Financial reporting reforms to enhance State entity transparency Minister Ncube
THE Government will continue to implement the necessary reforms for sustainable reporting, enhanced transparency and accountability in State entities in line with Vision 2030 targets, a Cabinet Minister has said.
Finance and Economic Development Minister Professor Mthuli Ncube said this while officially launching the Zimbabwe Financial Reporting Manual ZFRM) and Public Sector Professional Accountancy of Zimbabwe (PSPAZ) Training Office in Harare.
ZFRM is an ongoing project that entails the country’s migration from the rule-based approach to the accrual-based International Public Sector Accounting Standards (IPSAS) framework by December 2025.
The initiative forms part of the Government’s Public Finance Management (PFM) reforms and is aimed at enhancing transparency and accountability.
The development of the ZFRM is a recommendation of the IPSAS Implementation Strategy and Plan that was launched in 2019.
ZFRM is expected to guide the implementation of IPSAS by providing local interpretations and clarifying options thereby ensuring consistency of application of the various standards by reporting entities in central and local governments as well as parastatals.
“The Government under the Second Republic puts effort into fostering an environment for sustainable reporting through various economic reforms in line with vision 2030 aspirations.
“As you are aware, under the ongoing PFM reforms, the Government announced its commitment to migrate from the rule-based accounting to the principle-based International Public Sector Accounting Standards (IPSAS) reporting framework as from 1 January 2018,” said Prof Ncube.
The accrual-based IPSAS is focused on recognising the assets that the Government has unlike at present where the country’s balance sheet only shows liabilities (domestic and foreign debt).
The adoption of the IPSAS framework complements the Transitional Stabilisation Programme (TSP) and the National Development Strategy 1’s recognition of the role of timely reporting in financing the transformation of the economy towards the national vision,” he said.
TSP is a two-year programme implemented between 2018 and 2020 through which the Government spelt out initiatives and programmes aimed at transforming the economy by prioritising fiscal consolidation, economic stabilisation, stimulation of growth and creation of employment.
The programme laid a massive economic reconstruction platform and stabilised the economy, laying the fundamentals for the National Development Strategy 1 (NDS 1) in line with our Vision 2030 aspirations.
Prof Ncube said the accrual-based IPSAS reporting framework will be supportive of Government efforts to achieve the desired results-based performance through efficient utilisation of resources and, timely and transparent reporting.
The reform is part of ongoing efforts to enhance and strengthen the Public Finance Management (PFM) system through accountability and transparency by the Government.
Prof Ncube noted that the implementation of the NDS 1 demands effective public financial management that is permeated with transparency and accountability measures, to achieve the national vision of a transformed prosperous and empowered upper-middle-income economy by 2030.
“The TSP and the NDS1 recognise the role of timely financial reporting in the transformation of the economy towards Vision 2030.
“This alone calls for the Government to transform Public Finance Management (PFM),” he said.
Prof Ncube added that the Government has also embarked on a thrust to professionalise the public sector accountancy profession as a strong accountancy profession is indispensable to Zimbabwe’s economic development.
“The usefulness of a sound financial accounting and reporting system in socio-economic development cannot be over-emphasised with transparency and accountability being at the heart of our economic recovery strategy as we endeavour to establish economic confidence.
“There is no doubt that the contribution from this endeavour to the country’s economic recovery will be paramount to the achievement of National Development Strategy 1 (NDS1) towards the country’s 2030 vision.
“In any jurisdiction, the public sector accountancy profession has a duty to champion reliable financial information that drives good governance and stimulates investor confidence; thereby strengthening the climate for investment and driving sustained economic growth.
Development partners, investors and providers of capital can have confidence in using the country’s financial systems if and only if our reporting demonstrates transparency and accountability.”
Speaking at the same occasion, Secretary for Finance and Economic Development George Guvamatanga said Zimbabwe adopted IPSAS as a reporting framework following the gazetting of Statutory Instrument 41 of 2019 Public Accountants and Auditors (Prescription of International Standards) Regulations, 2019.
“The adoption of the accrual-based and the migration to IPSAS framework is necessary for the fulfilment of the public financial management principles in Section 298 of the Constitution of Zimbabwe which requires transparency and accountability in financial matters; public funds to be expended transparently, prudently, economically, and effectively; financial management and fiscal reporting to be responsible and clear.”
He said the ZFRM should be followed by public sector entities applying the IPSAS framework in the preparation of general-purpose financial statements and reports as required by PFM Act (Chapter 22:19).
The full list of entities expected to apply the manual was communicated through Circular 4 of 2022 which was released by the Treasury.
The list of the entities will be continuously reviewed and updated by the Treasury-herald
