This article addresses some fundamental issues on fraud prevention and control and their implications on socio-economic development of Nigeria using its public sector machinery.

Using the records compiled from early study covering 637 reported fraud cases in Nigeria, which were committed between 1970-1990 in respect of three-tiers of government selected from ten (10) states, the study employs chi-square technique to test the dependence of the types of fraud and the areas covered on the public sector organisation in which they are committed.

The study establishes the dependence and calls for systematic review of audit approach among others, to give special attention to fraud dimensions and areas, drawing largely from behavioral, equity, sociological and ethical principles.

1.1       Introduction

Public demands and expectations at the grassroots for the provision of essential social and basic services using government resources have continued to be astronomically high, as manifested by rising pressure on the resources with which to satisfy these.  This assertion is not difficult to appreciate if we accept the simple fact that the strength of any government depends on the success of its development programmes, which largely depend on an effective implementation of its policies, by its bureaucrats and technocrats.  It is obvious that social, political and economic development involves the effectiveness and the efficiency of the bureaucracy on one hand and the probity of the bureaucrats on the other.  Government exists to serve the interest of the citizens.  There must therefore be a way of holding the former accountable to the latter.

Huge amount of money is lost through fraud or due to internal control inadequacies and other criminal temptations, which to say the least, drains the nation’s meager resources through fraudulent means with its far-reaching and attendant consequences on the development or even socio-economic or political programmes of the nation.  Thus, like Kamaluddeen (1991:1) observes “billions of Naira is lost in the public sector every year through fraudulent means”.  This, he argues represents only the amount that is ferreted out and made public.  Indeed much more substantial or huge sums are lost in undetected frauds or those that are for one reason or the other hushed up.  Cases of frauds in the public sector are so pronounced that everyone in every segment of the public service, could seem to be involved in one way or the other in some of these nasty acts.  This assertion is not difficult to appreciate if we accept and adopt the simple definition of fraud as any deliberate false act aimed at deceiving or harming any party, individual or corporate body, in any manner. 

Haladu (1991:6) puts it starkly when he observes that:

The bane of financial administration in Nigeria has since the oil boom years a period under which the foregoing observation becomes relevant, has been the existences of structurally weak control mechanism, which create a variety of loopholes that have tended to facilitate and sustain, corrupt practices.  This is coupled, of course, with the fact that there is a near total absence of the notion and ethics of accountability in the conduct of public affairs in the country.

“The Guardian” in its issue of Wednesday, August 14th 1996 carried a story: “Public service staff Audit Report Ready”.  The article referred to the report of the Task Force on Staff Audit in the Federal public service inaugurated in March 1996 to investigate the incidence of ghost workers in 29 Federal ministries and about 500 Federal parastatals.  Indeed, the setting up of the Task Force was necessitated by the rampant discovery of ghost workers in the nominal roll of most government extra-ministerial departments, ministries and parastatals.  What came out of this Task Force and to what extent has it served, as adequate preventive measure is not clear to many academic and political observers!