EFFECT OF TREASURY SINGLE ACCOUNT ON FRAUD DETECTION AND PREVENTION IN NIGERIA (A CASE STUDY OF NIGERIA PORT AUTHORITY)

CHAPTER ONE

INTRODUCTION

1.1. Background of the study

A lot has been said on Treasury single account (TSA) since its conception and implementation in the Buhari administration as a result of his proposed stand on zero tolerance for corruption ranging from fraud to looting the nations treasury.

The Treasury single account TSA can simply be said to be a unified structure of government bank accounts enabling consolidation and optimal utilisation of government cash revenue. Through this bank account or set of linked bank accounts, the government transacts all its receipts and payments and gets a consolidated view of its cash position at any given time. (okoro 2014). The president MuhammaduBuhari’s directive to all ministries, departments and off course agencies to start paying all government revenues into a single account in the Central Bank of Nigeria(CBN) must be viewed as a commendable action against the massive looting that have limited the growth and development of Nigeria and its public institutions.

Before the introduction of the treasury single account TSA which necessitated the payment of all government revenues and receipts into a single account in the Central bank of Nigeria, it has sadly been a tale of massive fraud and general lack of commitment to the cause of the nation. According to the ministry of finance, Nigeria has lost so many funds as a result of its maintenance of diverse accounts which has made it easier for embezzlements and fraud related activities.

The Revenue Mobilization and Fiscal Commission released an audit report which indicted some banks for withholding about N12 billion revenue collected on behalf of the Nigerian Customs Service and Federal Inland Revenue Service. The revenue according to the commission is stashed in 19 banks from January 2008 to June 2012. The chairman, Non- Oil Committee of the Commission, Rev AjibolaFagboyegun demanded for urgent return of the funds by the banks to avoid sanctions. (Hamisu, 2015). This and other issues hinging on corruption, fraud and other related activities have been the order of the day in our public institutions.

Furthermore, it was common practice for agencies saddled with revenue generation to defraud government by the embezzlement of public funds through all sorts of bank accounts in their custody and unknown to the Nigerian government. With all government revenues and receipts being pooled into the Treasury single account TSA, not only would it be difficult for this monumental fraud to continue without serious sanctions, but also it would afford government a quick glance at the daily funds pooled into the TSA by revenue generation agencies.

1.2. Statement of the general problem

Generally speaking, it is a common knowledge that corruption negatively influences socio economic development of any nation.

The directive that all government revenue realized by ministries department and agencies (MDAs) has been appreciated by the masses as a result of the massive looting, fraudactivities and diversion of funds that have been a clog on the wheel of the progress of the nation. It is has been established that the level of corruption and fraudulent activities that occurs in Nigeria has reached an alarming level with fears  that if not checked at that level the nation may be absolutely broke.

Nigeria’s economy is sadly where it is today as a result of frequent cases of fraud and corruption where individuals would loot the nations treasury with impunity and still escape justice. Nigeria would have gone far from the present level if the revenue generated where properly managed and channelled appropriately into developmental projects.

Corruption has regrettably made ministries departments and agencies to function in less capacity which has inturn reduced the internal generated revenue of the country and has grossly retarded the economic development of Nigeria.

1.3. Objectives of the study

The main objective of the study is to examine the effect of treasury single account on fraud detection and prevention in Nigeria. Other specific objectives of the study include:

1. To determine the extent to which treasury single account TSA can block financial leakages, promote accountability and transparency in the public service.
2. To examine the level of corruption in Nigeria public service.
3. To examine the level of compliance of public agencies to the treasury single account.
4. To highlight other benefits of the treasury single account TSA to a developing economy.
5. To recommend ways of minimizing fraud and corrupt practices in Nigeria’s public service.

1.4. Research Questions

1. What is the effect of treasury single account in detecting fraud and preventing fraud in Nigeria?
2. To what extent does treasury single account block financial leakages and ensures accountability and transparency in Nigeria public service?
3. What is the level of corruption in the Nigeria public service?
4. What is the level of compliance of public agencies to treasury single account?
5. What other ways can corruption be minimized in the Nigeria public service?

1.5. Research Hypotheses

Hypothesis 1

H0: Treasury single account does not block financial leakages; enthrone accountability and transparency in the Nigeria public service.

H1: Treasury single account blocks financial leakages; enthrone accountability and transparency in the Nigeria public service.

Hypothesis 2

H0: Treasury single account does not improve fraud detection and prevention in Nigeria public service.

H1: Treasury single account improves fraud detection and prevention in Nigeria public service.

1.6. Significance of the study

This study would be of immense importance to government at all levels in their cause for detecting and preventing fraud and other corrupt practices in the Nigeria public service. The study would also benefit captains of industries and unit heads in their quest for ensuring the growth of their industries. Finally, the study would of course be beneficial to researchers, students and scholars who are interested in the benefits of treasury single account in Nigeria.

1.7. Scope and limitation of the study

This study is restricted to the effects of treasury single account on fraud detection and prevention in Nigeria with a case study of Nigeria port authority (NPA).

LIMITATION OF STUDY

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.8. Definition of terms

TSA: Treasury single account

FRAUD: Wrongful or criminal deception intended to result in financial or personal gain.

NPA:Nigeria Port Authority

DETECT: To discover, identify or investigate the presence or existence of something

REFERENCE

Adeolu I.A. (2015). Understanding The Treasury Single Account (TSA) System –Things You Should Know. Business & Economy, Market Development.

Bhatti, M. A., Hee, H. C., &Sundram, V. P. K. (2012). A guide for beginners: Data analysis using SPSS and AMOS. Kuala Lumpur: Pearson Malaysia SdnBhd.

CBN (2015).“Revised Guidelines for compliance with Treasury Single Account by Banks in Nigeria”.

Guardian Editorial,(2015). Buhari on Treasury Single Account, Guardian, August 28, P16.

Hamisu, M. (2015). “MDAs, banks under pressure as TSA deadline ends” Daily Trust, September 14, P3.

Jegede, M. (2015).Buhari and the Treasury Single Account, Daily Trust, September27, P22.

Obinna, C.(2015), Banks Face Liquidity Strain as FG Fully Enforces Treasury Single Account, Thisday Monday, 11 August,P52

Okechukwu .E, Chukwurah .I, Daniel C. &Iheanacho.N, (2015). “an analysis of pros and cons treasury single account policy in Nigeria”. Arabian Journal of Business and Management Review (OMAN Chapter) Vol. 5, No.4;