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Full Project – AN APPRAISAL OF ACCOUNTING SYSTEM IN THE PUBLIC SECTOR

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CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

History has it that the concept of accountability of public funds dates backs to the history of ancient Greece. As old as theory is, it would not be erroneous to say that the idea has been equally lost to antiquity although not much is known about it, this makes the subject, government accounting to remain a myth. Accounting in the public sector has received such a wide attention from scholars that the field of public sector accounting scans to be neglected. However, there is general awareness all over the world of the need to pay greater attention to the development of government accounting and financial control. The reason is obvious, government, in most, if not all nations constitute the largest single business entity in many places, the core of the economy. Government in any society is basically for maintaining law and order. With changes and the complete nature of the society, government responsibility has automatically changed from the role of maintaining law and order to business like nature in the modern era. The enormous activities of government, equally call for enlarged government accounting in order to accommodate the immense task. As a result of this development, the traditional cash procedures of accounting can hardly meet the demands of reasonable accounting for modern government in providing necessary services or information. Therefore, there is need for government accounting to be dynamic in order to accommodate both the fundamental roles and the developments. Government accounting is the process of recording, analyzing, classifying, summarizing, communicating and interpreting financial information about government in aggregate and in detail, reflecting all transactions involving the receipts, transfer and disposition of government funds and property. The purpose are to demonstrate the propriety of transactions and their conformity with established rules to give evidence of accountability for the stewardship of government resources and to provide useful information for the good control and efficient management of government operation. Financial management in the public services as can be observed has failed to encourage and promote the efficient utilization of public funds or serve as effective basis for planning and decision making as well as to ensure proper accountability. Besides, it does not mean that financial irregularities being detected in public sector at large is basically based on traditional cash procedure of accounting but it does arouse a question whether the modern system of accounting will make both modern management and financial management viable.

1.2 STATEMENT OF THE PROBLEM

The problem of this research is to identify these weaknesses and limitations inherent in the cash accounting system of the public sector (in relation to the accounting system of the sample ministry). This is with a view to propose means of eliminating them completely or at least reducing them to the barest minimum. Put in question form, what are those weaknesses and limitation that militates against adequate and efficient accounting system and financial reporting in the public sector and how can they be eliminated? Some of these problem witnessed in the public sector includes: the lack of accountability and abuse of delegated authority by the officers in authority, fraud and misappropriation of government funds, as well as lack of expertise and business acumen on the part of those officers. Due to the fact that government operation have been termed “Non-profit oriented operations”, there is no pressure on the part of these government officers to perform up to optimum expectation, accounts are kept in messy shape while the officers get away with lack of proper accountability. This research is carried out in order to examine the extent to which proper accounts are being kept in the public sector and to offer solution to the inherent problem discovered. The Enugu State Ministry of Finance and Economic Development is used as a sample ministry for this research work.

1.3 OBJECTIVES OF THE STUDY

The objectives of this research work/study include the following

To determine the extent to which the sample Ministry has installed an accounting system.

To determine the factors that promote or constrain the accounting system of the sample ministry.

To determine the impact of the accounting procedures of the sample ministry upon its financial reporting.

To make recommendations based on my findings.

IMPORTANCE OF THE STUDY

This research paper is intended to examine the accounting system common in public sector with a view to exposing and highlighting the inherent limitations in the system. Therefore, the research paper will be of interest and useful to the general publics, the government as well as the governed. Government entrust public funds in the hands of its officials hence government reporting has traditionally stressed stewardship. Original accounting emphasis has been directed towards measuring the public funds generated and expended by the government’s programme or activities. The traditional reporting approach is filled with many weaknesses of which it is hoped that this study will make useful recommendation on how to improve upon the accountability and financial reporting system of the government. The duty to report all its financial activities to the general public is a debt that government must pay. Such report will enable the people know how public funds entrusted in the hands of the government have been utilized, this type of report is very sensitive and useful to the public but very few of them (the public) can understand it. This study will serve as a useful medium to such member of the public who find government financial reporting very ambiguous and hard to understand. In many institution of higher learning the accounting curriculum offered is tailored specifically to provide students with an understanding of financial reporting as it relates to profit oriented enterprises. For this purpose, students are frequently surprised to discover that the basic framework of financial accounting is significantly altered when the profit motive is removed. Though the accounting terminology may initially appear to resemble foreign language to all students of accountancy, and related professions who always depraved of knowledge of accounting system of the public sector, this study will be very useful. Moreover, potential researcher in this aspect of accounting will find this research paper a very reliable reference base.

1.4 RESEARCH QUESTIONS

Three dominant questions being reviewed by this research include; Is the accountancy/accounting system in the public sector effective and adequate?

Does the accounting system in the public sector provide for proper financial control and accountability of stewardship?

Does the accounting system in the public sector provide useful information for the effective control and management of government operations?

1.5 SCOPE OF THE STUDY

As the research topic would suggest at a glance, the scope of this, is essentially focused on the accounting system of the sample ministry as a general overview sample study of the accounting in the public sector. Therefore, this study will look into the nature of the accounting system of the sample ministry; how the system operates, the relevance of the system to the environment, problems and prospects of the system.

1.6 LIMITATION OF THE STUDY

Scarcity of material: This aspect of accountancy (as pointed out above) has received very little attention from scholars despite its long historical age. Consequently, there are few literary publication on the student; the researcher was therefore limited to reviewing few literature which are mostly in origin, through relevant to the study.

– Bureaucracy: Government establishment are well known for maintaining utmost screening as regards their operations, more so, where it is a study that concerns their financial operation the researcher found it difficult to obtain material relating to the study (that is literature) and some officials who have been very elusive and uncooperative. More so the bureaucracy and protocol the research went through to obtain material and an appointment has been very discouraging. Due to all this constrains, the researcher cannot say for certain whether the study has covered very rutty gritty of the sample ministry as regards its accounting systems and procedures, but one thing is certain, enough materials have been gathered to help express an opinion as to the operative of the sample ministry. Apart from the above listed limitations witnessed by this researcher is time constraint. This is a major limiting factor as the time between approval of the study and the deadline for submission was very short. The researcher relied heavily on the good will of the research supervisor because he understands my plight. Again lack of sufficient funds to conduct an extensive study was another handicap. This was part of the reason why I had to limit my work to fewer staffs than was earlier planned.

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RESEARCH PROJECT CONTENTS
CHAPTER ONE - INTRODUCTION
1.1 Background of the study
1.2 Statement of problem
1.3 Objective of the study
1.4 Research Hypotheses
1.5 Significance of the study
1.6 Scope and limitation of the study
1.7 Definition of terms
1.8 Organization of the study
CHAPETR TWO – LITERATURE REVIEW
2.1. Introduction
2.2. Conceptual Framework
2.3. Theoretical Framework
2.4 Empirical Review
CHAPETR THREE - RESEARCH METHODOLOGY
3.1 Research Design
3.2 Study Area
3.3 Population of the Study
3.4 Sample Size and Sampling Technique
3.5 Instrument for Data Collection
3.6 Validity of the Instrument
3.7 Reliability of the Instrument
3.8 Method of Data Collection
3.9 Method of Data Analysis
3.9 Method of Data Analysis
3.10 Ethical Considerations
CHAPTER FOUR - DATA PRESENTATION AND ANALYSIS
4.1. Introduction
4.2 Demographic Profiles of Respondents
4.2 Research Questions
4.3. Testing of Research Hypothesis
4.4 Discussion of Findings
CHAPTER FIVE – SUMMARY, CONCLUSION & RECOMMENDATIONS
5.1 Introduction
5.2 Summary
5.3 Conclusion
5.4 Recommendation
REFERENCES
APPENDIX

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