ABSTRACT
This research was aimed at finding out the impact of public sector
accounting in Nigeria financial control system using Esan south east local
government area of Edo state as a case study. The purpose was to find out
if the control of public fund adopted by the local government is
appropriate, to determine whether the public sector accounting principle
applied by the local government is appropriate and effective and also to
investigate whether the source of revenue to the local government is
enough for them etc. The population size used was the staff and members
of Esan south east local government area of Edo state, out of which the
sample size was selected using the Taro Yamani‟s sampling techniques.
Data for this study were primarily and secondarily sourced. Chi-square was
used to analyze the responses gotten from the distributed questionnaires.
The findings made in this study are; the public accounting principles
applied by the said local government area is inappropriate and ineffective
and the control of public fund measures adopted is also inappropriate etc,
based on the findings, it was concluded that the public sector accounting
principles applied by the local government is inappropriate and also the
control of public fund measures adopted was inappropriate.
Recommendations were also made based on the findings which are, an
account committee should be set up to control the accounting system of the
said local government and monitor their day to day activities etc and when
this is met, the goal of creating the local government will be achieved.
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TABLE OF CONTENT
PAGE
Title page————————————————————– ——- — i
Approval page ——————————————————– ———- ii
Dedication ————————————————————- ———- iii
Acknowledgement ————————————————— ———–iv
Abstract —————————————————————- ———–vi
Table of content ——————————————————- ———-vii
CHAPTER ONE:INTRODUCTION
1.1 Background of the study————————————————-1
1.2 Statement of the problem ———————————————–3
1.3 Objectives of the study————————————————–4
1.4 Research questions——————————————————-5
1.5 Formulation of research hypotheses ————————————-5
1.6 Significance of the study————————————————–6
1.7 Scope of the study———————————————————7
1.8 Limitations of the study.————————————————–7
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CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 The concept of public sector———————————————–9
2.2 Overview of public sector accounting ———————————-12
2.3 Peculiarities of public sector accounting ——————————-13
2.4 Appraisal of Nigeria financial control system————————–19
2.5 Objectives of Public Sector Accounting——————————–22
2.6 The role of public sector accounting in Nigeria financial control
system.———————————————————————-24
2.7 The historical background of Esan South East LG——————–26
2.7.1 Sources of revenue to Esan south east LG—————————–26
2.7.2 Functions of Esan South East LG—————————————27
2.7.3 Controls of Esan South East LG —————————————30
CHAPTER THREE: RESEARCH DESIGN AND METHODOLOGY
3.1 Research design———————————————————–33
3.2 Sources of data ———————————————————–33
3.2.1 Primary data—————————————————————33
3.2.2 Secondary data ———————————————————–34
3.3 Population of the study—————————————————34
3.4 Sample size determination ———————————————–34
3.5 Sampling technique ——————————————————35
3.6 Research instrument used————————————————-35
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3.7.1 Reliability of research instrument ————————————–36
3.7.2 Validity of research instrument used————————————36
3.8 Method of data treatment and analysis———————————-36
3.9 Area of the study———————————————————37
CHAPTER FOUR: DATA PRESENTATION AND ANAYSIS
4:1 Data presentation/Analysis ————————————————38
4.2 Test of hypotheses ——————————————————-47
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSIONS
AND RECOMMENDATIONS
5.1 Summary of the findings ————————————————-55
5.2 Conclusion —————————————————————–56
5.3 Recommendations ———————————————————57
BIBLIOGRAPHY—————————————————————–59
APPENDIX / QUESTIONNAIRE———————————————-62
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CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Public sector is that sector of the economy established and operated by
government and its agencies distinguishable from the private sector and are
organized on behalf of the whole citizens while Public sector accounting is
the process government agencies and municipalities use to record financial
transactions.
Mathias, (2004:78). Said, similar to private sector accounting in theory, the
focus of public sector accounting is somewhat different. Most government
agencies and municipalities need to track funds generated from tax
revenues and expenditures related to projects or appropriations. In addition,
nations may need to follow a set of standard of accounting principles
different from private sector accounting rules. The creation of an
international accounting standard helps nations to follow similar rules in
other to present information in a similar manner.
Government accounting typically uses a set of rules that tracks financial
information. Rather than attempting to determine how much money a
public sector entity has made, the entity must report financial information
to interested parties, primarily constituents. The separation of money into
these funds makes it difficult for government agency or municipality to
spend money on unauthorized purposes. Elected officials or legislatures
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must create appropriations or spending authorizations to transfer funds
amongst government fund accounts. This process attempts to restrict the
spending of money on a free-will basis that will quickly deplete an
agency‟s resources
Similar to private sector accounting, public sector accounting principles
often seek to lay a framework for accounting practices.
Afolabi,( 2004:320). Said rather than creating a hard set of rules to follow,
the principles allow for an application of basic principles to either large and
small entities or municipalities. An international set of accounting
principles is also necessary for smaller nations to learn and adopt rules that
will enhance their internal national accounting process. Most times,
developing nations cannot or do not have the resources capable to create
and instil a framework for their public sector accounting practices.
Adopting an international set of accounting rules will help them overcome
this problem and typically helps them start on the path better infrastructure
development.
Another purpose of public sector accounting is to create a standard
expectation of ethics and accountability for a nation‟s financial
information. Standard public accounting principles will also make it easier
for a nation to undergo an audit. it is also harder for countries to hide
inappropriate financial transactions when using public sector accounting
principles. This research study will therefore appraise the impact of public
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sector accounting in Nigerian financial control system focusing on Esan
South East local government.
1.2 STATEMENT OF THE PROBLEM
The problems inherent in this research study as investigated by the
researcher are;
1. INADEQUATE REVENUE: that is, the source of revenue available to
Esan South East Local Government authority most often is not enough
for them, as this invariably affects diverse activities that are carried out
in the local government area.
2. Poor administration of local government funds.
3. Another problem is the fact that the control of public fund adopted by the
local government is inappropriate. It is as a result of this that there are
still setbacks in the local government as regards to infrastructural
development.
4. The adoption of inappropriate and ineffective public sector accounting
principles and guidelines.
5. Another problem is that the accounts of the local government are
characterized by inadequacies such as, improper maintenance and book
keeping of accounts and other necessary records, embezzlement of
public funds especially by the top officials.
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1.3 OBJECTIVES OF THE STUDY
The main objective of this study is to appraise the impact of public sector
accounting in Nigerian financial control system and also to aid local
government improve on their revenue generation and collection to that
point where all collectable revenue are actually collected and safely paid
into the council treasury.
Other objectives include the following:
1. To investigate whether the sources of revenue available to Esan South
East Local Government authority is enough for them.
2. To find out whether the revenue generated within the local government
is put into good use.
3. To ascertain whether the control of public fund adopted by the local
government is appropriate.
4. To determine if the accounts of the local government are
characterized by inadequacies such as, improper maintenance and book
keeping of accounts and other necessary records, embezzlement of
public funds especially by the top officials.
5. To examine if the public sector accounting principles applied by the
local government is appropriate and effective and also to recommend
strategies by which the local government can use in detailing out funds
and prevent revenue leakages.
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1.4 RESEARCH QUESTIONS
The following research questions are formulated for the purpose of this
research work:
1. Are the sources of revenue available to Esan South East Local
Government authority enough for them?
2. Are the revenues generated within the local government put into good
use?
3. Is the control of public fund by the local government appropriate?
4. Are the accounts of the local government characterized by inadequacies
such as improper book keeping and maintenance of other records etc?
5. To what extent do the irregularities as regards to public fund in the local
government affect the diverse activities of the local government?
6. Are the public sector accounting principles applied by the local
government appropriate and effective?
1.5 FORMULATION OF RESEARCH HYPOTHESES
The following hypotheses are formulated for the purpose of this research
work:
HO: the public sector accounting principles applied by Esan South East
Local Government authority is inappropriate and ineffective
HI: the public sector accounting principles applied by Esan South East
Local Government authority is appropriate and effective
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HO: the sources of revenue available to Esan South East Local
Government authority is not enough for them
H2: the sources of revenue available to Esan South East Local
Government authority is enough for them
HO: the control of public fund by the local government is inappropriate
H3: the control of public fund by the local government is appropriate
1.6 SIGNIFICANCE OF THE STUDY
This research work will be of immense significance to the staff of Esan
East local government. It will go a long way in enlightening them on the
concept of public sector accounting as well as the best strategies to be
adopted to monitor its generated funds. This research work will as well be
of benefit to students and researchers because it will widen their scope
from the information contained in this research work and lastly, it will help
the entire nation in modifying the methods and approaches used by
different ministries, parastatals and other inter-ministerial departments in
their financial control system and also it will help them in improving
revenue generations and minimizes expenditures since public sector is
differentiate able from private sector or bodies.
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1.7 SCOPE OF THE STUDY
This research work on the impact of public sector accounting in Nigerian
financial control system is focused on Esan East local government of Edo
state.
1.8 LIMITATIONS OF THE STUDY
This research would have been generalized to all local government areas in
Nigeria but due to some numerous factors, I have decided to limit my study
to Esan south East local government area, Edo state.
The following are the constraints encountered in this research:
1. FINANCIAL CONSTRAINT: Finance is the key to the success of every
research work and the said finance was readily unavailable on my part as at
the time I was carrying out this research and as such, proper research will
not be carried out if I go about all local governments in Nigeria.
2. TIME CONSTRAINT: The time stipulated for the submission of this
work was obviously too short and as such was unable to go about all local
government areas in Nigeria.
3. LACK OF KNOWLEDGEABLE AND SINCERE PERSONNEL: some
of the officials employed or appointed in most local governments in
Nigeria including that of Esan south East local government has no
knowledge of what public sector accounting is and they are also not
approachable because they placed themselves on a very high esteem and
even when one is opportune to interview them, there is sure to be
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shortcomings arising from the basis such as, misinformation, and deliberate
distortion of facts and these is as a result of not letting one know where
revenue comes from and how it is been utilized.
4. LACK OF RESERCH FACILITIES: Research facilities such as
transportation makes research work easier and interesting but it is noted
that Nigeria has a poor transportation system especially in the area were
most local government secretariat are situated and this restricted me from
going about all local government areas and as such, I was forced to focus
my study on Esan south East local government area though, the research
was still very difficult to carry out.
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