ACCOUNTABILITY IN GOVERNMENT ESTABLISHMENT: A CRITICAL REVIEW OF PUBLIC SECTOR ACCOUNTING SYSTEM (A CASE STUDY OF THE OFFICE OF ACCOUNTANT-GENERAL OF EDO STATE, BENIN CITY)

Abstract

This study investigates accountability in government establishment: a critical review of public sector accounting system. The broad objective of this study is to ascertain if there is any significant relationship between accounting system in the public sector and that of the private sector and also to determine if there is any relationship between public sector accounting system and accountability in government. Data were collected through the primary source, i.e. questionnaire and personal interview. A sample size of thirty (30) was chosen through the random sampling technique. The chi-square statistical tool was adopted to test the proposed hypotheses. The findings revealed that accountability in government is not effective enough and more plans should be put in place for its efficiency and that public accounts committee has a check on public accounting officers. The study recommends among others that the Board of Internal Revenue should organize in-service training programmme for its staff in order to make them familiar with the accounting system or procedure of the board.

TABLE OF CONTENTS

Title Page                                                         i

Certification                                                     ii

Dedication                                                       iii

Acknowledgements                                          iv

Abstract                                                           v

Table of Contents                                             vi    

Chapter One: Introduction                            1     

1. Background to the Study                                         1     
2. Statement of Problem                                      2     
3. Research Questions                                         3
4. Objective of the Study                                      4     
5. Statement of Hypothesis                                          5
6. Significance of the Study                                 6     
7. Scope of the Study                                           8
8. Limitations of the Study                                  8     
9. Definition of Terms                                          9

Chapter Two: Literature Review                    12   

1. Introduction                                                     12
2. Definition of Government Accounting              13   

2.3   The Concept of Public Sector in Nigeria           15   

2.4   Differences between Public Sector Accounting and Private Sector Accounting                                      17   

2.5   The Objectives of Government Accounting in the Public Sector                                                               20   

2.6   User of Public Sector Accounting Information 22

2.7    Fundamental Accounting Concepts and Convention in Public Sector                                                                     24

2.8   Principles and Application of Fund Accounting       27

2.9   Budgeting in Public Sector                              32   

2.10 Operation of Government Accounting              38

2.11 Internal Control in Government Accounts       39   

Chapter Three: Research Method and Design 46 

3.1   Introduction                                                     46   

3.2   Research Design                                              46

3.3   Description of Population of the Study            46

3.4   Sample Size                                                     47

3.5   Sampling Techniques                                      48

3.6   Sources of Data Collection                               48

3.7   Method of Data Presentation                           48   

3.8   Method of Data Analysis                                  48

Chapter Four: Data Presentation, Analysis and Interpretation                                          51   

4.1   Introduction                                                     51

4.2   Presentation of Data                                                51

4.3   Data Analysis                                                   51

4.2   Test of Hypothesis                                           63

Chapter Five: Summary of Findings, Conclusion and Recommendations                                                 71   

5.1   Introduction                                                     71

5.2   Summary of Findings                                      71

5.3   Conclusion                                                      71

5.3   Recommendations                                           73   

References                                                       76

Appendices                                                      77                                   

CHAPTE R ONE

INTRODUCTION

Background to the Study

Long before business enterprises emerged in whatever form, government has been in existence and has maintained records of taxes collection either in monetary or in kind as well as records of how these resources have been disposed off by their treasuries.

Economic activities in Nigeria are undertaken by the individual and government. Individuals carry out their businesses in different forms: solely; in partnership etc all with overriding desire to make profit. Government is also engaged in economic activities, however, such activities arc aimed solely at improving social welfare including health for the citizenry. These activities are carried out under the three tiers of government i.e. the federal, slate and local governments. Both Federal and state government have ministries as well as boards and corporations charged with specific area of responsibilities. The responsibilities of government and the volume of’ public hinds at its disposal have necessitated prudent and efficient financial management hence, ensuring government accountability in the public sector (Rasheed, 2010).

The means by which the public knows about the management of public fund is through accounting reports. These reports contain accounting information, which emanate from government accounting, otherwise known as pubic sector accounting. The principles of government accounting ensure a proper accountability of public funds within the economy. There is general awareness worldwide of the need to develop government accounting system in order to improve financial accountability. This is because government constitutes the largest single business entity and also forms the core of the economy.

1.2   Statement of Problem

Public sector is a very large sector; because of this, there are procedures or formalities put in place for smooth operation. But there has been lack of proper awareness to date about the accounting system in public sector. This awareness constitutes some problems in the sector. These problems are as follows;        that the assets and liabilities of the state belong to nobody, as such, public officers covert these assets and liabilities to their personal properly hence, there is no relationship between public sector accounting system and accountability in government.     That the application of government accounting principles have no practicability since accounting system in government does not check mate fraudulent practices within the public sector.

1.3   Research Questions

The following are the research questions to guide the research work.

i.      Is there any significant relationship between accounting system in the public sector and that of the private sector?

ii.     Is there any relationship between public sector accounting system and accountability in government?

iii.    Does government accounting system actually checkmate fraudulent practices within the public sector?

iv.    Does public Accounts Committee have any significant impact on public accountability of accounting officers?

1.4   Objective of the Study

This research work is aimed at identifying the need for an effective accountability in government and its control system within the bureaucratic operations of government. The objectives are as follows:

i.      To ascertain if there is any significant relationship between accounting system in the public sector and that of the private sector.

ii.     To determine if there is any relationship between public sector accounting system and accountability in government.

iii.    To determine if government accounting system actually checkmate fraudulent practices within the public sector.

iv.    To ascertain if Public Accounts Committee have any significant impact on public accountability of accounting officers.

1.5   Statement of Hypothesis

Hypothesis One

HO:   There is no significant relationship between accounting system in the public sector and that of the private sector.

HI: There is significant difference between Accounting system in the public sector and that of the private sector.

Hypothesis Two

HO:   There is no relationship between public sector accounting system and accountability in government.

HI: There is relationship between public sector accounting system and accountability in government.

Hypothesis Three

HO:   Government accounting system does not actually checkmate fraudulent practices within the public sector.

HI:    Government accounting system actually checkmates fraudulent practices within the public sector.

Hypothesis Four

HO:   Public Accounts Committee does not have a significant Impact on public accountability of accounting officers.

HI:    Public Account Committee have a significant impact of public accountability of accounting officers.

1.6   Significance of the Study

This research work has highlighted problems in the public sector accounting system and suggested possible ways of correcting them. This study is beneficial to:

Government: The government as a whole stands to benefit from this research immensely. It has gone a long way to point out the relevance of financial control measures for a proper accountability in government through the adherence to policies and program for an effective accounting system. This goes a long way in determining the quality of the inter-relationship between public accountability and auditing within the public sector.

Accountants: This research work also, added to the never-ending knowledge of accounting in its various forms. It did not only provide a springboard for future researches but also to give an insight to the operations of accounting system in other areas of public sector. This research work also would stimulate the interest of other accountants practicing outside the public sector. It would also he oil help to teachers of public sector accounting as a reference material.

Researcher: It is significant to the researcher because, it was made in partial fulfillment of the requirement for the award of the Higher National Diploma (HND) in Accounting. It broadens also, the knowledge of the researcher in the topic of discourse through much consultation of necessary literature and practical interviews. It also added to the skills of communication of the researcher and ant attempt to socialize with some civil servants. It also added to the experience of the researcher to know how what he was taught in school are been applied.

1.7   Scope of the Study

This research work was designed to cover on in-depth analysis of accountability in government; a critical review of public sector accounting system of the economy. Government Accounting is operational in federal, state and local Governments. Government accounting policies are applicable to the entire public sector. But the scope and nature of accounting for various facets of the public sector may vary accordingly but the underlying principles were highlighted in this research. Also, it examined the accounting and financial control functions with reference to the office of the Accountant General of Edo State, Benin City.

1.8   Limitations of the Study

It must be pointed out that the process of this research work was faced with some Limitations which included human and socio-economic impediments encountered in the course of the work. The members of staff of the Accountant-General’s office were statutorily restricted from giving out certain financial information. This was because such in formation were termed “Confidential”.

Moreover, there were some difficulties in sorting out financial data from the bulk of files and this was due to the absence of computerization in the office. Other constraints during this research study were the cost of acquiring relevant materials, transportation expenses, occasional lukewarm altitude of some members of staff and of course time constraint due to the fact that write-ups had to be combined with other academic works.

However, despite the above mentioned limitation encountered during the course of carrying out this research work, the purpose for which it was met was still achieved.

1.9   Definition of Terms

i.      Public Sector: This refers to the government, its ministries and extra ministerial departments, government parastatals and generally, the whole government budget financial sector of the economy.

ii.     Accounting System: It is a system or a process of in-related, interconnected and interdependent stages or procedures, meant for the purpose of capturing, aggregating, recording, interpreting and communicating financial information in aggregate for the purpose of decision making both internally and externally of an organization to users of such accounting information

1. Role of Government Accounting: This is the statutory functions, duties and obligation of institutions, organs and units of government in public sector in effective financial management and administrative frame work.
2. Accounting Unit: It refers to ministry or department through which accounts are processed. In public sector accounting, each ministry or extra ministerial department is regarded as an accounting unit. Each unit is manned by an accounting officer,
3. Financial Control: This refers to any integral part of financial management which ensures that financial resource are obtained economically and used efficiently and effectively in the accomplishment of desired goals.
4. Financial Year: This refers to any period of twelve (12) months adopted by the government at its accounting year.
5. Statutory Allocation: The compulsory amount of money to be released from the Consolidated Revenue Fund and to be used for statutory expenditures like remunerations of the President, vice President, Governors, Deputy-Governors, Justice of the Supreme Court, Auditor general of the Federal or any State and Chief Justice of the Federation or any etc.