IMPACT OF INTERNAL CONTROL SYSTEM ON THE EFFECTIVE MANAGEMENT IN GOVERNMENT MINISTRIES
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IMPACT OF INTERNAL CONTROL SYSTEM ON THE EFFECTIVE MANAGEMENT IN GOVERNMENT MINISTRIES
CHAPITRE ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The management and accounting of public funds has always occupied the majority of our constitution and institutional arrangements. As a result, different laws, regulations, and instructions are put in place to guide public authorities in the effective management of the funds entrusted to them.
The constitution generally establishes entire financial management and accounting of public finances, which has been in demand of the public sector, particularly the rendering or right stewardship of public revenue and expenditure.
Management encompasses the responsibility for effective and economical planning and regulation of an enterprise’s operation, which entails controls of the established pattern of accountability over the receipt and expenditure of public funds. To gain good value for money spent, public monies should be used for public purposes.
In recent times, the government has believed that the demand for public financial management is met by ensuring that all financial transactions are properly documented and conducted in accordance with providing rules and regulations,
but this has proven incorrect because public funds can be and are frequently sophisticated and embezzled within the framework of laid down procedures through inflated contracts and overstatement of bills and the accounting system.
The value of the legislation or the organization’s or management’s system that does not know and perform their duties. This effort tries to investigate challenges and stewardship practises.
1.2 STATEMENT OF THE PROBLEM
The purpose of this research is to determine the impact of internal control systems on government ministries, i.e. the significance of internal control systems in government ministries.
This is because the purpose of an internal control unit in government ministries is to verify accounts and investigate allegations of fraud and embezzlement within the ministries. However, in recent years, most of these safeguards have ceased to function, leading in misuse of funds in such ministries.
The project would look into the following research issues:
What are the effects of the Ministry of Finance’s internal audit unit?
What are the linkages between the actual application of internal control in the Ministry of Finance of Kaduna State?
What are the requirements for a government ministry’s internal audit unit?
What steps will be made in order to make meaningful recommendations to the study as needed?
1.3 OBJECTIVES OF THE STUDY
The study’s goal is to re-examine and re-assess the general financial administration and control system as it relates to the ministry’s revenue and expenditure. It is also to take the many procedures, tactics, and professionalism used to monitor the ministry’s activities in order to provide it the required attention, payment, and reward.
Furthermore, in terms of execution, the research is supposed to result in assessing the effectiveness, efficiency, and economical utilisation of source resources through the use of public opinion as part of financial administrative control procedures in order to reach the desired result. The outcome will aid in the harmonisation of the ministry’s connection with the public, ensuring proper use of public monies.
The effects of an internal control system on effective financial management was studied in the Kaduna State Ministry of Finance. The ministry is founded on the following goals:
i. Examining the impact of an internal audit unit in the Ministry of Finance of Kaduna State.
ii. To relate the impact to its actual application in the Ministry of Finance of Kaduna State.
1.4 RESEARCH HYPOTHESIS
The study’s goal is to look into the impact of the ministry of finance’s internal control system in the context of embezzlement and fraud detection.
As a result, the information gathered throughout this exercise will be utilised to evaluate the following hypothesis.
H1: An effective internal control system can help finance ministries prevent and detect fraud.
H0: An effective internal control system may not be able to prevent and detect fraud.
The research is set to confirm true or false, and to that end, the research has developed the above hypothesis. That the whole financial management and control system in terms of revenue and expenditure is effective, efficient, and technically sound.
Also, in terms of public opinion, the general financial management and control system is weak, ineffective, and lacking in operational achievements, which will impede overall development.
Identify fraud at the Ministry of Finance.
1.5 SIGNIFICANCE OF THE STUDY
The study’s significance is not tied to the general public’s desire to know that improvements would be made to the system when there are loopholes. It also aims to uncover difficulties related with the general financial management and control system in order to aid in the alignment of the link between insufficient financial resources and overall development. It will aid in planning, controlling, modelling, analysing, and making decisions.
The internal audit unit is the most important component of the organization’s internal control system. As a result, adequate internal and audit system organisation is required. This research will provide a prospective view of how internal audit could be organised to keep activities on track.
This study will also benefit the ministry and other associated organisations by demonstrating how errors, fraud, and other anomalies may be quickly recognised and prevented. It is an important aspect of any successful firm.
An organisation might be easily identified and stopped. It is an important aspect of any successful firm. An organisation that lacks an efficient internal control system will struggle to protect and manage its funds.
1.6 SCOPE AND LIMITATIONS OF THE STUDY
The purpose of this research is to investigate the public’s interaction with the ministry’s financial management control system. The subject of financial management is external or extremely broad and complex, which is exacerbated by the fact that it can be approached in a variety of ways, i.e. descriptive, theoretical, analytical, or appreciative;
for the purposes of this project, these areas may not be completely correct. A scenario is very important in the success of a study, thus this study is in a difficult financial situation.
As a result, the study ran upon roadblocks that limited its reach, such as:
– This study would take longer to complete than the time allotted for the study.
– Additionally, the financial circumstances will make it difficult to cover the travel fees to where essential information is forgotten.
– There will also be a lack of collaboration from the general public and the personnel involved. People will purposefully withhold essential information out of ignorance and fear of disclosing the secret of the cheque as it relates to financial data.
The research is being sent to numerous newsletters, journals, public radio, and other venues where vital information is likely to be accessed, i.e. in the current democratic system of government.
Data accessibility: The research could not obtain all of the necessary data from the organisation because it was classified, confidential, or secret. This hampered the collection of sufficient data for the preservation of future data. Because the literature accessible are old, one is compelled to rely on external sources for study. This created a delay in the work of this.
1.7 THE HISTORY OF THE KADUNA MINISTRY OF FINANCE.
The history of the Ministry of Finance in Kaduna dates back to the Northern Nigeria Region government, which had its headquarters in Kaduna. When the General Yakubu Gowon Administration established 12 states in the country in 1967, the ministry changed its name to the North Central States Ministry of Finance.
The state was renamed Kaduna State in 1976 without any change in status, and the ministry became known as the Ministry of Finance Kaduna. The establishment of Katsina state from the distinct Kaduna state in 1987 changed the state’s status, but the ministry remained the Kaduna state ministry of finance.
PRIMARY FUNCTIONS
The Kaduna state ministry of finance is tasked with a variety of financial tasks, including, but not limited to, the following:
1. The custody and upkeep of public funding records.
2. Distribution of monies from consolidated revenues and other public funds.
3. Maintaining records and preparing the state government’s annual accounts.
4. Control over the state treasury
5. Service and repayment of public debt
6. Handles issues including lost monies and inventory.
7. Supervising the ministry in charge of the state’s financial issues.
8. Maintaining the government car register and acting as a central purchasing hub.
9. Survey and enquires board (including disposal of boarded vehicles, equipment, and supplies).
ten. administration and management of stores
11. Examine financial instructions, store regulation, and enforcement.
12. Control and deployment of accounting and store personnel, including recruiting and training.
13. Continued interaction with other state governments and financial organisations.
1.8 DEFINITION OF TERMS
The following terminology are intended to be used from time to time throughout this text. As a result, it is critical to define the actual information.
Financial: this is concerned with the monetary aspect of every transaction; it may also be considered as a component of government activity that is concerned with the collecting, custody, and disbursement of public funds.
The term “public” refers to any action that is concerned with society as a whole.
The budget is a detailed annual report on the state of the national economy. It examines past economic and social issues and foresees future ones. It also examines the future project of economic and transaction difficulties in terms of aims and objectives.
Accounting officer: He is the officer in charge of voting in a ministry or department.
Auditor: An auditor is an impartial expert with appropriate knowledge to evaluate the data on which he is required to report.
Auditor report: This is the result of an overall audit of an organization’s accounting accounts for a specific time within a fiscal year. The auditor’s report contains his findings regarding whether the statements investigated offer a true and fair picture of the organization’s operations.
Government policy: this policy covers formal pronouncements or an overview of the government’s intended action or programme, also referred to as blue prints, which are normally aimed to achieve public aims.
Government expenditure: this refers to the government spending its money in various ways in order to keep the government machinery running and to provide much-needed social and economic services to the public.
Government revenue: This is income created by the government from various sources such as taxes, rates, court fines, and so on.
Accounting Control and Management: this is the assignment of responsibilities in the areas of checks or routine transactions where one person’s work complements that of another or where one’s work is independently confirmed accurate or wrong by another.
Internal auditing is the evaluation of an organization’s records and processes with the goal of guaranteeing the accuracy of records and the efficiency of operations.
Accounting is a discipline concerned with the recording, analysis, and recasting of business and other entities’ income and wealth. In general, it captures the transfer of economic values between or within economic organisations in monetary terms.
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