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THE CONCEPT OF COST MANAGEMENT IN THE MANAGEMENT OF PUBLIC FUNDS. (A CASE STUDY OF ENUGU STATE MINISTRY OF FINANCE AND ECONOMIC PLANNING)
This study is aimed at x-raying the degree to which cost management contribute to the judicious handling of public fund. This is a job, which is left in the hands of administrators, legislators, investors as well as the general public, precaution must therefore be taken to avoid wastage’s of public fund as a result of wrong planning and execution. In conducting on this topic, this project work attempts to find out the concept of cost management in managing public funds. What impact with the concept have on individual employee in an organisation, on the government sector, in generation to come how can it be used to ascertain the possible hindrance of achieving the virtue of public fund management in government quarters, how can it be used to examine the spending activities of the government including the current institutional framework in the government. The validity and reliability of the instrument used in this project work are tired to the most suitable population of the study which include employees and the six division of the ministry which includes treasury, planning, budgeting, administration etc of the Ministry of finance and Economic Planning, there is no doubt that the sampling techniques are effective and the statistical tools such as chi-square rate of response percentage used give clear picture of the identified products and relevant but possible solution. Findings shows that cost management has significant impact in the public sector. Finally, cost management has significant impact on the government and individual employee. In conclusion therefore, the researcher will suggest that effective management of fund is achievable if a cost monitoring unit is established in the ministry and property is give to projects meant to improve public lives and reinforcement of the use of warrant in authorization of expense from the government treasury.
1.1 Background of the Study
It has been said that government is the largest single in every country. This is because it covers a wide range of human activities.
The main purpose of government everywhere in this world is to give some services to people who live and work in the state. How well a government serves its citizen determine the degree of the acceptability and continuity of it.
This question of being responsive to the needs and requirement of the governed can be assessed by the degree of honesty, accountability and produce in the management of public funds. In a nutshell, it is government responsibility to see that the public money is not wasted, that it is used with the greatest efficiency and is applied only to the purpose which are authorized by law. To achieve this is to be cost conscious, strict control over spending of public money should be emphasized if the need is to be achieved.
This situation in Nigeria has been reported non-handy as regards the management of public funds observation and news of misdirected resources and uncompleted projects and the manageable surviving ones may be as a consequence of corruption and inefficiency in the public sector.
Opera (2006:7) is of the opinion that corruption in Nigeria is a way to life with most people pregnant with the spur to get rich quicker. This issue of corruption and inefficiency is complex.
When one has risen to position of eminence, there is notable and usually a long line of people looking up to him for assistance. In large part however ones high principles will be subject to ridicule should he turn his back?
Consequently, since Nigeria independence in 1960, many government and their agencies have failed, because or outright squandernamia in the system. Unfortunately, however, financial regulation and economic policies do not only fail to meet the requirement of the modern economic, but also are poorly and ridiculously implemented, resulting in huge amount of financial loss in system. In fact it is apparent from the available data that Nigeria is no under development but under managed.
From the above numerous, indicators point at the need to secure the public funds and judiciously administer to them for possible growth and benefit of the society at large.
1.2 Statement of the Problem
The popularity and ability to attract the allegiance of the governed in our modern society is a function of how much of the spirits of stewardship, accountability and prudence with which the authorities look after the resources of the nation.
Achieving cost management in the management of public sector also as it is an area that deserved the best of possible available implemented technologies
- Great attention has not been given cost managers as an effective tool for public funds. This research work attempt to know the usefulness of cost management on the management of public funds.
1.3 Objectives of Study
The objectives of this research work are
- To find out the possible hindrance of achieving this virtues of public fund management in government quarters.
- To seek areas where improvement or amendment may be required in future.
- To examine the spending activities of the government including the current institution frame work in the government.
- To find out how cost management affect the individual employee in the organization.
1.4 Research Question
The research sought to provide answer to the following question as to be able to form opinion on the level of cost management in the government and of course facilities the making of recommendation for improvement or otherwise, appreciate its own performance
- What is the component of institutional frame work of government establishment?
- What is the nature and adequacy of this frame work?
- What are the hindrances to achieving cost management in government establishment?
- What are the consequences of lack of cost management in government establishment?
- What are the possible solutions and strategies in the public sector?
1.5 Significance of Study
The increase in the challenged facing government of the nation is a function of the citizenry. In the exercise of this stewardship certain sacrifices will go with it. The extent to sum total of these sacrifices brought down to an acceptable level, to at least the great and efficiency of the governing authority.
Hence this research work which was intended to addressed these. All important concept of cost management will go a long way to benefit a lot of people especially the following groups.
- The average tax payer who need to understand the working of government spending.
It is only pertinent and traditional that any person who pays tax or contributes to the funds will like to know and of course should know how the money so contributed was utilized and it is the responsibility of the management to do anything within its reach to see that public funds are judiciously and effectively managed and
- The board and management of government par states corporation ministries
In performing this managerial function of planning and control, the
Information about cost is of vital importance to the manager. In choosing among alternatives. Cost data are also needed to make decision such as pricing, volume, make or buy, replacement, assets acquisition etc.
The performance of executives and their subordinates can be evaluated and constructed only when a comparison between the costs actually incurred is made.
Every government body must raise and spend its revenue in accordance with special regulation to ensure that the money will be designated and expanded for purposes.
- Cost of student and academic of business Administration and social services especially in the field of accountancy, finance, public administration etc.
- The legislative at all level of management on issue of spending the national resources in the public of the nation.
Prudence and economic in utilization of public fund are always very essential and legislature and management assume responsibilities for this, if the legislature at all level of management are accountable for how this funds should be shared or persons which are entrusted with these funds ensure proper records of the receipt and disbursement of funds it will go long way for them to achieved their goal and objectives.
- Businessmen involved in government project, contractors auditors etc.
Accountability is not just stewardship of retaining what is entrusted to manage, but that associated with profitability and growth, within a specified time, in other words, it implies prudent employment of scare resources such as men, machinery, material and money which have counter veiling dams to obtain optimum reward. The civil servants, business men involved in government project will benefit from this fund if they can safeguard and expand by considering the accounting practices and reporting procedures.
1.6 Scope of Study
This study covers the activities of the ministry of finance and planning especially the activities of the some division in the ministry. Such as treasury division planning division, financial policy and budget etc. it should be noted that governor and other ministries and department as regards the collection of revenue, disbursement of funds as well as recording of transaction.
In this study, attempt was made to examine the role of some bodies such as the state, the legislative etc.
1.7 Limitation of the Study
In the course of carrying out this study certain, factors limit the activity of the research work which hinder or reduce the essence of this study. Among this are:
- Sample size: sample size is one of the factor which will limit the findings of this research work because an organization was used in carrying out these research work the scope of the study limit the research to ministry of finance and economic planning which does not give the research the opportunity to new cost management affect that other organization.
- Negative Attitude of the respondent: Another factor that wills also limits the validity of the findings of this research work is that the respondent in the organization used as a case study will feel reluctant in giving out information to the researcher.
- Finance: finance was also another factor that limits the activities of this study.
1.8 Definition of Terms
- Cost: the total amount of money that needs to be spent by a business
- Management: a process demanding the performance of a specific function, which could be the process of planning, organizing, directing and controlling organizational resources so as to achieved the organizations goals.