AN APPRAISAL OF THE CHALLENGES OF
FUND MANAGEMENT IN THE NIGERIA LOCAL GOVERNMENT SYSTEM.
(A CASE STUDY OF LOKOJA LOCAL
GOVERNMENT)
CHAPTER ONE
1.0 INTRODUCTION
The
challenges of funds management in finance function, usually at a managerial
level through which the firms financial resources are harnessed and allocated
in the Nigeria local government system. The subject of financial management is
of immense interest of those in academic and practicing managers because it
provides them understanding with conceptual and analysis insights to make
decision skillfully.
Due
to scarcity to resource financial management is arguable the most, critical and
intractable of the problem which constrained the performance and development of
local government in Nigeria and which Lokoja local government is not an
exception inadequate financial resources has hampered development of Lokoja
local government and this has always remained a log on her wheel of
development. This coupled with other problems have made immense contributions
to the low performance of the local government. Esun (2013).
The
aim of this study is to know and evaluate the challenges of fund management in
the Nigeria local government system most especially Lokoja government council.
Also to minimize the identified problem in order to enhance the standard of
living of the local citizens.
1.1 BACKGROUND OF THE STUDY
Local
government is the third tier and government that are responsible for
administration at the grassroots level. According to Lock (1988), local
government is public organization authorized to dividend and administer a
limited range of policies within a relative and small territory which is a
sub-division of regional or national government.
Therefore,
local government has been considered desirable as essential instrument of
national and state government for the performance of some certain basic
services, like introduction and distribution of goods and services such as
areas of health care, education, agricultural extension, social welfare,
security and market which can best administered healthy or intimate knowledge
of needs condition and peculiarity of the area concerned.
The
1979 constitution guideline formed an important landmark in the evaluation of
local government in Nigeria. The reform therefore saw the emergence of uniform
structure of local government. The committee considered the accounting and
financial management system for the new local government that had emerged. The
accounting system consist of financial memorandum not be adopted on a
nationwide basis by all the local government in the country.
Fund
serves as changes in financial resources, arising from change in working
capital items and form financial investing activities of enterprise. According
to Akinsunsmi (1986). Money receive as payment income especially that of a
country from all sources.
Revenue
is defined as all tools, taxes impress rates, fees duties, penalties,
prefecture, loans rent allocation and all other government receipts form
whatever source over which the legislature has power for appropriation. Okowoli
(1988).
Champber
dictionary defined it as additional asset which do not increase any liability
of such additional to asset which should not represent the recovery of an
expenditure or their conciliating of any liability or decrease in assets.
1.2 STATEMENT OF THE PROBLEM
Owing
to the immense responsibility of the government to provide service and
infrastructure for its citizens, financing of these project, poses a great
challenge to the government thus a crucial need to raise fund in order to meet
the mandate of the people.
The
financial problem of the local government, Lokoja in particular falls under
three areas.
1. How to keep the money
2. How to utilize the money
Finance
as we know too well is heart of activities of government. Government unit at
all level, national state and local level are daily engaged in the provision of
social services in areas of health care, education, agriculture extension,
social services or welfare, security all of which involve money.
Inadequacy
in financial management is arguably the most critical and intractable of the
problem which constrained or limit the performance and development of local
government in Nigeria and which Lokoja local government is not an exception
inadequate financial resources has hampered Lokoja local government and thus
has always remained a log on her wheel of development.
Most
of the militating against rapid development of Lokoja local government totally
has been characterized by poor financial management by revenue officers,
revenue collections and administration tend to contribute to the problem of
financial management, corruption on the part of the revenue officers,
inefficiency, favourtism, lack of qualified personnel, tax evasion sectionalism
and embezzlement.
This
coupled with other problems have made immense contribution to the low
performance of the Lokoja local government. This financial problems needs to be
identified, discussed and improvement should be made upon if the local
government is to serves on effective instrument of government at the grass root
level. Adedeji (2003).
1.3 SIGNIFICANCE OF THE STUDY
The
study of Lokoja local government financial management as survival of local
government is significant in the sense that the research project identifies
some untapped sources of revenue which will in the long run boost the financial
base of the local government and make it less dependent on state and federal
government supports.
The
admonished independence of local government is a reflection and its in turn by
the admonished role of local sources of revenue in the administration of these
revenue as problem area are identified and possible. Suggestions are advanced
minimize if not to eradicate these identified problems.
The
study is equally important financial resources in the local who harness and
allocated financial to resources in the local government in order to enhance
the standard of living of the local citizens.
1.4 PURPOSE OF THE STUDY
The
purpose of the study is to evaluate the financial management (funds) base of
local government most particularly Lokoja local government whether at level of
different ways of managing the much needed funds for development.
However,
the study has the following specific purposes.
1. To survey the adequacy of existing
sources of revenue available to Lokoja local government
2. To identify internal and external
controls made by Lokoja local government in managing it funds
3. Examine the loopholes in the
administration of funds management in Lokoja local government and
4. Base on (i-iii) above suggest ways
and means of eliminating the problems, where they exist in the fund management
of Lokoja local government.
1.5 RESEARCH QUESTION
1. Now adequate are there existing
sources of revenue in the local government
2. What are the identifiable internal
and external control over fund in Lokoja local government?
iii.
What are the loopholes in the administration of funds in Lokoja local
government.
1.5.1 RESEARCH HYPOTHESIS
For
the purpose of this research work, null hypothesis and an alternative
hypothesis will be used i.e. (Ho and Hi) respectively.
Ho1:
In Lokoja local government the existing sources revenue/fund area adequate
Hi2:
There are identifiable internal and external control over revenue in local
government
Ho3:
There are loopholes in the administration of fund/resources in Lokoja local
government
Ho4:
The existence of loopholes of fund management is responsible for inadequacy of
fund/revenue being experienced by Lokoja local government.
1.6 SCOPE OF THE STUDY
This
project work is an attempt to critically evaluate the challenges of fund
management in local government (A case study of Lokoja local government area)
1.7 LIMITATIONS OF THE STUDY
In
the course of carrying this research work, the researcher faced a lot of
problems which limited the study. They include the following:
1. Time frame
2. Financial resources
3. Material resources
TIME FRAME: The researcher being a student has a lot of activities in
school so the only function of the time he has apportioned to the research
work, so the research was limited to the extent of the time research was able
to devote for it.
FINANCIAL RESOURCES: Also limiting factor of this research was financial
resources of the residence and the venue of the case study being student (the researcher)
was faced with the problem of transportation fees most time. In addition
expenses also include the purchase of stationeries photocopy and other
necessary expenses related to the research work. Therefore, the research was
limited to the amount of resources within the research reach.
1.8 DEFINITION OF TERMS
In
an academic research of this nature, it usually uses to define some key
concepts, which would be used in the course of the study. This is because it
helps to carry the reader along the following terms are therefore defined as
they are used in the context of this study.
LOCAL GOVERNMENT: Barber (1970) defined local government as ‘’authority to
determine and execute within a restricted area inside and small that the whole
state’’.
In the same vein, the guideline for
local government reform of (1979) defined local government as the ‘’government
establishment by law of the exercise specific power within defined areas’’.
FUND:
May be defined as change in cash and change in working capital
DEVELOPMENT: Development is defined as the act process result or state
of developed which in turn lead to advance to promote the growth of to further
improve or to enhance something.
SOURCES:
According to Advance Dictionary defined the word ‘’source’’ is the place person
form which something comes or is got from.
GENERATION: The word generation connotes the contents of producing or
derives in form of collection or accumulation. The particular function of this
word is use in the content of this project to produce, collect, accumulate
through possible means.
SUBVENTION: An amount of money given to support an organization,
industry public corporation and government level.
ADMINISTRATIVE: The word administration is derived from Latin word
‘’administer’’ which mean to case for or look after people to manage affairs.
Administration is universal process permeating all collective effort, be it
public directed toward the realization of consciously laid down objectives.
BUDGET: A
budget is defined as a conscious prepared in advance, relating to future period
of a time base on forecast of key variable adopted to achieve wish to contain
policy of an objective.
GOVERNMENT GRANT: Is the fiscal transfer of money the component units of
government, which is rather favour in form of statutory allocation.
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