An Empirical Investigation Into the Extent of Compliance With the Government Financial Regulation in...

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AN EMPIRICAL INVESTIGATION INTO THE EXTENT OF

COMPLIANCE WITH THE GOVERNMENT FINANCIAL REGULATION

IN THE NIGERIAN PUBLIC SECTOR

Accounting (B.S.C)

Chapters 1-5

No of pages 101 pages

Price N 5, 000

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ABSTRACT

This is an empirical study carried out to determine the extent of

compliance with the government financial regulation in the Nigerian

public sector. It is aimed at resolving issues regarding the relationship

between the levels of compliance by public civil servants with the

federal government financial regulations while carrying out the

accounting function.

The study was motivated by the need to promote economic

growth and development by effecting measure that will cut down the

rate of fund misappropriation in the Nigerian public sector. In giving

answers to the research problem, three hypotheses were developed;

related literatures were sourced as well as questionnaires administered.

The results obtained were presented in percent frequency tables

and statistical analysis was carried out using the sample correlation

coefficient. From the analysis, findings reserved that there is a positive

relationship between payment procedure in the public sector and the

federal Government financial regulations. There is a negative

relationship between supervision and custody of stores and the federal

Government financial regulations.

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From the findings, it is concluded that public officers charged with

the duty of managing imprest are meant to adhere strictly with the rules

laid down in the financial Regulation and they should also be kept

abreast of the rules so as to promote transparency.

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CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND TO THE STUDY

The machinery for financial administration of the federation was

put in place between 1956 and 1958. The Government Financial

Regulations was put in place in 1958, and since then it had seen only

two reviews, in 1975/76 and 1990/2000. This was brought about by the

1988 Civil Service Reforms (Oshisami 1992).

The preface of the Commissioner (Minister) for Finance to the

Revised Financial Regulations (1976) throws light on the position of

government and its expectation on the role of the Financial Regulations

in ensuring accountability, prevention of abuse, misuse or

misappropriation of government funds (Oshisami, 1992).

Since 1976 when the Financial Regulations were last reviewed and

published, the conduct of government business has undergone many

transformations. From the mid 1980s especially, anyone with the

slightest idea about how the machinery of good government should

work, would have noticed that the time-tested ways of conducting

government business have degenerated and fallen apart. Compliance

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with the Public Service Rules and Financial Regulations has been

jettisoned and instead, regimes of indiscipline, disorder and

arbitrariness were established (Obasanjo, 2000).

The heart of any country’s government administration is the

management and control of its public purse. Government business is

run in accordance to laid down rules and regulations. Obasanjo (2001)

opined that, “All the elements that enhance efficiency, reliability and

continuity of the system have been tampered with, resulting in major

and saver setbacks for the conduct of government business.

Government business was operated as if laws and rules on longer

existed to govern the way and the manner public funds were expended.

Public funds were disbursed illegally without recourse to the Financial

Regulations: facilities of Central Bank of Nigeria (CBN) and the Nigeria

Security Printing and Minting Company (NSPM) were recklessly abused

and the Contingencies Fund was used without regard to the rules

governing its operation.

In recent years, the number and monetary value of public sector

activities have increased substantially and in Nigeria represent the main

determinant of private sector prosperity. This increase in governmental

activities and their importance had brought with it an increased clamor

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for more accountability. Officials and employees who manage these

activities need to render adequate and timely accounts of the activities

to the public. The public needs to receive reliable and easily understood

accountability reports in order to access the performance of those

entrusted with public resources. Thus, the accountability concept is

inherent in the governance process of any nation. In fact, the

obligations of person or entities, including public enterprises and

corporations, entrusted with public resources to be answerable for the

fiscal, managerial and other responsibilities that have been conferred on

them and to report faithfully and truthfully to those that have conferred

these responsibilities on them, is heart and soul of good democratic

practice. It is therefore, to ensure that the legitimate processes of

accountability are reinforced, that financial, accounting and audit

regulations are put in place in the public sector (Owoyemi, 2005).

1.2 STATEMENT OF RESEARCH PROBLEM

The rate of fund misappropriation in the Nigeria public sector is on

the increase. This has led to the public asking questions as to the extent

of compliance to laid down rules and regulations by the officials saddled

with the responsibility of managing public funds.

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According to Obasanjo (2000), all the elements that enhance

efficiency, reliability and continuity of the system have been tampered

with resulting in major and severe setbacks for the conduct of

government business.

Some of these questions being asked by the public include:

1. Are payment procedures carried out in line with the federal

government financial regulations?

2. How are adjustments to transfer from various government

accounts treated?

3. How are bank accounts and cheques managed?

4. How is the custody of public money, stamps, security books and

documents, amongst others being arranged for?

5. How do public officers charged with the duty of managing imprest

go about it?

6. How is the payroll prepared and controlled?

7. Is the supervision and custody of stores in line with the federal

government financial regulations?

8. What is the level of compliance by public/civil servants with the

federal government financial regulations while carrying out the

accounting functions?

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1.3 OBJECTIVES OF THE STUDY

The objective of this study is to proffer solutions to the problems

of government financial management and control. Such objectives

include;

1. To ascertain the level of compliance by public/civil servants with

the federal government financial regulations while carrying out

the accounting function;

2. To find out if payment procedures are in line with the federal

government financial regulations;

3. To find out how adjustments to the various government accounts

are treated;

4. To find out how bank accounts and cheques are managed;

5. To find out how the custody of public money, stamps, security

books and documents amongst others are being arranged for;

6. To find out how public officers charged with the duty of managing

imprest go about their duties;

7. To find out whether the preparation and control of the payroll

system in the public sector is in line with the federal government

financial regulations; and

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8. To find out if the supervision and custody stores are in line with

the federal government financial regulations.

1.4 STATEMENT OF RESEARCH HYPOTHESIS

The following hypotheses direct the thrust of this study.

1. Ho: There is no relationship between payment procedure in the

public sector and the federal government financial

regulations.

H1: There is a positive relationship between payment procedure

in the public sector and the federal government financial

regulations.

2. Ho: There is no relationship between supervision and custody of

stores and the federal government financial regulations.

H1: There is a positive relationship between supervision and

custody of stores and the federal government financial

regulations.

3. Ho: The preparation and control of the payroll system in the

public sector is not in line with the federal government

financial regulations.

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H1: The preparation and control of the payroll system in the

public sector is in line with the federal government financial

regulations.

1.5 SIGNIFICANCE OF THE STUDY

This research will be of a great importance by way of its potentials

in expanding the frontiers of knowledge. Thus, emphasis is laid on its

academic, economic and social importance. It will fetch practical

benefits, which includes the following:

i. The results of this study will be relevant to the government of

Nigeria in ensuring that financial plans are implemented according

to government decisions and expectations.

ii. It will help in sensitizing the government of Nigeria in ensuring

that all relevant guidelines and regulations are used correctly in

order to secure acceptable accountability of, and transparency in

the use of public funds.

iii. It will enable the government to make informed decisions on the

allocation of its resources.

iv. It will help to create awareness on the part of government

employees to account for their financial activities.

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v. It will also lend to public credibility of the activities of public

servants in managing and controlling public funds.

1.6 SCOPE OF STUDY

The study was restricted to the Nigerian public sector, specifically

the federal and state public services. It was the researcher’s conviction

that apart from it being the engine room for economic development in

Nigeria, the sector had witnessed tremendous growth and development

over time.

Ministries/Extra-Ministerial Departments in Edo State were

selected for the survey. A geographical scope of the study, broke into

system of accounting for public funds and the compliance to rules and

regulations guiding such system, was adopted. The aim was to facilitate

a thorough analysis of the Ministries/Extra-Ministerial Departments’

implementation of rules and regulations guiding their system of

accounting.

1.7 LIMITATION OF THE STUDY

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Restrictions are a normal part of a man’s life. Limited resources

were the major limitations during this study. The researcher wishes to

acknowledge the following limitations:

a. A sample size of Ministries/Extra-Ministerial Departments in Edo

State have been preferable for the survey to cut across as many

Ministries/Extra-Ministerial units as possible.

b. Officials of the various Ministries/Extra-Ministerial units were not

willing to divulge needed information on grounds of their

sensitivity. Besides, some respondents failed to return the

questionnaires administered to them.

1.8 OPERATIONAL DEFINITION OF TERMS

1. Amendment: This involves a minor change or an addition to a

constitution, a law, rule, statue decree, etc.

2. Competence: The ability, authority, skill and knowledge that is

necessary for the management people and resources in an

organization.

3. Control: The power to govern the financing policies of another

entity so as to benefit from its activities.

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4. Extra-Ministerial Departments: These organizations of the

federal or state government to serve as controls or checks to the

federal or state ministries. They help to monitor the federal and

state ministries and professionals in the specific field usually head

them.

5. Financial Authority: The legal formalities in the area of public

sector accounting and financial control. They include laws, rules,

regulations, customers and accepted norms of behavior.

6. Public Officer: This refers to the holder of any public office,

including any person appointed to act in any such office.

7. Public Service: This is a service provided to people because such

service will help them and not for profit.

Accounting (B.S.C)

Chapters 1-5

No of pages 101 pages

Price N 5, 000

For more project materials

14



Log on to www.grossarchive.com

Or call

+2348130686500+2348097682691

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