A critical analysis into the introduction of private sector management and accounting techniques to the public sector. A case of beitbridge town council.

ABSTRACT

The study was undertaken to investigate on the appropriateness of employing private sector management and accounting techniques through the adoption of International Public Sector Accounting Standards (IPSAS) at Beitbridge town council. The non-compliance with IPSAS provisions, non-compliance with IPSAS due to the need for complying with statutes, high volume of errors in the financial statements, consolidation complications of IPSAS municipal financial statements and IFRS based statements of its businesses and the untimely completion of financial statements led to the need for this research. Literature from various sources was reviewed to obtain different perceptions from different authors on the objectives of the research. The major contributions were that, IPSAS has the potential to significantly improve the quality of public sector financial reporting and that the accrual basis of accounting is appropriate for the public sector. Also, the private sector and the public have various similar financial reporting aspects, for different aspects specifically peculiar to the public sector, the IPSASB develops respective standards, for example IPSAS 22 –Disclosure of Financial Information about General government sector, IPSAS 23 – Revenue from non-exchange transactions and IPSAS 24 – Presentation of Budget Information in the Financial Statements. Also found is that a successful transition to the new standards would require a sound cash basis system in place, adequate technical resources, realistic implementation time frames, appropriate information system, convergence of Acts with IPSAS and transparent governmental support. The researcher used descriptive and exploratory research designs. The researcher had a target population of 50 from which a sample of 44 was drawn. Recommendations were made in accordance with research findings, these included adequate training of personnel before and during the implementation phase of the standards. Adopting the transitional cash basis IPSASs before moving to accrual standards and convergence of statutes with IPSASs to ensure a smooth transition. Management (higher government officials) commitment and government ownership of the implementation process, like a legal framework for IPSAS implementation across all levels of the public sectors.