Assessment of challenges and solutions in implementing accrual-based IPSAS in the public sector entities in Uganda

Abstract

The main objective of this study was to examine the challenges and solutions associated with the implementation of accrual-based International Public Sector Accounting Standards (IPSAS) in Ugandan public sector entities. The study was motivated by the need to enhance fiscal transparency, accountability, asset and liability stewardship, fiscal risk reporting, and the provision of decision-useful financial information. Although Uganda has undertaken multiple public financial management reforms, empirical evidence suggests that the operationalization of accrual-based IPSAS remains uneven. Persistent gaps were observed in asset registry maintenance and valuation, liability and arrears recognition, system integration, audit preparedness, and the utilization of accrual information in planning and decision-making. The study adopted a positivist paradigm and a quantitative research design. Primary data were collected through structured questionnaires administered to professionals in accounting, finance, internal and external audit, planning, procurement, asset management, oversight, and public financial management. The sample comprised 140 respondents, with seven participants drawn from each of 20 public sector entities in Kampala. Of these, 122 questionnaires were returned and deemed usable, representing an 87.1% response rate. Data were analyzed using the Statistical Package for the Social Sciences (SPSS), employing descriptive statistics, reliability analysis, Pearson correlation, multiple regression analysis, and diagnostic tests to ensure model robustness. Study findings indicate that the level of accrual-based IPSAS implementation in the sampled entities is moderate. Institutional determinants and operational challenges were rated high, technical capacity moderate, and strategies for strengthening implementation very high. Correlation analysis reveals statistically significant positive relationships at the 1% level between implementation and institutional determinants, technical capacity, and implementation strategies, while operational challenges demonstrate a significant negative relationship. Multiple regression results show that the independent variables jointly explain 69.6% of the variance in implementation. Implementation strategies exert the strongest positive effect, followed by technical capacity and institutional determinants; operational challenges have a significant negative effect. The study concludes that effective accrual-based IPSAS adoption requires an integrated reform framework that aligns institutional structures, human capacity, information systems, data integrity, internal controls, leadership, and decision processes. Recommendations include strengthening coordination of implementation, continuous capacity building, comprehensive asset verification and valuation, assessment of liabilities and arrears, integration of financial systems, reinforcement of internal audit assurance, quality assurance reviews, effective change management, and systematic use of accrual information in budgeting, planning, performance monitoring, and public sector governance.