Finance

PROBLEM AND PROSPECT OF FINANCIAL ACCOUNTABILITY IN NIGERIA

PROBLEM AND PROSPECT OF FINANCIAL ACCOUNTABILITY IN NIGERIA

NATURE OF FINANCIAL ACCOUNTABILITY IN NIGERIA

Financial Accountability is viewed as the responsibility of an individual in public office handling resources, or positions of trust, to report on the intended and actual use of the resources or of the designated office. It is a major obligation for governance and requires that individuals in positions of public trust should render account of their duties and activities to the public or their duly elected representatives. It implies that those who take decisions are monitored and are responsible to others whom they represent. Regarding public financial management, certain mechanisms are employed for   accountability such as the use of auditor general, public account committee, and the ombudsman. These mechanisms must be strengthened to reduce the level of corruption in the country. The nation’s annual budget constitute an instrument of accountability, depicting the  report of what was done in any given financial year and  how money was allocated, unspent and what was  returned to the coffers of the government or even wasted. Therefore, accountability is the hallmarks of good governance and requires integrity, transparency and accountability in the management of public funds.

Public financial management entails the planning, organizing, procurement and

Utilization of government financial resources including the formulation of suitable policies

with the aim of  achieving  the aspirations of members of the society. Premchand (1999) views public financial management as the connection between the community’s aspirations with resources, and the present with future that  lies at the center  of the operations and fiscal policy of government Government accounting and financial reporting is a very significant component of the public sector financial management process .  Prenchard (1999) argues that government accounts have a double aim of meeting internal management requirements and providing the public with information on government operations. Government financial reports is prepared with the objective  of providing full disclosure of all material facts relating to government financial position and operations periodically (Achua, 2009). Financial reports independently are not accountability but they are an indispensible part of accountability. One of the important aspects of public sector financial management in Nigeria is the issue of audit of government financial reports. Audit constitute the  process which are  carried out by suitably qualified Auditors during the accounting records whereby   the financial statements of enterprises are subjected to examination by the independent Auditors with the fundamental objective of  expressing an opinion in accordance with the terms of appointment. The failure of auditing constitutes the major cause of high level of corruption in the public sector of Nigeria. As Prenchard (1999) puts it “many audit agencies are prevented legally from reviewing policies. Most of them cannot follow the trail of money, as they do not have the right to look into books of contractors, and autonomous agencies. The absence of value for money in the Nigerian

Public sector is supported caused by the failure of auditing functions and its agencies in Nigeria.

 

 

 

 

 

 

 

 

 

PROBLEM

1 The level of accountability is very poor in Nigeria because the channel of accessibility, comprehensiveness, relevance, quality, reliability and timely disclosure of economic, social and political information about government activities are completely non available or partially available for the citizens to assess the performance of public officers mostly the political office holders.

 

 

2 Many legislators constitute part of the corruption rather than reducing it and accounting to their communities.

 

 

3 Failure of the Value system;

Corruption and other vices have greatly perpetrated our society so much that the youths who are supposed to be leaders of tomorrow are deeply involved in crimes.

 

4 Lack of effective accountability framework, formal structures, and a proper

Environment.

 

5 Non- existence of a proper code of conduct and training in ethics,

 

 

6 The system of Governmental accounting in Nigeria is grossly deficient. Financial reports are outdated and unreliable

 

 

7 Little attention is paid to financial accountability in the public service

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROSPECT

 

 

  1. Legislatures to champion the cause of accountability.

The legislators have the constitutional responsibility to ensure that the executive are accountable to the people for the management of public funds.

 

  1. Re-orientation of Value System

The nation’s value system need be strengthened through the reintroduction of civics and ethics education into the curricula of our educational system and a national orientation of our value system

 

  1. Management accountability framework.

Government should install guidelines for preparing and approving work plan monitoring plans, reporting performance, and public accountability.

 

  1. Protection of Whistleblowers

The government in Nigeria should establish appropriate laws to protect whistleblowers.as a means of encouraging the dissemination of information on corruption

 

  1. Creating an environment of accountability

 

An effective framework of accountability should be created which rests, besides, formal structures, on a proper environment. It requires such things as existence of a proper code of conduct, training in ethics,

 

  1. Adoption of International Public Sector Accounting Standards

The success of accountability in the public sector in Nigeria lies on the proper implementation of the International Public Sector Accounting Standards. Public sector organizations in Nigeria use the cash basis of accounting. It is very necessary that Ministries, Departments and Agencies should begin to use the accrual basis of accounting.

 

  1. Public performance reporting Necessary laws should be enacted making it  compulsory for all public entities to report on their performance.

 

  1. Determination of the cost of doing government business

A detailed cost accounting system should be introduced in government.

 

  1. The establishment of the benchmark of efficiency

Benchmarks of efficiency should be established for all ministries, departments and agencies.

 

  1. Strengthening the Public Accounts Committee

Public accounts committees play a very significant role in accountability of public officers in Nigeria. Therefore they should be strengthened with a system of familiarizing the

Members with the audit scope, approach and methods through workshops and powers to take action if their recommendations are not implemented.

 

  1. Change in the structure of Government Accounting and Auditing

There is an urgent need to restructure the public sector accounting system taking into consideration the frailties and flaws of governmental accounting in Nigeria.

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