16 General Accounting
Table of Contents
16.1 Introduction 16.3
16.2 Retention of
Accounting Records 16.4
16.2.1 Responsibility of
accounts 16.4
16.2.2 Accounting records 16.4
16.2.3 Need to keep
financial records 16.4
16.2.4 Media of storage 16.5
16.3 Maintenance of
Accounting Records 16.6
16.3.1 General policies 16.6
16.3.2 Accounting records
kept by the DAO/AG/AGPR 16.6
16.3.3 Accounting records
kept by the DDO 16.7
16.4 Use of Suspense Account 16.8
16.4.1 General policies 16.8
16.4.2 Clearance of
suspense accounts 16.8
16.4.3 Clearing accounts 16.8
16.5 Control of Official
Forms and Chequebooks 16.9
16.5.1 Official forms and
accounting records 16.9
16.5.2 Chequebooks 16.9
16.1 Introduction
16.1.1.1 This chapter covers policies in relation to retention and maintenance of accounting records, use of suspense accounts and control of official forms and chequebooks.
16.2 Retention of Accounting Records
16.2.1 Responsibility of accounts
16.2.1.1 The Audit and Accounts Order lays down that “… the Auditor-General shall be responsible for the keeping of the accounts of the Federation and of each Province”.
16.2.2 Accounting records
16.2.2.1 The accounting records refers to books of account upon which transactions are recorded or any other document issued or used in the preparation and processing of the transactions.
16.2.2.2 The accounting records covers not only accounting records such as cash book, vouchers, authorities, schedules and computer records, but also consolidated reports and policy papers supporting and justifying financial transactions.
16.2.3 Need to keep financial records
16.2.3.1 All accounting records will be retained in their original form for at least a period of ten years. Also refer to the Manual of Standing Orders for retention of permanent records such as Establishment Records, Pension Records etc.
16.2.3.2 Departments / entities may retain records longer than prescribed period and should determine the period themselves based on the following considerations, their administrative needs and the cost of storage. Departments / entities should keep their retention practices under review.
16.2.3.3 Considerations that apply to the retention period of particular records are:
·
Statutory
requirements - Various statutes prescribe minimum retention periods for
certain classes of records.
Departments/entities should consult MoF or the Accountant General if
they need guidance on the statutory requirements applicable to the various
records they hold.
·
Administrative
needs - Departments will need to consider whether records that do not need
to be preserved permanently should be retained for administrative purposes
longer than the minimum time required and by any relevant statutory
requirement. Internal Audit Officer and
other consultancy, inspection and review services may also make use of such
records in the course of their reviews and should therefore be consulted about
their requirements. Longer retention may
be necessary to enable departments to handle late claims, settle disputes or
for the satisfactory conduct of departmental business including departments own
and their internal auditors' need to monitor past decisions and actions.
·
Requirements
of external audit - Records supporting transactions including vouchers,
schedules and other authorities will be retained until the completion of the
audit although the Auditor-General Office may be prepared to consider special
arrangements where there are major storage problems. The Auditor-General’s Office normally expect
departments / entities to retain main records for ten years. The timetable for the destruction of main
ledgers and of records supporting transactions is in the Manual of Standing
Orders.
16.2.4 Media of storage
16.2.4.1 The Auditor-General’s Office requires to see the original documents when conducting audits. Originals of documents such as contracts, agreements, guarantees and titles to property may be required for other purposes, including presentation as evidence to the Courts.
16.2.4.2 Departments/entities should consult the MoF or the Accountant General if they have doubts about the need for records that have to be retained in their original form.
16.2.4.3 Where records are kept for administrative purposes which do not have to be kept in their original form, departments/entities may wish to consider the costs and benefits of transferring them on to micro-film or converting them into computer data or other electronic formats so that originals may be destroyed.
16.3 Maintenance of Accounting Records
16.3.1 General policies
16.3.1.1 The following policies shall be applicable to all accounting records:
·
accounting records are not to be maintained in
loose-leaf form
·
in the preparation and processing of
transactions, and in all accounting and related entries, pencil is not to be
used
·
erasures (including the use of correction fluids
or chemicals) are not permitted in any accounting record
·
under no circumstances are pages to be removed
from an accounting record
·
where corrections are necessary the word or
figure to be removed shall be ruled through and the correction initialled by
the officer making it. The correct entry
will then be inserted above the correction
·
in a manual system, where corrections are made
in the Sub Ledger / General Ledger effecting the double entry transaction, any
amendment shall be carried out through a journal entry
·
where corrections are necessary in a
computerised accounting system, the original entry shall be reversed and the
correct entry shall be made through a journal entry.
16.3.2 Accounting records kept by the DAO/AG/AGPR
16.3.2.1 The accounting records (manual or computerised) which need to be kept by the DAO/AG/AGPR include the following:
·
monthly accounts
·
sub-ledger
·
General Ledger
·
budget head register
·
claim register
·
certification and authorisation register
·
cheque register
·
various abstracts
·
physical assets account
·
liability register
·
bank reconciliation statement
·
all permanent records (e.g. establishment
records, GP fund ledgers)
·
subsidiary registers (e.g. contingent register,
receipts register)
·
supporting vouchers and schedules.
16.3.3 Accounting records kept by the DDO
16.3.3.1 The accounting records (manual or computerised) which need to be kept by the Drawing and Disbursing Officer include the following:
·
cash book (or equivalent)
·
petty cash book (or equivalent)
·
contingent payment register
·
commitment register
·
payroll/establishment register
·
receipt register
·
financial asset register
·
budget head register.
16.3.3.2 In addition to above primary accounting records, the DDO may also maintain such other records as are necessary to manage its own resources. Refer to chapter 9 of this Manual for such records, which may be maintained by self-accounting entities.
16.4 Use of Suspense Account
16.4.1 General policies
16.4.1.1 Suspense and other clearing accounts will only be used in the following situations:
·
if there are insufficient details at the time of
transaction, to indicate the appropriate head to be debited or credited, then
the amount should be taken to the appropriate suspense head
·
if there is doubt as to whether the General
Ledger are properly due to or from the Government then the suspense head should
also be used
16.4.1.2 Suspense accounts shall not be used for transactions relating to contingent expenditures. Such expenditures shall only be certified and authorised if the correct budget head is mentioned on the claim voucher, as set out in chapter 4 of this Manual.
16.4.2 Clearance of suspense accounts
16.4.2.1 Where a suspense account is used, the delegated officer in the DAO/AG/AGPR shall identify the correct transaction head to be used and clear the above suspense account on a monthly basis.
16.4.2.2 The Accountant General is responsible to make sure that suspense accounts are cleared on a monthly basis and any outstanding item is investigated.
16.4.3 Clearing accounts
16.4.3.1 Clearing accounts are special purpose accounts which are part of the double entry system, such as cheque clearing account, inter-entity clearing account. They should not be used for suspense transactions.
16.5 Control of Official Forms and Chequebooks
16.5.1 Official forms and accounting records
16.5.1.1 Only those official forms and accounting records shall be used which are mentioned in this Manual and prescribed by the Auditor General from time to time.
16.5.1.2 Authorised official forms and accounting records shall be obtained only from the authorised government printing and stationery centres.
16.5.1.3 Official forms and accounting records, relevant to a chapter, can be found at the end of each chapter of this Manual.
16.5.1.4 The purchasing officer in the department / entity shall follow the policies and guidelines as set out in chapter 13 of this Manual in relation to procurement and should ensure that:
·
requisitions are prepared on the relevant form
·
the quantity ordered is not in excess of his/her
requirements
·
the officer shall check that stock is sufficient
enough to meet the requirement of his/her department / entity
·
all forms or records received should be recorded
immediately in the Accountable Forms & Books Register (or equivalent).
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