Public Sector Accounting In Nigeria


Public administration is becoming a fast widening area of study with complex social questions.  As societal needs become more complex the need to concertize a model that will cater for the welfare of the people particularly of the grassroots becomes imperative.[widget id=”related-posts-by-taxonomy-2″]

In the recent times, it has become necessary to critically examine the practice of public sector accountability.  The nature of public sector financial accountability is quite different from that adopted by the private sector.

In Nigeria, public sector accountability is ensured through a system of budgeting, public auditing and inquiries.  This is possible because the public sector accounting system provides the basic information for this operation.

The management controls in public sector are derivable from the budget and the various financial regulations.

However, accountability means that those who are charged with drafting determining and carrying out policy should be obliged to give explanations of their actions to their electorate being a composite group that includes: (Clients, employee and tax payer) that is to have a liability to reveal, satisfy and explain and it calls for openly declared facts and open debate on them.

External audit efficiently studies and performance measurement, all help to improve the public accountability.

The only vital way to discharge the responsibility of public sector accountability is to provide regular financial and related information and annual accounts well explained and presented.  All forms of public accountability should protect the individual form secret, arbitrary and unfair action.

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It is of importance at this stage to review the definition of terms and terminologies used in this work.

Omolehinwa (1990) define accounting system as set of rules, regulation and procedures, which are articulate by appropriate theoretical force into a system.

His definition of accounting system is rather instructive.  He maintained that accounting system processes data into information which are required as input in the decision-making system of the organization.  Financial control is a process revenue ad safeguarding the assets resources are sufficient to implement the plans, policies and generally ensuring value for money in terms of organizations resources management and application.

This is essential in the public sector because public money is being deployed and the success of its deployment is not always easy to measure.


From a political point of view, budget represents a statement of activities, it is an annual exercise of establishing an organization revenue expenditure and income plans and also incorporate proposal for capital development.

In public sector, the exercise culminates in the tax making process and often also includes review of charges and rents where applicable.

The public sector budget may be considered in terms of three aspects as a tool for accountability, as a tool of management an as a tool of economic policy.

As a tool of management, budget as an operational document specifies directly the cost, fine and nature of the expected result.

Budget as an instrument of economic policy has more varied functions.  It indicates the directions of the economy both at national and local levels and expresses intention retarding the utilization of the community’s resources.  The final stage is the appraisal of the implementation budget for accountability.


The part of the written down rules laid down by most authorities to regulate their finances in terms of the hierarchy of rules, that fall between standing orders which are the major formula rules of the authority and normalcy of instruction which prescribe matter in final details.

Financial regulations are usually printed and provides valuable guide for all officers of an authority.


This is an accounting method whereby income and expenditures are recorded and reported in the period in which the related cash receipt and payments occur.


Local government began its long series of reform from the end of the Second World War (1945) when the British government attempted to democratize the system as a basis for social and economic development in 1950’s various attempts were made by the regional government in Nigeria aimed at improving the means of achieving the objective of local government.  The most important enactments were Native Authority Law of 1954 in the Northern Region, the Local Government Law of 1955 in the Eastern Region and Local Government Law in Western Region.

These Laws were concerned with structural changes of local government definition of function, powers, responsibilities and the democratization of the membership of local government councils.

In 1960s they were first establishing plans for rural development by the state military government and sole administrators were appointed to take the charge of Administrative units were credited.  The aim is to aid the process of democratization, decentralization and deconcentration confronted with the desire to find a lasting solution to problems facing the local government and to give greater impetus to socio-economic development at the grassroots.  In the 1976 Federal Military government introduced reforms to local government.  The difference between he 1976 reforms and later 1960s was that the former policy was initiated at federal level and implemented by the state.

The 1979 Nigeria constitution subsequently crystallized the system and enumerated the function(s) of the local government.

On the May 29th 1984, the federal military government appointed the Dasuki committee to review the local government administration and the government in white paper accepted many of the recommendations of that committee, which ushered in some structural re-organization of the local government system.  The new structure of the local government has an administration that is the chairman, and the chief executive of the council.  Four members who are called the supervisory councilors and a secretary to the council who supposed to be career civil servant; one of the councilors must be a woman.

Both the chairman and councilors were elected by the electorate within their constituency. The councilor constitutes the legislative while the chairman the supervisory councilor form the executive. Arm.

The situation since 1988 has been for the Federal government to create local government reflecting the guidelines necessary for the creation.


What made the functions of the reformed local government unique was the mere fact that they were constitutionally mandated and their performance or non-performance primarily depends on the availability of funds and on the personal whims and caprice of a state executive as was the case in the past.  Moreover, the reforms were uniforms nationwide.

It is also expected that reforms of the local government will be continuous process until a pure democratized viable, efficient and effective local government system that would satisfy the interest of the grassroots is found.

At the start of the modern local government were not founded from federal treasuring local government were strictly perceived as part of state government whatever financial assistance whatever financial assistance local government received were part of the revenue to which their state was able to raise.

The 1976 local government reforms and 1988 implementation guideline on local government service established a standardized or uniform multi-purpose, single tier government, structure throughout he federation, hence each local government accounting system is a replica of the other in terms of personal position, function, financial information flow, budgeting and budgetary control system, approved source of revenue and general administration.

Out of all the six department in a local government, only the finance department headed government is authorized to collect and keep all the revenue.

The 1976 financial regulation was issued empowering all officers responsible for the collection and disbursement of public funds to comply with the rules for the operation of various funds.

They are to ensure that adequate control is exercised over the receipts, custody and that all transactions are properly recorded and that all documents and records relating to financial transactions are produced as required by the auditor or to the internal auditor.

An internal auditor is responsible for carrying out an independent appraisal of the accounting financial and other processes of the local government with specific objective, which are enumerated in the financial memorandum.

Under section 83 of the financial memorandum edict, the local government inspector may be appointed by the government in respect of any local government and he makes sure that the local government is discharging its responsibilities for the supervision of its finance as detailed in the financial memorandum.  He also draws the attention of the auditor that is Director of Audit to any matter relating to the accounts, which he considers that require specific examination.

Other functions of the local government include:

Education: Building of schools and administration of education, local government education department sees the recruitment exercise of teachers and their posting and maintenance of teaching services.  Presently, the head of the education department is the secretary, local education authority.  The local government also plays an important role in the adult literacy campaign and adult education.

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