Subject: PUBLIC SECTOR ACCOUNTING & FINANCE (PSAF)

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PSAF – Nov 2023 – L2 – Q7 – Public-Private Partnerships (PPP)

Discusses the merits and demerits of using private finance initiatives (PFI) in public sector projects.

Question

Public-Private Partnership (PPP) involves a private entity financing, constructing, or managing a project in return for a promised stream of payments directly or indirectly from government.

Required:

Explain THREE merits and TWO demerits of private finance initiatives. (15 Marks)

Answer

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Tags: Demerits, Merits, PPP, Private Finance Initiative, Public Sector Financing
Level: Level 2

Topic: Public-Private Partnerships (PPP)

PSAF – Nov 2023 – L2 – Q6 – Fiscal Policy and Public Finance

Explains debt refinancing, project financing, and the forms of debt refinancing.

Question

The merits and demerits of debt and tax finance for deficit financing are often debated. The choice of one method depends on the objective and overall long-term implications for the economy.

Required:

a. Explain the following:
i. Debt refinancing (1 Mark)
ii. Why debt refinancing may be of interest to a federal authority (4 Marks)
iii. Project financing (2 Marks)

b. Explain FOUR forms of debt refinancing. (8 Marks)

Answer

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Tags: Debt Management, Debt Refinancing, Project Financing, Public Finance
Level: Level 2

Topic: Fiscal Policy and Public Finance

PSAF – Nov 2023 – L2 – Q5 – Fiscal Policy and Public Finance

Discuss arguments for centralization vs. decentralization of fiscal responsibilities and strategies for economic downturn.

Question

Fiscal federalism deals with the division of tax and expenditure functions among the various levels of government in a federation. A federal system of administration allows both centralized and decentralized collective choices to be made by each tier of government.

Required:

a. Explain TWO arguments each in favor of decentralization and centralization of fiscal responsibilities. (6 Marks)

b. Explain THREE fiscal and monetary strategies that government takes to address the impact of the economic downturn. (9 Marks)

Answer

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Tags: Centralization, Decentralization, Economic Downturn, fiscal federalism, Fiscal Strategies, Monetary Strategies
Level: Level 2

Topic: Fiscal Policy and Public Finance

PSAF – Nov 2023 – L2 – Q4 – Performance Measurement in the Public Sector

Calculate the NPV, IRR, and ROCE for FFTA’s investment in a second rail coach to meet increased passenger demand.

Question

Fakafiki Federal Transport Agency (FFTA) introduced a new rail coach, Luxury DV, to its range last year. The coach is used to transport passengers, addressing a serious bottleneck in the transportation process, with a maximum capacity to transport 5,000 passengers per annum.

The Luxury DV product has been a huge success, and consequently, all passengers showing interest were accommodated. Based on feedback from high-net-worth customers, the marketing department has prepared the following demand forecast for future years:

Year	1	2	3	4
Demand (Number of passengers)	7,000	9,000	11,000	4,000

The Directors of FFTA are now considering investing in a second coach that will allow the company to satisfy the increasing demand. The following information relating to this investment proposal has now been prepared:

Initial investment: N350,000
Maximum additional passengers: 5,000 passengers
Current fare: N450 per passenger
Variable cost of operation: N200 per passenger
Fixed operating costs: N175,000

If tickets issued remain at 5,000, the current fare would continue for the remainder of the coach’s life. However, if passenger traffic is increased, the fare is expected to fall to N400 per passenger for all tickets sold. This fare adjustment will last for the remaining life of the coach.

No terminal value or coach scrap value is expected at the end of four years, when Luxury DV’s passenger service is planned to end. For investment appraisal purposes, FFTA uses a nominal discount rate of 10% per year and a target return on capital employed of 20% per year. Ignore taxation.

Required: Using an incremental approach, calculate the following values for the investment proposal of the second coach.

a. Net present value. (10 Marks)
b. Internal rate of return. (4 Marks)
c. Return on capital employed (accounting rate of return) based on initial investment. (6 Marks)

Answer

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Tags: estment Appraisal, Internal Rate of Return, Net Present Value, Return on Capital
Level: Level 2

Topic: Performance Measurement in the Public Sector

PSAF – Nov 2023 – L2 – Q3c – Public Procurement and Contract Management

Details provisions and penalties under Financial Regulations to prevent and address delays in contract payments.

Question

i. Identify TWO provisions of Financial Regulations which guide against the delay in contract payments. (3 Marks)

ii. Enumerate TWO punishments each that can be meted out to a government official and a legal person in case of delay in payment of contracts executed. (4 Marks)

Answer

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Tags: Contract Payment Delays, Financial Regulations, Government Contracts, Penalties, Public Sector Accounting
Level: Level 2

Topic: Public Procurement and Contract Management

PSAF – Nov 2023 – L2 – Q3b – Public Procurement and Contract Management

Prepare journal entries to record revenue, expenses, and payments for a healthcare construction project.

Question

Based on the budget of Azare Federal Ministry of Health and Wellbeing (AFMHW), a contract to construct 5 units of Primary Healthcare Centres (PHC) in each of the six (6) geo-political zones to address malaria, infant deaths, and years of neglect in prioritizing primary healthcare and well-being of the citizens was signed with Alaafia Construction Company. This contract was at the cost of N12,250,200 per unit, with a 2-year contract duration and no variation clause.

A valuation certificate was submitted at the end of year one, which showed that over 60% of the contract has been executed, while N294,004,800 has been estimated to have been spent on the project since inception. There were also indications that the office of AFMHW has paid the contractor a total sum of N244,100,000.

Required:

Prepare journal entries to record the above transactions. (4 Marks)

Answer

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Tags: Contract Expenses, Healthcare Construction, Journal Entries, Revenue Recognition
Level: Level 2

Topic: Public Procurement and Contract Management

PSAF – Nov 2023 – L2 – Q3a – Public Procurement and Contract Management

Describes the procurement process for consultancy services, virtual library items, and branded office supplies under BPP guidelines.

Question

Describe the procurement process for each of the following three items as specified in the Procurement Act, 2007 and the subsequent guidelines issued by the Bureau of Public Procurement (BPP), given that appropriations were made in the current budget of the Federal Government of Azare:

i. Consultancy Services Worth N99 Million (3 Marks)
ii. Procurement and Installation of Sundry Items for Virtual Library in Federal Government Secondary Schools, Including Construction of Building Facilities Worth N958 Million (3 Marks)
iii. Supply of Branded Envelopes, Files, and Letterheads Worth N4.2 Million (3 Marks)

Answer

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Tags: BPP, Government Contracts, Procurement Process, Public Procurement Act 2007
Level: Level 2

Topic: Public Procurement and Contract Management

PSAF – Nov 2023 – L2 – Q2b – Public Sector Audit

Explains the three audit responsibilities of the Auditor-General under the Financial Regulation 2009.

Question

Briefly discuss the THREE types of audit responsibility of the Auditor-General for the Federation in line with Financial Regulation (2009 Edition). (12 Marks)

Answer

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Tags: Auditor General, Compliance Audit, Financial audit, Financial Regulations
Level: Level 2

Topic: Public sector audit

PSAF – Nov 2023 – L2 – Q2a – Regulatory and Institutional Framework

Lists four required documents that must accompany the appropriation bill for National Assembly submission.

Question

Enumerate FOUR of the documents that must accompany the appropriation bill when the President is making submission to the National Assembly. (8 Marks)

Answer

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Tags: Appropriation Bill, Budget Documentation, Fiscal Targets, National Assembly
Level: Level 2

Topic: Regulatory and Institutional Framework

PSF – Nov 2023 – L2 – Q1 – Public Sector Financial Statements

Assess expected profit, completion stage, and financial statement recognition for a government contract under IPSAS.

Question

Housing-for-all Corporation is an entity established by Kazua State to engage in building construction. The corporation is partly financed with subvention from the State and also from the proceeds from its operations. It applied for a bid to construct twenty (20) classroom buildings in the riverine area of the state. After all the initial procurement processes on bid-opening were carried out, the corporation won the contract in June 2018. The contract price was N220m. The building construction contract was billed for completion in two years. The company uses stages of completion on the basis of value of work completed. The following financial data were available in respect of the contract as at December 31, 2019:

Description	Amount (N’000)
Total contract price	220,000
Total expected costs	180,000
Costs incurred to date	120,000
Value of work certified as complete	140,000
Amount billed to client (Kazua State)	130,000
Progress payment received from client	100,000

The contract was duly completed in June 2020.

Required:

a. Determine the expected profit of the contract, stage of completion in percentage, as well as the amount to be recognized in Housing-for-all Corporation’s income statement at December 31, 2019. (11 Marks)

b. Calculate the amount to be recognized as gross amount due to or from the client, Kazua State, the amount of trade receivable, and prepare extracts of financial statements in respect of the construction contracts at December 31, 2019. (13 Marks)

c. Identify what constitutes the composition of contract costs as contained in IPSAS 11. (6 Marks)

Answer

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Tags: Construction Contracts, Financial Statements, IPSAS 11, Public Sector Projects, Revenue Recognition
Level: Level 2

Topic: Public Sector Financial Statements

PSAF – Nov 2023 – L2 – Q7 – Public-Private Partnerships (PPP)

Discusses the merits and demerits of using private finance initiatives (PFI) in public sector projects.

Question

Public-Private Partnership (PPP) involves a private entity financing, constructing, or managing a project in return for a promised stream of payments directly or indirectly from government.

Required:

Explain THREE merits and TWO demerits of private finance initiatives. (15 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Demerits, Merits, PPP, Private Finance Initiative, Public Sector Financing
Level: Level 2

Topic: Public-Private Partnerships (PPP)

PSAF – Nov 2023 – L2 – Q6 – Fiscal Policy and Public Finance

Explains debt refinancing, project financing, and the forms of debt refinancing.

Question

The merits and demerits of debt and tax finance for deficit financing are often debated. The choice of one method depends on the objective and overall long-term implications for the economy.

Required:

a. Explain the following:
i. Debt refinancing (1 Mark)
ii. Why debt refinancing may be of interest to a federal authority (4 Marks)
iii. Project financing (2 Marks)

b. Explain FOUR forms of debt refinancing. (8 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Debt Management, Debt Refinancing, Project Financing, Public Finance
Level: Level 2

Topic: Fiscal Policy and Public Finance

PSAF – Nov 2023 – L2 – Q5 – Fiscal Policy and Public Finance

Discuss arguments for centralization vs. decentralization of fiscal responsibilities and strategies for economic downturn.

Question

Required:

a. Explain TWO arguments each in favor of decentralization and centralization of fiscal responsibilities. (6 Marks)

b. Explain THREE fiscal and monetary strategies that government takes to address the impact of the economic downturn. (9 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Centralization, Decentralization, Economic Downturn, fiscal federalism, Fiscal Strategies, Monetary Strategies
Level: Level 2

Topic: Fiscal Policy and Public Finance

PSAF – Nov 2023 – L2 – Q4 – Performance Measurement in the Public Sector

Calculate the NPV, IRR, and ROCE for FFTA’s investment in a second rail coach to meet increased passenger demand.

Question

Year	1	2	3	4
Demand (Number of passengers)	7,000	9,000	11,000	4,000

Initial investment: N350,000
Maximum additional passengers: 5,000 passengers
Current fare: N450 per passenger
Variable cost of operation: N200 per passenger
Fixed operating costs: N175,000

Required: Using an incremental approach, calculate the following values for the investment proposal of the second coach.

a. Net present value. (10 Marks)
b. Internal rate of return. (4 Marks)
c. Return on capital employed (accounting rate of return) based on initial investment. (6 Marks)

Answer

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Tags: estment Appraisal, Internal Rate of Return, Net Present Value, Return on Capital
Level: Level 2

Topic: Performance Measurement in the Public Sector

PSAF – Nov 2023 – L2 – Q3c – Public Procurement and Contract Management

Details provisions and penalties under Financial Regulations to prevent and address delays in contract payments.

Question

i. Identify TWO provisions of Financial Regulations which guide against the delay in contract payments. (3 Marks)

ii. Enumerate TWO punishments each that can be meted out to a government official and a legal person in case of delay in payment of contracts executed. (4 Marks)

Answer

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Tags: Contract Payment Delays, Financial Regulations, Government Contracts, Penalties, Public Sector Accounting
Level: Level 2

Topic: Public Procurement and Contract Management

PSAF – Nov 2023 – L2 – Q3b – Public Procurement and Contract Management

Prepare journal entries to record revenue, expenses, and payments for a healthcare construction project.

Question

Required:

Prepare journal entries to record the above transactions. (4 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Contract Expenses, Healthcare Construction, Journal Entries, Revenue Recognition
Level: Level 2

Topic: Public Procurement and Contract Management

PSAF – Nov 2023 – L2 – Q3a – Public Procurement and Contract Management

Describes the procurement process for consultancy services, virtual library items, and branded office supplies under BPP guidelines.

Question

Answer

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Tags: BPP, Government Contracts, Procurement Process, Public Procurement Act 2007
Level: Level 2

Topic: Public Procurement and Contract Management

PSAF – Nov 2023 – L2 – Q2b – Public Sector Audit

Explains the three audit responsibilities of the Auditor-General under the Financial Regulation 2009.

Question

Briefly discuss the THREE types of audit responsibility of the Auditor-General for the Federation in line with Financial Regulation (2009 Edition). (12 Marks)

Answer

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Tags: Auditor General, Compliance Audit, Financial audit, Financial Regulations
Level: Level 2

Topic: Public sector audit

PSAF – Nov 2023 – L2 – Q2a – Regulatory and Institutional Framework

Lists four required documents that must accompany the appropriation bill for National Assembly submission.

Question

Enumerate FOUR of the documents that must accompany the appropriation bill when the President is making submission to the National Assembly. (8 Marks)

Answer

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Tags: Appropriation Bill, Budget Documentation, Fiscal Targets, National Assembly
Level: Level 2

Topic: Regulatory and Institutional Framework

PSF – Nov 2023 – L2 – Q1 – Public Sector Financial Statements

Assess expected profit, completion stage, and financial statement recognition for a government contract under IPSAS.

Question

Description	Amount (N’000)
Total contract price	220,000
Total expected costs	180,000
Costs incurred to date	120,000
Value of work certified as complete	140,000
Amount billed to client (Kazua State)	130,000
Progress payment received from client	100,000

The contract was duly completed in June 2020.

Required:

c. Identify what constitutes the composition of contract costs as contained in IPSAS 11. (6 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Construction Contracts, Financial Statements, IPSAS 11, Public Sector Projects, Revenue Recognition
Level: Level 2

Topic: Public Sector Financial Statements

Subject: PUBLIC SECTOR ACCOUNTING & FINANCE (PSAF)

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PSAF – Nov 2023 – L2 – Q7 – Public-Private Partnerships (PPP)

Discusses the merits and demerits of using private finance initiatives (PFI) in public sector projects.

You're reporting an error for "PSAF – Nov 2023 – L2 – Q7 – Public-Private Partnerships (PPP)"

PSAF – Nov 2023 – L2 – Q6 – Fiscal Policy and Public Finance

Explains debt refinancing, project financing, and the forms of debt refinancing.

You're reporting an error for "PSAF – Nov 2023 – L2 – Q6 – Fiscal Policy and Public Finance"

PSAF – Nov 2023 – L2 – Q5 – Fiscal Policy and Public Finance

Discuss arguments for centralization vs. decentralization of fiscal responsibilities and strategies for economic downturn.

You're reporting an error for "PSAF – Nov 2023 – L2 – Q5 – Fiscal Policy and Public Finance"

PSAF – Nov 2023 – L2 – Q4 – Performance Measurement in the Public Sector

Calculate the NPV, IRR, and ROCE for FFTA’s investment in a second rail coach to meet increased passenger demand.

You're reporting an error for "PSAF – Nov 2023 – L2 – Q4 – Performance Measurement in the Public Sector"

PSAF – Nov 2023 – L2 – Q3c – Public Procurement and Contract Management

Details provisions and penalties under Financial Regulations to prevent and address delays in contract payments.

You're reporting an error for "PSAF – Nov 2023 – L2 – Q3c – Public Procurement and Contract Management"

PSAF – Nov 2023 – L2 – Q3b – Public Procurement and Contract Management

Prepare journal entries to record revenue, expenses, and payments for a healthcare construction project.

You're reporting an error for "PSAF – Nov 2023 – L2 – Q3b – Public Procurement and Contract Management"

PSAF – Nov 2023 – L2 – Q3a – Public Procurement and Contract Management

Describes the procurement process for consultancy services, virtual library items, and branded office supplies under BPP guidelines.

You're reporting an error for "PSAF – Nov 2023 – L2 – Q3a – Public Procurement and Contract Management"

PSAF – Nov 2023 – L2 – Q2b – Public Sector Audit

Explains the three audit responsibilities of the Auditor-General under the Financial Regulation 2009.

You're reporting an error for "PSAF – Nov 2023 – L2 – Q2b – Public Sector Audit"

PSAF – Nov 2023 – L2 – Q2a – Regulatory and Institutional Framework

Lists four required documents that must accompany the appropriation bill for National Assembly submission.

You're reporting an error for "PSAF – Nov 2023 – L2 – Q2a – Regulatory and Institutional Framework"

PSF – Nov 2023 – L2 – Q1 – Public Sector Financial Statements

Assess expected profit, completion stage, and financial statement recognition for a government contract under IPSAS.

You're reporting an error for "PSF – Nov 2023 – L2 – Q1 – Public Sector Financial Statements"

PSAF – Nov 2023 – L2 – Q7 – Public-Private Partnerships (PPP)

Discusses the merits and demerits of using private finance initiatives (PFI) in public sector projects.

You're reporting an error for "PSAF – Nov 2023 – L2 – Q7 – Public-Private Partnerships (PPP)"

PSAF – Nov 2023 – L2 – Q6 – Fiscal Policy and Public Finance

Explains debt refinancing, project financing, and the forms of debt refinancing.

You're reporting an error for "PSAF – Nov 2023 – L2 – Q6 – Fiscal Policy and Public Finance"

PSAF – Nov 2023 – L2 – Q5 – Fiscal Policy and Public Finance

Discuss arguments for centralization vs. decentralization of fiscal responsibilities and strategies for economic downturn.

You're reporting an error for "PSAF – Nov 2023 – L2 – Q5 – Fiscal Policy and Public Finance"

PSAF – Nov 2023 – L2 – Q4 – Performance Measurement in the Public Sector

Calculate the NPV, IRR, and ROCE for FFTA’s investment in a second rail coach to meet increased passenger demand.

You're reporting an error for "PSAF – Nov 2023 – L2 – Q4 – Performance Measurement in the Public Sector"

PSAF – Nov 2023 – L2 – Q3c – Public Procurement and Contract Management

Details provisions and penalties under Financial Regulations to prevent and address delays in contract payments.

You're reporting an error for "PSAF – Nov 2023 – L2 – Q3c – Public Procurement and Contract Management"

PSAF – Nov 2023 – L2 – Q3b – Public Procurement and Contract Management

Prepare journal entries to record revenue, expenses, and payments for a healthcare construction project.

You're reporting an error for "PSAF – Nov 2023 – L2 – Q3b – Public Procurement and Contract Management"

PSAF – Nov 2023 – L2 – Q3a – Public Procurement and Contract Management

Describes the procurement process for consultancy services, virtual library items, and branded office supplies under BPP guidelines.

You're reporting an error for "PSAF – Nov 2023 – L2 – Q3a – Public Procurement and Contract Management"

PSAF – Nov 2023 – L2 – Q2b – Public Sector Audit

Explains the three audit responsibilities of the Auditor-General under the Financial Regulation 2009.

You're reporting an error for "PSAF – Nov 2023 – L2 – Q2b – Public Sector Audit"

PSAF – Nov 2023 – L2 – Q2a – Regulatory and Institutional Framework

Lists four required documents that must accompany the appropriation bill for National Assembly submission.

You're reporting an error for "PSAF – Nov 2023 – L2 – Q2a – Regulatory and Institutional Framework"

PSF – Nov 2023 – L2 – Q1 – Public Sector Financial Statements

Assess expected profit, completion stage, and financial statement recognition for a government contract under IPSAS.

You're reporting an error for "PSF – Nov 2023 – L2 – Q1 – Public Sector Financial Statements"

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