Fraud Detection And Control In Cooperative Thrift And Credit Societies (A Case Study Of Selected Credit Cooperative In Ahiazu Mbaise L.G.A Imo State)

Project and Seminar Material for Cooperative Economics and Management (CEM)

Fraud Detection And Control In Cooperative Thrift And Credit Societies (A Case Study Of Selected Credit Cooperative In Ahiazu Mbaise L.G.A Imo State)


Abstract


Cooperative thrift and credit societies emerged as a result of people coming together, posting their resources in mutual effort in order to solve their problem. The focus of this study is to examine the way in which fraud can be detect and control in cooperative, thrift and credit societies in Ahaizu mbaise L.G.A Imo state.

The research also stated the problems, objectives the area the research work covers and limitations of the study.

The research make use of hypothesis in the research work some important words are explained.In chapter two, the study uncovers the strength and weaknesses common to the cooperatives, thrift and credit societies. The review of modern cooperative thrift and credit society’s movement were explained.

The research work also explained the major uses of internal control system, its element and its purpose in cooperative thrift and credit societies.

The research work helps the research to find out the major causes of fraud and how is committed in cooperative thrift and credit societies, and also its types. In this study, internal audit is also seen as another control system in CTCS.

In this chapter an overview of NDIC report cooperative thrift and credit societies were also explained. This study also uncover how fraud can be control and prevent in cooperative thrift and credit societies for instance using some approaches such as a moiré professional approach.

A strengthened management approach etc.In chapter three, data were collected data used were obtained from primary and second sources. The butted, direct interview and other available records while secondary were gotten from relevant textbooks, academic journals past research studies the society bye-laws, this chapter also explained the procedures used in processing data and test of hypothesis.In chapter four, the study also shown how the questionnaires were presented and analysis and interpreted.

This data were collected from respondents from olumpam CTCS, progressive Owutu CTCS, and umumbiri Ndioma CTCS in Ahiazu Mbaise L.G.A Imo State. Finally, findings and conclusion were elaborated and reasonable recommendations aimed at solving the problems CTCS in Ahiazu Mbaise.


Table Of Contents


Preliminary Page(s)

  • Title
  • Declaration
  • Approval
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of Content

Chapter One

1.0 Introduction

  • 1.1 General of the problem
  • 1.2 Statement of the study
  • 1.3 Objectives of the study
  • 1.4 Research questions
  • 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 term

Chapter Two

2.0 Literature Review

  • 2.1 Brief Historical thrift and credit society
  • 2.2 Meaning of fraud detection and control in cooperative
  • 2.3 The objective of cooperative thrift and credit society
  • 2.4 Scope for attaining cooperative thrift and credit societies
  • 2.5 Concept of fraud detection and control in cooperative societies
  • 2.6 Need for fraud detection and control in cooperative societies.
  • 2.7 Function of fraud detection and control in cooperative thrift and credit societies.
  • 2.8 Problem of fraud detection and control in cooperative thrift and credit societies
  • 2.9 Problem facing fraud detection and control in cooperative thrift and credit society
  • 2.10 Solution of the problems

Chapter Three

3.0 Research Design and Methodology

  • 3.1 Research design
  • 3.2 Population of the study
  • 3.3 Sample size determination
  • 3.4 Sources / method of data collection
  • 3.5 Sample techniques
  • 3.6 Validity and reliability of measuring instrument
  • 3.7 Method of data analysis

Chapter Four

4.0 Presentation and Analysis of Data

  • 4.1 Introduction
  • 4.2 Presentation of data
  • 4.3 Analysis of data
  • 4.4 Test of hypothesis
  • 4.5 Interpretation of Result

Chapter Five

5.0 Summary, Finding, Conclusion and Recommendation

  • 5.1 Introduction, summary of finding
  • 5.2 Conclusion
  • 5.3 Recommendation
  • Reference
  • Appendix
  • Questionnaire

Chapter One


1.0 Introduction

1.1 General Overview Of The Study

There has been specific reference of cooperative thrift and credit society, and a case study of Imo State.
It is worthy note that the case of fraud and foreign reported by Nigeria bank to Nigeria deposit insurance cooperative (NDC) between 1991, cooperative society suffered most both in terms of the numbers of case as will as the amount involved. Only ten out of above 250 of these ten bank, eight were commercial bank, only two were cooperative thrift and credit society.

Curiously NDIC in only of its report (1990) wrote that cooperative thrift and credit society’s staff were mostly involved in the unwholesome act. Thus, its management of such cooperative society are to blame for not putting very prompt and adequate internal workshop, some and symposia has been mounted by various financial institution in Imo State to address the issue of fraud and its effect on the financial system in particular and the economy in general. Yet more case are regularly reported media almost on a daily basis.

My focus in the project is also on fraud types, cause, detection and how to control it.
The role of the regular authorities in controlling fraud in the financial system particularly in cooperative thrift and credit soc8irties will also be considered.


1.2 Statement Of The Problem

Despite of internal control mechanism put place by financial institution and effort to delect fraud and eliminate before and after its occurrence, there are still incident of fraud in cooperative thrift and credit societies, bank and other financial institution and this has become a major problem of those institution especially to cooperative thrift and credit societies. This problem of fraud affected the activities and operation of the cooperative thrift and credit societies.


1.3 Objectives Of The Study

The objectives of this research work are

  1. To determine the cause of fraud in cooperative thrift and credit society.
  2. To indentify the prevalent fraud in cooperative thrift and credit societies.
  3. To provide solution on how fraud can be control in cooperative thrift and credit societies.
  4. To identify how to control fraud in cooperative thrift and credit societies.

1.4 Research Questions

  1. What are the possible causes of fraud in cooperative thrift and credit societies?
  2. What is the kind of fraud prevalent in cooperative thrift and credit societies, especially your societies?
  3. How can this prevalent fraud are controlled.
  4. What suitable solution could be applied to control fraud in cooperative thrift and credit societies?

1.5 Statement Of Hypothesis

T.C Amara and A.C Amara (2005) defined hypothesis as a preposition about a research formulated for empirical testing they are tentative statement of the expected relationship (s) between one or more variable.

They are tentative on intelligent answer to the problem on research problem. It follows than the general criteria for stating research problem also apply in stating research hypothesis.

Two ways stating research hypothesis:
  • The null hypothesis from (Ho)
  • The alterative hypothesis (H1)

Ho CTCS do not detect and control fraud significantly

H1 CTCS detection and control is not a major strategy in CSTS.

H1 fraud detection and control is a major strategy in CSTCS.


1.6 Significance Of The Study

This research work that is done under the case study of selection credit cooperative in Ahiazu Mbaise will enable to reader to know the relevance of CTCS. Also the signifance of CTCS decision to the workers, however the project work will serves as a piratical fulfillment of the condition for the award of Higher National Diploma (HND) in Cooperative Economics and Management and with be of economics benefit will succeed in the throwing a hot of light in the subject matter and in packing the conscience of all who have on assume responsibility on CTCS. The result of this research work can be applied to solve problem in both the public and private sectors.


1.7 Scope Of The Study

This research work, cooperative as fraud detection control in cooperative thrift and credit society in Ahiazu Mbaise L.G.A, this work focus on the ways by which cooperative could help in detecting fraud in the above mentioned L.G.A. to aid this work, some cooperative societies and government programmed in Ahiazu Mbaise were visited and consulted oral question and printed questionnaire were used as took together data through the data supplied by the respondents, analysis was done and it was discovered the best and most appropriate instrument on detecting fraud is for the government to which effective prosily alienation programmed in Ahiazu Mbaise L.G.A.


1.8 Limitation Of The Study

On the course of writing, this research, there are a lot of limitation that tends to put an end to wards the success of this research. The problem limitations encountered on this research work are as follows:

Time Constraints:

This time for this research work to be completed and submitted was limited. The research was also entrapped, lectures, and preparing for examination.
These made the time for the research very short it was not easy exercise.

Financial Constants:

The finance in hand during the time of this type like in sourcing, research, data including, internets browsing, textbook, research, journals all involves money.

Poor Responses:

The response of some people interviewed during the collection of fact was very poor most of them could not give satisfactory answer to most the question that has been asked. Others simply decline to answer certain issues, saying that they are confidential.


1.9 Definition Of Terms

Fraud:

This means something that constitutes criminal deception, some one who is not what he/she pretend he is legal terms fraud international misrepresentation made knowing, with the intention to deceive all.

Credit:

David W. pearle defines credit as financing directly and indirectly the lending is direct when a lending society, bank etc. Extends an overdraft facility to a customer or member who is a trader producers or consumer shop supplies goods on credit.

Thrift:

The oxford English dictionaries define thrift as the economical management of resources, the habit of saving contently.

Credit Cooperative Society:

This credit society helped a member in difficulty to norrow money from his society and attends to his need and for him to pay back later. It also helps for social or economic purpose to attain his goals.

Detection:

This is the process of discovering or notices something that is not easy to see or hear.

Control:

This means power to make decision about how an organization is run. It is the act of restricting limiting of managing something.

Cooperative Society:

This can be define as an autonomous, voluntary, open association of people in a sociological sense with variable membership and variable capital whose members have pulled their resources on the bases of self help, solidarity mutual assistance and self reliance to form a democratically managed and control business enterprise in which the members actively participate on whose basic objectives in the promotion of economics interest of the members through a solution of at least one socio-economic problems of these members by directly providing them with goods, capital and service or employment in the member dual capital at either owner customers or owner employees in the auxiliary and productive cooperative society.


Chapter Five


5.0 Summary Of Finding, Conclusion And Recommendation

5.1 Summary

In exploring into this study in some selected cooperative thrift and credit societies in Ahiuazu Mbaise local government Area, the research was able to find out that there are more population, of man than woman in this societies and most of them are married.

The research also find out that fraud really affect the activates of the societies and the major cause of this fraud is poor internal control and the major affective way to detect this fraud is thought internal audit.
In the course of carry out this study, the researcher find out that the major reason for internal control in the society is to protect resources against fraud, and the major element of this internal control is accounting system. The researchers also find out the following.

  1. That lack of adequate investigation of fraud and banking information also hindered the progress of cooperative thrift and credit in Ahiazu Mbaise.
  2. That some of the members/officers deliberately involve in the fraud.
  3. Lack of adequate training and retaining of staff lead as to poor performance which breed fraud.
  4. Finally, the researcher finds out that fraud detection and control is the major strategy in CTCS.

5.2 Conclusion

Cooperative thrift and credit societies fifers from other business organization since by the nature of their entrusted with deposit from members of the public and are responsible for the supply through the process of granting credit. They are the principle source of finance for industry and commerce and their ability to the sector has a profound on the development of the economy.

The fortune or otherwise of each cooperative, thrift and credit societies has reached the implication for the whole cooperative thrift and credit societies becomes a solvent and thereby failed to meet its obligation to its depositor and credit alike, the effect could be devastating to the whole economy. It becomes imperative therefore for the government to monitor the safety and soundness of the policy Nigeria cooperative, thrift and credit societies.

Hackers easily and regularly break into firewall around internet cooperative societies to effect fraudulent transfer of fund. These therefore represent or serious threat to the survival of the cooperative, thrift and credit societies industry because one successful fraudulent transfer could turn healthy cooperative societies into systematic distress. The greatest threat to cooperative, thrift and credit societies is not armed robbery which could be controlled by application of appropriates securities by greatest threat is fraud. Attention should be focused on cybercrimes, advance scan and other financial crime even as much as visible threat of arm robbery is tackled.


5.3 Recommendations

In this project study, many problems were identified as affecting cooperative, thrift and credit societies in Ahiazu mbaise L.G.A Imo State.

  1. The researcher, who carried out this study made some recommendation. Some of the recommendations include.
  2. The government should try to provide the cooperative, thrift and credit societies in Ahuiazu Mbaise facilities that will help robust the activities.
  3. There is need for training and retaining of staff for this will help them competent personnel that will handle the system effectively.
  4. A particular boards should be set up to control a cooperative, thrift and credit society which is a core wheel of economic recovery. This will improve thrift and credit societies in the country.
  5. The government should also give attention on the matter concerning cyber crime and attention on the crimes like over invoicing, poor record keeping etc.
  6. Adequate and effective audit should be carry out in cooperative thrift and credit societies at least twice in a year t  cross check the books and account of the societies this reduces the high rate of fraud.
  7. Finally, the researcher recommended that, for cooperative, thrift and credit societies to work effectively and efficiently, the members/officers both executives and ordinary members have to be honesty, they must be peoples that has fear of God in them, because without being honesty to the job, there is possibility of committing fraud.

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