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
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.
1.2 STATEMENT OF PROBLEMS
Most organization both profit and non profit oriented has problem knowing how to raise funds for their operation and most often fail utilize the available funds. The following problem below are found as obesities inherent in sources and application of funds in institute of management and technology IMT enugu.
i) it was difficult to know the extent steady sources of fund had made (I.M.T ) scale down it’s cout force.
ii) I.M.T funds it difficult to erect new structures show as class-room student intake
iii) it was difficult to know wetter I.M.T applies the funds it sourced in most appropriate manner,
iv) the impact of government discontinued finding to I.M.T was unknown Objectives/
1.3 PURPORT OF THE STUDTY;
THIS research topic ‘socures and application of funds in government parasratal was set towards establishing the following objectives:
i) to ascertain the extent the lack of steady source of funds had made IMT scale down it’s work force
ii) to find out how difficult it was to IMT to put up new class room blocks in retaliation to number of student in take
iii) to know whatever IMT applies the fund its scoured in most appropriate manner
iv) to determine the impact of government discontinued finding to IMT financial stability
v) to ascertain why staffers not promoted when due
vi) to keep the extent IMT management their fixed asset
1.4 SCOPE OF THE STUDY;
This research work is limited to the source of funds available to IMT enugu and how such funds ar4e expended the study will examine reports covering from (2000 to 2005)
the major constraints of this project re money, tine and materials. Each of these factors in addition to secrecy exhibited by some staff of the institute.
1.5 RESEARCH QUESTIONS;
To guide the study six research question were formulated as follows
0 What extent does the lack of steady source of funds made imt scale down its workforce?
1 To what extent does imt used it’s sourced fund to erect new class room blocks in relative to the number of the student in –take
2 Does IMT soured it’s fund internally or externally
3 To what extent does IMT apply the fund if sourced in most appropriate manner
4 Does the fund sourced goes payment of staff salaries only
6 Does the fund sourced goes solve some management problem like erecting of class room blocks setting their other numerous over heard cost, equipping student library maintaining their fixed assets such as building, motor vehicles furniture and fittings etc.
1.5 RESEARCH QUESTIONS;
To guide the study four researches were formulated as follows
I what extent does the lack of steady source of funds made imt scale down its workforce?
II To what extent does imt used its sourced fund to erect new class room blocks in relative to the number of the student in –take
1.8 DEFINITION OF TERMS
1. Application; - This means were these funds money sourced, what it is flashed for
2 Source; - place from which something comes or is obtained nova’s starting points,
3 Prasatal companies’ bodies or government bodies or institutions
4 I.M.T; - institute of management and technology imt enugu .
5 GOVERNMENT ENUGU STATE GOVERERNMENT
1 Iloh Joseph (2004) Business finance (issue and applications) 3rd Edith , enugu rock hill Associates 29,32,36,60
2 Orjih John (2001) finance and Management vol. 11 Enugu, splalimedia Organization p.20
3 Firth Michael (1976) Management of working Capital London, Macmillan fess ltd p. 109 – 111
4 Emekakwue Patrick (2002) Corporate finances and Management 4ed, Republic Congo, p 404
5 Rao, Rameah k.s (1998) financial Management Concept and application new York Macmillan publishing company, p 232
6 Orjih John (2001) finance and Management vol. 11 Enugu splalimedia Organization p.36-37
7 Euene Brigliam F (1997) fundamentals of financial management, or lade Florida dry press p. 342.