THE NATURE OF PUBLIC SECTOR ACCOUNTING (A CASE STUDY OF ENUGU NORTH LOCAL GOVERNMENT ACCOUNT)
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Public Sector Accounting
This study is in partial fulfillment of the requirement for the award of Higher National Diploma in Accountancy (H.N.D) in Institute of Management and Technology Enugu.
The topic is the Nature of Public Sector Accounting in (A case study of Enugu North Local Government Accounts).
The purpose of the study is to established areas of importance of the account of local government currently being neglected by the treasury department of the various local government which will assist in reducing or minimizing enormous fund that are lost annually from misappropriation, negligence and errors of commission. It is also intended to evaluate and highlight some of the various constraints inhibiting efficient financial management in local government.
In view of this, this researcher work is discussed under five chapters, with chapter one focusing on the general introduction and historical background of the topic under review. Chapter two deals with review of the related literatures as well as accounting procedures and books of the account. The source of the revenue and expenditure of the council and the financial control of local government were all treated under this. Chapter three is on the research design and methodology which analysis of the material for the study was obtained through the relevant literature.
Chapter four deals with the analysis of data interpretation and evaluation of the major findings. Chapter five focused on the summary of findings and conclusion, recommendation. It is hoped that the contribution of this study will be useful to student studying under financial studies, treasury departments of various local government.
1.1 BACKGROUND OF THE STUDY
Public sector is that sector of the economy established and operated by government and its agencies distinguishable from the private sector and are organized on behalf of the whole citizens while Public sector accounting is the process government agencies and municipalities use to record financial transactions. Mathias, (2004:78). Said, similar to private sector accounting in theory, the focus of public sector accounting is somewhat different. Most government agencies and municipalities need to track funds generated from tax revenues and expenditures related to projects or appropriations. In addition, nations may need to follow a set of standard of accounting principles different from private sector accounting rules.
The creation of an international accounting standard helps nations to follow similar rules in other to present information in a similar manner. Government accounting typically uses a set of rules that tracks financial information. Rather than attempting to determine how much money a public sector entity has made, the entity must report financial information to interested parties, primarily constituents.
The separation of money into these funds makes it difficult for government agency or municipality to spend money on unauthorized purposes. Elected officials or legislatures 11 must create appropriations or spending authorizations to transfer funds amongst government fund accounts. This process attempts to restrict the spending of money on a free-will basis that will quickly deplete an agency‟s resources Similar to private sector accounting, public sector accounting principles often seek to lay a framework for accounting practices. Afolabi,( 2004:320). Said rather than creating a hard set of rules to follow, the principles allow for an application of basic principles to either large and small entities or municipalities.
An international set of accounting principles is also necessary for smaller nations to learn and adopt rules that will enhance their internal national accounting process. Most times, developing nations cannot or do not have the resources capable to create and instil a framework for their public sector accounting practices. Adopting an international set of accounting rules will help them overcome this problem and typically helps them start on the path better infrastructure development. Another purpose of public sector accounting is to create a standard expectation of ethics and accountability for a nation‟s financial information. Standard public accounting principles will also make it easier for a nation to undergo an audit. it is also harder for countries to hide inappropriate financial transactions when using public sector accounting principles. This research study will therefore appraise the impact of public 12 sector accounting in Nigerian financial control system focusing on Esan South East local government.