Financial Management And Accountability In Local Government (A Case Study Of Ihete Uboma Local Government Area, Imo State)

Project and Seminar material for Public Administration

Project and Seminar material for Public Administration


This project therefore, shows past and present development in the system of financing the Local Government. It exposes the problems and prospects of planning at the Local Government level. It also shows how there financial and fiscal relations affect the fiancé and performance of the Local Government.

This study shows the major element in the financing of Local Government like the sources of internally generated revenue system of budgeting and planning cost and control as well as execution of policies.

A case study of Ihete-Uboma Local Government is considered the method used in the study of the research design in secondary and primary data structure and it reduced to the accounting determent of the Local Government, which was collected from the accounting department of the Local Government

Table Of Content

Preliminary Page(s)

  • Title Page
  • Approval Page
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of content

Chapter One

1.0 Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Objectives of the Study
  • 1.4 Research Question
  • 1.5 Significance of the Study
  • 1.6. Scope of the Study
  • 1.7 Limitation of the Study
  • 1.8 Definition of Terms

Chapter Two

2.0 Literature Review

  • 2.1 Introduction
  • 2.2 Local Government Finance and Planning
  • 2.3 Sources of Local Government Finance
  • 2.4 Patterns of Local Government Expenditure
  • 2.5 Problem of Revenue in Local Government
  • 2.6 Absence of Reasonable Tenement Worthy of Valuation and Rating
  • 2.7 Problem of Poor Finance Management and Accountability in Local Government

Chapter Three

3.0 Research Design and Methodology

  • 3.1 Introduction
  • 3.2 Research Design
  • 3.3 Sources/Method of Data Collection
  • 3.4 Population and Sample Size
  • 3.5 Sample Mechnique
  • 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 Conclusion
  • 5.4 Recommendations
  • Reverences
  • Appendix

Chapter One


1.1 Background Of The Study

Right from time immoral man was faced with the problem of managing himself and the environment surrounding him. He was faced with problems like providing security for himself and how acquired resources that were not within his reach to improve his standard of living. The c0-existence of men on earth necessitate the combination of scale resources, which were used t o achieve better development process.

These benefit of amalgamated resources and idea must reach to the nook and cronies of a defined area of jurisdiction, managed by credible hands must be accountable to the people that sent them to local government administration. These is a third tier of government that was charge by law or constitution to administer the function of government and see the welfare and interest of the local dwellers under the local government system.

During the colonial era, local administration was rested on officers appointed by the colonial masters. The appointees had executive, legislature and sometime judicial functions. Characterizing Nigeria local government system during and after colonial period till 1976 was non-uniformity of the system, each state operated its own local government unique to it while propelled the federal military government to reform local government administration in 1976, during Mohamade Obasanjo regime. This 1976 local government reform marked the inception of the modern local government administration in Nigeria.

This reform was timely because Nigerians needed a local government system that will serve as machinery forever and accelerated development. We need a local government administration that will serve as a vehicle for increased democratic processes at the grass-root and provide the foundation for stability of the national political system. The local government has the financial powers to initiated and direct the provision of services stated, briefly local government perform proprietary developmental and other functions that may be assigned to them from time to time by the authority that established them.

It is to this effect that the local government are usually empowered to sources for revenue independently in addition to the periodic statement allocation from other superior bodies like the federation specific function aid responsible were assigned to them will powers to raise revenue through taxation and other sources such as property rates, fines, fees on license etc. with the guideline prescribed by legislation.

To guarantee the effectiveness and efficiency of local governments, the 1979 constitution granted the local government the status of a third tier system of government to make them function effectively and efficiently as agents of local democracy aid local development. It also granted them power to strengthen their revenue base through independent taxation. Again, the revenue allocation act of 1981 provided for the federal and state government to contribute ten percent (10%) of their actual revenue to the local government.

According to Okoli M.U (2005) the Dasuki committee on local government reforms, the statuary allocation of local government was increased to 15% on addition to contribute 5% of their total revenue. Besides, the 1979 constitution also provided for a joint account with local government which the federal and state government paid their shares of hares of statutory allocation of local government from where finds are supposed to be disbursed to local government by the national assembly.

Ogonna, A. (1996:117) postulated that Babangida’s administration also led to the allocation of 20% of the federal account to local government in addition to granting them more powers to source revenue through taxation and grants as aid from the federal and state government. Despite all these, there has been appreciable improved in the fiancé of local government especially in the urban area where the availability of most local government are rejoicing because of quick revenue bases.

2.2 Statement Of The Problem

Over the years, there have been a lot of controversies as regarding to the poor performance of the local government in the country. As some people view the dismal performance of the local authorities as being the direct out come of lack of finance and low revenue capacity, others has also agreed that the problem of the local government is not fiancé but lack of the right person who posses the necessary power for effective and efficient management of resources. It has also been argued that most local councils especially in the rural areas rely on the statutory allocation as their major source of revenue,.

They are received as not being productive in the source that they project and policies. The revenue yielding machinery and the system of revenue collection have been flawed on the grounds of non-availability of qualified manpower, lack of public enlightenments over ambitions and corrupt revenue officers addition to other factors. In some cases, there has been lack of proper planning and budgeting which would have helped local councils to operate health financial system.

The above factor have always resulted to lack of finance as there are not appropriate procedures to collecting from the various sources hence leading to a situation where by the bulk of internally generated revenue goes into private purse instead of the government. The billion dollar questions therefore, “what are the appropriate way to increase local government revenue beside the period statutory allocation from the federal and “ what extent has lack of planning affected the fiancé and performances of the local government”? more over, what steps should be taken to ensure the effective and efficient panning and financing of local government? These questions are inevitable in a study of this nature.

1.3 Objective Of The Study

It is clear that this study show past and present development in the system of financing the local governments. It also exposes the problem and prospects of planning at the local government level especially, in the urban as well as the financial relations that exist between the federal and state government and the local government on the other hand.

It shows how the financial and fiscal relations affect the fiancé and performance of local governments.
The revenue generation capacity of local government are also taken into consideration as well as the various ways of enhancing the country. This has becomes so obvious in view of the charging patterns of local government fiancé, increased responsibilities imposed on them by federal and state government.

1.4 Research Question

  1. Is there any need for financial management and accountability in the local government?
  2. Is the leadership of the government accountable to the people of the locality?
  3. Does financial management and accountability help in achieving the goals of the local government?
  4. Why does local government have accounting department?

1.5 Significance Of The Study

This project is been carried out by the researchers because, they added responsibilities to the local government and their role in national and urban development all of which have exposed the state of their fiancés. The recent reforms of the local government system as well as the creation of more local governments have made the study to be more necessary than before.

Moreso, the changing role of local councils from services oriented to development oriented. This is made it inevitable for their financial system to be over-hauled in order to enhance their revenue capacity as well as planning budgeting procedure of management. Local council also serves as an agent of urban areas and this makes the questions on the financial system of local government highly unavailable.

1.6 Scope Of The Study

Scope of study is a general outline of what the study (eg class or seminar) will cover “scope defines the parameters this can be an object, or a theory process activity. Describing either future, current or east knowledge or statements of descriptive activity, experience etc. scope always unless of the unlimited nature (specific) will define specific boundaries.

Such as a manual is used to defined employee duties, or company procedures studies are used to obtain and knowledge to arrive at a logical finishing point. The definitions of scope are the “borders” where the objective, knowledge, instruction or outcome of the activity is found.

In terms of a research paper, the scope of the study refers to the parameters in with the study will be operating in you will want to make it as clear as possible, what you will be studying this also helps you remember and keep with in the accepted range of your study. This also reminds a research, that his method of investigation should be centered around trying to solve the problem within the provide scope

1.7 Limitation Of The Study

Some difficulties were encountered in the course of getting information and data for the study. These constants included the limitation of time for the study to be carried, finance, lack of past records and vital statistics attitudes of respondents and unwillingness on the part of government officials to release source official documents. All these contributed in preventing the availability of certain information that would have helped me to give more detail about the Ihete-Uboma local government financial management and accountability.

1.8 Definition Of Terms

Local Government:

Local Government refers to the third tier of government in the country or federal system of government.


This is the total amount of money which accrues to the local government from both internal and external sources

Fiscal Federalism:

This means the existence of two or more levels of government each with independent tax and expenditure power.


This refers to a financial statement of the proposed revenue and expenditure of the government for a given time usually a year.


This refers to the process and procedures by which public offices are meant to give account for public expenditure.

Chapter Five

5.0 Summary, Conclusion And Recommendation

5.1 Introduction

This chapter comprises of summary of findings, conclusion, recommendations, References and Appendix of this project research question and suggestions for furthers research.

5.2 Summary Of Findings

With regard to the recent changes in the local government system in Nigeria, it is certain that, the presidential system of government is now gaining ground at the local government level? More so, with the recent handing over of the responsibility for primary education to local government, there is need for more effective cost control measure at that level to ensure that local government performs effectively, their priority which is the most essential severity as catalyst of grass-root development. Constitutionally, local government now derives their fiancés from statutory allocations from both federal and state governments. To compliment these sources. They are also expected to generate revenue from internal source, presently due to the down turn in the nations economy, it has become necessary for local government to sources more revenues internally not only for the provision of essential services but also for capital project that will provide future sources of revenue.

In other words, in view of the recent reforms aimed at granting more economy to local governments. It is also necessary for them to asset their independence by generating more revenue in order to pursue their own policies that will be of utmost benefit to the majority of the citizens under their jurisdiction. The dismal performance of local governments within the past years has been as a result of the singular fact that, they spend a greater percentage of their revenue on personnel cost, with little or nothing left for capital expenditure on many urban cottage, industries which will at least provide employment for the citizens.

5.3 Conclusion

The existing staff in strategic department such as planning and revenue sections should be encouraged through in service training, workshops, seminars and others to increase their performance with appropriate rewards. Where rewards professionals should be employed and well paid to enhance office organization and efficiency in assessment and valuation as well as in the collection of local rates taxes. In the area of planning, efforts should be made to source the participation of the success of progremmes and policies of local government planning officers and others in charge of budgeting should be re-oriented on modern management accounting techniques cost control system planning and implementation.

Elected officials of the councils should be made award of the fact that, their responsibilities to the citizenry and not their respondent parties.

In governance, it is the welfare of the citizens that matters most and not party loyalty, since in general terms government is for the people.

Though paper, local governments are seemingly autonomous but there is still much that can be done to alleviate the poor financial position of local government derive cover 70 of their revenue from statutory allocations, it is important that such money should be paid into the individual accounts of local government to enable them plan effectively since they would now know what to expect and when the state governments should also follow this guide tine since the existing financial control arrangements are to the view of the researcher enough to ensure that local government comply to laid financial regulators.

Lastly, it is a know fact that, there is scarily of capital in local government as a solution, the local governments should be encouraged to invest in the various sectors of the economy. To the researcher there are various way through which the tible funds even for long-term project among them, the federal government funds from where loans could be made available for local government on the country to invest in certain economic projects that will help strengthen their revenue base.

This may be in addition to periodic grants in-aid that may be tied to specific projects. In the same token, at the state level, the joint economic planning board should be operationalized as a way of monitoring the developmental efforts of local governments.

Besides, state governments should also revive the local government revolving loans funds, to provide local government the finance needed for the execution of capital projects above all, when deemed necessary, the federal government should as matter of priority put in place, policies as appropriate sanctions for commercial bulks and lending houses to extend a specified percentage of their credit facilities to local government long-term capital projects and where necessary, the federal government should guarantee such loans in such a way that any local government default in payment the amount would be withdraw from the statuary allocations due to the local government in subsequent years. All these measure, we hope would help in solving the problems of capital formation at the local government level.

It is therefore, out contention that if the above measures are implemented local governments will be in a better shape at least, financially to discharge it’s constitutional responsibilities and functions as third tier of government.

5.4 Recommendations

Below are the following recommendations;

  1. Tax collectors should be re-oriented on the most efficient and effective way of collecting taxes for individuals.
  2. Effects should be made to minimize the incidence of tax evasion, root only by efficient assessment procedures of personal income tax, but through meaningful public education to create the awareness among members of the public on the need to pay their taxes.
  3. The problems of economic development and the high wave of fraud, embezzlement and mismanagement of funds at the local government viable as the third tier of government.
  4. We suggest that local governments should intensely their internal revenue generation efforts.
  5. The local government can also involves in more trading activities and commercial undertakings like urban co-operatives ventures, transportation business, shopping centers and others which are possible sources of internal revenues.
  6. There is also the need for the local government to up-grade the quality of its staff especially now that, they have limited autonomy in the recruitment of staff of which only people of proven experience and integrity should be recruited, that is based on merit and not partisan consideration.
  7. Instead of spending a greater percentage of their capital expenditure on non-productive activities, the local government should as a matter of priority engaged in long term. Capital investments by a way of cottage industries, small scale industries, factories which apart from being future source of revenues, can also be used as collateral for rising.

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