AUDITING AS AN AID TO ACCOUNTABILITY: A CASE STUDY OF ENUGU STATE POST PRIMARY SCHOOLS MANAGEMENT BOARD (PPSMB)

CHAPTER ONE

INTRODUCTION

Ensuring that auditing activities in Nigeria's public sector are carried out effectively and efficiently has remained a major concern over the years. Public interest in the proper management of government resources continues to grow, particularly because cases of corruption, financial mismanagement, embezzlement and misuse of public funds are still being reported. These challenges persist despite the existence of constitutional provisions and various regulatory frameworks established to guide public sector auditing in Nigeria (Olasupo, 2018). Addressing these problems requires improvements in the quality of audit personnel, alongside stronger institutional authority for public sector auditing bodies. It is also important for auditors to acquire modern auditing skills and adopt result-oriented approaches rather than relying solely on traditional methods of checking financial records and transactions.

Public sector auditing plays an essential role in ensuring that government resources are properly managed and utilised for their intended purposes. It promotes responsible financial administration, encourages compliance with established regulations and provides the public with information about how public funds are managed through audit reports. Considering the importance of these responsibilities to national development, the institutions and procedures responsible for carrying out audit functions must be properly organised and strengthened to achieve their objectives.

Traditionally, auditing activities focused mainly on compliance with financial rules, procedures and established accounting standards. This involved examining financial records to determine whether transactions were properly documented and carried out according to approved regulations. However, the scope of auditing has gradually expanded to include the assessment of efficiency, effectiveness and overall organisational performance. In view of this development, this research investigates the extent to which auditing contributes to accountability, using the Enugu State Post Primary Schools Management Board (PPSMB) as its case study.

The continued reports of financial irregularities, fraud and misappropriation of government property by public officers have raised questions about the effectiveness of existing accountability mechanisms in the Nigerian public service. One of the major responsibilities of auditing is to prevent financial misconduct, discourage the misuse of public resources and identify irregularities whenever they occur. In Enugu State, the audit department is responsible for examining and evaluating the activities of public officers who have been entrusted with managing government funds and other resources.

Government institutions operate through appointed officials, representatives and administrative agencies who are expected to account for the resources placed under their control. This responsibility is supported by the Constitution of the Federal Republic of Nigeria 1999, as amended, which establishes auditing arrangements at both federal and state levels. Section 125 provides for the appointment of an Auditor-General for each state, while Section 126 addresses the appointment process. These constitutional provisions empower the Auditor-General to examine the financial records of state governments, including those of ministries, departments, offices, parastatals and courts. They also provide the Auditor-General or authorised representatives with access to relevant financial books, documents, records and other necessary information.

For statutory corporations, government agencies, commissions and similar institutions, the constitutional framework provides a different auditing arrangement. Rather than requiring the Auditor-General to personally examine every account, these organisations are permitted to appoint independent external auditors. The Auditor-General provides a list of qualified auditors and guidelines concerning their remuneration. In addition, the Auditor-General is responsible for reviewing their annual financial statements and audit reports and may conduct periodic examinations of their financial activities.

Nevertheless, the continued occurrence of fraud, embezzlement and misappropriation of public resources suggests that existing control mechanisms have not completely achieved their intended purposes. Recent research on public sector auditing in Nigeria has also identified institutional and legal challenges, particularly inadequate protection of auditors' independence, uncertainty surrounding their tenure and weaknesses in public financial regulations that may create opportunities for financial misconduct (Ewa et al., 2025).

It is against this background that this study examines the responsibilities of the Enugu State audit department, the challenges affecting its operations and the measures that could improve its performance. It also investigates the factors contributing to fraud and the mismanagement of public funds within the state public service. Furthermore, the research evaluates the extent to which auditing has achieved its accountability objectives and considers possible strategies for improving financial transparency and responsible resource management. The findings are expected to provide useful information for strengthening accountability practices in government establishments.

1.1 BACKGROUND OF THE STUDY

The Enugu State Post Primary Schools Management Board (PPSMB) was established through the Enugu State Post-Primary Schools Management Board Law (Cap. 67, Revised Laws of Enugu State 2004). The Board operates as a government parastatal under the State Ministry of Education and is responsible for the supervision, administration and management of public secondary schools across Enugu State. Its responsibilities include overseeing school operations, managing personnel, preparing and presenting budget proposals for approval, and coordinating student admission activities (PPSMB Enugu, n.d.).

The Board is a major public institution in Enugu State, with considerable administrative and financial responsibilities. As of May 2019, it reportedly supervised 292 secondary schools and had a workforce of approximately 10,826 employees (PPSMB Enugu, n.d.). The significant number of schools, employees and resources under its administration makes effective financial control and accountability essential to its operations.

Understanding the development of public sector auditing in Enugu State also provides useful insight into the present auditing structure. Information obtained through an oral interview with the Chief Internal Auditor of the Enugu State audit department indicates that the history of the audit system can be traced to the colonial administration. During that period, auditing was conducted as part of the colonial public service, with regional audit departments operating under the administrative structure established by the colonial government.

Following the constitutional developments in Eastern Nigeria, the 1958 Constitution provided for the establishment of a Director of Audit for the region as an official within the regional public service. Subsequently, the creation of additional states in 1976, including Anambra and Imo States, resulted in the establishment of separate audit departments in the affected states. Each department was headed by a Director of Audit who supervised the examination of government financial activities.

Further changes occurred under the 1979 Constitution, which provided for the appointment of a state's Director of Audit based on the recommendation of the State Civil Service Commission, subject to confirmation by the State House of Assembly.

Enugu State was established in 1991 and subsequently developed its own public sector auditing structure in accordance with the 1999 Constitution and relevant state legislation. The state audit department is headed by the Auditor-General, who oversees the activities of other audit personnel and coordinates the examination of public financial records. The department also has responsibilities relating to government institutions and parastatals, including the Post Primary Schools Management Board.

1.2 STATEMENT OF THE PROBLEM

Inadequate accountability has remained a significant challenge in the administration of public resources in Nigeria. This problem is evident in government establishments and can also be observed in privately owned organisations where financial control systems are not properly implemented. The situation highlights the importance of conducting regular audits and establishing effective internal control procedures to ensure that financial resources are properly managed.

Auditing is generally regarded as an important instrument for determining the accuracy of financial records and assessing the financial activities of organisations. Through independent examination and evaluation of financial transactions, auditing helps management identify irregularities, improve financial discipline and ensure that available resources are used appropriately. However, despite the recognised importance of auditing, cases of poor financial accountability and mismanagement continue to occur in both public and private institutions.

Research examining public sector auditing in Nigeria has raised concerns about political interference in audit activities and the limitations affecting the independence of audit institutions (Olasupo, 2018). Similarly, weaknesses in existing legal provisions and inadequate institutional protection for auditors have been identified as factors that may reduce the effectiveness of public sector auditing (Ewa et al., 2025).

These concerns create the need to determine whether auditing actually performs its expected role in promoting accountability within government establishments. This study therefore focuses on the Enugu State Post Primary Schools Management Board to examine how auditing contributes to financial accountability, the extent to which available resources are properly managed and the challenges that may limit the effectiveness of audit activities within the organisation.

1.3 OBJECTIVES OF THE STUDY

The primary objective of this research is to examine the role of auditing in promoting accountability, with particular reference to the Enugu State Post Primary Schools Management Board.

The specific objectives are to:

1. Examine the various sources through which the Post Primary Schools Management Board obtains its financial resources.
2. Evaluate the extent to which officials responsible for managing the Board's funds demonstrate prudence, efficiency and effectiveness in the utilisation of available resources.
3. Investigate how funds generated or received by the Board are allocated and utilised in its daily administrative activities, while identifying alternative opportunities for generating additional revenue.
4. Assess the perceptions of junior staff regarding the management and distribution of available financial resources and determine how these perceptions influence their commitment, work performance and productivity.

1.4 RESEARCH QUESTIONS

The following research questions were developed to guide the investigation:

a. What are the major sources of financial resources available to the Post Primary Schools Management Board?

b. To what extent are the financial resources of the Board managed responsibly and efficiently?

c. What alternative revenue-generating opportunities are available to the Board apart from financial allocations and grants received from the federal and state governments?

d. What measures has the Board adopted to identify, develop and utilise alternative sources of revenue?

1.5 RESEARCH HYPOTHESES

To provide a basis for examining the relationship between auditing and accountability in the organisation, the following null and alternative hypotheses were formulated for testing.

Hypothesis One

H₀: Federal grants, state government subventions and local rates constitute the major sources of revenue for the PPSMB.

H₁: Federal grants, state government subventions and local rates do not constitute the major sources of revenue for the PPSMB.

Hypothesis Two

H₀: The management of the PPSMB utilises its approved annual estimates and budget appropriately.

H₁: The management of the PPSMB does not utilise its approved annual estimates and budget appropriately.

Hypothesis Three

H₀: The existing workforce of the PPSMB is adequate to facilitate the generation of sufficient revenue for the organisation.

H₁: The existing workforce of the PPSMB is inadequate to facilitate the generation of sufficient revenue for the organisation.

1.6 SCOPE OF THE STUDY

This research examines auditing as an instrument for promoting accountability in the Nigerian public sector, with specific attention to the Enugu State Post Primary Schools Management Board. It considers the contribution of auditing to financial transparency, proper utilisation of public resources and effective administrative control within the organisation. The study also investigates the challenges confronting internal audit departments in government institutions and examines possible measures for addressing these difficulties to improve their operational performance.

1.7 SIGNIFICANCE OF THE STUDY

The importance of this research lies in its potential contributions to professional auditing practice, organisational management, government administration and academic research.

Practical Significance

The findings of this study will be beneficial to professional auditors because they provide an opportunity to understand the responsibilities, operational challenges and constitutional provisions guiding auditing activities within the public service. The research also emphasises the importance of improving the working conditions and remuneration of public sector employees as part of broader efforts to discourage financial misconduct, embezzlement and the misuse of organisational resources.

Furthermore, managers and administrators in both public and private organisations may benefit from the study by understanding the importance of establishing reliable internal control systems. Effective internal controls help organisations monitor financial transactions, identify errors and irregularities, and ensure that resources are used in accordance with approved policies and objectives.

Members of governing boards, company directors and shareholders may also find the research useful in understanding how auditing contributes to organisational accountability and responsible financial management. Although the investigation focuses on a government education board, its findings may offer lessons that can be applied to other organisations.

In addition, policymakers and government authorities may use the findings as a reference when developing policies aimed at strengthening public sector audit institutions. Such measures may include improving auditors' professional capacity, protecting their independence and addressing weaknesses in the existing legal and administrative frameworks (Ewa et al., 2025).

Academic Significance

From an academic perspective, this research will serve as a useful reference for students, researchers and scholars interested in auditing, public sector accounting, financial management and organisational accountability. It will also contribute to existing academic discussions on the effectiveness of auditing in government institutions, particularly within the Nigerian public service.

Future researchers undertaking related studies may draw on the research objectives, findings and identified challenges to develop further investigations into auditing practices and accountability mechanisms in other government establishments.

1.8 OPERATIONAL DEFINITION OF TERMS

For clarity and proper understanding of the concepts discussed in this research, the following terms are explained according to their usage in the study.

Public Fund: A public fund refers to financial resources and other assets held or controlled by a government institution for the purpose of carrying out specific public responsibilities. In governmental accounting, a fund is treated as a separate accounting entity with its own records of assets, liabilities, revenues and expenditures, which are maintained in accordance with applicable financial regulations and restrictions.

Audit: Auditing is the systematic examination and evaluation of an organisation's financial statements, accounting records and supporting documents by a qualified individual or professional firm to determine their accuracy, reliability and compliance with relevant accounting requirements. The process results in an independent opinion on the financial statements examined.

Accountability: Accountability refers to the obligation of individuals or organisations entrusted with responsibilities or resources to maintain appropriate records, explain their actions and accept responsibility for the decisions and outcomes associated with their duties.

Stewardship Account: A stewardship account is a financial or administrative report prepared by an individual or management team to demonstrate how resources entrusted to them have been managed. It provides an account of their activities and decisions to the individuals or authorities to whom they are responsible, such as company managers reporting to directors and shareholders.

Compliance Audit: Compliance auditing involves the examination of an organisation's financial activities, records and operational procedures to establish whether they conform to applicable laws, regulations, approved policies and established administrative requirements.

REFERENCES

Ewa, [first name], Essien, E. N., & Adesola, W. A. (2025). Is the auditor truly a watchman or a gatekeeper in Nigeria? Asian Journal of Social Sciences and Management Studies, 12(1), 20–27. https://www.asianonlinejournals.com/index.php/AJSSMS/article/view/6806

Olasupo, S. F. (2018). Professionals’ perception of audit practices in public sector: A case study of Osun and Ogun States of South-Western Nigeria. European Journal of Accounting, Auditing and Finance Research. https://repository.run.edu.ng/items/2550dd67-8f42-4936-ba4f-e2d863f15aad

Post Primary Schools Management Board Enugu. (n.d.). About PPSMB Enugu. https://ppsmbenugu.com.ng/about-us/about-ppsmb-enugu.html