCE OF THE AUDIT COMMITTEE (FORMERLY CALLED AUDIT REPORT IMPLEMENTATION COMMITTEE-ARIC) IN YOUR DEPARTMENT? OR WHAT ARE THE DUTIES OF THE AUDIT COMMITTEE?

The Audit Committee is to ensure that the spending officer of its entily pursues the implementation of recommendations contained in all audit reports including that of Internal Auditors, External Auditors, Monitoring teams and Parliament’s decision on the Auditor-General’s report.

The Audit Committee is to prepare an annual statement showing the status of implementation of recommendations contained in reports of the Internal Audit Unit, the Auditor General, Parliaments decision on the Auditor General’s report and financial matters raised by internal monitoring teams.

It should also indicate in its statement as indicated above remedial actions taken or proposed to be taken to avoid reoccurrence of lapses and also indicate the period for the completion of the remedial action.

 

QUESTION 2

COLLECTION OF SCHOOL FEES HAS BEEN A BIG HEADACHE TO MANY EDUCATIONAL INSTITUTIONS, CAN YOU SUGGEST SOME METHODS OR PROCEDURES TO BOOST THE FEES COLLECTION SYSTEM?

1. School managements can adopt a barter system of paying fees e.g. farmers using their products to pay for fees.

2. Parents can arrange with school management to pay their fees by agreed instalments which should be completed before the term ends.

3. There should be regular compilation of student debtors’ list which should be made available to students, parents and WAEC (final year students).

4. Parents should be advised to pay fees themselves instead of handing over fees to students to go and pay.

5. There should be early preparation and delivery of student bills to parents.

 

QUESTION 3

HOW WOULD YOU TREAT A CHEQUE FROM COCOA MARKETING BOARD (CMB) MEANT FOR THE PAYMENT OF FEES OF SCHOLARSHIP HOLDERS?

In practice scholarship holders are not credited with their scholarship benefits for the term until the awarding agency pays the school with a list of beneficiaries. Some Accountants however indicate the scholarship values on the bills of the students.

When a cheque for scholarship is received it is first entered in the cheque register then receipted and posted to the credit side of the Students Control Account just as it is done with the payment of normal school fees. Correspondingly Cash/Bank is also debited.

The next thing is to enter the names of the beneficiaries and respective benefits into a scholarships register from which postings are done to the individuals’ ledgers to offset their indebtedness. It is necessary also to inform the students concerned about the payments made on their behalf.

 

QUESTION 4

WHAT IS AN IMPREST? NAME THE TYPES OF IMPREST THAT ARE OPERATED IN THE PUBLIC SYSTEM.

Generally an imprest is a sum of money given out for a specific activity or money to meet petty needs in an organization. In the case of the second imprest the sum of money is fixed as agreed upon and is accounted for and recouped as and when necessary but final accounting for the imprest done at the close of the financial year.

From the above descriptions there are two types of imprest – the Specific or Special imprest and the Standing or Recoupable imprest.

 

QUESTION 5

WHAT IS THE DIFFERENCE BETWEEN A SPECIFIC OR SPECIAL IMPREST AND A STANDING IMPREST?

The standing imprest is a fixed sum released to meet the petty needs in an organization and it is recouped as the amount gets exhausted (Recouping means accounting for the money used and requesting for the same in order to bring the cash holding to the level of the imprest). At the end of the financial year the imprest is retired (finally accounted for with receipts of expenditure and cash balance).

The specific or special imprest is a sum of money released for a particular activity, e.g. a workshop and it is accounted for when that activity is completed. The money released under special imprest cannot be used for any other purpose other than the activity specified.

 

QUESTION 6

WHAT IS A WARRANT? NAME THE TYPES OF WARRANT IN OPERATION IN THE PUBLIC SYSTEM.

A warrant is an authority granted by the Minister of Finance to the Controller and Accountant-General to spend out of the Consolidated Fund. The Controller and Accountant-General based on this authority issues a spending warrant to the Ministries, Departments and Agencies (MDA’s) to enable them spend out of their approved budgets.

The main types of warrant are the General Warrant and the Specific Warrant.

The General Warrant is the one which is issued to the MDA’s on monthly or quarterly basis to carry out their financial activities as contained in their approved departmental budgets.

The general warrant gives authority to spend in any area according to the approved budget once there is available funds depending upon the value of the warrant.

It means therefore that a general warrant cannot be issued to a department by the C&A-G if there is no approved budget for that department.

A Specific Warrant is one issued to carry out a specific activity within an MDA or to meet some contingencies e.g. payment of salary arrears of workers, subsidy to schools, payment for the construction of a science block of a school or purchase of vehicles for schools and disaster management. As the name implies the warrant is specific and can therefore not be applied to carry out any activity other than the one stated in the warrant.

 

QUESTION 7

WHAT RELEVANT AREAS WOULD YOU LOOK AT AS AN ACCOUNTANT WHEN TAKING OVER AN OFFICE OR HANDING OVER?

On taking over an office or handing over as an Accountant one should be concerned with the following areas:

1. Reconciled Cash and Bank balances supported with a certified bank statement,

2. Stock of fuel coupons,

3. Stock of value books (partly used and un-used) as recorded in a the stock register of value books – Receipts, cheque books, P.O., SRA, A&El, fuel coupons. etc.,

4. Creditors with supporting documents as recorded in the Purchases or Creditors’ Journal,

5. Debtors – students, staff advances (if any), rent arrears, etc,

6. Stock of other items – stationery, foodstuffs, etc.,

7. Office Inventory,

8. Accounting Staff – grades and schedules,

9. Books of Accounts in use,

10. Financial statements/returns – current status and copies,

11. School budget,

12. Audit report and outstanding issues

13. Ongoing projects — source of funding and contract details.

 

QUESTION 8

AS AN ACCOUNTANT WHAT IS YOUR ROLE IN RESPECT OF AUDIT OBSERVATIONS ISSUED TO YOUR DEPARTMENT? OR DOES THE ACCOUNTANT HAS A ROLE TO PLAY IN RESPECT OF AUDIT QUERIES ISSUED TO THE COST CENTRE MANAGER?

The Accountant is the technical adviser to the cost centre manager so far as financial matters are concerned and he is also in charge of the financial records of his department.

He again supervises the work of the Storekeeper and the Domestic Bursar. He is therefore in a better position than any other person to address audit observations which usually emanate from the kitchen, stores and accounts departments. It is his duty to prepare the draft responses for discussion with the cost centre manager who would also add his input before the response is typed and submitted.

Where an observation relates to a unit other than the accounts it is his duty to prepare a memo to the concerned officer seeking his comments and such memo should be signed by the cost centre manager unless he is authorized to do so.

Where an issue cannot be addressed within a specified period it is also his duty to draft a letter assigning reasons which should be signed by the cost centre manager and forwarded to the Auditor.

Generally, it is his duty to make sure that all relevant correspondence with regard to the audit observations with all supporting documents get to the Auditor within the stipulated period indicated in the management letter.

It is also his duty to do a follow up to ensure that implementations as undertaken in the response to the audit observations are carried out.

 

QUESTION 9

NAME FOUR ISSUES THAT REGULARLY APPEAR IN THE AUDIT REPORTS OF INSTITUTIONS AND INDICATE HOW THEY CAN BE AVOIDED OR MINIMIZED.

Issues which regularly appear in audit reports of institutions include:

1. Non-deduction of withholding tax and failure to pay same to the Ghana Revenue Authority (GRA),

2. Purchases not routed through the stores,

3. Failing to purchase from VAT registered companies

4. Payment without supporting documents

To avoid the occurrence of these issues in the audit report it is necessary to carry out these directives or suggestions:

1. Non-deduction of withholding tax and payment to GRA – it is necessary as much as possible to make all payments by cheque and this will make it possible to deduct the necessary tax. As and when the supplier or service provider is being paid the GRA should also be paid. There should be no excuse like inadequate funds or waiting till the end of the month so that payment may be forgotten.

2. Purchases not routed through stores – payment for stores should not be made until the relevant SRA is available for attachment to the payment voucher. Where payment involves refund or reimbursement the beneficiary should be requested to regularize the store procedure before payment is done.

3. Failing to purchase from VAT registered company – Where it becomes necessary to buy from a non-VAT registered company the VAT component for a transaction can be paid to the GRA which will in turn issue a VAT invoice for attachment to the payment voucher.

4. Payment without supporting documents – where it becomes necessary to make payment for goods, services and allowances that immediately supporting documents are not available it is necessary to tag the P.V. with a note indicating the short fall and the tag will be a reminder to the Accountant so that he will take the necessary steps to remedy the situation.

   The main cause of all the above shortfalls is making payments by cash thus limiting the cheque system. Cash payments should therefore be limited in favour of the cheque as much as possible.

 

QUESTION 10

IF AN AUDIT QUERY IS ISSUED HOW CAN THE AUDITEE AVOID APPEARING BEFORE THE PUBLIC ACCOUNTS COMMITTEE (PAC)?

In the financial administration of a cost centre some shortfalls are likely to occur which will attract audit queries. To avoid appearing before the P.A.C

1. Make sure that the report is responded to within the specified time frame. If there is any reason why this cannot be done communicate to the Auditor,

2. Make sure that recommendations as contained in the report are implemented and the Auditor invited to verify them.

3. Above all make sure that you get a clearance certificate from the Audit testifying that all recommendations have been implemented.

 

QUESTION 11

WHAT IS THE ROLE OF THE CONTROLLER AND ACCOUNTANT – GENERAL (CCA-G) IN THE FINANCIAL ADMINISTRATION OF MINISTRIES, DEPARTMENTS AND AGENCIES (MDAS)?

1. The Controller and Accountant-General as Chief Accounting Officer of the Government is the custodian of the consolidated fund and therefore disburses funds to the MDAs through the issue of warrants.

2. He prepares the Accounting Manual for use by the MDAs.

3. He gives approval for installation of accounting systems by the MDAs

4. He gives approval, in consultation with the Auditor-General, for the Financial Accounting Instructions of the MDAs.

5. He authorizes the opening of bank accounts by the MDAs.

6. He consolidates the accounts or financial statements of the MDAs.

7. He monitors the operations of the MDAs.

 

QUESTION 12

WHAT IS A GHOST NAME? IN WHAT FORM DO GHOST NAMES APPEAR ON THE PAY ROLL OF INSTITUTIONS?

A ghost name is a person being paid salary and allowances for no work done or non-existence. Any person who does not qualify to be paid but is paid is supposed to be a ghost.

Ghost names appear in the form of people who have vacated their posts but have their names on the pay roll, died but still have their names on the pay roll after the end of the month in which they died, people who have retired, people who are on study leave without pay but have their names on the pay roll and names of people whose identifies are not known but have been planted on the payroll.

 

QUESTION 13

WHAT CONTROLS ARE CURRENTLY IN PLACE TO REDUCE THE EXISTENCE OF GHOST NAMES?

The controls in place currently include the following:

1. Monthly validation of names on the payroll before salaries are paid.

2. Random headcounts at the cost centres by the District Directors of external monitoring teams (payroll auditing)

3. Immediate deletion of names from the payroll when detected to be ghost as classified above.

4. Publishing of names of prospective retirees ahead of the dates of their retirement so that steps could be taken to delete the names on the due date.

5. Biometric registration/validation of new employees before names are put on the payroll.

6. Letter of introduction from the cost centre manager to a newly employed worker’s bank before being paid first salary.

 

QUESTION 14

WHAT IS THE IMPORTANCE OF THE VEHICLE LOG BOOK? WHAT ARE SOME OF THE INFORMATION RECORDED IN THE BOOK?

The use of the vehicle log book helps to reduce the misuse of official vehicles, controls the use of fuel on official vehicles and helps to monitor their maintenance and fixing of parts on them.

The information recorded in the vehicle log book include the following:

1. 1. A responsible person authorizing the movement of the vehicle,

2. Recording of the movements, distance covered, time of departure and arrival of the vehicle and endorsing the appropriate column in the log book,

3. Recording fuel and lubricants used on the vehicle in the log book,

4. Recording dates on which the vehicle went in for maintenance or tyres fixed on it

5. Calculation of the average distance covered by litre or gallon of fuel at the end of the month.

 

QUESTION 15

WHAT IS BELOW THE LINE ACCOUNT?

It is a commitment which is neither revenue nor expenditure. Examples of such disbursements are salary advance and car loan.

 

QUESTION 16

WHAT IS VIREMENT?

Virement is the re-arrangement or re-allocation of budget provisions for sub-heads, items, or sub-items or sub-sub items within the ambit of a single Head so that savings under one classification could be utilized to provide for extra expenditure under another one without affecting total funds to be disbursed from the Head.

Virement is not provision of additional funds, neither can it be done when funds are not available.

Virement cannot be done for funds under Employee Compensation to be utilized for other purposes without the prior approval of the Minister of Finance but a sector Minister may authorize virements within Use of Goods and Services.

Again virement between items of expenditure can only be done with the approval of the Minister of Finance.

 

QUESTION 17

NAME THE HIERARCHY OF THE ACCOUNTING GRADES AS THEY CURRENTLY EXIST WITHIN THE GHANA EDUCATION SERVICE.

The grades are Accounts Assistant, Accounts Clerk, Senior Accounts Clerk, Assistant Accountant, Accountant, Senior Accountant, Principal Accountant, Deputy Chief Accountant II, Deputy Chief Accountant I, Chief Accountant II and Chief Accountant.

 

QUESTION 18

WHAT IS PRE-FINANCING? WHAT ARE ITS DISADVANTAGES?

Pre-financing means paying for goods or services not yet provided.

The disadvantages of pre-financing include the following:

1. The goods or services may not be provided by the supplier and this will be a loss to the organization and subject of audit query.

2. It can lead to the provision of shoddy work or low quality goods.

3. In the mist of limited resources it implies misplaced priority.

 

QUESTION 19

WHAT IS THE PURPOSE OF A BOARD OF SURVEY?

The board of survey is an annual exercise conducted to take account of assets with particular reference to stock and cash on hand at the close of work of the financial year. It is done before the commencement of business for the next financial year.

Interim or random board of survey may be conducted as and when the need arises, e.g. to take stock of unserviceable equipment for the purpose of being disposed off or for a handing over exercise.

 

QUESTION 20

AT THE CLOSE OF THE FINANCIAL YEAR A BOARD OF SURVEY ESTABLISHES THAT 10BAGS OF RICE VALUED ¢2,000 AND 10 BAGS OF MAIZE VALUED ¢1,000 WERE NOT UTILIZED FOR FEEDING OF THE STUDENTS.

MEANWHILE YOUR TOTAL EXPENDITURE ON FOODSTUFFS STANDS AT $215,000 INCLUDING THE VALUE OF THE ABOVE FOOD ITEMS. HOW WILL YOU INCORPORATE THE STOCK IN YOUR FINANCIAL STATEMENT?

The Income and Expenditure Account of an institution captures actual expenses or goods and services consumed during that particular financial year. Since the stock of food items Were not utilized at the close of the year their value should not be part of the foodstuffs expenditure.

To incorporate them in the financial statement a journal entry should be passed debiting stock of foodstuffs with ¢3,000 and crediting foodstuffs expenses with same amount. The figures that will appear in the trial balance would be foodstuffs – 212,000 (215,000 – 3,000) and stock (foodstuffs) – 3,000.

The foodstuffs figure of 212,000 would go into the preparation of the Income and Expenditure Account while the stock figure of ¢3,000 will pass through the notes, to the balance sheet.

At the beginning of the new financial year a reverse journal entry would have to be passed to close the stock account: Dr Foodstuffs ¢3000.00, Cr Stock ¢3000.00.