EFFECTIVE INTERVAL CONTROL MEASURES AS TOOLS FOR TRANPARENCY, PROBITY AND ACCOUNTABILITY IN THE MANAGEMENT OF PUBLIC RESOURCES:

(A CASE STUDY OF IGBO ETITI LOCAL GOVERNMENT COUNCIL OF ENUGU STATE)

PROPOSAL

The research work (Effective internal control measures as tools for probity, Transparency and accountability in the management of public resources) will identify the problems that lead to frond and mismanagement of public resources in local Government(s) The main objective of this project is to evaluate the role played by the management in resolving the inadequacy of internal control towards the achievement of planned objectives.The methodologies that will be adopted for the research are: self-administered internal control questionnaire, oral interviews, observation and literature review. For the fact that there is no project without limitations, the following constraint will be encountered financial constraints, lack of cooperation by some respondents and time constraints.In order to ensure probity and accountability in local government system internal check method should be used to organize the enter operations of office and the duties of the respective staff.

TABLE OF CONTENT

CHAPTER ONE

Introduction

1.1              Background of the Study

1.2              Statement of problem

1.3              Objective of the study

1.4              Significance of the study

1.5              Statement of hypothesis

1.6              Scope and limitation of the study

1.7              Definition of terms

1.8              References

CHAPTER TWO

2.0              Review of related literature

2.1       Definition of internal control

2.2              Specific activities of internal audit

2.3              Classes of internal control measures in public service

2.4              Types of internal control

2.5              Guideline to effective internal control.

2.6              References

CHAPTER THREE

3.0              Research design and methodology

3.1       Source of data

3.1.1    Primary source

3.1.2        Secondary sources

3.2              Population/Determination of sample size and method of investigation.

3.3              References

CHAPTER FOUR

4.0              Presentation, analysis and interpretation

4.1       Questionnaire analysis

4.2              Hypothesis testing triad prove

CHAPTER FIVE

5.0              Summary of findings, conclusions and recommendations.

5.1       Summary of findings.

5.2              Conclusions

5.3              Recommendations

Appendix-questionnaire

Bibliography.

CHAPTER ONE

INTRODUCTION

1.1              BACKGROUND OF THE STUDY

The need for effective internal control measures as tools for transparency, probity and accountability in the management of public resources cannot be over emphasized. This starts from the fact that right from the creation of the world, means in-seniority cannot be compromised. As a result of that, there is need to make rules or laws guiding financial management or internal control for proper discharge of responsibilities.

Thus, internal rules and regulations, financial laws, constitutions, criminal coders, audit Act of 1958, appropriate Act, treasury circulars and Audit circulars, represent steps forwards in trying to control man’s management of public resources.

 Corruption in Nigeria has earned for itself official recognition. The level of corruption has become so alarming that Nigeria’s reputation is being denoted abroad. This informs the reasons for the formation of anti-corruption Act by the present government headed by president Olusegun Obasanjo whose seal on the issue assisted in the early drafting of the anti-corruption will which later passed into law, having gone through the legislative process. The law to be cited as prohibition and punishment of bribery, corruption and other related offences act is meant to curb all forms of social, economic, politically corruption that has continually (hinder the growth of the  ratio undermine public accountability, transparency and probity in the management of public resources.

The act is to be implemented through independent corrupt practices and Allied offences commission to be headed and composed of men and women of high integrity and transparent honesty to be appointed by the president, subject to the approval of the relational Assembly. However, experience in the past has shown that more often than not, those entrusted with the duty of enforcing or preserving any state law break and undermine such laws. This has been described as ‘Nigerian” factor?

The installation of an efficient internal control mechanism into the public sector management are important steps assuring the general public the accountability and transparency of public officials for their stewardship as custodians of public resources.

1.2              STATEMENT OF PROBLEMS

The term mismanagement, misappropriation, misapplication and embezzlement are synonymous Mismanagement or misappropriate is the unauthorized, improper and unlawful use of fund or other properties for purpose other than that for which it is intended.

To give impression that fraud, embezzlement, misapplication of public fund suit because of lack of internal control, in government as claimed by the conference of the federal and state auditor general in Nigeria in their preface to “exposure daft” on public sector, internal control standard in May 1998  was uncharitable. The internal auditor passes salaries vouchers. Therefore, fraud and mismanagement of fraud does not exist because of absence of internal control but because operators have decided to set the control aside for selfish immediate benefit, irrespective of its consequence to a local government or the nation.

The following are issues, which lead to fraud and misappropriation of local government(s) fund:

1.         Borrowing of funds for capital projects, only to be misappropriated by the three wise-men-chairman, secretary and treasurer.

2.         Misrepresentation of actual receipt of funds from federal accounts and VAT receipts.

3.         Questionable overhead expenditure on security.

4.         Illegal overhead expenditure.

5.         Payment of council funds fictitious projects.

6.         Payment of council fund for the jobs not recounted.

7.         Over pricing by works officers of direct labour job contracts.

8.         Misappropriation of local government(S) fund through collusion of chairman, secretary and treasurer.

9.                Inflation of salary bills by the three wise-men.

10.            Misappropriation of special greats from the federal or state or their agencies.

The above issues account for nearly 100% of the cases of fraud and misappropriation of fund from local government.

1.3              OBJECTIVES OF THE STUDY

In view of the over view of the study and statement of problems already discussed, this work aims at achieving the following objectives:

i.          To identify the problems and the causes of the problems of internal control in the local government(s).

ii.         To evaluate the roles played by the management in resolving the inadequacy or ineffectiveness of internal control towards the achievement of planned objectives of the local government(s) council.

 

1.4              SIGNIFICANCE OF STUDY.

Internal control is an indispensable instrument in the management of an organization but it is regrettable that there is little or no internal control system in most local government s and ministries. With reference to the above local government, actual losses of millions of Naira occur every year and that is why there is a need to order a full research work in it. This study will therefore go a long way to contribute in appreciating the effectiveness of internal control in controlling the safe guarding of assets and generation of reliable financial information. An understanding of this will certainly suggesting the effectiveness and adequacy of internal control existing in the local government and departments.

The findings and conclusions would definitely be of help to those interested in making policies and decisions in the local government(s) and organizations. In summary, this study will recommend internal control measure to be adopted by government officials and minimizing the imminent losses suffered due to inadequate internal control in local government(s). this research work will also serve as an addition to an existing literatures in subject matter of the effectiveness of internal control local government.

 STATEMENT OF HYPOTHESIS.

For the purpose of this research work, the following assumptions were made:

1.         Ho:      There is an effective internal control measure in local governments.

            Hi:       There is no effective internal control measures in local governments.

2.         Ho:      Internal control is effective in the local government’ segregation of functions.

            Hi:       Internal control is not effective in the local government’ segregation of functions.

3.         Ho:      Government officials apply existing internal control measures in the performance of their duties.

Hi:       Government officials do not apply existing internal control measures in the performance of their duties.

4.         Ho:      Government official employ competent persons to work in various government departments.

Hi:       Government official do not employ competent persons to work in various governmnt departments.

1.5              DEFINITION OF TERMS

1.         TRANSPARENCY:   This implies that the custodian of public wealth should always recognize their obligation to submit to public enquiry of their stewardship any time willing and ready  to appear before the public enquiry and examination.

2.         ACCOUNABILITY: The obligation of an employee, agent or other person to supply a satisfactory report, often periodic of action or of failure to act following delegated authority.

3.         PROBIT:         Probity implies uprightness of character or that an officer is of high integrity.

4.         FRAUD:         The successful practice  of deception with the intention of cheating or injure another.

5.         STAFF COLLUSION:           A secret understanding between two or more staff to take, advantage of another with object of depriving him of a right or property.

6.         EMBEZZLEMENT:   The fraudulent appropriation of property lawfully in ones custody, as of cash or security try a cashier or trusted or of stores by a stock clerk.

7.         ETHICS:         Ethics or ethical conduct within a profession is a special application of the ideal conduct.

8.         ANTI-CORRUPTION BILL:            This is a proposed law drafted by the executive and submitted to the legislative for passage into law. If passed, it is intended to eradicate corruption in Nigeria.

9.         CORRUPTION:         A State of change from a sound to a putrid state, dishonesty, open to bribery, not genuine and full of errors.

10.       FINANCIAL MEMORANDA:        This is document with a codified set rules and regulations which provide detailed guideline and instructions on the financial accounting and  store procedures to be followed in the administration of financial affairs and material management of each local government.

11.       FINANCIAL INSTRUCTIONS:      Financial instructions are rules            and regulations bind up in a book called financial regulations. The         book outlines the manner by which the government finance and      accounting arrangements are regulated.

12.       APPROPRIATION ACT:      This is an act of the Nation or State Assemblies which state sources of government revenue and how these revenues will be spend within a stipulated period of time usually one year.

13.       SEGREGATION OF DUTIES:         This means separation of duties or functions between departments and individuals such that no one person handles a particular transaction from the beginning to the end.

14.       INTERNAL CHECK:            It is defined in the statement of auditing standard as the allocation of authority and work in such a manner as to afford checks on the routine transactions of day to day work by means of the work of one person being proved independently by another.

15.       INTERNAL CONTROLE:    It means whole system of controls financial and otherwise, established by the management in order to carry on the business of the enterprise in a n orderly and efficient manner, ensure adherence to management policies, safeguard its assets and secure as far as possible the accuracy and reliability of its records.

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REFERENCES

Aguolu Osita FCA (1998) Fundamental of Auditing, Rex Charles and                                                       Patrick Ltd. Nisno.

David N. Richuite (1982) Auditing Concept and Standard by South West                                                Publishing Co. Ohia.

Wilson Uchenna Ani (2001) Government and Public Sector Accounting I,                                               Immaculate Publications.

Eric L. Kohler, A Dictionary of Accounting, Fourth Edition.

Onyia Leo-Effective internal Control Measures as Tool for transparency,                                                probity and Accountability in the Management of                                               Public Resources.

 Being a Paper, Presented to a two-day Seminar on Modern Trend and Emerging Roles of treasury and Audit Management in Internal Control management in Government, August 2000.


CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1            DEFFINITION OF INTERNAL CONTROL

Different authors and professional bodies have given so many definitions. Aguolu (1998) defined internal control as “the whole system of controls, financial or other wise, established  by management in order to secure, as far a possible, the accuracy and reliability of the records, run the organization in an orderly manner, and safeguard the company’s assets, its objective being the prevention or early detection of fraud and errors. It may include internal auditing.

Anderson (1977) defined internal control as comprising the plan of the organization and all the coordinate systems established by the management’s objective of ensuring as far as practical, the orderly and efficient conduct of its business including the safeguarding of assets, the reliability of accounting records and the timely preparation of reliable financial information.

From the above definitions, it is clear that the essence of establishing internal control measures in any organization, be it public or private organization by preventing or early detection of fraud and errors.

The internal audit is a good control measure that can forestall the incidence of fraud or misappropriation of fund in government ministries if properly put in place. The internal auditors, is saddled with the responsibility of pre-payment checking of the accounting record of the government. The revenue accounts are check on daily basis, while the expenditure accounts, particularly the payment vouchers must of necessity be “checked and passed” by the internal auditor before payments are made. These actions of the internal auditor helps to prevent or detect areas of staff collusion, abuse of authority or areas where management circumvent establish control for their own selfish interest. From the    foregoing, the main objectives of internal audit are:

i.        To assist in protecting the arrest and inter of the local government by carrying out a continuous examination of activities in order to detect fraud, misappropriation, irregular expenditure and losses due to waste, extravagance and mal-administration.

ii.       To secure the continued maintenance of scurfy  based systems of control with each area of departmental responsibility.

iii.      To review and where necessary, make recommendations for the improvement of system control and procedures to ensure that they remain adequate and are adhered to in practice.

iv.     To monitor the use of resources in the defined objectives of the local government (s).

 

2.2            SPECIFIC ACTIVITIES OF INTERNAL CONTROL

1.       The internal auditor reports to the chairman of the council at least four times each year on the progress of the internal work. These reports indicate specifically the internal auditors findings with respect.

 i.       The collection of revenue

ii.       Recurrent and capital expenditure.

iii.      The protection of physical and other assets of the local government(s).

iv.      The effectiveness of systems control and procedures, relating to (i) and (ii) above.

v.       The use of the resources of the local government(s) in achieving its objectives.

 vi.     Any instance of:

a.       Fraud

b.       Misappropriation

c.       Irregular expenditure

d.       Waste in extravagance

e.       Mal-administration

f.       Any other matter revealed by internal audit to which it is considered necessary to draw the chairman’s attention.

2.       Internal auditor submits special report(s) to executive committee, or through its chairman where circumstance necessitates that.

3.       The internal auditor forwards a copy of its report to the auditor     general.

4.       Pre-payment audits: All payment vouchers are verified to ensure the processions of the financial memoranda have been followed before any cheque or cash is released.

The auditor ensures that payment are properly authorized and correctly charged to the stated sub-heads or accounts and that sufficient funds are available to meet them.

Today, many auditors complain that they are not receiving adequate co-operation from the people whose performance they are examine and evaluating and those who poses vital information necessary for the audit. The treasurers and accountants in discharging responsibilities should assist the internal auditors. Internal auditors should be seen as the partners in progress in carrying out their assigned responsibilities to entrust the culture of transparency and public accountability in the local government(s).

The Federal revised financial regulation of Nigeria (1976) outlined guidelines on how to prevent fraud and errors and government establishments. Section 202 of the financial instructions and regulations on civil service stipulate that fraudulent use of vouchers which stand as an authority for cheques to be raised or for cash payments to be made to the person named here on (payee) could be prevented if all vouchers could be numbered consequently and posted promptly into the role book and the cash book.

Section 315 and 828 provides that all forms spoiled or cancelled cheque leaves and receipts including originals must be returned in the booklets for reference purposes. Section 510 places the responsibility of authorizing and approving a request or authority to mere expenditure, signing certificates or vouchers on all officers in charge of writing, checking, passing and payment of vouchers.

In section 2039, the position of an accounting officer as the sole controller of expenditure in the local government(s) is explained. It specifically clarifies that officers controlling expenditure should ensure that a complete and detailed internal check outside the  internal audit of expenditure is carried out on each payroll before payment is made, the  officers involved in the internal control in an establishment, and approval of a request for payment should be exhaustively exercised by the superior accounting officer and that those who make the payment should  be different from these who prepare the payment vouchers in order to climate perpetuation of fraud by way of collusion and conspiracy among the separated officers.

Section 2203, empowers the internal auditor to carry out detailed audit of the accounts or the financial records as well as the examination of the system, and procedure in force. If necessary, issue special reports or queries in respect of deficiencies detailed in the records or call for the attention of accounting officer. The attention of the accountant in charge must as a matter of necessity be drawn to an irregularity in accounting records or to an apparent weakness in the accounting process and also to the reports of the auditor general or to the earlier internal audit reports issued by him.

Section 2204, provides that the internal auditor in charge will ensure that the programme of audit will entered to cover all the records of the ministry, department or unit in order to satisfy himself that:

a.       The safeguards introduced for the prevention or prompt detection of frauds and losses of cash or stocks or plants are adequate. Normal achievement of this relies on strict adherence and observances of government and departmental regulations and instructions for departmental regulations and instructions for existence of internal control.

b.       The system for the control of the collection of revenue is adequate and all moneys receive correct revenue heads and subheads.

c.       The system for the control of expenditure is adequate and that        payments made are properly authorized and that they are paid to the         right person from the correct head and such heads are made for the    purpose of which they were authorized.

d.       The system for the control of the issue and consumption of stock is         adequate and that all issues are made to the right person and are used        for the purpose for the purpose for which they are authorized.

e.       The accounting records are accurate.

f.       The inspection of headquarters accounts or central office are on a continuous basis.

 

2.3            CLASSES OF INTERNAL CONTROL MEASURES IN PUBLIC SERVICE.

In board terms, internal control may be divided into two parts:

i.        Accounting (financing) control.

This includes internal checks, internal audit and other financial system of controls.

ii.       Administrative control:  This is a non-financial control defined as “otherwise” in the definition of internal control. Before considering the accounting control, which is more real and hence noticeable. It is important that we have a good. Understanding of what administral control is there are simply all non-accounting and non-financial systems and methods which are built into an organization in the ways that are un-quantifiable. They have the most telling effect on results due to their intractable and non-committal nature if administrative control is weak, then the effectiveness of the whole system of internal control is weak. Some of the administrative controls that are in local government(s) system include:

i.        The plan of the local government(s) appropriate designating authorities and responsibilities, for financial and other matter. This is  well explained in the financial memorandum which clearly explained the function of both the executive and legislative arm of the local government(s). In many organizations the plan is usually presented in form of organizational chart or diagram usually called organization. Clearly separates the operating, financial and accounting duties. For instance, the functions of the treasurer of the local government(s) clearly distinct from that of town’s Engineer.

ii.       Administrative control evaluations appraisal  and reward measures including promotion, recognition and commendations procedures and methods. Promotions and recognitions are to be based on well defined and clearly understood criteria as well as laid down principles and procedures. We known that this is not the case in the local government system where what qualifies you from promotion and recognition depends on the number of years from last promotions and your level of relationship with the superiors.

iii.      Discipline and code of Ethics and conducts: it is of paramount importance that the staff of the local government does not allows their private interest to conflict with their official duties. Unfortunately, this is the order of the day in the local government(s). it is an established fact that the only day you know the numerical strength of a particular local government is on their payday.

iv.      Rotation of duties, Transfer and vocations: The administrative control system allows for rotation of duties, routine transfers and compulsory annual vacations both to relieve the workers of fatigue and to allow for an independent clerk of his work in his absence. In the local government system, while people who are in good position do not go on leave for many years, those who are not in good position embark on an unimaginable absenteeism.

v.       Education and training programs fidelity coverage for employees and officials. This is provided for in the local government system though staff and officials of the local government attach more importance on the allowances for programmes like this more than the knowledge they should acquires from such programmes. Bonding of officials like the treasurers and cashiers are provided for in the financial memorandum but this extends of practice of this control ids lefty for us to evaluate.

Accounting and financial control are all systems that are not administrative controls put in place in order to help in the attainment of the objective of internal control. Their impact internal control is more directly and easily noticeable from the impact of the administrative controls. Accounting and financial controls attract more attention from the administrative because of the ease with which a liaises in then can be exploited to corporate disadvantage. Some of the accounting and financial control readily noticeable in the local government system include:

a.       INTERNAL CHECK: This has been defined as the allocation of authority and work in such a manner as to afford check on routine transactions of day to day work by means of the work of one person being proved independently by another or the work of another staff. The whole essence of internal check is that no one person is allowed to erected a transaction from the initial stage to completion stage. Internal check vitiates principles pf trust to a large extent since it assumes that everyone is capable of an error and indeed fraud.

b.       INTERNAL AUDITING: This is an independent appraising unit usually set up by management to monitor in order to ensure strict adherence to organization set down policies. In all government ministries and departments in the state we have internal audit department usually led by internal auditor. In recent times the functions of internal audit have widened to include:

i.        Accounting and financial policies, procedures and regulations encompassing recording, safeguarding reconciliation, valuation of transactions and assets. There should be unambiguous policies and procedures regarding for instance, stores requisition and acquisition custody and use of assets. These procedures act as mile for performance and would seek compliance from staff. It is unfortunate that as important as accounting policies and procedures are in internal control systems, they are often ignored in the local government cooperation it is true for instance, that there is laid down procedure on how to handle cash in the financial memorandum but you know too well that in our local governments they merely exist in the books. There should be clearly consistent policies and procedures adhered to from year to year and not broken at will by the officials of the local government.

ii.       Another type of accounting financial control is the budgeting and budgetary control. A budget could be defined as a quantitative plan of action and budgetary control seeks to compare actual to compare actual o budgeted and subject the differences to what we call variance analysis. The executive arm of local government is responsible for preparing budget for all the activities it will embark on and present the said budget to the legislative arm who after retting, making corrections, additions and subtractions as may be necessary passes the budget to the executive for implantation. The budgetary control ensures a steady, system programmed, progressive and organizational development. In the local government, budget serves as a basis for the legislative are to check the executives whom are not empowered to embark on any project outside the approved budget. If this is not the case in the local government, manages will be by reaction, by urgency or by fire fighting approach and not by objective or exception.

2.4            TYPES OF INTERNAL CONTROL.

A.C Millichamp (1985) summarized the various types of control in conformity with the auditing standard and guidelines S. 204 in the following ways:

a.       ORGANIZATIONAL CONTROL:

The council should have a plan, defining and allocating responsibilities and identifying lines of authority for all aspects of the council operation, including the controls. The delegation of authorities and responsibilities should be well defined and (clearly specified).

b.      SEGREGATION OF DUTIES:

One of the prime means of control is the separation of these responsibilities of duties, which would, if combined, enable one individual to record, and powers a complete transaction.  Segregation of duties reduces the risk of internal manipulation of error and increase the element of checking. Functions, which should be separated, include those of authorization, execution, custody, recording and the case of development and daily operations.

c.       PHYSICAL CONTROL

These are concerned mainly with the custody of assets and involve procedures and security measures designed to ensure that access to assets is limited to authorize personnel. This includes both direct and indirect access to documentation. These controls assume importance in the valuable, portable, exchangeable or desirable assets.

d.       AUTHORISATION AND APPROVAL CONTROL:

All transactions should require authorization or approval by an appropriate responsible person. The limits for these authorizations should be specified.

e.       ARITHEMATICAL AND ACCOUNTING CONTROL:

These are the controls within the recording functions, which check that the transactions to be recorded and processed have been authorized, that they are all included and that they are correctly and accurately processed. Such control includes checking the arithmetical accuracy of the records, the maintenance and checking of total, reconciliation, control accounts and trial balances and accounting for documents.

f.       PERSONNEL CONTROL:

There should be procedures to ensure that personnel have capabilities commensurate with their responsibilities. Inevitability, the proper functioning of any system depends on the competence and integrity of those operating it. The qualification, selection and training as well as the innate personal characteristics of the personnel involved are important features to be considered in setting up any control system.

g.       SUPERVISION CONTROL:

Any system of internal control should include the supervision by responsible officials of the day-to-day transactions and the recording thereof.

h.       MANAGEMENT CONTROL:

These are the control exercised by management outside the day-to-day routine of the system, they include the overall supervision, controls exercised by management, the review of management accounts and the comparison thereof with budgets, the internal audit function and any other special review procedures. In the high of the above, the internal controls mechanisms existing in government in the local government in the local government: council can be classified into the following:

 i.       BUDGETARY CONTROL:

it is the establishment of budgets relating the responsibilities of executives to the requirement of policy and the continuous comparison of actual with budgeted results either to secure by individual action the objectives of that policy or to provides a firm basic for its revisions, the provisions in the budget (Estimate) represent legal allocation of resources to particular heads or sub-heads of revenue and expenditure that must be strictly adhered to by the relative department concerned. Thus, it is necessary for the individual department to ensure that estimated revenue targets are in the least met and also that expenditure are incurred within the limits of fund allocated to it with due recruise to public accountability and probity. We have encapsulated in the budgetary controls the following safe guards:

a.       Revenue collection control:

The following elements are identifiable:

i.        Bonding of revenue collectors adequately to ensure that loss of fund is easily reasonable from officer(s) responsible.

ii.       Indications as to where officials’ revenue receipts can be printed and       how to avoid the use of false receipts

iii.      The specification of grade of officers to take charge of revenue receipts store, issue receipts to revenue collectors and retrieve used receipts into store to ensure proper lending of the receipts.

iv.      Maintenance of revenue collection chart and adherence to periodic checking stipulated for collections.

v.       Separation of the duties of revenue checkers from the internal audit unit.

vi.      Periodic review of revenue generation performance to determine the cost of effectiveness of generating revenue.

vii.     Maintenance of sundry treasury records like cheque, register, paper money register, bond register etc.

To serve as control over variation in relation charges that may occur. The aim of revenue control is to ensure that revenue due to government is collected as and when due and that it is adequately and accurately accounted for through efficient control measures.

b.       Control over cash; this involves:

i.        Prescription of maximum cash holding for the treasury cashier impresses holder revenue collectors. To ensure that excessive funds are not retained by officers, which may pay the way to pilfering.

ii.       Release made for specific purposes since fund allocation is different from actual supply of fund.

iii.      Adequate maintenance of the cashbook with timely preparation of bank reconciliation statement to ensure safety of liquid assets in the bank.

iv.      Periodic review of all the investments e.g. mass transit, hiring of traitor, etc. the purpose of cash/fund control is to ascertain at al time that there is maximum value for funds released for outright expenditure and adequate safeguards for invested or idle funds.

2.       STRUCTURE CONTROL

It can be deducted from the structure of the local government services and administrative organization that enough safeguard have been built into the scope of public financial management. As presently prevalent, al local government(s) staff on salary G/L07 and above are directly controlled by the local government services commission in relation to appointment, promotion, discipline etc. thus there is a good measure of independence from the political functionaries at the local government level when the issue of overwhelming influence on the job to the contrary is put into consideration.

In this regard unilateral posting transfer or ability to render officers irrelevant at will on their official schedules have become difficult (if not impossible). Since the internal auditor belongs to this category of local government staff, it is imperative that he enjoys some degree of autonomy from the political functionaries hence, his independence of the system is fairly guaranteed and judging from his role as an internal agent for ensuring efficiency in the use of public fund, an effective check and balance has been installed. This is more so, when it is further observed that the internal auditor, through made to function directly to the  local government chairman, has the opportunity to forward a copy of his monthly report (or special report where it is necessary) unhindered to the auditor general for local government (s) for further necessary action.

 

3.       ADMINISTRATIVE CONTROL:

This has to do with the procedures that would be followed in the day-to-day business transactions of government. It is not allowed for example that an officer initiate action on payment and single handedly complete action to effect the payment without the opportunity for other officers to express their opinion on it. The administrative of procedural control is concerned with ensuring that the procurement of goods and services.

The primary objective of building internal control into local government accounting system is to help local governments achieve aims and objectives by the most economical, efficient and effective means and to ensure prudence and value for money” in the conduct of its business. By virtue of his role and in view of his functions, it is imperative that the internal auditor is not only conversant with his schedule as laid down but also a master of all internal control system as prescribed by regulations, laws and other government circulars.

 

2.5            GUIDELINE TO EFFECTIVE INTERNAL CONTROL:

Koontz O’Donnell and Weihrient (1983) reviewed internal control or check to posses eight guideline to enable it attain some adequacy and maintain a good control system namely:

i.        Control should be tailored to individual managers and their responsibilities.

 ii.      Control should be geared towards plans and positions.

iii.      Control should be objective.

iv.      Control should point out exceptions at critical points.

v.       Control should be flexible.

vi.      It should lead to corrective actions.

vii.     It should be economical.

viii.    Control should unify organizational climate.


 

REFERENCES

Aguolu, Osita (1998)     Fundamentals of Auditing Nimo Rex Charles and                                               Patrick LTD.

Anderson R.J (1977)     The External Audit I: Concept and technique, New                                    York, Pitman Publishing Company.

Federal revised Financial  Regulation of Nigeria 1976.

Koontz O’ Donnell and Wehriet (1983) Management (7th Edition) USA,                                         Migraine Hill International Book Company.

Mill champ A.C Auditing 3rd edition Shamp D.P publication.

 


CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

3.1            SOURCES OF DATA

In the source of data information collection for the study, the researcher employed the following techniques.

 

3.1.1    PRIMIARY SOURCES

The use of these primary sources involve a compilation of self administered internal control questionnaire personal or oral interview and observation techniques to find out the effectiveness and adequacy of the various operating control in the organization or legal government council.

a.       QUESTIONNAIRE

The internal control questionnaire is one of the major instruments used is this study. These questionnaires were administered to the management and employees of the organization who in one way or the other have access to the financial and inventory control of the organization. These include, all the officers within the rank of salary grade level of and above in the department of finance and supplies, personnel management internal audit unit, store and inventory unit.

The questionnaire were partially open ended and handful of them were closed ended in nature to facilities response and make it convenient for respondents and more.  Understandable, giving room for personal judgments. This is in conformity with the when they evaluate system of control with quicken the assessment of effective internal control system as practical by the organization or council.

The questionnaire is designed in four section and each  deals on a particular control as can be described below:

SECTION 1:        This comprises four open-ended questions and one closed ended question, bordering on the background information of the council. These questions internalia, the administrative structure staff strength and departments especially those who have to do with taking control of the controls.

SECTION 2:        This concerns itself with the administrative control existing within the organization. It is made up of five questions such as the power or authority for recruitment of accounting officers and personnel audit of all staff in the council.

SECTION 3:        This requests, the impact of financial accounting and inventory controls operating in the organization. This involves the procedural control vis-à-vis the recording of events, authorization and approval control of payment vouchers and interpretation of periodic returns to sub-treasury and on.

SECTION 4:        It asks questions on the effect of internal audit control on transaction in relation to authority to incur expenditure and the prudent preparation of payment vouchers, receipts etc for proper couching of the payment and in accordance with the legitimate law empowering such payment or transaction.

B.      PEROSNAL INTERVIEW:     In the pursuit of more facts, further survey was carried out in the form of interview. In the local government, the interview was taken from the members of the executive committee, head of personnel management. Head of department of the six departments and their assistants that made up the local government.

C.      OBSERVATION TECHNIQUE:      The operating internal controls were observed to test whether the accounting procedures of realizing information is adhered to. It was  observed and noted that all transactions were duly authorized by the chairman of the council and endorsed to relevant departmental heads and who in turn endorses same to the particular section that will eventually process it.

 

3.1.2    SECONDARY SOURCES

The secondary sources of data collection are obtained from various materials or works relating to the impact of internal control techniques and professional botches.

Information and materials were obtained from the following libraries.

1.       Igbo-Etiti Local government headquarters.

2.       National   library.

3.       Institute of management and technology (IMT) library.

4.       Enugu State library.

5.       Enugu State University of science and technology library.

 

 

 

 

3.2            POPULATION/DETERMINATION OF SAMPLE SIZE AND METHOD OF INVESTIGATION.

The population of staff of Igbo Etiti local government area as at January 2005 is seven hundred and twenty three (723). The council is made up of six departments namely:

1.       Personnel Manager

2.       Works department

3.       Agriculture department

4.       Finance and Supply

5.       Health department.

6.       Education department

the above population is distributed to various departments according to their cadre as follows:

figures 3.1 IGB ETITI LOCAL GOVERNMENT STAFF NOMINAL ROLL

Grade level

Personnel dept.

Financial dept.

Education & social welfare dept.

Works dept.

Health dept.

Agric. Dept

Total

Percentage (%)

GL-01

-

-

-

2

-

-

2

0-3%

GL-02

6

11

-

-

3

-

20

2-8%

GL-03

29

46

11

19

64

19

188

26%

GL-04

25

42

7

19

36

13

142

19.6%

GL-05

35

45

10

26

23

19

15

21.9%

GL-06

21

33

6

6

8

8

82

11.35

GL-07

9

16

4

5

4

6

44

6.1%

GL-08

4

3

2

10

14

4

37

5.1%

GL-09

4

3

1

-

8

1

17

2.4%

GL-10

7

1

-

-

3

1

12

1.7%

GL-11

1

1

-

1

4

-

7

1%

GL-12

1

1

-

-

9

-

11

1.5%

GL-13

1

-

-

-

2

-

3

0.4%

GL-14

143

202

41

88

178

71

723

0.4%

TOTAL %

19.8%

27.9%

5.75

12.2%

24.6%

9.8%

100%

100%

It is observed that many members of staff especially those on very low grade are mostly illiterates who could not read or write and who may nor understand the internal control system of the local government(s). For this reason, the cadres of employees selected for the study is not below salary grade level 05 in the council. The components of the above figure is obtained from the six department of the local government.

 

Figures 3.2

POPULATION DISTRIBUTION OF G/L 0.5 AND ABOVE OFFICERS

Department

Percentages (%)

Number of staff

Personnel manager

22.4

83

Finance and supply

27.8

103

Works

12.9

48

Health

20.2

75

Education/social welfare

6.2

23

Agriculture

10.5

39

Total

100%

371

 

 

SAMPLING

The obscurity of carrying out research with the whole population is obvious therefore it is imperative to choose or select an adequate sample out of the lot that will give an appreciable representation of the entire population to avoid obtaining a biases information. To achieve this, a survey was conducted to determine the sample size adequate for the exercise. The outcome of the exercise using the formular of Yaro Yamani is:

FORMULAR; n =     N

                               H(1-(e)2)

Where: n = sample size to be estimated

            N = population (371)

            E = Estimated percentage error (5%)

Solution: n =          N  

                        1 + (1-(e)2)

              371

          1 + (1-(5%)2)

                 371

          1 + (1-0.0025)2)

                 371

          1 + 0.9975

n = 186 staff.

The above calculation suggests that a total of one hundred and eighty six questionnaire wee to be distributed to the employees of the council. The aforementioned figures was to be allocated or distributed to the various departments and units of the council for proper representation using the  formula below.

No in each department x n

                   N

Note: No in each department refers individuals departmental contribution to the total population of the council original sampled for the study ie (G/L and above) see table 3.2: n, is sample population while N, is the population.

Solution

1.       Personnel management

         

83 x 186

                371                 = 42 staff

2.       Finance and supply

103 x 186

              371                   = 52 staff

3.       Works

48 x 186

              371                   = 24 staff

4.       Health

75 x 186

              371                   = 38 staff

5.       Education

23 x 186

              371                   = 12 staff

6.       Agricultural

39 x 186

              371                   = 20 staff

This could be represented in the table below


TABLE 3.3 SAMPLE ALLOCATIONS

Department

 No of staff

Percentage(%)

No of questionnaire allocated

Personnel manager

83

22.4

42

Finance and supply

103

27.8

52

Works

48

12.9

24

Health

75

20.2

12

Education

 

 

 

Welfare

75

20.2%

38

Agriculture

39

10.5

20

Total

371

100%

188

 


REFERENCES

Ifurueze M.S.K and Ejembi O.A (1995)     Essentials of Auditing in                                                                   Nigeria, Nigeria Amazing                                                                            Grace Printing and Publishing.

Anyafor A.M.O. (1994) Government and Public Sector Accounting,                                                                  Volume 1, Nigeria Gopro Foundation Press.

Wilson Uchenna.A. (2001)      Government and Public Sector accounting                                                           Volume 1,  Immaculate Publications LTD.


CHAPTER FOUR

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA.

This chapter is designed to study and evaluate data presentation and analysis  on the effective internal control measures operative in Igbo Etiti local government council where this research is carried out. It will also identify areas of strength and weakness, as the information presented here are the answers given by the respondents on the effectiveness of internal control measures as administered through questionnaire and the personal interview conducted by the researcher.

The presentation of facts and data are carried out in various section of the questionnaire as it is itemized below:

1.       Background information

2.       Administrative control

3.       Financial accounting and inventory control.

4.       Internal audit control

 The information obtained by the use of the various research methods enumerated in the preceding chapters were presented and  analyzed in statistical manner and also simple percentages were used to articulate relationship in the quantification of data used or consumed in the exercise.

 

4.1            INTERNAL CONTROL OPERATIONS IN IGBO ETITI LOCAL GOVERNMENT COUNCIL OF ENUGU STAFF QUESTIONNAIRE ANALYSIS-QUATITATIVE AND STATISTICAL

4.1.1    QUANTITATIVE ANALYSIS OF DATA

This was designated to elucidate information gathered through unstructured questions as presented in section one of the questionnaire. This section declares generally on the background information of the council.

Following the open ended questions featured in the above section, it is evident that the respondents would not give the same answer or solution to a particular problem since it was based on best judgment of the respondents and the rule of thumb unlike in the other fact where options were created for the respondents to choose or make choice from closed ended questions. Nonetheless, the answers so given enabled the researcher to draw valid conclusion on the effectiveness of internal control measures operative in the local government council.

 

QUESTION NUMBER 1

What is the position of the administrative structure of Enugu state local government system. It is the intention of the researcher to know the position of the local government council in order to unfold whether the local governments maintain absolute autonomy, semi autonomy or department on some other establishments for its administrative activities.

Department

Absolute autonomy

Semi autonomy

Dept. on other establishment

No idea

Personnel management dept.

7

32

3

-

Finance and supply department

6

44

2

-

Agric. Department

-

18

2

-

Health department

6

28

4

-

Works departments

2

19

3

-

Education and social welfare

3

8

1

-

Percentage

12.82%

79.2%

8%

-

Based on individual contributions, it is discernible that the council is partly autonomous and partly dependent on other establishments for its operation. Further oral interview revealed that the local government depends on federal government and state government for its revenue.

Section 162 (5-8) of the Nigerian constitution states that the head government(s) should depend on the federal and state governments for its revenue. In addition to this, local government has power to generate revenue internally.

The state government has power to monitor how there revenue distributed to the local government are spend. It does this through the Auditor general to the local governments of the state. The state has the power to discipline any local government official found wanting by misappropriation, mismanagement or embezzlement of public resources.

 

QUESTION 2

Has the local government self accounting autonomy?

In the government accounting, there are several systems of accounting preparation, subject to the financial and accounting system in use. Most respondents noted that local governments are granted self-accounting system. The enabling laws of local government have powers to maintain its own account of income and expenditure.

 

QUESTION3

How does power of instruction flow from the position of chairman to the lowest subordinate official in the council?

It is specially ideal to determine how the  power of authority mores between the position of the chairman to the lowest employee of the council. Going through the answers from the respondents, it was discovered that instruction and directives descends from the chairman, down to the head of Departments and to the other subordinate officers down to the lowest officer.

It is also pertinent to note that instructions and directives are quite different from request being made to the officers of the council. Request originates from the officer making it to the next officer under whom he serves up to  the officer under whose portfolio the request should answered.

It was also noted that the instructions from chairman has no sequential order of flow. The chairman has powers to instruct any officer directly without routing it  through any senior officer before the officer is being directed. An example is that the chairman has powers to instruct the treasurer to carry out any directive without passing it through the superior.

 

QUESTION NUMBER 4:

Does the following individual departments or units exert a measure of control over the assets of the council?

1.       Finance and supply department.

2.       Store and inventory unit

3.       Audit unit

in an ideal situation, the department of finance and supply sees or over sees the recording of transactions, custody of cash and financial documents of the council.

Arithmetic and accounting control are with in the recording functions, which check that the transactions to be recorded and processed have been authorized, that they are all correctly recorded and accurately proceed. Such controls include checking the arithmetic accuracy of the records, the maintenances and checking of totals, reconciliation control accounts, trail balances and accounting for documents.

Stores and inventory units are under finance and supply department but it takes control of issuance and receipts of stock and other materials in the council. These are concerned mainly with the custody of assets other than cash involves procedures and security measures designed to ensure that access to assets is limited to authorized personnel. This includes both direct and indirect access to documentation. These controls assume importance in the valuables, portables, and exchangeable or desirable assets.

Audit unit vouch the reliability and viability of the expenditure, use of materials from the store and overall control of exercise and extremities in the activity of the council. The instrument that established the local government council has made provision for an internal audit department headed by an internal auditor to provide a complete and continuous audit of the accounts and records of revenue expenditure, plants allocated and unallocated stores.

 

QUESTION NUMBER 5:

How many department are in the council?

The number of departments that constitute the local government council reveal the level of division of labour and segregation of function to check collusion of employees in the attempt to correct errors and fraudulent acts or practices. It is against this background that the questions is set to verify whether there is such criteria for control of assets and  documents of the council.

One of the prime means of control is the separation of those responsibilities or duties, which would, if combined, enable individuals to record and process a complete transaction. Segregation of duties reduces the risk of international manipulation of errors and increase the elements of checking. Functions which should be separated, including those of authorization, execution, custody, recording and the case of computer based accounting system development and daily operations.

 

4.2            STATISTICAL ANALYSIS

 

4.2.1    ADMINISTRATIVE CONTROL

QUESTION NUMBER 6:

How often is personnel audit being carried out in Igbo Etiti local government council in a year?

This is designed to test whether the authentic nominal role of the entire staff of the council is regularly updated and to evaluate the relationship of the cost of labour and whether it is commensurate to the official number of employees in the payroll of the council. It is also the aim of the researcher to find out whether there is room for ghost  workers in the payroll and the response of management or administrative staff to that.

In elucidating the response or solution to this problem, responses generated by the respondents are tabulated in table 4.2.1 as shown below.

 

TABLE 4.2.1

Response

Number Of Respondents

Percentage

Once

16

9%

Biannual

7

4%

Quarterly

16

9%

Not specify

149

78%

Not at all

-

-

Total

188

1005

The above question demands that all respondents should tick the applicable option which he/she feels would be the number of times personnel audit is carried in the local government annually as presented in the above table 4.2.1 above. It is discernible that out of 188 respondents, 78% were on the opinion that the number of times personnel audit is carried out in the local government per year is not specific. This percentage represents 149 employees of the council. 9% of the respondents supported that it is held once and quarterly respectively. 7 or 4% of them concerned to biannual basis whereas no one agree that it was not held at all. When the researcher carried out  oral interview to buttress this claim, the respondents explained that the state government may want to know the staff strength of the local government in the state by organizing personnel audit through the local government service commission. The state government on its own may also want to know the actual staff strength of various local government in the state to help it in its supervisory function over the local government(s) in the state.

Finally, the council executive most often update the official records of staff on its payroll to avoid inclusive of filiations names in the payroll by dubious officers. This is normally done when there is a charge in the  leadership of local government council(s) or general transfer of the officers of the council(s).

 

QUESTION NUMBER 7:

How does the council ensure that there is reliable statistical information of its labour forces?

a.       Through labour sheet analysis

b.       Through payroll monthly returns.

c.       Through recruitment roll sheet.

The rationale of this question is to detect the substantive source of information in the realization of the reliable record vis-à-vis the authentic number of the workers strength of the council. The response to the questions is presented in the table 4.2.2 below.

TABLE 4.2.2

S/No

Options

Number of respondents

Percentage

1

Labour sheet analysis

16

9%

2

Payroll monthly return

102

54%

3

Recruitment roll sheet

39

21%

4

Monthly staff evaluation control

31

16%

 

Total

188

100%

The above table demonstrates the various response gives to the four options provided for the respondents. The positions of the responses present the following information in the determination of an unbiased decision on the reliability of the labour force of the council.

Out of 188 employees who responded to the questionnaire, 16 or 9% brought the idea that information provided through labour sheet analysis is the only way the council can get a reliable source of determining the authentic labour force of the council 102 or 5$% supported that payroll monthly return is most reliable. 39 or 21% affirmed that it is through recruitment roll sheet or nominal roll. 31 or 16% also opined that it is through  monthly staff evaluation control that reliable statistical labour force can be ascertained .

This can be represented in the following form.

Pie chart

1.       Through labour sheet analysis

          16      x        360

          188             1

2.       Through payroll monthly return

          16      x        360

          188             1

3.       Through recruitment roll sheet

          16      x        360

          188             1

4.       Through monthly staff evaluation control

          16      x        360

          188             1       =       59o

 

 

 

 

 


 

Through payroll monthly return

 

Through Monthly staff evaluation control

 

Through recruitment roll sheet

 

Through labour sheet analysis

 

 
 

 

 

 

 

 

 

 



As the above figure 4.2.1 suggested 59o represents those responses, which opined that the reliable  labour force of the board is determined by the  use of monthly staff evaluation control. 75% signify those who gave support to the information obtained through recruitment roll sheet of the council 195o represents those who opined for data generated through payroll monthly return and 31o of the respondents said that it is only through the labour sheet analysis that reliable information could be obtained.

However, all the senior officers interviewed by the researcher opined that recruitment roll sheet method of obtaining statistical information on the official staff strength of the council. This method of not easily doctored. Table for instance, there aw many names on the payroll of the local government council who are not staff of the council. Examples are the political ward chairman who are pay rolled in the local government. The officers who have no power to increase or reduce the number prepare nominal roll of the staff.

 

QUESTION NUMBER 8:

Are workers promptly promoted as and when due? The purpose of this question is to find out if the workers are effectively motivated and remunerated. 63% or 34% of the respondents agreed that workers are promptly promoted. On the other hand, 125 or 66% of the respondents opined that workers are not promptly promoted.

 

QUESTION NUMBER 9:

If no, what do you think is responsible for non-prompt promotion of staff in the system? This question is a fellow-up question to the preceding  one.  It is directed to only those who answered that workers are not promoptly promoted. The respondents adduced many reasons as the cause of the problem.

a.       There may be embargo;  any government of the day may decide to place embargo of promotion for a number of years.

b.       The officers at the head may play non-challant attitudes to staff promotion.

c.       Since every staff promotion increases staff emolument, lack of adequate finding of the council delays promotions.

d.       Instability in the local government system either that of the council or local government service commissions causes delay in regular staff promotions. Also the policy that promotion of staff should be done centrally by local government  service commission causes delay.

e.       Administrative or leucocratic bottlenecks in the system.

 

QUESTION NUMBER 10

State three disciplinary measure your local government adopts to ensure prompt attendance to work.

This question was asked insider to find out those measures management used to control absenteeism and lateness to work and to ensure that workers put in their best in the services. That it to say that before any thing could be done physical presence of the staff is of great importance.

The respondents enumerated so many measures being used by council executive to ensure regular and prompt attendance to work by the staff of the council. Some of these measures are:

1.       Provision and monitoring of attendance register: Attendance register is provided at every duty post of the local government. At every duty post, an officer is assigned to monitor the signing  in or out by each staff under him and at the time this signing is done. The duty officer in-charge should ensure that the time he arrives or leaves office.

2.       Suspension of staff and or stoppage of salary for the period not worked. The chief executive in any of his spot checks may suspend a staff or stop his salary if it is found out that he has been absent or later to work for too long a time.

3.       One prominent disciplinary measure in Igbo-Etiti local government council for three or four years now is “pro-rate” method of payment otherwise known as “Don’t pay”. By this measure, workers are only paid for the rest paid back to the purse of government.

4.       issue of query to defaulting staff. When a staff is persistently late or absent from work, a query is issued to him or her if his answers are not satisfactory, another higher disciplinary measure is carried out one him/her.

5.       Signing of movement register. Every staff of the local government leaving office before dismissal or going out of his premises of work is required to sign a movement register indicating the time he left or come back and the place he or she is going. This measure is to monitor the movement of staff who may want to sign in and leave office at a time.

6.       occasional departmental spot checks by senior officers or chief executive. The chief executive or  any senior officer most often pay an unscheduled visit to any duty post of his choice to monitor physical presence of staff on their duty post. On such visits, attendance register and movement register are the first records to lay hands on before physical count is made.

7.       Occasional oral instruction and warning are issued to staff by senior officers and labour leaders. Senior officer and labour leaders occasionally call a meeting with workers to address them on their attitude to work and disciplinary action to be taken if such attitude persists.

8.       Art extreme cases, erring staff could be denoted or out rightly dismissed.

9.       Another disciplinary measure is that the chief executive or any officer acting for him could direct that the main gate into the local government be shut against latecomers and such staff be prevented from signing the attendant register for the day.

 

QUESTION NUMBER 11

Is access to documentation and inventory restricted to persons who require it for authorization duties?

This question is necessary to understand how the council guard their documents and prevent unauthorized access to the local government inventory. It was also intended to find out actually whether all those necessary controls to protect the assets and other documents of the council are being applied. The solution to this can be properly presented using table 4.2.3.

 

TABLE 4.2.3

Department

Yes

%

No

%

Total

Personnel department

20

10

22

13

42

Finance and supply

13

11

39

17

52

Agriculture

9

4

11

6

20

Health

11

7

27

12

38

Works

12

5

12

8

24

Education/social welfare

6

3

6

4

12

Total

71

40

117

60

188

Although the research has decided to present the data as in the table above according to departments, the result will be based on the sum total of the data.

This could further be demonstrated in pie chart for more understanding as present by figure 4.2.2

Response (Yes)    71      x        360

                             188               1      =       136O

Response (Yes)    177    x        360

                             188               1      =       224O

 

 


 

 

 

 


                                                   

 


224o

 
 

 

 

 


The answer provided indicated that the control operative in the local government is not effective. It is weak and porous because access to document by unauthorized persons could lead to loss of inventory from the stock of the council. There is need to strengthen internal control here to avoid wastage or entire loss of property and doctoring of official documents in official files.

 


QUESTIOPN NUMBER 12

Does the council operate the following system of control?

a.       Control accounting

b.       Cash receipts are periodically reconciled with the bank statements.

c.       The treasury receipt voucher (TRV) is at times crosschecked with the cashbook of the council.

The relevance of this question borders on system of internal controls operating in the council especially in monitoring of cash movement or flow. The table 4.2.4 below will help to elucidate how each of the control is being applied in the council to control outflow and movement of cash.

 

 

TABLE 4.2.4

S/No

Options

Yes

%

No

%

No idea

Idea

1

Control accounting

55

29%

63

34%

70

37%

2

Cash receipts are promptly lodge into the bank

15

82%

148

79

24

13%

3

Cash book is periodically  reconciled with the bank statement

150

80%

25

8%

23

12%

4

The treasury receipt voucher (TRV) is at times cross checked with the cash book of the council

162

86%

10

5%

17

9%

 

In the table 4.2.4 above, only 55 or 29% the respondent agreed that the council operate control accounting while 63 or 34% of  them maintained that there is nothing like that. The remaining percentages did not answer anything. 15 or 8% of the respondents agreed that cash  receipt are promptly recorded and  lodged into the bank account. 148 or 79% of the respondents maintained that cash receipt never go into bank account. The remaining number did not answer anything. 150 or 80% of the respondents agreed that cash book is periodically reconciled with the bank account while the remaining percentage did not answer  anything. Finally, 162 or 86% of the respondents maintain that treasury receipt voucher (TRV) is at times crosschecked with the cash book of the council.

The analysis of the above data presented follows that there is weakness in the management of outflow of cash received as cash received are only recorded and are pended without going into the bank. Th9s attitude can lead to reckless use of cash room. This could be attributed to the loss of about forty nine thousand naira from the safe of receiving ashier around may last four years when men of the under world struck the council.

 

QUESTION NUMBER 13:

Has the council exclusive authority to incur expenditure without the pre-approval from any of the following?

a.       Governor’s officer

b.       Auditor general of the local government

c.       None of the above.

This question was asked to ascertain the level of independence of the council in its decision to incur expenditure. It will go a to incur expenditure or does it obtain such authority from any establishment outside the council. It was one source of approval and authorization control in the council.

The response of this question is clearly presented in table 4.2.5 underneath.

 

TABLE 4.2.5

S//No

Option

Number of response

Percentage

1

Governor’s office

15

8%

2

Auditor general’s office

8

4%

3

None of the above

165

88%

 

Total

188

100%

 

 

The above table indicates thatb15 or 8% of the respondents believe that approval must be gotten from governor’s office before any expenditure is made. Further, 8 or 4% of the respondents agreed that the Auditor general  of the local governments gives approval before expenditure is made by the council.

Finally, 165 or 88% of the respondents opined that local government council do not seek approval from any of these bodies before incurring expenditure. The available data suggest that the Authority to Expenditure (AIE) was vested with the chief Executive of the council. The interview conducted by the researcher revealed that the council has powers to incur expenditure after which it prepares its account and submit same to the auditor general with a copy to the office of state governor. This can be further illustrated with a pie chart.


Fig. 4.2.2 PIE CHART

 

 


 

316

 
 

 

 

 

 

 

 


KEY

Office of the Governor

 

 

 

Office of the Auditor general

 

 

 

None of the above

 

1.       offie of the governor

15      x        360

188               1      =       29o

2.       Office of the Auditor general

8        x        360

188               1      =       15o

3.       None of the above

165    x        360

188               1      =       316o

 

QUESTION NUMBER 14:

Is there any separation of function between the people who take custody of assets and those who keep records of them?

It is very important to know whether there is feasibility of collusion and conspiracy among the employees working in more strategic areas of the council and effort is channeled at preventing such a situation. The contribution of the respondents is illustrated below:

 

Department

Yes

%

No

%

No idea

%

Total

Personnel management

14

7%

24

13%

4

2%

42%

Finance and supply

10

5%

40%

21%

2

1%

52

Agriculture

7

4%

10

5%

3

2%

20

Health

8

4%

28

15%

2

1%

38

Works

3

2%

18

10%

3

2%

24

Education/ social welfare

5

3%

6

3%

1

.005%

12

Total

47

25%

125

67%

16

8%

188

Based on table 4.2.6 above, it is discernible that there is no clear separation between those who keep records and those take custody of assets, though separation exist out of 188 respondents, 125 supported that there is no separation between the functions, about 47 employees maintained that there is separation between the two functions. When the researcher further interview, it was revealed that though the store keeper keeps records of inventory and its disbursement and as well maintain custody of the inventory, the actual record of supply if inventory remains with the treasury. It was also observed that the authorization control also lies with the treasure. This is true of cash. the cashier keep both the record and custody of cash.

This illustration is also represented with a pie chart in figure 4.2.6 thus:

Solution

Response (Yes)    47      x        360

                             188               1      =       90O

Response (No)     125    x        360

                             188               1      =       239O

Response (No idea)        16         x          360

                                    188                       1            =      31O


 

 

 

 

 

 

 

 

 


Response    (No idea)

Response    (Yes)

Response    (No)

 

 

 
KEY

 

 

 

 


In the figure pie chart above 47 persons or 90o represented the respondents who answered yes. 125 respondents or 239o represented those who believe that the two functions were not separated. 16 workers or 31o  represented those who have no idea of what to answer.

 

QUESTION NUMBER 15

Has the internal Auditor authority to query reports issued by the treasurer and the financial committee of the council?

This question was intended to find out  the extent the internal Auditor has power to control the exercise of the treasurer and his political work mates.

Response (Yes) 157 respondents

Response (No) 31 respondents

This implies that the respondents who agreed that the internal auditor can query the report of the treasurer and the  finance committee of does not comply with the financial regulations are as much as 157 persons ie 84% of the sample population.

Only about 31 persons has no such power. This could be represented in a pie chart thus:

Response (Yes)    157    x        360

                             188               1      =       301O

Response (No)     31      x        360

                             188               1      =       59O



QUESTION NUMBER 16:

Does the council recognize the impact of checked and passed” an every payment voucher which passes through the internal Auditor bef  ore payment is made?

This question was put to find out the role of the internal Auditor in ensuring prudent payment of cash from the council’s treasury.

Response gathered from the respondents shows that the impact of “checked and passed” is recognized in the council. 185 respondents agreed to this factor the analytical presentation of this data suggests that almost every payment voucher passes through the internal auditor for proper verification before payment is affected. This is concretized by 185 respondents ie 98%  giving affirmation that it is obtainable in the council. Through 3 respondents, about 2% refused this opinion that the number is so negligible to make impact.

 

4.2     TEST OF HYPOTHESIS

There will be a presentation of test of hypothesis stated in chapter one of this research study. The analysis of which will be shown using the chi-square on the relevant questions in the questionnaire.

 

 

HYPOTHESIS 1

NULL HYPOTHESIS (HO) There is effective internal control measures in Igbo-Etiti local government council

ALTERNATIVE HYPOTHESIS (Hi) There is NO effective internal control measures in Igbo-Etiti local government council

In testing this hypothesis, data illustrated in table 4.2.4 will be used and the chi-square method of hypothesis testing.

Chi-square formula:X2 = (oi- ei)2

                                           Ei

Where Oi = Observed frequency

          ei = Expected frequency

          8 = Level of significance (5%)

          DF = Degree of freedom

          X2o = Calculated chi-square value

           X2e = chi-square value from chi-square distribution table.


TABLE 4.3.1 DISTRIBUTION TABLE (ACTUAL)

S/N

Option

Yes

5

No

%

No idea

%

Total

1

Control accounting

55

29%

63

34

70

37%

188

2

Cash receipt are promptly received and lodged into the bank

15

8%

148

79%

24

13%

188

3

Cash book is periodically received with the bank statement

150

80%

15

8%

23

12%

188

4

The treasury receipt voucher is at times cross checked with cash book of the council

162

86%

10

5%

17

9%

188

 

Total

382

 

236

 

134

 

 

Expected  frequency = row total       x        column total

                                                                        Grand total

 

 

 

TABLE 4.3.2

EXPECTED FREQUENCY DISTRIBUTION

S/NO

Yes

No

No idea

Total

1

95.5

59

33.5

188

2

95.5

59

33.5

188

3

95.5

59

33.5

188

4

95.5

59

33.5

188

Total

382

236

134

752

 

TABLE 4.3.3

The x2 calculation can now be made


 

Observed frequency (oi)

Expected frequency9ei)

(oi-ei)

(oi-ei)2

(oi-ei)2

    ei

55

95.5

-40.5

1640.25

17.1754

63

59

4

16

0.2712

70

33.5

36.5

1332.25

39.7687

15

95.5

-80.5

16480.25

67.8560

149

59

90

8100

137.2881

24

33.5

-9.5

90.25

2.6840

150

95.5

54.5

2970.25

31.1021

15

59

-44

1936

32.8136

23

33.5

-10.5

110.25

3.2910

162

95.5

66.5

4422.25

46.3063

10

59

-49

2401

40.6949

17

33.5

-16-5

272-25

8.1267

                                                                            EX2 = 427.378

To find the number of degree of freedom for the chi-square distribution associated with a particular contingency table, we take the product of 1 les than the number of rows and 1 less than the number of columns in the contingency table.

DF = (Number of rows – 1) x (Number of columns –1) = (r-1) x (c-1)

In the table above, thee are 4 rows and 3 columns so that, (4-1) x (3-1) 3 x2 = 6 degrees of freedom using the formula x2 = (oi – ei)2

                                                                             Ei

          X2 = (55-95.5)2 + (63 – 59)2 + (70-33.5)2 + (15-95.5)2

          95.5                59             33.5          95.5

+ (149 – 59)2 + (24-33.5)2 + (150-95.5)2 + (15-59)2

            59             33.5            95.5            59

          + (162-95.5)2 + (10-59)2 + (17-33.5)2                           

             95.5                            59         33.5

17.1754 + 0.2712 + 39.7687 + 67.8560 + 137.2881 + 6840 + 31.1021 + 32.8136 + 32910 + 46.3063 + 40.6949 + 8.1267.

The chi-square table value at 6 degrees of freedom at 5% level of significance = 12.592%. as the calculated value (427.388) is greater that the value of (12.592), we reject the null hypothesis and accept that there is no  effective internal control measure in Igbo_Etiti local government council.

Chi-square distribution diagram

Fig. 4.3.1

 

 

 

 

 

 


 

 

 

 

 

 


2        4        6        8        10      12      14      16      1          8     20      22          24

 
 

 

 

HYPOTHESIS 2

Ho: Local government officials observe established internal control in the          performance of their duties.

Ho: Local government officials do not observe established internal control in    the performance of their duties.

To test this hypothesis, data derived from table 4.2.3 will be used in analysis the hypothesis using chi-square method.

 

TABLE 4.3.4 ACTUAL FREQUENCY TABLE:

S/NO

Department

Yes

%

No

%

Total

1

Personnel and management

20

10

22

13

42

2

Finance and supply

13

11

39

17

52

3

Agriculture

9

4

11

6

20

4

Health

11

7

27

12

38

5

Works

12

5

12

8

24

6

Education/social welfare

6

3

5

4

12

 

Total

71

40

117

60

188

Expected frequency = Row total x column total

                                      Grand total


TABLE 4.3.5 EXPECTED FREQUENCY TABLE

S/No

Department

Yes

No

Total

1

Personnel and management

16

26

42

2

Finance and supply

20

32

52

3

Agriculture

14

24

38

4

Health

14

24

38

5

Works

9

15

24

6

Education/social welfare

5

7

12

 

Total

71

117

188

 

TABLE 4.3.6

THE X2 CALCULATION CAN NOW BE MADE OBSERVED EXPECTED

Observed frequency (oi)

Expected frequency(ei)

(oi-ei)

(oi-ei)2

(oi-ei)2

    ei

20

16

14

16

1

22

26

-4

16

0.6154

13

20

-7

49

2.45

39

32

7

49

1.5313

9

8

1

1

0.125

11

12

-1

1

0.0833

11

14

-3

9

0.6429

27

24

3

9

0.375

12

9

3

9

1

12

15

-3

9

0.6

6

5

1

1

0.2

6

7

-1

1

0.1429

                                                                            EX2 = 8.7658

Degree of freedom (df) = (r-1) x (c-1) = (6-1) x (2-1) = 5 x 1 =  5 degree of freedom

Chi-square formula:X2 = (oi- ei)2

                                           Ei

Where Oi = Observed frequency

          ei = Expected frequency

          8 = Level of significance (5%)

          DF = Degree of freedom

          X2o = Calculated chi-square value

           X2e = chi-square value from chi-square distribution table.

X2 =            (20-16)2  + (22 – 26)2 + (13-20)2 + (39-32)2

              16               26             20                32

+       (9 – 8)2 + (11-12)2    +  (11-14)2   +   (27-24)2

            8               12               14               24

          +   (12-9)2   +    (12-15)2 + (6-5)2       + (6-7)2                

                9                     15         5                    7

X2 = 1 + 0.6154 + 2.45 + 1.5313 + 0.125 + 0.0833 + 0.6429 + 0.375 + 1 + 0.6 + 0.2 + 0.1429 = 8.7658.

The chi-square table value at 5 degree of freedom at 5% level of significant = 11.070 ie ie x2 = 11.070

As the calculated value x2 = 8.7658 is has than the table value of x2 = 11.070, we reject the alternative hypothesis and accept the null hypothesis that local government officials apply established internal control in the performance of their duties.

Chi-square distribution diagram

Figure 4.3.2

 

 

 

 

 

 

 


HYPOTHESIS 3

Ho:    Internal control is affective in the council’s segregation of functions.

Hi:     Internal control is not affective in the council’s segregation of         functions.

To test the hypothesis, data derived from table 4.2.5 will be of help using chi-square method.

Table 4.3.7 actual frequency table

To test the hypothesis, data derived from table 4.2.5 will be of great help using chi-square method.

TABLE 4.2.7 ACTUAL FREQUENCY  TABLE

S/No

Department

Yes

%

No

%

No idea

%

Total

1

Personnel management

14

7

24

13

4

2

42

2

Finance and supply

10

5

40

21

2

1

52

3

Agriculture

7

4

10

5

3

2

20

4

Health

8

4

28

15

2

1

38

5

Works

3

2

18

10

3

2

24

6

Education/social welfare

5

3

6

3

1

0.005

12

 

Total

47

25%

125

67%

16

8%

188

 


Expected frequency = Row total x column total

                                      Grand total

Table 4.3.8

 

S/No

Department

Yes

No

No idea

Total

1

Personnel management

11.3

28

3.5

42

2

Finance and supply

13

35

4

52

3

Agriculture

5

113

2

20

4

Health

9.5

25

3.5

38

5

Works

6

16

2

24

6

Education/social welfare

3

1

12

 

 

Total

 47

125

16

188

 

Table 4.3.9

The chi-square (x2) calculation using table goes thus

Observed frequency (oi)

Expected frequency(ei)

(oi-ei)

(oi-ei)2

(oi-ei)2

    ei

14

10.5

3.5

12.25

1.17

24

28

-4

16

0.57

4

3.5

0.5

0.25

0.07

10

13

-3

9

0.69

40

35

5

25

0.71

2

4

-2

4

1

7

5

2

4

0.8

10

13

-3

9

0.69

3

2

1

1

0.5

8

9.5

-1.5

2.25

0,.24

28

25

3

9

0.36

2

3.5

-1.5

2.25

0.64

3

6

-3

9

1.5

5

3

2

4

1.3

6

8

-2

4

0.5

18

16

2

4

0.25

1

1

0

0

0

X2 = 1.17 + 0.57 + 0.07 + 0,69 + 0,71 + 0.8 + 0.69 + 0.5 + 0.24 + 0.34 + 0.64 + 1.5 + 1.3 + 0.5 + 0.25 + 0 = 11.49

The chi-square able x2 = 11.49 is less than the table value of x2 = 18.307. we reject the alternative hypothesis and accept the null hypothesis that internal control is effective in the council segregation of functions.


CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.1          SUAMMARY OF FINDINGS

CAUSES OF LOCAL GOVENRMENT FRAUDS

Some reasons had been advanced for the causes of local government(s) frauds which should be taken note of in the campaign for probity and accountability of public fund.

i.             POOR SUPERVISION:

It was revealed during the researcher’s  work that poor supervision and management control systems leads to indiscipline among staff thus creating an environment for fraud to flourish. The researcher found out that though attendance registers are kept in every duty post, they are not properly monitored people can work anytime and sign the attendance register people can also sign for their friends or sign and leave the office for unknown destination. Movement register is a thing of the past, for there is no unit visited by the researcher. That keeps movement register ay longer.

ii.            STAFF NEGLIGENCE:

Staff negligence such as non payment of salaries and allowances and non promotion of staff as and when due could give to the perpetuation of frauds in local government offices.

iii.           RECRUITMENT SYSTEM:

Poor recruitment system where cognate experience, relevant technical knowledge, competence character and other qualities are scarified at the alter of non-performance related factors such as connections and nepotism, constitute importance facilities of fraud in local government offices.

iv.           ACCOUNTING EXPERIENCE OF STAFF:

All things being equal, frauds in local government offices occur with higher frequency among staff with little experience and knowledge. Where qualified accountants are involved in fraud, they are more likely to swindle few sum of money than the less qualified staff.

v.            NUMBER STAFF:

Where an officer supervises a large number of staff beyond his scope, there is a like hood that fraud will go undetected.

vi.           POOR SECURITY ARRANGEMENT FOR DOCUMENTS

In officers where security arrangements for valuable documents are weak poor and vulnerable, it is easy for fraudsters to have their way without detection.

vii.          DELAY IN OPERATIONAL PROCEDURES:

Delay in operational procedures create opportunities for hatching frauds in local government offices thus making prevention and early detection difficult.

 There are other environmental and social conditions that may cause fraud. These conditions could be:

1.            PERSONALITY PROFILE OF FRAUDSTER:

Most individuals with inordinate ambitions and without qualms are prone to committing frauds. Such individuals are bent on money at all cost. Such people dismiss normality as an unnecessary pre-requisite for virtuous life. To them, the end justifies the means, they are usually unscrupulous and opportunists.

2.                           The value system in any society is the set rules that prescribe what is right or wrong within that society. Where the possession of wealth determines the reputation ascribed to persons, that society is bound to witness unnecessary competition for the acquisition of wealth. These is no doubt as this will lead some people to use dubious means to get rich over right. It can be argued that the main cause of fraud in local government offices is traceable  to general dishonesty in the society where morality is not recognized.

 

5.1    CONCLUSION

Having conducted a thorough research on the effectiveness of internal control in local Government(s) system as tools for transparency, probity and accountability in the management of public resources, the researcher has drawn a conclusion following her findings.

The researcher observed that the existence of internal control in the system is no doubt a reality but the effect of it is not convincingly felt in the implementation of policy decision.

This, condition, the researcher observed to emanate from non adherence to the procedural control  council over unnecessary greed and naivety in amassing wealth and execution of government functions.

A lot of loopholes are detected from government inability to tick to laid down internal control measures in the council. It is also observed that government gives indiscriminate appointment to Naira and for ignorant people to man strategic positions and for that fact these people find it difficult to interpret and understand the systematic control prevailing in the system, in effect, the tendency is failure hence it will give room for scrupulous elements to maneuvered their ways in defrauding government treasury.

In conclusion, an efficient control measures installed should be followed up the ensure transparency, and accountability in the management and utilization of both financial, material and human resources. The preparation, authorization and approval of any transaction should be segregated to enhance checks and balances in the execution of such transaction.

 

5.2    RECOMMENDATIONS:

In order to ensure probity and accountability in local government system, internal control and the checks are the inevitable apparatus that need to be installed in the system.

The internal checks is the method of organizing the entire operations of office and the duties of the respective staff so that fraud and regulates are almost impossible without collusion. It involves a sub-division of duties by means of which no one person is entirely responsible for one transaction but at some stage in its performance each person’s work thereon comes to the notice of at least one other  person. Thus, a revenue clerk receives money. The cashier post the cash book and the third officer should be responsible for paying into the bank and thereafter makes the bank reconciliation. While the accountant supervisor the transactions and entries. It is thus very difficult for fraud to be perpetrated without collusion between the members concerned. Internal checks do not make fraud impossible but they certainly minimize the possibility by making fraud more difficult and increase the chance of detection.

Internal control is the whole system of controls, financial and otherwise which are established by management in order to carry out the business of the government in an orderly manner, safeguard its assets and secure as far as possible the accuracy and reliability of its records.

Having touched on the problems militating against probity and accountability in the local government system and having talked on some of the preventive measures and realizing the dangerous effect of the increasing wave of fraud in public service, there is the need to device different measures aimed at minimizing the incidence of fraud in local government system. These increases are based on the cause of fraud as was detected by the researcher in the course of this work.

 

GENERAL SOLUTION TO LOCAL GOVENRMENT FRAUD.

1.              JOB ROTATION AND ANNUAL LEAVE

The local government(s) should prevent a situation where one person is kept too long on a table. Nobody should be regarded as indispensable  in any section, hence there should be regular rotation of job and management should ensure that all staff take their leave when due. It was found out by the researcher that senior officers like the head of departments and other officers holding strategic positions don’t agree to go on annual leave for fear of leaving the table and responsibilities and what accrues from it to their juniors. The management of the council or local government service commission should make sure that such attitude stops.

 

2.              RECRUITMENT AND TRAINING OF STAFF

The local government must therefore evolve a sound employment policy, employers will have and know that he has a supervisor who will observe his work and performance. Workers should be employed on merit and not through connection or nepotism staff should be sent on regular training to enhance performance. The whole staff of the local government should be given a training once in a while and not restricting it to relations and friends of officers of the council.

3.              RESPONSIBILITY SHOULD DELEGATED TO INDIVIDUALS AS FAR AS POSSIBLE.

The psychological impact of fixing responsibility in this way is to promote care and efficiency

4.              All documents must be controlled in such a way that information is recorded immediately and cannot be subsequently remove or altered without authorization.

5.              Each executive should be permitted to exercise the maximum initiative within the limits of his delegated authority and training to ensure that the right cadre of staff are employed within the local government system. It is necessary to obtain identification from both their last Scholl principals and other responsible citizens whose reputations are in no double being employed.

6.              The internal audit is a good control measure that can forestall the incidence of fraud or misappropriate of fund in the local government, is properly put in place. The internal audit is saddled with the responsibility of pre-payment checking of the accounting records of the local government(s). The revenue accounts are checked on daily basis while the expenditure accounts particularly the payment voucher must of necessity be “checked and passed” by the internal audit before payments were made.

7.              There should be regular balancing and reconciliation of books provide fertile grounds for frauds. Some unscrupulous staff at times jammed books of records, making it difficult to balance and this is a danger sign. The officer in charge should ensure regular or daily reconciliation of accounts.

8.              Employee incentive and rewards: There is no gains saying that incentive to staff have helped to reduce the incidence of their involvement in fraud. hard work should be rewarded and should be part of the local government policy. Also regular payment of salaries as and when due including promotions and other incentives are necessary to be considered by the management.

9.              In order for accountant, treasures and auditors to command respect, they must demonstrate more than technical competence. They must continually  show their integrity and high standard on moral issues of the council.

10.         Payroll defalcations:

Fraud is usually committed by inclusion of ghost workers names and stepping up  workers salaries without authority. Some retired and those who have died are retained in the pay sheets. There could be detected in the following ways.

a.      With regards to engagements and termination of employment, verify that written authorization in both cases have been countersigned.

b.              Verify that overtime working is properly authorized.

c.               Verify salaries and wages according to agreements and checks that any changes have been properly authorized.

d.              Verify authorities for deductions completed by employees and check deductions with summarized records.

e.               Examine number of signatures for receipts or payments with original signature on commencement of employments and enquire into any name appearing frequency on the records.

f.                  Ascertain that balances of the unclaimed wages are banked regularly in accordance with the directive.

g.               Check of all deductions i.e. payee are paid to the concerned agency.

 

 

 

 


 APPENDIX 1

THE CHI-SQUARE (X2) DISTRIBUTION

 

 

 

 

 

 


    0                

 

Degree of freedom

Level of significance

 

5%

%

V=1

3.841

6.635

    2

5.991

9.210

   3 

7.815

11.345

   4

9.488

1313.277

   5

11.070

15.086

   6

12.592

16.812 

7

14.067

18.475

8

15.507

20.090

9

16.919

21.666

10

18.307

23.209

11

19.675

24.725

12

21.026

26.217

13

22.362

27.688

14

25.605

29.141

15

24.996

30.578

16

26.296

31.99

17

27.587

33. 409

18

28.869

34.805

19

30.144

36.191

20

31.410

37.566

21

32.671

38.932

22

33.924

40.289

23

35.175

41.638

24

36.415

42.979

25

37.652

44.314

School of financial studies

Sir,

QUESTIONNAIRE

I humbly apply for your co-operation and that of your officers in finishing me with  the information needed in this research work. I am a student of the institute of management and technology (IMT) Enugu, carrying out a research on effective internal control measures as tools for transparency, probity and accountability in the management of public resources. A case study of Igbo-Etiti Local Government Council.

I promise not reveal any official secret of the council. Any information received is for the purpose of this academic study.

Thanks for your anticipated co-operation.

Your sincerely

RESEARCH QUESTIONNAIRE

RESEARCH TOPIC: EFFECTVIE INTERNAL CONTROL                                            MEASURES AS TOOLS FOR TRANSPARENCY                               PROBITY, AND ACCOUNTABILITY IN THE                                    MANAGEMENT OF PUBLIC RESOURCES: A                                      CASE WSTUDY OF IGBO-ETITI LOCAL                                           GOVERNMENT COUNCIL.

INSTITUTION:

You are expected to tick (Ö) in favour of the option that serve your opinion in the optional questions, and to render simple answers that will be concise to the open ended question used.

1.       Sex

a.       Male  [        ]

b.       Female        [        ]

2.       Qualification/Rank

3.                           Working Experience

a.      below 10 years     [        ]

b.      Above 10 years    [        ]

4.                           Department

 
SECTION 1: BACKGROUND INFORMATION

1.              What is the position of administrative structure of Enugu State local government system?

a.      Absolutely autonomous [        ]

b.      Semi-autonomous          [        ]

c.      Dependent on other establishment    [        ]

d.      No idea       [        ]

2.              Has the local government self accounting autonomy    

a.      Yes    [        ]

b.      No     [        ]

3.              How does power of instruction flow the position of chairman to the lowest subordinate official in the council.

4.              Does the following individual departments or unit exert measure of control over the assets of the council.

a.      Finance and supply unit Yes   [        ], No  [        ]

b.      Store and inventory unit Yes  [        ], No  [        ]

c.      Audit unit No       [        ]

5.              How many department are in the council.

 

SECTION 2: ADMINISTRATION CONTROL

6.              How often is personnel audit being carried out in Igbo-Etiti local government council in a year.

a.      Once  [        ]

b.      Biannual     [        ]

c.      Quarterly    [        ]

d.      Not specific [        ]

e.      Not at all    [        ]

7.              How does the council ensure that there is reliable statistical information of its labour force?

a.      Through labour sheet analysis [        ]

b.      Through payroll monthly return       [        ]

c.      Through recruitment roll sheet          [        ]

d.      Monthly staff evaluation control      [        ]

8.              Are workers promptly promoted as when due?

a.      Yes    [        ]

b.      No     [        ]

9.              If no, what do you think is responsible for the promotion of staff in the system?

10.         State three disciplinary measures our local government council adopt to ensure prompt and timely attendance of work.

SECTIONS 3:

FINANCIAL ACCOUNTING AND INVENTORY CONTROL

11.         Is access to documentation and inventory restricted to persons who required it for authorization duties?

a.      Yes    [        ]

b.      No     [        ]

12.         Does the council operate the following system of control?

a.      Control accounting        [        ]Yes; [        ] No

b.      Cash receipts are promptly recorded and lodged into bank   

[        ] Yes; [        ]        No

c.      Cash book is periodically reconciled with the  bank statement         [        ] yes; [        ]         No.

d.      The treasury receipt vouchers (TRVO is at times cross checked with        the cash book of the council [    ] Yes; [        ] No

13.         Has the council exclusive authority to incur expenditure without the pre-approval from any of the following?

a.      Governor’s officer         [        ]

b.      Auditor general of local government [        ]

c.      None of the above          [        ]

 

SECTION 4: INTERNAL AUDIT CONTROL

14.         Is there by separation of function between the people who take  custody of assets and those who keep record of them?      

a.      Yes [ ]

b        No     [        ]

15.          Has the internal audit authority to query reports issued by the treasurer and the financial committee of the council?


a.      Yes [ ]

b        No     [        ]

16.         Does the council recognize the impact of “Checked and passed” on every payment voucher, which passes through the internal auditor before payment is made?

a.      Yes [ ]

b        No     [        ]

BIBLIOGRAPHY

Aguolu, Osita FCA (1998)     Fundamentals of Auditing, Rere Charles and                                            Patrick LTD NIMO.

Anderson, R.J (1977)    The External Auditing 1: Concept and Technique,                                                        Pitman Publishing Co, New York.

Anyafor, A.M.O   (1994)         Government and Public Sector Accounting                                                          Vol. 1 GOPRO Foundation Press Nigeria.

Wilson Uchenna .A (2001)      Government and Public Sector Accounting                                                          Volume, Immaculate Publications LTD.

Constitution of the Federal Republic of Nigeria (1999) Section 162 (5-8)                                                 P.66.

David N. Richuite (1982)        Auditing Concept and Standard South West                                                                Publishing Co, Ohio.

Federal Revised Financial Regulation of Nigeria (1976).

Financial Memoranda (1988)  Preamble 1.

Gordon, P. Sheldon and Gordon S. Florence (1994) Contemporary Statistics                                                    A Computer Approach MC Graw Hill INC,

New York.

Ifurueze, MSK and Ekembi, O.A (1995)    Essentials of Auditing in                                                         Nigeria, Amazing Grace Printing and Publishing,                                                 Nigeria.

Kohler, L. Eric (1982)    A Dictionary of Accounting, 4th Ed. New York.

Koontz O. Donnelly and Weihrite 91983)  Management (7th Ed) Magrano                                                Hill International Book Co, USA.

Millicha up, A.C Auditing (3rd Ed) (1985) D.P Publications, Sharp Shire.

Onyia, Leo (2000) Internal Control Technique in Local Government Administration, Being a paper Presented in A two-Day Seminar on “Treasury Operation and Fraud”, Organized By Enugu State Local Government Services Commission, Enugu (may 2000).

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