Local Authorities Accounting Policies

The Ministry of Finance in its quest to improve financial management in Local Authorities (LAs) established the Local Government Finance Department under the Office of the Accountant General in 2017 as part of the restructuring of the Ministry of Finance. The mandate of the Department is to manage and coordinate the development and implementation of financial management policies, legislation and guidelines in LAs in order to ensure accountability and transparency in the management of public resources for enhanced service delivery to the residents, business entities and other stakeholders.

LAs are at the front end of service delivery. To achieve this, it is important that there is effectiveness and efficiency in the management of resources used to finance service delivery. In this regard, the Ministry of Finance has prepared the Local Authorities Accounting Policies (LAAPs) for Cash Basis International Public Sector Accounting Standards (IPSAS) to guide LAs in the preparation of annual Financial Statements (FSs) that meet acceptable international reporting standards.

Specifically, the Cash Basis LAAPs will provide guidance on how financial transactions that involve cash are recognised, measured and disclosed in the Cash Basis IPSAS General Purpose Financial Statements (GPFSs) of LAs. The LAAPs also include Financial Statements formats that LAs will use in their preparation of annual financial statements.

The LAAPs will therefore make it easy to compare the financial performance of LAs with similar characteristics and facilitate decision making and corrective action to be taken against non-performing LAs.

The LAAPSs for Cash Basis Accounting will provide a basis for migration of LAs to Accrual Basis IPSAS in 2022.

It is my expectation that the provision of financial statements that meet acceptable reporting standards will also enable stakeholders hold LAs accountable in their discharge of functions as mandated under Article 151 of the Constitution of Zambia (Amendment) No. 2 of 2016.

I wish to urge all Town Clerks and Council Secretaries to comply with the LAAPs.