The Appraisal Of Financial Control Approaches In Nigeria Local Government System
In consonance with its transition of civil rule programme by the federal government this year, a lot of changes are being carried outin the local government.
First was the election of the local government chairman and councilors on the 12th December 1987, followed by the appointment of sole administrators and replaced by the caretaker committee in 1990. The current changes include the elected councilors forming he legislature and the secretary appointed supervisory, education etc. as is obtained in the sate government.
These spectacular actions of the federal government has given credence to new directions in the operation of the local government system in Nigeria (Nzelibe, 1990).
It is further to be noted that the federal government from ten percent to twenty five percent, in addition to the ten percent state generated revenue and the internal sources available to them.
With all these funds now available to them and the increase in their responsibilities especially the funding of primary school education, it becomes more important than before that the accounts of the local government should be audited in order to ensure that the money is judiciously used and channeled to the projects meant for them.
In this direction, this research work tries to find out the problem associated with financial control in Enugu south local government so as to proffer solution in order to make the local government more efficient and capable of rendering the services for which it were established.
1.1 Background of the Study
Nigeria local government system is as old as Nigeria creation. Even before the arrivals of the British to Nigeria and introduction of modern system of local government, the traditional system of local government exists. However, with traditional system of governance, which was administered by local people, the issue of financial control more often than not generates problem between the operator and the governed and a times between the operators themselves.
During the colonial rule the British divided Nigeria into regions, districts and division. The districts were then like what we call today local government areas. While the central government controls the entire country, it gave the subordinate unit some degree of independence in the control of its affairs and provision of certain amenities in the local areas.
Prior to the lunching of the 1976 local government reforms, all regional (states) government without acceptors created, modified and manipulated local government system and institutions as considered expenditure. The practice was not suitable and these brought about for a uniform local government system. It is on these grounds that a new local government system popularly called “1976 local government reforms” metamorphosed.
Ugwu, (1991: 11) states that is therefore the quest for effectiveness, good functioning and reliability of our local government system that brought about this decentralization of the power of the federal government by the 1976 local government reforms.
According to paragraph seven of the 1976 local government reforms, the term tier if design as a set of local government with their own identity powers and source of revenue established under state legislation and with the function for which they have been responsible to the state.
The guide line equal articulated the following objectives of the new local government reforms.
- To enable the people to service and activities in their communities through their representative bodies
- To mobilize human and material resources through the involvement and participation of the people in the programme for the development of their communities.
- To create favourable condition for democratic development initiative and qualities among the people.
- To enhance the sense of belonging and security through the effective communities and between the local government communication and the three levels of government in Nigeria.
- To provide a two way channel of communication between local communities and government (both state and federal(
- To bring government nearer to the people and guarantee reasonably, adequate functions, financed resources and staff for local government.
It is important to state that despite the various reforms that were equally other structural led to the creation of local government in Nigeria from 229 in 1977 to 301 in 1987.
In 1989 we had 589 and presently we have 774 local government areas in Nigeria. Enugu south local government areas which we used as a case study was created in 1991 by the general Ibrahim Badamosi Babangida led administration it is therefore, necessary to state despite all the guidelines structural and management and managerial reforms, all the financial control approaches in the local government system have not achieved maximum result and is in this basic that there is the need for the study.
1.2 Statement of the Problem
According to Odenigwe (1977:19) local government is defined as a system of local administration under which local communities and towns are organized to maintain law and order, provide limited range of social services, public amenities and encouragement co-operation and participation of the inhabitants in joint and endeavors towards the improvement of their condition of living. Form the above definition which is widely accepted, one would at a glance observe that the Nigeria local government system are based with varieties of problem.
The provision of social services, public amenities could only be achieved when there is availability of funds and good management of fund.
It is therefore, not of place to state that the problems of financial control in the local government system in Nigeria is attributed to poor planning, insufficient funding, structural design, mismanagement, misappropriation of funds, corruption and lack of qualified personnel on the local government operators.
The researcher therefore identified the expediently necessary to appraise the financial control approaches in Nigeria local government system with a case study of Enugu South Local Government area of Enugu State.
1.3 Purpose of the Study
The purpose of this study is to highlight some of the problems that inhibit the viability of local government financial control approaches and to look for the solutions
1.4 Research Questions
To help in the analysis, the following research question were put forward?
- What are the problems of financial control in Enugu south local government area?
- What is the impact of local government administration in economic development of Enugu south local government area?
- Does the source of fund available to local government responsible for poor financial control of local government finance?
- What are the causes of low performance of the local government?
- What are the areas of direction of economic development of Enugu south local government?
1.5 Research Hypothesis
- Ho: The financial control approaches in Nigeria local government system does not contribute to a greater revenue income.
Hi: The financial control approaches in Nigeria local government system contributes to a greater revenue income
- Ho: Financial control approaches in Nigeria local government system does not improve the management of finance and as well does not maintain meaningful development.
Hi: Financial control approaches in Nigeria local government system improve the management of finance and as well maintain meaningful development.
1.6 Significant of the Study
Finance is not a rite peculiar to the finance department, nor is financial administration. Financial factors have to be considered along with others not independently of them, the financial work will be dispersed throughout the whole organisation, and neither the most efficient finance department of which will avail unless those responsible for directing the operations of the authority interest themselves in finance control and management.
It is also important to note that unless problem associated with financial control in the local government are identified, useful suggestions cannot be made on how to improve the management of finances and as well maintain meaningful development, such words as over-invoicing, inflation of contracts, gifts, embezzlement have entered the vocabulary of governance.
According to Olewe B. N. (1996:337) the need for using a centralized financial administration to strength rather than weaken the sense of financial responsibility of the departments, the desirability of a proper distinction between the “control” and service aspect of the work of the accountant, financial officer and the need of inter departmental co-operation will be created.
From the above analysis the researcher will attempt to highlight the impact of financial control in local government administration.
1.7 Scope / Limitation of the Study
The researchers work is to appraise the financial control approaches in Nigeria local government system (a case study of Enugu South Local Government Area).
This work investigates the control mechanism in the public service with particular emphasis on Enugu south local government in distribution of dividend of the government
Limitation of the Study
There are a number of constraints that the researcher encountered in carrying out this research work. Some of these obstacles are highlighted below.
Owing to lack of forcible logistics to carryout compressive study of the operations of the whole local government under study a number of communities were selected.
Another important problem is the uncooperative attitude of the local government official, others are the perennial attitude to work in the public service. Sometimes when one called to get vital information on facts, the key officers may not be met to supply information needed.
Another important factor is the time constraint within which to complete the project work and bureaucratic procedure in public services to grant interview.
Also one of the constraint the researcher encountered is the limited literature of this particular logic.
1.8 Definition of the Terms
It is imperative at this juncture to defined some key words that form the concept to enable the reader appreciate the meaning and usage.
1. Local Government:
According to Umebali, E. E. (2000:4) Quoting Odenigwe define local government as the system of local administration under which local communities and towns are organized to maintain law and order, provide limited range of social services, public amenities and encourage cooperation and participation of inhabitants in joint endeavours towards the improvement of their condition of living
According to the Standard Collins English Dictionary, appraise means to evaluate or estimate value.
This simply means the money available for the organisation to perform its function.
Collins English Dictionary defined control as giving of command, dominate, regulate or direct.
Summary of Findings, Conclusion and Recommendations
5.1 Summary of Findings
This study was channeled towards the discovery of the various lapses and problems associated with the financial control system and accountability of Enugu south local government of Enugu state and also to appraise the impact of public sector accounting in Nigeria financial control system. This objective was achieved through the research questions formulated from the statement of the problem as this enabled the researcher to design and collect responses from the distributed questionnaires and the analysis of the returned questionnaires brought out the following findings which are enumerated below:
- There is enough evidence to show that the public sector accounting principles applied by Enugu south local government authority is inappropriate and ineffective.
- There is another proof that the control of public fund adopted by Enugu south local authority is inappropriate.
- The generated revenue of Enugu south local government authority is not put into good use.
- The accounts of Enugu south local government area is characterized by inadequacies, such as, embezzlement of fund by transferring public fund into private use and improper keeping of accounting records.
- The irregularity as regards to public fund in the local government affects the diverse activities of the local government.
- The source of revenue available to Enugu south local government authority is enough for them.
Based on the findings summarized above, the researcher was able to reach a conclusion, thus:
- The public sector accounting principles applied by Enugu south local government authority is inappropriate and ineffective.
- The generated revenue of Enugu south local government authority is not put into good use.
- The control of public fund adopted by Enugu south local government authority is inappropriate.
- The account of the local government is characterized by inadequacies such as, embezzlement of fund, improper keeping of accounting records and transfer of public fund into private accounts.
- The said irregularity as regard to public funds affects the diverse activities of the local government to a very great extent.
- The source of revenue available to Enugu south local government area is enough for them.
Based on the conclusion summarized above, the following recommendations were made as these will go a long way in helping the local government in terms of improvement and development if properly adopted. The recommendations are:
- An account committee should be set up to control and regulate the accounting system of the local government to ensure there is a proper record of the generated revenue by the account officers since most chairmen in conjunction with their supervisors collaborates and enrich themselves with the local government fund thereby leaving the council treasury bankrupt especially toward the expiration of their tenure in the office.
- The local government should take an efficient and effective planning control measures and prudent management of their resources and also to increase the salaries of all staff and members of the local government so as to motivate their efforts towards the discharge of the duties assigned to them in other to achieve the stated objective(s) of the local government.
- The local government authority should endeavor to look into its administrative activities regularly and then prosecute any officer(s) found embezzling public funds and also make the head of the account office answerable for any such misappropriation.
- There should be a close interference or inspection from the head of state or his representatives to the activities that are carried out in the local government area without informing the chairman or other top personnel on when they are to visit the local government secretariat.
- The local government authority should set up a disciplinary committee to punish defaulters especially the chairman and the head of account department after which they should be handed over to “economic and financial crime commission” EFCC for proper examination and prosecution as this will put fear into the minds of the in-coming chairman or the head of account department of the local government.
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