DETECTION AND PREVENTION OF FRAUD IN GOVERNMENT CORPORATION (A CASE STUDY OF PHCN)


Content

TABLE OF CONTENTS

 

CHAPTER ONE

INTRODUCTION

 

1.0    Background of Study

1.1   Historical Background of PHCN

1.2    Statement of Problem

1.3   Purpose of Study

1.4    Statement of Research Question

1.5   Restatement of Research Hypotheses

1.6   Research Methodology

1.7    Scope and Limitation

1.8   Plan of Study

1.9    Definition of Terms

 

CHAPTER TWO

LITERATURE REVIEW

2.1    Introduction

2.2   Causes of Fraud in PHCN

2.3    Types of Fraud

2.4    Control

2.5        Responsibility For Customer Public Money

2.6    Security in Strong Rooms and Cash Offices

2.7        Fraud Perpetrated From Salaries And Wages

2.8    Fraud Perpetrated From Contract

2.9    Fraud Perpetrated From Stores

2.10 Fraud Perpetrated From Inputting Wrong Data

 

 

CHAPTER THREE

RESEARCH METHODOLOGY

3.1   Research Design

3.2   Population of Study

3.3   Sampling Procedure/Technique

3.4   Data Collection Instruments

3.5 Method of Data Collection

3.6   Restatement of Research Hypotheses

3.7    Method of Data Analysis

 

CHAPTER FOUR

DATA PRESENTATION, ANAYSIS INTERPRETATION

4.1    Characteristics of the Sample

4.2    Analysis of Personal Data

4.3    Analysis of Research Questions

4.4    Testing of Hypothesis

 

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDCHAPTER FIVE

5.1    Summary

5.2   Conclusions

5.3    Recommendations

APPENDIX

 

 

 

 

 

 

 

 

 

CHAPTER ONE

INTRODUCTION

 

1.0       BACKGROUND OF STUDY

Fraud is number one enemy of the business world. It is in shipping, transaction in banking, in the export trade, in government parastatals. It is universal. It is a complex phenomenon. Tracing the Nigeria economy from the boom era, which is 1970's to the period of economic depression 1980's to date, one cannot but want to know the causes of the sharp fall in the economy. One of the identified causes of the down in the economy is fraud particularly in government "establishment. This research work will focus in critical analyses of the causes of fraud, ways of detecting and preventing future. The paper will also trace the historical background of Nigerian economy.

 

The discovery of oil in 1956 gradually erased the earlier dependence on exportation of materials, farm produce and other importation of commodities. The influx of revenue generated from oil was so glaring that some government officials felt it was ideal to share the 'booty' or 'national cake' without thinking of replacement, hence the different kind of frauds do occur.

This downward trends notwithstanding, the Nigerians still went on defrauding the government because they were already used to luxury. They found it very difficult to adjust or change their standard of living.

 

1.1      HISTORICAL BACKGROUND OF PHCN

Electric power development in Nigeria started towards the closing years of the last century when the first generating plant was installed (60kw) in the city of Lagos in 1898. From this date onwards and until 1950, the pattern of electricity development was the form of individual electricity undertaking set up at various towns, some of them by the Federal Government under jurisdiction of the public works department and some by the native authorities and one or two large municipal authorities.

 

 

 

Electricity Corporation of Nigeria (ECN)

In 1950, order to integrated power development and make it effective, the government passed the Electricity Corporation of Nigeria ordinance No 15 of 1950 This ordinance brought under one control the- Electricity undertaking section of the public  works department and all those undertakings which were- under native authority or municipal ownership and control,

 

The Electricity Corporation of Nigeria usually referred to as ECN, then became history body responsibility for generation, transmission, distribution and sale of electricity to all consumers in Nigeria.

Niger Dams Authority (NDA)

The Niger Dams Authority was established by the Act of parliament in 1962. The authority was. responsible for the construction and maintenance of dams- and other works on the River Niger and elsewhere, generating electricity by means of water power, improving navigation and promoting fisheries and irrigation. Construction of the kanji Dam which began in March 1964 was completed on schedule in December 1968.

 

National Electric Power Authority (NEPA) now Power Hold Company of Nigeria

In September 1969, the Federal military government deeded to merge the Electricity Corporation of Nigeria and the Niger Dams Authority into a single body.

 

A year tater, a Canadian firm of consultant "shawmont Limited”: was appointed to look into the technical details of the merger, Tile report was submitted in November 1971. By Decree No. 24 of June 29th 1972 (which became effective from 1st April 1972} the electricity corporation of Nigeria (ECN) and the Niger Dams Authority (NDA) were merged to become the National Electric Power

 Authority (NEPA). The actual merger did not take place until 6th January 1973 when a General Manager was appointed. The decree stipulates that the authority is to develop and- maintain an efficient coordination and economical system of electricity supply far all parts of the federation.

 

What is currently called- Power Holding Company of Nigeria (PHCN) was formally known as National Electric Power Authority (NEPA).

 

The affair of the authority is run by a nine member board whose members and chairman are appointed by the Federal Government. The authority is also accountable to the Federal government through the Federal Ministry of Mines Power and steel. The board is to lay dawn the authority and the chief executive (General Manager) sees to it that all decisions of the board are efficiency executed.

 

 

The day to day management of the affairs is in the hands of the General Manager now designated as managing director. The activities of the managing director is grouped under four functional divisions, each headed by an executive directors namely:

Executive Director (Generation)

Executive Director (Engineering, distribution & sales}

Executive- Director (Transmission)

Executive Director (Administration & Finance)

 

1.2      STATEMENT OF PROBLEM

In order to fully appreciate the adverse effect of fraud on PHCN and other government establishment, it will be appreciated to visualize the consequences of fraud on our country as an entity.

 

The state of country's economy today is chaotic and deplorable. This adverse situation of the economy can rightly be said to have had its roots in the fraudulent commercial practices by­ businessmen, past politicians and public servants.

 

Imported goods were over invoiced to the selfish advantage of a few individual resulting to serious depletion of our foreign exchange reserves, consequently, the country is finding it difficult to meet all her foreign exchange obligations, resulting in mass unemployment and upsurge in armed robbery cases. If all these adversaries can be suffered by a giant country like ours as a side effect of fraud, then one can imagine the ravaging effect that can have on PHCN or any other government establishment.

The prime aim of any business concern is not only to render services but also to make reasonable returns on its investments. In recent times the rate and frequency at which. PHCN distributes transformers, aluminums and conductors are stolen by the public with suspected connivance to the authority staff, have been a cause of great concern of management. Apart from the apparent loss of revenue, the imaged and goodwill of the authority is jeopardized.

 

1.3      PURPOSE OF STUDY

 The purposes of this study are;

1.         To critically analyze the causes of fraud in government organization particularly PHCN.

3.                  To check if there is any control in place as to prevent fraud at PHCN

3.         To identify any loopholes in government rules, sign and circular that can lead to perpetration of fraud.

4.                  To carefully look into the reported cases.

5.                  To pinpoint way of eradicating fraudulent activities in government most especially PHCN.

 

We should not fold our arms and allow the situation to continue Like that without making efforts to reduce the occurrence of fraud and possibly find a lasting solution to the problems. If a concrete step is not taking now, we may find out one day that PHCN viability has been completely eroded,

 

 

1.4      STATEMENT OF RESEARCH QUESTION

1.         What are the causes of fraud?

2.         Area where frauds can easily be perpetrated and

            detected?

3.         What are the various problems imitating against prevention and detection of fraud in PHCN?

4.         Will constant auditing by internal auditor prevent fraud?

5.                  Can the relationship between accounting and re-organizing the office of the head of audit department have effect in preventing and detecting fraud in PHCN?

6.         With prompt payment of workers salaries and wages be attributed to reduction of fraud cases in- PHCN?

 

1.5      RESTATEMENT OF RESEARCH HYPOTHESES

Hypothesis One

Null Hypothesis (H0): Introduction of seminars and other awareness programme does not reduce fraud in the mind of PHCN staff.

Alternative Hypothesis (H1): Introduction of seminars and other awareness programmes help to reduce fraud in the mind of PHCN staff.

 

Hypothesis two

Null Hypothesis (H0}: Over the year both the value and volume of fraud cases recorded in the PHCN Plc have been on the increase.

 

Alternative Hypothesis (H1): Over the year, both the value and volume of fraud cases recorded in the PHCN Plc have been reduced.

 

 

1.6 RESEARCH METHODOLOGY

The research will be carried out in four different department of the authority. These departments are:

1.        Account department

2.        Audit Department

3.        Engineering department

4.        Administrative department

 

This will be by means of questionnaire, oral interviews and secondary data collected from them. Eighteen officers from the rank of officer IV to principal manager will be needed for the questionnaire. Special reference will be given to officers directly involved with cash officer, final account, internal audit and losses and investigation section I any of the different departments.

Questionnaires will be administered individually in the place of work to the officers by personal contact. This process is hoped to last for five days. The questionnaire is divided into eleven sections. Section 1-4 contains personal data of the officer concerned. 5-7 are concerned with causes of fraud, 8 deals with area where fraud are perpetrated and how to detect them, section 9 critises the actions taken after the detection, while section 10 and 11 are concerned with preventive measures already in existence and suggestion for new ones.

 

1.7 SCOPE AND LIMITATION

The scope of this study will cover PHCN's accounting system with reference to other government establishments. One of the constraints of the research work has been non-availability of the time required to conduct an in-dept research. Limited financial resource is another constraints which restrict from making more in-dept research. Poor response from respondents will also contributes to the limit of this research.


1.8 PLAN OF STUDY

There will are five chapters in all; the next chapter and is devoted to the review of literatures and building of theoretical frame work in detail. In the third chapter, I intend to report on research survey and methodology and the analysis of samples adopted in collection of data.

 

Chapter four will concentrate on the analysis of the research data collected from primary: and secondary: sources, references to hypothesis and testing of hypothesis.

 

1.9       DEFINITION OF TERMS

Fraud:            Refers to an intentional act by one or more individual among management, corporate or third parties which results in a misrepresentation of financial statement.

 

Detect:            To find or discover the present of something by using equipment or making investment.

Prevent:          To ensure that it does not happen.

Receipt:          The act or acts of receiving anything to write acknowledgement of payment of a bill.

Revenue:        Total current income of a government receipt duties on import income from any form of property.

Bin-card:        Is an effective ready reference as to what is the quantity of a particular material that is in the store at any particular time.

Cheque: Is a form on which you write an amount of money and who it is to be paid to.

Audit: Is described as the independent examination of and expression of opinion on the financial statements of an enterprise by an appointed auditor in pursuance of that appointment and in compliance with any relevant statutory obligation.   

 

Finally, chapter five will be on the summary, conclusion and suggestions. Also recommendations and contribution knowledge shall be made on the findings after thorough research has been made.

 

 


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