Effect Of Mismanagement And Embezzlement Of Funds In The Public Sector

Introduction

1.1 Background of the Study

The Mismanagement of public funds is associated with the misuse and potential loss of funds and therefore raises questions about the integrity of the people in charge of the funds. Misappropriation constitute a deliberate act of the misuse of money. It is the channeling of money and other assets allocated for a specific official purpose for either personal use or for what it is not meant for. Such action constitutes an unauthorized spending of money or other assets for personal gain. Misappropriation is therefore the highest type of fraud in the public sector as People intentionally divert public fund for personal aggrandizement without any fear or negative conscience (Ibanichuka and Onuoha 2012). The fraud of this type is committed through the following means; Outright abscorndment of corporate or government assets for personal use.; Payment of salary to ghost workers; Payment for dubious purchase and contract ; inflation of contract prices; The diversion of government funds into private use; use of office imprest for personal allowance; The Unauthorized spending of public funds or asset; making Payment against uncleared cheques; The forfeiture of a disease staff gratuity and pension benefits and the Misuse of medical allowances and reimbursements; etc. The effect of fraud on any organization leads to grave consequences in either the public or private sectors. Kiabel (2002). Most misappropriation cases results in serious economic effects on the economy such as loss of fund, assets, revenue meant for current and capital expenditures, and lack of funds for the provision of socio-economic infrastructure for the public. The study seeks to appraise the effect of mismanagement and embezzlement of funds in the public sector. A case study of two local government areas in osun state.

1.2 Statement of the Problem

The issue of misappropriation of fund constitute a fundamental problem in the public sector. The case of misappropriation and embezzlement of public funds in the Nigeria resulted in the economic recession which led to the implementation some stringent policies by the government. The financial misappropriation of public funds hinders the provision of basic social and economic infrastructures and the development of the nation at large. The problem confronting the study is to appraise the effect of mismanagement and embezzlement of funds in the public sector. A case study of two local government areas in osun state.

1.3 Objectives of the Study

The main study objective is to appraise the effect of mismanagement and embezzlement of funds in the public sector. A case study of two local government areas in osun state; while the specific objectives include

• To determine the nature of mismanagement and embezzlement of fund in the public sector.
• To determine the effect of mismanagement and embezzlement of funds in the public sector.
• To determine the effect of mismanagement and embezzlement of funds in the gbesa local government areas in osun state.
• To determine the effect of mismanagement and embezzlement of funds in ifelodun local government areas in osun state.

1.3 Research Questions

• What is the nature of mismanagement and embezzlement of fund in the public sector?
• What is the effect of mismanagement and embezzlement of funds in the public sector?
• What is the effect of mismanagement and embezzlement of funds in the gbesa local government areas in osun state?
• What is the effect of mismanagement and embezzlement of funds in ifelodun local government areas in osun state?

1.4 Statement of Hypothesis

The statement of the hypothesis of the study is stated in null

Ho The effect of mismanagement and embezzlement of funds in gbesa local government areas in osun state is low.

Ho The effect of mismanagement and embezzlement of funds in ifelodun local government areas in osun state is low.

1.5 Significance of the Study

The study seeks to provide an evaluative appraisal of the effect of mismanagement and embezzlement of funds in the public sector. A case study of two local government areas in osun state. The study shall therefore serve as a veritable source of information to stakeholders to proffer interventions which will address the problem.

1.5 Scope of the Study

The study focuses on the investigation of the effect of mismanagement and embezzlement of funds in the public sector. A case study of two local government areas in osun state

1.6 Limitation of the Study

The study was confronted with logistic and geographical constraint

1.6 Definition of Terms

Misappropriation Defined

Misappropriation constitute a deliberate act of the misuse of money. It is the channeling of money and other assets allocated for a specific official purpose for either personal use or for what it is not meant for. Such action constitutes an unauthorized spending of money or other assets for personal gain.

Internal Control Defined

Internal controls consist of all procedures and methods which the firm applies to protect its assets and conduct a successful operation. The essence is to prevent fraud and losses arising out of fraudulent activities.

Fraud Defined

The falsification and misrepresentation of financial record of the firm

Operations Management Defined

Operations management is the management of business activities to create high efficiency. It is concerned with converting materials and labor into goods and services as efficiently as possible to maximize the profit of an organization.