SOCIETIES AND APPLICATION OF FUNDS IN A GOVERNMENT PARASTATAL

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

Organization both profit and non- profit oriented need funds       (financial assets) for their numerous operations. That is why all          organizations irrespective of their legal forms, device a means their       day- to –day operations. The funds sourced are not normally kept idle by the organization rather they are either being re invested to         generate future profit or consumed immediately to achieve the         origination day to day goals hence the word “ source and application   of funds” in accounting profession

Source and application of funds simply means the various avenues available to an organization thought which it source it’s financial assets and all  the outlet through which the sourced financial assets     leaves the coffers of the organization

In recent past, government pareastalal which institute of       management and technology is one, depended revenue grants in    forms of subvention for few existence and growth, in this era of     privatization, the government has decided to shade off it’s financial responsibilities in almost government paratatal so as to concentrate  in it’s constitutional role of providing enabling environment for      economic activities to thrive. This scenario has left many   government paratatal in total financial drought

For instance, the immediate lost years in the which institute of        management and technology has been a hectic one as financial       starvation meted to it by the government has left the which  institute with the following identifiably problems;-

1)      Constant face off between management and trade union in respect regular payment of salaries

11)    Lack of promotion to staff that are due to be promoted

111)  inability to maintain their fixed assets such as

a)       Building

b)      Motor vehicle

c)       Furniture and fittings

1V)    inability to settle their other numerous over heard costs

V)      Absence of non structures to replace the dilapidated once etc

The colossal nature of these problems enumerated above made the           institute of management and technology IMT various avenue of     source for the following

I)       Creation of non–existing charges such as accreditation fees, development fees and upward review of other existing charges;

ii)      Carrying out aggressive campaign to increase the number of students       intake by reaching out to all seventeen local government in the state     and beyond

iii)     Scaling down the work force

iv)     Denial of promotion to staff those are due to be promoted

those member yielded a  positive result as a report is issued by       admission department shows that nearly  over 20,000 student were       admitted in this academic year and the management can now pay    their monthly salary bills of over 39 million naira and other overhead     cost. But the sustainability of the current trend is fillgloomy as the  funds sourced from these measures would be applied in solving short  term problem which is mainly revenue in nature. While capital   projects would be unattended to based on this it has become of  paramount importance that a re appraised of all sourced of fund available to IMT and how the fund sourced would be applied be    made to funds for it’s capital and revenue expenditure.

Hence my choice of this topic source and application of funds I a   government parastatal” A case study of institute of management and  technology IMT Enugu. Those research is concern with exposing the  source and application of funds.