THE IMPACT OF EFFECTIVE PUBLIC SECTOR ACCOUNTING ON PUBLIC FUNDS MANAGEMENT IN NIGERIA

Description

THIS PROJECT WORK IS ON THE IMPACT OF EFFECTIVE PUBLIC SECTOR ACCOUNTING ON PUBLIC FUNDS MANAGEMENT IN NIGERIA. 

Abstract

This study has been carried out critically analysis and the impact of effective public sector accounting on public fund management in Nigeria. This project work was necessitated by the way government play in the development of the grassroots socially, economically and politically. In so doing, the researcher used both primary and secondary method in collecting government council. Both questionnaire and interview method were used while other data were collected from textbooks, journals and magazines of related literatures to government accounting in Nigeria government. However, from the result of the finding and conclusion, it was observed by the research that the accounting system of government fell short of being effective. As a result of this government has been caught in the cobweb of inadequate function and powers, inadequate finance, low administration, inefficiency and poor budgetary control. In spite of that the researcher did make some reaching and clear recommendation, which if adopted will greatly solves some of these problems in the government council.

CHAPTER ONE

INTRODUCTION

1.1   Background to the Study

Nigeria as a nation consist of three level of government that have interest in the public sector accounting, therefore, the status and power of these government are dearly defined by the constitution of the federal republic of Nigeria. Included in the government is federal, state and local government. The local government is regarded as the thired tier of the aforementioned level of government and it is essential in the development process of any country like Nigeria. This entail such as provision of social welfare services, provision of community mobilization, maintenance of local markets and roads etc.

Okhaide (2001) opined that the united nation office for public administration (UNOPA) defined local government as a political subdivision of a nation or (in a federal system) state  which is constituted by law and its substantial control of local affairs including the power to oppose, take and to employ labour for prescribed purpose.

The state government has a considerable power over their local government council. The financial regulation in which the local government applies in the preparation and presentation of their account are formulated by the relevant statues.

Financial regulation provides a basis for internal control and external accountability nevertheless, the question which has frequently arisen in the issues of local government in not really living up to expectation in the eye of the common man and government. One move aspect that has drawn the attention of the researchers has been the allege lack of financial.

Johnson (1995) attributed these as inadequate funds embezzlement, shortage of trained personal, poor infrastructure, illiteracy among councilors bribery, and corruption, favoritism, and nepotism, poor collection method of taxes and poor communication system.

In addition the system of accounting, auditing and control in Nigeria local government dearly leaves much to desire. These local government hardly know of any form of audit other than those performed periodically by officials of state government. This audit exercise came up infrequently and when conducted are done unprofessionally. In view of these clear deficiencies in local government councils, this research will provide a deliberate attempt to approach this question with a view to take a stand on some critical issues and making recommendation on how to improve on the system of accounting used by the local government.

1.2   Statement of the Problem

Accounting in the public sector was necessitated by the need to collected and disburse funds for the government.

1.          Is there any system of accounting in the third tier of government?

2.          Is there any need for effective and sound system of accounting in the local government councils?

3.          Is local government accounting and financial data useful?

4.          Do public officers at the grassroot level of local government councils given evidence of accounting of their stewardship?

5.          Is there adequate information useful for the good control and efficient management of government operation?

1.3   Research Questions

1.     Does local government council has accounting records?

2.     Does local government council prepared their account in compliance with the application guidelines?

3.     Does preparation of local government account show efficiency?

4.     Does the local government council have adequate internal control system?

5.     Does the local government council have internal audit department?

6.     Does the local government council reply on the recommendation of the internal auditor?

7.     Does the local government council audit their account periodically?

1.4   Objective of the Study

Government performs a wide rage of service and activities involving sizeable public funds. This high degree of financial commitment has created the need for sound system and techniques of accounting necessary for responsible and effective public administration. The process and structure of any accounting system have to be related to the need of the users of accounting information. Hence the purpose of this research includes.

1.          To evaluate and access the existing system of accounting in the third tier of government.

2.          To ascertain the usefulness of local government financial data.

3.          To emphasize the need for an effective and sound system of accounting in the local government council

4.          To emphasize the need for public officers at the grassroots level to give evidence of accountability for their stewardship.

5.          To provide useful information for effective control and efficient management of government operation.

6.          To clearly understand the type of account and return prepared by the local government.

1.5   Statement of Hypotheses

In the following hypothesis were formulated in order to have better understanding of this study.

Hypothesis One

HO:   Nigeria local government council has is accounting recorded.

HI:    Nigeria local government council has accounting recorded.

Hypothesis Two

HO:   Local government account are not prepared in compliance with the applicable guidelines.

HI:    Local government account are prepared in compliance with the applicable guidelines.

Hypothesis Three

HO:   The preparation of local government account does not show efficiency.

HI:    The preparation of the local government account show efficiency.

1.6   Significance of the Study

In the light of the present economic recession in Nigeria and the need to bring government closer to the people at the grassroot level, the federal government has deemed it fit to extend some of its responsibilities to the local government councils.

This research will help to solve problems encountered by local government authorities in effectively in having a system of book keeping and sound system of accounting. Thus, this research will mostly be useful in the following ways.

1.            To Local Dwellers: it serves as an opportunity on the need of local authorities to put in place effective and sound system accounting, which provides financial data that will enable them appraise the activities and performance of local government authorities in relation to their expectation.

2.            Administration and Politicians: the will find this project very useful as it compels the need on the need of the part of local government chairman and their council values of system of accounting which provides a suitable evidence of their stewardship.

3.            This project will also educate the government better so as to pay more attention to grassroot development.

4.            In addition researcher will also find it very useful not to serve as material but also to serve as an insight into the particular area of study.

5.            This project work will be of great benefit to the nation as is gendered towards finding solution to the problems of accounting in local government council.

1.7   Scope of the Study

In the view of diverse nature of this research work, the researcher has focused his research study within the geographical areas of a local government council in Edo State.

To adequate cover this research work personal interview and well structured. Questionnaires were administered to the local government council for extracting relevant information necessary for the purpose of this study. The scope of this study also cover such issues as the financial processes subsisting in the local government and the audit of books account of the local government council with the view of critically evaluating the effectiveness of the system of accounting.

Again it also interest the researcher to critically examine the internal control system of the council and advise the council professionally if there is any weakness in the internal control system.

1.8   Limitation of the Study

Basically the researcher study was to have a look at the impact of effective public sector accounting on public fund management in Nigeria but the following constraints were encountered

1.          Inability to gather enough information from the public.

2.          In sufficient current materials, such as text book, journals, magazines, financial Statement etc

3.          Attitude of the respondent to all question given to completion of the study.

4.          Inadequate constant flow of information and poor communication network.

5.          Non availability of essential material in the library.

1.9   Definition of Terms

Adams (2006) defined public sector accounting as a process of recording, communicating, summa rizing, analyzing and interpreting government financial statement in aggregate and in details reflecting all levels of transaction involving the receipt custody and disbursement of government funds.

The public sector includes all organization which is not privately owned, and their goal is not primary to earn profit by its owners.

The local basis of this accounting is governed by the constitution. Audit ordinance, financed regulations and revenue fund, the development fund management fund and contingency fund.