In Nigeria, there are three tiers in public administration: the central (federal) government, state governments and local governments. This project is devoted to the examination of local governments accounts, and the development of financial management with their departments. It is therefore pertinent at this point to mention that the local government is the third tier of government in Nigeria
Local governments in Nigeria derive their existence form the constitution of the federal Republic of Nigeria (promulgation). Decree No 45 of 1989 has brought about a new awekening public sector virile, dynamic, result and development oriented. At present, with aeration of more 177 local government expenditure, the total number of local government in Nigeria has therefore increased to 1776. One would then guess what effects will it have even before that, like since 1979, there has been a significant rise in local government expenditure in line with greater emphasis on grass root participation. Fore in stance, 1992 when compete political, admmistrative and financial independence were granted to the local government form state control, its responsibility was enlarged. With effect form 1992, local government has been directly responsible for primary heath care; this is in addition to its statutory functions.
Johnson (1992) said that, though virtually all developed countries have a system of local government, some system involve considerable local antinomy while others involve lee on a spectrum, the Nigeria system problem involves less rather than more antinomy. Then the question and answer are important as they reflect the type of financial and accounting framework required.
Sharpe (11980) noted that the participatory value, if not the liberty, value, still remains as a valid one for modern local government .Not perhaps in the full glory of its early pedometers but as an important element in a modern democracy nonetheless. But as a co-ordinate of service in the field; as a reconciler of community options; as a consumer peruse group as an agent to responding to rising demand; and finally as a country weight to incipient syndicalism, local government seems to have come into its own
The following point were listed in local government favor by the lay field committer (1976)
(a) It providers democracy.
(b) It acts as a counter weight to the uniformity inherent in government decision. It spreads political power.
(C) It embraces accountability because it brings those responsible for decision close to their electros.
(d) It is efficient because services can be adjusted in local needs and preferences, and because response can be more democratized.
(e) Central government would be over loaded by more functions.
(f) It provides a velricle for formulating new policies and pioneering ideas.
As a result of increase in the responsibilities and the fantastic expenditure associated with them, it is vital that the local government expend their sources of revenues beyond the present level. They would endeavour to tap all the potential resources so as to see their revenue based fureti fied any improvement to this effect will be welcome as it would give the local government an added impetus in discharging its statutory function and socio-economic advancement to the local inhabitants
From the in caption of local governments, they have been relying substantially on grants from state and central government and also statutory allocation form the internal generated funds of the state.
As a matter of facts, the internal generated revenue by the local government was very abysmal. Now that it has been granted antimony, it is statutorily required to rely more on internally generated funds for the performance of its functions. This being the case, government grants and statutory allocation are only supplement any sources of revenue to local government, Babangida (1992) for local government to be self sustaining financially without reducing the level and quality of its services to the people, it is essential that it exploits all potential internal ones. This as well suggests which would supplement existing ones. That the existing ones adequately exploited and property managed.
STATEMENT OF PROBLEM
Finance and Accounting in local government is probably more complex than in any other part of the public sector in Nigeria, the inability of local governments to raise adequate funds and keep accurate accounts to sponsor its expenditure and achieve grass root developments has been discovered as one of the local governments. The purpose of this study therefore, is to assess the problems of finance and accounting in local governments as to determine their prospect.
Since this research work is in ‘’the problem and prospects if contemporary local government finance and accounting in Nigeria,’’ the writer obtained facts chiefly through interviews and questionnaires. Some hypotheses have been formulated to produce better results.
Ho; That can increase in federal government statutory allocation of federation form 20%-25%would not help local government in achieving at least 75%of their statutory responsibites.
Ho; that the employment of low caliber staff has no significant negative relationship with the low efficiency and productivity of local government.
Hi; that the employment of low caliber staff has significant negative relationship with low effective
Hi; that the accounting system of local government effective in operation
Ho; That another source of tax revenue essential for Nigeria local government.
Hi; That another source of tax revenue is not essential for Nigeria local governments.
OBJECTIVE OF STUDY
Local government like any other organization encounter financial and of course accounting problems. These problem have in no small mean contributed to their poor performance. It is therefore imperative to mention that one of the major reason for under taking this work is the belief that for any meaning full improvement to take place in government accounting and financial control, the strands forming part of these systems must first be put together in during so, the adequacies in the areas of each system would be pointed out and criticized or mention as problem areas for future development.
In carry out the study efforts for future development should be geared to:
1. Identify the major causes of these maladies in the financial system of the local government.
2. Examine the accounting department to find out if it is being manned by the desired competent and of course qualified personnel.
3. Examine whether the sources of income to the local government is enough as to enable it discharge its constitutional, statutory and or otherwise obligations with ease.
4. Examine the various instruments of management and control of thee local government finances.
5. Examine the various problems of local government finances and accounts and ascertain the financial autonomy of the local government.
6. Examine the prospects of improving available sources off the local government finances.
SIGNIFICANCE OF STUDY:
Our local governments have in this recent times been riddled with financial and accounting problems, these undoubtedly have stultified the unflinching efforts of most local government to instill and of course restore sanity in the system hence the need for a steady on the problems and prospects of contemporary local government finance and accounting in Nigeria.
The study leaves no stone unturned in examining the problems confronting the existing revenue sources of the local government and appraises latent revenue resources that could be used to fortify the revenue base of the local governments.
This study, therefore, points out significantly that improved local government finance and accounting system is the corner- stoned to the much desired economic growth and development. It potentially serves as a guide to policy making in Nigeria. The study also forms a source of reference in other related topics and to researches in similar topics.
LIMITATIONS OF STUDY:
As has been earlier mentioned, finance and accounting in local governments is fraught with complexities. It is then not possible to provide a fully comprehensive coverage of all facts of the subject in this kind of study.
Local government finance and accounting has developed in a distinctive fashion and as such has evolved to terminology that may be unfamiliar even to those with experiences of finance and accounting in either the public or private sector.
This study restricts itself to the evaluation of the various revenue resources and expenditure patterns of local governments, examination of the problems associated with then and the prospects for enhancing them. Since it is not possible for a research project of this kind to develop into the entire local governments in Nigeria individual, this research work is confirms to information gathered from Nsukka local government.
This student researcher of this work is of desired intuition to carryout an elaborate and comprehensive study of the problems and prospects of the contemporary local government in Nigeria, but has to obey impenetrable limitations encountered during the research. At local government under study necessary statistical data could not be obtained in a particular location and bureaucratic tendencies seemed to be a rule rather than an exemption.
More so, majority of local government staff are illiterate people and could not give written information needed from enlightened follows. Yet same respondents are relevant to comply with piece of information needed from them.
In the final analysis, this research was also limited to the data gathered from the finance and accounting department of the local government. As such, it should be intensified to not that treasury department was the major source of information used in analysis of the study.
DEFINITION OF TERMS:
Local government is the third tier of government. According to shihu (1976)’’it is that level of government which is as close as possible to the people at the grass roots and vested with statutory porkers to perform certain function and both inherent and ascribed, confining its activities and authority within a particular district or neighborhood and subject to the control of the central government.
Finance refers to the raising of funds, contorting and using them in the running of an organization, be it private, corporation or government (ume 1980)
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