RELATIONSHIP BETWEEN FISCAL RESPONSIBILITY ACT AND PUBLIC SECTOR FINANCIAL MANAGEMENT PRACTICE: AN EMPIRICAL JUSTIFICATION
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Date
2018-04
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DEPARTMENT OF ACCOUNTING UNIVERSITY OF PORT HARCOURT, CHOBA PORT HARCOURT, RIVERS STATE
Abstract
Nigeria unrealistic budget practice due to fiscal indiscipline among others gave rise to the enactment of fiscal responsibility act in 2007 as a means of resolving the problem. This study evaluated the relationship between fiscal responsibility act, 2007 and government financial management practice in Nigeria. A descriptive cross sectional survey research design was used and 500 senior staff of ministry of finance, budget office of the federation, fiscal responsibility commission, and National Assembly were randomly selected as the study population based on the researcher’s judgment. Data was collected through questionnaire and analyzed using descriptive and correlation techniques to confirm the six formulated hypotheses. The results concluded that the proxies of fiscal responsibility act - macroeconomic framework; budget performance review; revenue trends and assumptions underlying projections; fiscal strategy paper; analysis and statement on consolidated debt and contingent liabilities; risks to medium-term outlook have positive and significant relationships with public sector financial management practice {Rs = .576; .679; .711; .765; .718; .561; Ps < .05}. It was recommended that fiscal rules should be well implemented to achieve proper revenue projection, expenditure discipline, minimized debt burden, and have a balanced budget that would stimulate economic development. The study contributed to literature by providing empirical explanation for the enactment fiscal rules in Nigeria. A comparative study to review fiscal laws applicable in various countries across continents was suggested for further research. This would assist researchers to properly advise Nigerian government on fiscal laws best practice in the public sector.
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Keywords
Fiscal Responsibility Act, Medium Term Expenditure Framework, Fiscal Responsibility Commission, Government Financial Management
Citation
Okpala, K. E., Adegbola, D. D. and Afolabi T. S. (2018). Relationship between Fiscal Responsibility Act and Public Sector Financial Management Practice: An Empirical Justification. University of Port-Harcourt Journal of Business, Accounting & Finance Management, 8(3), 105-120