CAUSES OF FRAUD AND WAYS OF PREVENTING IT IN NIGERIA PUBLIC SECTORS
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CAUSES OF FRAUD AND WAYS OF PREVENTING IT IN NIGERIA PUBLIC SECTORS
CHAPITRE ONE
1.1 INTRODUCTION AND BACKGROUND OF THE STUDY
With the expansion in the volume and complexity of organisations in the public sector, the problem of fraud has reached epic proportions. No organisation appears to be immune to this sickness, and there is definitely a need to address the issue seriously.
The purpose of this is to provide organisations with a thorough understanding of the subject matter and, as a result, to train them on how to deal with it.
Fraud is the number one enemy of the corporate world, according to Uzoka S..A; (1990,p20), and no company or organisation is immune to it. It’s a complicated phenomenon.
Cases of fraud and forgery in both the private and public sectors have not only grown incessant, but have also increased in recent years, to the point where Nigeria’s economic and financial basis has been experiencing palpable difficulties.
Despite several laws, decrees, enactments, and edicts issued by various governments, the number of recorded occurrences of fraud in the public sector has continued to rise.
The trend has indicated that cases of fraud take the form of embezzlement, misuse of public funds by senior officers, forgery, or even figure manipulation by subordinate officers in the field.
Various panels of inquiry have been established over time to investigate cases of fraud. Such panels frequently produce little or no results. As a result, the general public knows little or nothing about public finances and what they are utilised for.
The key significance of this ongoing fraud trend is that a critical component of a financial management system is missing. This demonstrates that there is still more work to be done in terms of financial control, reporting, and public financial accountability.
Financial reporting in Nigeria’s public sectors has not been highly efficient. In truth, there is no recognised framework in Nigeria beyond the one established by the 1958 Act.
Most parastatals, such as Nigerian National Petroleum Corporation, appear to produce virtually no report, and if they do, they provide little or no basis for financial management decisions and effective financial oversight by the competent authorities.
Accountability entails far more than stewardship. Anyanwu W.O (1988, p6) defines it as abdicating responsibility for one’s actions to someone else.
1.2 STATEMENT OF THE PROBLEM
In today’s Nigeria, the level of fraud has reached epidemic proportions. The number of causes and effects has grown by leaps and bounds. Most frauds in the public sector are thought to be committed with the active participation of a group of officers from various offices.
For years, and with each succeeding government, the cry has been one of public servants’ lack of accountability. Despite several decrees, enactments, and regulations to protect against fraud, the number of reported occurrences of fraud and misappropriation of public funds and properties has increased.
The widespread consensus is that there are no reliable records or proper financial reports of government activities in practically all of our ministries, agencies, and parastatals, indicating the extent of shortcomings. The following questions are based on the difficulties raised above:
(a) What is causing the increase in cases of fraud in the public sector?
Are there any flaws in public accounting reporting systems that have resulted in
Is there room for deception?
(b) What impact have panels established to combat fraud in various industries had on combating fraud in the public sector?
(c) How can the fraud syndrome in the public sector be checked and stopped?
1.3 OBJECTIVES OF THE STUDY
The purpose of this research is to look into the possible reasons of fraud and ways to prevent it in Nigeria’s public sectors, with a focus on the Nigerian National Petroleum Corporation (NNPC). During this process, the study will also focus on the following:
(i) To identify the causes and factors contributing to the rise in fraud in Nigeria.
(ii) To identify perpetrators in “fraud cases” in Nigeria.
(iii) To investigate financial laws and practices in order to correct or improve them.
(iv) Determine the usefulness of fraud investigation panel reports.
(v) To suggest fraud-prevention measures.
However, it is believed that insufficient reporting of accountability and stewardship of public officers sustains and exacerbates economic malaise.
This project also seeks to investigate the major set of components and mode of financial reporting in the public sectors and how this can be improved for proper accountability of government activities, particularly in the area of public funds.
1.4 SIGNIFICANCE OF THE STUDY
Given the high rate of fraud in the public sector, this study has become critical. The importance of this study stems from the fact that fraud prevention necessitates the establishment of an adequate internal control mechanism, staff training and retraining,
keeping up with new developments, and the acquisition of new technology to facilitate early detection and prevention of fraud. As a result, it goes without saying that every available measures must be used to combat the cankerworm known as fraud.
Again, this study will be very important in attempting to provide vital information to public officials on how to prevent fraud. It will also be used to assess the effectiveness of initiatives to reduce the frequency of fraud and forgery in the public sector. As a result, this study will be very useful to students who want to conduct research on comparable topics in the future.
1.5 SCOPE AND LIMITATIONS OF THE STUDY
This research will look at some of the financial approaches available to and employed by public sector organisations. It was concerned with how the results of these procedures are reported, as well as the primary papers in which detailed public expenditure recommendations are presented and accounted for,
in order to comprehend the nature and essential principles of public accounting. Thus, based on our data analysis, this work gives a summary of the study, draws conclusions, and makes recommendations.
The researcher experienced certain limitations when doing this investigation. To begin, because this topic is relatively new, there is very little literature available. Those that are available have nothing to do with Nigeria.
Second, little information could be obtained from public office holders because all material is categorised as “top secret” and no “good” civil worker is expected to share such secrets.
Third, the researcher’s attempts were seriously hampered by the lack of data on public expenditure from the federal office of statistics.
Finally, time constraints, money constraints, and respondents’ nonchalant attitudes towards providing essential information were all issues that hindered the researcher’s ability to conduct an indepth analysis of the research. However, the researcher’s efforts are hoped to serve as an attempt to discover a solution to the problem of fraud in public sector accounting.
1.6 RESEARCH QUESTIONS
HO1: Noncompliance with financial regulations is to blame for fraud in Nigerian public sector accounting.
HO2: There is no substantial association between fraud commitment and public sector growth in Nigeria.
HO3: It is impossible to prevent fraud in the public sector.
1.8 DEFINITION OF TERMS
To gain a better understanding of this study, it is necessary to explain several phrases that may not be often used in everyday conversation. Because this is a technical professional study, certain words are used with a high degree of prejudice. As a result, their definitions are critical, as this material may be widely consumed.
GOVERNMENT ACCOUNTING: According to Oshisani and Dean (1985,p6), government accounting is the process of recording, analysing, categorising, and summarising all government transactions in order to determine how wisely the government’s resources are spent.
population SECTORS: Government-owned and controlled businesses that provide important services to the general population.
Forgery and manipulation are examples of fraud. Embezzlement, misappropriation, and theft may be committed by management or personnel using a variety of means.
MANAGEMENT: These are the top executives in an organisation who are in charge of planning, coordinating, monitoring, and regulating the organization’s actions in order to achieve their goals.
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