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    Topic 1 Introduction To Public Sector

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    HKS
    The document provides an introduction to the public sector in Malaysia. It defines the public sector and identifies its key components which include the federal government, state government, local government, and public enterprises. It then describes some of the key features of the public sector compared to the private sector. This includes differences in stakeholders, objectives, accounting principles, and sources of funding. Finally, it provides a brief overview of public sector accounting in Malaysia, including the maintenance of accounting records, compliance with rules and regulations, and preparation of required reports and financial statements.

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    © All Rights Reserved
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    Topic 1 Introduction To Public Sector

    Uploaded by

    HKS
    2K views29 pages
    The document provides an introduction to the public sector in Malaysia. It defines the public sector and identifies its key components which include the federal government, state government, local government, and public enterprises. It then describes some of the key features of the public sector compared to the private sector. This includes differences in stakeholders, objectives, accounting principles, and sources of funding. Finally, it provides a brief overview of public sector accounting in Malaysia, including the maintenance of accounting records, compliance with rules and regulations, and preparation of required reports and financial statements.

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    Original Title

    Topic 1 Introduction to Public Sector

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    The document provides an introduction to the public sector in Malaysia. It defines the public sector and identifies its key components which include the federal government, state government, local government, and public enterprises. It then describes some of the key features of the public sector compared to the private sector. This includes differences in stakeholders, objectives, accounting principles, and sources of funding. Finally, it provides a brief overview of public sector accounting in Malaysia, including the maintenance of accounting records, compliance with rules and regulations, and preparation of required reports and financial statements.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    2K views29 pages

    Topic 1 Introduction To Public Sector

    Uploaded by

    HKS
    The document provides an introduction to the public sector in Malaysia. It defines the public sector and identifies its key components which include the federal government, state government, local government, and public enterprises. It then describes some of the key features of the public sector compared to the private sector. This includes differences in stakeholders, objectives, accounting principles, and sources of funding. Finally, it provides a brief overview of public sector accounting in Malaysia, including the maintenance of accounting records, compliance with rules and regulations, and preparation of required reports and financial statements.

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    You are on page 1of 29

    INTRODUCTION TO PUBLIC

    SECTOR

    OBJECTIVE OF CHAPTER 1
    INTRODUCTION TO PUBLIC
    SECTOR
    1. Define public sector.
    2. Identify & explain the features of public sector.
    3. Identify & explain components of public
    sector.
    4. Describe public sector accounting.

    INTRODUCTION
    TO PUBLIC
    SECTOR
    DEFINE PUBLIC
    SECTOR (PS)

    All organizations which are not privately


    owned & operated, but which are created,
    managed & financed by the Government
    on behalf of the public. (IFAC, 2012)
    as any entities owned by the central,
    state or local government & any entity
    established under any Act of Parliament,
    which requires the presentation of the
    annual financial statements to the
    Parliament. (MICPA as per Public sector
    Guideline No.1 1990).
    .as a device for regulating human
    services so that men & women can live
    together
    in
    reasonable
    harmony.
    (Derbyshire 1987).

    INTRODUCTION
    TO PUBLIC
    Public sector exhibit a variety
    SECTOR
    IDENTIFY &
    EXPLAIN THE
    FEATURES OF
    PUBLIC SECTOR

    of social, economic, political &


    legal characteristics.
    Different power &
    responsibility.
    Different patterns of
    accountability & objectives.
    Financed in different way &
    have different organizational
    structure.

    INTRODUCTIO
    N TO PUBLIC
    SECTOR
    IDENTIFY &
    EXPLAIN THE
    FEATURES OF
    PUBLIC SECTOR

    FEATURES

    PUBLIC
    SECTOR

    PRIVATE
    SECTOR

    Stakeholder

    Institutional

    Individual

    Framework

    Public
    authorization &
    control
    (Parliament)

    International
    standard

    Plurality of
    objectives

    Base of
    perceived need

    Market related
    demand

    Benefit of
    contributors

    No direct benefit
    receive

    Direct benefit
    receive

    Accounting
    principles

    Fund accounting

    Entity accounting

    Control

    Political

    Financial

    Resources

    Taxation &
    collection

    Loan &
    shareholder
    capital

    Performance
    indicators

    Ability to provide
    the services &
    good to public

    Profit generate

    INTRODUCTIO
    N TO PUBLIC
    SECTOR
    IDENTIFY &
    EXPLAIN
    COMPONENTS OF
    PUBLIC SECTOR

    1.
    2.
    3.
    4.

    Federal Government
    State Government
    Local Government
    Public Enterprises

    INTRODUCTIO
    N TO PUBLIC
    SECTOR
    1. Federal Government
    IDENTIFY &
    EXPLAIN
    COMPONENTS OF
    PUBLIC SECTOR

    The highest tier of government.


    Comprises of ministries,
    departments, units & public
    enterprises.
    Has authority over external affair,
    defense, internal security,
    administration of justice, federal
    citizenship, finance, trade,
    shipping, communication,
    transportation, education &
    others as stated in the 9th
    Schedule (list 1) of Federal
    Constitution.
    7

    MINISTRY

    INTRODUCTION Ministry of
    Science,
    TO PUBLIC
    Technology &
    SECTOR
    Innovation
    IDENTIFY &
    EXPLAIN
    COMPONENTS OF
    PUBLIC SECTOR
    Federal
    Government
    (Example)

    Ministry of
    Education

    DEPARTMENT

    STATUTORY
    BODIES

    National Space
    Agency;
    Atomic Energy
    Licensing Board;
    Malaysian Centre
    for Remote
    Sensing
    (MACRES).

    Malaysian
    Technology
    Development
    Corporation
    (MTDC).

    School
    Department;
    Private Education
    Department;
    Technical
    Education
    Department.

    Dewan Bahasa &


    Pustaka (DBP).

    Road Transport
    Department;
    Marine
    Department of
    Peninsular
    Malaysia.

    Keretapi Tanah
    Melay Berhad
    (KTMB).

    Ministry of
    Transport

    INTRODUCTIO
    N TO PUBLIC
    SECTOR
    IDENTIFY &
    EXPLAIN
    COMPONENTS OF
    PUBLIC SECTOR

    2. State Government
    The second tier of government.
    Limited autonomy power & operates
    at State level.
    Comprises of ministries (for Sabah &
    Sarawak only), departments & public
    enterprises.
    The executive authority is the ruler or
    Yang Di Pertuan Negeri;
    assisted by State Executive Council
    (headed by the Chief Minister or the
    Menteri Besar).
    The administrative machinery headed
    by the State Secretary.
    Example of state departments: State
    Religious Department, State
    Development Office & Public Work
    Division.
    Example of statutory bodies: State
    Sport Council (MSN), State Economic
    Development Corporation (SEDC).
    9

    INTRODUCTIO
    N TO PUBLIC
    SECTOR
    IDENTIFY &
    EXPLAIN
    COMPONENTS OF
    PUBLIC SECTOR

    3. Local Government
    The third tier of government.
    Governed by the Local Government
    Act 1976.
    Limited autonomy power.
    Any city Council, Municipal Council
    or District Council (Section 2, Local
    Government Act 1976).
    Consist of Mayor or President & 824 other Councilors to be appointed
    by the State Authority.

    10

    INTRODUCTIO
    N TO PUBLIC
    SECTOR
    IDENTIFY &
    EXPLAIN
    COMPONENTS
    OF PUBLIC
    SECTOR
    Local
    Government
    (Example)

    State

    City
    Council

    Municipal
    Council

    District
    Council

    Johor

    City
    Council
    of Johor
    Bahru

    Municipal
    council of
    Johor Bahru
    Tengah
    Municipal
    Council of
    Kulai

    Labis
    District
    Council
    Kota
    Tinggi
    Council

    Kedah

    Municipal
    Council of
    Alor Setar
    Municipal
    Council of
    Kulim

    Baling
    District
    Council
    Pendang
    District
    Council
    11

    INTRODUCTIO
    N TO PUBLIC
    SECTOR
    IDENTIFY &
    EXPLAIN
    COMPONENTS OF
    PUBLIC SECTOR

    4. Public Enterprises
    Comprises of Statutory Bodies &
    Government Link Companies
    (GLCs).
    statutory bodies are organizations
    set up under Statutory Bodies Act
    1980 & under the responsibility of
    ministry.
    Objective of implementing specific
    duties & responsibilities in line with
    the national objective.
    Examples of statutory bodies: USM,
    UUM, MARDI etc.

    12

    INTRODUCTIO
    N TO PUBLIC
    SECTOR
    IDENTIFY &
    EXPLAIN
    COMPONENTS OF
    PUBLIC SECTOR

    4. Public Enterprises (cont.d)


    GLCs are companies incorporated
    under the Companies Act 1965.
    Has a primary commercial objective
    & in which the Government has a
    direct controlling stake (appoint
    BOD members, make major
    decisions etc).
    Examples of GLCs:

    13

    INTRODUCTION
    TO PUBLIC
    To enable a conducive & vibrant
    SECTOR
    ROLES OF
    PUBLIC SECTOR

    economic environment.
    To facilitate growth &
    competitiveness of the industry &
    private sector.
    To support the country manpower
    needs;
    To enhance the quality of life of
    Malaysians citizens.

    14

    INTRODUCTION
    TO PUBLIC
    SECTOR
    PUBLIC SECTOR
    FINANCIAL
    MANAGEMENT
    ACTIVITIES

    A system by which financial management


    resources are planned, directed &
    controlled to enable & influence the
    efficient & effective delivery of public
    service goals. (CIPFA, 2012)
    Stated in the Constitution (under Part VII:
    Financial Provisions).
    Includes:
    a) Budgeting activities
    b) Financial accounting activities
    c) Reporting
    d) Auditing

    15

    INTRODUCTION

    TO PUBLIC
    SECTOR

    DESCRIBE
    PUBLIC SECTOR
    ACCOUNTING

    An accounting method practiced by nonprofit entities in public sector.


    The main aim/ purpose is to fulfill the legal
    requirement & establish a system for good
    public governance in managing public
    money (public accountability).
    Accountability- responsibility, answerability
    & liability to give explanation & evidence of
    their task.
    Accountability in the public sectorobligation for Gov. employees & leaders to
    answer & take action for responsibility that
    has been given or entrusted by public.

    16

    INTRODUCTION

    TO PUBLIC
    SECTOR
    DESCRIBE
    PUBLIC SECTOR
    ACCOUNTING

    It can be a tool checking & making sure


    that the public interest is maximized & not
    being undermined .
    In Malaysian Public Sector comprises of 3
    major components/ characteristics:
    a) Maintenance of books & records
    b) Compliance with rules & regulations
    c) Preparation of reports & statements

    17

    INTRODUCTIO
    N TO PUBLIC
    SECTOR
    DESCRIBE PUBLIC
    SECTOR
    ACCOUNTING
    a) MAINTENANCE
    OF BOOKS &
    RECORDS

    Various books & records used by


    public sector to account financial
    activities.
    VOTE BOOK/ ACCOUNTING:
    Defines as a financial record that must
    be kept by the government agencies
    for recording expenditure, liabilities &
    changes in the budget (Provision in
    the Treasury Instructions No. 95).
    Purpose used to control & to ensure
    the expenditure & liabilities are not
    more than the approved budget & also
    as medium of information to produce
    reports related to expenditure,
    liabilities & budget balance.

    18

    INTRODUCTIO
    N TO PUBLIC
    SECTOR

    PSO keep & present their operating


    accounts in the same format &
    alongside their budget.
    Purpose: to emphasize the budgets
    role in the cycle of planning-controlaccountability.
    To enable verification of the
    observance by Government of the
    budgetary authorizations granted by
    Parliament.

    DESCRIBE PUBLIC
    SECTOR
    ACCOUNTING
    a) MAINTENANCE
    OF BOOKS &
    RECORDS

    BUDGETARY ACCOUNTING

    FUND ACCOUNTING
    PS accounting system organized &
    operated on a fund basis.

    19

    INTRODUCTION
    TO PUBLIC
    SECTOR
    DESCRIBE PUBLIC
    SECTOR
    ACCOUNTING
    b) COMPLIANCE
    WITH RULES &
    REGULATIONS

    To ensure a true & fair view of the


    prepared public accounts.
    All public sector in Malaysia are
    required to comply with rules &
    regulations set by:
    The Federal Constitution,
    The Financial Procedure Act
    1957
    The Audit Act 1957
    Treasury Instructions &
    Treasury circulars

    20

    INTRODUCTIO
    N TO PUBLIC
    SECTOR
    DESCRIBE
    PUBLIC SECTOR
    ACCOUNTING
    c) PREPARATION
    OF REPORTS &
    STATEMENTS

    Most Public Sectors reports &


    statements must be presented in
    Parliament for approval
    Article 99 of the Federal Constitution
    requires the submission of Statements Of
    Assets & Liabilities to Parliament for
    approval, at the end of a complete
    financial year
    Section 16 of the Financial Procedure Act
    1957 requires all government agencies to
    prepare Annual Statements to be
    presented to the Legislative Assembly
    (Parliament)
    Annual Statements comprise of
    Consolidated Revenue Accounts
    Consolidated Loan Account
    Consolidated Trust Account
    Statement of Assets & Liabilities
    21

    INTRODUCTIO
    N TO PUBLIC
    SECTOR
    DESCRIBE PUBLIC
    SECTOR
    ACCOUNTING
    THE BASIC
    ACCOUNTING
    PRACTICES IN
    MALAYSIAN
    PUBLIC SECTOR

    22

    INTRODUCTION
    TO PUBLIC
    SECTOR
    MANAGEMENT
    MECHANISMS
    OF THE
    MALAYSIAN
    GOVERNMENT

    Main purpose is to provide an efficient &


    effective mechanisms to ensure the public
    resources can be used & managed
    properly & objectives achieved.
    3 broad levels:
    a) Policy-maker (pre-implementation)
    b) Implementation
    c) Post-implementation

    23

    INTRODUCTIO
    N TO PUBLIC a) Management Mechanism at
    Policy Level
    SECTOR
    MANAGEMENT
    MECHANISMS OF
    THE MALAYSIAN
    GOVERNMENT

    Refers to the management


    mechanism at the Parliament
    (legislature) where all the policies
    regarding financial mgmt. are set up
    through budget (annual
    appropriations).
    No expenditure may be incurred
    without Parliamentary approval.
    Once approved, becomes law
    (supply act).
    vote on account
    vote on credit
    24

    INTRODUCTIO
    N TO PUBLIC b) Management Mechanism at
    Implementation Level
    SECTOR
    MANAGEMENT
    MECHANISMS OF
    THE MALAYSIAN
    GOVERNMENT

    Refers to the management


    mechanism at the ministries,
    departments & agencies.
    Accounting officer:

    Public officer dealing with public


    money or stores (Sec. 3 Financial
    Procedure Act 1957).
    Must comply with financial &
    accounting procedures by Federal
    Treasury & held accountable for
    actions.

    25

    INTRODUCTIO
    N TO PUBLIC
    SECTOR
    MANAGEMENT
    MECHANISMS OF
    THE MALAYSIAN
    GOVERNMENT

    Controlling officer:
    Accounting officer in charge of
    expenditure.
    Appointed by the Minister of
    Finance.
    Usually the head of dept.
    Estimates how much is required to
    carry out departmental polices
    effectively & identify necessary
    funding.

    26

    INTRODUCTIO
    N TO PUBLIC c) Management Mechanism at
    Post-Implementation Level
    SECTOR
    MANAGEMENT
    MECHANISMS OF
    THE MALAYSIAN
    GOVERMENT

    Refers to the management


    mechanism at the Auditor General
    Office (AGO) & other watchdog
    agencies such as Malaysian AntiCorruption Commission (MACC),
    Malaysian Institute of Integrity (MII)
    etc.
    AGO has NO direct responsibility for
    monitoring the performance of the
    budget, physical progress of
    projects or existing management
    information syst.

    27

    INTRODUCTIO
    N TO PUBLIC
    SECTOR
    MANAGEMENT
    MECHANISMS OF
    THE MALAYSIAN
    GOVERMENT

    ONLY reports on deficiencies in


    budget implementation, improper
    payments & authorization,
    inadequate or poor record
    keeping & weak systems &
    controls.
    Monitoring of information &
    achievement of plan objectives:
    responsibility of controlling
    officers & central agencies.

    28

    ITEMS

    INTRODUCTION Purpose &


    objective
    TO PUBLIC
    SECTOR
    Accounting

    PUBLIC

    Compliance &
    accountability to the
    public.

    Financial performance &


    accountable to the
    shareholders.

    1st January 31st


    December

    According to the year of


    incorporation

    Accounting
    basis

    Cash/ accrual/
    modified cash-basis

    Accrual/ cash

    Budget
    preparation

    Mandatory

    Voluntary

    Coding
    system

    Standardize &
    specific for all
    agencies.

    Varies, subject to entity.

    Financial
    statements

    Statement of
    financial position
    Statement of
    financial
    performance
    Statement of cash
    receipts & payments
    Statement of
    memorandum acc.
    Notes to the acc.

    year end

    DIFFERENCE
    BETWEEN
    PUBLIC &
    PRIVATE
    SECTOR
    ACOUNTING

    PRIVATE

    Statement of financial
    position
    Statement of financial
    performance
    Statement of cash
    flow
    Statement of changes
    in equity
    Notes to the acc.
    29

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