CHAPTER ONE: INTRODUCTION
1.1 Background of the Study
In the 21st century Ministries, Departments and Agencies (MDA’s) in Nigeria has embarked on the use of Computerized Accounting System (CAS) such as Treasury Single Account (TSA), this has pose serious problem on high profile organizations and institutions.
Ama (2004), defined CAS as an Electronic Data Processing (EDP) machine that uses calculators and computer in collecting information. This author is not at variance with the definition above because, the computer convert financial data or transaction such as; sales, purchases, returns and the likes into useful financial information such as printed report and financial statement for accurate decision making to permit informed judgment. Still Ahmed (2006) posited that, computerized accounting system is to ensure accurate record of financial transactions, effective book management in order to avoid typo errors and improving the smooth running of the business. This author agrees to this assertion because CAS is an accounting information system that collect, process, summarize and report information about a business organization in monetary terms. It also collect data describing the activities of a business, uphold a comprehensive financial records of the business operations as per the Generally Acceptable Accounting Principle (GAAP), transforms the data into information in order to generate financial report as per the requirement of the users.
According to Tanenbaum (2010), computer is an electronic and automated device for processing data and storing the output for future use according to the instructions given to it. Vermant and Shelly (2011) also defined computer as an electronic device, functioning under directives of stored command in its own memory. This author agrees to this definition, because a computer is sensitive to commands; to accept input, process that input and produce information.
Bello (2009) defined accounting as an information system used by
economic units to attain various monetary decisions. Both private and public organizations use accounting to communicate to all stakeholders and other users of accounting information at a particular time about their performance and position in terms of profitability, efficiency, and responsibility Abubakar (2010) and Nzekwe (2009). This author agrees to the assertions of these scholars, this because the author sees accounting to be an information system that allow for the collection, recording, classifying, summarizing and interpreting financial transaction in a significant manner, communicating same to users for fiduciary purpose and to make informed decisions, which would in turn be of benefit all organizations.
IMF (2010), defined TSA as a “unified structure of government bank accounts that gives a
consolidated view of government cash resources”. The author is not at variance to this definition, because TSA is a computerized revenue collection platform for adequate collection of internally generated revenue by public MSAs. It is also seen as a consolidated bank account through which government transact all its receipt and payment.
Recently, the 21st century has brought about changes in Nigeria, the introduction of TSA a computerized accounting system has led to bank liquidity, loss of job, underdevelopment in research institutions and Universities, computer fraud etc. MDAs are mandated to withdraw their fund from banks and channel it to a single account called the Treasury Single Account. Obinna (2015) posited that, removing the treasuries from commercial banks will diminish the account of such banks and the MDAs will not have an opportunity of monitoring their account where it is kept. Balogun, Yusuf and Chiejina, (2015) also stated that, with the single account policy, federal government will not be able to know at a glance the revenue accruing to each ministry or amount debited, because all accounts are joined together. pattanayak and Fainborn (2011) also postulated that, the application of a TSA might involve changes in accounting systems and processes, including the redistribution of accounting roles and responsibilities between the central treasury unit, ministries and spending agencies, this will result to extra cost of training the staffs on the new technology. Oluwatosin (2016) reported that, The Academic Staff Union of Universities (ASUU) pointed out that the implementation of the TSA in university system might change the effective functioning of the institutions, because government allocations are not enough to provide the requirements of the institutions.
It is expected that the implementation of TSA would restore focus on the original purpose of which banks were set up – to collect depositors’ funds (not necessarily government funds), keep them safe; engage in intermediation to create wealth and jobs for the economy and in the process generate profit for itself. Government is also expected to ensure effective allocation of resources to institutions especially the educational sector.
1.2 Statement of the Problem
Scholarly work has proven that computerized accounting system such as treasury single account has pose a serious problem in the 21st century. Clementina (2016) reported that, at the beginning of the first quarter of 2015 N2.2 trillion public funds held by commercial bank was transferred to TSA and this resulted to bank distress. With the high Monetary Policy Rate at 13%, Cash Reserve Ratio (CRR) at 20% and 75% available for private and public sector deposits respectively, implementation of TSA would not favor the banking sector. Bank treasurers expressly said that, the implementation would negatively affect liquidity in the banking system. In relation to this, FBN Capital market stated in its money market reports that the NNPC withdrew about N400 billion from their banks increasing the interest rate overnight to 50 per cent. It was recorded that this pressure was corrected when Federal Account Allocation Committee (FACC) inflow came to the banks within the same period. Oguntodu, Alalade, Adekunle and Adegbie (2016) revealed that, there will be traffic when it comes to transfer of money from commercial banks to Central bank, which would definitely result to the problem of allocation of resources. Research evidence has shown that immediately funds are been transfer to central bank cost of borrowing will shoot up, banks would not only have liquidity problem, it would reduce growth in the bank because they would be unable to create credit, which would result into a new face of recession. Unemployment rate has increase due to the substantial decrease in banking operation.
Empirical researchers have shown that the heads of revenue generating agencies and their head of ministries and department are uncomfortable with the implementation of TSA, because it will limit their control over their funds which they use in funding some extra budgetary expenses Yusuf (2016). Academic Staff Union of University (ASUU) also disregard the implementation of TSA because presently it has caused underdevelopment of research in the Nigerian universities. Human Right Writers Association of Nigeria (HURIWA) said that unemployment will soon sweep across Nigerian employers and family would be affected, thus deteriorating the real purpose which actually guided the TSA policy. The HURIWA blamed the Arewa consultative Forum (ACF) ( A northern forum) and the former central bank governor Sanusi Lamido Sanusi (now the Emir of Kano) for planning to damage the economy by convincing president of Nigeria Muhammad Buhari to flow along with their plan by implementing a single account for all federal agencies to be domicile in CBN Uhembe (2015).
Several factors such as; bank liquidity, bureaucratic bottle neck, economic independency among others are perceived to be the cause of the problem Anoruo and Aforkwalam (2017). If government would be willing to use the TSA to reduce liquidity rate in banks, enhance proper allocation of resources especially to institutions that need fund on a daily basis, fostering an efficient cash management, reduce unemployment and establishment of an effective payment mechanism, there will be no problem associating to the use of computerized accounting in the 21st century. This would promote accountability and transparency in Nigeria Anoruo and Aforkwalam (2017).
1.3 Objective of the study
The aim of this quantitative research is to examine the problem and prospect of computerize accounting system (treasury single account) in the 21st century Nigeria. This research will investigate the problem and prospect of computerized accounting system (Treasury Single Account) in the 21st century Nigeria.
Specifically the research objectives are: To examine the problem of computerize accounting system (treasury single account) in the 21st century Nigeria.
To examine the prospect of computerize accounting system (treasury single account) in the 21st century Nigeria.
1.4 Research questions
What are the problem of computerize accounting system (treasury single account) in the 21st century Nigeria?
What are the prospect of computerize accounting system (treasury single account) in the 21st century Nigeria?
1.5 Significant of the study
This study would enlighten the government on problems faced by Nigerians in the 21st century regarding the implementing of TSA in order for them to device means of improving the TSA platform to eliminate traffic in remitting of funds to the CBN and allocation of funds to the different MDAs. The government would also map out ways by which educational institution would operate successfully without encountering problem such as underdevelopment of research. Again the federal government would be able to identify MDAs that need fund on daily basis and create a means of funding those MDAs.
It is expected that the aftermath of this research would restore the economy back to a better position, the banking sector would begin to identify other areas of raising fund in order to reduce interest rate, this would enable private firms to borrow money from commercial bank to run their business at a profit and also offering employment to the public. This would reduce liquidity in commercial bank, increase their profit and provide job openings to the public and eliminating recession in our economy.
This study will be of great important to the Academic/practitioners. This is because with the Academic/practitioners would educate their work force on the effects of Treasury Single Account on the society, the work force would employ means of eliminating these negative effect it have on the society. This research would serve as a guide to other researcher who wish to carry out further research in related areas.
1.6 Research hypothesis
H10:There is no relationship between problems of computerize accounting system (treasury single account) and the 21st century Nigeria?
H11:There is a relationship between problems of computerize accounting system (treasury single account) and the 21st century Nigeria?
H20: There is no relationship between prospects of computerize accounting system (treasury single account) and the 21st century Nigeria?
H21:There is a relationship between prospects of computerize accounting system (treasury single account) and the 21st century Nigeria?
1.7 Scope of the study
This research centers on the problem and prospect of computerized accounting system (Treasury Single Account) in the 21st century Nigeria. It covers the period of 2012-2017. The geographical area that would be covered are Akwa Ibom, Lagos and Rivers State, Nigeria. This study will be restricted to only Ministries, Department and agencies controlled by the federal Government. The population size shall be 90 and the sample shall be drawn mostly from Ministry of Education and Nigerian National Petroleum Corporation (NNPC), this is because they are affected and they will not be bias.
This study does not include the private sector, because there will be conflicting response and sometimes bias.
1.8 Limitation of the study
It is pertinent to note that in the course of this research, the author reviewed over thirty (35) journals out of hundred or thereabout, because most journals were written in other languages other than English. This study is restricted to two (2) MDAs out over 800 MDAs because they are considered as a sample representative of the MDAs in Nigeria.
This research calls for further research on the effect of treasury single account on the private sector in the 21st century Nigeria.
1.9 Definition of Terms
Accounting: Chionye (2003) defines accounting as an information system of collecting, recording, classifying, measuring, summarizing, interpreting financial data of an organization in a significant manner in order to aid in decision making.
Computerized Accounting System: Computerized Accounting System also known as Electronic Data Processing (EDP) is an accounting system which allows the users to enter transaction into the program once and all accounts are updated as necessary Emmanuel (2015).
Treasury Single Account: Uhembe (2015) defined Treasury Single Account as a unified or consolidated account through which government transacts all its receipt and payment.
Computer: Jeffry (1996) defined Computer as a programmable machine that receives data, process it and stored the processed data called information in its memory for easy retrieval.
Liquidity: Liquidity is the ability of a financial institution to meet its cash and deposit obligations without acquiring unwanted losses Francis, Edu, Frank and Raymond (2016).
