1.1       Background to the Study

Financial control as the name implies means the proper management and control of financial aspects, the efficiency effective and management of finance of the organisation.  The finance control and management law 1968 is designed for control and management for the public financial and maters connected there with and it stipulates under section 33 that the accountant general shall under to the auditor general accounts showing the financial position of the state at the end of every financial year and these include:

(a)        Statement showing the sums estimated to be received as revenue into the consolidated revenue fund and sums actually so received in the period of account.

(b)        Statement of assets and liabilities.

(c)        A statement showing the sums estimated to be issued out of the consolidated revenue fund and the sums actually so issued in the period of accounts.

So in every organisation or public sector, there is the need for financial control.


Almost all the workers in the civil services especially those involved in government financial operation and well acquainted with and an updated knowledge of the principles of financial controls.  Financial control is linked with financial planning.  This is not withstanding control parameter are outcomes of financial planning decisions.

However, systematic planning in itself requires a degree of control in terms of its process and procedures.  In most cases, government constitutes largest single business entity and in many places, the core of the economy.

Its pattern of expenditure or manner of resources allocation determines the extent to which accountability for economy, efficiency and effectiveness can be achieved.


Ugwoke (2005) opines that the Nigerian public sector is made up of the governments of the Federal, States, Federal Capital Territory, Local Governments and all their Ministries, Ministerial Departments and Parastatals.The public sector plays an important role in economic development. It provides services which the private sector may not be willing or able to provide. Chan (1988) argues that the public sector provides many essential services to society. It plays an essentially compensatory function; that is, it performs those functions that the market economy does not do efficiently or lacks the incentive to do at all.

Musgrave and Musgrave (1976), classify these functions as resource allocation, distribution of income and economic stabilisation.


In Nigeria, the various tiers of government perform these functions in varying degrees. Governments at all levels desire to deliver good governance to all their citizens. This is because good governance is an important factor in creating and sustaining an enabling environment for development (Asselin, 1995).

The importance of good financial management system in carrying out the functions of government has not lost its relevance. Based on this, the financial accountability of most countries is embedded in the Constitution to ensure the discharge of financial accountability. Oshisami and Dean (1984) remarks that in recognition of the importance of finance as a basis for political power, and the opportunities which absolute control offers for its abuse, control over public finance is divided. The division is formally recognised constitutionally.

In view of the enormous responsibilities placed on government for the welfare of its citizens, the public sector needs a lot of resources.


  • Statement of the Problem

The public sector performs an essential role in public financial management and economic development. The public sector is entrusted with public financial resources. It is therefore anticipated to stick to the utmost ethical standards, transparency and accountability to guarantee optimum utilization of scares public resources which could be actualise through a combination of individual professionalism, personal standards and a rigorous control framework (Chan, 1988).Safeguarding and control of public resources led to the institution of government financial control establishments, responsible for the monitoring of activities of government officials to ensure transparency and accountability in governance (Dauda & Kumanjock, 2015). To promote financial accountability in Nigeria, power over public finance is shared between the Executive (Ministry of Finance), Legislature and the Supreme Audit Institution or the Office of the Auditor General. They are statutorily empowered to harness all public resources for the benefit of the generality of the citizens. The question is, has the Nigerian Public office holders adhere to the principle of public accountability and voluntarily account for their activities while in office? These establishments have not been able to function effectively (Akinbuli, 2013).

It is observed that there have been reported cases of non-accomplishment of budget, budget disparity, budget indiscipline, poor or non-performance of budget and poor budgetary implementation (Olurankinse, 2013).

The budget is the legislative instrument of control over public funds. As good as our budget is, the performance of which can be measured in terms of accomplishment is nothing to write home about. Budget implementation is far from reality and the disparity between budget and its implementation are so wide and kept on abating as years pass by (Obara, 2013). Related to the issue just raised above, is the problem of spending without legislative authority. The checks and balances on public finance require that the Executive cannot spend without legislative approval. Even where voted funds fall short of requirements, the spending agency must apply for supplementary appropriations provisions and obtain legislative approval for such additional expenditure before incurring them. It has been observed that this requirement of the law is not usually followed (Olaoye & Ogunmakin, 2014).


The Executive arm of government which implements budgets is required to ensure that expenditures are properly covered in the relevant Appropriation Acts. Funds are meant to be apportioned to various spending departments based on their approved budget. It has been noted that public expenditures are frequently made on items not budgeted for, which of course means that such expenditure has no legislative approval. Once the budget has been approved, it is observed that funds are used for purposes other than those for which they were approved (Oke, 2013). This aspect of budgetary control is usually abused. We may ask, why should spending agencies fail to comply withincurring only legislative approved expenditure? With all these abuses, what has happened to the legislative oversight function?


Ehigiamusoe and Umar 2013, argued that legislative oversight committees have not been effective in stimulating Ministries, Departments and Agencies (MDAs) to the attainment of budget accomplishments and accountability. They argued that some legislative committees use oversight activities to intimidate rather than to encourage MDAs to perform at optimum levels especially in the areas of budget implementation accountability.This problem is assumed to have adverse effects on the performance of the Auditor General.

The performance of the Auditor General seems not to have ensured the successful execution of projects, neither has it done much in ascertaining that government derived value for money spent on projects in Enugu State. It is observed that the Auditor General is incapable of discharging the functions of his office which is constitutionally prescribed(Ijeoma & Nwufo, 2015).If this is true, why?


Furthermore, if the public accounts committee live up to expectations as per its functional role, why are the masses so perplexed about the prevailing condition of accountability of public sector financial activities and the rampant financial crimes across the country? Since we have by thelegislature, Public Accounts Committee, what impact does its function has on public accountability? If public sector accountability is ensured by public accounts committee through an audit process, why then do we have rampant financial crimes? In other words, in what ways public accounts committee influence public accountability and with what outcomes so far achieved (Pere & Osain, 2015).

The entire establishments of public sector financial control seem to have collapsed. Consequently, there are increases in the mismanagement, scandalous embezzlement, extravagance, wastage, misappropriation, contract abandonment, overprizing of goods/service, salaries padding, capital flights and all other sorts of corruption (Udu, 2013).


It is against these backdrops, which gave rise to poor economic and social development that this study sought to fill in the gap in the literature on the effectiveness of financial control establishments in promoting public sector accountability and how it can be used to enhance effective and efficient utilization of scarce public resources in Enugu State, Nigeria.

From the empirical review, the researcher observed that there issparse literature on the subject matter despite the importance of public sector accountability in sustaining economic development in Nigeria. Many researchers on the subject matter such as Dauda and Kumanjock (2015) who studied the efficacy of the Office of the Auditor-General of Nasarawa State in ensuring public sector accountability used only one statutory establishment of Public Sector Financial control which is Office of the Auditor-General. Also, Pere and Osain (2015) who studied the functional impact of public accounts committee on public sector accountability in Nigeria equally used one statutory establishment of Public Sector Financial control which is House of Assembly (Legislature). But this study used all the three statutory public sector financial control establishments in order to establish their relationships in promoting public sector well as larger scope than the previous works on the subject matter.


  • Objectives of the Study

The main objective of this study is to evaluate the effectiveness of Problems And Prospect Of Financial Control Tool In Nigeria

Specific objectives include to:

  1. a) To know the extent of financial control and prospect of financial control in public sector
  2. b) determine whether the reliance of the Auditor-General on internal audit work influences his audit work in Enugu State, Nigeria; and
  3. c) examine the extent of legislative oversight function on State Audit performance in Enugu State, Nigeria.


  • Research questions

The research questions in this study highlight the main areas of concentration. Hence, making attempt to find answers to the following questions will help to clarify the relationship between public financial control Institution and sustainable development.

The questions of this research are as follows:

  1. What is the significance of Budget as an instrument of Legislative control over public finance in Enugu State, Nigeria?
  2. To what extent does the reliance of the Auditor-General on internal audit works influence his performance in Enugu State, Nigeria?
  3. What is the extent of legislative financial oversight functions on the performance of State Audit in Enugu State, Nigeria?


  • Research Hypotheses

Based on the explanations contained in the background of this study, we propose the following hypotheses:

  1. The public budget is a significant instrument of Legislative control over public finance in Enugu State, Nigeria.
  2. The performance of the Auditor-General is significantly dependent on internal audit work in Enugu State, Nigeria.
  3. There is a significant relationship between State Audit performance and the quality of legislative financial oversight functions in Enugu State, Nigeria.






  • Significance of the Research

Research on the public sector, especially on financial control and management is very necessary. It is necessary to carry out this study in view of the prevailing poor living conditions in Nigeria as a result of poor financial control.


The significance of this study derived from the effort to contribute to existing literature on the matter of public sector financial control. Furthermore, it proffers suggestions to improve on public financial management system with regards to enhancing economic development. Thus, the financial policy makers in public sector will find this study useful to set up a sound public financial management system to address the prevailing problems of economic recession in Nigeria. Hence, the study draws the attention of public sector administrators on good financial planning and control to extend sustainable development projects to the country as the only way to show good governance.

The academic community will benefit tremendously from this research. Other researchers may use this research to investigate further issues on public financial control.

The three formal establishments of financial control in public sector, that is, the Ministry of Finance, the Legislature and the Office of the Auditor-General will discharge their financial responsibilities effectively if the recommendations of this research are implemented.


  • Scope of the Study

This research evaluates the problems and prospect of inancial Control Tool


1.8 Limitations of the Study

Collecting data on public sector activities were difficult. Data that is meant to be publicly available is treated as confidential. Inquiries for data were viewed with suspicion. The researchers were suspected to be agents of opposing political parties. We were thus to be kept at arms’ length. Some Government officials refused to supply the necessary information probably due to their ignorance of the main purpose of this study.

We overcame these limitations by convincing them that the data were purely for academic purpose.


1.9 Operational Definition of Terms


This refers to gathering, classification, analysis, communication, and interpretation of financial information aimed at aiding informed decision bordering on planning and control.


Public Sector Accounting

This is the process of recording, classifying and analysing financial information about government units and activities to be able to ascertain the amount of funds received, disbursed and balance left in such units and from such activities.



This refers to an estimate of revenue and expenditure for a year ahead chargeable to the revenue and capital accounts.


Public Financial Management

In the context of this study, it refers to the efficient and effective utilisation of public resources to meet the needs of the public in an equitable manner.

It shifts the emphasis from traditional public administration to public management. Public financial management systems permit greater flexibility of inputs and processes in return for greater emphasis on outputs and performance. Whereas the traditional public administration focuses on adherence and compliance with legislative appropriations, the Public Financial Management focuses on performance evaluation and result-orientedaccountability.



This refers to the abuse of public office through the instrumentality of private agents, who actively offer bribes to circumvent public policies and process for competitive advantage and profit. Beyond bribery, public office can also be abused for personal benefit through patronage and nepotism, for example, the theft of state assets or the diversion of state revenues



This refers to the obligation to demonstrate that work has been conducted in accordance with agreed rules and standards and the official reports fairly and accurately on performance results. Implied in the above definition are the indispensable roles of due process, transparency, and feedback in achieving accountability.



The control comprises those elements of an organisation (including its resources, systems, processes, culture, and tasks) that, taken together, support people in the achievement of the organisation’s objectives.


Internal Control

This means the whole system of controls, financial and otherwise, established by the government in order to carry on their activities in an orderly and efficient manner, ensure adherence to government policies, safeguard public assets and secure as far as possible the completeness and accuracy of the records.It includes organisation, segregation of duties, physical controls, authorization and approval, arithmetic and accounting, personnel management, and management controls.


Financial Control

This is the sum total of the work, which guides, directs and interprets the budget cycle. It covers the activities of the Executive branch, involving finance and the ministries, the audit department and the legislature.

Financial Control Establishments

This refers to public sector statutory establishments that are responsible for ensuring effective and efficient control and utilisation of public finance. They include: Enugu State Ministry of Finance, Office of the Auditor-General of the State and Enugu State House of Assembly (Public Accounts Committee).


Treasury staff

This represents the Staff of Enugu State Ministry of Finance that are needed to provide necessary information and responses, as a result of their direct participations in the main activities of the establishment.





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