BOOK KEEPING O LEVEL(FORM TWO) NOTES – GOVERNMENT ACCOUNTING

GOVERNMENT ACCOUNTING

Government accounting involves the comprehensive activities of analyzing, summarizing, reporting, and interpreting the financial transactions of a government unit. It ensures that all financial information is accurately recorded and presented to facilitate effective management and accountability within public sector entities.

PURPOSE OF GOVERNMENT ACCOUNTING

• To provide essential financial information to the government unit for decision-making.
• To facilitate effective control and administration of public funds, ensuring transparency and accountability.
• To enable the Controller and Auditor General to perform their duties in auditing and overseeing government finances.

GOVERNMENT REVENUE

Government revenue refers to all income collected to finance government services, including social services such as electricity, water supply, education, and healthcare. These revenues are crucial for sustaining the operations and development projects of the government.

SOURCES OF GOVERNMENT REVENUE

1. RECURRENT REVENUE – These are day-to-day collections by the government, such as taxes, licenses, and fees.
2. DEVELOPMENT REVENUE – Revenues collected specifically to fund development projects and expenses, including loans, grants, and subsidies.

GOVERNMENT EXPENDITURES

Government expenditures refer to all spending carried out by the government. This includes expenses on infrastructure projects like road construction, building hospitals, paying wages and salaries, and other operational costs necessary for running government services.

SOURCES OF GOVERNMENT EXPENDITURES

1. RECURRENT EXPENDITURES – These are day-to-day running expenses of the government, such as wages, salaries, utility bills, and office supplies.
2. DEVELOPMENT EXPENDITURES – These are capital expenditures aimed at long-term development, including construction of roads, bridges, and other infrastructure.

DIFFERENT TERMS USED IN GOVERNMENT ACCOUNTING

1. VOTES – Separate funds controlled by an accounting officer, usually identified by numbers.
2. AMBIT OF VOTE – The total amount approved by parliament for various government services.
3. TOKEN VOTE – An initial allocation made during budget preparation when a region, ministry, or department anticipates the need for expenditure.
4. VOTED EXPENDITURE – Payments made from funds appropriated by the national assembly.
5. GOVERNMENT BUDGET – The complete plan of revenues and expenditures for a parliamentary year.
6. CONSOLIDATED FUND – The main fund of the United Republic into which all public revenues and receipts are paid to meet government expenditures.
7. PUBLIC MONEY – Any public revenue held by an officer, whether temporarily or otherwise.
8. PAYMASTER GENERAL – A public service officer appointed by the Minister of Finance responsible for controlling the disbursement of public money to ministries and regions.
9. CONTROLLER AND AUDITOR GENERAL (CAG) – A public service officer appointed by the president to oversee the inflow and outflow of the consolidated fund on behalf of the national assembly.
10. ACCOUNTING OFFICER – A person appointed in writing by the Paymaster General responsible for accounting for services and appropriations made by the national assembly or from the exchequer account.
11. EXCHEQUER ACCOUNT – The government account managed by the Paymaster General and held at the Bank of Tanzania (BOT).
12. WARRANT HOLDER – An individual appointed by the accounting officer to control and account for government expenditures.
13. WARRANT FUND – The expenditure authority granted by an accounting officer to a warrant holder.
14. AUTHORIZED OFFICER – An officer authorized in writing by the accounting officer to assist the warrant holder.
15. RECEIVER OF REVENUE – An officer appointed by the Paymaster General responsible for collecting and accounting for specified revenues.
16. COLLECTOR OF REVENUE – An officer appointed by the receiver of revenue to collect and account for revenue on their behalf.
17. PUBLIC DEBTS – Debts owed by the government arising from loans, whether long-term or otherwise.
18. COMMITMENT – Entries in the vote book recording indents, requisitions, and local purchase orders (LPOs).
19. VIREMENT – Authority granted by the Minister of Finance to transfer approved funds from one budget item to another.
20. SINKING (SPECIAL) FUND – A fund established for the future repayment of public debts.
21. NUGATORY EXPENDITURE – Expenditures that do not add value to the government or its services.
22. APPROVED ESTIMATE – The amount of money allocated to an expenditure item after approval by parliament.
23. IMPREST – A small sum of money given to an officer to meet petty expenses.
24. ACCOUNTING/FINANCIAL YEAR – The period for managing public finances, starting on 1^st July and ending on 30^th June of the following year (in Tanzania).
25. CHILD – A person whose age does not exceed 18 years.