Fund Control And Management Problems In Nigeria Local government (A Case Study Of Owerri West)

Project and Seminar material for Public Administration

Project and Seminar material for Public Administration


This project is on “Fund Control Management in Local Government” using Owerri West as a case study. An attempt was made to evaluate the effectiveness and efficiency of fund control management procedure.

This research also focused on the parameters that gave credence to fund control management in the local government system in Nigeria. This research also determined whether adequate fund generation depends on the efficiency of the management of the local government.

The research of this project was also to know or point out the problems militating against fund control management in the local government system in Nigeria.

Chapter one and two was based on the objectives of the study and also finding solution to the problems facing the local government in Nigeria on fund control management, it also dealt on how they generate their revenue and their accounting framework.

Chapter three and four discussed about the presentation and analysis of data, testing of hypothesis and interpresentation data.

Table Of Content

Preliminary Page(s)

  • Title Page
  • Certification
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of contents

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 Questions
  • 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 Revenue generation in the Local govt.
  • 2.3 Local Govt. Expenditure
  • 2.4 Revenue Collection in the Local Govt.
  • 2.5 Budgeting and Local Govt. Revenue
  • 2.6 Accounting framework and auditing in Local Government
  • 2.7 Roles and responsibilities of Chairman and Members Of the Management
  • 2.8 Control of revenue and fund
  • 2.9 Effective and problems of fund management

Chapter Three

3.0 Research Design and Methodology

  • 3.1 Introduction
  • 3.2 Research design
  • 3.3 Sources / Methods of Data Collection
  • 3.4 Population and Sample Size
  • 3.5 Sample 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 Results

Chapter Five

5.0 Summary, Conclusion and Recommendations

  • 5.1 Introduction
  • 5.2 Summary of Findings
  • 5.3 Conclusion
  • 5.4 Recommendations
  • References
  • Appendix

Chapter One

1.0 Introduction

The local government is the third tier of government in the Nigerian government system. Prior to the major local government reform of 1976 there was no uniform local government system in Nigeria, rather, there existed many types of local government such as divisional, district and local councils in the East’s in the North era native authority, district and village council.

The responsibilities of dealing matters and policies relating to local government were carried out by the federal and state government, this led to the concentration of government, the urban levels while the rural area did not fully feel the impact of governance.

1.1 Background Of The Study

The beginning of a uniform in local government system in Nigeria which was aimed at ensuring effectiveness and efficiency in the administration of local government is traceable to the 1976 local government reform policy promulgated by the late General Murtala Muhammed/ General Olusegun Obasanjo’s military regime.

This policy gave rise to uniformity in Nigeria local government system and reviewed to an extent, the state and federal government burden on local matters and responsibilities governance, the reform created three hundred and one (301) local government in Nigeria. This was to make the impact of governance fully felt at the local levels.

In 1989, in furtherance to reforms in the local government administration some autonomy was granted to local government in Nigeria under the federal military government of Ibrahim Babangida. The administration equally promulgated decree No. 15, sect 27. Basic constitutional and transitional provision to fashion out the main functions of local government thus:

  1. Formulation of economic planning and development scheme of the local government.
  2. Collection of rates and insurance of radio and television license.
  3. Establishment and maintenance of cemeteries, burial grounds and homes for the carts.
  4. Licensing of bicycles, trucks (other than mechanically propelled trucks) canoes, wheel barrows and carts.
  5. Establishment of maintenance and regulation of slaughter houses, slaughter slabs, markets, motor parks and public conveniences.
  6. Construction and maintenance of roads, streets lightings, dams, parks, gardens, open spaces or such public facilities as may be prescribed from time to time by the executive governor on houses of assembly of a state.
  7. Naming of roads and streets and numbering of houses.
  8. Provision and maintenance of public convenience, sewage and refuse disposal.
  9. Registration of all deaths, births and marriages.
  10. Assessment of privately owned houses or tarriance for the purpose of leaving such rates, it may be prescribed by the executive governor or house of assembly or state.

Furthermore, in 1997 more local governments were created bringing to a total number of seven hundred and seventy four (774) local governments in Nigeria, all these are aimed at streaming the administration and allocation of responsibilities in order to ensure that local government serve as catalyst to economic developments at grassroots level.

In an effort to consolidate the federal government efforts towards the realization of decentralization of authority a decretive contained in the reform conferred power on state government on the basis of equality and population this added incentive to local government with wide raging responsibilities for local service delivery and promotion of suitable development, the prudent and efficient management of financial resources is a task that must be neglected at the risk of rural dwellers dissatisfaction and disaffection especially now that the country is undergoing an excruciating economic development in the local level, the local government must ensure an improved revenue generation mechanism to generate more fund and to supplement the statutory allocation from federal government and internally generated revenues.

Over the years, since in option as the third tier of government, local government poor performance has been attributed to insufficiency of funds in spite of the statutory allocation from the federation account and state governments. This then calls for efficiency in generating revenue so as to have enough funds to cater the responsibilities.

1.2 Statement Of Problem

It is an indisputable fact that local governments in Nigeria were established for political administrative and service provision purpose.

The rate of involvement of officers dealing with public funds in act ranging from misappropriation of fraud and embezzlement of public fund has put those entrusted with the management of public fund.

Notwithstanding the percentage given to the local government councils by the federal and state governments, the management of fund is still a problem in the local government system. Some of the problems facing the local government in Nigeria on fund control management include:

  1. Misappropriate of funds in the local government system in Nigeria.
  2. How exactly will fund control be managed in the local government system?
  3. Improper recording of funds by the administrative bodies.

1.3 Objectives Of The Study

The purpose of the work is to provide solution to the problems facing the local governments in Nigeria on fund control management. It is not only to present a project on fund control management in the local government but also to make the report of immense value to students and local government administrations alike. Recommendation on how the revenue base can be improved upon to enable local government council carried out its primary function of providing effective and functional social services to its people.

Also, it guides and advices the council on matters pertaining to the treasury and conduct of the council to ensure that proper system of accounting is being maintained. It could also be recalled that despite Federal Government’s effort of facilities economic development to the grassroots level made any services change or improvement towards releasing the objectives due to misadministration. This underscores the desire of the enthusiasm of the researcher to probe into the following:

  1. The mechanism or revenue generation in local government in relation to section 27 and 28 of local government (base constitutional and transition provision) decree 1989.
  2. The effectiveness and efficiency of local government in generating revenue internally
  3. The effectiveness and efficiency in utilizing the acquired funds in relation to financial management.
  4. Whether the fiscal policies are implemented accordingly.

1.4 Research Questions

  • Qo: Does adequate fund generation depend on the efficiency of the management of the local governments?
  • Q1: Do adequate fund generation depend on the efficiency of the management of the local government?

1.5 Significance Of The Study

This research is significant because I believe that it will help me in empirically exposing some of the theoretical inadequacies of some of the classical fund control management in the local government system in Nigeria of previous studies. Further knowledge obtained from this research will help in providing a theoretical premise upon which future researched in the area could be based.

In essence, this paper will go a long way to generate curiosity which will in turn lead to the accumulation of sufficient knowledge on the subject of comparative study of the Owerri West local government council. It is assumed that since the basic aim of this research is to analyze factors that lead to efficiency in local council, chairman, directors of administration and services, treasure and all council employees are likely to benefit from it.

1.6 Scope Of The Study

As the topic suggests, this is the study of what are obtainable in Owerri West local government in Imo state. However, these do not mean that there cannot be similarities between what are obtained in this local government and other local government of the federation.

The study only examine from a critical point of view, the various ways put in place for revenue generation system and management of fund which emphasizes on Owerri West local government.

1.7 Limitation Of The Study

This research is meant to appraise the performance of local government in Nigeria in terms of funds control and management. However, it will not be possible to appraise all the local governments individually, the researcher has therefore decided to choose Owerri West local government as a case study, this decision is justified by the fact that local government in Nigeria researcher would have loved to make aim depth study of many issues in the local government but for time factor, inefficient transport system, accessibility and the unwillingness of some management staff to comment on certain issues, in spite of these constraints the researcher has been able to delve into many areas that are necessary in the course of this study.

1.8 Definition Of Terms


The national committee on government accounting USA defined fund as an independent fiscal and accounting entity with self balancing set of accounts recovering cash and other financial resources together with related liabilities and residual equities which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulation, restriction or limitations.

Accounting Policy:

The general principles and procedure under which accounts of an individual organization are kept.


This is an inflow of money or other representation of value in return for selling goods or providing some type of services.


A deceptive trick planned to obtain an unjust or illegal financial advantage.

Government Grant:

This is the allocation on (revenue) act by which both federal and state governments supplement local government revenue.

Fees And Charges:

These are revenue yielding to local government property.


This is an issue of written acknowledgement of anything received.


Appropriations by agencies, programmes and classes of expenditure.


Subdivision of allocation into time elements.


Outflow of resources or the incurring of obligations for goods and services require to generate funds.

Government Budgeting:

It is the qualitative expression of the future plans and actions in financial terms usually for a year running from January to September.


This is an independent examination of an enterprise by an appointed audition in pursuance of that appointment and in compliance with any relevant statutory obligation.

Self Accounting:

According to Oparaeke in his book Public Sector Accounting vol. 1, a self accounting unit is a ministry or extra-ministerial department which the responsibility for the maintenance of the detailed record of the above, the line and below the line payments and receipts is delegated to the accounting officer.

Now Self Accounting Unit:

According to Oparaeke, it means ministry or department which is only required to maintain incomplete record of the above the line payments and receipts.

Fund Management:

This means efficient effective use of organizational money or funds to achieve the objective of which the fund was given/ issued.

Chapter Five

5.0 Summary, Conclusion And Recommendation

5.1 Introduction

The research is focused on the parameters that give credence to fund control management in the local government system in Nigeria. This study has systematically led the researcher to unearth some resounding truths about these phenomena.

5.2 Summary Of Finding

From the preceding chapter, it was noted that the two hypothesis tested were rejected. The statistical tools adopted are means of comparing the significant differences in responses to a given question from the statical test carried out it can be seen that effective and efficient management of funds in the local government areas have remained questionable. It also shows that adequate fund generation depends on the efficiency of the management of the local government.

From the respondents table, it was also observed that bank reconciliation statement is prepared quarterly in the local government, thus hampering the efficiency of the internal control system. There is a problem of fraud recorded in the council while fund generated are faced with problems.

Furthermore, the investigation also reveals that in spite of the aforementioned inefficiencies fund management has generally improved. They research of the project also reveals that respondents agreed that against fund control management in the government system in Nigeria.

It could also be seen that occasionally auditors discover fraud and irregularities in the accounts of the local government.

5.3 Conclusion

From this research, it could be seen that effective and efficient management of funds in the Owerri west local government areas have remained questionable. It can also be seen that adequate fund generation depends on the efficiency of the management Owerri West local government.

Some of the problems have been enumerated and widely discussed in order to effectively manage the fund or the local government council; the finance should carefully looked into by both federal and state government to see that the problems, hindering revenue generation are reduced to the barest minimum.

5.4 Recommendation

The following recommendations become pertinent as a result of the research study.

  1. Bank reconciliation statement should be prepared monthly to aid in the monitoring of bank and cash transactions to forestall all forms of fraud, misappreciation and embezzlement of funds.
  2. There is need for strict adherence to budgetary provisions in the expenditure of government funds; budgetary control measures should be also fully embraced.
  3. Adequate internal control should be established and maintained over each revenue collection and recording.
  4. There is the need to employ the services of qualified accounting personnel.
  5. The internal audit unit should be enlarged and adequately managed.
  6. The indiscipline among the management staff should be checked by the timely action of the federal government as well as the state auditor general for local government.
  7. Efforts should be made to ensure that both the internal and external auditors recommendations are implemented.

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