EVALUATION OF GOVERNMENT ACCOUNTING SYSTEM IN ANAMBRA STATE:
(A CASE STUDY OF MINISTRY OF FINANCE AND ECONOMIC PLANNING AWKA)
TABLE OF CONTENTS
1.1 Background of the study
1.2 Statement of the problems
1.3 Objectives of the study
1.4 Significance of the study
1.5 Scope and limitations of the study
1.6 Statement of hypothesis
1.7 Definition of Terms
Review of Related Literature
2.1 Governmental Accounting Procedure
2.2 The Role of Internal Audit Department in the Civil Society
2.3 Types of fund kept by government
2.4 Purpose of government accounting
2.5 Basic concepts of government accounting
2.6 The matching concept
2.9 Tax constraints
2.10 Current values
Research design and methodology
3.1 Research method used
3.2 Description of respondents
3.3 Determination of sample size
3.4 Sources of data
3.5 Primary source of data
3.6 Secondary source of data
3.7 Methods of investigation
3.8 Distribution of questionnaire
3.9 Statistical test used
4.1 Presentation, analysis and interpretation of data
4.2 Testing the hypothesis using the chi-square
Summary of findings, conclusions and recommendations.
5.1 Summary of Findings
LIST OF TABLES
Table 3.1: Population and sample size of each unit
Table 3.2: Distribution and return of questionnaire
Table 4.1: Response to Question 1
Table 4.2: Response to Question 2
Table 4.3: Response to Question 5
Table 4.4: Response to Question 6
Table 4.5: Response to Question 8
Table 4.6: Response to Question 9
Table 4.7: Response to Question 10
Table 4.8: Response to Question 12
Table 4.9: Response to Question 13
Table 4.10: Response to Question 14
Table 4.11: Response to Question 15
Table 4.12: Response to Question 16
Table 4.2.1: Observed and Expected frequencies
Table 4.2.2: Computation of X2 for Hypothesis I
Table 4.2.3: Observed and Expected frequencies
Table 4.2.4: Computation of X2 for Hypothesis II
This research work – Evaluation of Government Accounting system in Anambra State – “A case study of Ministry of Finance and Economic planning, Awka is divided into five chapters each chapter dealing with a particular aspect or research work.
The overall aim of the study is to find out the functions of various ministries in relation to preparation of government account.
A general review of what government accounting is all about the role of Anambra State Ministry of Finance Awka, towards achieving this objective was evaluated. The problem hindering efficient performance of the ministry of finance was discussed. The Audit Personnel role towards achieving or not achieving the objective was also analysed.
The research is hopeful that if the suggested measures are implemented the government accounting system in Anambra State will be solidified thereby enhancing proper accountability.
1.1 BACKGROUND OF THE STUDY
The governmental accounting system in Anambra State is operated under budgetary system. The background can be traceable to the provision of what is called “funds and accounts law 1962” which provides for the establishment of consolidated funds of the state. This provides that all money received for an on behalf of the government should be paid into the fund under approved revenue heads and sub heads while all payments to the account would be paid out form the fund under approved heads and subheads in the annual budget.
The government accounting system is not conducted with profit motive but rather it is the people. There are also the financial instruction guiding the daily operation of the accounting system which was guiding the daily operation of the accounting system which is collated form the old colonial regulation of the defunct Administration in Nigeria. There are also other forms of accounts kept by the government such as “Below – the – line account” where all other payments not classified by the budget are created on the approval of the Accountant General for specific purpose such as the various trading accounts. According to National Committee on Government accounting, below the line accounts are those accounts intended to accommodate transactions for a limited period only not affecting the recurrent or capital budgets.
1.2 STATEMENT OF PROBLEMS
The problem is that the government accounting systems are entrusted to certain individual employees; of the government. It also includes poor internal control; lack of management accounting concepts developed by the government; accounting concepts developed by the government; incomplete, inaccurate and late record of transactions; ineffective closing date of accounts; unauditable system; shortage of qualified staff to do the accounting job and lack of good accounting system. The accounting system of government are defective and often regrettable practice of importing accounting systems from developed nations. According to Ukwu I. Ukwu, one of the effective ways to deal with these problems is to have effective government auditors who are not corrupt in the performance of their duties.
In spite of the moral check envisaged by the establishment of audit, fraudulent practices still come on the increase. Government accounting officers are daily becoming inclined towards embezzling government fund thus indicating a decline in accountability. The problem is that of identification of the reason(s) for this ugly situation to a complete halt. The Anambra State Government is loaded with a lot of financial problem and as such cannot afford loosing most of her fund by way of fraud and misappropriation.
1.3 OBJECTIVE OF THE STUDY
This study aims at investigating into the problems envisaged by government ministries and parastatals in the preparation of their accounts and with a view to ascertaining whether it is enough to develop an indigenous accounting system for use by government agencies, ministries and parastatals. Thus the operation of public sector accounting is focused on:
(a) Providing useful information, which is necessary for the efficient and effective management of the financial resources of the government.
(b) Providing reasonable proofs of financial transactions.
(c) Information useful for evaluation managerial and organization performance.
(d) To ensure compliance and strict adherence to the laid down rules and regulations.
(e) Providing financial information that is useful for making economic, political and social decision and exhibit accountability and stewardship and
(f) To provide information necessary for the executives to report on the discharge of their duties and responsibilities relation to collection, custody and disbursement of public fund entrusted into their care.
1.4 SIGNIFICANCE OF THE STUDY
This study will be of immense help to the policy makers in identifying and ascertaining the most adequate and effective government accounting system for the state.
(a) It will suggest some effective strategies to be used in the preparation of government accounting in Anambra State.
(b) It will also find out why there is incomplete, inaccurate and late recording of transactions by governmental units and critical shortage of qualified staff to man the accounting department s of the government
(c) It will determine the causes of fraud ad misappropriation of funds in the public service and provide some strategies to be used in the governmental accounting system to minimize the practice.
(d) It will evaluate the role of the accounting officer in governmental units especially the Accountant General in the preparation of governmental accounting in Anambra State.
1.5 STATEMENT OF HYPOTHESIS
(i) Government accounting system does provide useful information in respect of the receipts and disbursement of public fund.
(ii) Public sector accounting does encourage proper management of the financial resources of the government.
1.6 DEFINITION OF TERMS
Accrual Basis: This is the basis of accounting under which revenue are recorded when earned and expenditure are recorded as soon as they result in liabilities for benefits received, notwithstanding that the receipt of the revenue or the payment of expenditure may take place in the whole or in part, in other accounting period.
Accrued Expenses: These are expenses incurred during the current accounting period but which are not payable until a subsequent accounting period.
Agency fund: A fund consisting of resources received and held by governmental unit as an agent for others, for example, taxes collected by the schools for the internal revenue board.
Allocation: This is a part of a lump sum appropriation, which is designed for expenditure by organization and/or for specific purposes, activities objects.
Allotment: A part of an appropriation, which may be encumbered or expanded during an allotment period.
Appropriation: An authorization granted by a legislative body to make expenditure and to incure obligation for specific purposes.
Assets: Properties owned by a governmental unit, which have a monetary value and could be highlighted in the final account for the year.
Balance Sheet: A statement which discloses assets, liabilities, reserves and equity of fund or governmental unit at a specific data, properly classified to exhibit financial position of the fund or unit of that data.
Bond: A written promise to pay a specified sum of money called the face value of principal amount of a specified date or dates in the future called the maturity date(s) together with periodic interest at a specified rate.
Budget: A plan of financial operation embodying an estimate of proposed expenditure for a given period and the proposed means of financial them.
Budgetary Control: The control of management of a governmental unit or enterprise in accordance with an approved budget for the purpose of keeping expenditures within the limitation of available appropriations and available revenue.
Cash Basis: The basis of accounting under which revenue are recorded when received in cash and expenditure are recorded when paid.
Capital Development Fund or Project: The capital development fund is established by section 4 of the funds and accounts law 1959. This is the source of all expenditure incurred upon the capital budget. Example is expenditure in connection with development plan. It provides money for renewal of capital assets, example; motorcars, typewriters, building of office blocks and so on.
Contingency fund: It is a limited revolving fund from which urgent and unforeseen expenditure for which no financial provision exists, may be temporarily met by way of advances.
Debt Servicing Fund: A fund established to finance and account for the government.
Disbursement: This is payment in cash.
Encumbrances: These are obligations in the form of purchase orders, contracts or salary commitments, which are chargeable to an appropriation and for which a part of the appropriation is served. They ceased to be encumbrances when paid or when the actual liability is set up.
Fund Account: These are all accounts necessary to set forth the financial operation and financial position of a fund.
General Fund: A fund used to account for all transactions of governmental unit, which are not accounted for in another fund.
Governmental Accounting: The composed activities of analysis, recording, summarizing, reporting and interpreting the financial transactions of governmental units and agencies.
Grant: A contribution by one government unit to another. The contribution is usually made in support of a specified function but it is sometimes also for general purpose.
Internal Control: A plan of organization under which employees duties are also arranged, records and procedures so designed as to make it possible to exercise effective accounting control over assets, liabilities, revenue and expenditure. Under such system, the work of employees is subdivided so that no single employee performs a complete cycle of operations.
Project: A plan of work, job assignment or task, also used to refer to a job or task.
Ordinance: A formal legislative enactment by the council or governing body of state. If it is not in conflict with any higher form of law such as decree.
Reimbursement: Cash or other assets received as a repayment of the cost of work or services performed or of other expenditure made for or on behalf of another governmental unit or department or for an individual or a corporation.
Reserve: An Accountant, which records a portion of the fund balance which must be segregated for some future use and which is therefore not available for further appropriation.
Reserve: An Account, which records a portion of the fund balance, which is therefore not available for further appropriation or expenditure.
Special Assessment Fund: A fund set up to finance and account for the construction, improvement or provision of services which are to be paid for, wholly or in part, from special assessment levied against benefited property.
Taxes: Compulsory charges levied by a governmental unit for the purpose of financing services performed for the common benefit.
Trust Fund: A fund consisting of resources received and held by the governmental unit as trustee to be expended or invested in accordance with the conditions of trust.
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