Assessing The Problems Of Financial Management In Local Government

Introduction

1.1 Background of the Study

Financial Management is primarily concerned with management process of planning the provision and effective utilization of fund. In the context of this study, financial management is more than mere receipt and disbursement of funds. It entails the proper use of available resources which are usually limited financial resources for the accomplishment of set goals and objective which would have been arrived at through and arduous and painful process of choosing among various competing and deserving alternative. In taking decision, especially those that have financial implication, local government functionaries are expected to have in very responsible manners, realizing that the are holding fiduciary responsibility on behalf of the public to whom they are accountable. Local government is the lowest tier of government anywhere in the world. It is very important because of its closeness to the people. As a result, it is multipurpose in terms of carrying out social economic services.

In the local society stimulating and encouraging local initiative in community work, promoting the democratic service as training ground for national political leaders, servicing as a medium of communication between the people and the higher tier of government.

The main purpose of local government system the reform, is to ensure effective administration at the grassroots level local government aims to ensure adequate mobilization of human and financial resources for local development. In the light of the foregoing, local government can e defined as administrative entity with a sovereign nation or aquasi sovereign state with distinct geographical boundaries she is vested with administrative and loyal power to make bye laws within her area of jurisdiction. Local government in Nigeria have undergoes a lot of vicissitudes and reforms the most popular which has been the 1976 reforms which inform the frame work of operation today, before 1978, it has been a situation of confusion, traditionalism and in some case neglect from 1976 to date a lot of committee had be set up and minor reform took place as a result but the spirit of 1976 reform is still living.

In sprite of the fact that the 1976 of local government reform had established a unified systems, there is a lot to be learned from the mistakes and achievement regarding the operation of the system. It s principally against the background professional administrators, councilors, supervisors and individuals in part of the country may find it useful to understand the operative system of local government finance in Nigeria. The general public will also like to know the councils obtain revenue and how such revenue accounted for and spent.

1.2 Problem of the Study

This study is intended to provide information on the structure, operation, finance and problem of financial; management in Ilorin South Local Government Area, Fufu of Kwara State. And however, suggested member of strategies for overcoming the problem of financial management in local government.

1.3 Purpose of the Study

The purpose of this study is to examine the problem of financial management in Ilorin South Local Government |Area of Kwara State and contribute to the further understanding of problem of local government, financial management in Nigeria and to serve as a factual text which may provide basis for future.

Critical objective examination of various local government financial problem in Nigeria. In essence to add to the store knowledge of local government finance in Nigeria and to encourage others who may want to explore it further.

1.4 Scope of the Study

Some of the importance of this study is to extend the sphere of knowledge f local government fiancé to the direction of Ilorin south Local Government "problem of financial management" therefore the study is enlarge to accommodate valuable knowledge about the structure operational roles system of accounting fiancé and financial management problems in Ilorn South local government. The study will not identifies problems alone but also attempt to provide remedies. It is hoped that student of local government public administration, public accounting and business.

1.5 Research Methodology

Both Primary and secondary data were collected for the study. Interview with the staff of Ilorin South Local Government Area also the secondary data are collected from various relevant files and books from distinguished authors listed in the bibliography some of the research questions includes:

Which calibers of works are mostly engaged in the management of funds in Ilorin South Local Government Area of Kwara State?

Do these workers use appropriate and suitable accounting records and how competent are they in the utilization of these records?

Do these workers have adequate working knowledge of the financial management memoranda and other relevant circulars?

1.6 Plan of the Study

This project is group into five chapters, which are summarized below: chapter one is on general introduction to the topic with problems, purpose and scope of the study, other data discussed in chapter one include definition of terms and plan of the study. Chapter two deals will literature review and financial control of local government. Chapter three deals with research methodology and historical background of Ilorin South Local Government Area Fufu.

1.7 Definition of Terms

In a study of this nature, there is need to define some key worlds or important concepts that will appear in the study for the purpose of clarity and guide against misinterpretation of such words. Some of these terms are defined as follows:

1. Local Government:

This is the government at local level exercise through representation council established by law to exercise speeded power within a defined area. This power should give the council substaint contain affair as well as the staff and institutional financial power to initiate and direct the provision service. Also to determine and implant objects, so as to complement the activities of the state and federal in their area and to ensure adequate devotion of function to those council and their traditional institutions that local initiative and responses to local needs and condition are maximize.

2. Finance

These are revenue occurring to the local government both externally derived from federal or state government and internally generated through source outlined in the reforms such as taxes, rates, fees, profit from commercial undertaking and the miscellaneous earning.

3. Statutory Allocation

This is the portion of federal and state revenue that accrues to local government. It was stated in the 1979 constrictions of Federal Republic of Nigeria in section 7 @ that : "the national assembly shall make provision of public revenue to local government councils in the federal and (b) the house of assembly of a state shall make revenue provision for statutory allocation of public revenue to local government council within the state.

4. Accounting

Accounting in the context of the study is defined as identification, selection, analysis, measurement, processing, evaluation and communication of financial information facilitate decisions regarding activities and resources.

5. Financial Management

Financial management is primarily concerns with the future and making of decision based on forecast. Financial manage covered all function concerned with attempting to ensure that financial resources are obtained and used in the most effective way. Generally, financial management is defined as the management of funds; dealing with planning, organizing allocating, controlling and making decision on matter relating to finance in order to achieve the stated objective. It is also concerned with the provision and effective utilization of funds.

5.0 Summary. Conclusion and Recommendation

5.1 Summary

Local government administration has generated a lot of interest in recent years. The reason for this is because of the tremendous impact and Influence, the local government have exerted on the general life pattern in the rural area where majority of our people reside. Majority of Nigeria are ultimate affected by the actives of local government on daily basis, be they are in rural or urban areas.

The fourth schedules of the 1979 constitution has spelt out in great details, the function of local government these function can only be performed effectively where there is responsive and dynamic arrangement for financial management and control. Is against the background that the subject of financial management in local government had gavel prominence. Generally, financial management is concerned with the efficient and effective acquisition and utilization of fund within a frame work of clearly understood objective of implication of decision and action taken it encompasses all aspect of management relating to the formulation of financial policy and subsequent qualification and evaluation of financial decision. All aimed at achieving the stated objective. It involves ensuring financial resources in whatever form are affectively acquired, safety hold judicious committed and economically used towards the attainment of predetermine objective. Financial management in local government is the immediately responsibility of the top management mainly the chairman, secretary supervisor and the head of finance department and his team. One major part of finance resources management which is of great concern to the local government system in the fiscal administration which deals with the policy planning and control of financial resources and their allocation. It involves the acquisition custody, utilization and accountability for the financial resource available to local government.

5.2 Recommendation

Based on findings information obtained during the course of this project, the research wishes to state that financial management problem is not in he rent in the system and can there fore easily be remedied, IT certain reform are introduce order to put local government on the path of efficiently and effectiveness. For the local government to assume their deal position as a tool of development and be able to perform their function in an affective manner in future, the following suggestion should be given consideration.

One of the problems facing financial management is the executive, incapacity and lack of adequate system by political office holders. It is suggested that political office holder in the local government should have at least OND in public administration as against WASC. This will help the political office holder who be at helm of affair formulating polities which must implemented these political office holder must attained an oriented course and frequent seminar on assumption of duty of familiarize themselves with the accounting norms and regulations in the local government. The four phased financial management circle in the local government, trained manpower. In order to make Ilorin south local government and other local government in the state developed institutions, Kwara State Local Government service commission should provide more training opportunities for all local government, s staff s in the state this will go a long way to haste the understanding and effective implementation of local government in the inefficient manner in which revenue items are being collected and administered. It is suggested that to improve the situation the following measures are preferred:

Appeal to state to respect the constitution right of local government especially on fiscal relations.

Awareness workshop for top and middle level local government functionalities on revenue potentials of local government and strategies to adopt.

Innovation and creative ways of generating revenue aggressive investment in productive sector.

In the same vein, the local government council should be allowed to raise internal loan through stock exchange to finance capital project. To the end a cohesive system of accounting system must be maintained for ensuring control in the administration of public funds, therefore, local government accounting system must be re- organized and strengthen along the following lines:

Accounting system should be designed to show compliance with legal provision.

Accounting system should incorporate effective procedure fore internal audit and control of operation

Local government accounting must be maintained in such a way to provide information necessary for the economic analysis and planning of government. Another major problem.

Fating financial management in the local government is the weak position of the internal auditor. The post should be professionally protected by the auditor general for local government to maintain neutrality and impartiality. Furthermore, the weaknesses associated with the control technique put in place do enforce accountability in the local government. It is suggested that to strengthen control and enforce the culture of accountabil8ity in the local government an audit guide should be reviewed. This will prevent local government functionaries from getting away with their financial recklessness while in office as they can still be held. responsible for all their action after leaving office. For the local government in Nigeria to be faced effective and develop, financial viability coupled with effective financial control cannot be dispensed with, as these are essential tools for the realization of the goals and objective underling the establishment of the local government.

5.2 Conclusion

The important of sound and effective management of finance of local government cannot be ever emphasized without a functional system, policy formulation of council in selecting through a great variety of field, may not be easily achieved, in other work adequate funding mechanism usually facilitate implementation and sometime even provide a stimulus to the implementation of policies. From the above discussion, it is clear that local Government in Nigeria is hurting badly by financial management faced problems: yet they are faced with ever increasing demand and challenge. This lead us to the conclusion that Ilorin south local government and other local government in Nigeria have failed to perform their role as a catalyst development in an efficient and effective manner due to the financial management problem both the political and career office of local government area need to acquire adequate working knowledge of the financial management and consciously and patriotically apply same of their work. All effort should therefore be geared towards not only reversing the weak accounting and financial management practices, but also in modernizing financial and resources management practices in the local government.

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