The Effect of Mismanagement and Embezzlement of Funds in the Public Sector: A Case Study of Two Local Government Areas in Osun State
Chapter One
OBJECTIVES OF THE STUDY
The main study objective is to appraise the effect of mismanagement and embezzlement of funds in the public sector. A case study of two local government areas in osun state; while the specific objectives include
- To determine the nature of mismanagement and embezzlement of fund in the public sector. 2 To determine the effect of mismanagement and embezzlement of funds in the public sector.
- To determine the effect of mismanagement and embezzlement of funds in the gbesa local government areas in osun state.
- To determine the effect of mismanagement and embezzlement of funds in ifelodun local government areas in osun state.
CHAPTER TWO
LITERATURE REVIEW
Internal Audit in the Public Sector
Aigbokhaevbolo (2001) defines internal audit as “the audit work carried out by an employee of the organization. The scope and report are determined by the internal regulation of the organization… It involves internal control, internal check, verification, and investigation”. Also, internal audit is seen as an appraisal function of management; it ensures that internal control rules and procedures of the organization are functioning effectively and efficiently in compliance with quality standards, (Adeniyi, 2010; Edet, 1999).
Highlights of this view includes.
- Internal audit is an appraisal activity established by management to evaluate its functions, operations, services, performance, efficiency, policies and compliance with standards and regulations to achieve the overall objective of the entity.
- The method of achieving all this is by measuring and evaluating performance and efficiency with set criteria and standards.
- After evaluation, the results, which are to be reported to management, will be used to effect or make decisions of control measures.
According to Robertson (1976) “on any particular assignment governmental auditors may perform services for the benefit of several interested parties – the management of the auditee, officials of the agency requiring the audit, officials of one or more agencies that fund the auditee’s programmes, members and committees of Local Governments, a State legislature or the Federal legislative arm and the public”.
The Nigerian standards of auditing and the International Standards of Auditing (NSA 26 and ISA610), on the “Work of Internal Auditors”, stated as part of the objectives and scope of the internal audit to include; as per fulfilling the requirements of management. In addition, NSA 5 and ISA 240, specifically mentioned that it is the responsibility of management and those in charge of the governance of the organization are responsible for preventing fraud. Therefore NSA 26 is directing that responsibility or function to the internal auditor. Internal controls are the measures management takes to prevent fraud, material misstatements of fraudulent nature, and misappropriations of all forms. The oversight of this function is vested on the internal auditor.
MISAPPROPRIATION OF FUND
Misappropriation is an intentional misuse of money. The appropriation of money and other assets meant for a specific purpose for either personal use or for what it is not meant for. Such act is an unauthorized disbursement of money or other assets for personal gain. Misappropriation is the highest type of fraud in the public sector. People deliberately convert public fund to personal use without a blink of fear or conscience disturbance (Ibanichuka and Onuoha 2012).
This type of fraud is committed by the following means (as provided by Udoayang and James 2004):
- Outright taking away of corporate or government assets for personal use.
- Payment of salary for non-workers.
- Payment for fictitious purchase and contract.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitute of individuals or elements that are homogeneous in description.
This study was carried out to examine The Effect Of Mismanagement And Embezzlement Of Funds In The Public Sector. Two Local Government Areas In Osun State form the population of the study.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered.
CHAPTER FIVE
CONCLUSIONS AND RECOMMENDATION
CONCLUSIONS
Based on the findings of the study, the study concluded that lack of good policy framework and proper internal control system, lack of training of personnel and lack of staff motivation were the factors that influenced mismanagement of public funds in Gbesa and ifelodun local government areas. Further, the study concluded that and its effects on service delivery in policy framework and internal control system, training of personnel and staff motivation have a significant effect on service delivery within Gbesa and ifelodun local government areas.
RECOMMENDATIONS
The study recommends that the government should formulate monitoring and evaluation policy that will guide in accessing the effectiveness of the operations of the county government. The
study also recommends that Gbesa and ifelodun local government areas should adopt good policy framework and proper internal control system to enhance service delivery within the county. Further, the study recommends that Gbesa and ifelodun local government areas should training of personnel as this will sharpen their skills and thus enhance service delivery within the county. The study also recommended that Gbesa and ifelodun local government areas should motivate their staff for better output in their work. This will result to better/improved service delivery.
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