Public-Private Partnership contracts: Gov´t working to attain uniform accounting standard.

The Sub Director for the Settlement of State Budget and Accounts at the Ministry of Finance, Dr. Sama Paul Samja, corroborated what the Minister of Finance, Louis Paul Motaze, had earlier said.

The Sub Director told journalists that they gathered to validate two accounting standards; the first on changes in accounting methods, estimation and correction of errors. 

The other, he said, was the public service contracts and management of assets that are acquired by executors of public contracts and other services.

Accounting methods, estimates & correction of errors explained

According to documents made available to the press, the purpose of the standard is to prescribe the selection criteria and the changes taking place in public accounting and to specify appropriate treatments for each of them.

The expected standardisation is also intended to enhance the relevance and reliability of the financial statements of the state and other public entities. 

They also said it as well touches on the comparability of their financial statements over time, with those of other similar public bodies.

Also, in the regulatory provisions, this standard, officials of MINFI remarked, gives the scope, specifies the definitions, and prescribes the accounting treatments to be used. 

They further said it also touches on the information to be provided in the context of changes in accounting methods, changes in accounting estimates and correction of errors.

In context also was the positioning of the standard in relation to other standards to achieve the principle of consistency of methods. 

The latter, MINFI officials said, stipulates that changes in accounting policies and methods should only be made if they contribute to a fairer presentation of the financial statements. 

Any change that has a material impact on income statements, the officials said, must be disclosed in notes to the financial statements being forwarded for validation by hierarchy. 

Public-Private Partnership Contracts

The purpose of standardizing Public-Private Partnership accounts, according to the officials, are triple pronged: to help in controlling the State´s commitments; to help in controlling the budgetary risks potentially associated with PPPs, which could be both fiscal and financial. 

Thirdly, they said standardization helps in controlling assets and state property acquired under PPPs. It includes periodic checks, assessing conditions of use, evaluating potential income, provisions, depreciation, impairment and other unanticipated exigencies.

A press statement handed to journalists also threw light on the legal texts that gave powers and impetus to the committee. 

In which case, Minister Motaze highlighted section 5 of law number 2023/008 of 25 July 2023; establishing the general regime for public-private partnership contracts.

The law, he said, defines a public contract as, “the contract by which the State or one of the corporate bodies subject to this law, entrusts to a private entity, for a specified period, depending, where applicable, on the amortization period of the investments or the financing arrangements adopted”.

The Minister of Finance, through the press statement, further explained that PPPs are managed institutionally by the Conseil d´Appui a la Realisation des Contrats de Partenariat, CARPA. 

CARPA is the Support Council for the Realisation of Partnership Contracts. It was set up by a decree in 2008. It went operational in 2009.