SUCCESSES AND FAILURES OF PUBLIC SECTOR ACCOUNTABILITY IN NIGERIA

ABSTRACT

This course of study is centered on the appraisal of the success and failure of public sector accountability. This is to say that, the essences of public funds are the provision of social benefits to the people who contributed to it. It is therefore, important that the public administrator should be given a clear account of what they did with public funds, if the aim of such an administrator is to complete its tenure in the office this is because people can resist tax payment, if they are not properly informed of what was done with their funds. This study exposes the individual on his or her right to demand an account from their trustee as their representatives.  The researcher made out thirty-five questionnaires which, were present to respondents and which were gathered back after their opinions were given, regarding the basic issues being addressed out of the thirty-five questionnaires distributed, thirty were accepted for analysis. To finalize the research work, I am saying that there is a very poor attitude towards public sector accounting in Nigeria. It was unfortunate that we could not establish or indicate major problems. People still wallow abject poverty because of a corrupt government that placed no value on the individual’s welfare.  Finally, I recommended that the government must ensure that all politicians declare their assets before assuming office. Their assets are again assessed on the completion of offices by the politicians. All banks that kept ill-gotten wealth should be blacklisted and their operating license is withdrawn. External auditors should be appointed to audit and publish all government account. Internal auditors should be made to report directly to the government.

 

CHAPTER ONE

INTRODUCTION

1.1            BACKGROUND OF THE STUDY

Every society is made up of individuals, who agree to come under one unit and to be governed as an entity for the society to function effectively, some individuals must manage its affairs as it affects the society overall good, be it a financial goal, social goal or political goal. Against this background of managing the affairs of the society, funds must be raised and used to achieve some of the goals of society. The funds must rest in the hands of the people’s representatives, to be administered in such a way that maximum social benefit to be achieved. To the extent of the funds contributed by the individuals and entrusted in the hands of representatives, services will be provides by the use of funds. Eventually then, these representatives will not only keep custody of the funds, they will account to the people who contributed to the funds. This is based however, on the existing of full democratic system of government. Back here in Nigeria when the public sector accounting did not develop to any meaningful extent until the coming of the British accounting for the public funds has been posing a lot of problems since the past 1991-2002 era. It is unfortunate that all efforts by the government to encourage public sector accounting did not achieve the desired outcome of providing adequate information regarding the use of public funds. Proper accountability should demand that, the extent of the financial performance of any government for the period ruled by the government.

1.2       STATEMENT OF PROBLEMS

The bone of the problem of the Nigerian public sector has been the improper accountability and management of the taxpayer’s money entrusted in the hands of their representatives. These representatives have rather to wealth amassment at the expenses of the taxpayers, when it was clear that little or no punishment was meted on them. They would rather be given titles as an encouragement for their fraudulent practices.

Consequently, there is a poor rate of development and a very poor standard of living of the average taxpayer. The researcher is therefore interested in increasing the awareness of the need for their trustees as their representative to properly account for the taxpayer’s fund.

1.3      OBJECTIVE OF THE STUDY

The cardinal objectives of the research work are: –

i.                    To find out to what extent, the public funds have been prudently utilized to maximize his welfare in Nigeria for the period of 1991-2002.

ii.                  To ascertain the taxpayer’s attitude towards tax payment.

iii.                To create a general awareness on the part of the public funds to demand an account from their representatives.

iv.                To recommend ways of providing public sector accountability now and also in the future.

1.4           SIGNIFICANT OF THE STUDY

The essences of public funds are the provision of social benefits to the people who contributed to it. It is, therefore, important the public administrator should be given a clear account of what they did with public funds; if the aim of such an administrator is o complete its tenure in the office. This is because people can resist tax payment if they are not properly informed of what was done with their funds.

This study exposes the individual on his or her right to demand an account from their trustees as their representatives. It also exposes the public administrator on how best to manage the taxpayer’s fund and achieve maximum support from the masses.

It will therefore, be useful o public administrators, account in the public sector tax administrators, the legislature and the executive arm of government as well as bankers. It will also enable the reader to know what has happened in the past, in terms of public sector accounting in Nigeria. This is a useful guide against the future Nigeria public administrators and politicians.

1.5                                      RESEARCH HYPOTHESIS

In order to reflect on the relevant ideology needed in the research work, based on public sector accounting, the research work is enclosed on the following hypothesis. These are built into Null hypothesis, Ho and alternative hypothesis, Hi.

HYPOTHESIS 1

Ho:                  There is no positive relationship between the amount of tax paid and the benefit derived from the payment.

Hi:                   There is a positive relationship between the amount of tax paid and the benefit derived from the payment.

                                    HYPOTHESIS 2

Ho:                  Improper management and accountability of public fund had not led to unemployment and uneven development among various states of Nigeria.

Hi:                   Improper management and accountability of public fund has led to unemployment and uneven development among various states of Nigeria.

                                    HYPOTHESIS 3

Ho:                  The public fund has not been wisely utilized towards maximizing their collective benefit in Nigeria.

Hi:                   The public fund has been wisely utilized towards maximizing their collective benefit derived from the payment.

1.6           BRIEF HISTORY OF NIGERIAN PUBLIC SECTOR

It is widely held opinion by financial experts that the public sector in Nigeria controls about seventy percent (70%) of the asset base of this country. This is likely to be so in most countries of the world more so in socialist and communist economies where the national government plays overwhelming roles.

The Nigerian public sector consists of three separate levels of government whose status powers and relationship are defined and guaranteed by the constitution. They are the federal government, state government including Abuja, which has the status of a majority and the local governments councils.

The federal and state government conduct their activities through two bodies, which of course made up the public sector ministers and public enterprises. The public enterprises include all corporations, para statuses, authorities, boards, councils and limited companies which the government has full or majority interest.

The public sector is not a profit-oriented sector of the economy and therefore, the more reason they adopt the cash basis for accounting purposes and where they are profit-oriented they adopt the accrual basis.

1.7           DEFINITION OF TERMS

The terms in the research work are drawn mostly from the disciplines namely: – the accounting discipline and the public administration. Some of the terms are: –

1.      Fund Accounting: – This is an accounting system that recognizes various indigent fund centers in the public sector and with the independents reporting system.

2.      Entity Accounting: – This is the type of accounting system that looks at the whole organization in different departments.

3.      Cost Center: – This is part of the organization that is charged with cost s of the purpose of ascertainment, report, and control for the organization. It could be manned by a person or maybe impersonal in the form of say machinery. It essentially involves sub-dividing the organizations with various responsibility centers, so that a person is given authority for the control of fixed overheads mean to be controlled.

4.      The Legislature: – This is the aspect of the public sector that is concerned with lawmaking. This aspect of law making includes finance and other laws.

5.      Accounting Concepts and Conventions: – These are underlying assumptions upon which the accounting profession rests. They are divided into: –

a.      Business entity concept

b.      Money measurement concept

c.       Cost concept

d.      Going concern concept

e.       Dual aspect concept

f.       Accrual concept

g.      Realization concept

The business entity concept requires that accounting information should be kept in such a way that business is recognized as a separate legal entity, different from its owner. Money measurement concept requires that the transactions and assets of the business should be expressed in monetary terms at all times. Cost concept entails that the resources of the business acquired are known as the assets and forms the loan for the subsequent period. The value recorded, as the balances of asset do not necessarily reflect in the current market value. The income of the business is measured by taking the value at data of sale and then deducting the cost used in making or buying them. Going concern concept, states that all business looks at the entire business as a continues process on liquidation a different approach becomes necessary. The dual aspect concept states that all business transactions have a dual aspect. The account record changes in the state of business. The balance sheet in a statement of the position of a business that records the sources and uses of funds in its statements. Every account has two effects on showing value received and the other given. It therefore normally has two entries in the ledger a debit entry and a credit entry. Accrual concept entails that income accrues to the business, the moment that there is a sale. It is normal to measure the operation of the business on annual basis. This period may be broken down into interim periods as may be required by the management. Expenses are deducted as far as they are incurred in order to earn the revenue under consideration. Realization concept states that revenue is deemed to have been earned the day t is realized and this is when goods are for immediately or in the future.

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