Critical Evaluation Of Accounting System In Non-Profit Making Organizations

Introduction

1.1 Background Of The Study

Non-profit making in its simplest form includes the public sectors, ecclesiastical i.e. churches and mosques, clubs e.t.c established to exhibit. A variety of social economic political and loyal characteristics; it is an organization which cater for services of the general public and a whole and thus with no view of making profit. In this sense it has different objectives and is financed in different ways.

The basic background is to impact the knowledge that no - profiting making organization exist and that they have accounts that they keep among the accounts kept by non - profit, expenditure account, wages account, statement of recurrent revenue, statement of recurrent expenditure to mention but of few public sector. Accounting is made up of many independence departments which are entitles on their own such like the case of the public limited liabilities company which is a legal entity.

The purpose of accounting is non-profit making organization includes the followings to demonstrate the proprietary of transaction and their conformity with the established rules (i.e rules establishing non-profit making organization) to give evidences of accountability or stewardship within the system to provide useful information for good control and efficient management.

1.2 Statement Of The Problem

The problem encountered in the accounting system of non - profit making organization with reference to this research work is as follows:-

The data i.e payment voucher, sales voucher receipt and the likes are delayed in computation and this hinders the progress of the system.

Some of staff is in experienced; they do not even understand reason for operating or keeping the account system.
The corporation cannot increases its water rate because its fixed by the government

1.3 Objectives Of The Study

The objectives of this study includes:-

To evaluate the accounting system of non-profit making organization critically.

To point to areas of weakness in the accounting system

To suggest any remedial courses of action that should be taken to improve the system.

To recommend a set of accounting system which will necessarily fatter the aims of the non-profit making organization?

To examine the rate of efficiency and achievement in the non-profit making organization

1.4 Significant Of The Study

This project works in significant in the followings ways:

To enable improvement on the old system of record keeping that is prevalent in non-profit making organization.

To enable people to understand the system of accounting that is obtainable in the non profit making organization.

To enable non-profit making organization understand what is realized of them by the public and to let them know what information is needed from them.

To make self actualization in people that non- profit making organization generate some revenue for the implementation of their objectives.

To instill the knowledge that it provides financial information useful, for the determining and predicting the flows, balances and financial resources of the government.

1.5 Scope And Limitation Of The Study

The scope of this study will be limited to kwara state water corporation being a good example of non-profitable making organization in the public sector. Due to time and financial constraint, emphasis will be on its background and accounting system.

The value of this limited to certain constraints. The most salient limitation in that the research covers only critical evaluation of the accounting system of the case study that is, kwara state water corporation, Ilorin.

There are some books and record that were not released which are of more value to the research work, because they are termed "official secrets".

Secondly, the study is constrained financially in terms of transportation.

Expenses, purchase of stationery, photocopies and other incidental expenses.

Thirdly, the time within which the project is to be completed is in short. a longer time might have allowed greater evaluation.

Fourth, the hostility faced or received from the respondents that in some members of state of kwara state water corporation ranging from come today, come tomorrow syndrome

Lastly, the data analyzed are ratable to the extent of their validity as applied by the corporation. Therefore, sufficient reliability is major limitation of this research,

1.6 Definition Of Terms

Accounting officer:- this is the title of the post held by the minister of the head of a central government department. He is responsible for the general supervisor of the accounts for the general supervisor of the accounts of this ministry and is expected to comply fully with the checks and balanced spelt of in the existing guide lives and financial regulations. He is responsible for the funds voted to this department by the provisional ruling council (P.R.C) by tradition he also licenses with the public accounts committee on all aspects of financial management.
General warrant; a warrant issued by the minister of finance authorizing the accountant general to make the payment provided in the estimates

Income and expenditure account (statement a financial account or statement that show) the surplus or deficit of fund arising from the operations of a non - trading organization in an accounting period. While such statement are commonly associated with public sector entities they are also prepared by certain private entities such as charities the counterpart to this statement for a trading organization is the profit and loss account. Imprest: an account of cash made to an officer who requires making payment on the authority of an imprest warrant.

Imprest warrant: a warrant issued by the accountant general authorizing on particular officer to receive an imprest.
Treasury: a place where the record of public funds of the nation are kept. A term freely used to denote the accountant generals department.

S.A: sole administrator

G.M: general manager

A.G.M: assistance general manager

ACCT: account

Summary, Recommendation and Conclusion

5.0 Introductions

This chapter contains the summary of the research, recommendation and solutions to problems identified in the research work and conclusion of the study.

This study considered the evaluation of the accounting system of non- profit making organization with kwara state water corporation as the case study. Existing literature relating to the topic were extended and received and useful finding were obtained from the analysis.

Kwara state water corporation like other non- profit making organization play a vital role in the social economic and political growth of a country with a view of fulfilling their obligation to the public funds are allocated by the government and it is highly expected of the corporation to give in details relevant and useful information on how the funds are used and how it operates.

The efficiency of the management of the corporation can be measured through the accounting systems operating in the organization. Different department of the corporation keeps different accounts which are governed by roles laid down for non-profit making transition.

5.1 Summary of Findings

In the process of conducting the study, certain problems are identifies which needs an immediate intervention.
The accounting system used in kwara state water corporation has been used for a very long time. Government is not fulfilling their agreed financial obligation to the corporation funds released by the government are not received in good time.

Figures presented in the analysis are unreliable; they are sometimes manipulated in the account.

Kwara state water corporation being a legal entity with different operational department, some members of staff of the accounting department are experienced. They do not keep proper accounts and the one kept are not operated well, this result in misinterpretation and mismanagement.

As a government owned organization, like any other non-profit organization, kwara state water corporation authorized to give a fixed water rate to the public. The accounts used in the accounting system in the corporation were not all disclosed during the course of conducting the research. Some information that can lead to further investigation were said to be corporation secrets. This is not encouraging and does not give room to critically evaluate the accounting system of the corporation.

The research report shows that means of keeping accounts are needs to be imposed on some ledgers and vouchers can be misplaced, no proper working equipment and machinery for keeping the accounts are not available.

5.2 Conclusion

Kwara state water corporation and non-profit making organization under review needs to render services to the public. To achieve their aims and objectives, funds are to be released to non-profit making organizations accountability should not be over emphasized. There is the need to make it known to the public that through these organizations do make profit; they keep account of all the activities of the organization.

In view of the time limit and little accessibility to data, there is need for other researchers to continue form this point to further expand the subject matter of this researcher.

5.3 Recommendations

In the basis of our finding the following recommendations are advocate.

Modern accounting systems that have been introduced or modified in the accounting principle and convention need to be used in keeping the accounts of the corporation.

Arrangement should be made by the organization to improve the working living condition this in turn improve the welfare of the organization and the growth of the corporation as a whole.

Government should fulfill its agreed obligations financially to the non-profit making organization so as to provide the needed services to public.

The management should work on their public relation which will in turn encourage researcher to expatiate on the accounting system of the corporation so that necessary and urgent invention can be taken to improve, modernize and bring back to existence the loopholes, the weaknesses of the set back of the corporation.

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