The Future of Financial Reporting in the Public Sector

Proposed amendments to Kenya’s Public Finance Management (PFM) Act, giving Chief Financial Officers only one month to submit their Annual Financial Statements to the Auditor General after the end of the financial year, are sending shockwaves through the public sector accounting community in Kenya, reports international auditing and financial reporting software company, CaseWare Africa. 

CPA Rexon Wachira, a public sector consultant at CaseWare Africa’s Nairobi office, says the process of compiling and reviewing these entities’ Annual Financial Statements typically takes public sector financial professionals three months or longer, challenged by the fact that in the fourth quarter in a year, reports must be submitted in the same period as well. “There is grave concern that it may not be possible to produce Annual Financial Statements so quickly,” he says. 

Stephan van der Merwe (CA) SA, Specialist in Public Sector Solutions at CaseWare Africa, notes that audit opinion is typically used to measure the entity’s performance. “The better your audit opinion is, the better the assessment of your entity’s performance, which is another reason why these Annual Financial Statements can take a long time to prepare; every entity wants to be very thorough to ensure they get a good audit opinion. Now with the proposed tighter deadlines, this could pose a huge risk for entities, and therefore, introducing efficiency into the process is now more important than ever before,” he says. 

While the amendment is still in the pipeline, CaseWare Africa says now is the time for public sector entities to review their processes and do away with time-consuming and error-prone manual systems to ensure that their reporting is more efficient, accurate and compliant. 

CaseWare’s IPSAS and IFRS Financial Statement solutions enable public sector finance professionals to automate the preparation of compliant financial statements on either International Public Sector Accounting Standards (IPSAS) or International Financial Reporting Standards (IFRS), whichever is required. This includes flexible lead sheets and a centralised document manager to organise all working paper collateral. Both these solutions simplify collaboration, consolidation and assure preparers of compliance with international standards. 

Mr. van der Merwe notes: “In the East African public sector, several entities have successfully implemented either CaseWare Africa’s IPSAS or IFRS Financial Statements solutions for process efficiency, data integrity and compliance. In the past, the focus among Kenya’s public sector customers was mainly on harnessing CaseWare Africa to reduce manual processing, but we now see a sharp surge in interest in using our solutions to achieve compliance in terms of both international standards and reporting deadlines.”