ABSTRACT
For a very long time now, the public sector in Nigeria have suffered great set back, vis-a-vis public funds management and control that the causes, effects o impacts and suggested remedies (solutions) for managing and controlling of funds in the public sector are inevitable for discussions. Consequently this paper has attempted an expository discourse on the causes and symptoms (effects) of funds mismanagement in the public sector in Nigeria.
It thus gave units on how to effectively and efficiently manage funds in the public sector where these signs of mismanagement of funds have been observed.
Conclusions arising there from are both outstanding and helpful too.
TABLE OF CONTENTS
Title page
Approval page
Dedication
Acknowledgement
Table of
QUINNELL
List of tables
Abstract
CHAPTER ONE
Introduction
1.1 Background of study
1.2 Statement of problem
1.3 Objectives of research
1.4 Scope and delimitation of the study
1.5 Research questions
1.6 Significance of study
1.7 Definition of terms
CHAPTER TWO
Literature
review
2.1 An overview of public sector
2.2 The conceptual definition of fund in the
public sector
2.3 Impact of funds mismanagement in the
public sector
2.4 Causes of funds mismanagement in the
public sectors
2.5 Enhancing effective and efficient funds
management and control in the public sector
2.6 Summary of reviewed literature
CHAPTER THREE
Research
methodology3.1 Research design3.2 Area of study
3.3 Population of the study
3.4 Sample and sampling technique
3.5 Research instrument
3.6 Reliability and validity of instrument
3.7 Method of data collection
3.8 Method of data analysis
CHAPTER FOUR
Data
presentation and results4.1 Data
analysis4.2 Summary of results
CHAPTER FIVE
Discussion and
recommendation5.1 Discussion of
results5.2 Conclusion
5.3 Recommendation
5.4 Suggestion for further research
5.5 Limitation of the study
Reference
APPENDIX
LIST OF TABLES
1. Period the act of embezzlement of funds
in the pubic sector started in Nigeria
2. The leadership era in Nigeria where
this art of embezzlement of funds in the public sector is pronounced.
3. The after-effects of funds embezzlement
in the public sector on the development of Nigeria
4. Effects of financial impropriety on the
economy of Nigeria
5. The category of public office holders
that indulge most in misappropriation of funds in the public sector
6. The root cause of funds
misappropriation and squandering habits among public officers in the public
sector of Nigeria
7. Who is to blame?
8. Measures to be put in place to enhance
effective and efficient funds management and control in the public sector in
Nigeria.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Even though a country may be
naturally endowed with diverse kinds of resources, the gestures of such country
lies in her ability to manage her resources properly. Public sector, in a nutshell, is the sector
that manages the resources of the government in other to ensure effective and
efficient allocation of these resources for satisfaction of the citizenry
concerned. The sector is used in
implementing government policies. It is
the tool for accelerating development in the entire economy. For instance, it accounts for approximately
two-third of gross national products (GNPs) in Nigeria. Pubic sector includes
all government ministries and departments, extra-ministerial department,
parastatals agencies, commissions and public enterprises. Being a service-oriented sector, it is
usually budget financed.
Essentially, funds, in the public
sector, refers to the sum of money or other resources segregated for the
purpose of carrying out specific activities in accordance with special
regulations, restrictions and limitations.
According to Vatter, (1947:3), public sector fund accounting is the
demonstration of fiduciary stewardship; to show that resources (funds) have
been dealt with in a proper way.
The management and control of
funds in the public sector revolves around towards: responsibility and
accountability. This has to do with the
honest application of funds and in compliance with proper procedures, ensuring
that these funds are spent on properly approved items and within the budgeted
level.
Inspite of its
paramount importance in the economy, this complex sector has failed to live up
to the expectations of bringing the policies and programmes of the government
fruition. Cases of financial
indiscipline like embezzlement of public funds by public office holders are
very rampant nowadays. Depletion of
public pulse is no longer a new scenario.
Most public office holders venture into this sector and come out
unprecedently rich. Astonishing, is the
way these undesirable elements embezzle these funds and go scoot free.
That Nigeria is
known as the third most corrupt nation is not an overstatement. This is largely as a result of financial
improperly that is ravaging the public sector.
When it comes to public funds, people seems to put aside their moral
values. Financial integrity is hardly
seen in the public sector. Worst still,
is the effrontery being exhibited by these perpetrators even when caught
red-handed. The president, Obasanjo, in
decrying the high incidence of financial impropriety, said in the daily
guardian newspaper on March 25, 2005 that “it is only in Nigeria that you will
catch a thief and he takes you to court”.
Unfinished projects, non-payment
of salaries and pension, and so on, were as a result of misappropriation of
public funds in the public sector. No
single day will pass without a report on misappropriation of funds in the
public sector. This entails the diversion
or misuse of funds earmarked for specified project or programme for another
unconstitutional selfish purpose. The
magnitude is unbearable. One may rightly
ask “is the financial statute vis-à-vis public sector not explicit on the way
and manner these funds should be utilized?
Or is it a resolution among pubic accounting officers to tow the part of
financial in discipline?
Financial profligacy is another
phenomenon that is wrecking serious havoc in the public sector. There is an accentuated, unbridled and
unnecessary squandering of funds in the public sector. About ninety five percent of Nigerians see
the public funds as a “NATIONAL CAKE” that fall from heaven. This attitudinal imbalance had led many of
these public officer holder to be improvident. The ripples of this overspending
are felt all over the economy.
Government has continued to run budget deficit, which has had adverse
effect on diminishing our gross national products, thus putting the living
standard of the citizenry on the decline.
This equally has rendered most public sector organizations
moribund. No wonder the government is
calling for privatization of most of these public sector organizations. Non performance of these sectors as a result
of misappropriation of fund meant for their operation must not be far from what
informed government decision to privatize them.
The questions
many people are asking are: is the
financial regulations, as enshrined in finance (management and control) Act
1958 so weak in combating this menace?
Are no procedures for managing and controlling of funds in the public
sector? If we have are they weak or do
public offices neglect them? Is there no innovation that could be plugged
into funds management and control system of this public sector or enable it
live up to the expectation? Hence my interest to embark on this project.
Federal Inland
Revenue Service of Nigeria is an apex inland institution established by the
federal government of Nigeria in the year 1977 as a successor to Nigerian
Building society established in the year 1956.
This apex institution is charged with the responsibility of
administering loan at an affordable rate of interest to citizens, for building
and buying houses and for renovating their own house through a government
approved housing policy known as NATIONAL HOUSING FUND (NHF) scheme.
National
Housing Fund scheme,. Being the main focus of Federal Inland Revenue Service of
Nigeria , was established by decree No 3 of 1992 (now an acts), primarily to
address the constraints to the mobilization of long term funds of housing
development and to ensure that every Nigeria has access to housing loan at
affordable rates of interest. It provides an enduring pool of funds for lending
to contributors to enable them build, buy and renovate their own houses. This scheme clearly redefined the activities
of Federal Inland Revenue Service of Nigeria.
1.2 Statement
of the Problem
Why is the
level of embezzlement of funds escalating in the public sector? What are the root cause of this financial
impropriety as observed in the public sector what impact has this on our economy? What have so warped the mind and values of
many public officers that they wallow in the act of misappropriating and
squandering of public funds without fear, shame of qualm? Could lack of proper
orientation and training, in any way, be responsible of this menace?
How can we
introduce an innovation that will bring about effective and efficient funds
management and control in the public sector?
There are the thought provoking questions which this project tends to
answer.
1.3 Objectives
of the Research
The objectives of this research
work are:
- To
ascertain the damage which this escalating level of embezzlements of funds
has done in the public sector.
- To find
out the extent this financial impropriety affects our economy as seen in
the public sector.
- To
ascertain the extent to which disorientation and lack of proper training
in the public sector results in misappropriation and unnecessary
squandering of public funds.
1.4 Scope
and Delimitation of the Study
The scope of
this project boarders on mismanagement of public funds (misappropriation,
embezzlement, financial profligacy and improperly and also management and
control measures in the public sector with particular reference to Federal
Inland Revenue Service of Nigeria .
1.5 Research
Questions
- To
what extent have the escalating level of embezzlement of funds in the
public sector affects development in Nigeria?
- To
what extent does financial impropriety as observed in the public sector
affects the economy?
- To
what extent does misappropriation and squandering of public funds as
occasioned by disorientation and lack of proper training in the public
sector hinder our economic development?
1.6 Significance
of the Study
The
significance of the study are as follows:
- It
will assist policy-makers in improving and adopting strategies to reduce
funds mismanagement in the public sector.
- It
will provide useful suggestions to avert high incidence of embezzlement
and financial impropriety in the public sector.
- Provide
basic information on the causes of various forms of funds mismanagement in
the public sector.
- It
will be very useful to policy makers, financial experts, graduates of
accountancy, and professionals in understanding and appreciating the
pivotal role of funds management and control in any organization.
1.7 Definition
of the Terms
- PUBLIC SECTOR – This comprises of
all government ministries and departments, extra-ministerial departments,
parastatals, agencies commissions and public enterprises that implement
government policies.
- GROSS NATIONAL PRODUCTS – This is
the gross domestic product plus the income accruing to domestic residents
arising from overseas.
- POLICIES – This connotes plan of
action, statement of aim and ideas especially one made by government.
- PROGRAMMES – These are integrated
series of development projects
- FUND – This is a self-contained
accounting entity with its own asset, liability, revenue expenditure or
expenses, other equity accounts and with its own ledger(s).
- FUND ACCOUNTING – is an entity
with a self balancing set of accounts that records cash and other
financial resources together with all related liabilities and residual
equities set aside for the purpose of carrying on specific activities in
accordance with special regulations.
- FINANCIAL IMPROPERITY – This means
financial dishonesty or wrong doing.
- FINANCIAL POFLIGACY – This s the
act of squandering or unnecessary spending of funds, i.e. extravagant
spending.
- MISAPPROPRIATION OF FUNDS – This
means intentional or unintentional diverting the funds earmarked for a
project or expenditure to another unconstitutional purpose, usually, for
selfish benefit.
- EMBEZZLEMENT OF FUNDS – This means
a deliberate theft of funds that is placed in ones custody.
- MORIBUND – This means the
inability to function effectively
and about to come to an end completely.
- CONTROL – Facility or power to
make events to conform to plan.
- MANAGEMENT – This refers to
harnessing all resources (funds) at the disposal of any organization in
such a way as to enable it achieve the overall goal.
- PARASTATAL – This is agency of
government that renders various services and does not rely on government
for monthly subventions but basically is under the supervisory role of
ministry. For examples, Nigerian
Port Authority, Hotel Presidential, Nike Lake Hotels, Federal Inland
Revenue Service of Nigeria etc.
- MINISTRIES – These are core
government departments that execute various government policies, and rely
solely on government subvention for payment of staff salaries. For examples, Ministry Finance, Ministry
of Housing and Urban Development, Ministry of Health etc.
- EXTRA-MISTRIAL DEPARTMENT – These
are extension from government ministries.
They also depend on government for monthly subventions for payment
of salaries. For examples, civil
service commission, judicial service commission.
- BUDGET – An estimate of future
operations which is usually measured in monetary terms but can also be
measured in terms of quantities.
- PUBLIC ENTERPRISES – Institutions
or public corporations created by government to carry out in the public
interest different kinds of operations or render various type of
services. They function outside the
civil service.
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