EFFECTIVENESS OF FINANCIAL CONTROL ESTABLISHMENTS IN PROMOTING PUBLIC SECTOR ACCOUNTABILITY IN ENUGU STATE, NIGERIA

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EFFECTIVENESS OF FINANCIAL CONTROL ESTABLISHMENTS IN PROMOTING PUBLIC SECTOR ACCOUNTABILITY IN ENUGU STATE, NIGERIA

 

ABSTRACT

The study evaluated the “effectiveness of financial control establishments in promoting public sector accountability in of Enugu State, Nigeria”. This study was aimed to evaluate the significance of public budget as an instrument of legislative control over public finance, to determine whether the reliance of the Auditor-General on internal audit work influences his audit work and to ascertain the extent of legislative oversight function on state audit performance in Enugu State, Nigeria. To achieve these objectives, the study adopted descriptive survey design. Formal financial control Establishments (Enugu State Ministry of Finance, Office of the Auditor-General of Enugu State and Enugu State House of Assembly) were used for the study. The population of the study was 195 respondents which comprised of treasury staff of Enugu State Ministry of Finance; core Auditors from the Office of the Auditor-General of Enugu State and Public Accounts Committee Members of Enugu State House of Assembly. Primary data was used for the study. Data were collected through questionnaire research instrument on a five-pointLikert scale. The reliability of the instrument of the study which was 0.72, was determined using Spearman ranking. The validity of the instrument was measured using content validity, and this was done by three public sector experts from both the academia and public sector. Data collected were analysed using simple linear regression and Pearson product moment correlation, at 5% probability level of significance with the aid of SPSS (v.22). The findings revealed that: Thepublic budget is a significant instrument of Legislative control over public finance (r = .649, p < 0.05). in Enugu State, Nigeria. Performance of the Auditor-General is significantly dependent on internal audit work (r = .955, p < 0.05). There is a statistically significant relationship between State audit performance andlegislative financial oversight (r =.83, p < 0.05). It recommended that the legislature should be more transparent, accountable and competent in the performance of their oversight activities if they are to improve public budget control and accountability. The office of the Auditor-General and Internal Audit Unit in Enugu State, Nigeria should be further strengthened by way of being adequately staffed, equipped, funded and independent to make them more effective institutional mechanisms for financial control and accountability. Lastly, the 1999 Constitution should be amended to give atime frame for the Public Accounts Committee of House of Assembly to consider and report back to the whole house matters arising from the audit reports of the Auditor-General in order to improve his performance.

TABLE OF CONTENTS

Title Page                                                                                                                    i

Declaration                                                                                                                  ii

Approval                                                                                                                     iii

Dedication                                                                                                                  iv

Acknowledgements                                                                                                    v

Abstract                                                                                                                      vi

List of tables                                                                                                               x

 

 

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study                                                                                     1

  • Statement of the Problem                                                             2
  • Objectives of the Study 4
  • Research questions 5
  • Research Hypotheses 5
  • Significance of the Research 6

1.7 Scope of the Study                                                                                               6

  • Limitations of the Study 7

1.9 Operational Definition of Terms                                                                           7

REFERENCES                                                                                                          10

CHAPTER TWO

REVIEW OF RELATED LITERATURE

  • Conceptual Review 12

2.1.1    The Concept of Accountability                                                                      12

  • Process Based Accountability 13
  • Performance Based Accountability 13
  • Accountability in Public Sector 13
  • The Concept of Financial Control 14

2.1.2.1Internal Control Mechanism                                                                            16

2.1.3    Concept of Government Accounting                                                                         18

2.1.3.1 The Basis of Government Accounts                                                               19

2.1.3.1.1 The Cash Basis of Government Accounts                                                   19

2.1.3.1.2 The Accrual Basis of Accounting                                                                21

2.1.3.1.3 The Commitment or Encumbrance or Obligation Basis of Accounting      22

2.1.4    Concept of Budget and Budgetary control                                                    22

2.1.4.1 Budgeting Techniques                                                                                    23

2.1.4.1 Benefits of Budgeting                                                                                                24

2.1.4.2 Purposes of Budget                                                                                        24

2.1.5    The Concept of Legislature                                                                           25

2.1.5.1 Functions of the Legislature under the Nigerian Constitution                       26

2.1.6     Audit of Government Funds                                                                         28

2.1.6.1 Definitions and Evolution of Audit                                                               28

2.1.6.2 Types of Audit                                                                                                29

2.1.6.3 The Need for an Audit                                                                                   29

2.1.6.4 Qualities Generally Required of Auditors                                                      30

2.1.6.5 Constitutional Provisions for Appointment and Removal of Government

Auditors (Auditors- General) in Nigeria                                                         31

2.1.6.6 Constitutional Duties and Rights of the Auditor-General in Nigeria             31

2.2       Theoretical Framework                                                                                   33

2.2.1    Efficiency Theory                                                                                           33

2.2.2    Agency Theory                                                                                               33

2.2.3    Stewardship Theory                                                                                        34

2.2.4    Stakeholder Theory                                                                                         35

2.2.5    Institutional Theory                                                                                        37

2.3       Empirical Review                                                                                            37

2.4       Summary of the Review of Related Literature                                              49

2.5       Research Gap                                                                                                  50

REFERENCES                                                                                                          51

 

CHAPTER THREE

METHODOLOGY

3.1       Research Design                                                                                             59

3.2       Population of the Study                                                                                  59

3.3       Sources of data                                                                                               59

  • Sampling Technique and Sample Size 59

3.5       Description of Research Instruments                                                              60

3.6       Data Analyses Techniques                                                                              60

3.7       Model Specification                                                                                        60

3.8       Validity of the Research Instrument                                                              61

3.9       The Reliability of the Instrument                                                                    61

3.11     Decision Rule                                                                                                  63

REFERENCES                                                                                                          64

 

CHAPTER FOUR

DATA ANALYSES AND PRESENTATION

4.1   Introduction                                                                                                        65

4.2   Distribution and Return of Questionnaire                                                          65          4.3     Descriptive Analysis of Research Questions One to three                                    66          4.4     Descriptive Analysis of Research Questions two                                                                                     68          4.5     Descriptive Analysis of Research Questions three                                                                                   72

4.6Test of Research Hypotheses                                                                                 764.7   Discussion of Results                                                                                                             82

REFERENCES                                                                                                          85

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

5.1       Summary of Findings                                                                                                 86

5.2       Conclusion                                                                                                      86

5.3       Recommendations                                                                                          87

5.4       Contributions to Knowledge                                                                          88

5.4       Suggested Areas for Further Studies                                                              88

BIBLIOGRAPHY                                                                                                     89

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