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PROJECT TOPIC AND MATERIAL ON ANALYZE THE IMPLICATIONS OF FEDERAL GOVERNMENT TREASURY SINGLE ACCOUNT ON ORGANIZATIONAL PRODUCTIVITY WITH PURITY FM, AWKA IN FOCUS
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- Name: ANALYZE THE IMPLICATIONS OF FEDERAL GOVERNMENT TREASURY SINGLE ACCOUNT ON ORGANIZATIONAL PRODUCTIVITY WITH PURITY FM, AWKA IN FOCUS
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1.1 BACKGROUND TO THE STUDY
Treasury Single Account is a public accounting system under which all government revenue, receipts and income and collected into one single account, usually maintained by the country’s Central Bank and all payments done through this account as well. The purpose is primarily to ensure accountability of government revenue, enhance transparency and avoid misapplication of public funds. The maintenance of a Treasury Single Account will help to ensure proper cash management by eliminating idle funds usually left with different commercial banks and in a way enhance reconciliation of revenue collection and payment (Adeolu, 2015).
The Federal Government’s directive to all revenue-generating agencies to close their accounts with commercial banks by February 28, 2015 and transfer same into a Consolidated Revenue Fund of the Federation and Treasury Single Account as a new electronic revenue collecting platform introduced recently by President Buhari has continued to generate debate across the country. The February directive, according to reports, was due to the speculation in the banking sector that shareholders lost about N573 billion in 2014 financial year following massive sell-off that overran the market in the last two quarters of the year.
According to the Accountant General of the Federation (AGF), Mr. Jonah Otunla, the new Electronic Revenue Collection (ERC) platform is aimed at improving internally generated revenue in the face of declining oil prices. This, he said, was in line with a series of treasury reforms, which began in 2012, aimed at ensuring transparency and accountability in the management of the nation’s finances. Director, Funds, Office of the Accountant General of the Federation, Mr. Mohammed Dikwa, who spoke on his behalf, posited that henceforth, government revenues would now be paid into the CRF/TSA, as it is now difficult for MDAs to maintain revenues with commercial banks. According to him, with the coming of E-collection, MDAs can no longer maintain Revenue Bank Accounts (RBA) with commercial banks. They are therefore advised to transfer any outstanding balance in your RBA to the CRF and immediately commence processes for closing them. MDAs were given up to February 28, 2015 to close their RBAs, stressing that appropriate sanctions shall be applied against any MDA that fails to comply. This directive was not implemented till recently when the Presidency re –affirmed his commitment in enforcing this policy.
However, speaking on the feasibility of the system, a development economist and
financial analyst, Mr. Odilim Enwegbara, said there was need to overhaul the Fiscal Responsibility Act (FRA) of 2007 in a way that blocks the huge leakages caused by certain sections and subsections of the Act. He said, I am particularly concerned with how Section 22(1) which, mandates all the revenue generating Ministries, Departments and Agencies (MDAs) to remit 80 percent of their operating surplus to the Consolidated Revenue Fund Account, allowed these MDAs to fraudulently resort to driving their so-called operating costs so high. By driving their operating costs so high, it allows them to declare close to zero operating surpluses and as a result, 80 per cent of their remittance to government treasury becomes close to zero naira Okwe,et.al, (2015).
He argued that, this singular lacuna has made it possible for revenue generating MDAs to have reportedly generated N3.06 trillion in 2009, but only remitted
N46.80 billion to government coffers; generated N3.07 trillion in 2010 but remitted mere N54.10 billion; and generated N3.17 trillion in 2011 and just remitted a meager N73.80 billion. He cited the case of NNPC and its subsidiaries, which, having internally generated N6.132 trillion between 2009 and 2011 remitted zero naira to the government treasury(Okwe,et.al,2015:53).
These frauds indicate that the single treasury account has its huge implications on the nation’s money and also on the organizations that are affected. By declaring less than generated and hiking impress, the objective of TSA to save is defeated, corruption and embezzlement encouraged and other restraining difficulties on TSA encountered thus encumbering administration and organizational productivity/efficiency.
From the foregoing, it is obvious that the primary benefit of a Treasury Single Account is the mechanism it provides for proper monitoring of government receipts and expenditure. In the Nigerian case, it will help to block most if not all the leakages that have been the bane of the growth of the economy. We have a situation where some Ministries, Departments and Agencies manage their finances like independent empire and remit limited revenue to government treasuries. Under a properly run Treasury Single Account, this is not possible as agencies of government are meant to spend in line with duly approved budget provisions. The maintenance of a single account for government will enable the Ministry of Finance monitor fund flow as no agency of government is allowed to maintain any operational bank account outside the oversight of the ministry of finance.
As a matter of fact, deposit money banks stand to lose immensely from the implementation of Treasury Single Account. This is because of the fact that public sector funds constitute a large chunk of commercial banks deposit. Indeed, it is estimated that organizational productivity of the federal government establishments will greatly improve as wastage will be avoided and income properly remitted to boost the national revenue generated annually. Also, in the long run, ministerial progress and productivity can easily be measured to see if their productivity level as intended or expected is reached. However, due to the limitations and bureaucratic nature of acquiring approval for spending by this ministries, there is fear as to how much this can slow productive efforts and affect results. This paper seeks to access the federal government treasury single account and its organizational productivity.
1.2 STATEMENT OF THE PROBLEM
There are so many problems faced by the Nigeria public sectors since its inception has affected its productivity. These problems range from financial recklessness, unaccountability, funds leakage and other financial related issues. In an effort to savage the Nigeria financial system, the treasury single account was proposed and then adopted.
Some school of thought however believe that while the introduction of TSA has its advantages, it none the less has other numerous disadvantages such that it can affect willingness to work, improve output, affect speedy execution of projects and hamper productivity.
The introduction of treasury single account by the federal government has with it so many challenges as it has its advantages. The researcher therefore in this study is trying to find out how the Federal Government Treasury Single Account affects productivity in Nigeria public service with Purity fm AWKA as a case study.
1.3 OBJECTIVES OF THE STUDY
The broad objective of this study is to analyze the implications of Federal government Treasury Single account on organizational productivity with Purity fm, Awka in focus.
The following are the specific objectives of this study:
- To identify the reasons for the introduction of the treasury single account.
- To identify how treasury single account affects organizational productivity.
- To find out how to maximize the benefits of treasury single account.
1.4 RESEARCH QUESTIONS
- What are the reasons for the introduction of treasury single account in Nigeria?
- What are the implications of Treasury Single Account on organizational productivity in Nigeria?
- What are the strategies to maximize the benefits of Treasury Single Account?
1.5 STATEMENT OF HYPOTHESIS
For the purpose of this study, the following hypothesis will be tested.
H0: Treasury single account was not introduced to check financial recklessness in Nigeria.
H1: Treasury single account was introduced to check financial recklessness in Nigeria.
H0: Treasury Single account does not encourage flexibility and ease of decision by public organizational directors thus affecting productivity.
HI: Treasury Single account encourages flexibility and ease of decision by public organizational directors thus affecting productivity.
1.6 SIGNIFICANCE OF THE STUDY
This study is needed at this point in the nation’s life when the single treasury account is yet to be fully understood and accepted in the nation thus requiring a lot of study and inquiry into the impact it has on organizational productivity.
The results from this study will educate the general public on the benefits of Treasury Single Account to the economy of the country. It will also educate on its effects on organizational productivity.
The study will also educate executives on how to run an efficient productive organization in under the treasury single account policy.
This research will also help policy makers identify how to fine tune the treasury single account policy towards positive economic development in Nigeria.
This research will further serve as a resource base to other scholars and researchers interested in carrying out further research in this field subsequently, if applied will go to an extent to provide new explanation to the topic.
1.7 SCOPE OF THE STUDY AND LIMITATIONS OF THE STUDY
This research work is centered on the implications of Treasury Single Account on organizational productivity with emphasis on Radio Nigeria, Purity Fm.
Financial constraint– Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
Time constraint– The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
Epileptic Power Supply – The poor and inconsistent power supply by the EEDC significantly slowed the progress of this research work as the researcher had to lose time waiting for them to restore and leave the light to a very reasonable time. This constant fluctuation in power supply often resulted to loss of data.
Lack of Compliance of Respondents and Poor Availability of Data: Due to the sensitivity of this research work, correspondence avoided giving their time to responding to questions raised by the researcher when they were finally persuaded to accept giving it at all. Also, accessibility to certain documents and data was frustrated thus limiting the length and speed of this research work.
DEFINITIONS OF TERMS
Federal Government Treasury Single Account:
Based on the principle of unity of cash and the unity oftreasury, a TSA is a bank account or a set of linked accounts through which the government transacts all its receipts and payments. The principle of unity follows from the fungibility of all cash irrespective of its end use.
Organization productivity has to do with determining a broad range of factors, some which can be evaluated quantitatively, and others which require a qualitative, analytical approach. In assessing productivity, it is important therefore to fully understand each of the key drivers that impact productivity. In addition to evaluating each driver individually, it is also necessary to determine how well these drivers work together and function as a whole.