INTERNAL CONTROL SYSTEM IN THE ADMINISTRATION OF WAGES AND SALARIES IN MINISTRIES (A CASE STUDY OF SELECTED MINISTRIES IN IMO STATE)

Project Abstract

<p> </p><p>The importance of internal control in the<br>administration of wages and salaries in ministry cannot be over emphasized. It<br>is the responsibility of management to establish and maintain an effective<br>internal control system that will enhance the attainment of organizational<br>goals.</p><p>&nbsp; &nbsp; &nbsp; Therefore, this study seeks to find out<br>what extent the effectiveness of internal control system in ministries in Imo State<br>can checkmate frauds. To carry out this assignment both the primary and<br>secondary sources of data were used. A descriptive design was adopted for the<br>study. One hundred and twenty questionnaire were distributed but only one<br>hundred were returned. All the two were testing using Chi-square at 0.05 level<br>of significance.</p><p>&nbsp; &nbsp; &nbsp; One accepted the null and rejected the<br>alternative indicating that gross payment in the ministry is not inflated while<br>the other one reject the null and accepted the alternative indicating that<br>there is a significant relationship between an effective internal control and<br>financial accountability.</p><p>&nbsp; &nbsp; &nbsp; The summary of the finding revealed that</p><p>1) &nbsp; There exists an internal control system in<br>ministry.</p><p>2) &nbsp; That there is a laid down procedure but the<br>problems lies in its operations</p><p>3) &nbsp; Those handling cash or near cash item are<br>properly checked but sometimes superiors may encourage those handling cash to<br>spend it inappropriately.</p><p>4) &nbsp; Importance is attached to the separation of<br>duties in the area of execution and custody of cash and bank reconciliation.</p><p>Based<br>on the findings the following recommendations were made.</p><p>1) &nbsp; It is suggested that all wages and salaries<br>irrespective of the amount should be paid by cheque as to allow the<br>authenticity of wages and salaries payment.</p><p>2) &nbsp; It is strongly recommended that workers<br>should be effectively motivated to attain organizational goal.</p><p>3) &nbsp; Young officer should be made aware of the<br>internal control measure in the environment in which they operate.</p> <br><p></p>

Project Overview

<p> </p><p><strong>1.0 INTRODUCTION<br></strong></p><p><strong>1.1 BACKGROUND<br>OF THE STUDY</strong></p><p>&nbsp;Ministries faced and saddled with the responsibility of administration of wages and salaries. The need for this arises so as to eliminate the case of ghost workers, to ensure that standards are maintained and adhered to, to ensure that workers are paid at the appropriate rate and to detect fraud by managers or other persons. These motives led to the introduction of an internal control system which has been defined in statement on auditing (U.4) as being “not only internal check and internal audit but the whole system of control, financial and otherwise, established by management in order to carry on the business of the company in an orderly manner, safeguard its assets and secure as far as possible the accuracy and reliability of its records”.</p><p>&nbsp;It is known fact that management in all ministries irrespective of their size and nature has financial statement as their main vehicle for presenting accountability and stewardship to the shareholders of their ministries.</p><p>&nbsp;Accounting to LYNN (1983) “The statistical data that must be estimated and accumulated to plan and control virtually all operation of ministries are best used in conjunction with financial data”. It can then be deducted that accountability and stewardship are best rendered in form of financial statement. Hence, management must device adequate means of promoting efficiency in operations safe guarding resources from fraud and other forms of mis-management and creating a reliable atmosphere over recorded transaction. This necessitates the concept of internal controls system in any ministry. If a financial statement is to present a true and view, then there must be effective control at all facts of ministries.</p> <br><p></p>