THE passing of the Public Finance Administration (Accounts) Regulations 2021 in the Legislative Assembly on Thursday, 4th August 2022, enables Tonga to continue to be guided by the International Public Sector Accounting Standards (IPSAS) especially with preparation of Government financial statements.
IPSAS are a set of accounting standards issued by the IPSAS Board for use by public sector entities around the world in the preparation of financial statements.
After its third reading in Parliament, all MPs in Parliament unanimously endorsed the Public Finance Administration (Accounts) Regulations which relates to Government’s public accounts and financial reporting.
In applying the international accounting standards, section 4 of the Regulation states that Government financial statements should be prepared within six months at end of the fiscal year according to section 35 of the Public Finance Management Act 2002.
It is the Finance Minister’s responsibility to prepare and present a report to Parliament no later than 6 months after the end of the fiscal year. If Parliament is not in session, the submission of a financial statement must be done in the next session.
In section five of the Public Finance Administration (Accounts) Regulation 2021, it requires that the presentation and format of the public accounts to be determined by the Finance Minister, guided by the appropriate application of IPSAS.
Hon. Tatafu said from past experience, Treasury find it exceedingly difficult to provide an accurate estimation of Government’s assets and liabilities. But, through a closer partnership with donor partners, Tonga was recommended to adopt the easiest financial reporting and IPSAS to guide its preparation of Government public accounts and financial statements.
In recognising the requirement of section 5 of the Public Finance Management Act, financial statements must therefore be prepared in accordance with Part 1 of IPSAS: Financial Reporting Under the Cash Basis Accounting.
Hon. Tatafu thanked Parliament for supporting the Regulation especially with efforts to promote improved government transparency and accountability.