Cost Accounting Practices and Pricing Efficiency in Ebonyi State Road Construction Projects

Cost overruns and pricing inefficiencies in government road construction projects have been documented as persistent challenges in Ebonyi State, contributing to project abandonment, poor infrastructure quality, and wastage of public resources, raising concerns about the adequacy of cost accounting practices in public procurement. This study examined the relationship between cost accounting practices and pricing efficiency in road construction projects executed by the Ebonyi State Ministry of Works. The study was grounded in the activity-based costing theory, which advocates for cost allocation based on actual resource consumption by specific project activities. A mixed-method research design was adopted, with a population of 145 engineers, quantity surveyors, project accountants, and procurement officers. A sample of 106 was drawn using purposive sampling. Primary data were collected via interviews and questionnaires, while secondary data were obtained from project financial records and contract audit reports. Data were analyzed using descriptive statistics and regression analysis. Findings indicated that absence of standardized project cost accounting systems, weak bill of quantities verification, and inadequate variance tracking were the primary drivers of pricing inefficiency. Projects that applied activity-based cost estimation recorded significantly lower cost overruns. The study concluded that cost accounting deficiencies are a primary cause of road project pricing inefficiency in the state. It was recommended that the Ebonyi State Ministry of Works should mandate the use of standardized cost accounting templates for all road construction contracts above a defined threshold.

Keywords: Cost accounting, pricing efficiency, road construction, activity-based costing, Ebonyi State