MACHAKOS UNIVERSITY
School of Business & Economics
Bachelor of Commerce
FOURTH YEAR, SECOND SEMESTER (May-Aug.2023)
COURSE OUTLINE
UNIT CODE &TITLE: BAC 410 PUBLIC SECTOR ACCOUNTING
Lecture: T. N. Ondieki (Mobile: 0725873835
INTRODUCTION:
This unit is intended to equip the trainee with knowledge, skills and attitudes that will enable him/her
to apply public sector accounting regulations and principles in practice
LEARNING OBJECTIVES:
By the end of this study, the trainee should be able to:
 Explain and account for all government revenues and expenditure
 Explain the various accounting officers in the public sector
 Evaluate which government agencies, business enterprises and other organisations, are part of
the government reporting
 Prepare and explain the financial statements or accounts typical in the public sector
organisations
 Explain the government budget/planning process
 Prepare a budget for a government department that will be rolled up into the overall national
budget
COURSE DESCRIPTION
Overview of public sector accounts, concept of financial management in public sector, sources and
expenditure of central and local government revenue, Government budgeting process and budgetary
control, capital budgeting and project appraisal, public debt management, cash and treasury
management, corruption and audit of public sector organisations.
1. OVERVIEW OF KENYAS PUBLIC SECTOR:
 Introduction
 Definition
 Objectives of public sector accounts
 Users of public sector accounting information
 Regulatory framework of public sector accounting
 Concepts and principles of public sector accounting
 Bases of public sector accounting
 Comparison between private sector and public sector accounting
2. SOURCES AND EXPENDITURE OF NATIONAL AND COUNTY GOVERNMENTS:
 Introduction
 Operations of National and County governments on management and control of public finance
 Sources and classifications of government revenue
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Revenue authority
Revenue control
Establishment of public funds in the public sector
Government expenditure
Authorization of government expenditure
Funding principles
Expenditure control
3. ACCOUNTING OFFICERS IN PUBLIC SECTOR:
 Introduction
 Accountant general
 Auditor general
 Accounting officers
 Revenue officers
 Budget controller
 Expenditure controller
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CASH AND TREASURY MANAGEMENT:
Definitions of the terms cash, treasury and voucher
Preparation of voucher
Types of vouchers
Treasury department
Organisation of the office of the accountant general
Preparation of government accounts; i.e. final accounts
5. GOVERNMENT BUDGETING PROCESS AND BUDGETARY CONTROL:
 Definition budget
 Methods of preparing government budget
 Zero-base budgeting technique(ZBB)
 Planning, programming and budgeting systems (PPBS)
 Periodic budgeting
 Flexible budget
 Capital expenditure budget
 Base estimate
 Rolling plan or continues budgets
 Factors that militate against the budgeting system in the public sector
 Procedure for preparation and approval of budgets
6. CAPITAL BUDGETING AND PROJECT APPRAISAL:
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Definition of capital budgeting
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The nature of investment
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Capital budgeting decisions
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Investment approval
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Methods of investment appraisals
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Discussions of appraisal methods
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Problems of investment appraisal methods
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Risk and uncertainty in capital budgeting /investment appraisal
7. PUBLIC DEBT MANAGEMENT:
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Introduction
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Internal/domestic debt
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External/foreign debt
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General causes of public debt
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Consequences of public debt
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Approaches to solving debt problems in a country
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Getting out of external debt trap
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Reasons for borrowing
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Disadvantages of borrowing
8. CORRUPTION AND AUDIT OF PUBLIC SECTOR ORGANIZATION:
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Introduction
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Corrupt practices in the public sector
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Code of conduct for public officers
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Nature of auditing
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Types of auditing
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Objectives of internal auditing
REFERENCE TEXTBOOKS:
1. Saleem, N.A. (2015), Public Finance and Taxation, Saleem publications Ltd. Nairobi
2. Musgrave, R.A. & Musgrave, P.B.(2012); Public Finance in Theory and Practice;
MacGraw-Hill, New York
3. The Constitution of Kenya 2010.
ASSESSMENT & EXAMINATION:
Assignment 15%, CAT 15% & Examination 70%