Accounting System In Nigeria Health Institutions

Project and Seminar Material for Accountancy / Accounting

Accounting System In Nigeria Health Institutions


This research work is a very important study on the accounting system in Nigeria health institution. This was motivated by the need to establish the extent paper documentation has been made need for paper control measure in keeping sound accounting system to solve these problems, impair were collected using questionnaires and observation during clinical visit. The respondent comprised of senior and junior staff of the relevant unit. In organizing and presenting data collected tables, percentage was used which gave the following findings: Some financial transaction are not properly documented. There cannot be a sound accounting without proper control system. Personal interest, overlapping and exercise of authority has some contributory side effect on sound accounting system. The works of internal auditor and revenue clerks are not relied on as far as fund generation and disbursements is concerned. The management should ensure that every belief receipts and payments should be properly documented to avoid fraud and pilferage. The management need to employ an control system. The management need to employ an internal auditor There should be segregation of duties.

Chapter One


1.1 Background of the Study

Record keeping in business has been an old practice right from time. It helps businessmen and owners to plan on how activities will be carried out and to determine how activities have been performed and comparisons made among different periods in accounting. The need of record keeping cannot be over-emphasized, in different organizations’ accounting systems and procedure in record keeping vary.

Though system and approaches may differ, they still aim at the same thing-producing accounting information necessary for control and decision making.

Each organization is unique and so plans its operations and procedures that suits it’s purpose. However, standard procedures apply to small and big organizations. In most cases, cash and cheque record must be receipted written in both words and figures and banked, with proper account of its given be clerks entrusted with it. Equally cash/check disbursements must be duly authorized and carried out according to the procedure aid down in the organization, proper voucher together with supporting documents should be attached to vouchers with appropriate signatories.

In an organization where there is no proper documentation of some financial transaction and a measure of control on the activities of its staff can not maintain a sound accounting system.

Parklane General Hospital as one of the institution was established in 1930 as a Nursing home for colonial masters. Nigerians and other blacks were not allowed or treated there until 1952 when the first civil servants resident in GRA were allowed and treated in the Nursing home.

In April 1967, during the Nigeria civil war, the Nursing home was converted into a general hospital and the first expansion work started in May 1967. By 1970, the hospital had 200 beds and between 1978 and 1982, the surgical ward, eye clinic, pediatric ward, plant houses, mortuary and four new blocks of consulting rooms in the OPD were constructed and commissioned. In 1985, a new phase of development started with contracts awarded for a maternity ward. Both surgical ward and ante-natal clinic have been completed and commissioned while the marketing ward was still under construction.

In August 1999, a Nursing School was opened in the hospital on a temporal basis, using the proposed gynecological block. Also block of 5 bungalows were completed for house officers awaiting the accreditation of the hospital for training of the house officers.

1.2 Statement of the Problem

From the observations and reports of some patients and staff they have been pointing at the same thing. There are no documentation of some financial transactions, inability to have perfect control on the activities of the staff, cases of misappropriation of fund, and other irregularities which contribute to unsound accounting system in the institution. Therefore the problems are:

  1. Non documentation of some financial transaction.
  2. No proper control measure to ensure a sound accounting system.
  3. The extent personal interest, overlapping of job and the exercise of authority affect accounting system in Parklane General Hospital.
  4. To what extent does the management rely on the work of the accountant, internal auditor and revenue clerks.

1.3 Objective of the Study

The increasing rate of non-documentation of some transactions has brought conflicts of personal interest with the hospital interest and misappropriation, I believe that the information collected from this study will highlight the benefits which these institutions have been missing without a sound accounting and control system. The major objective of this study are:

  1. To determine how proper documentations of some financial transactions can be made and maintained.
  2. To advise the institution on a proper control measurement to ensure sound accounting system.
  3. To ascertain the extent of personal interest, overlapping of job and exercise of authority affecting accounting system.
  4. To fine out the extent the management has been replying on the works of the accountant, internal auditor and revenue clerks.

1.4 Research Hypotheses

Hypotheses 1
  • H0: Some financial transactions are not properly documented.
  • H1: Some financial transactions are properly documented.
Hypothesis 2
  • H0: There can not be a sound accounting with out proper control system.
  • H1: There can be a sound accounting with out proper control system.
Hypothesis 3
  • H0: The work of internal auditor and revenue clerks are not relied on as far as fund generated and disbursement is concerned.
  • H1: The work of internal auditor and revenue clerks are relied on as far as fund generated and disbursement is concerned.

1.5 Research Questions

The study is set out to find answers to the following questions:

  1. To what extent has documentation of some financial transactions been made and maintained?
  2. What are the effect of proper control measure on accounting system.
  3. To what extent does personal interest, overlapping of job and exercise of authority affects accounting system?
  4. To what extent does the management rely on the work of the accountant, internal auditor and revenue clerk?

1.6 Significance of the Study

Since Parklance General Hospital is a health institution and government establishment known for internal generation of fund in a great measure, it is necessary to research into its accounting system and control system.

This research will give more insight on the losses sustained by the government and the hospital for non documentation of some transactions.

It will reveal the relationship between control measure and sound accounting system. And the importance of an accountant, internal auditor and revenue clerks in maintain good accounting system in an organization. It will also be of immense help to practicing accountants and future researchers.

1.7 Scope of the Study

The study covers the areas relating to Parklane General Hospital’s accounting section in relation the maintaining sound accounting system in the area as relating to drug sales receipts, disbursement of hospital bills, card consulting fee and payment for laboratory tests.

1.8 Limitation of the Study

In carrying out the research, the researcher encountered some limitations which include time constraint inadequate of fund lack of knowledge of some respondents in the area of accounting terms, they could not give the desired answers.

1.9 Definition of Terms

1. Colonial

Belonging to a country that controls another country.

2. Pediatrics

The branch of medicine dealing with the care and disease of children.

3. OPD

Out patient department

4. Antenatal

Before birth, during or relating to pregnancy. A medical examination during pregnancy.

5. Maternity

The state of being a mother, the character or relation of a mother.

6. Gynecology

The branch of medicine dealing with health care for women, especially the diagnosis and treatment of disorders affecting the female reproductive organs.

7. Misappropriation

The intentional, illegal use of the property or funds of another person for one’s own use or other unauthorized purpose, particularly by a public official, a trustee of a trust, an executor or administrator of a dead person’s estate or by any person with a responsibility to care for and protect another’s assets.

8. Conflict

It arises whenever individuals have different values, opinion, needs, interest and are unable to find a middle way.

9. Insight

Understanding of the true nature of something.

10. Immense

Of boundless or immeasurable size or extent.

Chapter Five

Summary Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was to ascertain the accounting system in Nigerian hospitals.

In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of accounting systems in Nigeria health institutions.

5.2 Summary

Most hospitals in Nigeria do not keep detailed records of the distribution of drugs and medical supplies. It was necessary, therefore, to allocate the total cost of drugs and medical supplies to cost centers by studying a sample of issues from the pharmacy store. It is assumed that the number of drugs and other medical supplies issued from pharmacy stores was equivalent to consumption in the recipient cost centers. (There are no records of actual consumption in the cost centers, except for the outpatient pharmacy) which makes it cumbersome for the accountant to prepare a financial statement which shows a true and fair view of the financial state of the hospital.

5.3 Conclusion

The process of ascertaining effective accounting system gave Hospital Management Teams a good idea about how their hospital is organized from a cost point of view. They have already used the results to prepare better hospital budgets and recognize its potential value in negotiating more reasonable budget allocations with the Ministry of Health and the Ministry of Finance. Information on unit costs in each area of the hospital has provoked discussion about the possibility of producing services for less cost without compromising unduly on quality. Hospital training courses on financial management have used the results of cost analysis to show how better use could be made of this information to deliver services more efficiently. The next step for hospitals is to consider placing responsibility for costs and revenues on the managers of each cost center, a strategy that is likely to lead to improvements in efficiency.

5.4 Recommendations

Haven completed the study, the researcher recommend the establishment of effective monitoring committee to oversee the activities of the managers of the basic Conditional Cash Transfer scheme (an initiative that transfers cash from the State government to household as a measure to boost primary education and strengthen healthcare services) across the local government areas. Establishment of virile political framework and democratic governance that will be impartial in policy formulations, especially, as it concerns healthcare provision in the state. Review of the current revenue allocation/sharing formula, where (through operating joint revenue account) the state government controls the amount of revenue that goes to the local government areas from the federation account. If funding which comes from the federation account is allowed to go directly to the local government councils, much improvement will be made, more so, since the funding of primary health care centers remains the prerogatives of the local government councils. More involvement of international donor agencies in the health intervention programs of the country. Nigeria still requires the support of foreign partners in fighting the scourge of disease within and around the country.

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