Analysis of Effect of Public Sector Accounting on Financial Control Systems in Nigeria Local Governments

The local government in Nigeria has faced a persistent challenge of financial control leading to 
the loss of billions of naira into the hands of public office holders. The trend has negatively affected 
local governments’ ability to fulfill their statutory responsibilities. Therefore, the main thrust of 
this study was to empirically examine the effect of public sector accounting on financial control 
system in local governments in Osun State—specifically Osogbo, Ife Central, and Iwo. In specific 
terms, the study investigated the extent to which public sector accounting, as measured by public 
sector audit, budgetary process, and procurement process affects financial control in local 
governments. The study population comprised 188 staff members of the three selected local 
governments, and random sampling techniques were employed. Data collected through 
questionnaires were analyzed using descriptive statistics and inferential regression analysis. The 
result of the findings indicated that public sector audit has a significant positive effect on financial 
control in Osogbo, Ife Central, and Iwo Local Governments, Osun State, Nigeria. This is shown 
by the following statistics: public sector audit was found to have as significant positive effect on 
financial control system in local government in the Osogbo, Ife Central and Iwo, Osun State, 
Nigeria. (β = 0.482, SE = 0.092, t = 5.269, p < .001). Budgetary control had no significant effect 
on financial control in the Osogbo, Ife Central, and Iwo Local Governments, Osun State, Nigeria 
(β = 0.121, SE = 0.082, t = 1.479, p = .132). Procurement process was found to have a significant 
positive effect on financial control in Osogbo, Ife Central and Iwo local government, Osun state. 
Nigeria (β = 0.279, SE = 0.079, t = 3.668, p < .001). The study therefore recommended that the 
government strengthen its audit practices, procedures, and mechanisms; it also recommends that 
future research should investigate why budgetary control fails to predict financial control; lastly 
the government should domesticate and enforce the Procurement Act across all local governments 
in the country.