THE IMPACT OF FINANCIAL MANAGEMENT IN CONTROLLING FRAUD IN THE LOCAL GOVERNMENT SYSTEM
(A CASE STUDY OF OLAMABORO LOCAL GOVERNMENT AREA, KOGI STATE)
ABSTRACT
This research work was aimed at studying
the Impact of Financial Management in Controlling Fraud in Olamaboro
Local Government Council. The objective of this work is to provide
realistic strategies on how the resources of the local government can be
effectively controlled so as to avoid fraud and misappropriation. The
researcher used both primary and secondary methods in collecting data.
Analysis of the data was done through the use of simple percentage
method for easy understanding. It was revealed after the investigation
that effective financial management and control is very necessary for
good governance in Olamaboro local government area. And for this to be
possible, there must be accountability for any money spent. At the end,
the researcher also made the recommendations that there is need to
appoint competent staff to ensure that appropriate records such as
balance sheets are kept and updated, and that the need for the internal
and external auditors to work together cannot be over emphasized.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The question of financial control and
management or Accountability has received a lot of attention in all
governments of the world. Nigeria right from the colonial period in
particular towards the attainment of independence also devised a way of
controlling government finance.
There is no way public sector especially
that of local government area can operate without adequate finance. It
will be needed to satisfy the aspirations of the masses.
Government is saddled with the
responsibility of providing security of lives and properties,
educational services as well as construction of roads and bridges. These
and many other services required that a lot of finances are needed and
are generated to be spent on doing every thing for them but failed to
realize that government resources are limited while the societal needs
are unlimited.
However, there is a need to manage the
limited resources so that social expectation can be met. Today, that
desire to get rich quickly among the political administrators and the
top officers of local government is a shameful practice that subjected
them to defraud local government financial resources careless spending
of public fund.
Besides, the act of accounting or giving
bribes and 10% kick back, tips, embezzlement, misappropriation tax
evasion, over-invoicing under invoicing and all sort of fraudulent
practices is the general observation and complaint of the public. These
raised the need for major central and management of financial resources.
To this end, financial management is
another effective tool that can limit misappropriation, embezzlement and
all such fraudulent practices especially in local government
administration.
People’s fraudulent act can only be
controlled through effective financial management according to Pandey
(1979) financial managements is that management activities which are
concerned with the planning and controlling of the firms financial
resources.
Bagaji (2002), defined financial
management as a liability which entails the establishment of a pattern
of control over receipt and expenditure so that public funds can be used
for their purposes.
Effective financial management is the same answer for prevention of fraud, embezzlement and misappropriation of funds.
1.2 STATEMENT OF THE PROBLEM
It is observed that the account of
Olamaboro local government is not prepared in accordance with the rules
and regulations (constitution). Non-payment of revenue into government
account, fraud and executive embezzlement is rampant. Citizens of
Olamaboro local government area itself were complaining of abandoned
projects not executed and the local government also in the same way,
complains of inadequate funds to meet up with the obligations. It is on
this note that the researcher wishes to see if financial management
could prevent fraud in Olamaboro local government area and ensure
effective financial management in controlling local government financial
resources.
1.3 OBJECTIVES OF THE STUDY- To examine the strategies employed in financial management and control in Olamaboro local government area
- Aim at assessing the causes of fraudulent practices in the local government area
- To identify the constraints which make finance to be audited by auditor in Olamaboro local government area
- To curb cases of embezzlement and misappropriation of funds
- To make some recommendations on how to evoke effective financial techniques in the management and control of financial resources in the public sector.
- The current study will be of importance in nature to control fraud in Olamaboro local government
- The study will provide financial information for the management to take quick decision where possible
- The study is going to be useful for planning and budgeting during the year
- It will equally be useful to evaluate the effort of local government area in preventing fraud among the officers
- Could financial management be effective in controlling fraud in Olamaboro local government area?
- What are the strategies used in controlling fraud in Olamaboro local government area?
- Why little generation of funds or revenue in Olamaboro local government area?
- What are the causes of fraud in the local government area?
1.6 SCOPE OF THE STUDY
The study is carried out to analyze the
effects of financial management in controlling fraud in a public sector.
The current work covers an aspect of resources control, fraud
prevention and especially treasury management.
The study will be limited to Olamaboro local government headquarters especially in the treasury department.
However, the result shall be generalized
on the entire Olamaboro local government area and all the local
governments in Nigeria. The study covers the entire staff of treasury
department of Olamaboro local government area who are responsible for
policy execution. It examines the causes of fraud, the techniques for
controlling it and the level of staff involvement for the 2013-2014.
1.7 DEFINITION OF TERMS
FINANCIAL MANAGEMENT:
Pandey (1981), defines financial management as that managerial activity
which is concerned with the planning and controlling of the firm’s
financial resources.
MANAGEMENT: Nwachukwu
(1988), defines management as getting things done through other
scientifically defined coordination controlling of the organization
resources.
FINANCE: Inegebeneber and Agodudu (1995), defined finance as concerned with cash or resources for purchasing goods
FRAUD: Aliyu (2002), conceptualized fraud as deception or cheating in one way or the other, which is not acceptable by law.
CONTROL: Johnson (1991)
defines control as the process by which managers ensure that resources
are obtained and used effectively in accomplishment of a goal.
FINANCIAL CONTROL: Abubakar
(1992), defined financial control as ‘’the institutionalization of
administrative and statutory measures to ensure that appropriate funds
are spent according to set down rules and regulations, minimization of
waste, checking dishonesty and extravagance and the promotion of economy
and effectiveness in the conduct of the financial activities of
government.
IMPACT: For the purpose of the work, impact means effective change either negative or positive
L.G.A: An abbreviation that connotes Local Government Area
PUBLIC SECTOR: Basu Rumri (2001) defined public sector as the arm of government policies and actions.
FINANCIAL RESOURCES: Simply means cash or money or revenue of a local government for financing capital and recurrent project.
1.8 ORGANIZATION OF STUDY
The project is limited to the Impact of
Financial Management in Controlling Fraud in Local Government Area. with
particular reference to Olamaboro Local Government Area.
The study is organized into five
chapters; chapter one is all about general introduction or the
background of the study, statement of the problem, objectives of the
study, significance of the study, research questions, scope of the study
and definition of terms.
Chapter two talked about literature
review, concept of fraud, financial management in public sector, curbing
fraud through financial management, expenditure in public service and
its control through financial management, expenditure in public service
and its control through finance in Olamaboro local government area, and
the tools of financial management.
Chapter three dwells mainly on research
methodology, design, method of data collection, population and sample of
the study instrument used in data collection and method of data
analysis.
Chapter four comprises data presentation, analysis of data and discussion of findings.
Finally, chapter five as usual, focuses on summary, conclusion and recommendations.
SOLD BY:
No comments:
Post a Comment