IMPACT OF AUDITING FOR THE ENHANCEMENT OF ACCOUNTABILITY IN PUBLIC SECTOR

1.1 Introduction

Public sector is a part of the economy set up, operated and financed by government and its agencies distinguishable from the private sector and is organized on behalf of the whole people. Public organizations in Nigeria signify the most leading economic force, as a result efficient and effective systems of government financial management which are also in form of internal and financial control are vital for budgeting the nation's resources. There is a broad opinion that most of the public institutions have failed to deliver on the basis for which they were established. Management incompetence and inadequacy have been advanced by practitioners and researchers of public enterprises as the bane of the Nigerian public sector.

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitations of the Study and Definition of technical terms.

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1.2 Background of Study

The ministry of finance is one of the twelve ministries of the Imo state government. It came to being on creation of Imo state in 1976. The ministry has the ultimate goal of working towards the attainment of health economic growth. It's basic objective is to formulate and execute ideas designed to facilitate the effective management of the financial resources of the state. The chief executive of the ministry is an honourable commissioner in the person of chief Ekwegh. A permanent secretary in the person of Mr. C. Okoye and the Accountant General Dr. Emeka Adinmadu are assisting him.

There are six functional departments in the ministry, these departments are:

1. Department of administration and finance
2. Department of accounts
3. Departments of planning research and statistics
4. Investment and loan department
5. Department of planning operations
6. Department of accounts operations

This is the historical evolution of the topic which is seen and explained briefly above with the permanent secretary and the accountant general who is also assisting him in the Imo state ministry of finance. The public sector is a part of the economy whose activities are under the control and direction of the government. These include civil service, statutory corporation and other government – controlled enterprises which provide public utility service. In public sector, accountability and transparency is a collective responsibility but everybody cannot be “watch dogs or whistle blowers”. Rather the laws empower certain officers through the executive arm of government to collect all funds due and accruing to the state and disburse them for the purpose for which they are meant.

The responsibility of controlling all financial matters and regulations with regards to government revenue and expenditure is under Ministry of Finance. This Ministry acts as the supervisory ministry to other ministries and parastatals on all financial matters and execution. Its vision include maintaining the required management capacity and institutional framework for effective and efficient application of financial resources in an accountable and transparent manner and to instill due process in government financial transactions to ensure probity, values for money, transparency and accountability in public expenditure (Ministry of Finance, service delivery charter). Therefore, the officers of this ministry owe the public a duty to render a proper account of their stewardship.

However, the officers of the Ministry of Finance have been found to have contributed to the malfunctioning of vision and mission of government by failing to discharge their statutory duties efficiently. Their hidden motives to get rich quickly have forced most of the operator to keep improper records and render falsified statement of accounts. As such for public sector to achieve its motive of serving the public by reporting to them on how funds are received and expended, public officers need to be transparent by carrying out their duties with all amounts of sincerity, honesty and selflessness and strict adherence to laid down rules, regulations, procedures, giving of information freely and clearly (Ntah, 2009).

Therefore, in Imo State Ministry of Finance where the research was carried out, the activities that was conducted is to know the impact of auditing for the enhancement of accountability in public sector.

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1.3 Statement of Problems

Investigation revealed the problems of the impact of auditing for the enhancement of accountability in public sector research work, which entails that:

1. Majority of fraud in the public sector have been trace to lapses in the internal control in the ministries and parastatals.
2. The accountant general of the federal reportedly said that between 10-15% of the country's annual recurrent budget is lost each year through stealing, wastage and misappropriation.
3. Lack of Adequate Qualified Staff: here most of the senior staff still consists of people who joined public service with basic qualification.
4. Lack of Audit Independence: the internal auditors are easily controlled are ordered about by the chief executive.
5. Absence of Functional Audit Programme: lack of competent and qualified internal auditors has also resulted in inability to prepare and utilize a functional audit programme.

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1.4 Aim and Objectives of Study

The aim of the study is to examine the impact of auditing for the enhancement of accountability in public sector using Ministry of Finance as a case study. In achieving this aim, the following specific objectives were laid out as follows:

1. To examine auditing as effective tool for enhancing accountability in Ministry of Finance;
2. To determine the extent to which auditing could be used to influence the behaviour of public officers on management of public funds;
3. To find out how auditing could serve as a check on government accounting system by which public funds could be safe-guarded from waste, fraud and inefficient management;
4. To examine how auditing could enhance effective revenue generation and curb extravagant spending of government funds by officers of Ministry of Finance, Owerri, Imo State.

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1.5 Research Questions

The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:

• Can auditing be used as a tool for enhancing accountability in Ministry of Finance?
• Can auditing enhances effective revenue generation and curb extravagant spending in Ministry of Finance, Owerri, Imo State?
• Can auditing check and safeguard government resources from waste, theft, fraud and inefficient management?
• Can auditing influence the behaviour of public sector in the management of government funds?

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1.6 Research Hypothesis

In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.

Hypothesis One

• H0: Auditing does not enhance effective revenue generation and curb extravagant spending in Ministry of Finance, Owerri, Imo State
• H1: Auditing enhances effective revenue generation and curb extravagant spending in Ministry of Finance, Owerri, Imo State

Hypothesis Two

• H0: Auditing does not influence the behaviour of public sector in the management of government funds
• H1: Auditing influences the behaviour of public sector in the management of government funds

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1.7 Significance of Study

The study on impact of auditing for the enhancement of Accountability in Ministry of Finance is very necessary. This result of this study would help Ministry of Finance and Accountant-General office in particular in safeguarding its wealth from waste and fraud. It could also serve as a good source of reference to accounting students and others business students who might consult it for academic purpose.

Secondly, it would be useful to all accounting officers in any organizations; be it private or public companies for assessing and evaluating the performance of their functions as regards to accounting system.

This study will be of immense benefit to other researchers who intend to know more on this study and can also be used by non-researchers to build more on their research work. This study contributes to knowledge and could serve as a guide for other study.

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1.8 Scope of Study

The scope of the research is focused on the impact of auditing for the enhancement of accountability in public sector using Ministry of Finance as a case study.

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1.9 Limitations of the Study

During the course of this study, many things militated against its completion, some of which are:

1. Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
2. Establishment Policies: Establishment policies posed a serious limitation as most staffs are not ready to release information needed for this project work. There were lots of information needed from the staffs of this establishment to enhance the study which took them time to release or they did not release at all for security purposes, hence the scope was reduced.
3. Research material: availability of research material is a major setback to the scope of the study.
4. Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
5. Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

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1.10 Definition of Terms

Accountability: It means the obligation of an individual or organization to account for its activities, accept responsibility for them and to disclose the result in a transparent manner. It also includes the responsibility for money or other entrusted property.

Budget: This is a document that expresses the anticipated revenue and expenditure of government revenue and expenditure of government for a specific period of time.