Public Procurement Practices and Financial Accountability in the Public Sector

Public Procurement Practices and Financial Accountability in the Public Sector

Dr. Kolawole Olalekan Adebola

Department of Management Sciences, School of Social and Management Science, Bamidele Olumilua University of Education, Science and Technology, Ikere Ekiti. Ekiti State.

DOI: https://dx.doi.org/10.47772/IJRISS.2025.908000075

Received: 18 July 2025; Accepted: 23 July 2025; Published: 28 August 2025

ABSTRACT

This study investigates the efficiency and the economic impact of the Public Procurement practices to establish an empirical argument to support the extent to which it has affected financial accountability.  Specifically, the study investigates the impact of public procurement procedures on financial transparency in tertiary institutions in Southwest, Nigeria, and determines the significant difference between the procurement procedures of Public Universities, Polytechnics, and Colleges of Education in Southwest, Nigeria. The study adopted a descriptive research design of a survey type. The study covered 803 procurement-related officers in the Audit and Bursary departments of the selected. Data collected were analyzed using descriptive and inferential statistics. From the analysis carried out, it was discovered that public procurement practice has a positive but non-significant impact on financial accountability of public tertiary institutions in Southwest, Nigeria, to the tune of 0.076(p-0.062>0.05). The ANOVA result unveiled that there is a significant difference between the procurement procedures of public universities, polytechnics, and colleges of education in Southwest, Nigeria, based on the F-statistic given to be 14.06 and the p-value given to be 0.000 < 0.005. Hence, it was concluded that there is a statistically non-significant impact of public procurement practices on the financial accountability of public tertiary institutions in Southwest Nigeria.

Keywords: Public Procurement Procedures, Financial Accountability, Public Universities.

INTRODUCTION

The public sector is empowered by the statute to harness the public resources, collect all money, and spend the same for the benefit of the entire citizens. The public service, which is seen as the custodian of public resources, statutes, and the machinery for societal development, has lost its reputation and distinction in the eyes of the general public, tarnishing the nature of financial accountability. In the public sector, financial accountability could be ex ante, necessitating a parastatal or department to give an account of how a project would be undertaken before it is carried out. Financial accountability could also be ex post, necessitating a parastatal or department to give an account of the results of their activities (Onuorah, 2017). In the same vein, financial accountability could also be amendatory, necessitating corrective action to compensate for a grievance. It could also be political, which represents the accountability of the executive arm of government to the legislative arm of government. Financial accountability could also be managerial, representing the delivery of public services by government and its agencies to the citizens for a fee or for the utilization of public wealth to deliver those services.

Financial accountability is needed in the public sector to account for different resources, incomes, revenue, expenditures, projects, investments, debts, and so much more. However, the need for financial accountability is different from its effectiveness and efficiency. Personal observations show that the public sector undergoes activities of financial accountability, thus fulfilling the need for financial accountability. However, fulfilling the need for financial accountability is not synonymous with the effectiveness and efficiency of financial accountability, which is highly lacking in the public sector in Nigeria. That is, despite the frequency of financial accountability, it has not improved the effectiveness and efficiency of financial accountability in the public sector.

It is worrisome to note that over the years, public institutions and other institutions either partially or ignore the principles and procedures outlined for accountability. Agbatogun (2019) averred that there have been assumptions that the duties and trust reposed in the public officers were not efficiently and effectively performed. Hence, improving financial accountability of tertiary institutions demands identifying the internal and external factors that could affect it. Odero and Ayub (2017) and Adewale (2019) argued that one of the prominent internal factors affecting the financial accountability of tertiary institutions is the procurement procedure.

Public procurement is the chain of interrelated functions towards the identified wants with the right quality, quantity, price, and delivered at the expected time and place towards the realization of the desired goal (Adewale, 2019). The process consists of blueprints and flow charts to describe a process in images using symbols with arrow lines relating each operational phase to another. These public procurement processes are grouped into six different phases, which include needs identification, specification, suppliers’ selection, contractual agreement, follow-up, and evaluation process.

Public procurement system centers on the system adopted by tertiary institutions to obtain supplies and services (Odero & Ayub, 2017). Public procurement systems are highly centralized, and at the state level, State Procurement Boards govern the procurement function. In Nigeria, due to the linkage between the weak/poor public procurement report and theft/corruption from a World Bank Country Procurement Assessment survey conducted in 1999, Public Procurement Reform was introduced (Oyebamiji, 2018). The report unveiled a huge loss annually as a result of a high level of fraudulent practices in public contracts through a rise in contract costs, poor project prioritization, a lack of competition, poor budgeting processes, and other kinds of contractual agreement manipulations.

Hence, the procurement reform was enacted to reinstate the due process system in contract execution. This resulted in the founding of the Budget Monitoring and Price Intelligence Unit (BMPIU, 2001) for the implementation of the Federal Government’s Public Procurement Reform Policy. Following the reform with legal backing, the management team of the BMPIU presented a Public Procurement Bill to the National Assembly in 2003/2004. On 1^st June 2007, the Nigeria Procurement Act was established. Hence, the Nigerian Public Procurement Act guides the procurement function in Nigeria’s tertiary institutions.

The Act stipulated that in Nigerian tertiary institutions, procurement functions include the acquisition of landed properties and infrastructural requirements and facilities, purchase of office furniture and equipment, laboratory equipment and tools, stationeries, office electronics and gadgets, motor vehicles and spare parts, ICT gadgets, farms tools and machinery, recommended textbooks, purchase of food substances and purchase of laboratory equipment. To ensure transparency, cost efficiency, and accountability in procurement functions, Nigerian tertiary institutions are expected to conform to the procurement process outlined by the Act.

Nigeria Procurement Act of 2007 requires public procurement systems to be fair, equitable, transparent, competitive, and cost-effective. However, the challenge is that the principles enshrined in the aforementioned Act appeared not to have been enforced as expected. Some of the weaknesses identified in the procurement contract implementation are a failure to ensure fairness, competitiveness, and transparency. There is still a lack of comprehensive internal procurement processes, a policy regulatory framework, effective leadership and management, and ICT infrastructure support. There is also a lack of a central body with technical expertise, absence of clearly defined rules and responsibilities for procurement entities, and absence of a comprehensive legal regime to safeguard public procurement and monitor public procurement (Moneke, 2020).

The Nigeria Procurement Act of 2007 has, since its inception, introduced several relevant modern procurement principles that are expected to correct the rot and anomalies that were widely associated with public procurement. This notwithstanding, the implementation has been quite challenging. Ezeanyim, Uchenu, and Ezeanolue (2020) noted that the Procurement Act is a universal remedy to the numerous problems that bedevil public procurement.

Oyebamiji (2018) argued that it is an instrument that overly relies on competition and is therefore inadequate and lacks the needed strength to curb the various moral concerns that characterize public procurement practice. It is the interest of the researcher to investigate the efficiency and the economic impact of the Public Procurement practices to establish an empirical argument to support the extent to which it has affected financial accountability.

Specifically, the study:

1. investigate the impact of public procurement procedures on financial transparency in tertiary institutions in Southwest, Nigeria.
2. determine the significant difference between the procurement procedures of Public Universities, Polytechnics, and Colleges of Education in Southwest, Nigeria.

The contemporary world, where organizations are faced with challenges of managing their scarce resources, has put continuous pressure on most tertiary institutions to seek all opportunities that enhance the management of available capabilities (Aliyu, 2015). For institutions to excel in their service deliveries to society and surpass their expectations, a high-quality service, at minimal cost and made available in a minimum time, is desirable. Therefore, the supply chain of such tertiary institutions needs to be well-managed and can minimize cost while enhancing society with a good quality of service at a low cost (Alabi, 2020). This could be achieved via compliance with the Nigerian Procurement Practice, as procurement incurs the highest proportion of expenditure in tertiary institutions.

Public procurement system centers on the system adopted by tertiary institutions to obtain supplies and services (Odero & Ayub, 2017). Public procurement systems are highly centralized, and at the state level, State Procurement Boards govern the procurement function. In Nigeria, due to the linkage between the weak/poor public procurement report and theft/corruption from a World Bank Country Procurement Assessment survey conducted in 1999, Public Procurement Reform was introduced (Oyebamiji, 2018). The report unveiled a huge loss annually as a result of a high level of fraudulent practices in public contracts through a rise in contract costs, poor project prioritization, lack of competition, poor budgeting processes, and other kinds of contractual agreement manipulations. Hence, the procurement reform was enacted to reinstate the due process system in contract execution. This resulted in the founding of the Budget Monitoring and Price Intelligence Unit (BMPIU, 2001) for the implementation of the Federal Government’s Public Procurement Reform Policy. Following the reform with legal backing, the management team of the BMPIU presented a Public Procurement Bill to the National Assembly in 2003/2004. On 1^st June 2007, the Nigeria Procurement Act was established. Hence, the Nigerian Public Procurement Act guides the procurement function in Nigeria’s tertiary institutions.

Public Procurement Act 2007, aids the establishment of appropriate institutional frameworks so as to bring about a regime of transparency, accountability, probity, value for money, competitiveness, cost effectiveness and efficiency, and professionalism in the public procurement system (Mohammed, Olukayode & Onukuwbe, 2019). Also, it ensures that corruption is reduced significantly in Public Procurement practice. Of course, the Public Procurement Act, 2007, does not seem to be perfect as it should have been. This is because there have been some agitations on the need to amend some sections of the law to make it more effective (Adeyeye, 2014).

To date, the general expectation is that all tertiary institutions in the Southwest should have complied with the public procurement laws by now, but the reverse is the case. Many tertiary institutions’ stakeholders have opined that despite having such an Act in place, many loopholes are found in their compliance with the public procurement procedures. Enofe, Okuonghae, and Onobun (2015) ascertained that while the choice of a procurement method is principally that of the procurement department and can vary depending on their experience, exposure, volume, and continuity or repetitiveness of their functions. However, construction projects differ in nature, complexity, scope, and objective. Act VI, sections 25-28, which centered on the procurement methods, only focused on procuring goods and services. There is no unique and clear indication on how to procure for construction or specialized projects.

On a similar stand, Nwadighoha and Emmanuel (2017) disclosed that the Public Procurement Act 2007 fails to provide methods for conflict resolution that could arise during project execution. Though Part XII of the Act stipulated various activities that could be charged as an offence, it fails to provide ways to settle conflicts among the participants in project execution.  Thus, based on the aforementioned loopholes, the Act is due for amendment to encompass provisions for conflict resolution methods and procurement methods for construction projects. According to Earnest, Sarfo, and Collins (2011), public procurement is considered a politically sensitive activity at the university and polytechnic levels. The management of the Procurement Department takes on the role of agent for elected political leaders/godsons to bid for contractual agreements for the supplies of goods and services. However, this practice hinders the legitimate procurement practices in the institution (due process). Yusuf (2014) argued that senior officials and political leaders use public office for private gain, and this has weakened the motivation to remain transparent and honest in public offices. Practically, during the tendering process, it is believed that many of the suppliers who are highly connected to the top officials at the institution or political offices have a greater opportunity, regardless minding the required standards.

Theoretically, this study is underpinned by agency theory.  It is believed to have been established by Jensen and Mecklin (1976) when they asserted that a contractual relationship exists when a person (the principal) gives authority to another entity (the agent) to carry out some activities on his behalf. Agreeably, procurement activities are contractual, as people are being delegated with authority to carry out some responsibilities, which could be in the form of purchases. In analyzing the relationship between the principal and agent in a contract, it is believed that there exists some sort of information asymmetry between them. One noticeable application of it is the design of ideal structures of managerial reward (Daly, 2015).

Saussier and Valbonesi (2018) opined that public procurement entails making contract agreements between two or more people. A standard practice in the microeconomics of this theory is to represent the behaviour of a decision maker under definite arithmetic utility structures, and then apply an optimization algorithm to recognize ideal decisions. Such a practice has been used in the theory framework for several typical situations, known as moral hazard, adverse selection, and signaling. The essence of these models is to find theoretical ways to inspire agents to take suitable actions, even under an insurance contract. The major outcomes realized through this family of models involve: precise properties of the efficacy structure of the principal and the agent, lessening of assumptions, and disparities of the time organization of the contract relationship, among others.

This theory is relevant to this study because it clarifies the role of contract management on an institution’s financial accountability in the public sector. The procurement unit plays a major part in ensuring the terms of the contract are completely enforced. The management is the agent who should guarantee the interests of citizens in procurement. This theory ensures that quality service is provided by the suppliers and any issue that may reduce the well-being of the beneficiaries is strictly eliminated.

METHODS

Research Design

The study adopted a descriptive research design of a survey type. This is considered appropriate because the study describes the relationship between public procurement procedures and financial accountability of Southwest Tertiary Institutions in Nigeria, and the survey design allows every segment of the population to be represented, through which inferences could be made. Under this design, the research instrument is administered to the targeted population of the study, which would provide the required information to answer the research question raised for the study.

Population of the Study

All the 2,516 officers in the bursary and audit department of Federal Universities, State Universities, Federal Polytechnics, State Polytechnics, Federal College of Education, and State College of Education across all the States in the Southwest region of Nigeria constitute the population of this study. Employees working in the bursary and audit departments are the ideal respondents in order to obtain the relevant insights that could help to answer the questions raised for the study. The breakdown is given in Table 3:1:

Table 3.1: Population of the Study

Source: Office of the Bursar of Each Institution, 2023.

Sample and Sampling Techniques

A sample is a segment of the population that is selected for investigation. It is also a subgroup of the elements of the population selected for participation in the study. In the study, 803 procurement-related officers in the Audit and Bursary departments of the Federal Universities, State Universities, Federal Polytechnics, State Polytechnics, Federal College of Education, and State College of Education across all the States in the Southwest region of Nigeria constitute the study participants using a purposive sampling technique. This is because it is believed that the employees working in the procurement department have the required information that could help to answer the research questions of the study.

Table 3.2: Sample Size of the Study

Source: Office of the Bursar of Each Institution, 2023.

Research Instrument

A closed-ended questionnaire designed by the researcher, tagged Procurement Procedures and Financial Accountability of Tertiary Institutions (PPFAFI), was used to collect relevant data for this study (See Appendix I). The questionnaire was administered to the respondents using a drop-and-pick-up method. Primary data is preferred in this study because the data would be up to date and much more accurate since it was collected by the researcher himself for the specific study. The researcher administered the study’s instrument with the assistance of two research assistants who were trained on how to properly administer a questionnaire. Before the administration began, the researcher got authorization from the institution’s management, and a proper follow-up was done for a better understanding.

Data Analysis

Data collected were analyzed using descriptive and inferential statistics. Mean and standard deviation were used to analyze questions raised on each of the specific variables. The first six formulated hypotheses were tested with Pearson Correlation, Simple Linear Regression, and the ANOVA analysis method.

RESULTS

Analysis of the Background Information of the Respondents 

The background information of the respondents is represented in Table 4.2. the table shows that 474(63.5%) of the respondents were male, while 272(36.5%) of the respondents were female. This implies that most of the respondents were male. It also unveils that 333(44.7%) of the respondents were between the age range of 21-30, 263(35.2%) of the respondents were between the age range of 31-40, 75(10.1%) of the respondents were between the age range of 41-50 while 75(10.1%) of the respondents were above 50 years. This indicates that the majority of the respondents were between the ages of 21- 30 years.

Furthermore, the table shows that 474(63.5%) of the respondents were Christian, 244(32.7%) of the respondents were Muslim, and 28(3.8%) of the respondents practiced other religions. This implies that the majority of the respondents were Christian. The table also shows that 368(76.1%) of the respondents had 1-5 years of experience, 113(15.1%) of the respondents had 6-10 years of experience, 147(6.3%) of the respondents had 11-15 years of experience, while 118(2.5%) of the respondents had 16 and above years of experience.

This implies that most of the respondents had 1-5 years of experience. Also, the table shows that 188(25.2%) of the respondents were single, 492(66%) of the respondents were married, 61(8.2%) of the respondents were divorced, and 5(0.6%) of the respondents were widowed. This implies that most of the respondents were married. Finally, the table showed that 112(15.01%) of the respondents works in treasury units, 264(35.39%) of the respondents works in procurement units, 186(24.93%) of the respondents works in store units, 102(13.67%) of the respondents works in expenditure control units, while 82(11.00%) of the respondents works in final account unit. This indicates that the majority of the respondents are from the procurement department.

Table 1: Background Information of the Respondents 

Source: Field Survey, 2023.

Pearson Correlation Matrix

Table 2 presents the Pearson correlation matrix result. From the table, it was deduced that an appositive relationship exists between the pair of variables included in the study. This implies that an increase in one variable engenders a rise in the other.

Table 2: Result of Pearson Correlation Matrix

Source: Field Survey, 2023.

Simple Linear Regression

The R-square statistics reported in Table 3 disclosed that about 60.3% of the systematic variation in financial accountability of tertiary institutions in Southwest Nigeria can be jointly explained by public procurement practices. It was revealed from the estimation result presented that public procurement practices have a positive but non-significant effect on financial accountability in tertiary institutions in Southwest, Nigeria, to the tune of 0.076(p-0.062>0.05).

Table 3: Simple Linear Regression Result

Source: Data Analysis, 2023.  R-0.612, R-Square- 0.603, F-Stat- 39.799, Prob-0.000

ANOVA analysis

The ANOVA analysis represented in Table 4 revealed that the procurement procedures of public universities, polytechnics, and colleges of education in Southwest, Nigeria are statistically significantly different from each other based on the F-statistic given to be 14.06 and the p-value given to be 0.000 < 0.005. The Bartlett’s test result with the chi-square of 1.1940 and prob-value of 0.1905 showed that there is no evidence to accept the null hypothesis of equal variance of a continuous or interval level dependent variable across two or more groups of the independent variables. Hence, the test confirmed that there is no equal variance among variables. From the different analyses conducted, it was observed that public universities take into consideration the procurement established procedures and Act in their procurement function. This is evident in the high level of transparency and accountability in most public universities in Nigeria.

Table 4: One-way ANOVA result

Source: Data Analysis, 2023.

DISCUSSION

This study examined the economic impact of public procurement practices on the financial accountability of public tertiary institutions in Southwest Nigeria. The findings revealed that public procurement practices have a positive but statistically insignificant effect on financial accountability (β = 0.076, p = 0.062 > 0.05). Although this suggests that procurement procedures have some potential to influence cost-efficiency and accountability, the insignificant result implies that this potential is not being fully realized in practice. A possible justification for this outcome lies in the widespread operational inefficiencies and systemic weaknesses that characterize procurement in Nigeria’s public tertiary institutions. One key issue is the lack of professional capacity among procurement personnel. Across many institutions in Southwest Nigeria, procurement roles are often handled by individuals without formal training or qualifications in procurement or supply chain management. This results in poor understanding of the Public Procurement Act (2007), weak planning, and suboptimal decision-making. In such environments, it is difficult for procurement to significantly impact financial accountability, as procedures are not being executed with the level of technical expertise they require. This supports the principles of planning theory, which emphasizes that procurement outcomes are largely a function of careful, expert-led planning and implementation.

Moreover, corruption and political interference undermine the procurement process. Contracts are frequently awarded based on favoritism rather than open competition, a practice that not only limits value-for-money but also reduces transparency and effectiveness. This helps explain the insignificant impact of procurement practices, as the procedures in place are often not followed in spirit or substance. The lack of enforcement mechanisms further worsens this problem, with many institutions failing to sanction breaches of procurement regulations. These structural weaknesses help justify the observed disconnection between procurement efforts and measurable improvements in financial accountability. The finding is further supported by the observation that procurement is not widely recognized as a professional field within many Nigerian tertiary institutions. The absence of degree programs or structured training in procurement contributes to a shortage of qualified personnel. As a result, procurement processes are often handled informally, with little attention to strategic sourcing, planning, or evaluation—all of which are necessary for achieving cost reductions and accountability.

Empirically, this outcome is in agreement with the findings of Christopher (2021), Mdemu (2013), Aimable (2018), Kiplel and Chepkesis (2018), Gavurova, Tucek, and Kovac (2019), and Onyanigo (2012) that public procurement practice in the public sector exerts an insignificant impact on the value of money. On the contrary, Awuzum (2010), Angela (2016), Odero and Ayub (2017), Christianne (2018), Walker and Brammer (2017), Rono (2017), Ahmed, Aiman and Muhammed (2019), Flora (2019), Charles and Samson (2019) concluded that that public sector agencies’ success greatly depends on the success of public procurement planning practices. The significant effect was a result of the compliance of the procurement department with the established procurement procedures and methods. Also, institutions that prepare annual procurement plans and set participatory goals are expected to experience a significant effect on the success of the institution.

Interestingly, the ANOVA results revealed a statistically significant difference in procurement procedures among public universities, polytechnics, and colleges of education in the region (F = 14.06; p = 0.000 < 0.005). This difference likely reflects institutional variations in funding capacity, administrative autonomy, purchase volume, and procurement culture. Some institutions may strictly adhere to due process, while others operate with limited controls. This aligns with the findings of Aladejobi and Adedeji (2015), Anne and Geoffrey (2017), and Daniel and Samuel (2019), who also identified variability in procurement practices across public sector institutions in Nigeria.

CONCLUSION

This study has been able to provide explicit information on public procurement practices that cut across all the Southwest Tertiary Institutions in Nigeria. From the analysis conducted, it can be concluded that there is a statistically non-significant impact of public procurement practices on the financial accountability of public tertiary institutions in Southwest Nigeria. Thus, it is recommended that the management of the Southwest Tertiary Institutions in Nigeria should ensure the practices of the enacted regulation guiding public procurement procedures to ensure the basic principles of public procurement to include accountability, competition, economy and value for money, efficiency and effectiveness, fairness, planning, financial transparency, and integrity. This would promote the financial accountability of the public funds.

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