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This chapter is concerned with the following:
– Background of the study
– Statement of the problem
– Objectives of the study
– Significance of the study
– Research questions
– Delimitation of the study
– Limitation of the study
– Definition of some concepts
1.1 Background of the Study
It is an established fact from a practical point of view that some government entities or ministries in Nigeria do not pay appropriate attention towards establishing and maintaining a good accounting system, be it financial or management wise. The reason for this practice is that there entities provide either essential or social services and are not profit oriented and that the caliber of staff who handle various activities are sub-standard.
Although, there are noticeable changes in the handling of finances and accounts in some of these government parastatals due to recruitment of qualified state, yet a total change is imperative and can only be possible if the old system, which is fundamental ceases to have influence on the current standard accounting practices. Institute of Management and Technology is a government entity owned by Enugu State Government with the institution pay appropriate attention towards maintaining a good Financial and Accounting system is the question that stimulates the case of this study, and the case of Institute of Management and Technology Financial Accounting System is the basic area of concern.
The Institute of Management and Technology (IMT), Enugu came into existence under the then East Central State-Ajie Ukpabi Asika, Prior to the establishment of the great IMT, there existed up till 1967 the College of Technology, which offered courses in Engineering and Laboratory Technology leading to the award of Ordinary Diploma.
The College of Technology was part of the ministry of education and the ministry controlled it. The Ministry of Establishment controlled the Institute of Administration while the Co-operative College was directly under the Ministry of Rural Development. All these institutions were stopped by civil servants who were posted there form the Ministry and could be re-posted to other departments or units according to the needs of civil service.
In 1970 there arose the need to establish a higher institution of learning for upgrading and training of our men and women in technological management and engineering fields. This need was pursued vigorously and in October 1971 the Ukpabi Asika administration decided to merge the former College of Technology with the Institute of Administration. To give effect to this decision both the Institute and the College came under the unified control of the cabinet office on 1st April, 1972.
In October of the same year the Administrator of the Eastern Central State appointed a provisional council. This council was charged with determining and recommending to the government on appropriate structure of an autonomous, technical as well as professional and managerial man-power in the subject areas indicated by the state and national needs. The council pursued its task with vigor and vision and submitted a report early in April 1973. Thus on 31st May 1973 the Edict No. 10 of 1973 titled “The Institute of Management and Technology Edict 1973” was promulgated.
The Edict took effect from 1st July 1973 and thus gave birth to what is now known as the Institute of Management and Technology (IMT), Enugu. Dr. Ukwu .I. Ukwu became the first Rector and the first Registrar in the person of Mr. B.O. Akwu-Kwuma. The Institute of Management and Technology, Enugu is the second oldest polytechnic in Nigeria.
1.2 Statement of the Problem
The challenge to write or make this research has not being without problem, base on the experience of one of the researchers during her I.T.F with the Institute of Management and Technology Bursary Department during her Nigeria Certificate in Education (N.C.E) Programme. The researchers noticed that there is a higher rate of fraud and financial misappropriation by the fraud talented personnel in accomplishing their dubious aims in the Bursary Department of the Institution.
The financial accounting system of the institution is not properly recorded which led to the ascertainment of ghost works almost every month. To make out-look to the Institute of Management and Technology Financial Accounting System to identify the above problems or the causes of the above problem stimulates this research.
And also, we want to make contribution to Institute of Management and Technology Internal Control System to make it more effective, since the reliability, validity and importance accord to the accounting system depends on the soundness and efficiency of the internal control system.
1.3 Objectives of the Study
Carrying out a research study on the Financial Accounting System of Institute of Management and Technology, the researchers have the following aims and objectives in mind.
a) To ascertain whether the control system is adequate and effective and whether the control system take appropriate and prompt actions to correct adverse deviations.
b) To determine if financial activities are planned and forecasted arising there from are based on valid and scientific assumptions.
c) To determine whether the present operating system control the receipts and payments of the institution accurately. These aims and objectives will critically view the system of financial accounting and internal control of the institution’s Bursary Department.
d) To examine whether there is perfect synchronization between the amount received and the amount paid by the institution.
1.4 Significance of the Study
The importance of this study cannot be over emphasized hence, its relevance can be viewed at in different perspectives. A part of the requirement for completion of Nigeria Certificate in Education (N.C.E). The study is serving vital role towards the wrile’s programme, which enables his achievement of academic pursuance and completion. It enables the reader to know what a system of Accounts, its components and how the inefficiency of any of its elements can adversely affect the accounting system.
Furthermore, it is a pleasant role of the study to provide positive rectifying solutions and suggestions and at the same time portrays the defect of the system of account and its component that has been advantageously used by fraud talented personnel to achieving their dubious aims.
Finally, the importance of this study will much sanctioned or most of the negative syndrome is well spelt out and the alleviating measures appropriately recommended to enhance the institution’s credibility and confidence on the existing dynamism, documentary evidence authorization, segregation of obligation asset safe guard and independence performance evaluation.
1.5 Research Questions
i. To what degree is the financial activities of Institute of Management and Technology (I.M.T) planned and forecasted?
ii. To what extent is the control system of the Institute of Management and Technology adequate and effective?
iii. To what level is the synchronization between the receipts and payment of the institution?
1.6 Delimitation of the Study
This project is a detailed practical research into the Financial Accounting System of Nigeria Higher Institutions with a special reference to Institute of Management and Technology.
Based on the above, this study is delimited to Financial Accounting System of Institute of Management and Technology Bursary Department and Personnel of the Bursary Department.
1.7 Limitation of the Study
This research work encountered some set back due to the following factors:
a) Time: Time factor also contributed some obstacles the research work since other programmes were too much to attend to previous works. No previous work on this research was carried out on this topic to stand as a guide for further research and development, most data, information were collected personally through some friends and colleagues plus experience one of the researchers acquired with the Bursary Department during her industrial attachment in the course of her Nigeria Certificate of Education (N.C.E).
b) Lack of Perfect Co-operation from some of the Bursary Department: Some of the Bursary Department did not give some true facts of their accounting systems only some few facts were disclosed to the writers or researchers.
c) Funds: Money was not also available to warrant journey to other Higher Institutions. The above mentioned reasons posed limitation to this research work.
d) Attitudes of Respondents
e) Attitude of Group Members
1.8 Definition of Terms
Terms found in this work should be continued as defined below:-
The Board: Refers to the Board of Governors of (I.M.T)
Authority: Refers to the highest power body of the Institute of Management and Technology with the Rector as the Chief Executive.
Paying Unit: Refers or means any unit that can incur expenses on behalf of the Institute of Management and Technology.
Head: Refers to a unit of account.
Sub-Head: Means sub-division of a department.
Section: Means or refers to a division of a department.
Estimate: Means an authorization granted to the finance committee to make expenditure and incur obligation for specific purposes.
Expenditure: Means actual expenses chargeable to an estimate.
Vote: Means funds allocated to a Head.
Revenue: All income accruing to the Institute of Management and Technology.
Below the Line: Means account belonging to another party other than the Institute of Management and Technology for example, finance directly belonging to students of Institution of Management and Technology is a more custodian in this case.