It has become a very important task for Accounting Officers of Ministries, Departments, and Agencies (MDAs) to pay more attention to and make regular checks on their corporation’s cash books and bank accounts.
Internal control systems are usually put in place to prevent the possibility of committing errors and fraud. This has been more challenging and requires all accounting officers to be more knowledgeable in the act of keeping records. Every organization has to keep a close watch on its bank account transactions to guard against fraud or the infiltration of extraneous entries. This is done through regular preparation of bank reconciliation statements.
As a result of widespread internet fraud, the Accounting Officer of the Ministry of Land and Housing, Alhaji Maito Garba, has been concerned with the Ministry’s banking transactions. In recent times, there have been challenges reconciling the Ministry’s banking transactions. There was no time when the Ministry’s bank balance agreed with the cash book balance. However, there was no adequate information to suggest that there was fraud or misappropriation of funds. Nonetheless, Alhaji Maito Garba invited you to his office for professional advice.
He informed you that the Director of Finance of the Ministry had been avoiding him on matters relating to the Ministry’s bank and cash positions.
He also informed you that he was able to retrieve some of the finance department’s data, which he handed over to you as detailed below:
Transactions recorded in the books for the year ended December 31, 2017
(Amount in N’000)
| Description |
N’000 |
| Subvention received |
55,000.00 |
| Interest from investment |
3,501.68 |
| Rent on property |
11,300.35 |
| Ground rent |
16,801.00 |
| Saving deposits interest |
6,281.00 |
| Grants for construction of estates |
51,301.50 |
| Deposits for land |
19,000.60 |
| Personnel costs |
36,801.00 |
| Travel and transport |
7,000.40 |
| Telephone services |
2,401.50 |
| Repairs of property |
4,868.25 |
| Stationery |
901.86 |
| Provision of water for estate |
14,300.60 |
| Consultancy services |
3,001.26 |
| Training and staff development |
1,001.56 |
| Auditing and staff development |
1,500.00 |
| Entertainment and hospitality |
500.00 |
| Construction of estate |
35,607.58 |
| Construction of access roads |
8,400.60 |
| Cash book balance as at 1/1/2017 |
21,500.00 |
Preliminary investigations revealed the following information:
- 1,370 prospective landowners deposited N10,000 each, while 580 deposited N20,000 for high- and low-density areas of the estate, respectively.
- Included in the payments for the construction of the estate were various duplicated vouchers amounting to N9 million.
- The bank balance as per the statement on December 31, 2017, was N39,560,600.
- Uncredited cheques amounted to N6.9 million, while unpresented cheques stood at N4,337,800.
- There were some falsifications in the bills for items bought for the provision of water for the estate.
Required:
a. Prepare the adjusted cash book for the Ministry of Land and Housing for the year ended December 31, 2017. (10 Marks)
b. Prepare the bank reconciliation statement for the Ministry of Land and Housing as of December 31, 2017. (10 Marks)
c. Identify FOUR statutory institutions that the suspicious case(s) of fraud in (b) above could be reported to. (4 Marks)
d. State FOUR procedures that should be followed by the Accounting Officer in reporting the case(s) of fraud to the statutory institutions in (c) above. (4 Marks)
e. Identify TWO related offenses that two of the statutory institutions in (c) above can deal with in this case. (2 Marks)
