Financial Control And Accountability In Public Sector Organisation (A Case Study Of Imo State Ministry Of Finance Owerri)

Project and Seminar Material for Accounting

Project and Seminar Material for Accounting


Public financial control and accountability is not new phenomenon. It is as old as man in his social relationship with his fellow man. This is so because in ancient time, the accounts of an estate or manor were examined by reaching them out by those who complied them. To the persons in authority. Therefore, there were elements of answerability in government. This study has been embarked upon because of some problems inherent in the public sector that has hinted effective and efficient financial control and accountability.

These problems were captured in the introduction part of this work and they are as fellow, late finalization and publication of accounts and poor keeping of internal accounting records, inconsistent audit of account inability to conform to financial regulations, excessive authorization of responsibility and lackluster attitude to collection of debt and revenue.

In the course of investigation these problems questionnaire were used in collecting the data for analysis. From the analysis of the data, the following findings were made.

a. There is a system of financial control and accountability in Imo state ministry of finance Owerri but the system is not effective.

b. Resource are allocated in this system but its optimality will reduce the rate of ineffectiveness based on the above findings, the researcher conclude that financial control and accountability will be effective and efficient if pattern of government expenditure or resource allocation and effective accounting information are productively channeled therefore, the following recommendations are made

  1. Review of internal control system
  2. Recruitment, training, implementation of workers condition.
  3. Legislation and implementation of positive for publication and finalization of accounts.
  4. Independence and individual responsibility.

Table Of Contents

Preliminary Page(s)

  • Title Page
  • Approval Page
  • Dedication
  • Acknowledgement
  • Table of Contents
  • Abstract

Chapter One

1.0 Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Objective of the Study
  • 1.4 The research Question
  • 1.5 Statement Of Hypothesis
  • 1.6 Significance of the Study
  • 1.7 Scope Of The Study
  • 1.8 Limitation of the Study
  • 1.9 Definition of Terms

Chapter Two

2.0 Literature Review

  • 2.1 Brief History of Imo State Ministry of Finance
  • 2.2 Nature and definition of Financial control
  • 2.2.0 Financial Control over other Ministries
  • 2.2.1 The Commissioner for Finance
  • 2.2.2 The State Accountant General
  • 2.2.3 Auditor General of the State
  • 2.4 Legal Dimensions of Accountability
  • 2.4.1 The Constitution 23
  • 2.4.2 The Audit Act No. 38, 1956
  • 2.4.3 The Public Accounts Committee (PAC)
  • 2.4.4 Internal Audit
  • 2.5 Government Internal Audit Department
  • 2.6 Internal Check
  • 2.7 Budgetary Control
  • 2.8 Summary of Literature Review

Chapter Three

3.0 Research Methodology

  • 3.1 Research Design
  • 3.2 Sources of Data
  • 3.3 Population of the Study
  • 3.4 Sample and Sampling Size
  • 3.5 Methodology of Data Collection
  • 3.5.1 Primary Data
  • 3.5.2 Secondary Data
  • 3.6 Method of Data Analysis

Chapter Four

4.0 Data Presentation, Analysis and Interpretation

  • 4.1 General Characteristic of Responses
  • 4.2 Presentation of Data

Chapter Five

5.0 Summary, Conclusion and Recommendation

  • 5.1 Summary of Finding
  • 5.2 Conclusion
  • 5.3 Recommendation
  • Bibliography
  • Appendix
  • Questionnaire

Chapter One

1.0 Introduction

1.1 Background Of The Study

Financial control and accountability in the public sector of the economy is an indispensable factor that must be considered with a great care and skill. Almost all workers in the civil service especially those involve in government financial operation are well acquainted with financial control and accountability. In view of this, such terminologies such as cash control, capital expenditure, warrants, budgeting to most public servants but unfortunately only few understand the nature, need objective and efficiency only of the financial system in governments.

Public accountability is as old as the exchange process that gradually developed with civilization. It is as old as man in his social relations with his fellow man. The reason is quite obvious, productive resources such as estate or minor, in the ancient time were owned by one persons in authority. This illustrating the stewardship function of accountability in government.

Our society is dynamic. According to Ana (2003:25) “as economic activity progress from the final system to agriculture and then to industrial revolution”, accounting continued to hold to the need of society. As business unit become more complies and brooder in scope, accounting involved in response to the increase planning and control responsibility of management. As government grows in size accounting was developed to meet the increase accountabilities.

But it is after a race that the miles were counted. This is why today, public accountability and stewardship is more concerned on whether one uses of resource allocated yield more benefits than another of course, inefficiency and ineffectiveness or the revise as can be fund in the Nigeria public sector.

Quoting Aristotle in the politics Johnson (1999:79) said” to protect the treasure from being defrauded, let all public money be issued openly in front of the whole city, and let copies of the accountable deposited in the various wards”.
The question of whether one use of resource allocated yields more benefits than one another make public accountability more complex with serious consequences. This is especially when decisions taken in public office are brought under open and public strutting, often by person who were not involved in making decision and those learned in the field.

Public financial control and accountability is usually jaundiced and vaguely articulated. This depends on the understand and ethnical standards of the group defining it, its prevailing circumstances and the values of the people in the society. As a result of this, the research work will adequately dive into our public sector organization examine the extent of financial control and accountability.

Therefore, the research expectation is to know at the end of the work whether there has been a positive drive towards financial control and accountability in the public sector organization.

1.2 Statement Of The Problem

Nigeria public sector is faced with a lot of problem. This is especially so when viewed from the perspective of functional control and accountability evidence in the public. It is believed that there is a lot embezzlement and other forms of financial recklessness in government parastatals.

One of the problems is the late finalization and publication of accounts, and poor keeping of internal accounting record. It is caused by the large nature and functions of government department and prostates as well as caliber of personnel in its employment. The effect is that it takes a long time before relevant records and accounts are gathered, prepared and published.

Some public sector organization, witness inconsistency in the audit of their accounts. In fact, is a corollary of the above problem. The effect is that files of accounts that needed to be audited lies in the organization unattended to and confusion besiege the auditors minds on how and where to start.

Financial regulations are also not conformed to in the public sector organizations. This is because most of the regulations are basically proper works that are not implemented, due to the fact that there are no transparent and skilled staff, no adequate supervision and non use of controlled forms, receipts book and documents, and poor remuneration. The effect is that, widen room for chains of fraud malpractice are created.

Another problem is the excess authorization of expenditure. This is cruised by an anticipated livelihood of shortage accruing within the fiscal year. The effect is inflation of contract, price of procurement etc. there is also problem of lack of individual responsibility. This is caused by bureaucratic nature of public sector. Its effect according to (Aguwas 2003: 88) “if the policies failed, the ministry is blamed”.

Public sector organization is also faced with problem of lack of luster attitude to the collection of debts and revenue. The cause is that there is no formalized system or method of collection of debts and revenue. E.g. government changes where they are, they are frequently floated and not adhered to, the effect is that government losses thousands naira yearly.

Lastly, there is also a problem of lack of effective internal control/audit system in the public sector. Its causes are lack of independence, integrity and objective e.g. where a head of accounts has a higher qualification than the internal auditor. The effect is that the audit is controlled and influenced.

1.3 Objective Of The Study

The objective of the study is to achieve the following purposes.

  1. To investigate and know whether the formalization, publication of account and poor keeping of internal account records has been resolved.
  2. To examine the extent of public sector conformity with financial regulations
  3. To know whether there are still inconsistencies in auditing the accounts of public sector organization.
  4. To know the extent to which lack of individual responsibility affects the public sector financial control and accountability.
  5. To know whether or system of controlling excessive authorization of expenditure has been placed.
  6. To investigate and know whether lack of luster attitude to collection of debts and revenue has been ameliorated.
  7. To know the extent to which an internal control audit system has been placed in the sector.

1.4 Research Questions

  1. Is there any system of financial control and accountability in Imo State Ministry of Finance?
  2. Are there possibilities for institutory system of control and accountability in the ministry?
  3. Are there existing system of accountability and financial controlling the ministry?
  4. The existing ministry is they effective?
  5. Is there any need to amend the existing system?

1.5 Statement Of Hypothesis

  • H0: There is no need to amend the existing system?
  • H1: There is a need to amend the existing system?

1.6 Significance Of The Study

Financial Control and accountability has been a very important benchmark to the public sector of every economy.
Based on this research the need for developing a sound control and accountability especially in the ministries and parastatals of a developing state like imo can be over emphasized. It is because the government is at the center of the economy.

This study will portray on the extent that partner government expenditure of manner of resources allocated, determines the extent to which accountability and control can be achieved for economy, efficiency and effectiveness.

It will also portray the need for every public sector organization to establish and maintain effective accounting information which would be reliable, timely and compatible for decision making, management control, and internal control as the case may be the accounting information system should be understandable and disclose government financial condition as well as results of operations.

Apart from the government and the entire public sector that will benefit from this resources work, the researcher and academics will also benefit from it. This is because it will serve as a benchmark for further research and replication.

1.7 Scope And Limitation Of The Study

This study will be restricted to Abia State ministry of finance. It shall review the impact of the accountant general office account committee (PAC). The expenditure procedures and control within the ministry shall also be reviewed to evaluate their effectiveness, efficiency, and economy.

The class of personnel studied, varied in their qualification, profession and units, they include: the staff (senior and junior) and contractor in the ministry.

Abia State Ministry of Finance was selected for this because it represents an aim of the public sector in Imo State and its proximity to the public researcher. The personnel-staff and contractor in the other hand are seen to perform the same duties and functions in the whole gamut of institution or wholly owned by the government on behalf of the general public.

In the course of this study, the researcher encountered some limitations, such limitations are common occurrence that could prevent successful execution of research work.

The major limitation of this research work are:

A. Time:

A lot of time was wasted while trying to convince and negotiate with the respondent and return of questionnaire.

B. Money:

No research can successfully be accomplished with financial resources. Therefore, the researcher encountered financial shortage in the process of moving from place to place together the research materials, and finally to work together.

C. Insufficient Textbooks:

The researcher also encountered a problem of gathering enough textbook for the literature review.

D. Primary Data: Generation Limitation:

The researcher was not given free to interview some to-short in the ministry.

1.7 Definition Of Terms

A. Accountability:

It means the obligation of an individual or organization to account for its activities, accept responsibility for them and to disclose the result in a transparent manner. It also include the responsibility for money or other entrusted property.

B. Budget:

This is a document that expresses the anticipated revenue and expenditure of government revenue and expenditure of government for a specific period of time.

C. Government Finance:

It refers to the wide range of activities undertaken by government in financial and economic matter (the encyclopedia Britannica 1988).

D. Internal Audit:

This is the process of continuous review of the financial transaction in order to ensure that they are working as management intends (Azubuike: P :151).

E. Internal Check:

It is the aggregate of the check and balance imposed on the day to day transaction in an organization where by the work of one person is verified independently by or is complimentary to the work of another, the objective being the prevention of early detection of errors and fraud (Okoro 2001:P:32).

F. Internal Control:

These are procedures or things a company or an organization will adopt in order to avoid wastage of resources and also to secure proper asset.

G. Statutory Basis Of Audit / Public Sector Auditing:

This is the independent examination of an expression of option on the financial statement of that government by an appointment auditor in pursuance of that appointed and incompliance with any relevant statutory obligation.

Chapter Five

5.0 Summary, Conclusion And Recommendation

5.1 Introduction

This chapter focuses on summary, conclusion and recommendations. In this research, an attempt has been made to assess the Financial control and accountability in public sector organization

5.2 Summary Of Findings

The indisputable truth revealed by this research work is that there is an existing system of financial control and accountability as well as a present system of government expenditure and resources allocation in Imo State Ministry of Finance, Umuahia from the analysis of data and test of hypothesis in chapter four as follows:

  1. That there is above 50% placement of system of internal control in the existing system and the present system of government expenditure and resource allocation in the ministry.
  2. That there is above 50% rate of finalization and publication of accounts in the existing system and present of government expenditure and resource allocation.
  3. That the ministry is more than 50% in conformity with government financial regulation.
  4. That a system is in place for controlling the rate of expenditure in the existing and present system of government expenditure and resource allocation in the ministry.
  5. That a system is in place to ameliorate the lackluster attitude to collection of debts and revenue in both the existing and the present system of government expenditure and resource allocation.
  6. That there is an above 50% effect of lack of individual responsibility on the ministry.
  7. That because these rates are below the set target of 95% confidence level, these systems are therefore concluded to be ineffective.

5.2 Conclusion

It is obvious that from the analysis of the findings, the problems of the subject matter exists and are improving gradually. This is to say it has a limited level of improvement and control and therefore account for the reason for as wide spread of continuous financial recklessness in many ministries of government.

Many a time, prompt financial reports are delayed. This led to the manifestation of accounting, budgeting and audit failure in the ministries which invariably prevent sound financial control and accountability. This often resulted in a situation where there are no based for assessing performance of individual workers and the various units in the ministry.

The importance of optimality should be effective and each unit should have both the basic and necessary tools that will ensure that objectives are effectively and efficiently achieved.

Indeed, it is clear that there is a system of finance control and accountability in Imo State Ministry of finance, Umuahia. But the result from the test of hypotheses reveal that these systems are not effective and therefore efforts should be made by the government and management to channel. The resources and accounting information system productivity.

5.3 Recommendations

As a panacea to the ineffectiveness of financial control and accountability in the ministries and public sector as a whole, to drive maximum financial control and accountability, the following actions are recommended:

  1. There is need to install a more effective sound system of internal check proper segregation of duties, clear definition and assignment of duties to different person/units such duties include Authorization, Custody, Disbursement, Recording.
  2. All legislations enacted by the federal government and professional bodies on publications and finalization of accounts should be strictly implemented and monitored or practicalised
  3. This will motivate workers and they will have a better frame of mind towards discharging their duties and in optimal use of the available resource in the Ministry
  4. The internal audit unit should be made more effective by giving the auditor in charge enough authority and independence in execution of his duties. The individuals in various cadres should also be allowed some element of responsibility in the discharge of their duties. This will ensure effective and efficient performance of individuals’ duties.

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