SUCCESSES AND FAILURES OF PUBLIC SECTOR ACCOUNTABILITY IN NIGERIA SINCE INDEPENDENCE (A CASE STUDY OF SELECTED GOVERNMENT-OWNED ESTABLISHMENT IN EBONYI STATE)
Every society is made up of individuals who agreed to come under one unit and to be governed as an entity. The affairs of the society are managed, to provide the needs of the society.
Public sector accounting is accounting for non-profit oriented business enterprises such as government ministries, department and parastatals others include churches, social clubs, town unions, hospital, educational institutions, humanitarian agencies etc. These organizations do not have profit as their main purpose for existing. This does not mean that they cannot or do not operate at profit. Their main reason for existence is to provide services for which they are established. If they ever make profit in the course of business, that profit is re-invested into the business, it is not shared to owners.
When we talk of public sector accounting we normally concentrate on Government accounting, whereas Government accounting is only an aspect of public sector accounting. It is generally understood that, both public sector accounting and government accounting are used inter-changeably. This is because the larger percentage of public sector accounting is based on government ministries and departments.
Public sector accounting is a matter of both politics and economics. Public sector is that aspect of the economy manned by the government and it is comparatively large. The vast nature of the sector, do not permit, or, it is not convenient to accommodate every body in the House of Assembly to take application of public fund. Therefore the need for representatives in the house becomes obvious. Mandate and power are invested into the few elected individuals by the citizenry to represent their interests in the government and decide on how their accumulated common fund would be directed for the provision of public goods and services.
1.2 Background of the Study
Individuals in a society need their resources to be managed effectively. For the society to function effectively, some group of people who may be appointed or elected must manage the affairs as it affects the society’s overall goods or financial or political goals or socio-economic goals. Against this background of managing the affairs of the society, funds must be raised and used to achieve some of the desired goals of the society. Their funds must rest in the hands of these elected or appointed representatives who will handle such in a way that maximum societal benefits are achieved. To the extent that the funds contributed by individuals and entrusted in the hands of their representatives, service must be provided by the use of the funds. Essentially, then these representatives must not only keep custody of the fund, but must also account to the people who contributed to the funds. This is based however, on the ground of full democratic system of government.
In Ebonyi State, public sector accounting did not develop to any meaningful extent until the creation of the state by military administration in 1996. Accounting for public fund has been posing a lot of problems since it is unfortunate that all efforts by the government to encourage public fund has been posing a lot of problems since the creation of the young state. It is unfortunate that all efforts by the government to encourage public sector accounting did not achieve the desired out come of providing adequate information regarding the use of the public funds. Proper accountability should demand that the extent of financial performance of any government should be measured by publishing audited financial performance of such government for the period gazzeted by the government.
1.3 Statement of the Problem
The problem of Ebonyi state public sector accounting has been the improper accountability and management of taxpayer money entrusted in the hands of their representatives. Their representatives have wrong notion of the wealth of government which,, contrary to reality, is usually regarded as limitless; a national cake from which any individual in position could cut his/her share at will and get away with it, therefore very scant and weak public or societal reaction against excesses of public officers which frequently include deliberate misallocation and misappropriation of fund, fraud, embezzlement, waste conversion, etc.
Those representatives have resorted to wealth amassment at the expense of fund payers when it was clear that little or no punishment will be given to them. They would rather be given title as an encouragement for their fraudulent practices.
Consequently, there is poor rate of development and poor standard of living of an average tax payer.
The researcher is interested in increasing the awareness of the need for their trustees as their representative to properly account for public funds.
1.4 Objectives of the Study
The main objective of this research are as follows:-
- To find out to what extent the taxpayers money has been prudently utilized to maximize their welfare in Ebonyi State.
- To X-rays the taxpayer’s attitude towards tax payment since the creation of Ebonyi State.
- To find out rate of social harm done to tax payers as a result of imprudent utilization of tax to maximize their welfare
- Recommend ways of improving public sector accountability now and in future.
- To create awareness the public (taxpayers) to demand for an account from their representatives from time to time.
1.5 Significance of the Study
The essence of tax payment is the provision of social benefits to the people who contributed to it. This study exposes the individual on his or her right to demand for an account from their trustees as their representatives. It also exposes the public administrators on how best to manage the fund and achieve a maximum support from the masses that pays the tax.
It will therefore, be useful to public administrators, accountant in the public sector, tax administrators, the legislature and the executive arms of the 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 since independence.
1.6 Research Questions
The aim of this study is to identify the successes and failures of public sector accounting in Nigeria.
For the objective of the study to be achieved some specific question has to be addressed. These includes:-
- How has the tax payers money been utilized?
- Has an average taxpayer react to tax payment?
- Has improper management and accountability of public revenue led to massive unemployment and un-even development among various regions in Ebonyi State?
1.7 Formulation of Hypothesis
In order to reflect on the relevant ideology needed in this research work, based on public sector accounting the research work is anchored on the following hypothesis, these hypothesis are build into Null and Alternative hypothesis.
Ho: The taxpayers money has been imprudently utilized towards maximizing his individual and collective benefits in Nigeria and Ebonyi State in particular.
Hi: The taxpayers money has been prudently utilized towards maximizing his individual and collective benefits in Nigeria.
Ho: An Average taxpayer does not show a positive attitude towards tax payment.
Hi: An Average taxpayer responds positively towards tax payment
Ho: Improper management and accountability of public revenue has not led to massive unemployment and uneven development in Ebonyi State.
Hi: Improper management and accountability of public revenue has led to unemployment and uneven development among various regions in Nigeria.
1.8 Research Method
The step by step method the researcher used in this study in sources of data. It includes the primary sources and the secondary sources.
- Primary sources: These are the sources of data the researcher collect first hand. That is, it is a raw-data collected from the field of the study. This type of data was obtained from the field through interview, questionnaire, surveys, planed experimental observation or recording of the uses of fund.
- Secondary data: Secondary data is a data obtained second hand from the first hand owner of the data.
- This type of data was obtained from published materials, and from other materials like government agency and professional associations.
1.9 Limitation and Delimitation of the Study
This research work is however, hampered by the following un-avoidable constraint.
- TIME: The battle of carrying out this research along with the semester’s academic work was enormous and fudious. The researcher could only manage any available time at his disposal that would not disturb his other pressing academic works.
- RESOURCE CONSTRIANT: The financial needs of this research work is also enormous. The fact that the researcher is prone majority to his parents who were civil servants that earn their daily bread from their monthly payment given to them lately every month as salaries pose a very big threat to the actualization of this noble work because of the cost of data collection.
- RESPONDENT: The information used was basically provided by top civil servants who were seen as actual participants in the keeping and disbursement of public funds.
- LOCATION CONSTRAINT: The research was based on information provided by civil servants serving in Ebonyi state even though the research work was a survey of the entire country situation.
1.10 Definition of Terms
The terms used in this research work were drawn mostly from disciplines namely, the accounting discipline and public administrations.
Some of the terms are:-
- Fund accounting:- This is an accounting system that centred on public sector and independent reporting system.
- Entity Accounting: This is the type of accounting system that works at the whole organization as one even though there could exist different departments.
- Cost centre: This is part of the organization. It could be manned by a person, or may be impersonal in the form of machinery. It essentially involves subdividing the organization into various responsibility centres, so that a person is given authority for the control of fixed overheads meant to be controlled.
- The legislature: This is the aspect of the public sector that is concerned with the law making. This aspect of law making includes finance and other laws.
- Accounting concepts and conventions which the underlying assumptions upon which the accounting profession rests.
They are divided into;
- Business entity concept
- Money measurement
- Cost concept
- Going concern concept
- Dual aspect concept
- Accrual concept
- Realization concept
- Materiality concept
Money measurement concept requires that the transactions and assets of the business should be expressed in monetary terms at all items.
Cost concept entails that the resources of the business acquired are known as assets and forms the basis for subsequent period. The value recorded as the balance of asset do not necessary reflect in the current market value. The income of the business is measured by taking the value at date of sale and then deducting cost used in making or buying them.
Going concern concept looks at the entire business as a continuous process on liquidation, a different approach becomes necessary.
Dual aspect concepts state that all business transactions have a dual aspect. The account records charges in the state of business. The balance sheet is a statement of the position business that records the sources and uses of funds in its statement. Every account has two effects. One shows the value received and the other value given. It therefore normally have two entries in the ledger a debit entry and a credit entry.
Accrual concept entails that income accrues to the business the moment that theme 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 for 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 it is realized and when goods are transferred to customers whether it is paid for immediately or in the future.
Materiality concept, this state that the size of an amount will influence its treatment, serious controls should not be made on items of small value similar items that command small values could be lumped together in the accounts. The figures may also be rounded off to the nearest naira or monetary equivalent.
6. The executive: This is the arm of the public sector that are directly involve in carrying out the decisions of legislature.
Agyei, A.K. (1983); Principles of personal Income taxation in Nigeria. Lagos West African Book Publishers Ltd.
Emekekwue, P.E. (1993); Principles of Public Finance Kinshasha Zaire. African Bureau of Educational Service.
Garbutl, D. (1972); Carters Advanced Accounts London Pitman Publishing Ltd.
Okpe, I. I. (1998); Public Sector Accounting Enugu Pre. Publication Education.
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