CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Money is an organization tool which is used for proper management, control and co-ordination. Economically, it is said to be scare in supply and the scare nature of it makes it necessary for good and effective management. Every organization whether small or large, requires good Accounting system for efficient management and control of her finances which may be done through a specified method as: i. Controlling of Assets ii. Internal/External Auditing iii. Keeping of Proper Books iv. Preparation of Financial Statement v. Compliance with Legislation/Statutory Requirement. A good Accounting System would provide orderly assembly of Accounting Information and from the basis of continuity. Polytechnics though tertiary institutions like any other organization are required by law establishing them to prepare accounts which are in conformity with general accepted principles of accounting so also with Kaduna Polytechnic which form the basis of this study. Higher institution of learning established by Decree/Act (Kaduna Polytechnic) been one, operate accounting system some how similar to a great extent. It is of paramount importance at this juncture to have a broad knowledge of accounting system and funds accounting as it applies to tertiary institution. Accounting system is the art of recording and controlling an organization by keeping accurate book-keeping of business transactions articulate to form an accounting process.
Finney and Miller (1971) define Funds Accounting as “an independent fiscal and accounting entity with a self-balancing set of recording cash and other resources together with all related liabilities, obligation, reserves, and equities which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restriction or limitation. Public funds accounting tends to vary due to management policies differences. Though this higher institution of learning which are established for objective reasons are not profit oriented , there accounting systems are based on Historical cost concept, which indicates that Assets and liabilities are shown in the accounts at their Historical cost rather than current market value. It is a common knowledge that all businesses and non business organizations including government runs on money equally, like there are wide range or ways of spending (expending funds). So also there are also variety of ways of generating it. Source of fund refer to the different ways available to business enterprises through which it can mobilize money (funds to finance its operation i.e. from planning, conception, take up buying of fixed assets to day to day operations.