A CRITICAL ANALYSIS OF THE PROBLEMS OF FINANCIAL MANAGEMENT IN LOCAL GOVERNMENT COUNCILS IN NIGERIA
1.1 BACKGROUND OF THE STUDY
Local government in Nigeria has been changed by the constitution of
the responsibility or grassroots development and such recognized as the
third time of government. There has been a number of national conference
and seminars in local government in various parts of the country. All
these, one effective system of local government in Nigeria, this study
is mortised by the derive to ascertain the reason why in spite of
series of seminars and conference on local government administration
especially on financial management in efficiency and Mis-management of
resources are still rapid and uncontrollable in local government.
The introduction of 1976 local government reform in Nigeria made more
specific duties of government which has contributed in no small measure
towards making people feel more of the need for a strong government at
the level more result oriented.
Unfortunately the local government has not been able to
achieve most of its adequate financial resources which has been a major
problem leading to instability and inefficiency as many local government
are incapable of government in their different localities with the
introduction of the 1976 reform position of local government system
because the system made it possible for the local government to raceme
most of their revenue from the federal state government. But the
dependency on the statement for therefore it revenue have some notable
disadvantages grants from centre. This could affect the cordiality of
their service. In addition of grants from the central government also
receive revenue t6hrough internal sources like fees and fines local
licenses, rates on local government property interest and dividends
retirement and miscellaneous income (slaughter fact etc.). Most often
this revenue are not effectively collected and misappropriated out
mostly be members of staff responsible for collecting it.
Aboh Mbaise local government is one of the oldest local governments in Imo State. It was created in 1981.
Geographically, Aboh Mbaise has a boundary with delta state in the North; it is bounded by rivers state.
At local government bounding in the North. It has bounding with
Aguata local government at the east. It has boundary with Ihelas local
Aboh Mbaise local government is divided into three zones namely
Enyiato local government, Ngwu local government, and okewuwu local
In the light of this therefore research as has been done in three
states the financial management in order to final solution in solving
them. In an attempt to do this we started with chapter one the
introduction, background of the study, statement of the problem,
objective of the study, scope of the study, chapter two deals with
review of the related literature.
Chapter three deals with the design and methodology. These are
subdivided in to areas of the study. Population of the study, sampling
procedure. Techniques used instrument, method of data collection and
method of data analysis.
Chapter four deals with presentation of and analysis with focus on testing of hypothesis and summary of the result.
Chapter five deals on discussion, recommendation and conclusion of
the research implication of the research finding and suggestion for
1.2 STATEMENT OF PROBLEM
The research is concerned with the problem of financial management in
Imo State (a case study of Aboh Mbaise LGA) with the local government
reform of 1976, local government become recognized as the throatier of
government rested with the statutory power to discharge the duties and
responsibilities of a government in order to achieve set objective and
an efficient accounting system. It will be very difficult for local
government management to keep close control of financial transaction,
policy formulation mobilization and expending their resources. But
things still differ in Nigeria local government because there have been
complaints of inefficiency and Mis-management of local government
revenue and as a case of Aboh Mbaise local government their case is not
different. For example:
1. The council could not execute the proposed
project of reconstruction regarding the major road that lead to Aboh to
Ahiara and Chokonaeze to Mubutu.
2. They could not develop a good project like schools in Aboh Mbaise.
3. The council Mis-manage our funds while we don’t have electricity in our local government and pipe born water in Aboh Mbaise.
1.3 OBJECTIVE OF THE STUDY
Aboh Mbaise local government has so many financial obligation or function to reform. The research paper is carried out:
1. To find out how the generated revenue is controlled
2. To find out how what brings out the management of Aboh Mbaise local government revenue.
3. In finding out the financial management are being handling
1.4 RESEARCH QUESTIONS
1)How the generated revenue is being controlling by the Aboh Mbaise local government?
2)What brings out the Mis-management of Aboh Mbaise local government revenue?
3)How can the financial management of order are being handling by the top people in the local government.
1.5 SIGNIFICANCE OF THE STUDY
First the research is timely because not such studies have been
conducted in the local government because the administration could not
embark on development project but came to the chairmanship position for
their personal again. It will help the republic chairman and other
coming after him on how best to manage the present financial crises that
militate against the development of Aboh Mbaise. Despite series of
reforms and other attempts made by the federal and various state local
governments the problem of financial administration and management
1.6 SCOPE OF THE STUDY
The study covers only Aboh Mbaise local government area since
allocation differs a very from local government to local government
which depends in the formula for the allocation especially primary
pupils enrollment lend mass central. It should be pertinent to role that
there is general application of rules and regulation on the local
government in Nigeria which they must strictly to. By this therefore
what is applied in one local government is applied to the other because
of their uniformity.
1.7 LIMITATION OF THE STUDY
Certain constraints are envisaged in the course of this project work:
1. Time was not enough to get material for the project work.
2. This is lack of statistical data to cover the needed areas
3. There is lack of finance to carry on the debt research work.
1.8 DEFINITION OF TERMS
Is allowing for better understanding of the research. It is
considered necessary that some of the term used in the work be defined:
Financial: In the economic sense is defined as
economic decision capable of enhancing social welfare or a resources
allocation income distribution and stability aspect. It can also be
defined as economic behavior of government into the facts, techniques
principles theories rules directing and policies shaping and governing
the use of financial resources of government.
Management: It can be defined as a mechanism where
by the nature and structure of existing finance can be managed and
analyzed to follow existing government policies as directed in the
budget. Management includes when the allocation has been shared to
various local government the strategies will be how to control the
allocation and internal generated revenue to ensure efficiency
management of fund.
Statutory allocation: A fund established by the
federal government for pulling of extra –budgetary revenue of unexpected
home especially from oil exporters. It is also provided sources of fund
for emergency purpose.
Tax: Compulsory payment by individuals corporate
organization and partnership into the pursue of government for running
of its activities.
Tax avoidance: A legitimate way of not paying tax by engaging in non-taxable activities.
Tax evasion: An illegal way of not paying tax, one is liable to pay to government. It is a criminal offence.
Per capital income: A method of assessing the standard of living in any country. It involves determining potential income per person in an economy.
Multinationals: Large firms in Nigeria that are of the numerous subsidiaries of the parent companies abroad.
Foreign policy: Articulated course of section that
defines Nigerians relationship with other country’s and its stand and
attitude towards certain international issues.
Budget: An economic tool used by government to
estimate its expected revenue and project expenditure over a period of
time usually or yearly.
Marginal propensity of investment: That degree of increases in investment due to increase in income.
Inflation rate: The rate or speed at which the general price level are increasing.
Marginal propensity to consume: That degree of increase in consumption level as a result of increase income.
Debt conversion programme: A system initiated by the
federal government through the central bank in which the country’s
external debts are sold through auction to interested parties.
National rolling plan: A fiscal policy adopted by
government especially during 1989- 2000 year which aimed at achieving
real economics growth and macro economics , stability in order to fight
the problems of unemployment and poverty in the society.