CHAPTER ONE: INTRODUCTION
1.1 Background of the Study
In the 21st century
Ministries, Departments and Agencies (MDA’s) in Nigeria has embarked
on the use of Computerized Accounting System (CAS) such as Treasury
Single Account (TSA), this has pose serious problem on high profile
organizations and institutions.
Ama (2004), defined CAS as an
Electronic Data Processing (EDP) machine that uses calculators and
computer in collecting information. This author is not at variance with
the definition above because, the computer convert financial data or
transaction such as; sales, purchases, returns and the likes into useful
financial information such as printed report and financial statement
for accurate decision making to permit informed judgment. Still Ahmed
(2006) posited that, computerized accounting system is to ensure
accurate record of financial transactions, effective book management in
order to avoid typo errors and improving the smooth running of the
business. This author agrees to this assertion because CAS is an
accounting information system that collect, process, summarize and
report information about a business organization in monetary terms. It
also collect data describing the activities of a business, uphold a
comprehensive financial records of the business operations as per the
Generally Acceptable Accounting Principle (GAAP), transforms the data
into information in order to generate financial report as per the
requirement of the users.
According to Tanenbaum (2010),
computer is an electronic and automated device for processing data and
storing the output for future use according to the instructions given to
it. Vermant and Shelly (2011) also defined computer as an electronic
device, functioning under directives of stored command in its own
memory. This author agrees to this definition, because a computer is
sensitive to commands; to accept input, process that input and produce
Bello (2009) defined accounting as an information system used by
economic units to attain various monetary decisions. Both private and
public organizations use accounting to communicate to all stakeholders
and other users of accounting information at a particular time about
their performance and position in terms of profitability, efficiency,
and responsibility Abubakar (2010) and Nzekwe (2009). This author
agrees to the assertions of these scholars, this because the author sees
accounting to be an information system that allow for the collection,
recording, classifying, summarizing and interpreting financial
transaction in a significant manner, communicating same to users for
fiduciary purpose and to make informed decisions, which would in turn be
of benefit all organizations.
IMF (2010), defined TSA as a “unified structure of government bank accounts that gives a
consolidated view of government cash resources”. The author is not at
variance to this definition, because TSA is a computerized revenue
collection platform for adequate collection of internally generated
revenue by public MSAs. It is also seen as a consolidated bank account
through which government transact all its receipt and payment.
Recently, the 21st
century has brought about changes in Nigeria, the introduction of TSA a
computerized accounting system has led to bank liquidity, loss of job,
underdevelopment in research institutions and Universities, computer
fraud etc. MDAs are mandated to withdraw their fund from banks and
channel it to a single account called the Treasury Single Account.
Obinna (2015) posited that, removing the treasuries from commercial
banks will diminish the account of such banks and the MDAs will not have
an opportunity of monitoring their account where it is kept. Balogun,
Yusuf and Chiejina, (2015) also stated that, with the single account
policy, federal government will not be able to know at a glance the
revenue accruing to each ministry or amount debited, because all
accounts are joined together. pattanayak and Fainborn (2011) also
postulated that, the application of a TSA might involve changes in
accounting systems and processes, including the redistribution of
accounting roles and responsibilities between the central treasury unit,
ministries and spending agencies, this will result to extra cost of
training the staffs on the new technology. Oluwatosin (2016) reported
that, The Academic Staff Union of Universities (ASUU) pointed out that
the implementation of the TSA in university system might change the
effective functioning of the institutions, because government
allocations are not enough to provide the requirements of the
It is expected that the
implementation of TSA would restore focus on the original purpose of
which banks were set up – to collect depositors’ funds (not necessarily
government funds), keep them safe; engage in intermediation to create
wealth and jobs for the economy and in the process generate profit for
itself. Government is also expected to ensure effective allocation of
resources to institutions especially the educational sector.
1.2 Statement of the Problem
Scholarly work has proven that
computerized accounting system such as treasury single account has pose a
serious problem in the 21st century. Clementina (2016) reported that, at the beginning of the first quarter of 2015
trillion public funds held by commercial bank was transferred to TSA
and this resulted to bank distress. With the high Monetary Policy Rate
at 13%, Cash Reserve Ratio (CRR) at 20% and 75% available for private
and public sector deposits respectively, implementation of TSA would not
favor the banking sector. Bank treasurers expressly said that, the
implementation would negatively affect liquidity in the banking system.
In relation to this, FBN Capital market stated in its money market
reports that the NNPC withdrew about N400 billion from their banks
increasing the interest rate overnight to 50 per cent. It was recorded
that this pressure was corrected when Federal Account Allocation
Committee (FACC) inflow came to the banks within the same period.
Oguntodu, Alalade, Adekunle and Adegbie (2016) revealed that, there
will be traffic when it comes to transfer of money from commercial banks
to Central bank, which would definitely result to the problem of
allocation of resources. Research evidence has shown that immediately
funds are been transfer to central bank cost of borrowing will shoot up,
banks would not only have liquidity problem, it would reduce growth in
the bank because they would be unable to create credit, which would
result into a new face of recession. Unemployment rate has increase due
to the substantial decrease in banking operation.
Empirical researchers have shown
that the heads of revenue generating agencies and their head of
ministries and department are uncomfortable with the implementation of
TSA, because it will limit their control over their funds which they use
in funding some extra budgetary expenses Yusuf (2016). Academic Staff
Union of University (ASUU) also disregard the implementation of TSA
because presently it has caused underdevelopment of research in the
Nigerian universities. Human Right Writers Association of Nigeria
(HURIWA) said that unemployment will soon sweep across Nigerian
employers and family would be affected, thus deteriorating the real
purpose which actually guided the TSA policy. The HURIWA blamed the
Arewa consultative Forum (ACF) ( A northern forum) and the former
central bank governor Sanusi Lamido Sanusi (now the Emir of Kano) for
planning to damage the economy by convincing president of Nigeria
Muhammad Buhari to flow along with their plan by implementing a single
account for all federal agencies to be domicile in CBN Uhembe (2015).
Several factors such as; bank
liquidity, bureaucratic bottle neck, economic independency among others
are perceived to be the cause of the problem Anoruo and Aforkwalam
(2017). If government would be willing to use the TSA to reduce
liquidity rate in banks, enhance proper allocation of resources
especially to institutions that need fund on a daily basis, fostering
an efficient cash management, reduce unemployment and establishment of
an effective payment mechanism, there will be no problem associating to
the use of computerized accounting in the 21st century. This would promote accountability and transparency in Nigeria Anoruo and Aforkwalam (2017).
1.3 Objective of the study
The aim of this quantitative
research is to examine the problem and prospect of computerize
accounting system (treasury single account) in the 21st
century Nigeria. This research will investigate the problem and prospect
of computerized accounting system (Treasury Single Account) in the 21st century Nigeria.
Specifically the research
objectives are: To examine the problem of computerize accounting system
(treasury single account) in the 21st century Nigeria.
To examine the prospect of computerize accounting system (treasury single account) in the 21st century Nigeria.
1.4 Research questions
What are the problem of computerize accounting system (treasury single account) in the 21st century Nigeria?
What are the prospect of computerize accounting system (treasury single account) in the 21st century Nigeria?
1.5 Significant of the study
This study would enlighten the government on problems faced by Nigerians in the 21st
century regarding the implementing of TSA in order for them to device
means of improving the TSA platform to eliminate traffic in remitting of
funds to the CBN and allocation of funds to the different MDAs. The
government would also map out ways by which educational institution
would operate successfully without encountering problem such as
underdevelopment of research. Again the federal government would be
able to identify MDAs that need fund on daily basis and create a means
of funding those MDAs.
It is expected that the aftermath
of this research would restore the economy back to a better position,
the banking sector would begin to identify other areas of raising fund
in order to reduce interest rate, this would enable private firms to
borrow money from commercial bank to run their business at a profit and
also offering employment to the public. This would reduce liquidity in
commercial bank, increase their profit and provide job openings to the
public and eliminating recession in our economy.
This study will be of great
important to the Academic/practitioners. This is because with the
Academic/practitioners would educate their work force on the effects of
Treasury Single Account on the society, the work force would employ
means of eliminating these negative effect it have on the society. This
research would serve as a guide to other researcher who wish to carry
out further research in related areas.
1.6 Research hypothesis
H10:There is no relationship between problems of computerize accounting system (treasury single account) and the 21st century Nigeria?
H11:There is a relationship between problems of computerize accounting system (treasury single account) and the 21st century Nigeria?
H20: There is no relationship between prospects of computerize accounting system (treasury single account) and the 21st century Nigeria?
H21:There is a relationship between prospects of computerize accounting system (treasury single account) and the 21st century Nigeria?
1.7 Scope of the study
This research centers on the problem and prospect of computerized accounting system (Treasury Single Account) in the 21st
century Nigeria. It covers the period of 2012-2017. The geographical
area that would be covered are Akwa Ibom, Lagos and Rivers State,
Nigeria. This study will be restricted to only Ministries, Department
and agencies controlled by the federal Government. The population size
shall be 90 and the sample shall be drawn mostly from Ministry of
Education and Nigerian National Petroleum Corporation (NNPC), this is
because they are affected and they will not be bias.
This study does not include the private sector, because there will be conflicting response and sometimes bias.
1.8 Limitation of the study
It is pertinent to note that in
the course of this research, the author reviewed over thirty (35)
journals out of hundred or thereabout, because most journals were
written in other languages other than English. This study is restricted
to two (2) MDAs out over 800 MDAs because they are considered as a
sample representative of the MDAs in Nigeria.
This research calls for further research on the effect of treasury single account on the private sector in the 21st century Nigeria.
1.9 Definition of Terms
(2003) defines accounting as an information system of collecting,
recording, classifying, measuring, summarizing, interpreting financial
data of an organization in a significant manner in order to aid in
Computerized Accounting System:
Computerized Accounting System also known as Electronic Data Processing
(EDP) is an accounting system which allows the users to enter
transaction into the program once and all accounts are updated as
necessary Emmanuel (2015).
Treasury Single Account:
Uhembe (2015) defined Treasury Single Account as a unified or
consolidated account through which government transacts all its receipt
Computer: Jeffry (1996)
defined Computer as a programmable machine that receives data, process
it and stored the processed data called information in its memory for
Liquidity: Liquidity is
the ability of a financial institution to meet its cash and deposit
obligations without acquiring unwanted losses Francis, Edu, Frank and