ABSTRACT
The study aims to examine the relevance
of finance department in the public sector using a case study of Etsako West
Local Government Area. It aims to ascertain
whether there is a proper authorization of expenditure in the council and to
ascertain if a sound system of internal control is being instituted over
council expenditure. The data
collected was presented using tables and simple percentage and both the primary
and secondary sources of data collection method was used in gathering the data.
It was discovered that there is no significant
relationship between proper authorizations of expenditure and the council.
Finally, it was recommended that the local government authority should endeavor
to look into its administrative activities regularly and then prosecute any
officer(s) found embezzling public funds and also make the head of the account
office answerable for any such misappropriation.
TABLE
OF CONTENTS
Title
Page i
Certification
ii
Dedication
iii
Acknowledgements
iv
Abstract
v
Table
of Contents vi
Chapter
One: Introduction 1
1.1
Background to the Study 1
1.2
Statement of Problem 2
1.3
Research Questions 4
1.4
Objective of the Study 4
1.5
Statement of Hypotheses 5
1.6
Significance of the Study 6
1.7
Scope of the Study 7
1.8
Limitations of the Study 7
1.9
Definition of Terms 8
Chapter
Two: Literature Review 10
2.1 Introduction
10
2.2
Meaning of Public Sector Accounting 14
2.3 Objectives
of Public Sector 15
2.4 The Roles of Public Sector finance in Nigerian
Financial Control System 16
2.5 Functions
of Etsako West Local Government Area 18
2.6 Controls
for the Local Government Operation 22
Chapter
Three: Research Methodology 25
3.1 Introduction
25
3.2 Research Design 25
3.3
Description of Population of the Study 26
3.4
Sample Size 26
3.5
Sampling Techniques 27
3.6
Sources of Data Collection 27
3.7
Method of Data Presentation 28
3.8
Method of Data Analysis 28
Chapter
Four: Data Presentation, Analysis and
Interpretation
30
4.1
Introduction 30
4.2
Presentation of Data 30
4.3
Data Analysis 30
4.4
Hypotheses Testing 41
Chapter
Five: Summary of Findings, Conclusion and
Recommendations
49
5.1 Introduction 49
5.2 Summary
of Findings 49
5.3 Conclusion
50
5.4 Recommendations
51
References
54
Appendix
I 56
Appendix II 57
CHAPTER ONE
INTRODUCTION
1.1
Background to the Study
In recent times, there
has been rapid increase in public expenditure in some African countries
particularly in Nigeria due to the fact that the functions of the various
levels of government have equally increased both intensively and extensively the
fund being pumped into the sector which calls for adequate expenditure control.
The circumstances
surrounding the low rate of development in the public sector could as well be
described to lack of proper accountability, composition and incidence public
expenditure and finally, the structure of institution which surrounds public
sector decision.
One begins to imagine
with the high rate of wealth acquisition by politicians in public offices, if
stringent control are not being instituted over public funds or the finance
managers in the public fund control the finance (Afolabi, 2004).
In the past, several
attempts have been made to present proper and acceptable practices on finance
budgeted and also to ensure an efficient financial control system in the public
sector. All attempts so far have failed and short comings in the operations of
establishment in the public sector have regrettably been on the increase. The
work of those public officers who are charged with the responsibility of
interpreting the laid-down rules and regulations leave much to be desired.
As widely reported in
Udodis’ report the poor result in the operation of public sector establishment
could be blamed on the interpretation and application of the financial
regulation invariably adverse consequences on the availability and efficiency
of government services (Ogunle, 2004).
1.2
Statement of Problem
Over the years, it has
been observed that every government establishment has its own peculiar problem.
The same can be said of Etsako West Local Government Area, Auchi.
Some of these problems
could be as a result of the difficulties normally encountered by the finance
managers in an attempt to effectively control the expenditure process of the
council. Others could be as a result of administrative bottle necks and
policies, executive financial misappropriation and the internal control
weakness in the council in respect to detection and prevention of fraud.
Some of the major
problems that may initiate against the finance managers in an attempt to effectively
control council expenditure are: that sources of revenue available to Etsako
West Local Government authority most often is not enough for them, poor
Administration of Local Government Funds. It is as a result of this that these
are still setbacks in the local government as regards to infrastructural
development.
1.3
Research Questions
This
study also seeks answers to the following questions:
a.
Is there a
proper authorization of expenditure in the council?
2
Is there a sound
system of internal control over council expenditure?
3
Is adequate
financial record in the council expenditure being maintained?
4
Is the role
finance managers play in an attempt to exercise control over the council funds
being maintained?
5
Are the reports
prepared by the finance managers been utilized?
1.4
Objective of the Study
In order to address the
problem listed, certain objectives that should be achieved by the study are set
out below:
i.
To ascertain
whether there is a proper authorization of expenditure in the council.
ii.
To ascertain if
a sound system of internal control is being instituted over council
expenditure.
iii.
To know if
adequate financial records in the council expenditure have been maintained.
iv.
To examine the
role finance managers play in an attempt to exercise control over the council
funds.
v.
To examine the
extent in which the reports prepared by the finance managers are utilized.
1.5
Statement of Hypotheses
The following hypotheses
were formulated for this study.
Hypothesis
I
Ho: There is no significant relationship between proper
authorizations of expenditure and the council.
Hi: There is a significant relationship between proper
authorizations of expenditure and the council.
Hypothesis
II
Ho: There is no significant relationship between a sound
system of internal control being instituted and the council expenditure.
Hi: There is a significant relationship between a sound
system of internal control being instituted and the council expenditure.
Hypothesis
III
Ho: There is no significant relationship between
adequate financial records and the council expenditure.
Hi: There is a significant relationship between adequate
financial records and the council expenditure.
Hypothesis IV
Ho: There is no significant relationship between finance
managers and their control over the council funds.
Hi: There is a significant relationship between finance
managers and their control over the council funds.
1.6
Significance of the Study
This study is expected
to be useful in the following ways:
a.
Managers: It
will serve as a reference document for the finance managers in local government
area to be alive to their responsibilities over the control of public sector.
b.
Management: It
will help the management/executives of local government area in the administration
of the public sector.
c.
Public: To
ensure adequate internal control measure are put in place to guide against
public fund mis-use.
d.
Executives: It helps
the executive in recognizing the relevance of accountants’ participation in
decision making in the public sector.
1.7
Scope of the Study
The study centres on
the relevance of finance department in the public sector using Etsako West
Local Government Area as a case study. The participation is restricted only to
the finance department in the public sector.
1.8
Limitations of the Study
During the course of
this study, many factors which were beyond the researcher’s control and some of
these problems are:
a.
Attitude of Respondents: It was difficult for the researcher to get 100%
feedback and cooperation as a result of some of the respondents’ constant
inability to give adequate attentions as of much responsibilities and work load
at the time of visit.
b.
Time Factor:
The time within which project work was conducted was inadequate for the
researcher to obtain enough information regarding the work schedule.
c.
Lack of Sufficient Materials: This research work was also limited by lack of
sufficient reference materials to the government area and finance on the part
of the researcher.
1.9
Definitions of Terms
1. Dominant:
This is the process of having power
and influence over others.
2. Council:
It is a group of people who are
elected to govern an area.
3. Financial:
This is connected with money and
finance.
4. Finance:
The management of large amounts of money especially by governments or large
companies. It is also a field that deals with assets and liabilities over time
under conditions of certainty and uncertainty.
5. Note
Book: This is memorandum
account book.
6. Accounting:
This is the process of identifying, measuring, communicating economic
information to permit judgement and decision.
7. Accounting System:
This is an organize set of manual and computerized accounting methods,
procedures, and control established to gather, record, classify, analyze,
summarize, interpret, and present accurate and timely financial data for
management decisions.
8. Public Sector:
This is that sector of the economy established and operated by the government
and its agencies.
9. Public Sector Accounting:
This can defined as the receiving and disbursement of funds to meet the
goals/objectives such as health, education, power supply, water, transport,
etc.
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