THE IMPACT OF PUBLIC SECTOR ACCOUNTING ON GOVERNMENT REVENUE GENERATION AND EXPENDITURE CONTROL ON PUBLIC FUNDS. CASE STUDY OF THE MINISTRY OF FINANCE IMO STATE

CHAPTER ONE

INTRODUCTION

Background Of The Study: The public sector is made up of organizations in which the public, as opposed to private owners, has authority over them, and the provision of services, rather than profit, is the major focus of their operations. According to Ofurum (2015), it is difficult to make comparisons between the financial performance of the public sector and that of the private sector. This is due to the fact that public sector organizations serve multiple purposes, do not deal with a single product or service, and have different sources of finance. Additionally, the absence of a profit motive in the public sector hinders performance in measurement.

The success of financial management in the public sector is contingent on the adoption of policies that are directed toward the achievement of comprehensive economic development throughout a country. It addresses core objectives that include but are not limited to economic and governance reform projects of the government, and it does so by making use of the principles of monetary discipline, legitimacy, predictability, transparency, and accountability in order to reform and strengthen public finances. There is a tremendous lot of potential that may be realized with well crafted and successfully carried out financial policies. They contribute to the decrease of the tendency toward deficit spending, the promotion of equality, the minimizing of debasement, the containment of helpless service delivery, and the containment of temporal inconsistency in budgetary policy. In addition to this, it serves to increase the confidence of the government's commitment to financial manageability and, as a result, it facilitates countercyclical monetary management. In addition to reducing yield instability and boosting long-term development, increased predictability of financial arrangements may be achieved via the use of financial regulations ( Jinghan 1990).

Because the resources required to achieve economic development are generally limited, deliberate attempts are often undertaken to identify areas of most need where resources might be diverted to, in order to achieve the maximum level of satisfaction possible. According to Olaoye and Olaniyan (2020), the theory of the public sector need to concentrate on how the government ought to acquire and spend funds. Because there are so many of them, the primary purpose of the government is to figure out how to get sufficient funding to accomplish all of its goals. Government has a great deal of goals since there are so many of them. The government has certain responsibilities that it must fulfill, and in order to do so it must have adequate funding. Because these responsibilities have an impact on the economy as a whole, the government of Nigeria should make every effort to ensure that at least more than half of its annual proposal is carried out.

1.2 Statement Of The Problem

In the public sector, the government is required to function and carry out its responsibilities to the country. Because of this, there must be a large quantity of something that we call money. Additionally, in order to prevent improper fund management, the money that is produced by the government has to be spent sensibly and in an acceptable manner.

As a result, the purpose of this body of work is to investigate the influence of accounting practices in the public sector on: "Where the government gets its income; How to use the money; How to retain the money;" and "How to keep the money."

The influence that limiting expenditures has on the public fund.

1.3 Objectives Of The Study:

The basic objective of the government in the society is to ensure the highest degree of Happiness and contentment or largest number of people in the society.

With regards to the above statement, the objectives of this study are as follows:

1. To find out whether the revenue accruing to the government are properly recorded.

2. To observe the need for due process in executing government plans.

3. To establish a proper system of accounting record in the effective management of the sector.

4. To establish expenditure control in order to ensure that all expenditures are wholly, necessarily, reasonably and exclusively incurred for the purpose for which they are meant for.

1.4 Research Question:

In order to carryout this study effectively, the objectives and sources of the problems associated with the study gave rise to those research question.

1. Are the revenues accruing to the government properly recorded?

2. Does the observation of due process help in the execution of government plans?

3. Does proper system of accounting record help in the effective management of the sector?

4. Does the exercise of expenditure control help the government to make expenses that are wholly, necessarily, reasonably and exclusively?

1.5 Scope Of The Study

The scope of the research is to cover adequately all aspect of revenue generation and expenditure control in government parastatals, but due to the vastness of the scope, the researcher restricted the scope of the study to the ministry of finance Imo State.

1.6 Need For The Study:

This study will enable the citizens to know the importance of expenditure control on public funds, and also to ensure that a sound system of accounting record are kept in various ministries of the government.

1.7 Limitations Of The Study:

In carrying out the research work, the following limitations and constrains were encountered by the researcher.

1. Inadequate Information:

It was not easy for the management and staff of the ministry f finance to disclose all information needed in this research, duties to current happenings and for security reasons.

2. Finance:

As a student who is still dependent on the parents to provide all financial needs, the money involved in carrying this research work was not enough.

3. Time:

The research is time consuming, as a student who has other things to do, time constraint do not invalidate this work.

1.8 Definition Of Terms:

Account:

A formal record of a transaction expressed in money and kept in a journal. It is popularly called the language off the business.

Analyzing:

This is the procedure of separating transaction into relevant parts.

Classifying:

This is the classification of revenue and predetermined expenditure into account groups according to predetermined codes, that is revenue head and sub head.

Communicating:

This is the communication of the out come of the operations on the financial data of the government to intended users.

Expenditure Control:

This is the procedure that is needed to regulate the use of public fund and to ensure proper authorizations of the government spending.

Expenditure:

This is the outflow of resources or the incurring of obligations for goods and services required to generate funds.

Fraud:

A deceptive trick planned to obtain an unjust or illegal financial advantages .

Fund:

This is a separate fiscal and accounting entity governed by specific regulations separated from other funds and established for a specific purpose.

Fund Management:

This means efficient and effective use of organizational money or funds to achieve the objectives of which the fund was given issued.

Interpreting:

This is the interpretation of the meaning of the financial statement on the activities of the various levels of government.

Public Sector Accounting:

This is the process of recording, communicating, summarizing, Analyzing and interpreting government financial statement in aggregate and in details reflecting all transactions in the receipts, custody and disbursement of government fund.

Recording:

This is the documentation of financial transactions and events affecting the various units in to appropriate books of account.

Parastatals:

These are some of the administrative groups of government such as ministries authority’s statutory corporations and agencies whose intentions and objectives is not profit oriented.

Public Revenue:

This referees to the income accruing to the government from the performance of its economic activities.

Public Expenditure:

This also refers to the expenses which the government incurs for maintaining itself and the economy as a whole.

Summarizing:

This is the gathering of data into sub-total and totals in accordance with the management specification