The Effects Of Inadequate Funding On Rural Areas (A Case Study Of Abua-Odual Local Government Area)

Project and Seminar material for Accountancy

Project and Seminar material for Accountancy


This project work is a research on the effect of inadequately finding on rural development a case study of Abua-Odual local government Area, River state. In this work we are classifying funds into seven which include. General funds project fund, capital fund self liquidity fund e.t.c we are also group to look at the local government reforms and its implementation we will take a critical look at the various views of individuals on the issue of the present allocation formals and also suggestions how funds can be made available to rural areas.

We are will be taking a critical look on fiscal federalism. Its problems and how it works.

The success used for data collections include personal interview questionnaires. Journals, news papers and intend. The method of data collection analysis is a statistical method from the information given by respondent we analyzed our questions.

From our findings we discover that the causes of funds not being adequate could be attributed to various reasons, and also the researcher made recommendations as the allocations of funds should be review along side with encouraging internal revenue generation in the rural areas using our case study Abua-ODual local government area is highly under developed due to the funds available too it are inadequate or are been misappropriated

Table Of Contents

Preliminary Page(s)

  • Title page
  • Approval page
  • Dedication
  • Acknowledgment
  • Abstract
  • Table of content

Chapter One

1.0 Introduction

  • 1.1 Back ground of study
  • 1.2 Statement of the problem
  • 1.3 Objectives of the study
  • 1.4 Research questions
  • 1.5 Significance of the study
  • 1.6 Scope of the study
  • 1.7 Limitation of the study
  • 1.8 Definitions of items

Chapter Two

2.0 Literature Review

  • 2.1 Introduction
  • 2.2 Classification of funds
  • 2.3 Restoring infrastructure and services
  • 2.4 Local government reform
  • 2.5 Sources of revenue for local governments
  • 2.6 Fiscal federalism
  • 2.7 Evaluation of local government in Nigeria
  • References

Chapter Three

3.0 Research Design and Methodology

  • 3.1 Introductions
  • 3.2 Research design
  • 3.3 Sources / methods of data collection
  • 3.4 Population and sample size
  • 3.5 Sampling technique
  • 3.6 Validity and reliability of measuring instrument
  • 3.7 Method of data analysis

Chapter Four

4.0 Presentation and Analysis of Data

  • 4.1 Introduction
  • 4.2 Presentation of data
  • 4.3 Analysis of data
  • 4.4 Interpretation of result

Chapter Five

5.0 Summary Conclusion and Recommendation

  • 5.1 Introduction
  • 5.2 Summary of findings
  • 5.3 Conclusions
  • 5.4 Recommendations
  • Reference
  • Appendix (ces)

Chapter One

1.0 Introduction

This study was prompted by the cry against the inadequate of fund been released to government especially locale government area in the country.

Generally majority of local government project are usually slow or never got computed and this been appropriated to them for this project.

In typical democratic government which is the government arrangement of the day, a lot of plans and funds are stated in budget (yearly) on how to develop rural areas and make life more bearable for the inhabitants
Funding is very important in the development of any project and not just finding but adequate funding, this is because without this funds nothing can be done.

It does not matter if the funds generated internally or is been appropriated to that region by the government, if the is being not adequate then the cam is defected so in this study, we will be taking a artificial look at the causes of this inadequate funding and how deep its effect has eaten into the rural development of most parts of this country.
There are also important factors that contributed to fund if it is adequate or in a accountability of managers of public funds, the needs of the community in question and any others.

1.1 Background Of The Study

Funding is very important in the development of any project and not just funding but adequate funding, this is because without these funds nothing can be done.

It does not matter if the fund is generated internally or is been appropriated to that region by the government, if it is not adequate then the cam is defected so in this study, we will be taking a critical look at the causes of this has eaten into the rural development of most parts of this country.

There are also important factor that constitutes to fund, if it is adequate or inadequate, they include government policies, accountability of managers of public funds, the need of the community in questioned and so many others.

1.2 Statement Of The Problem

Local government funding problems are various categories and each one of them is equal allocations from the federal government.

The major objectives of this study are to determine the effects of inadequate funding in rural development with particular reference to Abua-Odual local government Area n rivers state others include:

  1. To analyze the various sources of funded available to local government.
  2. To determine why the funds are usually inadequate to meet up the set goals.
  3. To analyze the process of allocation from the federal government down to the local government
  4. Also to determine other factors such as poor management and accountability that contributed to funds been inadequate.
  5. How to ensure inadequate funding in local government are to enhance rapid rural development.

1.3 Objectives Of The Study

Local government is the third tier of government in Nigeria, state government however have a considered influence over the local government council, but the function of local government are now recognized by the fourth schedule of the constitution of the federal republic of Nigeria.

There are various source of revenue of funds to the local government areas to help in the development of various rural areas.

Also there is this age long problem of under development in most rural area of this federation and most time part on the facts that the funds available to them are inadequate.

Although there are the other causes of under development, but when compared to the problems attributed to funds, we discover that adequate funding is almost impossible but does not mean the standard faced with its peculiar cause and implication on the society.

We discover that must local government areas if asked, always narrow down their liability to perform or carry out the major projects to problem of inadequate funds.

Although we could say that their statute allocation has been on the increase.

Our case study, which is Abua-Odual local government Area of River state is under developed, therefore we are to find how the managers of public fund of the above local government handle the funds been released to them no matter how inadequate they are, which also include the problem of misappropriation and misallocation if funds, in Abua-Odual local government Area.

In the study, we also want to find out if the needs of the rural area are been put into consideration before allocations are been put into consideration before allocations are made rather than use of a particular allocation formula for all local government areas.

In Abua-Odual local government Area for example, most of the communities lack motorable roads, water and other vital infrastructures but if compared to local government area in urban areas, we discover that the said local government have more needs, but all have of living of the people that dwell these area by developing them and providing the material needed.

With the present democratic dispensation the allocation from the federal government to local government have been increase and development of these rural areas.

The civil service 9re-organisation) decree a result of financial impropriety, which has characterized the public sector for decades, now the reform was intended to ensure improved “performance” in government and transform the public service into effective machinery for implantation of government policies, programmer, projects, and activities on cost effective basis.

Fayonic (1994) maintained that the ration of sound financial have not matched with performance from the forgoing and the general dissatisfaction expressed by the populace, there is clear evidence that there is a problem of nonperformance on the part of accounting officers in the public sectors.

This work is intended to investigate the problems of under development but concentrate mainly on the problems of inadequate funds.

1.4 Research Questions

  1. Does inadequate funding have any effect on the development of rural areas?
  2. Does adequate funding improve the development of rural areas?
  3. What is the attitude of staff of Abua-Odual local government area towards inadequate funding?
  4. Inadequate funding is not a pancreas for development of local government
  5. Inadequate funding does not provide a tentative judgment in Abua-Odual local government area River state.

1.5 Significance Of The Study

The numerous finding of this study will contribute significantly to the development of rural areas and improvement of the level of living of the members of every community no mater how big or small.

In recent time, the failure and inefficiency if local government area has been narrowed down to insufficient funds therefore this study will help to eradicate the eye long contributed to the under-develop of rural area.

  1. This study gives both student and other member of the public the right information about funds there allocation and their disbursement.
  2. This study is significant because it is been carried out to improve and help leaders and also gives proper orientation to the manager of public of public funds.
  3. It will also aid law makers in discoursing the need of proper funding and its importance for rural area to be developed, it also help policy makers, they stand the chance of improving or making better policies that will be great benefit to the masses.

1.6 Scope Of The Study

It is limited to the effect of inadequate funding on rural development with a case study of Abua-Odual local government area, the disbursement of these funds to the local government and also the manger of public fund.
However, much emphasis is not on the other political problem of the local government area since out focus is the reason for the under development of the area.

1.7 Limitation Of The Study

As a result of the nature of this research work “ the effects of inadequate funding on rural development, apathy of workers, most staff didn’t show interest in the work and would not co-operate in supply necessary materials, some vital record that could have help in the work were missing due to negligence, all in the name of “top secrets records.
Based on the constraint, the suggestion in this war are partially influence only to the extent and dept of it coverage which of course is this yardstick for the reliability of the data collection.

Economic Imputation:

due to the economic value or cost of carrying out a research like that the research report has been summarized to reduced cost to a reasonable amount.

Problem Of Independence:

The local government is not independent, it depends on mainly state and federal government, therefore they do not have independence and most information needed is not easily gotten

Inavaliablity Of Adequate Information:

as a result of the field which research work covers that is public sector. There is little or no intensive work that has been done in that aspect therefore limiting the researcher information bank.

1.8 Definition Of Terms


A fund is a sum of money or other resource separated from other monies set aside for obtaining certain objectives established by special regulations and consisting a fiscal and accounting entity.


This is the income gotten from federal state allocation and internal generated funds.

Misappropriation Of Funds:

This is the undesignated use of revenue, for that which it was set for. It can be seen as undesignated use of local government resources for which a potential liability is recognized.

Allocation Formula:

This is the ratio that the federal governments use to allocate funds to the various tiers of government the allocation formula is:

  • Federal government 48.5%
  • State government 24%
  • Local government 20%
  • Others 7.5%

This can be defined as the ability of managers of public fund to account or ensure that money and other assets entrusted to them are adequately and efficiently utilized and accurately recorded.


Budget could be defined as a future form of action for an organization.

It can be seen as a financial and or quantitative statement prepared and approved prior to defined period of time of the policies to be pursue by the organization in order to achieve organization goal and objectives

Fiscal Federation:

It is the functional reasonability of each tier of government and method of the financial resources available for these functions.

Appropriate Bill:

It is a bill which must be overseen or overview by the house of representation and senators before been accepted by the president

Appropriate Act:

Appreciation bill becomes an act when the house of representation and president has approved it.

Chapter Five

5.0 Summary, Conclusion And Recommendation

5.1 Introduction

This chapter gives answers to the question the researcher gave to the respondents on questionnaires.

  1. It analyses and gives results to the research question as contained in chapters
  2. It also haves empirical prove above the number of respondents that answered the question on the questionnaires.
  3. This chapter also forms the crux of the subject matter of the study, it is therefore important to r-emphasis the main purpose of the study, which is to find out the main effects of inadequate funding in rural development.
  4. Also that the federal government should sometimes handle some large projects that may demand so much funding to ease the burdens on the rural areas.

5.2 Summary Of Findings

The done so far in this study is to find out the effect of inadequate funding on rural development, a case study of Abua-Odual local government area in River state. From the responses gotten from the questionnaires, it was discovered that inadequate funding by the federal government is the basis cause of underdevelopment in the rural areas. This is because without funds projects cannot be implemented.

Also that the have mentally of our teachers is a basic cause of funds not been adequate event when the funds are allocation the managers of public funs mishandle it and therefore the funds became inadequate. Another major problem of inadequate funding is caused by partly patronages in vast to delight partly members, fund are directed to any particular area.

5.3 Conclusion

With the co-operation the staff and management of Abua-Odual local government area, the researcher has been able to come to conclusion this is that funding is the basis of development but it is only when the funds are adequate.

We discovered that most development projects are capital intensive, therefore without funds been adequate; this project cannot be carried out successfully.

The researcher also concluded that Abua-Odual local government area has a lot of development problems which should be given immediately attention. That is not just so because, the government allocations are inadequate but also because the little available are being mismanaged.

It was also discovered that the local government area has no notices means of generating revenue and so depend on the federal government.

But with the increase in allocation to these areas and the proper management of the funds available, the local government’s problems of inadequate funding will become a thing of the past.

5.4 Recommendation

From the research, a lot of observations were made and the researcher is making the following recommendations:

  1. That federal government should allocate fund according to the level of development of the area.
  2. Incentive to encourage internal revenue generation should put in place in the local government areas.
  3. That the management of public funds should be committed to capable hands and not into the hands of a bad manager.
  4. That appointment of leaders should be done by merit and not on favouritism.

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