Impact of Tax Evasion on Revenue Generation in a State (a Case Study of Ebonyi State)



Nigeria is one of the largest producer of oil and gas in the world, but the average Nigerian on the street is poor and there is poor infrastructure like power supply, roads, hospitals, educational institution, etc, financial management and accountability constitute an indispensable tool of public service organization on achieving their objectives. It assumes effectively and efficiently put to use for the achievement of the greater happiness for all .In this work; the challenges of financial management and accountability in the public sector, the author examines the management of public office holders give accountability report of their stewardship. By so doing, it is expected that every office holder should give a proper account of his /her stewardship. In carrying out the work, the author consulted several work ranging from textbooks, journals, newspaper, coursework and internet. Questionnaires were analyzed with the aid of tables, and conclusions were drawn with the aid of statistical sampling of the responses of the respondents. It was found that the most challenges faced by the ministry of finance is staff dishonesty. It was also discovered that financial management and accountability has improved the financial regulation of the ministry positively. It is recommended that public sectors should ensure staff honesty in order for them to account judiciously. It also recommended that public sectors should ensure proper and adequate financial regulations.





     The challenges of financial management and accountability in public sector could be traced to the fact that members of staff go for sustenance than their employer, ministry or departmental interest. Some employees even go to the extent of diversifying funds, resources and others economic benefits meant for their employer, ministry or department to their own private affairs.

This posses a lot of problems in the effective and efficient management of finances in the public sector. The Nigeria society is filled with stories of wrong practices such as stories of ghost workers on the payroll of ministries, extra ministerial  departments and parastatals frauds, embezzlement and setting ablaze of offices housing sensitive documents and corruption are founding everywhere in the country (OKWOLI 2004).

Bellow (2001), observed that huge amount of naira is lost through one financial malpractice or the other in Nigeria, which to say the least, drains the nation meager resources through fraudulent means with far-reaching and attendant consequences on the development or even socio-economic or political programmes of the nation.

          The challenges of political of financial management is as old as stewardship accounting which was developed as a result of great expansion in industry and commerce taken from industrialization resolution in 1800 century in recent times, financial management in public sector is highly professionalized but challenges are bound on special scenanos where death or retirement of a professional accountant makes preparation of financial statement technical.

          It is understood that public sector does not make profit as against the primary objectives for her counter parts (private sector) whose primary objective is make maximize profit. Upon this, sector is excepted to maximum service and account judiciously for money funds granted subsides to its realization from tax payer etc.

Okoh and Okwoyibo (2009) says that accountability reflects the need for government and agencies to serve the public effectively in accordance with the law of the land.  Accountability is a fundamental valve of the law political system.


          Imo state ministry of finance, Owerri is located at block 4, State Secretariat, Port Harcourt Road Owerri. Imo State Ministry of Finance is pivoted in financial control because of her roles in relation to ministries, and parastatals of government. In April, 1988, the Ministry of Finance was recognized like other agencies of government.

This ministry is now basically concerned with financial administration and execution of government financial policies which have been handed down in comfort with the national objectives of maintaining economic and monetary stability while pursing sustained growth of the nation’s economy. The ministry in carrying out its role of financial administration aims at the following among others:

  1. The development of initiatives for the formulation of policies on fiscal and monetary matters.
  2.   The mobilization of internal and external financial resources for development.
  3.  The supervisory control of other ministries/ department and agencies of government in financial matters.

        The finance headquarter is one of the arms of the ministry of finance and is headed by a permanents secretary. The headquarters serves as the co-coordinating arm of the ministry. Currently has staff strength of 112 officers, seven (7) department or units, that carry out normal operations of allocating and disbursing funds, loans and advances. The departments office:

    1. Accountant general’s office
    2. Administration and finance
    3. Treasury operations
    4. Inspection and training
    5. Revenue mobilization
    6. Debt management
    7. Final accounts

Also, the ministry has number of boards/agencies under its control which equally carry out services to the citizens of the state. These boards/ agencies include the following;

a.  Board of internal revenue

b. Imo state savings and loans

c. Budget and economic planning directorate.


There are certain observed problems which gave rise a research work on the challenges of financial management and accountability in the public sector. They are:

  1. Inclusion of Ghost workers in the pay roll. This is one of the challenges of financial management and accountability in Imo State Ministry of Finance, where managers have the authority to issue pay checks to fictitious employers who have ghostly appearances. Also managers hire ghost employees to his pay roll in order to collect the wages paid for the period.
  2. Embezzlement: This is states as theft of assets (money or property) by a person in a position of trust or responsibility over those assets. And also accounting embezzlement is form of crime; by which manager manipulate accounting records to hide his crime. This can be done by forgery, falsification of documents or information eg checks, bank drafts, contractors agreements, travel expense reports, electronic files etc with the intent to obtain an authorized financial benefits.
  3. Staff Dishonesty: this is another challenges faced by the Imo State Ministry of Finance where member of staff go for personal sustenance than their ministry or departmental interest. Staff/ employees even go to the extent of diversifying funds, resources and other economic benefits meant for their ministry or department to their own private affairs.


a.       To ascertain how ghost workers are included in the pay roll, and its effects in the ministry.

b.       To ascertain the effect of embezzlement on the organization / ministry.

c.       To find out how staff dishonesty can affect the operation of the ministry.


     This research work has picked up some interesting enquiries and discussion which centered more on the challenges of financial management and accountability in Imo State Ministry of Finance. This includes;

  1. How ghost worker’s included in the payroll?
  2. How is embezzlement of fund affects the performance of the ministry?
  3. How can staff dishonesty affect the ministry?


          This study, challenges of financial management and accountability in the public sector can be extended and it covers all organization which are not privately owned, and operated but which are established, run and financed by the government on behalf of the public but because of some constraints it was limited to the Imo State Ministry of Finance, Owerri. This ministry was selected due to its contribution in the nation’s economy. The scope does not take me beyond here for carefulness and reasonability.


          Some assumptions were made by the researcher with the aim of carrying out this research work successfully, the assumptions are:

  1. That the management and staff of the ministry will co-operate and provide relevant information needed in the course of the research work.
  2. That all questionnaire administered will be correctly filled and returned to the researcher and the research work will be great benefit to the Imo State Ministry of Finance in particular.


          At the end of this empirical investigation, a certain set of people are to benefit from the study. The fundamental truths and findings with regard to the challenges of financial management and accountability in the public sector are excepted to be evaluated and exposed to many such as;

  1. It is excepted that the study will be of great importance to the educational sector and other sectors as it will ensure effective and efficient financial management and accountability of public fund.
  2. The study will be useful to the educational institution especially to researchers and students who want to know more about the challenges of financial management and accountability in the public.
  3. The study could also serve as a guide to government policy relating to management of public funds.
  4. Management and staff of Imo State Ministry of Finance will benefit, as the information from the study will help improve their knowledge.


  1. ACCOUNTABILITY: Adegite (2010) defined accountability as the obligation to demonstrate that work has been conducted in accordance with agreed rules and standards and the officer reports fairly and accurately on performance sults vis avis mandated roles and \or plans. It also meant doing things transparently in line with due process and provision of feedback.
  2. AUDITS:  An audit is an independent examination of the financial statement of an enterprise to attest whether the financial statement is of true and fair view. Such examination tries to verify whether the accounts of an enterprise were prepared in accordance with some regulation guiding it.
  3. AUDITOR GENERAL: This is the officer responsible under the constitution of the Federal Republic of  Nigeria to audit all accounts of all accounting officer and persons entrusted the collection, receipts and custody, issue and payments of federal government money or with recruit, shares or other property  of the federal government and the certification annual accounts of government.
  4. MANAGEMENT: The act of running and controlling a business or similar organization.
  5. BUDGETARY CONTROL; This includes all measures found necessary to oversee the implementation of budget statement as to achieve the objectives of the budget.
  6. CHALLENGE: Accounting to Oxford Dictionary challenge is a new or difficult task that fests somebody’s ability and skill. It also means a statement or an action that shows that somebody refuses to accept something and questions whether it is right legal etc.
  7. FINANCIAL CONTROL: This process assures that financial resources are obtained economically and utilized efficiently and effectively in the alignment of the desired goal.
  8. FINANCIAL MANAGEMENT: This is concerned with the planning, controlling, organizing, and utilizing of financial resources as well as the formulation of a appropriate policies in order to achieve the aspirations of members of the society.
  9. INTERNAL CONTROL: This involves the system of control, both financially and otherwise by the management in order to carry on the business of the government in an orderly and efficient manner to ensure adherence to management policies, safeguard as far as possible the completeness and accuracy of the records.
  10. STAFF: All the workers employed in an organization considered as a group.
  11. ORGANIZATION: A group of people who form a business together in order to achieve a particular aim.
  12. PUBLIC SECTOR: This refers to all organization which are not privately owned and operated but which are established, run and financial by the government on behalf of the public.
  13. STEWARDSHIP ACCOUNTING: This is the process whereby the manager of financial business organization account reporting by means of financial statement.
  14. FUND: An amount of money that has been saved or has been made available for a particular purpose.
  15. FINANCE: Money used to run a business, an activity or a project. The activity of managing money, especially by a government or commercial organization. Eg the ministry of finance.




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