Govt moves to enhance efficiency in accounting
The Malawi Government has intensified efforts to improve efficiency, transparency and the quality of public financial reporting in ministries, departments and agencies (MDAs). Through accrual accounting, government wants to ensure that it records financial transactions when they occur rather than when cash is received or paid. This system will also allow MDAs to capture assets, … The post Govt moves to enhance efficiency in accounting appeared first on Nation Online.
Black News 
The Malawi Government has intensified efforts to improve efficiency, transparency and the quality of public financial reporting in ministries, departments and agencies (MDAs).
Through accrual accounting, government wants to ensure that it records financial transactions when they occur rather than when cash is received or paid. This system will also allow MDAs to capture assets, liabilities, income and expenses.
Speaking at the start of a five-week training in Blantyre on Monday for 240 accountants in MDAs, Accountant General Department director of accounting Chifundo Kapululu said government is currently operating a dual system where MDAs are using both cash-based accounting and accrual accounting as part of a gradual transition towards full accrual reporting.
He said the shift to full accrual accounting will enable government to fully capture and value national assets, including land, buildings, roads and natural resources such as lakes, rivers and mountains, which were not fully recorded under cash-based accounting.
Kapulula said MDAs are now better able to meet the legal reporting deadlines while also improving disclosure of government assets, including infrastructure, land and other public resources.
He said: “Accrual accounting allows us to record transactions when they occur and also capture the value of assets and liabilities.
“This has already improved efficiency and the timely production of financial statements.”
Under Section 107 of the Public Finance Management Act of 2022, controlling officers are required to prepare and submit financial statements for their votes within two months after the end of the financial year, meaning all submissions must be completed by May 31 annually.
Roads Fund Administration finance manager James Dzonzi, who was one of the participants, said while government is using the Integrated Financial Management Information System (Ifmis) to support financial reporting, several challenges remain in fully aligning the system to accrual accounting requirements.
He said Ifmis was originally designed around cash-based accounting principles, making it difficult to fully accommodate the new reporting demands.
Dzonzi said key challenges include system limitations in handling accrual adjustments, difficulties in correctly capturing opening and closing balances under the new framework, and capacity gaps among users in interpreting accrual-based reports.
The new system is in line with Malawi 2063, the country’s long-term development plan, and digital finance initiatives to create an inclusive and innovative financial system that supports economic growth and financial inclusion for all Malawians.
The efforts are also supported by various government strategic plans and projects aimed at enhancing the digital landscape and improve access to financial services.
The post Govt moves to enhance efficiency in accounting appeared first on Nation Online.
