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System of Financial Control and Budgeting QUESTION #5656
Question 1
A CFAO discovers that departmental accounts have not been reconciled with CGA/AGPR figures for three consecutive months. Under his duties what is the MOST SERIOUS institutional risk this creates?
  • Risk of salary delays for government servants
  • Risk of undetected unauthorized expenditure going unreported to Parliament and the PAC because the liability register and actual figures will diverge — rendering financial control and audit ineffective✔️
  • Risk of loss of budget allocation for the next year
  • Risk that the Financial Adviser will be held personally liable
Correct Answer Explanation
The CFAO must systematize maintenance of accounts and their timely reconciliation with CGA/AGPR figures and maintenance of the Liability Register. Failure to reconcile means that unauthorized expenditure excess spending and liabilities cannot be detected compared against the actual figures — this fundamentally undermines the entire financial control architecture including audit PAC accountability and the PAO's personal answerability. This is analytically the most serious institutional risk.