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Unique Journal of Business Management Research Vol. 1(3), pp. 034-041, September, 2013
Available online@http://www.uniqueresearchjournals.org/UJBMR
©2013 Unique Research Journals
Unique Journal of Business Management Research
Full Length Research Paper
Public sector accounting and developing economies: A
comparative review and analysis of Ghana and Nigeria
Owolabi Sunday Ajao1*, Ocansey Evans2 and Dada Samuel1
1Department of Accounting, Babcock University, Nigeria.
2Valley View University Adenta, Ghana.
*Corresponding author. E-mail: emilagba05@yahoo.com. Tel: +2348034097016.
Accepted 16 September, 2013
Public sector constitutes the largest sector of the economy of all nations, employs the largest work
force and controls the greatest part of nations’ financial resources. The paper adopted exploratory
research method through literature scrutiny and scanning for relevant facts to assist in the
achievement of the paper objectives. The public sector accounting system of Ghana and Nigeria were
reviewed and was found that some of the differences that exist were as a result of the governance
system (unitary and federal). It was also found that Nigeria has a unique system of allocating revenue
collected to its various constituencies on monthly basis. The two countries are working gradually
toward the implementation and adoption of International Financial Reporting System for the public
sector. Also both countries are using modified cash basis of accounting along side with fund
accounting. The bases of monitoring and evaluating budget are not well defined or benchmarked thus
making performance evaluation difficult. Additionally, section 26 of the Fiscal Responsibility Act is
rarely complied with in Nigeria. It is recommended that Ghana can adopt or modify its system of
revenue allocation to enable fair allocation of resources to the regions even though Ghana is using
unitary system of governance. The paper also recommended that procedures should be put in place to
facilitate the full compliance to the provision of the Fiscal Responsibility Act in Nigeria or be amended
to serve its intended purpose. Again clear performance measurement standards and bases of
monitoring and evaluation should be put in place for the two countries. Detailed and continuous
monitoring and evaluation process throughout the year for enhancement of value for money are further
recommended. Finally, it was recommended that, the Auditor-General should be solely appointed by the
civil service; founded that the auditor-general is appointed by the president in consultation with council
of state (in Ghana) or the Federal Civil Service Commission (in Nigeria). Probably, his appointment by
the president can generate some amount of sympathy or obligation of reciprocity and thereby reducing
his independence.
Key words: Public sector accounting, regulatory framework, conceptual framework, budgeting, auditor-general.
INTRODUCTION
Public sector can be described as entities or
organizations that implement public policy through the
provision of services and the redistribution of income and
wealth, with both activities supported mainly by
compulsory tax or levies on other sectors. That is, it
comprises governments and all publicly owned,
controlled and or publicly funded agencies, enterprises,
and other entities of government that deliver public
programs, goods, or services.
Public sector accounting is a system or process which
gathers, records, classifies and summarizes as reports
the financial events existing in the public or government
sector as financial statements and interprets as required
by accountability and financial transparency to provides
information to information users associated to public
institutions. It is interested in the receipts, custody and
disbursement and rendering of stewardship of public
funds entrusted (Kara, 2012; ICA-Ghana, 2010).
Therefore, the public sector accounting system in many
countries uses cash bases accounting. However,
literature review on existing public accounting revealed
that cash accounting system provides essential
information and it is simple, easier to understand,
facilitate decision making, and much more objective than
other alternatives (Ross, 2003). Nonetheless, the system
is not planned to provide information on the cost of
services, earned revenues, account receivables, account
payable, long-term assets and liabilities, accrued interest
on external debt and stock value (Akenbor and
Oghoghomeh, 2011; Zakiah, 2007; Saleh, 2007; Jones
and Pendlebury, 1984). To add, cash accounting system
is not significantly effective in providing accounting
information for efficient performance of public sector
organization as indicated by Okoye and Oghoghameh
(2011). They further indicated that, the cash accounting
bases has no indication of long-term.
Amayah (n.d.) indicated that, public sector constitutes
the largest sector of the economy of all nations and
employs the largest force. He further said that, public
sector controls the greatest part of the financial resources
of the nation.
The government budget size and the contribution of
public expenditure to Gross Domestic Product are very
great especially in developing economies or counties.
There is a thin line between the public sector and private
sector accounting when looking at concepts and
techniques that are used. Further, the emerging need
and use of information technology by both the public and
private sectors have made the issue of public sector
accounting a pertinent part of accounting studies in the
world (ICA-Ghana, 2010).
It is probably perceived that Ghana and Nigeria have
so many things in common especially in public sector
accounting. Therefore, this paper seeks to perform a
comparative review and analyze the public sector
accounting practices of Ghana and Nigeria. This paper
therefore compared and analyzed the nature of
Government Sector Accounting, conceptual and
institutional frameworks, Compliance of International
Public Sector Accounting Standards (IPSASs), regulatory
framework and budgeting. It is one of the objectives of
this paper to pinpoint some of the major differences in the
public sector accounting systems of Ghana and Nigeria.
LITERATURE REVIEW
Nature of government or public sector accounting
The nature of government accounting has the purpose of
determining how much money was received and its
Owolabi et al. 035
sources, how much was spent and for what purposes and
the financial obligations accrued. Profit is not the main
focus. On like the private sector which has profit as the
prime focus and determine the profit of the business over
a given period. Hence, many factors influence
government accounting such as the role of government in
the different fields like the armed forces, health and
education and the policies set by government to achieve
its aspirations and goals. Thus, government accounting is
interested in information gathering that will enable her to
prepare Receipts and Payments accounts (Omolehinwa
and Naiyeju, 2012).
The practice of government sector accounting evolved
over the years with the focused on cash receipts and
disbursements on the cash accounting basis or modified
cash accounting basis. Hence government revenue is
only recorded and accounted for when cash is actually
received and expenditure is incurred only when cash is
paid irrespective of the accounting period in which the
benefit is received or the service is rendered. It therefore
means that, the amounts incurred by the government in
purchasing fixed assets are treated the same way as
expenses. They are therefore written off as part of
expenditure for the period the costs were incurred (ICA-
Ghana, 2010; Omolehinwa and Naiyeju, 2012; Oecon,
2010).
Since the payments made for the acquisition of fixed
assets by the government are written off in the year of
acquisition irrespective of the useful life of the fixed
assets, it follows that fixed assets like buildings and
motor vehicles which are usually used the preparation of
the balance sheet of a private sector business will be
available in preparing the balance sheet of government.
According to Omolehinwa and Naiyeju (2012), this
explains why, for instance the Accountant-General’s
statement of assets and liabilities of government will not
include anything on the fixed assets of the government.
More so, since fixed assets are not capitalized,
depreciation for fixed is not necessary in government
accounting system that uses cash basis of accounting. It
can also be pointed out clearly that since revenue is
recognized only when cash is received, debtors as it is
known in the private sector will be absent from
government financial statements.
Conceptual and institutional frameworks
Sound public sector accounting rests on an articulate
framework which has been defined to reflect best
practices in the world. To this end, a conceptual
framework for public sector accounting is structured to
reflect objectives and scope, recognition and
measurement criteria, definition and qualitative
characteristics of financial information shown in financial
and accounting reports of public sector accounting
entities (Izedonmi and Ibadin, 2013).
Unique J. Bus. Manage. Res. 036
Izedonmi and Ibadin (2013) explain that, conceptual
framework describes the period or time frame of financial
reporting of government levels. It is the heart of financial
reporting in the government sector. It spells out the
government accounting principles and forms the basis of
the preparation and publication of budgets, maintenance
of complete financial records, provision of full disclosures
and submission to full audit. In other words, the
framework helps monitor incomes, expenses, assets and
liabilities and assist assessment of financial
consequences of transactions and events. This finally
leads to producing user-friendly financial reports on a
periodic basis.
The institutional framework comprises the legal,
institutional and the professional standards that regulate
the public sector accounting. The International Public
Sector Accounting Standards (IPSASs) which is issued
by the International Federation of Accountants
International Public Sector Accounting Standard Board
(IPSASB) is probably the major standard for public sector
accounting. Ghana and Nigeria are signatories to IFAC
and adopts the relevant IPSASs issued by IPSASB. The
International Standards of Supreme Audit Institutions
(ISSAIs) is another institutional framework. These bodies
are of the overseeing the management of public sector
accounting to reflect transparency and accountability
within the wider context of good public governance
(Izedonmi and Ibadin, 2013).
Compliance of international public sector accounting
standards (IPSASs)
The International Public Sector Accounting Standards
(IPSASs) have been accepted by the World Bank and the
International Monetary Fund (IMF) hence, they are
requiring that all countries or bodies use these standards
for accounting for funds. Also, other international
organizations which provide funds to developing
countries stipulate IPSASs compliance as a condition.
Thus, creditor countries are beginning to use public
sector accounting compliance to IPSASs to assure
themselves that funds and grants given are being used in
the public (Izedonmi and Ibadin, 2013). Chan (2008)
described IPSAS as defacto benchmark for evaluating
government accounting processes and practices
worldwide.
The World Bank in collaboration with the office of the
Accountant-General cited in Omolehinwa and Naiyeju
(2011), conducted research and found that the 2010
financial report of Nigeria has no record in the
consolidated account for external aids and grants; no
complete disclosure of financial activities of controlling
entities such as NPA, NNPC and CBN; unrealistic
gains/losses due to foreign exchange were not reported;
payments on behalf of third parties were not disclosed;
inability of controlling entities of the Federal Government
of Nigeria to pay their account as at when due; no
account for undrawn assistance and inadequate
disclosure of cash out of direct controls for instance
under litigation.
However, according to Wynne et al. (2011), some of
the good financial practices identified in Nigeria using the
2008 financial statements include: inclusion of audit
certificate from the auditor general; inclusion four
statements cash flow, assets and liabilities, consolidated
revenue fund and capital development fund and the
consistency of the main totals between them; inclusion of
comprehensive set of notes and accounting policies
including outstanding impress and advances; detailed
schedule provided of internal and external loans; details
provided of subventions to parastatals by the overseeing
of ministry, department and agency; consistency of the
financial statements from t 2005 to 2008 (when the new
format stated); financial statement appear on the internet;
the development of some financial reporting guidelines by
FAAC.
According to Obazee (2008), even though in Nigeria,
government operations and accounts have been
conducted within the general framework of the principles
of fund accounting, there is a major problem when it
comes to the absolute application of the principles to
financial reporting.
METHODOLOGY
The research method adopted here is exploratory
system; this is found to be appropriate for the purpose of
establishing the key issues and variables in explaining
the degree of comparability and areas of deviance. The
source of data is secondary source that is through
historical review of the accounting system by examining
the previous documents, such as legislation, decrees and
professional pronouncements. Archival sources, books
and journals are other sources of information. Also
internet sources provided us with additional information.
The method of analysis is explanatory in nature; this is
done through adequate exegesis of the gathered
information.
Public sector accounting of Ghana and its regulatory
framework
The Public Sector of Ghana constitutes the central
government, ministries, departments and agencies; local
government units-public boards and corporations and
public educational institutions. Stewardship and control,
accounting and accountability, planning and budgeting,
internal and external audit, fund accounting especially
consolidated fund, reporting, public ownership of assets
and liabilities, cash, accrual, modified accrual and
commitment accounting; treasury system of accounting
and financial flows are some of the essential features of
the above organizations (ICA-Ghana, 2010).
Public Sector Accounting has a long history but the first
legislative reference seems to be made in 1954, the Gold
Coast Constitution. However, the reference was oblique
one, contained in Section 68 which provides for all
departments and offices of government to be audited by
the auditor-General. It was therefore assumed that
accounts existed but no obligation was imposed on
anyone for keeping and rendering accounts. Accounts
have been kept and published under the authority of
Colonial Regulations since the establishment of the Gold
Coast Government in 1874. All constitutional legislation
since 1954 has repeated this oblique reference of
accounts of government. But when the country attained
independence in 1957, the first comprehensive attempt
was made to give legislative recognition to the account of
government. This was the Public Account Ordinance, no
37 of 1957. This enactment enabled rules relating to
public accounts. In 1959, three set of rules were issued-
Public Accounts (Railway and Harbours Administration),
Public Accounts (Treasury) and Pubic Account (Audit).
The treasury rule did provide for keeping and rendering
accounts, and a number of rules relating to the manner in
which they should be prepared. For instance, specifying
the period of the financial year, and that the statement
presented to parliament “shall include only sums which
have been actually paid or received within the period of
account” (ICA-Ghana, 2010).
According to ICA-Ghana (2010), before any state
institution can obtain government recognition or funding,
it must be shrouded in government legality, quasi-legality
or some government regulations. This is considered to be
a cardinal principle in every state or country. It further
explained that, the laws are enabling acts and the
regulations provide guidelines for the day to day activities
of the institutions. Hence, almost all institutions of the
governments are covered by laws. This therefore brought
into being the enactment of The Financial Administrative
Decree 1967 (NLCD 165) includes a part VI-Public
Accounts (Consolidated Fund), and others. Some of
these rules were repealed by the 1972 Audit Service
Degree. The legal framework that regulates public sector
financial operations in Ghana consist of: the 1992
constitution, the Financial Administration Act (2003) Act
654, the Financial Administration Regulation (2004) L.I.
1802, the Internal Revenue Act, the Customs Excise and
Preventive Act, The Bank of Ghana Act, the District
Assembly Common Fund Act, Procurement Agency Act
(2003) Act 663, Audit Service Act (2000) Act 584, Internal
Audit Agency Act (2003) Act 658 and other regulations
that parliament may enact from time to time (Centre for
policy Analysis, 2005; ICA-Ghana, 2010).
The regulatory authorities that see to the
implementation and control of these regulations are the
executive and parliamentary control. The executive take
decision on government policies with respect to the
Owolabi et al. 037
financial outlays implications and careful control of
appropriations because all decision taken must be
approved by parliament. No revenue can be levied or
expenditure incurred unless it is authorized by
parliament. Therefore, it is very important for the
executive to obtain approval from parliament on both
revenue raised and expenditure to incur. Hence,
parliament exercise control through three different
phases, namely, appropriation, audit and review by public
account committee. More so, the Ministry of Finance is
empowered by law to oversee the financial affairs of
public corporations with regard to their financial
management (The 1992 Constitution of Ghana; ICA-
Ghana, 2010).
Public sector accounting of Nigeria and its regulatory
framework
The Nigerian public sector includes the federal
government, the 36 states, the 774 local government
councils, all government corporations, commissions and
institutions (Omolehinwa and Naiyeju, 2012).
According to Izedonmi and Ibadin (2013), Nigeria’s
Institutional frameworks includes statutory framework, as
the 1999 Constitution, the Finance (Control and
Management) Act of 1958 as well as the Audit Act of
1956. The Financial Regulations, Treasury and Financial
Circulars and Circular Letters are others. They are
envisioned to guide the day-to-day operations of
government Departments and to aid the accomplishment
of probity and accountability. It also provides, among
others, the various types of funds as the Consolidated
Revenue Fund for the Federation and for States and the
various charges at the federal level and at the state level.
Moreover, the Constitution through the relevant sections,
either at the federal and state level, details the
authorization of expenditure from the Consolidated
Revenue Fund.
The responsibilities of the Minister of Finance and
those of the Accountant- or Auditor- General of the
Federation and the similar Offices at the state level are
delineated by the Constitution. While it is one of the
responsibilities and functions of the Minister of Finance to
issue warrant (or authority) to incur expenditure from any
of the Funds types, the Accountant-General ensures
actual payment, and then the preparation of CRF and
other funds as required by regulations or by the Minister
of Finance.
They further said that, the Finance (Control and
Management) Act of 1958, the Audit Act of 1956, among
others are all aimed at bringing about effective
management and operations of government funds,
including the regulation of accounting format for the
preparation of government accounts, the audit and
accountability in respect of the Federal Government, and
by extension the State Government.
Unique J. Bus. Manage. Res. 038
Budgeting
Budget is a future oriented financial plan of expenditure
preferences of government expressed in monetary terms
for allocating resources among alternative uses, both
within the government and between governments, and
the rest of the economy to implement the dominant
political leadership (Matheson, 2003). Hence, budgeting
lies at the heart of every public sector because of its key
role in the accounting system. This is well posited by
Wysocki (1965).
“All public sector organizations are accountable for the
financial resources, which they have been allocated for
management. In addition to the obligation for preparing a
budget, there are detailed rules regulating the cash
accounts, the bookkeeping and the book closing” (p. 17).
It naturally follows that, the public account system
revolves around budgeting. Hence the accounts must
report how these organizations have been financed in the
form of revenue and how the revenue has been
expensed. Consequently, accounts prepared are
compared with the corresponding budgetary revenues
and the expenditures of public organization (Oecon,
2010). In addition, public accounts are prepared to show
the adherence to and deviation from planned and
executed budget with numerical reports Wysocki (1965).
According to Omolehinwa and Naiyeju (2011), the
government budgeting process in Nigeria involves budget
formulation or preparation, budget approval and
enactment, implementation, and monitoring and
evaluation. However, in Ghana, the budget process
involves budget formulation, authorization, approval,
implementation and evaluation (ICA-Ghana, 2010).
Budget formulation is a key concept in the allocation of
resources. Appah and Coleman (2009) espoused this by
saying that, in Nigeria the budget formulation articulates
the fiscal, monetary, political, economic, social and
welfare objectives of the government by the President. It
makes use of the departmental policies and guidelines
which form the basis of circulars to
Ministries/Departments requesting for inputs and their
needs for the ensuring fiscal periods. ICA-Ghana (2010)
supported by indicating that, the budget process begins
with the issuance of budget circular to all government
units by the Minister of Finance and Economic planning.
Omolehinwa and Naiyeju (2011) explain budget
formulation by intimating that government must consider
funds that will be available for spending at sustainable
level given current and future state of the economy, the
sectors for funds be allocation, projects and programs to
be funded, the expenditure preferences of stakeholders
and the preferences that can be accommodated and
activities that can be undertaken by other stakeholders.
ICA-Ghana (2010) added by suggesting that budget
formulation considers the world’s economic events, future
outlook, income policy, inflation trends and macro-
economic policy of the government.
Budget approval is very essential after it has been
formulated. In Nigeria, the president present the prepared
budget with it accompanied document to the National
Assembly for consideration. The presented budget which
is also known as the appropriation bill is passed into
appropriation act when the National Assembly has
agreed on the budget Omolehinwa and Naiyeju (2011).
On the other hand, In Ghana, after the formulation of the
budget, the cabinet discusses it with the president to
arrive at optimal level of government objectives. But
before then, various sector ministers would have to table
their budgets before parliament for approval. These
sector based budgets are then collated and consolidated
into an Appropriation law by parliament (ICA-Ghana,
2010).
The implementation stage follows after the approval
and enactment. This is the stage where government
collected revenues are spent as authorized by legislation.
In Ghana, at this stage, the Minister of Finance and
Economic Planning issues a general warrant to the
Controller and Accountant-General to utilize monies as
approved by parliament. The Controller and Accountant-
General then issue general warrants to Ministries,
Departments and Agencies, and Treasury Officers for
implementation. In Nigeria too, the Minister of Finance
issues warrant authorizing the Accountant-General of the
federation to disburse monies as planned from the
consolidated revenue fund (ICA-Ghana, 2010;
Omolehinwa and Naiyeju, 2011).
Budget monitoring and evaluation is another important
stage of the budget process. Arikawe (2009) indicated
that, budget monitoring has to do with continuous or
periodic review of program implementation and the
assessment of delivery and the remedial of identified
challenges. He further explained that, monitoring should
address that funds released for specific projects are used
as planned. It should also examine government spending
on purchases and construction activities. Further, it
should measure the efficiency and effectiveness of
government projects. Omolehinwa and Naiyeju, 2011)
continued by explaining that, evaluation should be
concerned with the worthiness of government program or
project with respective to the stated objective by paying
attention to the efficiency of resources.
FINDINGS AND DISCUSSION
The review of ICA-Ghana (2010); Omolehinwa and
Naiyeju (2012) revealed that the public sector of Ghana
consist of the central government, ministries,
departments and agencies; local government units-public
boards and corporations and public educational
institutions. However, the public sector of Nigeria consist
of the federal government, the 36 states, the 774 local
government councils, all government corporations,
commissions and institutions. The differences may be
due to different system of government. Ghana is running
unitary system government while Nigeria is running
federal system of government.
In addition, Ghana has five levels of governance at the
local government. These are the Regional Coordinating
Council, Four-tier Metropolitan Assembly, Three-tier
Municipal/District Assembly, Urban/Town/Area/Zonal
Councils and unit committees. But Nigeria has the main
sources and classifications of funds available to the
government sector of Ghana are tax revenue, grants,
sales of goods and services. According to the 1992 final
account of the consolidated fund, the contributions of
various sources of fund to government were taxes on
international transactions 17%, Value Added Tax,
Personal Income Tax, Domestic Goods Tax, HIPIC,
Grants and Non-Tax Revenue were 28, 28, 13, 5, 7 and
2% respectively (ICA-Ghana, 2010). However, the main
sources of income to the Nigerian government sector are
oil revenue (crude oil and gas sales, and oil tax and
levies) and non-oil revenue (companies’ income tax and
customs and excise duties).
The total revenue received by the Nigerian Government
shared monthly among the three tiers of the government
based on the preceding moth’s collections. The federal
government of Nigeria takes a total of 52.68% of the total
revenue but out of this amount, 48.5% goes into the
consolidated revenue fund, 1% goes into ecology fund
and federal capital territory respectively, and 0.5% and
1.68% goes into the stabilization fund and development
of natural resources respectively. This allocation is done
by the Federal Account Allocation Committee (FAAC)
(Omolehinwa and Naiyeju, 2012).
It was also recognized that the consolidated fund of
Ghana was established by the Financial Administrative
Act (FAA). All revenue collected on behalf of the
government are paid into and all lawful disbursements
paid on behalf of the government out of the consolidate
fund. It serves as the central mechanism of controlling
public funds (ICA-Ghana, 2010). However, the
consolidated fund of Nigeria consist of the Federal
Government of Nigeria (FGN) share from all states, 15%
share of Value Added Tax, all independently collected
revenue of the FGN, cost of collection of revenue by both
FIRS and Nigerian Customs and FGN’s share of excess
crude oil account based on revenue allocation formula
(Omolehinwa and Naiyeju, 2011).
Moreover, it was found out that Nigeria has unique
system of allocating revenue to its various states.
According to the section 162(2) of the Constitution of
Nigeria, the National Assembly is to consider the
populations, equality, internal revenue generation effort,
land mass, terrain state and the population density of
each state. However, Ghana has no such a system. This
may be due to the unitary system of governance.
Further, according to ICA-Ghana (2010), Ghana has
Owolabi et al. 039
five main special funds; namely, the trust funds, sinking
funds, counterpart funds, contingency funds and
resolving funds. All these special funds were established
by the FAA.
District Assembly Fund, Ghana Education Fund and
Road Fund were also created. On the other hand, Nigeria
has two main classes of special accounts. That is,
revenue collection based special accounts and federation
account based special accounts. The revenue collection
based special accounts consist of 0.5% ECOWAS Trade
Liberalization Scheme (ETLS), 2% Levy on Imported
vehicles, 1% Comprehensive Import Supervision Scheme
(CISS) Charge, 2% Education Trust Fund (ETF), 5%
Sugar Development Levy, 7% Port Development
Surcharge Account, Nigerian Export Supervision Scheme
(NESS), Cocoa Levy, 50% Rice Development Levy and
Federal Government of Nigeria (FGN) Bonus Account.
The federation account based special accounts consist of
1.68% for FNG Development of Natural Resources, 1%
for FGN Share of Derivation and Ecology and 0.5% for
FGN Stabilization Account (Omolehinwa and Naiyeju,
2011). It is noticed that the scope and purposes of these
special funds were spelt out. Nonetheless, what informed
the percentages of the allocations is a mystery. To add,
mechanisms put in place to evaluate the performances of
these special funds were not there.
Furthermore, it was found out that, the District
Assembly Fund Act 1993 cited in ICA-Ghana, 2010
indicated that, 15% of the total allocated fund by
parliament and all interests and dividends from the
investment should be retained as reserved fund. This
reserved fund is distributed by allocating 1.5% to the ten
regional coordinating councils, 2% reserve at the
discretion of the regional minister, 0.5% for district
assembly common fund administration, 5% for district
development and the remaining 6% should be reserved.
More so, the remaining amount the District Assembly
Common Fund should be shared by allocating 1% for
human resource capacity building, 35% for national youth
employment program, 0.5% for response initiative, 0.5 for
malaria prevention, 2% for people with disabilities and the
61% left for other projects.
Besides, it was found that in Nigeria, the appropriation
act is not often passed before the new financial year
begins. This makes the compliance to section 26 of the
Fiscal Responsibility Act which requires the Minister of
Finance to prepare and publish an annual cash plan
disbursement schedule within 30 days before the
enactment of the appropriation act (Shehu, 2010).
Moreover, it was found out that budget monitoring and
evaluation involves financial monitoring, physical
monitoring and output analysis monitoring. In Nigeria,
budget monitoring is done by the minister of finance the
budget officers of federations (Omolehinwa and Naiyeju,
2011). But in Ghana, budget monitoring is done at the
assembly level but the bases of monitoring are not
defined. It hardly set benchmarks to measure
Unique J. Bus. Manage. Res. 040
performance. In addition, even though monitoring is
expected to continuous through the year, it seems that
selective and restrictive monitoring takes place (ICA-
Ghana, 2010).
The Auditor-General of the Federation of Nigeria is
unique among all civil servants. The president appoints
him by the recommendation of the Federal Civil Service
Commission but subject to the approval of the senate. He
serves as an external auditor to government ministries.
He is the only civil servant whose position is created by
the 1999 constitution. Therefore, his salaries and
allowances are charged to against the consolidated fund.
He can only be removed from office two-third majority
vote of senate (Omolehinwa and Naiyeju, 2011). In
contrast, the president of Ghana in consultation with the
Council of State in accordance with Article 70 (1b) of the
constitution appoints the Auditor-General. He could be
relieved of his position by the president when he exhibit
misbehavior, incompetence and incapacitation of mind or
body after his appointment (ICA-Ghana, 2010). However,
he reports to parliament; but in Nigeria, the Auditor-
General reports to the senate. This is done to sever as
check and balance of power.
CONCLUSION AND RECOMMENDATION
There are only few differences between the public sector
accounting of Ghana and Nigeria. These differences are
due to differences in the governance. That is, Ghana is
practicing unitary governance while Nigeria is practicing
federal governance. The difference is in the recipient of
report.
Further, there are differences in the allocation of
revenue collected. In Nigeria, there are monthly
allocations of collected revenue to various states and the
central government and with specific percentages for
fund accounts. Ghana has no such monthly allocation of
revenue collected. Rather, in Ghana, there are laid down
percentages for the allocation of District Assembly
Common Fund.
However, the bases of allocating revenue collected to
various states and the central government of Nigeria
were not spelt out. It is also same with the allocation of
the District Assembly Common Fund and other fund of
the government of Ghana. In addition, mechanisms put in
place to check the efficiency, effectiveness and economy
of the utilization of these allocated funds were not
indicated. Therefore a research into the bases of
allocation of funds and the mechanisms to check
efficiency, effectiveness and economy of these funds is
highly recommended.
Based on the finding that Nigeria has a system of
allocating revenue collected to its various states monthly,
it is believed that Ghana can adopt or modify this system
of revenue allocation to enable fair allocation of
resources to the regions even though Ghana is using
unitary system of governance.
Established that, section 26 of the Fiscal Responsibility
Act is rarely complied with, it is recommended that things
should be to put in place to facilitate the full compliance
of this section or the section should be amended to serve
it purpose.
Founded that the bases of monitoring and evaluating
budget is not well defined and benchmarks to measure
performance are not usually set, it is recommended that,
standards should be set for measurement of performance
and the bases of monitoring and evaluation should be set
clearly. Detailed and continuous monitoring and
evaluation should be performed throughout the year. This
will enhance value for money.
Even though, the Auditor-General is appointed by the
president in consultation with Council of State and
Federal Civil Service Commission in Ghana and Nigeria
respectively and report to parliament or senate for check
and balance of power, it is recommended that the
appointment of the auditor-general should be done by the
auditing service. The president’s appointment can
generate some amount of sympathy or obligation of
reciprocity and hence could reduce the independence of
the auditor-general.
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