Financial Control Tools In Public Sector Organization (A Case Study Of Owerri North Local Government)

Project and Seminar material for Accountancy

Project and Seminar material for Accountancy


Abstract


The management and/or board of directors of every organization must remained that every material that held in financial control tools saying that financial problem of the organization resulting to it doom. However, centralization of purchasing function is essential in every organization for the purpose of attaining both optimum operating efficiency and maximum profitability; more so, an organization’s financial officer should motivate its financial control officers to ensure a common relationship with each other in conduction the research, the researcher adopted the survey method using oral interviews, questionnaires and personal observations. The researcher also interview other related literature necessary to get the needed information for the data collection for study.


Table Of Contents


Preliminary Page(s)

  • Title page
  • Approval page
  • Certification
  • Dedication
  • Acknowledgement
  • Table of contents

Chapter One:

1.0 Introduction

  • 1.1 Background of the study
  • 1.2 Statement of problem
  • 1.3 Need of study
  • 1.4 Objectives of study
  • 1.5 Hypothesis
  • 1.6 Scope of the study
  • 1.7 Assumption of the study
  • 1.8 Limitations of the study
  • 1.8 Definitions of terms

Chapter Two:

Literature Review

  • 2.0 Brief introduction
  • 2.1 Commissioner for finance
  • 2.2 State account general
  • 2.3 Financial regulation (FR)
  • 2.3.1 Government audit department
  • 2.3.2 Public account committee (PAC)
  • 2.3.3 Audit alarm committee
  • 2.3.4 Accounting officer
  • 2.3.5 Budgeting control
  • 2.4.1 Internal control in the public sectors
  • 2.5. Internal audit
  • 2.5.1 Guidance for internal auditors
  • 2.5.2 Internal audit in the public sector
  • 2.5.3 Internal audit of the ministry
  • 2.6.Internal check
  • 2.7 Conclusion

Chapter Three:

Research Methodology

  • 3.0 Introduction
  • 3.1 Procedure for data collection
  • 3.2 Sources for data
  • 3.2.1 Primary source of data
  • 3.2.2 Secondary sources of data
  • 3.3.1 Oral interview
  • 3.3.2 Desk research
  • 3.4 method of data analysis

Chapter Four:

4.0 Data Presentation and Analysis

  • 4.1 Introduction
  • 4.2 Data needed for the investigation
  • 4.3 Treatment of data
  • 4.4 Interpretation of findings based on table
  • 4.5 Summary table chart
  • 4.6 Conclusion

Chapter Five:

5.0 Summary of Findings Conclusion and Recommendation

  • 5.1 Summary of findings
  • 5.2 Conclusions
  • 5.3 Recommendations
  • 5.4 Bibliography
  • Appendix 1
  • Appendix 11 – interview questions.

Chapter One


1.0 Introduction

The term financial means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. It is a means of applying general management principle of financial resources of the enterprise. Financial is the management of finance of a business/organization in order to achieve financial objectives.


1.1 Background Of The Study

The objectives of financial,the financial is generally concerned with procurement, allocation and control of financial resources of a concern. The objectives can be following.

  1.  To ensure adequate returns to the shareholders which will depend upon the earning capacity, market price of the share, expectations of the shareholders?
  2. To plan a sound capital structure. There should be sound and fair composition of capital so that a balance is maintained between dent and equity capital.
  3. To create wealth for the business, to generate cash.
  4. To provide an adequate return on investment bearing in mind the risks that the resources invested.
    Financial control is a critically important activity to help the business ensure that the business is meeting its objectives.

Accountability is the system for ensuring proper stewardship of asset which involves a legal and moral liability for ensuring that public funds are used for public ends o purpose and that the best value is obtained for money spent.


1.2 Statement Of Problem

There is no gain saying of the fact that local government in Nigeria are established for political administrative and services provision purpose. The question that is yet to be answered is low the local government has been able to achieve the objective of its inauguration. This is evident by the prevailing lapses and short –comings are setting local government administrative operations which eliminate in the following phenomena:

  1. Persistent review of local government operation policies of modus operandi
  2. Indiscriminate appointment of accounting officers as chief executives of local government who lack the managerial ability of their position
  3. Gross mismanagement of public funds which has degenerate into financial crisis and poor performance of the local government in economic and social development of the country.
  4. Loss of sight in long and short run economic development of the country projects and ignorance of applicant of financial principles to investment.
  5. Short supply of professional staff in the field of accountancy and financial in the local government due to poor remuneration scheme.

1.3 Need For The Study

Based on the forgoing, the need for development sound accounting and financial control systems especially in Owerri north local government and the developing state like Imo State cannot be over emphasized. This is because the government is at the Centre of the economy. It is also important to note that the pattern of expenditure or manner of resources allocation determines the extent to which accountability for economy, efficiency and effective can be achieved.

There is also the need for every public sector organization to establish and maintain, an effective accounting information which would be reliable timely and compatible for decision making and management control.
The accounting information system should be understandable and disclose government financial condition as well as the results of its operations.

The big question now are,

  1. Is there a system of financial control and accountability in the Imo State ministry of finance if so, why?
  2. What is the possibility of putting one in place?
  3. If on the contrary, there is a financial control and accountability system already in operation. How expenditure is It.?

1.4 Objective Of The Study

The main aim is to bring economic development to the level. Despite government’s effort to facilitate economic development at the grass root level, the faulty functioning of local government have not made any significant change or improvement towards realizing the objectives. It is on the evidence of this faulty function that this research study is initiated to finding out the following objectives.

  1. To know how local government are keeping abreast with the policy of their establishment objectives.
  2. To inquire into the administration structure of local government
  3. To know the financial resources and statutory allocation is enough for its efficient functioning.
  4. To know what is obtained as regards to financial
  5. To know whether the new policy is working or not.
  6. The raising of per capital income and standard of living and therefore of regional and national income.
  7. The reduction of wealth and income inequalities between urban and rural areas.

1.5 Hypothesis

This has to do with the statement about the local government financial which may or may not be true.

  • Ho: the employment of incapable accounting personnel at the citadel of the local government has not degenerated into poor performance of many authorities
  • Hi: the employment incapable accounting personnel at the citadel of the local government has degenerated into poor performance of many local authorities.

1.6 Scope Of The Study

This research work on financial in local government focused on a case study Owerri west local government area on which all findings and analysis are based. Owerri west local government was chosen in order to have representation of average local government in Nigeria, as it is one of the local governments in Imo State. For organizations like local government with wide range of responsibilities for local services delivery and promotion of sustainable development, the prudent and efficient management of financial resources is a task that can only be ignored at the risk of the community’s dissatisfaction and disaffection. This is more so when sordid event of the recent past have shown that to a large extent, the traditional explanation for poor performance of our local government that is, inadequate of funds no longer convincing.

Definitely hit with the significance increase in their share of statutory allocation from the federation account from 10 to 24 percent according to Abubaka (1993) it is becoming increasingly clear that the answer to the problem of local government should be sought elsewhere. One such area is a more efficient and effective financial system with a strong composes on control and accountability in view of these ongoing problems in the local government the scope of this study are itemized below:

  1. To highlight in addition to pass works, the management of local government financial resources.
  2. To make suggestion to the government or more efficient and effective ways of managing financial resources. To find out the various managing financial resources.
  3. To find out the various control and frequency of reporting in the local government.
  4. This research will enable them to replant so as to achieve better results that also be useful for future, researches who may be interested in investigation other factors that are responsible for the room effective performance of local government in Nigeria.

1.7 Assumption Of The Study

Social authorities has substantial powers which have a deep effect the life change of many writing its area the local authority is a tax – raising authority imposing substantial burdens on rate payers to provide services for the community. The local authority exercise of public power, accountability is required. That accountability is enforced first and for most by the electrical process. That process gives legitimate to those who exercise that power, yet public accountability more than holding to account, it requires prescribed procedures and scrutiny in the case of local authorities there are enforced with greater rigor than in the case of central government.

A local authority has to publish annual reports and accounts and is subject to external audit. In this respect the requirement of public accountability, there are procedures governing the awards of contracts. According to Abubaka (1993).public accountability sets norms for the behavior of the local authority and for those who work it. A local authority has to account for its action to an extent unknown to the private sector. That is right and proper, for the exercise of public power has to be justified. Then significant to account can, however, encourage conformity rather than innovation it is easier to justify stability than change. Public accountability need not and should not be passive. It can be involved more than the observance or proper procedures. Public accountability should be grounded in citizenship. An active citizenship is the guarantee of accountability.


1.8 Limitation Of The Study

The empiricism of research project executed in a hitch free is atmosphere is prone to skepticism in a subconscious mind. Though the research has access to some official documents, some of the information required are confidential and posed problem before they were got, the limitation of this study are itemized below;

  1. The limitation in the area of data collection is poor record keeping coupled with the classified nature of government documents contributed to inadequate relevant information.
  2. There was a lump of commitment in the field work of ranging from escalating cost of printing high cost of transportation to mention but a few, it is possible to emphasis that the research project is executed under regulated time frame coupled with a time lay associated with the collecting of materials for completion of the study.

Despite all these problem, it is hoped that academic input contained in the study of local government fund management as it concerns Ezi–Nihitte local government.


1.8 Definition Of Terms

1) Financial:

Financial is defined as the business function that deals with the management of capital source and uses so as to attain desired goal.

2) Control:

Is he institutionalization of administrative and statutory measure that appropriate funds are spent according to set down rules and regulations minimize of waste, checking dishonesty and extravagance and the promotion of economic and effective in the conduct of the financial activities of government.

3) Accountability:

Is a system for ensuring proper stewardship of asset which involves a legal and moral liability of ensuring that public funds are used for public ends or purpose and (that) the best value is obtained for many spent.

4) Auditing:

Is an independent examination of and expression of opinion on the financial statement of an enterprises by an appointed auditor and in pursuance of that appointed and in compliance with any relevant statutory obligation.

5) Budgeting:

Is a conscious and systematic allocation of resources prepare in advanced, relating to a future period and based on a forecast of key valves adopted to achieve certain policy objectives which may not set explicitly defined performance target for the achievement of objectives to anticipated revenue, and forms the basis against which actual expenditure and revenue can be measured and controlled.

6) Accounting Policy:

Is the specific accounting bases followed or items considered to be material in the determination of profit or loss for the period and stating matters in the financial position.

7) Fraud:

This is the use of deception to obtain an unjust o illegal financial advantage.


Chapter Five


5.0 Summary Of Findings, Conclusion And Recommendations

5.1 Summary Of Findings

1985 civil service reform of the federal republic of Nigeria has extensively enlarge the legislative and government responsibilities have pragmatically charged to that of the executive president model with the executive personal being placed at the helm of affairs. Those elected as well as appointed to serve have the statutory responsibility of

  1. Institutionalization or revenue generation, collection utilization in a way that ensures efficient accounting, accountability and probability.
  2. Utilization of the revenue generations, or collected in such a way the objectives and aspirations of the local government including the electioneering promise of the chairman and conclusions are achieved.

Accounting to the government or electorate as to how the revenue collected were gathered or collected, utilized and what is left.

The implicit assumption and fats of this research work is that revenue once generated or collected no matter the source of name becomes the property of the people (public of the local government area. It is central and husbanding it should not be utilized or treated or spent anyhow.

  1. The faulty implementation of local government policies has caused persistent reformation of local government policies.
  2. This employment of incapable accounting personnel at the citadel of the local government has degenerated into poor performance many local authorities.

5.2 Conclusion

Financial permeates all activities is any organization elaborate arrangement exist to ensure an efficient and effective system of managing finances in our local government but a combination of institutional and structural factor.(including the notorious Nigeria factor) have continued to undermine the efficiency of the system.

This channel before the newly appointed chairman and members of the caretaker committee is to ensure a strict compliance with existing rules and regulations and by their own individual collective action ensure that they operate strictly within the later and spirit of these rules and regulation.

The credibility of the country’s local government system is presently at the lowest ebb particularly with regards to the ability of local government officials to shoulder public trust. The new caretaker committee must do their best to resuscitate public confidence in the local government. To do this, they must make accountability their watch word and of curse live and be seen by all and sundry to live above board.


5.3 Recommendations

Despite all the elaborate arrangement to ensure and accountability, there is not much to show that these two important objectives f financial are severally undermined. These measures through well intended have been rendered ineffective in our local government today.

  1. A major contributing factor to the weakling of control and accountability could be attributed of the inability of accounting and audit to impose appropriate sanction and surcharge on earning officials. One major responsibility facing the new caretaker committee is to ensure that those control measures are correctly applied and the necessary sanctions imposed.
  2. More so, it is our consideration view that our local government system has no choice except to mount and embark on well-organized and effective training for the generality of their personnel so as to cope with the public expectancy on them as regards sound financial.
  3. Furthermore, the success of any set of controls depends on the willingness and co – operation of employed operators to implements them.

Therefore employees/operations should be given incentives say awards for hardworking to boost their attitude to work.

Finally, accountability is a culture which every local government should take serious. If the local government populace are given prompt account of the amount collected and utilized on quarterly, half yearly basis, the incidence of evasion and avoidance will be avoided thereby promoting the level of patriotism.


Financial Control Tools In Public Sector Organization (A Case Study Of Owerri North Local Government)


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