Nigeria as a developing country is faced with the challenge of improving fiscal discipline, bringing resource allocation in line with development priorities, creating an enabling environment for public financial managers, and protecting due process.
The management and control of public funds is the heart of government administration, government businesses, whether in form of policies, programmes, activities or functions should be run in accordance with the laid-down rules and regulations. These rules and regulations become vigorous especially in relation to the accounting and reporting for the purpose of collecting and disbursement of government funds, which supports the process of governance. In some developing countries because of weak expenditure management process that have room for an exaggerated request, the spending is likely to be for less priority. In these circumstances, the best reaction would be to improve expenditure budget preparation. Since expenditure management is easy at budget preparation than later during the execution of the budget.
This research study seeks to examine the critical role accounting plays in the management and control of public expenses in the central bank of Nigeria. the researcher make use of both primary and secondary data source to generate relevant information for the research study, and SPSS package and chi-Square technical analysis was used to test hypothesis.
At the end of the various recommendations were made.
Keywords: Accounting, Control, Public expenditure, Budget, Finance, management, Accrual, Standard.
- BACKGROUND TO THE STUDY
The role of accounting seems to be more pronounce in the control of public expenses in relation to the apex bank of Nigeria, as it forms a growing trend among the general public during the period of economic recession.
Perhaps, the aspect of public sector accounting that has received much attention in the literature, debate and empirical analysis is the role of accounting in the control of public expenditures. Many support a large public expenditure on the ground that it puts money into circulation, increased investment and employment and reduces tax averseness. However, public expenditure has some obvious economic consequences, for instance, when the state enters the market for factor inputs or labour, it stimulates unhealthy competition with the private sector firms for these same materials or labour services. As such, the government becomes the largest purchaser of goods and services because of its widespread activities, as hitherto evidenced in Nigeria.
Recently, there has been cases of misappropriate of funds in the public enterprises and improper accountability. These factors have led to the general public becoming aware of what is happening in the public sector and thereby drawing their attention to notion of public expenditure management.
Expenditure of financial resources of the public needs to be strictly controlled otherwise, people charged with the responsibility of expending public funds would do so to their benefits or advantage, thereby making the attainment of government objectives difficult if not impossible. It is also necessary to control the expenditure of public funds to ensure that members of the public will benefit from such expenditure by ensuring that funds are applied directly to those projects they are meant for.
Over the years, increases in the finances of the Federal Government have led to a number of theoretical and empirical investigations of the sources of such increases. Researchers have particularly questioned whether increases in the size of the federal budget tend to be initiated by changes in expenditures followed by revenue adjustments or by the reverse sequence, or both (Baghestani and McNown, 1994; Akpan, 2005).
The circumstances surrounding the law speed of development in this field of human endeavour could perhaps be ascribed to many potent factors such as lack of readily accessible information about the composition and incidence of expenditure. The lack of being appropriate which characterizes many public expenditures, the multitude of difficulties surrounding estimates of the value to be attached to public expenditures which and finally the structure of institutions which surrounds public expenditure decisions.
In most developing countries including Nigeria, government participation in economic activity is usually significant. One of the ways through which government has intervened in Nigerian economy is through the establishment of public enterprises and statutory bodies operating services of an economic or social character on behalf of the government. Moreover, In Nigeria, public enterprises are engaged in a while spectrum of economic activities including agriculture, mining, construction, manufacturing, commerce and services. The classification of public enterprises in Nigeria, had been made according to varieties of criteria by different authorities.
Abu and Abdullah (2010) observe that government expenditure has continued to rise due to the huge receipts from production and sales of crude oil, and the increased demand for public goods like roads, communication, power, education and health. Besides, there is increasing need to provide both internal and external security for the people and the nation.
Meaning of expenditure control:
Expenditure control is defined to be a whole system of controlling finances or otherwise, established by the management in order to carry out the transactions of the organizations in an orderly manner and to ensure adherences to management policies safeguard the assets and secure as far as possible.
The management and control of public funds is the heart of government administration, government businesses, whether in form of policies, programmes, activities or functions should be run in accordance with the laid-down rules and regulations. These rules and regulations become vigorous especially in relation to the accounting and reporting for the purpose of collecting and disbursement of government funds, which supports the process of governance.
Oshami (1991), who state that “It is obvious to say that except government expenditure is controlled, no matter the amount of funds collected on its behalf will have no positive effect on the public.
In any organized society, there are various forms of controls. In the public sector, we have two forms of control. They can be identified as:-
- Administrative control
- Financial control
- Administrative control includes all the control that is operated by an organization to facilitate its activities and improve its efficiency and productivity.
- Financial or accounting control, as clearly defined by the American institute of certified public accountants said is the plan of the organization, and the coordinated procedures used within the organization to;
- Safeguard its assets from loss by fraud or errors.
- Check the accuracy and reliability of accounting data which management uses in making decisions.
The control of public expenditure by Central Bank of Nigeria using accounting methods and techniques is important to the public in general as these controls contributes to the attainment of the objectives of the public expenditure or to the purpose for which the funds were expended on.
This research work is therefore concerned with “Evaluating the role of accounting in the control of public expenditure in Nigeria using (Central Bank of Nigeria).
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