chapetr 2 psa
TRANSCRIPT
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NUR AFIQAH ISHAKNUR ARLI JAHARUDINRAFIDAH ADRISEAIN ATIQAH YAZID
Financial System
and Procedures
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INTRODUCT
ION
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GOVERNMENT SYSTEM&PROCEDURES
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FINANCIAL
PROVISIONS OF THEFEDERAL
CONSTITUTION
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Establish the general framework for the control ofpublic expenditures by the legislators.
Provide good financial management systems ingovernment.
Govern the methods of which public funds are to beadministered and accounted for.
Define the borrowing powers of Federal and Stategovernments
Provide guidelines on the maintenance of specifiedConsolidated Funds by the Federal and State
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FederalGovernment
revenues
Article 96 of the FederalConstitution
- No taxation applied.
StateGovernment
revenues
Article 110(3)
- Export duty on tin.
Article 110 (3A)
- Export duty on minerals.
Revenues of the Federal government are larger in terms ofamount & sources. Since, the State Government has limitedsources of revenues, they receive annual financial assistancefrom the Federal government in terms of grant; Statutorygrants and Non-statutory assistance
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Grants from the FederalGovernment to the State
Governments Statutory Grant
(a)
Capital Grant[Article 109(1)
(a)]
(b)State Road
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Grants from the FederalGovernment to the State
Governments Non-Statutory Assistance
(a) Contribution in Aid of RatesAssistance [Article 156]
(b) Payment for services rendered[Article 80(5)] and Treasury CircularBil. 17/1979
(c) Advance to State Governments
(d) Loans to State Governments
(e) Loans to State Governments [Article
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CATEGORY OF GRANT
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4 MAJOR TYPES OF GRANT
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Capitation Grant
Article 109(1)
(a) of theFederalConstitution
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State Road Grant
Given the purpose of maintaining the State roads.
Based on Article 109(1)(b) of the Federal Constitution
Calculation for the amount of State road grant is stated inSection 2, Part II of the Tenth Schedule of the FederalConstitution:
Average cost to a State of maintaining a mile of Stateroad, at the minimum standard determined for Stateroads.
So much of the mileage of State roads in the State asqualifies for grant.
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Maintenance of State roads means thepreservations, upkeep & restoration of State roads,roadside furniture, bridges, viaducts or culvertsforming part thereof or connected therewith as
nearly as possible in their condition as constructedor as subsequently improved.
Effective from 1990, the basis used to calculateState road grants is on the consumer price indexthat takes into account the cost of material, thecost of labour & the cost of machinery.
State Road Grant
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State Reserve Fund
State Reserve Fund is given upon applicationfrom the particular State.
The purpose of the fund is to assist StateGovernment that had deficits in their current
accounts as well as to help implement thedevelopment throughout Malaysia.
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State Reserve Fund
This fund provides grant based on theeconomic development, infrastructure & wellbeing of the respective States.
Article 109 (6) :-
Federal shall pay into a fund.
(b) every financial year, such sum of federalgovernment may, after consultant with NationalFinancial Council, determine to be necessary.
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Revenue Growth Grant
Given to the State Government whenever there is a growthor increase more than 10% in the revenue of the Federationin any financial year.
This grant is made in accordance with the Revenue GrowthGrant (Amendment) Act, 1980.
The calculation of this grant is that a provision of RM150
million is divided into 2 parts:-
- Part I is RM50 million of which RM25 million is dividedequally between the 13 states in Malaysia & the other RM25million is to be based on the population of the state.
- Part II is RM100 million of which will be determined by theFederation
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EXPENDITURE
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CONTROL MANAGEMENT OFFUNDS
Establish in order to administer and regulate the financialprovision of the Constitution
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BORROWINGS
Borrowings by the govt are strictly regulated as this willincrease public debts & have major implication on the ability
of the govt to meet its objectives.
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BUDGETS & FINANCIALSTATEMENTS
operational tools for controlling andmanaging public money
Provide an avenue for governmentto prove its performance.
BUDGET
FINANCIALSTATEMENT
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ARTICLE 99
Federal govt has to submit to Parliament,statements of the estimated receipts and
expenditure of the Federation of the followingyear
Should submit before commencement of thatyear and statement of assets and liabilities of
the Federation at the end of the last completedfinancial year.
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ARTICLE 100
Requires expenditure to be included in a supply billfor them to be withdrawn from the Consolidated
Fund except charged expenditures.
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ARTICLE 101
The supplementary budget is prepared ifthe amount appropriate by the Supply Act is
insufficient
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AUDITOR GENERAL
- Made by Yang di-Pertuan Agong
- With advice from PM & after consultation with theConference of Rulers
- (Article 105 (1) of the Federal Constitution)
- Article 105
- Eligible for reappointment but not for any other
The
appointment
Reappointment
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AUDITOR GENERAL
-May resign at any time but NOT to b
removed from office- Except as described by the Federal
Court.
- Article 98
Resignation &
Removal
Remuneration
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AUDITOR GENERAL
- Article 106
- To audit & report on the accounts ofthe federal and states
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Other duties in relation to theaccounts of the federal, state andpublic authorities, specified by Yangdi-Pertuan Agong.
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Power & Duties
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AUDITOR GENERAL
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For the State govt and other publicauthorities, the audit reports are tobe submitted to the State Ruler/ Yangdi- Pertua Negeri.
- Laid before the Legislative Assembly.
Power & Duties
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NATIONAL FINANCECOUNCIL
Provide a venue in which
representatives from the federal andthe states are to meet & discussissues concerning the financialaspects of both parties.
Comprises of PM, ministers & 1representatives from each stateappointed by the ruler.
Article108
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NATIONAL FINANCE
COUNCIL
1) When necessary by the PM
2) At the request of 3/ morerepresentatives
3) At least once a year
3CONDITIONS
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NATIONAL FINANCECOUNCIL
Making grants by federal to states
Assignment of any proceeds of
federal tax/ fee
Annual loan requirements of federal& state
Federalgovernment National
Finance
Council
consult
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THESTATES OF SABAH &
SARAWAK
Article
112A
Article 112B
The Auditor General shall submit reportrelating to the accounts of each of the Stateof Sabah & Sarawak or any public authority
exercising powers vested in it by State lawto the Yang di Pertuan Agong & Yang diPertua Negeri of the state.
Federal Constitution shall NOT restrict the
state of Sabah & Sarawak to borrow underthe authority of State Law.
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THESTATES OF SABAH &
SARAWAKArticle112C
Article112D
Special grants and assignments of revenueto Sabah & Sarawak
a) The federation shall pay grants specifiedby part IV to the states of Sabah &Sarawak for each financial year.
b) Shall receive all proceeds from taxes,fees & dues specified in part V of thatschedule, if collected, levied or raisedwithin the states.
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DEFINITION OF TERMSFinancial Authority
In relation with Fed. Consolidated Fund, means the treasury & in relation tothe Consolidated Fund of a state means the state Fin authority
Financial year
Period of twelve months ending on the 31st day of Dec in any year
Public Moneys
All rev,loan,trust & othr moneys & all bonds,debentures & other securities
raised/received by/on acc of the federation/by/on acc of a State but does
not include zakat,fitrah,baitumal or similar Muslim rev.
Public Stores
Moveable property of / under the control of the Federation /of a state
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CONSOLIDATED FUNDS
Sec 3 Fin. Procedure Act 1957
Means - > Federal & States Consolidated Fund as in Article(1) & (2) ofFe
Types ( As stated in sec7 (a),(b) & (c) )
ConsolidatedRev Acc
All rev rceivedexcpt Islamic
rev Used to
maintain2types exp.- charged expend
(Article 98)- supply expend
(Article 100 & 101 ofFE)
ConsolidaedLoan Acc
Main source:--> Domestic
borrowings-> Externalborrowings Market Loan Project Loan
ConsolidatedTrust Acc
Classifiedeither as :-
-> Gov TrustFund-> Public TrustFund-> Deposit Acc
FINANCIAL PROCEDURES FOR :
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FINANCIAL PROCEDURES FOR :
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CUSTODY & INVESTMENTOF PUBLIC FUND
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YEARLY STATEMENTS OF
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YEARLY STATEMENTS OFACCOUNTS
Sec 15 of Fin Procedure Act 1957- Annual Statements of the Goverment:
-> Conco lidated Rev A cc
-> Conso lidated Tru st Acc
-> Con solidated Loan Acc-> Stateme nts of Acc o f fund s created b y the Fed Con stitutions /
Act1957 & n o t accounted in Consolidated Trust Acc
-> Statem ents of Assets & Liabilities o f Fed & States
All annual statements have to be presented to the Legislature after
by the Auditor General
FINANCIAL REGULATIONS
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FINANCIAL REGULATIONSPROVIDED BY THE YANG
DI-PERTUAN AGONG Sec 36 of Fin Procedure Act 1957, after consulting the National Fin. Council, Yang di- PertuanAgong may provide this regulations :-
Collection, receipt, custody issue, expenditure, due accG for, care &management of publimoney & the guidance of all persons concerned the rein
More effectual record, examination, inspection & departmental check of all receipts &expenditures & the keeping of necessary books & acc
Forms for all books & doc required under this Act Purchase, safe custody, issue, sale / other disposal / write-offs, acting & stock taking of
stores & property of Fed & states.
Preparation of estimates of rev & expenditure of Fed & states Authorization of rates of payments of public funds for specific purposes if not provided
law
Making of advances to pblic officers & other persons & the rates & limits of such advancerates of interest