Accounting Procedure Adopted in Government Ministries and Parastatal
Chapter One
Objective of Study
Having recognized the role played by the government of Nigeria in the provision of amenities and such economic development projects, it may be concluded that, for the economy of Nigeria to improve greatly, the accounting system of government must be intact, improved, reviewed, and monitored for proper financial reporting.
The purpose of this is to conduct research on the procedure used by the government in keeping their records and in preparing their financial statement. It also aims to research how the condition of the procedure can be improved.
CHAPTER TWO
LITERATURE REVIEW
Good Accounting, either in industry or government plays a vital role in making every day transaction recorded. The importance attained to account departments is an evidence of the fact above. The nature of public sector accounting is quite different from that adopted by private sector. It is based on a quite distinctive financial and institutional structure.
According to Agbebiye, H.A(2001) the role of Accounting professional in Nigeria. “This is saying that public sector is budget financed. That is, the federal government either provides service on a notional basis or re- distributes fund on quarterly basis and many other services”.
According to Fahm(2008) the role of public account. This states that “public accounting are guided by the provision of financial regulations, treasury circulars and other circulars issued by both the establishment and minister of finance in addition to relevant provision of the civil service rules and other constitutional requirement.
In (2008) Adie I.I says that “public sector accounting is based on cash payments and cash receipts and commitment.
According to Adegbite(2002) in his work on Accounting professional in government; he maintained that contribution of accountancy profession to society or in local government could be viewed with accuracy and competence.
Oshisami.K and P.N.Dean in the book “financial management in the Nigeria Public sector”(2005) as the process of recording , analysing, classifying, summarizing, communicating and interpreting financial information about government in aggregate and interpreting financial information about the government and in detail reflecting all transaction involving the receipt, transfer and disposition of government funds and property.
According to Friedman(2000) specified in commercial operation’s designed to run an industry or public utility according to economic and commercial principle, social services corporation designed to carry out a particular social services on behalf of the government in local government . That is to simplify the presentation of fund information and to focus attention on the major activities of the entity of local government account.
According to legislature and public Accounts committee(PAC), they said that for local government account to show true and fair view, the auditor’s report on the account prepared are submitted to the legislature for review and consideration and any adverse report is sent to the PAC for thorough investigation to determine whether the account show true and fair view.According to AICPA’s statement on auditing standard no
10 discuss that internal control must be established within the organisation of local government for careful consideration for circumstances.
HOG WOOD (2003) says that ‘accounting in local government must ensure that proper segregation of resources are maintained and proper accountability on entity of local government account and to ensure that the nominal general ledger is maintained.
OBJECTIVE OF ACCOUNTING PROCEDURE IN PUBLIC SECTOR
In 1979, the national council on government accounting (U.S.A), in its research report stated that government account and financial reporting principles provide the following objectives.
- Financial information useful for making economic, political and social decision and demonstration of accounting and stewardship.
- Information useful for evaluating managerial and organization
- Information useful for planning and budgeting and predicting the impact of the acquisition and allocation of resources on the achievement of operational objectives.
CHAPTER THREE
RESEARCH METHOD
In this chapter emphasis will be laid on data collection, sample and sampling techniques, the sample size, the construction and administration of the research instrument and various problems encountered in collection of information required for the research study
SOURCES OF DATA
All necessary data were collected from both the primary and secondary sources. The two methods used for the collection of primary data includes self-administered questionnaire and personal interview.
In taking to the use of questionnaire, I was aware of it’s limitations such as where the respondent will not be willing to give adequate responses but this awareness was dominated by the fact that questionnaires often allow for standardization of questions which would facilitate easy comparison between different respondents.
In addition, personal interview technique was also employed because it seems to eliminate ambiguity in questions and affords researcher the opportunity of disabusing the mind of the respondents as to the purpose of the research.
The secondary source of data was also used to support the figures collected from the primary source of data. To this end, textbooks, newspapers, journals, financial regulations of Ogun state were consulted.
SAMPLE AND SAMPLING TECHNIQUES
The sample of this research was drawn for Ogun state ministry of finance and economic planning. The sample was purposely chosen for economy and convenience. It is also chosen so that adequate information relating to the accounting procedure may be obtained.
The method of sampling techniques adopted was stratified random sampling which entails dividing the population into strata or unit of block and using simple random sampling to draw from each stratum. This technique is useful in a heterogeneous population so as to make it as homogeneous as possible.
CHAPTER FOUR
DATA ANALYSIS AND INTERPRETATION
The result of this study will be analysed and interpreted vis-a –vis the hypothesis and research question formulated earlier in this project. This part is therefore concerned with the testing of hypothesis and answering research question so as to agree or disagree with the view. Therefore,
For accuracy and uniform comparison, analysis is based on the use of percentages and descriptive model.
In view of this section A of the questionnaire is to affirm the calibre of people taking as a samplefor carrying out this research study. While section B of the questionnaire is the research information.
CHAPTER FIVE
SUMMARY,COCLUSION AND RECOMMENDATION
SUMMARY
Summarily, the salient issues discussed in the research study are stated as follows:
Government accounting being the procedure of keeping books and records of government activities has been defined. A comprehensive definition is being given a d well explanation were also stated.
As is being stated by the National council on Government Accounting (U.S.A), government accounting and the financial reporting provide various information depending on the users of such information; which includes information relating to economic, social and political decision, evaluating managerial and organizational performance.
The nature of public sector accounting in which the account of ministries and parastatals belong is quite different from that adopted by private sector. This characteristic includes cash basis, zero basis, and appropriation regulation and accounting unit system.
The techniques used in public sector accounting comprise of budgetary, cash, commitments, accruals and fund accounting.
Private sector or commercial accounting is quite different from that which exists in the public sector and it is in the areas of purpose, scope and methods of performance measurement as well as other factors including the nature of Audit.
It also mentioned, the role of government accounting data to economic planning where it performed invaluable assistance which includes the areas of economic planning, evaluation of projects, capital formation, taxation, management appraisal e.t.c.
In other words, users of government financial statement are numerous which comprise of management, Elected members, lenders, foreign interest, customers and suppliers, investors, public, clients e.t.c; each of the needs the statement for their decision making.
The ministry of finance and economic planning being the ministry that perform the financial role of the state functions through four departments and other autonomous offices, via department of Budget , central Economic planning, statistics, personnel management and finance and supplies, office of Accountant-General and Board of inland Revenue.
The accounting procedure of the state is governed or regulated by Western state of Nigeria financial regulation and Ogun state Accounting manual.
Revenue is been source by the state Government in various ways through the Ministries and parastatals and this finds were applied to various expenditure of the government both capital and recurrent.
Treasury cash offices were located in some towns in the state for proper collection and disbursement of fund for the activities of government.
The Annual estimates of the state were prepared in accordance with the procedure laid down in the financial regulation. Various measures were set up to control the fund and expenditure of the government through accounting procedure and process and departmental procedure.
At the end of each month, the ministry and parastatals account were reconciled with that of the Accountant –General so as to know the extent of each ministry’s commitments and make necessary adjustment( if any) for error committed.
Various problems hindered the accounting system of government which includes the problem of manpower, technical instrument, perception, ideal and organisational or administration arrangement.
However, for the purpose of this research study, the methodology used in conducting the research is from both primary and secondary sources of data. For primary data, questionnaire and personal interview were adopted while for secondary data collection. Various texts, journal e.t.c. were consulted.
Analyses of data collected were made so as to ascertain the acceptance or rejection of hypothesis and other related questions.
This were analysed by using percentages and CHI-SQUARE method of hypothesis testing.
Recommendation for improvement on the procedure of accounting or in the Ministry and parastatals were also givens
CONCLUSION AND RECOMMENDATION
I have endeavour in the project to specify the framework of development and the government’s role therein.
I have also, in examining the tasks of government accounting. I tried to relate these to the role of government in Ogun State. In carrying out this research work, I tried to make some observation:-
- Relative little attention has been given to social government accounting and budgetary control system.
- Accounting procedure in government ministries reflecting complicated systems of checks, re-checks and balances tend to hamper the efficiency and timeless of the accounting system.
- Government accountis seen mainly as an accountability device for public receipt and expenditure, therefore, efficiency and economy of operation tend to be neglected.
- Book keeping or administrative ledger compliance proceduresare more common than modern accounting approach
- The amount of paper is vast butneither efficiency, accountability nor financial control is achieved
- The accounting data upon which government budget and plans are based are frequently in accurate and in complete.
- In making this observation, the following are recommended for the improvement of accounting procedure in the government ministries andSome post in the ministries and parastatals should be held by an experience and professional who can perform up to expectation. This post, especially relating to account should not be subject to promotion policy of the ministry.
RECOMMENDATIONS
That is, some key post in the accounting sector should be exclusively for these trained as an accountant rather than putting inexperience person who rose to the post through his years of working in the ministries.
- The person to be appointed as accountant general, Director, finance and suppliers should be a professional Accountant.
- In the area of revenue generation, proper techniques should be put in place, this is because the internal revenues are unable to identify the tax payer and even where they are identified, and their sources of income are not. The internal revenue is usually unable to confirm that tax payers have disclosed in their tax returns all the sources of their income particularly this unearned part.
- There should be improvement in the data, classification, methods and accounting procedures. Emphasis should be laid on training.
- If the full benefit of government accounting is to be reaped within the framework of development administration, the accounting in government should be fully professionalised, not only in terms of training but in certification and accreditation.
- The united nation organisation recommends what government accounting system criteria meet in order to become a useful tool for economic management. Some of these criteria are as follow:
- Accounting system should be maintained in a manner that will clearly identify the objectives and the purpose for which funds have been received and expended and the executive authorities who are responsible for custody and use of funds in programme execution.
- Accounting system must be development in a manner that will permit effective administrative control of funds and operations, programme management and internal audit and appraisal.
- Accounting system have to be designed to comply with the constitutional, statutory and other legal requirement of the country.
- Accounting system must be maintained in a way that will facilitate audit by external review authority and readily furnish the information needed for effective audit.
- External auditor should be engage to audit the account of the ministry so that any conclusion within the ministries and Auditor-General can be detected.
REFERENCES
- Government Accounting Standards Boards (2004). Guide to implementation of GASB statement 34 on basic financial.
- Osborne, D. and Gaebler, T. (2005). Reinventing Government How theAccounting procedure is used in public sector.
- Renzuli,S and Reis, S.M. (2003). The school wide Enrichment Model.
- Fowler, Jr. (Edition), Development in school finance 1998 NCES –2012). US. Departments of education, National centre for education statistics. Washington, Dc: U.S Government pronting office.
- Washington, Dc: National Centre for Education statistics. U.S. Department of education institute of education science (2004). Financial accounting for local and state school system.
- Governmental accounting standards board (2004).Guide to implementation of GASB statement 34 and related pronouncements.
- Government accounting standard board (2003) codification of government accounting and financial reporting standard (statement 34 edition).
- Gauthier, Stephen J. (2005). Governmental accounting, authority and financial reporting. Government finance officers association.
- American institute of certified public accountants, statement on auditing standard No 78, consideration of internal control in a financial statement
