The Efffectiveness of Debtors Management System

Topics: Debt, Credit rating, Credit score Pages: 37 (10672 words) Published: June 19, 2013

10 Introduction

Ministry of Health and Child Welfare is the second large ministry in the Public Service in terms of establishment and is given a slice on the fiscus .All its functions are guided by the Public Service and Health Services Act. From 1 June 2005 the ministry started functioning as the Health Services Board but still governed by Public Service Regulations Acts. The physical address of its Head Office is 3rd Floor Kaguvi Building, corner Central Avenue and 4th Street, Harare.

The Health and Child Welfare Ministry is composed of health and non-health staff. Health staff is made up of a diversity of medical staff who include; surgeons, technicians, doctors, nurses, scientists and nurse aides among others. Non health staff is made up of human resources, registry, administration, typing pool, auditing and accounting personnel. The ministry has nine provinces namely, Harare, Mashonaland Central, Mashonaland East, Mashonaland West, Matebeleland North, Matebeleland South, Manicaland, Masvingo and Midlands.

All the provinces including head office have an accounts department which is fully computerised with the Public Finance Management System, which are on line with the Ministry of finance, Treasury Department and other computerised ministries. The accounts department has two sections, the expenditure and the suspense department.

Suspense accounts department is housed in every province of the Ministry of Health and Child Welfare including its Head office. Its core business is to manage the debtors of the ministry be it sports, culture or education. The Expenditure section deals with cash allocated from the fiscus for use in travelling and subsistence allowances, and day to day running of the ministry e. g. paying for water, electricity etc. The suspense section which is the subject of this research, also deals with the recovery of money from debtors of the Ministry.

Salaries are paid by Salaries Services Bureau (SSB) to head office in the form of cheques. SSB calculates the salaries of the month on behalf of the Ministry, issues an invoice for cash on delivery of service. The Ministry, from the appropriated funds issues a cheque to SSB after having reconciled the invoice with the establishment within the Ministry.

Salaries paid are for the nine regions including Head Office. The salaries are paid as gross salary with its allowances less PAYE and pension for the employees appointed on indefinite periods.

The problem arises when SSB is notified late of an employee’s abscondment from duty, death, termination of service, wrong date of advancement, late notification of transfer from urban to rural or visa or maternity leave, discharge due to ill health, a ghost employee or employee on study leave.

When the amended documents reach SSB, a disallowance or a surcharge is raised. A debit note (DN) is a debit to the Ministry raised in the current year. It is an advance account when recovered, where the Ministry money revolves and can be used within the financial year.

When SSB is notified after the financial year has lapsed, it raises a surcharge. A surcharge is a debit to the Ministry, which is an event after the balance sheet. It is a revenue account and the monies when collected, transferred and banked, are deposited straight into the Consolidated Revenue Fund (CRF) of Zimbabwe. When SSB raises surcharges and disallowances copies, it issues them to Head Office who in turn disburse them to the respective regions and Head Office after issuing every copy with an account number.

The Suspense section on receipt of copies, record them and introduce them to the respective accounts via the computers which are on line with Head Office and Treasury, a department in the Ministry of Finance. The totals of the copies are checked, recorded and itemised e.g. if salary, transport allowances or martenity leave overpayments.

SSB makes out a cheque to the various...
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