ABSTRACT
The quest for improving corporate governance as a pre-requisite for better performance has become an increasingly important issue in Nigerian Universities.
Efficient corporate governance is the bedrock for proper and effective management of institutions world over including managing finances in Nigerian Universities of which this study examined. The obvious corporate failures in Nigerian universities are associated with poor management for recognising risk management and poor internal audit. Therefore the problem this study unravels was the value of corporate governance in financial management of the University of Nigeria. The data for this study was generated through structured questionnaires and interpersonal interviews. The data obtained were analysed using frequency percentage, mean and chi-square statistical method. From the result of data analysed, it was found out that the major sources of finance to the university include Government grant, student school fees, Income from investment, donations from friends of the university and income from subsidiary companies. The objectives of financial management in the university were also identified to include reduction of fraud in the system, increase accountability and transparency in the system and to promote effective financial regulation.
Furthermore, the value of corporate governance was found to include the following; independent of Auditor is emphasized, effective internal control is maintained and due process of financial management is ensured. The study recommended among others that the Bursar, who is the head of finance, should be a member of related accounting professional bodies like ICAN, ANN, ACCA.
Also, since it was obvious that corporate governance aims to minimise chances of corruption, mal-practice and financial fraud. The object of good corporate governance is attained when an institution demonstrate their public accountability and conduct their businesses within acceptable ethical standard.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The higher education system in Nigeria is composed of universities, polytechnics, technological institutions, colleges of education that form part of, or are affiliated to universities and polytechnic colleges, and professionals, specialised institutions (IAU, 2000). They can be further categorised as federal, state or private universities, and as first, second or third generation universities (Harnett, 2000:1).
Federal universities are owned and funded by the federal government while state universities are owned and financed by the states . The private universities are owned and financed by individual owner(s).All federal universities receive the backup of their financing (almost 95%) from the federal government through the National University Commission NUC, (Harnett, and 2000:1).
Furthermore, the federal university budgeting processes and expenditures have to adhere to budgeting and expenditure formula stipulated by NUC as follows: 60 percent total academic expenditure; 39 percent for administrative support; and 1 percent for pension and benefits (Harnett.2000: 7).
Ogunlade sighted in Ania (2004), stated four sources of finance in Nigerian university education: (a). Support from federal and state governments consisting more than 98% of the recurrent cost and 100% of the capital cost. (b). student fees/ educational fees; (c). Occasional grants, (d). interest earnings on short term bank deposits and rents of university properties. Other sources of finance to higher education in Nigeria include endowments, fees/levies, gifts and international aids from international organisation, for example, World Bank, (Sikiwibole and Suleman, 2000).
Within the Nigeria university system and management function, the Bursary department is in direct control of finance. The Bursar is the chief financial officer of the university, and is appointed by the council and is responsible to
the Vice Chancellor, Rector, Provost.. The Bursar ensures that the funds of the institution are spent in accordance with the provisions of Government financial regulations and university Act laid down by the council and that no funds of the institutions are spent without proper authority and accounting. Financial management is a necessary tool for supporting the organisations goals and objectives. Financial management according to (Miller, 2000:2) states that financial management involves controlling, conserving, allowing, and investing the organisation’s resources including personnel, equipment, supplies and the non monetary contributions of volunteers and donations.
Federal government controls the universities through the following organs: Federal Ministry of Education, national University Commission (NUC), which among other things allocates funds to federal universities and also prescribes the spending formula .Each university, is administered by a council and the senate and is headed by and appointed. The duties of the bursar as the financial manager are controlled by the Vice Chancellor while the Vice Chancellor is the Accounting officer of the university answerable to and appointed by the Council. The governing council of a university is the highest regulating and policy making organ of the institution, while the Senate is highest authority in terms of academic matters in the university. The Council of every higher institution is been headed by a pro chancellor who is appointed by the Federal Executive council. The Senate equally have members representing them at the Council level while the congregation and convocation have two of their...
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