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1.3 OBJECTIVES OF THE STUDY
THE IMPACT OF PUBLIC SECTOR ACCOUNTING IN NIGERIA FINANCIAL CONTROL SYSTEM (A CASE STUDY OF ESAN SOUTH EAST LOCAL GOVERNMNENT AREA, EDO STATE).
1.1 BACKGROUND OF THE STUDY
Public sector is that sector of the economy established and operated by government and its agencies distinguishable from the private sector and are organized on behalf of the whole citizens while Public sector accounting is the process government agencies and municipalities use to record financial
Mathias, (2004:78). Said, similar to private sector accounting in theory, the focus of public sector accounting is somewhat different. Most government agencies and municipalities need to track funds generated from tax revenues and expenditures related to projects or appropriations. In addition, nations may need to follow a set of standard of accounting principles different from private sector accounting rules. The creation of an international accounting standard helps nations to follow similar rules in
other to present information in a similar manner.
Government accounting typically uses a set of rules that tracks financial information. Rather than attempting to determine how much money a public sector entity has made, the entity must report financial information to interested parties, primarily constituents. The separation of money into
these funds makes it difficult for government agency or municipality to spend money on unauthorized purposes. Elected officials or legislatures must create appropriations or spending authorizations to transfer funds amongst government fund accounts. This process attempts to restrict the
spending of money on a free-will basis that will quickly deplete an agency‟s resources
Similar to private sector accounting, public sector accounting principles often seek to lay a framework for accounting practices.
Afolabi,( 2004:320). Said rather than creating a hard set of rules to follow, the principles allow for an application of basic principles to either large and small entities or municipalities. An international set of accounting principles is also necessary for smaller nations to learn and adopt rules that will enhance their internal national accounting process. Most times, developing nations cannot or do not have the resources capable to create and instil a framework for their public sector accounting practices.
Adopting an international set of accounting rules will help them overcome this problem and typically helps them start on the path better infrastructure development.
Another purpose of public sector accounting is to create a standard
expectation of ethics and accountability for a nation‟s financial information. Standard public accounting principles will also make it easier for a nation to undergo an audit. it is also harder for countries to hide
inappropriate financial transactions when using public sector accounting principles. This research study will therefore appraise the impact of public sector accounting in Nigerian financial control system focusing on Esan South East local government.
1.2 STATEMENT OF THE PROBLEM
The problems inherent in this research study as investigated by the researcher are;
1. INADEQUATE REVENUE: that is, the source of revenue available to Esan South East Local Government authority most often is not enough for them, as this invariably affects diverse activities that are carried out in the local government area.
2. Poor administration of local government funds.
3. Another problem is the fact that the control of public fund adopted by the local government is inappropriate. It is as a result of this that there are still setbacks in the local government as regards to infrastructural development.
4. The adoption of inappropriate and ineffective public sector accounting principles and guidelines.
5. Another problem is that the accounts of the local government are characterized by inadequacies such as, improper maintenance and book keeping of accounts and other necessary records, embezzlement of public funds especially by the top officials.
1.3 OBJECTIVES OF THE STUDY
The main objective of this study is to appraise the impact of public sector accounting in Nigerian financial control system and also to aid local government improve on their revenue generation and collection to that point where all collectable revenue are actually collected and safely paid
into the council treasury. Other objectives include the following:
1. To investigate whether the sources of revenue available to Esan South East Local Government authority is enough for them.
2. To find out whether the revenue generated within the local government is put into good use.
3. To ascertain whether the control of public fund adopted by the local government is appropriate.
4. To determine if the accounts of the local government are characterized by inadequacies such as, improper maintenance and book keeping of accounts and other necessary records, embezzlement of public funds especially by the top officials.