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1 – 10 of over 78000This paper assessed accuracy level in accounting for government funds in Nigeria's federal treasury and their faithful presentation in government financial reporting. It aimed to…
Abstract
Purpose
This paper assessed accuracy level in accounting for government funds in Nigeria's federal treasury and their faithful presentation in government financial reporting. It aimed to determine whether the reported annual balances in Nigeria's financial reporting were reliable or otherwise. Data used in analysis were obtained from secondary sources from federal treasury.
Design/methodology/approach
Ex-post “facto” analysis method was adopted in the study involving the use of statistical techniques of absolute or aggregate mean percentage error derived from differences between recomputed and published fund balances and was employed. This was augmented with interactive review meetings of the initial case research report with the management of Nigeria's audit agency.
Findings
Results distilled from the consolidated revenue fund (CRF), development fund and public debt show that recomputed values were greater than the fund balances in the gazetted financial statements. Results for contingency fund (CTF), federation account fund (FAF), special trust fund (STF) and sundry deposit fund yield equal figures and accurate. The paper concludes that there were serial understatements of the core public fund balances in the financial statements over the years. This trend of reporting incorrect in three core public funds in financial statements rendered Nigeria's financial position unreliable in the affected years for decisions. It also facilitated frauds, mismanagement of funds and corrupt practices.
Research limitations/implications
The scope of the research is restricted to assessment of degree of accuracy in fund accounting, faithful representation of the respective fund balance in the liabilities side of FGN balance sheet and the reliability of the financial position. But, it did not consider or cover the implementation of International Public Sector Accounting Standards (IPSASs) in federal treasury since FGN had not issued any full IPSAS–oriented financial statements as on 2015.
Practical implications
Identification of deficiencies in fund account balances, structural defects in fund accounting and acts of understatement of carrying balances in CRF and capital development fund (CDF) implies that the aggregate core fund liabilities reported in financial statement of government entities without corresponding assets do not actually reflect a true and fair financial position in some countries. It reveals remarkable degree of financial information asymmetry in government financial reporting. Illusionary fund accounting has direct linkage to poor fiscal governance in many sovereign with associated sub-optimal delivery of public goods and service level distress syndrome in many economies; lead to poverty, unemployment, crisis and macroeconomic disturbances.
Social implications
The study contributes to the development of fund accounting system; strengthening government financial reporting architecture and practices. It provides framework for tracking financial information asymmetry in government financial reporting and mismanagement of public funds. It provides platform to effect necessary adjustment (correction) during the “first time 3-year adoption” adjustment window in Nigeria. Flowing from the findings, it advocates for institutionalization of government fund accounting standards and provides evidence for migration to accrual accounting system in countries that have not already implemented it. Evaluation system developed herein will improve fund management in federal treasury and contribute to efficient public financial management, good governance and enhance development of public accounting practice.
Originality/value
This exploratory empirical research is the one to ever evaluate accuracy level of fund accounting in sovereign entities and faithful representation in government's financial position prior to implementation of accrual accounting and financial reporting. The study established substantial level of illusionary accounting for public funds and information asymmetry in published government's financial reporting. It is necessary to rectify these discrepancies in fund accounting and financial reporting prior to and or during the first three years of the IPSAS transition implementation programme. These research deliverables provide adopters with relevant data for adjustment accounting during the transition period in strengthening public financial reporting in order to realize the benefit of full IPSAS accrual accounting.
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Examines the financial accountability implications arising from the adoption of accrual‐based accounting principles by Australia’s largest public sector employee pension fund…
Abstract
Examines the financial accountability implications arising from the adoption of accrual‐based accounting principles by Australia’s largest public sector employee pension fund manager, the State Authorities Superannuation Board of the Australian State of New South Wales (SASB), during its brief existence from 1988 to 1996. While the adoption of accrual‐based accounting principles increased management’s political accountability concerning the performance of SASB’s commercially‐managed asset portfolio, it reduced the level of generational accountability concerning the under‐funding of its major pension fund, the State Authorities Superannuation Scheme (the SAS). Negative political visibility associated with management’s voluntary compliance with a controversial financial reporting standard, together with government’s adoption of accrual accounting, resulted in two major changes in the SASB’s organizational structure. The impact of political visibility on the generational accountability behavior of SASB management is examined by comparing stock and flow funding trends of the SAS over time.
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Solabomi Omobola Ajibolade and Collins Sankay Oboh
The purpose of this paper is to attempt an empirical examination of government budgeting and expenditure processes in Nigeria, a developing country. It examines the current state…
Abstract
Purpose
The purpose of this paper is to attempt an empirical examination of government budgeting and expenditure processes in Nigeria, a developing country. It examines the current state of budgeting and public funds management (PFM) in Nigeria. It also examines the extent to which the government has used the budgetary mechanism to effectively manage the nation’s economy.
Design/methodology/approach
The paper employed simple regression estimation technique for data analysis. Time series data set of budgetary information was constructed from different archival sources over a 16-years period (2000-2015), majorly the national Appropriation Acts, press releases, regulatory and governmental reports, reports of Transparency International, World Bank and Central Intelligence Agency.
Findings
The findings confirm that the nation’s annual budgeting approach is defective and lags in achieving its fiscal objectives. The budget indicates a state of poor accountability and transparency in PFM. Findings also suggest that the level of economic development in Nigeria is not commensurate with the size of government expenditure.
Practical implications
The paper draws the attention of the government to the need to restructure its approach to budgeting and adopt a more resilient approach that suits its environment and economic peculiarities in effort to ensure efficient management and accountability of public funds. The paper also offers value to other developing countries. It provides empirical evidence that explains an aspect why the African continent remains underdeveloped hitherto.
Originality/value
This paper lends a voice to the call for a restructuring of the Nigerian budgetary system and its implementation strategy. It advocates for the adoption of an alternative budgeting approach that matches Nigeria economic realities. The paper demonstrated that the traditional budgetary approach being used by many developing countries is limited in certain ways and could hinder sustainable development.
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Julius A. Nukpezah and Sawsan Abutabenjeh
The purpose of this paper is to draw on the theory of institutional isomorphism to investigate how Mississippi’s centralized cash management policy affects the cash management…
Abstract
Purpose
The purpose of this paper is to draw on the theory of institutional isomorphism to investigate how Mississippi’s centralized cash management policy affects the cash management practices in the state’s rural and urban counties.
Design/methodology/approach
The study uses a sequential exploratory mixed methods design involving a qualitative documentary analysis and a quantitative analysis of a survey of Mississippi counties.
Findings
The study finds that institutional isomorphism drives cash management practices in the counties by influencing how they follow state and agency mandates. Moreover, while urban counties have superior socio-economic indicators compared to their rural counterparts, no differences exist regarding standardized financial indicators, which suggest that local governments in the state may be imitating the practices of one another.
Practical implications
First, states should consider the different financial and economic conditions of their local governments when prescribing cash management policies because uniform policies could stifle local innovation and reduce efficiency in cash management. Second, when there is pressure from a higher-level government or a state agency, local governments may end up imitating one another rather than exploring opportunities for innovation within state policies. Third, state policies should consider requiring education and training in cash management practices that help identify strategies to add value to public funds within the scope of local fiscal capabilities.
Originality/value
The study uses one state to investigate a unique case of centralized cash management practices. The lessons learned can apply to other states seeking to develop a policy for their small local governments without placing the larger ones at a disadvantage.
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Luís Leonardo Cumbe and Helena Inácio
The purpose of this paper is to evaluate the impact of external audit on the management of the Common Fund of the Mozambique National Institute of Statistics (INE).
Abstract
Purpose
The purpose of this paper is to evaluate the impact of external audit on the management of the Common Fund of the Mozambique National Institute of Statistics (INE).
Design/methodology/approach
This paper followed a case study approach of the INE Common Fund that was based on the qualitative evidence from the content analysis of the external audit reports, annual plans of activities and budget for the past seven years and interviews with middle managers of the INE.
Findings
The research found that external audit has a relatively significant impact on the management of the INE Common Fund. The authors attribute the positive impact to the high concern of management to implement the external audit recommendations, associated with the financial dependence between the agent (the National Institute of Statistics) and the principal (Fund Donors), explained through Laughlin’s Model of Accountability.
Practical implications
The results indicate that external audit associated with the financial dependence of the agent on the principal has a significant impact on the accountability. Thus, it contributes to assist in the formulation of public policies on external financing to developing countries.
Originality/value
Most of the studies on external audit and accountability are from countries with more developed economies than Mozambique’s, without heavy reliance on external financing, and these studies analyse the audits carried out by public audit institutions. This research explores the phenomenon in the context of external financing to the State Budget by governments and international organisations.
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Yuchen Gao and Yimei Hu
This study aims to explore key factors and specific ways for the upgrade to hybrid incubators in the context of China. A hybrid incubator means that a technology-based business…
Abstract
Purpose
This study aims to explore key factors and specific ways for the upgrade to hybrid incubators in the context of China. A hybrid incubator means that a technology-based business incubators (TBIs) can implement various distinct value creation processes with the integration of the advantages of non-for-profit and for-profit TBIs at same time as Chinese government now requires government-sponsored non-for-profit TBIs to be profitable self-sustainability with less dependent on direct public subsidies, aiming to motivate these TBIs to provide higher quality services for their tenant new technology-based firms (NTBFs).
Design/methodology/approach
This study conducts a single in-depth case-study of Tuspark Incubator (located in Tsinghua Science Park [TSP]) with categorical analysis.
Findings
Three factors, i.e. incubation subdivision, intermediary platform and proactive approach, are found to be essential for a formerly government-sponsored TBI’s upgrading. Incubation subdivision enables Tuspark Incubator to create multiple incubation processes with incubator characteristic variables of both non-for-profit and for-profit incubators; with the establishment of intermediary platform, Tuspark Incubator provides specialized business support and high-quality networking from relevant specialized service organizations external to the incubator; more proactive approach with equity investment on incubating firms from Tuspark Incubator help to generate social welfare and financial profit at the same time.
Practical implications
For the incubators’ managers, incubation subdivision enables TBIs to operate for-profit and non-for-profit processes at the same time and provides different specific needs; more open intermediary service platforms can leverage the full potential of the actors in innovation system and help TBIs to save resource when upgrading to hybrid incubators; proactive approaches nurture learning climate and entrepreneurship environment to enhance the successful rate on NTBFs inside incubators and provide main profit source for incubators. For policy makers, using proactive approaches including creating a good milieu for incubation on technology-based start-ups and the design of public guidance funds is increasingly crucial.
Originality/value
This research is a pioneering study on the key factors and specific ways for the upgrade of government-sponsored non-for-profit TBIs in China to hybrid for-profit and non-for-profit incubators.
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Scott Douglas and Tom Overmans
The principles of public value management (PVM) have greatly inspired public management practitioners and scholars, but the application of these ideas to the everyday practice and…
Abstract
Purpose
The principles of public value management (PVM) have greatly inspired public management practitioners and scholars, but the application of these ideas to the everyday practice and research of government has proven to be more difficult. This article formulates propositions for how the principles of PVM could affect one of the core processes of government: budgeting. These propositions can inspire practitioners and be tested by future researchers.
Design/methodology/approach
The article identifies the core principles of PVM and applies these to the budgeting functions of the allocation, management and accountability of public money. This exploration leads to a first conceptualization of “public value budgeting” and generates 12 propositions about how budgeting will change and remain unaltered under the influence of PVM.
Findings
The central argument is that “public value budgeting” could promote more coordination and integration between public funds and community resources, more involvement of societal stakeholders in the budgetary process and more continuous tweaks and changes to the budget. At the same time, legislative vetoes, financial controls and debates about the best use of public money will remain an important feature of public budgeting.
Originality/value
The article forwards the first conceptualization of public value budgeting, connects the literatures on public value and public budgeting, and offers both a practical application of PVM to public budgeting as well as a concrete agenda for future research.
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The recent financial crisis provides an opportunity to examine the management of local government investment pools (LGIPs). This study examines asset concentration of current…
Abstract
The recent financial crisis provides an opportunity to examine the management of local government investment pools (LGIPs). This study examines asset concentration of current LGIPs to find if investment practices of LGIPs are consistent with the objective of prudent management of public funds. Using cross-sectional data of 72 LGIP portfolios, exploratory factor analysis was conducted. Findings suggest that there are five underlying factors that describe the investment practices of current LGIP portfolios. The findings also suggest that LGIP investment managers considered return on investment when they chose investment instruments. However, LGIP managers put more focus on the safety of investment when they allocated assets in their portfolio.
Lexis Alexander Tetteh, Cletus Agyenim-Boateng, Samuel Nana Yaw Simpson and Daniel Susuawu
In this study, we use neoinstitutional sociology to explore how institutional pressures exerted on Ghana influenced the government’s decision to adopt, implement and use…
Abstract
Purpose
In this study, we use neoinstitutional sociology to explore how institutional pressures exerted on Ghana influenced the government’s decision to adopt, implement and use integrated financial management information systems (IFMIS) for the management of public financial resources.
Design/methodology/approach
Based on a case study of Ghana’s Controller and Accountant General’s Department (CAGD), the study uses a qualitative interpretive case approach as the methodological stance, and some key officials involved in the implementation of the IFMIS project were interviewed and documentary evidence was also analyzed to achieve triangulation of data and results.
Findings
The results show that the IFMIS reform was instigated by two main forces. One is the pressure from external stakeholders like the World Bank related to funding relationships. The other is the indigenous pressures coming from internal stakeholders who felt dissatisfied with the outcomes of previous reforms. The findings also suggest that many contingencies for successful reforms to IFMIS were present in Ghana, such as the commitment of internal stakeholders, the training programs for improving the needed skills of employees, and the will to get inspired by best practices abroad. Nevertheless, ultimate users mostly were hesitant to use IFMIS due to fears of losing their jobs because of institutionalized practices and a lack of IT skills. The study further revealed that, even if many conditions for a successful reform, especially regarding adoption and implementation, are in place, the reform may ultimately fail due to the impact of other factors that particularly regard the use of the newly developed accounting repertoire.
Practical implications
The findings of this study can be considered as a blueprint to emerging economies yet to adopt and implement similar IT-based Public Financial Management Information System (PFMIS). Moreover, given that some ultimate users exhibited resistance to the use of the new system, the results will prompt emerging economies that have not yet implemented IT-based PFMIS to recognize that cultural change management is an inevitable condition for successful implementation and use of IT-based PFMIS.
Originality/value
This study contributes to studies on public sector accounting reform in emerging economies by highlighting how the adoption of public sector accounting reform was instigated by both development partners and indigenous institutions responsible for ensuring effective and transparent management of public funds. Furthermore, unlike previous studies, the implementation team imported business case ideas from the private sector to augment the IFMIS implementation.
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