THE ROLE OF FINANCIAL CONTROL IN THE PUBLIC SECTOR (A Case Study of Lagos State Ministry of Finance, Alausa)
The research topic on “The Role Of Financial Control In The
Public Sector, a case study of ministry of finance, Alausa Lagos State” The
chapters reveal the creation of Public sectoring Nigeria, source of income and
revenue in Public sector and the topic also reveal the financial management
operation system in Nigerian. Many problems are ascribed to the cause of
managing a public sector which included corruption, misappropriation of funds,
proper accessing control and mismanagement of funds. The research work also
reveal the basic problems affecting ministry of finance in Lagos state which
include source of revenue, financial motivation and ways by which revenue
allocated are been utilized. However, the research basically state that the
problems of financing a public sector lies in the hands of the government, the
society and individual contribution to their community. It should be noted that
for .any society to achieved success, most especially in the area of financial
there is need for individual, nongovernmental and governmental support is needed.
TABLE OF CONTENTS
TITLE PAGE I
TABLE OF CONTENTS VI
CHAPTER ONE: INTRODUCTION
BACKGROUND TO THE STUDY 1
1.2 STATEMENT OF THE PROBLEM 3
1.3 OBJECTIVE OF THE STUDY 3
1.4 RESEARCH QUESTION 4
1.5 RESEARCH HYPOTHESIS 5
1.6 SIGNIFICANCE OF THE STUDY 5
1.7 SCOPE AND LIMITATION OF THE STUDY 5
1.8 METHOD OF DATA COLLECTION 6
1.9 METHOD OF DATA ANALYSIS 6
1.10 DEFINITION OF TERMS 8
1.11 HISTORICAL BACKGROUND OF THE CASE STUDY 7
CHAPTER TWO: LITERATURE REVIEW AND THEORETICAL FRAMEWORK
2.0 INTRODUCTION 9
CONCEPT OF LOCAL GOVERNMENT 10
2.2 PURPOSE OF A PUBLIC SECTOR 12
2.3 FUNCTION OF A PUBLIC SECTOR 15
2.4 FINANCIAL MANAGEMENT SYSTEM IN PUBLIC
2.5 PROBLEMS OF
FINANCIAL MANAGEMENT SYSTEM IN PUBLIC SECTOR 24
2.6 MISMANAGEMENT OF FUND 30
PERFORMANCE OF MINISTRY OF FINANCE, ALAUSA LAGOS STATE 31
CHAPTER THREE: RESEARCH METHODOLOGY
RESEARCH DESIGN 38
RESEARCH POPULATION 38
SAMPLE AND SAMPLING TECHNIQUE 38
METHOD OF DATA COLLECTION 39
METHOD OF DATA ANALYSIS 40
VALIDITY AND RELIABILITY OF RESEARCH INSTRUMENT 41
CHAPTER FOUR: DATA ANALYSIS AND INTERPRETATIONS
4.1 INTRODUCTION 42
4.2 DATA ANALYSIS 42
OF HYPOTHESES 53
CHAPTER FIVE: SUMMARY, CONCLUSION AND
5.1 SUMMARY OF FINDINGS 56
5.2 CONCLUSION 57
5.3 RECOMMENDATIONS 58
1.2 BACKGROUND TO THE STUDY
is the sinews of wars for all functional organizations in any economic. It is a
critical prerequisite which enables an enterprise, public or private to
maintain itself and effectively meet its commitment to individuals and groups
who consume its output of goods and services.
state ministry of finance is a public sector organization with assigned
functions and responsibilities-administrative structure and financial
arrangement for maintaining both itself and rendering its statutorily assigned
functions to us citizens. In view of this, the genetic centrality of finance to
organizational performances also applies to public sector.
Nigeria, the operating 1999 constitution of the Federal Republic accepted local
government as a third tier of government. Like in most countries of the world,
public sectors have five easily discernible sources of revenue open to them.
Those are grants, local tax, rates or property tax, user fees and charges and
loans. The prevailing federal government revenue allocation formula stipulates
that public sector is entitled to twenty percent of the revenue accruable to
the federal and ten percent of the internally generated revenue of the state
government and of course these are in addition to finance from traditional
internal sources of local revenue. However, the amount internally generated by
each of the public sectors is very small.
ministry of finance is therefore in a situation where they depend almost
entirely on the Federal and State Government for funds for the performance of
their statutory functions. Consequently, the federal and state government have
often remained paternal in the financing of this level of government. A
function of this paternalism is the financial uncertainly in the country.
Therefore one is not surprised that the little wonder Nigerian public sector have
seasonally suffered pecuniary distress which taxes their operations. The
peculiar circumstance of the creation and existence of public sector coupled
with the unpredictability of its political and administrative environment in
Nigeria largely account for the appeal of the topic: the role of financial
control in the public sector.
result of this appeal has been the sustained effort in seeking strategies for
evolving stable financial arrangement for the success of public sector in
meeting its dual commitment of maintaining itself and rendering services of the
part also informs the present study. However, it is clear from the prevailing
literature that most of the findings are not up-to-date hence some of the
beliefs and attitudes of scholars to the identified problems of public sector finance
are not supported by both adequate and current data.
view of the laps that has been identified, another enquiry into ministry
finance in Nigeria as become most imperative. It is hoped that such inquiry
will be more intellectually simulative in the area of public sector finance
especially as it highlights the financial policy for public sector in the
country in particular and the world at large.
1.2 STATEMENT OF THE PROBLEM
the various efforts and initiatives taken by past governments in ensuring
financial emancipation of ministry of finance and to ensure its smooth
functioning, this third tier government is still faced with mirage problems.
Some of them are as follows:
of financial autonomy for the public sectors, which hampers the effectiveness
of the ministry of finance.
financial arrangement for the success of public sector.
menace of corruption and mismanagement is still a major concern.
inability of most ministry of finance to improve on their internally generated
revenue to complement the statutory allocation.
gap between income and expenditure vis-à-vis the expenditure pattern of most ministry
1.3 OBJECTIVES OF THE STUDY
objectives of the study include the followings:
To examine the existing financial
control arrangement relevant to the Nigerian public sectors with special
reference to sources of income.
To examine the inter–governmental
relationship existing between Nigeria’s three levels of government and by
extension ascertain the constraints on the financial autonomy of public
To attempt to appraise the existing
and potential source of income for public sector.
To explore citizens for residents
attitudes to public sector finances with a view to explaining whether or not
they are ready to pay rates, users fees charges and taxes and possibly find out
their perception of local services in general.
To examine prospects for Nigeria
public sector in the light of the finding and logically recommend ways for
effective financial management for public sector throughout the country
1.4 RESEARCH QUESTIONS
attaining the given objectives of this study, a number of pertinent and
specific questions were asked. Some of the questions are:
What are the existing source of
revenue of public sector and to what external is their statutory functions
commensurate with the financial implications of their statutory functions.
What implication has the
inter-governmental constitutional relationship between Nigeria’s three
levels of government for public sector.
What are the factors hindering the
improvement of the financial base of public sector.
Are the people unwilling to pay their
taxes while they expect and demand good services.
What other potential revenue sources
abound which public sector could tap to improve their efficiency and
1.5 STATEMENT OF HYPOTHESIS
order to achieve the objectives of this study, the following hypothesis will be
financial control will not affect the performance of public sector.
HA: Inadequate financial
control will affect the performance of public sector
autonomy will not improve the administration of public sector.
HA: Financial autonomy will
not improve the administration of public sector.
the internal generated revenue base on public sectors will not stimulate
HA: Increasing the internal
generated revenue base on public sectors will stimulate growth.
1.6 SIGNIFICANCE OF THE STUDY
This study is very essential to
various classes of people in the area of business. the study will go a long way
in helping both the existing and potential entrepreneurs and management of
business organization and public sector organization towards the undertaking
and the knowledge of the uses of the financial control for the expansion of
their businesses and opportunity to the creditors financials and suppliers, to
study the usage of the financial statements in estimating the risk of entering
into bad debts in their transactions.
1.7 SCOPE AND LIMITATION OF THE STUDY
study will focus on the activities of Lagos State ministry of finance (Alausa).
will examine the financial capacity and capability of the public sector to
finance its expenses vis-à-vis its revenue and various problems.
in getting relevant information and materials are the major factors that tend
to limit the success of this research. However, lack of time and financial
resources are also major bones of contentions.
1.8 METHOD OF DATA COLLECTION
research work will make use of PRIMARY DATA that will be the source from the
staff of Lagos State Ministry of Finance, Alausa, through the use of
questionnaire and personal interview, (when necessary) for case of work, the
RANDOM PROBABILITY SAMPLING method was adopted, this is to ensure information
is gathered from all the level of workers. Also, varieties of scholarly
investigations of subject matter will be exploited.
1.9 METHOD OF DATA ANALYSIS
method of data analysis and interpretation would be based on analysis of
variance and tabulation will be used, this is to ensure that proper analysis at
various variables are examined as exemplified in the hypothesis. It also ensure
that every problem units of analysis of the research work has equal chance of
being dually represented by the analysis. Pilot study will be conducted to pre
—test the study schedule.
Chi-square test is given by the formular.
= Chi - square sign
= Summation sign
= Expected frequency
= Observation frequency
1.10 DEFINITION OF TERMS
It refers to facts that show whether or
not the business has the right to control the economic aspects of the worker’s
Is the state sector, is a part of
the state that deals with either the production, delivery and allocation of
goods and services by and for the government or its citizens, whether national,
regional or local/municipal
Finance: Is often defined simply as the management of
money or “funds” management.
1.11 HISTORICAL BACKGROUND OF THE
Ministry of Finance is a unique agency that provides the financial backbone
that helps government translate its vision of providing the dividends of
democracy to the teeming population of Lagos State.
the ministry of Finance and Economic Development at inception in April 1968,
the Ministry had Aihaji Chief I. A. S. Adewale as its pioneer Commissioner.
in 1995, the Economic Development was separated from Ministry of Finance and
merged with Budget to become the Ministry of Economic Planning and Budget while
Ministry of Finance stands on its own.
Finance Ministry then was structured into six Directorates consisting of the
three common services personnel Management, Planning, Research and Statistics
as well as Finance and Supplies and three other professional Directorates
Public Finance, Computer Services and Central Internal Audit.
inception, the Ministry operated through three (3) Agencies: Finance
Headquarters, the State Treasury Office, and the Board of Internal Revenue.
However, the Board of Internal Revenue, which is saddled with the
responsibility of collecting tax-related