Public Sector Governance and Accountability Series: Budgeting and ...

284 Daniel Tommasi
payment. In the francophone budget systems, the budgetary expenditure is
recognized and recorded at this stage, both in the books of the public
accountant and in the books of the authorizing officer whether the payment
order will be immediately paid or not.
The Payment Stage
The bill is paid by cash, check, or electronic funds transfer. Payments through
checks are, in most countries, recorded when checks are issued. Comparisons
with bank statements should be systematically carried out, at least monthly.
Many countries do not make these comparisons and should address this
issue. In many African anglophone countries, the budgetary expenditure is
recognized and accounted for in the books only at this stage.
When the float of unpaid checks is significant, payments must also be
reported on the basis of checks paid. In some African anglophone budget
systems, in order to bypass the annual rule (described shortly), some
accountants issue checks at the end of the year that cannot be immediately
paid. Such a practice leads to high fiduciary risks.
The organization of the payment system and the related distribution of
responsibilities are discussed later in this chapter.
Controlling Compliance in Budget Execution
The basic compliance controls during budget execution are the following:
At the commitment stage (financial control), verify that (a) the proposal
to spend money has been approved by an authorized person, (b) money
has been appropriated for the purpose stated in the budget, (c) sufficient
funds remain available in the appropriate category of expenditure, and
(d) the expenditure is classified in the correct way.
When goods and services are delivered (verification), the documentary
evidence that the goods have been received or that the services were carried
out as required must be verified.
Before payment is made, confirm that (a) the expenditure has been properly
committed; (b) a competent person has signified that the goods have
been received or that the service has been carried out as expected; (c) the
invoice and other documents requesting payment are complete, correct,
and suitable for payment; and (d) the creditor is correctly identified.
After final payment is made (audit), examine and scrutinize the expenditure
concerned and report any irregularity.