CORRUPTION AND ECONOMIC CRIME IN THE PUBLIC SECTOR

ABSTRACT

The effect of fraud on any organization leads to grave consequences in either the public or private sectors. Most misappropriation cases results in serious economic effects on the economy such as loss of fund, assets, revenue meant for current and capital expenditures, and lack of funds for the provision of socio-economic infrastructure for the public.
The issue of misappropriation of fund constitutes a fundamental problem in the public sector.

The case of misappropriation and embezzlement of public funds in the public sector resulted in the economic recession which led to the implementation some stringent policies by the government. The financial misappropriation of public funds hinders the provision of basic social and economic infrastructures and the development of the nation at large.

The problem confronting the study is to appraise the effect of mismanagement and embezzlement of funds in the public sector. A case study of the Cameroon General Certificate Of Education Board in the South West Region, BUEA.

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND TO THE STUDY

The corruption of public funds is associated with the misuse and potential loss of funds and therefore raises questions about the integrity of people in charge of funds .In the challenge of corruption and economic crime (embezzlement), analyzed that all political systems needs to mediate the relationship between private wealth and public power, Susan Rose Ackerman (2004: 1) Those that fail risk of dysfunctional government and captured by wealth interest.

Embezzlement is a symptom of such failure with private willingness to pay trumping public goals , private individuals and business firm to get routine services and to get the head of bureaucratic queue.(Susan 2004:4).  Misappropriation constitutes a deliberate act of the misuse of money. It is the channeling of money and other assets allocated for a specific official purpose for either personal use or for what is not meant for. Such actions constitute an unauthorized spending of money or other assets for personal gain. Misappropriation is therefore the highest type of fraud in the public sector as people intentionally divert public fund for personal aggrandizement without any fear or negative conscience [Ibanichuka and Onouoha 2012]. It is the violation of the obligation of probity, fidelity, and inequality in the public service to the detriment of the individual or organization (Roderick and Subramanian,) (2003, 45). Seminar treaties on corruption and embezzlement, fraud and corruption for instance dealt with the various phases which are; state capture and bureaucratic or administrative corruption, nepotism and patronage. Bureaucratic fraud refers to the internal imposition of distortion in the prescribe implementation of existing law, rules and regulation to provide advantages to individuals in and out government through illicit non transparent means. (Scott 1972:21)

The fraud of this type is committed through the following means; outright abscornment of corporate or government assets for personal use, payment of salaries to ghost workers, payment of dubious purchases and contracts, inflation of contract prices, the diversion of government funds into private uses, the use of office impress for personal allowance, the unauthorized spending  of public funds or assets, making payments against unclear cheques, the forfeiture of a diseased staff gratuity and pension benefits and the misuse of medical allowance and reimbursements, divulging information about the funds without the party’s authorization ( breach of confidentiality), violation of fiduciary duties of trustees, failing to account for any transactions or changes in a trust account etc. of course, the person or party entrusted with the funds is generally not bound to perform extraordinary feats of financial investment. Instead, the party is required to invest the funds in way that it is reasonable and prudent on the other hand, if the party was hired under contract, specifically because of their investment skills, they would be expected to perform under the terms set forth in the contract. The effect of fraud on any organization leads to grave consequence in either the public or private sectors. Kiabel (2002; p.43).

Most misappropriation cases results in serious economic effects on the economy such as; loss of fund, assets, revenue meant for current and capital expenditures, and lack of funds for the provision of socio-economic infrastructures for the public. The need to talk about corruption and embezzlement in the Cameroon public sector remains a very important course of action and can be said that there is existence of these acts on other sectors and in other countries not specifically Cameroon. It is a scourge that existed since human beings started organizing themselves into societies and communities, indicating that these practices exist in all over the world (stifung, 1992:44).

What generally differ from on sector to another or from one country to another are intensity and most importantly is the ways the governments and the society’s at large deal with the problem so as to reduce or eliminate fraud. From a study carried out Friedrich Elbert Stiffing on the nature and manifestations of fraud in Cameroon from 1994-1998, the intensity was so high especially in the public service. It was not long as months later a German based non-governmental organization (NGO) Transparency International (TI) rendered a report on the top 85 most fraudulent countries and Cameroon would top the list followed by Paraguay and Honduras (Geddes 1999:6). 

Already at the time in Cameroon there was a general outcry of the  manifestation fraudulent activities such as embezzlement, and corruption at virtually all level of the society, consequently, it did not take long for conscious Cameroonians to discover its devastating consequences for the society, the economy, and on the behavior of citizens and civil servants in general were and cannot be over emphasized since the patriotic citizens in Cameroon have always questioned the practices of this ills with the objectives to fight and eliminate these drawbacks to the developmental process in the nation, as well as the adverse effects to the democratic process of the country .

The Cameroon GCE board was officially created in 1993, according to a book titled ‘the Cameroon GCE crisis: A test of Anglophone solidarity’. The book says the creation of the board was spearheaded by Anglophone community groups, such as the Teachers Association of Cameroon (TAC), led by Mr. Peter Chateh; churches; confederation of Anglophone parents teachers Association of Cameroon (CAPTAC), with other trade union groups also playing a pivot role in the creation of the board.

It took 10 years, from 1983 to October 1993 for a consensus to be reached by the aforementioned groups and the government of Cameroon to create an examination board to award certificate to Anglophone Cameroonian students. Before the Cameroon GCE board came to existence in 1993, certificates were awarded to Anglophone Cameroonian student by the General Certificate of Education in the UK as it was a trust territory under British administration (known as British Cameroons) from 1922 to 1961. 

The GCE is composed of three levels; they are in increasing level of difficulty which are; the Ordinary level (‘O level’), and the Advanced level (“A level”).The study seeks to appraise the effect of corruption and embezzlement of funds in the public sector, A case study of the Cameroon General Certificate of Education Board (G.C.E) in the South West Region.

1.2 STATEMENT OF THE PROBLEM

The issue of misappropriation of fund constitutes a fundamental problem in the public sector. Embezzlement and corruption in the public sector has registered a severe adverse impact on the public sector. This is primarily due to the practices of these evils in various sectors of the public sector.

This includes; fraudulent activities between shareholders and members in an organization, and the abusive seizure of goods in the custom service and favoritism in the award of government contracts for unjustifiable reasons. The case of misappropriation and embezzlement of public funds in Cameroon resulted in the economic recession which led to the implementation of some stringent policies by the government.

Throughout the years there have been infinite companies, persons and also countries that have been declared bankrupt, caused by financial management. The financial misappropriation of public funds hinders the provision of basic social and economic infrastructures and the development of the nation at large. By taking a look at some of the world’s largest economies we can find cases where the financial management has somehow gone wrong and depict how severe the effects of financial mismanagement can actually lead out to be.

There are numerous examples of where finances are not managed right and where companies, organization, individuals and even countries are liquidated, and even more examples where there have been episodes of financial mismanagement but the situation was still able to escape. Financial mismanagement and embezzlement will always be a possible problem for businesses, Individuals, for countries and even in our homes. The problem confronting the study is to appraise the effects of mismanagement and embezzlement of funds in the public sector, a case study of the Cameroon General Certificate of Education Board in the South West Region.

1.3. RESEARCH QUESTIONS.

1.3.1 GENERAL RESEARCH QUESTION

Is there Corruption And Economic Crime In The Public Sector

1.3.2 SPECIFIC RESEARCH QUESTIONS

1) What is the effects of corruption and embezzlement of funds on the public sector?

2) What is the nature of corruption and embezzlement of funds on the public sector

3) Is there any evidence that corruption and embezzlement hinders economic advancement?

1.4. OBJECTIVE OF THE STUDY

1.4.1 General Research Questions

The main study objective is to appraise the effects of corruption and embezzlement of funds in the public sector. A case study of the Cameroon General Certificate of Education Board in the South West Region;

1.4.2 Specific Research Questions

 this study will specifically attempt to achieve the following objectives in

To determine the nature of corruption and embezzlement of funds on the public sector

To determine the effects corruption and embezzlement of funds on the public sector

To examine the level of corruption and embezzlement practices.

To evaluate the impact of government anti-corruption policies in fighting the menace of fraud and corruption practices.

FURTHER READING: POLTICAL SCIENCE PROJECT TOPICS WITH MATERIALS