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Dfi 402 Question Paper
Dfi 402
Course:Financial Management In The Public Sector
Institution: University Of Nairobi question papers
Exam Year:2010
INSTRUCTIONS:
1. Attempt ALL questions
2. Show your workings clearly
QUESTION ONE
a) Explain the structure of Kenya''s Public debt. (5 marks)
b) Explain the following terms as used in debt management:
i) Multilateral debt (4 marks)
ii) Bilateral debt. (4 marks)
c) Identify and explain the weaknesses in the management of public debt in Kenya. (6 marks)
d) The state should and need not to assume a passive role in management of economic affairs of the country. Clearly explain how the Government would use the fiscal policy as a measure in raising the level of income, output and employment in the economy. (6marks)
QUESTION TWO
a) . Risk Management in Kenya-public sector is complex. Explain methods that can be used to manage the risks of public sector development projects in Kenya (5 marks)
b)clearly explain how the government of Kenya can improve
i)" Management of cash (3marks)
ii) Management of inventories (3marks)
iii) management of debtors (3marks)
Explain the purpose of government budget and outline why budgeting in the public sector is crucial
(11marks)
QUESTION THREE
a) A local authority runs a restaurant for its workers, which must atleast break on a year by year basis. During the last financial year, the costs of providing a meal in its restaurant were as follows:-
Variable cost per meal:
Food sh 45
Fuel sh 15
Annual fixed costs.
Wages: Sh.3,600,000
Other overheads Sh.2,400,000
Average meal price Sh. 72
Number of meals sold 700,000
Capacity (cereals) 825,000
For the next financial year, it is anticipated that the cost of food per meal will rise to Sh.50, fuel to Sh.16, wages will increase to Sh.3,800,000 and other overheads to Sh.2,500,000
Required:
The catering manager needs to know:
i) How many meals must be sold to break even?
''ii) From the Information in (i) above give an insight into the situation of rut;
Restaurant and how it can be solved, (13 marks)
Explain each of the following funds of Government:
i) Road Maintenance Levy Fund (RMLF). (3marks)
ii) The Constituency Development Fund (CDF) (3marks)
iii) The Local Authority Transfer Fund (LATF) (3marks)
c) Explain the Institutional framework of public entities relating to procurement (3marks)
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