The impact of public sector accounting in nigeria financial control system (a case study of esan south east local governmnent area, edo state)

Thesis Overview

<p> INTRODUCTION<br>1.1 BACKGROUND OF THE STUDY<br>Public sector is that sector of the economy established and operated by<br>government and its agencies distinguishable from the private sector and are<br>organized on behalf of the whole citizens while Public sector accounting is<br>the process government agencies and municipalities use to record financial<br>transactions.<br>Mathias, (2004:78). Said, similar to private sector accounting in theory, the<br>focus of public sector accounting is somewhat different. Most government<br>agencies and municipalities need to track funds generated from tax<br>revenues and expenditures related to projects or appropriations. In addition,<br>nations may need to follow a set of standard of accounting principles<br>different from private sector accounting rules. The creation of an<br>international accounting standard helps nations to follow similar rules in<br>other to present information in a similar manner.<br>Government accounting typically uses a set of rules that tracks financial<br>information. Rather than attempting to determine how much money a<br>public sector entity has made, the entity must report financial information<br>to interested parties, primarily constituents. The separation of money into<br>these funds makes it difficult for government agency or municipality to<br>spend money on unauthorized purposes. Elected officials or legislatures<br>11<br>must create appropriations or spending authorizations to transfer funds<br>amongst government fund accounts. This process attempts to restrict the<br>spending of money on a free-will basis that will quickly deplete an<br>agency‟s resources<br>Similar to private sector accounting, public sector accounting principles<br>often seek to lay a framework for accounting practices.<br>Afolabi,( 2004:320). Said rather than creating a hard set of rules to follow,<br>the principles allow for an application of basic principles to either large and<br>small entities or municipalities. An international set of accounting<br>principles is also necessary for smaller nations to learn and adopt rules that<br>will enhance their internal national accounting process. Most times,<br>developing nations cannot or do not have the resources capable to create<br>and instil a framework for their public sector accounting practices.<br>Adopting an international set of accounting rules will help them overcome<br>this problem and typically helps them start on the path better infrastructure<br>development.<br>Another purpose of public sector accounting is to create a standard<br>expectation of ethics and accountability for a nation‟s financial<br>information. Standard public accounting principles will also make it easier<br>for a nation to undergo an audit. it is also harder for countries to hide<br>inappropriate financial transactions when using public sector accounting<br>principles. This research study will therefore appraise the impact of public<br>12<br>sector accounting in Nigerian financial control system focusing on Esan<br>South East local government.<br>1.2 STATEMENT OF THE PROBLEM<br>The problems inherent in this research study as investigated by the<br>researcher are;<br>1. INADEQUATE REVENUE: that is, the source of revenue available to<br>Esan South East Local Government authority most often is not enough<br>for them, as this invariably affects diverse activities that are carried out<br>in the local government area.<br>2. Poor administration of local government funds.<br>3. Another problem is the fact that the control of public fund adopted by the<br>local government is inappropriate. It is as a result of this that there are<br>still setbacks in the local government as regards to infrastructural<br>development.<br>4. The adoption of inappropriate and ineffective public sector accounting<br>principles and guidelines.<br>5. Another problem is that the accounts of the local government are<br>characterized by inadequacies such as, improper maintenance and book<br>keeping of accounts and other necessary records, embezzlement of<br>public funds especially by the top officials. <br></p>