Effective Accountability And Transparency In Financial Management In Local Government

Project and Seminar Material for Accountancy / Accounting

Effective Accountability And Transparency In Financial Management In Local Government


Abstract


The purpose of this study was to determine the effectiveness of accountability and transparency in financial management of local government in Nigeria. The research was conducted on 200 staff of selected local government of Ondo state randomly selected by the researcher as the population of the study. It was concluded that financial administrators in the Local Government Areas in Nigeria to a low extent comply withfinancial estimates regulations, revenue collection procedures, expenditure procedures, and financial statement regulation in Local Government administration in Nigeria, which are necessary for proper planning, accountability and good governance. The study also looked at the basic ways of fund and revenue sources in the local government and its disbursement.


Chapter One


Introduction

1.1 Background of the Study

The Accountability and transparency has been critical issue in financial management of local government. It has been hampering the performances of the council and has been and is still a yet problem to be solved. It could be traced to have started during the early era of management, when people are in co-operative efforts to achieve aims which they could not achieve individually.

What is today known as local government in Nigeria has been metamorphosed from the pre-colonial transitional system of government which was highly localized according to the peculiarities of the areas. The local council or native authority presents the basic unit through which any nation administers her people of the grass-roots level. The theory of local government therefore, is that there must be an administrative agency through which the central government governs the people in their respective homes.

All over the world, the structure; the form and the functions of the local government are determined by the political beliefs of the people who control the central government. The local unit usually operated under a council which may consist of persons elected through democratic process by the local inhabitants or through persons appointed by the government to run the affairs of the local inhabitants.

Starting from the early 1950s, there have been lots of re-examination of the institution of local government in Nigeria. There have been a large amount of military decrees, legislature and judicial activities and finally, reforms from committee‟s recommendations. Meanwhile, the most remarkable of all these in the 1979 local government reforms made the Nigerian local government states. Local government is the government at the grassroots that is nearest to the local populace. The implication of its constitutionally guaranteed governance structure and its closeness to the people necessitate the need for accountability and transparency in financial management, and their norms in governance, more evident at this level.

But contrarily, local governments in Nigeria are often seen as nurturing grounds for barefaced corruption and near absence of accountability and transparency in conduct of public service. Local government council however, instead of discharging their functions as development centers to the people at the grass root, acquired notoriety for corruption, fiscal indiscipline and overall irresponsibility. The lack of integrity, accountability and transparency at the level of governance definitely constitutes a heavy toll on the well-being of the people of local government (Agbo 2012:20).stealing, embezzlement and misappropriation of fund has become a major hobby in Nigerian local government.

Circumvention of financial and non financial issue in the Nigerian local government has been on the increase, geometrically. this issue and many others brought the need of this research to identify the responsiveness of local government administration to accountability and transparency in their activities and the changes if any accountability and transparency in responsibility has brought to the local government administration since its invention as a mode of operation in Nigerian government.


1.2 Statement of the Problem

The research work is to evaluate and investigate the problems associated with lack of accountability and transparency in financial management of local government council. Local government councils has been faced with the problem of employments racketing, corruption in procurement, internal revenue collection, award of contracts to the wrong contractors, etc.

Salaries and allowances are paid to non-existing worker as if they are duly recruited staff of local government. Government goes on to pay this money without a due process to ascertain this transparent nature of transaction.

The accounting officers in this process go on in this act without adequate accountability of its responsibility.
Overhead expenditures in the council are incurred without documentation; documents that are not favorable to the council chairman or officer-in-charge are destroyed to avoid persecution after services. Tender are not observed as a process of procurement but insistently friends and family members are not given the mandate to supply goods and provide services to the council without tenders.

Contract award has been on man know man, which could either be political allies or financers. These contractors as a return to investment of financial support to the council chairman either abandon or execute the contract to the extent to which they wish, in other to recoup their money invested in election of the council chairman knowing fully well that the council chairman will not query him.

In this acts, council inhabitants suffer. The federal government of Nigeria presumes that introduction of accountability and transparency (the progress) in government activity down to local government could put a check to these illicit activities in financial transactions of government down to council activities.

This research tends to access the efficacy of accountability and transparency inventions in the local government financial and non-financial of government down to council activities as enshrine by due process office.


1.3 Objective of the Study

The following objectives to this research work stand to be achieved;

  1. To ascertain whether accountability and transparency has put to check the circumvention of due process in financial and non-financial activities of the local government council in Nigeria.
  2. To ascertain whether the inhabitants of local government council have benefited from the proceed of accountability and transparency through the improvement of social amenities.
  3. To ascertain whether the accountability and transparency have affected the official and non-official financial behavioral attitudes of council staff in Nigeria.

1.4 Research Hypothesis

The research work is based on the following hypotheses which are formulated in tackling the problems in the subject.

  1. HO: Accountability and Transparency has not put to check the circumvention of due process in financial and non-financial activities of the local government council in Nigeria.
    H1: Accountability and Transparency has put to check the circumvention of due process in financial and non financial activities of local government councils in Nigeria.
  2. HO: The inhabitants of local government council has not benefited from the proceed of accountability and transparency in improvement of social amenities.
    H2: The inhabitants of local government council has benefited from the proceed of accountability and transparency in improvement of social amenities.
  3. H0: The process of accountability and transparency has not affected the official and non-official financial behavioral attitudes of council attitudes of staff in Nigeria.
    H3: The process of accountability and transparency has affected the official and non-official financial behavioral attitudes of council staff in Nigeria.

1.5 Significance of the Study

This research work will enable the researcher to establish the possible factors causing improper accountability and transparency in financial management in the conduct of public sector in Nigeria.

It is equally expected that, the research work will help to provide solution which will be applied in improving the stability in the public sector. This study therefore, will expose the weakness of the local government council system.
Finally, the study will generally be of immense importance to the readers on various agencies establishing by federal government in fighting corruption in Nigeria.


1.7 Scope of the Study

This study as the case may be covers the nature of accountability and transparency in financial management in the local governments with particular reference to Bende local government area of Abia state.

The study takes a holistic approach in its research to unveil the challenges and problems hindering the proper accountability and transparency in financial management in local government and better ways of curbing them.

The study also looked at the basic ways of fund and revenue sources in the local government and its disbursement.


1.6 Limitations of the Study

In this research work, there are many constraints that affect the output of this work. One of the limitations is time frame given to this work by the school for the writing and submission of this project work as well as academic and personal pressure was faced.

Also, it was not easy collecting information from the council area. Officers I met did allow me access to some of their documents for security purpose.

Furthermore, most of the personnel in Bende council area are not qualified accountant and this imposed some problems in data collection. Exact is one of major problem in school, getting it from the management or people in authority is not easy financial limitations is another, imposing a big constraint in conducting the research work effectively; particularly in administrating of the question naira and lack of adequate material for the study.


1.7 Definition of Terms

Local Government:

Is the third tier of government in Nigeria. It is the government at the lower level that has power of control our local affairs as well as the staff by carrying out its functions.

Revenue:

Is fund raised by the government for public purposes and constituting of taxes, licenses, fines, special assessment.

Allocation:

Is specified amount given or allocated to various local government in the country by the federal and state government to carry out their day to day.

Management:

The achievement of organization and goals through an effective and efficient utilization of human and material resources.

Council:

This means an area defined to carryout government functions.


Chapter Five


Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was to ascertain the effectiveness of accountability and transparency in financial management in local government.

In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing challenges of accountability and transparency in financial management.


5.2 Summary

Good governance is a form of the government that is intended to achieve the goal of the State. The principle of transparency is really important for the implementation of good governance, and the constitutional law and the administrative law are as the spearheads. The principles of transparency and accountability are very important in the context of the supervision and the legal protection of the human rights as defined in the Constitution 1945 of the federal republic of Nigeria. Both principles are also intended to prevent the power abuse in governance, including the financial managements of the State and of the local government. The mismanagement and the leakage of the state and local finance can be avoided. However, there are some barriers in the implementation of transparency and accountability in financial management of the local government. They are the readiness of Human Resources, the old management system which is not easily changed to the better one which could meet the demands of the people, and the political cultures in which there are less local authorities allocate the budget for the public interest.


5.3 Conclusion

he purpose of the study was to determine the effectiveness of accountability and transparency in financial management in local government. Data were collected, analyzed and interpreted. Based on the findings of the study, it was concluded that financial administrators in the Local Government Areas in Nigeria to a low extent comply withfinancial estimates regulations, revenue collection procedures, expenditure procedures, and financial statement regulation in Local Government administration in Nigeria, which are necessary for proper planning, accountability and good governance.


5.4 Recommendations

On the basis of the findings, discussions and conclusions of the study, the following recommendations were made. A monitory body should be put in place by both the State and Federal Government to sanction all offending officers who would not comply with the estimation procedure stipulated in the Revised Financial Memoranda. This sanction should be holistic from the Chairman down to the junior workers as half measure yields no result but failure. The art and act of training and supervision should be instituted in the Nigeria local governments. Workers newly employed should be properly oriented on the rules in the Revised Financial Memoranda and the reasons for compliance. Workshops, conferences and retreat should be organized on the subject “compliance with the rules of the Revised Financial Memoranda” occasionally. This will go a long way in inculcating in the workers the principles guiding the receipt and expenditure of funds in the local government system.


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