1.1 BACKGROUND OF THE STUDY
With the prevailing situation in the Nigeria economy, it is an established fact that embezzlement and mismanagement of resources is what the director of companies embarked upon, instead of adequate management of resources pulled together by the shareholders. Also these directors despite the stewardship they hold are not exhibiting accountability and transparent honesty, it is for these reasons the researcher deems it fit to examine how effective internal control system can serve as a means of preventing fraud in the public sector.
According to Oxford Advanced Learner Dictionary fraud can be defined as an Act of deceiving in order to make money or obtain goods, “Kirk Patrick” (1985) described a person who pretends to be something that he is not a fraud, deceptive, tricky, a cheat and a swindler”, furthermore fraud includes embezzlement, theft or nay attempt to steal unlawful possession of assets.
From the above, it is understood that fraud involves the use of deceit and tricks. The action, it is understood that form of forgery, falsification, of document, authorized signature and outright theft.
However, it has been establish that majority of frauds in the public sector can be attributed to lack of sound or lap set in the internal sector and the existence of poor control region.
1.2 STATEMENT OF PROBLEM
Organizations have failed in their occasional review and appraisals of the internal control system in operation or have totally ignored the operations of effective internal system in the discharge of their duties and this has over the years been the bane of an effective service to the people.
Also it is the use of internal control as a management tool. In the society; the work will also provide answers to the role of internal control in manufacturing organization.
1.3 SIGNIFICANT OF THE STUDY
Internal control is the type of control exercised by the management within the organization. Internal control is not only internal check and internal audit but the whole system of controls, financial and otherwise, established to secure the asset and secure as far as possible the completeness and accuracy of the records.
It should be noted that the need to safeguard assets and keep proper records is an essential justification for internal control. All measures employed by an organization to:
Safeguard assets from waste, fraud and inefficient use. Promote accuracy and reliability in the accounting records and encourage compliance with company policies and evaluate the efficiency of operations.
1.4 OBJECTIVE OF THE STUDY
The study will look into loopholes and weakness in the internal control system used in the organization and to make recommendation for any necessary improvement as a complete change of the system in operation.
The research work intends to study the organizational structure of the internal control department as the internal audit department. Problems being encountered by these two departments in their functioning and strategies to be used in solving these problems will be considered.
1.5 SCOPE OF STUDY
This research study is designed to find out if actually the non-operation of effective internal control system has been the cause of irregularities in electricity supply in the country.
The data to be used will be gathered mainly from the accounting department, budget department and wages and salaries department of the OGITECH Nigeria bottling company.
However, the results are envisaged to bear relevance to other manufacturing industry with same internal control system.
1.6 RESEARCH QUESTIONS
These are some questions that will be relevant to help carry out the research work such as follows:
Does internal control affect manufacturing company performance? Does internal control helps to safeguard the assets of the organization? Is there a correlation between internal control and manufacturing company performance? Does internal control system help the organization in case of workers commitment to work? Does internal control system increase organization productivity?
1.7 RESEARCH HYPOTHESIS
Ho: Internal control does not affect manufacturing company performance
Hi: Internal control affect manufacturing company performance
Ho: There is no correlation between internal control and manufacturing company performance
Hi: There is correlation between internal control and manufacturing company performance
1.8LIMITATION OF THE STUDY
During the course of this study research, was some major limitations have been inescapably encountered. This includes: a. Inadequate time and logistic which as expected, constitute a constraint. b. The usual un-corporative attitude of some official secret has succeeded in impeding the depth or vastness of this work. To curtail this, secondary data released is released is relied upon in the execution of this work. c. Lack of proper record which have been identified by many reputable researchers as a major threat to the expansion of small scale enterprises. It is not surprising to realize that this also has unfavorable constraint to the research work.
1.9 DEFINITIONS OF TERMS
Book-keeper: A person who records financial statement of company or an organization Advertising: The activity or business of advertising things on television, radio etc or to tell the public about a product or service in order to persuade them to buy Embezzlement: To steal money from the place where you work.
Mismanagement: If someone mismanages something they are in charge of, they deal with or manage it badly. Shareholder: Someone who owns shares in a company or business. Stewardship: Someone’s stewardship of something is the way that they control or protect it. Fraud: The crime of deceiving people in order to gain something such as money or goods or someone or something that is not what it is claimed to be. Internal control: Is a whole system of controls, financial and otherwise, established by the management in order to carry on the business of the enterprise in an orderly and efficient manner, ensure adherence to management policies. Safeguard: to protect something from harm or damage. Organizationalstructure: It consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims. It can be considered as the viewing glass or perspective through which individuals see their organization and its environment.
1.10 HISTORICAL BACKGROUND OF OGITECH
Just like the mustard seed the dream of Ogun State Institute of Technology Igbesa(OGITECH) formally, Gateway (ICT) Polytechnic, Igbesa(G.P.I) was planted in the heart of the Ogun State Government in 2015. The infuriation took place June 29th 2006.
OGITECH was established with the mission of being the first choice of student business and public organization through delivery of high standard of education, and producing qualify graduate to make to make important contributions to the state in particular and the country as a whole. Currently, OGITECH Igbesa runs courses in applied sciences and Technology, Engineering Studies and Management Studies.
Meanwhile, Ogun State Institute of Technology is running nine(9) National Diploma and five (5) Higher National Diploma courses, all which are accredited by the national board of technical Education (NBTE) and more are still in pipeline for resources approval. As an information communication technology (I.C.T) based institute, OGITECH, also runs professional certificates in CISCO I.T. Essentials: PC Hardware and Software, Cisco Certified Network Associates (CCNA 1-4) and CCNA security. It is mandatory of all students of the institution to undergo ICT programme thereby acquiring two certificates at graduation.
The institute population is relatively large with full time and part time students’ academic and non- academic staff to have its own special life. Ogun State Institute of Technology, Igbesa by the pronouncement of the Ogun State Government on Wednesday 8th February, 2012 is presently Headquarters in main campus to three (3) campuses namely:
(1) KessingtonAdetutu campus saapade (2) Abraham Adesanya Campus Ijebu Igbo (3) D.S Adegbenro Campus, Itori