EFFECTIVE INTERNAL CONTROL AS A TOOL FOR CHECKING CORRUPTION IN LOCAL GOVERNMENT NIGERIA

CHAPTER ONE

1.0 INTRODUCTION

1.1 GENERAL DESCRIPTION OF THE AREA OF STUDY.

According to law dictionary in 1910 by Shumaker and Longsdorf defined corruption as an act done with intent to give some advantage inconsistent with official duty and right of others. In checking corruption in local government Nigeria the need for effective internal control cannot be over emphasized this starts from the fact that there is need to make rules, laws guiding financial management and internal control. For proper discharge of responsibilities, thus internal rules and regulations, financial laws, constitutions, criminal coders, audit act of 1958, appropriate act, treasury circulars and audit circulars represent steps forward in trying to control corruption in local government in Nigeria.

According to section (2) two of the independent corrupt practices and other related offices commission act 2000 of the 1999 constitution of Nigeria defines corruption as wrong doing in a special position of trust which includes bribery, fraudand other related offences, corruption in Nigerian has earned itself official recognition in the sense that the level of corruption has become so alarming that it informed the reasons for the formation of anti-corruption act by the former president OlusegunObasanjo whose seal on the issue assisted in the early drafting of the anti-corruption will which after passed in law, having gone through the legislative process the law cited as prohibition and punishment of bribery, corruption and other related offences act is meant to curb all forms of social, economic, political, corruption that has continually hindered the growth of the nation.

The act is to be implemented through independent corruption practices and allied offences commission to be headed and composed of men and women of high integrity and transparent, honest to be appointed by the president subject to the approval of the national assembly.

According to Merriam Webster (2010) corruption is defined as a dishonest or illegal behaviour especially by powerful people (such as government officials).

However, experience in the past has shown that more often than not, those entrusted with the duty of enforcing or preserving any state law, break and undermine such laws this has been described as “Nigerian” factor this installation of an effective internal control mechanism into local government in Nigeria are important steps towards assuring the general public the accountability and transparency of public officials fo their stewardship as custodians of public resources.

1.2 HISTORY OF CASE STUDY/ORGANISATION

Afikpo North also known as (Ehugbo) is started in the northern part of Ebonyi state Nigeria. Ehugbo is the headquarter of Afikpo North local government. It is the second most popular and second most important city in Ebonyi state.

It is located on six (6) degrees north latitude and eight (8) degrees east longitude it occupies an area of about 64 square miles.

The population of Afikpo is estimated at 156,611 according to the Nigerian 2006 census Afikpo comprises the following Urban communities namely, Amasiri, Ehugbo and Unwana. Afikpo north local government has so many natural resources such as palm oil products, grandaunt products, fishes, sand from their river, stones, rice, cassava, vegetable and so on. It also has a well-structured and known market (Eke market). It has many social amenities like good drinking water, adequate electricity supply and qualified special hospitals (Both private and government hospitals). It has one federal polytechnic and many secondary schools and primary/ Nursery schools scattered everywhere in the locality.

There are six (6) existing department in operation which are agriculture, administrative, education/ social welfare, finance, health and works department.

These six (6) departments make up the local government. However, they have their individual and collective functions as a body under the umbrella of government in the local government, they have about 198 members of staff that are employed by the government who are currently working as civil servants.

1.3 STATEMENT OF PROBLEM

The problem attributed to effective internal control as a tool for checking corruption in Nigerian are as follows.

1. Borrowing of funds for capital project only to be misappropriate by the three wise men chairman, secretary and treasurer.

2. Misrepresentation of actual receipt of funds from federal accounts and VAT receipt.

3. Questionable overhead expenditure on security.

4. Illegal over expenditure

5. Payment of fund for jobs not carried out

6. Payment of council fund fictitious projects.

7. Misappropriation of government fund through collusion by top level officers.

8. Misappropriation of special grants from the federal or state government.

The above issues account fornearly 100% of the cases of fraud, misappropriation and at large corruption

1.4 OBJECTIVES OF THE STUDY

The objective of this research topic according to the problem stated above are as follows:

1. To ensure that he borrowing of funds for capital projects are not misappropriated by the management, three wise men Chairman, Secretary and Treasurer.

2. To ensure representation of actual receipt of funds from federal accounts and VAT receipt.

3. To ensure proper expenditure on security.

4. Payment of council fund and execution of projects paid for.

5. To ensure that jobs paid for are carried out

6. To ensure appropriation of government fund.

7. To ensure appropriation of special grant from federal or state, local government.

1.5 RELEVANT RESEARCH QUESTIONS

The relevant research questions includes the following

1. What ways can we ensure that funds borrowed for capital project are not misappropriated by the three wise men Chairman, Secretary and Treasurer

2. The jobs paid for are they carried out

3. How special grants from the federal, state, local government can be effectively appropriated.

4. How actual receipts of funds from federal accounts and VAT receipt be properly represented.

1.6 DELIMITATION/SCOPE OF THE STUDY

The research work covers a great deal of the topic. It is considered as an evaluation of effective internal control as a tool for checking corruption in Nigeria. Therefore, this research work is limited to Afikpo north local government area AfikpoEbonyi state Nigeria.

1.7 ASSUMPTIONS

The assumptions behind the work are to see that there is greater efficiency in Nigeria when effective internal control is used as a tool for checking corruption in Nigeria.

It is assumed that the result obtained from the case study governmentpalatals.

1.8 SIGNIFICANCE OF THE STUDY

Internal control is an indispensible instrument in management of an organisation but it is regrettable that there is little or no internal control in Nigeria like in federal, state and local government loss millions of naira every year and that is why there is a need to order a full research in it.

The study will therefore go a long way to contribute in appreciating the effectiveness and adequacy of internal control existing in Nigeria.

In summary, the findings and conclusion would be o f help to those interested in making policies and decision in the three triers of government and organization and also it will recommend internal control measures to be adopted by government official in minimizing the imminent losses suffered due to ineffective internal control in Nigeria.

1.9 DEFINITIONS OF TERMS

FRAUD: According to Olufidipe (1994) defined fraud as deceit or trickery deliberately practiced in order to gain some advantage, dishonesty gain which may or may not be financial.

CORRUPTION: According to Merriam Webster defined corruption as a dishonesty of illegal behaviour especially by powerful people (such as government officials)

EMBEZZLEMENT: According toPeter Singer encyclopedia Britannica 1985 defined embezzlement as the illegal transfer of money or property for personal use.

ETHICS: According to Peter Singer encyclopedia Britannica 1985 defined ethics as the discipline concerned with what is morally good, bad, right and wrong.

APPROPRIATION ACT: According to Mark Mcracken 2010 defined appropriation act as legislation under the jurisdiction of the house and senate committee on appropriation that provides budget authority for federal programs to agencies by law such as act has a particular style and title.

ACCOUNTABILITY: according to Merriam (2010) defined accountability as taking or being assigned responsibility form something you are supposed to do.

INTERNAL AUDIT: According to international professional practices framework (IPPF), defined internal auditing as an independent objective assurance and consulting activity designed to add value and improve an organisations operations. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management control and governance possess.

INTERNAL CONTROL: According to Aguolu (1998) defined internal control as the whole system of control, financial or otherwise established by management in order to serve as far as possible, the accuracy and reliability of the records, run by the organisation in an orderly manner and safeguard the company’s assets, it objective being the prevention of early detection of fraud and errors. It may include internal auditing....

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