CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
The purpose of the
public sector can be viewed from two distinct and opposing perspectives: i)
public sector exists to ensure equitable management and distribution of
economic resources, and ii) public sector exists to provide limited range of
goods and services to the populace (Guthrine, 1998; Minogrue, 2000).
The former (referred to
as the traditional model of public sector management) placed emphasis on
compliance with laid down rules, thus accountability (Guthrine, 1998; Owolabi,
Ocansey, & Dada, 2013). This view is a contestable ideology as public
sector practitioners (Morsen, 2008) and academics (Anessi-Pessina and
Steccolimi, 2007) have argued that citizens’ expectations from the public
sector is drifting from mere provision of services to good governance and
efficiency in the provision of services (value for money). The desire to hold
government accountable for results is becoming more prominent, thus, making the
demand for quantitative and qualitative financial reports imperative for
accountability.
In the same vein,
accounting is viewed as the most critical system for maximising efficiency and
minimising costs of public services (Andrews, 2002; Bruno, 2014; Jones &
Browrey, 2013: Owolabi et al., 2013). Consequently, the existence and use of a
good financial reporting system was regarded as key to achieving the objective
of maximising efficiency in the public sector.
The imperatives of good
governance demands timely reporting of the activities of government for the
attainment of accountability and transparency. Audit reports keep the citizenry
informed of the financial activities of the government. The auditor assesses
the financial activities of the Government. The role of auditor in an economy
is assurance of transparency and accountability (Adegoroye, 2008).
An audit ensures proper
and effective use of public funds and the development of sound financial
management. Effective operations of the functions of the Auditor –General
provide the proper execution of administrative activities. Moreover, the it is in promoting accountability, sound financial
management and the encouragement of sound internal control mechanism (Akenbor,
C. & Oghoghomeh, 2011)..
Effectiveness of the
auditing has a dissuasive effect on those who might otherwise engage in fraud
and other financial malfeasance. Audit, Accountability and Transparency are the
tripod for sustainable financial and economic development in the comity of
nations.
However, there is absolutely
a dismal state of accountability for public funds in Nigeria. There is a lot of
gross negligence and ineffectiveness on the part of public officers in the
discharge of their duties. Employees and
government officials in the civil service do not discharge the responsibilities
placed on them by statue and this results in inefficiency, in public finances.
Nigeria has grossly misappropriated the large monies it earned from oil and has
been faced with chaotic fiscal management (Aruwa, 2002)
A very reliable audit
report will make most of the anti-economic crime agencies redundant because
they will not have much to do and it is against this background that this study
is been carried out to assess government
internal audit accountability in ministries/extra-ministerial department.
1.2 Statement of the Problem
There has been outcry
of fraud and looting of public funds by government employees and
officials. Even the politicians that are
to protect the funds and the right of the people have engaged in massive
looting of public funds, and to this
end, the massive and the cizentry of the country and calling for accountability
of government ministries and extra ministry department.
The major challenge,
however, is the capability of the present public sector accounting system (cash
basis) to meet reporting requirements of citizens. The use of this reporting
system (cash basis) has been criticised for not reporting government
liabilities and the real state of their finances (Akenbor & Oghoghomeh,
2011). This enabled the government to pass-on present costs to future generations,
thereby creating the problem of inter-generational fairness Ijeoma,
N. (2014). Given this and many other criticisms of the cash
accounting system (such as focus on reporting inputs rather than outputs; and
does not provide a true picture of government financial activities), proponents
of public sector financial management reforms (e.g. Andrews, 2002; Barrett,
2006; Ibanuchuka & James, 2014; Pollit, 2003; Rao, 2014) have agitated for
“an extensive application of business-like practices” (Pollitt, 2003: 166) in
the financial management and reporting system of the public sector.
This study contributes
to the growing trend of discussions on adoption of accrual accounting in the
public sector as part of the requirements for ensuring good governance in
Nigeria. The study does not claim ultimate superiority of accrual over cash
accounting, but highlights how it will help to further strengthen the quality
of government accounting and reporting, auditing and accountability.
1.3
Objectives of the Study
The main objective of
this study is the assessment of government
internal audit accountability in ministries/extra-ministerial department.
The specific
objectives are;
1.
To
ascertain the functionability of the Public Accounts Committee
2.
To
assess the relationship between internal auditing and accountability in the
ministry and extra ministry department
3.
To
assess inaction to audit queries by Ministries and Extra- Ministerial
Departments
4. To
examine the reasons for late presentation of internal auditing
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