Abstract
The Project File Details
Name: Accounting Procedure Adopted in Government Ministries and Parastatal
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Length: 45 Pages
INTRODUCTION
1.1 The Background of the StudyThe economic development of a country is often planned and financed by
it’s government. Many countries in Africa have recently built ‘DAM’
(such as Aswan in Egypt and kanji dam in Nigeria.) to provide electric
power and essential services.
Economic development like these can only be financed by government.
And if government is to provide public services and to exercise control
over the economy, it needs great amount of money to pay for the
development project and to employ those people who work for it. In
Nigeria revenue generation can be categorised into two; namely, oil
revenue and non oil revenue. Oil revenues include royalties, petroleum
profite.t.c. while non oil revenues include indirect t taxes, import duties,
export duties e.t.c.
Each year, a government should produce a budget, which is a plan for
spending the revenue in its various departments and for different
development. This budget has to be approved by the National assembly
which consists of the people representing the interest of their electorates.
In Nigeria, the public sectors consist of three tiers of government whose
status and power are defined and guaranteed by the constitution. They are
Federal, State and Local governments. The federal, state and local
governments conduct their activities through two major forms of
organization; Ministries such as Ministry of finance, Health, education
and parastatals such as hospital management Board of Ogun state water
corporation etc.
Hence, government accounting may be viewed ‘as the system adopted by
the government establishment in rendering their account of stewardship
to the public and where necessary to the management’ since the aim of
government establishment is to make profit, referred to as ‘fund
accounting system’.1.2 Statement of Problem
With the present economic condition in which the people focus attention on
the public sector for the provision of amenities, it has been observed that
various irregularities were going on in the public sector which is now an
open secret. Such irregularities and lack of amenities are those arising
through poor or inefficient management of government accounting and
which may result in losses. This may further lead to other irregularities as;
1. Irregularities not directed or immediately resulting in losses to the
government, but which infringe upon budgetary control and proper
financial management.
2. Irregularities including those resulting in losses to government due to
either fraud, negligence or incompetence.
Therefore, proper accounting system and its implementation and
compliance is necessary for the effectiveness of government functions
so that interested users of government account may make appropriate
decision relating to the economy of the country.
1.3 Significance and Relevance of the Study
As it is now a common that the major problem of government account is
the mismanagement of fund and inefficient management of public sector
accounts. Based on this, it is hoped that this project will examine the
procedure of keeping books of account and record.1.4 Objective of Study
Having recognised 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 at making a research on how the condition of the
procedure can be improved.1.5 Scope of the study
Because of the wide scope of government accounting and that of the
accounting procedure adopted by the ministries and parastatals are similar
in nature, this research work is limited to Ogun state public service with
Ado-Odo/Ota Ogun state ministry of finance and economic planning.
The researcher decided to choose ministry of finance so that a wider
scope can be covered due to the fact it is the ministry that is in charge of
the financial role of the state.1.6 Research Questions
In carrying out this research work through the research instrument, these
are some questions that needed to be asked to be able to form opinion of
the sample obtained for this research, some of these questions were
contained in questionnaire while some are used in the course of personal
interview;
1. Are there any regulation governing the accounting procedure in the
government ministries and parastatals in Ado-odo /ota local government?
2. Are they employing with these regulations?
3. Are there any qualified Accountant heading the treasury department in
Ado- odo/ota local government?
4. Arethe internal control system in the treasury department adequate or
strong enough to provide financial information?
1.7 Statement of Hypothesis
1. Are there any regulations governing the accounting procedures in the
government ministry and parastatals?
Ho: There are no regulations governing the accounting procedures in the
government ministry and parastatals.
Hi: There are regulations governing the accounting procedures in the
government ministry and parastatals.
2. Are they following these regulations?
Ho: They are not following these regulations.
Hi: They are following these regulations.
3. Are there any qualified accountants heading the treasury department in
Ado- Odo/Ota local government?
Ho: There are no qualified accountants heading the treasury department
in Ado- Odo/Ota local government.
Hi: There are qualified accountants heading the treasury department in
Ado- Odo/Ota local government.
4. Are the internal control systems in the treasury department adequate
or strong enough to provide financial information?
Ho: The internal control system in the treasury department adequate is
not strong enough to provide financial information.
Hi: The internal control system in the treasury department adequate is
strong enough to provide financial information.
Based on this, I hope this research project will examine regulations, the
role of the qualified accountant and to know whether the internal control
system in treasury department in Ado-Odo/Ota local government is
strong enough to detect manipulation on how the fund is mismanaged.1.8 LIMITATION OF THE STUDY
The researcher decided to choose ministry of finance so that a wider
scope can be covered due to the fact it is the ministry that is in charge of
the financial role of the state.
It is hoped that this project will give broader knowledge on accounting
procedures in the ministries and parastatals.1.9 DEFINITION OF TERMS
1. ACCOUNTING: This can be defined as the process of recording,
classifying, reporting and interpreting the financial data of an
organisation.
2. GOVERNMENT ACCOUNTING: this can be defined as the process
of recording, analysing, classifying, summarising, communicating, and
interpreting financial information about government in aggregate and in
details, reflecting all transactions involving receipt transfer and
disbursement of government fund and properties.
3. PROCEDURE: this is a sequence of clerical operations usually
involving several people in one or more departments established to ensure
uniform handling of recording transactions of the business.
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4. MINISTRY: this is a government department led by a minister
(federal level) and commissioner (state level) to carry out specific
functions of government on any responsibilities allocated to it.
e.g.Ministry of finance and economic planning.
5. PARASTATALS: These are the corporation, authorities, boards,
council, and limited company in which government has full or majority
interest. Each parastatal is set up to provide essential services to public
e.g. water corporation, sport council.
6. FUNDS: this can be defined as a separate fiscal and accounting entity
in which resources are held, governed by special regulation, segregated
from other funds and established for specific purpose on which the
resources of the fund may be expended.
7. DEPOSIT: These are monies paid to government for safe keeping.
8. VOUCHERS: This is a documentary evidence used to discharge
obligation through disbursement (or payment) of money.
9. IMPREST: This is the money set aside for disbursement when
voucher cannot be immediately prepared or raised.
10. REVENUE: This is the total annual income that government of a
country is able to generate through taxes, fees, fines and proceed from
sales and for mineral resources or loan.
11. EXPENDITURE: This is the government spending in the execution
of its programme for the country.