A SURVEY ON THE MISMANAGEMENT AND EMBEZZLEMENT OF PUBLIC FUND AND ITS IMPACTS ON GOVERNMENT PARASTATALS (A CASE SYTUDY OF FIRS, ABUJA)

A SURVEY ON THE MISMANAGEMENT AND EMBEZZLEMENT OF PUBLIC FUND AND ITS IMPACTS ON GOVERNMENT PARASTATALS (A CASE SYTUDY OF FIRS, ABUJA)

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Background to the study

Financial misappropriation is gaining attention throughout the world, with many nations undertaking deliberate and significant attempts to enhance the use of public funds. Financial misappropriation is a global issue that has a significant socioeconomic impact, particularly on poor countries. The phrase "financial misappropriation or embezzlement" refers to the purposeful manipulation of financial statements in order to create an illusion about the riches of a state or corporation (Tutino and Merlo, 2019). Financial misappropriation is defined as the purposeful, substantial falsification of financial statements or financial disclosures, or the commission of illegal conduct that has a material direct impact on financial statements or financial declarations. As a result, this has been the experience of emerging economies such as Nigeria's public sector.

The scourge of public sector financial mismanagement in Nigeria since the oil boom years, when fundamentally poor control mechanisms created a range of vulnerabilities that tended to enable and prolong corrupt activities. This is compounded by the almost complete lack of the concept and principles of accountability in the behavior of the country's public entities. Government parastatal are primarily formed to undertake economic or social development programs or to provide critical services to the people. While we acknowledge that government parastatals have not been able to satisfy their public expectations owing to misappropriation and embezzlement of funds provided to the agency, several panaceas have been offered for the "chronic sickness" that continuously befalls our parastatal in the form of what

Mismanagement of public funds is connected with abuse and probable loss of funds, raising concerns about the integrity of those in control of the funds. Misappropriation is an intentional act of misusing money. It is the redirection of funds and other assets designated for a certain official purpose for personal use or for a purpose for which they were not intended. This is an illegal expenditure of money or other assets for personal benefit. Misappropriation is thus the most serious kind of fraud in the public sector, since people actively divert public funds for personal gain without regard to the consequences. This sort of fraud is done by the following methods: outright misappropriation of business or government assets for personal use; payment of salary to ghost workers; unauthorized use of public funds or assets; payment against uncleared checks, and so on (Aramide  & Bashir, 2015).

The effect of fraud on any organization has serious consequences for either the public or private sectors, with most misappropriation cases resulting in serious economic effects on the economy, such as loss of funds, assets, revenue intended for current and capital expenditures, and a lack of funds for the provision of socioeconomic infrastructure for the public. The issue of misappropriation and embezzlement of public funds in Nigeria resulted in an economic slump, which prompted the government to impose certain harsh measures. Misappropriation of public funds impedes the supply of essential social and economic infrastructure, as well as the financial growth of the country. Although there is scattered literature on corruption in the public sector, none has been directed specifically towards mismanagement of funds in parastatals. As a result of this gap, and in an effort to offer recommendations to curb these unethical occurrences in public agencies, the motivation to embark on this research was borne in order to examine the effect of mismanagement and embezzlement of funds.

1.2 Statement of the problem

In Nigeria, the report gathered from the Guardian Editorial Column on August 25, 2019, shows that most Ministries, Departments, and Agencies (MDAs) are guilty of financial wrongdoings and non-compliance with financial regulations despite having a government that has a zero-tolerance for corruption. The nonretirements of overdue personal advances of 4.87billion dollars, no remittance of collected reductions in the sum of 3.79billion dollars, and the existence of a doubtful cash balance of more than $315billion as at December 31, 2016. The sum of 60.39 million naira was claimed to have been used for the purchase of estacode and air tickets for some government officials without evidence, which is against the ethics of financial regulations accompanied by irregularities. These irregularities further include fraudulent financial reporting undertaken to render financial statements misleading, sometimes called management fraud, and misappropriation of assets, sometimes called defalcations, associated with manipulation, falsification, or alteration of public accounting records. The implication of this on the MDA. Financial misappropriation, the unaudited and non-submission of audit reports to the respective authorities on government financial affairs have violated the breach in financial regulatory and unethical professional practice in the federal public service. The detrimental impacts of public sector corruption substantially lead to an increase in the cost of public goods and services, lead to the misallocation of public resources, weaken policy making and implementation, and destroy public confidence in the government. Systemic corruption in the public sector erodes public trust in government institutions, damages policy integrity, and distorts public sector outcomes. It also has a deep-seated negative impact on the public sector in that it leads to a self-perpetuating organizational culture of corruption. The vested interests of the different actors in the system make systemic corruption very difficult to fight. Therefore, it is against this backdrop that this study seeks to examine the impact of mismanagement and embezzlement of public funds on government parastatals using the Federal Inland Revenue Service (FIRS) as a case study.

1.3 Research questions

The research is guided by the following research questions

1. What is  the nature of mismanagement and embezzlement of fund in the public sector?
2. What are the factors that enhances  mismanagement and embezzlement of fund in the government parastatals ?
3. What are the effect of mismanagement and embezzlement of fund in the public sector?
4. What is the extent at which such irregularities and corrupt practices affect public  service delivery?

1.4 Objectives of the study

The main focus of this study is to examine the impact of mismanagement mismanagement and embezzlement of public fund on government Parastatal. Specifically the study seeks:

1. To determine the nature of mismanagement and embezzlement of fund in the public sector.
2. To investigate the factors that enhances  mismanagement and embezzlement of fund in the government parastatals .
3. To ascertain the effect of mismanagement and embezzlement of fund in the public sector.
4. To determine the extent at which such irregularities and corrupt practices affect public  service delivery

1.5 Research Hypotheses

The following null hypotheses will be tested in the study:

HO1: The nature of mismanagement and embezzlement of fund in the public sector is prevalent.

HO2: There are no factors that enhances  mismanagement and embezzlement of fund in the government parastatals.

HO3:  There is no significant effect of mismanagement and embezzlement of fund in the public sector.

HO4:  The extent at which financial irregularities and corrupt practices affect public service delivery is low.

1.6 Significance of the study

 The significance of this study can not be over stressed. It will proffer information on the structure and administration of parastatals and relate those variables to funding, embezzlement, mismanagement, and how they have crippled the efficiency of parastatals. Findings from the study will serve as a veritable source of information for stakeholders to proffer interventions which will address the problem. The study will also serve as a wake-up call to the incumbent government on the need to never relent in the fight against corruption and ensure that the established commissions continue to do their job in order to curb irregularities in the public sector. Finally, the study will add to the body of empirical literature and serve as a reference material for academia and students who wish to conduct further studies in related fields of study.

1.7 Scope of the study

The scope of the study borders on the impact of mismanagement and embezzlement of public fund on government parastatal. The study further x-ray the factors that breed these corrupt and unethical practices for a period of ten years (2010 to 2020) and how this would affect the service delivery and efficiency of the government agencies. The study is however delimited to Federal Inland and Revenue Service Abuja.

1.8 Structure of the study

To achieve the purpose of this research. The study is divided into five inter-connected chapters, ranging from chapter one to five.

In this chapter one the researcher has been able to give an introduction to the work, state the problem that necessitate this study, outline the questions this work seek to answer as well as the objectives it hopes to achieve and statement of hypotheses. The scope and limitations of this study were also outlined.

Chapter two deals with literature review and theoretical framework. Chapter three discuss the methodology to be used in gathering data for this study. Chapter four delves into data presentation, analysis and interpretation of results. while chapter five deals with the summary, conclusion and recommendations.

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