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Effect of Treasury Single Account (TSA) Implementation on Financial Accountability in Nigerian Government Ministries, Departments, and Agencies (MDAs)

Abstract

The Treasury Single Account (TSA) has emerged as one of the most significant public financial management reforms introduced by the Federal Government of Nigeria to strengthen fiscal discipline, improve cash management, enhance transparency, and promote accountability in the management of public funds. Prior to the implementation of the TSA, government Ministries, Departments, and Agencies (MDAs) operated multiple bank accounts across various commercial banks, creating opportunities for financial leakages, idle cash balances, unauthorized expenditures, revenue diversion, and weak financial oversight. These challenges undermined the efficiency of public financial management, reduced government revenue, and weakened public confidence in the accountability of government institutions. In response, the Federal Government introduced the Treasury Single Account policy to consolidate all government revenues and payments into a unified account maintained by the Central Bank of Nigeria (CBN). Since its implementation, the TSA has transformed government cash management by improving revenue monitoring, reducing borrowing costs, strengthening budget execution, minimizing corruption, and enhancing financial reporting across MDAs. Despite these achievements, concerns remain regarding the extent to which TSA implementation has improved financial accountability, particularly in areas such as expenditure control, compliance with financial regulations, transparency in resource utilization, timely financial reporting, and efficient management of public funds. Furthermore, challenges relating to technological infrastructure, institutional resistance, operational bottlenecks, and capacity constraints continue to affect the effective implementation of the policy. Against this background, this study investigates the effect of Treasury Single Account (TSA) implementation on financial accountability in Nigerian Government Ministries, Departments, and Agencies (MDAs).The study is anchored on Agency Theory, Public Accountability Theory, and Institutional Theory. Agency Theory explains the relationship between government officials entrusted with managing public resources and the citizens they serve, emphasizing the need for effective monitoring mechanisms to reduce agency problems, information asymmetry, and misuse of public funds. Public Accountability Theory posits that government institutions are obligated to manage public resources responsibly and transparently while remaining accountable for their financial decisions and performance. Institutional Theory argues that public sector organizations adopt reforms such as the Treasury Single Account in response to regulatory requirements, government policies, and societal expectations aimed at improving governance and financial management. Collectively, these theoretical perspectives provide a comprehensive framework for understanding how the implementation of the TSA influences financial accountability within public sector organizations.The study adopts a quantitative research design using a structured questionnaire administered to accountants, internal auditors, finance officers, budget officers, treasury personnel, procurement officers, directors of finance and administration, and senior management staff across selected Federal and State Ministries, Departments, and Agencies (MDAs) in Nigeria. A stratified random sampling technique will be employed to ensure adequate representation of respondents from various categories of public institutions. Primary data collected from respondents will be analyzed using descriptive statistics to summarize respondents' demographic characteristics and perceptions regarding TSA implementation and financial accountability. Structural Equation Modeling (SEM) will be employed to examine the effect of TSA implementation on financial accountability. The reliability and validity of the research instrument will be evaluated using Cronbach's Alpha, Composite Reliability (CR), Average Variance Extracted (AVE), and Confirmatory Factor Analysis (CFA). Additional diagnostic tests, including multicollinearity assessment, common method bias analysis, and model fit indices such as the Comparative Fit Index (CFI), Tucker-Lewis Index (TLI), Root Mean Square Error of Approximation (RMSEA), and Standardized Root Mean Square Residual (SRMR), will be conducted to ensure the validity, reliability, and robustness of the empirical findings.The study anticipates that Treasury Single Account implementation will have a significant positive effect on financial accountability in Nigerian Government Ministries, Departments, and Agencies. The implementation of the TSA is expected to improve transparency in revenue collection and expenditure management by consolidating government funds into a centralized account, thereby reducing opportunities for financial leakages, unauthorized expenditures, idle cash balances, and diversion of public funds. TSA implementation is also anticipated to strengthen budgetary control, improve cash flow management, enhance compliance with financial regulations, facilitate timely financial reporting, and promote more effective monitoring of government financial transactions. Furthermore, the centralized nature of the TSA is expected to improve internal control systems, reduce corruption, strengthen audit processes, and increase public confidence in the management of government resources. Consequently, MDAs that effectively implement the Treasury Single Account policy are expected to demonstrate higher levels of financial accountability, improved operational efficiency, enhanced fiscal discipline, and greater transparency in public financial management.This study is expected to make significant theoretical and empirical contributions to the literature on public sector accounting, public financial management, government finance, and public administration by providing comprehensive evidence on the relationship between Treasury Single Account implementation and financial accountability in Nigerian MDAs. Unlike previous studies that focused primarily on revenue generation or cash management, this research specifically examines the influence of TSA implementation on broader dimensions of financial accountability within the Nigerian public sector. The findings will provide valuable insights for the Federal Ministry of Finance, the Office of the Accountant-General of the Federation, the Office of the Auditor-General for the Federation, the Central Bank of Nigeria (CBN), the Budget Office of the Federation, policymakers, public sector managers, development partners, and other stakeholders regarding the effectiveness of the TSA as a public financial management reform. The study will also provide evidence-based recommendations for strengthening TSA implementation, improving technological infrastructure, enhancing staff capacity, reinforcing internal control mechanisms, promoting regulatory compliance, and fostering greater transparency, accountability, and efficiency in the management of public resources in Nigeria.

Keywords: Treasury Single Account (TSA), financial accountability, Ministries, Departments, and Agencies (MDAs), public financial management, transparency, fiscal discipline, public sector accounting, Structural Equation Modeling (SEM).