CHAPTER ONE
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 abscorndmentof 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 impress for personal allowance; The Unauthorized spending of public funds or asset; making Payment against unclear 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 examine if there is any significant relationship between financial mismanagement and national development
- To examine the effect of financial mismanagement on economic growth
- To ascertain the effect of financial mismanagement on the infrastructural development of Osun state
- To explore the role of government in curbing financial mismanagement
- RESEARCH QUESTIONS
The following research questions were formulated by the researcher to aid the successful completion of the study;
- Is there any significant relationship between financial mismanagement and national development?
- Does financial mismanagement have any effect on economic growth?
- Does financial mismanagement hinders infrastructural development of Osun state?
- Does government play any role in curbing financial mismanagement among public servant?
- RESEARCH HYPOTHESES
The following research hypotheses were formulated by the researcher to aid the completion of the study;
H0: There is no significant relationship between financial mismanagement and national development
H1: There is a significant relationship between financial mismanagement and national development
H0: Financial mismanagement does not hinders infrastructural development of Osun state
H2: Financial mismanagement does hinders infrastructural development of Osun state
1.6 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
1.7 LIMITATION OF THE STUDY
The study was confronted with logistic and geographical constraint
1.8 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
