International Journal of Research in Management Sciences

Volume 1, Issue 1, July-September, 2013, pp. 46-57

© IASTER 2013, www.iaster.com

Public Sector Accounting and Developing Economies:

A Comparative Review and Analysis Of Ghana And Nigeria
OWOLABI Sunday Ajao, PhD
Associate Professor of Accounting
Department of Accounting, Babcock University, Nigeria

OCANSEY Evans O. N. D.
Senior Research Assistant
Valley View University Adenta, Ghana

Dada Samuel O., PhD

Senior Lecturer
Department of Accounting, Babcock University, Nigeria

ABSTRACT
Public sector constitutes the largest sector of the economy of all nations, employs the largest work
force and controls the greatest part of nations’ financial resources. The paper adopted exploratory
research method through literature scrutiny and scanning for relevant facts to assist in the
achievement of the paper objectives. The public sector accounting system of Ghana and Nigeria were
reviewed and was found that some of the differences that exist were as a result of the governance
system (unitary and federal). It was also found that Nigeria has a unique system of allocating revenue
collected to its various constituencies on monthly basis. The two countries are working gradually
toward the implementation and adoption of International Financial Reporting System for the public
sector. Also both countries are using modified cash basis of accounting along side with fund
accounting. The bases of monitoring and evaluating budget are not well defined or benchmarked thus
making performance evaluation difficult. Additionally, section 26 of the Fiscal Responsibility Act is
rarely complied with in Nigeria. It is recommended that Ghana can adopt or modify its system of
revenue allocation to enable fair allocation of resources to the regions even though Ghana is using
unitary system of governance. The paper also recommended that procedures should be put in place
to facilitate the full compliance to the provision of the Fiscal Responsibility Act in Nigeria or be
amended to serve its intended purpose. Again clear performance measurement standards and bases of
monitoring and evaluation should be put in place for the two countries. Detailed and continuous
monitoring and evaluation process throughout the year for enhancement of value for money are
further recommended. Finally, it was recommended that, the Auditor-General should be solely
appointed by the civil service; founded that the auditor-general is appointed by the president in
consultation with council of state (in Ghana) or the Federal Civil Service Commission (in Nigeria).
Probably, his appointment by the president can generate some amount of sympathy or obligation of
reciprocity and thereby reducing his independence.

Keywords: Public Sector Accounting, Regulatory framework, Conceptual framework, Budgeting,

Auditor-General
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1. INTRODUCTION

Public sector can be described as entities or organizations that implement public policy through the
provision of services and the redistribution of income and wealth, with both activities supported
mainly by compulsory tax or levies on other sectors. That is, it comprises governments and all publicly
owned, controlled and or publicly funded agencies, enterprises, and other entities of government that
deliver public programs, goods, or services.

Public sector accounting is a system or process which gathers, records, classifies and summarizes as
reports the financial events existing in the public or government sector as financial statements and
interprets as required by accountability and financial transparency to provides information to
information users associated to public institutions. It is interested in the receipts, custody and
disbursement and rendering of stewardship of public funds entrusted (Kara, 2012; ICA-Ghana, 2010).

Therefore, the public sector accounting system in many countries uses cash bases accounting.
However, literature review on existing public accounting revealed that cash accounting system
provides essential information and it is simple, easier to understand, facilitate decision making, and
much more objective than other alternatives (Ross, 2003). Nonetheless, the system is not planned to
provide information on the cost of services, earned revenues, account receivables, account payable,
long-term assets and liabilities, accrued interest on external debt and stock value (Akenbor &
Oghoghomeh, 2011; Zakiah, 2007; Saleh, 2007; Joned and Pendlebury, 1984). To add, cash
accounting system is not significantly effective in providing accounting information for efficient
performance of public sector organization as indicated by Okoye and Oghoghameh (2011). They
further indicated that, the cash accounting bases has no indication of long-term.

Amayah (n.d.) indicated that, public sector constitutes the largest sector of the economy of all nations
and employs the largest force. He further said that, public sector controls the greatest part of the
financial resources of the nation.

The government budget size and the contribution of public expenditure to Gross Domestic Product are
very great especially in developing economies or counties. There is a thin line between the public
sector and private sector accounting when looking at concepts and techniques that are used. Further,
the emerging need and use of information technology by both the public and private sectors have made
the issue of public sector accounting a pertinent part of accounting studies in the world (ICA-Ghana,
2010).

It is probably perceived that Ghana and Nigeria have so many things in common especially in public
sector accounting. Therefore, this paper seeks to perform a comparative review and analyze the public
sector accounting practices of Ghana and Nigeria. This paper therefore compared and analyzed the
nature of Government Sector Accounting, conceptual and institutional frameworks, Compliance of
International Public Sector Accounting Standards (IPSASs), regulatory framework and budgeting. It is
one of the objectives of this paper to pinpoint some of the major differences in the public sector
accounting systems of Ghana and Nigeria.
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This paper has been divided into seven parts this first portion takes care of the introduction followed
by literature review after which the methodology aspect of the work was introduced. Public sector
accounting in Ghana and its regulatory frame work alongside with that of Nigeria formed part four of
the work. Part five concentrate on budgeting while part six dealt with findings and discussion. The
final part contains the conclusion and recommendations.

2. LITERATURE REVIEW

2.1 Nature of Government or Public Sector Accounting

The nature of government accounting has the purpose of determining how much money was received
and its sources, how much was spent and for what purposes and the financial obligations accrued.
Profit is not the main focus. On like the private sector which has profit as the prime focus and
determine the profit of the business over a given period. Hence, many factors influence government
accounting such as the role of government in the different fields like the armed forces, health and
education and the policies set by government to achieve its aspirations and goals. Thus, government
accounting is interested in information gathering that will enable her to prepare Receipts and Payments
accounts (Omolehinwa & Naiyeju, 2012).

The practice of government sector accounting evolved over the years with the focused on cash receipts
and disbursements on the cash accounting basis or modified cash accounting basis. Hence government
revenue is only recorded and accounted for when cash is actually received and expenditure is incurred
only when cash is paid irrespective of the accounting period in which the benefit is received or the
service is rendered. It therefore means that, the amounts incurred by the government in purchasing
fixed assets are treated the same way as expenses. They are therefore written off as part of expenditure
for the period the costs were incurred (ICA-Ghana, 2010; Omolehinwa & Naiyeju, 2012; Oecon,
2010).

Since the payments made for the acquisition of fixed assets by the government are written off in the
year of acquisition irrespective of the useful life of the fixed assets, it follows that fixed assets like
buildings and motor vehicles which are usually used the preparation of the balance sheet of a private
sector business will be available in preparing the balance sheet of government. According to
Omolehinwa & Naiyeju (2012), this explains why, for instance the Accountant-General’s statement of
assets and liabilities of government will not include anything on the fixed assets of the government.
More so, since fixed assets are not capitalized, depreciation for fixed is not necessary in government
accounting system that uses cash basis of accounting. It can also be pointed out clearly that since
revenue is recognized only when cash is received, debtors as it is known in the private sector will be
absent from government financial statements

2.2 Conceptual and Institutional Frameworks

Sound public sector accounting rests on an articulate framework which has been defined to reflect best
practices in the world. To this end, a conceptual framework for public sector accounting is structured
to reflect objectives and scope, recognition and measurement criteria, definition and qualitative
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characteristics of financial information shown in financial and accounting reports of public sector
accounting entities (Izedonmi & Ibadin, 2013).

Izedonmi & Ibadin (2013) explain that, conceptual framework describes the period or time frame of
financial reporting of government levels. It is the heart of financial reporting in the government sector.
It spells out the government accounting principles and forms the basis of the preparation and
publication of budgets, maintenance of complete financial records, provision of full disclosures and
submission to full audit. In other words, the framework helps monitor incomes, expenses, assets and
liabilities and assist assessment of financial consequences of transactions and events. This finally leads
to producing user-friendly financial reports on a periodic basis.

The institutional framework comprises the legal, institutional and the professional standards that
regulate the public sector accounting. The International Public Sector Accounting Standards (IPSASs)
which is issued by the International Federation of Accountants International Public Sector Accounting
Standard Board (IPSASB) is probably the major standard for public sector accounting. Ghana and
Nigeria are signatories to IFAC and adopts the relevant IPSASs issued by IPSASB. The International
Standards of Supreme Audit Institutions (ISSAIs) is another institutional framework. These bodies are
of the overseeing the management of public sector accounting to reflect transparency and
accountability within the wider context of good public governance (Izedonmi & Ibadin, 2013).

2.3 Compliance of International Public Sector Accounting Standards (IPSASs)

The International Public Sector Accounting Standards (IPSASs) have been accepted by the World
Bank and the International Monetary Fund (IMF) hence, they are requiring that all countries or bodies
use these standards for accounting for funds. Also, other international organizations which provide
funds to developing countries stipulate IPSASs compliance as a condition. Thus, creditor countries are
beginning to use public sector accounting compliance to IPSASs to assure themselves that funds and
grants given are being used in the public (Izedonmi & Ibadin, 2013). Chan (2008) described IPSAS as
defacto benchmark for evaluating government accounting processes and practices worldwide.

The World Bank in collaboration with the office of the Accountant-General cited in Omolehinwa &
Naiyeju (2011), conducted research and found that the 2010 financial report of Nigeria has no record
in the consolidated account for external aids and grants; no complete disclosure of financial activities
of controlling entities such as NPA, NNPC and CBN; unrealistic gains/losses due to foreign exchange
were not reported; payments on behalf of third parties were not disclosed; inability of controlling
entities of the Federal Government of Nigeria to pay their account as at when due; no account for
undrawn assistance and inadequate disclosure of cash out of direct controls for instance under
litigation.

However, according to Wynne et al 2011, some of the good financial practices identified in Nigeria
using the 2008 financial statements include: inclusion of audit certificate from the auditor general;
inclusion four statements cash flow, assets and liabilities, consolidated revenue fund and capital
development fund and the consistency of the main totals between them; inclusion of comprehensive
set of notes and accounting policies including outstanding impress and advances; detailed schedule
provided of internal and external loans; details provided of subventions to parastatals by the
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overseeing of ministry, department and agency; consistency of the financial statements from t 2005 to
2008 (when the new format stated); financial statement appear on the internet; the development of
some financial reporting guidelines by FAAC

According to Obazee (2008), even though in Nigeria, government operations and accounts have been
conducted within the general framework of the principles of fund accounting, there is a major problem
when it comes to the absolute application of the principles to financial reporting.

3. METHODOLOGY

The research method adopted here is exploratory system; this is found to be appropriate for the
purpose of establishing the key issues and variables in explaining the degree of comparability and
areas of deviance. The source of data is secondary source, that is through historical review of the
accounting system by examining the previous documents, such as legislation ,decrees and professional
pronouncements. Archival sources, books and journals are other sources of information.. Also internet
sources provided us with additional information. The method of analysis is explanatory in nature; this
is done through adequate exegesis of the gathered information.

4. PUBLIC SECTOR ACCOUNTING OF GHANA AND ITS REGULATORY

FRAMEWORK

The Public Sector of Ghana constitutes the central government, ministries, departments and agencies;
local government units-public boards and corporations and public educational institutions.
Stewardship and control, accounting and accountability, planning and budgeting, internal and external
audit, fund accounting especially consolidated fund, reporting, public ownership of assets and
liabilities, cash, accrual, modified accrual and commitment accounting; treasury system of accounting
and financial flows are some of the essential features of the above organizations (ICA-Ghana, 2010).

Public Sector Accounting has a long history but the first legislative reference seems to be made in
1954, the Gold Coast Constitution. However, the reference was oblique one, contained in Section 68
which provides for all departments and offices of government to be audited by the auditor-General. It
was therefore assumed that accounts existed but no obligation was imposed on anyone for keeping and
rendering accounts. Accounts have been kept and published under the authority of Colonial
Regulations since the establishment of the Gold Coast Government in 1874. All constitutional
legislation since 1954 has repeated this oblique reference of accounts of government. But when the
country attained independence in 1957, the first comprehensive attempt was made to give legislative
recognition to the account of government. This was the Public Account Ordinance, no 37 of 1957.
This enactment enabled rules relating to public accounts. In 1959, three set of rules were issued-Public
Accounts (Railway and Harbours Administration), Public Accounts (Treasury) and Pubic Account
(Audit). The treasury rule did provide for keeping and rendering accounts, and a number of rules
relating to the manner in which they should be prepared. For instance, specifying the period of the
financial year, and that the statement presented to parliament “shall include only sums which have
been actually paid or received within the period of account” (ICA-Ghana, 2010).
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According to ICA-Ghana (2010), before any state institution can obtain government recognition or
funding, it must be shrouded in government legality, quasi-legality or or some government regulations.
This is considered to be a cardinal principle in every state or country. It further explained that, the laws
are enabling acts and the regulations provide guidelines for the day to day activities of the institutions.
Hence, almost all institutions of the governments are covered by laws. This therefore brought into
being the enactment of The Financial Administrative Decree 1967 (NLCD 165) includes a part VI-
Public Accounts (Consolidated Fund), and others. Some of these rules were repealed by the 1972
Audit Service Degree. The legal framework that regulates public sector financial operations in Ghana
consist of: the 1992 constitution, the Financial Administration Act (2003) Act 654, the Financial
Administration Regulation (2004) L.I. 1802, the Internal Revenue Act, the Customs Excise and
Preventive Act, The Bank of Ghana Act, the District Assembly Common Fund Act, Procurement
Agency Act (2003) Act 663, Audit Service Act (2000) Act 584, Internal Audit Agency Act (2003) Act
658 and other regulations that parliament may enact from time to time (Centre for policy Analysis,
2005; ICA-Ghana, 2010).

The regulatory authorities that see to the implementation and control of these regulations are the
executive and parliamentary control. The executive take decision on government policies with respect
to the financial outlays implications and careful control of appropriations because all decision taken
must be approved by parliament. No revenue can be levied or expenditure incurred unless it is
authorized by parliament. Therefore, it is very important for the executive to obtain approval from
parliament on both revenue raised and expenditure to incur. Hence, parliament exercise control
through three different phases, namely, appropriation, audit and review by public account committee.
More so, the Ministry of Finance is empowered by law to oversee the financial affairs of public
corporations with regard to their financial management (The 1992 Constitution of Ghana; ICA-Ghana,
2010).

5. PUBLIC SECTOR ACCOUNTING OF NIGERIA AND ITS REGULATORY

FRAMEWORK
The Nigerian public sector includes the federal government, the 36 states, the 774 local government
councils, all government corporations, commissions and institutions (Omolehinwa & Naiyeju, 2012).
According to Izedonmi & Ibadin (2013), Nigeria’s Institutional frameworks includes statutory
framework, as the 1999 Constitution, the Finance (Control and Management) Act of 1958 as well as
the Audit Act of 1956. The Financial Regulations, Treasury and Financial Circulars and Circular
Letters are others. They are envisioned to guide the day-to-day operations of government Departments
and to aid the accomplishment of probity and accountability. It also provides, among others, the
various types of funds as the Consolidated Revenue Fund for the Federation and for States and the
various charges at the federal level and at the state level. Moreover, the Constitution through the
relevant sections, either at the federal and state level, details the authorization of expenditure from the
Consolidated Revenue Fund. The responsibilities of the Minister of Finance and those of the
Accountant- or Auditor- General of the Federation and the similar Offices at the state level are
delineated by the Constitution. While it is one of the responsibilities and functions of the Minister of
Finance to issue warrant (or authority) to incur expenditure from any of the Funds types, the
Accountant-General ensures actual payment, and then the preparation of CRF and other funds as
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required by regulations or by the Minister of Finance. They further said that, the Finance (Control and
Management) Act of 1958, the Audit Act of 1956, among others are all aimed at bringing about
effective management and operations of government funds, including the regulation of accounting
format for the preparation of government accounts, the audit and accountability in respect of the
Federal Government, and by extension the State Government.

6. BUDGETING

Budget is a future oriented financial plan of expenditure preferences of government expressed in

monetary terms for allocating resources among alternative uses, both within the government and
between governments, and the rest of the economy to implement the dominant political leadership
(Matheson, 2003). Hence, budgeting lies at the heart of every public sector because of its key role in
the accounting system. This is well posited by Wysocki (1965).

“All public sector organizations are accountable for the financial resources, which they have been
allocated for management. In addition to the obligation for preparing a budget, there are detailed rules
regulating the cash accounts, the bookkeeping and the book closing.” (p. 17).

It naturally follows that, the public account system revolves around budgeting. Hence the accounts
must report how these organizations have been financed in the form of revenue and how the revenue
has been expensed. Consequently, accounts prepared are compared with the corresponding budgetary
revenues and the expenditures of public organization (Oecon, 2010).In addition, public accounts are
prepared to show the adherence to and deviation from planned and executed budget with numerical
reports Wysocki (1965).

According to Omolehinwa & Naiyeju (2011), the government budgeting process in Nigeria involves
budget formulation or preparation, budget approval and enactment, implementation, and monitoring
and evaluation. However, in Ghana, the budget process involves budget formulation, authorization,
approval, implementation and evaluation (ICA-Ghana, 2010).

Budget formulation is a key concept in the allocation of resources. Appah & Coleman (2009) espoused
this by saying that, in Nigeria the budget formulation articulates the fiscal, monetary, political,
economic, social and welfare objectives of the government by the President. It makes use of the
departmental policies and guidelines which form the basis of circulars to Ministries/Departments
requesting for inputs and their needs for the ensuring fiscal periods. ICA-Ghana (2010) supported by
indicating that, the budget process begins with the issuance of budget circular to all government units
by the Minister of Finance and Economic planning.

Omolehinwa & Naiyeju (2011) explain budget formulation by intimating that government must
consider funds that will be available for spending at sustainable level given current and future state of
the economy, the sectors for funds be allocation, projects and programs to be funded, the expenditure
preferences of stakeholders and the preferences that can be accommodated and activities that can be
undertaken by other stakeholders. ICA-Ghana (2010) added by suggesting that budget formulation
considers the world’s economic events, future outlook, income policy, inflation trends and macro-
economic policy of the government.
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Budget approval is very essential after it has been formulated. In Nigeria, the president present the
prepared budget with it accompanied document to the National Assembly for consideration. The
presented budget which is also known as the appropriation bill is passed into appropriation act when
the National Assembly has agreed on the budget Omolehinwa & Naiyeju (2011). On the other hand, In
Ghana, after the formulation of the budget, the cabinet discusses it with the president to arrive at
optimal level of government objectives. But before then, various sector ministers would have to table
their budgets before parliament for approval. These sector based budgets are then collated and
consolidated into an Appropriation law by parliament (ICA-Ghana, 2010).

The implementation stage follows after the approval and enactment. This is the stage where
government collected revenues are spent as authorized by legislation. In Ghana, at this stage, the
Minister of Finance and Economic Planning issues a general warrant to the Controller & Accountant-
General to utilize monies as approved by parliament. The Controller & Accountant-General then issue
general warrants to Ministries, Departments and Agencies, and Treasury Officers for implementation.
In Nigeria too, the Minister of Finance issues warrant authorizing the Accountant-General of the
federation to disburse monies as planned from the consolidated revenue fund (ICA-Ghana, 2010;
Omolehinwa & Naiyeju, 2011).

Budget monitoring and evaluation is another important stage of the budget process. Arikawe (2009)
indicated that, budget monitoring has to do with continuous or periodic review of program
implementation and the assessment of delivery and the remedial of identified challenges. He further
explained that, monitoring should address that funds released for specific projects are used as planned.
It should also examine government spending on purchases and construction activities. Further, it
should measure the efficiency and effectiveness of government projects. Omolehinwa & Naiyeju,
2011) continued by explaining that, evaluation should be concerned with the worthiness of
government program or project with respective to the stated objective by paying attention to the
efficiency of resources.

7. FINDINGS AND DISCUSSIONS

The review of ICA-Ghana (2010) and Omolehinwa & Naiyeju, (2012) revealed that, the public sector
of Ghana consist of the central government, ministries, departments and agencies; local government
units-public boards and corporations and public educational institutions. However, the public sector of
Nigeria consist of the federal government, the 36 states, the 774 local government councils, all
government corporations, commissions and institutions. The differences may be due to different
system of government. Ghana is running unitary system government while Nigeria is running federal
system of government.

In addition, Ghana has five levels of governance at the local government. These are the Regional
Coordinating Council, Four-tier Metropolitan Assembly, Three-tier Municipal/District Assembly,
Urban/Town/Area/Zonal Councils and unit committees. But Nigeria has the main sources and
classifications of funds available to the government sector of Ghana are tax revenue, grants, sales of
goods and services. According to the 1992 final account of the consolidated fund, the contributions of
various sources of fund to government were taxes on international transactions 17%, Value Added
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Tax, Personal Income Tax, Domestic Goods Tax, HIPIC, Grants and Non-Tax Revenue were 28%,
28%, 13%, 5%, 7% and 2% respectively (ICA-Ghana, 2010). However, the main sources of income to
the Nigerian government sector are oil revenue (crude oil and gas sales, and oil tax and levies) and
non-oil revenue (companies’ income tax and customs and excise duties). The total revenue received by
the Nigerian Government shared monthly among the three tiers of the government based on the
preceding moth’s collections. The federal government of Nigeria takes a total of 52.68% of the total
revenue but out of this amount, 48.5% goes into the consolidated revenue fund, 1% goes into ecology
fund and federal capital territory respectively, and 0.5% and 1.68% goes into the stabilization fund and
development of natural resources respectively. This allocation is done by the Federal Account
Allocation Committee (FAAC) (Omolehinwa & Naiyeju, 2012).

It was also recognized that the consolidated fund of Ghana was established by the Financial
Administrative Act (FAA). All revenue collected on behalf of the government are paid into and all
lawful disbursements paid on behalf of the government out of the consolidate fund. It serves as the
central mechanism of controlling public funds (ICA-Ghana, 2010). However, the consolidated fund of
Nigeria consist of the Federal Government of Nigeria (FGN) share from all states, 15% share of Value
Added Tax, all independently collected revenue of the FGN, cost of collection of revenue by both
FIRS and Nigerian Customs and FGN’s share of excess crude oil account based on revenue allocation
formula (Omolehinwa & Naiyeju, 2011).

Moreover, it was found out that Nigeria has unique system of allocating revenue to its various states.
According to the section 162 (2) of the Constitution of Nigeria, the National Assembly is to consider
the population, equality, internal revenue generation effort, land mass, terrain state and the population
density of each state. However, Ghana has no such a system. This may be due to the unitary system of
governance.

Further, according to ICA-Ghana (2010), Ghana has five main special funds; namely, the trust funds,
sinking funds, counterpart funds, contingency funds and resolving funds. All these special funds were
established by the FAA. District Assembly Fund, Ghana Education Fund and Road Fund were also
created. On the other hand, Nigeria has two main classes of special accounts. That is, revenue
collection based special accounts and federation account based special accounts. The revenue
collection based special accounts consist of 0.5% ECOWAS Trade Liberalization Scheme (ETLS), 2%
Levy on Imported vehicles, 1% Comprehensive Import Supervision Scheme (CISS) Charge, 2%
Education Trust Fund (ETF), 5% Sugar Development Levy, 7% Port Development Surcharge
Account, Nigerian Export Supervision Scheme (NESS), Cocoa Levy, 50% Rice Development Levy
and Federal Government of Nigeria (FGN) Bonus Account. The federation account based special
accounts consist of 1.68% for FNG Development of Natural Resources, 1% for FGN Share of
Derivation and Ecology and 0.5% for FGN Stabilization Account (Omolehinwa & Naiyeju, 2011). It
is noticed that the scope and purposes of these special funds were spelt out. Nonetheless, what
informed the percentages of the allocations is a mystery. To add, mechanisms put in place to evaluate
the performances of these special funds were not there.

Furthermore, it was found out that, the District Assembly Fund Act 1993 cited in ICA-Ghana, 2010
indicated that, 15% of the total allocated fund by parliament and all interests and dividends from the
investment should be retained as reserved fund. This reserved fund is distributed by allocating 1.5% to
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the ten regional coordinating councils, 2% reserve at the discretion of the regional minister, 0.5% for
district assembly common fund administration, 5% for district development and the remaining 6%
should be reserved. More so, the remaining amount the District Assembly Common Fund should be
shared by allocating 1% for human resource capacity building, 35% for national youth employment
program, 0.5% for response initiative, 0.5 for malaria prevention, 2% for people with disabilities and
the 61% left for other projects.

Besides, it was found that in Nigeria, the appropriation act is not often passed before the new financial
year begins. This makes the compliance to section 26 of the Fiscal Responsibility Act which require
the Minister of Finance to prepare and publish an annual cash plan disbursement schedule within 30
days before the enactment of the appropriation act (Shehu, 2010).

Moreover, it was found out that budget monitoring and evaluation involves financial monitoring,
physical monitoring and output analysis monitoring. In Nigeria, budget monitoring is done by the
minister of finance the budget officers of federations (Omolehinwa & Naiyeju, 2011). But in Ghana,
budget monitoring is done at the assembly level but the bases of monitoring are not clearly defined. It
hardly set benchmarks to measure performance. In addition, even though monitoring is expected to
continuous through the year, it seems that selective and restrictive monitoring takes place (ICA-
Ghana, 2010).

The Auditor-General of the Federation of Nigeria is unique among all civil servants. The president
appoints him by the recommendation of the Federal Civil Service Commission but subject to the
approval of the senate. He serves as an external auditor to government ministries. He is the only civil
servant whose position is created by the 1999 constitution. Therefore, his salaries and allowances are
charged to against the consolidated fund. He can only be removed from office two-third majority vote
of senate (Omolehinwa & Naiyeju, 2011). In contrast, the president of Ghana in consultation with the
Council of State in accordance with Article 70 (1b) of the constitution appoints the Auditor-General.
He could be relieved of his position by the president when he exhibit misbehavior, incompetence and
incapacitation of mind or body after his appointment (ICA-Ghana, 2010). However, he reports to
parliament; but in Nigeria, the Auditor-General reports to the senate. This is done to sever as check
and balance of power.

8. CONCLUSION AND RECOMMENDATION

There are only few differences between the public sector accounting of Ghana and Nigeria. These
differences are due to differences in the governance. That is, Ghana is practicing unitary governance
while Nigeria is practicing federal governance. The difference is in the recipient of report.

Further, there are differences in the allocation of revenue collected. In Nigeria, there are monthly
allocations of collected revenue to various states and the central government and with specific
percentages for fund accounts. Ghana has no such monthly allocation of revenue collected. Rather, in
Ghana, there are laid down percentages for the allocation of District Assembly Common Fund.
However, the bases of allocating revenue collected to various states and the central government of
Nigeria were not spelt out. It is also same with the allocation of the District Assembly Common Fund
and other fund of the government of Ghana. In addition, mechanisms put in place to check the
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efficiency, effectiveness and economy of the utilization of these allocated funds were not indicated.
Therefore a research into the bases of allocation of funds and the mechanisms to check efficiency,
effectiveness and economy of these funds is highly recommended.

Based on the finding that Nigeria has a system of allocating revenue collected to its various states
monthly, it is believed that Ghana can adopt or modify this system of revenue allocation to enable fair
allocation of resources to the regions even though Ghana is using unitary system of governance.

Established that, section 26 of the Fiscal Responsibility Act is rarely complied with, it is
recommended that things should be to put in place to facilitate the full compliance of this section or
the section should be amended to serve it purpose.

Founded that the bases of monitoring and evaluating budget is not well defined and benchmarks to
measure performance are not usually set, it is recommended that, standards should be set for
measurement of performance and the bases of monitoring and evaluation should be set clearly.
Detailed and continuous monitoring and evaluation should be performed throughout the year. This will
enhance value for money.

Even though, the Auditor-General is appointed by the president in consultation with Council of State
and Federal Civil Service Commission in Ghana and Nigeria respectively and report to parliament or
senate for check and balance of power, it is recommended that the appointment of the auditor-general
should be done by the auditing service. The president’s appointment can generate some amount of
sympathy or obligation of reciprocity and hence could reduce the independence of the auditor-general.

REFERENCES
1) Akenbor, C. O. & Oghoghomeh, T. (2011). Public Sector Accounting System in Nigeria: A
Comparative Study of Cash-Basis and Accrual-Basis of Reporting.
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