AN EMPIRICAL ANALYSIS OF COMPLIANCE WITH GOVERNMENT FINANCIAL REGULATION IN THE NIGERIAN PUBLIC SECTOR
ABSTRACT
This is an empirical study conducted to determine the extent to which the Nigerian public sector complies with government financial regulations. It aims to resolve issues concerning the relationship between public civil servants’ levels of compliance with federal government financial regulations while performing the accounting function.
The study was motivated by the need to promote economic growth and development by implementing measures to reduce fund misappropriation in the Nigerian public sector. Three hypotheses were developed to provide answers to the research problem; related literature was sourced, and questionnaires were administered.
The obtained results were presented in percent frequency tables, and statistical analysis was performed with the sample correlation coefficient. According to the findings of the analysis, there is a positive relationship between payment procedures in the public sector and federal government financial regulations. The federal government’s financial regulations and store supervision and custody have a negative relationship.
According to the findings, public officers charged with managing imprest are expected to strictly adhere to the rules outlined in the Financial Regulation, and they should also be kept up to date on the rules in order to promote transparency.
CHAPTER ONE
INTRODUCTION
1.1 THE STUDY’S BACKGROUND
Between 1956 and 1958, the federation’s financial administration machinery was put in place. The Government Financial Regulations were established in 1958 and have only been reviewed twice since then, in 1975/76 and 1990/2000. The Civil Service Reforms of 1988 were responsible for this (Oshisami 1992).
The preface to the Revised Financial Regulations (1976) by the Commissioner (Minister) for Finance sheds light on the government’s position and expectations regarding the role of the Financial Regulations in ensuring accountability and preventing abuse, misuse, or misappropriation of government funds (Oshisami, 1992).
The conduct of government business has changed dramatically since 1976, when the Financial Regulations were last reviewed and published. Anyone with even a passing knowledge of how the machinery of good government should function would have noticed that the tried-and-true methods of conducting government business had degenerated and fallen apart by the mid-1980s. Compliance with the Public Service Rules and Financial Regulations has been abandoned in favor of regimes of indiscipline, disorder, and arbitrariness (Obasanjo, 2000).
The management and control of a country’s public purse is at the heart of its government administration. Government business is conducted in accordance with established rules and regulations. According to Obasanjo (2001), “all the elements that enhance the system’s efficiency, reliability, and continuity have been tampered with, resulting in major and cost-saving setbacks for the conduct of government business.”
Government operations were conducted as if laws and rules did not exist to govern how and where public funds were spent. Public funds were illegally disbursed without regard for the Financial Regulations: the Central Bank of Nigeria (CBN) and the Nigeria Security Printing and Minting Company (NSPM) facilities were recklessly abused, and the Contingencies Fund was used without regard for the rules governing its operation.
The number and monetary value of public sector activities have increased significantly in recent years, and in Nigeria, they are the primary determinant of private sector prosperity. This increase in governmental activities and their importance had resulted in a greater demand for greater accountability. Officials and employees in charge of these activities must provide adequate and timely accounts to the public.
To access the performance of those entrusted with public resources, the public requires reliable and easily understandable accountability reports. As a result, the concept of accountability is inherent in any nation’s governance process.
In fact, the obligations of persons or entities entrusted with public resources, including public enterprises and corporations, to be accountable for the fiscal, managerial, and other responsibilities that have been conferred on them, and to report faithfully and truthfully to those who have conferred these responsibilities on them, are at the heart and soul of good democratic practice. Financial, accounting, and audit regulations are thus implemented in the public sector to ensure that the legitimate processes of accountability are reinforced (Owoyemi, 2005).
1.2 STATEMENT OF THE RESEARCH PROBLEM
The rate of fund misappropriation in Nigeria’s public sector is rising. As a result, the public has begun to question the extent to which officials charged with managing public funds adhere to established rules and regulations.
According to Obasanjo (2000), all of the elements that improve the system’s efficiency, reliability, and continuity have been tampered with, resulting in significant and severe setbacks for the conduct of government business.
Among the public’s inquiries are the following:
1. Are payment procedures in accordance with federal government financial regulations?
2. How are adjustments to transfers from different government accounts handled?
3. How are bank accounts and checks handled?
4. What arrangements are in place for the custody of public money, stamps, security books, and documents, among other things?
5. How do public officials tasked with managing unrest go about doing so?
6. How is the payroll prepared and managed?
7. Is store supervision and custody in accordance with federal government financial regulations?
8. What is the level of compliance with federal government financial regulations by public/civil servants while performing accounting functions?
1.3 THE STUDY’S OBJECTIVES
The goal of this research is to provide solutions to problems with government financial management and control. Among these goals are:
1. Determine the level of compliance by public/civil servants with federal government financial regulations while performing accounting functions;
2. Determine whether payment procedures are in accordance with federal government financial regulations.
3. To learn how adjustments to various government accounts are handled;
4. To learn how bank accounts and checks are handled;
5. To learn how the custody of public money, stamps, security books, and documents, among other things, is organized;
6. To learn how public officers tasked with managing unrest carry out their responsibilities;
7. Determine whether the preparation and control of the public sector payroll system complies with federal government financial regulations; and
8. Determine whether the supervision and custody stores comply with federal government financial regulations.
1.4 RESEARCH HYPOTHESIS STATEMENT
The following hypotheses guide the direction of this research.
1. Ho: There is no connection between public sector payment procedures and federal government financial regulations.
H1: There is a positive relationship between public sector payment procedures and federal government financial regulations.
2. Ho: There is no connection between store supervision and custody and federal government financial regulations.
H1: The federal government’s financial regulations and store supervision and custody have a positive relationship.
3. Ho: The preparation and control of the public payroll system do not comply with federal government financial regulations.
H1: The payroll system in the public sector is prepared and controlled in accordance with federal government financial regulations.
1.5 THE STUDY’S SIGNIFICANCE
This research Project will be very important because of its potential to expand the frontiers of knowledge. As a result, emphasis is placed on its academic, economic, and social significance. It will yield practical benefits such as the following:
i. The findings of this study will be useful to the Nigerian government in ensuring that financial plans are implemented in accordance with government decisions and expectations.
ii. It will assist in sensitizing the Nigerian government to ensure that all relevant guidelines and regulations are followed correctly in order to ensure acceptable accountability and transparency in the use of public funds.
iii. It will allow the government to make informed decisions about how to allocate its resources.
iv. It will help to raise awareness among government employees about the importance of accounting for their financial activities.
v. It will also increase public trust in the activities of public servants in managing and controlling public funds.
1.6 STUDY OBJECTIVES
The research was limited to the Nigerian public sector, specifically the federal and state governments. The researcher was convinced that, aside from being the engine room for Nigeria’s economic development, the sector had seen tremendous growth and development over time.
Edo State Ministries/Extra-Ministerial Departments were chosen for the survey. The study’s geographical scope was broken down into a system of accounting for public funds and the compliance to the rules and regulations guiding such a system. The goal was to facilitate a thorough examination of how Ministries/Extra-Ministerial Departments implemented the rules and regulations that govern their accounting system.
1.7 OPERATIONAL TERMS DEFINITION
1. Amendment: A minor change or addition to a constitution, a law, a rule, a statue, a decree, etc.
2. Competence: The ability, authority, skill, and knowledge required for managing people and resources in an organization.
3. Control: The ability to direct another entity’s financing policies in order to benefit from its activities.
4. Extra-Ministerial Departments: These federal or state government organizations serve as controls or checks on federal or state ministries. They help to monitor federal and state ministries, and they are usually led by professionals in the relevant field.
5. Financial Authority: The legal requirements for public sector accounting and financial control. They include laws, rules, regulations, customers, and accepted behavioral norms.
6. Public Officer: This term refers to the holder of any public office, including anyone appointed to act in that capacity.
7. Public Service: This is a service provided to people for the purpose of assisting them rather than for profit.
Do You Have New or Fresh Topic? Send Us Your Topic
AN EMPIRICAL ANALYSIS OF COMPLIANCE WITH GOVERNMENT FINANCIAL REGULATION IN THE NIGERIAN PUBLIC SECTOR