A SYSTEM EVALUATION FOR ACCOUNTING
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A SYSTEM EVALUATION FOR ACCOUNTING
CHAPTER ONE
1.0 INTRODUCTION
This project work is being carried out in order to analyse the mode of operation of the accounting system in Enugu state ministries, with particular reference to the ministry of finance. To that purpose, this chapter describes the study’s history, specifies several essential terminology, explains the study’s objective, and identifies issues in the accounting system used by Enugu state ministries.
It also goes on to explain the significance of the study, its limits, and will analyse and address some hypothetical problems raised by the study.
1.1 BACKGROUND OF THE STUDY:
Nigeria declared independence from the British government (her colonial ruler) in 1960. In 1963, she was also granted republican status. As a result of the aforementioned, her civil service and ministries were established along the lines of the British civil service and ministries. The structure remained essentially unchanged until 1963, when the country was divided into four regions. Late General Murtala Mohammed further subdivided the four zones into nineteen states.
Anambra state was formed from the previous East Central state of Nigeria during this sub-division in 1976. Nigeria currently has thirty-six states, with Abuja serving as the capital territory, and Enugu state was formed in 1991 from the old Anambra state.
As a result, the ministerial accounting system in Enugu state is not unlike to that of other states, because they were all established by the British colonial ruler to suit her circumstances.
Certain laws, orders, and accountant-General circulars govern the Enugu state ministerial accounting, as they do all well-organized and established agencies. These are some examples:
i. Chapter v of the Eastern Nigeria Constitution Law of 1963
ii. The laws governing funds and accounts
iii. Enugu state financial guidelines
Enugu state civil service regulations
The accountant-General is Enugu state government’s chief accounting officer, with specific responsibility for the production, management, and monitoring of government accounts.
STATEMENT OF THE STUDY 1.2:
This study evaluates the accounting system used by Enugu state ministries, with a focus on the ministry of finance.
1.3 STATEMENT OF THE PROBLEM
With reference to established accounting principles and rules, both government and non-governmental organisations design the accounting system or approach that will suit their needs.
Similarly, a typical government establishment, such as the Enugu State Ministry of Finance, runs by employing accounting procedures that suit its purpose and discharge its commitments to the individuals it was formed to serve. Its accounting method keeps track of all transactions and payments made throughout a given time period.
It is not necessary to write company concern. Profit and loss are not carried forward to the following accounting period, thus all of its activities begin at the start of any given year and stop at the conclusion of that year.
The researchers set out to investigate the challenges inherent in this type of situation and to arrive at a viable solution following review. The study will specifically address the following:
i. Is the accounting system or approach used by the Enugu State Ministry of Finance appropriate for government activities?
Is the accounting procedure effective?
These questions are intended to expose the flaws inherent and concomitant in Enugu state’s ministerial accounting practises.
The accounting system used is such that it records all receipts of revenue generated in the state, as well as the expenditures made from them, as contained in the year’s budget estimate (as set forth in the authorised estimates for 2010).
1.4 LIMITATION OF THE PROBLEM
The technique or procedure’s drawbacks include that it does not indicate the ministry’s financial position at any one time, taking assets and liabilities into account. The financial returns at the end of the year simply show revenue and expenditure. It is deafeningly silent about the depreciation of land, buildings, furnishings, and equipment.
1.5 PURPOSE OF THE STUDY
The researchers set out in this study to evaluate and present a new insight into the nature and structure of the accounting system operating in Enugu state ministries in order to help the public understand the various limitations inherent in that system, with particular reference to the ministry of finance.
Fresh accountants who previously worked for the government must undergo a new course in the government accounting system or risk the humiliation of being coached by ordinary accounts clerks. It is astonishing that accounting graduates who did not complete any of the aforementioned trainings cannot accomplish the required government accounting obligations. This is because, in the past, accountancy degree syllabuses in both Nigerian universities and institutions of education did not include government accounting.
1.6 SIGNIFICANCE OF THE STUDY
The importance of this study is that it would highlight the fundamental shortcomings of the accounting system used by Enugu state ministries. It will identify areas of inefficiency and delay, referred to as “red tepism” in the civil service. The most essential significance is that it will strive to bridge the gap in accounting education and learning as practised by the government and government departments.
The information contained in this study will serve as a supplement to other accounting text books for the uninitiated, accounting students, new professionals, and the general reading public.
This study is recommended for politicians who want to seek for political office in the government.
1.7 QUESTIONS FOR RESEARCH
The following research questions would be included in order to conduct a successful research and evaluation.
i. Is the workers’ educational background adequate?
ii. How did you become acquainted with the government accounting system?
iii. Suggestions for enhancements.
1.8 SCOPE AND LIMITATIONS OF THE STUDY
The researchers intended to cover at least 60% of all Enugu state ministries because the study is on general accounting systems operating in Enugu state ministries, but due to constraints, cost, study requirements, and for the purpose of detailed study, the researchers have limited the scope to a specific ministry that is a good specimen ministry in Enugu state – the ministry of finance.
Another issue concerns store control and organisation. Enugu state financial instructions volume 1 govern this. Accounting officials are not assigned to stores since government purchases are made centrally in the cabinet office. As a result, this study did not include shop organisation and control.
1.9 DEFINITION OF TERMS
To minimise misunderstandings about the framework being established, the following definitions of terminology are provided.
a) Accounts general: refers to the accountant general of Nigeria’s Enugu state, who serves as the state’s chief accounting officer.
b) Accounting officer: any officer charged by the ministry with accounting for any monetary service.
c) Appropriation law: the law enacted each year, the main objective of which is to appropriate public funds for the services listed in such law.
d) Consolidation revenue fund: the consolidated revenue fund established by Section 56 of the Eastern Nigerian constitution.
e) Legislature: refers to the state legislature.
f) Accounting system: a systematic method of recording, analysing, interpreting, and presenting financial information about organisations.
g) Estimates: Enugu state government’s budget for revenue and expenditure for a specific fiscal year.
h) Remittance: the distribution of government cash balances to various stations.
i) Financial instruction: a financial document that incorporates a variety of ways or uniformity in the recording of certain financial transactions, events, and positions to aid in the accomplishment of accountability.
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