Title page i
Declaration ii
Certification iii
Acknowledgements iv
Dedication vii
Table of Contents viii
List of Tables xiv
List of Figures xvii
Abstract xviii
1.1.1 Financial Control 3
1.1.2 Institutions of Financial Control in Public Sector 5
1.2.1 Research Questions 10
2.3.1 Powers and Responsibilities of Government Financial and
Accounting Officers 31
2.3.2 Duties and Powers of Permanent Secretaries as Accounting
Officers 33
2.3.3 Governmental Budgeting 35
2.3.4 Purposes of Budget 37
2.4.1 The Basis of Government Accounts 58
2.4.2 Treasury Control of Public Funds 63
2.4.3 Financial Reporting in Government 69
2.4.4 Objectives of Financial Reporting in Government 70
2.4.5 Users and Uses of Governmental Financial Reports 71
2.5.1 Definitions and Evolution of Audit 73
2.5.2 Types of Audit 74
2.5.3 Types of Auditors 75
2.5.4 The Need for an Audit 75
2.5.5 Qualities Generally Required of Auditors 76
2.5.6 Threats to Objectivity of Independence of Auditors 80
2.5.7 Appointment and Removal of Government Auditors
(Auditors-General) in Nigeria 83
2.5.8 Duties and Rights of Auditor-General 85
2.5.9 Value for Money Audit 87
2.5.10 Audit Organisation in the Public Sector 88
2.5.11 The Provision of the Civil Service (Reorganisation) Decree
1988 as they affect Government Auditors 89
2.5.12 Hindrances to Performance of Government Auditors in Nigeria 90
2.6.1 Origins of Parliament 94
2.6.2 Functions of Parliament 96
2.6.3 Functions of the Parliament under the Nigeria Constitution 97
2.6.4 Governance and Legislative Performance: A Critical Analysis 99
2.6.5 Hindrances to Legislative Performance 107
2.6.6 Strengthening Legislative Instrument of Control over
Public Funds 109
2.6.7 Other Legislations aimed at Promoting Financial
Accountability in Nigeria 113
3.2.1 The Primary Data Source 116
3.2.2 The Secondary Data Source 116
3.3.1 Sampling Procedure 117
3.3.2 Sample Size Determination 118
3.4.1 Test of Validity 125
3.4.2 Test of Reliability 129
4.2.1 The Chi-Square Test 131
4.2.2 Test of Hypothesis One 132
4.2.3 Test of Hypothesis 2 138
4.2.4 Test of Hypothesis Three 144
4.2.5 Test of Hypothesis Four 148
4.3.1 Legislative Reliance on the Executive for Funding 155
4.3.2 Infringement on Financial Regulations/Instructions 157
4.3.3 Budgetary Infringement 157
4.3.4 Performance of the formal Institutions on Financial control of
public funds 158
4.3.5 Financial Record keeping in Plateau State 164
4.3.6 Requirement for the preparation of Accounts 166
4.3.7 Audit Queries and other financial offences 166
4.3.8 Effect of Financial and Material Support on State Auditors
Independence 174
4.3.9 Measures to Promote Financial Accountability 180
4.4.1 Discussions of Findings in the hypothesis 183
4.5.1 Discussion on Findings in other Analysis 197
4.5.2 Performance of the Formal Institutions of financial control 197
4.5.3 Legislative Funding and Performance 198
4.5.4 Executive influence on State Audit Performance 199
4.5.5 Financial Offences 204
4.5.6 The Dominance of Executive Arm of Government on Financial
Control 205
4.5.7 Measures to Promote Financial Accountability 206

5.3.1 Recommendations Based on Findings in this Research 210
5.3.2 Areas for Further Research 216
Table 1: Budget Amendment Powers of National Legislatures 106
Table 2: Questionnaire Administered and Returned 119
Table 3: Computation of Sample Variance Based on Pilot Study 121
Table 4: Sample Size Distribution Based on Pilot Survey 124
Table 5: Correlation Co-efficient Between First and Second Tests 128
Table 6: Level of Budget Implementation 133
Table 7: Significance of the Legislature in Controlling Public
Finance 134
Table 8: Public Budget Implementation by the Executive
Arm of Government 135
Table 9: Public Budget Implementation by the Executive
Arm of Government 137
Table 10: Reliance of the Auditor-General on Financial Statements
Prepared by the Executive 139
T able 11: Performance of State Auditors 140
Table 12: Effect of Reliance on Financial Statements Prepared by the
Executive on Performance of State Auditors 141
Table 13: Effect of Reliance on Financial Statements Prepared by the
Executive on Performance of State Auditors 143
Table 14: Performance of the Public Accounts Committee (PAC) 145
Table 15: Influence of PAC on State Auditors 146
Table 16: Quality of PAC Performance and its influence
on State Auditors 147
Table 17: Qualification of Treasury Staff 150
Table 18: Financial Records Kept 151
Table 19: Treasury Operating Staff Qualification and Number
of Financial Records Kept 152
Table 20: Treasury Operating Staff Qualification and Number
of Financial Records Kept 154
Table 21: Effect of Financial Support from the Executive on Legislative
Performance 156
Table 30: Operation of Financial Control by the Executive 159
Table 31: Quality of State Audit Work 161
Table 32: Effectiveness of the Checks and Balances on Public Funds 163
Table 33: Why Proper Financial Records are not Kept 165
Table 35: Audit Queries and Amount Involved 167
Table 36: Nature of Financial Offences that gave Rise to Audit
Queries 169
Table 37: Disposal of Audit Queries by the Executive Arm of
Government 171
Table 38: Satisfaction with the Follow-up by the Executive Arm of
Government on Issues Raised by State Audit 173
Table 39: Level of State Auditors’ Independence in the Performance of
Its Audit Work 175
Table 40: Financial and Material Support 177
Table 41: Effect of Financial and Material Support on State Auditors’
Performance 179
Table 42: Measures to Promote Financial Accountability 181
Table 43: Budget Implementation as Approved by Legislature 185
Table 44: Influence of Budget Implementation on Legislature Oversight
Function 187
Table 45: Budget Size and Actual Expenditure 191
Table 46: Statement of Statutory Allocation and Vat 1999-2003 201
Table 47: Total Internal Revenue Collection 203
Table 22: Payment without authorization 245
Table 23: Payment without vouchers 246
Table 24: Absence of prepayment audit 247
Table 25: Payment without supporting documentation 248
Table 26: Expenditure not included in approved estimate 249
Table 27: Exceeding approved budget limit 250
Table 28: Under-funding of approved budget 251
Table 29: Non-funding of approved estimate 252
Table 34: List of accounts to be maintained 253
Figure 1
Budgetary Cycle 41


Financial matters are so important that they receive constitutional recognition. To avoid abuse, the 1999 Constitution of the Federal Republic of Nigeria, provides a series of checks and balances over public finance by sharing financial responsibilities among the Executive, the legislature and the Office of the Auditor-General. The research sought to evaluate the effectiveness of the checks and balances on public finance in Plateau State. The research also set out to recommend measures that will enhance the discharge of financial accountability. In this research, four hypotheses were formulated and tested. The primary data was obtained through the administration of questionnaires, interviews and actual observation. This was supplemented with secondary data. The technique of simple random sampling was used in the questionnaire administration. The population of the study was 386 out of which a sample of 160 was studied. The chi-square (x ) test statistics was used to test the four hypotheses. Percentage analysis was used to investigate issues considered relevant to this research but were not covered by the hypotheses. The findings of this research indicate that the public budget is not a significant instrument of legislative control over public finance in Plateau State; the reliance of Auditor- General on the financial statements prepared by the Executive arm of government does not significantly influence his performance; the quality of legislative financial oversight has a significant effect on the State Auditor-General and qualification of State Treasury staff is independent of the number of financial records kept by them. The research shows that budgetary non-compliance is quite common. Infringements on financial rules and regulations are also common. The Public Accounts

Committee of the State Legislature never met to consider the report of the Auditor- General between 1999 and 2003. The implications of these findings are that the legislature is unable to discharge its Constitutional responsibility using the public budget; the weakness of the legislature adversely affects the Auditor-General and poor financial record keeping is not solely attributed to the qualification of those who maintain them. The study recommends a balanced redistribution of financial powers among the Executive, the Legislature and the Auditor-General to promote the discharge of financial accountability in Plateau State.




Nigeria, a federation of thirty-six States and Seven Hundred and seventy-four local governments, was a colony of Britain but became an independent State in 1960. It has a population of nearly one hundred and twenty million people and the dominant source of income is oil (Oladosu and Oyelakin 2003:1).

Nigeria has been divided into six geo-political zones – South-South, South-West, South- East, North- East, North -West and North- Central. Plateau State falls within the geo-political zone of North-Central. The State was first created as Benue-Plateau in 1967. It later became Plateau State with the creation of Benue State in 1976. Nassarawa State was also created out of Plateau State in 1996.

The Nigerian public sector consists of the governments at the Federal, States, Federal Capital Territory, Local Governments and all government parastatals. The public sector plays an important role in economic development. It provides services which the private sector may not be willing or able to provide. Chan (1988:15) argues that

the public sector provides many essential services to society. It plays an essentially compensatory function; that is, it performs those functions that the market economy does not do efficiently or lacks the incentive to do at all.

Musgrave and Musgrave (1976) classify these functions as

  1. Resource Allocation – the provision of public goods and services.
  2. Income Distribution – the adjustment of the distribution of wealth or income in the society to conform to some principle of fairness.
  3. c) Stabilization – the use of fiscal policies to achieve high employment, price stability and economic growth.

In a Federal system like Nigeria, the different tiers of government perform these functions in varying degrees. Governments at all levels desire to deliver good governance to all their citizens. This is because “good governance is central to creating and sustaining an enabling environment for development” (Asselin, 1995:3). A strong link exists between economic development and good governance, and between good governance and fiscal transparency.

The importance of good financial management in achieving the objectives of government has not lost its relevance. Because of this, the financial accountability of most countries is enshrined in the Constitution to facilitate the discharge of financial accountability. Oshisami and Dean (1984:36) remark that in recognition of the importance of finance as a basis for political power, and the opportunities which absolute control offers for its abuse, power over finance is divided, the division being formally recognized Constitutionally in virtually all countries Global practice shows that power over finance is shared between the Executive and the legislature and in some cases with an independent body – the Supreme Audit Institution. Has this Constitutional sharing of power over finance achieved the desired result?

In view of the enormous responsibilities placed on government for the welfare of its citizens, the public sector needs a lot of resources. In pursuit of this, the government needs to put up a framework for the management and control of the public purse. The formalities established in relation to accounting and financial control support the process of governance

  • Financial Control

The term ‘control’ has long been recognised as one of the principles of management. Control exists in most human endeavours. Most authorities agree on what constitutes control. Lucey (1996:137) states that control is concerned ‘with the efficient use of resources to achieve a previously determined objective, or set of objectives, contained within a plan’. Similarly, Koontz, Donnel and Wiehrick (1980:81) define control as the measurement and correcting of activities of subordinates to assure that events conform to plans. Ekwonu (1996:35) states that control ‘is the measurement of the performance of the activities of subordinates in order to make sure that objectives and plans devised to attain them are being accomplished’. All these definitions point to the fact that control exists to ensure that organizational objectives are met through measurement of performance. The control process according to (Koontz et al 1980:722) involves three steps:

  1. Establishing standards
  2. Measuring performance against these standards and
  3. Correcting deviations from standards and plans

Finance occupies a special place in the conduct of government business. Public finance has been defined by Buhari (1993:66) as ‘a branch of economics concerned with the finance and economic activities of the public sector’.

From these definitions, we can state that public finance not just deal with the ways government raises money, but also the manner such money is expended with the aim of achieving economic growth.

In Nigeria, the Federal government raises money through the following major sources: Petroleum profit tax, Mining, Company income tax, Import duties, Export duties, Excise duties, Interest and repayment of loans granted by the government (Buhari, 1993:169).

Others include; Education tax, Value added tax, Pay-as-you-earn, Fees and charges, Royalties, Rent of government property, Grants, aids and loans

The money raised through the above sources is expended on the following items: Administration, Infrastructural services, Productive services, Defense, Interest on internal and external loans, and Diplomatic missions (Buhari, 1993:168)

In connection with government finance, we can identify two basic groups of control- administrative and financial control; the former referring to those techniques which have indirect bearing upon expenditure operation while the latter denote techniques of control relating to fiscal control. The emphasis of this study is on financial control.

Financial control is a very important type of control in the management of government finance. Oshisami (1992:29) defines it as the process which ensures that financial resources are obtained at cost considered to be economical and utilized efficiently and effectively for the attainment of established objectives.

A comprehensive definition of financial or fiscal control is given by Ekwonu (1996:33) as the sum total of the work, which guides, directs and interprets the budget cycle. It covers the activities of the Executive branch, involving finance and the ministries… the audit department and the legislature…

In a democratic era, financial control may operate internally and externally.

Within the Executive arm of government control by the finance ministry is internal while audit by the Auditor-General and legislative oversight constitute external control.

  • Institutions of Financial Control in the Public Sector

There are formal and informal institutions of financial control over public revenue and expenditure. The formal institutions of financial control include the Executive arm of government, Legislature and Office of the Auditor-General or Supreme Audit Institution. The informal institutions of financial control include; the media, the organised civil society and donor agencies.

With respect to the formal institutions of financial control, the Constitution of the Federal Republic of Nigeria, 1999, establishes a cycle of financial accountability for public funds. The cycle provides that:

  • Legislature authorizes expenditure
  • The Executive controls the collection and issue of funds. In   addition, it prepares the accounts.
  • The prepared accounts are audited by the Auditor-General and
  • The Auditor-General submits the results of his audit to   the  Legislature through its Public Accounts Committee (PAC). PAC acts on the report by inviting accounting officers to appear before it where need be.

The wisdom in sharing these responsibilities is that absolute conferment of this power on one arm of government can create abuses in financial administration. In other words, financial administration requires a series of checks and balances so that public funds are not wasted or misapplied. But, is this what we find in practice? Are these checks and balances observed?

The financial accountability cycle provides that the Executive arm of government collects, disburses and prepares the accounts of government. The other formal institutions of financial control are excluded from this very vital stages. Their involvement in public sector financial control is only visible when funds have been expended. Is this not the same as calling a medical doctor to give an autopsy report? What guarantee do we have that this sharing of financial responsibilities promote sound financial management in the public sector? Haven been excluded from the critical stages of collection and disbursement of public funds, can the Legislature and State Audit significantly influence public finance?

In the cycle of financial accountability established by the Constitution, the budget is a legislative instrument of financial control over the Executive. Funds should be expended according to legislative intent as expressed in the budget. Has the Legislature been able to control public expenditure using the budget?

The Office of the Auditor-General is a creation of the Constitution. Therefore his status and duties are constitutionally determined. His basic duty is to report on the accounts prepared by the Executive. In his report to the Legislature he states whether the Executive has complied with legislative approval in its execution of the budget. For the Auditor-General to be able to play this important role he has to rely on the financial data supplied by the Executive. He also needs a strong Legislature to help implement his findings. In practice, does the Auditor-General derive the required support from the Executive and Legislature to perform his Constitutional duty? Has he been able to discharge the functions of his office as stipulated by the Constitution?

Informal institutions of financial control may promote financial accountability over public finance and these include; the mass media, the organised civil society, the World Bank and other international donors.

A vibrant media may promote financial accountability by reporting the findings of the Auditor-General. By exposing wrong doings the media may influence the behaviour of public officials who may not want to be publicly exposed.

The organised civil society too, may play a significant role in promoting financial accountability in the public sector. This can be achieved by an active inter-reaction between them and the legislature. Krafchick and Wehner (2002:1) argue that inter-reaction between legislatures and civil society organisations is increasing in many countries… From the legislature’s perspective, the input of civil society can help to make the legislature’s engagement with the budget more effective.

The donor community today is an important institution that promotes financial accountability in recipient countries. They encourage borrowers to strengthen domestic institutions of financial control. Sahgal (2001:1) states that “most donors are now looking for ways to improve their performance in terms of promoting good governance and accountability.”

While these informal institutions may also promote financial accountability, however, it is the formal institutions that are the focus of this research.

Researches targeted at strengthening the institutions of financial control over public funds have ignored the influence of the link between the institutions of control, especially the influence of the Legislature on State Audit performance. For example the researches of Ball et al (1999); Bartel (1996); Asselin (1995); Premchand (1989); Hogy (2004); Dye and Stapenhurst (1998); Martinez-Soliman (2003); Krafchik (2002); Sahgal (2001) and Ahsan (1994) emphasize strengthening the institutions of financial control over public funds in isolation, without establishing the interaction between them.

These researches address the problem of public sector financial accountability arrangements on institutional basis only. They fail to identify the shortcomings of the present cycle of financial accountability over public funds in Nigeria. This research intends to address these shortcomings in the context of Plateau State of Nigeria.


Control of public finance is very important to public governance. That is why power over public finance is enshrined in the Nigerian Constitution. To promote financial accountability in Plateau State, power over finance is shared between the Executive, Legislature and the Supreme Audit Institution or the Office of the Auditor General. Have these institutions been able to play the roles assigned to them?

It is observed that there is the problem of non or partial implementation of the budget by the Executive arm of government in Plateau State. The budget is the legislative instrument of control over public finance.

Related to the issue just raised above, is the problem of spending without legislative authority. The checks and balances on public finance requires that the

Executive cannot spend without legislative approval. Even where voted funds fall short of requirements, the spending agency must apply for supplementary appropriations provisions and obtain legislative approval for such additional expenditure before incurring them. It has been alleged that this requirement of the law is not usually followed.

The Executive arm of government which implements budgets is required to ensure that expenditures are properly covered in the relevant Appropriation Acts. Funds are supposed to be apportioned to spending departments in line with the approved budget. It has been noted that public expenditure are frequently made on items not budgeted for, which of course means that such expenditure have no legislative approval. Once the budget has been approved, it is alleged that funds are shifted to purposes other than those for which they were meant.

Limits of expenditure are imposed by the budget. However, spending agencies do not observe these limits when incurring expenditure. In the course of budget implementation, a vote book is maintained to ensure that approved budgetary limits are not exceeded. This aspect of expenditure control is often abused. We may ask, why should spending agencies not respect limits when incurring expenditure? With all these abuses, what has happened to the legislative oversight function?

The performance of the Auditor General in Plateau State has been called to question. It is alleged that the Auditor General is incapable of discharging the functions of his office which is constitutionally prescribed. If this is true, why?

The Plateau State Legislature is seen to be weak and unable to discharge its constitutional responsibility of exercising its power of financial oversight on the

Executive arm of government. This problem is alleged to have adverse effects on the performance of the State Auditor General.

Public financial control in Plateau State also suffers from poor financial record keeping. Where financial records are poorly maintained, can the reliance of the Auditor General on these records adversely affect his performance? In addition, if it is true that financial records are poorly maintained in Plateau State, is this a function of the qualification of those who keep these records? How do these problems listed above impact on financial accountability in Plateau State?

Research Questions

The questions of this research are as follows:

  1. Is the Budget a significant instrument of Legislative control over public finance in Plateau State?
  2. Are the rules and regulations governing the use of public funds being observed in Plateau State?
  3. Does the quality of legislative financial oversight enhance the performance of State Auditors?
  4. Does the reliance of the Auditor-General on financial statements prepared by the Executive enhance his performance?
  5. Is there any relationship between educational/professional qualification and the number of financial records kept in Plateau State?
  6. Do the formal institutions of financial control play their roles as spelt out by the Constitution?


This research sets out to evaluate the role of the formal institutions of financial control over public finance in Plateau State. Specifically the research has the following objectives:

  1. To evaluate the significance of the public budget as an instrument of legislative control over public finance in Plateau State.
  2. To determine whether the reliance of the Auditor-General on the financial data supplied by the Executive enhances his audit work.
  3. To examine the quality of legislative oversight function on State Audit performance.
  4. To investigate the significance of the qualification of Treasury staff on the number of financial records kept.
  5. To recommend measures on how to improve financial accountability in Plateau State.


Hypothesis One

Ho.  The public budget is not a significant instrument of Legislative control over public finance in Plateau State.

H1.   The public budget is a significant instrument of Legislative control over public finance in Plateau State.


The budget is an expression of legislative approval on how public funds should be disbursed. Budget implementation is used to judge the Executive’s conformance to this legislative approval.

This hypothesis is formulated to find out whether or not the Executive complies significantly with Legislative approval during budget implementation.

Hypothesis Two

Ho   The performance of the Auditor-General is not significantly dependent on the financial statements prepared by the Executive arm of government.

H1.  The performance of the Auditor-General is significantly dependent on the financial statements prepared by the Executive arm of government.


The Auditor-General is an agent of the Legislature. The Auditor-General has the duty of overseeing the management of public funds and the quality and credibility of governments’ reported financial data. The Auditor-General ensures that the budget is implemented according to legislative approval. This hypothesis will reveal whether or not the Auditor-General is able to exercise his duties inspite of his reliance on the financial statements prepared by the Executive.

Hypothesis Three

Ho   State Audit performance is not significantly dependent on the quality of legislative financial oversight.

H1   State Audit performance is significantly dependent on the quality of legislative financial oversight.


This hypothesis seeks to establish whether the quality of legislative oversight (through its public accounts committee) has any influence on State Audit work. Does the quality of legislative financial oversight influence the work of State Auditors?

Hypothesis Four

Ho:   There is no significant difference between the qualification of treasury operating staff and the number of financial records kept.

H1:   There is significant difference between the qualification of treasury staff and the number of financial records kept.


Where there is a culture of poor financial record keeping, no meaningful control can be exercised. Good financial record keeping is a necessary condition for the production of auditable financial statement. The aim of this hypothesis is to evaluate whether qualification has a significant effect on financial record keeping in Plateau State.


A research on the public sector, especially on financial control is very important. This research is significant in a number of ways.

The research will assist financial policy makers in Plateau State and indeed other States in Nigeria formulate policies that will promote financial accountability. The academic community will benefit tremendously from this research. Other researchers may use this research to investigate further issues on public finance control.

The three formal institutions of financial control in Plateau State, that is, the Executive, the Legislature and the Auditor General will discharge their financial responsibilities effectively if the recommendations of this research are implemented.


This research evaluates the role of the formal institutions of financial control over public finance under a democratic setting. This is because the institutions of financial control are fully operational only during democratic dispensations. The Legislature does not exist during military rule.

The role of the informal institutions of financial control such as the media, the organised civil society and international donor agencies though important are not the immediate focus of this research.

Plateau State which is chosen as the case study is an old State – first created as Benue-Plateau State in 1967. The State has witnessed flashes of democratic rule from 1979 to date.

The research period covers years under democratic regimes. These are 1979­1983; 1991-1992; and 1999-2003. The research period covers ten years of democratic rule. The broken periods are periods of military rule.

The research covers only ministries. Parastatals are excluded because the 1999 Constitution S. 85 (3) does not authorize the Auditor-General to audit or appoint external auditors for government parastatals. Local governments are also excluded since they are guided by a different financial rule called the financial memoranda.


A number of limitations were encountered in this research. The major ones included:

  1. Literature Review – Getting materials for literature review was difficult – An extensive search for literature took over one year. The cost incurred in obtaining the relevant materials was also enormous.
  2. Questionnaire Administration – During the main research, we had to deal with an enlarged number of participants in the research. Since the questions were randomly administered, many of the participants were seeing the questions for the first time. Many of them felt that participating in this research would amount to “leaking of government secret”. They were visibly uncomfortable – that was even in spite of assurances given by research assistants that the information required was strictly for research purposes. Some of them asked for time to make up their minds as to whether to complete the questionnaires. For this category of respondents, research assistants had to plead and make repeated visits before the questionnaires were completed and returned.
  3. Secondary Data Collection – Getting information on public sector activity is difficult. But it is even more difficult getting information on financial activities. Information that is supposed to be publicly available is treated as confidential. Enquiries for financial information are viewed with suspicion. A very high official must authorize the release of such financial information. But getting such an official to authorize the release of the information is pretty difficult. The research assistants were suspected to be agents of opposing political parties. They were thus to be kept at arms’ length. It took a long time to convince the custodians of the required information to release the information.
  4. State of Emergency – The state of emergency declared in Plateau State on the 18th of May 2004 adversely affected this research. The Plateau State House of Assembly, it will be recalled was also suspended during the period. Reaching out to the suspended members to participate in the research was difficult. Even where contacts were established eventually, completing the questionnaire was not seen to be of any immediate importance. Some of the lawmakers told me that their immediate concern was whether they would be reinstated. They eventually participated. Democratic structures were restored at the end of the state of emergency in November 2004. To God be the glory.

Copyright © 2021 Author(s) retain the copyright of this article.
This article is published under the terms of the Creative Commons Attribution License 4.0

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