IMPACT OF FISCAL ACCOUNTABILITY ON FINANCIAL MANAGEMENT OF PUBLIC SECTOR IN NIGERIA
Abstract
Financial accountability is central to financial management. Public financial management cannot be achieved without effective fiscal accountability. This study explored the impact of fiscal accountability on public sector financial management in Nigeria. Specifically, the study examined the extent to which regulatory laws, compliance reporting, and statutory oversight affect the financial management of Nigeria’s public sector. The investigation investigated his seven public institutions in Nigeria namely her NDLEA, NERC, NOA, NDIC, BPE, DMO and NPC. Questionnaires were used to collect data from respondents who were accountants and auditors of selected institutions. Descriptive statistics and multiple regression analysis were used for data analysis. As a result, we found that regulatory laws, compliance reports, and legal controls have a significant impact on the financial management of selected institutions. Among other things, the study empowers governments to put in place strategic structures that enable the establishment of tax accountability frameworks, protect whistleblowers, and create an enabling environment for tax accountability in general. He suggested that it is necessary to enact regulations that give They have a real capacity to improve the financial management of Nigeria’s public sector.
chapter One
Foreword
1.1 Research background
Fiscal accountability is a concept deeply rooted in politics and democracy. It is a bridge that connects bureaucrats entrusted with public funds and property with the people. Fiscal accountability is the administrative report of officials showing how public funds are spent on behalf of the people. Financial accountability is a prerequisite for modern economies to function and improve people’s material well-being. In many countries, public institutions are given funds and other resources. Good management assurances are expected to be presented to the public. Fiscal accountability ensures that information is available to assess the performance of public institutions in curbing abuse of power and resources (Anichebe, 2012). Such fiscal accountability ensures that the financial activities of public institutions are open to all and equally accountable for their actions and omissions.
Tax Accountability by Harunara. (2015) refer to the requirement that public officials be accountable to stakeholders and the general public, particularly with respect to the use of public funds. Adiogu (2013) states that fiscal accountability is concerned with the responsibility of public office holders for their actions on the state’s financial resources. Financial accountability includes disclosure systems, access to financial information, openness to public participation, lack of unnecessary concealment, willingness to be subject to public scrutiny, humility of public officials to answer questions from the public, etc. Characterized by features. Tax liability is threatened in systems where access to public information is blocked.
Financial management focuses on making decisions about the use and management of an organization’s or company’s finances. Financial management is a subset of management activities that focus on how to plan and manage an organization’s financial resources. Financial management also includes the procurement and optimal use of funds for the smooth running of an organization. Financial management maximizes an organization’s net worth, allocates scarce productive resources among competing demands, and identifies possible avenues for implementing strategies to achieve stated goals for such an organization. focus on. Financial management in the public sector context can be described as the process of procuring, managing, planning, coordinating, organizing, and directing the financial resources of subnational government agencies. These quasi-governmental agencies include federal ministries, state ministries, local councils, authorities, and offices.
The issue of financial accountability in Nigeria
1.2 Problem
The public sector is responsible for using public resources, raising funds (income) and spending them for the benefit of the people. Public officials must provide complete, appropriate and accurate information regarding the administration of public funds. The public sector, which is seen as the custodian of public resources, laws and mechanisms for national development, has lost the goodwill of its citizens due to its lack of accountability. If Haru. (2015) implied that departments, institutions, and departments did not adequately adhere to the principle of accountability. This claim is consistent with her Akinbuli (2015) finding that the duties and trusts of officials are not effectively and efficiently discharged. Accountability has been neglected in the public sector. Most public semi-public companies in Nigeria do not maintain proper accounting records and rarely issue annual reports or audited accounts on time. Academics have identified financial mismanagement, inefficiency, inefficiency, mismanagement and negligence as hallmarks of the Nigerian public sector.
Public sector financial reports are most commonly falsified and manipulated. Most government quasi-government agencies do not properly use the funds allocated through the budget. A budget is created and presented late. Moreover, if there is an error in the budget, no concrete action will be taken to correct it.
Another issue is the quota system. Quotas are imbuing public services with mediocrity. Employment in public service was based on the man-knows-man syndrome, not on merit. Public services employ unqualified workers for sensitive jobs. This creates room for embezzlement and financial fraud.
Also, problems related to public sector financial management include forced employment, corruption in procurement, diversion of funds for infrastructure development into private bank accounts, theft of public assets, improper collection of internal revenues, False contract orders, paying salaries and benefits to contractors, friends and family, ghost workers, failing to record expenses, embezzling funds by Congressional officials for improper personal gain, after-service Destruction of documents unfavorable to management to enable prosecution to be avoided, nepotism, etc. Most paranational government agencies do not fully adhere to the principle of tax accountability. All these issues make accountability very difficult in the Nigerian public sector. 1.3 Purpose of the survey
The primary objective is to study the impact of tax accountability on financial management in the Nigerian public sector.
The specific objectives of this research are to:
He studies the impact of regulatory law on financial management in the Nigerian public sector.
Assessing the Impact of Regulatory Controls on Financial Management in the Nigerian Public Sector.
I study the impact of compliance reporting on financial controls in the Nigerian public sector.
1.4 Research question
The questions of interest in this study are:
To what extent do regulatory laws affect public sector financial management in Nigeria? To what extent have legal controls affected public sector financial management in Nigeria?
To what extent has compliance reporting impacted public sector financial management in Nigeria?
1.5 Research hypothesis
The research hypothesis underlying the study is:
H01:
Regulatory laws have not had a significant impact on public sector financial management in Nigeria.
H02:
Legal controls do not have a significant impact on public sector financial management in Nigeria.
H03:
Compliance reporting has no significant impact on public sector financial management
1.6 Operationalization of variables
This study examines the impact of tax accountability represented by regulatory law, statutory oversight, and compliance reporting on financial management in the Nigerian public sector. The dependent variable is financial management and the explanatory variables are regulation, legal control, and compliance reporting. The functional form of the model can be expressed as
Y=f(X)…………(1.1)
Y=f(X1,X2,X3)……………….. (1.2)
From where:
Y=Financial management
X= financial accountability, regulatory representation (X1); legal controls (X2) and compliance reporting (X3).
Model 1:
The impact of supervisory laws on financial management
Y=f(X1)…………(1.3)
Y=β0 + β1X1+ µ……………… (1.4)
Model 2:
Impact of laws and regulations on financial management
Y=f(X2)…………(1.5)
Y=β0 + β1X2+ µ……………… (1.6)
Model 3:
Impact of compliance reporting on financial controls
Y=f(X3)…………(1,7)
Y=β0 + β1X3+ µ……………… (1.8)
1.7 Validity of research
Through its findings, this study helps identify factors that may arise from poor financial management accountability in the Nigerian public sector. The study is equally expected to provide relevant suggestions to improve the stability, effectiveness, efficiency and service delivery of Nigeria’s public sector.
This study will be of great benefit to accountants as it will help accountants improve their day-to-day operations and effectively manage the finances of their respective semi-public companies. Financial analysts will find this work invaluable as it serves as the basis for advising clients on their investment decisions.
Additionally, the study will encourage local, state and federal departmental, agency, and departmental managers to develop policies that improve processes of accountability, transparency, and integrity in their operations. It also helps various government-established agencies combat corruption within semi-governmental institutions. Likewise, students will find this study a guide for future research on the subject.
1.8 Scope of investigation
This study examines the impact of tax accountability on financial management in the Nigerian public sector. The investigation is limited to her seven subnational federal agencies in Nigeria.
National Drug Law Enforcement Agency (NDLEA); National Electricity Regulatory Commission (NERC); Nigeria Deposit Insurance Corporation (NDIC); Debt Management Office (DMO); Meeting (NPC).
1.9 Definition of key terms
Financial management
This includes decisions about the allocation and use of company finances. This is an administrative activity focused on planning and managing the company’s financial resources. public agency
This refers to the part of the economy controlled by the government. It also includes government-established organizations, ministries, departments, quasi-governmental bodies, and agencies.
financial accountability
Fiscal accountability deals with compliance with established laws and regulations, adherence to good accounting principles, the accuracy and fairness of financial statements, and enforcing cost legitimacy.
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