Dear Mymoena Ismail and Colleagues: I do not know the legislation in South Africa, but it would be normal for the legislation to expect that entities account for every cent paid out and received.
When there is reference to "cash basis" accounting it refers to how cash receipts and payments are handled in the accounts, and how invoices and accruals are handled. Most government systems ignore invoices and accruals...which is, in my view, a ridiculous situation...but legal for most government entities and funds, while being illegal since around 1880 for the corporate world. Talk about a double standard! When you talk about the South African Municipal Financial Management Act, does it require an entity to maintain "balance sheet accounts" and do its financial reporting with a full balance sheet as well as an income and expenditure statement? It might. Some progressive countries, notably New Zealand, have pushed forward to improve public sector accounting, but most countries firmly stick to weak and outmoded accountancy requirements that facilitate poor management of resources and grand corruption. Peter Burgess ____________ Peter Burgess Tr-Ac-Net in New York 212 772 6918 [EMAIL PROTECTED] The Transparency and Accountability Network With Kris Dev in Chennai India and others in South Asia, Africa and Latin America http://tr-ac-net.blogspot.com In a message dated 5/27/2005, Mymoena Ismail wrote: > Not all local authorities work on a cash basis. In South African > legislation (i.e., the Municipal Financial Management Act) requires > local authorities to account for every cent spent and income received. > The City of Cape Town recently implemented a SAP ERP solution to better > manage its finances but also to ensure that there exists one back-end > system to support all related e-governance projects. > > > On Mon, May 23, 2005, Peter Burgess wrote: > > > Following up on postings by Janice Brodman and Ed Cherlin ... the > > interesting thing about a company is that the stakeholders who are > > interested in its "value" look at both balance sheet and the profit or > > cash flow past and future. This is very helpful in thinking about what > > works and what does not. Governments (including local governments) do > > their accounting on a cash basis that cannot reflect the financial > > performance of the government entity in a meaningful way because > > expenditures that have life beyond the current period are essentially > > "off the books". It is a weak system, and I am sure has stayed in > > vogue for that very reason. ------------ This DOT-COM Discussion is funded by the dot-ORG USAID Cooperative Agreement, and hosted by GKD. http://www.dot-com-alliance.org provides more information. To post a message, send it to: <[EMAIL PROTECTED]> To subscribe or unsubscribe, send a message to: <[EMAIL PROTECTED]>. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd For past messages, see: http://www.dot-com-alliance.org/archive.html
