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Full Project – Design and implementation of software for the accounting system in a local government

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CHAPTER ONE

1.0 INTRODUCTION

In recent times computers have so developed to become powerful tools that enables users, firms, organizations, public offices and Government offices to store and process large amount of data quickly. Practically every business, no matter how small uses a computer to handle bookkeeping, track inventory, balancing of accounts, store documents, and so many other things.

From the above explanations, it is clear to observe that a computerized account processing system is very much needed in the local government councils for it to be timely driven along the world of globalization. Another reason why the computerized account processing system is imperative is because in the local government councils these days professionals are being employed. It will provide them the adequate modern resources to handle accounts in line with the government initiative drive of accountability, vast investment in computer training and computer acquisitions.

Because there may be many accounts processing packages in exhaustive in number, this research project shall limit to developing unique computer account processing system for Ngor-Okpala local government accounts department which is manually computed and processed.

It shall strive to explain the background manual computation methods employed by the local government councils, its constraints, need for the computerized system, the newly developed model and its application.

Finally, it shall also strive to explain the use of new model and techniques for better account processing in the local government council. This research work shows and explains the use of computer and how a computer can aid account processing in the local government.

1.1 INSIGHT TO ACCOUNTING SYSTEM

There is a wide range of accounting, each looking at different information, or measuring and reducing this information in different ways. From very many areas, the perception is enormous.

Basic accounting thinks of the accounting system is a wheel whose hubs is the general ledger (G/L), feeding the hub information are the spokes of the wheel”. These include:

Accounts receivable
Accounts payable
Order entry
Inventory control
Cost accounting
Payroll
Fixed assets accounting

These modules are ledgers themselves. We call them sub-ledgers. Each contains detailed entries of its specific field, such as accounts receivable. The sub-ledgers summarize the entries, and then send the summary up to the general ledger. For example, each day the accounts receivable sub-ledger records all credits sales and payments received. The transaction net together then goes up to the general ledger to increase cash and decrease inventory. The task then will be to check to be sure that the balance of the sub-ledger exactly equals the account balance for that sub-ledger account in the general ledger. If it doesn’t, then there’s a problem.

Webs defined accounting as “the total structure of records and procedure which discovers, records, classify and report information on the financial position and operations or a governmental unit or any of its funds, balanced accounts groups and organizational components”.

Accounting system can be divided into four main sections based on who they provide information for. The four systems according to (Drury) 1990) are the:

Financial accounting which provides information to people outside the organizations, investors, and government in particular. This system provides inventors with the means to check how their money is used and relative information on where to invest
Cost accounting (Drury 1990) states that it provides the appropriate valuation of stocks and produced goals and for financial accounting

iii. Management accounting (Arnold and Hope 1990) provides information’s managers for decision-making and control. It allows internal decisions within a company or government to be appraised

National accounts according to (Van Dieven 1995) provides information for governments, international organizations, and inventors as to the state of the National economy

Another strong insight into accounting system is the regard for components associated with the accounting system, this strives to explain that accounting system can be organized by function. From an internal control standpoint, it is very wrong for just one person to do all the transaction entries. Having too few people doing all the accounting opens the door for fraud and embezzlements. For the same person to draft, check and reconcile the checking of account is a good example of how not to assign accounting duties.

In the components of the accounting system, the first assignment is to figure out who is going to do what in the accounting system in these areas which include:

Overall responsibility for the accounting system
Management of the computer for the computer system
Accounts receivable
Accounts payable
Order entry
Cost accounting
Monthly reporting
Inventory control
Payroll and
Fixed assets

In accounting system, in many cases, the same person will do many of these things. The person you assign to be in overall charge of the system should be the one who is most familiar with accounting. Accounting and insight into accounting system are not easy tasks.

They require professional touch and experience centralizing effects of the accounting system.

An accounting system needs to know two things, who it is producing information for, and for what purpose. This defines its main functions of data collection and data reduction.

The first function of an accounting system is to collect data, but obviously, not all data is relevant to a particular report or decision. Knowing the purpose of the data allows an initial restriction on the type of requisition by the department to be made so that accountant could then reduce the information a more manageable forms. Data be measure and assigned.

Some information’s are hard to quantify or assign to a particular process in this case the accounting system provides a number of techniques. The important thing to note is that each accounting system reduces the information in a certain way, present it from a certain view point. This viewpoint should be taken into considerations when actions are to be taken from this information. On major problem posed when information is passed to different user that has limited knowledge of the system is that he would be lost and would not know the limitation.

1.2 HISTORICAL OVERVIEW

The local government in Imo state follows a system of accounting, which is stipulated in the financial memoranda of the federal government and follow directions by the financial instruction. It was conceived by the federal government to administer a uniform accounting system to the third tier government and to give directive to the grassroots administrations in Nigeria conceived it. It is supposedly believed that it will give a good report monthly, quarterly, or yearly balance of accounts of the local governments. It is believed also that it would state the position of revenue that has accrued to a local government and the position of expenditures made within a period in view.

The local government runs a central accounting system processed in the production unit. According to Web definition accounting systems, as the total structure of records and procedures which discovers, record, classify and report information on the financial position and operations of a governmental unit or any of its funds, balanced account groups and organizational components. This visualizes the type of accounting system practiced in the local government councils. One can rightly say that it run a public account system as prescribed in the financial memoranda. The local governments generate revenue internally from its domino area pf administration. The specific area allowed for drawing or sourcing internally generated revenue are from houses and councils establishment.

The federal governments provides the federal allocation which is a distribution of what is due to the seven hundred and seventy six (776) local government council in Nigeria from federally generated revenue.

It also provided such federal allocations as the derivations from value added tax (vat), ecological fund allocation, excess derivation allocation, oil state special allocation and others. The state governments are supposed to give the local government councils some allocation of their funds as stated in the constitution.

Each of the six departments draws funds, which it expends, from the revenue, which the local government received and has generated. The local government council expands funds in line with the approval in the local government estimates and rolling plan of activities. The local government estimates build every year and areas of expenditure provided for in the estimate. The rolling plan gives the local government the perception and direction of expenditure activities towards a period of time. The estimate makes provision for local government council to spend money on sectorial bases and distribution. The sectors are in the areas of economic sector, social sector, area development sector and on t6he administration sector and contingencies. These sectors expenditure are coded in such a way that they can harmoniously fit into the department coded of expenditure and charged to proper expenditure heading therein the estimate. The reason why this is done is because the department are from where local government accounting information are taking, measured, quantified, coded, vouched, posted appropriately, joined together and use to balance the local government account for monthly, quarterly or yearly reports and sent to appropriate government offices.

The local government expenditure pattern was designed to fellow a meticulous system of expenditure. To incur a capital expenditure, it required the executive chairman taking the proposal to the finance and general-purpose in line with the state government perception and direction and the local area demand.

The finance and general-purpose committee approvals are now sent to the legislative house for debate, ratification and approval, sequel to submission. When it’s approval, tenders are called for. The works department prepares the tender notices and publishes it through the administration department. The works department scrutinizes the tender submissions and selects according to competence and passes on the selected firms list to the personnel department who writes to the appropriate approved companies. On completion of any project, the executive chairman approves payment after job certification has been carried out by the work department, through the director of administration and general services (DAGS) who then certifies payment with accompanying papers through the voucher clerk. The raised voucher will be signed appropriately by the approving officers and payment effected.

The cashier makes the payment. The cashier sends the paid voucher to the appropriate file of expenditure of that period. The expenditure file is moved to the accounts production unit that now posts the payment voucher accordingly where appropriate for use to balance the account that period. A side the capital expenditure that waits the finance and general purpose committee approval, every other expenditure is approved by the chairman through the director of general services and treasurer and audited before the payments are affected. Recurrent expenditure like salaries are pay rolled, vouched, audited effected after due signing.

The unit that is mainly concerned with the balancing of the accounts of the local government are the accounts production unit, a sub-unit in the finance department. An accountant heads the department but usually it is not the case. The account production unit opens up all the both of accounts of local government council. The various books of accounts are the revenue abstract ledger, the deposit ledger, the expenditure ledger, the salary and service advances ledgers. Each of these ledgers houses measured, quantified and coded information in various item of heads.

A balanced account is produced for a local government when an accurate revenue acquired, correct expenditure debited, proper deposits placed advances taken are retired, and an appropriate balance stricken and entered into the return books.

1.3 STATEMENT OF PROBLEM

Emphasis are these days laid by the federal and state government on prudent spending, transparency and accountability. There are needs to accomplish this good vision for continuous economic growth in Nigeria. These vision are not perceived nor near actualization in the local government councils. Over years local government accounting system and accounts are in shambles and disarray because manual accounting are beset with problems arising from human limitation. These limitations include:

a) Handling of records is problematic: The records are not kept well, because records are not kept well and accesses to records are difficult
b) Government has not taken seriously to know when, how what and where all allocations and internally generated revenue to the local government councils are expended
c) There has been issue of mutilation of records due to handling over the years. This has led to the non-accounting of the council’s records and the near collapse of the local governments.
d) The processing of these accords is also very slow due to mediocrity
e) There are also problems of wrong entries of transaction being made to files to due to human shortcoming, and dubiousness

This research work is therefore, geared towards curbing these problems and to sought to solution on how the local government council can embark on prudence spending transparency and accountability in line with government visions and aspirations. It will also seek to evolve a computerized account processing system that enhances account production local governments in-line with modern computer application.

1.4 OBJECTIVE OF THE STUDY

Computerized processing are ever growing and being employed in almost all modern offices and companies. Computer application software programmes are being continually developed.

It becomes true fact that this area of research is imperative and timely. The objective of this shall limit on:

To develop a computerized accounts processing system for the local government and the application
To introduce components of accounting and the computer resources that would be used in this account processing for the local government

iii. To assist surveying the local government accounts processing software

To assist to use this model to remedy the time lost and non accomplishment of production of balanced account
To outline the computerized accounts processing programme developed, the strategies considered and applied in the development, and the program
To assist to identify and prescribe the protocol, the usage of the program for processing the local government account

1.5 SCOPE OF THE STUDY

Development of computerized accounts processing system could be accomplished using different software programmes. Its application can be said to be wide and enormous in different areas of application in accounting system in the world. Programmes are mindful of the mistakes due to arise because of lack of experience, various approaches to installation being adopted, and how the programmers are being abreast by the user. It remains necessary to state that for proper analysis of this program no boundary limit would be set for the research.

However, the following scopes shall guide to form attention:

Revisiting records in textbook and web-sites on computerized account processing software.
Paying special attention to the experience, mistakes, successes and failures of software packages
Unravel constraints experienced account-processing system
This research work shall be meant to cover and also evolves a computerized account and control system for Ngor-Okpala local government council.

1.6 LIMITATION OF THE STUDY

The task of developing a processing system software program that would process different accounting system especially, one like the local government account processing is enormous.

The limitations encountered while carrying out this research work are as a result of the following constraints: time, money lack of data and data bank, lack of official secre5cy, lack of intelligence and computer practical experience in the local governments staff.

Time: Time is one of the basic limitations to this project research. Due to limited time needed to attend to serious engagements in school and office, it becomes difficult to cover many local government for collection of more useful materials, visiting the websites, the studying the existing system, writing and test running the developed account processing software.

Money: Limited funds posed some problems in the course of the researching work. It involve enormous amount to visit and browse the network for data, payment for keying in and running of the program developed, photocopying of relevant materials, typesetting and binding the research work were all money consuming.

This is appreciated when other school activities and home financial demands are considered.

Lack of data and data bank:

To develop a model definitely involves studying the existing system. There are little or no data available.

There are no data banks to lay hand to study extensively the past account procedures and processes. It involved building and collation of data.

Official secrecy: Official secrecy also made access to data very limited Lack of computer experience: The lack of intelligent computer experience hampered responses to appreciate the development of account processing system by the staff.

1.7 SIGNIFICANCE OF THE STUDY

The significance of this project is that it will serve as a document which the entire local government, the staff and the general public can lay their hands on either reading it for pleasure or as an introductory book to the understanding of computer account processing system in local government operation.

It will help to purview the historical background of the introduction of the use of computer processing program in the local government operation
Further more, the project will bring into light what computer can do to the over all operation of the local government system to sanitize its accounting system through computer processing.
Also it will be minimize help to enable the people, the government to know how to access the account of the local government on-line.
It will be of immense help to accounting organizations, companies both private and government owned that would be interested in computerized account processing.

It is hoped that with this work and other similar works, the era of superfluous paper work beset with errors by Ngor-Okpala local government account department will be over.

1.8 DEFINITION OF TERMS

This research paper is geared toward exploring computer and software. It is almost a new area of conceptual study hence, there is need to give definition of terms used in the research to enable the reader understand and appreciate clearly the basics of this project.

ACCESS: This permit right, privilege or opportunity in individual or group has to enable her use data information.

COMMUNITY: A household of computers, technical workstation, application servers, database services, printers, communication drives network and management tools.

DATABASE: An organized collection of interrelated records, stored and used a systematic way.

DATA: Data is a specific representation of given item of information into record… all information consists of data..

DATA PROCESSING: Data flow in manipulation mode to produce results.

CLEAR: The CLEAR command clears the screen before the menu is displayed.

SAY: The Say command tells the program to display the text that follows on the screen in the specified position.

@: The @ signs member display text on the screen.

DATA COMMAND: The transmission of data information organized form from one computer another through a communication media.

HARDWARD: The physical components of the computer.

INFORMATION: Information is data which have been interpreted and understood by the recipient of the message.

SOFTWARE: Program or instruction that are used to enable an otherwise dead machine to understand your input and transform them into desired outputs.

WORKSTATION: Assemblage of specialized range computers that has good graphic capacities, enormous processing power, memory and good communication capability.

POP-UP: A computer menu that can be brought to the screen quickly while you are working on another document.

STRUCTURED PROGRAM: Technical term for the principles of good programming style.

ACTIVATET: To make a device or computer start working.

ALGORITHM: A set of rules that must be followed when solving a particular problem.

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